Budget Debate

This is a good place in which to start this speech, because on the Justice and Electoral Committee we have had Māori submitters, time and time again, ask the Labour Māori members of Parliament to oppose the Supreme Court Bill, and what do those members do? They are out there supporting it. And those members say they are conscientious and hard-working! They are nothing like that—nothing like it, at all. They have no regard for their Māori electorates. [Interruption]

Mr SPEAKER: I know what the member is going to raise. I will not have that sort of noise. I know some members have to leave the Chamber to go to committee work, but I want there to be no more noise. I was involved in an important discussion, and I do not want to have to raise this matter again or people will be leaving.

DAIL JONES: The issue becomes a question of access to justice. We are to have $39 million now being spent on a Supreme Court, and we have Māori New Zealanders who struggle to get access to justice for all their cases. The Māori members have no regard for their electorates whatsoever. The report of the Law Commission has looked at the question of access to justice and has made it clear that it is usually people in the lower socio-economic group, like many of our Māori citizens, who are unable to start court cases because of costs. Claims are not pursued because the costs would probably exceed any recovery. People plead guilty to criminal charges in order to close the matter more quickly, and end up with a criminal record that is with them for ever. They sometimes have to represent themselves because of the cost of hiring a lawyer, they have difficulty in assessing and calculating the costs of legal action, and they have large personal debts from litigation.

What is this Government doing about that? It is doing absolutely nothing. We have seen the vote for legal aid, for example, being reduced from $85 million in 1998-99 down to $78 million in 2000-01. This Government should be ashamed of itself insofar as its regard for the hard-working people of New Zealand is concerned. The Law Commission has stated that the cost of access to justice is the biggest problem facing New Zealanders, and this Labour Government is doing nothing about it, other than using $39 million to have a court that the Māori people, in all their submissions, have stated they do not want. That is $39 million to replace a court that currently costs us absolutely zero and is regarded as one of the best courts in the world.

I just want to touch briefly on another matter. The Labour member for Waitakere last night said that in 2007 there will be seven schools in Waitakere City. But I have news for her. We have seven high schools already. I have a list of them: Rutherford College, Massey High School, Waitakere College, Henderson High School, Kelston Boys High School, Kelston Girls High School, and Green Bay High School. That member should get out into her electorate more often.

I raise a point of order, Mr Speaker. I wish to clarify a matter. The previous speaker said that I said there were a number of schools in Waitakere—

The ASSISTANT SPEAKER (Hon Clem Simich): I ask the member whether she is saying that a previous speaker misquoted her. Is she saying it was a mistake?

LYNNE PILLAY: Yes.

The ASSISTANT SPEAKER (Hon Clem Simich): She can correct it then, on a point of order.

LYNNE PILLAY: The previous speaker said that I said there were seven schools in Waitakere, yet I was speaking last night about the number of schools that would be taking part in the Gateway programme.

I raise a point of order, Mr Speaker. I heard the speech, and, as I understood it, the member said there would be seven secondary schools in Waitakere City in 2007. I say that that is how many there are now. I got the impression that more were going to be built.

The ASSISTANT SPEAKER (Hon Clem Simich): That is not a point of order.

I raise a point of order, Mr Speaker. If that member does not alter her words in Hansard—and she cannot now—and she has misled this House, then that is a breach of privilege matter.

The ASSISTANT SPEAKER (Hon Clem Simich): The member was quite entitled to correct what had been said about her. There is no right to enter into a debate about what the member said.

Rt Hon WINSTON PETERS: But you would agree, though, that if what she said is not in accord with the Hansard record, then there would be an action somewhere else?

The ASSISTANT SPEAKER (Hon Clem Simich): There is no need for me to agree to that. It is hypothetical. I thank the member.

As I am the Associate Minister of Energy and the Associate Minister of Transport—both subjects that I have had a long interest in—people might expect me to spend much of my time in this Budget speech on those items. But I am not going to, because, firstly, I am the MP for New Plymouth, and I have looked at this fine Budget with a view to what it means for ordinary people, such as those who live in my electorate.

Budget speeches are an opportunity for members of Parliament to talk about how things are going in their electorates and how the Budget affects the people they represent. It is really important for an MP not to lose sight of the people who have elected him or her. They want to hear their own area being spoken about in the House. A point I think I should make is that it may well be useful for the House to consider having, perhaps once a year, a “state of the electorates” debate, so that other members of Parliament might be informed about what is going on in the electorates of MPs who represent them. I think that many people would be surprised to find out what is happening. For example, there are many people who would not know that Port Taranaki is one of the major export ports of this country, and growing, and that, I believe, it actually ships more cargo out of New Zealand now, as exports, than does the Port of Wellington. That is an example of a statistic that most people would not be aware of. Unless we have the opportunity to speak in the House and tell them, they would not know those sorts of things.

This Budget is about a Government that is actually doing what it said it would do—keeping its word. We campaigned on getting more people into work and on making life better for ordinary people. I want to look at a few aspects that have been pretty dear to my heart over the years, and, being one of the very few members of Parliament ever to have been a tradesman, I say to the House that, in particular, I am absolutely delighted at the success of the Modern Apprenticeships programme. Over 5,100 people were doing new apprenticeships under that programme as at 31 March this year. Over 5,000 people have been placed in apprenticeships since this Government came into power, and that is a marvellous—

Steve Chadwick: Fantastic!

Hon HARRY DUYNHOVEN: My colleague is absolutely right—that is fantastic. And we are well on target for the figure to be 6,000 by the end of this year. More New Zealanders now are working than ever before. Since December 1999, the number of New Zealanders employed has increased by 132,000. I sat in the Chamber—regrettably for only 6 of the 9 years that Labour was in Opposition—hearing Government MPs of the day prattle on, time after time, saying what a wonderful thing it was they were doing. Their efforts were insignificant compared with what this Government has already done in that regard. I tell New Zealanders that this Budget invests in their future. We have done a huge amount—

Simon Power: Unless you are a student.

Hon HARRY DUYNHOVEN: I will come to that, too. We have done a huge amount, particularly with regard to New Zealand’s trade situation. Investment New Zealand has been established, with the merger of Trade New Zealand and Industry New Zealand, and at the Federated Farmers’ conference on Monday I heard our excellent Minister for Trade Negotiations and Minister of Agriculture, Jim Sutton, commended—by Federated Farmers, no less—for the tremendous work we are doing in terms of growing New Zealand’s international trade. He was complimented on his performance and on the way the Government is putting effort into that area.

The Budget approaches the whole issue of a sustainable growth rate as a whole-of-Government approach. If offers certainty and stability in a world that we would have to say has been pretty dysfunctional in the last year or two, with things like tourism incidents, severe acute respiratory syndrome, and all the rest of it. We ask: “OK. What can the New Zealand Government do to give stability?”. I say that it is actually doing it. This Budget reinforces New Zealand’s reputation. Moreover, it reinforces Labour’s reputation as being fiscally prudent and economically pragmatic in terms of—as National wants us to do—spending everything. National has both sides of the argument. On the one hand, my National colleagues on the other side of the House say we should be spending more on this, that, and everything else—and I hope someone is tallying up all the things they want us to spend money on, because Don Brash will not be happy about that—and, on the other hand—

Simon Power: He is not.

Hon HARRY DUYNHOVEN: I am sure he is not. Simon Power agrees with me that he is not happy about the promises National members are making. On the other hand, Mr Brash says: “No, no, no. We have to ensure that the budgetary constraints are put on tightly. We shouldn’t spend anything. We should drop taxes.” They cannot have it both ways. The Minister of Finance has done a huge job in getting things structured and well ordered for the future. We all know that next year will be a tough year. We all know that the drought has reduced production, which means that next year’s export receipts will not be quite as high as they have been. We all know that we are being affected by our terms of trade, especially the value of our dollar against the US dollar. But our Minister of Finance has structured the Budget in such a way that ensures we prepare prudently for the future.

Let us look at some of the areas in which the Government has spent money wisely. Health has received a 9 percent increase in funding, and industry and regional development has received a 43 percent increase. Those are two key areas for the future. I have young children, and I want to be sure that for as long as possible they have a Government that acts in the way this Government is: ensuring that spending is prudent. Let us look at economic growth. Our growth rate at present is one of the strongest in the OECD. We are looking at 4.4 percent growth. That is what we know our growth rate is. Next year is not going to be as good; we know that.

Simon Power: Like 2 percent.

Hon HARRY DUYNHOVEN: Yes, it may be 2 percent, but I say to the member opposite that I think successive National Ministers would have been delighted to achieve what we have in such a short time. Next year we will see, perhaps, a little more than 2 percent growth, but then it is expected to rebound to more than 3 percent. Growth will still be above the OECD average. Let us look at our debt as a proportion of gross domestic product. It is at the lowest level since Treasury began collecting the data. It also is forecast to drop further, to 23 percent by 2006-07. Look at superannuation. We have fully funded it this year. The complete amount, $1.879 billion, has been transferred. Anyone knows that unless we prudently put aside and save for our future we will have problems in the longer term.

The Budget contains a number of specific initiatives. I particularly want to turn to what we are doing within the framework of growth and innovation, because that is a really important Government policy for the future. Over the next 4 years, $140 million, excluding capital, is to go to research, science, and technology; $73 million is to go into promoting overseas trade; and $44 million has been allocated to attract migrants to New Zealand—migrants who have the skills the economy needs; technical skills that we do not naturally have ourselves. Those are the sorts of areas the Budget is addressing. My own electorate of New Plymouth has already dramatically benefited from that. At present, New Plymouth has a very strong growth rate. We have had a number of initiatives, many of them long term—not just the movie that has been filmed there in the last 6 months, although that brought in a tremendous amount of skills and enterprising entrepreneurs who have got out there and used that to best advantage, but a whole lot of things that have been going on for years and years.

I had a dream 15 years ago, of a shipyard in New Plymouth. Reclamation was undertaken. I did the legislation for it. It is in place and happening today. That does not come across as something that can be done overnight, but it is—

Hon Maurice Williamson: “Ah had a dream.”!

Hon HARRY DUYNHOVEN: The member Maurice Williamson is quite right. But it is happening, and we are building yachts. Fitzroy Yachts is doing a marvellous job, creating jobs, employing local people, and bringing new people to the area. It is benefiting Taranaki’s economy with its skilled, high-tech approach. That is the sort of enterprise I want to see generated, and I have lots more ideas. I recommend to the Speaker that we have some opportunity—once a year, perhaps—for each electorate member of Parliament to talk about what is happening in his or her electorate and what they would like to see in their plans for the future. I think that would be tremendous. The Budget speech is probably not the best place to do it, but it is a marvellous opportunity.

I start by saying that United Future is extremely pleased that families got a mention in this year’s Budget, and we are obviously thrilled that a chunk of that will be invested in the long-term best interests of the family through the establishment of the Families Commission. The $11 million promised for a safe and positive parenting media campaign will be a welcome inclusion in the United Nations Year of the Family in 2004.

Beyond that, we need to foster a culture in New Zealand that views parent education as an important investment. United Future looks forward to exploring with the Government ways to facilitate parent education courses for families during those seasons in family life when some help would be most appreciated. These are easily definable moments, such as the birth of the first child, the entry point into school, and the onset of adolescence, when parents are often the most open to the opportunity for some helpful tips. These definable moments also coincide with families making contact with health and education providers, and so provide the ideal chance for the Government to give vital information about community resources that are geared towards helping parents.

Reviewing the thresholds for family support is welcomed. However, United Future would have preferred to see the threshold for family support take into account the inflation rates since 1998, when the current thresholds were set, and we would have preferred to see a budgeted promise to have those thresholds reviewed yearly against the inflation rate as an ongoing and automatic process. Strategies for improving family income are hugely important, and United Future waits in anticipation for the promised improvements signalled to be included in the 2004 Budget.

Getting more people into sustainable employment is a family-friendly focus. The $59 million budgeted to better support low-income parents entering full-time work is a great start. The increase from 37 hours of subsidised childcare per week to 50 hours will make a difference for parents transitioning into employment. However, United Future asks for consideration to be given in the future to families of pre-school children who would like the chance to have a parent at home for those important formative years. The window of opportunity that families get when their children are in their pre-school years to invest personally in those formative years is made all the more difficult by the increasing struggle for families to establish themselves on a single income. United Future looks forward to the day when families with dependants can be targeted with tax relief through income splitting, to give those families greater work-life flexibility and choice. If New Zealand families of the future are to be able to service the parents’ ongoing student debt, save for their retirement, and pay off a mortgage, then the Government is going to have to seriously address the disposable income levels of low and middle income families.

Finally, I have to say that United Future is disappointed at the failure of the Government to give any clear signals to the thousands of kinship caregivers in our nation as to their status and level of financial support they can expect for the contribution they make. We recommend that the Government give kinship caregivers distinct recognition that includes definitive policy and guidelines for those considering their status, and that those caregivers be entitled to either a benefit or a tax credit that reflects the real cost of the care they provide. We suggest that kinship caregivers be entitled to the same range of additional allowances received by foster parents, and that they are automatically entitled to legal aid once their role has been investigated and established by the Department of Child, Youth and Family Services. We think it is time that increasing reliance by social services on, in particular, elderly family members caring for their grandchildren, needs to be recognised and addressed. United Future remains committed to making MMP work, and looks forward to engaging with the Government on these essential family issues.

United Future was delighted to see the provision of $895,000 in this Budget for a second claims development team, and to see that this provision is not just for this coming year but for subsequent years as well. I was also very pleased to see there was a commitment in the Budget to claim development and pre-negotiation as important focuses of the Labour Party and the Government. United Future specifically requested that those claims funds be put into the Budget, and we are very pleased that the Government has responded to that request from us. However, I note that the Office of Treaty Settlements significantly underspent its budget in this financial year. As I said in a speech last week, it is important the office is now proactive—especially now it has a second claims development team—in bringing iwi and other significant Māori groups to the point where they can negotiate and finalise treaty settlements so that we can get the process speeded up.

The second thing that United Future is very happy about is the increased funding for the Waitangi Tribunal. Again, that is something we have been pushing for. The sums of $320,000 this coming year and $500,000 in subsequent years will go some way towards helping to spread the case management system that has been trialled to other case management solutions. Even as recently as last week I was calling for more to be done to speed up the process, and therefore we are very happy with the commitment the Government has made to that. However, this does represent an astonishing turn-round by the Labour Party, and I think that that is due to some extent to United Future’s pressure on, and influence with, the Government, both publicly and privately, to have that process speeded up. I have given many speeches and asked many questions over the last year to that end, and it is nice to see those labours bearing some fruit.

Labour has been vague and woolly with regard to the treaty settlement process up until now. In its manifesto Labour says: “The process must maintain its integrity. Labour will not compromise the integrity of the settlement process by speeding it up beyond the capacity of those involved to a point where the fullness and finality of settlements must be brought into question.” The Minister for Courts, last year, on 17 October, in response to a question from me about funding for claims involving research planning and casebook research said: “Even if research funding was available for all those claims at once, the resources required in terms of personnel and counsel, etc. would not be available to hear all those cases at once. The claimants themselves would probably not be ready.”

In response to that answer, in a speech later in the House I asked: “Why does the Minister simply dismiss the underfunding of the tribunal by saying that even if the research was completed, the claimants would probably not be ready to proceed? How can she know that? Surely, if the Crown were able to go to the claimants and say ‘We’ve got our act together; when will you get your act together?’, it would provide a substantial spur to the claimants to get going. However, as it is,” I said, “the claimants say: ‘Oh, well, the Government has not done its part yet, so there is no urgency on us.’ How serious”, I asked “is this Government in trying to get the settlements through? Moreover, why does the Government not provide the funding that is necessary in order to see all this process through into the tribunal, and to get these matters out of the way so that they can be discussed, negotiated, and settled?” .

We have now seen a turn-round from the Government. Members may like to contrast the response from the Minister quoted earlier with the answers she gave last week to questions I asked her in the House. I asked: “… will she commit herself to doing all that she can to ensure that enough resourcing is provided to the tribunal to implement the new approach for all claims, given her promise to the House on 17 October 2002 that if the Government could resolve historical grievances before 2010, it would?”. Her answer was “Yes.” I asked: “Given the Minister’s commitment to assisting the tribunal to complete its investigations by the 2010 deadline, is she willing to commit herself to a target date of 2015 by which to have 90 percent of historical treaty claims fully settled;”. She said: “… yes, we will put forward our best endeavours to be able to achieve that target.” I think that that is an amazing turn-round in terms of policy, and I am delighted to see it. I will be holding the Government to account on that commitment, so that we can see all historical treaty grievances settled by 2015.

United Future has undoubtedly had a significant impact on this Government’s priorities and policy implementation. In this Budget alone, $140 million has been spent on United Future initiatives and requests. In contrast to the role played by the other minor parties, United Future is making MMP work.

This Government cares about future generations. We want to ensure that our children’s children inherit an economically prosperous country. We want to ensure that future generations inherit a united country—one that is not riven by racial intolerance or greed. We want to ensure that future generations inherit sensible solutions to problems that we, in our old age, will help to create. All of that is evident in the Budget before this House.

But what is also clear in this Budget is a real desire by this Government to ensure that future generations also inherit a sense of identity. That is why a total of $15.2 million has been put aside in the Budget for the preservation of New Zealand’s historic places, stories, and artefacts. As part of this package, $4 million will be spent over the next 4 years to upgrade and restore some of New Zealand’s most significant historic sites managed by the Department of Conservation. The department’s resources have traditionally been used to protect New Zealand’s flora and fauna, and our mountain hut and track networks.

The preservation of our nation’s biological wealth and its breathtaking landscapes is indeed vital work, but so too is the role of the Department of Conservation in historic conservation. The department manages about 12,000 heritage sites around our country. Most of these are archaeological sites that require less intervention than buildings in order to conserve their values, but about 500 of those sites require what the department calls “active management” to ensure they are there for future generations. Until now, the management of these sites has not been as active as it should have been. Important maintenance work has been constantly deferred—but not under this Government. The money set aside in the Budget will ensure that the most significant of those sites receive the attention they so richly deserve.

Those to get immediate attention are Ruapekapeka Pa in Northland, and I know that the Opposition senior whip will be delighted about that, and North Head fortification in Auckland, and I am sure the National member for North Shore, Mr Mapp, will be delighted with that. The Dominion Observatory in Wellington; Godley Head fortifications in Christchurch; and Jacks Hut at Arthur’s Pass in Canterbury are all iconic sites.

The beauty of these sites is that by investing in them the Government is also investing in the tourism infrastructure of New Zealand communities. We are starting to see in New Zealand a gradual recognition that conservation, be it environmental or historic, has significant economic benefits for our economy. All over the country there are examples of innovative communities, reared in a culture of extraction, embracing the sustainable economic opportunities of historic and environmental conservation.

I have recently set the Department of Conservation the task of trying to identify and quantify the extent of the contribution that conservation is making to the New Zealand economy. The work is at a very early stage, but is focusing on three broad areas. The first is the direct contribution that the department’s assets and services are making. I am thinking here of the sizable infrastructure of huts, tracks, information centres, and sites maintained around the country that contribute directly to tourism and recreation. The Department of Conservation manages over 11,000 kilometres of track, 1,000 backcountry huts, 1,600 toilets, and 80 visitor and information outlets. Frankly, no region of the country would be the same without those assets.

The second area the department is looking at is the contribution that conservation makes to tourism. The whole tourism industry in New Zealand floats on the foundation of the public conservation estate. Tourism provides hundreds of thousands of jobs, and it would not be an exaggeration to say that many of those are reliant on conservation attractions for their very survival. Within the boundaries of Tongariro National Park there are 1,000 jobs directly dependent on the mountains. Over 1,000 tourism operations hold concessions to operate directly on conservation land.

In the past 2 years some concessionaires in some regions have seen an increase in business of over 100 percent. I recently met the Mayor of Rodney District, John Laws, who gave me a report from the Rodney Economic Development Trust on the economic contribution that the Leigh Marine Reserve is making to the Rodney district. That report estimates that the 260,000-plus visitors a year that the reserve receives are bringing in $12 million to the local economy. The trust predicts that the tourist trail to the reserve could generate up to $40 million in the future. That is not bad for 5 kilometres of protected coastline!

The final area in which I believe conservation is contributing economically is the provision of ecosystem services. I recently opened the Te Papanui Conservation Park in Otago. This is an outstanding example of an ecosystem service derived from the conservation estate for Dunedin City. The park protects a vast tract of unbroken tussock grassland that, due to farming and ploughing, is now rare and vulnerable in New Zealand. The park sports a diverse range of fauna and flora, with some 547 different species of insect alone found within its boundaries, many of which live nowhere else in the world. Te Papanui’s unusual beauty will no doubt make it a tourist and recreation destination, but it has another value as well. Intriguingly, the area is also critical to Dunedin City’s water supply. Over 60 percent of that supply comes from the eastern slopes of the Lammermoor Range and over the Te Papanui plateau. Tussock grasslands are good for water supply. Their fine foliage can intercept tiny water droplets and fog as it blows over the plateau. The water supply is consistent, regardless of the weather. The Dunedin City Council is so convinced of this benefit that not only did it contribute over $600,000 to developing Te Papanui to protect its water supply but it is replanting tussock in other parts of its water catchment area.

So I challenge the Opposition to start seeing the conservation estate as an asset. ACT is probably a lost cause. It is more interested in destroying New Zealand’s historic and environmental heritage. Look at its views on the Resource Management Act—development at any cost and never mind that future generations will pay the price. Look at the National Party’s view on the Dobson Dam. Just last weekend I was on the West Coast and visited the site. Some National MPs boasted in this House a few weeks ago that they were going to go down to the West Coast to look at the proposed Dobson project. They went down there, but it was raining, so they never got out to the site. I, on the other hand, went and stood in the Card Creek ecological area and saw why that area was gazetted as conservation land in 1983, under a National Government, and I saw why it deserves the conservation status it has now.

Some National MPs want to destroy an ecological area that a previous National Government thought was important enough to protect for our children. They have seized on a power generation proposal that would rip the heart out of a conservation asset, when there are literally dozens of other far more significant alternatives being discussed by everyone else in the country except them. What a pathetic state National Party members are in; they cannot see the trees for the gorse. When are Opposition members going to realise that in neglecting a historic site or destroying a conservation area they are destroying an asset. This Government recognised that fact long ago, and our Budget funding increase for conservation reflects that.

I have just a couple of minutes left, and I would like to mention education. This Budget delivers for education. I have 27 schools in my electorate of Te Atatu. I visit them all; in fact, I call into them very regularly. As a former teacher, I am passionate about education. I can report that virtually every one of the schools in my electorate has engaged, or is engaging, in major building projects—projects that have been dependent on funding that has come from this Government. More teachers are being taken on, and more resources are being developed in our schools because this Government passionately believes that education is the ticket to a good future for the young people of our country. I applaud what my colleague Mr Mallard has done in education. I thank him, on behalf of the parents and children of the Te Atatu electorate and I look forward to more resourcing going into the vital area of education.

This Budget has delivered for New Zealand. It is wide and comprehensive, and has seen major funding in all important portfolio areas, which are investments for the future of our country. Not the least of those is conservation, which has done so very well under this Labour Government.

The 2003 Budget is an utter disgrace. It cements New Zealand on a path to failure. We are facing the most uncertain uneconomic time in recent decades, and Labour’s response is to bend to ignore the major constraints to growth, and squander taxpayers’ money. We have the America’s Cup, Māori television, treaty education, and now we hear that Labour wants to slug the poor old taxpayers with a new $200 million power tax to bail it out of the power crisis it helped to create.

I heard on the news this morning what is going to be a beginning trend, caused by Labour’s meddling in local government—a 300 percent increase in rates for Aucklanders. This is a tax-and-spend Government. It taxes people to the hilt and then asks them to spend more in user charges, stealth taxes, and regulatory fees.

I say to the Labour Government that a core responsibility is to ensure that conditions are in place to allow a country to grow, to enable an economy to prosper, to raise the standard of living, and to increase opportunities. But what has Labour delivered in this Budget? It has delivered a halving of our growth, from 4 percent to 2 percent, so that working families who are struggling to pay the bills and feed the kids can look forward only to a harsher future under this Labour-United-Green coalition Government. On behalf of the taxpayers of New Zealand I say to Labour that that is simply not good enough. Taxpayers deserve better. Hard-working families deserve what the Australian Government delivered to them last week—a tax cut. Small businesses also deserve a tax cut.

We have done a survey of taxpayers in New Zealand. We have had thousands of responses to our petition. One of those respondents said: “As a small-business owner I would like to be able to offer employment for two or three more people if I were given some tax relief.” Another said: “Give small businesses a break. We are the backbone of the country and we’re being hammered by over-governance and growing compliance costs.”

The reality is that a tax cut would boost the economy. With tax cuts we could achieve a 4 percent growth rate and a rising standard of living, especially if it were combined with a bonfire under the bureaucratic compliance costs that this control-freak Government is introducing, as it regulates the free market to death.

The fact is that the values of this Labour Government are out of step with the values of New Zealand families. It is a Government obsessed with power and control. As one of our petitioners stated: “You do not own the citizens of this country. We are free individuals. You have no right to determine how our wages are spent. That’s a decision solely for the rightful owner of those wages—the individuals who earn them.”

Since being in Government, Labour has created a culture of racism, lawlessness, and dependency in this great country of ours, so that a growing number of New Zealanders have now had enough.

Here is another quote: “Like many people, I am tired of working 60 hours a week to support more and more people who are being paid by the Government to do nothing.”; and another quote: “As the sole income earner in a family with a young child, I am crippled by tax to support non-workers. Something needs to be done about our welfare State—too few workers supporting too many unemployed; it can’t be sustained.”

Before Labour changed the welfare system in the early 1970s, there were 28 full-time workers to every full-time person on a benefit. Today there are 4 full-time workers for each beneficiary, and the Budget figures show that that situation will get worse. But I have to say that the information is not easy to find. The Government left the welfare numbers out of the Budget. If it had not been for Treasury posting them on its website, we would never have known that welfare spending is set to increase by $2 billion over the next 5 years, and that all categories of benefit are set to grow, with the sickness benefit and the invalids benefitset to sky rocket.

This soft-on-welfare Labour Government has signalled that the next Budget will be a welfare Budget as it prepares to buy votes for the next election. But along with the United Future party, as each day goes by, this is a Government that is increasing welfare dependency. For every person whom Labour entices on to welfare in the long term, that is a Kiwi life it ruins, and children whom it damages.

The Government’s own research shows that children and families dependent on welfare fail to do as well in all areas of life as those with parents who work, and that children and families without a father are at even greater risk. That is why it is outrageous that Labour and United Future have failed to tackle the problem of 32,000 New Zealand children who do not know who their father is, because their mothers who are on the domestic purposes benefit choose not to name the fathers of those children. ACT believes that every child has a right to know who his or her father is, and we would make naming of the father a condition of domestic purposes benefit eligibility.

Labour and its United Future puppet try to pretend that they care about families and children, with the $28 million bureaucratic monster, the Families Commission. Well, they are misleading the public, because if they really cared about families and children, welfare reform would be their urgent priority. I want to use this opportunity to put on record that ACT’s plan for welfare reform is based on the belief that those who can work should work, and that only work should pay; that we need to help the unemployed overcome the barriers they have to work, with childcare assistance, transport help, and the like, so that when they are offered a job there are no hurdles. But our priority is to reduce long-term dependency, reinforcing that welfare is not a lifelong right.

We would introduce time limits to create a sense of urgency, with guaranteed job placements for those who reached their limits. We also believe that the welfare system should replicate the real world of work, and we would require that those who are able-bodied take part in a 40-hour-a-week programme of work training and organised job search to help them develop the skills, habits, and disciplines of the workforce.

If welfare is modelled on the workforce, it sends a very clear message that welfare is there to provide a temporary helping hand in times of need. But in return we ask that those on welfare have an obligation to have the same 40-hour workweek as the rest of adult society. That plan would turn round the lives of the poorest New Zealanders, because everyone knows that common sense tells us that the only way out of poverty is through work.

But there is another compelling reason to introduce real welfare reform, and I hope that the Government is listening to this. It is not very politically correct to talk about it, but it is the real link between welfare and crime. If one talked to the police, one would be told that over half of all criminal offences are committed by a person on a benefit. The majority of those people committing those crimes come from families without a father. But it is not only that. The majority of all of the victims of crime are poor families on benefits. So the fact is that Labour’s soft on welfare and soft on crime agenda is hurting the most vulnerable people in society. In fact, it is hurting its own voting base.

The Budget shows that there will be more family breakdown over the next few years, more children will be growing up without fathers, and there will be more welfare dependency. All of that tells us that crime will rise. What has Labour done about that? One looks in the Budget, and what does one find it has done to support the police? To my astonishment, in spite of the police being understaffed, overstressed, and outnumbered by the gangs in New Zealand by three to one, the police budget has been squeezed. When Labour took office, 1.9 percent of all Government spending was spent on police. In this Budget 1.6 percent of Government spending will be spent on police. That is a 15 percent decrease in spending on the police by this Government.

That means that when Labour was voted into office in 1999 it ignored the 92 percent of New Zealanders who said to get tough on crime and to put more resources into upholding the rule of law—into law and order issues. What has Labour done? It has slashed police funding. It is no wonder the police are overwhelmed. It is no wonder they cannot investigate basic crime any more and are telling people to try to do it themselves. It is no wonder the methamphetamine crisis is running out of control, and gang problems are escalating. This Labour Government has failed the people of New Zealand.

Kia ora, talofa lava, and warm Pacific greetings to all. This Budget is a further demonstration that this Labour-led Government has managed the economy carefully. In spite of the difficult times, this is a good-news Budget, and a very good-news Budget after the last speech. It is easy to say that this is a good-news Budget, but let us look at the facts. The levels of the operating surplus, growth rate, and debt as a proportion of gross domestic product (GDP), are three accurate indicators of economic management. They are hard facts. Last Budget the projected operating surplus for the year was $2.3 billion. This year the projected surplus is expected to be over $4 billion. At 4.4 percent, our growth rate is up from 3 percent last Budget, and one of the strongest in the OECD. Last Budget, gross debt was forecast to fall to 28.6 percent of GDP, down from the 36.8 percent when the Government took office. In this Budget, gross debt is forecast to fall to 27.2 percent of GDP. That is the lowest level of gross debt as a proportion of GDP since Treasury began collecting the data in 1971. The hard facts stack up. The levels of the operating surplus, growth rate, and debt have all shown significant improvements since last Budget. My congratulations to Dr Michael Cullen!

Last Budget the Opposition said that Labour had got lucky, that the global economic conditions had been good, and that Dr Cullen was just riding on the good times. The Opposition said that global economic conditions may get worse. That was one prediction they got right. But Dr Cullen has managed the economy well during the bad times as well as the good times. Dr Cullen continues to show that he has a safe pair of hands.

With each Budget Dr Cullen has demonstrated the wisdom of prudent financial management. Steady, sensible financial management may be boring, but it is good for our country, and as a result the New Zealand economy is in good heart. The key economic indicators bear this out. Negative international factors will slow the growth rate next year, but it will bounce back because we have the fundamentals right. Inflation is within the target range, and unemployment is continuing at its current low level.

This is a good-news Budget. This Budget is good news for all New Zealanders. This Budget is good news for the people of Mana. The people of Porirua City and up the Kapiti Coast are experiencing a period of economic growth. Steady economic development is the good-news story for the people of Mana. According to the latest edition of Regional Outlook, a publication of the Wellington Regional Council, Porirua City enjoyed an economic growth rate of 5 percent in the year ended March 2002. Kapiti Coast district also faired well, at a respectable 3.1 percent. The report prepared by Infometrics, an independent economic forecaster, shows that there is good economic growth in Mana. Why is that? One reason is that Government policies are working on a regional level, and complement the excellent work done by groups like Business Porirua, the Porirua City Council, the Kapiti Coast District Council, and the initiatives of the Wellington Regional Economic Development Agency.

The retail sector has been an important driver of growth in our area. The report notes that retail trade at the new Porirua MegaCentre adds to the already substantial North City Shopping Centre and was a key contributor to the expansion of the business sector over the year to March 2002. However, the increase in value was spread across many industries. That is good news. It demonstrates that growth in Mana is broad-based and should be sustainable. Mana is home to many, many smart and successful businesses that are benefiting from the Government’s sound economic management.

Let me tell the House about one smart and successful company run by a smart and successful local businessman. Murray Treweek runs Effuzi International, a company that manufactures high-quality seating systems for lecture theatres, auditoriums, and stadiums. Murray’s job is to put bums on seats. He is doing that throughout Australia. Some examples are the Auckland Town Hall, the Bruce Mason Theatre in Takapuna, the Capitol Theatre in Sydney, the 2,070-seat Lyric Theatre in the Sydney casino complex, 18,000 seats at the Bay Park Speedway, 20,300 seats at the Waikato Stadium, 18,400 seats in the new west stand at Jade Stadium, and seating in virtually every university in New Zealand. Effuzi International is exporting over 70 percent of its products. Effuzi International, based in the humble suburb of Elsdon in Porirua, is just one example of successful local companies that are growing and providing jobs for New Zealanders. I can give the House many examples of local businesses that are doing well.

The Government is providing the right conditions for economic growth, and appropriate assistance when required. Labour is transforming the economy. Economic innovation is at the heart of this Budget. To have innovation we must have better education. This Budget places a high priority on education—$1.186 billion in new education spending over the next 4 years has been announced in this Budget. This includes $422 million for the new tertiary education funding system, $400 million for new school buildings, $167 million on an additional 774 teachers, and $84 million to increase the numbers in industry training. Young people who study at the Whitireia Community Polytechnic in Porirua are amongst those who will benefit from this Budget.

The Modern Apprenticeships scheme will receive $56 million to increase the number of places available. This is really important. The Modern Apprenticeships scheme is one of our great successes because it provides opportunities for our young people who will not go on to other tertiary education. In the year 2000, 30 percent of Porirua school leavers left without a qualification. That was not good enough. This Government is putting real money into education to turn round the statistics of educational failure that were the product of 10 years of neglect. We have not forgotten that good education starts at a very early age—$55 million will improve access to quality early childhood education. Some of this funding will go to early childhood centres in Mana.

This Budget demonstrates the responsible leadership that the Prime Minister has provided to New Zealand, and the careful fiscal management of the Minister of Finance. Health, education, economic development, overseas trade, new technology, and the police all receive a funding boost, and at the same time $1.879 billion will go to the New Zealand Superannuation Fund to be set aside for future pension payments. This Budget is good news for the people of Mana, and it is good news for all New Zealanders.

I know that the member who has just resumed her seat is a very sincere member. I have a regard for her sincerity. She called this a good-news Budget. I remind her, when she leaves her office tonight, to please switch the light out, because we cannot afford it. That is good news? I do not think so. This country is being treated terribly. This is a do-nothing Budget. It is a politically correct, do-nothing Budget. I notice that when Dr Cullen sat down after he had announced the Budget, everybody bobbed up and gave a standing ovation, with the exception of United Future members. They were looking at their shoes. They could not have looked any further down. I had to look to see whether they were actually in their seats. They were under the counters.

They now say that but for them this Budget would have been tame and that they captured the spirit of what this Government is about. I heard Peter Dunne say on the radio that the United Future Families Commission Bill, which it has funding for something like $28 million, is the jewel in the crown.

Simon Power: Of what?

PETER BROWN: Yes, of what? There is no definition of family. This is the party that voted against the Health and Safety in Employment Amendment Bill because there was no definition of stress. That party will now vote for a Families Commission Bill where there is no definition of the family. The family is the backbone of this country. It is the greatest institution that this country, and, indeed, all countries in the Western World, have ever produced.

In the last election campaign when I was going around the country I stood against a number of people who stood for United Future. One of those people was a Baptist Minister. He outlined what he believed this country should do for the family. He outlined just who and what a family was. I have to say that United Future has sold him down the river. It has hung him out to dry. If United Future does not take stock of this position and have a definition of the family put in that bill, then the bill is not worth the paper it is written on.

I remind United Future members that should the Prostitution Reform Bill go through—and probably even if it does not go through—under United Future’s bill a family could consist of three or four prostitutes and their pimp living in the same house. The member over there is squirming. She does not believe me. I can tell her that a group of prostitutes living in a brothel with their pimp, will constitute a family under the Families Commission Bill as it is written. I really do not believe that United Future members want to go along those lines.

However, help is at hand. My colleague Dail Jones has a bill in the ballot entitled: the Commission for the Family Bill. It has not been drawn yet, but it has a definition of a family. I will put it in Hansard, because there is no doubt that we will move this as an amendment if and when the United Future bill surfaces in this House: “A family is defined as a family group including an extended family—(a) in which there is at least one adult member, and (b) in which the members have a biological or legal relationship.” We will be moving that as an amendment, I am absolutely certain, to United Future’s bill, and I challenge United Future to vote it down.

But, having said that, one has to say that Labour is responsible for a significant area of growth in this country, namely crime. Violent crime has increased 13.3 percent since this Government came into office, and I have the figures right in front of me if any member wants to dispute that.

Jill Pettis: Now tell us how low burglaries have gone down.

PETER BROWN: Oh, the member is interested only in burglary? Let me talk about what real New Zealanders are concerned about. In the year ended December 1999, according to police statistics, 39,688 violent offences were committed in this country. In the year ended December 2002, 44,960 violent offences were committed in this country. That is a shameful growth in crime. To offer the police a token increase of 50 police in total for Auckland is an insult. That same Minister is determined to see more and more violent crime in this country. He is sitting on his hands when these films that depict graphic violence and explicit sex come into this country. He is doing nothing. There is a film out now, and I will not name it, but it has a 10-minute rape scene, and a homosexual rape I might add—a young woman, I understand, is raped by a homosexual male. The film also has a scene where a man’s head is bashed to pulp.

Hon George Hawkins: Have you seen it?

PETER BROWN: Has the Minister seen it?

Hon George Hawkins: No, I don’t watch violent TV.

PETER BROWN: Nor do I. But if I were the Minister it would not be coming into this country.

Jill Pettis: How do you know, if you don’t watch it?

PETER BROWN: Because I have read the reports. The member should take an interest in what is coming into the country.

Jill Pettis: I do.

PETER BROWN: She takes an interest in what comes into the country through our borders—the meat, the biscuits, and other things, but she should actually be taking an interest in things coming in that affect the mind, particularly the minds of young people. This Government’s approach to crime, and everything associated with that, is an absolute disgrace

Jill Pettis: As a responsible parent I just made sure my children didn’t watch them.

PETER BROWN: That is a good question.

Jill Pettis: No, it’s a statement.

PETER BROWN: It is a good statement. I hope the member will take a call and enlarge upon it. Let me tell that member, because clearly she has an interest here somewhere, that I believe that the law should be on the side of responsible parents, not on the side of those who want to make money out of parents having the anguish of kids watching those sorts of videos.

Let me come back to electricity. Two years out of the last 3 years, the Government has had to plead with New Zealanders to use less power. This year it is not even cold, and we are pleading with New Zealanders to save 10 percent of power. What will happen to the elderly when it does get cold? The Minister told us yesterday that the announcement he made yesterday on the reforms will have no impact on this year at all—none whatsoever. It is an absolute disgrace. The Government has had a year in-between to do something, but it has done nothing.

Let me turn now to another issue that concerns me: namely, transport. Roading in this country has not kept pace with traffic volumes or vehicle type. There is urgent need to address this problem now. I think the new Minister of Transport has picked up on that, and he has the Land Transport Management Bill before the select committee. But I do not believe that that will do it, and I think, frankly, nor does he. There is urgent need for funds to develop our roading, and if necessary, and I believe that it is necessary, the Government should be prepared to borrow from the Superannuation Fund to get on with the job and get our roading up to speed. Debt is under control. Net debt is currently about $18 billion, and there is plenty of scope for borrowing to address our roading needs, and indeed our other transport needs.

This Budget is a King Canute Budget—talk loud enough and one might stop the waves. Well, it will not. This Budget is a “do nothing” so that next year Labour can offer a few little monkeys and lollies to the electorate to vote for Labour again. I hope the electorate is much more wise than it is right now, because New Zealanders are not being well served by this Government.

I rise in support of the 2003 Budget delivered by the Hon Dr Michael Cullen in the House last Thursday. I do so with a real sense of pride in the work this Government is doing, and the programme that this Government has presented to the country for all the people of this country. I believe that there is good reason for the House to congratulate Michael Cullen on his stewardship—his fourth Budget out of probably the dozen he will deliver in this Chamber. Mr Peter Brown, the deputy leader of New Zealand First, thought we had some big plan to spend lots of money next year. Well, we have plans to spend money, and raise money, in this country for the next 16 years of this 20-year Labour Government. When Opposition members see what is still to come, they should be frightened about the effect this Budget will have in terms of the confidence of the people in this Government.

I think the Government was able to come to the House with a sense of pride and purpose in the Budget that was presented. New Labour members of Parliament who joined the Government in its second term—Lynne Pillay from Waitakere, David Parker from Otago, Russell Fairbrother from Napier, Dave Hereora, Dr Ashraf Choudhary, and myself—joined a team that has very much a good purpose for our country. It has been very much an exciting time for us to see what the Budget contained, and to know that the country is moving forward in a steady, firm, logical, and compassionate way. That was made very clear as more of the information about the Budget has come out.

I would also like to congratulate colleagues who have had promotions in recent times—particularly my friend Rick Barker, who is moving into Cabinet roles—and also other colleagues who are stepping up into the ministry. It shows that there is a depth of talent in this Government that cannot be matched by Opposition parties. I believe that when our team gets into full swing, the Opposition will be even more gobsmacked than it has been in the last 4 years. It is a coalition Government, and the Progressive party has played a huge role in the development of this Budget. I acknowledge it, and also our colleagues in the confidence and supply arrangement we have with United Future. It always amazes me how quick Opposition parties are to get up and attack United Future. It is a small and independent party, but it has some influence in this Government and in this House. National and New Zealand First climb over one another to attack United Future, simply because it is a relevant party in this Parliament.

When one looks at the information in the Budget statistics, particularly around economics, there is much to be heartened by. A 4.4 percent growth from a Labour-led Government is something that Opposition members, at the beginning of our term in office, said was absolutely impossible. The sky was going to fall in when Labour took control of the economy. But what we have seen is history repeating itself. Labour Governments have been fantastic stewards of our economy, and this Budget is proof of that. We will deliver growth in the economy that is higher than the OECD average this year, next year, and the year after. That is something that members of the House should celebrate. We have been consistently above that average. Inflation is heading down to below 2 percent for 2004-2005, so the monetary policy of the Government is very strong.

There are other economic statistics in the Budget that have not received much attention. I refer members to the debt figures. Although the Budget has been in surplus now since 1994, people often forget that the country carries a significant amount of debt that future generations will have to pay off. When this Government took office in 1999, 36.8 percent of gross domestic product (GDP) was gross debt. Today that figure stands at 27.2 percent. That is quite a large drop-off—almost 10 percent of our gross debt. When one looks at our net debt figures when we became the Government, replacing the National administration, 21 percent—nearly 22 percent of GDP—was the value of net debt. That is now down to 14 percent.

Hon George Hawkins: That’s pretty good.

DARREN HUGHES: As Mr Hawkins says, 14 percent is pretty good going. What it shows is that not only are we governing for today, we are also governing for the future by making sure that future Governments are not shackled by lots of debt.

In my electorate of Otaki, which stretches from Paraparaumu on the Kapiti coast through to the Horowhenua just south of Palmerston North, there is much to be excited about in terms of what is happening in our area. The Budget reinforces the positive work that is being done. I am working very closely with the member for Mana, Winnie Laban, who spoke previously in the debate, to ensure that we get the kind of growth and jobs we need to lift living standards for all the people who live in our area.

On the health side of the equation, construction has begun on a new health facility in Kapiti that fits in with the district health board’s redevelopment of services. In Horowhenua, we are working hard to get Government funding for a new health facility to sort out the health issues there, as well. On transport, Winnie Laban and I are fighting very hard and lobbying Transit New Zealand to upgrade the priority of McKays Crossing—which, as members will know, is about 40 minutes north of Wellington City, and where a railway track goes through the middle of State Highway 1. Every time a train goes through and the barrier is lowered, traffic builds up, and in peak times never recovers. It is a ridiculous—

Hon Richard Prebble: I blame Richard Prebble for that.

DARREN HUGHES: Richard Prebble got rid of a lot of those kinds of things when he was Minister of Transport, but he did forget McKays Crossing. Under Paul Swain’s visionary leadership, I am sure we will see that occur. It will open up the coast, which is a very popular place with people from Wellington.

Mention has been made of the Government’s investment in skills training, which is a very important thing, not only when people are in the schooling system, but also when they are in the workforce. How we match up the pool of people who are unemployed to make sure they have skills that match the job vacancies in the economy is a real challenge for the Government. We have to put a lot of effort into that. Sure, while people are at school, we need to make sure that they have competencies in things like reading and writing, information and communications technology, but when they have left the formal structure of schooling and are out there in the workforce, we need to make sure that they are continually upskilling. That will be a big challenge, but through programmes like the Gateway scheme, we are beginning to meet that challenge. As we begin to get people thinking about lifelong learning and making sure they have relevant and appropriate skills in the workplace, we have set the goal of having 150,000 people in industry training.

I am pleased that the Gateway programme will now be rolled out to include more schools in my electorate—Horowhenua College, Otaki College, and Waiopehu College in Levin. Manawatu College in Foxton is already part of the scheme. That is a practical and positive way that the Government is getting on with the job of skills training. We have 48 modern apprenticeships, and I am keen to see that number increase.

Hon George Hawkins: What a good member!

DARREN HUGHES: The member is working as hard as he can. Representing the oldest electorate in the country means that the needs of superannuitants and senior citizens—

Lynne Pillay: The youngest MP in the House.

DARREN HUGHES: The youngest member representing the oldest electorate—it is a funny old world. We are trying to make sure that we look after our senior citizens. We have done that with the cost of living adjustment to superannuation on 1 April that put about $3 million extra into my electorate. We are also moving on asset testing, with a $200 million – plus policy to begin the removal of asset testing. What we are doing for future superannuitants is putting aside the surpluses from today to save for the generations of tomorrow. The current generation of retirees had lots of children. Many members of the House are members of that generation, but the generation that is currently middle-aged did not have enough children. People of my generation, who have to pay all the user-pays charges that other generations got for free, now have to try to fund a large group of retirees from a small pool of people.

That is why I support Dr Cullen’s New Zealand Superannuation Fund, because it is putting aside money to ensure that we can meet the pension bill for the future. My parents should be able to retire at 65 years of age, and they should have certainty in their retirement income. Unless Governments of today’s generation—

Hon Richard Prebble: If it was up to me, you could retire at 25.

DARREN HUGHES: It is up to people of my generation to make sure that the money is there to ensure that.

On the other side of the House, we see a National Party in total disarray. In his Budget speech, the Leader of the Opposition did not propose one single policy that was different from those in this Budget. There were no new ideas at all. There was no policy on the family in his speech on the Families Commission Bill the other day, either, or any alternatives to what National had done. The one last chance Bill English now has is to put all his eggs into the basket of trying to turn the Treaty of Waitangi and Māori issues into some sort of division in our country, in order to get coverage so that he can try to lift his flagging profile.

It is a great shame that a constitutionally significant document like the Treaty of Waitangi becomes something that members of Parliament parade around and try to denigrate, rather than trying to use it as a document we can be proud of—as something that makes us New Zealanders and New Zealand a special country that is different from others. It is an enormously sad thing to me when I look at other countries around the world and see how proud they are of their history and their past. Day after day in this Chamber, we are subjected to denigration of, and political point-scoring against, the indigenous people, when, surely, we should all be trying to work together.

Members on the other side of the House have proposed abolishing Māori seats that have been in Parliament since 1867. There would be no consultation or referendum, or anything like that. They would do it purely for the votes. When it comes to the Supreme Court, they want endless consultation and a referendum, all for something they believe in, yet on the other side of the equation they are prepared to disenfranchise Māori voters who have elected to go on the Māori roll. That is a sad and tragic thing. Then again, members of the brat pack inherited the National Party at 47 percent of the vote when they arrived in 1990, and they have driven it down to 20 percent with their so-called political genius. They are a joke.

New anti-terrorism or security spending comes up in a number of Government departmental budgets. There is a large category of $19.8 million in the immigration budget, supposedly to “manage immigration risks”. No doubt, some of the anti-terrorism spending is justified, but there is also an overreaction to imitate what is happening overseas. It is not so much to keep up with the Joneses but to keep up with the Bushes—that is, George W Bush. It might be fair enough to strengthen security at our embassies overseas, but do we really need to be spending a lot of money on detaining asylum seekers here in New Zealand, when before September 11 we almost always let them out into the community while awaiting their refugee status? I have not been able to find in the Budget papers, or through inquiries to the Minister’s office, how much we are spending on detaining asylum seekers this year. This year’s Budget is much less enlightening than last year’s in terms of breakdowns. Last year’s Budget had an expenditure of $601,000 on detaining asylum seekers.

There will be virtually no terrorist threat to New Zealand unless our Government is silly enough to hitch itself to the arrogant interventionist policies of the United States. All international terrorism—as opposed to domestic terrorism—over the last few years has been targeted at Israelis, Americans, or people from closely allied countries. Of course, the Greens are utterly opposed to and condemn such terrorism, but we have yet to see any evidence of the targeting of New Zealand or New Zealanders, or even Western countries as a category. Keeping out of the war in Iraq was a big plus for New Zealand, although we will make few friends in the Middle East by having our Orion and our frigate in the Persian Gulf and the Gulf of Oman under overall American command. According to the Budget, that deployment will also cost us an extra $5 million,.

The Greens think we should fight terrorism in both its main forms. The predominant form is State terrorism, which we have seen an explosion of this week with the invasion of Aceh by Indonesian troops. We see it on the West Bank in Gaza with Israeli troops again firing on Palestinians. We see it with Russian troops continuing their human rights violations in Chechnya. The Greens favour the use of considerable sums from our foreign affairs budget on political and diplomatic efforts to fight that State terrorism, and it is good to see the Minister of Foreign Affairs and Trade, Phil Goff, visiting the Middle East.

The second form of terrorism is small-group terrorism, as we have seen in Saudi Arabia and Morocco recently, and which continues amongst Palestinians in the form of suicide bombers. We also very strongly condemn all of that terrorism, which is born and sustained by the anger and despair felt by many people in the Islamic world and in other less-developed countries. It is anger towards domineering American Government policies, and in cases like that of Palestine, it is the despair of people who live in an occupied country without any real control over their own future. But military action and over-the-top security measures do not defeat that small-group terrorism. They merely help them recruit, as we have unfortunately seen with the recent atrocities in Saudi Arabia and Morocco. Instead, we should help empower the people of poorer countries and help their socio-economic development.

In that context, it is good that the aid being sent overseas by New Zealand is rising from $230.4 million in last year’s Budget to $245.6 million—a 6.6 percent increase—in this year’s Budget. But it is really only a catch-up for inflation, because in the first three Labour Government Budgets, aid increased by a total of only 5.2 percent. We will still be languishing at around 0.25 percent of gross national income (GNI), compared with the international standard of 0.70 percent.

New Zealand aid is now correctly focused on poverty reduction, on building the capacity of communities, and on human rights. I raise a point of order, Mr Speaker. I think there is a second—

The ASSISTANT SPEAKER (Hon Clem Simich): You will have a bell at the end of your 5 minutes.

KEITH LOCKE: I would like to pay tribute here to those many New Zealanders who are posted overseas, helping more needy countries to build a better future.

We are in the middle of an electricity crisis, and the Government has allocated a miserly $1.4 million extra to the one agency that could help us to solve it. The Energy Efficiency and Conservation Authority is charged with promoting both efficiency, which is technical improvements that will give us long-term reductions in demand for no change in output, and energy conservation, which is simply common-sense behaviour and wise use that can also save money and save us from the effects of this winter’s lack of rainfall. It is conservation rather than efficiency that can get us through this winter. There is not enough time to put in the energy-efficient plant that would have an effect this winter; that is what we need to do for the future. Rather, it is energy conservation—the simple, sensible things like remembering to turn things off when one leaves a room, and the host of other issues that have been talked about—that could have an effect this winter, and that the Energy Efficiency and Conservation Authority could be helping us to implement now.

The Government has taken on board the need for energy efficiency. It supported my bill and passed it, and I was pleased to work with the Government on that. The strategy that the legislation requires is in place and approved by Government, but it is not being funded. At the same time, the State-owned enterprises that generate and sell electricity are profiting from the high spot prices that have been charged in the market. How much they are profiting is not entirely straightforward. For example, Meridian Energy has a lot less water to sell and low-price contracts to Comalco to fulfil, but Genesis Power, which has been running its thermal plant—which is not affected by the lack of rainfall—flat out for months, and collecting high spot prices, must be making a windfall. Last year those State-owned enterprises returned to the Government $100 million from Meridian Energy, $11.8 million from Genesis Power, and $19.2 million from Mighty River Power. This year the balance will be very different, but we can predict that there will be some windfall profits.

I call on the Government to plough those windfall gains into solving this year’s crisis through conservation, and into solving future dry-year crises through efficiency. The Government can do that by funding the Energy Efficiency and Conservation Authority. We could have a bunch of experts visiting every big commercial premise in this city and others, and working with its engineers to show it how to reduce its energy demand without being miserable, without dropping production, and without affecting well-being. The authority could do the same with retail premises. It needs to have the people on the ground, helping people out there to make the practical savings that can keep the lights on and the water hot, but that is not happening.

If we are to have an energy-efficient economy in the future, we have to build capacity. We do not have enough trained energy auditors, and we need to train more. We do not have enough people trained in retrofitting houses. Of the new money, $1.2 million is going towards retrofitting cold, draughty, damp houses, and I strongly support that. But we do not have enough trained teams on the ground to do that, and the quality control is not always adequate. If one asks for a solar water-heater to be installed, one is very lucky if one does not have a plumber come along and put it in with the thermo-siphon working backwards, using electricity to heat the sky. We need a lot more training right through all the energy-efficiency and renewable energy professions, if we are to build a culture and an industrial sector that are capable of running on energy efficiency. That would be good for the economy, would reduce climate change, would protect the environment, would be better for people’s health—because buildings are warmer and drier—and would create jobs and well-being.

Members should compare that miserable $1.2 million for the retrofitting of houses with the $7 million that has just been wasted by David Caygill and the industry’s self-regulating Electricity Governance Board, which is described very aptly by Saturday’s New Zealand Herald as a $7 million flop. That board fell over on Friday and now has to be replaced by a Government-appointed board. We support the appointment of a Government-appointed board and a regulator. We have said for 2 years that that is needed, but let us look at the money that has been wasted!

Members should also compare that $1.2 million for retrofitting with the $1.2 billion—a hundred times as much as that—that is being spent on the next power station, Project Aqua. I say that $1.2 billion could buy a great deal of energy efficiency, which would make new supply unnecessary. The numbers are out of kilter and the balance is wrong. It is time that we started to fund the Energy Efficiency and Conservation Strategy that we have so wisely put in place.

They say home is where the heart is, and, after such a watertight and progressive Budget, I, for one, have been happy to return home to Christchurch Central to measure the Budget’s impact on the ground. Of course, as many of my colleagues have observed, this is an early Budget in what will be a long series. A measured approach is a virtue when it is driven by a coherent strategy, and that is at the heart of this document. Saving for the future through the Superannuation Fund, flagging major new spending from 2004 onwards to help low and middle-income families, and focusing on growth, innovation, and education are classic investments for our future success as a nation, as is driving down the gross debt as a percentage of gross domestic product. That is now at the lowest level since Treasury started collecting data in 1971.

But what does all that mean to a person sipping a long black outside Le Cafe in the Arts Centre of Christchurch—which is the Christchurch Central equivalent of the archetypal man on the Clapham omnibus? Well, I have drawn out 10 themes in this Budget that will bring particular pleasure to my electorate, but first, let me set the scene. Like any inner city electorate, Christchurch Central is one of extremes. It contains the most expensive real estate and the poorest neighbourhoods in the South Island, only three blocks apart from each other. It is increasingly multiracial. It is young. It contains more single-person dwellings than virtually any other electorate. My office caseload is dominated by work and income, housing, and immigration issues.

For me, theme one in the Budget is a growing recognition that investment in State education is an effective way to lessen some of the inequities in our society. There has been real growth in early childhood education, with at least 15 new teachers being employed in my electorate, and the money for new buildings for Christchurch Central schools has grown by 25 percent, to the equivalent of $7 million over the next year. On the visits that I make to local schools in my electorate, an incessant theme is the need for more support for those young people who are failing in traditional education and for extra-curricular activity. The Budget includes spending for the vital Social Workers in Schools programme, which started in Christchurch, and also $11 million for additional sports coordinators in secondary schools.

Theme two in the Budget is health. We all know that even to sustain current health standards will eat up an ever-greater percentage of Government spending worldwide. It is right and necessary that health spending has grown by 9 percent in this Budget, but we are going further than that. The development of the primary health strategy has been fast, efficient, and inspirational to health providers on the ground. In its development, it has drawn much from Pegasus Medical Group, the primary health-care provider that includes nine out of 10 general practitioners in my area. Over the years I have written countless letters advocating funding for such agencies as the 198 Youth Health Centre, which was the nation’s first dedicated health centre for young people, and the Christchurch Union and Community Health Centre. Now that they are part of the city’s first primary health organisation, such vital places will receive adequate reward for those years of struggle. In growing primary health, we are realising a dream. We will be remembered for that in the years to come.

The third theme is justice, and I am happy to take as my text in this area the 1999 referendum on law and order, which I opposed but which 85 percent of the people in my electorate supported. That vote showed that people wanted tough but tender justice policies: longer sentences for the very worst offenders but home detention for those who offer minimal threat, more support for victims, the expansion of restorative justice, and accessible and affordable legal advice. This Budget develops all those themes. The money is there for the cost of those longer sentences. There is also $2 million more for victim support, real growth in tenancy services, and 4 years’ funding to cut the unacceptable waiting lists for the services of the Privacy Commissioner. I am also delighted that in the last year funds were freed to secure the future of community law centres, which National is on record as wanting to close—even though they cost the taxpayer nothing.

The fourth theme is the spending on social development. I am delighted about both the immediate interventions in the Budget, such as $59 million to increase the childcare subsidies and to raise the income tax thresholds for family support and the child tax credit. There is also extra investment to help migrants to become work-ready, and there is the promise of more fundamental changes in our welfare system to come. The benefit system, which has been built piecemeal over many years, has to be substantially reformed if money is to be used to best effect and if people are to able to access what they need and are entitled to.

The fifth theme is housing. Christchurch has comparatively fewer State houses and more private rental housing than the average New Zealand community. It also has the country’s biggest local body housing stock, which is expanding further under our enlightened city council. On the basis of the dollars and cents for housing in this Budget, I look forward to an improvement in the growth of the city’s State housing stock, and also to expanded partnership arrangements between the council and the Government. There is $63 million in the Budget for that partnership work nationwide.

The sixth theme is economic development. Labour and the Progressives are steadily growing the spending in this area, which mainly means grants, training, and advice to companies and entrepreneurs on the ground. That spending has increased from virtually zero when we were elected in 1999 to $192 million in 2003-04—with a 43 per cent increase just in the last year. Thanks to an interventionist local body, Christchurch has had a long history of active support for innovation. The Canterbury Development Corporation has risen to the challenge of the new era, and has an excellent cooperative relationship with Industry New Zealand in the city. The range of clusters it is addressing includes information technology and fashion, and it is also leading the nation in the development of business incubators.

The seventh theme is community. Christchurch contains over 3,000 voluntary organisations that face common challenges, including compliance costs, management performance, addressing the growing diversity of our society, and the recruitment and retention of volunteers. One of the Government’s quieter success stories of the past 3 years has been in building its relationship with that voluntary sector, in growing our understanding of those problems, and also in improving our ability to solve them. It has been a triumph for consultation, for partnership and for the development of whole-of-Government approaches. The Budget includes funds to establish an office for the community and voluntary sector in the Ministry of Social Development, and continued support for volunteering, including volunteer centres. More than in any other area of Government, that is value-added work.

The eighth theme is local government—an example of an area where the Government spends, comparatively, very little. It has also been one of the seminal issues of the past 12 months. The Local Government Act was a resounding answer to years of complaints from local bodies. It is visionary, it is of constitutional importance, and it marks a significant shift of power in our society towards the people. That Act was inspired in so many ways by the leadership role played by the Labour-influenced Christchurch City Council over the years.

Theme nine is the arts. My electorate contains the Southern Hemisphere’s leading cultural precinct. Its shimmering jewel is our brand new art gallery, its heart is our arts centre, and its future is our museum, which is soon to undergo major renovation. Over the last year the Government has invested in all those projects.

For me theme ten is actually conscience matters, which are currently dominating many MPs’ mailbags. Most of them are of minor influence on the Government’s Budget, yet they are especially important matters in inner city areas. The next year will see decisions on prostitution law reform, on whether to pursue the debate on euthanasia, and on expanding the smoke-free law. Parliament should be looking at plans for civil union law, and our Health Committee will be reporting on cannabis law. That is an unprecedented clumping of conscience matters, and I guess it shows that this Parliament is properly focused on issues of human, as well as of financial, concern.

Dr DON BRASH (NZ National): Last week the Minister of Finance presented his fourth Budget. I am bound to say that it was a profoundly disappointing document. The Budget was not surprising, but it was disappointing. I will not attack the Budget for being boring and predictable, as being predictable is, in fact, desirable—indeed, it is mandated by the Fiscal Responsibility Act of 1994 introduced by one of the Minister’s most illustrious predecessors, a former National finance Minister. Nor will I attack the Budget for proposing to run surpluses, as running surpluses is entirely appropriate at this stage of the demographic cycle and, indeed, with a buoyant economy. However, I will argue in a moment that the surpluses proposed are far too large. Rather, I want to attack this no-growth Budget for doing almost nothing to get to grips with the big issue facing New Zealand.

The big issue facing New Zealand is the gap in living standards between New Zealand on the one hand, and Australia on the other. Last week—in fact, just a few hours before the Budget—Mr Jim Anderton gave a speech. I do not often agree with Mr Anderton, but in his speech he said that if we had grown at the Australian growth rates over the last 30 years, it would have meant extra income for the average worker of $175 a week, and it would have meant for health another $3.7 billion a year and for education another $4.2 billion. He also said if our gross domestic product had grown at the same rate as Australia’s, we could have invested twice as much per capita on our transport infrastructure over the last 30 years. I agree with Mr Anderton on that point.

None of us can do anything about the past; what we can change is the future. The Australian Budget assumes growth of 3 to 3.5 percent a year over the next few years. Ours will average less than 3 percent over the next few years; it is projected to average just 2.5 percent a year over the next decade. So the gap between our living standards and those in Australia will not only fail to become smaller but will continue to widen. In terms of our achieving a goal that the Government used to have—namely, getting New Zealand back into the top half of the OECD within a decade—there is not a dog’s chance of that happening.

The gap that exists between our living standards and those in Australia—the gap that will widen over the next decade—has serious implications for New Zealand society as a whole, and it should have been the main focus of the Budget. Instead, we have had a little fairy dust sprinkled around: a little more money for industry training, some small incentives to commercialise public sector research and development, and a modest attempt to ease the compliance costs arising from the taxation system for small business. There was not even any pretence of changing the taxation system to make it more growth supportive.

This Government spent millions of dollars on commissioning a major review of the taxation system in 2001, led by some of the best taxation experts in New Zealand and one or two from Australia. But the Government has totally ignored the recommendations of that committee. As a consequence, we still have a company tax rate that is one of the highest in the Asia-Pacific region. We have a situation where people earning over $38,000 a year—and most full-time workers in New Zealand now earn more than that—pay more than 40 percent of their income above that level in income tax and GST. Most full-time workers now enter that taxation bracket, and, of course, those who earn above $60,000 pay almost half their income above that level in income tax and GST.

The reality is that this Budget proposes to continue overtaxing hard-working New Zealand families and New Zealand businesses. The Minister of Finance sometimes dismisses the idea that growth has anything to do with taxation, and points out that the tax cuts in 1996 and 1998 were followed by a recession. The reality is, of course, that those tax cuts were followed by a serious international downturn and two successive serious droughts. No serious economist doubts that the amount of taxation raised, the marginal taxation rates affecting those inclined to invest and to work harder, and the nature of Government spending are all relevant to future growth. This Budget failed to make any growth-enhancing changes to the taxation system. For a mere 10 percent of the projected surplus, the Minister could have reduced the company tax rate to equal the Australian rate. For less than half the surplus, he could have given significant tax reductions to all full-time workers in New Zealand.

Nor did the Budget make any attempt at all to rectify the problems experienced with the roading system in Auckland, Tauranga, and various other parts of the country. Granted that it makes sense to run a Budget surplus at present, why does it make sense to invest those surpluses in foreign shares and bonds? Why invest them in foreign shares and bonds? I do not propose that the surpluses be squandered on low-yielding projects of marginal value, but the Prime Minister herself has said that traffic congestion in Auckland costs this country $1 billion a year. Transfund has a 4:1 benefit-cost ratio hurdle before it will fund roading projects. There is an abundance of high-yielding infrastructure investment projects available in New Zealand that that surplus could have been invested in. Instead, the Minister is proposing to squander it in low-yielding international shares and bonds, at considerable risk to the taxpayer. It is worth mentioning that the Budget itself provides a 6 percent reduction in Government spending on transport and communications between this year and next—a 6 percent reduction in that spending.

Nor did the Budget make any real attempt to deal with the serious problem of underachievement in our schools. Yes, there was quite a bit of money to pay teachers of pre-school children on a par with primary and secondary teachers, and more money to further subsidise the education of tertiary students, but there was only a trivial amount to deal with the serious problem of illiteracy. There was $15 million spread over 4 years to reduce illiteracy in years 1 to 8 in our primary schools. That is a totally inappropriate allocation for such a serious problem.

The Budget did nothing about reducing welfare dependency either, a serious issue that has been hidden by the fact that the Budget has simply dropped out of sight the traditional forecast of the number of people on benefits. We know that the number of people on benefits is projected to keep on rising over the next 4 or 5 years, but we are denied that information by the Budget.

What has been the reaction to all that? The National Bank states: “The Government’s plans have little growth-enhancing initiative. Effectively, they have just reallocated the pie and have done little to make it grow any bigger.” The Employers and Manufacturers Association says: “The Budget abandons economic transformation and the growth of the economy as the primary goals for New Zealand. It demonstrates the Government has given up on getting New Zealand back into the top half of the OECD.” Even Chris Trotter, who can often be relied on to find something positive to say about the Government, concluded: “The Budget was delivered on a theme of smart growth. Frankly, I am sceptical. According to economists, the key to long-term economic success is a sustained improvement in labour productivity. But Michael Cullen’s Budget contained nothing that suggested such an improvement was imminent.”

The Minister had a great opportunity to contribute to a faster rate of economic growth. Tragically for New Zealand, he muffed it.

That speech was very disappointing. Even the press releases by the National Party finance spokesperson suggested that this Government is spending too much money, particularly in the welfare area. Yet we have other members of the National Party, including its leader, saying we are not spending enough. That party is completely confused. Some of the party are pulling in one direction, and the rest are pulling in a different direction. No House divided against itself can stand, and I suggest that divisions within the National Party also indicate that it has not got over its leadership problems.

It has a finance spokesperson who, in the dead of night, at 5 o’clock—and I am just wondering who picked the slot for the National Party finance spokesperson, and whether it was Bill English who picked the slot that is buried halfway or three-quarters through this debate—finally gets up to speak about the Budget. That is a very poor state for the once-proud National Party to be in, and I am very disappointed that the former Governor of the Reserve Bank, a financial spokesman of some repute, ends up being buried three-quarters of the way through this Budget debate. I need to ask why he has this slot. I want to know who put him there. Was it Bill English? We are concerned about Her Majesty’s Opposition and the state it is in. Enough of that, because the previous speaker is continuing to preach discredited economic philosophy, and nobody really wants to take any notice.

I want, firstly, to congratulate Dr Michael Cullen, the Minister of Finance, on a very responsible Budget. There is no question in the minds of most New Zealanders that the Minister of Finance in this Labour Government is very prudent and responsible, and has absolute credibility when it comes to financial and economic management. As far as I am concerned, a $4 billion surplus is an indication of the success of that economic management. There is no question that New Zealand’s strong economic growth under this Labour Government, at the top end of the OECD countries’ economic performance list, also indicates the Hon Dr Michael Cullen’s performance as an outstanding Minister of Finance. There is no question about that, and when members start talking about performance, they should remember we are already near the top of the OECD countries. That is something to be proud of.

There is no question that there are problems in the world economy. We have just had a war in Iraq. We have had the severe acute respiratory syndrome epidemic. We have had a drought in New Zealand, and certainly that is creating problems in generating electricity. We all know that. We also know there is an increase in the value of the New Zealand dollar, and there is the uncertainty of the US and the world economy. It is obvious that we need to err on the side of caution. There is no question about that, and this Budget represents that cautious, responsible approach that we need to take to the management of our economy.

Despite that responsible approach, this Government, I believe, still shows New Zealanders that we have a heart. We do have a heart as a Government.

Hon Richard Prebble: Will the member answer a question?

Hon TAITO PHILLIP FIELD: The member wants to talk about hearts. Some of the things that ACT is coming out with indicate it is a heartless party, but at least Labour continues, despite responsible economic management, to indicate that we do have a heart and we will deliver policies that are balanced, and we will promote the interests of those who are most vulnerable in our communities. This Budget indicates a very coherent and highly credible programme, not only for this year but for next year too. It strongly supports economic growth through innovation and through funds that support good public services and good infrastructure in terms of the initiatives we need to take to promote economic growth. Without economic growth we do not have the means to deliver on social policy.

Debt is another area shown up by this Budget. We inherited from the National Party Government a debt that was 36 percent of gross domestic product (GDP). That is a disaster. But this Government in the short time of 3½ years has reduced debt from 36 percent of GDP to 27 percent, and it is projected that by 2003-04 that level will go down even further to 23 percent of GDP. That is a success story. It is certainly a success story that the National Party in its 9 years in power could not match, and it is an achievement this Government can be proud of.

This Budget is a responsible one that looks at key areas of welfare. Admittedly, there have been only some small movements in those areas, and some people in the community are not happy, but there is no point in making significant changes that we cannot sustain in terms of benefits and changes to the benefit system. So I am pleased there has been some improvement, particularly in the threshold of tax credits and in family support, for those with the greatest need. I reckon that is a movement—already there is a signal—that significant changes will be looked at for next year to help significantly those with the greatest needs in our community.

In the social area, I congratulate the Hon. Steve Maharey on the initiatives he has put in place. I have been proud to work closely with him in social services. We are going to pursue those initiatives that are reducing unemployment, and in this country that is another proud record this Government has achieved over the last 3½ years, because unemployment is at the lowest level for 20-odd years. The unemployment level has dropped from the highs of 12 percent—

Dr Wayne Mapp: Dr Cullen says it’s going to increase.

Hon TAITO PHILLIP FIELD: For Pacific people, I can tell the member that it is down to 7.5 percent. That is quite an achievement—dropping from something like 15 percent under National. The Māori unemployment rate is also tracking down, and that is as a result of the initiatives that this Government has put in place. So we have laid the strong foundations for, and bedded in over the last three Budgets, a course that will maintain a strong position in these times of uncertainty.

The funding that this Government has put towards health is something we can be proud of. The total spending, particularly in the area of primary health-care, is important for Māori and Pacific Island communities. I say that, because an extra $435 million has been dedicated to the promotion of primary health-care. There are 34 primary health organisations established up and down this country, and I am proud to have assisted recently in opening one of those, Ta Pasifika, which is already making positive contributions within the community.

Those primary health organisations are making significant improvements in the situation of low-income people in my area. They have cut the cost of visits to the family doctor for those children and other low-income people. An illness like diabetes is an example of what is important about the Budget, and what it is investing in—that is, health and education for our low-income communities, in particular for Māori and Pacific Island people. It is also an example of the importance of the money we can save through effective primary health-care.

I want to quote a small extract from an article that indicates the seriousness of diabetes in our community: “Preventable diabetes-related hospital stays are costing taxpayers $500 million a year—more than twice as much as previously thought—a major health group says.” Diabetes New Zealand patron, Don Beaven, said that the figures are far more than what was originally estimated at $250 million, and show that the Ministry of Health urgently needs to do more to halt a growing diabetes epidemic.” That is an important aspect of the programme this Government is putting in place in the primary health-care area. Prevention is better than cure, and too many Māori and Pacific Island people are heading towards renal failure and then expensive treatment by means of renal dialysis.

This Government can be proud of its record as a competent, responsible economic manager in all sorts of areas, and, in particular, in education. I compliment the Minister of Education on the millions of dollars that have been put into that area, particularly the extra $55 million put into the promotion of early childhood education. That is very important for Pacific people, because until our infant children get a good start their chances of failure in the education system will continue at a very high level. A 62 percent participation level by Pacific Island children is an appalling situation in terms of their chance of succeeding in our education system. I compliment the Hon Trevor Mallard on the $55 million he has dedicated to early childhood education, particularly for Māori and Pacific Island children, to get increased participation levels amongst those two communities. The investments are there in this Budget for the future of our economy and our country.

I have just been speaking with South Island mayors, and receiving their impression of the Budget. Do members know the very best ranking they managed to give it?

Judith Collins: What is it?

Dr LYNDA SCOTT: It was five out of 10. That was the highest ranking they gave it. None of the mayors put it over that; most of them gave it three out of 10. That is what they thought of this Budget, and they are there today talking about how hard done by they feel with regard to Transit’s 10-year plan. This Government changed the rules. It changed the rules from the benefit-cost ratio to what it said would be the local area’s priority. Well, guess what! Our local priority for Nelson-Marlborough is the Awatere bridge, but that is not on the 10-year funding plan. What about the roadways where all those people are getting killed down south? There have been seven people killed in 7 years. Another person died last week. What has Transit said? No, that is off the list for 7 years.

Clayton Cosgrove: Was the member at the meeting?

Dr LYNDA SCOTT: It is absolutely outrageous. We are having one ourselves right now, so the member should not talk about what he does not understand. At the meeting I have just been attending with the mayors it was stated that they are very, very unhappy with this Government and the Budget. What did the Budget do for the electorate of Kaikoura—that is, North Canterbury, Kaikoura, and Marlborough? It did nothing. It did absolutely nothing to fix infrastructure problems. It did nothing to fix the Awatere bridge, which is 100 years old. It did nothing for business. Did it do anything to reduce red tape for business? No, it did not do a thing. Did it do anything to fix the Resource Management Act? No, it did not do a thing. Did it reduce tax for any of these businesses? No. Who makes the money for this country? It is made by hard-working New Zealanders and businesses. They make the money, and this Government and this Budget did nothing for my electorate in that regard. So the mayors are not that happy at all; nor are the other people of the Kaikoura electorate.

But I really want to talk about a couple of things, because I am the Opposition spokesperson on senior citizens and on health. I will start with senior citizens, and ask what they got from the Budget. They got a sherry tax! Well, I thought they were really looking forward to that—a sherry tax and a port tax. They got those, and they will get cold showers, for the privilege of having to turn off their heated towel rails. Well, hello, some people do not actually have heated towel rails. We might tell Trevor Mallard and our Prime Minister that. Some people do not have towel rails to turn off, but they have to have cold showers, and for that privilege this year they will have to pay an extra $50 electricity tax.

What about the funding for aged care? We had a petition before the Health Committee and in that petition representatives of aged-care institutions said they had to cut care, cut corners, or close. Is there anything in this Budget for aged care? No, there is not. This Government is so determined to keep people at home. I have just had someone’s son on the phone to me, talking about how his father-in-law has had both his legs cut off as a result of the appalling care he received. Because of pressure areas and appalling care, he lost both his legs. His care plan was absolutely inadequate, and this Government has done nothing for aged-care funding or home-support funding. There has been nothing—absolutely zilch. There has been no increase for geriatric hospital-level care since this Government came to power—not one bit. The Health Committee said the Government had to look at that area, and expected something out of this Budget. It got nothing. What else have the elderly got? Most of them have been culled from the waiting list. Twenty-five thousand elderly New Zealanders have been culled from the waiting list—waiting, then cut off the waiting list.

John Carter: Surgically removed.

Dr LYNDA SCOTT: Yes. They are waiting for hip, knee, cataract, and hernia operations. This Government should be called “the truss Government”. It is back to the days of the truss, because people cannot get hernia operations in our public hospitals these days. But nobody makes trusses any more—they thought those days were gone, so people have to make their own. That is what the elderly have got.

Then there is the matter of the raising of the asset level for those people going into residential care. During two elections this Government promised it was going to do something about that, but it has not done anything. The Government is not reducing income and asset testing; it is just raising the asset level. That is the Government’s spin.

I need to get on to actual health and the health budget. I have to say that $9.6 billion is a great deal of money. We do have an aging population. We do have a diabetes epidemic. We do have an asthma epidemic. We have higher rates of cancer than Australia. New Zealand does face some immense challenges. But I want to pick up on some of the points that the last speaker made. I worked as a doctor in the Hokianga. There was free health-care, free prescriptions, free everything, but there was no evidence that the outcomes for Māori were better—no evidence at all. So if the Government is going to pour money into primary health-care, untargeted money, based on location, then Government members ought to know that it is actually going to deliver. There is nothing to show that primary health organisations will deliver. Why should it be that one person—I raise a point of order, Madam Speaker. I think I have put up with quite enough. There has been a total barrage of interjections for 6 minutes.

Madam DEPUTY SPEAKER: There has been quite a lot each way. I ask members to keep it down.

Dr LYNDA SCOTT: Quite a lot each way? I thought I was the speaker. I thought I was supposed to be speaking, but anyway, $9.6 billion is a lot of money. Primary health organisations—and I hope the Government will actually listen, because this is quite serious—have had money put into them, untargeted. So if someone is a poor white person who has high health-needs and lives in the South Island, does he or she get increased ability to go to the doctor—increased funding? No, that person does not, I say to Clayton Cosgrove. But for those who are Māori and live in Te Rawhiti, or in Auckland, it does not matter whether they have a high income because they will get increased funding to go to the doctor.

This is the way that primary health organisations get funded—only 50 percent of its population has to be Māori, Polynesian, or low-income with high-needs; the other 50 percent does not. This is untargeted funding being put in, based on location. At the same time that the Government is culling the waiting list, and severely rationing secondary services and surgery, it is pouring money, untargeted, into primary care. That does not make sense, and National would not accept that or agree with it. National will go back to targeting.

In relation to secondary care, we think that if somebody needs surgery, it costs more not to treat that person. I have someone who has been ringing me over the last couple of months. He is 72 years old. He has high priority for a hip replacement—he has 90 points. His surgeon says it should be urgent. He has been waiting for over a year. He was booked for surgery. What happened? An acute case bumped him off the list. This guy is on morphine. He has so much muscle wasting that it will cost the Government more to treat him and rehabilitate him. The Government does not care about the financial situation—that it will actually cost more. It is a ridiculous situation that we have found ourselves in.

There are many other things that we should talk about in the health area—like $35 million going to the America’s Cup. The people out there, the 25,000 people dumped off the waiting list, think: “I can’t get my surgery. I am in pain. I am in need. I can’t get my surgery but this Government is going to give $35 million to the America’s Cup.” Then there is the increased level of bureaucracy. There are 21 district health boards, and all of them are in deficit. No, sorry, there is one that is not. There is one that is actually managing to operate on the borderline. The rest are in deficit. Michael Cullen said he was really pleased the boards were making some progress, but they will still come in with a deficit of $180 million.

It is with considerable pleasure that I rise to speak in the Budget debate. I want to say that this will go down as one of the all-time great Budgets.

Dr Wayne Mapp: Oh!

Hon RICK BARKER: Mr Mapp can scoff. But I say to him that there will not be, for a long, long time, a National Party Minister of Finance, and a National Party Minister of Finance will not deliver a Budget that has 4 percent-plus growth registered in the economy—

Government Member: It’s 4.4 percent.

Hon RICK BARKER: —yes, 4.4 percent—substantial surpluses, money put away for superannuitants’ pensions in the future, increases in health funding, and increases in education funding—increases everywhere. We had the dead hand of Bill Birch giving Budgets for a long time. The dead hand of Bill Birch built an economic theme park of disasters around this country. The dead hand of Bill Birch cut, slashed, and burned into services in this country, and left a legacy of financial debt and social debt. This is the first time we have had a series of Budgets that has invested heavily in the economy, our social infrastructure, and our people.

The point I want to start with in this Budget debate is about the Customs Service. I have the privilege of being the Minister of Customs, and the Budget is a very good-news Budget not just for the Customs Service—which has had substantial investment—but also for New Zealand security, for regional New Zealand, and for our international trade. I do not think that many people have reflected upon the consequences of the September 11 event in New York. One of the consequences has been that the United States has become very conscious of security issues. It has made dramatic changes in its border agencies, and it will make further changes. The United States is also very concerned to ensure that what goes into the country is exactly what it says it is. In the review of its security after September 11, the US came to the conclusion that millions of containers are going into the United States, and that it has very little knowledge as to the contents of those containers. As a consequence of that, the United States now requires overseas countries to give an assurance about those containers—from the port or the country they go from.

New Zealand has over $4 billion of trade with the United States. We send 70,000 containers there. If we do not meet the security standards of the United States on the container trade we put that trade at risk. There is another issue: if we cannot assure the Americans about the contents of those containers and that they are secure, then the Americans will in fact do the work themselves, and that could mean New Zealand – sourced containers sitting on a wharf in the United States for between 3 and 5 days. So this is a trade issue for New Zealand. New Zealand exporters could not afford to have their containers held up on US wharves for over 1 week, possibly. To meet this demand, and this issue for New Zealand, the Government has invested in this Budget a $9 million increase to the Customs Service for its operating expenditure. This funding will employ up to 130 additional staff and give them the resources necessary. The Government has also budgeted for an increase in X-ray technology of between $15 million and $25 million. With this investment, the New Zealand Customs Service will be able to have a non-invasive inspection of containers that are of interest to the New Zealand Customs Service, or to the United States customs service, to ensure that the paperwork about those containers actually reflects what is in the containers.

But, better than that, the New Zealand Customs Service is developing a whole-of-Government approach to ensure the supply chain. In the past, the United States customs service has made agreements between itself and ports. What we in New Zealand are asking for is for the customs service in the US to have an agreement—which we have with it; an interim agreement—for the New Zealand Customs Service. Without this, some of the trade from some of our smaller ports would be put in jeopardy, because they would simply be too small to be able to comply with the requirements of the United States.

Simon Power: Tamihere is nodding.

Hon RICK BARKER: The National Party member scoffs at this issue, but I ask him this: how is he going to be able to sustain, for example, the port of Timaru or the port of Nelson to be able to export containers to the US? If he could not, what would that mean for the viability of those ports? If the economic viability of those ports is not of interest to the National Party, I can assure the member that it certainly is of interest to this Labour-led Government. We are going to invest heavily in container security, to ensure that we are able to guarantee our exports to the United States. So there are reasonable development issues with this, and there are also trade issues.

The other point I would like to make is this: in the event of a terrible disaster in the United States, if we have such an arrangement with the United States about container security and we are able to offer them the certainties, or the sureties, that are necessary, our trade will continue, or is very likely to continue. If we are unable to give those assurances to the United States customs service, then our trade will be put at risk. I will repeat the figure—we are talking about $4 billion worth of trade. Another very important improvement for the Customs Service in the Budget was $1.98 million to employ a further 16 new investigators at the border, for drug enforcement. I was the Opposition spokesperson on customs during the 1990s, and I am sorry to say that I witnessed the decline in funding in the Customs Service under the National Government. That decline in funding has left the Customs Service very hard-pressed to meet its commitments. One of the areas of great concern to the general public is the rise in the use and sale of methamphetamines and P-type substances. The New Zealand Police have successfully raided about 150-odd laboratories in the last 12 months, but it is also of concern to the Government that these drugs may be coming across the border, and there is strong evidence to suggest that is the case. The Customs Service has had a dramatic increase in the number of seizures of methamphetamines and P-type substances. The increase of almost $2 million to the drug investigation teams will ensure that we have an increased capacity to be able to catch the people who bring the drugs into New Zealand, and not only intercept the drugs but also prosecute the people concerned.

The other point I would like to raise concerns Work and Income, for which I have delegated responsibility. I am pleased to see that there has been a substantial increase in investment in the Ministry of Social Development. There is $42.75 million of new money, which will enable us to develop more long-term sustainable plans for people who are on our records. We will be able to help people get into jobs, identify the skill shortages, help people gain the skills that are necessary to get the jobs, and generally improve on the work that has already been done. It is with some considerable pleasure that I can say to the House that we have seen the number of registered unemployed steadily fall under this Government. Every month there has been a steady fall in the number of unemployed. Contrary to the assertions of the National Party, the total number of people on a benefit in this country is fewer and fewer every month, and that is something that the National Government in the past could not achieve.

In conclusion, I would like to say that this Budget is not only good for the Customs Service and the people of New Zealand generally; it is also very good for the Hawke’s Bay electorate of Tukituki that I represent. There is increased funding for education and health. We now have a primary health organisation established in Hawke’s Bay. There is better funding for mental health in my area, and the mental health services in Hawke’s Bay, after decades of foregoing the client, are on the turn-round. There have been improvements in funding for innovation. There is more money for my people to be certain about their superannuation. Income-related rents continue to be a policy of this Government, meaning that people on a benefit and who are in a State house have more money in the hand. We are also seeing housing upgrades. We have security of our exports. There have been improvements on every front. I can honestly say that in the decade I have been the Hawke’s Bay member of Parliament, for both Hastings and Tukituki, I have never seen the province so prosperous and so looking forward to the future. This Government has been fantastic to Hawke’s Bay, and I expect it to continue to be re-elected.

I raise a point of order, Madam Speaker. I noted during the member’s speech that he made reference to the fact that he has delegated responsibility for Work and Income. I wonder whether you could advise me as to whether the delegations for the new Ministers have been tabled, and if they have not, under what time frame that would normally be expected to occur.

Madam DEPUTY SPEAKER: The new schedule of delegated ministerial responsibilities has yet to be tabled. I am sure the Leader of the House will attend to that in due course. There is not a set time frame, although I note that the present Minister of Customs was Minister of Customs previously, and the delegation for Work and Income was previous to that, too.

We have just heard from the Hon Rick Barker how well this Government is performing. I have listened to a lot of Budgets over the years, and, of course, this Budget, as Mr Cullen has said, has been a careful Budget. [Interruption] After sitting through the Budget last week, I would call it “he moe Budget”, a very sleepy Budget, I say to Mr Ririnui. I just want to get back to some facts that my colleague Dr Lynda Scott mentioned. The taxpayers of this country deserve better. They expect whatever Government is in power to deliver the essential services that their tax money provides for.

The Government is saying that, yes, it is doing this and doing that. I want to touch on a lot of the issues and a lot of the services that the Government says are working. The airlines were bailed out, for $800 million. The railway system is in a mess. We do not know whether the Government wants to buy it back, or buy portions of it back. It is in a mess. The roading system is in a mess. Health is in a mess. We have just heard from Dr Lynda Scott that 25,000 people have been cast off the waiting list. The very people who paid for the roads and the railways of this country have been denied that service. I refer to defence. If a conflict broke out today, we would not stand a chance. The Defence Force is in a mess. In respect of education, we have only to read the Dominion Post recently to see that principals of prominent schools have said that the money provided in this Budget for education is a pittance.

I was walking the streets of Wellington today. I say to the Minister of Māori Affairs, who is not in the House, that he should have taken a hīkoi down Lambton Quay today. He would have seen a whānau not only singing for their supper but also singing for school uniforms for the children to go to school in. Is that what he calls closing the gaps? I do not. The police are pussyfooting around the methamphetamine problem and pussyfooting around the gangs. The Māori members of the Labour Party know, after the hui at Waiwhetu last week, what the consequences of that are for our young people. More police are required. The 50 additional police officers that have been allocated are, quite frankly, not enough. What have we heard about power in the last few weeks? It is in a state of shock. Even today, taxpayers have been asked to turn off this and turn off that. It is a disgrace.

I turn to immigration. There are 60,000 to 70,000 people coming into this country. [Interruption] I say to Mr Tamihere that today we hear that Asian students are out of control in Auckland. We should look after ourselves first—before we start to look after them. Mr Barker spoke about Work and Income, and this afternoon the kōrero is being presented on how well it is working. Funding used to be $10 billion, now it is $14 billion. The investigators have 8 months’ work ahead of them investigating allegations.

We heard from Mr Barker about how well the rural sector is going. I tell members that in 3 or 4 months’ time they will soon see how the rural sector is operating. The high dollar is encroaching on the purchase of equipment that is required, such as tractors, cars, and field equipment. I say to Government members that the Government has ridden on the back of the coalition Government of New Zealand First and National. Its monetary systems have not changed. It has ridden on the back of the coalition’s policies that were put in place, and the rural sector has made sure that the urban sector has improved.

I want to touch on the Māori members over there. What have Māori got out of this Budget? This Budget gives $34 million to the America’s Cup, and it gives $150 million for Māori television. What should the Government have spent that money on? What should Māoridom have got money for? The money should have been for housing, land development—[Interruption] Hang on; what is in the Budget for marae development? Those members sat there quietly and never said a word. Education is the key to Māoridom’s success. What about kapa haka? What did that receive? I see that all the other cultures got plenty of money in the Budget, but what did kapa haka get? At least New Zealand First can say that it did put money into kapa haka. What the Government wants to do is spend that money on that hit-and-miss Māori television station. On Sunday the Hon Parekura Horomia said on television that the survey showed that Māori want television. But he never put up housing and television—and I know what our Māori people would have gone for. It would not have been television, that is for sure.

Funding of $6.5 million has been put aside to educate Māori and the public on the Treaty of Waitangi. Have members ever lived on a farm and seen a pig trough that is V-shaped? Imagine those people! They would have their snouts and pork trotters tucked in there sucking out the $6.5 million. Over the next 3 years, they will do nothing. If people have not learnt about the treaty now, they never will. [Interruption] At least New Zealand First put $3 million into marae development. At least we got free health service for the under-sixes. Those Māori members ought to go back to their Government and ask: “Where is the partnership in the Budget?” The Budget states that there have been significant improvements in the position of Māori. I ask those members: “Do you approve that 53 percent of prison inmates are Māori males?”. Do they think that is an improvement? I do not. I think that the number of Māoris in prison is disgusting. I do not care what Government is in office; we have to improve that level.

Again, those Labour members talked about how unemployment, and how employment has improved for Māoridom. In Ruatoria, a little wee place, 240 people have just been put out of work. Those members should look at unemployment again. With regard to the Māori agencies that assist the Government to get a better working relationship with the agencies, I say, in closing, to the Māori MPs that the money that is going out for Māori initiatives needs to be more controlled. Te Puni Kōkiri should have a body that makes sure that whatever money goes out is spent correctly and the people in Te Puni Kōkiri should have the knowledge to be able to assist those people, so that the money does not go astray. I finish by saying there is a great cartoon in the paper. It shows Michael Joseph Savage, 1872-1940, New Zealand’s first Labour Prime Minister. The cartoon shows him turning over and muttering something about millionaires’ bloody yacht races, and he asks: what about the working man?

I have 3 minutes to say a lot. [Interruption] We are all singing from the same hymn-book, so it does not matter.

New Zealand’s economic performance has been poor since the mid-1980s. We have seen a focus on the reduction of inflation, and, for the most part, a mean-minded approach to social spending. New Zealand is now placed at the lower end of the developed countries, and our position has been deteriorating. Real and lasting national prosperity will come only via real economic growth. New Zealand First recognises that our lifeblood has always been trade. Export-led economic growth is the key to our future development. For example, New Zealand exports only US$3,600 per man, woman, and child, compared with Ireland, which exports about US$19,000 per man, woman, and child. We may then compare a small nation like Singapore with a beautiful country like New Zealand, which is just so rich in resources. It is quite staggering that Singapore exports US$34,731 per man, woman, and child, compared with a beautiful, rich-in-resources country like New Zealand. Mita Ririnui is looking at me as if to say, “What’s wrong with that?”, well, that is a big difference—$3,600 compared with $34,000 is bad news. Clearly, we have underperformed as a country, and that is certainly our problem.

There are a number of major factors affecting that poor performance, and an emphasis on the interests of the financial sector at the expense of those of the productive sector, and exporting is one of the problems. Another problem is our overvalued exchange rate, coupled with high interest rates. What is the exchange rate now? It is nearly 60c to the US dollar. What is that doing? It is hurting our exporters and our farmers. What are we going to do about it? What is this Government doing about it? I have seen nothing in this Budget to show that the Government is trying to stem the growth of that exchange rate as it heads upwards. All that is helping is the big import giants like the Warehouse, and so on. They do a great job in our community, but my question is what are we doing for our exporters? What is this Government doing? It is not doing a hang of a lot, if one asks me.

Last night I heard David Parker—the guy who kicked out Gavan Herlihy—say how great the Labour Government of the 1980s was. He was heralding how amazing the Labour Government of the 1980s was. I was not very old in the 1980s—

Hon Richard Prebble: You still aren’t.

CRAIG McNAIR: I thank Mr Prebble for the compliment. I still remember that that Government sold Air New Zealand for a song—for the value of three Boeing 767s from the 200 series. That is what the Government sold a 34-aeroplane fleet for, with trucks and everything else under the sun that went with it. The Government that David Parker is so proud of also sold Telecom. That is the Labour Government—[Interruption]. Red is red; it does not matter. Labour MPs today are still under the Labour banner, and I tell them that that is exactly what the Labour Government of the 1980s did. It sold New Zealand Steel, Petrocorp, Postbank, Land Corporation, and Telecom. Last night David Parker was saying how great it was when the Labour Government could be proud of that kind of thing.

Firstly, I congratulate Michael Cullen and this Government on presenting a very balanced and careful Budget. This Budget reinforces the Government’s reputation for fiscal prudence and economic pragmatism, guided by its social conscience. I am proud to be part of this Government.

This Labour-led Government has a clear set of policy priorities. Those are to achieve higher living standards for all by restoring New Zealand to the top half of the OECD in terms of per capita income, to support a cohesive society by funding good public services, and to achieve socio-economic outcomes that we can all be proud of. This Government has consistently pursued those objectives since taking office 4 years ago, and this year’s Budget takes some further important steps in that direction.

This Budget has put more money in the Government’s investment in the education sector and in the growth and innovation framework, and continues its record of strong investment in health and social development, which is an investment for the future of this country. This Budget shows an integrated, whole-of-Government approach to lifting the sustainable growth rate, and it offers certainty and stability amid a threatening, confused, and insecure world environment. It is about educating for a successful and innovative society; implementing the growth innovation framework; creating opportunity and security, which are key to a successful society; and creating infrastructure sustainability through transport, energy, water, and technology. I will concentrate my contribution on the education and science areas, because I believe that the economic health of a country is pretty much dependent on education and innovation.

Education is important for the opportunity it provides not just to individuals, but also to the economy. This year’s Budget has provided nearly $1,200 million—a 6 percent increase—in new education spending over the next 4 years, plus a further $128 million for capital investment. More specifically, we have put a lot more money into early childhood education, we have increased operating funds for schools, and we have provided $400 million for new school buildings, and over $400 million to increase the student component of tertiary funding, which will increase by 3 percent in 2004. We have also introduced a new fee maximum policy at tertiary level, which will both provide long-term fee predictability and contain fee increases, and which will give surety to a lot of students in terms of what they will have to pay.

The Budget also contains $23 million over 4 years for bonded scholarships and research fellowships to attract people into specialised professions that are critical to our success. It is very important to make sure that good students are welcomed and well regarded. There is additional money in the Budget to provide for 774 teachers, which includes funding for teacher supplies. The Tertiary Education Commission has been set up to steer development in the sector. So there are a whole lot of new initiatives in the education sector.

I will talk just briefly about industry training and Modern Apprenticeships. This Budget allows an increase in the number of industry trainees from 100,000 to 150,000 by the year 2005. We have an additional $14.6 million for Modern Apprenticeships. There is a whole lot of new money for training in the Gateway programme, and so on. Additional funds are going into research, technology, and science.

This Budget continues the Government’s commitment to the innovation and growth framework to strengthen the economy’s capacity to grow, which is important. For example, I know that a huge amount of money is going into the new research, science, and technology area. There is funding for a pre-seed accelerator funding programme, and that is very important. As a scientist, I know that I had difficulties in years gone by—one could have a good idea that one wanted to promote, but there was no funding at the pre-seed level that could be used to promote one’s particular idea and to take it to the next step in terms of commercialisation. It is very important to encourage scientists to actually bring their technology into the commercial arena.

We recently announced $6.4 million to increase the highly successful business incubator programmes, and that is very important, also. It will encourage new initiatives in terms of innovative parks and regional development, and it will create more employment.

The Budget provides $44 million to attract migrants to New Zealand with the skills that the economy needs. It is very important for us to target funding to get people who can contribute to the economy, or who can be employed before they actually arrive in this country.

In addition, there is a whole lot more money in terms of biotechnology, information and communication technology, and design and screen production. I am delighted that a whole lot of innovative initiatives are taking place in the industry, and also in small and medium-sized enterprises. This Government is putting together a package to assist small and medium-sized enterprises, which will include some clever and highly practical tax changes. A special forum will be held next year to discuss those changes, and a small advisory group will be established.

I now want to talk briefly about ethnic New Zealanders. I have heard a lot about Asians and other ethnic people coming under attack from the other side. It is a shame to hear those attacks over and over again. Someone on the other side just mentioned Singapore, for example, saying that it has done well, and that it is going ahead. I am aware of that, but who are Singaporeans? They are Asian people, and members should not forget that.

This Government has taken steps to recognise the growing ethnic and cultural diversity of New Zealand. Our country was built on a bicultural foundation, but today it is home to many peoples. There are about 400,000 ethnic New Zealanders, and some, like early Chinese settlers, have been a part of our society for almost 150 years. We recognise that some migrants, and especially refugees, may have high settlement needs. It is important to address those needs, and to ensure that ethnic people feel accepted in New Zealand, so that they are able to integrate into our society, and contribute to its culture, growth, and prosperity. I am delighted that the Labour Government has established the Office of Ethnic Affairs as a permanent policy and advocacy body for ethnic people. Since its beginning in 2001, the office has expanded and consolidated its resources, and now has branches in Auckland and Christchurch. That initiative aims to encourage participation by ethnic people in all spheres of life, and to recognise those individuals who have left a mark on New Zealand society.

We have recently launched the language-line pilot—that is, the Government’s 30-language, free-to-use telephone interpreting service, which is intended to allow ethnic people easy access to Government agencies, such as the Police, the Accident Compensation Corporation, the Immigration Service, Work and Income, and Housing New Zealand. We have also recently launched a policy on English for speakers of other languages. There are 50,000 non-English speakers in this country, and that strategy will allow those people access to learn the English language, and it is very important that that is being done.

Finally, this Budget has allocated over $21 million over 4 years to improve the employment services for migrants and refugees through an Auckland metropolitan migrant and refugee strategy—that too is important. A key component of the strategy is the establishment of specialist migrant and refugee work track and work action programmes.

I am delighted that this Government has taken initiatives that are very balanced, that look forward to growth in the economy, and that put money into education and science, in particular.

I am delighted to follow my colleague from the Manawatu. I have to say I did not agree with a word he said, but I am delighted to follow him in this Budget debate. Two things struck me as I sat in the Chamber while Dr Michael Cullen read the Budget speech—and this is the fourth Budget I have sat through. Firstly, I was stunned that not once during the reading of the Budget did anybody from the Government clap at any one initiative. That is the first time that has ever happened in the four Budgets I have heard since I have been in this House. Secondly, I was absolutely stunned to see at the conclusion of the Budget speech delivered by Dr Michael Cullen that members of coalition partner, United Future, sat on their seats.

They sat on their seats and did not get up and applaud the Minister. They did not get up and support the Government. It was very noticeable that, while we on this side of the House sat, on cue all the Government members leapt to their feet. But United Future members who sit over in that corner of the Chamber, who support this Government, and who, no doubt, will vote for this bill at the end, did not get to their feet. Nor did the Greens get to their feet during the course of that speech, and I found that absolutely fascinating. The reason was that this Budget was lukewarm at best.

I want to concentrate on the three areas of the Budget I am concerned about, and then on one area in particular at the end that I know will interest my colleague the Hon Richard Prebble. I will spend a bit of time talking about what has happened to the convention of individual ministerial responsibility, but before I do that I just say how disappointed I am that defence did not get one mention in this Budget. There was not one word about defence or foreign policy in this Budget. I thought that was appalling. It was appalling for two reasons. Firstly, the Minister of Finance started this debate by saying that we live in an uncertain environment and that the Government has to be fiscally prudent in what it does. He did not explain anything about that uncertain environment. He did not explain what this Government is doing to support a credible foreign policy. He did not say what this Government would do to bolster up our defence force to meet that uncertain environment. There was no mention of any of those things, at all.

We have done some forecasting on this side of the House, and we know this: defence spending is now at 0.9 percent of gross domestic product (GDP), falling to 0.8 percent in 2005. Compared with other figures over the last 15 years, that is an appalling state of affairs. But worse, when we compare this Budget with the Australian Budget that came out last week—a Budget with a major focus on defence and on foreign policy—we saw increased spending of A$2.1 billion over the next 5 years. More significantly than that, up to nearly 2 percent of GDP is to be spent on defence—double what this Government will be spending on defence over the next short while. That is a sad indictment on this Government.

One other thing was missing from the Budget, which I thought was very interesting—

Clayton Cosgrove: Have a drink.

SIMON POWER: To give him credit, Clayton Cosgrove did notice this, although it did not get him into Cabinet. In all the discussion about a $4 billion surplus, not one mention was made of agriculture—the very industry that delivered that $4 billion surplus to the Government. Did that industry get a word of thanks or a word of recognition? There was nothing—zip. There was not even a mention of those people who are the backbone of this economy and the backbone of New Zealand’s economic state of affairs. I tell the people of Rangitikei that this Government does not care that they have provided the surplus for it to spend. The Government will take the money but will not give thanks where thanks is due.

Speaking of giving thanks where thanks is due, I point out that during the course of this Budget debate we have not heard a lot about the missing generation—the generation of students who will have to stare this Government down over the fee maxima. In 1999 a very young and airbrushed looking Helen Clark made a statement on the credit card—

Hon Richard Prebble: Is that who it was?

SIMON POWER: Well, it could have been anyone, actually. Helen Clark made a statement on the credit card that her commitment was to cut the cost to students of tertiary education. Wrong, gone, finished, end of that! Then, on a second credit card, is a picture of a very different-looking Helen Clark—it could be the same person, although it is difficult to pick; obviously, the computers were down that day, but it looks sort of similar. It states in the third point under the headings “The Next Steps” and “Our commitments to you” that Labour will “Keep tertiary education affordable.”

Hon John Tamihere: I didn’t see that.

SIMON POWER: Oh, Minister Tamihere has not seen that! The fee maxima will see the average cost of a BA go from $3,000 to $3,900 overnight. Those Government members have to understand that those credit card promises are breached. Those covenants are breached, and they mean nothing. I look forward to standing on the platform at the next election with the candidate who is put up for Labour in Rangitikei and asking how those credit card promises are coming along and whether there have been any breaches. Well, I can tell members that that promise is the first of six to go.

The port and sherry tax—“No other taxes will come along”—is another example of how this Government is introducing stealth revenue-gathering activities, while the people who matter most to this imagined knowledge economy, the students, will be left out in the cold. What worries me most about that is this Government saying those credit card promises would be kept, no matter what. Well, I am looking forward to the media reports of Helen Clark at Otago University tomorrow. I bet $1 they will not be favourable. The reception will not be favourable. I see John Tamihere having a quiet chuckle there, and wishing her well at Otago University. I tell those members sitting opposite that students now do not trust Labour. That party has come full circle, and students do not trust members on that side of the House from this point on.

I want to spend a couple of moments talking about the convention of individual ministerial responsibility. I have noticed over the course of the last 3 years that, in particular, Minister Dalziel and the Prime Minister are very good at blaming officials when something goes wrong in their portfolio areas. But in the last 2 days we have seen a complete erosion of the convention of individual ministerial responsibility with the Hon Parekura Horomia’s total reluctance to take responsibility for what his officials have done. I thought it was worth spending a bit of time looking at what Geoffrey Palmer had to say about these matters. He said that the idea of ministerial responsibility is often said to be one of the great protections of our constitutional system. Well, so much for that. I worried when Bob Semple said: “I’m responsible, but not to blame.”, and did not resign as a result of the tunnel works that were not up to scratch; or Jack Marshall, with the corrections issues. Those are Ministers who carried on in their portfolio areas. Denis Marshall, my predecessor, was caught in exactly the same predicament over Cave Creek in respect of individual ministerial responsibility.

A spectacular example of where the doctrine of individual ministerial responsibility worked most—and my colleague Richard Prebble will remember this—was in 1986, when Budget documents were released prior to Budget day. Roger Douglas went to David Lange and said: “I am responsible for my officials mucking up, and I will resign.” The doctrine of ministerial responsibility was invoked in the environment properly. David Lange said “No.” The point is this: in an MMP environment individual ministerial responsibility is a far more important convention than it was under the Westminster system, because it is the only mechanism by which multi-parties have the opportunity to pin Ministers down to the departments they are responsible for. It is not good enough for a Minister to come into this House and blame officials for their department’s work, when that doctrine, which is one of the pillars of the Westminster model, is being eroded by this Government in a disgraceful way—and that Prime Minister has a lot to answer for.

Sitting suspended from 6 p.m. to 7.30 p.m.

It is an absolute pleasure to join the debate on the 2003 Budget, because this is a fantastic Budget. I have heard our critics say that it was boring and there was nothing in it for ordinary New Zealanders. I have to say that, while we on this side of the House express some concerns about literacy rates in New Zealand, that makes me question even further the literacy rates of some of those who sit on the other side of the House. Even the most casual reading of the Budget will tell members how much there is in the 2003 Budget for all New Zealanders—

Hon Ruth Dyson: Even those from Northland?

JILL PETTIS: Yes, even those from the most northern parts; I am not suggesting that that member has any problem with literacy. There is something for everybody in this Budget, and one of the most fascinating and fantastic aspects of the Budget from my perspective and from that of my electorate of Whanganui is the attack that we as a Government have been able to make on unemployment. This Government has invested heavily in youth. That is an investment in the future and an investment that is paying off already.

Hon Taito Phillip Field: Record employment levels.

JILL PETTIS: Absolutely! As my colleague Mr Field says, we have record unemployment levels: the lowest for 14 years. That is a fantastic achievement. In the Whanganui area, in particular, there are now 600 fewer people unemployed than in the period when the previous National Government was in power. That is a wonderful achievement.

We are not claiming that we did it all on our own. We know that there have been some very positive contributing factors to it, particularly the excellent commodity prices that New Zealand has been able to benefit from. But nothing stands in isolation. A combination of a whole range of efforts and initiatives have gone into achieving that wonderful reduction in unemployment.

My colleagues, in their contributions, have talked about the Gateway programme, and I too want to mention it, because it is an initiative that has been particularly successful in our secondary schools, and more schools still in the Whanganui region are to be included in it. Hawera High School and Wanganui City College are already engaged in the programme, and it is now being extended to Patea High School, Waverley High School, Opunake High School, Kokohuia School, Cullinane College, and Wanganui Girls’ College. That programme will give our young people further experience at making that transition from school to work, and we are receiving fantastic reports that are very positive, from the young people themselves, from their teachers, and from their parents. It is a real investment in the future of New Zealand.

One of the comments made by some of the detractors with regard to the Budget was that there were no surprises in this Budget. Budgets are not like Christmas presents. They are about planning for the future, which is the strength of this Government and of this Budget. It is about planning for the future. Those of us who have been around for a while remember one of those dreadful Budgets that was packed full of surprises. It was named by the Minister of Finance herself at the time as the “mother of all Budgets”. My constituents reeled from the shock of what that surprise Budget meant for New Zealand in the cold, hard light of day. That Budget lead to so many negative aspects for New Zealand. It put this country into a depression—not only a financial depression but also a depression of the spirit—and it has taken a lot of hard work to rise up from that. We experienced some terrible times in which the most vulnerable in New Zealand were under attack.

But, in a more positive vein—because there is so much to be positive about—I want to say that under this Government health spending has risen dramatically. It now accounts for 20 percent of all Government spending. That is an investment in today and in the future. The other fantastic investment that this Government is making is in the whole social service area, and in education in particular, and that is in line with typical Labour Budgets and policies. Access to education is the most important thing we can give young people. Our education policies are not only about the young; they are also about continuing education, about assisting people with second-chance education to help them contribute to our society in a whole variety of ways.

Another investment made by the Government that I would particularly like to comment on is the investment in arts, culture, and heritage. I am pleased to see Mr Ardern in the House tonight, because he was heard on the radio on Friday making derogatory comments about this Government’s investment in arts, culture, and heritage. We have invested $76 million in arts, culture, and heritage, and I am proud of the commitment we are making to that very important policy area. It, too, is about investing in ourselves as a people and as a country. It is about recognising ourselves as New Zealanders, recognising those values that we have as New Zealanders, and recognising that we can express ourselves in many artistic forms.

It is not just about art galleries, although I suspect Mr Ardern will be there in Taranaki when the Puke Ariki art gallery has its official opening. He will want to be seen amongst the crowd, glad-handing and trying to take credit for that wonderful initiative of the people of Taranaki and the Government, that shared investment in arts, culture, and heritage. He will not be saying he thinks it is just a waste of time, and all those artists are just a bunch of woofters. He will not be saying that when he is standing there at the ceremony. He will be smiling and trying to bask in the reflected glory and the hard work of the Labour Government.

I also want to mention the investment this Government has made in the Defence Force. This Government puts its money where its mouth is. It is not all bluster and blank bullets. We have given our armed, trained personnel a pay rise, which they never got under Mr Ardern’s Government. We have invested in capital expenditure, and have also assisted our trained personnel by giving them a pay rise. Historically, Labour Governments have invested more in defence capital expenditure than that party ever has. It talks tough, talks big, and rattles sabres but never puts its money where its mouth is. Labour does, and I am proud of that.

The other aspect I want to cover, in closing, is the many comments that have been made from that side of the House about the levy that was applied to drinks with a high alcohol content some weeks ago. I want to correct any misconception that the good people of New Zealand might have from listening to those people over there, who try to imply that this country is made up of a bunch of lushes. We are not saying that. New Zealanders do not spend their life drinking sherry and that other stuff. That levy was about protecting young people, and about making sure they can make a contribution to the future of New Zealand—a New Zealand that has been made stronger by this Labour Government.

The ASSISTANT SPEAKER (H V Ross Robertson): I advise all members of the House that the Green Party is going to split its call.

The Green co-leader Rod Donald and previous Green speakers have already expressed our general opposition to this Budget. I am particularly concerned about the issues around tertiary funding, in particular the continued unwillingness of this Government to address what I think are the real issues of funding in the tertiary sector. I am referring to the levels of funding that are needed to ensure that facilities and services are maintained at an acceptable level, and that staff salaries are able to be internationally competitive, or even remotely comparable. That is on one side. Of course, on the other side are the issues around the student loan scheme. Although I acknowledge that there is an expanded eligibility for the student allowance, and that some students will benefit from that, there is a lack of anything in this Budget for the majority of students. A lot of students were hanging out for the fee maxima, and we are sad to see that it has largely been set at a level that provides for significant fee increases for the majority of students. Postgraduate students have been left out altogether. So we are saddened by those things.

I will concentrate most of my speech on a different area. I acknowledge that the Government has taken some small, but useful, steps in the area of drug policy. The Green Party has been calling for more focus on effective drug education and treatment since we became an independent Green Party in this House. We led the way with the first new initiative around drug education for many years, last year, when we negotiated half a million dollars with the then Minister of Youth Affairs, Laila Harré, for work in a critical area where there was a glaring gap in knowledge, and that was simply what effective drug education is, how one does it, and how one knows what is good. That was envisaged as a first step to better funding for that area.

I was concerned that, with the new Government, that would be dropped, as it was my idea. To its credit, the Government has picked up and continued that funding. We are seeing the funding rolled out over 3 years. In the first year it will be around information gathering and analysis, and literature reviews identifying evidence-based best practice and key messages. In the second year, 2003-04, it will be around resource developments, guidelines for effective evaluation, standards for effective drug education, and criteria for purchasers of drug education to use when deciding which programmes meet their needs. In the last year, 2004-05, it will be around publishing standards and guidelines, and developing options for community pilots. It is good to see those things going ahead. That is to the credit of Mr Anderton and the ministerial committee on drug policy, and it is good to see that moving forward.

Credit is also due to the ministerial committee on drug policy for following through on a number of other useful initiatives. We are seeing funding going to 15 community action initiatives based on the model of the Community Action on Youth and Drugs programmes. We are seeing $2.5 million go into those per year, and that is extremely good, because those are some of the few programmes that have shown any evidence of being useful. The Minister, Mr Anderton, is announcing a 19-point programme to deal with methamphetamine. Although the details are sketchy at this stage, he has said the emphasis is on dealing with those who supply and make the drug, but also on having compassionate treatment facilities for the victims. He says: “We need to rehabilitate those who are on the drug, and show no tolerance for those who are manufacturing or selling it.” That is more like the right approach. We need to take a less punitive approach, and we need to recognise that the issues of drug abuse will not be solved by the police, but by education and treatment. There is also funding for police teams for the clean-up of methamphetamine labs, and that is also extremely good, because there are real environmental risk problems with clandestine methamphetamine laboratories.

I congratulate the ministerial committee on drug policy on those issues. In the past, I have offered to work with the Government on those kinds of issues, and although that has not been taken up, I would like to repeat that offer. Although Mr Anderton and myself often disagree on drug policy issues, I think the Minister does deserve some congratulation on those efforts.

In my view, there are two serious omissions in the Budget. The most significant omission is the failure to provide any additional funding for the Waitangi Tribunal, but perhaps the Government’s recent response to the two latest tribunal reports is a clear explanation of that omission, with those responses being characterised by arrogance and a dismissal of Māori views.

The Office of Treaty Settlements has received a huge boost in funding in the Budget. It will get about $10 million more, which will be directed toward pursuing direct negotiations on the Government’s terms, but it is the tribunal that is best placed to give an independent assessment of the historical injustices and the Crown’s complicity in those injustices. The Green Party supports increased resources for the Waitangi Tribunal, including adequate resources for claimants to prepare and present their cases, and for increased transparency and accountability. That is necessary if the tribunal is to develop a diversity of models for restitution and nationally sustainable compensation over time. It is those roles and the tribunal’s independence, along with its contribution of extensive research, quality assessment of external research, and hearings of complex legal and historical information, that give the tribunal the legitimacy that is essential in such a charged area of governance. But there is no new money in this Budget for the tribunal.

I personally am appalled that Murray Smith from United Future can stand in this House, and, with a straight face, claim credit for the funding of the Office of Treaty Settlements. But it is not only that; he also claims credit for funding of the tribunal that does not exist. I believe that that is an example of extreme, patronising arrogance. The tribunal funding this year includes a drip feed of money that was set out in last year’s Budget. So, unfortunately for Murray Smith, he is wrong, despite his sincerity. The money that the Government has committed to treaty settlements that it often talks about is directed to its own agency, not to the tribunal, which advocates for a fair and just assessment of the wrongs committed in the past. The tribunal has been deserted by this Government.

A second great omission is the total lack of support for children with special needs and with behavioural difficulties. No new funding has been provided for special education, despite the Court of Appeal ruling this year that the Government had failed properly to provide for those children. That is a disgrace, and a smack in the face for those families who are struggling to meet those children’s needs.

In addition, despite the rhetoric from the Government about suspensions and stand-downs, no money is being directed to helping those students, or the schools that have to manage and provide for those students’ needs. Suspensions and stand-downs have a huge impact on a child’s education. Research shows that the punishment generally arises out of problems to do with drugs, assaults, and continual misbehaviour. Some of the schools with the highest levels of suspensions and stand-downs are having to cope with extra levels of security for students, are dealing with low-level drug use, and are having to provide counselling and other support services to try to keep those children in school. Indeed, it would not even be very expensive to provide for those schools, given that the problems are concentrated in only a few schools—1.5 percent of schools are responsible for 24 percent of the suspensions and stand-downs, and low-decile schools are more likely to have those problems. But this Government has paid no attention to the needs of those children and those schools, which are seeking more constructive ways to manage the children’s behaviour that do not leave the students isolated, demeaned, and labelled as bad kids. Those children have also been deserted by this Government.

It is fantastic to be able to contribute to this debate in support of our Budget, the fourth Budget presented by the Hon Dr Michael Cullen. It is one of which I am particularly proud personally, because I am in Cabinet for the first time. It is a great responsibility, privilege, and honour to represent my constituents, and the sector for which I have responsibility.

I would like to give a little attention to my portfolio areas: how they were voiced in the Budget, how that is reflected, and what we are going to do with the additional money that has been given to us. Within my area of disability issues, and as Associate Minister of Health with responsibility for aged care, I can say that we have had a lot of concern about the increasing workload of caregivers. Caregiving is across the board, and involves providing support in people’s homes, in rest homes, and community facilities, and of course includes those who are employed in providing support through the Accident Compensation Corporation. Those caregivers have never been recognised as the integral part of the health system that they are. I am delighted we have recognised that, in the work we have done over the last 3 years. We now have a specific focus on improving quality and safety issues for caregivers.

In this year’s Budget we received $1 million for a project that looks at quality and safety issues, including specific workforce issues for caregivers. That is backed up by the work the community support services industry training organisation is doing in developing a nationally recognised certificate for caregivers. The aim is to address quality and safety issues so that we can be confident of the level of care that caregivers are providing. We also want to be confident of care workers’ safety. In return for an increased level of qualification that is nationally recognised, we are sure that the improved funding that providers of caregiver support receive will be passed on to the paid workforce. This will be a win-win situation for the workers, the people who are receiving the service, and of course the general public.

This year, in the areas of disability we have focused on tertiary education, and that is sorely needed. People with disabilities are under-represented in their attendance in tertiary institutions as students, and we are determined to continue to address that. So this year we have seen an increase in the total funding for the special supplementary grant, and an ongoing commitment from the Associate Minister of Education (Tertiary Education) and myself to continue to look at how that special supplementary grant is spent, and how best we can improve access to tertiary education for students with disabilities. We have also made a commitment to fund accessible format material for blind tertiary students, for another year. This is critical, because if students cannot access the material from which they are to learn, then their learning will be of very low quality indeed, and that would not be acceptable to us.

An innovation that has significant funding is to improve the coordination of the support resources for deaf students in tertiary education. We are now working through with all the key stakeholders how we would operate a resource centre of excellence, offering support primarily through sign language interpreters and note takers. This will be based in the Auckland region in order to pool the resources and share them fairly amongst the different tertiary providers there. It is a huge step forward. I look forward to the collaboration and cooperation of all the tertiary providers in the Auckland region so that we can work together to improve access to tertiary education for deaf students.

A little while ago the Minister of Communications and I announced the establishment of a telecommunications relay service as a telecommunications service obligation under the telecommunications legislation. In this year’s Budget we have $540,000 to fund equipment for deaf, hearing-impaired, and speech-impaired people, so that they can access the telecommunications relay service. This is fantastic news for people who are looking forward to the opening of the relay service. Deaf, hearing-impaired, and speech-impaired people in New Zealand can finally access the telephone system in the same way as people who are not hearing impaired or speech impaired. That $540,000 grant will enable people to access the equipment they need to use the relay service.

Finally, I would just like to move on to my other portfolio of Accident Compensation Corporation, and talk about the additional money that it has received in the Budget to improve subsidy levels for health providers. Every time accident compensation claimants go to a health provider, the Accident Compensation Corporation gives the provider some money, and the claimant gives the provider some money. That money is called the Accident Compensation Corporation subsidy, and it was set in 1988. In 1992, the then Accident Compensation Corporation Minister, Bill Birch, looked at the level of subsidy and said: “That’s not very much money; what shall we do with it?”. He cut every health provider subsidy across the board by 15 percent, and the subsidies have stayed at that level ever since.

That is not acceptable to this Government, which believes in funding high-quality health service at a fair level. So this year we have had increases in the subsidy level for health providers for the first time since that was altered—slashed—by Bill Birch in 1992. For physiotherapists an additional $12.3 million has been allocated across the board, which will enable the Accident Compensation Corporation to roll out the endorsed provider network over the next few months. Physiotherapists will now have a higher level of qualification, there will be improved reporting to the Accident Compensation Corporation, and the claimant has no co-payment at all. In my city of Christchurch—home not only of endorsed provider network physiotherapists, but also of the Crusaders—the whole city has access to free physiotherapy treatment for accident compensation claimants. We have increased the subsidy for dental treatment for under - 18-year-olds, and we have increased the subsidies for primary practice treatment materials, for practice nurses, for counsellors, and for rural general practitioners.

So this is really fantastic news for accident compensation claimants. It has been a real pleasure working alongside the Minister of Health, Annette King, to ensure that accident compensation and health work in tandem, rather than operating separately as they have done in the past. This has particularly been the case with the increased subsidies of rural general practitioners and practice nurses.

Canterbury has been a real winner out of this Budget. Not only will we win the final on Saturday night against that team from the secondary island of the north, but we have also been good winners in—I am not going to talk about the netball, because Canterbury has not done as well in that, but it does not matter. In the areas of health and education particularly, the people of Canterbury can be very proud of the gains we have made.

I want to mention one other measure that has been long called-for in Canterbury and that has been achieved in this Budget, and that is the youth residential drug rehabilitation centre, which is part of the youth suicide prevention centre. It has a $620,000 operating expenditure, and $250,000 in one-off capital expenditure. That has been very warmly welcomed in Christchurch, and I am very pleased to stand alongside my colleague Jim Anderton, who has been a very strong promoter of that.

In my own electorate, another special announcement that I want to mention briefly is the urban search and rescue team. It is based in my local area of Woolston and has had a significant increase in the amount of funding that it has received. They are an internationally recognised best-practice team. I am particularly proud of them as the local member, so is the whole of Canterbury, and so is the country, just as we are of the Budget.

Never in the history of New Zealand has there been a Government with so much financial good fortune that delivered so little. We have a Prime Minister who has developed an ability to generate so much spin that if we could harness it to a turbine we would be able to solve the energy crisis.

John Carter: Only if she were conscious.

SHANE ARDERN: Yes, absolutely. We have had “Picturegate”, we have had “Corngate”, and we have had “Goregate”, and when she is not apologising for public statements she has made consciously that have offended our trading partners around the world—the very trading partners she depends on to give us the good economic fortune she has had—she goes around trying to apologise for things that none of us have had any part in.

I want to bring the House’s attention to a letter that was sent to me by a former Taranaki – King country constituent who now resides in the US. He is a good National supporter, of course. He wrote: “The Prime Minister, Helen Clark, does not speak for all of us Kiwis. I can’t express how personally sad her strategic error makes me.” That is what he wrote. “I would have thought I would have been happy to see her bungle give the National Party a bit of an edge. However, the damage to the country transcends any political advantage, real or imagined. I watched the interview with President Bush and the Australian Prime Minister at President Bush’s private ranch in Texas, and closed my mind to the damage that was being done to New Zealand.” That is what he said in his letter to me, and that is exactly so.

Under this Government we have seen the arts—and my colleague in the south has referred to that—the America’s Cup, and a whole range of other feel-good, do-good, socialist engineering get a big dollop of money, but what have we seen going into defence and biosecurity? We have a Government in this country that, quite clearly, does not understand that this is an export nation. We have a Government that quite clearly believes that an ambulance at the bottom of the cliff is better than a fence at the top. We have a Government that does not realise that this economy depends on exports.

In response to public concerns, the Auditor-General did a most comprehensive report on biosecurity, and he noted that the overall emphasis was that the response to incursions was too slow and the funding process too complicated. So what do we have? We have disjointed departments, no clear objectives, no cohesion between groups, and a lack of ability to react quickly to incursions. If we look at the recent painted apple moth debacle in Auckland, which has cost $90 million thus far—and the meter is still ticking on that eradication programme—what we have is a dog’s breakfast.

Clayton Cosgrove: Sounds like the National Party caucus, mate.

SHANE ARDERN: No, no, what we have is a dog’s breakfast over on the other side of the House. What sort of wake-up call does this Government need before it does something about it? How much insurance is too much, and how much insurance is not enough? That is the question this Government needs to ask. Last year, 8 tonnes of meat came into this country with people. We had 15.9 tonnes of fruit, 3.6 tonnes of seeds, 3.2 tonnes of dairy products, 3.2 tonnes of fish products, and 5,800 plant species introduced into the country or brought into the country on someone’s person. What concerns me is how much was not picked up. The Ministry of Agriculture, in its own audit, said that there is about 10 percent that it does not pick up. That is far too much meat and other potential foot-and-mouth material coming into New Zealand.

A recent Treasury report stated that as much as $12 billion would be lost to the New Zealand economy, with a foot-and-mouth outbreak. And what do we get in the Budget in response to that? Zilch! We get a reduction. To eradicate the problem, we need to educate the public and increase the penalties. Where was there any evidence of that? There was none at all. Today we have learnt that the bee varroa mite has escaped right across the North Island. It was being contained in the northern part of the North Island, but it has escaped right across.

What are the long-term costs of that? Let us look at the response we get from the Government. In response to a question in the House, the Acting Minister for Biosecurity, Marian Hobbs, told us that she thought that finding only six incursions in the last fortnight showed that we were really good at surveillance. Well, what does one say? This is the Minister who often acts for the Minister for Biosecurity, because as the Minister for Biosecurity told the Federated Farmers conference in Taranaki last week, in regard to a recent trip overseas: “This was the third trade mission I have led this year, and just one of the many, many overseas trips I will be making this year.”

We have a Minister for Biosecurity who says at the Federated Farmers conference that he will be out of the country most of the year. As Minister for Trade Negotiations, that is absolutely right and proper. So we have an associate Minister who actually handles biosecurity, and who believes that finding six incursions in a fortnight is a very, very good response. What hope do we have? We have a problem, and one that urgently needed addressing in this Budget, and what did we get from the Minister? Nothing, absolutely nothing—that is what we got. [Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): Order! I refer members to Speaker’s ruling 51/5(3).

SHANE ARDERN: The more they heckle, the better the speech, but I am thankful I have your protection. We have a $4.2 billion surplus, which is plenty of money to deal with the border control problems, and what do we get? We get nothing at all. Last year, 420,000 sea containers came into New Zealand. We have a problem with incursions through sea containers. How many of these containers do we inspect? We inspect 24 percent of the high-risk containers, and a recent Ministry of Agriculture audit showed that of the 24 percent we inspected, as many as 1,700 containers contained further incursions of insects and spiders. I think the figure was an increase from six to 71 spiders that the ministry had not found in the initial inspection.

Brian Connell: Sounds like the Labour caucus.

SHANE ARDERN: Exactly. It does sound like the Labour caucus. Quite a few spiders are hidden in amongst there. The containers themselves are very host-friendly. One would have thought there would be some mention in the Budget of how the Government was going to deal with that problem. But there was not a thing. We did not see a thing in the Budget about that. There is a suggestion that the Government will introduce some further process in this regard, but where is that? And when is it? When will it happen? How big a risk do we have to take before this Government wakes up and understands what this will be?

In the last 6 months we have had a number of incursions, and the number we have had is increasing steadily—and the Government is doing nothing. The only good thing we can say about the consistency of our defence is that it is consistent. We seem to get a new incursion every week—and this Government sits on its hands, at a time when it has a huge fiscal surplus like no other we have seen in the history of this country. So I say to this Government that it is time it did something about that, it is time we saw some investment in this area, and it is time we did something to eradicate the problem we clearly have with our biosecurity.

I warn the Government to fix it, because otherwise its $4.2 billion surplus will turn into a $10 billion deficit. A recent Treasury report that said $12 billion would be lost to this country if we had a foot-and-mouth outbreak. That amount could expand when we take the flow-on effects of tourism, and from the evidence we have seen from overseas it could expand to as much as $60 billion. I suggest to this Government that it take some action while it still can.

E te Kaihautū me te whakaruruhau ki a mātau, a Ross, aroha ki a koe; Mr Speaker, I pay special homage to you. As a Labour Party Minister and member I speak in favour of, and commend, the Budget to the House. I want to acknowledge, as usual, the real workers of the country, in whose name we produce the Budget, whether it is the Clerks of this House, the messengers who run our errands, the security officers out there, or our VIP drivers who drive VIPs around the country.

In that respect, I want to pause and pay a special mihi to one of our VIP drivers who passed away last night—Richard Mangu. E te rangatira ki a mātau Richard, e aroha ana ki a koe. Kāre e warewaretia e mātau, me ngā mahi maha ki te awhi i a mātau. Kāre e warewaretia. Nō reira, Richard, moe mai, moe mai i te moenga roa. E te whānau pani, he aroha ki a koutou mai i ngā mema o te Pāremata. E Richard, he aroha. He aroha ki a koutou.

[To you Richard, a noble one to us, our affectionate regards. You are one whom we will never forget, including the many cherishing things that you did for us. These things will never be forgotten. So slumber there, Richard; sleep the long sleep. To you the grieving family, affectionate regards from the members of Parliament. To you too, Richard, fond regards. Regards to you all.]

I was paying homage to a great worker who used to drive a number of Prime Ministers, members of Parliament, judges, and Cabinet Ministers, regardless of their colour, race, or creed. He was a great bloke and I wanted to pay homage to him since he has passed away and been taken north to his people to rest in peace.

This is what Labour Budgets are all about, and this is what being a Labour member is all about. It is about acknowledging the real people, not the big people in this country who can look after themselves, fend for themselves, organise lobbying at Parliament, and always get a good deal. These Budgets are about the big masses of Kiwis—the good old Kiwi battlers.

Just before I progress to giving some detail of the Budget, I want to say a few things about the ACT party. It is great to have the ACT party in this House—absolutely great. I want to give a special acknowledgment this evening to all the drongos who vote for them, because having wonderful honourable members like Rodney Hide in this House—the No. 1 scamster and crook from Fiji putting smear campaigns out—

The ASSISTANT SPEAKER (H V Ross Robertson): The member cannot use that word. He will withdraw and apologise.

Hon JOHN TAMIHERE: I accept that. I withdraw and apologise.

Dail Jones: I raise a point of order, Mr Speaker. I ask that the member be asked to withdraw and apologise. I could not hear because there was so much interjection coming from members on the Labour benches.

The ASSISTANT SPEAKER (H V Ross Robertson): I remind members that it is unparliamentary and unacceptable to interject during a point of order. People have been ordered from the House for doing that. The Minister did acknowledge it, and did withdraw and apologise.

Dail Jones: I raise a further point of order, Mr Speaker. When you are speaking, I expect that all members should be seated, including the Minister, who refused to sit at any stage during my point of order and even when you were speaking.

The ASSISTANT SPEAKER (H V Ross Robertson): Thank you. The member is now seated, and I call him.

Hon JOHN TAMIHERE: It is interesting, because with the member coming from the wonderful ACT party we knew about those pyramid-selling programmes outside the precincts of this Parliament from one of its members, Owen Jennings. We all knew that Mr Hide attended a scamsters hui worth $10 million in Fiji. He was first to the buffet over there, had a wonderful trip on behalf of the organisers of that hui, and gave it great credence. We also know that he is very interesting in the urinal, particularly on Waiheke Island.

Well, I shall put that to one side, and move quickly on to the Budget. I want to make the point very carefully and very clearly tonight that the record of Labour Governments is absolutely amazing and significant in the way in which they have set infrastructure in place. Labour Governments have set First World nation precedents in respect of the way our economy should conduct itself. The National Party has always tried to portray itself as the party of sensible economic management. History does not support that view. It is Labour Governments that have run surpluses; it is National Governments that have spent them. Labour Governments have done the hard work of setting in place structural settings. We have to sort out infrastructure right now—basic as it is—for roading and transport, for airlines, and all the way through the transport system. Labour Governments have to conduct the best economic management programmes that this nation has ever seen.

It was the hard work of Nash and Nordmeyer that enabled Holyoake to surf the good times. History will show that this Budget, under Cullen, sets the platform—

The ASSISTANT SPEAKER (H V Ross Robertson): Speaker’s ruling 6/1 (Supplement) says a member cannot be referred to by one name, but should be referred to by his or her title, portfolio, or by the term “the honourable Minister”.

Hon JOHN TAMIHERE: As you please, Mr Speaker. Moving along, I want to make another point, about numbers. National Party members opposite will struggle with it, but here we go. I will try to give them a sort of a mathematics lesson in economics 101. In the year to June 1999 when the Labour-led Government came into power, revenue was about 33.8 percent of the gross domestic product (GDP). Expenditure was about 33.3 percent of GDP. Government debt was 35.6 percent of GDP—very large. Net debt was 21 percent of GDP. In the year to June 2003—and I will labour this point because I know that Dail Jones does struggle; but for his benefit I will say it very slowly and he can read my lips—revenue is 33.2 percent of GDP, and expenditure is down to 32.1 percent of GDP. Who says that Labour Governments spend surpluses, in the light of what the Tories did?

The evidence is not on the table. Government debt is down to an all-time low of 27.3 percent of GDP, and net debt is down 7 percentage points. That is huge—$7 billion. I tell Dail Jones to get his mind around that. I know he will be struggling. Lindsay Tisch, the National Party whip, is nodding because he agrees with me. He is getting his mind around that and he understands it.

Moving on again, I ask what the response of the leader of the National Party is to that. He says to spend the surplus. Don Brash is the leader in waiting, with Simon Power as his deputy. We saw that today when they walked into the Chamber together and there was definitely a clump of the National Party caucus in the Chamber. They say we are not to spend. So, somewhere over in the National Party caucus, one day its members might sing off the same song sheet, but we should not hold our breath over it.

What often happens is that they say to spend it all now and damn the consequences—that is Bill English for us—but we are a sensible Government, supported by United Future. Simon Power asked us today why United Future members did not get on their feet and clap Michael Cullen for a great speech. Well, I say they were too busy on their knees saying “Alleluia!”. That is why. I want to acknowledge United Future members, because they knew where it is at. The United Future colleagues in this House, great Kiwis as they are, the stabilisers of the Government, called “Alleluia!”. That is what I have to say to members. This is marvellous stuff!

Just before I conclude, because I am sure I have some injury time over from spurious points of order raised, I want to acknowledge a great colleague of the Labour Party, and former Deputy Speaker of this House, who has just entered this Chamber—Geoff Braybrooke. On behalf of my colleagues I acknowledge his presence in the House today. He was a great Deputy Speaker, who used to be able to put the Tories in their place.

But moving along, I say that the Budget shows why this party will continue to sit on the Treasury benches, and why this party is the natural party of government. We can pick and choose amongst the liquorice allsorts over the other side of the Chamber as to how things work up and down, but, basically, we are here for a long time. At the same time as promoting an exciting agenda of change and innovation, we are keeping our eyes on the fundamentals. We are delivering economic management unrivalled by our trading partners. We are increasing social spending, and building infrastructure, but doing so in a prudent and appropriate manner. Clearly there is more to be done, and this Budget is all about securing the foundations of the future, and giving us a stable platform to build on. On behalf of the Labour Party, my colleagues in Cabinet, and members, I want to say to all Kiwis out there that we are down here hunkering for them, and I can assure them the Opposition is not.

At the start of my speech I would just like to tautoko the mihi of the previous speaker to Richard Mangu and his family. I also want to say to the previous speaker that, having looked at this Budget, I now know why the Taranaki Māori are making claims on the gas and oil underneath the ground. It is because there was nothing in this Budget for the economic development of Māori—I can assure members of that. Taranaki Māori have looked at the Budget, too, and they thought they had better go down the other track.

Earlier this year, New Zealand First embarked on a crusade over the issue of the increase in National Certificate of Educational Achievement (NCEA) fees, which was callously dropped on parents when their children began this school year. This Labour Government, this so-called worker-friendly Government, has increased fees by as much as 233 percent, in some cases. As I pointed out the implications of those ministerial decisions on low-income families, in particular, I can report that Labour members on the Government side of the House showed great embarrassment. Their body language was obvious, and it said the Minister had mucked that one up. I challenged the Minister to get up and say that, yes, the Government had got that one wrong and would bring the fees back down. I said that if he did that, he would earn our respect.

As everyone knows, New Zealand First is a party that always keeps its promises. So I say to the Minister of Education that he has won our partial respect. He has not brought the fees down for middle-income earners, but he certainly has done something for lower-income workers and for those with more than one child sitting qualifications in the same year. Therefore, to the Minister we offer our partial respect. I also generously add praise to the Minister for the provision of funding for 16 and 17-year-olds in tertiary education who have completed year 13. But the point is this: had it not been for that campaign by New Zealand First—supported, I might say, by no other party in this House except by the body language of the Labour members—those Budget initiatives would not have occurred. New Zealand First was prepared to take up the cudgel for the battlers on “Struggle Street”, and in this case we have had a success. That goes to show we are the party that asks “Can we fix it? Yes, we can!”

I will take that one step further. When the Labour Government took office, it inherited a design for a school qualifications system that an overseas expert had claimed could be the best system of any country in the world, if it could be successfully implemented. All that Labour had to do was to implement it properly, and it could not even do that. By the end of 2002 it was obvious that we had a shambles on our hands, and it was then that Parliament itself stepped in, in the guise of the Education and Science Committee. Through a careful investigation that committee demonstrated that the NCEA was in danger of becoming a disaster, because of underfunding. I give credit to the members of that committee, acting as an agency of Parliament itself. I believe that the members of that committee gained the essential additional funding of $78 million to support the implementation of the NCEA and the administration of other qualifications. However, the question has to be why the Government could not work that out for itself. What is wrong with this Minister that it took a select committee report to get him to understand what was staring him clearly in the face?

To understand this Budget, it is necessary to face the reality behind the spin. For example, an extra $61.2 million was announced for schools operational funding. That sounds good. I have to admit, it sounds good—but it is over 4 years. When we break that down to the increase over 1 year, we find it works out at about 2 percent, which is slightly less than the predicted rate of inflation. In other words, the schools are going backwards. Then there is the $55 million for early childhood education, to ensure that more children can access quality education before they get to school. That is also over 4 years. When the New Zealand First – National Government put its first Budget together in 1997, we put up an additional $55 million for early childhood education—and those dollars were worth more than they are now—and the present Minister of Education said that that was mean and miserly. Well, if that was the case, then this $55 million over 4 years must be even more mean and miserly.

Who are the big winners in the Budget? Kindergartens are the big winners; they are to be funded at a rate of $3.97 per hour. Other early childhood education providers will receive $3.13 in the first half of the year, and $3.18 in the second half. So those providers will receive 27 percent less funding in the first 6 months of the year, and 25 percent less in the rest of the year, than kindergartens. Those providers have to deliver the same curriculum and operate under the same Desirable Objectives and Practices. But here is the rub: kindergartens will deliver, according to this Budget, half a million fewer hours of early childhood education next year than they have delivered this year. The providers who are to receive 25 percent less than kindergartens in funding will be the ones who will be producing the two million additional hours of early childhood education.

I turn to the early childhood assistance grants. That is the money that the Government gives out for the provision of more accommodation in the early childhood education sector. It is money for new buildings. That money has been cut by 16 percent—by $1.6 million. United Future members are saying they will vote for that. In fact, they are saying “Hallelujah!” to this particular Budget, according to John Tamihere. Yet we are cutting that money for early childhood education by 16 percent.

Let us look at some of the other areas of Vote Education. I totalled together all the increases in the Vote Education departmental classes. I will go through them. In terms of policy advice, ministerial services, ownership advice, provision of information, administration of regulations, and administration of education sector resourcing—in other words, the bureaucracy—the funding has gone from $160 million last year to $182 million in this Budget. That is an increase of $22 million for the bureaucrats. I will look at another area: supporting parenting. One would think this Government would really get in behind the supporting parenting programmes, especially with United Future here in the House. United Future wants to see the delivery of Parents as First Teachers programmes and Family Start programmes, etc. Those programmes have an extra $109,000, compared with the $22 million increase for the bureaucrats; that shows where the priorities are. But when we look a little closer at that increase, we see that 1,000 fewer families will have access to parenting support programmes next year under this Budget than the number having such access now.

That is down to United Future. That is the Budget that United Future is saying “Hallelujah!” to. United Future got $28 million for the Families Commission, but the Families Commission is not, by statute, actually allowed to deliver anything. We are talking about the programmes at the coalface, the programmes that deliver and that help parents to bring up their kids and make them better citizens. This caring Government, supported by United Future, which is the family party, has reduced the access to those programmes by 1,000 families. But the good news is that we have $28 million for the Families Commission. Taxpayers do not mind paying additional funds for positive, constructive programmes that will build our society. But why are we cutting into the very ones that we know are productive and, instead, putting all that extra money into the bureaucracy?

One of the big issues facing education at the moment is the industrial issue. I say that although in this Budget the Government has poured huge amounts of extra money into teachers, I have never in my life known the teaching profession to be so disgruntled. It is disgruntled because of the mess that Trevor Mallard made of the collective contract negotiations, which were then caught up in an early election and had to put over to an alternative disputes resolution panel, which ended up giving the secondary teachers more than they had asked for in the first place. But a whole lot of people were alienated from access to that settlement, and a severe breach of the social contract occurred with those teachers.

The anger in our schools is immense. It is immense not just from those teachers who have not actually received the G3 plus increases but also from those people who did. Even the ones who have received them feel that the whole thing is unfair and unjust. The Minister of Education has a tiger by its tail, and every time he tries to fix up a pressure point here, another pressure point pops over there. We now have hundreds of millions of dollars going out purely and simply to resolve industrial issues that should have been resolved in the first place. That is not adding one jot to an improvement in the quality of education for our young children.

I finish by saying that this Budget is a nothing Budget. People need to look below the surface to see the reality of it.

Before I start I will make a comment about the previous speech. It was so full of information as to be inarticulate. Essentially, that member has my respect as a fellow educationalist, but maybe he had too much in his speech to make an impact.

Ka tū mai ahau ki te tautoko mai i te mihi poroporoaki ki tētehi o ngā rangatira e tiaki mai i ngā Minita katoa mai rā anō. Ko te tangata rā hoki, hoki atu ki tana kāinga ūkaipō. Ka tū mai ahau ki te mihi mai ki tēnā e tautoko mai i te kōrero o tōku nei hoa a Tamihere. Kei a koe hei whakapākehatia.

[An interpretation in English was given to the House.]

[I rise to endorse the farewell tribute extended to one of the respected persons who has looked after Ministers for a very long time. That person has indeed returned to his maternal home. I stand to acknowledge and support the tribute made by this colleague of mine, John Tamihere.]

I just want to take a slice of the Budget. The slice I am talking about is worth $6.5 million.

Gerry Brownlee: Nothing. Waste of time.

MAHARA OKEROA: That member would not know about it. All that he represents is a very centrist view, with regard to New Zealand society as it is. All that the National Party’s policies aim for is to appeal to a certain sector of our community, which in my view is retrospective and retrograde. All that that party’s policy does, with regard to the Treaty of Waitangi—

Ron Mark: How are the mining rights going?

MAHARA OKEROA: That member has a chance to speak. When his chance comes up, he can talk. Until then, Kahungunu, me noho, noho puku ai.

[until then, Kahungunu, you should sit down and not say anything.]

There was a great man—and he does not have any tribal affiliation in New Zealand—named Martin Luther King, who said: “Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity.” The member for Ilam is not prepared to listen to reason, and we understand that. What Martin Luther King was referring to was the commitment of this Labour Party—

Ron Mark: He didn’t even know its members.

MAHARA OKEROA: I find that member’s humour, coming from a recently reborn Māori, ill-fitting.

Labour, if I may say so, is committed to leading a nation where the Treaty of Waitangi is understood. [Interruption] If I may be allowed—there is a windbag sitting in the corner who is absolutely full of nonsense—I will say this about a former Minister in charge of Treaty of Waitangi Negotiations by the name of Sir Douglas Graham. He was the first treaty negotiations Minister, from 1991 to 1999, and he said that those 8 years were a massive learning experience for him. Why should he as a former Minister of the Crown, and especially as a former Minister in charge of Treaty of Waitangi Negotiations, say that those 8 years were a massive learning experience for him? It was because like the honourable member sitting in the corner, Sir Douglas Graham was totally ignorant of a whole range of factors that were very, very significant to Māori. If the member does not mind my interrupting him, I thought I would give that as an example of where the National Party is today.

The National members do not know anything about treaty issues. All we get from that party’s leader is a one citizenship party. What does that mean? It means to me, as a member elected for Te Tai Tonga, together with the six other Māori electorate MPs, that this is a one nation thing and it is all about assimilation. I tell that member that the dynamics of New Zealand society have moved on from that. That member is appealing to a group of people who are still living in the 1900s, the 1920s, the 1930s, the 1940s, and the 1950s. I say that member should wake up. The dynamics of our society have changed, as Sir Tipene O’Regan said. He said that Ngāi Tahu did ask, as did Waikato-Tainui, for the then National Government to run a treaty awareness and education programme for the wider public. What happened?

In response to that member over there, the newly reborn Māori, all that I have to say is this: what is the price of ignorance? The price of ignorance is about making those kinds of comments in response to a commitment by the Labour Party. That commitment is about public awareness—

Ron Mark: How far will $6 million go?

MAHARA OKEROA: It will go a helluva lot further than what you might have put in if you were in Government.

The ASSISTANT SPEAKER (H V Ross Robertson): The member must not bring me into the debate by using the word “you”.

MAHARA OKEROA: I am referring to the honourable member who keeps interrupting my speech because he has nothing else to do.

Ron Mark: That’s my job.

MAHARA OKEROA: If that is the member’s job, then I have a real aroha for him.

Hon Dover Samuels: You are overpaid, bro.

MAHARA OKEROA: Yes, he is overpaid for interrupting. We could do that for $5 an hour.

Ron Mark: How much will $6 million get?

MAHARA OKEROA: The Government, as far as I am concerned, can—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): Running commentaries are out of order. If the member wants a speech—

Ron Mark: I raise a point of order, Mr Speaker. The member is deliberately engaging me in direct discussion. Tradition allows me to respond to him. If he wishes to continue to draw me into his debate, then that is a choice he makes and he is entitled to receive a reply to the questions he puts to me. That is fair; that is normal debate in this House. If I was throwing interjections at him consistently and he was not inviting me into his debate, that would be a totally different story. But he is deliberately inviting me in.

MAHARA OKEROA: I raise a point of order, Mr Speaker. I am not inviting the member into my debate. All that he is doing is occupying himself by interrupting.

The ASSISTANT SPEAKER (H V Ross Robertson): There has been a bit of toing and froing tonight, and given the nature of the debate we will let that pass. But members should be mindful of the Standing Orders.

MAHARA OKEROA: All that I am trying to do is to eliminate the price of ignorance. The interruptions acknowledge the level of ignorance that exists.

As a member of this Labour Government I am very pleased to stand here and say that the Government wants to ensure more information is made available about the Treaty of Waitangi. The treaty provides the basis for building relationships of respect and recognition, and it is important that New Zealanders are able to debate the significance of the treaty in an informed and a positive way. I think that is the core of the policy. I think it is absolutely critical that those who avail themselves of the opportunity can gain that knowledge, so that ignorance does not sit there unchallenged.

As my concluding comment, I say I totally support anything that adds to the knowledge of the members of this House. What this issue is about is that knowledge is power, and once people are empowered we can in future have an informed debate about the treaty. Kia ora mai tātou katoa.

I raise a point of order, Mr Speaker. Throughout the previous member’s contribution to the debate I was brought into the debate, without my having made any comment. There are, of course, remedies available to me in the Standing Orders, but I think that in the circumstances those would be somewhat extreme. I simply say to the member that if he thinks he can achieve all that for $1.50 a head, kia ora to him.

The ASSISTANT SPEAKER (H V Ross Robertson): That is not a point of order.

Nothing in the Budget covers an item that may represent one of the biggest financial embarrassments for this Government over the coming year. Nothing in the Budget covers the indifference by the justice establishment, presided over by this Government, towards people who are wrongly imprisoned—who could be languishing in prison on false evidence; people who may be in prison on the basis of perjury; people who are in prison on charges labelled rapist or murderer, and who may be in prison for many, many years. I see nothing in this Budget to recognise that in some of those cases the liability, in terms of the principles announced by the Minister of Justice himself, may be as much as $600,000 per person.

Perhaps some may think that this is a strange issue for ACT to raise. We are the party that believes in truth in sentencing and zero tolerance, and is tough on crime, but believes in justice. We believe in the principles of justice, and we will defend those principles. We will defend innocents. We will even defend those who may not be innocent, but who have raised reasonable prospects of doubt about their conviction.

A month ago I mentioned the case raised by Peter Hartley, of the two Dale brothers and Mr McLeod, in prison on the evidence of one Melissa Antunovic. She has since been convicted of false complaints against others, using almost exactly the same fabrications. I have another deeply disturbing saga. Again, a miscarriage of justice may be involved, perhaps involving people who are no angels. However, I draw to this House’s attention that in this case the cost of dithering, the cost of refusing even to advise the Governor-General promptly on a petition for pardon, could run into millions of dollars. That case involves Rex Haig, whom the Minister, no doubt, would say is a scumbag, just as he has described the others I have previously mentioned. The man is certainly no angel.

In 2001, 17 months after Rex Haig’s first petition, it was rejected. Since then, with fresh evidence—12 affidavits, two respected former police officers in support, and two senior lawyers, including a QC, in support, at, I understand, no expense—a fresh petition has been lodged. But 17 months have passed since that fresh petition was lodged. The central allegation in the Haig petition is that Haig was wrongly convicted of the murder of Roderique, on the pivotal testimony of his nephew, David Hogan; that Hogan has portrayed himself as the real killer to a string of friends and former associates; that Hogan is not only a killer but arranged a second murder to silence a man to whom he confessed; that the Solicitor-General may not have had all the relevant evidence before granting Hogan immunity from prosecution.

With that petition are sworn statements from 12 people who directly, or indirectly, implicate Hogan in Roderique’s death. They allege that Hogan admitted sole responsibility for the killing on five separate occasions. Comments allegedly made by Hogan about Roderique, the murdered victim’s disappearance, included “I knocked him off.”, or, “I blew him away.” Roderique was described in one conversation by Hogan as “fish bait”. Hogan was also stated to have told friends and former associates that he framed Haig for murder. Those admissions were made in the 5 years following Roderique’s disappearance—that is, the 5 years before 1999—to people in the Christchurch, Greymouth, and Invercargill areas.

Police were well aware of two of those alleged admissions, before Haig was charged with murder. That raises a critical question. How rigorously did the police and the Crown test Hogan’s story before deciding to grant him immunity? The Crown Law Office has rebuffed the request by Nigel Hampton QC to source the information on which those immunity decisions were based, and the communications between the police and the Crown solicitor, and the Solicitor-General’s office were deemed to be privileged.

One of the two witnesses to whom Hogan allegedly confessed, prior to the arrest of Haig. was Anton Sherlock, and in a September 1994 statement to the police, Sherlock said that Hogan had admitted killing someone at sea. Sherlock later told police: “He said he would kill me if I said anything.”

In March 1995, 9 days before the Roderique murder depositions were to begin, Sherlock was bludgeoned to death at Lumsden. A Nigel Johnstone was convicted of murdering him over drug money, but that conviction, too, is challenged through the Haig petition. Sworn statements from new witnesses alleged that another man, Greg Iverson, also known as Butterfield, had killed Sherlock at Hogan’s bidding.

Why is ACT raising this in the House? Why do we care? Because we are a liberal party. We are tough on crime, but we believe that the law should not be brushed aside for convenience. We believe that innocence matters, and that the Minister should not have been waiting for 17 months after receiving that petition, when the innocents may be in prison, however unfavourably he may regard them. We believe that this is symptomatic of a smug attitude to justice, and we will speak out against it.

I want to draw the attention of this House to another smugness, and it was a smugness that was finally lost today. The Government was exposed as totally unprincipled in an area that has cost this country billions—that is, in treaty settlements. The Minister in Charge of Treaty of Waitangi Negotiations confirmed today that the public interest prevails over the Treaty of Waitangi. All the wheels of the treaty gravy train fell off this afternoon. We have tried to get principles of the Treaty of Waitangi for more than 2 years in this House, and today we learnt the most important one. The most important one is that the treaty does not stand against the public interest.

The Hon Dover Samuels told us the same thing yesterday, and I quote: “I think you can see clearly that in fact in the interests of the nation it would be appropriate that those resources be vested in the Crown”, he said, referring to oil and gas reserves, and, I think, to the royalties from them. “I think that common sense applies, and I hope that the people will see it that way.” I tell him that New Zealanders have been crying for common sense for at least 15 years. A little common sense applied to the treaty would not have had the trust set up for the radio spectrum. A little common sense applied to the treaty would not have had local authorities all over this country spending millions trying to understand how far they must subject the decisions of elected counsellors to the consultations, veto rights, or involvement of unelected representatives of people with inherited brown skin.

New Zealanders will be wanting to know from this Government just why it is that the national interest did not prevail and send packing years ago the claim to native plants and animals—the ownership of every native plant and animal species in this country. Why is Wai 262 still before the tribunal, if common sense, as the Hon Dover Samuels says, or the national interest, as the Minister Margaret Wilson says, is all that is needed to prevail over the treaty industry? New Zealanders will be wanting to know whether the foreshore might now be safe or whether the Queen’s Chain is no longer open to being claimed. They might want to know whether the national interest, which now plainly trumps the treaty, can protect them from some of those other myths, the thousands of lawyers and other consultants who are making a living out of interpreting the completely uninterpretable provisions this Government has been putting into legislation.

Was it a presentiment of a change of heart that let us see cultural landscapes, spiritual values, and ancestral landscapes dropped at the very last minute from the Resource Management Act? What about the rest of the Resource Management Act veto powers—the powers that have given the stand-over rights that have allowed Ngāi Tahu to extract $1.5 million from Contact Energy; that have allowed thousands of ordinary New Zealanders to be subjected to a treaty toll gate across the roads of their property? In essence, to be subjected to claims under the treaty that had no foundation in the treaty, claims that were based purely on spurious principles—on principles that never existed, that were inserted into the law by this Government—and claims that do not stand scrutiny. These so-called principles we have never been able to find, but, plainly, they do not now stand against the national interest, or even common sense, as Dover Samuels said.

Why has this Government refused, through 2 years of Parliament, to tell us what the principles were? Lurking in the back of its mind we apparently had a principle that all claims need to look to the national interest. Thank goodness for the national interest! This Government should have been looking to the national interest well before it sent these billions of dollars to waste.

It is always a privilege to speak in the Budget debate, and I appreciate it very much. I would like to compliment the Minister of Finance, Dr Michael Cullen, and the Ministers who have brained out a very prudent Budget for this particular year. A prudent Budget can give the country some confidence that there are safe hands on the tiller—a cliché oft used by this side, but one that is nevertheless true—and provides a sense of certainty and stability in which the nation can move forward. Mix that with the vision, growth, and innovation that we as a Government offer this country, and we have the basis of a winner. In my own electorate of Wairarapa, for example, the kind of winning in this particular Budget has certainly been highlighted within the education sector. I know for certain that there will be a nearly $400,000 increase for operational funding in that electorate, and that will be welcomed. That, of course, is on top of what is already provided for those matters in the Wairarapa, which is about $17 million.

This Government has also shown that it has a commitment to the young people of this country. I would like to highlight something from the newsletter of Makora College, Masterton, published on 16 May—a day after the Budget was delivered. Its opinion of how that Budget affected the school goes like this: “The Budget this week contains significant funding for education. The initiatives announced will have a positive impact on Makora College. All secondary schools will receive increased staffing from next year. There will be an increase in the operations grant, and there will be extra funding for schools like Makora to assist in transition from school-to-work programmes. Interestingly, the Budget also included significant money for network reviews. There will be another ten areas around the country where they will take place”, and the article goes on. That is just one of the colleges in the Wairarapa. Its response to the Budget with regard to its particular interest was positive and very quick, and that can be said for many other areas around the country.

Since this Government came on to the Treasury benches after the 1999 election, we have built a baseline improvement where we wanted to see things happen. We knew that the out years would lay a solid foundation and add to the stability and certainty that we want this country to feel in very trying times. Many members have referred to those times in relation to a number of issues of international significance, and we are, of course, part of that global world.

There were those who criticised the surplus that Dr Cullen highlighted as being a feature of this Budget, but he also tempered it with the reality that a lot of it is paper figures, and that the true aspect of the surplus is much less than that. No, he will not go out and spend it wildly and willy-nilly, simply because a Government must take a certain amount of responsibility for what can be seen as potentially insecure for the future of the economy of the country. That has been highlighted by a number of members who mentioned the decline in some economic areas that we might see in the next wee while. One does not go out and spend the reserves—for want of a better term—when they might well be needed by many in our producing industries to offset any of the negative impacts that could happen globally in the future. We are reinforcing ourselves. I believe the country should take some comfort from the fact that it is a responsible Government that does that, and does not just blow all the money when it feels like it.

Obviously, health has been another area of improvement. A significant amount in this Budget has again been applied to the health area. In order to have a thriving nation, one must have a healthy nation. We have had many years of neglect, of upheaval, and of change. We are now looking to temper that and make sure that those who most need access to the services will receive them, and certainly as we can afford to make that access more available to a much wider group of people. For example, if people are living in an adequately healthy home environment, then the possibility of disease and other ailments that might clog up our hospital corridors could perhaps be minimised. The rolling out of public health organisations, which has proven to be successful and welcome around the country, has to bring benefits to very many New Zealanders.

We must improve on that, of course. This is no time to sit down and be complacent. That would be irresponsible. We must always be striving for the betterment of this nation. This Government is genuine and sincere in its intent to do that, given some of the difficulties that lie around us. I guess it is the nature of Parliament and these kinds of debates that it is the job of the Opposition to whinge, moan, grizzle, and give us a hard time over it all. However, at the end of the day, there would be a lot more whinging and moaning if the coffers were empty and there was nothing to secure us for the future. We are, indeed, keeping a lid on that kind of extravagance and flippancy, which certainly would not be helpful.

From the social services point of view—and I have an interest in that area as chairperson of the Social Services Committee—I look forward to seeing the application of some of the funding that has been mentioned in the Budget, and, in particular, the $20 million-plus going towards the Families Commission. That again reinforces the very networks of our society that help to make us strong and lead us forward. There are many complex factors to be addressed, and we hope that the legislation that is now before the select committee will try to address them. Some of the funding that has gone in behind that measure will reinforce and secure some certainty in that area for the future.

At this stage of a Budget debate it is very difficult to mention new things, because there is just so much good news in the Budget. People have mentioned that it has been boring, and that there is not much in it. However, that is not exactly true. In regional development and through Industry New Zealand, we are still maintaining the importance of our creative industries. In the film industry, for example, we have production and products that are out there showcasing our world. That applies not only to what we attract here via The Lord of the Rings - type productions, or The Last Samurai, but also to what our Kiwi film makers are doing out there in the international world.

Although I say it ever so modestly, I am very pleased that the documentary about my own life, which has since picked up six awards internationally, is about to play in June to 250 million Americans, which is a very large audience. That particular programme encapsulates not only the story of my life, but is a story about New Zealand. It happens to be a good news story. It is a little disheartening that the producer of that film received some funding assistance from our agencies here in New Zealand, but she still struggled and had to go overseas to pick up the rest of the funding. It is quite amazing that that purely New Zealand product—except for most of its funding—will now be out there helping to highlight some of the great features, and the humanity and compassion, of this country. In conclusion, I believe that humanity, compassion, and prudence are some of the features of this particular Budget.

One of the more insightful comments on this year’s Budget was one penned by the business editor of the New Zealand Herald. He said this: “This year’s Budget is akin to putting mag wheels and an in-car satellite navigation system into the same old Holden Barina and sending it out for speed trials on an increasingly badly potholed track.” He went on to say: “A successful economy needs a powerful engine, and as with time trials, faster growth can only be achieved on a good track.” He said the engine of economic growth in New Zealand was business, but that it continued to be held back by excessive Government regulation and inadequate infrastructure. To Jim Eagles, I say, “hear, hear!” That is a very apt description of this year’s Budget—lots of frills around the edges, little bits of money for this and little bits of money for that, while it fails totally to address the main issues holding back growth in this country. They are excessive bureaucracy, excessive red tape or regulation—whatever one wants to call it—excessive compliance costs, and inadequate infrastructure.

It is fascinating to look at the Budget and see what the Government is allocating for infrastructure development in this next year. I searched through the great pile of media statements and I did find something on infrastructure. It said, wait for it—$550,000 for a stocktake of infrastructure in this country; not $550,000 to actually to do something about our inadequate infrastructure, no sir, but for a stocktake. I found another bit too: another $1m over 2 years, which, of course, is $500,000 a year, to investigate—not to do anything at all, or build any more infrastructure—but to investigate pricing and regulatory treatment. So there we have it—in the next 12 months there will be half a million dollars for a stocktake and half a million dollars for an investigation into pricing and regulatory treatment. That is why the business editor of the New Zealand Herald said that this Government’s Budget did nothing to address the serious infrastructure issues.

I would like anyone in the Auckland region listening to this Budget debate tonight to take note of that in particular, because that is what this Government has done in this Budget to fix the massive transport and motorway problems in Auckland. There is an infrastructure crisis in Auckland, and the Government allocates half a million dollars for a stocktake of infrastructure and $500,000 for an investigation into pricing and regulatory treatment.

Now on Monday night this week, the National Party held a forum in Orewa, in my electorate.

Hon Damien O'Connor: Two people turned up.

Dr the Hon LOCKWOOD SMITH: I tell the Hon Damien O’Connor that it was probably the biggest political meeting in the region for 15 years. Four hundred people were packed into that facility in Orewa; they were hanging from the rafters. What is important is not the fact that there was a huge crowd, but what was revealed. Transit New Zealand had a court ruling that it had to complete the extension of the motorway system north of Auckland by 31 December this year. Until 31 December this year, the Environment Court had approved the use of what is commonly called the Link Road, or Westhoe Road, down through Orewa, where the motorway ends in the middle of nowhere. So many tens of thousands of people know all about that as they try to head north of Auckland on weekends, not to mention during the week. From 31 December this year, Transit no longer has consent to use the Link Road, so the motorway stops up in the northern part of Orewa and goes no further. Back in 1999 when National was in Government, the money was available to build that road right through to Puhoi.

At that forum, we heard that Helen Clark had meddled in the funding. I do not know whether that is true, but that was what one of the speakers claimed. There were four speakers at the forum: a property developer from Orewa, whose property development the Link Road runs down through, and who is inevitably involved in the whole thing; the chair of the Auckland Regional Council’s transport committee, Catherine Harland; Transfund’s Auckland regional manager, Dave MacDonald, and the national highway manager of Transit New Zealand, Rick Van Barneveld. But what one of the speakers claimed is not the most important thing. It is that Transit New Zealand told that forum of 400 people that it had applied for consents to use the Link Road—and that, of course, means that the motorway will not be constructed north of Auckland, and why I want Auckland listeners to hear this—not for 1 more year, 2, 3, 4, 5, 6, or 7 more years, not even 8 or 9 more years. Transit New Zealand has applied for consents to use the Link Road down through Orewa from the end of the motorway, which ends in the middle of nowhere, for 10 more years. The people of Auckland need to know that this Labour Government and its Transit operation say at the moment that they will not have the motorway extended north of Auckland for 10 years—not till 2010. I tell a lie—I was wrong there a moment ago. Forgive me, it is till the end of 2010—7 more years.

What Transit also applied for was an extension beyond 2010, if the motorway could not be constructed because of circumstances beyond its control. I want Auckland people to know about that, because in 1999 that motorway was going to be built by the end of this year. Under this Labour Government, that motorway will not be completed for 7 more years at least. Why that is so serious is that already on weekends the traffic jams go all the way back to Warkworth. It takes people hours and hours to access Auckland from the north. One-third of this country’s economy is being strangled by the lack of infrastructure, and Labour in its Budget has allocated $500,000 to do a stocktake. We do not need a damn stocktake; we need a Government with the balls to get up there and build that motorway. There is no other way to describe it. That lily-livered bunch opposite that gives $500,000 for a stocktake should be ashamed of itself, because until Monday night no one knew that Transit, on behalf of this Government, had applied for an extension through to the end of 2010 for the use of the Link Road down through Orewa. By then, there will not even be room to put the cars on the road, let alone for them to be driven anywhere.

That is a shocking indictment on this Government. It will put $2 billion into the “Cullen Fund”—70 percent of which will be invested on the New York Stock Exchange, while our people in Auckland and to the north cannot even travel between the north and Auckland without it taking several hours. It is an indictment on this Government, and the people of Auckland now know about it.

The ASSISTANT SPEAKER (Hon Clem Simich): The next speaker will take 5 minutes. The bell will ring at the 5-minute mark, followed by a 5-minute bell at the end.

I walked into the House on Budget day with high expectations of an exciting Budget. After all, this Government had a $4 billion surplus, but what I heard of this Budget was dull, boring, and lacked anything to do with the real issues facing this country right now. The Minister of Finance, Michael Cullen, told us yesterday that the $4 billion surplus was a paper surplus only, not really cash in the bank. The real truth about the surplus—and what the Government is not telling the people—is that Michael Cullen has no idea where it came from and he is salting it away for a rainy day. That rainy day is the election year. Promises will be made to win votes, but immediately the election is over, the promises and the surplus will evaporate. The people are being set up to be conned yet again by this Labour Government.

This Budget allows funding for an additional 50 police in Auckland only, spread over 4 years. Auckland is short by more than twice that number right now, caused by the mass exodus of people leaving the police because of overwork and the futility they feel when they look at the bulging cabinets of incomplete case files—files where the identity, name, and address of the perpetrator is known but the police do not have the personnel or the resources to get the cases to the courts and finality. The Minister of Police, George Hawkins, proudly stands in this House and tells us how close police manning levels are to the budgeted levels, but the Minister is not giving us the figures for the approved levels, which are quite different to the budgeted levels. For example, a station with an authorised level of 30 has a budgeted level of 20—sorry, that has just been reduced to 19 in this Budget, and the actual level is 18. We are constantly told that the station is one person short only. In fact, that station is 12 short of the authorised level, which was set 20 to 25 years ago. Members should think about that. This Government’s cunning sleight of hand is nothing more than deception. The way those figures are presented make it a lie.

The “Weekend Herald” of May 17-18 states: “The police deal with crime on priorities worked out nationally, regionally, and put into practice on a daily basis by station supervisors. Crimes of violence are given the highest priority in line with public expectations.” Minor offences are way down the list and left to rot in the gutter. All of that is after issuing one speeding ticket and one seatbelt ticket per hour. Clearly, that is a directive to help compensate for the shortfall in police funding offered by this Budget. Jill Pettis screamed across the House to my colleague Peter Brown: “What about the burglaries?” Let us look at the “Crime File” of the week’s burglaries in south Auckland—the home patch of the Minister of Police, George Hawkins—which was published last Friday, 16 May, in the Manukau Courier. In Mangere, there were 10 burglaries in the previous week, up to 16 in the current week. In Otahuhu, there were 12, up to 25. In Otara, there were 10, up to 18. In Papatoetoe—and he would be pleased about this one—there were 32, down to 21, but in Manurewa, there were 15, up to 30. Where is the so-called lowering of the burglary rate, as Jill Pettis called out?

Dr Cullen and Mr Hawkins should get real and provide the police with the resources and manpower to do the job the public expects them to do—that is, respond to the public need, solve the cases, and really reduce crime levels in all of our cities. They should give back to the police the pride they need in the work they do, and regain the respect of the public.

New Zealand First believes that this is a bogus Budget for just about every New Zealander. It tries to portray New Zealand as a nation basking in the glow of economic prosperity with another record Budget surplus. Nothing could be less accurate. New Zealand’s poverty crisis was not addressed at all. It is not a good-news Budget for low-income and middle-income families.

New Zealand First believes that this Budget is heartless, hare-brained, and hazardous. It is heartless because thousands of children who are not fortunate enough to be born into a wealthy family will continue to be disadvantaged from birth, and their hard-working parents will continue to battle on to provide the basic necessities for their children. This heartless Budget continues to tolerate the fact that three out of every 10 children are living in poverty, despite the Government’s own Ministry of Social Development warning that there has been an increase in child poverty and that 150,000 children under 5 live in poor families. This Budget is out of step with the needs of poor New Zealand families. It is heartless, too, for the women of New Zealand, who have suffered because of Dr Bottrill and his misreading of smear tests. That compensation process is still being dragged out.

The second “h” that describes this Budget is “hare-brained”. It chooses to keep money in the bank that could be used as a preventive measure in the areas of health, pre-school training, education, and dentistry for our young people. We all know that large amounts of extra dollars will be required in those areas before the full costs of the ageing population are felt in the economy. The Ministry of Social Development has warned the Government that there is an urgent need to increase spending on young people before 2010, when the full cost of the ageing population kicks in. Has that been budgeted for? No.

The Budget is hare-brained, because families on low incomes—which, New Zealand First reminds the Government, make up a huge proportion of society today—are left with a miserly rise in the income thresholds for family assistance that has not kept up with inflation. There is no excuse for the Government delaying income support for families for another year. There is no excuse, either, for reducing the number of families that will have access to parenting programmes, as pointed out by the Hon Brian Donnelly. It is an unfortunate fact that the subsidised childcare provided for in this Budget is unlikely to reach many people because they do not fit the Government’s poverty criteria.

The Budget is hare-brained because there is nothing in this Budget for the elderly. For two elections, this Government has promised to remove asset testing, but the elderly have been told that that is still coming. They have been told that 2005 is the latest date.

The final “h” is “hazardous”. This Budget is hazardous for New Zealanders. It does not acknowledge the serious repercussions of what financial stress can do to a family. The Government has ignored the fact that many couples now have to deal with an enormous student loan debt as well as their own health and general living costs. The bottom line is that that group has little disposable income in their pockets to cater for the financial cost and stress of raising a family. There will be that $28 million for the Families Commission, but another Government department will not help those people in any way whatsoever. All it means is that extra money is being put into a bureaucracy. This may be a good Budget for some people but for families trying to educate, clothe, feed, and care for their children, this is a nothing Budget. It will extract a huge social price. The time for action is now, not next year in time to give out these cherries for the next election.

Nor did we ever expect to see this Government encourage foreign students to leave health debts for the taxpayer, because, as visitors to this country, they apparently bring in more money than the debts they leave. It is absolutely disgraceful, at a time when many children in New Zealand cannot access some of the services that foreign students can access, and then leave debts behind for us to pick up.

I say to Barbara Stewart that the only “h” word I would use is “helpful”. I apologise now if I seem a little boring in my speech, but I think people in this country appreciated the fact that the Budget was boring. It was predictable, consistent, and helpful. It may be boring in some people’s eyes—[Interruption]—but I tell Mr Shirley that it is exactly what this country needed. Labour wants to carry on with the good work that it has put in place, and with the programmes that it has laid down over the last 3 years in Government.

When Labour came into Government we had a dollar that was overvalued. We got in there, spoke to the Reserve Bank, and got the dollar down to a reasonable and sensible level that offered security to exporters. That one move alone has driven this economy on to the stable footing we have today. I will speak briefly about rural industries, about farmers, and about the very industries that drive this economy and will do so for a long time into the future. The reality is that, in spite of all the other claims made by many other industries, the agricultural and horticultural sectors have out-performed most other industries in this country for many, many years, and they will continue to do so.

We settled the dollar. We focused on the infrastructural needs of the rural sector, and we put some other key things in place. We put secondary schools on a good footing. We put the Modern Apprenticeships scheme in place. There are almost 6,000 modern apprenticeships now, but there were none under the National-ACT Government because it thought the market would deliver all the needs of the growing New Zealand economy—regardless of the fact that the economy was not growing too well under that Government.

On behalf of farmers I say that they wanted a steady, boring, consistent Budget, because they are doing OK. I must quote from Federated Farmers, which stated: “In the light of the very uncertain economic outlook, with falling overseas demand in prices for our products, it is wise for the finance Minister to be wary of eroding the surplus.” Federated Farmers’ expectations are not high, and we delivered for them in a number of ways. Firstly, we committed an extra $14.2 million to World Trade Organization negotiations. That is something that the last National-ACT Government did not do. Secondly, we are going to spend an extra $6 million in biosecurity. A number of incursions occurred under the last National Government—[Interruption]—Mr Worth may not have been in Parliament but I tell him that it was his colleagues who played a part in those biosecurity breaches because the last National Government did not commit funding to biosecurity. We have committed funding, and we will increase it in the future.

One of the joys for the farming sector is an extra $10 million for the Sustainable Farming Fund. The market gurus, and the flat-earth people in the National Party, do not think we need to intervene and facilitate any sustainable growth in the farming sector. There are hundreds of projects around the country now that are focused on growing the agricultural and horticultural sectors, on looking after the environment, and on producing better results from the money invested. There are a large number of areas in which we have helped the rural sector. We have committed $35 million specifically to rural health initiatives.

John Key: It is not enough.

Hon DAMIEN O'CONNOR: That member is from the party that will cut taxes and spending, and he is saying that we did not spend enough. I tell Mr Key that we are very responsible economic managers. He will not have the opportunity for a long, long time to show how incompetent he would be in Government.

We know that it has been difficult to get medical professionals in the rural sector. We committed money and set up reasonable rostering so that medical professionals could have some time off, and we provided locum support—doctors and nurses who will come in and help—so that those professionals will stay in the rural sector rather than pack their bags and go. If doctors and nurses go from the rural sector then farmers and workers will follow, and that will mean a run-down of our productive sector. We are not going to stand by and let that happen as the last National Government did. We have committed money.

Simon Power: Rubbish!

Hon DAMIEN O'CONNOR: Does that member know why his colleagues got kicked out of Government? They got kicked out because they ignored the productive rural and horticultural sectors in this country. They turned their backs on those sectors, which kicked them out of Government—for a long, long time into the future.

That is why we are making such a commitment to look after those sectors. We have a surgical bus going around this country, which delivers surgery to rural people when they never thought such a thing would be possible. That is the kind of innovation this Government has brought to this economy—growth, security, and innovation. We will continue to bring that innovation. How have we done that? What did we do this year? We have allocated an extra $140 million over the next 4 years for science and technology. We have allocated $110 million over the next 4 years to respond to the recommendations on biotechnology—

John Key: You won’t be anywhere near the Treasury benches to administer it.

Hon DAMIEN O'CONNOR: Mr Key probably does not understand what biotechnology is and what it can do for this economy—because unless Governments are prepared to commit money to help facilitate that growth, it will not happen. We have committed that money, and we look forward to the growth in that sector, which is built on the successful agricultural sector in this country.

There are many, many other good things that this Government has done, but I have to go back and ask what the alternative would have been. What if, by a long, long shot, we are ever to have Mr Brash as Minister of Finance? What would he do? Of course, Mr Brash was going to cut taxes. We heard the age-old Tory dogma of cutting taxes, yet Mr Key says we do not spend enough money. What is the cost of cutting taxes? It is probably a couple of billion dollars. Mr Brash would also increase spending on defence and police, and do members know why? There will be so much social inequity under the next National-ACT Government—which we will not see for a long time—that it will have to spend that money. At least he has some idea of what might be necessary in the future. Mr Brash, in his visionary way, wants to have drug testing of beneficiaries. What a wonderful innovation! What else would Mr Brash do? He would slash Government expenditure by 20 percent.

Labour is not prepared to undertake those draconian policies. They are the vision of the National Party—if it ever works out who might be the next leader, and if it ever has someone with any vision and leadership to take it forward. Perhaps that leader will be Mr Power. He is not prepared to stand up and say he wants to be the leader of the National Party, because he knows the party will be in the doldrums for a long, long time. I ask Mr Power whether that is correct. What about Mr Key? He is an upcoming leader, but, no, he is not prepared to do anything either because he knows that he will be in the dog box for a long time.

I hope that speech was boring enough. I hope I have emphasised just a few of the key things that Labour has done for the rural sector in this country. People in the rural sector know that more apprenticeships will mean more tradespeople for the rural sector. They know that getting people into training will help drive agriculture and horticulture in the future, and they know that if we help doctors and nurses, they, out in the rural sector, will get help when they need it.

This Government has undertaken a programme over the last 3, now almost 4, years to drive this economy into the future, and we will be doing that for a long time yet. If Dr Cullen comes up with another boring Budget next year, then I will be more than happy to stand up in this House and give another boring speech in the Budget debate, because what this country wants is consistency, security into the future, and the knowledge that this Government will not sell its assets, privatise the roading system, or cut taxes unnecessarily. Those are the only alternative policies put up by the National Party or the ACT party. Thankfully, I trust the wisdom of New Zealanders not to put those parties into power for a long, long time.

Most members in this House will know that ever since I arrived here I have been asking the Government to explain why all the revenue raised from petrol excise taxes is not spent on transport-related expenditure. The answer I have normally been given is that the Government could not afford to, that it would have to raise new revenue somehow to recover what was taken from the consolidated account and put back into the National Land Transport Fund, or it would have to cut expenses in some other area. The Government frequently asks: “What hospitals or what schools will we close?” If the members of this House cannot recall my frequent questions in this regard, I am sure that those who most certainly do recall them are the 900,000 members of the Automobile Association , Federated Farmers, members of the Road Transport Forum, Local Government New Zealand—which, year after year, must extract more rates from property owners to pay for local roads—and Business New Zealand, and the residents of Auckland, Wellington, and Tauranga who are facing increasing congestion on their streets every year.

This raiding of the petrol excise taxes began in the 1970s when Government began to spend less on roads than it was collecting. The situation was worse during the 1980s when income was 211 percent of expenditure, rising to a peak of 283 percent by 1990. By the year 2000 it had reduced to 165 percent, but rose again to 174 percent in 2002. Now, in this Budget, it is projected to rise to 182 percent. In fact, I was told that during the stormy years of the National - New Zealand First coalition, when New Zealand First, to its credit, was trying to get greater transparency over this expenditure, the Minister of Finance, Bill Birch, threatened to resign if any more of his precious cash cow was touched. That is the way Ministers of Finance refer to this funding.

The most common response of former Governments, both National and Labour, when asked why more of the petrol excise tax money is not spent on the roads we so desperately need—roads that could save lives and reduce injuries, and therefore save health and accident compensation costs—is to answer with questions: “What schools would you like to close? What hospitals would you close? What surgeries will you cancel? What taxes would you raise?” But in this Budget the Government announces new expenditure on health and education, and a whole raft of other new spending, without closing hospitals or schools, or raising new taxes. The Government is able to do that because of a surplus, and it chooses what to allocate that extra revenue to without cutting some other department’s expenditure at all—except, perhaps, the $13 million cut, ironically, from Transfund in this Budget.

My point is that this new spending announced in the Budget is possible only because of the planned plundering of the National Land Transport Fund next year to the tune of $452 million of fuel excise taxes, which will be diverted to the consolidated account, or $867 million if we simply take the excess of revenue from the petrol excise and road-user charges, which totals $1.579 billion over Transfund’s budget of $867 million. The much-acclaimed surplus then is not really as large as it appears to be, and it has been bolstered only by the excess of revenue collected from the motorists of this country over the amount spent by Transfund.

That begs the question of who really is paying for this new spending. That answer is simple: the New Zealand motorist is. Motorists are paying for the new health and education initiatives, as they have paid for them year after year under successive Governments. Previous Governments have raided the National Land Transport Fund to meet those other areas.

We do not expect this situation to be corrected overnight. It has happened over the course of 20 to 30 years, and it will take more than a few years to correct it. But now the results of robbing Peter to pay Paul have come home to roost with this Government—or should I say the robbing of Paul to pay Trevor, or the robbing of Paul to pay Annette? What worries me is whether Paul will be robbed again next year to pay Steve. We ask this Government to break with the old, bad habits of the 1980s and 1990s and commit, in next year’s Budget, to replace over time the money it has raided from the National Land Transport Fund. I know that the Minister is aware of the problem, and I trust it will be dealt with.

This is a Budget of huge missed opportunities. This is a Budget that was given a D minus by a leading New Zealand economist, Susan St John, who, one would think, was a friend of the Clark-Cullen Government.

Simon Power: No friends left.

Dr PAUL HUTCHISON: That is right—no friends left. From almost every commentator in New Zealand, from either side of the political spectrum, from the banks, from the farms, from the business community, and from the Child Poverty Action Group, is the view that Dr Cullen’s Budget is a miserable failure. It is a failure because Dr Cullen had the opportunity, with a paper budget surplus of $4 billion, to put in serious policies that would promote and sustain economic growth, but he failed. He absolutely failed.

John Key: He doctored the Budget.

Dr PAUL HUTCHISON: He absolutely did. Dr Cullen’s Budget is a failure, because it has, in the words of the Child Poverty Action Group, done nothing for 300,000 of New Zealand’s poorest children. It is a failure because it has fuelled one of the most unfair and inequitable primary health systems that I know of anywhere in the world, and Helen Clark and Annette King should bow their heads in shame. I do accept, however, that the Hon Pete Hodgson made some effort by investing in more science research, and attempting to expand New Zealand’s public and private research investment. I applaud that. But as Pete Hodgson himself said in this House, there is a long, long, way to go. That improvement could be totally offset by this Government’s insistence on getting the fundamentals wrong.

I would like to remind the House that in 1960 Australians were slightly worse off than New Zealanders in terms of per capita income. Today, they are $200 per week better off than New Zealanders in per capita income, for every man, woman, and child, and that is because they have looked at the fundamentals, which is something that Dr Cullen has failed to do. I would like to refer members to a little tome that came from Australia. It is that Government’s innovation report of 2002. It talks about the economic framework. It states: “In recent years, Australia’s economic fundamentals have improved substantially—we continue to achieve strong economic growth, in an environment of lower interest rates, low inflation, and a new tax system.” It is a tax system that is markedly different from New Zealand’s, in that Australia has a company tax rate well below ours. The report goes on to state: “The Government continues to pursue reforms aimed at stimulating a positive environment for investment in new business development. A strong economy, profitable businesses, and a secure tax base provide the best opportunities for investment and innovation in R & D.” The Labour Government is not moving in this vital area of getting the fundamentals right and of lowering company tax, and in 2 years’ time a National Government will put that right. Dr Cullen’s Budget added $1.5 billion more to social spending, but, as was pointed out by the Child Poverty Action Group, much of the social spending was inequitable, and in the case of health the principle that those most in need receive the scarce health dollar has been utterly abandoned.

A key weakness of this Budget is that Dr Cullen has failed miserably to stimulate the engine of economic growth—the small, medium, and large businesses that make up the lifeblood of our economy. The Clark Labour Government seems to have a congenital reflex to bring in regulatory hurdles. The obvious example is, of course, the Resource Management Act, but, by chance, there happens to be an excellent article in today’s Independent by the National MP for Port Waikato. The article describes the Government’s Pavlovian-dog readiness to over-regulate the new organisms legislation, putting it in danger of becoming the biotechnology equivalent of the Resource Management Act. That is a tragedy for New Zealand, particularly when the Government’s growth and innovation strategy focuses on biotechnology as a major area to grow the New Zealand economy. It is a tragedy that the Government’s own biotechnology task force talks about the possibility of a $10 billion industry for New Zealand in the next 10 years, but adds: “The biotechnology industry must have a regulatory environment that is transparent and predictable.” The facts under this Labour Government are the very opposite. This is what the chief executive officer of PPL Therapeutics had to say only 2 weeks ago at a symposium at the royal society: “While each and every ERMA application for transgenic herd production is subject to public debate, investment by biotechnology companies will dry up and wither away.”

The morning after the Budget, I decided to go to a seminar at Auckland University to gain a perspective of how the Budget was viewed by a group other than the business community. I have often heard people say that a mark of a country’s humanity and civilisation is the way in which it treats the lowest common denominator. The view of the meeting at Auckland University, the day after the Cullen Budget, was that this Labour Government had basically ignored the concerns of the 300,000 children who come from the poorest homes. That has to be an indictment on this Labour Government. It is hugely ironic that in a year with a record surplus the Helen Clark - led Government abandons children who are most in need.

Simon Power: It’s appalling.

Dr PAUL HUTCHISON: It is appalling. The member is absolutely right. As an obstetrician, I am deeply aware of how absolutely vital the first 5 years of life are for a child’s development. In fact, it is hugely important—

John Key: The first 5 minutes.

Dr PAUL HUTCHISON: The first 5 minutes—absolutely. It is hugely important for New Zealanders to realise that one of the greatest investments we can make as a nation is to ensure that all our children are given the opportunity to achieve their full potential by access to first-class education and health, from preconception, but that as adults they should exercise individual responsibility. What an irony it is for the Clark-Cullen Government that this is the second year that a huge amount of taxpayers’ money will be directed towards a superannuation fund—a fund that will be largely invested overseas, and a fund that could have provided far greater quality of spending if it were being used to stimulate the New Zealand economy. As I noted at the beginning of this speech, the Cullen Budget is marked as gaining a D minus grade. It is absolutely a opportunity missed, and it is another of Labour’s abject failures.

The last speaker on the Government side in this debate was Damien O’Connor, a Minister of the Crown. What people have to realise, of course, is that everyone has a job in this executive. There are, I think, only four people who have not got a special job. Let me tell members that it is the best way for any Prime Minister to keep control—give them all a job! Buy them off! We have the biggest executive ever, I think.

Ron Mark: In history.

Hon KEN SHIRLEY: Yes, the biggest executive in history. Every week there is a new executive position and a new assistant—someone else to carry the handbag. It just goes on and on. But I come back to Mr Damien O’Connor. I actually have a lot of respect for Mr O’Connor. He is a solid, rural member. He comes from the West Coast. But let me just tell members what he actually said, because it is very revealing. This comment came from a Minister in the Government—a Minister of the Crown. He was praising the rural sector in New Zealand, and he said that his Government got the dollar down. He said that they settled the dollar. That is a very interesting concept, is it not? It is true that when the Helen Clark Labour socialist Government was elected, the dollar did take a dive. But it was actually driven down by the confidence of international investors. It had nothing whatsoever to do with—

Hon Damien O'Connor: What about the targets?

Hon KEN SHIRLEY: He is interjecting on me now. The other side—which he does not forget—is that in recent months the dollar has gone up. Did the member’s Government do that, too? Is that part of the targets? Is that a deliberate policy? The nice little message the member is giving to the farmers is: “Hey, we got the dollar down for you.” Is the member now saying that the Government put the dollar up for them? Which way is it, I ask Mr O’Connor. Was the Government in control when it drove the dollar down, or was that international markets? Or is the Government in control now and driving the dollar up? Or is that international markets? He cannot have it both ways. I ask him to nominate one or the other, because it is a very curious position that he has adopted. He is caught both ways, whichever way he looks at it.

This Budget purported to have a $4 billion surplus. Michael Cullen and all the Ministers—all 27 of them, I think it is—have been swanning around the country and saying: “We have delivered a Budget surplus. We can manage the economy. The surplus is $4 billion.” All of a sudden, come Budget day—oh no! The Government’s constituents are saying: “Let’s have more welfare spending. Let’s spend more. Let’s have more for Māori television and all the rest of it.” Then, all of a sudden, it is not really a $4 billion surplus. It is actually only a $1.5 billion surplus. So when the Government actually comes to spend it, it is only a $1.5 billion surplus.

I have been doing some work, and talking to some people who are very knowledgable on the subject. They are actually doing some further figures. They tell me that when we take the capital expenditure that is involved in this Budget and the financial investment for policy purposes, which, of course, includes the ”Cullen fund’’, that great monster, their assessment—and it is not final yet; I will be bringing it to the House—is that this Budget, in international terms, how all other countries assess it, is actually a deficit. This is a deficit Budget. At a time of good fortune, because of a low dollar, very good climate conditions for our export crops, record agricultural production because of the favourable climate conditions over the last 4 years, and good international commodity prices—at a time when all those stars are in alignment—this Government is actually running a Budget deficit, because of its wasteful spending. That is indeed a very worrying situation. What have we got? We have got $34 million being thrown out on the America’s Cup. Who actually believes that it is the role of the Government to be funding a sporting event for the international well-to-do?

Sure, we ought to have pride in the America’s Cup, but is it the role of the Government to throw money at it? Government members say: “Oh, but it will encourage investment and earnings.” Well, why not give $34 million to Fonterra? Why not give $34 million to Carter Holt Harvey, which is owned by International Paper—or 51 percent is.

Stephen Franks: Or EDS.

Hon KEN SHIRLEY: The Government has given money to EDS. My colleague has reminded me of Jim Anderton and his “job machine”—this great ministry to create jobs and help regional development. We have had Sovereign Yachts, and now it is the America’s Cup. The Government actually dished out hard-earned taxpayers’ money to EDS—a multinational corporate monster. I am not against multinational corporate monsters. I think they are great. But, hell, do they need to have their hand in the hip pocket of the poor struggling New Zealand taxpayer? I do not think so. But Jim Anderton and this Government thought it would be a good idea to give that company a special-projects grant to develop a particular market. I have spoken to some people at EDS, and they are laughing. They think it is a joke. They have taken the Government’s money—I should say our money; the country’s money—but they despise the Government. They think the Government is a fool. The Government continues to go around the country, dishing out money to groups like EDS. Telecom got a grant under Jim Anderton’s regional development scheme—it got a special-projects development grant under this Government’s scheme to create jobs. That is appalling mismanagement of the economy.

I particularly want to turn to the energy sector because I think that this Government has failed there perhaps more than anywhere else. We know that the roading infrastructure is in chaos and that the Government has done nothing to address that, but our basic electricity infrastructure in this country is in a woeful state. We can read the briefing papers to the incoming Ministers in 1999, and again in 2002. The Government commissioned a ministerial inquiry, which reported in June 2000. Read the recommendations! The Government has ignored them, and if it had acted, it would have averted the crisis we are now facing. I notice that the Minister for State Owned Enterprises is in the Chamber tonight, and I welcome him. We do not see him very often. He has a responsibility for the State-owned generators—[Interruption] The Minister is chirping now; he is interjecting. Do people realise that 70 percent of our total generation is controlled by Government-owned enterprises that effectively now have regional monopolies?

Stephen Franks: Strategic assets with no strategy.

Hon KEN SHIRLEY: Very good; I could not have put it better myself. The Minister for State Owned Enterprises is here, so let me put this to him. Genesis is a very important State-owned enterprise. It runs the Huntly power station, our biggest generator of 1,000 megawatts, or potentially 1,000 megawatts, and a whole lot more. Of course, it is not running at 1,000 megawatts. Why? Because it does not have any coal. It is that Minister’s responsibility to ensure that it did have it. If we look at the stockpiles of coal that that station has had on 31 March every year since 1992, we will find that on average it was over 1 million tonnes, because that is what it required. Since this Government has been in office, and in particular this year, on 31 March, it has had less than 500 tonnes in stockpile. I ask the Minister whether that was his cunning strategy to—what could it possibly be for? I cannot think. Why did the Minister not address that issue? Any Minister for State Owned Enterprises who had that responsibility would have ensured that there was sufficient fuel for the Huntly power station. Now the Government is trying to sign up contracts to bring in 600,000 tonnes of Indonesian coal to fuel that power station, and the Government is talking about bringing it into the Port of Tauranga. Let me say to members that the Government will not be able to do it. There will be huge problems. The Government thought it was going to deliver the coal by rail, but the railways are so run down that it cannot get it through. The Government is now talking about trucking it. I have the figures. There was going to be a coal truck every 20 seconds I think, heading over the Kaimais. I do not think that would be a very popular move.

I ask the Minister to please think about it: why were we caught out in respect of the coal stockpiles at Huntly, which he—as the Minister for State Owned Enterprises; for Genesis—is responsible for? Why are New Zealanders being asked to have cold showers? Why are our export-earning industries cutting back, and laying people off? Why are jobs, production, and export earnings being lost? It is because that Minister failed to ensure that there were adequate coal reserves. We know we have problems getting access to our own coal reserves, because of Chris Carter, the Minister of Conservation.

Otirā, te wāhi tuatahi anō tautoko ake ngā mihi ki tō tātou rangatira kua huri ai ki tua o te ārai. Koi rā a Rihari Mangu. Kua hinga atu nei, ā, hoki atu nā ki tōna wā kāinga, tēnei te mihi ake, poroporoaki nei ki a ia.

[The first thing indeed is to endorse the tributes made to our respected one who has passed beyond the veil. I am referring to Richard Mangu. He has fallen and has returned to his homeland. I greet him and bid him farewell.]

I join with previous speakers of the Government in expressing condolences to the family of Richard Mangu, who, I believe, was employed by VIP Transport since 1974. I met the man on several occasions and found him a very pleasant person. My condolences to his family.

There is a reason that I am speaking in this debate at 5 to 10 on a Wednesday night. As they say, we in the Government always save the best for last. I was very intrigued by the speeches from National Party members prior to the dinner break. It is true there is a lot of division amongst their ranks, because every member who spoke had a different point of view in terms of the Budget. I shall give members some of those views. Dr Don Brash reckons that the Government spends too much. Dr Linda Scott said that it spends too little. Future National Party leader, Simon Power, had some very strong views on the Budget. However, I was kind of intrigued by his infatuation with Helen Clark’s photograph. He has two of them in his pocket, one from 1999 and one from 2002. I know that he has aspirations for leadership, but surely he does not need to copy the leadership style of Helen Clark, the Prime Minister. Maybe in the future he will find that such a leadership style is of benefit to him, but I have to say that he will have a very long wait. [Interruption] There are no models in the National Party for him to follow—that was going to be my next point.

Also, I was very, very surprised to hear a person like Shane Ardern say that the worst thing he could find about the Budget was that there was a $4 billion surplus. If that is bad, then having money in the bank is bad also. National is a party that wants to spend it all today and never mind tomorrow. National members want to spend it on this generation and to hell with the next. The previous speaker, Dr Paul Hutchison, said that the morning after the Budget he heard a lot of commentators condemn this fourth Budget of Dr Michael Cullen. I also read some of the comments the morning after, and this is a very, very profound one from a very well-known political commentator, Mr Colin James, who said: “Traditional Labour, within the constraints of prudent budgeting and with genuflections to a high-skills economy—that’s Michael Cullen’s fourth Budget.” How much of an endorsement can one get? I shall go through some of the details of those genuflections. We are talking about a highly skilled, well-educated, fully employed future nation. The interjections from members across the House are not being heard above all the praise for this Government and its fourth Budget.

In particular, I want to speak about the commitments this Government has made to the treaty education programme. I say that because, at the moment, the Justice and Electoral Committee is in the process of hearing submissions on the Supreme Court Bill. What has become apparent during this process is that very few people understand what the treaty is and what it means to us as a nation—more so, Opposition members in this House. I do not know whether they refused, or just do not want to learn about the treaty, or whether there is something in their party manifesto that says that they cannot, and shall not, and will never have anything to do with nation building as far as the treaty is concerned.

Debate interrupted.

The House adjourned at 10 p.m.