Estimates Debate — External Sector

Members, we now come to the votes for the external sector—volume B.5, volume 4. The question is that Vote Customs, Vote Defence, Vote Defence Force, Vote Foreign Affairs and Trade, and Vote Official Development Assistance stand part of the schedules. I ask the chair of the committee to set out the major findings of your committee in relation to the estimates.

I have a lot to say in such a short time, but I will give it my best shot. I wanted to speak about Vote Foreign Affairs first and then cover off very quickly what we discussed in our appropriation hearing in the committee. The first thing is, of course, the sheep farm in Saudi Arabia. I just want to say that from my own observations from my own time up in the Middle East, I was very interested to watch a big stock-handling facility that was built in Boosaaso. It was sponsored by the Qatari Government. It was built so that the state of Puntland, which is a part of Somalia on the Horn of Africa, could start trading livestock with Saudi Arabia because of the size of the market and the demand there. It helped drive up its GDP. It was a very good project.

I also want to state that mutton and lamb is a big part of the diet in the Middle East. That is not something new. It is not like we are just taking sheep into the Middle East for the first time—they are there. The markets in Basra in southern Iraq used to feed a good part of the Middle East prior to the second war, and people would travel from all over the Middle East to go to the markets and the stockyards in Basra to buy mutton.

We were told that no additional funds had been provided to New Zealand Trade and Enterprise to actually fund the agribusiness hub there, and there are about 30 New Zealand businesses connected to the agribusiness hub that are providing goods and services. This is a big business. This has a lot of potential for New Zealand. We own a lot of the intellectual property, the knowledge, and the know how in order to actually create a real, vibrant business in the Middle East.

We spoke about the Trans-Pacific Partnership agreement. We asked for an update on that. The agreement is an important one for New Zealand. It involves 40 percent of New Zealand’s trade in goods and services and it involves five of New Zealand’s top 10 trading partners. We know that once the agreement is signed by all parties, it will go through New Zealand’s domestic approval processes, in the course of which the agreement and its associated national interest analysis will come before the Foreign Affairs, Defence and Trade Committee. If changes are required to New Zealand’s domestic legislation, Parliament will need to pass them before ratification of the treaty.

We spoke about the ASEAN relationship. The year 2015 is the 40th anniversary of New Zealand’s diplomatic relations with ASEAN countries, and New Zealand will host 31 celebratory events across 10 ASEAN capitals.

We talked about Niue. The Minister of Foreign Affairs spoke about Niue. He highlighted that since 2010 New Zealand has focused its support to Niue on the development of its tourism industry, at the request of the country’s Premier and Government. We heard that Niue’s visitor numbers have increased considerably and that this has been a very, very successful initiative, which has been supported by New Zealand.

We asked the Minister about our seat on the United Nations Security Council, of which I am personally very proud to see him now sitting in the president’s seat. I want to acknowledge him, all of our ambassadors—for example, Sir Jim McLay, whom we spoke to on the weekend—and the Ministry of Foreign Affairs and Trade for being so successful in securing us a seat on the Security Council.

We have begun our month-long presidency. In that time we are going to host an open debate in the council on 30 July, in which countries from outside the council can participate. This is important. This is significant because this is one of the points that we lobbied on in trying to gain support to actually win that seat on the Security Council. They are going to be talking about the security challenges facing developing small Island States. Although such States make up about one quarter of the membership of the United Nations, only three of them have ever served on the Security Council. New Zealand wants to provide an opportunity for the wider group to be heard on the council. We also plan to have an informal, closed dialogue on reform of the Security Council to make it more accountable and more transparent, and there is going to be a fair bit of focus around the use of the veto.

The Minister spoke briefly about the Middle East peace process. He highlighted the fact that having a seat on the United Nations Security Council will affect our involvement in the Middle East peace process, and that there is general consensus that after the Israeli elections and the formation of its Government, the Security Council talks on Iran also need to be concluded before the Middle East peace process can be addressed. There may be an opportunity in August or September to consider the peace process, and New Zealand will be alert to playing an active role in the process, on which the international community agrees urgent action is needed. So you can see that the Minister and the ministry are going to be very active on the Security Council.

I want to speak to the New Zealand Defence Force estimates and to begin by saying that at the estimates hearing, having the Minister of Defence before the committee is a real test of whether the Minister has any knowledge or understanding of his portfolio. I regret to report to the Committee that 8 months into his portfolio Gerry Brownlee does not understand defence. He has not got a clue about it.

It was interesting. We started with a fairly light issue. “Light issue” is a play on words, I guess, because it was about obesity problems in the Defence Force. That week there had been a major article in the paper saying that 20 percent of the Defence Force personnel were obese and 10 percent were significantly obese, and the Minister said that he did not know anything about it. To give credit to Mark Mitchell, he said: “But surely, Minister, if you banned fizzy drinks and deep-fried food from the armed services’ canteen, there must be a problem?”. And Gerry Brownlee said: “Oh, we were just following what Labour did in the schools 4 years earlier.” I want to know how come it is that “nanny State Gerry Brownlee” will stop adults in employment from drinking fizzy drinks but the Government removed the requirement not to put those things on the shelves of school cafes, in order to look after the kids. That was curious.

Then there was a question about Vanuatu. Vanuatu—we were a bit late getting there. We have a great ship, the Canterbury, to do the job in Vanuatu, and the Minister said: “Well, we can’t send our people up there till we know what they want.” We know what they want from day one. When there is a cyclone, they need building materials, they need water purifiers, they need food, and they need equipment to move the debris. But we took 2 weeks to get there and we did not put the NH90s in there, as the Australians did. What did Gerry Brownlee say? I have got it here. He said the NH90s were “a dreadful purchase”. Well, I want to read to the Committee the answers to two questions that I asked the Minister in the written questions for estimates: “Does the Minister stand by the assessment of the NH90 aircraft by his predecessors the Hon Wayne Mapp and the Hon Jonathan Coleman as being ‘very capable’ and ‘a quantum leap forward for New Zealand’?”. The response from Gerry Brownlee was “Yes”—yes! He said it was “a dreadful purchase” but it was a quantum leap forward, according to his predecessors, and he agreed.

Then I asked “Has the RNZAF ever advised the Minister that the NH90s are not and will not be fit for purpose?”, and the answer was no. I want to tell the Minister how angry the people are in the Royal New Zealand Air Force about his disparaging of the best rotary wing aircraft they have ever had.

But the real questions came on the deployment to Iraq. I sat down and read the New York Times when I was at an international airport, about the same time as the inquiry was going on. What did the New York Times report? It reported that the United States military in Iraq had more than three times the capacity for training Iraqi soldiers than was being used. They had 2,000 soldiers being trained. They had capacity for 6,700. So I have got to ask the question: why are we spending $65 million and putting our capable troops at risk to have 16 trainers go to Iraq when there is already a surplus of trainers in that country? The article went on to say that the other problem is that there are 22,000 Iraqi troops who have deserted and 50,000 ghost soldiers, where the money is being ripped off and put into the private pockets of those running the military leadership.

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

I rise to take a call in respect of the trade estimates. There are two issues that I want to address. The first issue is in respect of the sheep saga, which was traversed a little at the Foreign Affairs, Defence and Trade Committee, and as members who were there will know, the National Government members did their best to stop us inquiring into that. They gave the Minister, the Hon Murray McCully, the opportunity to explain things from his perspective and to try to cover his tracks, and then they stopped us from inquiring into it properly. This is part of the orchestrated cover up that we have had from the Government in respect of the Saudi sheep saga. Even now, we and just about every media organisation in New Zealand have outstanding Official Information Act requests that have been routinely ignored, in breach of the Act, by all of the ministries—by New Zealand Trade and Enterprise, by the Ministry of Foreign Affairs and Trade, by the Ministry for Primary Industries, by the Ministry of Business, Innovation and Employment, and by Treasury. They have all gone to the end of the statutory period and have then all claimed that they need more time. Then Treasury had the audacity to say that it was going to have a proactive release some time in the distant future.

At the heart of this is the fact that the Government has been caught acting unscrupulously. It has wasted more than $6 million on a farm in the desert, where most of the lambs died. The Minister for Primary Industries, Nathan Guy, said he thought that it might have been because of a sand storm, which is rather ironic given that the farm advisers say it was more likely to have been a rain event, which is, itself, ironic given that the sheep are under shelter. That waste of $6 million is less unprincipled than the $4 million facilitation payment that the Government paid unnecessarily in order to settle what it says was some threatened legal claim, which we now know was never threatened. There has never been any legal advice that we have been able to see that says there was any legal risk to be settled. It was a facilitation payment paid to the Al-Khalaf Group—a $4 million upfront payment that was hidden for a number of years and that has still not been properly explained by Mr McCully.

As if that was not bad enough, we have also had the South Korea free-trade agreement, which makes some important advances in terms of tariff reductions for New Zealand, and, therefore, is good for our traders. But, again, we had to drag out from the Government and from officials the truth that the South Korea free-trade agreement contains a limitation on a future New Zealand Government extending the sorts of categories of investment that are screened for—i.e., you can screen for existing categories of investment like farms but you cannot add a new category of screening like banning the purchase of houses. It is almost unbelievable that the Government could be so inept as to get this wrong in respect of the South Korea free-trade agreement, because the recent South Korea free-trade agreement with Australia permits just that: the banning of the sale of houses to South Koreans. So why this Government was so negligent as to trade the sovereignty of a future Government being able to do that I do not know.

As if that was not bad enough, we have then had denial after denial in this House, where the Minister of Trade has refused to answer questions as to whether the same mistake is being made in the Trans-Pacific Partnership. They have insulted the intelligence of this House by refusing to answer questions when exactly the same questions were answered by Minister Groser on The Nation and on Q+A at the weekend, and then by the Prime Minister on Q+A on Sunday. It is a disgraceful thing. Lots of my forebears came to New Zealand to escape absentee landlords, and yet that is what this Government is allowing to happen in New Zealand. The richest 1 percent in the world from overseas countries who want to put their money beyond the reach of their authorities or to spread their investments, or who think that New Zealand is a safe place to put their money, can outbid New Zealanders, can push up house prices, and can exclude New Zealanders from owning one house in their own country.

We have seen a documentary in Australia of the problems that it is having in respect of farmland purchases at the moment; another area where this Government allows overly permissive rules. This Government pretended after the Shanghai Pengxin transaction that it was tightening the rules, and then it sent a side letter to the Overseas Investment Office telling it to look felicitously or to approve applications for up to 10 times the size of the average farm unit.

E te Tiamana, tēnā koe. As Minister of Customs Te Mana Arai o Aotearoa it is my pleasure to update the House on the excellent work of the New Zealand Customs Service and our Budget initiatives. It is an enormous privilege to be the Minister of Customs because it is the oldest New Zealand service. It is celebrating its 175th anniversary this year, because the first customs house was established in Russell weeks before the Treaty of Waitangi in 1840. I like to say that customs is 175 years young, because even though it is a traditional organisation and it has loyalty and commitment, it is innovative and forward-thinking and it delivers cutting-edge services and technology. So it is great to see that you can teach an old dog new tricks.

Customs has four major roles. The first is protecting the border, the second is managing travellers as they cross that border, the third is managing imports and exports, and the fourth is collecting revenue. Over that 175 years the demands at the borders have changed, but they are always challenging, because customs’ job is to keep New Zealand and New Zealanders safe. We do that by managing risk and making border access as quick, as easy, and as cost-effective as possible for legitimate travellers and goods, but as complicated, as difficult, as time-consuming, and as expensive as possible for illegal or dangerous people or goods. The New Zealand Customs Service does this very well. The World Economic Forum rates New Zealand as fourth in the world for facilitating trade across the border and sixth in the world for its actual border processing. That is pretty amazing considering the emphasis we have on biosecurity and the fact that other countries do not do that at all.

Last year 10.4 million travellers crossed our border, and those numbers are increasing every year. They are increasing in number and in diversity. We have more non-English speaking travellers and we have different cultures, and that increases the complexity at the border. SmartGate allows us to manage that risk. Just this week I announced 29 new SmartGates. These are SmartGates on steroids. These are SmartGates that are brand new technology with a one-step process. No more ticketing booths. No more two queues. It has faster processing and better-quality biometrics. That is a fantastic upgrade for New Zealand.

We are also delivering for importers and exporters of goods. The Joint Border Management System and the Trade Single Window are world-leading technologies. They are transforming border processes and streamlining systems. Recently I visited the US, and talking to customs officials and business people there they were absolutely impressed that New Zealand had this technology—and jealous, because they do not have it yet. Customs manages about 11 million import and export transactions, and 99 percent of those are managed within 30 minutes. We are also actively supporting exporters. Whenever the Government negotiates any trade agreements, customs is involved in order to manage the border processes. In Budget 2015, $6.2 million has been allocated over 4 years to support small businesses so that they can access international markets and reduce the risk of trade disruption.

We are constantly challenged at the border by people who want to bring illegal or dangerous things into New Zealand by smuggling drugs, offensive weapons, and child pornography. So we need to be vigilant and we need to be one step ahead, and we do that by working in partnership with the New Zealand Police and with international agencies. In the last 6 months we have stopped half a tonne of methamphetamine at our border. That is a street value of $246 million. We know that we are holding our own against the drug rings and organised crime because the price of methamphetamine has remained the same since 2011, so we have control.

We also collect revenue for the Crown. We collect about $12 billion every year.

Tēnā koe, Mr Chair. Te mihi nui ki Te Wiki o Te Reo, Te Reo rangatira, Te Reo tino ātaahua, Te Reo tūturu, Te Reo kotahi o Aotearoa.

[I salute Māori Language Week, the noble language, the beautiful language, the original language, and the sole language of New Zealand.]

Before I speak about overseas assistance and aid I would like to talk just a little bit about foreign affairs as that is part of the appropriation. How is the war going? How is that going—$65 million worth of it? How is the Trans-Pacific Partnership agreement going—that thing that was never going to take away our medicines but we have found out, just today, that it is going to take away our cheap medicines? It is going really well, if you do not think about the real value of the way we use our money in this country. The way we make trade deals, the way we actually approach peace and defence is a bit of a disaster, and so foreign affairs at the moment, defence—a number of these portfolios that are covered by this appropriation—are actually a real mess.

We have actually done really well in helping to polarise things further in the Middle East and at the same time, in another appropriation, we are refusing to take any more refugees except the bare minimum. So on the one hand $65 million is going to promote the wars that create more polarisation; on the other hand we are not going to help people whose lives are destroyed by war. So that is a really great start for foreign affairs.

I would like to talk, however, about overseas development and assistance because it is our privilege to be in Te Moana-nui-a-Kiwa, the Pacific, the wonderful Pacific, where we have relationships with a number of Pacific nations. Some of those relationships ought to include a healthy and honest relationship around aid, because we are the privileged, the wealthy, and the exploiter, in some cases, of the cheap labour of the Pacific—we have been in the past—and so we need to have a robust and ethical overseas development and assistance aid programme.

Under the current Government it has become very economics-focused and to our shame there is no more of it. In fact, in 2014 our appropriation was 0.27 percent of gross national income (GNI) compared with 0.39 percent for most OECD members. So other countries of a similar size are doing a whole lot better but, unfortunately, the Government is a bit mean, a little bit selfish, and is not prepared to go for the real goal for official development assistance, which would be 0.7 percent of GNI. We can be the better country because we rely on the relationships we have in the Pacific. Just because we are bigger and more powerful does not mean we should change our aid policies or freeze our aid policies to what they were way back in the old days. If the defence budget can be increased why cannot the official development assistance budget be increased? We are going to make more peace in this world through those aid and development healthy relationships than we are ever going to make by sending people over to kill people who already think that killing people is the solution.

So I think it is quite important to look closely at official development assistance and look at what it should be addressing. We are on the Security Council. We are in a position to talk about security and aid, and all of those things should be focused on addressing climate change, engendering more local participation and gender equity—dare I say it, as if anyone saw the New Zealand Herald story today they will know that the Government is not really not very big on gender equity at the moment; its statistics are shameful—but particularly overseas, looking at the economic and social rights of recipient countries.

So official development assistance needs to be strengthened and it needs to be increased, and there needs to be support for the right kind of development. I said this in this Parliament—was it 2 years ago; I cannot quite recall, maybe less—when we had a wonderful conference here, which the Government did host and fund, for Pacific nations to come and talk about the important issues of the Pacific. It was a great conference. The greatest thing about it was its rejection of the Government’s free-trade agenda and the Pacific nations’ rejection of opening their economies—

💬 Hon Simon Bridges: I don’t remember that.

Mr—I cannot remember his title—the Hon Mr Bridges forgets that in the last discussion at that wonderful conference when there was a statement put forward about the Pacific, Pacific nations said: “We do not want your idea of development.” Country after country got up and said about this important relationship around overseas development and around assistance and around trade: “We reject your model. We want to protect our resources.” Vanuatu was the first speaker. I can quote you the speech. And they were the first people to say it, but country after country got up and said: “We know that the natural resources of our world need to be protected. We know that they are vulnerable. We know that our relationship with Australasia and Aotearoa is important. But we want overseas development and assistance that actually allows us to protect our resources.” They do not want the Trans-Pacific Partnership agreement any more than many of us in this country do.

I just want to touch on the speech from Nicky Wagner from before. What she failed to talk about in her speech was the JBMS—the Joint Border Management System—that her Customs Service has been overseeing. It has run off-budget—$30 million off-budget. It has not delivered what she said it was going to deliver, and now we have the old system and the new system—the CusMod system and the Joint Border Management System—running side by side, duplicating each other’s work. What a shemozzle. And if that was not the only thing wrong with the Customs Service, here is another thing: there is the highest number of churn through that department than any other Government department, and there is the lowest morale in the Customs Service. There are serious things wrong with the Customs Service. It is the staff who are not happy and the information systems that have failed, and that is what this Minister of Customs is not getting on to.

But, anyway, I want to move on to foreign affairs. We came on to the United Nations Security Council this year. It is good that New Zealand is represented there. We were all very proud of that, and we are currently, right now, this month, in the presidency—there is a rotating presidency, and New Zealand holds the presidency in the United Nations Security Council. Murray McCully said that there were three things he wanted to do: he wanted to solve the Middle East peace process, he wanted to solve the issue of the veto in the United Nations Security Council, and he wanted to do some work on bringing up the issues and the interests of small, developing States. Well, we have not heard anything about small, developing States; we have heard a bit about solving the Middle East peace process, and at the moment we have got 3 days left in July and we still have not quite got on top of it; and we still have not knocked off the veto in the United Nations Security Council. This may play well to a New Zealand audience, but to an international audience it sounds woefully out of touch and incredibly naive. We can, obviously, do some work to progress these issues, but coming out and saying somehow New Zealand is going to turn those things round is—well, look, I wish him all the best, but in anybody’s reckoning it is wishful thinking.

Meanwhile, the Government has done this—and I want to just run through this little story. There are 900 sheep in the South Island, 300 owned by Mr Al Ali Khalaf. The Government and Murray McCully, really without very much consultation with any of his colleagues, decided to buy 300 sheep for Mr Al Ali Khalaf, fly them courtesy of Singapore Airlines to Saudi Arabia to Mr Al Ali Khalaf’s farm, and give them to Mr Al Ali Khalaf. Can you believe that? This is a true story. This is a true story. You could write about this and nobody would believe you. And then those 900 sheep that sit there in Saudi Arabia are all pregnant ewes, and 700 of their lambs die. This is supposed to be a model farm that New Zealand is going to be advertising its wares from. Incredible—what an incredible fiasco and debacle.

The reason we did that, according to the Government, is because the Labour Government said that we were banning the export of live sheep, and it had upset Mr Al Ali Khalaf. Well, actually, this Government extended the ban on live sheep exports in 2010, but somehow that was the problem. Mr Al Ali Khalaf was supposed to be suing New Zealand because we had taken away some of his rights. The only thing is that the Government will not release the papers that show what Mr Al Ali Khalaf was likely to do. Mr McCully says: “Oh, we actually had a legal opinion on this.” Well, he will not release the legal opinion, and they certainly will not release any information about whether they sought a second legal opinion, perhaps from the Crown Law Office—absolute debacle.

But then there is another reason. There is another reason, and that reason is that somehow this is going to block a free-trade agreement that New Zealand is going to have with Saudi Arabia and other Gulf States. I want you to reflect on this: if a company had said that they were going to be paying a Saudi businessman this sort of money, what would we call it? We would call it a bribe. That is what we would call it and that is exactly what it is, and yet Mr McCully has entered the New Zealand Government into a bribe.

It is a pleasure to take a call in this part of the debate on Vote Foreign Affairs and Trade. Particularly, I would like to commend, I suppose, all of the members of the Foreign Affairs, Defence and Trade Committee for the useful report that they have put together. Of course, we have heard from other speakers about the great accomplishments in the area of the foreign affairs of New Zealand and, therefore, the Government and the Minister of Foreign Affairs, Murray McCully, over the last year. Of course, that is about our accession—our moving up and being elected—to the UN Security Council.

Over the 3 or 4 or 5 years that Mr McCully and Sir Jim McLay and others were campaigning on behalf of New Zealand for this seat on the Security Council, there were members of this House who said that it would never happen. They said that New Zealand would not get the recognition that Minister McCully was seeking, and some said that it was a waste of effort, a waste of time, and—dare I say it—a waste of taxpayers’ money. I think that it is a significant accomplishment on the part of New Zealand to be elected to the Security Council, not only on the first vote but also with so many votes to spare. The reason why the support that New Zealand received was so significant is that we are seen to be a fair-minded country that will stand up for the rights of people all round the world. We set out an agenda and said that we would go and talk about those issues, and we received that significant support.

I know that every member of this House, bar a few, supports Mr McCully in his work and is certainly very proud that New Zealand has been recognised and has received the votes of so many countries of the world. I know that inside this Chamber is a political place, but listening to some of the speeches during this part of the debate, it would lead one to believe that not all of the support that should be backing New Zealand is as obvious and apparent as it might or should be from members of the Opposition. I put that down to the politics of the situation. I know that David Shearer is a very big supporter of New Zealand’s place on the United Nations, and he is a man for whom I have a lot of respect—a lot of respect for Mr Shearer. Indeed, he spoke about customs and his concern about the very high churn of officials in the Customs Service. I was of a mind not to believe him but then I realised, actually, that he has a lot of experience in this area. Nowhere else across the Government or within this Parliament has there been more churn than with Mr Shearer and all of those other Labour Party leaders who have rotated through that seat over the past 6 years.

Mr Shearer said that he was supportive of Mr McCully, but then he offered some words of wisdom about what he should actually be doing over there. This is the same Mr Shearer who jumped on a plane to go and support Mr McCully just after, I think, the election last year, and who was the very first person to put out a press release following the vote, congratulating Mr McCully—not congratulating New Zealand or the Government, but saying that he had been able to do some important work in the day that he had been there that had helped to deliver this victory for New Zealand. That was Mr Shearer. Putting that aside, actually, I know that his heart is in the right place and that he is one of the few members on that side of the Chamber who are actually willing to put what is important for New Zealand first, even when it comes to—and this is my second intervention, when I want to talk more about trade—being supportive of high-quality trade agreements. I know that when many of his colleagues vote against the Trans-Pacific Partnership, he will be conflicted. I would not mind betting that we will see him on this side of the House.

We have taken on the UN Security Council presidency at the moment, and Mr McCully, with our representatives there, is representing New Zealand extremely well. There are two other parts that I want to speak about in this report. The first is our relationship with the ASEAN countries. In 2015 there will be the 40th anniversary of New Zealand’s diplomatic relations with ASEAN, and that is quite some achievement. In fact, we have very important relationships with all of those countries. Indeed, New Zealand will host 31 celebratory events across 10 Asian capitals, with representatives from these countries, to celebrate that relationship and the important trading relationships that we have with them. But it goes so much further than that—many of those ASEAN countries supported us towards the UN.

A final bit here is about Niue and our relationship with it—the smallest country in the world and a very special relationship for New Zealand. Mr McCully has championed our relationship and has ensured that we give the right type of support to Niue, and, in particular, since 2010 a lot of effort between the Governments has gone into the promotion of tourism.

I rise on behalf of New Zealand First to make a brief call in defence of Defence Force personnel during the debate on the external sector in the Committee stage of the Appropriation (2015/16 Estimates) Bill. I have to say I subbed briefly on to the Foreign Affairs, Defence and Trade Committee to take the opportunity to hear the Minister of Defence, who made a presentation along with the Chief of Defence Force, Tim Keating, so that I could get a bit of clarification around why I could not find in the appropriations a clear indication or any detail of a pay increase for Defence Force personnel. I think it is only appropriate at this time to remind the Committee that it was not so long ago when we had a certain gentleman standing on that side of the Chamber yelling at the House—in fact, I actually believe it was outside the Standing Orders myself, but the Speaker never responded—

The CHAIRPERSON (Hon Chester Borrows): Do not relitigate that, please. Carry on.

He did not respond, Mr Chair. The question was put to this side of the House that we should gain some intestinal fortitude; in fact, that we should “get some guts”. The question put across the House was about how the Opposition needed to get some guts and support the deployment of these troops. Often in my time in the Defence Force—15 years in the New Zealand Army and 5 years operating internationally—I heard many, many speakers from this House talking about how they valued Defence Force people. In fact, if I summed up the number of minutes of speeches at Anzac Day services by Government MPs and Ministers from both sides of the House—Labour or National; both the same to me—talking about how they valued Defence Force contributions, I mean, if I had a dollar for every second I would not be here today; I would be retired.

What we now know from the appropriations is that despite the calls to get some guts and despite the accolades poured upon the Defence Force, it did not seem to be enough to move this Government to give personnel a pay rise. There is nothing in this Budget for a pay rise for Defence Force personnel. In fact, when I look a little bit deeper, what do we in New Zealand First find? We find that this Government, actually, has the legislative tools and the mechanisms to do one thing for our Defence Force personnel—those deployed to Iraq who have got the guts to go—and that is to give them a tax-free wage. Australia has done it, the United States has done it, but not the New Zealand Government. When I asked the Minister of Defence that very question in the select committee, his answer was no, they didn’t consider that. New Zealand First’s question is why not. If these Defence Force personnel are so vital to the foreign policy of this nation and so vital to foreign policy in the view of this Government, then why can this Government not see fit to pay them a tax-free wage, as the legislation, Minister Bennett, allows your Cabinet to do. She is mouthing at me across the Chamber—take a call, answer my question. As opposed to just chipping at me and mouthing across the Chamber, Minister Bennett, tell the people of New Zealand and the people at Linton Military Camp and Burnham Military Camp why this Government chose not to.

If I look at the Cabinet committee that is meant to advocate on behalf of these Defence Force people—the people whom the Government values so much, the people that it wants to pour so many accolades on but is too cheapskate to actually pay them what they are worth—who do I find on this committee? Oh, the ministerial committee that makes this determination includes the Prime Minister John Key—well, he clearly did not think that they deserved a pay rise. He clearly did not think that they deserved a tax-free wage for being in Iraq. There is the Minister of Defence—well, who is going to expect a hell of a lot of support from that gentleman—and there is the Minister of Finance. I am surprised about Bill English. I had almost picked that Bill English was on his own. Section CW23(3) of the Income Tax Act states that the ministerial committee, which also includes the Minister of Foreign Affairs, “may, for the purposes of subsection (2)(b), decide that an amount of income derived by a member for being in an operational area is exempt income.” But this Government, no matter what it says out there on the hustings, no matter what it says in the media, and no matter what it says in the House, cannot find it within itself to pay our troops in Iraq today a tax-free salary.

What would that do? Well, let me tell you, as someone who has deployed, unlike the person who is yelling out across the House—he would not know what deployment meant—

💬 Alastair Scott: Can you spell it?

What I can tell you is about when the husbands, the wives, those service personnel are offshore—listen up, Alastair Scott. When they are offshore it is left down to the spouse remaining to look after the kids, to pay the power bill, to pay the rent—now that they are subject to market rents, because the houses have been taken away from them by this Government—pay all off those bills and deal with the coughs, the colds, the trauma that normally comes up in raising a family. It is hard to do as a couple. It is even harder to do when one is on one’s own. It is even harder to do if one’s spouse is deployed in Iraq and cannot get back. When all those things come to a head it is left down to the spouse back here at home, and it is left down to this Government to have some heart and recognise that.

Thank you for the opportunity to speak in this debate. I just want to contrast that last speaker, Ron Mark. The members of the public out there will know him as probably one of the most angry members of this House, and a most detestable member of this House as well. But that member was actually part of a Government that sent troops overseas and did not give them tax-free salaries. Why did that Government not give them a tax-free salary? Why did the Government that that member was part of not give them a tax-free salary? When that member was in Government, troops were sent overseas without tax-free status.

And then today, in this Chamber, he comes here and says: “Look at me. I am the person standing up for those troops. I am the person who is the only one who cares. I am the only one who is doing this.” And when he had a chance he delivered nothing for those troops. All he did was pay for his big fat salary so that he could walk behind his leader and leave this Chamber whenever his leader instructs him to do something. Never has that member delivered anything for this country, in this Parliament. Never has that member actually delivered anything that an individual member of Parliament would do. All that member has done in his whole lifetime is sit behind somebody else and be on their gravy train. That is all that member knows.

💬 Ron Mark: I raise a point of order, Mr Chairperson. I need to assist, as a point of correction. I was in a National - New Zealand First coalition Government that delivered lots of good things for the people of New Zealand.

The CHAIRPERSON (Hon Chester Borrows): That is not a point of order; it is a matter of debate. The member will be seated.

Thank you. When we come to the foreign affairs and defence areas of this country—

💬 Hon Clayton Cosgrove: Which you’d know very little about.

Mr Cosgrove is over there. Mr Cosgrove is another member who knows all about sitting on the fat of the country, is he not? We would like to see him win a seat back in that area again, but that is not going to happen, is it, Mr Cosgrove? Coming in here spouting, as well—

💬 Ron Mark: Go back to San Francisco.

I would be quiet, Mr Mark, because the public has seen your true colours tonight. The public has seen somebody that is not black and white. He is not New Zealand First. He is not even Green. Ha, ha! He is another colour, and the reason that he is that colour is that he does not stand up for the people of New Zealand when he has a chance, and that is the reality of it. And the Labour Party—

The CHAIRPERSON (Hon Chester Borrows): Back to the bill—back to the bill.

OK, but it is not really a bill. It is the estimates, but I will get back to it.

When we talk in this debate about foreign affairs, it is important to look at New Zealand as an open, free country, a country that is confident to take its place on the world stage, a country that New Zealanders can be proud of, and proud of what it stands for, and a country that is open to people coming here and making their lives in this country. New Zealand is a country that sees a future in the Asia-Pacific region. It is a country that does not want to discriminate against people on the basis of their surnames. It is a country that does not want to discriminate—

The CHAIRPERSON (Hon Chester Borrows): The member is debating the estimates; it would be good if he got back to them.

OK, Mr Chair. I know Mr Mark wants to clap, but that is what he does when he is that member of the party, and I would love for Tracey Martin to be here at this stage, as well. The estimates are an important part of what we look at when we look at what this country is achieving on the world stage, especially in the defence area and in the foreign affairs area. When we look at the speeches made in the past, they have talked about things like New Zealand’s role on the Security Council, they have talked about free-trade agreements with Korea, and they have talked about free-trade agreements that are soon to come, which the Green Party will be voting against, and which the Labour Party, for the first time in its history, will be voting against. It will be voting against free trade and against something that will deliver for New Zealanders, and that is a shame on the Labour Party.

You just have to go across the Ditch to see that it did not work out when people took that attitude towards the ability of a country to trade and become more successful. New Zealanders need those trade arrangements. They need those trade agreements, and it is a shame on the Labour Party that its leadership will be ideologically driven to oppose free trade—just as they are opposed to immigration, just as they are opposed to people making New Zealand their home, and just as they are opposed to this country taking its rightful place in foreign affairs and taking its rightful place in the Asia-Pacific region. We can be a leader in that region. We can be a country that is seen as free, independent, and confident, and one that delivers for its people. We do not have to be seen as a country that is insular, against trade, against immigration, and against people making a future for themselves in this country, as the Opposition parties have shown themselves to be tonight in their speeches and in their failure to act when given the chance to many years ago.

I almost did not want to interrupt the member David Bennett. That was one of the most insightful and thought-provoking speeches I have heard in this Chamber for some time. I congratulate him on that. As he is the chair of our most significant committee in this Parliament we are in very good hands.

I want to talk now about trade and the importance of trade. Not everybody in this Parliament understands the importance of trade to New Zealand. We do not become richer from selling to ourselves. Of all the things we produce so well, be it from dairy, wood, and wood processing—all of these areas—we produce more than we can consume in New Zealand. We are a trading nation. To be able to make sure that our producers can trade successfully, to make sure that New Zealanders can retain their jobs, we need high-quality, broad trade agreements that at the very least give us the same advantage that some of our competitors have into some of the most competitive markets in the world. But in many cases a free-trade agreement gives us an advantage, a preference.

Over the last year New Zealand has achieved a significant amount in trade negotiations, but also when it comes to trade. Last year New Zealand exported $55 billion worth of goods and services, a significant increase on the previous year. That is the first thing. The second thing is that when one looks at the top 10 countries of importance that we trade with—Australia being No. 1, China being No. 2, the United States being No. 3, and Japan being No. 4—we see that we have a free-trade agreement with them, or we have launched a free-trade agreement with them, or we have a negotiation under way to launch a free-trade agreement.

When I look at that list, at the next 10 most important countries that we trade with, I can see that we have a free-trade agreement with every single one, or we are negotiating, or we are having discussions with them about the launch of a free-trade agreement. I repeat: we do not become richer as a nation by selling only to ourselves.

Tim Groser at the moment is overseas negotiating a high-quality agreement of exceptional importance to New Zealand.

💬 Hon Clayton Cosgrove: Are they coping?

I know that Mr Cosgrove, although he may well have been muzzled—and good luck to those on his side who try to muzzle him—understands trade and is supportive of trade. I know that he has described himself as a rabid free-trader. I accept what that means. That means he is extremely supportive of free trade. He knows the benefits it delivers. Mr Nash is another one. He is a little less rabid when it comes to free trade, but he is a free-trader none the less.

I think there are starting to be great divisions within the Labour Party when it comes to the trade issue. So are they going to support a high-quality agreement—the Trans-Pacific Partnership—or are they not? I would suggest that a number of the members on the opposite side of the Chamber—the members who know about trade and the importance of trade to New Zealand and are actually in touch with the electorate and know what mums and dads, workers, and businesses want when it comes to trade agreements—want to support this.

But their leader is not so sure, you see. I do not know, but if you are angry about lots of things, why not just get angry about a trade agreement? Why not put aside the collegiality that has often been in this House between the two largest parties when it comes to trade agreements? We will not agree on all aspects of them, but, actually, there has been a bipartisan approach to trade and free trade. We can have the debates about how much further you would go, but it is extremely worrying when it comes to New Zealand’s place in the world and the view that the world will have of New Zealand, with the second-largest party signalling that it may well vote against an important agreement that would deliver for New Zealanders.

So the question is: do we want a free-trade agreement with Japan? Do we want one with America? Do we want to back our businesses to do well in trade with them? Well, of course we do—a high-quality agreement. I know that there are members on that side of the House who, when they were in Government, advocated for, and argued in favour of, a negotiation with those two countries and others. I know that deep down that they support this.

So why is this important? Well, think about the New Zealand - Korea Free Trade Agreement that has been delivered and is about to go through this House. I will give you an example from the Bay of Plenty of how exceptionally important this is to individuals and mums and dads. We export a lot of kiwifruit. We are the best kiwifruit producers in the world and the best exporters of kiwifruit. But others produce good kiwifruit as well, and others are competitive and others have lower costs of production. So when Chilean kiwifruit go into Korea, they have a lower tariff rate than we do.

It is a pleasure to speak about the estimates and appropriations hearing. The estimates hearing was on 25 June. With the knowledge that New Zealand would be taking the United Nations Security Council chair on 1 July, the Foreign Affairs, Defence and Trade Committee asked the Minister of Foreign Affairs about New Zealand’s role in the Middle East peace process. We heard several things. We heard that the last time the Middle East peace process had been considered was 6 months previously in December. We heard that the process was waiting for the outcome of the Israeli elections. We also heard that there needed to be some conclusion on the P5+1 nuclear talks.

Several weeks later we can look at what actually happened. The Israelis decided their electoral process—a Netanyahu Government. I would also note the successful conclusion, several weeks after the Minister presented this, of the P5+1 nuclear talks. Indeed, Mr McCully talks to this. We have to imagine that this is a very important activity around the world. Nearly everyone was very pleased to have those talks concluded in a satisfactory way, and New Zealand was the chair when that happened. Mr McCully talked to it at that time. Here is what he said: “Over the last eighteen months negotiators have been working to secure an agreement that will increase international confidence in the nature of Iran’s nuclear programme … This agreement is a positive development for regional stability in the Middle East and will allow for further progress to be made in the relationship between New Zealand and Iran. New Zealand commends all parties to the negotiations for staying the course and concluding this important deal. As the current President of the United Nations Security Council, New Zealand will do what it can to expedite any necessary Security Council action, and we call for the agreement to be implemented as soon as possible,”.

So there was a clear answer to us. We asked what role New Zealand was playing on the Security Council. There was a clear answer, and within a few weeks we had already stepped up to the plate and been a part of those talks. Furthermore, on taking the chair of the council on 1 July, New Zealand has more than kept to its word on the whole matter of the Middle East peace process. At the recent Middle East open debate at the United Nations, Mr McCully demonstrated that leadership and commitment that we bring, because that is what got us the seat in the first place. The small nations said: “Yes, we believe in you. We believe you will lead us, that you will speak for us, that you will guide us and help us.”, and within the first few weeks, that is exactly what we did, tackling some of the hard questions—and the Middle East peace process is a hard question.

Here is the statement that demonstrates to those who supported us that we do indeed respect their vote and that we are doing stuff. This is from Mr McCully. Speaking to the United Nations Security Council at the Middle East open debate in New York, where New Zealand is currently president, Mr McCully said: “[T]he situation in Syria has remained deadlocked for far too long. The region cannot afford for the conflict to continue. Nor can the Council – its credibility is at stake.” These are fighting words. This is tough talk for New Zealand. Although the United Nations Security Council celebrated a historic agreement earlier this week when it signed off a nuclear deal with Iran, Mr McCully stressed that the council could not rest on its laurels. That is good stuff. It is a real demonstration that we carry a strong voice at the council.

We also heard from the Minister of Customs. We asked customs about what our drug detection capabilities at the border are. We were advised of many refined and very sophisticated tools that we have at our disposal. These included intelligence machinery—that is, advanced passenger processing that gives us the ability, before people actually hit our borders, to have a higher index of suspicion and to do something about it. We were also able to share the Ministry for Primary Industries’ X-ray equipment, and it was relayed to us that purchasing approval had been had for cutting-edge detection technology that can detect drug suspended in solutions. This is a good thing. We were also told that we have trace-detection technology that works at a molecular level, and, of course, drug dogs, which are very successful for mass screening.

So we were told what mechanisms we have to detect, and we clearly know what we see and find, but an interesting question is: what do we not detect? What could be getting past us? Do we have any sense as to what that looks like? So we actually asked that question, and what we were told was that, yes, there are actually several ways to determine on the street how we are doing and what might be getting past us. Those two ways were, first of all, a survey that Massey University does regularly. That gets some assessment as to what is on the street, what got past us. The second way is measuring commodity prices and simple supply and demand. What they are noticing is that prices for refined methamphetamine especially are stabilising and may even be rising, and that would suggest that supply is falling. So I think that in some sense that is an independent measure that our drug detection capabilities at the border are actually successful.

At the estimates hearing we heard very strong support for the New Zealand Defence Force. It was quite akin to what the member Ron Mark from New Zealand First was telling us. I do not think a Minister could have given a stronger statement, and, indeed, it raised some contention amongst the committee members at that time. So I want to totally disagree with what Ron Mark was saying. What we did ask the Defence Force about was the other side of the work. So there was a lot of discussion around our forces in Taji and the excellent work they are doing. We asked them about their capabilities and their work around disaster relief, more specifically in Vanuatu in the wake of Cyclone—

Vote Customs, Vote Defence, Vote Defence Force, Vote Foreign Affairs and Trade, and Vote Official Development Assistance agreed to.

Finance and Government Administration Sector