Imprest Supply Debate

I move, That the Imprest Supply (Third for 2005/06) Bill be now read a second time. The Imprest Supply (Third for 2005/06) Bill will ensure that the Government will have sufficient supply to meet further policy decisions following the introduction of the 2005-06 estimates and the Imprest Supply (Second for 2005/06) Bill, as well as meeting any increases in demand for revenue expenses and other risks or contingencies in excess of the amounts provided for in the previous bill. It seeks the authority to incur expenses of $4.8 billion and to incur a capital expenditure of $1.1 billion.

The primary reasons behind this bill are to fulfil certain commitments made before the election and certain undertakings given after the election to various other parties—in particular, to raise the level of New Zealand superannuation to 66 percent of the net average ordinary-time weekly earnings from 1 April 2006; to extend the Working for Families package, particularly in terms of increasing the abatement threshold from $27,500 to $35,000 from 1 April 2006; to reduce the abatement rate from 30 percent to 20 percent from 1 April 2006; and to introduce an interest-free student loan policy from 1 April 2006.

Those measures will have a large impact on a large number of New Zealanders. Clearly, all superannuitants will gain from the change from 65 percent to 66 percent. I emphasise that this is not a change to the statutory rate; it is an administrative change to 66 percent. It does not affect the statutory rate of New Zealand superannuation. The Working for Families package will lift significantly the gains to some 100,000 families who, from 1 April next year, already qualify for Working for Families, and it will extend the tax relief support to some 60,000 additional families. The result of that will be an enormous improvement in the level of family income for a very large proportion of low to middle income working New Zealand families. It does not affect the incomes of those on benefits, but those in employment. It is much cheaper, and much more targeted and effective, than any attempt to deliver the same gains at the same cost across the board by means of tax rate changes would be.

The student loan policy, of course, was clear Labour Party policy before the election. I emphasise again that the operating provisions of that policy impact are estimated now at some $202 million a year by 2008-09. There is, of course, some anticipated increase in the uptake of student loans, but the cost of that is included within the ongoing operating provisions impact. We cannot double count those, if we understand actual accruals accounting. There is actually an interest rate write-off, which is included within the operating provisions impact. The reason why National Party members keep getting the number wrong is that they do not understand that the existing student loan scheme already has within it a significant element of interest rate write-off. That is because, firstly, people who are students already do not pay interest, and, secondly, the current Government changed the provisions in such a way as to ensure that people are paying 50 percent of their repayments in terms of capital repayment. That requires a level of interest rate write-off at the present time. That is why Mr Key keeps getting his numbers wrong, and it is why that kind of smiling adolescence will not get him very far in terms of politics in New Zealand—because he lacks depth and any understanding of these kinds of issues.

Hon members: Ha!

Hon Dr MICHAEL CULLEN: I notice that Opposition members on the back bench are all saying “Haw, haw”, because it is pretty clear that most of the new members support Mr Key as the leader of the National Party, and do not support the old one down there in the front. They cannot actually disguise the fact that they are salivating at the prospect of sticking the knife into the back of the old bull and putting the new bull into the No. 1 position—and they will hear a lot more about this from the Labour Party over the coming few months, because we have seen this kind of dance from the National Party so often over recent years.

The background, of course, is one of an economy that has been moving very strongly over recent times, and indeed over the last year it has been moving more strongly than either the Reserve Bank or the Government would have wished to see. We are now seeing significant pressures in terms of inflation—which is running at around 3.5 percent or so per annum—a very tight labour market, and a very substantial current account deficit as a consequence of a long period of an inflated exchange rate within New Zealand. What is National’s answer to this? It is to have a tax cut. Now, even if one is an extreme right-wing economist—lined up against the wall, truth-or-dare kind of stuff—the notion that the answer to a current account deficit, excessive consumption, and over-inflation within the economy is a tax cut, is about as dumb as one could get in terms of macroeconomic management. It says that if people are spending too much money, the answer is to give them more money so that they can spend even more.

We look forward to the National Party trying to explain that extraordinary policy over the remainder of this evening and tomorrow afternoon, because the essential difference in this election campaign, apart from things like homophobia—and apart from things like scratching various little issues, the word for which I am not allowed to use within this Parliament—was that National said that the surplus was so big we could give some of it away and have tax cuts as a consequence. So those members said: “It’s about time you got your dividend out of your sacrifices over the last few years.” In other words, they said it was about time people got their dividend out of the Labour Government’s success in lowering unemployment and sustaining the rate of growth at around 4 percent or so per annum, which the last National Government was completely unable to do for 9 years. It actually had a growth rate of 3.1 percent per annum, on average, over its 9 years in Government.

Of course, the fallacy in all of that is, when the economy is running so strongly and we have those imbalances, that we do not feed extra demand in by way of making large tax cuts and reducing the surpluses. [Interruption] Who says so? Well, actually, if those members bother to read it—

Hon Member: Treasury.

Hon Dr MICHAEL CULLEN: Yes, Treasury said that. Last week Treasury said that the Government should maintain the current level of surpluses and savings, and the much-vaunted tax cuts would have been paid for, dribble by dribble, over the next 3 years out of cutting back the growth and spending—and I will come back to that in a minute. Yesterday the Reserve Bank said very clearly that the Government should not engage in any further fiscal easing. Now, I have to explain to the members opposite that fiscal easing is not just spending more money; fiscal easing also includes cutting revenue. Fiscal easing is the gap between revenue and expenditure.

The problem with the National Party is that it has convinced itself that revenue does not matter in that respect, and we can cut it as much as we like. Of course, the National Party is up to its old tricks already. I think it is amazing how quickly members of the National Party get house-trained. Goodness me, if they were puppies, within a day they would be asking to go outside—they are so good at being house-trained. Or perhaps, in the National Party, they never learn to go outside—I am not quite sure what the difference may be. Look what we have seen even with their maiden speeches. We have seen National speaker after National speaker call for more spending. They went around the country saying that the Government was spending too much—except, of course, in each member’s electorate, where the Government should spend more. It is the old National Party trick of telling two stories, depending on where a member is. So Paula Bennett wants to spend a lot more money helping people on the domestic purposes benefit to get a job. Mr Blumsky wants us to build Transmission Gully straight away; so does Mr Guy. Mr Clarkson, who has temporarily popped in from God’s waiting room for the next 3 years and then will pop out again at the end of that particular period of time, said that our roads are totally underfunded. He wants billions more to be spent on the roads each year, and he wants the Government to spend billions more on building 6,000 new houses every year.

Bob Clarkson: Rubbish!

Hon Dr MICHAEL CULLEN: In his maiden speech Mr Clarkson said that he saw that 6,000 affordable houses a year are being built and sold by State housing. I ask Mr Clarkson where the money is coming from. It is coming from borrowing, of course. Mr Clarkson has yet to work his way around little, simple issues about arithmetic like that. It is not like running his business in the past.

What about that member’s front-bench colleagues? Mr Ryall, who has everything both ways in life—we know that only too well—said that we have to spend more money on drug rehabilitation services. Then Mr Ryall said we have to spend more money on aged care. Dr Brash, putting aside all private and personal care, said that, yes, we have to spend more money on aged care. Mrs Rich said we should spend more money on breast cancer drugs right now. Mr Power said we should spend more money on the police. Ms Goudie said we should put more money into subsidising passports, and so it goes on and on and on. I predict that in the next 3 years we will see Mr Key get up and say that the Government is spending too much—ha, ha, laugh, laugh, as he does for 5 minutes—and we have to cut back Government spending—ha, ha, laugh, laugh, for 5 minutes—and every other National Party spokesperson will say that the Government is not spending enough in his or her area. It sounds just like the briefings to incoming Ministers.

The Hon Michael Cullen has not told the public that the National Party position is that what we oppose is the wastage of the Labour Government with regard to the money it has spent. I ask members to look at one recent example of that waste. Have members heard of Converge 05? One hundred and fifty people converged together to try to convert some creative initiatives into commercial reality. Apparently, New Zealand Trade and Enterprise contributed $250,000 for 150 people to have a talkfest. That is what it was. When the organisers were asked how the Labour Government could be sure of the value of the $250,000 that had been spent, they said that it is hard to determine the benefit in the short term and that that type of creative project needs to be reassessed in the medium to long term, because at this stage people have just got together to learn, to think, and to bounce ideas off each other. That is what the National Party is opposed to. It is not opposed to Government spending but to the way this Government wastes taxpayers’ money.

We oppose this Imprest Supply Bill for the very simple reason that Treasury, the chief adviser to the Labour Government, in its briefing papers has observed that there is “little information to indicate that New Zealanders are getting more services and better results from the public sector for the large increase in resources provided”. The question that National wants to ask of the whip and the few Labour MPs who have bothered to turn up to the House, is: given that Labour’s own adviser—Treasury—actually states that Labour has not lifted the performance of the public sector, how can the public have confidence in continuing to pay high taxes into the Labour Government’s coffers, when we are not getting value for money? Treasury states there needs to be a greater driver for performance across all parts of the State sector.

We happen to agree with Treasury. In the financial review coming up in the Finance and Expenditure Committee, our hard-working fellow National colleague Mrs Katherine Rich will certainly want to get to the bottom of how the $250,000 that was spent on Converge 05 was used. Of the 150 people who attended that function, only 10 paid the full cost of $1,200, and I am sure that those 10 are now rapidly trying to claim a refund for attending that conference. When we have a Government agency that is not acting responsibly in dishing out taxpayers’ money, I think the Government has a lot to answer for.

I wonder whether that was the reason why the Hon Jim Anderton, who sort of set up New Zealand Trade and Enterprise and who had a disastrous run of scandals uncovered relating to grants, is being shunted away by the Labour Government. It has now put him in charge of the agriculture portfolio. We all know that the Labour Government is less than popular with the farming community. Can members guess what happened to the Hon Jim Sutton? He was tossed out by our very good National colleague Jo Goodhew. That is what the Labour Government has in store for the Hon Jim Anderton. It is trying to line him up with the farming community, which is totally disillusioned with the Labour Government. We are looking forward to the Hon Jim Anderton paying the price for that at the next election, by losing the Wigram seat. I am sure National will put forward a good candidate.

It is interesting to note that the Prime Minister, Helen Clark, lives in denial, because she said in a speech made on 8 November: “My Government has implemented a framework for growing a higher-value economy.” We have just seen it spend $250,000 on trying to change so-called creative initiatives into commercial reality. We want to know why the Labour Government cannot just accept what is stated in the Treasury briefing papers: “New Zealand continues to be a natural resource - based economy.” Why can the Labour Government not acknowledge the backbone of our economy: our agricultural, farming, fishery, forestry, and tourism sectors? Why can it not accept that and be proud of them? But none of those sectors has actually asked New Zealand Trade and Enterprise to come up with $250,000 for a talkfest. I am sure that a lot of small businesses would love to have a share of the $250,000 so that they could have a thinktank, strategy meeting, or talkfest, but they have to risk their own hard-earned money in order to start their businesses.

Helen Clark said that the Labour Government had built a strong economy, but I wonder whether she has been following the series of surveys being put out by the various banks. The latest one, put out by the ANZ National Bank, points to the risk of New Zealand going into a recession. Business confidence is at its worst level for a long time, with 66 percent of those surveyed expressing gloom and doom in terms of their own businesses and of the economy.

The Labour Government promised it would work in partnership with stakeholders to grow our economy. All that our business community asks for is sensible initiatives. It did not ask for $250,000 worth of talkfests. All it wants is two things: firstly, a cut in company tax, which is the recommendation of the extremely right-wing—according to Dr Michael Cullen—Treasury, echoed by the business community, and, secondly, a cut in compliance costs, which I think is very sensible. The business community conducted a survey that shows that the average total cost for each enterprise, over each of the four compliance cost areas, is $53,000 a year—that is, for 2005. Can members imagine that it costs businesses up to $53,000 a year just to fulfil compliance costs?

When everything was going well, the Labour Government took the credit for that, but now that the economy is packing up, why is the Hon Michael Cullen blaming New Zealanders for saving in the form of buying their own houses? Why is he blaming the public for spending? Why can he not take some of the blame? Now it looks as though our economy is going into a recession. National will definitely not support this Imprest and Supply Bill, because it will simply waste more taxpayers’ money.

First, I congratulate you, Mr Deputy Speaker. It is good to see you back in the Chair.

New Zealand First will definitely be supporting this Imprest Supply Bill, and we will be very proud to do so. We promised stability in this country, and that is what we intend to deliver. [Interruption] In response to the barracking from the National Party, I just ask all those people who voted for National to come clean, rack their brains, get out their pencils and calculators, search through all the rhetoric of the election, and tell us what they will gain over the next 3 years from having voted for National. To save those people from wasting ink and having to make the effort to go through all the speeches made by Don Brash and his team, I will tell them the answer. They got nothing. All those who voted for National got nothing from that party and, if they are not very careful, they will get nothing following the next election.

Having said that, I also say that it is true what people—including the Deputy Prime Minister—are saying: that it is inevitable that the economy will slow down. New Zealand First spoke about that during the election campaign, as well. If an economy is going to be run on immigration and on the consumption of goods that the country cannot afford—consumption way beyond the ability of our exports to pay for it—then, as we have told everybody, it is inevitable that the day will come when that all has to be paid for. The day is nigh—as they say in the Bible, which is about the only bit of it I have read lately—when that has to happen.

The next question is: where will the money to pay for it come from? [Interruption] My Scots friend over there, a good Presbyterian like myself, knows that sooner or later we will have to pay for it, but where will the money come from?

Bob Clarkson: Where’s it gone?

R DOUG WOOLERTON: Oh, we know where it has gone. Where it will come from is what will concern us in the future. I can tell members where it will come from. It will all come from the same place it had to come from in the past—that is, from farmers, foresters, fishers, and all those people involved in primary production.

Pansy Wong: What about tax cuts?

R DOUG WOOLERTON: I will get on to tax cuts in a minute. All those who are involved in primary production will be asked yet again, as they have been asked many, many times in the past, to crank up production and pay for the profligacy of people who have imported without thinking about how to pay for it. My Scots friends, not only here but throughout the country, know that the piper always has to be paid, and that the money will have to come from the good folk in the countryside, who will have to crank up production yet again.

It is all very well for National members to barrack, but National went around this country saying there would be tax cuts, and Labour talked about cuts for student loans and passing legislation for that before Christmas. They promised all those things, yet both of those big, old parties knew that a slowdown in the economy was coming. They both knew that their promises could not be easily fulfilled. They both knew that if they were to fulfil their promises, then it would have to be on the backs of hard-working farmers and those in the primary sector. National promised unaffordable tax cuts. I will not even go into what Labour members promised, because “They are our friends at the present time, are they not?”, I ask Barbara Stewart. We will support this bill, but both of those big parties knew that they were getting into areas of unsustainable promises, and that this would be the time when the chickens came home to roost. However, the point is that the chickens would have come home to roost whether the Government was a Labour-led Government or, indeed, a National-led Government.

Because the Labour Party got more votes than the National Party, the Labour Party is the one New Zealand First has had to support in the interest of stability in this country. Thank heavens for the good, responsible people in New Zealand First, who have had to put aside personal interests and go with what is good for the country. Rather than offering promises at the election, New Zealand First members went out and talked about things that really matter. Not only did we talk about them during the election campaign, but when it came time to put our bodies on the line and to negotiate with the party that got the most votes, what did we get? We went out there and we negotiated for serious things for our seniors. We negotiated more superannuation. We negotiated a senior citizens card, and we talked about a review of immigration.

We talked about extra police—and those extra police will be delivered. I know that it is fashionable to be pedantic and talk about whether they will be front-line or back-line, but the fact is that there will be more police, and all National Party voters can thank New Zealand First for that. I do not know whether they will lay petals at our door. I do not know whether they will open car doors for us. I do not know whether they will send roses through the mail, or whether they will spend money, but I know they will be very, very grateful for New Zealand First because National could not deliver all that, so New Zealand First has had to step up and we are delivering those things.

We all know that it will be tougher in the next few years, but people can be assured that New Zealand First has made sure there will be a $12 an hour minimum pay rate for workers. That is something Labour was not prepared to do and something National was not prepared to do, but it is something New Zealand First has made sure it has delivered. People will be very happy to have that.

We will also make sure that the land access issue—something that National went around the country raving on about but could not deliver on—will be addressed, and that there will not be any freedom to roam on farms, not only in the Waikato where David Bennett lives, or crouches, but also in the high country of the South Island and on the plains of Ashburton where Mr Connell, the favourite rebel of the National Party, comes from. We are looking after those people, from North Cape to Bluff, because National could not. We do not expect huge accolades, but we expect to be quietly thanked in the fullness of time.

I rise and follow the others who have congratulated you, Madam Assistant Speaker, on this elevation, and I rise to support this bill. This bill reflects a great deal of enthusiasm, unlike the feeling among the Opposition members, who have campaigned on divisiveness, tax cuts, and stigmatising Māori identity. It is an utter mystery to me as to how, within the first week after the election, they were only too happy to abandon all those great ideas and cuddle up to the whanaunga in the Māori Party.

Colin King: Why not? They are very nice people.

SHANE JONES: I will pass comment on that.

One of the great things about this bill is that it enables us to talk about moving forward together. Throughout the recent election campaign, my good friend John Carter—and I say to him, God speed and get well soon—and I encountered huge numbers of people who want to move together and who do not want a toxic recipe of the races fighting each other or of people being driven together over fear about the Treaty of Waitangi settlement process.

Nothing more clearly demonstrated that than the response to the cynicism and the opportunism shown by the Leader of the Opposition in his visit to Whangarei, where he tried to drive a wedge in heartland New Zealand. Fortunately he was challenged very vigorously by the current member for Te Tai Tokerau, and what that showed is that the recipe used by the Opposition failed. A huge number of New Zealanders turned their backs and said that they did not want a country that is possibly going to have a hīkoi every month, 2 months, or 3 months. They said the blend they were looking for was shown by the policies Labour put out, and those policies will indeed be hugely supported through the resources being transferred through this bill.

In addition to that, despite the huge rumour-mongering, etc., Labour fought a campaign that supports families. We are not into punishing families. We are not into stigmatising or demonising those families who from time to time fall on hard times. The assistance package, which will very shortly be extended and come back into this House, where with a great deal of enthusiasm we will pass it into law, showed that our rhetoric has reality. We are spending real money by extending the family assistance package to those who absolutely need it.

The Opposition, in comparison, sought to introduce a policy of tax cuts, which would have lead to the destruction of services and the erosion of infrastructure. It came as something of a surprise to hear, when I listened to some of the maiden speeches, that despite the Leader of the Opposition trotting around and saying how vigorously he was going to cut taxes, the new member from Masterton, Mr Hayes, called for public expenditure to fix a sewerage system. Why on earth he would choose a sewerage treatment system as the item in his speech with which to launch his career, one can only ponder.

There is a deep and an unsolved riddle here. A party cannot promote tax cuts and a recipe that would benefit a tiny minority, and at the same time constantly call, in urban and rural New Zealand, for infrastructure renewal and development. One cannot get rid of dough through tax cuts whilst that money is secretly needed to fund local projects—unless, of course, one wants to raise more debt. Raising more debt would be a massive leap backwards, and perhaps it is a demonstration of how National is going back to claim its pedigree, under Muldoon, of huge, inordinate debt. Members cannot go ahead and preach tax cuts whilst at the same time want to maintain expenditure on a whole variety of pet projects—not the least of which is a sewerage system—unless they access the capital. No doubt that would happen through debt, quite apart from the impact it would have on inflation.

Fortunately, the good voters of Aotearoa decided that they did not want that. Firstly, the policy would have been fiscally profligate; secondly, it would have definitely caused inflation to spiral; and, thirdly, it was based on an ethos about people that was opportunistic and was driven to demonise the Māori personality. I am fortunate to be able to say that that strategy failed, and that it will fail for a long, long time.

In relation to the safety net, we are very, very proud to continue on with the family assistance package. It builds another strand to the net, so that those who want to help themselves have the necessary resources and the necessary revenue on a weekly basis to care for their kids—through attending sport, attending school trips, and doing the simple things that are often overlooked when we become focused on tax cuts, especially for those who are exceedingly well off.

It might be said that by allocating tax cuts to those who are exceedingly well off, others would enjoy the trickle-down effect. Well, that concept has a curious expression in the Māori language—it is known as the mimi effect. It is not unlike those who sit at the bottom and receive that which is not very nice and trickles down. That is not what we want. We want a situation where opportunity—not rampant monetarism devoid of any social conscience—is provided and rewarded, but where those who are unable at a certain point in time to help themselves can help themselves. Those people are families. There is nothing more important or long-lasting than investing in families, because families are producing tomorrow’s workers and tomorrow’s taxpayers. Without a necessary level of fiscal assistance, tax cuts would only worsen their situation.

How else would tax cuts worsen families’ situations? Demographically, we are changing. We are going toward a situation where a huge number of the new entrants to the workforce are of either Pacific Island extraction or Māori extraction, and, unfortunately, many of them are not doing particularly well in education. That is why additional resources, through the well-honed and highly popular Māori development strategy, deeply embraced by the vast majority of Māori Party voters, will spur us forward. There is no way that those groups of the very vulnerable and disproportionately unskilled can be assisted when we lay the cupboard bare by handing out the dough, racking up debt, and overlooking the assistance needed for those who are most in need.

How important will that need be over the next 15 to 20 years? Let us look at the facts. The facts are being acted out and added to and are becoming a reality, not through courtrooms but through bedrooms. We have a situation where the percentage of the population that comprises Māori and Pacific Islanders needs huge investment so that its human capital skills and capacities get to a stage that it can enrich overall society. We cannot do that by slashing. We cannot do that, either, by racking up unsustainable levels of debt, with all the hallmarks of Muldoonism.

Perhaps I might finish by saying that when our party, the Government, pursues its ideas and strategies, we are deepening people’s knowledge and awareness as to their duties and obligations. That is why we are building on families. Families are premised on obligation and duty, and they are an investment for the future. They will not flourish under a situation where essential services are cut. They will not flourish under a situation where resources are cut, and where they are cut adrift and left to the dangers of monetarism without conscience.

Mr Jones certainly makes a lot of noise, and not necessarily a lot of sense, although I must say that he did give an excellent maiden speech the other day.

I want to spend my time tonight discussing an area that has been woefully neglected by this Labour Government, and that is science and technology. We immediately hear the shrill cacophony of scorn from the Government. But this is quite serious. Let us look at the New Zealand Herald of 14 November. “No way to treat a scientist” was the headline. “There was a grim irony in Industrial Research’s announcement that it was to close its research sites in the country’s two main industrial centres and make about 20 scientists redundant.” It goes on: “The state-owned institute’s decision was made public on the same day that the speech from the throne declared that ‘science and innovation are critical to driving our prosperity’.” The contrariness did not end there. A day later the chief executive of AgResearch warned of a looming shortfall in scientific brainpower.

We have heard the Government say time and time again how much it has spent or invested in the area of research and development over the last few years. But the facts are quite different. Let us look at the 2004 research and development survey, which states quite clearly that Government spending on research and development, excluding universities, in 1998 was 0.39 percent of GDP, but by 2004 had fallen to 0.36 percent. But then, let us look at the universities. We see that in 1998, Government spending on universities for research was 0.4 percent of GDP, but by 2004 it had fallen to 0.33 percent of GDP. Who was presiding over this? It was none other than Steve Maharey.

It is no wonder the universities do not like Mr Maharey very much, and no wonder they were very glad to get rid of him, because he is the man who presided over the creation of the Tertiary Education Commission, New Zealand’s most bloated and fastest-growing bureaucracy. The wānanga is just a side effect of one of the other things he did. But he is the man who has now come over to science and technology.

What we must not do, however, is to forget his predecessor in science, research, and development. It was none other than Labour’s own billion-dollar mistake man, the Hon Pete Hodgson. He came to this Parliament and said: “I’m going to write out a cheque for $500 million because of our Kyoto Protocol policy.” He has created the biggest fiscal mistake in the history of the New Zealand Parliament, by being just plain stupid. He was the Minister of Research, Science and Technology and he is now the Minister of Health. It is absolutely vital that we do not forget his legacy. What did he do for scientists? What did scientists say about Pete Hodgson? They said that his policies were all over the place, absolutely ad hoc, with no recognition of the long-term requirements of scientists, and no recognition of the huge importance of planning.

But what about the compliance costs? I will repeat what one of the doctors from Industrial Research Ltd, Dr David Hayward had to say. He might not have lost his job, but he said: “The disintegration of IRL highlighted the funding system that required a staggering amount of scientists’ time. The bureaucracy meant it virtually cost more to apply for funding than the funding itself was worth.” That is the sort of tangled bureaucracy and hurdles that the Labour Government has created over the last 6 years in the area of science and technology, not only in terms of funding grants but also in terms of a regulation regime that is one of the most complicated in the world and that has caused New Zealand scientists in the biotechnology area to leave this country. The legacy in science and technology left by this Labour Government is woeful.

This is the first opportunity I have had to take a call in the forty-eighth Parliament, so I would be pleased, Madam Assistant Speaker, if you would convey to the Speaker of the House my congratulations on her reappointment. I would also like to convey my congratulations to you and your colleagues on their appointments. To the members of the Government who have been favoured with ministerial warrants, I convey my congratulations. I am sure that most of them will take their responsibilities very seriously and will execute their duties accordingly. I tell those members to enjoy the baubles of office, because we in the National team intend to make sure that they earn them.

I would also like to take a moment to pay my respects to the memory of Rod Donald. He was a man I came to admire because he had the courage of his convictions. When people all around him, myself included on occasions, were shouting him down he still had the strength of character to get up and articulate what he believed in, and I admired him for that.

Therein I have a message for new members of the House. I have listened to some outstanding maiden speeches over the last few days. Most have cited a desire to come to Parliament to do something for their constituents, to get things done. I say to them that if they are going to achieve those ambitions, they will need to exhibit some of that Rod Donald backbone. They will need to challenge conventions, they will need to challenge conventional wisdom, and they will need to stand up and be counted when things get tough, as they will in this Chamber, let me assure them.

The last 6 years have been good economic times for New Zealand, and whilst National has significant differences from the Government, particularly around taxation and areas of Government expenditure, an objective assessment of the Government’s performance would have to say that it is fiscally responsible—the same assessment, though, would also have to mention that it should have been, because this economy has been awash with cash. If the Government could not do it in the last 6 years, it was never going to be able to do it, and the test for this Government and the concern that I have with this bill is that I do not see anything to give me any confidence that when things get tough, as they will over the next 3 years, there is a coherent strategy in place to address those issues.

Despite all the rhetoric, Labour’s economic strategy to get New Zealand back into the top half of the OECD remains a mystery. When all the rhetoric is put to one side, a detailed strategy that will bring Kiwis back to New Zealand and keep them here, a detailed strategy that will see Kiwis get a better deal, is not easily found. When economic commentators look at this Government they say that to date Labour’s performance or strategy would get a rating of “not achieved”. I know from experience that it is easy to go into a business—in this case, an economy—and make things look good when things are good. The real test of character and ability is to go into an economy or an organisation and put things right when they are tough. That is the mark of a good Government, and this Government, I think, will be found wanting.

I am pleased to speak in this debate and to follow Brian Connell. I thought that he gave a very calm, politic speech. Was that the same Brian Connell I heard just a few weeks ago on National Radio saying: “Don, happy to meet you, but down in my area.”? Yes, I think it was the same Brian Connell, because he is laughing over there.

Darren Hughes: That joker has got more hair!

PAUL SWAIN: He possibly has. This is the same Brian Connell who a few weeks ago was very gung-ho about his own abilities and the fact he had been passed over. He said that Don Brash did not deserve the leadership. At that time he said that he was happy to talk about it, but that Don Brash had to go down and talk to him in his own electorate. That was a slightly different Brian Connell from the statesmanlike Brian Connell we heard from tonight.

Darren Hughes: He’s been made over.

PAUL SWAIN: He has been made over. The hair is looking good.

Darren Hughes: He’s windswept.

PAUL SWAIN: He is looking windswept, but he has also had a political makeover. However, I think the problem is that the speech has come too late. We know in this job that people have very, very long memories. In a few years’ time they will not be pulling out the statesmanlike speech made by Brian Connell in which he congratulated everybody. I was almost waiting to hear congratulations to his leader on a fine campaign. But I do not think the speech that he has just given will be one that is pulled out in the future; I think the people with long memories will be pulling out the speeches made about a month ago. They will have a look at the transcripts. I actually heard Mr Connell on the radio, on the afternoon show. He was very gung-ho then, but is very much different now. I wish the member well. He was prepared to say what he thought, and good on him for doing that, but the problem is that the people in the National Party leadership have very, very long memories.

The imprest supply is what we are supposed to be talking about. It is the spending that goes on until the middle of the year. One of the things we ask ourselves is what would be happening if, by some absolutely appalling, tragic circumstance, that other crowd opposite were sitting on this side of the House. There is not much chance of that for a very, very long time, thank goodness. I think that for probably the next 6 years that party will be absorbed in sorting out who will lead it. I have already talked about that, so I will not dwell on it.

But one of the things I thought that party would be doing now is allocating money for PC eradication. We know about the PC eradicator, Wayne Mapp. The idea might have had some chance of flying a little bit if it had not been given to Wayne Mapp. The problem with Wayne Mapp is that he is an earnest fellow and the vast majority of people cannot understand whether the National Party is really trying to make a joke of it all or really being serious. One of the things that Wayne Mapp will be known for when he leaves this place is being earnest. That is the best thing one could say about Wayne Mapp. He kind of reminds me of Don Quixote—how one pronounces it depends on which university one went to, but “Don-key-o-tee” is probably a little bit more relevant, if members will excuse the pun. There is “Don Quixote” on his little donkey—the little donkey is a bit skinny and absolutely groaning under the weight—with his lance poking at a whole lot of institutions and trying to eradicate PC. Of course, we have had trouble trying to get some definition out of “Don Quixote”, the PC eradicator, about what exactly political correctness is and, therefore, what will be eradicated.

I ask the National Party, having set up “Don Quixote”, the PC eradicator, how much PC has been eradicated up until this moment.

Hon Tau Henare: All of it!

PAUL SWAIN: No, not one thing. The problem is that as fast as “Don Quixote” can get rid of PC it gets added to by the maiden speeches of the back-bench National members of Parliament. I have not heard so many “kia oras” spoken since I was last on a marae. We now have the National Party and “Don Quixote”, the PC eradicator, wanting to get rid of all this PC nonsense, and we have all the National back-bench MPs who are indicating warmth and feeling for a whole lot of issues that the PC eradicator will try to get hold of. I did not hear much about one law for all or the Ōrewa speech.

Hon David Benson-Pope: Lots of kia ora.

PAUL SWAIN: Yes, there was lots of kia ora. If I were Wayne Mapp, the “Don Quixote” PC eradicator, I would be going with my little donkey and my lance into my own National Party caucus first. There is a lot to be done there.

Darren Hughes: The only one not doing it is Brian Connell.

PAUL SWAIN: Yes, that is true. I actually think Brian Connell should have been the PC eradicator. That might have had a bit more credibility. Dear old Wayne Mapp said he did not know that he was going to get the job, but that was the big, grand-plan strategy. Did he get anything else? Is he a spokesperson for anything else?

Hon Chris Carter: No.

PAUL SWAIN: He is the spokesperson for PC eradication. Will it be on his business card—“Wayne Mapp, PC Eradicator”? I think he should have a little cartoon on it of him sitting on his donkey and going after PC. On this side of the House we will be watching him with great interest. Each week we will ask how much PC Wayne Mapp—“Don Quixote”—has eradicated. I think the first thing to do would be to define what is meant by it, and, secondly, to work out what people in the National Party are saying. We will be measuring it. Every week we will be asking what he means and what he has done.

Of course, that was not the only post-election irony. One of the things we heard from the National Party during the election campaign—

Brian Connell: Talk about the bill.

PAUL SWAIN: I am going to talk about the bill. The notes are not particularly large, so we need to embellish a little.

One of the things we heard during the election campaign was how the National Party was going to do a thing in economics that was quite miraculous. [Interruption] Oh no, Madam Deputy, I must have more time than that. I would like to seek an extension of time at the end, because I am only just winding into my speech. National said that it would cut taxes and spend more. That is called voodoo economics. We had two campaigns going on. The leader of the National Party, Don Brash, went on television saying that National was going to cut taxes and slash spending. But in every electorate around the country, every local National Party candidate was saying that we need to spend more on roads and on health, that we need to do more for the local schools, that we should lock people up for longer, and that we need to build more prisons. Those were the kinds of things being talked about throughout the election—[Interruption]—and they were saying “kia ora” at the same time, even though they are not PC, as we are being told.

We heard so much during the election campaign about what the National Party was going to do. One person actually said that it was not going to spend more at all really; it was just going to borrow a bit and spend a bit. The leader of the National Party would absolutely turn in his grave if he could have heard what some of the candidates were saying out in their electorates, in absolute dire opposition to each other. The problem is that they are lions out in their own electorates and lambs in this House. They promise anything out in the electorate, then come into this House and talk about tax cuts. That is the problem with the National Party: it is not credible. That is why it did not win—because it is not credible—and its credibility sinks to the absolute limit with the ”Don Quixote” PC eradicator, who is on a mission to try and get rid of everything PC. To date, he has not done a single, solitary thing.

It is my pleasure to speak in this imprest supply debate, which is all about making sure that there are sufficient resources, going forward from here, to implement and progress the programme of this Labour-led Government. In order to address adequately the needs going forward, we need to traverse a little history, which I am pleased to do.

Before entering this House and before running as a candidate in the recent election, I was, for the last 5 years, a member of the Housing New Zealand Corporation board and for the last year or so I was its deputy chairperson. I want to take this opportunity to talk about housing. I want to talk about where we are going with housing under a Labour-led Government, because it is a good story and an important story. I will be interested in every interjection of the National Party, because housing was a key area of complete blankness in its policy in the election campaign. In fact, it was worse than that. When National’s leader was asked what his party’s policy was on State housing, he could not remember. I want to talk about some of the things that have been done in housing in the last few years, and about why housing is such a critical issue for us to advance in the next 3 years.

One of the first things I did when I was on the Housing New Zealand board was to attend meetings in which we used to go around and visit different parts of the country at different times, to see what was happening. I am not sure whether I see the member for Northcote here, but one of the first things we did was to visit the North Shore. I had a look at the kinds of conditions that people were living in prior to the State housing renovations and urban renewal programmes that have been implemented recently. I had a look at some of the old Housing New Zealand blocks, and I looked at the backyards. Looking out the back window of one of those properties, I saw a couple of children kicking around in the backyard, and all they had to play with was a rotary clothes line—there was nothing else. I went back home to my comfortable house in central Auckland and I cried, because I saw what my daughter was fortunate enough to have in her backyard to play with, and the comparison was distressing.

Since that time I have watched the progress of Housing New Zealand Corporation as it has reversed the degenerative processes that were in place under the previous National administration. I want to talk about some of the things we did and why we need to continue to do those kinds of things. There is no reason to have Third World housing in this country. In my time on that board I saw an enormous number of quite fundamental changes in the maintenance and refurbishment of existing State houses. There have been some cases where the State houses have been knocked down and replaced with better ones—more modern, more appropriate housing for the kinds of families who need them. We have done more than 5,500 retrofits under the Labour-led Government. The retrofits are about very basic things. They are about water-lagging—putting lagging around water pipes to retain heating—and about energy conservation. We have fitted hundreds upon hundreds of smoke alarms into State houses, but beyond that also into privately owned houses that were identifiably in need.

Projects that were approved and generated by this Labour-led Government have addressed some of the most grotesque housing situations in Northland, East Cape, and the Bay of Plenty. The circumstances of some of the people who live in private houses there were such that we intervened. We hear a lot from the National Opposition about there being too much Government. Well, there are some parts of our communities, our society, that still need some assistance and will continue to need assistance. A Labour-led Government does not shy or shrink away from providing that. We have assisted private housing to come up to standard, for the sake of the health standards of the children who live there, or to prevent houses—or crates—from burning down because people who are not reticulated to an electricity supply are using candles. That is not tolerable in this country. I challenge the Opposition members to defend a withdrawal of Government services in those areas, where the need is so blatant. When one visits some of those places and sees the houses sinking into septic tanks that have not been maintained and have not been appropriately sunk in the first place, then one realises that the health of the children, in particular, who live there is the most critical thing that needs to be addressed.

The things we have done, and why we need to continue forward, are the obvious things. We restored income-related rents for State housing, so that the qualifying low-income tenants pay no more than 25 percent of their income in rent. We stopped the bulk sale of State houses—a programme that the previous National Government embarked upon—and we have increased the stock. Now we have more than 6,000 additional State houses. But more than that, some significant joint exercises are being carried out by Housing New Zealand Corporation, under the direction of this Government, with organisations like Counties Manukau District Health Board and the Auckland District Health Board. Those are the Healthy Housing projects, and they are about making sure insulation is right, that people do not have mould on the walls and moisture running down on the insides of their houses, and that the kind of overcrowding that contributes to the health difficulties of families does not occur.

I want to talk briefly about why we need to progress the things we have committed ourselves to doing, like the KiwiSaver programme. We have said quite clearly that we are implementing a KiwiSaver scheme that provides a $1,000 kick-start for each KiwiSaver account. Yes, that is Government intervention, and I am not ashamed of it. I am proud of it. If we look at a recent report written by the Salvation Army called A Home I Could Own, we see that everywhere across the country it was reported, in relation to low-income clients of the Salvation Army, that saving for a deposit was the key barrier to their owning a home.

Why is the National Party opposed to a scheme like the KiwiSaver scheme? Why is it opposed to that, when in fact it concerns a fundamental item? Aspirations for home ownership are greatest, in fact, amongst Māori and Pacific Island people. Ownership of their own homes is a key aspiration, and it remains a key aspiration of New Zealanders. How do we assist them to get in there and own their own homes? We do it through programmes like KiwiSaver, which I am proud to have this Labour-led Government continue.

It is a great feeling to be back in this House after 3 years of absence. Some people might say, though, that I need some counselling for coming back. There are a number of pertinent issues that I will raise on this, my first opportunity. However, given that this is my first opportunity to speak in this Parliament, I will keep the salutations brief because of the time constraints of a 5-minute speech. I convey to the presiding officers my congratulations. I wish them both wisdom and fortitude in the rulings they make, because the perceptions in which the public holds this House depend very much on the manner in which it conducts itself—and that is the responsibility of the presiding officers. So I wish them well.

I also acknowledge at this time the man I replace, Mark Peck, and wish him well for the future. I am sure it is proper and appropriate that we wish him well in his fight to beat the demons that have demonised his life over the last period of time. We wish him well and trust that he can get on top of the particular problems he has had.

I was content to leave here—that is the way politics works. But a short time after I had been at home in Invercargill, I saw a march that was necessitated by the Labour Government’s first breach of a promise. That breach occurred when Labour was re-elected after the election previous to the last one. Labour had made an absolute commitment on the hustings that agriculture would be exempt from the carbon tax of the Kyoto Protocol. But before very long I was standing and observing a march of significantly irate people from the primary production sector—a march under the name “Fight Against Ridiculous Taxes”, or “FART”. That was the first breach.

I have to say that I was a convert in the 1980s to the notion that a carbon trading credit was an appropriate way forward. By about 1994 I had seen the light, because that particular regime would do nothing to solve the problem. I do not want to get into the debate about whether there is a problem. I accept that the world is getting warmer. Whether it is getting warmer faster than by a natural cycle I do not know, but I believe that mankind has done a number of things in the burning and consumption of fossil fuels that must have an impact. So we have a responsibility. I am appalled, then, that we are continuing with the notion that the Kyoto agreement will solve the problem. It is now actually a charade, because last week in the House the Minister of Finance, Dr Cullen, said that $380 million could not be replaced without applying some cuts or raising the money somewhere else. So the carbon tax has nothing whatsoever to do with solving the greenhouse problem; it is purely a revenue-gathering mechanism.

I am absolutely appalled at that. I do not know why the country at large has slowed down on its “fart tax” programme, because it is indeed a ridiculous tax. It is also a breach of a contract that was made through a mandate promised in the 2002 election.

Chris Auchinvole: It’s a plunder.

ERIC ROY: It is absolutely a plunder. The member is quite right. The crucial problem is that when such a tax is applied, the primary wealth creator is the one that pays. Everybody else can pass it on.

Although the members opposite have been in a phase of self-congratulation and self-adulation over their success in regaining the Treasury benches, I just say that they should note that a blue tide began moving during the last election campaign—and that movement will not be complete until this Government is removed. The Government should take a warning: the primary production sector is the first down. Its members are a wise group of people who know that this Government is bereft of ideas and that a socialist programme is leading this country absolutely nowhere.

It is no wonder members opposite are looking so scared—there are 20 hungry, ambitious new National MPs coming at them. They should keep an eye on their rear-view mirror and keep left unless passing as we move into the top half, and further, up the OECD averages.

Obviously Mr Cullen, who spoke recently, did not listen to my maiden speech the other night—I can give him a copy if he likes—because I told him that tax was not his money. It is ours, the taxpayers, and it comes from all of New Zealand, including the small businesses of New Zealand. Mr Cullen seemed to be able to do something that I cannot do—that is, burp and speak at the same time. There is a nightmare coming. He is out there trying to browbeat everyone down, and trying to browbeat the banks down, but there is a nightmare coming. This is what it will be: the New Zealand dollar will plummet, interest rates will rocket, and confidence will be about six feet under. We are seeing one of those three factors right now, in the confidence indicators out today. Those are not just my words; they are in the Reserve Bank’s most recent Financial Stability Report. It is all there, and it does not sound too good.

I have heard speakers earlier taking credit for the economic conditions over the last few years. But does the Labour Government set the price of lamb? Does the Labour Government set the price of dairy products? No, they are part of a commodity boom it has ridden on the back of, and by which it has siphoned money from the real and good New Zealand, the rural and provincial New Zealand, that it lost in the election—that National gave it the red card for. That is why there are so many new and ambitious MPs right here and coming at Labour.

That report—which, I tell everybody, is scary—also talks about the risk premium coming on to New Zealand, the Eurokiwi and Uridashi bonds, which in my previous life I used to swap. Some of the things we used to note were to look for opportunities, or for the mistakes that this Government is making right now. There is a nightmare coming. Mr Cullen knows it; he is an intelligent man. Obviously, he has also read this report.

I heard Mr Jones, I think, speak earlier about the dangers of borrowing and about debt, or perhaps it was Mr Cullen. Well, one borrows against the income stream of an asset. Can anyone show me someone in this House—or, at least, someone on the other side of the Chamber—who bought his or her house with a 100 percent deposit? No one did. One borrows against one’s future income stream and the life of the asset. That is the real world; that is how it works.

There are three things in this bill. It will allow for the funding for superannuation, the Working for Families package, and the interest-free student loan policy. Mr Cullen noted that the superannuation funding is an administrative change only for as long as it is part of the agreement with New Zealand First—therefore, it is only for as long as this Government survives. Does that mean the superannuation rate will go back to 65 percent in 18 months’ time when the Government gets kicked out? Going from 65 to 66 percent misses the point of how pathetic the New Zealand average wage is to start with. Going from 65 to 66 percent will not pay for much at all—not for the inflation that people on superannuation have to pay when electricity prices have gone through the roof, when the petrol price has gone through the roof, and when the consumer price index is increasing but we still see lower numbers now, which is all about increased prices for whiteware and things that superannuitants do not buy all the time. Their inflation rate must be nudging something like 6 or 7 percent.

Yes, Dr Cullen may be right that the Working for Families package does increase some recipients’ income, but it also increases dependency and decreases aspirations. Because of secondary tax, it effectively controls net income. The Government does not care any longer about gross incomes—it controls via net incomes by those high and punishing marginal taxes. Again, I remind Dr Cullen that it is not his money.

The third thing in this bill is about student loans. The other day Mr Maharey talked about student loans as an investment. Well, I just point out that an investment does not receive a zero percent interest return. Interestingly, the Inland Revenue Department has penalty interest rates for not paying interest on student loans. Those rates are something like 26 percent. The logic is that people are incentivised by the higher interest rate to pay off their loans. Of course, logic says that the lower the interest rate, the more people will borrow, and the less incentive they will have to pay it back. [Interruption] I say to Mr Swain that provincial and rural New Zealand is now corrected politically.

Most Labour MPs are out of town and out of touch. National has about 11 new provincial and rural seats—I thank New Zealand very much. Rural New Zealand is starting to shout; Labour should keep an eye on its rear-view mirror.

It is typical of many of the speeches that we are hearing from the new National Party members that they still have not worked out that National lost the general election. They are talking as though they are the great representatives of the people, but they lost at the general election. The country went off to the polls after a very hotly contested election campaign, and the Labour Party, with allies in other parties, was returned to govern New Zealand. Now we have to try to pass this Imprest Supply Bill, because this debate is Parliament’s opportunity to approve the money that will be spent between now and the end of the financial year. We are looking at the sorts of things that the Government is proposing to spend money on. It is also a very good opportunity to reflect, as a confidence measure, on what would be happening if the other lot were running New Zealand. That is where we get into some big problems.

The first part of the argument regarding the Labour-led Government’s programme involves us actually having to put numbers on a page that all add up together. That is a bit of a problem in politics—what we say on the one hand, we have to be able to do on the other. We have a kind of realism problem in the Labour Party: we actually like to do the things we talk about. That is why we put out a commitment card. The figures are all there for everybody to see in a printed bill and in a printed Speech from the Throne. They are all there for everybody to see.

But members on the Opposition side of the House say that they think the Government taxes people too much. Mr Foss has just told us that tax is more or less theft, and that the money does not belong to the Government but belongs to the people. So presumably, on that basis, he does not believe in taxation, at all. Or if he believes in a bit of taxation, presumably he thinks the tax rates that the National Party took to the last general election were far too tough—he thinks that National, the party he belongs to, was too timid, and that it should have gone further with tax reductions than the $7 billion borrowing and spending-cut tax plan it proposed at the last general election.

If we accept and take as reasonable Mr Foss’s point that the taxes charged by Labour are too high and the taxes National proposed to charge were too high, that would mean savage cuts to Government spending. That is where we run into problems. That guy will get up in Parliament within the next 3 years and demand that the Government pay orchardists to rip out trees. He will get up in Parliament within the next 3 years and demand better roads between Napier and Hastings, and demand a sweetheart deal on an airport. That member will get up in Parliament within the next 3 years and demand every single bit of taxpayer dollar he can for his own area, and then say that he is a fiscal conservative, that he traded a few dollars here and there around the world, and that he believes it is not Mr Cullen’s money but the people’s.

So we have a massive contradiction; there is no logic, at all. For 3 years National will have to work out a way of trying to reconcile the craziness of saying that it wants to tax less and spend more. I am not saying that National will spend more just because I am trying to attack it politically. We had to sit through the raft of maiden speeches—which were more politically correct than the Labour Party back-bench speeches, I have to say. Of course, none of the National members campaigned in that way. They all said around the country that we needed one law for all, that the Treaty gravy train was going crazy, and that it was political correctness gone mad. But they all stood up in here, wearing the biggest pounamu and bone carvings they could, hunched up over their desks, and said: “Tēnā koutou, I acknowledge the Māori people in my area. I am trying to learn to say a few more words, with a little pronunciation that sounds vaguely South Pacific.” Those people are extraordinary in the double standard we are seeing. On the campaign trail they said that political correctness had gone mad and that they had to fix all those problems, and then they come in here and say that the Government taxes too much but that it should please, please spend more on the things they like.

I see Mr Blumsky over there on the Opposition benches. Of course, he did not really bother to add up accounts when he was at the Wellington City Council, and he does not think he should do the same when he comes into Parliament, either. He wants billions of dollars of extra spending, right across the Crown bank accounts. I bet he wants to charge people less tax, as well. Members can imagine what would have happened if Mr Blumsky had gone around the harbour ward, and said he would put people’s rates down and their spending up. I know he got into a lot of trouble when he had that job, but not even he went around, when he had that responsibility, and said he would put people’s rates down and their spending up. But that is what National is trying to do in the imprest supply debate.

At least the list MP from the West Coast was slightly more realistic in his aim, because of all the extra spending that he wanted, he wanted the strategic Arahura road-rail bridge to be done. That was the only thing that he wanted to have done. It is fair enough to hear one thing that an MP wants to have done, but we have had to sit through 15-minute speeches from all those people, demanding that more and more be done.

National became so desperate about its taxation policy during the election campaign that it even promised to get rid of petrol taxes in the last week of the campaign. That is how desperate it was to try to win the general election. So I remind the National Party of the biggest tax bribes New Zealand has ever seen—the 15-year itch the National Party gets. In 1975 it was going to get rid of the New Zealand Superannuation Fund and put superannuation up to 80 percent of the average wage, and in 1990 it was going to cut the surcharge. It won those two elections. But in 2005 the 15-year bribe—the National Party itch—came around and National could not do it, despite the tax cuts, despite the petrol tax, and despite the race card. It tried all those things. For all National’s talk of the new, representative feel it thinks it has, all it did was to hoover up the votes of the other non-Labour parties. It was not some great victory by the National Party. How can its members say they feel good, having thrown everything they possibly could in order to try to buy a general election, to be sitting in Opposition—that they delighted to be there? I think that is absolutely amazing.

I see the member for Rangitikei on the Opposition side of the House. His big new plan is to build some new prisons. He was on the front page of the Dominion Post this week, stating we should build some new prisons. So we have to take all the promises from the general election campaign, plus the tax cuts—National was going to put a total of $5.2 billion into all of that. Now, since the election, all the extra promises have started. So Simon Power asks for a few more prisons. But there is a problem with that: where we will build the prisons? On the one hand National members beat their chests and say we should build a few more prisons, and on the other hand they say they should not be built in their areas.

We saw that with Mr Ryall, who is a slightly odd sort of character. He used to go around saying we need more prisons, but not in the Bay of Plenty. As soon as people wanted to build a new prison in the Bay of Plenty, guess which piece of legislation the National Party reached for, in order to try to slow it down? It was the Resource Management Act. Yet what was National’s position on that Act? Its position on that Act, around the country, was that we had to get rid of political correctness gone mad, and the appeals process—except when National needed it. The National members also said we had to try to cut taxes, except when they wanted to spend money on their favourite thing.

It is absolutely extraordinary that National now comes in here to the House to oppose a bill that actually adds up. It does not like it, but its members will have to explain to people why they are voting against legislation that puts into place some policies that, I think, will be quite popular out there. I am glad the student loan money will get voted through in this bill. I am delighted that the National Party keeps making a big song and dance about the student loan issue. It is on the wrong side of that argument, completely—just as it was in 2000. I ask the National members to please put in all their six questions tomorrow on the student loan policy. Of course, in the Labour Party we had the scarfies on our side—actually the National Party had scarfies on its side, too, but our scarfies were students and its scarfies were from a cult. National put a taxation plan out there that gave members of Parliament, like all of us, $91 a week in tax cuts, but that gave two-thirds of people less than $10 a week. That is fairness; that is the mainstream! The mainstream is now people who are very, very wealthy, but those who get only 10 bucks a week back are not counted as part of it.

Finally, I say the National Party is very upset about the support we are getting from New Zealand First and United Future. It is absolutely devastated about it. National has not explained to Parliament how it is that the Government, working with two parties, is a hotchpotch arrangement, but a National-led Government of five parties would be a fantastic idea. How is that? It is a stable Government if it is Don Brash and five parties, but if it is Helen Clark and two other parties on top of the Government, that is a hotchpotch. How does that work? It does not work, and that is why the National members will sit over there on the Opposition benches for another 3 years and try to work out why this Government is making progress on things that people actually care about. That will lead to 9 long years in Opposition for the National Party. We have to watch people like Mr Power wasting away their middle age in Opposition, sitting around and trying to find work to do.

The only other good thing that will happen, I think, in the taxation area, is—[Interruption] Trying to find work to do—that is right. Well, I tell the member he should keep on looking, because it will take a while. I see that Mr Copeland from United Future will speak next. As part of our arrangement with United Future, we will look at the corporate tax rate. The interesting thing about that is that a Labour-led Government will go back to the polls at the next election with a better policy towards business regimes than the National Party had in its taxation plan at the last election. So for all those members’ talk about freeing business from the shackles, their taxation plan was the harshest on their business supporters.

We have an Imprest Supply Bill that takes us through to the end of the financial year. It is balanced, it has been worked out, and it contains policies that Kiwis want—against a pie-in-the-sky policy that says: “I want this; I want that. I am like a kid in a lolly shop: I want to try to get a job that pays lower wages but pay my mortgage off at an even higher rate.” It will be 3 long, bad, sorry, sad years on the Opposition benches for those members, because they will have to get out all the abacuses in the world to work it out that talk is cheap, and that being in Government is good.

United Future will vote in favour of this Imprest Supply Bill. I thought I would take the opportunity tonight to explain why, because I know from my experience of the last 3 years that for the next 3 years every time I stand up to say that United Future disagrees with the Government about something—and we will do on plenty of things—members on the other side of the House will bay at us and ask why we voted for the Government’s Imprest Supply Bill.

I will get down to telling members why. The election was, by any standards, a major set-back for United Future. With our caucus cut from eight to three, on just about any calculation we would have been irrelevant to the make-up of this Parliament. Therefore, I had contented myself with the thought that I would spend the next 3 years experiencing for the first time what it is like to be on the Opposition benches, engulfed and surrounded by the new eager beavers of the National Party. I thought it might be fun.

I had fantasised, for example, that United Future might get lucky and end up in a Parliament with New Zealand First on the Government benches and United Future on the Opposition benches. That would have given me the opportunity to design a little sign, similar to the one that Winston Peters had last time, that read “poodle power”. Believe you me, for those members who were not around during the last 3 years, Winston Peters did have a little sign like that. Every time we stood up to speak, Winston Peters would put up his little sign that read “poodle power”.

It was quite a mutually beneficial arrangement, because every time Winston Peters put up his little sign he would grin like a Cheshire cat, and I would look at it and read in bold letters from Winston Peters the thought: “I am jealous.” Believe you me, I have already heard some speeches like that delivered by members opposite, who decry parties like United Future—and now also New Zealand First—and the members just sound so jealous. I am sorry, but as the old saying goes, when the rubber hits the road and all is said and done, we have just had an election and the people have spoken. Members opposite should just get over it and accept the reality of the next 3 years. I think they will experience greater contentment that way than they would by going down the road of jealousy.

One interesting little point, Madam Assistant Speaker, which will be of personal interest to you, is that in the last 3 years, not one single Speaker ever noticed Winston Peters’ little sign. He sat in a seat on what is now the National front bench, and he always managed to have his sign tilted and directed at about where I was sitting. No Speaker ever actually saw his little sign, so I thought I would just give you that tip, Madam Assistant Speaker, in case some member opposite is tempted to come up with a similar sign this term. It would be quite pleasant if someone did, but maybe it is contrary to Standing Orders; I do not know.

In any event, United Future is back on the Government side of the House with just three MPs, one of them the Minister of Revenue, and with the Labour Government committed to advancing 15—yes, 15—major United Future policy planks. That is not a bad outcome, and it is one that will ensure that the next 3 years of this New Zealand Parliament will see some positive outcomes. We may be small, but we sure are influential. It is not for nothing. We are doing this for the people of New Zealand. We are doing it for the families of New Zealand. We are doing it for the communities of New Zealand. We are doing it for the charities of New Zealand.

Darren Hughes: For the businesses.

GORDON COPELAND: We are doing it, as Darren Hughes has just mentioned, for the businesses of New Zealand. The National Party said that the businesses of New Zealand will have to wait until 2008. We will deliver long before then. There are only three of us, but we will deliver where National members have failed to deliver.

We will deliver for farmers in this country, and, believe it or not—and this will be a comfort to Jeannette Fitzsimons—we will deliver for the environment. We have two party colours: purple and green. The Green Party has two colours: bright red and green. Ours are purple and green. We will deliver in our supply and confidence agreement these things—and I ask members to listen. We will have a nationwide pest reduction strategy. We actually want to get rid of weasels, stoats, and possums so that the beautiful birdlife of this country can flourish. That is what we will do in the next 3 years.

We will address issues to do with water quality, which is a problem in many, many rivers in whole areas of New Zealand, such as the city of Dunedin, which has no fresh water. We will fix that. We will fix the agrarian runoff. Nitrate leaches into the water, which allows weeds to grow in the first place. For the benefit of those who are not scientific, I say weeds feed on nitrate, and if nitrate is stopped from going in the rivers, the weed problem will be cleared up. We will do that. We will have—members should listen to this one—public access along rivers and lakes in this country, so that people who want to catch a trout can get to their favourite fishing hole. That is what we will deliver to the people of this country, as part of our confidence and supply agreement. I say that the Green Party and United Future should have a lot in common in those policies. The members of the Royal Forest and Bird Protection Society have signalled that once we have begun the pest reduction, they will give us their support at the next election, so I look forward to that with great interest and great enjoyment.

I could go on. Through our agreement, we are going to review the prostitution law. We are going to use private hospital capacity. Dr Jackie Blue spoke about that during her maiden speech, and I thought what she said was very, very impressive. We are actually going to start doing it. Our supply and confidence agreement states that appropriate private hospital capacity will be used to reduce waiting lists. We are going to deliver on that. It will happen during the next 3 years of this Parliament. I say to members opposite: “Eat your heart out, guys. We’ll be doing that.” We will be bringing in tax breaks for charities—something that charities have waited 18 years to get. This Parliament—parties from both the left and the right—has failed charities for the last 18 years. We are still stuck with a miserable 630 bucks for donations rebate; that will become at least $6,300 under United Future.

United Future is going to deliver all that, supported by the Labour Party. I think that is quite an amazing achievement for a team of just three MPs. In exchange we are only too happy to give our votes in support of the Imprest Supply Bill.

Debate interrupted.

The House adjourned at 9.59 p.m.