Debate on Prime Minister’s Statement

Last year the world was gripped by the global financial crisis. It is quite easy in the New Zealand context to forget that, as the rest of the world is still coping with some of the financial conditions and the aftershocks of that crisis. In fact, in Europe now countries like Greece and Ireland are still grappling with the effects of the global financial crisis.

Last year this Government worked hard to mitigate the worst effects of the global financial crisis in the New Zealand environment. With the help of our friends across the Tasman and the Asian countries, we were able to prevent the worst of the recession from coming home to this country, to the point where most New Zealanders are now of the view that the global financial crisis was not too bad. But across the rest of the world, of course, it was very harsh indeed.

This year we have a different set of challenges. This year we have different decisions to make. Those decisions, which are for all New Zealanders, were alluded to by the Prime Minister in his speech. We will take some decisions to enhance growth for the benefit of New Zealand families in 2010. Will we deal with this country’s tax issues, which discourage savings and growth and result in the exporting of some of our most skilled labour overseas? Will we take reasonable steps to advance some industries that can add growth and wealth to New Zealand and New Zealand families, like the mineral sector and the aquaculture sector, to name just two?

Will we take reasonable steps to control State sector spending, to stop the State sector crowding out the private sector, and to improve productivity in the State sector, which has lagged the private sector in productivity growth in this country? Of course, productivity is a huge part of creating growth and wealth. Will we invest in infrastructure? Will we give ourselves the ability to do more in the infrastructure space? Will we tackle the skills shortage that has bedevilled this country for a long period of time? Will we tackle the underachievement whereby 20 percent of children are leaving school without suitable levels of literacy and numeracy?

These are the questions we have in front of us, and some of the answers are not easy. Some of them are a little discomfiting at times and some of them are a little challenging, but these decisions do need to be made. And that is the challenge the Prime Minister has laid down before us this year in his statement to Parliament. Are we going to make the changes that will encourage economic growth and prosperity for New Zealand families?

Labour did not take those chances. It did not meet those challenges, and it did not make the decisions. During 9 years in Government Labour spent a lot of time calling for reports, then not acting on them. It had lots of reports. It had the Knowledge Wave, the growth and innovation framework, and things like the Skills Strategy. It had a group called the Small Business Advisory Group. It got that group together and asked it to come up with a whole range of things, and then it ignored most of them.

Labour’s other solution was to not make any hard decisions around public spending. It layered spending programme on top of spending programme. If a programme was not working, it would not stop it. It would just add another one, and if somebody asked Labour members why they did not stop the first one they would say that it might upset a few people. Labour just kept putting programme on top of programme, and this Government is left with trying to unpick some of the mess it left. If it did try to do something for growth and encountered any opposition, then it would throw more money at the problem. That was its solution. I personally am very familiar with that in relation to a certain roading project in Auckland that came up with a highly expensive $2.8 billion option because the Government was not prepared to discuss the project with the community and come up with a sensible mitigation proposal that did not place the country further in hock.

Under Labour, the Government sector grew hugely, the private sector grew anaemically, and the tradable sector went backwards for 5 years. As a result we were the first country in the world to go into recession in 2008, before the global financial crisis. It is no coincidence that with a new National Government we have come out of it better than we would have if we still had the old Labour Government.

Labour members still do not understand what is required. They still believe in the fiscal fairies at the bottom of the garden. They opposed every change in spending priorities that this Government has put forward. They have called for more public spending all the time. They have called for us to legislate for higher wages. It is true economic illiteracy to suggest that we can legislate for higher wages when wages are paid for by people who actually get out, engage in entrepreneurship, and pay what they can afford. We cannot legislate for a wealthier economy, and it is time the Labour Party worked that out, because if it does not it will remain an economic joke.

Labour members have opposed all significant changes in regulation, and some of the insignificant ones. I note that the chainsaw massacre of trees has not yet occurred in Auckland. A few trees are still up in that proud city—apparently only a couple, but they are all still there—and the Armageddon of trees did not come to pass in that city.

But the nadir of Labour’s economic understanding came with its little committee last year to try to tie down the New Zealand exchange rate. Labour members just did not understand the grand irony of that, because the one big contribution the Government makes to high exchange rates is high levels of public spending, which lead to high interest rates, which contribute to high exchange rates. They were all sitting in a room saying that they wanted to get exchange rates down but they did not want to talk about the rather large elephant in the middle, which was how much they grew public spending over the last 9 years.

I think New Zealanders are ready for change. I think New Zealanders are ready to step out for a brighter future. They are ready to make the decisions that the 9-year Labour Government did not make. This year we will make those decisions, and the Prime Minister’s statement lays them out very carefully and very sensibly indeed. One of the most important, which I want to focus on for a couple of minutes, is on tax.

Why is tax so important? It is because tax is the one area where the Government is pervasive in people’s lives. Like it or hate it—it is death and taxes, is it not? The Government, fortunately, does not control death, but it certainly controls taxes, and that is the one thing where the Government has the greatest impact on the economic outcomes. It is tax that determines the incentives for New Zealand families. The greater the tax burden on a particular part of life, the less people do it; the lesser the tax burden, the more people will do it. So in New Zealand what do we do? Currently we tax labour at a high rate. We tax people’s personal work at a high rate. We tax savings and investment at the same high rate. We tax consumption, comparatively, at a lower rate, and we tax investment property negatively.

As I said, people respond to incentives, so is it any wonder that in this country people over-invest in property, over-consume relative to their incomes, and do not save enough? Is it any wonder that a huge swag of our skilled people and their families take themselves off to Australia—which was, incidentally, Labour’s skills strategy? People respond to incentives, and if we want to lower consumption, stop people over-investing in property, reward people better for their labours so they stay and labour here, and reward people for savings and interest, we have to make adjustments to the tax rate. Until Labour works that out, it will not know how to grow an economy. That is the reality of it, and it is time Labour learnt that fact, because we could not afford another 9 years of its economic mismanagement. So, we need to deal with taxes.

We need to get a much more productive public sector, and we are working very, very hard on that. We need to encourage innovation, and the Prime Minister has laid out some challenges in the areas of science, and research and technology. It also has to be said that we are working very hard in the trade area. We have our two men about the world, Mr Groser and Mr McCully, who are out there working very, very hard. We have trebled the efforts of the previous Government in striving to achieve free-trade agreements.

We are also reforming regulation. We are driving reform in the regulation area to allow more things to be done and, of course, we are doing huge things in terms of infrastructure. Modesty prevents me from going on at great length about the transport sector and the communications sector, but we are flat out, and we are putting a lot of work into the rail sector, as well.

Finally, education is crucially important. The irony is that Labour, which is supposedly the education party—nobody believes that, except Labour members and their union mates—has been arguing against tackling the shameful tail of underachievement that comes out of our school sector. They have been afraid of tackling it, and now they do not want us to tackle it.

This year is a year of change. This year is the year for us to grow the economy much faster. I believe that New Zealanders are ready for that change. I know the Prime Minister does; that is why he laid out the opportunities for New Zealand in the brilliant speech he read out in Parliament just over a week ago. We are ready to step out for a brighter future. Thank you.

That speech by Steven Joyce was probably the best example of an eloquent description of what the Government would like to do. The problem is that it is not doing any of it. I thought that the most revealing part of Mr Joyce’s speech was when he talked about the speech that the Prime Minister “read out”. The reason he said that is—everyone knows that Steven Joyce is kind of a Voldemort figure of the Government—he wrote it. He was so disappointed that his eloquent words, which were tabled, were not the same ones that were read out by the Prime Minister when he gave his speech. Normally parliamentary convention requires that a Minister or member who has given the preceding speech stays to listen to the person speaking afterwards. But I invite Mr Joyce to go back to his office now, because I think that what happened in question time today means that Anne Tolley will be gone by Easter, and he will be Minister of Education as well. So I take no objection to his departure. He is a busy man with a big Government to run. He should go and read all about that portfolio, because that will be his next one.

The next thing we have to deal with is the fact that in the Prime Minister’s statement this Government has failed on its own election promises. This might be National members’ new policy agenda, but it is not what they campaigned on at the last election. The member for West Coast - Tasman did not go around the communities of the West Coast telling them that GST would go up. Did he do that?

💬 Chris Auchinvole: The, ah, member for West Coast - Tasman—

He said “um”. Normally he has so much to say, but when it comes to whether he fronted up at community meetings and said: “Please vote for me, it is time for a change. I would like GST to go up.”, that was not quite the campaign strategy he adopted, and neither was it adopted by all those other members. No one knows what the member for Wairarapa would have said; he is not really one for the party line, if I can put it that way. He may well have said that GST should go up, but none of the others did.

The other key difference in what the Prime Minister has told the country is that at the last general election, National said that there would be tax cuts for every New Zealander. What was very clear about last Tuesday is that there will no longer be tax cuts for every New Zealander; there will be tax cuts for only some people in our country, which is a direct change from the approach that National took when it was campaigning at the last election. Will it be a tax cut for people on low, middle, and average incomes? Will it be a tax cut for people on high incomes? I think so, given what Mr Joyce the Associate Minister of Finance was saying. Apparently, we are being strangled in this country by having a top tax rate of 38c. Well, a lot of countries would love to have 38c as their top income tax rate. I ask Mr Burns what the top rate in Australia is; he says it is 48c. The UK is about to have a 50p top tax rate. But apparently in New Zealand, the biggest issue is getting the top rate down, even if people who earn average incomes pay more of their money across to the Government in order for that to occur.

The one thing that no Government speaker has been able to explain to any of us yet is how this can be a tax package where there are no losers. How will there be no losers? If every single person ends up paying exactly the same level of income tax after the Budget as he or she is paying before the Budget, then how can this be so? Of course, not a single Government speaker has told us how it will be possible. By definition, if some people pay less tax and the whole package will result in the same amount of revenue being paid to the Government, then there must be some people who will pay more tax.

I will tell members who those people will be. They will be the people whom no Government has ever been able to help out in a meaningful way by way of changes to the tax system—that is, single people, or couples whose children have already left home or who have no children. They make up the vast bulk of taxpayers in New Zealand. They are people who have done a good job of raising their kids, who have now left. They are middle-income people who always feel that they fall between two stools when it comes to Government assistance. They cannot receive a tax cut to compensate them for GST.

Despite the fact that the Government gets the majority of calls in this debate and that those members all get to speak for 10 minutes, none of them—and I have listened carefully—have been able to explain to us how we can have equitable changes, which the Prime Minister said, when he launched the Tax Working Group report, was the aim of the whole process. [Interruption] Mr Auchinvole says that it will all be revealed. I do not think that he is on the Government strategy committee. I have a feeling that he might have just missed out on membership when it comes to the ninth floor strategy committee. I suspect that he does not know and that none of the other Government speakers know.

The other problem is that a 20 percent increase in GST will hit our pensioners. Our pensioners know that there is not a single increase the Government can make by way of a CPI adjustment on 1 April that will put them in a better position, because the CPI adjustment that Government speakers have been referring to takes place after the year in question. Pensioners have to go through the whole year paying higher prices. In Kapiti and Horowhenua the power prices have gone up just in the last week. It will be plus 5 percent on the power bill and plus 15 percent GST that our older citizens are paying. There is no way of compensating them for those changes for a full year. The Government does not even know its own mechanism for supporting people in that respect.

What I loved most about the Prime Minister’s statement was how proud of it National members were on Tuesday. Of course, members on the other side of the House have an enormous degree of sycophancy, so they have kept the pride; the reasons for it have just changed. When National members started to speak in the debate on Tuesday, they all said: “This is an amazing plan. It’s got 9,000 words.” That was the end of the debate, basically, because they said that they had been getting all of this criticism about the fact that there was no plan for jobs and they had the Job Summit, which was not going to be a talkfest—now it does not even meet the test for a talkfest, let alone a job summit—but they thought that if they could say how many words were in the Prime Minister’s statement, then that would make people think that National has a plan for the year.

That all started to fall apart during the course of the week, because on Tuesday the Prime Minister said that GST would go up to 15 percent. That was the direction he was boldly taking New Zealand in. By Friday, on Morning Report, he had said that the Government had not decided that yet, that Cabinet had not signed up to it, and that if the Māori Party did not want it, then the Government would not do it either because he did not want the Government to fall over. He was not at all quite sure what was going to happen. Then obviously a bit of steel was put into the spine by Mr Joyce and Mr English over the weekend, and now this week the tax rise by way of GST is back on.

But nowhere is there a better example of the fact that the Government can never stick to tough positions than on the foreshore and seabed issue. After Waitangi Day, on the Monday, the Prime Minister said, in the way that he does, that we have all moved on together now because mud does not get thrown at people at Waitangi. That is the definition of nationhood, apparently, but that is a speech for another day. The big definition for Mr Key was that he has found an “elegant solution” to the foreshore and seabed issue. On Tuesday Government members were all going to come together and support it. In the Prime Minister’s statement, he described the Foreshore and Seabed Act as a “weeping sore” on the nation’s conscience. By Thursday Mrs Turia had said that the elegant solution about the “public domain”—those words are familiar—was not going to be a goer. So by Friday Mr Key was saying: “Oh, well, if no one agrees, we will just keep with the current legislation.” This is the legislation that was a weeping sore on the country’s soul on Tuesday.

In terms of strong leadership, we know that the Prime Minister does not like criticism. He had a good year in the opinion polls last year, no one can deny that. This year has been a bit tougher. It has been a bit scratchier out of the starting gates this year, and I think that this week’s performance—particularly yesterday’s performance at question time—shows how brittle the Prime Minister is when it comes to criticism. When everyone does not like him, he does not get all that happy. When columnists on the right wing of politics say that National is not going far enough to implement a National agenda and when the Māori Party does not like things, we find that National members cut and run from the position.

In fact, at one point last week, the Māori Party held the power of veto over whether there would be a rise in GST. The party of 58 members was saying to the party of five members—even though I am pretty sure that National will have ACT’s votes locked up on tax cuts for the upper income earners in this country—that it would have that power of veto. As soon as the Māori Party realised that it had that power of veto, it did not want it, which is sort of the opposite of tino rangatiratanga in a sense. Those members were given the power and they said no, they did not want that to happen at all.

So far we have seen from the National - Māori Party - ACT Government a week where those members have been sloppy, they have been slippery, and everything has been a shambles. It is coming through so clearly, because Government members’ own election manifesto is disintegrating in front of us. We now have a tax plan that is focused on only some New Zealanders, not on all people. The Government will cut adrift the average-income earners in New Zealand so that they pay higher GST. Mr Goff gave the example of the Prime Minister in one of those scenarios getting a $500 a week tax cut, although the people working in this building who give us key support would get only 35c a week in tax cuts. We know that the minimum wage has moved by only 25c an hour this year, which is an absolute disgrace, and that the cost of living for all families is going up right at the moment. I have not even had time to talk about tertiary students, who spend 100 percent of what they get. Of course they cannot possibly be compensated through all of this.

I will finish by touching on the issue of what is happening out in the community, where all the words that are said in here count and where the rubber really hits the road. I am absolutely shocked that Tony Ryall, who dances and prances around telling us that he will fix the health system, is overseeing some of the most massive cuts in community-based health all across the country. In my area of Horowhenua and Kapiti, as Winnie Laban knows, there are massive cuts to home support for older people. People have been rung up and told on the phone that up to 75 percent of their home care is being cut, and the Government refuses to step in and do anything about it. In Levin we opened a $16 million hospital just 2½ years ago. It was a hospital that I campaigned very, very hard to achieve for the people of Horowhenua. The National Government wants to rip out the 24 hospital beds in that centre—24 beds.

💬 Hon Ruth Dyson: How many would be left?

There would be zero beds left for assessment, treatment, and rehabilitation for our older people. How can that be sooner, better, and more convenient health care for the people who have to travel to Palmerston North?

The statement from the Prime Minister shows what the real priorities of the National Government are. Those members want to look after their supporters only. When the heat comes on, they cannot stick to their principles, because in the end it is about popularity, not principle.

It is a huge pleasure to rise and speak in support of the Prime Minister’s statement. I thank the Hon Darren Hughes for his dynamic diatribe. John Key leads a Government that is principled, pragmatic, and committed to finding solutions to the many challenges facing our nation—a nation that, sadly, has woefully underperformed under the previous, arthritic administration.

Despite in the years 2000 to 2007 enjoying some of the best global economic conditions in generations, this country lagged in its tradable sector performance. The sectors that drive our overseas earnings and that grow the economic cake—forestry, agriculture, fishing, and manufacturing—failed to deliver under the late, benighted Labour administration. It failed to deliver year after year. Instead, the long-suffering New Zealand public was treated to the spectacle of an ailing administration crouched around a simmering cauldron of bile and dogma, casting legislative spells and incantations, seemingly seeking to strip New Zealanders of their birthright of self-belief and initiative, and any ideas of personal responsibility. The country woke up in the second term of the Labour administration, but Labour, though lost and forlorn, limped into a third term, teetering on the brink of irrelevancy for 3 more dark and dismal years—3 more years of attempting to plaster over, condone, or ignore evidence of mismanagement, misdeeds, and manifest malfeasance within its ranks. Perhaps the most egregious example of Labour’s arrogance, self-interest, and contempt for New Zealanders was the Electoral Finance Act.

The people have spoken, and we are acting to address their concerns. The days of gloom, doom, and despondency, and a diet of wormwood and gall are behind us. New Zealand is looking at a brighter future. John Key leads a Government that is committed to unlocking the treasure trove of vast and varied potential that beats within the heart of every New Zealander. We applaud, and this Government will reward, the pursuit and attainment of excellence. This year we will be rattling the cage a little as we maintain a focus on the economy and on jobs, and act to reshape the mesh in different areas and different levels to lift the long-term performance of our economy. We are acting to make New Zealand a more prosperous country, capable of providing well-paid jobs and a better standard of living for us all, and to provide the world-class public services needed to give opportunity and security to New Zealanders and their families.

At the heart of the Government’s economic plan lie six main engines. Members may have heard us mention them before: a tax system that is growth enhancing; better, more efficient public services; support for science, innovation, and trade; better regulation, including the regulations relating to natural resources; investment in infrastructure; and improved education and skills.

We are acutely conscious that New Zealand’s wealth is ultimately generated by the private sector. The Manukau-Manurewa area, where I am privileged to be National’s support MP, is a perfect example of the mix of small firms, big companies, and sole traders that generate the jobs, the profits, and the return on investment that drive our economy. The Government agrees with the Tax Working Group that New Zealand relies heavily on taxes most harmful to growth—as intimated earlier by the Hon Steven Joyce—particularly corporate and personal income taxes. There is a hole in the tax base around the taxation of property, and real risks to the sustainability of the tax revenue base itself. We need, and New Zealanders deserve, a tax system that encourages savings and boosts the productivity of investment, that is fair, that is easy to comply with and to administer, and that encourages people to work hard, improve their skills, and get ahead right here in New Zealand. We will be announcing measures to achieve these ends as part of the Budget in May.

We are also acutely conscious that New Zealand’s future economic performance depends to a large extent on generating and using new ideas. As a country, we have a proud track record of innovation, and New Zealand companies regularly produce world-beating products and services. We aim to support those companies. This year the Government will, alongside industry, invest up to $40 million in the Primary Growth Partnership in research and innovation to boost New Zealand’s primary, forestry, and food sectors. We are also investing significantly in the domestic Centre for Agricultural Greenhouse Gas Research and the Global Research Alliance on Agricultural Greenhouse Gases to drive much-needed investigation of agricultural greenhouse gas emissions. The potential value of intellectual capital generated in this field is enormous. We believe that Crown research institutes are centres of excellence that could do more to drive growth. We will be introducing measures to facilitate the commercial realisation of their research and knowledge, and thus grow the economic cake. These are just two spaces we are working in.

We promised a brighter future; we are acting in these and many other areas to create a more prosperous nation and to make that brighter future a reality. We are not perfect. We do not have a magic wand and we cannot change things overnight, but the feedback I am receiving from the hard-working citizens of the Manurewa electorate tells me that our efforts are making a difference. Let me tell members of my experience there just 2 days ago. On Monday just before 6.30 a.m. I was at the Manurewa Train Station meeting members of the electorate and offering them a copy of this Government’s 2009 report card. Being hard-working individuals ambitious for themselves and their children, they read it avidly. Standing on the platform as the sun rose over Manurewa, those commuters read of the multitude of initiatives taken to deliver New Zealanders from the worst effects of the recession; to lay the foundation stones of a flexible, robust, and growing economy; to deliver better health care sooner and more conveniently; to help keep them safe in their communities; and to lift educational standards in our schools. They read, for instance, of the $7.5 billion spent on infrastructure in roads, houses, schools, and broadband, and the nearly 17,000 youth opportunities provided in work and training for 16 to 24-year-olds over the next 2 years to help cushion them from the worst effects of the recession. The commuters learnt of the 180,000 homes to be insulated in the Warm Up New Zealand: Heat Smart campaign.

We are a trading nation, and this year the Government will continue to open up New Zealand exporters’ access to world markets. We want to make it easier for New Zealanders to sell their goods overseas so that they can create more jobs back home. In 2009 we signed free-trade agreements with Malaysia and with the 10 countries of the ASEAN bloc. We will soon be signing agreements with Hong Kong and with the economies of the Gulf Cooperation Council. The Government will also press ahead with perhaps our most important trade negotiation—that of working towards a free-trade agreement with the United States through the Trans-Pacific Economic Partnership Agreement. We will also be undertaking important trade negotiations with India and Korea. Efforts on the multilateral front will continue as we strive for a conclusion to the Doha rounds.

We are looking at reforming legislation. We have completed the first stage of the Resource Management Act reforms, and have taken decisive action to sort out the electricity sector. We have published the Electricity Industry Bill, which contains major reforms to New Zealand’s electricity system and is now with the Finance and Expenditure Committee. This bill contains a suite of changes to New Zealand’s electricity system to improve competition and constrain price increases, to increase security of supply, and to ensure effective and streamlined governance in the sector.

As the Zen master said to the hot dog vendor, “Make me one with everything.” The Prime Minister’s statement makes no attempt to detail everything we will be doing, but it clearly outlines that this year we will be putting our foot on the accelerator in a number of key areas to drive this country to a brighter future. I relish being part of the John Key team. Thank you.

I rise to support 150 percent the Prime Minister’s statement to the House at the opening of Parliament last week. I think there is something quite nice in the notion from this side of the House that Labour members limped to their final political death on their arthritic legs, as my colleague Cam Calder so eloquently said before. That is the reason, I guess, why they have been absolutely no good in this debate, at all, and have not been able to bring forward anything of any substance as to why they think the Prime Minister’s statement was not the right way forward for New Zealand.

Who can argue with a Government that has an economic plan to introduce a world-class tax system that is fair to all, and that will make a better job of managing public services over the next 9 years than what happened in the last 9 years? Who intends to introduce a higher standard to our education system, so that pupils going to our schools will know, as they are going through school, how they are doing compared not only with their own cohort but also with the international standard? Who will invest in infrastructure on a level that has not been seen in this country for over 50 years? Who could argue that it is an unnecessary or undesirable outcome? Who will reform the regulatory regime in this country—the biggest area, of course, being the Resource Management Act—and remove roadblocks to business and innovation?

On the subject of innovation, which has already been touched on, $40 million this year will be invested in the Primary Growth Partnership by business and the Government, in conjunction, for research and development in very essential areas such as agriculture, which will grow the economy. Labour, over 9 years of some of the best times we have ever seen in this country’s economy, saw negative or very slow growth. It has been stated recently by the Governor of the Reserve Bank and others that it will be enormously challenging for New Zealand to catch up to Australia. I do not agree with that, actually. Our Australian colleagues are very competent, and their economy is very strong, but in New Zealand we have everything that Australia has, plus some. We have more minerals per capita than the Australians; that is the real irony. And we have something that is actually much more sustainable than that—we have protein, which comes from three sectors: fish, meat, and dairy. I hope that we can unleash the potential that lies there. It is happening, of course, with the very good work that our trade Minister, Tim Groser, is doing internationally by signing up to new trade deals all over the place. Work is going on in the World Trade Organisation, and others are assisting him in that work. I acknowledge my colleague John Hayes, who is also playing an active role in that area.

With those opportunities opening up to us, New Zealand has never been better placed to seize on a strong, growing economy that will see most of our hopes and aspirations met. The Prime Minister, you see, does not base his assumptions on pure academic rhetoric; he has life experience in how to make the ship go faster, how to make the cake grow quicker, and how to earn money and then invest it in an area that will help to grow the economy even beyond that. We are not talking, as we have in the past, about people who have theory about how they can do it; we have someone who actually has done it. I often refer to the American experience—the American dream of being prosperous. We do not have to look to America for a dream; our Prime Minister is the New Zealand equivalent of the American dream. He started off from a humble background and has been able to make it on his own merits. So we have someone now who has a vision for New Zealand, unlike the past when most of the driving was done by a Government that was looking in the rear-vision mirror. We have someone who will take New Zealand forward, and who stated, in his opening comments to Parliament, how he intends to do that.

In terms of protein we need to look at all of the roadblocks that are stopping those industries from developing, growing, and being able to carry New Zealand forward. One of those roadblocks concerns the augmentation of water: the distribution, availability, and storage of water. This Government is looking at what can be done about that, particularly, but not entirely restricted to, the eastern belt, and more particularly, and probably more important at the moment, in regard to Canterbury. We will hear more from the Government over the next few months and years about what can be done in that regard. We look forward to growing the economic cake by growing the agricultural base. That is the thing we are good at, the thing we are world class at, the thing we are leaders in, and where we can do the best we can going forward.

This Government will not do what the last Government did and put up roadblocks, one after the other, to every good idea put forward for innovation and investment in these areas. I have always asked how it is that in New Zealand we can grow a Pinus radiata tree 5 years quicker, on average, than the Australians can, yet the Australian forestry industry has grown and ours has, at best, stagnated. How is that? What are the reasons? When we ask the industry they answer that there is too much red tape, that it is because of the Resource Management Act, that they cannot get consent to put in cogeneration, that in Australia they encourage investment—the list goes on. We need to address those issues. The area we are most likely to have the greatest success in addressing those issues at the moment is taxation; and more will be announced about tax in the upcoming Budget. I look forward to finally having a tax system that is competitive not only with Australia but internationally.

We always hear Labour Governments say that we must be able to put up a fence around New Zealand and pretend that the rest of the world does not exist, that we must put up barriers to any type of industry or innovation, and that we must put up barriers to growth wherever we can and the world will sail past and not bother us. The problem with that notion is that we are an export nation. The dairy industry exports 94 percent of what it produces; we consume 6 percent of the production. The domestic market is so insignificant to us that putting roadblocks in the way of growth is very destructive to the growth of the New Zealand economy. It defies logic that people would do so, but the last Government did.

The Prime Minister’s statement will take New Zealand forward. It is a vision for New Zealand. It is a plan, a blueprint, for us to look to, to reference, and to ask whether we have done this or that, and whether we are on track. It is, for the first time, an achievable goal—an aspirational one but an achievable one. Members on this side of the House are totally in support of the direction the Prime Minister has taken. For me, in particular, the area of agriculture—the growth in our economy that will inevitably come from the opportunity we have to unleash for rural New Zealand in terms of protein—was clearly outlined in the Prime Minister’s statement. It showed the direction we are heading. There is no doubt that the Labour Party hates it and I can understand why that is the case.

I cannot believe we have had so many 10-minute speeches from members of the Government. They clearly do not understand what the plan is either, because not a single one of them has articulated it in his or her speech. To the member Cam Calder, who spoke recently, I would just say put down the thesaurus, back away from the thesaurus. Can I say to National members that I think they need to stage an intervention, get Parliamentary Service to remove the thesaurus function from Microsoft Word, and I think that his speeches will be all the better for it. I will not say anything mean about Shane Ardern, because I actually respect that member. It is a shame he is undervalued in his own caucus. He should be doing a lot more. He knows a lot more about agriculture than David Carter does, and it is a real shame he is not given the respect he deserves by his own colleagues in his own caucus.

All I want to say is where is the plan, and I want the next National speaker to tell us what the plan is. From listening to the National members, apparently the only problem we have in New Zealand is that we do not charge people enough for food. The biggest problem we have is we do not charge people enough for food. We do not charge people enough for services. We do not charge them enough for rates. We do not charge them enough for clothes for their children. The only answer this Government has to what is going on in our economy is to put up GST: to increase GST by 20 percent. It is a 20 percent increase in GST. I tell National members to wake up, because they may still be partying on the top floor, but people are suffering in this country.

I was out at the protest earlier this afternoon for the cleaners who clean this building. How many National MPs bothered to turn up to support the cleaners who clean the Beehive and who clean the Parliament Buildings? Not a single one turned up. [Interruption] They all have excuses why they could not be there. We met the woman who cleans John Key’s office. Cleaners get $12.55 an hour. Bill English thinks that the person who cleans his house should get $20 an hour. I say that for the cleaners who clean this place, we should lead by example and they should not be getting $12.55 an hour. National MPs, if they disagree with that, should have had the guts to turn up and to tell those workers why they do not believe that the workers should be paid more than that for cleaning these parliamentary buildings. The Labour members and the Green Party members who were out there support those workers and we are proud to do so.

It was interesting that the Prime Minister, John Key, said today that last year there had been a small contraction in jobs, and that we should not be concerned, because we are still below the OECD average when it comes to unemployment. Well, that is pretty cold comfort to all those New Zealanders who lost their jobs last year, who are continuing to lose their jobs this year—168,000 New Zealanders—because our Government has no plan. In Australia, across the Tasman, they put billions and billions of dollars into their economic stimulus package to deal with the recession, and guess what has happened to their unemployment? It has stopped rising and now it is going down. The National Government just thinks that is a coincidence, and that Australia is just lucky, maybe, that that is the case.

The fact is our Government has absolutely no plan for jobs, and that has been reiterated by every single National MP who stood up and has been unable to say what the Government is doing in this area. Do members know what Tim Macindoe said yesterday? He said we just need to instil a work ethic. Well, maybe Tim Macindoe should have gone and talked to those 3,500 New Zealanders who queued for 150 supermarket jobs, if he thinks that Kiwis do not have a work ethic and they do not want to work. The fact is the jobs are not there, and our Government does not care.

Our Government’s answer to people who do not have jobs—and Nicky Wagner can sneer at me because she does not like what I am saying, and she should not like it, because it is terrible and she should be ashamed—is that the Government will whack an increase in GST on top of the people for whom they are doing nothing to get them into work. That is National’s answer, and if that is not what it is doing and if it wants to let us in on this great secret plan it has, where apparently it will be revenue neutral, so it will keep the same amount of revenue but everyone will be a winner—some people will pay less tax, no one will pay more tax, but everyone is going to win—we would be very interested.

Nicky Wagner says yes, that is the plan. Well, I think that what has happened is that National wants to use national standards to dumb down numeracy in this country so that people will buy that economic argument. We can talk about national standards, and I really want to mention this because every single National MP who has stood up and defended those standards has said that the schools in his or her electorate currently do not provide information to parents on how well their kids are doing. Katrina Shanks said it outright. Katrina Shanks said that the school that her kids go to does not do a good job in telling her how her kids are doing.

Nikki Kaye said that none of the schools in Auckland Central—and I cannot wait for Jacinda Ardern to go around and visit those schools and tell them that she said this—do a good enough job at telling parents how their kids are doing. They are all doing a lousy job. That is what National says—they are all doing a lousy job. We look forward to going around to all our schools and making it clear that National MPs think their schools are doing a lousy job. That is what they have been saying.

I will talk about housing. I am so pleased the Minister of Housing is in the House for my speech. I know he got pre-warning. He came down because he is looking for some more policy ideas. He has run out and he is hoping I might give him some ideas in my speech. I will not do that, because I think he needs to learn to stand on his own two feet. He has run out of Labour legislation to pass now. He will have to do a little bit of thinking. Overall, I think it will be character building for Mr Heatley. I am all about being here to support him, so I am not going to give him some more Labour ideas to pass into National policy.

I thought it was very interesting that the Prime Minister specifically mentioned the Residential Tenancies Amendment Bill in his speech. I started to think that the only reason the Government has been putting off passing this legislation is so that they can still talk about the fact that it is doing something. There is no reason why that legislation should not have been passed before Christmas. It is Labour legislation. We support it. Minister Heatley took it on. He made it a little bit worse, but it is still better than the status quo. The fact is that over Christmas we heard stories of boarding-house tenants who were asked to move out during the sevens rugby event in Wellington. They did not have the protection of the residential tenancy law. If Minister Heatley had had that legislation reported back from a select committee in September and passed it before Christmas, that could not have happened. I think this Minister needs to explain where that bill has gone, why he has not passed it, and why he is refusing to give vulnerable boarding-house tenants the full protection of the law. What has Minister Heatley done in his first 15 months in Government? He has sold one State house to a tenant, he created an Options and Advice Service, which has done nothing except keep people off a waiting list—

💬 Hon Phil Heatley: Pretty much. That’s it pretty much.

Yes, that is right. They do not get a needs assessment, I say to the Minister. They get kicked out of the Housing New Zealand office and they end up in emergency accommodation. I am pleased the Minister has admitted that all this has done is keep people off the waiting list so that he can claim that the waiting lists have not increased. The fact is if every person had a needs-assessment, he or she could have Options and Advice Service for those who are C and D category, who are unlikely to get a house in the short term. But we had people who would have been A and B category turning up in emergency accommodation, because they had been turned away by the Government’s Options and Advice Service from a State house that they would have qualified for. The Minister should know this, and the fact that he is laughing is a little bit of a worry, actually, because these are our most vulnerable families, whom the Minister does not seem to care about. What is very telling is that the Minister barely talked about housing in his speech.

💬 Hon Phil Heatley: I seek leave to table a statement in the House from the Hon Ruth Dyson that says that the C and D applicants will never be housed, under a Labour Government.

The ASSISTANT SPEAKER (Hon Rick Barker): I say to the member that the convention in this House is that when members wish to seek leave it is done at the end of a member’s speech. To do it during a member’s speech is disorderly and interrupts the flow of the member’s speech. That is not a Standing Order; it is just the colour of this House. I ask the member to respect that. I am not going to take the leave at this point. If the member wants to move it at the end of this member’s speech, I will certainly entertain it at that point.

Well, he has just upped his work rate for the year, anyway, with that point of order. I am pleased we were able to help out in that respect. Minister Heatley, in his speech—after we heckled him enough so that he actually started talking about housing and vaguely kind of mentioned it in passing—said that he wants to achieve even more this year than he did last year. I say to the Minister that I think it would be physically impossible for him to do less this year than he did last year. That is a very, very low bar to reach.

I will briefly mention also research, science, and technology, because this is an area that, obviously, I am very passionate about, as well. I think this Government has a gall to stand up in this House and claim that it cares about science and it cares about innovation, after it slashed the Budget last year. It slashed the Budget last year for science and for research and development. National members may be johnny-come-latelys to this whole science and innovation thing, but it will take more than words to have a step change in this country. I do not believe that this Government has what it takes in order to achieve that.

I will focus on the research and design tax credits, because it is a really important point. Most other developed countries, OECD countries, have research and design tax credits, so even if those members do not like them it makes sense to have them when everyone else has them. Otherwise, we are automatically behind. We have lost research and development capacity overseas since the National Government cancelled the research and development tax credits last year. Why did it cancel them? Bill English said it was corporate welfare. But apparently it is not corporate welfare to subsidise jobs at McDonald’s, which this Government is doing. Todd McClay said he knew that they were not being used for the purpose for which they were intended. How he knew that when they were applied for at the end of the tax year—and they were cancelled well before people had even put applications in—is beyond me.

I speak to the Prime Minister’s commencement speech. It is all about stepping up.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. I see that the member, Phil Heatley, was distracted. He made a commitment to seek leave to table something.

The ASSISTANT SPEAKER (Hon Rick Barker): I say to the member that he has committed exactly the same transgression that Mr Heatley did. Nicky Wagner was speaking, and the member knows well that he cannot seek leave on behalf of another member to do something.

💬 Hon Trevor Mallard: I was not. I was just reminding him.

The ASSISTANT SPEAKER (Hon Rick Barker): I remind members that it is respectful of this House to let people continue to speak. I also remind them that points or order are about the order of the House. The member, Phil Heatley, was out of order when he sought leave to table a paper. This member, Mr Mallard, was out of order to take up the issue himself.

💬 Hon Darren Hughes: I raise a point of order, Mr Speaker.

The ASSISTANT SPEAKER (Hon Rick Barker): Is this in order, Mr Hughes?

💬 Hon Darren Hughes: I certainly do not want to be called out of order by you, Mr Assistant Speaker, and I would not raise the matter unless we were already discussing it. My understanding was that you rightly pulled Mr Heatley up, and you said you would put the seeking of leave at the end of the speech in order not to interrupt the member. The member did seek leave—it is a convention that one does not break up a speech, but he did seek leave—and your response was to say you would put the seeking of leave at the end of the member’s speech, and that time has now come.

The ASSISTANT SPEAKER (Hon Rick Barker): As I recall it, I said to the member, Mr Heatley, that I would take his seeking of leave at the end of the speech. It is up to that member to stand at that point and seek leave. I will not seek leave on the member’s behalf. I was not going to give the member the advantage of seeking leave during Ms Wagner’s speech as to have done so would have been to condone the disorderly behaviour. I was not going to do that. The member wanted to seek leave, and it was up to him to do so at the end of the speech.

💬 Hon Members: Take it now.

The ASSISTANT SPEAKER (Hon Rick Barker): We are taking nothing now. We are listening to Nicky Wagner, who had started her speech. Nicky Wagner, the floor is yours, and a respectful House will listen to you.

Thank you, Mr Assistant Speaker.

The Prime Minister’s statement is all about stepping up—stepping up for 2010. The Prime Minister is committed to a step change, which is long overdue, in New Zealand’s economic performance, with a focus on growing the economy and creating sustainable new jobs.

As Moana Mackey commented, 2009 was a tough year for New Zealanders. As the Government managed the fall-out from the international fiscal meltdown and the worst recession for 50 years, its focus was on protecting families from the sharpest edges of the recession, supporting jobs, and preparing for future growth. Last year was particularly tough for those who lost their jobs or whose jobs were downsized. It was also a tough year for those who have worked longer, harder, and for less return, and it was a tough year for everyone who was fearful and worried about what the recession could do to them and their families.

Since the last election, the Government has focused firmly on stimulating the economy. It has focused, firstly, on maintaining jobs, and then on actively creating job opportunities. It has invested in infrastructure, in roads, in schools, and in broadband. It has invested in those projects to create jobs now and to underpin future productivity.

We have provided opportunities for young people through the Job Ops, and the Community Max schemes. I have seen some really good examples of this working in Christchurch. We have also provided financial support and encouragement for people who have lost their jobs, and we have helped many people find new ones. Now, after surviving 2009, and with indicators that the economy—both national and international—is improving, it is time to make some real change. It is time to make changes in taxation, in education, and in investment in science and technology.

The taxation system is a powerful lever for change. Intuitively, most of us have always felt that there were problems with our tax system. Appointing an expert technical tax advisory working group to look at the issues was an intelligent first step. The group’s analysis identified major problems in terms of integrity, fairness, and incentives. It said that the taxation system is broken. That means we must make change, and the Prime Minister has outlined reforms to the system. The taxation reforms will create incentives for people to work hard, improve their skills, and get ahead. The reforms must encourage savings and boost productivity, and the reforms must be fair for all New Zealanders.

I think anyone would agree with these broad intentions. But members of the Opposition, even though they know there has to be change, have scaremongered about every possible taxation scenario in the most negative of terms. They have not offered one positive suggestion. National will address these issues, and the Budget will present a well-thought-out taxation package. It will reduce personal tax rates to encourage investment and savings, and it will change the way that property is taxed to ensure that the tax system is fair.

The Budget will also protect the vulnerable and low-income families. It will make no major changes to Working for Families, and it will compensate low and middle income earners, beneficiaries, and superannuitants if GST is raised. The framework as outlined has generally been well received. In fact, it is hard to argue against it. Accountants KPMG stated: “This is the right way to go about tax reform to ensure a fair and coherent tax regime.” Charles Finney from the Wellington Regional Chamber of Commerce stated: “We are pleased with the government’s intention to rebalance the tax system and we strongly support the direction outlined.” So people can expect to see in the Budget an intelligent reorganisation of the tax system that will be fair to all and will produce positive change in our economy.

I will talk a little bit about education. Education opens doors and allows choices, and it is the key to future opportunities and prosperity for our young people. Most people understand that. In fact, I find that particularly the young people of Third World countries understand the power of education and are thirsty for educational opportunities. They make enormous sacrifices to get access to learning. They even stop people in the street to practise their English. But too many young New Zealanders are unengaged in terms of school and education, and consequently they are not getting the opportunities they deserve.

I believe that in New Zealand we have sold out our young people. We have sold them short. One-fifth of school leavers cannot read or write enough to hold down a job. That is a crime. The fact that many employers have to teach basic numeracy and literacy skills in their businesses in order to upskill their workers says it all. As the greatest percentage of our jobs become more sophisticated, high-tech, and demanding, there are dwindling opportunities for those who do not have a decent education.

We need to take action now to involve and engage all young people in learning and educational achievement. I support national standards. I believe they will help schools, families, and young people to understand educational standards and the expectations of schools and of life, so that a far greater percentage of our young people will get an education that will fit them for the world of work and allow them to take up future opportunities and fully engage in our communities.

Finally, I will talk about encouraging innovation in science, research, and technology. I am particularly interested in the stimulation of what I call blue-green businesses—businesses that are environmentally friendly, sustainable, and profitable. The Primary Growth Partnership fund underpins $40 million for research and innovation to boost New Zealand’s primary, forestry, and food sectors, and this will be a catalyst for work in the blue-green business area.

There are plenty of ideas to develop. On the rural news on Radio New Zealand National yesterday, we heard of two new initiatives. The first was about processing wool. Wool is getting a new persona as a natural, high-quality, and environmentally friendly product. Yesterday the programme was promoting eco-certification of wool processing to underpin that clean, green image. Yesterday we also heard about new research into grains, particular oats, to extract biopolymers, which can be used for high-cost, all natural, and environmentally friendly cosmetics. New Zealand is ideally placed to produce valuable new high-tech products from the quality animals we breed and the crops we cultivate.

The Government is also investing in both the Global Research Alliance on Agricultural Greenhouse Gases and the domestic Centre for Agricultural Greenhouse Gas Research. These initiatives are invaluable in creating new opportunities and new low-carbon technologies and products. New Zealand can and will lead the world in this area.

New Zealand is also known for its high-quality food products, and the Government is giving food technology and innovation a shot in the arm by providing open-access food development and commercialisation facilities across New Zealand. New Zealand has always been good at ideas and innovation but not so good at commercialisation.

So there we have it: three good reasons why New Zealand is better off under John Key and the National-led Government. We will deliver a better, fairer taxation system that will incentivise economic development. We will demand that our education system produces a much higher percentage of young people who can read and write. We will invest in innovation, and we will back the can-do ability of New Zealanders to produce better, more sophisticated, and more environmentally friendly products and services.

It was fascinating to hear Nicky Wagner end on the topic of the importance of supporting science and innovation in New Zealand. No one on this side of the House would disagree with that. But let us turn to what the Prime Minister’s statement says about science and innovation. It states: “Science and innovation are therefore key elements of the Government’s economic agenda, both this year and into the future.” That sounds good. But then we read a little further down: “As I indicated earlier, the fiscal situation means that future new spending allowances can only be very modest, and most agencies will miss out on funding increases altogether.” So there we go: the Government thinks science and innovation is important and that it will contribute to growing our economy, but it does not want to fund it.

That is typical of the Prime Minister’s statement that we are talking about today. Some people have criticised the Labour Party for suggesting that the statement was both timid and dangerous, that it was a kind of “Danger Mouse” statement by the Prime Minister. The reality is that the statement is both timid and dangerous, because we have a Government that is forced by electoral imperatives to adopt a vast range of popular Labour policies, but is bridling against them. John Hayes does not really support Working for Families, 20 hours’ free early childhood education, or interest-free student loans, but he knows National had to support them in order to get elected. The desire is there to reward National’s mates and to get back to trickle-down economics, because that worked really well, did it not? The Government wants to get back to privatisation, and to reducing the size of the State. That is what Government members really want to do.

We saw in the Prime Minister’s statement the Government bridling against that. Bill was not happy, though, was he? It took him a long time to get up in the debate, and when he finally did he kept saying: “Well, we’re just considering it. We’re not quite sure whether we’re going to go through with this.” It was a timid speech, but what underlay it was a dangerous agenda to take New Zealand down a path where we look after only the few, not the many. It is a dangerous path to be going down, when we look at a situation where a tax cut change could deliver $500 a week to the Prime Minister, and only 30-odd cents to somebody on the minimum wage. That is a very dangerous path for New Zealand to go down, because it is a recipe for inequity and instability in our society. It is not a path that the Labour Party favours going down.

It has been a difficult time for the Government since the Prime Minister delivered his statement. Things have got very, very messy in terms of some of the key elements, like GST. We are not certain where the Prime Minister stands on GST. However, the one thing we do know is that before the election the Prime Minister ruled out an increase in GST, but now he is not so sure. He is contemplating an increase in GST to 15 percent, but only if the Māori Party agrees to it. However, that position appeared to change this week, as well. It was the same with Whānau Ora. After the speech, we began believing that Whānau Ora was only for Māori. Tariana Turia developed it and we understood that it would be funded through Te Puni Kōkiri. That is fine; it was only going to be there. That was the Māori Party’s clear position. Suddenly, John Key says: “No, it is for everybody—and it is also a waterbed. It is both of those things.” He is a master of the English language. There is total confusion about Whānau Ora and about GST.

My colleague Darren Hughes has already talked about the foreshore and seabed. There is complete confusion about what is happening there. This is a very, very messy coalition arrangement and the Prime Minister is reduced to being some kind of deranged ambulance driver, running around and trying to pick up all the casualties of his coalition. He is trying to hold it all together and, as a result, there is no clear plan emerging from this. All we see emerging is a Government that is grappling with itself, and with the fact that what it really wants to do is move further in the direction of privatisation and of rewarding National’s friends. But National members know they cannot do that because they will not get re-elected. That is the tension. That was the “Danger Mouse” speech by the Prime Minister. He came through with a speech that does not deliver a plan, because he cannot quite manage to do it.

A key element of the Government’s agenda is supposedly to get us better public services. All New Zealanders want better public services. Certainly, the Labour Party wants to see public services adapt and change, and to look like the 21st century public services we want them to be. Labour made some good advances in that direction in our term in Government, but there is much more to do. National’s vision for public services simply will not deliver improved public services. In its first year in Government, it said the message was: “We want to do more with less.” The problem is that National is now doing less with less. It has managed to cut indiscriminately across the public sector. It has cut into institutions like Child, Youth and Family and the Ministry of Social Development. Those places are under even more pressure now, as we come out of the recession. They are the places that National has cut. National has a policy that is based on a complete fabrication about something called front-line services and backroom services.

In the select committee deliberations on the estimates, we managed to ask most of the agencies what front-line services were. We managed to get almost every agency to deliver a different definition of what front-line services are. Some people said they had been told by the State Services Commission what they were, and some people said the State Services Commission did not have a definition. Archives New Zealand is an institution that I am personally very proud of, but I did not quite agree with it when it said that 80 percent of its staff are front-line workers. I am struggling to work out how it could be 80 percent. I think Maurice Williamson probably would not agree that 80 percent of Archives New Zealand’s staff are front-line workers. This is the problem when we set up artificial definitions, but that is the cornerstone of National’s policy.

The reality is that if we start making arbitrary distinctions like that in institutions such as district health boards, we will start to get into trouble. We have already seen it with administrative staff being laid off in district health boards, and that means only one thing: doctors and nurses spending less time with patients and more time filling in forms and doing administrative work. Making artificial distinctions between the front line and the back room simply will not deliver better services for New Zealand.

I hate to say this, but morale in the public service in New Zealand is very low at the moment. It is because people are having to do the jobs of two and three people. They are under huge pressure. They have been told by the Prime Minister in his statement that there will be no funding for 5 years in many of those departments—5 years. At the same time, the Government is saying that it also wants the Public Service to be innovative, take on new technology, and look at different ways of doing things. Well, that is proving impossible for people who are covering for their mates who have lost their jobs, and they are having to do more and more work with fewer resources around for them. It simply is not on to suddenly say to snap one’s fingers and public services will be better. We have to invest in public services. We have to invest in public servants to ensure they can deliver the 21st century Public Service we all want.

The other point concerning public services is that this is the year in which primary school teachers and nurses will renegotiate their contracts. I think the Government needs to tread very carefully here. It is saying to those people that there is no new money for 5 years. We are already seeing industrial action in places like the Ministry of Justice, with court staff. The Inland Revenue Department is not far away from the same thing. We will have major problems and disruption in this country if the Government is not prepared to invest in public services, invest in the teachers and nurses, and make sure they have good rates of pay. That is a major problem coming ahead for this Government, and I do not see anything in this statement that would enable us to believe that the Government wants to invest in public services. We see a recipe for increasing unfairness in the Prime Minister’s statement. It is Robin Hood in reverse. It is taking from the poor and giving to the rich. That is what we are seeing in this statement.

I want to end on a positive note about what Labour is doing at the moment. Labour is working through its policy process at the moment. The important thing for Labour at the moment is to work out how we can take this country forward with a sustainable economy. Time and time again I hear colleagues in the National Party tell us that the economy and the environment are two separate things. If this country is to go forward prosperously, we need to ensure that the economy and the environment are considered together. It is ridiculous to find in the Prime Minister’s statement a section called “Unlocking resources”, which is code for mining our national parks. If we cannot bring the economy and the environment together, New Zealand has no future. We need to ensure that we invest in people, we support children in the early years of their lives, and we educate people and give them the skills to contribute. Then we will have a productive economy. Unfortunately, there is none of that in the Prime Minister’s statement.

It is a pleasure to stand and speak in support of the Prime Minister’s statement. I note what a difference a year makes. This time last year the richest countries in the world were virtually in meltdown, banks were being bailed out, and the Government was giving handouts and rescue packages to businesses, which made the very eyes of the most financially literate water. Now, 12 months on, we see that the situation was the worst in 70 years. It has grown to a stage where we see a lot of the developed world very much still in the grips of a recession. However, the Government held its nerve, it managed its resources, and it achieved an outstanding result. Through the whole experience, one can only describe the performance of the Government as excellent. In actual fact, it would be fair to say that even the Opposition would concede that. We are out of recession 12 months on, and last week the Government delivered the next important steps for success on the road to prosperity.

The Prime Minister’s statement demonstrates that this Government will back the individual to know how best to manage his or her resources, educate his or her children, and invest his or her savings. The wonderful thing about New Zealanders is that they are beginning to trust and have confidence in themselves again. This Prime Minister’s statement has gone a long way to further reinforce that. New Zealanders need to be taught again to believe in themselves along the lines that they can keep up with Australia, that we are a nation of achievers, and that we are winners. Provided we work together, we will enjoy the fruits of success.

I wish to concentrate on just three points within the Prime Minister’s statement. There are many, many points covered there, but time does not allow me to go over them and canvass them all. I will concentrate on science and innovation, unlocking this nation’s resources and potential, and a growth-enhancing tax system.

The Prime Minister’s statement has articulated the most efficient and effective manner of funding science and innovation. The Government is ready and able to fund good, top-quality science, and the Prime Minister’s statement addresses the challenges of getting more of our firms using science, research, and technology to deliver more valuable products and services. This will make New Zealand companies more successful and more competitive in our export markets. In turn, it will create new jobs and better-paid jobs for all New Zealanders. This Government is determined to develop a public science system able to support such a dynamic economy. This year the Primary Growth Partnership will contribute $40 million, and up to $70 million in future years, which will be matched dollar for dollar by industry. In my mind there is no doubt that this will be the most appropriate model to follow. This model will produce quality science and research that no other country can aspire to. It will deliver value for money, and it will also deliver the ground-breaking scientific discovery that such an inspirational Government attains to.

New Zealanders can have confidence in this Government’s agenda. I refer to what has become known as the most progressive alliance to occur in modern scientific times within the context of climate change, and that is the Global Research Alliance on Agricultural Greenhouse Gases. It now involves 23 nations who will be meeting in New Zealand later on this year. We have high expectations of a very successful meeting when those nations come to New Zealand during 2010. Sadly, the only dissenting voice in this whole debate around the alliance has been Labour member Charles Chauvel. This only further demonstrates how this Government is able to gain international traction and buy-in from other countries leading to scientific success, and why the Opposition is so last century and out of touch with global thinking.

If there is one thing this Opposition fails to grasp it is that if we want first-class health, first-class education, and first-class law and order, we must have a first-class economy. The Prime Minister’s statement took us through a number of things that are very, very positive and constructive. It told us that presently there are 10 separate work streams that are under way covering economic growth areas like infrastructure, urban design, and critical work on improving New Zealand’s freshwater management. The Prime Minister’s statement outlined how the Government will progress an action plan to further unlock New Zealand’s petroleum potential. Estimates are that the petroleum sector will generate many billions of dollars in the near future and with that, many, many jobs. There is also the extraordinary economic potential in the mineral estate residing in Crown-owned land. The Prime Minister’s statement also recommended that areas within Crown land from schedule 4, plus additional land that is not yet in schedule 4, be added for the purposes of harvesting some of the minerals within those areas.

Within the speech, the Prime Minister talked about the Government action to remove particular regulatory roadblocks and progress water storage in Canterbury. So I will take the opportunity to focus on that for a moment because it is one part of the debate that I feel has been overlooked somewhat. When this is achieved it will contribute enormously to the New Zealand economy. This project, which is large in anyone’s terms, is compared to having the Rugby World Cup in New Zealand every year; such is the contribution and potential of this project to the New Zealand economy. This major regional development will create thousands of jobs and contribute many hundreds of millions of dollars to the New Zealand economy annually. Entire communities in the east coast dry parts of the South Island are heartened that after many, many years we have a Government that is prepared to take action and not one that will engage in endless meetings and talking. These communities are finally saying that we have a Government that will take action and by placing the environment at the forefront of all considerations will work towards prioritising a win-win situation for all stakeholders to the future prosperity of all New Zealand.

We will now move on to the issue of a growth-enhancing tax system. This Government is not prepared to stand by and allow New Zealanders to miss out on a prosperous future by continuing to rely on a tax system that possesses inconsistencies and perverse consequences. We have a tax system that taxes labour and investments hard at a high rate, yet we tax consumption at a very low rate. It is of no surprise then that we need to adjust this taxation system to ensure that we get better incentives going forward. The Government has a number of objectives to attain with these tax reforms. Clearly this country of ours needs a tax system that creates incentives for people to work hard, improve their skills, and get ahead. Most important, and something that is always overlooked by the Opposition, is that people learn to do that under their own steam. We need a tax system that encourages saving and one that boosts productivity.

I have referred here to only three of many points brought out in the Prime Minister’s statement. I assure the Opposition that 2010 will be a year to remember for all the right reasons. So, in conclusion, it is with immense pride that I speak in support of the Prime Minister’s statement. It is appropriate, it is a step change, and it is the first step towards a brighter future for all New Zealanders.

Tēnā koe, e te Mana Whakawā, huri noa i tō tātou Whare, tēnā tātou, kia ora tātou katoa. “Whāia te iti kahurangi ki te tuohu koe, me he maunga teitei”. When translated that whakataukī or proverb means “Strive for the ultimate, and if you must bow your head, let it be to a lofty mountain”. It basically means be aspirational, be ambitious, be positive, be productive, and be determined. These are all the hallmarks of our Prime Minister John Key, of his leadership, and of the work programme that was established in the Prime Minister’s statement early last week. That statement sets out a comprehensive work agenda for 2010 that is possible only because last year, in 2009, this Government powered through a huge clean-up programme that was the legacy of the previous Labour administration. That work in 2009 has created enough space to allow us to now focus on the important structural and systemic issues that face this nation.

What did we inherit from the previous Labour administration? We inherited both economic and social despoliation of New Zealand. It was a squandering of a decade of the best economic conditions. New Zealand was a country strangled by debt. But worse, the previous administration had the belief that it was better to place the Government, the State, at the centre of New Zealanders’ lives, rather than support them to build their own personal and professional capital, their own whānau, and their own communities. There was a belief that Government programmes should and could fix everything. It was a behaviour that squeezed people and communities out of their own lives. It was a mishmash of contracts and compliance regimes that mistook activity for achievement, busyness for business, and contracts for caring. Labour Opposition members now have the cheek to ask questions in this House about issues that are the consequence of Labour’s own inept administration. They ask questions about schools, hospitals, roads, and other important infrastructure that was left to languish while Labour wallowed in the largesse of the best economic conditions of several lifetimes

💬 Chris Hipkins: Talk about wallowing in largesse!

Well, I cannot comment on the size of the Opposition’s wallowing in lard, and I will leave that to Opposition members. We have been left to deal with the legacy of the Labour administration, which seems to have contracted some sort of political amnesia.

This National-led Government does not underestimate the capacity of New Zealanders, or their aspirations for a brighter future, nor their willingness to work creatively, harder, and smarter. This Government is committed to supporting that ambition. We have an absolute belief in the potential of the people of this nation, and our role is to create an environment in which that potential can be realised. So what has to be done? The Prime Minister’s statement sets out a comprehensive and clear agenda of work, with the economy as the No. 1 priority and reform in the social sector as our No. 2 priority. These are complementary and mutually reinforcing goals, which together will provide the structural and systemic responses necessary to achieve the brighter future that New Zealanders voted us into Government to help build.

We must rebalance the economy towards investment, savings, and exports, and away from the unsustainable consumption, borrowing, and Government spending that were the hallmarks of the previous administration. We need to change the incentives so that resources flow where we want them to go. After hearing back from several panels and review teams over recent months, we are considering a range of options to deliver a faster-growing economy that creates jobs and improves Kiwis’ living standards.

There is, as the member opposite said, no one quick-fix solution. I think that the member opposite needs to be aware that we have been in Government for 14 months and have managed to clean up a great deal of the bad Government that members opposite had 9 years to offer this country. There is no one quick-fix solution. Instead, we need to do several things. For example, we can shape the tax system to deliver the incentives that the Government supports. For ordinary New Zealanders, we want a tax system that rewards effort, encourages savings, and helps families to get ahead. For the economy, we want a tax system that helps fix our structural imbalances, which were built up under the previous Government. Shoring up the tax base and lowering personal taxes are important to this Government. We must also ensure that our company tax rate is competitive internationally. We need to do this at the same time as continuing to make progress with reducing deficits and controlling debt.

The Prime Minister last week made it clear that the Government is considering across-the-board personal tax reductions as well as upfront increases in benefits, New Zealand Superannuation, and Working for Families payments. That will give people choices and help families to get ahead, so it is incorrect to say that only the top personal tax cuts are being considered. In the previous Government’s last 3 years in office, the economy grew at a meagre 0.9 percent a year on average. What an achievement for the previous Government! It was a growth rate of 0.9 percent a year on average. That was less than half the growth rate of major overseas economies and less than one-third of Australia’s growth rate. Shaking one’s head does not make it untrue, regrettably; the facts speak for themselves. That is why we need to change the way that we do things.

For hard-working Kiwi families, lower personal taxes across the board are good, because they give people incentives to work hard, improve their skills, and get ahead here in New Zealand, but we have to pay for them. At an economic level, we want to encourage more investment, savings, and exports and we want to have less borrowing and consumption, because New Zealand spends a lot more as a country than it earns, and that is unsustainable.

💬 Sue Moroney: That’s under National.

That was the approach, I say to the member opposite, of the previous Government and not the approach of this Government.

As part of a package of tax changes to help achieve these things, the Government is carefully considering a modest increase in the rate of GST, to no more than 15 percent. We are acutely aware that a rise in GST would have an impact on lower and middle income New Zealanders, so we are not interested in a tax package that adversely affects those groups. No decision has yet been made about increasing GST. The Government has asked for more work to be done on this. But let me give members a quote from someone who texted me just today: “If tax increases, I would prefer it to be GST, offset by a reduction in PAYE, because this means I have more choice”—

💬 Chris Hipkins: How much do they earn?

Whakarongo, whakarongo, ko ēnei ngā reo o ngā tāngata ā-rohe e kōrero ana ki tēnei Whare Pāremata. This is the voice of an actual New Zealander, saying what that person thinks.

💬 Hon Members: How much do they earn?

I object to the idea that I have to pay people to speak to me. Perhaps that is those members’ experience, but it is not mine. The text message continued: “That is, if I can’t afford to buy something, then I won’t buy it. I don’t have this option with PAYE.” This John Key - led Government believes in the potential of New Zealand and New Zealanders. That is why not only are we concerned to ensure that we have a better economy and a world-class tax system but also we are committed to ensure that any changes meet the tests of equity and fairness. They must deliver benefits to households and the economy that outweigh the costs, and, given that we face another 6 years of Budget deficits, they must be fiscally neutral.

But tax is just one policy lever that we can pull to help rebalance and grow the economy. We are equally concerned about our social sector. I will turn and speak for a minute about education, an extremely important part of the work programme of this John Key - led Government. The quality of education, as we are all aware, expands and improves our life choices. Those life choices, good and bad, have an impact on the individual, the family, the community, and ultimately our society. Ensuring an excellent education for all our school students is, therefore, a critical personal and public investment. National standards will allow us to have an early warning system that tells us whether our students are doing well, and if they are not, it will tell us what kind of support they need.

It gives me great pleasure to rise today and speak on the Prime Minister’s statement, which was delivered such a short time ago. What a wonderful speech that was—9,500 words of action, 9,500 words of direction, and 9,500 words of inspiration that New Zealanders have overwhelmingly welcomed and supported. What was his speech about? It was about aspiration. It was about looking to the future. It was about meeting challenges head on and focusing on economic development. At the end of the Prime Minister’s speech, others got up to speak as well, and I thought for a moment, as I was thinking of what to put in my notes today, of what some of those speeches were about. The Leader of the Opposition, Phil Goff, stood up, and it was a little bit like the stories that my wife reads to my children. I nicknamed him “fairytale Phil”. There was everything in there, except for a happy ending—

H V Ross Robertson: I raise a point of order, Mr Speaker. The member has been here for some time and his father has been a member of the House, so he has some idea about Standing Orders and Speakers’ rulings. He well knows that when he refers to a member, he must do so by using the member’s full name or using the member’s honorific. In this case, he referred to the Leader of the Opposition by his first name only.

The ASSISTANT SPEAKER (Hon Rick Barker): The member is correct. I just say to members that when they are raising points of order we do not need a lot of prefacing of them. The member will refer to other members of the House respectfully, in the address that is agreed to.

After I heard the speech made by the Hon Philip Goff, whom others have nicknamed “fairytale Phil”, it was clear to me that members opposite were looking glum. I jotted down the names of a few of those members when we looked at the TV later on, and I jotted down what I thought they were thinking. I ask why members of the Opposition would be feeling glum when their big, strong, able leader, who sits on a motorbike and rides around the country in his time off, is talking about his vision for New Zealand. Well, they would be concerned, because there was not a lot of vision in his speech. I had a look at this and asked who they were. Were they only members on the backbenches or were they members on the front bench? It was interesting that Chris Hipkins was looking quite concerned, and I looked at what happened at the last election. The reason for that was I think that Mr Hipkins is not at all sure that with leadership like the leadership that has been shown by the Hon Phil Goff, whom others have nicknamed “fairytale Phil”, he can get back into this House in 2011. I am sure that he is thinking that he will have to work extra hard now in Opposition just because of those members’ leadership.

Clayton Cosgrove was looking quite disappointed, too. This is the Hon Clayton Cosgrove, who is not to be confused with the Hon Philip Goff, whom others have nicknamed “fairytale Phil”. Why would he be looking concerned? His nickname—

💬 Sue Moroney: I raise a point of order, Mr Speaker. I know that the member is a new member, but he has failed to recognise your previous ruling. He has just committed the offence of using nicknames for a member another two times.

The ASSISTANT SPEAKER (Hon Rick Barker): The member is trifling with the ruling, in that members should be referred to respectfully. The member was referring to how others may or may not refer to the member. I just say to the member that all members in this Chamber are honourable members. Yes, we should accept a little bit of jousting, and once or twice is OK, but I ask that we get on to the substance of the speech. I look forward to the member continuing.

I do have great respect for the Leader of the Opposition, the Hon Phil Goff, and I think he will find great respect in the community when he is no longer leader and he goes out and starts looking for other employment.

I will just go back to where I was, because it is the crux of what the Prime Minister’s speech was all about. Clayton Cosgrove is worried about his majority, which is thinner than what is under his hat. Labour list MPs are looking glum. Some of them thought that they would be in Government at the moment. Some of them are in Parliament only because they were on the list and they are a little bit worried that they might have to get back out into the real world. Only two people were not looking glum. One of them was Shane Jones. He seems to think that the Leader of the Opposition’s speech was part of his plan to lead the Labour Party. The other person is Parekura Horomia, and I heard it mentioned earlier that he is looking to be Shane Jones’ No. 2 when Shane Jones is the leader. I think it is because Parekura Horomia did not think he would get back in 2008 so he does not have very high hopes for 2011.

Let me tell members a bit about the area of New Zealand that I am a member of Parliament for—the central North Island area. Every single seat in that area is now a blue seat. Every seat is National. Do members know why that is? It is because our Prime Minister has vision, and his speech showed us where that vision was. A few MPs from that area who have limped back into Parliament on the Labour list will be concerned about the Prime Minister’s speech. In a moment I will go through some of the things he set up for this year.

We do not see Labour in Taupō any more. Labour has moved its office from Rotorua to Tauranga, which is a seat that it has not held for 12 years. The people of Rotorua are really glad they can phone an 0800 number! I want to recognise the Hon Stephanie Chadwick, who announced a short while ago that for the good of the people of Rotorua—because she misses being a Minister—she will stand again in Rotorua in the 2011 election. By golly, I am looking forward to that. People have said they will be coming to see her in her office in Tauranga. We do not see Labour in Hamilton, and it gave up on Tauranga a long time ago.

The Prime Minister made a very gifted, directed speech that touched on many of the problems left to this Government when we came in. Let us think about the economy for a moment. Members opposite have spoken at great length about how strong the economy was in the 9 years they were in Government. Let us dig down a little deeper than that. I accept what the member says. Absolutely, unemployment was lower. But the size of the Public Service was growing and growing. The Labour Government did not work out that it is not a Government that should be employing people, it is businesses. What we have to do in this country is back businesses so that they can get on and create employment. Governments create direction, and the Prime Minister has created a great deal of direction in this area.

Let us go back to the productive economy, to those people who produce things and sell them or export them, they go out and invest, and after they invest they employ other people. The productive economy in New Zealand has been in recession since the year 2005. The members opposite who are smiling must be proud of that statistic. Since the year 2005 our productive base has been dwindling. Here we are in the year 2010 and do members know what level it is at? It is at the same level that it was back in 2000. So after 9 years of a Labour Government and the wonderful surpluses it tells us about, the wonderful things it was doing, and the excellent things it was fixing in this country, where are we now? The New Zealand productive sector, which should be employing, investing, and exporting, is at the same level as it was when Labour limped into Government. Of course, it did not limp out of Government; it was chucked out. Some changes are coming.

Why is the New Zealand productive sector struggling? I went out in my electorate a little while ago and asked people in the productive sector. I asked those in the kiwifruit sector where some of the blockages have been for them. It is pretty clear that for them getting their produce to the port and exported has taken too long, has been too difficult, and has cost far too much money. Here is a little bit of good news for Mrs Chadwick, who I notice likes to wag a finger around. The people of Rotorua liked that finger a few years ago. Here is some great news: our Minister of Transport has fronted up, and there will be a new road from the middle of my electorate that will go all the way across to the port—a Te Puke bypass. Do members know what the farmers there, the foresters, and those who drive trucks are telling me? They say: “Our Minister of Transport is a great, great Minister of Transport and that’s a very good road.”

Let us think about another road in my electorate, in Rotorua. Forty years ago somebody said that Rotorua might grow or it might not, but we need a new road that will bring us from our airport into town and it is a bypass. For 40 years people have been talking about that. Last year the people of Rotorua realised that although a few weak, limp promises had been thrown around about the possibility of roads, it was only if they let their petrol be taxed locally, which would mean they would be less productive. The Minister of Transport has fronted up and the good news is that Rotorua got $1.5 million of funding to move to the next stage of the road that Labour members and others have been talking about for more than 40 years. It is a great road; bring it on. If we had not got the money last year it would be many, many more years until the project could get even close to getting under way.

I want to come back to the productive economy, because it is something that New Zealanders are concerned about but members opposite conveniently forget about it because they know the great damage they did in that area during their 9 years in Government. Why is it that we have not had good investment in the productive economy in New Zealand? It is because a number of the things the Labour Government did pushed New Zealanders in the wrong direction. It was too hard to invest. It was too difficult for businesses to get on, and everywhere they went there were regulatory roadblocks. During the campaign and since that time I have not had a single person, except the friends of Mrs Chadwick in Rotorua, say: “Todd, leave the Resource Management Act alone; it’s working really well.” We get overwhelming support for good changes whereby people can get out and get good projects moving forward and can look clearly at what we need to do there.

Trade is another example. A lot of trade work has been done by our new Minister of Trade. He is a very active Minister and he is in and out of countries talking about trade and freer trade. We had a wealth of trade agreements last year. On the agenda this year is a trade agreement with the United States, with India, and with Korea. The forestry community of Rotorua, the kiwifruit community of Rotorua, and the other groups of farmers who produce in this country and who have been held back tell me that they are glad of this. Do members know that for kiwifruit Korea has a tariff of 45 percent against New Zealand produce? In Chile, where we have a trade agreement, it has been reduced to 25 percent. Tariffs make us less productive and less competitive, and it means that the farmers in my electorate, who are having a great kiwifruit year this year, would find it more difficult to compete. I think that our Minister Tim Groser is doing wonderful things. I am glad that he is the Minister because he is a Minister of action. All of our Ministers seem to be Ministers of action.

My time is almost up and there is so much that I could talk about in relation to the Prime Minister’s speech because there was so much in it, so much depth, and so much detail. I want to touch upon national standards, and here is a little lesson for the Opposition: they should stop talking just to union officials and the odd teacher and instead get out on the streets and talk to parents. Parents want us to back their kids, and national standards will do that. I will conclude by saying I have been reading a few blogs lately. Some of them are hugely humorous and some of them are very serious. I want to touch on one blog I read a little while ago. The suggestion was—

The ASSISTANT SPEAKER (Hon Rick Barker): I regret to advise the member that his time has expired.

Kia ora tātou no reira te Whare, e ngā iwi, e ngā reo, e ngā hau e whā, tēnā koutou, tēnā koutou, tēnā koutou katoa. I say to matua Rick Barker, haere rā. When I first read the Prime Minister’s statement, I thought surely this is not the best the Government can do, but I am still waiting to find anything of substance in the statement from the Prime Minister. Where is the leadership that is required to motivate and inspire New Zealanders to effort? It is not on that side of the House. I rang around some business contacts, who asked: “Is that it?”. I say to the Prime Minister that tax is not a silver bullet.

I say to the honourable member Todd McClay, who preceded me, that Steve Chadwick is out knocking on doors now. She has acknowledged her candidacy for 2011 and she will fight it tooth and nail. While Todd McClay has to stay here in the House, we will have our candidate out there wresting the seat back for the Labour Party, and we will give her all the support that we can.

With this Prime Minister’s speech we have a half-hearted effort. The speech is shrouded in uncertainty until we see the Budget, and it is full of sound and fury signifying nothing. It is time that the Prime Minister delivered on his promise to lift our country’s performance. I believe, as do my Labour colleagues, that Alan Bollard was right when he said that the Prime Minister has over-promised and he cannot deliver. Although we have had the Prime Minister’s statement to Parliament, I acknowledge the speech made by the Hon Phil Goff. His speech to the nation in Hamilton resonated with the many and not the few, whereas the Prime Minister’s speech pandered to the few while ignoring the many. It was a speech of a smiling Muldoon; I remember him well.

GST, the major initiative unleashed by the Prime Minister, is a regressive tax, taking more as a percentage of earnings from the low paid than it does from those with more discretionary income. Let me give members an example. If people take home $200 a week and their grocery bill is $100, that bill currently includes a GST component of $12.50. So they pay 6.25 percent of their take-home pay in GST. But if they take home $1,000 and their grocery bill is $100, that $12.50 in GST is only 1.25 percent of their take-home pay. Therefore, the less people earn, the greater the percentage of GST they pay. Personally I would prefer to live in a country that prioritised looking after the many, not the few. What it means is that those who are the most vulnerable in our society and those who are on fixed incomes—and I stand here as the Opposition spokesperson for the elderly, most of whom are on fixed incomes—will be greatly disadvantaged by the implementation of an increase in GST. Not only that, but they will lose their purchasing power while they are waiting for a catch-up.

I have been inundated with calls from constituents about the impact of GST on their standard of living, and they ask why they should trust this Government’s word and its rhetoric when the Prime Minister promised not once, not twice, but three times not to raise GST. He can use all the weasel words he likes here in Parliament to deny it, but the people know differently, especially the elderly. They are the reason that I stand here speaking up for them. I have the senior citizens portfolio; it is a challenging one, but I enjoy it. I have been inundated with calls from around the country and I intend to hold this Government to account.

💬 David Garrett: How many?

H V ROSS ROBERTSON: The point about GST, I say to Mr Garrett, is that it is a regressive tax. So those at the bottom are paying a greater percentage of their income than those who are earning much more.

As a result of this Prime Minister’s statement to the House, what we see is that the elderly will continue to suffer under this regime. To date a number of changes have affected senior citizens. There has been the issue of home support on the Kapiti coast. We have heard that the district health board has been ringing people to ask whether they are OK, and when they say that they are, the board cuts the number of hours of home support that they are entitled to. The Safe with Age driving programme, which was implemented in the South Island, has been changed and cut, as has senior citizens’ access to student loans and allowances. These things have all been cut.

My Labour colleagues and I have been vocal in opposing cuts to health, accident compensation, and adult education, and we have been drawing attention to the axing of the Safe with Age driving courses and speaking up against the freezing of the contributions to the Superannuation Fund. We also oppose the recommendation of the Tax Working Group to increase GST to 15 percent, a policy that we know would hit our elderly citizens particularly hard.

💬 Chris Tremain: So why did you raise it from 10 to 12.5 without reimbursing senior citizens last time?

H V ROSS ROBERTSON: Let me just say to the member, on behalf of senior citizens, that during my regular visits to Grey Power around the country, I have been alarmed to hear of instances of a general lack of care and empathy for some of our most vulnerable seniors, including where one district health board informed and gathered information by telephone to justify cutting back home support hours. Other district health boards are discharging patients from accident and emergency departments late at night, without considering whether those people have the necessary resources to get themselves home.

The honeymoon, I say to this Government, cannot go on for ever. When the gloss comes off, we will be waiting, and thank goodness we have a democracy in this country. I want, at this stage, to acknowledge all of those who have fought and those who have died so that we might have that privilege. I look at the plaques around the Chamber, starting over here with ones for Malaysia, Viet Nam, Korea, Cassino, Pacific, El Alamein, Crete, Fortress Europe, River Plate, South Africa, and Atlantic, to name just a few. Those people did what they did so that we might have a democracy here, so that we might have change. Change will come again, because more and more people are recognising that this Government is not delivering what it promised.

Alan Bollard made it quite specific last week, when he said that we would not be able to achieve what the Prime Minister had set out to do. He fronted up; he told the people of this country that they cannot believe everything they hear from the Prime Minister.

We will continue, as Her Majesty’s loyal Opposition, to hold this Government to account, because the speech read to this House by this Prime Minister was lacking in vision, it was lacking in commitment and dedication, and it is holding all of us up in the air while we wait to see what is in the Budget. Leadership is about motivation, it is about inspiring others to follow, and to date that has not happened. Let me say to the people of New Zealand, and to the senior citizens whom I represent, kia kaha—stand tall. The elderly are not to be taken for granted, and we on this side of the House will continue to speak up for them. Tēnā koutou, tēnā koutou, tēnā tātou katoa.

I will focus on the paragraphs of the Prime Minister’s speech in which he spoke soothingly and reassuringly about how Auckland governance reforms will simplify and streamline the governance structures within the Auckland region. This is a classic example of Orwell’s double-speak, which is a language that seeks to make the bad seem good and the inappropriate seem appropriate. In fact, the Auckland governance structuring will not so much streamline and simplify the governance structures in the region as decimate them, and will wipe out seven perfectly well-functioning local democracies, replacing them with what will really be a corporatised structure masquerading as democracy.

I noticed that the editor of the normally conservative Local Government magazine recently said in an editorial: “A cynical observer might think that the Auckland supercity juggernaut is all part of a cunning plan by politicians in Wellington to remove local government entirely.” I think the editor has hit the nail on the head, because the reality is that the Government’s so-called super-city plan is a master plan by Rodney Hide—aided and abetted, of course, by every member of the National caucus, including every National member here today—to corporatise most of the Auckland councils’ functions and, of course, their $28 billion worth of assets and ready them for privatisation. The plan is also to remove layers and layers of local democracy, and to reduce the ability of ordinary Aucklanders to participate in local government.

Under Rodney Hide’s master plan, which I have deemed to be Rogernomics II, seven perfectly well-functioning city councils will simply cease to exist. Councils like Waitakere City Council and Manukau City Council—which are amongst the most innovative, the best supported, and the most successful councils in this land—will disappear in October for no good reason. They will be replaced instead by a form of State government—a huge, bloated bureaucracy of 6,000 staff, led by a mayor with sweeping new executive powers. It is called the “strong mayor” model. There will be 20 councillors, who between them will represent 1.2 million people, or one-third of New Zealand’s population. The 20 elected councillors will represent constituencies that are larger than constituencies probably anywhere else in the world. Of course, they will be far larger than MPs’ constituencies. Some councillors will represent constituencies with 88,000 people, which is far more than the 55,000 people the average constituency MP represents—almost twice as much. One can hardly call that sort of representation local government; it is a form of State government, pure and simple.

It turns out, however, that under Rodney Hide’s master plan the 20 councillors will not have a lot to do, except perhaps thump on the council table in frustration and impotence. Virtually every important Auckland Council function—water, transport, sewerage, economic development, tourism, property, development, all the regional facilities, stadiums, the zoo, and, of course, the council investments in the airport and the port—will be siphoned off from the council into corporate businesses run by corporate boards, where decisions will be made in secret by unelected and unaccountable directors appointed by none other than Rodney Hide. They will not even have to publish their agendas or their minutes. I have direct personal experience of how those council-controlled companies operate. I was on one in the Wellington City Council for 8 years, and I saw that they are basically nothing more than a corporate company masquerading as somehow being within a democratic structure. They are not; they are a way of sabotaging it.

It is worth reminding ourselves that the main purpose of local government in the Local Government Act 2002 is “to enable democratic local decision-making and action by, and on behalf of, communities.” That is stated in the Act. These changes will completely undermine the central purpose of local government by removing most of the Auckland councils’ functions and virtually all of their $28 billion worth of assets from the control of democratic decision makers. Really, it is nothing short of a coup d’état. The wonder is that the Government is getting away with it, although I note that the polls suggest Aucklanders are waking up and are increasingly opposed to what is happening.

I took the trouble to look up the definition of “coup d’état”, and it perfectly describes what is happening in Auckland. A coup d’état occurs when a small group of the existing Government establishment infiltrates a Government and succeeds in getting rid of one form of government and replacing it with another. Well, that is exactly what is happening in Auckland. Rodney Hide and his hand-picked members of the Auckland Transition Agency have wrested control out of the hands of the democratically elected councillors whom Aucklanders elected in 2007. Instead, the unelected and unaccountable members of the Auckland Transition Agency, appointed by Rodney Hide, are pulling all the strings and deciding what the councils may or may not do in their last few months of existence. The National Government has imposed radically new power structures on Auckland, in which unelected officials will make virtually all of the key decisions.

It is good to see that some Aucklanders, and even some of the business community, are waking up and speaking out against it. Even Michael Barnett, head of the Auckland Regional Chamber of Commerce and Industry, said that there was a growing perception that the super-city reforms were being imposed by Wellington and a select group of bureaucrats. He is right about that. Even he is opposed to the idea that Rodney Hide and the Auckland Transition Agency will appoint all of the directors and the senior managers of the company boards, and so he should be. It is an unprecedented level of interference for central government to decide what companies will be set up in Auckland, what their functions will be, and when they can be disappeared, and to appoint virtually all of the members to those boards. For every single other board in New Zealand the council decides what they will do and who will be appointed to them.

I noticed today, just before I came to the Chamber, that it seems the only people who support the council-controlled entities that are being set up are the members of the Council for Infrastructure Development, which has put out a press release rushing to support those entities. Of course they would: their members are rubbing their hands as they wait to get them on the $28 billion worth of infrastructure at the Auckland Council.

Finally, a word about the local boards, which the Government is holding up as a sort of fig leaf to argue that that is the way ordinary New Zealanders will be able to have some say in the decisions that are being made. Local boards are not even units of local government; they are unincorporated bodies. They have absolutely no power in their own right—no resources, no staff, and no ability to set rates—and any powers that may be delegated to them by the Auckland Council will be able to be removed at any time on virtually any pretext.

I am sad to say that Wellington is turning its mind to the issue of amalgamation, and that Mr Dunne is trying to fast track Wellington into a super-city. Wellingtonians are far too clever to be fooled by Rodney Hide and his merry men—far too clever. They will not fall for this master plan by Rodney Hide, but I am concerned that the proposed terms of reference for the Wellington region, as put out, only have the public being consulted about the plans at the end of the entire consultation process—that is, in a few years’ time. That is not good enough, and I will be seeking, with my Labour colleagues, to make the people of Wellington—

💬 Mr DEPUTY SPEAKER: I am sorry to interrupt the member, but her time has expired.

As the Prime Minister said last week, New Zealand has a substantial challenge ahead of it, and that is closing the income gap with Australia. I say to members opposite that they also recognised that that challenge existed in 2000, and they totally failed to even think about closing that gap. There is no doubt that it will be a huge challenge, because it requires that New Zealand has a sustained higher growth rate than Australia over time—not for 1 year, not for 2 years, but over a sustained period of time. We in New Zealand can be sure, of course, that Australia will not rest on its laurels during that period of time.

One of the key opportunities that New Zealand has in bridging that gap is by the effective application of science to business innovation. It may be true that Australia has a large amount of accessible minerals, but New Zealand has clear advantages in agriculture and other areas, and the success of New Zealand’s agriculture has always been built on the application of science. Many places in the world have good rainfall and temperate climates, but few have achieved the productivity levels of New Zealand in this sector, and we have done so fundamentally on the basis of the application of science. Many of the Crown research institutes, in fact, are completely directed to that purpose: AgResearch, the National Institute of Water and Atmospheric Research, Landcare Research, and Scion, just to name a few in that field. In addition, there are the emerging sectors of biopharmacology, digital film, and sophisticated manufacturing, particularly where there is no long-range production, but rather there is short-run production with unique requirements.

Today I went out to Weta Digital, which of course is where Avatar was made. That movie has been a world-wide success, so it makes sense for New Zealand to co-fund the next stage of that technology. Those members who have seen the film and the imagery of running water, and so forth, may have thought that that was a natural New Zealand river. In fact, the scene is entirely digital, which is the innovation that Weta Digital brought to that production. When the Foundation for Research, Science and Technology invested $5.8 million along with Weta Digital—which is putting in $2 for every $1 that the foundation is investing—that is intended to take what we saw in Avatar to the next stage of technology. That is the competitive edge. There were a thousand people working in Wellington in that sector, and a leading edge technology has been built in this area. A whole fabric of companies that do that has been built around Weta Digital, and this is one of the sectors that has proved that it is successful in the marketplace.

It pays for the New Zealand taxpayer to back that sort of success, because for the nation’s investment we will benefit from $300 million being spent, primarily in the Wellington region, through those companies, and then going out into the wider economy. It is similar with more traditional areas like Zespri. The co-funding of $15 million—

💬 Chris Hipkins: The what?

—the co-funding—over the next 7 years will enable Zespri to develop, in essence, the next Zespri Gold kiwifruit. It might actually be red, in truth, but gold kiwifruit produced just last year $400 million in revenue, which was a direct payback for the research expenditure to date. Plant and Food Research alone received $10 million in licensed revenues. The reason I am focusing on these success stories is that this is how we grow the New Zealand economy. This is, in fact, the sort of example, which the Prime Minister referred to in his speech, that shows how we can build the New Zealand economy to go forward. I mention, for instance, another case in point: Fisher and Paykel Healthcare. That company has grown over a relatively short number of years to be one that had $500 million in revenue last year. I will repeat that for the benefit of the House—half a billion dollars. The foundation has invested in that company in its research space, and I stress for members that that investment is in research, the next level of technology, and is for $3 million.

The Government has looked at the opportunities around this area, and we say that if we can put more emphasis on science, that will be a core driver of innovation, the next stage of economic growth. That is why we have chosen that as one of the six sectors; that is why we have in fact said to the nation that we see it as the pathway for an accelerated level of growth. We have to have an accelerated level of growth if we are to bridge that wealth gap with Australia. I say to members that when I became the Minister of Research, Science and Technology, it was clear that the science sector needed a substantial improvement, so I have spent a lot of time listening to scientists and to science managers, and talking to businesses, and asking them what things need to be done that will make the difference. They say that we should get rid of the complexity, get rid of the bureaucracy, and focus on expenditure that enables scientists to get on with their business. So that is precisely why we established the Crown research institute taskforce, and it will be reporting back to Ministers shortly. It is our intention to get more outcome—more science, in fact—out of the Crown research institutes, which will enable us to drive the innovation sector ahead.

I want also to say what we did in 2009. In 2009 we increased funding for the Marsden Fund by 23 percent. It was the largest increase in its history. We increased funding for the Health Research Council by 20 percent. We increased funding for the Crown Research Institute Capability Fund by 18 percent. These are real gains that are building the research infrastructure of our country, and the Crown research institute taskforce is intended to build on that. The appointment of the Chief Science Advisor to the Prime Minister, Sir Peter Gluckman, has also been part and parcel of that. I can say to members on both sides of the House that I, along with the Prime Minister, am working closely with the Chief Science Advisor to build the next platform of growth.

Members might ask how we will bridge the gap with Australia. The way we do so will be to build the innovation culture of this country—to build on existing success, and then to power it up and take it forward to the next level. I can tell members that the next Budget will set out the platform that will drive our economy ahead. The Prime Minister’s statement has made the clearest set of priorities, and 2010 will be the year in which we will lay the foundation for growing the economy. When I listened to Mr Ross Robertson, all he could focus on was GST. All he could do was focus on GST. He said it was going to go up by 2.5 percent; I have to remind members on that side of the House that their Government increased GST from 10 percent to 12.5 percent, and there was no compensation. National has said to all New Zealanders that everyone will be better off under our tax package, and that we will be growing the economy. Budget 2010 will set that platform.

Last November John Key celebrated being Prime Minister for a year, but survivors of sexual abuse and disabled people in “New Zilnd”, or New Zealand as we say here, have nothing to celebrate. John Key promised there would be a brighter future for all New Zealanders, but survivors of sexual abuse and disabled people in New Zealand do not have a brighter future. In his speech in this House, John Key promised there would be improved opportunity, fairness, and security for all New Zealanders, but that is not the case for survivors of sexual abuse or for disabled people. John Key promised a New Zealand in which his Government would improve the opportunities available to our most vulnerable citizens, but that is clearly not the case.

There is absolutely nothing in the Prime Minister’s statement that could give any hope, whatsoever, to New Zealanders—no innovation, and no support for the vast majority of Kiwis. National has failed New Zealand families. Let us look at the rise in the GST rate, which will push more costs on to hard-working New Zealanders—and they are already struggling to make ends meet. Will the tax cuts deliver more to low and middle income earners? No, they will not. Will they deliver more to the 10 percent of high-income earners in this country? Yes, they will.

Let us look at how much those people will receive. The Prime Minister will get another $509 a week—

💬 Dr Ashraf Choudhary: How much?

He will get another $509 a week. That figure is around the minimum weekly wage in this country and is almost exactly the same as the wages of the cleaners who rallied outside Parliament today. Labour Party members and Green Party members went out to meet them, but did National Party members, Māori Party members, or ACT members go out to meet them? No, they did not. If those members had listened to those people, they would have heard that all they were asking for was a small increase so that they could make a living. But they were not listened to by the National Government. I say again that currently the cleaners’ weekly wage is almost exactly the same amount as the additional money that John Key would get under his Government’s tax cuts. Those same cleaners will also suffer a 20 percent increase in GST on what they spend just in order to look after their families—to feed and clothe their kids. Where is the justice in this? That is a line that John Key took from Labour’s statement: “opportunities for all for a brighter future”. Yeah, right! Labour will fight alongside every community group, every family, the majority of all New Zealanders—

💬 Hon Darren Hughes: “The many, not the few”.

—the many, not the few, to oppose this GST rise. That is what we are about. As my colleague Darren Hughes said, we are about the many, not the few.

Yesterday there was another rally outside Parliament. This is the rally season, and that protest was against the huge hike in accident compensation levies, the cutting of all the entitlements, and quite clearly the lining up of the accident compensation scheme for privatisation in the future. A wide range of people were there, and I congratulate everyone who turned up. The biking community were there in their leather gear.

💬 Hon Trevor Mallard: They looked really good.

They did look really good. The people who are getting dealt to under the accident compensation scheme were there. The victims of injury were there. The Accident Compensation Corporation (ACC) has referred to them in terms of “draining the swamp”. Those were the people who turned out, but I want to talk about—

💬 Dr Ashraf Choudhary: Who wasn’t there?

Again, the National members were not there to listen to that group.

I want to talk about another group that turned up: the victims of sexual abuse, and the professionals who support them and provide counselling. Those victims and survivors have suffered the most horrendous forms of abuse that one could ever contemplate. This Government introduced a new pathway for dealing with those claimants. Well, that pathway was nothing short of a high wire. The latest figures show that 70 percent of those claims were turned down in a 6-month period. Victims are being pushed from pillar to post; they are forced to retell and retell their stories in order to apply for the help they need and deserve. The system is so shocking that many counsellors have felt compelled now, on ethical grounds, to not even participate in it.

Let us hear some of the reasons given by ACC for declining claims. It decided that sex with a 12-year-old was consensual, and that a childhood rape was sexualised play. Two young boys who were raped and thrown out of a window were deemed not to need counselling.

💬 Hon Trevor Mallard: What?

That is the new policy.

💬 Hon Trevor Mallard: That’s the policy?

That is Nick Smith. This cost-cutting exercise is, without a doubt, one of the most cruel and shameful we have ever seen in our country.

I have a message for the National Government, and it is this: victims and survivors of sexual abuse, counsellors, therapists, organisations, and members on this side of the House will not go away—not in 6 months, not in a year, not ever—until this Government accepts that what it is doing is absolutely wrong and reverses the cuts to accident compensation.

The other thing I want to talk about is another group who have been seriously dealt to, and that is people who are living with disabilities. The cuts in this area have been nothing short of mind-blowing. I will start with Minister Paula Bennett’s cutting of the training incentive allowance. That allowance is not only about single parents; it supports disabled students in tertiary education. That is gone. Community education has also been cut. I predicted, as did my colleagues, quite rightly that that cut would lead to the axing of sign language classes. Anne Tolley said no, no, that was not true. I notice that Anne Tolley is not saying a word now; she is heavily involved in sorting through her papers. Anne Tolley stood in this House and said that that was not true, but now we are seeing the axing of those classes. I tell Anne Tolley that is shameful, and it is no wonder she is looking embarrassed. We see the sacking of support and teachers for deaf children and their families. Again, Anne Tolley should hang her head in shame on that one. We see the cutting of support for tertiary students in the Auckland region. Again, Anne Tolley should hang her head in shame. It is no wonder that the Government dumped her from the tertiary education portfolio, and I say to Mr Joyce it is his time now to fix it.

We are also looking at the extraordinary organisations that help children with disabilities. Has Anne Tolley been moved to tears, or am I imagining that?

💬 Hon Trevor Mallard: No, you’re imagining that.

I am imagining it, OK. We see cuts in the funding of other organisations that help disabled students and support them to reach their full potential. The cut in that area is absolutely shocking stuff. This is a roll of absolute shame for this Government. In just a few short months we have seen all the support be slashed, and that was done under a Prime Minister who has said he cares about our vulnerable people.

Well, in the House today the Prime Minister said sometimes politicians get things wrong. On that I agree. In his Prime Minister’s statement he said he wanted to improve opportunity, fairness, and security. In order to do that, his statement should have said other things. It should have said the Government would stop the attacks on accident compensation and return to a fair system. It should have said the Government would shelve the GST hikes and stop giving huge cuts to high-income earners, and would reinstate the cuts to disability organisations. I can see Mr Joyce looking at that and thinking it is not a bad idea. The statement should have said the Government would reinstate the 2 percent employer contributions to KiwiSaver, which National actually snatched away from workers, and reinstate the funding for community education. It should also have said the Government would make sure that the cleaners who clean our offices in Parliament received a fair wage rise. If John Key had said he thought that his proposed tax cut, whereby he will get more money than the cleaners who clean those offices, was unfair, then he would get some positive words from members on this side of the House. Will the National Government do that? No, it will not. Will it front up to those injustices? No, it will not. Will it stop wrecking our education system with its national standards? I tell Mr Joyce that he will have to build a heap more roads after the new education statement that was made today, because people are going to be whirling all over Auckland City, taking their kids to the school of their choice.

I will finish now, but I say the Prime Minister’s statement is an absolute travesty and an absolute insult to ordinary New Zealanders.

This is a fantastic, exciting year, 2010, for education. This is probably one of the most important years in education in New Zealand in the last 20 years. I just want to read something from the Prime Minister’s statement. He said: “We believe a high-performing education system at all levels is essential to ensuring New Zealand’s young people have the skills they need to acquire the jobs of the future. The status quo is not good enough.” This Government is passionate about education. This Government is determined to give every single child in New Zealand the chance to reach his or her full potential. We came into power with a promise to address the completely unacceptable fact that up to one in five—one in five—of our young New Zealand students is being failed by the education system. It is not that they are failing in the system but the system is failing them. Up to 150,000 children are being failed by the system and are leaving school without the reading, writing, and maths skills they need in order to succeed. We want them to have a chance and we are determined to do something about it. Too many—they can laugh, but the Opposition actually had 9 years to do something about this. They sit there now on the crossbenches where the community have confined them, because they did nothing about it. They talked about it and they still want to talk about it. This Government is going to do something about it.

How are we going to do that? Through national standards. One would think from listening to that side of the House that national standards were the devil incarnate. What are national standards? They are simply clear expectations of what a child should have learnt, and by when, in reading, writing, and maths—reporting clear information to parents so that they can be involved in what happens next for those children who are struggling to make progress against the standards. I would have thought that every single New Zealander would think that that was a great thing to do. In fact we know that 73 percent of New Zealand parents think it is a great thing to do, but that lot over there do not support kids. That lot over there do not support parents; they support the union. They support the union that is worried about things like performance pay. Teachers are worried about their own, about how it will affect them. On this side we are worried about the kids. The previous Minister of Education left teaching and came to Parliament in—was it 1975? It was 1984. It seems like 1975. That was 27 years ago. They did things differently then, and he has not caught up.

Our schools this year are getting on professionally, implementing national standards. This Government, unlike the previous Government, is happy to say that it will watch and see how this goes. We in the National Government are going to have some evaluation, we are going to have some monitoring, and we have set up an independent advisory board. If things need to be changed, we will change them, because it is about the kids. It is about getting it right for the kids. We are not like that previous Government—when it was told that the National Certificate of Educational Achievement was not working, the Minister of Education did not listen. He did not listen to the experts, he did not listen to the teachers, he did not listen to the principals, and he certainly did not listen to the kids. Well, we are going to listen to all of them. If we need to make changes, we will make them.

The second thing I want to talk about is the Youth Guarantee. What a great policy that is. Do members know what we have done already? The Opposition members sit there and weep, because all they had was Schools Plus. There was no money, no policy, they released it three times—and in less than 12 months this Government has started to make changes for our young people so that they have better pathways and better opportunities—

💬 Chris Tremain: A brighter future.

—and a brighter future about their education. So what have we done with Youth Guarantee?

💬 Hon Annette King: What are you doing?

That is exactly right. The Opposition does not know. Well, the kids know. The kids know and the sector knows that it is more than talk like Schools Plus, which was nothing. There was no policy work and no money. We have put 2,000 places into tertiary education—2,000 within 12 months; 2,000 fully-funded places. We have funded the Manukau Institute of Technology tertiary high school. That has never been done in New Zealand before. They talked about it; we funded it and made it happen. We have added another seven service academies. Another seven service academies have been opened this year for young people to give them the opportunity—

💬 Hon Parekura Horomia: All the community providers are closed up.

There is one in our own town, I say to Parekura Horomia. That gives students the opportunity to get a Defence Force background. That is a partnership between the Ministry of Education and the Ministry of Defence to create more opportunities for kids who are interested in the services. We promised in the election to open five trades academies by 2011. How many are we going to open next year? Six, and we have another five being developed. So that is what is happening in the Youth Guarantee, and ex-Minister King had better make a few notes about it, because people out in the sector know that that is what is happening with Youth Guarantee. Those members should just wait, because we are on a roll. We are going to roll it out. We are rolling it out for young New Zealanders. I am pleased that those members are applauding, because it is a policy that is worth their applause. I think that they should be sitting over there ashamed of themselves. They should be ashamed of themselves. They had 9 years to address young people in this country, who were relying on them as a Government for some sort of assistance to help them build a career. But what did that previous Government give them? They gave them Schools Plus. What was that? The previous Government was going to keep students in school until they were 18. That was all that it had. This Government is delivering for New Zealand children. This Government is determined that every single child will have an excellent education.

I raise a point of order, Mr Deputy Speaker. The previous speaker, Mrs Tolley, started her speech at 5.39 p.m. My understanding was that valedictories were normally 15 minutes in length.

💬 Mr DEPUTY SPEAKER: That is not a point of order.

It is a great privilege for me to stand in the House today to support the Prime Minister’s statement and the tremendous leadership he is providing for New Zealand. It was a statement that showed the failed policies of the past and of the previous Labour Government. That Government cannot be remembered for anything other than its members who squandered the best years this country has seen for many, many years. When the members of the previous Government had an opportunity to invest in putting more money in peoples’ pockets through tax reductions to reward New Zealanders for their hard work, they said no. When they had an opportunity to improve the standards in New Zealand schools, they said no. They had some pin badges, which they put out. Did those badges say “Wassup!”? That was their education policy.

I tell members to know that this Government has an education policy that is being rolled across this country with great support from parents and right-thinking teachers, with 74 percent of New Zealanders backing national standards. Those 74 percent of New Zealanders are backing national standards because they know we have to do more for the one in five kids who are leaving school unable to read or write. That is not good enough. It is good that we have strong support across the country. The unions and the media can beat it up as much as they like, but in the end parents know that they should have the information on how well their children are doing. The Minister of Education, Anne Tolley, will provide them with Plunket book - type charts to show parents how well their kids are doing and what they need to do to work with their teacher to help their children get ahead. We are totally in support of that.

I also back the Prime Minister when he talked about the need for a growth-enhancing New Zealand tax system. We simply have to do more to create incentives for people to work hard, improve their skills, and get ahead, to encourage and boost productivity, and to be fair to all New Zealanders. The Prime Minister has been very clear. This Government is considering a tax switch to get this economy moving further ahead from what we inherited from the previous Government. How many people here know that the statistics that crowd over there used to justify their growth all had to be changed? How many people here know that the Minister of Finance has revealed that there were revisions to official statistics issued late last year? They showed that in the last 3 years of the failed previous Labour Government, before the impact of the global financial crisis, our economy grew by less than 1 percent a year. The previous Government members did not tell New Zealand that before the election, did they? They did not tell New Zealand how they were wasting the best years in a generation. We say to New Zealanders that our Prime Minister has set out a comprehensive plan of work that this Government will do to improve public services in New Zealand, move resources from the back office to the front line, and provide a safer, smarter, and healthier New Zealand.

Judith Collins is providing strong leadership in a portfolio area that lacked leadership for 9 years. When we needed a tougher approach in our prisons and stronger support for the police, who did we get?

💬 Hon Members: Who?

George Hawkins, Damien O’Connor, and Phil Goff. That is all the previous Government could provide. Judith Collins has delivered more police into South Auckland, a focus on the crimes that matter, and a much tougher penal system in New Zealand, which sends a clearer message to the criminal element that this Government will deal with them.

This is also a Government that has capped the Public Service. The core Public Service grew by almost 50 percent in the 9 years of the previous Labour Government. It grew by 5 percent a year, year on year, and that meant more growth in bureaucracy, policy analysts, and officials in Wellington, and less service for the public. It is part of our responsibility to have the Public Service backing the economic recovery New Zealanders need. We have capped the growth in the core Public Service. That is a major achievement by this Government. We have capped the growth, but at the same time we have moved a lot of extra resources into improving front-line services. There are more front-line people at the desks in the police, in the prison service, in Child, Youth, and Family, and in our various Work and Income offices, which are providing support for beneficiaries. We are lifting the quality of the public services we inherited.

Goodness, would it not have been easier to be in Government when members opposite were, when there was more and more money every year? They had billions of dollars extra every year, and still they could not deliver the quality public services that New Zealanders needed. More money was going into the health service year on year, but fewer people were getting the care they needed. More and more money went into bureaucracy and less and less money went into the front-line services that back New Zealanders.

While we are talking about backing New Zealanders, I ask members about encouraging innovation. The Minister of Research, Science and Technology is doing great work to invest in research, science, and technology, and to roll out the Primary Growth Partnership. I think that is superb. There are real opportunities there for New Zealand. As for infrastructure, the Minister of Finance was in Auckland today, and will be again tomorrow with the Minister of Education, talking about what this Government is doing for strong investment in our infrastructure. The previous Government talked about it for 9 years. Do members remember all the strategies, plans, and directions? Annette King was launching a new road plan every 5 minutes, but never a new road—

💬 Hon Phil Heatley: A paper road!

That is right—Annette King and her paper roads. We have started large new State highway programmes in Christchurch, the Waikato, and Auckland. We have made real progress on Auckland’s rail network. There is the $1.5 million investment in ultra-fast broadband. We have made a huge investment in schools. The Minister of Education, Anne Tolley, is putting tens of millions of dollars into building new schools in our communities that the party opposite never would. This Government is also putting millions and millions of dollars more into building our health infrastructure in New Zealand and making sure we back it with the improved quality services that New Zealanders want.

The difficulty we inherited from the previous Government is appalling, but this Government is determined to make the changes we need to get this country moving. People should be confident that the leadership of the Prime Minister and the Minister of Finance, and the strong support of the parties that support National, are delivering New Zealanders the future they deserve.

I think the Minister of Education was right. I do not think the Labour Party lives in the real world. Trevor Mallard lectures the Parliament on education. He does not realise that when he was last a teacher, 26 years ago, education was different. It has moved on from when he was a teacher 26 years ago, when he first came to Parliament. Times have changed and parents have higher expectations of the schools than when Trevor Mallard was there. It is 26 years since he was last in front of a classroom. Children want to learn, and that is why we have our national standards policy and our Youth Guarantee. It is a huge investment in education for New Zealand.

The Prime Minister is providing the leadership that this country needs. Members of the party opposite, who, as has been said, are struggling with relevance deprivation syndrome, will continue to grasp at straws and lose every opportunity they have to show New Zealand that they could once again be in a Government of this country. Chances are they are still a very long way away from that opportunity.

Questions might be raised by anyone who is watching the House today as to why so many National members have descended on this debating chamber at 5 to 6, just before the dinner hour, to listen to this national debate. I think they have come down to find out what national standards are all about, because anyone who watched question time today would be left none the wiser as to what they are all about. I think there are two questions in this debate. Viewers may ask today whether New Zealand, prior to now, was in a situation where parents were absolutely devoid of information about how their children were performing in schools. Was there not an ounce of information? If listeners were to believe the Government, they would think that not an inch of information was being provided. That is absolutely not the case, but that is what this Government has claimed national standards are all about. We know that schools were providing that information. We only need ask some of our excellent principals, including one on our own side of the House, Kelvin Davis, who will tell members that the provision is already there for that information to be provided to parents. If there were situations where schools were not providing that information to parents, that problem did not have to be rectified via national standards.

So what is the real agenda? The Government tells us that the real agenda is to assist vulnerable children and children who are not performing—

💬 Mr DEPUTY SPEAKER: I am sorry to interrupt the member. The time for this debate has expired.