Debate on Crown Entities, Public Organisations, and State Enterprises

The CHAIRPERSON (Eric Roy) Link to this

The House is in Committee for consideration of the performance in 2007-08 and current operations of Crown entities, public organisations, and State enterprises. The debate on the performance of Crown entities, public organisations, and State enterprises is a series of debates on individual financial reviews of Crown entities, public organisations, and State enterprises as reported by select committees. A total of 3 hours is allocated for the debate.

The debate on the individual financial reviews should be relevant to their performance in the 2007-08 financial year and to their current operations. A member may have no more than two calls on each financial review. A list of the financial reviews available for debate is appended to the Order Paper. Reports on entities yet to be reported cannot be debated.

I understand that members have indicated the Crown entities, public organisations, and State enterprises that they wish to debate. I understand that the first entity members wish to debate is the Human Rights Commission.

KEITH LOCKE (Green) Link to this

On behalf of the Greens, I praise the work of the Human Rights Commission, under the very capable leadership of Rosslyn Noonan. I think its work is even more important today; it is well spelt out in the annual report of the Human Rights Commission. I think the commission is continuing that good work, which is relevant in the sense that the Government itself has dropped the ball in this area over the last while, particularly regarding international human rights. The current operations of the Human Rights Commission—in particular, sending people like Joris de Bres to the United Nations World Conference against Racism and Rosslyn Noonan to the United Nations Committee Against Torture hearing on New Zealand recently—are really holding New Zealand’s end up in the international arena.

A little while ago, when the Government decided that it would not take up the seat that it had long campaigned for on the UN Human Rights Council—instead giving it to the United States—the head of the Human Rights Commission, Ms Noonan, expressed concern that the withdrawal of New Zealand’s candidacy would be interpreted as a lessening of New Zealand’s commitment to strengthening human rights internationally. Unfortunately, not too long after that, we saw Ms Noonan’s words come true when New Zealand was one of only eight nations to boycott the United Nations World Conference against Racism held in Europe. It has been quite upsetting when I have questioned the Minister of Foreign Affairs on why New Zealand was not present. It all seems to hinge on clause 63 of the declaration of the earlier World Conference against Racism, Racial Discrimination, Xenophobia, and Related Intolerance in Durban, which talked about the Palestinian issue in very objective terms—defending Israel’s right to defend itself but also talking about the foreign occupation that Palestinians suffer in that place. I do not think that New Zealand should line up with Israel, considering Israel’s human rights violations.

It was good that the Human Rights Commission was present at the World Conference against Racism in Europe. Joris de Bres, who was the Race Relations Commissioner under the Human Rights Commission, even spoke on behalf of several of the non-governmental organisations of the countries that were represented at the conference. He expressed the views of the nations present to the overwhelming majority of the nations in the United Nations that—unlike the official New Zealand delegation—turned up to the conference. Joris de Bres attributed great success to the conference in terms of monitoring and providing education on human rights. Out of that World Conference against Racism there was clear support for New Zealand to sign the international Declaration on the Rights of Indigenous Peoples, which also came out of the United Nations Human Rights Council’s audit of New Zealand’s human rights. The Government would be well placed to agree with the direction of the Human Rights Commission that New Zealand should sign—or at least support—the Declaration on the Rights of Indigenous Peoples.

The Human Rights Commission submits regularly to select committees. It states quite clearly that the “three strikes and you’re out” bill is contrary to international law, and it points out in its submission that life imprisonment is not used in New Zealand even for war crimes. So why should it be used in this “three strikes and you’re out” provision, whereby for committing a much smaller crime than a war crime someone could be imprisoned for the rest of their days?

It was left to the Human Rights Commission to report back fully on the success of the UN review of New Zealand’s human rights, and on some of the problems that the New Zealand Government should continue working on, such as the problems in the immigration and counter-terrorism legislation whereby the rights of those affected—people alleged to be terrorists or who have problems in coming to New Zealand—are not fully recognised. Problems with classified information prevent those people from fully understanding their rights. Thank you.

The CHAIRPERSON (Eric Roy) Link to this

Just before I call the next speaker, I say that at least 13 discussions are going on in the Chamber. There is too much—[ Interruption] I am on my feet. There is just too much chatter. Please keep it down.

Hon SIMON POWER (Minister of Justice) Link to this

I join the Green Party member in congratulating the Human Rights Commission on its work, under the leadership of Rosslyn Noonan. Engagement has been welcomed from the new Government and we have met on a number of occasions on a range of issues that the commission has wished to bring to the attention of the new Government.

In response to some of the matters that the member has raised, but particularly as Minister of Justice with some responsibility in this area, I want to briefly take this opportunity to advise the Committee of some matters that the Government has been working on in this area. Protecting human rights in New Zealand is a daily, weekly, and monthly process, gradually changing opinions and eroding older barriers and quietly building away in the background. Under all Governments, both present and past—and, I hope, future—New Zealand has always taken its human rights commitments seriously. As a country we have been involved with the UN since its inception and are party to most major international human rights instruments. The Human Rights Commission plays an important role, as I said earlier, in advising the Government on human rights issues and advising the Government on issues both domestic in nature and, of course, on the international stage.

On 7 May this year I was fortunate to present New Zealand’s first Universal Periodic Review report to the United Nations Human Rights Council in Geneva. This was the first time that New Zealand had participated in this review. Civil engagement was a vital element in the development of New Zealand’s Universal Periodic Review report. The commission itself took a leadership role in the run-up to the presentation of the report, leading three round-table discussions in Auckland, Wellington, and Christchurch. Ms Noonan was present in Geneva for the presentation of the Universal Periodic Review report for the New Zealand Government, and the Government is appreciative of the commission’s input into that process.

New Zealand’s participation in the review mechanism represents part of our continuing dedication to human rights not just in New Zealand but across the globe. The process that was entered into was a very interesting one. It works something like this. The country that is currently undergoing an examination of its human rights record makes a presentation, effectively choosing the length of time it wishes to present for, but for the course of the entire presentation, which is some 3 hours in scope, or which has the potential to be some 3 hours in scope, it is allowed to contribute for only 1 hour in total. There is literally a clock running down behind the presentation as it is delivered.

On behalf of the New Zealand Government I chose, in consultation with different organisations, to make a presentation that lasted roughly 15 to 20 minutes. Before the process commences, member States queue up to ask specific questions, make specific recommendations, or point out specific shortfalls in the presenting country’s report. In this case, it meant that in representing New Zealand we had to respond to 38, I think it was, member States’ questions and recommendations during part of this process. If you like, it was a little bit like an international question time. We were not quite sure what was coming from some countries, and others had already submitted their questions prior to the process beginning. We were fortunate that the mission, I believe that is the right phrase, in Geneva that represents New Zealand was there to assist me with this process, and we had some Ministry of Justice officials there who had particular specialist areas. There were people from the Crown Law Office and from the Department of Corrections. That meant that we had access to immediate knowledge to answer questions from member States.

We took an approach that was pretty straightforward, in that we acknowledged some of the things that the country over time had done well. To be fair to the previous Minister for Disability Issues, the Hon Ruth Dyson, this was one of the areas where we had made considerable progress and were given considerable kudos by the fact that the Hon Ruth Dyson and Don McKay, in that case, had worked so hard towards achieving those particular goals.

Questions were asked about some of the protocols, declarations, and optional protocols where New Zealand had not signed up or become party to some of those instruments, and I, in my capacity as representing the report, was able to put the case for why it was that some of those instruments had been ratified or adopted in a slower, more considered way. Part of that stems from the fact that over a long period of time New Zealand has taken the view that it will only ratify or sign up to these instruments where our domestic legislation meets the grade. In other words, we view the reservation process as one that should be entered into only in the most extreme or difficult of circumstances, and that by and large signing up to one of these instruments should be done in a full way.

I guess I am signalling to the Committee today that the best way we view, and I think the last Government viewed, this process, is to make sure that all our domestic policy and legislation is in a row prior to signing up, rather than the other way around, and to take reservations on each of those instruments on the way through. I think that that is a sensible and serious way to engage with the process, and shows a fair amount of integrity from successive Governments as to the way they have approached this particular process.

Speaking to the matters raised by the member from the Green Party, Keith Locke, about the Durban Review Conference, I tell the Committee that New Zealand did not attend that conference in April 2009, as Keith Locke pointed out. It became apparent in the days leading up to the review conference that some consensus was lacking around the matter of whether the conference itself would be productive. However, New Zealand is a strong supporter of the international Convention on the Elimination of All Forms of Racial Discrimination, and remains firmly committed to combating all forms of racism, racial discrimination, xenophobia, and related intolerance. One of the issues raised, by way of statement from some member States, was the issue of a declaration on the rights of indigenous peoples. Members are welcome to look at the report, to see how that matter was addressed by the Government in that case.

Balancing the human rights of New Zealanders against legislative domestic processes—that is, making the comparison on an international stage with what is occurring domestically—can be difficult, and can be contentious. But one of the things we must realise is that New Zealand historically has had a leading role in this area, and should continue to have that in a way that signals we are prepared to lead in this field. But I emphasise this final point: it is no use being a party to some of these instruments unless we are prepared to do what is necessary domestically, which is why, as I said earlier, we have always had a history of having minimal reservations to instruments to which we have become a party. I think that that in itself is a method of engaging in this process that shows a high degree of integrity. There are challenges we still have, in this fora, as the member who took the first call will understand, but I assure him that I take these issues seriously, and that we are working as best we can towards those particular goals.

One of the things I think was essential for New Zealand to do in its first Universal Periodic Review report was to be honest about some of its shortcomings, and I believe that the report we submitted was an extremely honest and transparent report. As I said, this is an area in which I have taken some considerable interest. Historically, it has been an area farmed off to an Associate Minister of Justice; I was determined to keep this matter under my own warrant, and I have enjoyed the work immensely.

Hon RUTH DYSON (Labour—Port Hills) Link to this

If members of the Committee look on the website of the Ministry of Health, they will see a photo of the word “HOPE” written in large letters in the sand on a New Zealand beach. It is a still from the world-acclaimed Like Minds Like Mine advertising campaign—the campaign that most recently featured John Kirwan, standing tall and telling New Zealanders his story of hope and of recovery. Well, despite Tony Ryall’s axing of the mental health target from the focus of district health boards and the Ministry of Health, that photo of hope still remains on the ministry’s website, illustrating the now-axed target. In my view—and I certainly hope that my view is correct—it is a show of some healthy subversion remaining in the Ministry of Health, despite that ministry’s staff now being cut instead of being capped. I will be very interested to see how long after my contribution in the Chamber—and it is now 12 minutes past 3—it will take the Minister of Health to instruct his officials to get that sign of hope off its website. I do not think that it will take very long.

The Mental Health Commission started about the same time as the Like Minds Like Mine campaign. It is designed to give the Minister independent advice; it acts as an advocate for the interests of service users and their families—that is, for one in five New Zealanders. By the late 1990s New Zealanders had reached a level of shame and disquiet about how we treated our own, and we began this journey of hope to reduce the stigma, and to see mental health issues through the lens of support and recovery. And that has been working. Until now, there has been a cross-party agreement in this Parliament to ensure that those with mental illness are supported through recovery.

Since 2007 the mental health sector has been focusing on a target of having at least 90 percent of long-term clients with up-to-date relapse prevention plans. In the last year, over 1,500 more clients have had those plans—a 16 percent increase since the first quarter of the year before, when this target started to be measured. That is a total of 7,476 people—76 percent of all clients—who have up-to-date relapse prevention plans. But now that work is no longer considered a priority by the Minister of Health. The National Government has turned its back on some of the most vulnerable New Zealanders by saying that mental health is no longer a priority. The Government does not think mental health is important enough to rate as a target for the health system in New Zealand, so more than 7,400 people can now feel shunned by the National Government. Well, I say that that is a disgrace. It will be an everlasting shame to the current Government that it treats in that way some of the most vulnerable people in New Zealand.

Peter McGeorge, the Chairman of the Mental Health Commission, recently warned about the increase of mental health problems as a result of the recession. He said that rising unemployment is a critical factor, and that every 1 percent increase in unemployment leads to a 2 to 3 percent jump in the number of people at risk of developing mental health issues. There seems no better time to support the most vulnerable in our community, and to support those who are now even more at risk of developing mental health problems. Now is exactly the wrong time for the Government to turn its back on those people and to say that it is more important that people can get into accident and emergency departments in a speedy time than it is that someone with a mental health illness can get the support he or she deserves.

IAIN LEES-GALLOWAY (Labour—Palmerston North) Link to this

During the Health Committee’s financial review of the Mental Health Commission, the commission expressed its concern that district health boards sometimes used the ring-fenced funding that is provided for mental health for other purposes. However, its greatest concern was the possible removal or reduction of the funding itself. It acknowledged that the transfer of existing services into the ring-fenced area, without additional funds, would cause problems. Against that backdrop, we have the removal of mental health targets from the Government’s priorities. Although the Minister of Finance has assured us that a target’s removal from the list of priorities does not necessarily mean that funding will not be available, we are already—

Hon Dr JONATHAN COLEMAN (Associate Minister of Health) Link to this

It is a pleasure to rise and speak in this debate, because a couple of things need to be corrected and put on the record. First of all, it is incredibly ironic that Labour members have chosen to debate the Mental Health Commission. Of all the entities they could have put up, they want to put up the Mental Health Commission and place a big, fat target on its back. Quite frankly, the previous Government’s performance over 9 years on mental health was absolutely abysmal.

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

I begin by congratulating the Mental Health Commission, which, over many years, has done a fantastic job for people with mental illness in New Zealand. I commend the work that it does. As a Government, Labour extended the life of the commission, not once, not twice, but three times, because we believed that it needed to be in place until we had the best possible mental health services in this country.

Today New Zealanders have just listened to a political rant from a man who claims to be a doctor. If that is the case, he should know something about mental health. I am absolutely ashamed of the speech he has just made. If he knew a single thing about mental health, he would know that one of the things that needed to happen in New Zealand was a major change to the way we provided mental health services. The reason why we needed to make a change was that when Labour became Government in 1999, there had been 75 inquiries in the 1990s into failures of the mental health system in New Zealand. The most significant inquiry was the Mason report, which set out for us a very clear way forward.

From my time in Government, I know what happened—I was the Minister of Health for 6 years, I say to the Minister. I know exactly what priority we put on mental health. First of all, we said that mental health was not the Cinderella of the health system, and that mental health needed to be right up there as a major issue. We said that it should not be sidelined—it is not something a Government does when it has done everything else—and that it was a major issue for New Zealand. Labour needed to take it seriously. We needed to implement the blueprint on mental health services in New Zealand, and we needed a strategic direction as to what we were going to do in the years ahead. We set out to implement that blueprint and to put those services in place. I am particularly proud of what we did in the area of mental health, with the support of the Mental Health Commission and with the support of the mental health workforce of New Zealand.

Let me give the members an example of what we did not have in this country. Today people glibly talk about the need to have mental health services for adolescents and young people. Could we have provided that before we became Government? No, we could not have done so. There was no training of mental health workers in child and adolescent mental health. That did not start until we invested in the John Werry centre in Auckland and started training people in the area of adolescent and child mental health. The work to produce such a workforce started under the Labour Government. Anyone who had read what had gone wrong in mental health in New Zealand would know that our problem was a lack of money, a lack of a trained workforce, and a lack of priority for mental health services. This is such a sad day because that is no longer a priority. I fear that if it is not a priority for the district health boards—because that is the message they will get from the Minister’s statement—the emphasis on improving mental health services for New Zealanders will no longer be there.

The reason why I ring-fenced the mental health money into district health boards was to ensure they spent it on mental health services. Over many decades, when money went into area health boards, into Crown health enterprises, into hospital and health services, and, finally, into district health boards, the easiest money to rob was mental health money. It was taken for whatever else was needed. Acute care always got priority, and mental health money was taken. So we ring-fenced that money, and we saw the improvement in mental health services over the time that we were in Government. It was a huge improvement—over 27,000 New Zealanders every day of the week were receiving mental health services in the community. We improved access to acute mental health services. We built new mental health units around New Zealand. We made it a priority—it must be a priority. Any humane country would make it a priority.

I went to the World Health Assembly conference in 2001. The theme of the conference was mental health. I happened to chair the plenary session, and I listened to Ministers from 40 countries provide their descriptions of the mental health services in their country. I listened to what they were doing. I listened to the Minister from Nigeria—and I heard him today in the form of the Associate Minister of Health. The health Minister in Nigeria said: “We have no mental health problems in Nigeria, so we don’t have a mental health system. It’s not a priority.” And that is what we heard today. I heard the French health Minister say: “In France we have a huge mental health problem. The problem is we have too many psychiatrists.” What I heard from countries all around the world was that most of them know there is a problem, but some deny it as a problem. We heard today a denial of the problem from the Associate Minister of Health, who was trying to say that the previous Government did nothing and to complain about the legacy we have. It was total hogwash. I have never heard more distortion and untruths put together in one speech, in my time in Parliament.

The priority on mental health has to remain. It must remain. It is no good for the new Government to say that it thinks 13 priorities are too many. Well, why have any? If everything has the same priority, why have any priorities? The Government could just make everything the same. How ridiculous! One has to set priorities, and mental health must be one of them.

A second priority the Government has removed is that of oral health. Good heavens above! There would not be a member opposite who did not write to me when I was the Minister of Health and ask what I was doing about oral health. Members asked what the Government was doing about the provision of child oral health and adult oral health, so we set about bringing back the training of dental therapists. Can members believe it? The previous National Government had got rid of all training of dental therapists, so how were we going to be able to provide such a service?

Hon DAVID PARKER (Labour) Link to this

This year has been a sad year for accident compensation, because the accident compensation system has been under attack not from members of the public but from the Minister for ACC, Nick Smith. The Minister, soon after coming into office, claimed that the system was fundamentally broken. He said that unless drastic changes were made to the scheme, the costs would rise by $2,400 per household. He claimed that the scheme was insolvent. The words he used in the general debate on 4 March were: “The reality is that ACC is effectively insolvent.” When challenged about that on Morning Report on 1 April, he thought the whole of the country was foolish, because when I said: “You’ve been calling ACC insolvent. It is not.”, the Hon Dr Nick Smith said: “I have not.” He obviously contradicted his express statement in the House that the scheme was insolvent.

It is true that accident compensation costs have increased. Why have they increased? There are a number of reasons. The breadth of cover has been increased. Why was it increased? It is because there was unfairness in the previous scheme. I will give members an example. Some seasonal workers had an out-of-season accident—they were knocked over by a drunken driver. Their earnings-related compensation was calculated on the basis of the short period of their earnings prior to their injury. If they were disabled for life, they would never get any earnings-related compensation relating to their seasonal earnings, even though they paid accident compensation levies and their employer paid accident compensation levies in respect of their earnings. That was an unfairness that was righted by the previous Government—and so it should have been—and that did increase costs.

There were other areas of increased costs in the scheme, and there were some areas where expenses did increase. I have acknowledged previously, as has the outgoing chair of the Accident Compensation Corporation board, Mr Ross Wilson, that changes needed to be made to physiotherapy, because those cost increases were higher than was predicted. But that comes under the heading of housekeeping, and it does not point to a fundamental flaw in the scheme.

In terms of the outstanding liabilities of the scheme, it is true, too, that they grew. It is also true that the amount of accident compensation that was pre-funded grew from 45 percent of its liabilities in 1999—when the previous Labour Government took over from National—to 64 percent when we left office. The amount of the scheme’s assets increased from $2 billion to $12 billion, so to suggest that it was insolvent was a nonsense. National introduced a new definition of insolvency to accident compensation that made wrong every audit certificate the scheme has had since the day it was formed. If that was the measure of insolvency, the scheme was insolvent from the day it was formed, because it has never been 100 percent pre-funded, although it is more pre-funded now than it ever has been in the past. The Government cannot have it both ways.

What did the commentators say? They saw Dr Smith’s comments for what they were. The Minister’s gross exaggeration was roundly criticised by a number of commentators. An actuary pointed out that National was scaremongering, that there was nothing wrong with the scheme, and that much of the increase in liabilities arose from the decrease in the rate of return on the scheme’s investment portfolio, which meant there needed to be a bigger portfolio in order to fund the tail of claims in years to come. That independent actuary said that there was nothing wrong with the scheme, and that this was a case of scaremongering.

Fran O’Sullivan from the New Zealand Herald criticised Dr Smith by saying there was a fine line between using the international financial crisis to create a position to justify fundamental change and downright chicanery. Brian Fallow described Dr Smith’s behaviour as “bizarre”, which is very strong language from a moderate commentator. He said that the Minister’s actions were bizarre, and that he was causing unnecessary worry and stress to the many thousands of New Zealanders who were reliant upon accident compensation. Vernon Small at the Dominion-Post said it was largely a manufactured crisis—manufactured by the Minister for his own ends. Rod Oram did the analysis. He showed that the vast majority of the increase in liability was a consequence of the decreasing rate of return on international finance markets.

What is the underlying agenda here? It is to go back to prior mistakes. The Government wants to privatise accident compensation.

Hon Dr NICK SMITH (Minister for ACC) Link to this

I think the numbers with regard to accident compensation speak for themselves. I will read the actual numbers with regard to the state of the Accident Compensation Corporation (ACC) over the previous Labour Government’s last 3 years in office. That Government increased the liabilities of the accident compensation scheme in just 3 years by $10.5 billion. That equates to $5,000 for every household of New Zealand. That is a deterioration of $5,000 for every Kiwi household as a consequence of Labour’s management of accident compensation over the last 3 years.

The members opposite, and Mr Parker, said they accepted there was a mess with physiotherapy, but that it was just housekeeping. I have a housekeeping bill in my home, and I tell Mr Parker how expensive his housekeeping bill over the physiotherapy mess that his Government made over the last few years, has been. The extra cost of accident compensation in physiotherapy has added $500 million to the accident compensation scheme’s liabilities. That is not a bad housekeeping bill! That is an extra $100 million per year.

I would like any Labour member opposite to explain why they ignored advice from the Department of Labour, because I have very clear advice here from the department stating that the physiotherapy decision was wrong before the Government made it. A further point I ask is this. The changes were made in 2004 to physiotherapy. ACC reported to Ministers in 2005, in 2006, in 2007, and in 2008 that expenditure was out of control in physiotherapy. What did Labour do? It did absolutely nothing—absolutely zip. Labour handed this new Government a hospital pass of which physiotherapy is just part.

It is the view of this Government that a 24/7 accident insurance scheme along the Woodhouse inquiry principles is absolutely critical. But if we are to save that heritage for New Zealanders, we have to deal with the loose financial management of ACC. That will involve levy increases. That will involve changes in ACC—this week the corporation will be announcing redundancies in terms of head office corporate staff, which has also grown out of control. That is in line with National’s provisions and promises to put the focus on front-line services. We will review some of the expensive extensions made to the accident compensation scheme by the previous Government, but not funded.

I say this new Government has been left a hospital pass, a $10 billion increase in liabilities, and we will have a difficult challenge that will require compassion, a strong heart, and a strong head as we ensure the security of this important New Zealand institution.

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

I rise to speak on the financial review of the Accident Compensation Corporation (ACC). From the Minister for ACC today we have heard a continuation of his manufactured crisis in ACC. I have one question for the Minister: how can the New Zealand accident compensation scheme be too generous if it is still cheaper than the Australian scheme? The National Party likes to compare us with Australia all the time. It says that Australia is better at this and better at that; they are always doing better than New Zealand, and we have to catch up. But our accident compensation scheme, with 24-hour-a-day cover, is cheaper than the Australian scheme. Why, then, is it too generous for New Zealanders?

I think the comments made about the Minister’s behaviour, which totally embarrassed his colleagues for a number of weeks, were picked up on by many commentators. Comments about bizarre actions, scaremongering, and many others were made at the time about the Minister’s actions. I think that they were true, because this was a manufactured crisis to reduce services to New Zealand.

One other thing the Minister said today is he wants to retain the 24-hour-a-day cover for accident compensation—our iconic cover. He wants to focus on front-line services. Well, I have a question for the Minister today. I want to know why the plug has been pulled on the sexual abuse crisis line hat was funded by ACC. That was a 24-hour-a-day service, a front-line service. It had over 8,000 calls a year, yet ACC has just pulled the funding from the 24-hour-a-day crisis service. ACC has funded that service for 8,000 callers a year at a cost of about $350,000 a year, but ACC will not continue that funding in the new financial year, and that is a question that needs to be answered.

Hon Sir ROGER DOUGLAS (ACT) Link to this

The Minister for ACC’s analysis of the financial position that the new Government inherited from the previous Labour Government is, I believe, an accurate one. To call it a disgrace would be to treat it rather lightly. The question now is what the new Government intends to do about the situation that it inherited. The Minister said that there would be redundancies at the Accident Compensation Corporation (ACC) and there would be increased charges, but I say to the Committee and to the Minister that such an approach is not likely to work over the medium term.

The real problem with ACC is that it is a monopoly, and that is the fundamental problem that the changes the Minister is talking about will not overcome. Monopolies always fail, and they fail for one simple reason: they are not required to offer cost-effective and good-quality services to attract customers. Monopolies fail to meet consumer demand because consumers simply have no other choice. Monopolies fail to reduce costs because they have no competition to drive out their high-cost structure. Only competition in this area will make the fundamental changes and restore ACC to some level of reasonable performance.

ACC is bankrupt. There is much confusion on this point—fostered, I might add, by the Labour Opposition—but the fact remains that if ACC was a private company or corporation, it would already be in liquidation. It has what is called an unfunded liability, and I ask the Minister what he intends to do about this unfunded liability over time. But the Minister has inherited more problems than just the unfunded liability. It may well be the biggest problem, but another reason why ACC is bankrupt is that there are now 1.7 million claims per annum. Almost 40 percent of New Zealanders are making a claim. I note that despite that figure, ACC is spending millions advertising its “You’re covered” campaign. What does ACC want to make it—2.5 million claimants?

According to ACC’s PricewaterhouseCoopers 2008 report, only around 5 percent of these claimants could attribute any fault to another party. Yet before 1972, we had a situation where around 5 percent of people who could prove third-party fault got compensation. There is something out of whack here. Now only 5 percent of people say they can attribute fault to someone else. Before 1972 only 5 percent could not show that fault could in fact be attributed to someone else.

The corporation’s administrative spending is incredible. We have seen a situation where it now spends $468 million in operating costs. By my calculations, that amount has increased by 30 percent since 2005—up from $341 million. Doing a quick calculation, I think it is now $127 million more than it was 3 years ago. I would be interested in what the Minister in the chair, Dr Nick Smith, intends to do about that.

But coming back, I say it is really only competition that will rectify this situation. I ask the Minister what he will do about the situation where the scheme shields the negligent. The accident compensation levy schedule is based on aggregates. For example, it presumes—

Hon Dr NICK SMITH (Minister for ACC) Link to this

I will take the opportunity to respond to the point that Annette King raised in relation to the very sensitive area of support for women in Auckland who have been sexually abused or raped. I wish to put her correct in terms of this issue. Nikki Kaye, the member for Auckland Central, raised these issues with the Associate Minister for ACC, Pansy Wong, and me late last week. I and the Associate Minister met with officials from the Accident Compensation Corporation (ACC) yesterday to work through these issues.

The fundamental difficulty is that the funding currently provided in lump-sum form for the Auckland Sexual Abuse Help Foundation helpline is outside the legal boundaries of what ACC can legally fund, in terms of payment for a service, and that has brought about this need for the review and the notification. I and the Associate Minister for ACC, who is also the Minister of Women’s Affairs, are concerned about the impact of this matter. For that reason, the Associate Minister for ACC wrote to ACC yesterday, requiring a 3-month extension of the funding, which will give us the time frame in which to work with the other Government agencies. The Ministry of Social Development also has an interest in this. It provides funding of about $350,000 a year for this service as well. Funding also comes from the Auckland District Health Board.

Over the 3-month time frame we want to review the service to see that there is fairness in who receives funding. But I want to provide on behalf of the Government an assurance to the people of Auckland who are dependent on that service—

MICHAEL WOODHOUSE (National) Link to this

I will start by talking about the one thing that I agree with in relation to what we have heard from our friends on the other side of the Chamber. The Hon David Parker said this has been a sad year for the Accident Compensation Corporation (ACC). But there, sadly, any agreement ends. To suggest that the situation ACC finds itself in is somehow manufactured by the new Minister absolutely beggars belief.

ACC really is an organisation that is simply too important to have that sort of politicking done to it. Last year, 1.7 million New Zealanders made a claim with ACC. That is 1.7 million people who had an expectation of a fast and lasting return to work or to independence to the maximum degree possible.

ACC is one of this country’s largest public institutional investors. It has more than $10 billion invested. It has built up those funds over the last 10 years or so out of a plan that was put in place to achieve what is known as “fully funding the scheme”. Full funding and the solvency of the scheme—we have got into some definitional questions here—are such that the assets of the scheme will meet or exceed the net present value of the future costs of the claims that are currently on the books. We have a situation where a residual claims levy was put in place that was intended to have those claims fully funded by 2014, and new claims coming through should have their costs fully funded by the levies that were collected in each year.

I have been doing a bit of an analysis of the scheme’s drive towards solvency, and I have been plotting the corporation’s performance on this graph. The black line is the goal year on year towards achieving that solvency by means of fully funding accident compensation in the year 2014. As members can see, the red line, which represents progress towards that target, has shown that the corporation was performing extremely well until about 2005-06, when things did not just change but took a veritable U-turn. Suddenly, the solvency ratio of the scheme went down. This is very important, because we have heard for the last 6 months that this has somehow been caused by an economic downturn—

JEANETTE FITZSIMONS (Co-Leader—Green) Link to this

The Education and Science Committee report on the financial review of the National Institute of Water and Atmospheric Research Ltd was not very informative. A number of issues about the way this Crown research institute spends money need looking into. I actually learnt more about the institute from the media—and particularly from Tom Frewen’s article in the National Business Review—than I did from the select committee’s investigation.

The article discloses that the National Institute of Water and Atmospheric Research Ltd has been through a major rebranding exercise. It has beefed up the number of staff in communications and marketing, has ordered new letterheads and a new logo, and has extended to a new building. The institute has moved its Auckland offices and undertaken a refit of the new building. The annual report from the National Institute of Water and Atmospheric Research Ltd reveals only that there was $58 million of capital spending on a number of issues, which included accommodation upgrades. It is impossible to find out how much was spent on accommodation upgrades, but I understand that the institute has moved from Newmarket to the Viaduct Basin.

I asked the Minister of Research, Science and Technology, the Hon Dr Wayne Mapp, by how much the rent had increased, and the total refit cost of the new building. The Minister refused to answer my written questions, on the grounds that the matter was an operational matter that he took no interest in. But I understand that the rent far more than doubled, that the old premises were plenty big enough for the staff, and that the refit cost around $3 million. If those figures are wrong, I would like the Minister to correct them in the Committee, but as far as I am aware at the moment, those are the figures being talked about. That is $3 million—plus the rest—that could have been spent on science, particularly the science that the National Institute of Water and Atmospheric Research Ltd does around climate change, which is one of the foremost issues of the day. The select committee itself made the very mild observation that it thought that the National Institute of Water and Atmospheric Research Ltd could address climate change issues in a more proactive and public way. The money could have helped them do that.

The National Institute of Water and Atmospheric Research Ltd’s mission statement is “to conduct leading environmental science to enable the sustainable management of natural resources for New Zealand and the planet”. But when a National Institute of Water and Atmospheric Research Ltd scientist tries to address climate change issues in a more proactive and public way, he or she gets into very deep trouble. One scientist who previously worked at the institute has been the public face of that organisation for years, is well known on television, and is well loved by the public for explaining clearly what is going on with the weather and climate—that is Dr Jim Salinger. He was a lead author of the Intergovernmental Panel on Climate Change and contributed to the Nobel Prize that the panel and its leading scientists received. He is world famous. Last month he was sacked for addressing climate change issues in a more public and proactive way and was given 3 hours to clear his desk. Again, I invited the Minister to take some responsibility, and asked a question in the House, but the Minister replied that it was an employment matter for the board and chief executive of the institute and not a matter for the Minister. That is absolutely right when we are dealing with matters of administrative detail, but when does a scandal over the sacking of a world-leading Nobel scientist for doing his job—a scandal that reached the pages of Nature magazine—become a matter for the Minister? When does New Zealand’s international reputation become a matter for the Minister? It appears to be never for this Minister.

Salinger is not the only one. Dr Andy Reisinger left the National Institute of Water and Atmospheric Research Ltd and now works for Victoria University, where he has more academic freedom. He described the sacking of Dr Jim Salinger as “incomprehensible”. Dr Dave Lowe left the institute 18 months ago and now works independently, because he wanted the freedom “to get on with the job”. The problem here is that the institute has a culture where corporate bureaucracy is put above good science. It has a culture where obeying bureaucratic rules is more important than being a world-leading scientist. It has a culture where academic freedom and the freedom to speak out is a sackable offence. I am not talking about criticising the organisation or Government policy; I am talking about the freedom when on the West Coast to ring a television presenter with whom the institute has a contract and say that it is raining so hard the rivers are flooding.

Hon GERRY BROWNLEE (Minister of Energy and Resources) Link to this

The member who just resumed her seat, Jeanette Fitzsimons, started her speech by saying that the work of the Education and Science Committee in conducting the financial review of the National Institute of Water and Atmospheric Research Ltd was not very informative. I suppose on the details of what are essentially employment issues the report is not informative, but on the substance of what the institute does I think it is very informative. I will give some of the information that is contained in this report so that people can get a sense of it. The National Institute of Water and Atmospheric Research Ltd is a very fine organisation and very focused on the work that is precise to it—in other words the long-range forecasting and consideration of matters relating to our atmosphere.

In the year in consideration the institute employed in excess of 750 people at some 15 locations across New Zealand. The member was upset that of a $58 million capital spend, some $3 million was spent on refitting facilities. I simply suggest that even scientists like to have up-to-date facilities to work in. I do not see too much of a difficulty in an organisation that was able to turn a $10 million profit last year spending some of that money on making sure that facilities are right and appropriate for its workers.

In that regard it is worth noting that in New Zealand we are often critical of the extent to which there is a Government agency involvement in the sciences. This particular organisation is a commercial organisation, but it is owned by the Crown. In the last year, its revenues were some $120.7 million, and that was money paid to the organisation, in one way or another, for particular pieces of research, for some information, and for activity that blends science with our economy and our economic activity.

I will point to some of those current activities. Firstly, one of the activities that the Education and Science Committee wanted to highlight in this report was the ensuring of a secure and sustainable energy supply for New Zealand. A collaboration of Crown research institutes has been brought together under the lead agency, the National Institute of Water and Atmospheric Research, and funded by the Foundation for Research, Science and Technology, to give New Zealanders better information about what we need for a future energy supply that can be produced and relied on as a fuel source, from sustainable fuel feeding.

This agency was also involved in achieving higher returns from aquaculture—something quite different. New Zealand is a country that makes a reasonable amount of export dollars from aquaculture. In my view, aquaculture has one of the biggest potentials for rapid expansion, and the work that the National Institute of Water and Atmospheric Research does in working out the best places to locate aquaculture facilities and the best species to farm, etc., is extremely valuable.

It also undertakes a lot of other fisheries work. For example, I know that tuna fishermen will routinely contract with the National Institute of Water and Atmospheric Research for water temperature information, and from that information the fishermen will be able to work out where the tuna are most likely to run. The net effect of that is that the fishermen can position themselves for those runs using the least amount of fuel possible and can be at sea for the least number of days possible. Those sorts of mergers between the science of climate monitoring and the activity of fishing indicate how closely science and business can work together.

The wise allocation of fresh water is part of the work that the National Institute of Water and Atmospheric Research does—it provides the advice stream around that. No one in this Chamber would not understand that the future of our freshwater supplies in New Zealand is a matter that we should all be concerned about. Throughout the country there are issues around the overallocation of groundwater resources and the potential for water storage above ground. Those activities can be augmented by much of the work that the National Institute of Water and Atmospheric Research does in this particular area. I think it is a very good organisation, and this is an excellent report; the Committee should be eager to adopt it.

Hon DARREN HUGHES (Labour) Link to this

The Committee is debating the Land Transport New Zealand financial review, which, alongside Transit New Zealand—as it was—now makes up the New Zealand Transport Agency, for which the Minister of Transport, the Hon Steven Joyce, has full and sweeping authority and power.

One of the things that the Opposition would like to question the Minister on today is the attitude he has taken to important transport projects in New Zealand. My colleague Darien Fenton will raise some public transport matters with the Minister, but I am particularly interested in—

Hon STEVEN JOYCE (Minister of Transport) Link to this

There are no easy options in respect of the Waterview Connection, of course, unless the member Darren Hughes is now telling us that the proposal of the previous Labour Government, whereby 160 houses would go, is not on the table. At the end of the day the difficult thing for all of us, unfortunately, is that these things are measured in monetary terms. It is an important time to think about that, given that this week is Budget week.

I actually have some questions for the Opposition around the issue of Waterview; I have a couple of questions that I think members opposite need to answer. They can say what they like about the Mt Albert by-election, but this Government has been upfront with the voters of Mt Albert, and it has said: “This is what we can afford to do. We understand the costs it imposes. We are going to be upfront with you. We are going to talk about Waterview before the by-election, so you get the opportunity to make your choices.”

Of course, Opposition members are not taking that approach. They are saying everything is possible and the expenses are not real. In Budget week that is a particularly ironic thing for them to be saying. They have criticised the Government policy statement. They have criticised the new Government’s changes to the policy statement that the previous Government put together, which put more investment into the State highway infrastructure. That, for the benefit of my learned—and I say that advisedly—friend Mr Hughes, is why we can build this particular project from within the National Land Transport Fund.

Here is the first question for the Labour Party. Its members have been criticising intently the Government’s changes to the National Land Transport Fund. Are they now saying they would endorse those changes? They have to say they would endorse those changes before they would be able to even begin to build the Waterview tunnel. Let us get that clear. I invite the next Labour speaker to advise us whether that is something Labour is planning to do. If Labour is not planning to do that, then we know it is all complete puffery and a Labour Government would have to borrow the $2.77 billion or the $3.2 billion. As the Prime Minister pointed out today, the cost of borrowing money for and building twin three-lane tunnels is $3.2 billion, and that is the direct comparator with building a three-lane option in each direction from within the National Land Transport Fund. Labour members need to tell us whether that is what Labour is proposing to do.

They need to tell us that as well in terms of the Budget this week, because the $3.22 billion, or the $2.8 billion if we go with the non - future-proofed option, would have to go on top of the Budget spend this week. Whatever debt the Government turns in in its Budget on Thursday would be added to by whatever amount these people say they would spend in order to build Waterview. That is what the country has to face, and that is the difficult part. Members can sit there in Opposition and say they will do this, that, and everything, but we find that nobody believes that is what they will do. Voters will look at those members in 3 years’ time and ask whether they can trust them with the Government finances—with taxpayers’ money and with taxpayers’ income. If those members persist in saying that a Labour Government would spend that amount of money on Waterview, regardless of the economic situation in New Zealand, then I am sorry but they will never get voted back in in this country while they have that attitude. It is simply not conscionable for anybody to make those sorts of statements in a financial sense. If Labour takes that approach, that is fine. Will Labour members also say that a Labour Government would find a way to build the central business district tunnel in Auckland and that it would all be costless, or that it would build a train line to Manukau, out to the airport, and that it would all be costless?

Perhaps the Hon David Cunliffe, who has just entered the Chamber, would be prepared to answer these questions as the Opposition spokesperson on finance, ahead of the Budget being delivered on Thursday. I think Labour members owe that kind of honesty to the people of Mt Albert, before they vote in the by-election. Are Labour members really saying that in the current economic environment, a Labour Government would go out and bore the deep tunnels at Waterview, particularly when this Government has identified an option that addresses a large number of the issues in the Waterview community? It does not address all of them; I am completely open about that. It does cause issues with regard to the Alan Wood Reserve. The only thing I can point out with regard to that is that, at the end of the day, it is a railway reserve. I know that option is not the whole answer, from the people’s point of view. But the questions that Labour members must answer are whether they now endorse the Government policy statement on transport, and accept that the Government’s approach is the only reasonable approach to building the Waterview project in Auckland. Thank you, Mr Chairman.

DARIEN FENTON (Labour) Link to this

Thank you for the opportunity to speak on the financial review of Land Transport New Zealand. First of all, I say to the Minister in the chair, Steven Joyce, that he is the one in Government, so we get to ask the questions and he has to answer them. It was a bit confused there, for a little while. I refer to the Government policy statement. Labour is criticising it. I want to criticise it in particular concerning public transport services infrastructure and the cutting of up to $335 million over the next 3 years.

I ask the Minister why he has such a motorway fixation. The Government is roads mad. It is very interesting. I live in Auckland, unlike many Government members, and I have to get around Auckland. I know the issues. The Minister is on record as saying that Aucklanders do not use public transport—they go to work in their cars. Does he know why? It is because of the underfunding of public transport for decades, prior to Labour becoming the Government.

I have news for the Minister. Aucklanders do use public transport. They use the trains. The trains are used to capacity. The Northern Busway is used to capacity. Who was involved in building new infrastructure, public transport infrastructure, like the Northern Busway and the double tracking of the railways? It was the Labour Government. And people use them.

I would like the Minister to answer a question. What does he think needs to be done about Auckland’s car ownership? There is a big problem in Auckland with car ownership. Auckland, per capita, has the second-highest car ownership in the world. On the North Shore, car ownership is equal to the first-highest country. That is shocking. People have cars, and when we build more roads, people get on them in their cars. [Interruption] That is true. “Crusher” might take care of a few of them. The more the Government builds roads, the more they fill up with cars, unless there are alternatives. Labour increased funding, over many years, by 15 times, to fund public transport alternatives so that Aucklanders had a choice. But now we have a Government that has cut back that funding.

What else has it done? It has cut the regional fuel tax; it has dumped it. That has left Auckland $200 million short. Where is the railway station in New Lynn? Where are the new ferry terminals? Where is the electrification of the railways? Where are the new railway stations, and other forms of public transport infrastructure? I say to the Minister that they have been dumped. Aucklanders are extremely disappointed and extremely worried about it, and they are desperate for alternatives and for the Minister to give them an answer to the question about the alternatives to driving on clogged motorways, other than building more roads.

He is “Tarmac Man”. At the moment there is a tarmac vision. [Interruption] I thank the member for referring to cycleways, because National is making a lot of its $50 million for a cycleway. [Interruption] No, “Crusher” will get their bikes, if we are not careful! The $15 million that cyclists are losing was designated for making life safer for commuters. As we know, making life safer for commuters gets cars off the road. It means one fewer car on the road, and it means less pressure on our roading infrastructure. There is cleaner air, people exercise more, and communities are healthier. I do not think these simple facts are understood by National.

In fact, there was a great quote in the weekend from Christine Rose from the Auckland Regional Council. She said that we need a city run on fat, not oil. Cyclists are trying to encourage this Government to build more safe cycleways throughout the city, not across the country.

The other question I have for the Minister is how he plans to ensure that by removing $41 million from previously budgeted spending on road policing over the next 3 years, the road toll does not go up. I want to know what the Minister thinks his legacy will be in terms of road deaths.

Hon STEVEN JOYCE (Minister of Transport) Link to this

I cannot let the moment go without putting some facts right and also responding to the honourable member, of course. I notice that she has quoted the noted right-winger Christine Rose from Auckland on the subject of transport. I note also that the member is seeking that the Government do something about car ownership in Auckland. I gained the complete understanding that that meant there was too much of it, and that we should therefore somehow control it. I think the good burghers of that city will be interested to know Labour’s view on that. I am wondering what the limits on car ownership are.

I know it was someone from this side of the Chamber, but I remember a Spanish gentleman in the mid-1980s called “Carlos Days”, who came out of this Parliament. I just wonder whether the member opposite is actually proposing that “Mr Days” reappear on the scene in New Zealand, or whether perhaps she has some other method of control to reduce the number of cars in Auckland. I think that would be an important policy for the Labour Party to announce before the next general election, and possibly even before the upcoming by-election. It would be nice to know that Labour is planning to put some sort of limit on the number of vehicles that people are allowed to own—perhaps one per every second house—or maybe it was saying that cars could be driven only on certain days of the week.

The point that I think the member has not grasped is that we are trying to promote all transport options in Auckland, while recognising the history of the city and how it has evolved over the last 150 years, in terms of the way people have been transported, and while also recognising certain financial realities along that way. I took it from the member’s speech that the Labour Party remains opposed to the Government policy statement; if that is the case, then that is fair enough. But, as I said, Labour members need to be very clear, prior to the by-election, about what they are actually holding out to the people of Mt Albert. I think that the people of Mt Albert would be pretty concerned if Labour took a policy to that by-election that said it would do this and that, and then, subsequently, prior to the next general election or in a couple of years’ time, it then had to turn that policy around.

Let us also point out, in terms of the record on public transport, that the previous Labour Government spent $484 million on public transport over the last 3 years—

Hon TAU HENARE (National) Link to this

I want to make a couple of comments especially directed at Darien Fenton. You see, the problem is—

DAVID BENNETT (National—Hamilton East) Link to this

Following on from that very good point my colleague made about the roads of national significance, I think it is important that we just take some time out in this debate to reflect on the change we have seen in this portfolio, with the new Minister. I think we are very fortunate to have a Minister with great financial expertise, as he detailed in his last speech to the Committee in regard to this financial review. The Minister also has good business nous, which has been sorely lacking among the Labour members who have tried to take on this portfolio in previous years. The reality is that we see that in those roads of national significance. It is not an unusual concept. It is not something that the previous Labour Government could not have thought up or followed. It is actually something that is done in Australia, where the major infrastructural developments are taken away and put in a different pot. That pot has a much simpler system, which enables those roads to be built a lot more quickly.

This has been going on worldwide for many years, but consecutive Ministers of Transport under the previous Labour Government failed to do it. Those Ministers thought that their job was just to look after the portfolio, and to make sure it did not get too much publicity. They were keen to go into budget rounds to try to pump up what they were doing and to make it look better than it actually was. They had no constructive plan for what was important for New Zealand’s infrastructure going forward. They made no concerted effort at finding out what we actually could do to make our infrastructure programme more viable and effective. I congratulate this Minister of Transport on doing that, on taking out the roads of national significance and putting them in a different pot, so that we can build those roads and deliver the major infrastructural projects that the Government needs to deliver for this country, and that the public expects of this Government.

That is the vital thing that I think previous Labour Governments failed to do. Those Governments failed to look at transport and this portfolio in a wide sphere. They just looked at babysitting the portfolio, and the result is that we have had to make some more fundamental reforms, in the sense of the projects of national significance.

This financial review relates to Land Transport New Zealand and Transit New Zealand, the two organisations that were put together by the previous Government. Whether that combination will be as effective as was planned, is yet to be seen. However, it does give us the ability to go forward with the programme we are undertaking. That programme is a result of years of a lack of value for money in transport. There were continual projects and reports on how the transport sector was not performing, in the sense that the Government was not getting value for its money and its investment. Through those review processes, the previous Government basically tried to hide the problem, and said that it would reinvent the wheel.

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

It is a pleasure to take a brief call on the Retirement Commissioner because, of course, the Retirement Commissioner is charged with helping New Zealanders prepare for their retirement. It is particularly important to draw attention to this matter in Budget week because here we have the coming together of two great objectives: providing for our senior citizens’ future, and making sure that we have enough savings in our economy.

It is a matter of amazement to the Labour Opposition that this Government is toying with the irresponsible idea of suspending contributions to the New Zealand Superannuation Fund. At a time when credit-rating agencies are saying that the No. 1 problem facing New Zealand is our external deficit—not our Government debt—and that a key part of that deficit is actually our savings gap, which those payments help address, why on earth would we suspend payments? The argument that is put up by members opposite, of course, is that we would have to borrow money to put money into the New Zealand Superannuation Fund. Well, here is some news for those members: the Government has a borrowing plan across the whole of the Government Budget. It is totally arbitrary and totally illegitimate to say that that borrowed money goes on any one component.

The Government should take the advice of the chief executive of the New Zealand Superannuation Fund, who said in front of the Social Services Committee that this was a once-in-a-lifetime opportunity to buy assets when assets are cheap. It is ironic—is it not—that this Government is led by a former financial trader. Traders typically seek to buy low and sell high; this Government is seeking to buy high and sell low. It is absolutely ridiculous. The bottom line is one that Bill English has often reminded Parliament about. [Interruption] Craig Foss is a smart guy, and he knows it: there is no free lunch. If we stop paying money in now, we will have to do one of a number of things. Either we will have to stop paying out at the same rate later, which means raising the age of entitlement or cutting the benefits, or we will quite simply have to pay in more later, or fund it by some other means. There is no free lunch.

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

Let me stand to take a call on the Retirement Commissioner. I make the point, first of all, to the few poor people who may be listening that National proudly says there will be no cuts whatsoever to superannuation. It is locked in securely; we said we would lock it in. It is slightly above 66 percent of the average wage at the moment; it is a little bit more than that. It is with quite some pleasure that I can say that, as of 9 April, there were 539,000 superannuitants and people receiving the veterans pension. I am proud to stand here right now and tell superannuitants that superannuation is locked in and is there as a surety for them. We know that these are tough times for those on a fixed income like superannuation, and they need an assurance that that money is there for them.

Let us talk a little about the work that the Office of the Retirement Commissioner has been doing, which is pretty impressive in many respects. There is no doubt that, when it comes to the need for people to fund their retirement, we should be talking to people earlier rather than later. The office has done work on that, such as the www.sorted.org.nz website. It does it in a part-time capacity. I think that, given the work that it covers, it does an outstanding job in the time that it has got.

The office has been working in conjunction with the Ministry of Education to teach financial matters in the classroom. That has been very impressive. It was brought in by the previous Government. It is something that the office has been running with and something that we have taken close notice of. We have seen it work for those young people, who work out how they can get themselves better sorted financially so that they can accomplish the things they want in life, such as buying a home, going down to one income in order to raise a family, and managing themselves through the most difficult times.

Superannuation is locked in under this Government. That was a promise that John Key made, and it is a promise that he is quite happy to stand up and make absolute.

SANDRA GOUDIE (National—Coromandel) Link to this

I am delighted to follow the excellent Minister the Hon Paula Bennett. She is absolutely right. Right now our superannuitants want certainty; they do not want scaremongering from Labour. They do not need Labour members of Parliament going out and telling people that things are not as they are. National is standing by superannuitants, and people should not listen to the scaremongering of Labour members of Parliament. All those members do is undermine people’s sense of well-being by scaremongering. The Minister is absolutely right that we need to give people the certainty and the surety that they are supported during these tough times. That is why she is such a great Minister.

She is absolutely right when she talks about the website www.sorted.org.nz. That has been a huge success on the part of the Retirement Commissioner—absolutely huge. So many more people are visiting that website now. Last year more than 1.2 million people visited it, and more than 220,000 booklets have been distributed throughout New Zealand, as well. Diana Crossan, the Retirement Commissioner, says that people are not taking just a cursory look at this website, but are taking a really close look at it and using the calculation provision on it.

It is all about improving people’s financial literacy and that is really, really important as well. That is why the Retirement Commissioner is working not just with the over 65s, but with our young people in primary schools, and with high schools and the tertiary sector. It is about financial education and financial literacy for the whole spectrum of our society. It is about instilling some financial literacy in our generation and in future generations—future adults—to keep that literacy going. It is such a huge step forward in the way the Retirement Commissioner has been operating, and I applaud all her efforts in that regard. This is a very big part of the focus of the Retirement Commission.

The Retirement Commission’s national strategy for financial literacy has a vision about personal financial well-being for all New Zealanders. The sooner we can start educating our young people about the importance of managing money and managing it well, the better. There has been a huge disconnect in that regard for a generation and we need to pick up on that, improve it, and make such a difference in people’s lives as they plan for their future and their retirement security. This is not just about people who are over 65, but it is about our young people, as well—getting them to plan and plan ahead for their own retirement. The mission statement states: “New Zealanders are financially well educated and can make informed financial decisions throughout their lives.”

That is one thing National is really good at—managing money. I have to say that Labour members have never managed money. Mother Hubbard stripped the cupboard—it was bare.

The Labour Government knew how to spend that money ahead. So if anyone ever wants financial advice, I would say: “Never go to a Labour member of Parliament.” They just cannot cut the mustard when it comes to money. That has been proven time and time again. When we took office, when the New Zealand public decided they needed a Government that could actually look after them, particularly in regard to their money, we opened up the books and saw that the cupboard was absolutely bare, and then some. Labour spent ahead, and spent more than it had. I take as an example the Nature Heritage Fund. Labour spent the next 4 years—

Hon DAVID PARKER (Labour) Link to this

The speaker who has just resumed her seat tried to reinvent history and say this Government inherited a poor set of books. The reality, as the fourth estate knows and as anyone who is informed knows, is that the incoming National Government inherited the third-lowest Government debt to GDP ratio in the world. The previous Labour Government had run surpluses, which were criticised every year by National, which called for higher tax cuts. Labour ran surpluses and we left the Government books in very good order, indeed.

We heard the Minister Paula Bennett refer to the “few poor people who may be listening”. I do not know what that meant, but I can tell members that a lot more poorer people will be listening in future years, because without the pre-funding of superannuation it is far less likely that superannuation entitlements will be able to be maintained in the future. The National Party appeared to have a road to Damascus experience about 4 years ago, when it changed its mind on the issue of advance contributions in order to pre-fund superannuation. We all know that our population is ageing, and that as it ages a greater proportion of people than at present will be reliant on Government superannuation. Intergenerational unfairness, as well as real Budget pressures, will be created if we do not put some money away now to create a fund for superannuation for that larger number of people.

We also know, of course, that about 3 or 4 years ago the National Party was so desperate to get back to the Treasury benches that it would tell people anything that it thought they wanted to hear. So National tried to perpetuate the myth that people could have everything they already had, plus tax cuts. During the election campaign John Key promised that he would maintain contributions to the Superannuation Fund at the same rate as was the case previously. We already have a broken promise there, but why should we be surprised about that? In a former National Government, Bill English cut superannuation, and the Muldoon National Government introduced the superannuation surtax. The next National Government, under Mr Bolger, broke promise after promise on superannuation, as well.

Here, again, we have a broken promise by National on superannuation. I say to Mr Garrett that he should be listening to this, because he knows what National promised during the election campaign and that it has now resiled from its promise and is not pre-funding superannuation. Now we hear Paula Bennett say superannuation is locked in and loaded. Locked in and loaded—what does that mean? That is another metaphor that does not mean much. It sounds like the fire-at-will provision for people who are employed under the 90-day legislation. Superannuation in the future will become as insecure as employment is now under that Minister’s Government.

Superannuation is very important to New Zealand. It is, perhaps, even more important that we improve our savings in New Zealand. We have a current account deficit, and we have poor levels of private saving. What has the National Government done in response to that? It has cut the generosity of KiwiSaver, which, instead of having a 4 percent savings level plus a 4 percent employer contribution, has been cut to 2 percent plus 2 percent. The National Government has cut out the tax credit that was going to pay most of the employers’ cost, and it has also cut out much of the tax credit for employees. We now have reduced incentives for saving, and that will inhibit the future performance of New Zealand economically. There will be less investment capital available to our economy and lower savings available to people in their retirement, and, even more important, the Government is cutting the contributions to the New Zealand Superannuation Fund, in breach of its earlier promise.

In my opinion, this is disgraceful politics. This Government came into power on the promise that it would keep on pre-funding superannuation. That promise was explicitly made time and again. It was an issue of political controversy when National was on the opposite side of the debate, so it changed its position in order to get on to the right side of the politics. It reversed its stance, only to flip-flop again once it was in Government. National has broken its promise to the electorate. Now Mr English says he cannot pre-fund superannuation because National would have to borrow in order to do so. It borrowed for tax cuts—the tax cuts that were so unfair that an incredible one-third of the cuts was delivered to the top 3 percent of income earners. How can that be fair? Of course, the people in that 3 percent are not very worried if they do not have their future superannuation entitlement; they do not really need it as much as most people do. But the majority of New Zealanders will still be reliant on superannuation in years to come. It is disgraceful that this Government is not pre-funding superannuation at this time, because it makes it less likely that superannuation will be able to be afforded at current rates in the future.

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

I am so pleased that the Hon David Carter welcomes my contribution tonight with a big smile and a cheer. I have to say that the Families Commission has been in the news a little bit lately. It has made the headlines in the news over the last few weeks.

This organisation was first established in 2004, so it is relatively new. It is the brainchild and baby of the Hon Peter Dunne. When he was in coalition with a Labour-led Government, he put this issue on the table as very important for him, so we saw the establishment of the Families Commission. It was set up with three main activities: to listen and to identify issues; to research, which means to promote and commission research on issues that matter to the family; and to act to encourage debate to raise awareness and advocacy for the family. If one could identify a major issue that the Families Commission has been closely involved in over the last few years, it would be the It’s Not OK campaign. The Families Commission has been a driving force behind the It’s Not OK campaign to reduce family violence. So it has been working up to become, I think, a very effective commission, indeed.

I believe that the latest appointment of Christine Rankin to the commission shows that it is being set up to be dismantled. Ms Rankin has made it very clear that she does not even know why the commission exists, yet she has just been appointed to it. Her appointment was not done in a straightforward way. It was not done in a transparent, honest way. It was done by the Minister for Social Development and Employment, who took this appointment to the Cabinet appointments and honours committee but failed to tell her Prime Minister the full facts about the appointment that she was making.

JO GOODHEW (National—Rangitata) Link to this

I think it is helpful to reflect, given that we have had a lot of feedback in the last 18 months or so from New Zealanders asking what the Families Commission is and just exactly what it does. It is an autonomous Crown entity whose functions include encouraging debate on issues that affect families. Certainly, no New Zealander would say that that was not a good thing. The Families Commission is responsible for promoting and undertaking research about families and helping to shape Government policies that promote or serve the interests of families. It is important that it works in partnership with front-line services and non-governmental organisations to carry out those functions. That is an introduction to what the Families Commission does, but where do we find that there are concerns on the part of New Zealanders?

The Social Services Committee prepared a financial review of the Families Commission, and it would be fair to say that the committee acknowledged that there were some things that were good, but that it also had some concerns. I will briefly talk about what we as New Zealanders feel we deserve from the Families Commission, but also about what does not stack up with some New Zealanders—those people who are feeling the squeeze and want to know that their taxpayer funding is going to very good effect.

New Zealanders want value for money. New Zealanders want research that translates into action. What is wrong with that? Not a thing. New Zealanders want a voice for their families, a voice that connects with how it feels to be in their family. There is no great surprise in any of that. In fact, some would say there is no great surprise in some of the recent findings from research that the Families Commission undertook—such as the research that found that teenagers feel they spend enough time with their parents. Actually, a lot of teenagers probably feel they spend way too much time with their parents, and they would like to put a bit of distance between themselves and their parents. The research showed that teenagers feel they spend enough time with their parents. There was also the finding that as a result of the recession some people are working longer hours. Well, hello! Did we need research to work that out? I am not so sure.

There are also some examples of Blue Skies funding through the Families Commission that gave me cause for concern. I will read out the description of one particular example: Strengthening Rural Families: An exploration of industry transformation, community and social capital. The description states: “This project seeks to understand how rural families adjust to changes in the social and economic landscape and how rural families participate in the accumulation and utilisation of social capital within their communities to bring about balance between paid work, community commitments and family life.” I have to say that it sounds a bit waffly, does it not? So I wonder what the researchers found out about rural communities other than the fact that rural communities just do. They get on with it. Rural communities do not wonder; they just pull together and get on with it. In terms of studying rural communities, one should study what they do not have good access to, such as general practitioners, oral health professionals, pharmacies, or high-speed Internet access. Those would be good projects indeed for the Families Commission. But New Zealanders, in rural communities in particular, just get on with it.

The Families Commission has a job to do. It needs to be relevant as an advocate for families and for family members. I have a really good example of something the Families Commission did that I believe was incredibly useful. There was a report entitled Elder Abuse and Neglect: Exploration of risk and protective factors. The Social Services Committee discussed this with the Families Commission and we were told that it was a really good example of the commission’s work having a practical effect, because that research has been used by Age Concern in its work with rest homes and the community, and in helping it to develop other pieces of work. It is absolutely vital, in fact, that the Families Commission is seen to be relevant.

Probably never before, in the last two or three decades, have New Zealanders been so intent on knowing that their Government and Crown entities are making very good use of the money that New Zealanders pay in their taxes. Right now it is particularly important for those who have lost their jobs to know that their taxpayer funding—the funding that is actually going out there and being used by entities such as the Families Commission—is being put to good use.

RAHUI KATENE (Māori Party—Te Tai Tonga) Link to this

It would be a relatively easy task to drill down into any social policy to ascertain the relationship of dysfunctional families to policy responses. We can learn about the effects of low income, poor housing, and alienation in rates of educational achievement. We are told that the most severely dysfunctional families may constitute no more than 10 percent of the population, yet are responsible for 70 to 80 percent of serious criminal offending. We will see ghettoisation effects, with pockets of poor health associated with low-income communities—and so it goes on. Yet, when we come to the 2007-08 financial review of the Families Commission, we read “results are difficult to measure or evaluate”. The lack of logic appals me. How is it that we can report on the evident states of crisis and trauma within some families, that we can reveal the chronic, the chaotic, and the destructive lives their members live, and that we can identify families that society would say are failing, yet we cannot measure and evaluate the state of well-being that we in the Māori Party describe as whānau ora. It is this uncertainty—long before Christine Rankin’s appointment was even announced—that has made us seriously question the capacity of the Families Commission to live up to its statutory commitment to act as an advocate in the interests of families generally.

In the same breath as it discloses that the commission is unable to describe the good results it believes it has achieved, the report states that the It’s Not OK campaign against family violence has been very successful to date. The concept of success needs further explanation. Is it really successful when there has been a significant rise—39 percent—in family violence notifications? Although more people are evidently reporting family violence, would real success not be yielded by a reduction in family violence statistics, reflecting an actual reduction in family violence overall? If we are to go on reports we receive from providers and community organisations, it appears to be one thing to have an increased demand for services, but quite another to have the capacity to respond. So the Māori Party welcomes the Community Response Fund for being able to specifically have the means to channel the increased demand for family violence services.

In much the same way, Age Concern using the Families Commission’s research on elder abuse and neglect in its work with rest homes is surely only partial success, restricted by a focus on outputs and activities rather than outcomes.

This is why the Māori Party has been advocating for work to achieve outcomes emerging out of whānau ora. If we are to really see results in whānau ora, we will see a developmental approach that promotes whānau capability. Whānau ora focuses on the whānau as a whole, not children, elders, women, or parents as individual subsets of the whole. Why can we not pool the Children’s Commissioner and the Families Commission together to really focus our efforts on whānau ora?

We went into the relationship agreement with National to achieve significant outcomes in whānau ora, and we hope to see the first foundations of this approach laid in a couple of days’ time in Budget 2009. The Families Commission is legislatively required to have regard for the needs, values, and beliefs of whānau Māori, and to the factors that enhance and maintain whānau strengths and resiliences. These are issues we would absolutely support, but we do not believe that wonders can work in isolation. We want to see whānau-centred policy that facilitates positive and adaptive relationships with whānau. We also want to recognise the interconnectedness of health, education, housing, welfare, employment, and lifestyles as elements of whānau well-being. If the debacle over Christine Rankin has shown anything, it is that we need commissioners who are totally committed to whānau ora, and to respecting the needs, values, and beliefs of whānau Māori as an essential part of their work. New Zealand does not need cheap shots such as that Māori abuse their children more than anyone else.

DAVID GARRETT (ACT) Link to this

I rise to speak in the debate on the financial review of Crown entities. One of the many things we learn when we come to Parliament is the sheer number of boards, agencies, and commissions that use taxpayers’ money. We have a list of them, and I think we are looking at 60 of them today. We are standing and talking about the Families Commission. When I take a quick look at the long list, I wonder how we managed without all of these organisations and how we managed to grow to adulthood without them.

Let us talk about the Families Commission. Christine Rankin is not the issue; the issue is whether the Families Commission should exist at all. It was established in 2004 with the lofty goals of identifying issues by talking with families and organisations, of encouraging debate, and of raising awareness. It may just be that I have not been in Wellington long enough, but to me that sounds like a bunch of waffle. I note it with interest because it is my hope and the hope of the ACT Party that the Families Commission will be part of the fat that is cut from the National-led Government’s expenditure in this Thursday’s Budget.

The Families Commission costs $8 million a year to run. Some would say that is not a lot of money. To paraphrase a saying of our grandmothers, I say we should look after the millions, and the billions will look after themselves. What does $8 million buy? I am told it buys 500 hip replacements, 267 coronary bypasses, 2,280 cataract operations, or 6,957 grommet operations for children who suffer from glue ear. But what did the $8 million that was spent in the last year on the Families Commission get us, other than keeping my Labour colleague Rajen Prasad in a job? What did it give the average family—those outside what the Labour Party now cutely calls the “beltway”, as if that makes us somehow special? What did the people for whom the Families Commission is supposedly set up get for $8 million? It got them a nice, glossy, 66-page brochure. I have a common or garden black and white version here, entitled Reaching Out: Who New Zealanders turn to for relationship support. I wonder how many people have a copy of it on their coffee table at home.

I have had a bit of a leaf through the brochure, and it tells us some quite incredible things. It reads like a sociological thesis written in somewhat down-home language. The section on page 33 is entitled “Informal and Semi-formal Support”. Amazingly, it tells us that passive support in relationships is the receipt of advice and information outside personal interaction. Examples include watching TheOprah Winfrey Show and Dr. Phil, and that was done mainly by Pākehā and Māori participants. Asian and Pacific people talked to their families—gosh, that is amazing! They tended to talk to their aunties, rather than to their workmates. Is that not fascinating? I wonder how much that all cost? This ridiculous document tells us things that anyone with a modicum of common sense would have known. Apparently, many Pākehā males talk about relationship problems with their mates at work. Well, gosh, I never knew that!

What else did we get for our $8 million? In a splurge of activity not long before the last election—and I am sure it had nothing to do with list candidate Rajen Prasad—the commission published a number of recommendations, including one to increase paid parental leave from 14 weeks, as it is now, to 56 weeks. There is a word for that: reckless. Why?