Budget Debate

By virtue of moving the adjournment motion after the Budget was read on Thursday, I find myself with 9 minutes and 50 seconds to reflect on the 2004 Budget, introduced by the Hon Dr Michael Cullen. One of the great things about the last 2 weeks for Labour members of Parliament and our Progressive colleagues has been being able to go out into our electorates and talk about the really good things that are happening in this Budget. [Interruption] Opposition members ought to stay and find out what the good things are.

Mr SPEAKER: I know that select committees are meeting. When members leave for those—[Interruption] Members will have their conversations outside.

DARREN HUGHES: One would think they would want to stay and hear all the good news, because there is so much in the documents that were brought to the House by Dr Cullen. The last 2 weeks have been a fantastic opportunity to get around the towns and the villages of New Zealand, and even into some of the cities, as well, and talk about what this Labour-Progressive Government stands for. If there was any theme running through that Budget, it was fairness and opportunity—two words the National Party cannot stand, because those words do not reflect the values it has. Fairness and opportunity ran through every page of that Budget document, because that is why this Government came to office—to deliver for ordinary people.

It does not matter what area we care to look at. If I think about my own electorate and what I was able to do over the adjournment, I would have to say that one of the great events I attended was the launch of Enterprise Coast, which brings together the Kapiti and Horowhenua economic development agencies. Nowhere has our Government’s plan for the regions, and working together in cooperation and partnership, been more evident than in what we are seeing in the provinces. That is not just because they are producing nice glossy pamphlets or anything like that, it is because I see the unemployment rate in provincial and rural New Zealand. It is because I see the number of new businesses that have started right across my electorate and also in areas to the north. I think of electorates like Rangitikei, where jobs and businesses are booming because of the kinds of policies this Labour-Progressive Government is bringing in.

At the launch of that economic development agency, there were a whole lot of people who were upbeat and positive about their local economy. I know it is fashionable, when people are talking about business and the economy, to put the most negative spin possible on it. All the doomsayers and the gloomy-gutses on the other side of the House cannot wait to tell us that the latest Government policy will result in the closing of the New Zealand economy. They are on to about their 437th policy now that will lead to the end of the universe. Every single time they say it with the same kind of evangelical vigour, and every single time they are wrong.

Simon Power: Take a breath!

DARREN HUGHES: I do not have time to take a breath because there are so many good things in the Budget. I do not get the chance to laze around in my leader’s seat like he is doing at present, thinking of another day when he may get the chance to lead his party. When Mr Power does get the chance to lead his party, I hope he gets a slightly better Budget response than what we heard from the Opposition. What we heard from Dr Brash when he got up was: “Er, I’m comfortable with much of the Budget and, quite frankly, I’m not sure what the National Party would do.” This is the Opposition’s chance to come to the House and spend hours and hours over the next 3 days telling us what they would “er, quite frankly” do for this country. I do want them to bring some policy down to the House, and I do want them to tell us what they are comfortable with. To date, we have not heard what they are comfortable with. We have a few ideas of what they are uncomfortable with, but—

Hon Maurice Williamson: That will take only 30 seconds.

DARREN HUGHES: It will take a lot longer than that. Just wait! We are making work pay for ordinary families in New Zealand. I want National members to tell us whether they are “er, uncomfortable” with the extra early childhood hours. Can the National Opposition members tell us whether they are uncomfortable with the extra after-school childcare for kids?

Jill Pettis: They’ve gone very quiet.

DARREN HUGHES: There is silence. They are uncomfortable with that. So I take it that they are uncomfortable with what the early childhood provisions will be. Can they tell us whether they are against pensioners in this country paying no more than $3 for most prescriptions? Are they “er, comfortable” with that?

Jill Pettis: They’ve gone quiet.

DARREN HUGHES: Oh, they have gone quiet again. So we cannot find out whether they are comfortable that pensioners—people who are 65, or almost 65 in the case of some of their own members—will be able to get a $3 prescription charge when they go to the chemist. We are not sure whether they are comfortable with that.

Can they tell us whether they are “er, comfortable” with the superannuation fund? Can they tell us whether they will make sure that pensioners in New Zealand, when they retire, are going to be in a position where they are guaranteed the pension? One of the things this Budget does is look to the future. I am actually quite interested in the future, unlike the Opposition. One of the issues that future members of Parliament will have to deal with is an ageing population and pressure on superannuation. When I pick up the Budget and look at what the New Zealand Superannuation Fund will do, I see that by the time it gets to its peak, 36 percent of the cost of superannuation will be met by the superannuation fund.

I ask Opposition members, if they are going to be here for a while, what they are going to do about that issue. Mr Key might be here for a while. What is he going to do to pay for the pensions of his constituents who are currently working? I am talking about people under the age of 50, who are being told by Dr Brash that there will not be any certainty about what the pension will be. What is Mr Key going to do to pay for it? He is uncomfortable. Mr Key is uncomfortable, which is becoming a contagious condition in this House. What will that mean for people? They say they will borrow and hope. Mr Key was on the Agenda programme a couple of Saturdays ago saying: “If we want a big wish list of all the things we want to build in New Zealand, all the things we want to pay for, I think the way we should do it is to borrow more money.” He said he knows a few merchant bankers. He said: “I’ve got a few friends on speed dial on my cellphone. I can whip up a few hundred million dollars and borrow and hope, and ask future generations to pay for it.” So under the National Party future generations get no certainty about their future pensions, they get no cheap primary health care, and then they have to spend their tax money paying off the debts because Mr Key wants to borrow and hope. I am starting to feel uncomfortable with the kinds of policies that the National Party has been bringing to Parliament.

I turn to the Future Directions legislation, which, of course, is about working for families, and on which we went into urgency before the adjournment. Hundreds and hundreds of millions of dollars will go to ordinary communities to help families raise their kids. What is wrong with that? Is the National Party opposed to it? I sat in the House for the debate and the only thing one of the bright lights of the National Party, Katherine Rich, was able to tell us was that when she rang the 0800 number a woman called Mandy gave her some information that she did not like. That was the full extent of the contribution of National Party’s No. 4 spokesperson on the Future Directions (Working for Families) Bill. The only thing she had to say was what Mandy from the call centre was able to tell her.

I think the fact that National Party members were unable to put together a coherent response to the Future Directions legislation was an absolute indictment on them. It showed that, at their core, they know this Budget is about the fairness and opportunity that will be delivered in October this year, April next year, October next year, and in April for the 2 years after that, because this is a long-term Budget for the future. We are not just doing it as a flash in the pan. We have been told by Opposition members that this is a cynical Budget. If it were a cynical Budget the entire package would start on 1 April next year. But it does not do that, because it is a responsible Budget that will give opportunity and certainty to families, and it will roll out over a long period of time.

Of course their proposed tax cuts would be brought in straight away, to bring money in for them and their rich mates. They would not worry about the families that they said they were for. Before the Budget, of course, they said they were for every single working family. Then when they read the Budget and worked out that those very working families, for which they had been advocating in Parliament, were going to get some assistance, all of a sudden they were not for those families at all, and they wanted to deliver tax cuts to the wealthy.

I think it is incumbent on National Party members to tell us exactly which parts of this Budget they will not support. For example, is the National Party against the $800 million in the Budget for capital spending on health?

Hon Member: Uncomfortable!

DARREN HUGHES: “Er, uncomfortable”—back to the same old theme! I cannot identify which of the big-ticket items in the Budget the National Party members—and they say they are going to vote against the Budget—are against. Those members themselves cannot tell us. The National Party will not talk about the wider picture of the economy—15 percent growth in the economy over the last 4 years. Debt owed by 2007 will be at just over 20 percent of GDP—the National Party will not talk about that.

What is the one fiscal issue in the Budget that the National Party has talked about? It is not the surplus, the debt ratios, economic growth, or the 16-year low in unemployment. The only fiscal position stated by the deputy finance spokesperson, John Key, was that he did not like the excise going up on alcohol. The only fiscal position put out by John Key was: “Please don’t put up the excise on alcohol by inflation adjusting it.” That was the extent of the analysis that went on—we were told that some researchers were sent out to the trendy bars of Wellington. That is the ultimate response from the National Party.

So it does not matter what angle one looks at it from—the fiscal direction, the economic policy, the Working for Families package, the help for kids in education, the partnership with the regions, or the primary health care package—this Budget delivers fairness and opportunity to the people whom the Labour-Progressive Government came to office to represent and advocate for. I will proudly cast my vote in favour of this Budget, and I cannot wait to tell the people of Otaki why the National Party is opposing it.

That was the MP for Otaki—the translucent Mr Hughes. I can see through him, the way the people of New Zealand can see through this Budget. What a load of rubbish this Budget is. The Government is going to spend $21 million promoting the Budget. It has spent years working on it. Hundreds of officials at Treasury and the Ministry of Economic Development have been working on the Budget, and Darren Hughes got up and did not even want to talk about it Labour members know that it is such spoilt goods, they wanted me to deliver a Budget. Well, I have good news for Mr Hughes. A Budget will be coming from this side of the House in 2006, and it will be a Budget welcomed by more than one in five households. It will be a Budget welcomed by people who do not just vote for us. It will be a real Budget that will deliver economic growth to the people of New Zealand.

This was the largest Budget surplus in New Zealand’s history—the greatest opportunity for any Minister of Finance to deliver a really ground-breaking solution for the people of New Zealand. He had at his fingertips the opportunity to deliver prosperity for the years ahead, and what did we see? We saw a typical Labour Budget—no growth, no opportunity, and no hope. It was so bad that even Treasury, as a result of the Budget, stated in the documents that the growth rate for the next 10 years will be on average 1 percent lower than it has been in years earlier. This was the largest opportunity in history, and the growth rate going forward will be 1 percent lower.

This Budget was the opportunity to really invest in the infrastructure of New Zealand, the opportunity to fix the roading crisis that pervades our cities, the opportunity to restore the welfare crisis in our society, and the opportunity to go out there and fix the energy sector, which we know is creaking and about to fall over. This was an opportunity to do some real things for New Zealand so that we can have relative living standards that are equal with Australia, or maybe better than in Australia, and that are up there with world-class OECD economies. And what did we really see? The most cynical vote-buying Budget. And even then, the Government has got it wrong. Labour members are embarrassed by the news that they have delivered to working families an effective marginal tax rate that in some cases is 90c in the $1. That is right. Mr Hughes is shaking his head in absolute amazement. The average working family—the poor old working family—will be giving back 90c of every $1 earned. To make it even worse, if the wage earner has a student loan the family will be giving back 101.2 percent. The family will lose more money than it receives.

This Budget has some of the most bizarre results ever delivered in New Zealand’s history. Consider this for just a moment. A family earning $38,000, with three children, will, after this Budget, have a take-home pay of about $48,000. In other words, the family will get more money than it has earned, in gross terms. But if the family next door earns $70,000—nearly double—and has three children and an average student loan, its take-home pay will be less than that of its neighbours who are earning $38,000. The Minister of Finance had the audacity to come down to the House and tell us that the No. 1 aim of this Budget was to make work pay. I would like the Minister of Finance to explain that to us.

This was a Budget that had incredible design faults. Those design faults have even shocked the Minister of Social Development and Employment, the Minister of Finance, and the Prime Minister. They were all caught on the hop when they were interviewed. Each one of them had answers that were more pathetic than the ones before. When I was on Morning Report with Steve Maharey a question was put to him about effective marginal tax rates for a family earning $38,000 with two children compared with a family earning $60,000 with two children, or for a family earning $38,000 with three children compared with a family earning $70,000 with three children. What was the response from Steve Maharey on Morning Report?

Judith Collins: So what?

JOHN KEY: No, that response came days later, and he really had to think about that one. The response was: “That was a bizarre and unusual set of circumstances.” He said that a family earning between $38,000 and $70,000 with two or three children is a bizarre and unusual set of circumstances. Even Sean Plunket was lost for words at that one. When I managed to point out to Mr Maharey that there are actually lots of families in New Zealand with two or three children and that about 80 percent of them earn between $38,000 and $70,000, he was absolutely lost for words. His next response, reported in the newspaper, was “So what.” It does not matter whether 90c or 100c in every dollar is given away, it will not do anything.

The Prime Minister said that people would act irrationally. It does not matter that they will lose every dollar of their overtime. It does not matter that people will not bother to retrain to get a higher job. It does not matter that it will not be worth people’s while to take on extra responsibilities in their work or that maybe their spouse or partner will get a part-time job. The Prime Minister told us that the people in that group would act irrationally and just ignore those things.

Well let us consider that just for a moment, because it is exactly the position that beneficiary families in New Zealand faced some years earlier, and it was for a very small part of their income. What was the behavioural outcome? The behavioural outcome was that they did not move from welfare to work; they stayed on welfare. We know that the Government recognised that the problem was so severe that it was the aspect of the Budget that it actually changed. The Government recognised that in the beneficiary community of New Zealand, where there were effective marginal tax rates of about 90 percent, it was a huge disincentive for people to move from welfare to working, but somehow the Prime Minister wants us to believe that working families that earn between $38,000 and $70,000 and have two or three children will act irrationally. The people who are acting irrationally in this situation are not the working families of New Zealand, it is the Prime Minister, the Minister of Finance, and the Minister of Social Development and Employment, who think that New Zealanders will not recognise that situation.

This was one of the most poorly devised Budgets in New Zealand history. It is true that a lot of people were facing this situation earlier but it was for a small amount of their income, not a large amount. In many instances it was a situation that could have been addressed with a well-thought-out Budget, but that was not the case.

I want to talk about two other aspects of the Budget that are important. The first is the area of childcare and childcare assistance. I ask members to think about a particular situation. As a result of the Budget, in certain instances the subsidy payment was increased to certain working families in New Zealand. That meant that if the childcare subsidy was $3 an hour, and a family was paying $8 an hour—a $5 difference—that has now gone to $4 and the gap has narrowed. What is the likely response to increasing the subsidy? I will tell New Zealanders what will happen. The providers of those services will increase their prices. Exactly the same problem will happen with the accommodation supplement in many cases. A lot of that benefit will not stick with the working families and the families in need, it will move to the landlords and to the people providing the accommodation.

A lot of the Budget has been taken up by the very poorly designed Working for Families package. The package has now been orphaned by the Minister of Finance. He no longer cares or wishes to discuss it because it has a design fault similar to some of those buildings one sees in London. He did not bother to talk too much about the fact that $7.2 billion worth of increased expenditure will take place in our State sector. There will be $7.2 billion worth of bloating in our civil service, but will we get a better return? If we are going to get a better return, why has the Minister of Finance written to the Minister of Health to ask her why, despite the fact that billions of extra dollars have been put into health, fewer operations are happening in New Zealand today than when the funding was so much lower? The solution is not more money all the time, the solution is often more efficient government. The solution is having the right controls. The solution is making the Government care about the way it spends money—the way that hard-working New Zealanders are expected to care. This is an overtaxing Government that takes a lot of money off households. The Government does not want to tighten its belt, but every other New Zealander must.

I am proud to support this Budget. This is a Budget that is good for families. Family health is the cornerstone of any progressive Government’s agenda. The health budget is about extending health to our families. It is about extending health to our older folk. It is about providing affordable primary health care and ensuring our older folk get access to timely services, particularly orthopaedic operations. It is about ensuring that our children and those who are chronically unwell get access to affordable primary health care.

This is a good Budget for New Zealanders. When we look around the world we see that many countries face huge problems, and at times it is difficult not to feel almost overcome by the sheer enormity of global health issues. No health system anywhere in the world is perfect. Therefore, it is important that New Zealand remains at the forefront of developing innovative approaches, to ensure we use effectively and well the dollars we put in and achieve the best possible health system.

This Budget puts almost $10 billion into health. Although we often hear about funding in terms of hospitals, a lot of that money is ensuring that we reduce costs for people accessing primary health care. It has always seemed silly to me that it is free for people to have an operation in a hospital, but they pay top dollar to get through the door of their local general practitioner. Surely we ought to have been looking at how we can get them into the system earlier to screen them for disease, to ensure that we keep them healthy and well for as long as possible. We needed to shift the emphasis away from always looking at the hospital end to looking at prevention and early intervention as a better approach.

This Budget shifts new funding into primary health care. It builds on the work we have done in other Budgets. It takes us further forward, and in the next few years we will totally implement the primary health care strategy, which will provide affordable primary health care for all New Zealanders, regardless of their wealth. It will be dependent on their health need, not on their financial situation. I am very proud that we have committed ourselves to a strong primary health care approach.

In my speech today I want to emphasise the orthopaedic project announced in the Budget. A package of $70 million a year will be permanently going into increasing the rate of operations we do for major joints—hips and knees, in particular. At the moment New Zealand’s rate of intervention is about 1.2 operations per 1,000 population. That is well below the international average across countries that we like to compare ourselves with—the United Kingdom, Canada, the US, and so on.

With the money that is going into the orthopaedic project in this Budget we will see a doubling of the number of major hip and knee operations we will be doing. That money will not go in just as a one-off—like we saw in the past, when, as a one-off hit, money was put into reducing waiting times, but then the waiting lists grew again. Rather, it will go in year in, year out, retaining a level of 2.4 operations per 1,000 population, which is higher than the level in Australia at 1.9 and the UK at 2.3. We will be right up there amongst the best in the world. The Government has committed itself to that position, because when it comes to quality of life one of the best operations we can carry out for our older folk is major joint-replacement surgery.

There would not be a member in this House, who works with his or her community, who has not had people saying they have been waiting too long for major hip and joint operations. It took us a year of hard work, working with the Orthopaedic Association, the district health boards, and the health sector to put in place an approach that has been agreed upon by everybody. We agreed on the access criteria. Right now, people in some parts of New Zealand can get an operation much more quickly than those in other parts of the country, because of the different criteria. If people are lucky enough to be in an area where not so many operations need to be carried out, then they will get into the system more quickly and the level of acuity will be lower, than for people in Auckland or Christchurch, for example. So the criteria for the types of operations that will be carried out were agreed on with the Orthopaedic Association. The standard will be nationwide and therefore whether or not people live in Whangarei, the Bluff, or the Wairarapa the same criteria will apply.

We also reached agreement that we would maximise all the capacity we have to carry out these operations. We would utilise all the capacity in our public sector, but, where needed, we would also utilise what capacity there is in the private sector.

This has been an extremely encouraging piece of work undertaken with our doctors, nurses, and district health boards. I am pleased it has come together as an ongoing project. The most important part of the accountability of this project is that we pay the money to district health boards after an operation has been done. One might ask why we would do that and not just give them the money and let them do the operations. Well, history has taught us—and I see Edwin Perry nodding, because he knows this only too well—that in the past the money has gone into the boards. They have been asked to do more operations, and when the audit has been done, maybe 2 or 3 years later—

Ron Mark: What about eyes?

Hon ANNETTE KING: —I will get to that later; it is found that the money has gone into propping up the operation; it has not gone into performing the operations.

Ron Mark: Into the bureaucracy.

Hon ANNETTE KING: No, and I must answer that interjection. In fact, I will provide the member with the latest information showing that the growth in bureaucracy in the health system is very low indeed. The growth in the number of doctors and nurses in our health system has gone up considerably over the last few years. That is necessary. We need doctors and nurses in order to undertake initiatives, like the orthopaedic project.

The other area where work is now being done—and I am sure the member interjecting wants to hear this—is in cataract operations. They are another one of those quality of life operations. In many areas of New Zealand people do not have to wait long for a cataract operation, but in many other areas they do have to wait too long. That matter is certainly on my work agenda this year. It does mean we have to get cooperation from ophthalmologists, and to ensure we are able to carry out those procedures within the capacity we have.

Over the last 3 years a lot of money has been committed to reducing the cost of primary health care—more than $400 million. But over the next few years, almost as much again will be put in to ensure we are able to provide affordable primary health care. We started with our old folk. Last year we increased the money to the under-sixes. We then added the under-18s. Now, on 1 July, older people over 65 who are part of a primary health organisation will pay a reduced fee to their primary health provider. They will pay reduced costs for their prescriptions—no more than $3. That is a real commitment to primary health care.

I am proud of what we have been able to achieve in this Budget. There will always be demands. There will always be things that can be done better. I hope that over the next year we will see very good use made of the dollars we provide. We certainly make sure that our district health boards are accountable for the money they get.

We want to retain our workforce. We want a workforce that people enjoy being part of and are committed to. Over the next year we will see a lot of effort going into workforce retention, and so on.

This is a good Budget for families and a good Budget for health. What I do not understand is that when the Government provides support for families through the family support package, that is seen as a handout, but when it provides support to elderly people so they can have operations, that is OK. Why is it not OK to support families but OK to support operations? I support both those things.

We can debate whether this is or is not a good Budget for families, but I will tell the House one thing: this is not a good Budget for law and order, or for the police. This Budget is a wet squib. It does nothing more than address the requests made of this Minister last year. It is a bare minimum allocation and it continues the trend of short-term patch-ups rather than fully addressing the declining state of law and order in this country.

We can look at methamphetamine and organised crime, for example. The Government crows about providing an extra $39 million over 4 years. Funding of $39 million over 4 years does not sound like a big amount; it sounds pathetic. This is the Government’s attempt to police the methamphetamine industry, which is rumoured to be worth $400 million per year. How can this Government expect the police force to keep up, when gangsters have more money and more resources than our police have to deal with the problem?

Let us look at what the police asked for in 2002-03—and the document I have here details it. The police asked the Minister in this Government for funding to establish three full-time clandestine laboratory response units, and last year this Government gave them two. That was decided, despite figures from the police that showed that already they were closing down a massive number of clandestine laboratories and discovering even more, and the trends were ominous. They asked for extra funding for an investigative and intelligence unit of 34 officers dedicated to addressing counter-terrorism and organised crime. What did they get? They did not get it last year, and the Government crows and expects to be patted on the back for finally starting to deliver on some of those requests—12 months later.

The problem is what has happened in the intervening period. In that period there has been more P on the streets, more drugs, more drug-related crime, and more victims. Yet this Government applauds itself and pats itself on the back for finally, 12 months later, coming up with something—a pittance of $39 million over 4 years.

This Budget highlights the problem with this Government’s attitude to organised crime. It is a commitment from this Government that it will police organised crime, whereas the public is crying out for a commitment to destroy organised crime. This Government has an approach of harm minimisation towards gangs, as opposed to the people’s call for the elimination of gangs and organised crime. So I ask the Government, on behalf of the public, where in this Budget is its commitment to destroying gangs? The answer is it simply does not exist. If this Government were serious about dealing with gangs like the Mongrel Mob from Tāneatua, which graced the front pages of our newspapers this morning, and the Nomads, who every now and then pop up and terrorise people in Ōtaki and Levin, it would surely make moves towards making them illegal in the first instance, and in the second instance, funding and resourcing the police so they can eliminate gangs.

This House is very quick to legislate against international terrorists in New Zealand but still allows gangs to terrorise our people on our own streets. Why has this Government not pushed for a “Suppression of Organised Crime Bill” similar to the Terrorism Suppression Bill? At least that would give the police more power to act against the people who are most responsible for putting drugs on the streets and for all the drug-related crime that ensues.

Additional funding for the Institute of Environmental Science and Research is something the Government has bragged about; in the Minister’s press release he does so. It is a step in the right direction, but the Government needs to note that the institute is under pressure from a number of areas, not the least from private firms that are increasingly using the institute’s services to drug test employees. A commitment to destroying organised crime would free up the institute to perform other valuable tasks such as DNA testing, which would lead to more criminals being caught, convicted, and doing more time.

The Minister crows and congratulates himself that the police budget has broken the much-vaunted $1 billion ceiling for the first time. What a joke, what a con. The fact is that if one was simply to adjust the police budget to account for inflation, it would have broken the billion-dollar ceiling anyway. This is not something for the Government to congratulate itself on; this is an indictment on the Government that it does not take seriously the problem of crime, and law and order—unlike New Zealand First.

I want to put the facts on the table. New Zealand First does not just come to this House and criticise. We have a policy and it is out there for everyone to see. We are the law and order party in this House and we are the party that says if this Government were serious about dealing with law and order, and crime, then it would do as we say—it would double the size of the police force and double the size of its budget, if necessary, to do that. Only then would this Government be able to say that it is genuinely concerned about the safety and security of the citizens on its streets.

Since we are talking about numbers, let us talk about police numbers. The Minister again crows in his press release that police numbers are at a record high. On the back of New Zealand First’s time in Government when we increased the police force by 500, and on the back of New Zealand First’s policy that said we should have twice the number of police that we currently have, the Minister’s crowing is rather empty and pathetic. The sad fact is that one will never be able to have a policy of zero tolerance, or deal with organised crime or the methamphetamine industry, as long as one believes one can just tinker with police numbers.

The people of New Zealand want to see their streets cleaned up. One of the areas that they want to see cleaned up is immigrant crime. When we first started discussing this in the House people called us racist and xenophobes. Call us what they like—the facts are the facts. Immigrant crime is blowing out disproportionately in just the same way that Māori crime is. The problem is that we are allowed to talk about Māori crime, but we are not allowed to talk about immigrant crime because it is politically incorrect to do so. The facts are there: kidnapping, extortion, murder. Crime of this nature committed by our newly-arrived New Zealanders and foreign students is out of hand, and in this Budget the police still do not have the resources to deal with the language and cultural issues that must be dealt with. Some would argue that if we are not going to give those resources, then we should not bring the people here in the first place, but that seems to be falling on deaf ears.

Then we have the question of priorities in this Budget. It is interesting that the big issue that I can point to is the quota ticketing regime of this Government. If we look at Labour’s record we see that since it has been in Government quota ticketing revenue has jumped a massive $52.5 million. If we go out on the streets and ask who is being ticketed—and my colleague Edwin Perry has some very interesting answers to some written questions—we find that in some parts of the country the low-income areas of town are being targeted by quota ticketing. How interesting! Those facts will come back to haunt this Government. Quota ticketing is destructive and it is all about revenue collecting.

The Minister can crow about his projections to put out more tickets this year and collect $112.73 million in revenue on quota ticketing, but the damage it is doing internally in the police—with dissent, division, officers calling other officers “snakes” on “snake patrol”, general duties officers getting upset and angry because they do not want to just be dishing out tickets when they could be solving real crimes, and the backlash in the courts from citizen jurors—is coming home to roost.

New Zealand First has a firm policy on this issue, and this Government will hear about it. We are not pretenders to the throne of law and order; we are the law and order party. We have good policy, unlike National. Its answer to law and order was to replace Kiwi cops with a computer called INCIS. We do not do that. This Government is not taking the message from the public. By continuing to run a quota ticketing system it is undermining the integrity of the police force, bringing the police into disrepute, doing nothing about road safety at all, and diverting resources that should be going into solving real crimes that create real victims. That is the tragedy of this Budget.

If there was ever a time to be proud of being in a Labour-led Government, this is it. If there has ever been a time to truly identify what Tories stand for, this is it. We have heard from the National Party—the Tory speakers—that we have seen the largest surplus ever in this country’s history. Where is the acclaim, the thanks, and the praise to Michael Cullen for that? Nowhere! The Tories are too miserable to even acknowledge that the fiscal and financial management of this country by Michael Cullen has been outstanding. Now the question is: who should share that success? Tories give it to their mates. Labour gives it to the people who have worked so hard to create it.

Back in the 1980s and 1990s we saw a large number of reforms. Working families—the real New Zealanders—bore the brunt of that. Family people with a fixed job who were locked into a mortgage and who were under pressure from reforms around them, such as the Employment Contracts Act, had nowhere to go. For the best part of 15 years the working families in this country saw their lifestyles decline, and their opportunities, and those for their children, go backwards because this country was driven by ideology, and run by a bunch of Tories who thought the trickledown theory would deliver to each and every New Zealander. It does not, and this Government has finally got to the position where it can pay back to those working families that which they deserve.

It was quite interesting to hear John Key say that this is a load of rubbish. I would like to remind him that one man’s trash is another man’s treasure. Thankfully, for most New Zealanders this Budget is a treasure. This Budget is a treasure for the low and middle income New Zealanders who have been battered around by a bunch of self-serving Tories who have delivered tax cuts, ideology, and cheap State assets into the hands of their mates for years, so that they can reap the rewards while—

Hon Dr Nick Smith: Name one.

Hon DAMIEN O'CONNOR: The railways. Does Nick Smith remember that? Air New Zealand was sold to National’s mates, Brierley’s. We are finally in a position where we can say thank you to the working families in this country. As I said, it is payback time. When we first came into Government we were in a pretty difficult situation. Beneficiaries were being squeezed; we gave them sure income and lifted the level of benefits so that they could have some dignity in their lives. Superannuitants had seen their incomes dropped back by the Tory Government.

We guaranteed their level of income, lifted it to 65 percent of the average working wage in this country, and said it would remain at that rate so that people would have security of income into the future. We did that for beneficiaries, we did that for superannuitants, and we lifted the minimum wage for those people who had been screwed by the Employment Contracts Act. Then we worked through to nurture our economy to the point where we have one of the strongest-growing economies in the Western World. We are now starting to reap the rewards of that and, thanks to Michael Cullen’s management and the support of all his Cabinet colleagues, we do have a wonderful Budget surplus.

We have said we will give that back—not in one big hit, because that would be irresponsible, but over time as we can afford it—to working families up and down this country. But what does that miserable bunch of Tories say? They say: “Oh, cut taxes. Yes. You’ve got to give more money to our mates.” [Interruption] Yes, because Don Brash wants 600 bucks a week back! And what would he give to someone on $30,000, $40,000, or $55,000 a year? Well—$20. That is sufficient, apparently, because the Tories think that the way production is driven at the top end has incentivised people with high incomes and incentives, and that the way to drive production at the bottom end, for low-paid people and beneficiaries, is to threaten them with a stick or with insecurity so they are fearful—fearful of stopping to take a breath and work out where they are going or who they should be voting for. Well, this Budget is payback time. We are putting some power and some money back into the hands of the hard-working people up and down this country.

The reality is that even in the short 4 years we have been in Government, we have not been able to turn around some of the core problems and challenges in this economy. Do members know that half of all children aged 10 years and younger live in households on a taxable income of less than $45,000 a year? Those are the ones who will gain most from our package. The Tories do not know what it is like to live on $45,000 a year. In fact, some of us over here on the Government benches, if we are not careful, might also forget. Thankfully, we have a whole lot of loyal supporters—Labour Party people for the most part—who keep reminding us that the $45,000 a year that supports half the children in this country is not sufficient. We have to do better, and we have done better.

We have not brought it in, in one big rush. We will spend $220 million over the next year and $664 million in the year after that, and finally reach about $1 billion, in benefits to the working families of this country. Business people have said: “Well, what about us?”, so I ask members where they think those hard-working families spend every one of those dollars. They do not save them or spend them on trips to Monaco. No, they spend them on living, on trying to pay school fees, and on trying to give their kids a better opportunity. Every one of those dollars will go back into the economy, and that is where we will continue to see economic growth in this country.

We have done a number of things for working families in New Zealand, and the basic—

Ron Mark: They don’t go skiing in Switzerland.

Hon DAMIEN O'CONNOR: No, they do not, but there would be quite a few members over that side of the House who do. I am sure Mr Mark is not one of them, and neither is Mr Donnelly, but we know where members in the ACT party, the “flat earth, flat tax” party there, led by Mr Hide, will be spending it. I ask that member whether they will be not be taking trips to Fiji for conferences. He will probably make it compulsory now for all his party members to go to a conference in Fiji, learn about fiscal management, and tell people how to get ripped off. Well, we will not be giving them the money for that, because we will be giving it to hard-working, honest families. That is whom we will be giving to. We are trying to make sure that people who are in work will be better off for their efforts. That is why incentives are there, and payments will be there for families in work.

We will also tell people about the benefits in the Budget. There has been much criticism of the money that will be spent to tell people about the things we are going to do over the next 3 years to help them out. It is important, not just for those at the top income level, I tell Mr Hide, but also for those at the bottom level, to have a vision—to know where they are heading, and to know that the Government will support them.

I could go back and use the wise words of a previous National Party leader, who acknowledged in 1996 that many New Zealanders were missing out on health. That was the wise James Bolger—Jim Bolger, a very learned man. He and his mate Bill Birch acknowledged that many of the things they had introduced to help out people in this country were not taken up, because people did not know that those opportunities and benefits had been laid out before them. I think Bill Birch released figures that showed that only 28,000 out of an estimated 150,000 eligible families entitled to benefits had taken up those opportunities.

Well, we are not going to allow that to happen. We are not going to run a Budget based on the fact that a large percentage of people will not take up the benefits we have laid out for them. We are saying that we shall spend the money to inform them, and that they should take up their entitlements. Do members know why? Because those people have worked hard for those benefits. They have been the ones who were pressured by ideology from the National Party, supported by ACT. They have been the ones who were squeezed by the Employment Contracts Act through the early 1990s—and now it is payback time. I am proud to be part of a Labour-led Government that has delivered this Budget for working families in this country.

During the first reading of the Future Directions (Working for Families) Bill, taken under urgency and by way of interruption to this Budget debate, I praised the Government’s action in that regard. We could quibble with some of the specifics, but the big-picture reality is that 300,000 New Zealand families and, most important, hundreds of thousands of children in those families, will be significantly better off as a result of this Budget. That is a superb outcome and should, in my view, be celebrated by all parties in this House, although during the debate it became clear that the ACT party, should it ever become Government—God forbid!—would want to return several hundred thousands of those kids to poverty.

ACT’s policy is for a flat tax rate of 20 percent, and I remind New Zealanders today that the majority of New Zealand taxpayers already pay tax at a rate of either 15 percent or 19.5 percent. Therefore, a flat tax rate of 20 percent actually represents for them an increase in taxation. I am not exaggerating when I talk about the hundreds of thousands of children being returned to poverty, because this bill in fact reduces child poverty in New Zealand by 60 percent. I am heartened that Dr Don Brash, in his response to the Budget, conceded that the package is highly beneficial to families. However, some of his caucus colleagues, including those on the front bench, endeavoured to convince the House during the Working for Families debate that the measure was some kind of prelude to Armageddon.

Let me repeat my challenge to National: if it is going to repeal the measures that are lifting hundreds of thousands of New Zealand children out of poverty and improving the lives of hundreds of thousands of others who are getting by only with a struggle, then let that party clearly spell it out to the people of this nation. John Key, since that debate, has come up with some figures that have been published and circulated in the media that indicate that there is a real problem with the Budget because it does not sufficiently incentivise those on higher incomes. He has pointed out that for one-income, two-parent families with two young children, in the south or west of Auckland or in Wellington City, the difference in net pay between one family earning $38,000 and the other earning $60,000 will be only $2,376. As well, for equivalent one-income, two-parent families with three young children in central Auckland, the difference between the family on $38,000 and the family on $70,000 will be only $2,856.

I am not sure whether John Key’s argument about disincentives really applies. I can remember when I paid tax at a rate of 60c in the dollar, and I can assure everyone in this House that far from that being a disincentive to me it was in fact a spur, because I figured out that every extra dollar I could earn would put my family in a better position to enjoy the fruits of my labours. So I do think that that disincentive point is overstated.

But, setting that to one side, the point I would like to make is that the answer to the dilemma that John Key has raised, is income splitting. That is a United Future policy that would see families on $60,000 or $70,000 being able to split their family income, because in both cases they are single-income families—one-income families. If the amount is split fifty-fifty for tax purposes, as we propose, then those families would be paying tax at a rate of just 19.5c in the dollar, which is, as I say, below the rate proposed by ACT. In that situation, the difference identified by John Key of only $2,376 would lift, in the case of a family on $60,000, to $5,346 a week—that is more than $100 a week extra—and in the case of a family on $70,000, it would increase the difference from $2,856 to $7,776. That is more than an extra $150 a week.

So therefore today, I call on the Government, and indeed the House, to consider seriously the option of undertaking income splitting. Today in question time, Stephen Franks pointed out that this does not benefit low-income families and I agree with him, because if one’s income is under $38,000, one pays only 19.5c in the dollar, anyway. But what income splitting does is start in the middle group and it extends right up to people on about $120,000, who would be significantly better off in a situation where one single earner—one income—is endeavouring to support not only a family, but also a spouse. I believe that, on the basis of fairness and equity, it is an idea whose time has come, and I hope very much we will hear more of that in the years to come.

Could I also say that this Budget is not entirely the way United Future would like it to be. The Government was not prepared to heed our call that the present tax brackets be adjusted to cover inflation for the period of 1 April 2002 to 1 April 2005. United Future believes that the Government’s unwillingness to do that is a fundamental and serious error. I remember the member Darren Hughes talking earlier about fairness, and he used that word repeatedly in his speech. I would like to ask the Labour Government how it can be fair, whilst it is giving those tax breaks to low and middle income earners, to at the same time be increasing the rate of tax, for that is what it is doing in real terms. It is increasing the rate of tax for all New Zealand taxpayers who do not have children or do not qualify for this special assistance.

That is the case because inflation erodes the purchasing power of their salaries. What those taxpayers may not understand quite so clearly is that this Government’s continuing failure to adjust the current tax rates for inflation means the purchasing power of their salaries and wages is being steadily eroded by additional taxation.

Let me give some concrete examples. For those earning between $9,500 and $10,800 per annum—which is surely not much of an income, in anybody’s terms, but there are 100,000 New Zealand taxpayers in that bracket—their taxes have been increased by more than $2 a week, or $108 a year, under this Government. For those earning between $10,800 and $38,000, their taxes have also been increased by $108 per year under this Government. For those earning between $38,000 and $43,000 a year—which is very close to the average level of household income in New Zealand—their taxes have been increased by up to $13 a week, or $675 per annum, under this Government. For those earning between $43,000 and $60,000 a year, that increase is also $675 per annum, and for those earning over $60,000 a year, the increase is $22 a week, or $1,155 per annum.

This money rightly belongs in the pockets of our 3 million taxpayers and should not have been collected in the first place. On this point, I want to be as clear as I possibly can. The reality is that under this Government, tax rates have been increased and $630 million per annum is now being collected from New Zealand taxpayers by stealth. That is the position, and not even Dr Michael Cullen has set out to claim otherwise—nor could he, without seriously misleading the public.

When I first raised this matter with the Government early in 2003, the cumulative movement in the consumer price index was 9 percent. By 1 April 2005, based on the Reserve Bank forecasts, the movement will be almost 14 percent. Accordingly, the longer the Government delays action on this matter, the greater the problem becomes, and I would say that the Government must adjust the brackets in next year’s Budget, if it is to go into the 2005 election with any credibility, and I will continue to remind New Zealanders of these realities.

Let not New Zealand think that United Future is a lone voice on this matter. Indexation of the tax brackets for inflation has been adopted in Canada, the United States, and the United Kingdom. It is time for New Zealand to follow suit, and there is one last opportunity for the Government to act before next year’s election. United Future also asks the Government to increase the tax rebate level for gifts to charities by individuals, from the present stingy $630 a year to a new figure of at least $5,000 per annum, with an equivalent adjustment for companies. This has not yet been done. We want to see this issue also addressed in next year’s Budget, by which time the Charities Commission will be in place, and any remaining excuse for continuing inaction will therefore have been addressed.

It might cost the Inland Revenue Department about another $20 million a year, but it would benefit the charities of this country by an extra $60 million a year. The extra charitable work that could flow from that would make a significant and overwhelmingly positive contribution to the social fabric and welfare of our nation. It would represent an investment that would eventually pay rich dividends to taxpayers by reducing the Government’s own expenditure on social welfare assistance.

I know of no New Zealander who would choose to deal with the Department of Child, Youth and Family Services in preference to, say, The Salvation Army or Presbyterian Support Services. The difference is like night and day. It is time we began to realise that reality, and gave additional practical support to our charities, before it is too late.

As the Green Party stated 2½ weeks ago when the Budget was delivered, although we are really disappointed that Dr Cullen and Labour are dedicating virtually no resources at all towards an environmentally sustainable future, at the same time we cannot help but be pleased that we finally have a Government that acknowledges the reality of endemic child poverty and is planning to do something about it. The offer of up to a billion dollars to low and middle income families by 2007, increases in childcare support, increases in the accommodation supplement, and other changes like those to some abatement regimes are all to be welcomed. However, though acknowledging that what the Government has put forward is 100 percent better for low-income workers and beneficiaries than anything a National or National-ACT Government would ever be likely to come up with, the Green Party remains unavoidably critical of some of the social justice aspects of Labour’s 2004 Budget.

First of all, we are unhappy that the budgeted increases to families are due to take so long to come into effect. The first boost to family support does not happen until April 2005, the in-work payments and family tax credit increases start in April 2006, and the full impact of the new support does not really kick in until April 2007. I question whether Labour really had to wait as long as that to implement the full programme of support for families, given that the Ministry of Social Development’s report to the incoming Government in 2002 advised then that nearly one-third of the country’s children are living in poverty, and from all accounts that figure has not really improved, despite the continuing fall in unemployment that we have seen. I think the dilatory approach Labour is taking towards boosting family incomes is unnecessary and uncalled for, while we still have far too many families dependent on food banks and other forms of charity for survival. A Government that was really serious about ending child poverty would not have delayed full implementation of its programme by up to 4 years before it really began to kick in. I know a lot of people feel quite let down by hearing on Budget day that they will get a reasonably substantial increase in family income, and then finding out a few hours later that they will have to wait for years—and through a whole election cycle—to receive much at all. When people need assistance to feed, clothe, and house their families at the most basic level, they need it as soon as possible, not in some far-off future.

I would add here that I find it appalling that the Government is prepared to give nearly $34 million to the America’s Cup effort, co-sponsored by the Emirates Airline, instead of putting $34 million into the pockets of families who need it now. The argument that the Team New Zealand money is a good investment for the taxpayer, because it will be spent mostly in New Zealand, simply does not wash. If we were instead to put $34 million towards families on benefits and low wages, it would be completely spent within New Zealand on the necessities of life, not on an elite international yacht race. I do not believe that giving money to an elitist sport is appropriate as long as some New Zealand children and young people are growing up in poverty, and while a number of the community and social service groups that so valiantly struggle to support them are on the brink of collapse because of chronic Government underfunding.

The second major area of concern the Green Party has with this Budget is that it locks in systemic discrimination against beneficiaries, and as well gets rid of the special benefit, which is currently the benefit of last resort for all too many people. Although I understand and support Labour’s motivation in wanting to help beneficiaries to make the transition between benefits and work, I do not think that creating a new poverty trap called the in-work payment, of up to $60 per week to families where one or both parents are in the paid workforce, is the way to go. The in-work payment locks in the concept that the children of beneficiaries do not need as much to live on as the children of a parent or parents who are in the paid workforce, which is manifestly ridiculous. All the research shows that the most poverty-stricken families are most likely to be those headed by sole parents. I ask why we as a country are so determined both to punish such families, including blameless children, and to deny the fact that, in reality, pushing a single mother with two or three young children out to work will in many cases have a detrimental, rather than a positive, impact on all concerned.

I would like one day to be part of a Government that finally recognises that all adults and children need enough money to buy food, clothing, and accommodation, if they are to live anything approaching a decent and fulfilling life, and that also recognises that the task of raising a family, especially on one’s own, is a full-time job worthy of respect and support from the rest of society, not one for which one should be condemned as a person and then subjected to various financial penalties if one does not race back into the paid workforce quickly enough. Of course, let us encourage and help people who are unemployed, and/or who are on other benefits, to move into work. But let us at the same time acknowledge the value of being a good parent, and prioritise in the finding of jobs those whose main task in life at a particular moment is not the raising of young children. Let us focus on providing extra payments to people who are transitioning to paid work that are based directly on their work-related needs and costs, rather than penalise the children of those who are still in the benefit system.

In terms of the special benefit, it was indeed alarming that the intention to remove that essential third-tier layer of assistance was brought in without warning or consultation on the day of the Budget, with eventual savings of up to $91 million per year to be made through its removal. I would not be complaining about the loss of the special benefit if the Government had engaged in a wholesale reform of the benefit system at the same time, in order to ensure that people had enough to live on without third-tier assistance, but that has not happened. Meanwhile, I fear the worst for many beneficiaries in the coming years, unless we see a change of heart somewhere along the way. The new temporary additional support allowance manifestly will not fill the gap that the special benefit will leave.

A third major area of concern for the Green Party in this Budget is housing. Although I am not knocking the increases in the accommodation supplement, because I know they meet a real and an urgent need, I am very aware that this Budget has not adequately addressed at all the housing crisis that is currently faced by low and middle income earners in this country. The Green Party believes that stable, affordable, healthy housing is a fundamental need and right of all people. We acknowledge the efforts that Labour has made in this area since 1999 in beginning to turn back the clock on the inequities of the 1990s, when National sold off so much of our State housing stock and established a rental regime that, combined with the benefit cuts and the effects of the Employment Contracts Act, pushed so many families and others into the margins. However, just continuing to focus on increasing the availability of the accommodation supplement, rather than prioritising the building of more social housing, simply increases the massive taxpayer subsidy we are currently offering landlords, and, behind them, employers, as well. That is how the Government gets away with having such a low minimum wage. With such a low-wage, low-benefit economy, only broadly expanded income-related rents and a more accessible homeownership regime will, in the end, together enable the bulk of lower-income people to access stable, affordable housing. At the moment a decreasing proportion of householders own their own homes, while a larger proportion is renting. At the same time, the private rental market is naturally expanding to meet that need, fuelled by the accommodation supplement.

Social housing provided by the State, local government, and the third sector simply is not keeping pace with that need in the slightest. As a proportion of the total housing rental stock, social housing is in a precipitous decline. In 1991, total social housing—State and local government—stood at around one-third of the entire rental market. That has dropped dramatically over the last 10 years, and in 2001 made up just 19 percent of the rental market. When social housing as a proportion of total rental housing drops as low as that it means, firstly, that many people who need income-related rents simply miss out—witness the 12,000-plus households on the Housing New Zealand Corporation waiting list at the moment—and, secondly, it means that social housing has very little impact on subduing rents in the overall market. When social housing becomes so irrelevant to the rental market, all the other renters end up paying more rent, and that is what is happening now. This Budget announced that the Government will build or acquire just over 1,000 new State houses or flats in the next year, but given that the total rental market has been growing at around 10,000 households per year, it means that State housing will decrease markedly as an overall percentage, and its slide towards irrelevancy will continue. The demand on the accommodation supplement will rise unabated. The accommodation supplement is a short-term, not a long-term, solution to the housing crisis, as it acts only as a landlord subsidy, and fuels—or props up, depending on the state of the market—house prices and rents in the private sector.

However, overall and in conclusion, I should like to say that the Budget does take a major step in the right direction, in terms of redistributing at least a little of our country’s wealth to some of those who need it most. Tax cuts, as proposed by National and ACT, are not the answer. All that they would do is make the rich richer, and the poor poorer.

I am proud to speak today on this Budget. It was a wonderful day for those of us who came to Parliament in the class of 1999. When we came into Government in that year, we wanted to see the things that were announced in this Budget announced in that year. We have had to sit and wait as back-benchers. We have had to sit quietly and work away at the reform of the social assistance package, and we have been slightly impatient. The member before me was quite right, but she knows that we cannot get it all, and we cannot get it all at once. Government members have learnt to be patient, and I really believe that we have now delivered. We have delivered a socially redistributive Budget. It is good for families, and anything that is good for families is good for the economy. Even the hard-headed members of the Opposition know that the economy will grow when we lift up the value of the families in the bottom sector of our society.

Fair-minded New Zealanders have their heads around this targeted and strategic Budget, and it has been well received. In heartland New Zealand, where I come from, those in my neighbourhood and on the street—and I get out and pound the street every day, buying my bread at the dairy, and going to the grocer and the butcher—like this Budget. They are the people who will speak in the next election. Rotorua is not a wealthy community; half our families live on an income of below $25,000 per year. I want to tell members about what Paul Blair, who is a friend of the Greens, said in Rotorua: “This Budget is great. It gives more money to people with children, and that has to be positive for families.” This Budget has been a long time coming, and I know that Paul will be prepared to wait until we can bring all the provisions on stream by 2007. This is a redistributive Budget. It will work for families, and will help with State house upgrades by Housing New Zealand Corporation. It provides for only 1,000 additional houses, but for improvements to 850 houses. That is good. In my neck of the woods, a huge dollop of investment has been put into science and research. If the Government does not continue to help with research funding, then how will we know what to spend our future funding on?

The Budget will build strong public services. Our early childcare centres will be pleased to know today that there is funding also for the private childcare sector—that was very poorly understood when the Budget first came out—as well as for community-based childcare centres. There is funding for education and for the Department of Child, Youth and Family Services. People in my neck of the woods are absolutely thrilled to hear that there will be a youth justice facility. We have been asking for it for 4 years, and we will get it. We are also pleased because the communities of Kawerau, Murupara, and Rotorua do have a drug problem that they are beginning to face up to, so the extra resources for the police to fight P are a good thing for us.

However, I shall focus on health today. This Budget will be good for our health. Vote Health is a whacking dollop of Government spending, of almost $10 billion. Twenty percent of total Government spending will go into health. That is $3 billion more than the previous National Government spent on health in its last year in Government, and we must remember that. Health is now a healthy sector. There is never enough money to go into health, and there never will be. But health is now resourced by a prudent Government that has listened to communities and is now able to meet their targeted health needs. It is only with a 3.4 percent growth in expenditure in the Budget that we can manage to do things in health that will achieve an outcome that will make people healthier.

Dr Brash has no policy directions in health—none at all. It is very frightening to hear what is coming out as health policy from the Opposition. We hear from the Opposition it would get rid of primary health organisations and Pharmac—that they will be gone by lunchtime. That is very frightening. When I spoke to Grey Power last Thursday, it was very afraid, and it needs to be. We need to see more robust things than taxation cuts. Those taxation cuts would total over $15 billion. If one bears in mind that health costs $10 billion, one would have to ask which sectors the Opposition would concentrate its spending on and who would suffer because of its flat-tax and taxation cuts approach. It would be the health and education sectors; they would be gone by lunchtime. That is an appalling approach. Government members are now telling the Rotary clubs and Grey Power that they should be afraid of the so-called presumed gains from taxation cuts. Just over $10 billion is the Government’s contribution to Vote Health. All that we have seen from the Opposition is a list of what it will not do and does not intend to do.

The drivers of cost in the health services had to change. This Government was prepared to front-foot those changes. We now have 3.4 million New Zealanders enrolled in primary health organisations. From an initial $48 million investment to set up primary health organisations, this year they will receive $264 million. The Opposition should try telling general practitioners that we would not have primary health organisations any more. It should try telling nurses, health educators, and health workers in the community that it would take away their primary health organisations. It would not be easy, nor would it be a vote-catcher. This year, as well, the Government will put in $26 million for people who have very, very complex health problems like diabetes and heart disease. A Māori primary health organisation in Rotorua has Māori turning up every Monday night to the Monday club, to do line dancing. They are shedding weight and having diabetes tests. They have a wonderful joie de vivre about life. They are on their feet. We should not take that away from them, because that initiative is funded through a primary health organisation.

Who is getting cheaper doctors’ visits now? From last year 16 to 17-year-olds were, and from July this year all over-65-year-olds who are enrolled in primary health organisations will. The people at Grey Power loved to know that they would get cheaper doctors’ visits and that it would cost only $3 for each prescription. Even Dr Tricia Briscoe from the New Zealand Medical Association said that the accident compensation subsidies indicated in the Budget were great. They are good for general practitioner visits and good for accident compensation - related surgery. Some of that targeted surgery is about people who have been long-term sickness beneficiaries and have gone back into work. No one could snipe at that, and no one in the Opposition should snipe at that. Hospitals are getting $802 million for capital upgrades. They have caught up, and now they are surging ahead. They are not deficit driven, and they are finding the opportunities most exciting.

The big announcement in the Budget was $30 million more for hip and knee operations—better joints for the elderly, we in the Government say. How can Grey Power not welcome that increase? The Budget provides $30 million this next year and that will extend out to 2007 and 2008, when the amount of funding for orthopaedic surgery that hospitals are getting now will be doubled. Frankly, as electorate MPs we got tired of looking at lists of people who were waiting for surgery. Rotorua will get funding for 50 more operations just in this year, and that figure will increase to 123 above what it was doing by 2008-09. Those operations will probably not be needed, as the focus is more on issues like weight loss, nutrition programmes, and plenty of exercise.

This health Budget will deliver for people in Rotorua and New Zealand, and they absolutely love it. When we add to that the Working for Families package, we will start to get a healthy society. Cindy Kiro said that the Budget is absolutely fantastic, that it was working for families, and it would help low and middle income families to provide the basics for their children. In practical terms, the funding will mean that families will be able to put more nutritious food on their tables, heat their homes, and pay for their children to take part in sport. That is what we want. We want people in New Zealand to build resilient families with optimism about tomorrow that will be engaged in making New Zealand a healthier and brighter place for us all to work and play in.

Mr Assistant Speaker, as this is my first speech as leader of the ACT party, I shall take a moment to thank you for your guidance during your time in this House. I also thank the Speaker, the Rt Hon Jonathan Hunt. As leader of the ACT party, I look forward to receiving more good advice from you and Mr Hunt.

I also acknowledge the Prime Minister, Helen Clark, for her gracious comments. I myself enormously admire and respect Helen Clark as a person. She is very capable, highly intelligent, and committed to New Zealand. I disagree with many of the policies she and her Government are pursuing, but that does not mean that I cannot respect her as a person.

I thank the leader of the National Party, Don Brash, for his congratulations. I look forward to working with him so that he will be the next Prime Minister of New Zealand. I thank Winston Peters, who, in his own inimitable way, congratulated me on achieving the leadership of the ACT party. I also thank Peter Dunne.

I thank my caucus. Changing leaders is never an easy process, as everyone in this House well knows. The caucus has done well. A special thank you goes to Stephen Franks, who ran a tremendous campaign to be the leader of the party. He almost got there, but having not made it, has been absolutely gracious, and remains committed to the people of New Zealand, the ACT membership, and the ACT party. It bodes well for the ACT party that we have such a good team.

I also acknowledge Minister Parekura Horomia who, amongst all the congratulations I have received, looked more joyous at my taking the leadership of ACT than even me. I can only assume that that is because he has seen that I will be more statesmanlike in my approach to this House and doing less to hold Ministers and their departments to account. I thank the Minister Parekura Horomia. I have to say that even though I have questioned him hard about what he is up to in his department, he has never lost his humanity or sense of humour. While on opposite sides of the House, often in tough circumstances, he and I are good mates.

We are here to debate this Budget. Nothing shows the difference between that side of the House and this side than this Budget, which Helen Clark and Michael Cullen cobbled together, and which United Future voted for. This Budget gives no hope to New Zealanders for a better future. It is all about the here and now. It is all about what people get if they fill out a form to the Government and get a handout back. There is nothing aspirational about this Budget. There is nothing forward-looking. There is nothing in this Budget that will make New Zealand a richer place. Rather, it is all about taking a big chunk of what we have now and giving it to the Government, and then handing it back to those New Zealanders who first produced that wealth.

Michael Cullen says he is giving it back to those who need it. But when we look at this Budget, we see that it is actually being given back to those whom Michael Cullen needs the votes off. That is what this Budget is about; not what is good for New Zealand, but what is good for the Labour Party. What sort of Budget is it that to help families the Government has to spend $21 million on party propaganda trying to resuscitate its vote?

Steve Chadwick said that this is a redistribution Budget, and it is. It is not about making the cake bigger; it is about dividing it up. We normally think about that as robbing Peter to pay Paul, but when we look at this Budget, we see that the Labour Government is robbing Peter to pay Peter. That is what this Budget is about—robbing Peter to pay Peter. How else can we explain people paying taxes and then having to apply to get them back?

How barmy is it that people on $100,000 with six children will apply to the Government to get some of their tax dollars back because they are needy—and from the very Government that put their tax rates up from 33c to 39c? Having taken the money off them, the Government is giving them the opportunity to apply for a bit of it back if they have children. That is a Budget of robbing Peter to pay Peter. How much simpler would it have been just to lower taxes and not to take the money in the first place. But no, that would not help Michael Cullen and Helen Clark to get elected. That is not what they want.

They say they stand for the people who are poor and dependent. I say it is the National Party and the ACT party that stand for people who are on low incomes and who are dependent. Why is that? It is because our two parties want to take the poor people and make them richer. Our parties want to take people who are currently dependent on the Government and allow them to be independent.

This Budget is all about spreading poverty and dependency on the Government—so much so that a family on $100,000 will find itself receiving an in-work benefit. How demeaning is that? People are sitting there on 39c in the dollar, on $100,000 a year, and they have to apply to Michael Cullen for an in-work benefit, so they, too, become beneficiaries. That is what this Government wants. It wants to spread dependence rather than independence.

Today we heard the Prime Minister talk about taking the top rate of tax and the company rate down to 20c. She also talked about who would get what as though that is the reason why we take that top rate down. We take the top rate of tax and the company rate of tax down to benefit every New Zealander.

Hon Judith Tizard: Ha, ha!

RODNEY HIDE: I know that the Minister with responsibility for Auckland Issues, who pretends to represent Auckland, thinks it is a joke that the people of Auckland are taxed hard.

If we take the top rate down from 39c to 20c and the company rate down from 33c to 20c, what would happen? The profitability of every business in New Zealand would be increased by 20 percent. Instead of keeping just 67c in the dollar profit, they would get to keep 80c in the dollar. What would that mean? It would mean more investment, more entrepreneurship, more business activity, more businesses, and more jobs—not just for a few selected businesses that the Government has put on welfare, but every business in New Zealand as of right.

In this Budget we could have dropped the top rate of income tax to 20c, and taken the company rate of tax to 20c. Michael Cullen showed that it could be done. If New Zealanders vote for the ACT party, it will be done. That I promise.

Ā, kia ora Mr Speaker. E tū ahau ki te mihi nui ki a tātou o ngā tāngata kei runga i tēnei Whare Pāremata; nō reira tēnā koutou, ā, tēnā koutou, tēnā koutou katoa.

[Thank you, Mr Speaker. I stand to extend a huge greeting to us all in this House of Parliament; so greetings to you, greetings to you, and greetings to us all.]

Firstly, I want to acknowledge my caucus colleagues. I came in with the school of 2002. In my maiden speech I made reference to the fact that one of the main reasons for my coming into this House was to try to give effect to substantial change to support the family. The reason why I would like to acknowledge my caucus colleagues is that I know they did a lot of hard work in formulating the right policy so that I was able to enjoy with them the release of this Budget. It is my view that this Budget is good for families and good for the economy, and, therefore, it must be good for New Zealand. I take the opportunity to thank my caucus colleagues for their hard work.

The Budget is a balance between social and economic investments, and, most important, a balance that delivers enhanced strands of supportive gains affecting our families today. I see the Budget in two parts. It addresses issues in relation to what is affecting families today. When the Budget is fully in place it will deliver an average increase of around $100 a week in direct income assistance to those families in the $25,000 to $45,000 band. That will certainly help a young family in my rohe that has eight children under the age of 16 years. An average of $100 a week to such a family adds a real difference of opportunity. Whether those extra dollars be used for health or education, the run-on effect of them on that whānau is a brand that clearly separates Labour from National. Labour nurtures and cares for parents and children, and the Budget focus is targeted to ensure that it helps low and middle income families.

It does that by lifting family support and family tax credits, by changing abatement levels for family income assistance, and by replacing the child tax credit with a large in-work payment for working families. It is a Budget that provides fairness and security for low to middle income New Zealand families. That is where two-thirds of this Budget is targeted. It is a Budget for getting New Zealanders into work, and making work pay. It is a Budget that Labour has been striving towards, and has now achieved. Basically, it is giving more back to families for support.

The Working for Families package in the Budget beats tax cuts any day. The Government’s $2.75 billion Working for Families package boosts the incomes of working families more than any tax cuts package ever could. Slashing taxes would benefit single people and couples without children on high incomes, and would make no real difference to the weekly earnings of low and middle income working families. A two-parent, single-income family with four children earning $55,000 will gain an extra $150 per week from the Working for Families package. Tax rates would have to reduce to a flat rate of 9.5c in the dollar to boost that family’s income by the same level.

The Budget reduces barriers to work. It ensures that people are better off working, and it ensures that families are able to give their children the best start in life. The majority of the expenditure will be on families who are in work, because the purpose of the package is to alter the factors that make it hard for low-income New Zealand families to remain attached to the world of work.

I had an opportunity to visit a couple of early childhood education providers in Clevedon and Karaka over the last week or so. The Budget makes significant improvements to early childhood education by investing another $365 million over 4 years. Both providers were experiencing full roll numbers and those roll numbers were growing. One in particular had a focus on special needs, and I understand that 50 percent of its roll represented special-needs children. They both welcomed the new initiatives from the Budget: the move to 20 hours per week of free early childhood education, inflating to 30 hours per week, coupled with specific teacher-training programmes to ensure that the delivery of quality learning is achieved. Also, kura kaupapa will benefit from a $347 million increase in funding for facility upgrades in schools.

That raises the question of what is in the Budget for Māori. In akoranga mahi, which is the workforce, Māori unemployment is at 4.3 percent, an all-time low, down from 17 percent. That has been achieved partly through specific industry training. We are looking at the future of our economy. The 15,000 Māori involved in industry training represent 17 percent of all industry trainees. Another 800 Māori are in the Modern Apprenticeships programme—14 percent of all apprentices.

Māori participation in tertiary education has almost doubled since 1999. In mātauranga, which is education, the Government is injecting a further $2 billion over 4 years. Kura kaupapa will receive a $347 million increase in funding for facility upgrades. The sum of $4 million will go towards strengthening the use of te reo in whānau and the community. The proportion of Māori participating in tertiary education has grown rapidly over the last 5 years. Māori exceed the proportion of the non-Māori population in tertiary education—that is, 14 percent of Māori compared with 10 percent of non-Māori. So Māori are not failing in tertiary education; they are participating in greater numbers, and they are doing a lot better than ever before. On 1 July last year there were 60,000 Māori studying towards formal tertiary qualifications. Māori made up 20 percent of all formal tertiary students, and about 43 percent of Māori students were enrolled in a mainstream university or polytech, and about 42 percent at wānanga, which, obviously, are Māori universities. Also, there were 13 percent at private training establishments. There were 15,000 Māori studying towards degrees. I think that is healthy, I think that is a good investment in our future, and I think that is the best possible way one can use a Budget to inject help in those areas.

In hauora, or health, there is the primary health care package, which is really about patients not profit. It is already making health care more accessible and affordable. Over 33,000 Māori are already enrolled in primary health organisations, and that means that primary health care is more affordable. It also brings prescription fees down to $3, which is a lot cheaper. We launched the He Korowai Oranga: Māori Health Strategy, which has developed a permanent annual plan - provided development fund of $10 million to expand services for Māori by Māori. That is part of the Government’s commitment to Māori health providers. There are more opportunities for Māori health providers, given the increase in funding for the health sector. The Māori health strategy along with the Māori health action plan, Whakatātaka, provide long-term frameworks for improvements in the delivery of health services to Māori.

In finishing, I would like to revisit my earlier comments: I extend my sincerest thanks to my caucus colleagues for giving me the opportunity to share with them in the presentation of this Budget, which will have positive effects on family and whānau. Kia ora tātou.

That speech from that Labour member follows on from others, and it sounded so much like the suicide note of a Government whose time has come. It is over, the Budget is a fizzer, and those members’ days on the Treasury benches are numbered. The reason the public have responded so cynically to this financial plan is that it is a cynical exercise in political vote-buying.

Let us reflect on the last 5 years and what this Government has done. Those members came to Government in 1999 and set about taxing ordinary New Zealand families more than ever before, despite their inheriting a strong economy from the previous National Government. They put up income tax, and they put up excise tax on booze, on smokes, and on gas. If it moved this Government taxed it. An extra $4,000 has been taken in taxes from the average New Zealand family, and now those members think people are stupid enough to feel grateful that they will be given back a few bob. But there is a comeuppance. The Government will not give them the refund before the next election. Those members have delayed all these family support payments, which they so proudly boast of, until further on. It is a patronising attitude: “Eat your vegetables and you might get a dessert. Eat your vegetables, be good kiddies, and you might get a dessert.” Well, the public are not fooled. They know they are being treated like mushrooms—fed muck and kept in the dark.

What is more, I really want to ask members opposite whether they truly believe in the rhetoric we have heard this afternoon. Somehow we are to believe that for the tax department to go out and collect $2.75 billion from working New Zealanders, then for the welfare department suddenly to hand it back out again, is sensible economics. It is voodoo economics. It is nuts. What members on this side of the House have quite consistently been saying is that rather than having all these families, 60 percent of New Zealand families, dependent on a benefit, it would be far better to simply let them keep more of their hard-earned income.

I particularly want to highlight the socialistic new regime we are going to have, which will affect so many families.

Darren Hughes: Another new word!

Hon Dr NICK SMITH: Mr Hughes laughs. I want him to explain this to me: why, under his Government, does a family that increases its income from $38,000 to $60,000—that is a lot of hard work, a lot of overtime, a lot of hard graft—deserve only less than 10 percent of it? Why does he believe that that family deserves only $2,000 for its hard work? Do the members opposite really believe that New Zealanders in that middle-income bracket will go out there and be as productive as possible, contribute as much as possible to the wealth of this country, when his Government will claw back so much? Is it not interesting how silent Mr Hughes has become?

At least, I have say he is better than Mr Maharey. Do members know what Mr Maharey said? When our finance spokesperson, John Key, pointed out that huge anomaly, Mr Maharey, the designer of this great system, said that that was an extraordinary circumstance. What was the extraordinary circumstance? It was a family with two children, living in Auckland, on an income between $38,000 and $60,000. What planet are members of the Government on when they think it is extraordinary to have two kids and earn between $38,000 and $60,000!

I will give another example for the young member opposite: if a family with three children earns between $38,000 and $70,000, this Government will take 93 percent of their extra earnings off them; for every extra dollar they go out and earn, this Government will claw back 93c. I say that is extraordinarily damaging to the New Zealand economy.

Hon Judith Tizard: The claw-back provision is there for them.

Hon Dr NICK SMITH: I tell Ms Tizard that it does not matter whether one earns $38,000 or $68,000, and it does not matter whether one earns $38,000 or $70,000 and has three children; they will all be paid the same. Does that not sound familiar? All those guys there studied old Karl Marx at university; they studied all that left-wing rhetoric about our all being equal. Well, that is what the Government has done with this system. It will destroy innovation, growth, and wealth creation like no other Budget that I have seen in my 14 years of Budgets in this Parliament.

Darren Hughes: Is National for the childcare package?

Hon Dr NICK SMITH: I tell that member that National is about giving families tax reductions. We say it is nonsense to collect money off families by putting their taxes up by $4,000, and then to pay them out another $4,000 in benefits. Further, I ask Mr Hughes this: has Labour told the public of New Zealand, in its $23 million propaganda campaign, that over half of the payout is just catch-up for inflation? Let us go back to 1999. There have been 4 years of inflation and huge housing cost increases. Has Labour lifted the accommodation supplement? No. Has it increased the income thresholds on tax to match inflation? No. Has it increased the tax deductibility for any of its huge range of reductions? No, it has not. If Labour were truly honest, rather than spending $23 million on a hoodwinking exercise on the taxpayers of New Zealand it would give that money back to the public.

Darren Hughes: It’s only $21 million.

Hon Dr NICK SMITH: Does that member really believe that spending $21 million on propaganda is better than spending it on special-needs kids, better than spending it on hip operations, and better than spending it on teachers and all those things that make a difference? No, he is more interested in saving his own butt than in delivering any sorts of services for the people of Otaki.

Hon Judith Tizard: What about the people of Nelson?

Hon Dr NICK SMITH: Do members know what the headline in tonight’s Nelson newspaper states? “Get your candles ready for power cuts”. We have great talk of the growth economy, we have the Government launching a new economic development agency, and the new technology information age means, for the people of Nelson, cold showers and candles. What sort of state have we got ourselves in when that is the scenario?

What has happened in terms of electricity in the top of the South Island is one of the issues that should have been dealt with in the Budget. This country faces an infrastructure crisis, whether it be roading in places such as Auckland, Tauranga, Nelson, and Christchurch, or whether it is electricity issues—[Interruption] That member, Judith Tizard, the “Minister Who Has Done Nothing for Auckland”, pops her head up. What we needed in this Budget was some real action on issues such as providing electricity to power the New Zealand economy, and there was nothing. What we needed was a genuine commitment to reform the Resource Management Act so that we can build some of the roads, build some of the power stations, fix some of the transmission problems, and get small business growing. But, again, the Government is silent.

Instead, we have its nonsense laws of political correctness. Under its labour laws, employers have to pay time and a half to people who call in sick on a State holiday—that is, we think so, but those members are not sure. I notice that Margaret Wilson, the Minister responsible for that mess, is in the House.

So this Budget seriously lets down the people of Nelson. It gives a few dribbles of money out into the future, if Labour comes back—and we know that that is not going to happen. We have no addressing of the real issues that are of concern to the people of Nelson, such as electricity, and dealing with our roading congestion, and those sorts of issues. This Budget is a fizzer. It is a flop. The Government thought it would get it out of its political woes. It will not, because it is a cynical, vote-buying exercise when what this country needed was a Budget that would deliver independence, not increased dependence; a Budget that would deliver real economic growth rather than more of the Jim Anderton style of corporate welfare. This Budget is a failure. Its policies will not last 18 months. May we soon have that election so that we can deal to the failed leadership of this Labour Government, and can deliver policies that provide for independence and provide for a growing New Zealand economy.

I first want to acknowledge the maiden speech of Mr Rodney Hide in his new role as leader of ACT and congratulate him. I was lulled, momentarily, by the calm dulcet tones of the new Mr Hide and began to wonder whether we now had a Dr Jekyll in our midst. However, I was reassured that the old Mr Hide was still with us when he got through the pleasantries—ever so briefly—and moved very quickly to what passed for the substance of his speech. His voice rose to its familiar falsetto screech, and we had a full-blown attack on the hard-working men and women of this country, and the fact that they should benefit at all from what is, I think, acknowledged by all working New Zealanders as a Budget that is there to help them.

At least Mr Hide has the virtue of consistency. He is representing the greedy, and he has never resiled from that fact for a moment. It is “they”, he assured us, who will always have a voice in this House while he is leader. I was also relieved to hear him linking his policies with those of the National agenda, because that was also a very clear indication that he considers that he should be influencing that party to ensure that they also remain consistent in voicing the concerns and interests of the greedy.

What he was saying, and what the member who preceded me confirmed, was that the agenda of the 1990s is alive and well. Anyone who does not believe that only has to look at the statements that are coming forward from what passes for the Opposition. There are no new ideas there. It is quite simple—it is all about tax cuts. It is all about taking away benefits. It is all about getting rid of public services. It is all about user-pays. There is nothing new at all in that agenda.

Which, of course, brings me to the purpose of this debate, and that is the Budget, because the Budget, in effect, is nothing new either. The Budget, in contrast, reflects the values of a Labour-Progressive Government. It is a Budget that consistently provides for predictable good management, both economically and socially, of this country. As the Minister of Finance said in his speech, he has a long-term vision for this country—not the short-term, greedy vision of those in the opposite benches, but one that takes a responsible position on matters of managing the economy by knowing that if one does not manage that well, then one cannot give the benefit to all those New Zealanders who work so hard to contribute to our society.

This Budget is a Labour Budget, and if anyone has any doubt of that, one only has to hear the attacks from the Opposition. This is a Budget that reflects the values of those who represent working people in this country. It is a Budget that clearly states that one cannot have fairness and opportunity in a society unless one provides for one basic thing. That is that everyone has full employment, and that that employment provides a decent income and conditions that then enable people not only to provide for their families, but also to be able to contribute fully to the community they are part of.

My colleagues on this side have gone through the various specific provisions in this Budget in great detail. They have emphasised how—in a very practical way, not in a high, rhetorical way—the Budget succeeds in addressing the very real needs of those in our community who struggle in seeking to provide for themselves and their families. It goes through quite clearly and puts the conditions that are necessary to get people into work.

One of those areas is something that has been part of the Labour Party agenda for many years, and that is ensuring that good quality childcare is available so that men and women can be assured that their children are well cared for if they wish to go back into the workforce. This policy in particular, being one of many that could be highlighted, demonstrates how the Labour-Progressive Government is attempting to lay down the conditions that in the long term will ensure that everyone can fully participate within our society. The early childhood education package is an investment of another $365 million over 4 years in the children of this country.

If we go through the various specific provisions in the Budget, it can be noted that it is focused on the next generation. It is an attempt to ensure that our children will have houses in which they can live without the fear of overcrowding and the diseases that result from that. They will have the security of knowing that they will be able to have a decent education at primary and secondary level, and at tertiary level in whatever form that might well take.

It was also a Budget that attempted, and I say succeeded, to address those real needs that people have but have been unable, through the hard work and efforts of themselves, to generate decent incomes and a decent life for their families. It is a Budget that also attempts to ensure, and I would argue succeeds, in providing for the social inclusion of every citizen in this country in contributing to our society.

It does that in ways that might not be obvious, but which will ensure that everyone has access to a health system that will address his or her needs. It is in that area in particular that many people are denied access to employment, because they have been unable in the past, through the policies of the 1990s that ran down our public health system, to get themselves into a healthy position to be able to return to work and contribute both economically and socially to the community.

It is a Budget that in its detail recognises the important work being done in so many areas, including in my own area of responsibility for treaty negotiations and the settlement of historical grievances. It is a Budget that sensibly recognises the need for resources to ensure that we can contribute to the pace of change taking place there.

The Opposition has made much of trying to say that little progress has been made on the settlement of historical grievances. Members opposite had a go at that. They thought it was all about money, that a sum should be put on it, that it should be divided up, that the claimants should then go away, and that is how grievances are settled. This Government has attempted to negotiate, in a proper way, to try to address both cultural and financial needs, in order to ensure that grievances are settled in a way that is genuinely full and final. This Budget addresses that. A new negotiating team will be formed, and there will be the resources we need to ensure that that happens.

The Budget also addressed what is extraordinarily important from the point of view of the values of Labour, and that is recognising that we cannot have a healthy community unless we have healthy and productive workplaces. Those provisions in the legislation—through acknowledgment of the working group on productivity—were overlooked by just about everyone. But one of those measures in the Budget ensures that we are thinking of the future and laying down the conditions that will produce real results, and not what members of the Opposition are saying in their rhetoric.

One of the Opposition members mentioned that this Budget was “a fizzer”. Well, it probably was a fizzer for the people that member represents. It was a fizzer for those who have only their own interests at heart and not those of the community. For those who want to make a future for this country and to be part of that future, this is the Budget that leads the way.

The ASSISTANT SPEAKER (H V Ross Robertson): Before I call the next speaker, I understand that United Future members have agreed to share their time. They will have 5 minutes each, and I shall ring the bell at 4 minutes, giving members 1 minute’s notice.

Today I want to address some of the elements in the Budget relating to education—in particular, the areas associated with tertiary students and the debt that that forms in the minds and in the back pockets and bank accounts of many students in this country today. We have to ask whether we are producing, through the Budget, a millstone for people or a milestone for their education.

I want to start by congratulating the Hon Steve Maharey on lifting parental income levels for students to obtain allowances from the 1992 levels they have been at all these years. The level has now been lifted from the 1992 level to be equal to the adjusted consumer price index for this year, 2004. It is a level that United Future has been suggesting, speaking about, and asking questions in this House. I thank the Government for ensuring that this milestone event can be, and is, extended to students throughout the tertiary sector.

However, we do not believe that this was an adequate response to the needs of all the students in this country. Weights still remain that students have to carry, and they will create millstones around their necks. In United Future we do not think for a moment that our brightest should be struck down with loads of debt that they cannot take into their lives and their families of the future. United Future continues to challenge the Hon Steve Maharey to move students more to a place where the brightest have the greatest freedom to express and contribute to our society.

United Future says that students should not be treated worse than, for instance, those on the dole. If the Minister thinks about it age for age, people on the dole over 18 years of age can have their income assessed, not their parents’ income assessed, for the level of the dole they receive. Therefore, if they earn nothing, they then have the full benefit of a dole payment. However, students have to wait until they are at least 25 years of age before being able to be assessed on their own income. Up until then, students are assessed on their parents’ income, which sends the wrong message to our young people.

I ask the Hon Steve Maharey what sort of message is he trying to communicate to our young up and coming and brightest. We are asking them to go into debt to achieve something for their future, when others, who are not doing anything at all, are being looked after by the State. I do not sense, and neither does United Future, that this is a just matter that has been laid before the student body of New Zealand.

Secondly, I think that Mr Maharey needs to look at some of the discrimination that has been set out against married students. I do not think that New Zealanders—mums and dads—can handle the logic of what the Minister is saying here. These married students, who are being discriminated against, are once again becoming dependent on their parents’ income when they are capable of earning their own income. They should be assessed on their income for any support. United Future urges the Government to unshackle our brightest students, so that our families can look forward to a genuine future.

Before I get on to some of the broader themes, I would like to address the law and order aspects of the Budget. I am quite pleased with some of those, but less pleased with others. Certainly, the $1.5 million that is directed towards Victim Support groups is an absolute plus. In fact, more money could have gone into Victim Support, because the amount of money being directed there is fairly paltry. I certainly hope that some strings are attached, because the last thing we want to see is money being tied up in bureaucracy when it should be going to the victims of crime, of whom there is an increasing number in this country. Many aspects of the victims’ rights legislation have yet to be implemented, and I hope that this money will deliver some of the promise of that legislation. Similarly, the $4.4 million that is allocated to restorative justice programmes will be of some benefit, because restorative justice programmes, although they are still pretty much in their infancy and have had scattered success around the country, do show great promise further down the track. Again, I would like to think that the money will go towards ensuring that the programmes stay viable and true, rather than becoming overladen with bureaucracy, as is the wont in terms of most Government interventions.

If we look at where the other money is to be spent, we see $180 million over 3 years is to be put towards the construction of four new prisons. Obviously, that has to be good news, because we are running out of space in our prisons. As a lot of people still have to come before the courts, no doubt the system will become overloaded. The last thing we want to happen is for inmates to be let out earlier than necessary, simply because we are running out of prison beds. I question whether the capacity of the four prisons will be enough, particularly if we really want to put some meaning back into meaningful sentencing.

One of the things I am concerned about is the $30 million increase in the 2004-05 Budget, rising to $40 million in the year after that, for staff training, property maintenance, and prison health services. I suspect that a lot of that money will go into staff training. Part of the reason may be that the Department of Corrections is to take back the management of Auckland Central Remand Prison, and I am sure that that will boost the costs quite dramatically. Why the Government has decided to get rid of the private management of that prison and the savings it delivered to taxpayers—some of whom happen to be the very victims of crime, who now have to pay twice—escapes me. However, I understand that it is an ideological matter, and I hope that the situation will change when, and if, the next Government comes into being. I believe that the issue will become one of United Future’s planks.

The Budget provides the sum of $73.4 million to tackle court delays—and it is no wonder it does so, because 35,000 people are waiting for their day in court. What sense of justice is there for the victims represented by that number? It makes no sense to me that we are looking at infrastructure, when we have the facilities. Why do we not open up the courts at night and have judge-only night courts, to get the proceedings through in a much more timely fashion? Money is also provided to address domestic violence, and nobody can disagree with that.

I will refer now to some of the broader themes. Nobody can deny that the Government possibly had its heart in the right place, in the sense of what it is delivering to middle New Zealand in the Budget. But the mechanism has been utterly wrong. What I sense here is that if work does not pay—because we are seeing a dislocation from what people are earning from work, when they are then having money redistributed back to them via the Government—then maybe crime does pay. We will need more prisons, because work simply will not pay. It is the Government, I suspect, that is being greedy. It is being greedy because it is taking the wealth off the people who created it. How on earth can this Government be arrogant enough to assume that the people who created the wealth ought not to keep it? It is their labours that put the wealth together. This Government, which arrogantly says that those people are being greedy, needs to look at itself. For example, it wants $21 million to sell this Budget to the public, and that is nothing more than a vote-grabbing exercise. The Government is being greedy, not the people who created the wealth.

I have listened to Budgets being delivered over many years. I first became interested in politics as my grandfather and his mates sat around an old valve radio, listening to Budgets being delivered and wondering whether they had hedged enough alcohol and tobacco before the various Ministers of Finance put up their price. It used to strike me as being extraordinary how, when the excise duty on alcohol and tobacco increased, my grandfather and his mates would smoke and drink all night and think they had been so fabulous in cheating the tax people out of their revenue. I thought that what they did was to their loss, and that they should have saved the alcohol and tobacco to drink and smoke at a more leisurely rate. However, that is the contradiction some people show in their approach to Budgets.

I have listened to Budgets since I was about 7 or 8 years old. Many of them have been National Budgets, and many were Labour Budgets. I recall the “mother of all Budgets”—and was it hyped up! In all the years that I have listened to Budgets, that was the worst Budget I have ever heard. The then National Government decided it would take an axe, a chainsaw, or any other destructive piece of machinery it could to the fabric of New Zealand families in this country. It chopped into benefits, and, to my amazement as I went around Hastings campaigning for the first time to get elected in 1993, one of the shop owners said to me he did not believe he would ever say this to a budding politician, let alone to a Labour politician, but he thought that the benefit cuts were wrong. He said that the closure of the Whakatū, and subsequently of the Tōmoana, freezing works did less damage to his till takings than the benefit cuts. He said he did not think he had had anything to do with beneficiaries in his shop, but the benefit cuts implemented by the then National Government did more damage to his business than he would have believed possible. But that was not the end of it. The National Party then decided it would chop into families’ support even more, by introducing commercial rents for State house tenants. I had queues of people coming to see me in my electorate office, devastated at the damage that that did to their family income. That Budget would have to be the worst Budget I ever heard being delivered.

This Budget would be the best Budget I have ever heard being delivered. It is at the absolute opposite end of the spectrum from “the mother of all Budgets”. Michael Cullen has set out a plan in this Budget to do more to help families in this country than I have ever heard in any other Budget in my lifetime. In my opinion, this Budget is the complete opposite of the “mother of all Budgets”, which was oversold and in some ways under-delivered. In constrast, this Budget has been undersold and over-delivered. It will do much more for families than I can ever recall other Budgets doing in my life. It has at its heart the very words that are essentially Labour’s: it is about hope, opportunity, security, fairness, and families. All of us attend family functions, whether they are barbeques, Christmas functions, or whatever else they may be. The members of the National Party on the Opposition side of the House seem to think that families are households, because after the Budget was delivered they said that it affected so many families, which they measured by household. It is a typical Tory attitude to say that a household equals a family; that is how small-minded they are. But on the Government side of the House, we are all-embracing. We know that families are not just about households. Families include grandparents, great-grandparents, uncles, aunts, sisters, mothers-in-law, brothers-in law, cousins, nephews, second cousins, and third cousins, and when they get together at Christmas and have barbeques they all gather together.

When we have those family occasions, we recognise that the people who are the most harassed and hard done by are the families with kids, not just because they have kids but because they are under pressure financially. Those are the people who are starting out in their lives, and trying to get together a house and the household goods they need. There are kids, and mum may be working some hours and dad some hours, but they are under pressure in every way. We all try to help those in our extended families who have young children. We help them with a load of wood here, something else there, and so on, because they are struggling to make ends meet. We all know it to be a fact that if ever there is a deserving group in our community that needs to be looked after, it is low and middle income families. Those are the people who have the responsibility of bringing up the next generation. Those are the people, the next generation and their grandkids, who will look after us as we get older—when we are in rest homes, if we ever get there. Those people are bringing up the generation of the future, and we as a society should be doing our utmost to make sure that the people who are to look after the next generation have the wherewithal to give it the best possible opportunities. That is obviously what we have to be doing.

I find it extraordinary that the National and ACT parties can come along here to the House and say that we should give taxation cuts across the board, knowing that the bulk of that money would go to high-income earners, and that the struggling families at the bottom would get next to nothing out of it. Why would they want to do that? It is obvious. That is what makes the Government side of the House Labour, and the Opposition side of the House Tory. We look after families in this country, and we have done, in my view, an outstanding job of that. I do not have to go through all the figures again—Michael Cullen has done them—but if there is one thing that is at the heart of this Budget it is looking after families and the kids who will be our future. If we did not give families the resources to look after their kids, we would not be looking after our future. We have done that.

But we have done much more than that. I will speak about an area that I have been fortunate enough to have some responsibility for, as the Associate Minister for Social Development and Employment working with Steve Maharey, who, I think, has done a fantastic job on this Budget’s development and policy. I have been fortunate to be working with Steve Maharey and the Ministry of Social Development in terms of Work and Income. One of the great things that we have done is to reduce the level of unemployment in this country. When we went through the 1990s—the nasty nineties—under the then National Government, unemployment was skyrocketing out of control. Parents everywhere were desperate about what their kids would do when they left school. They had to go on to tertiary education whether they liked it or not, because that was the only opportunity they had—or they went and registered for the dole. Young people were on the dole, and they sat there and did nothing.

Hon Judith Tizard: Apprenticeships.

Hon RICK BARKER: There used to be apprenticeships, but that National Government and the dead hand of Bill Birch smashed the apprenticeship system, so that there were no apprenticeships. We all said that that would create a skills shortage in this country in the future, but those National Party MPs had their ears painted on and could not hear good advice. They still do not hear good advice.

Darren Hughes: Not much has changed.

Hon RICK BARKER: The member is exactly right. What we have done in Work and Income and Ministry of Social Development policy have been fantastic. We have cut the number of people on the unemployment benefit by half. It is extraordinary that we were looking at a figure—depending on how it was counted—of approximately 150,000. We are now down to fewer than 70,000 people on the unemployment benefit, and that is in just 5 short years.

We have reduced unemployment in a number of ways. We have introduced training for young people—the apprenticeship is back; we have over 7,000 people in apprenticeships. We have much, much more going into occupational training, and we are putting more resources into helping people to get into employment. The previous regime used to have people turn up to Work and Income and describe their barriers to employment. They would describe what their barriers to employment were—they had tatts, they had fallen out of school, or they had this or that. If they were not depressed before they started, they certainly were depressed when they finished the process. Labour has turned that around, by asking what we can do to help people to get into employment, and has put the support processes in there. As a consequence, we have the lowest rate of unemployment in 18 years. That is giving people hope and opportunity. It is giving hope to young people that when they leave school, they have the prospect of getting a job. I am proud to say that the proportion of young people who are on the unemployment benefit today has dropped significantly. Not only has it dropped in absolute numbers, but whereas it used to be that a third of the people on the dole were young people, that figure is now less than a quarter. We have made great gains in that area. We have helped in the areas of housing and education—we have kept tertiary education costs down, and we have improved people’s access to the student allowance.

This Budget goes on from that, and in all sorts of ways it helps families and people to have hope for and opportunity in the future. This Budget is so complex and diverse in its areas that people are still getting to grips with it—even the Opposition spokesperson John Key still has not got his head around how complex this Budget is. He is still asking questions in the House, because he does not know the exact extent to which this Budget will influence the future of this country. This is a fantastic Labour Budget. It is aimed exactly at where the money needs to go—to young families who are starting out, and who are looking after tomorrow’s generation. I am very proud to be a Labour member of Parliament as we pass this Budget. I think as we look back on it, we will see that this will be one of the finest Budgets this country has passed in a century.

I will refer to the Economic and Fiscal Update and its predictions for the state of the economy in the future, because some very worrying assumptions underlie the economic forecasts that suggest the whole Budget edifice is seriously flawed. I wish that were not so. There are a number of things in this Budget that we support, particularly the assistance to low-income families, but these assumptions are enough to ensure that the whole economic and fiscal outlook becomes a house of cards.

Last October the Ministry of Economic Development published its energy outlook. It said that the expected oil price for the year 2004 was US$20 a barrel, rising to US$25 a barrel by 2020. Its high forecast—unlikely, but at the high end—was for US$25 a barrel this year, rising to US$30 a barrel by 2020. Within a month of that publication the actual oil price in US dollars was around US$30 a barrel. Page 44 of the Economic and Fiscal Update records that within a very short time that forecast was revised and the new assumption, which underlies all the figures and predictions in this Budget, was for US$32 a barrel until after the middle of this year.

There are a few red faces, I think, behind page 44 of the Economic and Fiscal Update, where it is recorded that by the time the Budget went to press, world oil prices were US$37 a barrel. I note that the day it was presented in Parliament prices had reached US$40. The real doozy is still to come, because page 44 also assumes that oil prices will fall in the latter part of this year to US$19 a barrel, and that this is the long-run equilibrium price that this forecast assumes will underlie our economy for some years to come. I wonder how many people really believe that?

There is a certain discussion of causes: the low United States inventory as that country goes into summer, and supply concerns in the Middle East. The effects that they record are an increase, perhaps, in domestic inflation, but there is no recognition at all that world oil production is getting close to its peak, and that it will then start to decline, and that US$19 a barrel for any length of time is simply not credible.

There is still debate about when that peak will occur. Shell International puts it out after 2020, but that company has also been caught lying about its reserves to its shareholders. It had to take a big drop in its share price when the shareholders found out they had been lied to, so I wonder whether we should really believe its predictions. We know that for some years now oil discoveries have been running at about one to two barrels discovered for every four burned in the same period of time. One does not need to be a mathematical genius to know what that does to the total size of the reserves.

I wonder whether Treasury and the Ministry of Economic Development have ever looked at, for example, the work done by the Association for the Study of Peak Oil and Gas, and Colin Campbell—a very reputable oil geologist and engineer who has spent a lifetime studying the way oilfields behave. He believes that the peak will be within the next 5 to 10 years, and that the decline after that will be fairly steep.

But even if Shell International, the International Energy Agency, and the US Government—which have strong vested interests in persuading everybody that there is nothing to worry about—are right, there is still no time to waste. Where are the Budget measures to provide a smooth transition to a future based on renewables, and where energy is used much more efficiently? Instead there is a silence, almost a conspiracy of denial that this is even happening. Instead we have tax and royalty concessions for oil and gas exploration costing $100 million, and we have a $15 million handout to provide free geotechnical information for oil and gas drillers.

I have to say that it would be handy if we discovered a bit more gas around New Zealand, particularly if it were onshore and therefore did not have to be used flat out in the way that the Māui gasfield was used to pay for the costs, which drives up wasteful consumption. But Shell withdrew from exploration, because for 2 years it had drilled nothing but dry holes. How long should the New Zealand taxpayer continue to subsidise dry holes in oil and gas drilling, and could we spend that money rather better? We know that peak oil means that new oil and gas will be harder and more expensive to find, and will be more costly in terms of energy to extract, than they used to be.

So those handouts—$100 million in forgone tax and royalties, and $15 million in data production—far outstrip any assistance this Government has ever given to renewable energy, which we know will not run out and which will be available in the long term. There has been some help through carbon credits, and I applaud the Minister for that. It was a good move, but it is tiny compared with what is being given to a dying industry that we know cannot be sustained in the long-term.

What we did not see was any serious expenditure in the Budget to hasten the transition to clean, secure energy. If people want to build wind farms, they have to pay for the meteorological data they need about the wind conditions on the various sites they are considering. Nobody gives them a $15 million handout of information about wind conditions in New Zealand. There is quite a lot of information in the public domain, but it is scattered all over the place amongst different institutions and is hard to access. One little thing that could so easily have been done would be to collect it all together in a single website to encourage those who want to build wind turbines for the future. But we have not seen that done.

A lot more could be done about a similar collection of data on the arisings of wood waste from the forestry industry, which are available as an energy source for co-generation in industry, for example. A lot more could be done to research the best ways of using it, and to try to put potential users together with the sources of that fuel. Professor Ralph Sims at Massey University, whose whole field of study is biomass energy, has calculated that the wall of wood coming towards us contains within it a waste-stream with an energy content equal to half a Māui gas field. Is that not worth capturing for energy, and what is the Government doing about it? But we have seen no steps towards those alternatives, and the amount of money they would take is absolutely tiny compared with what has just been done for the oil and gas industries.

We would have liked to see a substantial beefing up of funding for the Energy Efficiency and Conservation Authority. After all, if 20 to 30 percent of our electricity is still wasted because it would actually be cheaper to save it with better technology than to pay for it or build the power stations to generate it, is that not a much more useful well to drill than the dry ones we are drilling out in the sea at the moment? We know that that energy is there to find, we know what it costs, and we just have to go after it.

Would it not have been worth doing something to build capacity in the solar industry? More than 20,000 new houses are built each year, and hardly any of them are designed to make use of passive solar energy to heat themselves. It costs almost nothing, unlike solar water heating that costs quite a bit. We just have to get it right when we design and build houses, but we are doing almost nothing on that level either.

We are still building houses that will be there in 80 years’ time, which will cost an enormous amount to heat because they do not have windows on the north and do not have adequate insulation or adequate thermal mass. They are simply not built to solar principles at all. We could have been building capacity in the solar water heating industry by letting Government contracts in order to build up the scale of production and insulation and train the necessary people. The cost of the units would then come down, and the private sector would install them as well.

There are a whole lot of things we could be doing right now to plan for the end of the oil age—which will gradually happen over the next few decades—for us to be ready for it, for us to have an economy that will work. Instead, we just assume “$19 a barrel”.

I am delighted to have gained the call. It seems a considerable amount of time since I was able to give a speech in the Chamber, and, while I am on that subject, can I say that during my recent health problems I received many best wishes from members around Parliament, and I would like to take the opportunity to thank those members for expressing those good wishes. They assisted in my speedy recovery, and, indeed, I could be considered dangerous right now—certainly, dangerous in the sense that we are debating the 2004 Budget.

Quite clearly, it is good to be a Labour member of Parliament these days, when a Budget like that is delivered. Once again, Dr Michael Cullen, the Minister of Finance, has been consistent in showing the steady hands on the tiller approach that he has had since the Labour-led Government came into power in 1999. Furthermore, with this 2004 Budget we have delivered most generously to those who are most in need in this country. The Wairarapa electorate is one of the beneficiaries of the Budget, and I would like to run through one or two points that illustrate where this Budget has assisted people in my particular electorate.

The march towards a more skilled workforce is taking major strides, with figures showing that over 2,200 workers were in on-the-job training in Wairarapa last year. The forestry industry had 520 trainees, the agriculture industry had 436, and the hospitality industry had 106. Nationwide, of course, industry training numbers grew by almost 20,000, or 19 percent, to reach a record high of 126,870 trainees. In the Carterton, South Wairarapa, Tararua, and Masterton District Council areas, a total of 2,279 workers participated in industry training last year. It was not that long ago when we in the Wairarapa—certainly, in my memory—were screaming about some of the highest regional unemployment rates in the country.

There has been comment about that dreadful Budget of 1991, which has come to be known as the “mother of all Budgets”, and I certainly concur with the comments of those fellow members who have referred to that Budget. It wrought devastation in areas of provincial New Zealand such as the Wairarapa. It is quite true that some of the small towns, such as Carterton, Greytown, and Featherston, had a rude awakening. Many of the small-business owners—particularly, owners of dairies and those kinds of places that provide everyday goods for families in those areas—were shocked to find out that the income they received from customers on benefits was to be severely reduced.

This Government, since it came to power in 1999, has made it a policy to get people into work. If they cannot get into work and need skills, then we will get them into training, in order that they have the right skills to meet the job requirements that are out there. I am pleased and proud, as a member of a Labour-led Government, that in my area we are looking for more workers now. Our unemployment rates have plummeted. As of 19 March, the number of people on unemployment benefits in the Wairarapa and Tararua districts had plummeted to 892 from 1,988 in March 1999. That is a significant gain in terms of people going into work, in an area like the Wairarapa.

We do have difficulties—I like to think of them as positive problems—whereby businesses and enterprises cannot get enough of the workforce they require. That offers opportunities, absolutely, to those people who find work difficult to get, in areas like the Wairarapa. There are opportunities, and if people do not quite have the skills to match the jobs, whether in the forestry or agriculture sectors, or in some of the light industrial, manufacturing industries, then we have a way, with this Government’s training incentives, to fill some of those gaps that need to be filled.

There is a lot of work to do. A Labour-led Government over the next triennium, after this particular Parliament is finished, is essential because the good news in this Budget rolls out over a number of years to come. That is consistent with the roll-out that this Government has introduced since 1999 in a vast range of areas: industry, education, health—you name them. This Government has made a very strong effort, including in the business and industrial sectors. We have been assisting not only locally but, certainly, in the international arena to help maximise and to capitalise on the good image and value that New Zealand offers in a global market. I believe that this Government has been fair in its balance between those who are most in need in this country, and those who are in most need of assistance to help grow this country even more. It is a positive commitment that this Government has been giving.

More than 250 pupils at four Wairarapa electorate primary schools were part of a further chapter in the Government’s commitment to lift literacy standards. Wallingford School, Weber School, Mangatainoka School, and Woodville School were among the first intake of 133 schools to take up a new, professional development programme for teachers that assists teachers to improve their pupils’ literacy skills.

I also have to mention the primary health organisations. They have cut the costs of medical prescriptions for young people. Instead of families paying around $15 per prescription, 6 to 17-year-olds enrolled with their local primary health organisation now pay only $3, as part of the Government’s push to make primary health care affordable for everyone. It is great to see the momentum of primary health organisation enrolment in the Wairarapa area, and the Government’s commitment to providing affordable, targeted health-care.

Part of the reason why the Tories of the 1990s lost the Wairarapa seat was that Government’s abysmal performance when it came to health. Members opposite may well criticise this Government as far as education reviews and the closure of schools are concerned, but I have to say the closure of hospitals in an area like the Wairarapa was absolutely devastating and did not help those members’ re-election chances in 1999 one little bit. Indeed, the member for Wairarapa who preceded me happened to be the Minister of Health at the time, and I think he well understood that the programme the National Government had rolled out regarding health, hospitals, etc. was turning into a dismal failure. It took a Labour-led Government to provide $27 million to Masterton Hospital not only to improve the services available there—including the two primary health organisations that have been established, one in the Tararua district and one down the Wairarapa-Masterton end of the area—but also to restore confidence and faith in a healthy health system for the Wairarapa. That was something the people of the Wairarapa, over the entire period of the 1990s, were in fear of never achieving.

A Labour-led Government, with Budgets such as this, has delivered to provincial areas of New Zealand such as the Wairarapa. Oh yes, we have much to be grateful for when it comes to extolling the virtues of this particular Budget, and there is no better example of how it scares off the Opposition members than their rantings and ravings as they rail against what has to be seen, historically, as one of the best Budgets this country has ever had. It is inclusive of many thousands of New Zealand working low and middle income families. It is inclusive of those who are involved in business, the generators of wealth in this country. Research and development and other such initiatives are benefiting from a Labour-led Government, with a Budget such as this. It is a good day to be a member of the Labour Party and the Labour-led Government, and I hope all New Zealanders will see this Budget for what it is. It is about uplifting our people and our country towards a greater, better, more prosperous nation for our future generations. If people are thinking about the future, I say it lies with Labour.

It is very interesting to listen to—well, it is not actually as interesting as all that to listen to—the Budget debate, but if one is a politician, it is interesting because we are a funny sort of people. It is unfortunate that most members in this House, be they on the National side or the Labour side, talk about the redistribution of the cake, and that concerns me. Many of the speeches we have heard today have been about that redistribution, people’s respective share of the cake, and that sort of thing, but I would like to congratulate those people who grow the cake. I would like to congratulate and speak about those people who earn overseas income that gives us our lifestyle and allows us to redistribute or otherwise—and those people are in agriculture, forestry, and fishing, in the main. There are lots of people who add to our exports, and I applaud them all, but I am responsible for agriculture, so it is those people whom I will speak on behalf of and to.

I am pleased to see that the Minister of Agriculture has made moves in the Budget to the tune of something like $46 million to strengthen our borders with regard to biosecurity incursions and the risks that we and our industries—our forests and farms—face on a daily basis from pests brought in through the importation of goods. I applaud the Government for that increase and for extending inspections, from some containers that come to this country, to 100 percent of containers coming in.

We can all question whether it will be done thoroughly, or whether the Government has the right systems in place to do it effectively, but the fact that it has moved to do that shows a commitment to our exporters and people in agriculture, which is to be applauded.

Likewise, I cannot let this chance go by without applauding the swift response to the concerns resulting from the floods in the lower North Island, and I know that the people there are grateful the Government understood their need and responded to it. There is still some concern, I add, that some of the infrastructure there, including some of the stopbanks and so on under the control of local bodies, is not being seen to so swiftly and the money is not coming through quite so quickly to the local bodies, but that is another matter.

There was a time in a previous administration when the areas of the producer boards were looked at and disbanded to a great degree. Out of that, 25 percent of our exports in particular, being our dairy exports, came under the banner of an entity known as Fonterra. It is interesting that many people at that time were sceptical about how well Fonterra would do. I am pleased to report to the House, and it should be public knowledge, that Fonterra is in fact doing very, very well under a cooperative model. It is not a complete cooperative, but it is a cooperative model that was roundly rubbished by the administration of the time and by the bureaucrats who were advising the special committee set up to look into the boards. I was a supporter of the cooperative system and the cooperative model, and I am pleased to see that it is by and large working. By the same token, I am pleased to see that some competition has come into the system, and so not all of it was bad.

It is also heartening to see in our country the move by Māori into agriculture and also to look after those lands that are in their care by way of corporations, which I think is a rather unique and particularly appropriate form of ownership for what used to be a problem regarding multiperson ownership of land. Unfortunately, that ownership had led to a lot of land not being fully utilised. The use of the corporation has made that a very different kettle of fish, and there is now a large involvement of Māori, especially in fishing.

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

R DOUG WOOLERTON: As I recall, I was praising the Government for some of the things it is doing in agriculture. While reflecting over the dinner period, I thought I had been praising the Government far too much, so I thought I would say a couple of things. I think we in the agricultural sector should remind the Government that not all of the money, and not all of the new money—as in the extra that has been put into the Budget—should be spent in Auckland. In spite of what many people think—and I know that the Minister is shuddering at the thought that I should even mention that it should not be spent in Auckland—it is a good thing to spend this money where it earns overseas income. It will, in the long run—and actually it will not be so long—benefit the people of Auckland, so it should not be spent all in Auckland. One thing farmers do not need is any nonsense like New Zealand joining up with the Kyoto Protocol, which we would do if it were not for Russia, God bless its soul—and I never thought I would say that. We should not be flirting with the Kyoto Protocol in this country when our emissions into the environment are 0.001 percent. I do not know how we even measure that amount of greenhouse gas. [Interruption] It is 0.02 percent of the world total, is it?

Hon Ken Shirley: The OECD total.

R DOUG WOOLERTON: Okay, but it is very low, and it is not a cost and impost that we should be inflicting on our farmers, foresters, or fisheries. The people who farm in this country and produce much of our export wealth are a resourceful lot. They are entrepreneurial and are good business people, and the last thing they need is costs and stupidity imposed upon them. I implore the Government to desist from any of those sorts of plans, and we will enjoy a long and prosperous future.

I am very pleased to contribute to this Budget debate. It is a debate that is important for New Zealand, because we are at a crossroads where investment in our people is very much needed. I am proud to be part of a Government that, with leadership under an outstanding Prime Minister, Helen Clark, and with the economic stewardship of Dr Michael Cullen, will, I believe, go down in history with a legacy comparable to that of Michael Joseph Savage’s first Labour Government.

Contrary to claims by the National Party about election bribes, we on this side of the House know that the commitment to social justice has been the plan of this Labour Government ever since it took office 4 years ago. This Budget comes on the back of the right moves to build an economy that is growing, and I really want to commend the stewardship of Dr Michael Cullen in that regard. Without proper planning and fiscal responsibility, we could not deliver the social justice that this Budget now represents. This social justice relates to those with the greatest needs within our communities. I am proud that I am from an area that is very positive about the package that this Budget offers to low and middle income families, and particularly to their children.

The issue of child poverty is not new. Research and studies have for many years identified one-third of New Zealand children as living and struggling in financial and economic hardship, and some of that research clearly shows that those children are living below what is termed the poverty line. Not only do they suffer as a result of the economic situation they are in, but their whole future, health, and education is affected by it. As a result, they become dependent on the State, and because of that educational failure, in many instances they end up unemployed. That is a waste of the potential of those children who are in that situation.

This is a proud moment because the Government can deliver targeted assistance that could never be achieved by tax cuts. It is targeted assistance in a way that achieves for those families and children with the greatest need. This Budget is a point in the history of New Zealand, and we are indeed delivering to and investing in that one-third of our children from low and middle income families for the future of this country. This Budget is good for families and good for the economy. It is a Budget for growth and opportunity. It is a Budget that has a heart and is fiscally responsible in terms of promoting economic growth.

I also commend Dr Cullen for dealing with a problem that a lot of Western countries face—the question of superannuation. We have just been focusing on some of the veterans who went to Europe for the El Casino and D-Day ceremonies, which commemorated the free world’s fight against the evil of Nazism. Those veterans deserve superannuation, as does the baby-boomer generation born after the war. As most members of the House know, the issue of superannuation is a common problem amongst Western countries, but the National Party has done nothing about the issue except talk about the problem. It does not have any solutions; it has no policies. I can say at least that Dr Cullen and this Government have worked out a solution to the problem that other countries are struggling with. The Government is looking to solve the problem by ensuring that we have enough money to sustain into the future a pension for older people who have retired.

The leader of the National Party—who can only talk about the problem—talks about putting up the age of eligibility, which would be a disaster for Pacific and Māori people, because their life expectancy does not go past 70 years of age. Unless National comes up with another solution to the problem, most Māori and Pacific people would never see a pension under National, because of the likelihood of Don Brash putting up the age of eligibility to 70 years of age for superannuation. The Māori and Pacific communities could kiss goodbye to any hope of a pension in the future.

There are other areas in relation to the strategy that has been put in place by this Working for Families package that promote people into employment. One of the key issues relates to affordable childcare, and the giving of a big enough subsidy for childcare so that women have the opportunity to move into the workforce. This Budget provides for extra improvements to childcare. The rates of subsidy will increase significantly, and many more families will be eligible for a subsidy. This package is designed to encourage and be an incentive for those families on benefits to move into employment. There is no question about that, and that incentive is important to encourage those who could contribute to our economy to move from benefits into employment.

One of the important parts of this Budget is early childhood education, and one of the things this Budget does is invest an extra $365 million into it over the next 4 years. I know that Māori and Pacific communities are concerned about the low level of participation by young Pacific Island children in pre-school, and this money will go a long way to encourage more early childhood education development for Pacific Island children. This adds to the already significant amounts of money that this Government has committed to early childhood education. We are looking at a total of about $750 million in that area. I believe that that is a very good investment to deal with the high educational failure rates amongst Pacific Island children.

This Budget relates to a decade of problems of hardship created by the legacy of the past National Government. We can talk about the sort of poverty generated by the 25 percent benefit cuts in the “mother of all Budgets”, which was delivered by Ruth Richardson, the Minister of Finance for the National Government at that time.

We can talk about market rents, which is one of the major factors that have contributed to the poverty in this country. There can be no argument about that—the research and facts are there. Under the Employment Contracts Act, low wage packets, and worse conditions for employment, resulted in low-paid employment and poverty for people in this country. That was the legacy of the National Party. When it comes to the election next year, people in communities should remember some of the policies of the former National Government, and know that this Government is now looking at measures in the Budget to deal with poverty, fairness in the workplace, and to ensure that workers have the right to negotiate improvement in their conditions of employment as well as their wages.

Funding of half a billion dollars over the next 4 years to strengthen economic performance is another responsible part of the Budget that will focus on investing in our economy. Spending on economic development in tourism, research, and trade promotion has increased by over 25 percent since this Government took office. The Budget will provide $212 million - plus over 4 years for science, research, and technology, bringing the total public investment to $621 million. That is also a 45 percent increase since Labour took office. That sort of investment will ensure that the economic growth that has been generated by this Government’s policies in the last 4 years will continue into the future.

Some people like to take the credit for some of the economic changes. A Labour Government was also part of those economic changes and restructuring that will ensure economic growth for this country. In particular, there has been a lot of talk about tax cuts. I tell members—and if they can do their sums, they will know—that there is no way that tax cuts could have delivered that sort of targeted assistance to people in our communities with the greatest needs. I invite members on the other side of the House to do their sums and to explain to the House how a Government could deliver targeted assistance to remove child poverty in our communities by way of tax cuts, and maintain a progressive tax system.

Mr Williamson may talk a lot, but I would like to hear how he would achieve, by way of tax cuts, the extra $150 to $170 being paid to middle income families to improve their standard of living. I invite him to do that when he has the opportunity.

That speech by the Labour member Taito Phillip Field was symptomatic of the problems the Labour Party now faces. The speech was completely without vision, was full of rhetoric and slogan, and had no substance or vision.

Dianne Yates: Where’s your vision?

Hon DAVID CARTER: I shall give that member a few thoughts on my vision shortly.

The 2004 Budget will go down as the biggest bribe that has been presented to this Parliament. Even the Government itself was not prepared to put its new provisions before a select committee so that the committee could examine the Government’s Working for Families package. Immediately after the presentation of the Budget the Minister of Finance slammed the House into urgency, and we spent the next 2 days debating measures that will not come into effect until 2007. That shows that the Government was not prepared to allow a select committee to scrutinise the package. But I think that New Zealanders are not fooled by the Budget, which clearly states: “Vote for Labour and Labour will deliver some money to you over the next 3 or 4 years.” I note that the member Miss Mackey is nodding her head in agreement with that. But if members follow what has happened in the polls since the presentation of the Budget, they will find that the voters of New Zealand are far sharper than the members sitting on that Government side of the fence. New Zealanders have already completely rejected this Budget as a cynical bribe to spend New Zealand taxpayers’ money.

It takes very little skill by a Minister of Finance to achieve record Budget surpluses if that very Minister of Finance is just going to continue to lump tax increase after tax increase on to New Zealanders. We have had 23 new tax increases since that Government came into power. I do not include the “fart tax” that the Labour Party, in embarrassment, had to back down on. The average household in New Zealand now pays $2,600 more in tax each year than it paid before the Labour Government came into power.

As the Government splashes that money around on its Working for Families scheme, I congratulate my colleague John Key on his excellent research. He compared two single-income families, each with two children. One family is earning $60,000 a year, and the other family $38,000. For the benefit of Chris Carter, because he is not good at maths, that means the first family has $22,000 more in gross income. But I ask Mr Carter what happens when tax is taken off the family earning $60,000 and benefits are added to the family earning $38,000? Surprise, surprise—the family earning $60,000 is a paltry $2,000 better off each year. What incentive is there for anybody to try to get out of the welfare trap and stop being dependent on a Government welfare system? It is just outrageous! I suspect that those Government members who are continuing to jab and interject did not even understand the effect of the Budget package when they voted for it before the adjournment.

I am pleased to say that the Budget has already been rejected by New Zealanders. Yet we found out in the House today that the Government is to spend $21 million of taxpayers’ money to try to sell this Budget to New Zealanders. That is totally unacceptable, but what worries me most, as Labour members go around the country using that $21 million of taxpayer money to sell the Budget, is whether they will be telling the truth about the Budget. I became concerned today when I looked back at press releases put out by the Hon Jim Sutton, the Minister of Agriculture—

Hon Chris Carter: An excellent Minister.

Hon DAVID CARTER: Well, he stated in his press release “In 2001 we”—meaning the Labour Party—“introduced a $200 instant fine for biosecurity breaches at airports—something previous Governments had been too scared to do.”

I tell Mr Carter that that is absolutely incorrect. That legislation was introduced by the National Party in 1999. It was not initiated until 2001, because the hapless Marian Hobbs, who was the Minister for Biosecurity at the time, forgot to apply for the Budget allocation and the legislation sat on the statute book unused because of her incompetence. Yet Jim Sutton had the audacity to suggest that a previous Government was too scared to move on that issue.

I now move to the next rather strange message delivered in the House today, again by the Hon Jim Sutton. A patsy question was asked by David Parker—

Hon Member: He’s gone.

Hon DAVID CARTER: Oh, the “previous” member for Otago—on what reports had been received analysing recent Budget allocations in biosecurity. The Minister of Agriculture replied that the rural media analysed the Budget extensively. Even the Rural News had commented that the Budget was good. Well, I went back to my office and got hold of copies of the Farmers Weekly and the Rural News. The front page of the Farmers Weekly states: “Bad for ag” and has a photograph of the Minister of Finance. It is slating the Government and stating that there is nothing in the Budget for agriculture. When we move on to page 4, we see: “Family Budget means little for agriculture”.

Dianne Yates: Where’s your vision?

Hon DAVID CARTER: I tell the member who wants some vision that the Farmers Weekly goes on further to state: “Peanuts for agriculture”. How can the Minister of Agriculture come into the House and for even a minute try to suggest that the rural papers have been kind to the Government and have given it a tick of approval?

Hon Maurice Williamson: What about the Rural News?

Hon DAVID CARTER: The only comment I can find in the Rural News that states something good about the Budget was written by one Hon Jim Sutton, the Minister of Agriculture. But I need to tell the House about the editorial.

Hon Maurice Williamson: Look at that! Great headline.

Hon DAVID CARTER: Oh, I had forgotten that one. It states: “Thanks for nothing, Cullen.” And I ask members about this headline for the editorial: “Why are we waiting?”. That editorial is all about the issue of public access, an issue Jim Sutton is sitting on. Huge reports were gathered last year. He promised to deliver a policy on public access to the House by 31 March, and farmers all around the country are waiting with bated breath for the silent Minister Sutton to come forward with his policy.

There was an opportunity for this Budget to be good for farming, because farmers are worried about the cost structure they operate under. We, as farmers in New Zealand, have to compete particularly with farmers in Australia, and farmers in Australia now have an easier and substantially lesser cost structure under which to operate. If the Government is to continue to pile tax after tax on to New Zealand farmers, then it will not see the growth rates we have seen over the last 4 years. I say that those growth rates have been because of agriculture. Agriculture has been kind to this Government, and there has been growth in the economy because farmers have done well.

But members of this Government, and particularly Mr Sutton as the Minister of Agriculture, threaten the very existence of the whole of the New Zealand economy unless they wake up and listen to the concerns of New Zealand farmers. Their concerns can be summarised to this extent: they are grossly overtaxed and the cost-compliance regime imposed by the Labour Government is far too oppressive.

I am extremely proud to stand up in this House tonight to support Budget 2004, which will deliver for families. The only bad thing about having to stand up in this House to deliver a Budget speech is to have to sit through another National Party speech. I think that National Party members believe that if they keep repeating their same spin lines over and over again the spin might miraculously become true, but it will not. The reality is that out in the community feedback for the Budget has been great. [Interruption] Maurice Williamson can squawk away over there like a chronically depressed budgie, but it does not change the fact that this is a Budget that delivers to families.

This is a Budget that also continues the strong fiscal management of this Labour-led Government. It is probably fair to say it is a Budget we would have liked to deliver in our first term, but we knew we could not. We knew we had to keep a firm hand on the rudder and make sure the money was there, because we would not help any low and middle income families if we were to try to deliver something that was not sustainable.

It is also very amusing to hear National members call this Budget a bribe. That is because they are probably not used to having popular policies that the community embraces. There is also a double standard. Somehow, their tax cuts for their wealthy mates are not a bribe but our delivery to low and middle income families is a bribe. That is a double standard and I thought that National members were spurning double standards—but obviously only when it suits them.

This is a true Labour Budget, and a Budget that most of us have probably waited about 14 years to see delivered in this House. It is a Budget that will go some way to undoing a lot of the damage that was done in the 1990s. What does the National Party offer? Simon Power over there can laugh, but the National Party has not offered any alternatives to this Budget that will deliver for low and middle income families. The previous speaker said he would outline his vision, but he did not. I will give him the benefit of the doubt and say that he just forgot to deliver his vision to us, but we have not heard a single piece of policy on what the National Party would do about this Budget and how it would deliver for those families.

What does the National Party want? It wants tax cuts. It is overwhelmingly obvious to the majority of people that tax cuts deliver money to the people who need it the least. That comes from a party that says it wants only needs-based policies. How are tax cuts a needs-based policy? To the family who was featured in the Sunday Star-Times, a tax cut would deliver $35 a week. How would that help those family members in their situation, when this package under this Government will deliver them five times as much? Of course, those of us sitting in this House would all do very well with tax cuts, but we do not need them. As someone who benefited from the public health system, the public school system, and the university system, I am quite happy to give back some of the money that I have earned.

When we go out to campaign we will remind people that if the National Party becomes the Government its promises are the same failed policies of the 1990s—the same policies that delivered to the rich and delivered nothing to middle and low income New Zealanders. The “mother of all Budgets” absolutely savaged those families who were on benefits at a time of high unemployment, and that is what people can look forward to again under the National Party. Its members very unashamedly sit here and tell us they would deliver the same policies again. They have not changed. In the election campaign National Party members may try to convince New Zealand voters that they are different. They may try to soften down some of their policies in order to get re-elected, but the fact is that the leopard does not change its spots, and Tories do not change their policies. A National Party Government would deliver exactly those same policies that saw it booted out of office in 1999.

I would like to focus on how this Budget delivers for young New Zealanders. One of the things that I am most proud of—and this is the vision of Steve Maharey—is working towards the goal of having all 15 to 19-year-olds in training or employment. Currently, we know that anywhere from 10 to 17 percent of those young New Zealanders—which could be up to 45,000 of them—are not enrolled in study or in any form of employment when they leave school. Budget 2004 has delivered for young New Zealanders, in this instance. In Budget 2004, there will be $57 million over 4 years for the new Youth Transitions Service.

Hon Maurice Williamson: Ha, ha!

MOANA MACKEY: Mr Williamson laughs because he does not really care about policies that he will not benefit from, but for young New Zealanders this service will make a big difference. The Youth Transitions Service, for young people when they leave school, will provide customised support and career planning, and work with local employers and training and education providers. Anyone who has come through school recently has had to go to university under a system that costs an awful lot of money. It probably was not such a big deal when people could go to a university that was almost completely paid for by the State—when they got a universal student allowance, and when they could afford to make mistakes and change courses part-way through their studies to study something else, if that was the case. Students do not have that luxury nowadays. University education is expensive, and when students go to university they deserve to be armed with the knowledge of where their strengths are, what their options are, and the best options open to them for tertiary training if that is the way they decide they will go. Alongside that transition service is a 2-year “designing careers” pilot, which will see all year 10 students preparing an individual learning and career plan, with assistance from their teachers.

We will also see the expansion of the Gateway programme, which is a programme that is working extremely well and which will be extended to all decile 6 schools by 2008. The Gateway programme is very important. It really stands alongside the extremely successful Modern Apprenticeships programme, which is not only plugging severe skill shortages that threaten to choke our economy but is also providing many young people with a career and career path they would not otherwise have had without that scheme. The Modern Apprenticeships scheme has been under huge demand, and by 2006 there will be 8,000 places on it. The Gateway programme has also been extremely successful. It is a programme where students can actually get on-the-job training while studying at high school, and while studying subjects that are relevant to those students’ future careers. I have been to see how that Gateway programme works at schools, and I have seen kids who probably would have dropped out if the programme had not been there. Not everyone will go on to university, and not everyone will be a lawyer or a doctor, or do a BA or a BSc. [Interruption] “Thank God!” says my colleague.

There are many students whose skills lie elsewhere. Up until very recently—up until the election of this Labour-led Government—those kids were being allowed to drop through the gaps or were being left to fend for themselves. With the Gateway programme, I have seen kids at high schools studying mechanics, hairdressing, and a range of different programmes that then lead on to full employment. They are kids who would probably have been perceived as being high-risk, and the school I visited was in an area that would be perceived as being high-risk. But those kids now have jobs, they now have a career plan, and they now have a future, thanks to the Gateway programme. I fully endorse the expansion of that programme. When young people are students and faced with a multitude of choices, it is sometimes hard to be able to make sense of it all, and the Youth Transitions Service package is a common-sense way of dealing with that.

I briefly want also to outline student support. To colleagues in United Future I say that I welcome their commitment to reducing costs to students, but I do not see how they can advocate tax cuts at the same time. The two simply do not go together. With regard to married students, I can say that when I was at school I knew that many of my friends who were flatmates got married so that they could get the allowance. I think if members are worried about the demeaning of marriage, then probably this issue is more important that some other topical issues of late. But in the area of student support, 36,000 more students will benefit from the expansion of the student allowances scheme than previously. Probably most important is the fact that parental thresholds will be indexed to inflation, so students will not miss out as their parents’ incomes increase over time. That is something that was seriously lacking in the 1990s.

In terms of student debt, I think it is very important to note again that the changes the Hon Steve Maharey has made in the student loans repayment system mean that for the first time student loans are coming down. I can vouch for that, personally. Unlike members opposite, I actually have a student loan, and my student loan is decreasing thanks to this Labour-led Government. Long may it reign.

I have had the pleasure of sitting in this House and hearing 17 Budgets, nine of them while we were in Government and eight of them while other parties were in Government. One of the things that members do when in Opposition is wait desperately while the finance Minister’s Budget speech is photocopied out in the lobbies and flicked around everyone. Then they race through it as quickly as they can to spot their portfolios and see what the Government is going to do in their areas. I have to say that in my portfolio of transport the one issue that is screaming out for action—indeed, more than screaming out—is roading, and, in particular, the problem that Auckland faces.

This is not a new problem. Even in the late 1990s it was becoming very clear, and the National Government initiated work to see what had to be done to get huge investment into Auckland’s infrastructure to try to solve the problem. Labour Party members, when in Opposition, made their position very clear: “We don’t want a bar of this privatisation of our roading. We don’t want the private sector. We don’t want tolls. We’ll solve it another way.” Let us give them some credit. That is what they thought. That is their philosophy. But after 5 years of this Labour Government I wonder what any Aucklander—who one cares to stop on the side of the road and ask—thinks about Labour’s solution. Anyone would think that after 5 years with Labour in Government—and Chris Carter cannot deny this—the problem with Auckland’s roading has become far, far worse. It is worse than it was before Labour became the Government. But Labour just keeps saying: “Hang on. Help is on the way.”

The Government released a package in December, and one could think that it sounded quite good.

Hon Chris Carter: How much was it?

Hon MAURICE WILLIAMSON: It was something like $1.6 billion. So people say: “Boy, that’s a big number! That sounds good.” However, let us put it in context. That is $1.6 billion over 10 years. That means it is only $160 million a year. Let us put that in context. What is a realistic estimate of what Auckland’s roads need spent on them in the next decade? We can debate whether we put extra services on the eastern corridor or whether we do a tunnelling or whatever, but the figure that is very widely accepted amongst the mayoral forum and the Automobile Association, and so on, is about $10 billion. So about $10 billion is required to get Auckland moving again; and members should remember that Auckland is a very important part of the New Zealand economy. I accept the agricultural sector provides an enormous amount of the powerhouse of the economy, but Auckland is also central to that. People cannot get their goods to market if the ports cannot function. People cannot make the agricultural sector work, if they cannot export.

So $10 billion is the figure, but let us get it in perspective. That $10 billion is the broad-brush agreed figure that Auckland needs. What is the Government doing? Let me tell members about its previous 3 full years of spending on new roads in Auckland. These are the Minister’s own numbers. In 2000-01 the Government spent $82 million on Auckland roads. The next year it spent $127 million.

Hon Chris Carter: What was the figure last year?

Hon MAURICE WILLIAMSON: It was $139 million. I am pleased Chris Carter asked that, because in real dollar terms National’s last year of spending was higher than any of the years in which this Government has been in office. That is a fact. Those are the Minister’s own answers. Here is the graph, if the member does not believe me. So I am pleased he led me into saying that in National’s last year in office more was spent on Auckland roads, in real dollar terms, than in any year this Government has been in office. But let us forget that and move on to look at last year’s full year of spending—$139 million—and multiply it by 10. I will be generous and say $1.4 billion. So we take the $1.4 billion, which is currently spent, and add the $1.6 billion for the new package. Let me do the figures: $1.4 billion and $1.6 billion—take the square root of 91, divide by five—and I think that comes to $3 billion.

Let us be generous and tip in the whole billion dollars that Infrastructure Auckland has sitting in the pot, waiting. Now we are up to $4 billion. Even if we do a real sleight of hand with some of the other numbers—and it is very hard to do with the way things are funded, and the Auckland Regional Council’s money, and so on—we would be barely pushed to get to $4.2 billion or $4.4 billion. That says that Auckland’s needs are $10 billion but it will not get even half of that under the Government’s announced package.

I had thought this Budget would be the first vital chance for Auckland. I know how Governments work. Governments do a little teaser. They announce, for example, the $1.6 billion in December, and when the Budget comes along the Government has the Opposition lulled into thinking it is only $1.6 billion. Then the big cruncher comes. I have been in Government. I have been a Minister. I know how they do it. They set it all up and they come in with the cruncher on Budget night—it is another $2.4 billion or another $3.6 billion. So I grabbed the Budget speech—and there is not a single member in this House who will deny that Auckland is in serious trouble with its transport issues—and I read it. I went through page after page. I am a very quick reader when I am looking for something that says “transport”, “roading”, or “funding”. There was not a mutter, not a murmur, not a sausage. Nothing—absolutely nothing.

So I went and talked to people like the Automobile Association, the chamber of commerce, and the Employers and Manufacturers Association. They said the Government has lost the plot. So I thought I had better refer back to the December package and see whether the Government is really committed to roads. I am pleased the Hon Chris Carter, Minister of Local Government, is in the House. I read his press statement. Guess what? He does not mention roads in it. See—he is surprised. I say to the Hon Chris Carter that he should go back and read it. He does not mention roads in his December package. He talks about “transport solutions”. He talks about cycleways and walkways. He talks about all sorts of things, but not roads. I have to tell him that, in the end, yes, ferries will provide about a 1 percent solution to Auckland’s problems.

Hon Ken Shirley: I don’t know about fairies.

Hon MAURICE WILLIAMSON: Not the sort of fairies—no, that is very unfair! I am talking about rail probably getting to 0.8 of 1 percent, and buses—let us be generous—getting to 2 or 3 percent, or maybe 4 percent. But in the end, members simply cannot deny that the motorcar and the roading network is what Aucklanders are seeking. This Budget did absolutely nothing for that? Absolutely nothing.

I understand why Governments at various times in the past have said they could not spend anything. I was one of the incoming Ministers in 1990 and I saw the books and saw deficits so big they would literally take one’s breath away. So I know why Governments have said they simply could not do anything, because they were so hamstrung and it was moribund. As members will know, in the “mother of all Budgets” the extra spending was next to nothing. In fact, we had to cut wherever we could.

But here is a Government that makes a complete and utter boon out of the fact that it has a $7 billion surplus. It is easy to do, actually. What one does is overtax people. It is really easy. When the Government has the taxation lever in its hand, it is easy to do. It just pulls back, and then pulls back a bit further. There is a $7 billion surplus. The people of Auckland were saying that the good thing about the Government having this surplus is that it would have the ability to spend some money to fix the one serious problem that is killing this city. Did it do it? No, no.

I ask anyone who is interested in this debate to go and have a look at the completion dates for the various major arterial connectors that will finally solve Auckland’s problems. Are they planned for 2005, 2006, or 2007 where they need to be? Not on your nelly! This Government published its completion dates for the Mount Roskill connection of the Māngere motorway, State Highway 20 through to Manukau City, State Highway 18 across the top, the connection of the north-western motorway through to the Auckland Harbour Bridge, and the eastern corridor. The dates are 2015, 2017, 2018, and 2019. Aucklanders will revolt long before 2010 if this Government carries on with a pathetic attempt to solve that.

Now, there is one other way the Government could have fixed it. It could have let the private sector loose to build it, toll it, and start seeing the Albany to Puhoi realignment B2 (ALPURT B2), and so on. But what has it done to the private sector? It has kicked it in the guts and said: “We don’t like you. We won’t send you anything.” This Budget is an outrage.

I rise on behalf of the Government in support of our Budget—a Budget that has delivered for New Zealanders. We listened to the previous speaker, a former Minister of Transport, talk for 10 minutes about how little this Government has done for Auckland. Well, that must have had Aucklanders rolling in their seats, because what did the previous National Government do for Auckland between 1990 and 1999? Absolutely nothing! Our $1.6 billion—and I will repeat that figure; our $1.6 billion—that we have assigned to Auckland’s transport needs was dismissed. He dismissed it out of hand. What did he do while he was the Minister of Transport? I am privileged, among other things, to be Minister of Local Government. I am proud to say that a bill will be introduced into this House next week that will establish a new governance structure for Auckland’s transport needs. It provides for a radical overhaul, so that we can focus on the city’s transport needs through the Auckland Regional Transport Authority.

Recently I was at the Auckland Mayoral Forum, and none other than John Banks, the Mayor of Auckland City, said: “No Government has engaged more with Auckland than this Government. I am a Tory. I will always be a Tory, but I have to say, Minister, that no Government has engaged with Auckland like the Labour-led Government has done.” That was praise, indeed, from Mayor Banks, and I accept it with gratitude and appreciation for his courtesy and honesty. Mr Banks has seen money flowing into Auckland. He has seen the Westhaven Marina saved for the people of Auckland, because this Government took the radical steps of funding it and helping Auckland City to buy it. He has seen the double-tracking of the rail line out west. He has seen this Government delivering the goods, because that is what it has done. As Minister of Local Government I am proud to be here with my colleagues Judith Tizard and the Prime Minister, and the rest of the Government, working to solve Auckland’s problems.

The previous speaker talked about this country being overtaxed. We were told at question time today that in terms of our top tax bracket, only one country is less taxed than New Zealand. That country is Mexico. If we cut our taxes, we will be cutting our services. We will be stopping the money that will fix up Auckland’s transport. We will cut off the funds that did things like save Air New Zealand. The Government spent $800 million to save our national airline. Had it collapsed, our tourism industry would have been destroyed. That is the sort of action one can do when one is in a careful Government that uses resources for the good of the people. Anyway, those are actions that took place before this Budget. This Budget delivers in a whole range of areas, particularly for families. But what I would like to talk about tonight is another area that I am responsible for, and that is conservation.

This Government has delivered for conservation. There is a $79 million capacity package to fund the evolution of a network of parks and reserves in the high country of the South Island. In 1998 the 304 families in the high country who hold Crown pastoral leases for farming asked the Government to set up a process whereby they could freehold that land, with part of it going into the conservation estate—the sensitive, important environmental areas—and with the lands that were suitable for agriculture going to farmers. Of course, the previous National Government did not resource that process. Last year a delegation from Federated Farmers came to see me, as Minister of Conservation, to say that there needed to be resourcing so that the tenure review process, which two-thirds of those farmers had entered, could be speeded up and carried out effectively. We delivered a $79 million package to do just that—something that farmers requested. I think there will be some excellent outcomes, not the least of them being a new network of parks and reserves in the high country of the South Island. That will create enormous recreational and tourism opportunities in New Zealand, as well as protect those very sensitive environments and the biodiversity that is found there.

Just recently I commissioned a study by the Department of Conservation on the impact of the conservation lands on the economy of the West Coast of the South Island. That study revealed that some 1,800 people on the West Coast directly owe their jobs to the conservation estate, and as well some $221 million goes into the local economy. That demonstrates that conservation lands are important not only for recreational opportunities and for biodiversity, but are incredibly important as an economic resource. I would argue that the conservation estate, which covers one-third of our country, is the greatest economic asset that we have. It brings millions of tourists into this country, and provides great opportunities for eco-tourism activities around it. The conservation estate is, of course, a sustainable resource that will be there forever, and it only gets better with time, as the land recovers from the impact where sometimes very unsuitable farming practices were carried out.

As part of that process, I have set up the Public Wildlands Programme, which has seen a series of strategic purchases, sometimes of those high country estates that are in critical areas where we want to create our parks, and also in places like Kaikoura Island in the Hauraki Gulf, which the Government recently purchased for $10 million. I am very proud of that programme. We have added 200,000 hectares in the last year to the conservation estate—that is Molesworth Station, Birchwood Station, Clent Hills Station, Canaan Downs, Waikawau Bay on the Coromandel Peninsula, Knuckle Point up north, Kaikoura Island, and I could go on. Those are things that future generations of New Zealanders will thank this Government for, because it is an investment. It guarantees public access and public ownership, and preserves and enhances the recreational and biodiversity opportunities of those sites. If I have done nothing else in the time that I have been a Minister and a member of Parliament, those land purchases for future generations of New Zealanders will be the thing that I am most proud of.

The Budget also has some other very interesting things. Another very exciting project, which some may have glimpsed me announcing on television a few weeks ago, was the $7 million we have set aside to make two islands off Fiordland National Park—Secretary Island, and Resolution Island—pest free. Those two islands, one of them 20,000 hectares in size and the other one 11,000 hectares, will be a really incredibly exciting project, because they will be the largest on-shore islands that anyone, anywhere in the world, has ever attempted to make pest free. If the Department of Conservation is successful in doing that it will be cutting edge, of interest internationally, and will give us the technology and the experience to address the incredible challenges that our native biodiversity faces.

In no other country in the world has the natural environment been more impacted on by pests than here in New Zealand. We were, as members of this House are undoubtedly aware, the only country in the world with a sizeable land mass that was without mammals, other than the three bat species and marine mammals. So the introduction of pests—stoats, rats, weasels, ferrets, goats, pigs, and so on—as well as all the plant pests that have been introduced, gorse, broom, and so the list goes on, has had an incredible impact on our native biodiversity. We are barely holding the line on biodiversity protection, but this Government has funded the preservation of our biodiversity like nobody else did. The Department of Conservation’s budget, since 1999, has been increased by 40 percent. It is still barely holding the line, but it is a 40 percent increase, which is an incredible commitment to future generations and to the future of this country in relation to preserving our biodiversity. I am really pleased about the $7 million for the two island projects in Fiordland: Secretary and Resolution islands.

One of the other criticisms of the Department of Conservation has been that it is somehow a poor land manager. It is a myth that is often repeated in this Chamber. I could dispute that myth with science and facts, but what we have recognised is that as the tenure review process takes place in the high country of the South Island, more land will come under the management of the Department of Conservation. In this Budget $18 million has been set aside to manage those new lands for weed control and to deal with pests. We have put the money where the problem is. It is a little bit like what Mr Williamson was saying before about Auckland transport, when he asked what the Government had done about that. We have done heaps. We have not only talked the talk but we have walked the walk. We have taken action, and that is also what has happened in conservation.

Wilding pines are another big issue, as is rural fire control. Both those issues have received extra funding. One thing that is often forgotten in this House when the Department of Conservation is being criticised is that it is the major rural fire service. It helps farmers. We will put $7 million over the next 4 years into improving the department’s firefighting capacity. Another $700,000 has gone into controlling wilding pines. For those who are bit mystified as to the term “wilding pines”, I will explain that they occur when trees that were introduced into the high country as shelter belts spread their seed everywhere and destroy the iconic landscapes beloved not just by New Zealand urban dwellers but particularly by high-country farmers. It is a very important issue.

We have delivered the resources to look after our environment, and as the Minister of Conservation I am incredibly proud of what this Government has done to preserve New Zealand for future generations.

It is always good to follow the Labour Minister of Conservation, who is so enthusiastic about handing out other people’s money. That is what we have seen in this debate from the Government members, who have stood up and talked about how great it is to be able do things in some areas. That is fine, but what they fail to realise is that it has come about because this Government, over the last 5 years, has increased the pool of funds to enable it to make the handouts that those members have been talking about today, and talked about during the debate on the package before the recess.

We are the only country in the OECD group of countries that has increased its rate of taxation. There are former Soviet Union countries that have actually reduced their rate, but, no, when this Government came into office it increased the rate for those earning over $60,000 from 33 percent to 39 percent. What did Labour say in its pledge card? It said that only 5 percent of people would be affected by an increase in tax—that 95 percent would not be affected. That figure is now running at over 15 percent. The thing about it is that if one has a pool of funds, one can do wonders with it. How has it come about? It has come about because this Government has just run the largest Budget surplus in our history—a fund of $6 billion. The forecast for next year is also in the range of $6 billion. If I had $6 billion of other people’s money, then I could do wonders with it.

Unfortunately, an opportunity to grow New Zealand’s economy has been squandered by the Budget. This was not a growth strategy Budget. There was nothing in it to promote investment and growth, and to build up the skills and the educational levels that are required to have a dynamic, growing economy. No, there was nothing like that. There was nothing to increase opportunity, nothing to enable us to become internationally competitive, move onto the world stage, and sell our products in an increasingly competitive world market. There was nothing in the Budget that talked about the biggest challenges that we face in New Zealand—that is, our infrastructural challenges. Maurice Williamson talked about those challenges in terms of roading, especially in Auckland. Neither was there anything about the source of electricity. The biggest hindrances to investment in New Zealand have been identified as the tie-ups and lack of infrastructure in terms of roading and our power resources. What was this Budget about? With $6 billion, there were opportunities to grow the economy, to build skills, and to allow businesses to expand, but they were wasted because this Budget was about wealth distribution. That is exactly what it was about.

I am the champion of small businesses. We are a nation of small businesses. There are 297,000 small businesses in New Zealand employing just under 600,000 people. Who benefited from this Budget? It was not the young people who want to start a business. It was not the young couples starting off in life. It was not the middle-aged couple looking to save some money for retirement. It was not the superannuitants, and it certainly was not those who are established in business. None of those growth areas and none of those people whom this Government should have been looking towards got any benefit out of the Budget at all. Only one household in five—that is, 300,000 households out of 1.5 million—actually got any benefit.

I support those who are in the business sector. This Government does not take business seriously. It does not like small businesses in particular. It has a negative attitude to business. In fact, if we look at the Queen’s Birthday honours list, do we see anybody who came from a business background? There was not one there. This is a Government that does not take business seriously. Those who grow the economy were overlooked. [Interruption] OK, there was one person in Hamilton, who was a worthy recipient at that, but that is only one out of a list of a couple of pages. We need to create a culture of enterprise. It is desperately needed. My premise is that private property and free-market economies are superior to State ownership and central planning, which are exactly what was in the Budget.

What are some of the principles that National believes are important for growing the economy? Earlier John Key referred to those families earning $38,000 who have two children, and those earning $60,000 who have two children. He said that when we consider the handouts to those earning $38,000, we find that the actual differential between the two families is only about $2,500. Where is the incentive for people to try to better themselves? Free people are not equal, and equal people are not free. When I talk about being equal, I am talking about economic equality. People are not free and equal, because of the challenges we all face, whether it be in the jobs we do or the talents we have. We have expertise in certain areas. Yet this Government is looking to say, in the Employment Relations Law Reform Bill, that if people are on an individual contract, they cannot have a better deal than those on a collective contract. Well, people are different in terms of their talents. For example, sportspeople make a lot of money if they are very good.

Equal people are not necessarily free. Socialist Governments always talk about wealth distribution, and that is the point I made earlier. What happened in Cambodia is a great example. It tried to make all people equal, and 2 million people out of 8 million died over a 4-year period. If we do not create wealth we cannot spend it. Where this Government has gone wrong is it has not created the right environment. With a $6 billion surplus it could have easily moved to create the environment for a growing economy. Tax rates do not make people more equal; they just drive the industrious people and the entrepreneurial people into other places. We have to be very, very mindful of what happens in that field.

People tend to take care of what belongs to them. What belongs to no one, or to everyone, tends to fall into disrepair. We saw that in the Soviet Union, where there was central planning and State ownership. It minimised private property because it thought that private ownership was selfish and counterproductive. People should let someone drive their cars for a month, then see what they are like when they get them back. If we want to encourage something, to get more of it, then we have to make sure there are some incentives.

I want to dwell on the point about taxation. We consider increasing taxes on cigarettes and alcohol in order to discourage people from smoking and drinking, so why increase tax on consumption if we want to grow the economy? It is a disincentive. The point we have made in previous speeches is that there was an opportunity to have a tax rate competitive with that in Australia. Reducing our corporate rate from 33 percent to 30 percent would make us competitive with that country. At the moment our tax rates are so high that 1 June was the day of liberation, because for the first 6 months of this year business people were working just to pay the costs due to the Government. Incentives have been shackled by red tape and compliance costs.

Jill Pettis: Oh, don’t be silly.

LINDSAY TISCH: I look forward to when that member has a say, because this Government is shackling initiatives. The latest survey states: “Red tape ties up growth”. There is plenty of evidence, and plenty of surveys have been done, to show that the red tape, compliance costs, and regulatory creep, which this Budget could have addressed, were not taken notice of.

This Government has no interest in business. It does not understand what grows the economy, and until it does we will see businesses in New Zealand suffer. I am quite prepared to stand up and be their champion, because it is the National Party that believes in free enterprise. It believes in incentives for people to get up and do their own thing and make a dollar. If they are making a dollar they are going to be paying more tax. Under this Government, an opportunity was squandered. Part of the $6 billion surplus could have gone into incentives such as a reduction in the corporate tax rate, to allow businesses to grow the economy for the benefit of all New Zealanders.

That was Mr Lindsay Tisch, a National member of Parliament. Three business people in his electorate received Queen’s Birthday honours, having been supported by local Labour members of Parliament.

Hon Chris Carter: Not for Mr Tisch.

TIM BARNETT: No, not from Mr Tisch, apparently. This is a lengthy Budget debate. I want to be just a little parochial in my contribution, looking at this Budget, and the successes of the 4½ years of Labour Government leading up to it, from the point of view of my electorate, Christchurch Central. Christchurch Central contains neighbourhoods with the highest levels of social deprivation outside of south Auckland. This is a Budget made for such areas, driven by politicians who know that such poverty cripples people and communities.

I believe that this Budget represents the most efficient use of the available money to tackle child poverty—a direct and efficient investment in the future of our nation. The tax cuts that some in this House advocate—and would, of course, benefit greatly from—mean little to the great majority of people in my electorate. Lower tax means worse public services and, inevitably, a widening of the wealth gap.

For those who suggest that more of the so-called Budget deficit should be used for one-off spending, what is fairer than building up the Superannuation Fund? New Zealand has a uniquely egalitarian Robin Hood - style superannuation scheme that benefits everyone equally, with a liveable level of income at the age of 65. My generation has infinitely more security and more assurance that we and our peers will enjoy such a living income, thanks to the vision of this Government in that fund. So this is a superb Budget for eradicating poverty and building up security bit by bit for the future.

Unemployment levels in my electorate are the lowest for a generation. They are down below 6 percent in neighbourhoods whose names were synonymous with deprivation, even when the rest of the city was booming. Welfare dependency has shrunk dramatically over the past year in some local Department of Work and Income offices, such as Linwood, Shirley, and Stanmore Road. The number of people on the unemployment benefit has reduced by two-thirds, and, contrary to the myths spread by some, the rise in the numbers on invalids and sickness benefits has been modest or minimal. All that means that Department of Work and Income staff can start to do the job they are best at—offering genuine and supportive help and resources in an intensive way to get people back to work. The results are stunning. People’s lives literally have been transformed, and nationwide literally billions of dollars have been saved, to be used in other areas of Government.

The last National Budget—thank goodness, 5 years ago now—simply ignored economic development. Whereas in most of the world, even including Australia, Governments were investing heavily in building their economies, in 1990s New Zealand it was simply left to the market, and the business community seemed to accept that as the only way it could be done. It has all changed now. My business visits in my electorate often feature positive feedback on the performance of the local and national State agencies in this area, and genuine pleasure from business people at the accessibility of a wide range of support. Budget 2004 features plenty of examples of this. It is a milestone Budget for getting people into work and for further strengthening our economy.

My electorate contains over 30 State schools. In terms of the amount and range of support from Government, they have never had it so good. They face growing challenges, especially in areas like behaviour management—the legacy of neglect of social need throughout the 1990s. Knowing that the Government will listen and is flexible enough to respond by investing in innovation and good ideas is all-important to those teachers and schools.

Worldwide, school investment in information technology is proving to make the critical differences. Ratios of terminals to schoolchildren are improving annually. With that comes more classroom material designed by and for the computer generation. It is fitting, therefore, that one item in this Budget was laptops for primary schoolteachers, putting the quality machines where they can be of most use. This is a stunning Budget for education.

My electorate is enjoying its lowest crime levels, again for a generation, combined with a best-ever level of policing resources. This Budget invests in the justice system of the future, including restorative justice. It implements the family violence programme, and it responds to the current demands for more police. This Budget builds up a responsive, modern, justice system.

Many people in my electorate are elderly, and they deserve the best. They have served our society and their families for a lifetime. This Budget, combined in Christchurch with the launch of the nation’s largest public health organisation, Partnership Health, gives them a new and fair deal. Everyone aged 65 or over enrolled in a public health organisation will pay less to see their family doctor, thanks to an increased Government subsidy, and most prescriptions will be no more than $3 an item. Also, spending in orthopaedics will double over 4 years, vastly improving the quality of life. Asset testing is finally on the way out—the proof is in this Budget—and that will be mourned by few. This is a memorable Budget for our older citizens.

As an inner-city area, my electorate has many young people, and some are very young. They will benefit from the new childcare subsidies at the heart of this Budget, or from the new investments—an incredible one-third of a billion dollars more over 4 years in early childhood education. The students who live in inner-city addresses that have been student residences for generations also have reason to celebrate, as only they can. Nationwide, 36,000 students will see an increase in their allowances and a reduction in their future debt. That means about 1500 people in Christchurch Central.

For those heading for apprenticeships, we have seen a turn round in that “market will provide” mentality to outstanding interventionist partnerships between business, their collective bodies, and Government, giving our young people skills, work, and a living income. So this has been a special and memorable Budget for young people.

My electorate is served by the country’s most innovative local body—Christchurch City Council. That organisation’s relationship with the Government and the community has flourished over the last 4½ years. The law under which that relationship is set up, the Local Government Act, is now a “can do” not a “can’t do” measure. We have partnerships in housing and in social provision—local government and central government have never worked more closely together. This is a brilliant Budget for local democracy.

My electorate contains in Christchurch’s city centre the country’s leading heritage and arts precincts. The old market-driven ideology consigned those sectors to that dog-eat-dog world. That meant that beautiful buildings were demolished in the interests of the property market, and innovation in the arts simply did not happen. What has happened in this sector is a classic litmus policy—something to define what is special and different about this Government. It happened under Keating in Australia, and is now happening in New Zealand under Helen Clark. Careful investment in the arts and in heritage has released the floodgates of innovation. The shortage now is of arts administrators, not of good ideas worthy of funding. This Budget has sustained and further grown this area and, combined with new legal protections for heritage buildings and the Resource Management Act, we really have seen the turning point in this area. This is a Budget to showcase what makes our country different.

There we have it—a Budget to remember, which, for once, people are talking about and are positive about. It is a Budget that brings hope for people who need that helping hand. It is a Budget that continues to invest in economic development and the infrastructure for a solid future. It is a Budget that uses money cleverly to make real, positive changes to people’s lives—for those waiting for a hip replacement, for those wanting better equipment to face the challenges of primary school teaching, for those wanting to follow their dreams as artists and film makers. That is what a Labour Budget is all about.

It is a great pleasure to follow my good colleague from Christchurch Central. It is wonderful to be a member of Parliament when one can be truly proud of one’s country—unlike the knockers on the other side. It is a very proud moment for me, to be a member of this Government presenting this Budget, which obviously is a very, very good Budget for our country.

In summary, I think it would be really good to bullet point again the major features of this Budget. It is a prudent Budget. The gross debt is forecast to drop to 21 percent of gross domestic product by 2007-8, and surpluses of above $5 billion are forecast. Our economic outlook is positive. Unemployment and inflation are to remain low, and wages are to increase steadily. Basically, we are in a situation of having a very, very sound economy.

In terms of the Waikato, I will talk a little about health in particular. I also say, along with my colleagues Dianne Yates and Nanaia Mahuta, how delighted and proud we are to have recently been part of the announcement of the major capital upgrade of our major base hospital, Waikato Hospital. We are also very proud of the recent announcement of increased funding for orthopaedic surgery in this Budget. It is really good to see that, for example, in our own area twice as many hip and knee replacement operations will be performed in the next 4 years. This project will ultimately enable over 9,000 New Zealanders each year to regain their physical independence and quality of life. This particular spending initiative will help a number of people get back to work. It should be obvious to most people that people in need of hip or knee replacements are often severely limited in their ability to work or live a normal, quality life, because of the pain and disability they suffer. It is really interesting to note, and I do want it noted, that the Association of Salaried Medical Specialists said that the Government’s announcement to double the number of orthopaedic operations on hips and knees over the next 4 years is great news for patients and senior doctors. I quote: “Implementation of this positive announcement will relieve the pain and suffering and improve the quality of life for thousands of New Zealanders. Improving patients’ quality of life is one of the most rewarding things senior doctors can experience.” It is really good to see that the Waikato region gets very, very significant funding in this area.

The other initiative that is assisting the Waikato area is the extra funding for primary health organisations. Now, 6 to 17-year-olds can receive, and are receiving, reduced cost health-care. Special targeting means that people aged 65-plus who are enrolled in primary health organisations will pay just $3 for prescriptions. This Budget, in terms of health, is all about a fair shake and a fair go. It is all about access. It is so wonderful to be part of a positive Government that is doing great things for our country—unlike those in Opposition, who meet in their dark rooms and ask what they can knock today. We have there a party of knockers, and here a party of doers.

Education is another area where it is really good to see increased funding. It is really good to see that pupils in 266 primary schools across the greater Waikato area will get an important boost to their education, thanks to new funding that sees laptops rolled out to primary teachers nationwide. It is good to see an improvement across the board in terms of operational funding for our schools.

I will touch on an issue that I believe the Budget is making great strides to address, and that is, of course, the scourge and the tragedy of P drug addiction, which, like in a number of other countries, has grown in this society at a very alarming rate. I chair the Law and Order Committee and we recently went to Australia as part of the trans-Tasman exchange. We had a number of interesting discussions, particularly in Western Australia and New South Wales, and at the federal level, on what the Australians are doing to combat the P drug epidemic. It is very important, I would stress, that we have full trans-Tasman cooperation. Again, it is excellent to see that the Budget allocates just under $40 million over the next 4 years in additional funding to tackle the P trade and organised crime.

Indeed, these initiatives are but another example of this Government’s commitment to making communities safer by ensuring that the police have the capacity and the capability effectively to target crime. This funding is primarily aimed at reducing the supply of drugs and achieving more prosecutions, and is in addition to earlier initiatives like the reclassification of the P drug as a class A drug with its penalty of life imprisonment. We want, and certainly commend, the initiatives being undertaken in allocating resources so that we can crack down on drug manufacturers, who must fulfil the definition, in my view, of human scum in our society. Those people, one or two of whom actually have a respectable facade in the community, prey upon our young people. I cannot think of something more inherently evil and base, and it is really good to see that the Government and the country are focusing on this issue and recognising it for the very serious issue it is.

It is really good to see the extra funding for the Institute of Environmental Science and Research. In terms of my visit to the institute in Auckland, along with other members of the Law and Order Committee last year, I want to compliment those scientists and teams on the fantastic work they do. Again, I commend the $17 million of extra funding for the institute. It enables it to hire a further six scientists and technicians by Christmas, including one scientist who is just about to start now. Its methamphetamine analysis team will increase to 18, and, obviously, the more people there are doing that work, the more chance we have of achieving successful prosecutions. That is one example of a major problem afflicting our society at the moment that is addressed by some very, very positive initiatives in this Budget.

In summary, I have focused on a few issues close to my heart, obviously. One issue is the extra funding for health, particularly for hip and knee joint operations, which are a quality of life issue. Another issue is the funding to halt the P drug epidemic in order to protect our young people, and the other is the major funding for our schools. Other speakers have spoken comprehensively about the extra funding and assistance we are giving to New Zealand families. We hear a lot, particularly from the Opposition benches, about tax cuts. We, through this Budget process, have given some really meaningful tax cuts in terms of providing assistance to families where it is needed most. The number of young people who, in terms of opportunities, improved health-care, and improved education—extra cash coming into the budgets of families—have benefited and will benefit from this Budget is hugely significant.

Finally, as I said at the beginning of my speech, I am proud to be part of the Waikato team, with Nanaia Mahuta and Dianne Yates. I am proud to reflect on the significant benefit to our region. I am proud to reflect on the major spending on health services in our area, the major spending to combat crime in our area, and the major spending in terms of schools and education, to assist our young people and give them the future they deserve. This has been said before, but I will restate it: this is truly a good Budget—an excellent Budget for all New Zealanders.

The ASSISTANT SPEAKER (H V Ross Robertson): Just before I call the next member, I tell the House that I understand that New Zealand First is to share its 10-minute slot. There are two speakers, Craig McNair and Barbara Stewart. I will ring the bell at 4 minutes to inform them.

Tonight I am very proud to stand and speak on behalf of the New Zealand First team in this Budget debate. There is something I want to focus on specifically tonight—that is, a group in our society who will probably be here a lot longer than most of us in this Chamber—some longer than others. I am sure that most members by now will know who I am talking about—that is, the group in our society who are our young people. The ministry has been called the Ministry of Youth Development. In a way, I am quite glad that it has been named the Ministry of Youth Development, because in many ways youth development can symbolise so many things. Youth development, in my mind, is the ability to provide assistance, encouragement, financial assistance, mentorship, and leadership in a lot of areas to our young people, who indeed truly are the future of our nation. That is one reason why I am very passionate about speaking on this topic tonight, and there are a few issues that I really want to focus on.

Just before I do that, I want to focus on another topic within the Budget, but it is something I am very disappointed in. That is, the inability to see anything about a universal student allowance for our students of this nation, a lot of them being young people, in that category. We in New Zealand First say that if we really want to encourage the young people of our nation and ensure we invest in them for the future, we should provide an education system that is affordable. One way we can do that is by providing a universal student allowance. That does not mean to say that there is not a degree of private good for every student to be able to pay some of their fees, and so on, but we say that a universal student allowance should have been part of this Budget, and it is not.

One small step in the right direction, I would say, is that the parental income qualification levels have been increased from their 1992 levels, and that is better than nothing. That is not really giving anything; it is just raising the levels back to what they really should have been, anyway. We say that that is not good enough. It is only a very, very minute step in the right direction, and we need to move towards a universal student allowance for the students of this nation, of which young people make a large number.

But getting on to the subject of the youth development appropriations, I quickly want to touch on a few things. There are a couple of things I want to congratulate the Government on, and a few things on which I want to encourage it to do better next time. One of the things I want to congratulate the Government on is its increased spending on the youth suicide prevention information service. That is something I spoke about very passionately last year, considering the very little the Government was spending on it—$460,000 last year. I am glad that it has heeded my call and the call of others as well, to increase that very, very important service, for which we all know there is an incredible need in our society today.

I want to ask the Minister about one thing, and I am very interested in the fact that the amount of money spent just on policy advice in this appropriation for Youth Development is $3.8 million—23 percent of the actual vote is to be spent on advice. I say that that seems like too much. If members looks at the “policy advice”, they will see that the only explanation given is—there is a little bit more after this, but pretty much this is it in a nutshell—“Purchase of policy advice on young people to support their contribution to a healthy and productive society, and facilitate them reaching their full potential.” We say that there has to be some real answers to this question of how much money is actually being spent on that particular area.

On behalf of New Zealand First, I rise to speak to the health section of this 2004 Budget. It is commendable to increase the health budget. It is very commendable to increase progressively the spending on health over a number of years, so that our health system can attempt to regain its former First World standing. Our rate of intervention in the health area has lagged well below that of the international average of countries we like to compare ourselves with—Australia, Canada, and Britain. The Minister acknowledged that fact earlier.

Many New Zealanders would have had their hopes rekindled when they heard this Budget. They could see their hip and knee operations far closer than they had been for many, many years. It is to be hoped that those hopes will be realised, and not dashed before their very eyes. We know that many of the district health boards no longer have all the resources necessary to carry out those operations because, firstly, we are exporting New Zealand health professionals in ever-increasing numbers, and one of the strategies must be to focus on workforce retention. It is an essential part of any health system. That workforce is urgently required if there is to be any reduction in waiting lists for orthopaedic surgery and, of course, for all other medical conditions.

The second issue, as reported in recent issues of the Dominion Post, is the performance challenges experienced by district health boards. It was disappointing, and interesting, to note that many district health boards are under higher than normal scrutiny because of performance concerns. Although we can applaud the fact that that performance has been recognised and action is being taken, it is becoming increasingly apparent that many of those district health boards cannot meet their obligations, because it is physically impossible for them to do so. Their emphasis on clerical rather than clinical management of patients has been a feature of recent times.

It was interesting too, to hear the Minister of Health say earlier this afternoon that the Government will pay for operations after they have been carried out. We do not want to see additional funding used for increased bureaucracy in much the same way that it has happened in the past. We will be looking for the appropriate use of the dollars that have been set aside for those major joint operations.

New Zealand First was disappointed that there was nothing at all in this Budget for cataract operations. All members receive a lot of letters on this issue, so it is something that does need to be eventually addressed.

Jill Pettis: My 82-year-old mother is getting her cataracts done.

BARBARA STEWART: Good! I am very pleased to hear that. We also need to ensure that the health of our young people and children is not neglected. The number of dentists providing free dental treatment for adolescents of high school age is now minimal and in some areas, totally non-existent, and this situation needs addressing urgently. We do not want to see those who can afford to pay for dental care having it, while those who cannot afford to pay are missing out. We do not want a return to that situation, and I can see that Mr Gallagher agrees with me there. Oral health is essential for everyone’s overall health, and we want to see some action on this very important issue.

We were also disappointed that there was nothing in this Budget to ensure that foreigners coming into this country are required to have their own health insurance policies. New Zealand taxpayers should not have to pick up the health debts left by foreigners who require medical attention, particularly when it is so difficult for our New Zealand people to access the health system. We all know that there are not limitless dollars for health spending, and this situation should not be occurring at all.

Likewise for migrants, the health screening has not gone far enough or fast enough. People entering New Zealand needing treatment for any medical condition should be identified before they come into the country, and the decision made then on whether we should let them in. We cannot afford to be seen as a soft touch to cure the world of all its health ills. We really do need to ensure that the health of all New Zealanders is looked after before we look after the rest of the world. We are heavily indebted to Australia for the care that country provides for our cancer patients, and we could not see any end provided for this in the Budget.

The public of New Zealand need to have confidence in our health system, and we will be keen to see the improved outputs in this area.

I felt proud sitting in Parliament on 27 May this year, listening to the Hon Michael Cullen deliver Budget 2004. That is the 14th Budget I have heard from within Parliament’s debating chamber, and the fifth Budget of a Labour-led Government.

I had cause to reflect that the first Budget I listened to as a brand new MP in this House 13 years ago was the one Ruth Richardson branded the “mother of all Budgets”, and what an insult to mothers that Budget was. It was the Budget that followed on from the slashing of benefits and the introduction of the Employment Contracts Act that divided workplaces, destroyed wages and conditions of employment and, with the slashing of benefits, took dollars out of the economy from the pockets of those who every week spent every cent they received. That decision alone took our country into a recession. It was the Budget that scrapped the universal family benefit, brought in market rents for State housing, and introduced the competitive market philosophy into our health system, with the ideologically-driven funder/provider split. It was the Budget that undermined the Accident Compensation Corporation scheme, which was virtually at the point of being fully funded until Mr Birch got his hands on it. “Paying more and getting less” was the mantra of the 1991 Budget. It was the Budget that lifted the age of eligibility for superannuation from 60 to 65 and, yes, I admit that that was signalled by all parties prior to the election, but what people forget is that every party said they would do it over 20 years—not the 10 years the National Government subjected this country to and revealed in that Budget. It was the Budget that introduced the student loan scheme. I know that the line Ruth Richardson used—“the mother of all Budgets”—was a throwaway line, but the first 9 months of her financial management of this economy were a disaster for families.

Budget 2004 stands in stark contrast to that Budget. This Budget unashamedly puts working families first. I do not know how many times in the 1990s I was approached by constituents who identified that they were not better off when they went out into the paid workforce. This Budget says that going to work will pay. It will ensure that people will earn more by going out to work than they could receive on a benefit. This Budget responds to the needs of people who have spoken out over a number of years, and it does so in a way that is deliberately targeted to lift children out of poverty.

Yet I hear the National Party speaking against the Budget. I have heard National Party members say that they would prefer tax cuts. Being on an MP’s salary, I understand why they would say that. They know that tax cuts would benefit those on higher incomes, but tax cuts do nothing for those on low to modest incomes. The trouble with tax cuts is that they are based on income only; they do not take into account the different circumstances of those who may in fact be on exactly the same income. Why should a couple with a double income and no kids—the dinkies, as they are known—get a bigger slice of the cake than a couple with two or three kids? Why should that be? I do not accept that that is right and I fit into the former category, not the latter. I have, obviously, a number of nieces and nephews. I think that the parents of those children deserve to have a lift, rather than people who do not have those responsibilities. Income is not based on what people need; it is based on what they can negotiate with their employers or generate with their businesses.

It is appropriate to redistribute, in order to assist those with children. This Budget unashamedly does that, and I am proud of what the Government has achieved. Over the next 3 years, the Working for Families package will deliver around $100 a week in direct income assistance to families in the $25,000 to $45,000 income bracket. Many households will also benefit from changes to the accommodation supplement and childcare subsidies.

But there is so much more in this Budget that has not really achieved the sort of headline news that the Working for Families package has, with its greater focus. There are huge Budget gains for education, and for early childhood education in particular. We know that the foundation stones that are put in place for young children to enable them to get a good start in the education system and to build a commitment to lifetime, life-long learning, will stand this country in enormous good stead in the future.

There are another 500 modern apprentices. When I go out and talk to older tradespeople, they tell me that what they miss most are the young apprentices they were able to mentor—not only in terms of their trades but also in terms of life skills. Those are the sorts of things our older generation wants to pass on to the new generation coming through, and I congratulate this Government on what it is doing for modern apprentices.

Health funding will reach almost $10 billion next year, and members have already heard from a number of speakers about the extra money being targeted for hip and knee operations. I know that it is frustrating for constituents when they tell me their surgery is described as “elective”. It sounds as if one can elect to have it or elect not to have it, but those people are suffering while they wait for important surgery that may not meet the threshold of urgent need, but that certainly must be done in order to give fulfilment of life.

There will be 1,054 new State houses, with an upgrade to over 850 more. This is a real Labour Budget; it is devoted to the needs of people who need it most.

The contribution to the New Zealand Superannuation Fund will be a further $2.1 billion. I know that the National Party plans to get rid of this fund—probably by lunchtime, I would say, just to use an expression that I know Dr Brash likes to use from time to time. I want to make just one point about that. My first political awareness, I guess, was as a 15-year-old when I asked my parents why the National Party was advertising the Russian Cossacks who were dancing across our television screen. As a 15-year-old, I could not understand why National was doing that. My parents explained to me that the advertisement was on because a superannuation fund had been started by a very good Labour Government in 1974, and the National Party was scaremongering about the fund, saying that it would develop into an asset the State would use, and that New Zealand would become like Russia. I think that communism is what the National Party was trying to imply. The bottom line is that the National Party, in the biggest election bribe in electoral history in this country, threw away the opportunity that that Labour Government had had to save for the future. We have that opportunity back now with the New Zealand Superannuation Fund, but I warn all my constituents and others who are listening that it is really important to remember that National will get rid of the ability this country now has to save for the future.

This Budget is big by New Zealand standards, but it has been made possible by this Government’s prudent fiscal management and by the resilience of the New Zealand economy. Budget 2004 will be remembered for its sustainability and its fairness. It will be remembered as the family-friendly Budget, because it has put families first. As I said, it will always be for me a stark contrast to the incredulity I experienced as a brand new MP when I heard a Minister of Finance tear our economy and social fabric apart. This is a great Budget. I pay tribute to the Hon Michael Cullen, and also to the Hon Steve Maharey, who I know is deserving of considerable credit for the effort he has put into improving the lives of so many New Zealand families.

The ASSISTANT SPEAKER (H V Ross Robertson): Just before I call the next speaker I tell honourable members that United Future has requested that its 10 minutes be separated in two. I will therefore ring the bell at 4 minutes.

“The maintenance of court services with independent judges to adjudicate on disputes and to uphold the law is the hallmark of every civilised society. It is a fundamental responsibility of every Government to ensure their provision.” Those are the opening words, under Margaret Wilson’s name, of the Labour Party’s justice policy. However, instead of following that, this Government is making access to justice more difficult for New Zealanders, and is grossly negligent in its funding of the lower tiers of justice in particular. The very place where most New Zealanders come into contact with the justice system is being inadequately funded, and there is nothing in this Budget to help that.

It is hypocritical of this Government to pour money into the Supreme Court—its key argument being that such a court would help to increase accessibility to justice—but to ignore the lower strands of our justice system. Millions of dollars have been poured into a court that, when it was in England, cost New Zealand taxpayers nothing.

There have been significant increases in the salaries of judges. The Court of Appeal had the highest percentage increase in salaries in the years from 1997 to 2000. In order to pay for that, this Government is making huge increases in court fees for the average New Zealander, which will make it even more uneconomic for small business people in particular to access the courts in order to chase debtors.

At the bottom end of the justice system sit the disputes tribunals, where thousands of average New Zealanders are able to have a multitude of small disputes resolved, in an environment that encourages parties to talk about their issues and seek to resolve them themselves. In this context, disputes tribunal referees play an extremely important role in our justice system but are extremely poorly paid. A review of the fees of disputes tribunal referees by the Department for Courts in late 2002 found that disputes tribunal referees rank among the lowest paid statutory officers on the scale of charges of the judiciary, generally. The review concluded: the current per diem rate for disputes tribunal referees did not reflect the significantly increased financial jurisdiction of the position; the environment was rapidly becoming more demanding, with claimants more knowledgable and better briefed; the cases coming before the tribunal were more complex; the fee had not kept pace with salary increases of similarly sized statutory positions; the fee had not kept pace with the percentage increases enjoyed by the judiciary; the fee did not provide an inducement to recruit or retrain suitably qualified and experienced candidates; the fee had fallen well below the consumer price index, greatly eroding the purchasing power of referees; and the fee was not subject to regular deadlined review.

That report was given in February 2003, and despite strong pressure from the referees and even with the threat of industrial action the Government did nothing about it until earlier this year, when it looked at it and made an extremely modest fee increase of about $40 per day. Disputes tribunal referees used to get $310 per day, and now get $350, but Weathertight Homes Resolution Service referees get $1,000 per day, and sports disputes tribunal referees get $900 per day. In comparison with those referees, disputes tribunal referees are being badly short-changed.

Labour was, or is meant to be, a party for low and middle income earners. Those are the people who most use disputes tribunal referees and they are entitled to skilled and experienced referees. Referees should be paid at levels commensurate with the status they have in, and the skills they bring to, this most important role. After promising the review for years, the Government has been extremely slow to implement its recommendations. It should implement them. It should increase the salary to at least $450 per day. It should regularly review that salary, and I think should even look at giving the referees back-pay as well. The opening quote from Labour was: “It is a fundamental responsibility of every Government to ensure the provision of court services.” It is not doing that in this case.

The well-publicised baseline review of the Department of Child, Youth and Family Services was very clear regarding the issues that that Government agency needs to be addressing if it wants to clear its in tray of the literally thousands of notifications that are unallocated at present. The Government, however, has not been mean-spirited when it comes to throwing money at that organisation. It nearly doubled the funds to the organisation in the first 4 years it was in power and, since the baseline review, has offered at least another $109 million to that end.

We are pleased that more social workers have been employed across the nation, although we are concerned about the number of those who are yet to be registered. But we are still unclear about what is being done to address the systemic issues highlighted by the review.

In the important issues of child protection, child placement, and prevention work in this area, the choice should never have to be between quality and quantity. Those areas of social work are specialised and, because of statutory responsibilities, should be the domain of only our most competent and experienced social workers. The decision to uplift children and place them in care is one of the most serious decisions that should ever have to be made, and social workers need to be actively reviewing those decisions with regularity if the department is to live up to the very clear principles in the Act that govern their work. I personally have serious misgivings about the placement of young and inexperienced social workers in the kinds of positions where they are required to make those kinds of calls, about the time restraints and pressures that exist, about the processes that are rushed, and about the families that are often left feeling unheard.

However, I am also equally concerned about the length of time taken to allocate cases. Many of the most critical cases where children’s immediate safety is in question are second and third notifications. The evidence is clear that children’s circumstances deteriorate while those children wait to be allocated. The most tragic aspect of that scenario for me is the fact that most communities have competent, non-profit agencies, with qualified staff who would be well able to effectively pick up on the current 3,862 unallocated cases where prevention is the required focus. United Future would like to see some of the money spent on that valuable service redirected to those agencies, and the Act amended so that those agencies could be contracted directly to do that which at present remains undone. The issue is not about privatisation of social services; it is about a commonsense approach to making full use of all the resources available to us so that children are safe and, when they have fallen victim to abuse, that the very best help is directed their way for as long as it is needed.

The Minister responsible for the Department of Child, Youth and Family Services has assured us that the extra funds set aside for that department will not be thrown in some haphazard way towards the problems faced by the department, but will be targeted towards improved delivery. With that in mind, I implore the Government to consider the differential intake system proposed by United Future, which would see the existing work of the Department of Child, Youth and Family Services divided between a child protection agency and a more strength-based family service involving community agencies as key providers of quality support for children and their families, before their circumstances deteriorate to a point where more serious interventions are needed.

It is not enough to respond to the needs of the department by merely raising the level of resourcing. Money and staffing alone will not turn around that department. It is commendable though that in some communities, agencies are not waiting for a ministerial directive but are beginning to explore ways in which they can work cooperatively to reduce waiting times. Bridges are being built and relationships are developing as Government and non-government agencies forge working models that need to be implemented across the board. Those agencies like Barnardos, Plunket, the Salvation Army, Parentline in Hamilton, the Family Help Trust in Christchurch, and Te Aroha Noa in Palmerston North are not second-rate do-gooders. They already have a proven track record for honouring Government contracts. They have excellent auditing outcomes and professional development, and supervision and other recognised professional standards are in place. They are already doing the work, but they have key staff spending outrageous amounts of their time fund-raising for the next financial quarter.

It is a real pleasure to be able to participate in this Budget debate, not only because of the nature of the Budget itself—which I think this community is beginning to recognise for the great achievement that it is—but also because of its focus on major initiatives and changes of direction for this country that have been so long overdue. In my contribution I want to talk about richer communities, not richer individuals.

We have heard a lot in this country lately, and also in my hometown of Dunedin, about poverty—food poverty and child poverty in particular. Some members may not be aware that the average household income in many parts of my electorate of Dunedin South is around $15,000 per annum. So it will not surprise members to hear me say that I do not have much time for the attitude of those National Party members in the House—all two of them—and the way in which they look after their mates. That is why it is so timely that this Government has launched such an offensive on child poverty in New Zealand. It is the greatest offensive that this country has seen for decades. We do not believe that a vibrant society, or vibrant communities, can be sustained by casting adrift those at the bottom—those struggling most to make ends meet. They are the very people who inevitably have been historically, and who would be again, the victims of the selfish policies the National Party put in place in the past. The policies are the same policies it has offered to the electorate once again.

We all know, and the community knows, that the centrepiece of this Budget is the Working for Families package. I would like to comment on some of its features, and on some of the other priorities that have been less well publicised. The Working for Families package has three key aims. The first aim, which must be espoused by everyone in this community, is to reduce the barriers to work. The second aim is a clear effort to make work pay, by ensuring that people are better off by being in work and that people are rewarded for their work efforts. The third goal, which will be as successful as the other two, is to support people into work. One of the major differences between this Government and Opposition parties, and one of the reasons for the Government’s success, is that we believe that a supportive approach is infinitely preferable to the punitive approach that those parties in Opposition so often apply to the least advantaged and most vulnerable in our communities.

That package in total will assist nearly 300,000 families over the next 3 years. Over 60 percent of families with dependent children will benefit from the combination of increases to family support, new in-work tax incentives, increased family tax credits, and changes to abatement rates and thresholds. The average increase will be $66 a week and almost $100 for families in the $25,000 to $40,000 income range. As I have said, that package in total represents the biggest offensive against child poverty in memory in this country.

Using 60 percent of the median household income as a poverty measure, the Working for Families package will reduce the number of children living in poverty by a whopping 30 percent. Other recognised measures of poverty—shifting that median to 50 percent for example—will put the reduction as high as 70 percent.

I shall give members the example of the now famous Waihī family—a working couple with four young children on one income of $55,000 a year. That middle-income family, the one we have read about so much, will be nearly $110 a week better off by 1 April 2006, and $150 a week from 1 April 2007, as this package works its way through. It is instructive to contrast that family’s gains with the gains to be had from other options that have been so tediously repeated by the Opposition. At a 20 percent flat tax rate—a cost of about $5.5 billion a year to this country—how much would that family receive? It would receive $39 a week. So Mr Tisch and Dr Brash should not tell this community that tax cuts work. They do not.

New Zealanders need support to help their families and to help people look after their children properly, and delivering targeted assistance of this kind is the only way to do that. This Government is not interested in the “look after your mates” approach that flows from the tax-cut regime. I am sorry but an income of $55,000 dollars a year and an increase of $150 per week does not compare with Dr Brash’s 20 percent tax rate to generate a paltry $39 a week.

But I do not want to spend all of my time on the Working for Families package. It is a key element of the Budget, but in many ways it has unfortunately eclipsed some extraordinary commitments, and expenditure that is also committed to, in this year and the 2 following years.

For example, this Budget invests $1.2 billion in supporting business. Mr Tisch should have looked at the Budget before he made those ridiculous comments earlier, in the House. The Budget covers numerous initiatives, which include increasing links with offshore markets, strengthening the international education industry, developing research, science, and technology, and marketing New Zealand job opportunities for potential migrants. There is also the notable sum of $212 million earmarked for research, science, and technology.

There is increased funding for the Modern Apprenticeships scheme and industry training organisations that will boost the vocational skills of school leavers. Provision has been made for young people in another 500 places in the Modern Apprenticeships scheme, which we started 3½ years ago. They will join the 6,500 young people already involved in modern apprenticeship training. One of the most telling things about the National Party is a quotation I found this afternoon from Max Bradford—that man who gave us the shambles of the electricity supply and delivery industry. In 2000 Max Bradford said that the Modern Apprenticeships legislation was: “… pathetic, just like the scheme that is behind it, and the sooner we get rid of it the better.” He went on to say: “This is a pathetic little bill that does absolutely nothing to improve the lot of apprentices or to improve the number of apprentices who are likely to go into the scheme. All it does, basically, is to appoint some coordinators.” Well, Mr Bradford is not here because he got it wrong about the electricity industry, but his colleagues in the National Party are still getting it wrong about the Modern Apprenticeships scheme. The scheme that Mr Bradford said would fail is now delivering 6,500 apprentices, and we have increased funding for yet another 500. How good is that when we have such terrible problems to cope with as the lowest unemployment numbers in 16 years and great economic growth?

The other great achievement is, of course, the continued contribution to the superannuation fund. When people focus on a thing like a Budget they look at what is in it for them. The one thing that is in this Budget for all New Zealanders, apart from great advances in health care and education, is yet another $2.1 billion invested this year in the superannuation fund. I have previously been on record on many occasions for complimenting my predecessor Dr Cullen on his achievement of what I think is an extraordinary goal in the establishment of this fund. I think that that achievement for the future of this country has been eclipsed by his being able to pull together this Budget. I extend my congratulations to him for that.

Education in this Budget gets a whopping, new $2 billion extra over 4 years. Schools gets about one-fifth of that, and about half of that—$92 million—is dedicated to operational spending. Equally important, and perhaps even more important than in the established secondary sector, there are wonderful new initiatives in early childhood education in particular. This is a Budget for the whole community, and it is about richer communities, not richer individuals.

During question No. 2 today I asked a supplementary question of the Minister of Finance about whether he accepted that a tax cut for business and a cut in the top tax rate would boost the economy, and, if he did not think it would boost the economy, why he thought that a 20 percent cut to those tax rates would not boost the economy. It was interesting that he refused to answer that question. He was not prepared to answer it, because he knows that all the advice he has received shows overwhelmingly that the best thing that could be done for the New Zealand economy—[Interruption]

I raise a point of order, Mr Speaker. It seems that some of the members on the Government benches had a very enjoyable dinner, and we are just having a barrage and a tirade of shouting from them. I ask that you stop that.

The ASSISTANT SPEAKER (H V Ross Robertson): I thank the member for his contribution. I had looked at the member interjecting, but the member on his feet was himself out of order in suggesting something otherwise. Running commentaries are out of order. It was getting very close to that, and I refer members to Speaker’s ruling 56/1. I ask both members to recognise that they are out of order.

Hon Rick Barker: I raise a point of order, Mr Speaker. I take objection to the implication that was made by Mr Ken Shirley, and I wish him to withdraw and apologise.

The ASSISTANT SPEAKER (H V Ross Robertson): I did call Mr Shirley to order on that, and the member will withdraw.

Hon KEN SHIRLEY: Because the Minister had an enjoyable dinner break?

The ASSISTANT SPEAKER (H V Ross Robertson): The member is a very longstanding member in this Parliament. He has served in this Parliament for a considerable length of time and he knows what was implied, as do many others. I ask the member to withdraw and continue with his speech.

Hon KEN SHIRLEY: If I have caused offence, I certainly withdraw and apologise.

The Minister of Finance would not reply to my question today, because all the advice he has had tells him that a cut in the tax rate would indeed benefit the economy. Instead, in his reply he said that the last time we had a big cut in taxes was in 1988, when both he and I were members of the Government, and he went on to imply that that had not helped the economy. Is that not extraordinary? I think that all economists recognise that the courageous reforms done by that Labour Government—of which I was a part, along with Roger Douglas and Richard Prebble—laid the foundations for reforms—

Hon Rick Barker: No wonder this member was fourth in the run for leadership.

Hon KEN SHIRLEY: I raise a point of order, Mr Speaker. I asked you before to intervene, and I ask you again. I do not expect a tirade from that side from the same person you brought to heel just a few moments ago.

The ASSISTANT SPEAKER (H V Ross Robertson): The debate is rather vigorous, and the member probably invites some of the comments. However, I say to members on my right that under Speaker’s rulings 56/1(3) running commentaries are out of order, and I ask the members to desist.

Hon KEN SHIRLEY: It is widely recognised amongst economists and people who understand these things that the courageous decisions taken in that 1980 period, along with the progress made by Ruth Richardson, have set this economy on track. Indeed, the surpluses we have today—the low fruit that this Government is picking and enjoying—result from the hard yards done during those reform periods. It is interesting that Government members, on the one hand, rail against the reforms, yet, on the other hand, are happy to pick the fruit of the benefits and squander and waste it. We even had Lianne Dalziel in this very debate criticising the National Government for introducing the student loan scheme. Has Labour undone the student loan scheme? I do not think so. Has Labour undone GST? I do not think so? Has it undone the corporatisation of the public sector? I do not think so. Everything that Labour rails against, it has carried out. It has enjoyed the benefits and the fruits of those hard yards and is now squandering them.

There is no virtue whatsoever in a Government surplus. All that a Government surplus means is that the Government has taken too much money in revenue. And where does it get that money? Governments do not have any money. These socialists talk about Government money and Government spending. The only money Government has is the money it takes off hard-working New Zealanders, hard-working families, and enterprising businesses—

Russell Fairbrother: From people who have jobs.

Hon KEN SHIRLEY: —in the pretence that the Government can somehow spend it more wisely than people like Mr Fairbrother from Napier. Is that not extraordinary? One just needs to look at the waste in Government spending, like the Government throwing money at hip hop trips through North America and deciding to subsidise Auckland’s purchase of the Auckland marina so that wealthy people can have Government-sponsored moorings of their yachts. It is bad for any Government to get involved in things like that.

No country in the OECD has improved its economy performance by increasing taxation. I put a challenge out to that lot over there on the Government benches to name one country in the OECD that has improved its economic performance by increasing taxation. There is not one. Conversely, every country in the OECD that has cut its tax rates has leapt ahead in economic performance. That is a reality. The problem is that members of Labour socialist Governments can think only in terms of a static model. A dynamic model is just a bit too complicated for them to get their heads around, or possibly their rhetoric and their dogma precludes them from thinking in those terms. The only money the Government has is what it takes out of the economy, and I have already mentioned the wastage. This Government is using this Budget to buy votes. It is a pork-barrel Budget—nothing but a pork-barrel Budget. The Government is bribing people with their own money, and the public have seen though it. The Government has fired its salvo and has played its big card. The polls tell us overwhelmingly that the majority of New Zealanders recognise the Budget for what it is and would have far preferred a tax cut in the first instance.

J F Kennedy, a Democrat, was what we might call a socialist President of the United States, in relative terms. He made a rather interesting statement. He said that the best way to secure revenue in the long term was to cut tax rates in the short term. I think that President Reagan gave us an even better quote when he was Governor of California. When he was asked what he thought about Government spending, he stared down the camera and, in that classic Reagan voice, said: “Thank God we don’t get all the government we pay for.” I think that really summed it up.

This Government commissioned the McLeod report. Soon after coming into Government in 1999, Michael Cullen commissioned the McLeod report on taxation. He got that report. His officials gathered around in his office up on the seventh floor as it was presented to him. He read it, and I am told by a number of people who were there that he threw it across the room, and said: “I’ve just spend a million dollars getting an endorsement of the ACT party’s manifesto.” Overwhelmingly, the experts who looked at the New Zealand tax system said that on all accounts, to improve the taxation system, to improve the economy, and on all the indicators that drive the economy, the best thing one could do would be to lower the taxation. But through dogma and rhetoric this Government was not prepared to do that.

I raise a point of order, Mr Speaker. Can I have an assurance that the interruptions I received from that side of the House do not come out of my time?

The ASSISTANT SPEAKER (H V Ross Robertson): I have taken that into consideration.

Hon KEN SHIRLEY: So I am in injury time. We have also had the Scully report. That came to the same conclusion. It recommended that the optimum tax rate for this economy is 20c in the dollar. That is the ACT party’s policy. That is the way we will leap ahead.

This is a wealth-sapping Budget. Government members can think only in the static situation of a pie. They want to cut the slices differently, and we get crumbling and wastage when we do that. Anybody who thinks in terms of a dynamic model recognises that the best way is to go for growth and a bigger pie so that everyone can enjoy a bigger slice—not just a redistribution model, which epitomises this Labour Government. That is very regrettable, because we had a golden opportunity with the surplus to recognise that it should have been given back to the people who had paid it. That is the way we would attract investment in this economy. That is the way we would get growth. That is the way we would be going down a pathway to being a more prosperous nation. Past Governments have recognised that. The Labour Government in the 1980s recognised that. The National Government at the start of the 1990s recognised that. ACT recognises it. Unfortunately, the current Government has no idea.

I am delighted to follow on from that exile from the Government. I am delighted to follow on from that man who grasped upon the unwise spending of a hip-hop tour, but who has spent 6 weeks jetting around the country with his three fellow colleagues, vying for the leadership of the eight-man ACT party. He has spent 8 weeks jetting around the countryside, and I bet the bill for that exceeded the unwise hip-hop spending of $54,000. ACT is a party that cannot select its own leader without its members flying around the country at great expense, vacating their responsibilities in this House to preen and parade themselves amongst their few paltry members, who are all seeking tax avoidance schemes. ACT members came here and had a bitter fight on Sunday, after reading the Sunday newspaper, to select their leader. As the learned Winston Peters said: “You can Hide, but you can’t run.”

What that last speaker tried to do was to run away from the truth of this economy. He threw out the challenge about the OECD, and I think it is probably apposite to bring him right back to OECD figures. What was delivered in this Budget could not happen without economic success. From 1990 to 1999 economic growth averaged a rate of 2.6 percent per annum below the OECD growth rate. Then this Government came to power. Our annual growth rate of 3.4 percent on average in the past 3 years compares well with the OECD average rate of 1 percent. Under Labour, the economy has expanded by over 15 percent in 4 years. It is no wonder that the National Party, ACT, and those acolytes of the right want to talk about anything but the economy. It is no wonder they want to indulge in their fantasies about hip-hop, while jetting around this country trying to decide who their leadership should be—and the success of that endeavour is for all to see.

This is a country that, when compared with the countries in the OECD, achieves amazing growth without tax cuts and without raising taxes, and provides a Budget that is sustainable and meeting need, as opposed to pandering to the greedy in this society, which is what Opposition members want to do with their harping, carping, avaricious claims. They want to say that they will increase the bill of $1.1 billion, which provides $150 per week - plus to middle-income workers and their families and children, to a $5.5 billion bill, to give the tax cuts they promise to provide of just $35 per week. Those contrasts are staggering, yet Opposition members do not address them in their speeches in this House.

I want to talk about what this Budget does for Hawke’s Bay. This is a Budget that unifies Hawke’s Bay. It brings our communities together and it reinforces the family as the basic unit of our country, of our province, and of my electorate.

The Budget tackles the needs of education. The last speaker wondered why this Government had not dis-assembled the terrible changes of the 1980s, but that is because this Government offers a sustainable Budget. It offers reliability and predictability, and it offers growth for the future. One does not get that by see-sawing between policy variation and policy variation. One picks up what one has to do, works with the tools one is given, beavers away honestly and earnestly, and lets the results speak for themselves. What are the results in Hawke’s Bay? As a result of this Budget, each student is better off by about $80 in real terms. That is a real benefit to the people in this country, a real benefit to Napier, a real benefit to families, and a real benefit to students. Was there any mention of that by the last speaker in his diatribe? No, he avoided that issue.

Let us talk about Modern Apprenticeships, which my colleague Mr David Benson-Pope referred to. He told us about the folly of National’s attitude to apprentices. It would abolish schemes for them. As I move around my electorate, knock on doors, visit schools, and visit old folks’ homes, one of the repeated underlying concerns is the lack of trade training and the lack of availability of tradesmen. The days of craft and skill appeared to be long gone until the Labour Government came over the horizon and brought back to this country an apprenticeship scheme. What does that mean for Hawke’s Bay? There are currently 181 modern apprentices in Napier. That number is up from 32 a year ago. Let me repeat that. In 12 months, there are almost 50 additional modern apprentices—up by 50 to 181. The growth is exponential, it is better than we hoped, and the signs for this country are good. So one day when people ring for a plumber or a carpenter, they will get a qualified plumber or carpenter, on time and on price.

One of the issues that right-wing parties in this Parliament often bleat about is law and order. They believe that by spreading fear and insecurity they will gain more votes, but what really counts in this country is how we look after our young families and provide for our young children. Because of the great “reforms” praised by the previous speaker, most families in this country are now double-income families just to survive. As a result of that, the need for early childhood training is essential. This Budget delivers to Napier and Hawke’s Bay. There are 17 private and 51 community-based early childhood education services in Napier, and they will each receive a boost in funding. That is not a giveaway; it is not a lolly-scramble; it is investing in families. It is making this country a better and safer place in which to live. It means that “the day after tomorrow” is not a phrase we should be frightened of, but a time to smile at the future as it is unveiled before us in the hands of our young children.

However, the really good news in this Budget is perhaps described in the health vote. There are some staggering figures for Hawke’s Bay. The number of orthopaedic operations currently runs at about 264 this year. As a result of this Budget, that number will increase by 55 in the coming 12 months. That is a 20 percent increase in actual orthopaedic operations. But it does not just stop there. This is a sustainable growth Budget, so that in 5 years’ time—that is, the 2008-09 year—we will have an additional 188 orthopaedic operations. That is 70 percent more than the current year’s number of 264.

Darren Hughes: And they’re against it.

RUSSELL FAIRBROTHER: And they, of all people, will have creaky joints and damaged knees as they genuflect to the tax-cutting elite in this country. They may need those orthopaedic operations, and they will welcome retiring in Hawke’s Bay—the land of plenty—to enjoy those operations in 5 years’ time.

This is a Budget that makes every person in Hawke’s Bay proud, and they welcome it. I called at a door on Sunday afternoon and I met a chap in his seventies. I asked him how things were going and whether there was anything he wanted to say to a mere politician. He said: “Yeah, the Government should be doing things.” I said: “Like what?”. He said: “Superannuation.” I said: “It’s guaranteed. Are you enjoying that?”. He said: “Yeah, that’s great.” I said: “What else?”. He said: “Oh, it’s pretty good, really. No, this Government is really good.”

So that is the message I bring to this House from the electorate of Napier. This is a Budget that people who have been spending their hard-earned dollars and trying to get their children educated know is a good Budget. This is a Budget that makes the sun shine in Napier just an extra hour longer. This is a Budget that makes our sunsets in Napier a beautiful pink and orange, and then go to green, until finally the day settles to a peaceful evening. This is a Budget that we in Napier are delighted to usher in for the next 12 months.

But the real surprise about this Budget is that it is just the beginning. It is the basis on which we can build an improved economy and improved social services. We can get our people back to work and into proper training. We can keep our children in schools where they can be educated at levels that suit their abilities, so that they come out with meaningful qualifications. That is what this Budget is about. And no bleating by members on the other side, as they appeal to the avaricious—no bleating on the other side with their sound bites—is going to undermine what has been a remarkable recovery and celebration of success in this Budget.

I am delighted to speak after my colleague, who has very eloquently explained a whole lot of our policies in this Budget. I am really delighted to see how much we are doing for education, for health—including surgery for hip and knee joints—and for whatever else we are doing. It is really great to see this Labour Government, Michael Cullen, and my colleague Steve Maharey presenting such a family-friendly Budget.

With the little time I have, I want to talk briefly about one part of the Budget that I do not believe has been talked about much—that is, the package in it that allocates $62 million over the next 4 years for practical measures to help migrants, refugees, and their families to make a greater contribution to the economy and society in this country. In this Budget, new initiatives will contribute to the Government’s settlement strategy, which is designed to help employers find skilled workers. It will also enhance the ability of migrants, refugees, and their families to settle here. Over the next 4 years, $4 million is being allocated to Career Services to provide specialist employment advice, information, and guidance to migrants. That will target migrants who are already in jobs, or who are out of work but looking for better opportunities. Many of these migrants entered the country under old policies that did not require them to be matched with skilled jobs. Another Budget initiative is to target adults with professional qualifications who need to improve their English skills. It will provide free advanced English for speakers of other languages training at a cost of $1.6 million for a pilot programme over the next 4 years.

Other initiatives in the immigration settlement package include a big boost to funding of about $37.9 million over the next 4 years, for schools to provide more English language teaching to children from a non-English speaking background. The package will increase resources for refugee and migrant services by $6 million over the next 4 years. In addition, $11.7 million will go to the establishment of a network of migrant resource centres over the next 4 years. A national secretariat based in the Department of Labour will be provided to support communication on migrant and refugee settlement issues between community groups, other organisations, and central and local government at a cost of $1 million over the next 4 years.

Ongoing initiatives outside the Budget package will still form part of the Government’s broader immigration strategy, and will include ongoing funding. There will be $1.3 million next year for the Language Line, a telephone interpretation service that offers 35 different languages for clients of the Accident Compensation Corporation, Housing New Zealand, the Department of Internal Affairs, the New Zealand Police, the Ministry of Social Development, and the New Zealand Immigration Service. Ongoing employment services for refugees and migrants announced in the 2003 Budget will be delivered through Work and Income at a cost of $21 million over 4 years, which will enable migrants to connect with the New Zealand labour market in order to become productive members of the workforce.

This Government has done tremendous work not only for families but also for the wider communities of New Zealand. I am proud to be part of this Government. It is delivering for everyone in this country, and bringing peace, harmony, and stability to the society we live in. Certainly, we are proud that we are providing fair and just budgetary measures for all concerned in New Zealand.

Debate interrupted.

The House adjourned at 9.59 p.m.