Tuesday, 22 May 2007

Tuesday, 22 May 2007

Tuesday, 22 May 2007

Madam Speaker took the Chair at 2 p.m.

Prayers.

Visitors

Vanuatu—Deputy Prime Minister

Madam SPEAKER: Members I have pleasure in informing you that His Excellency Sato Kilman, Deputy Prime Minister and Minister of Foreign Affairs, from the Parliament of the Republic of Vanuatu, is present in the gallery. I am sure members would wish that he be welcomed.

Questions for Oral Answer

Questions to Ministers

Housing New Zealand—Non - New Zealander Tenants

1. PITA PARAONE (NZ First) to the Minister of Housing: Does he stand by his statement to the House that “No tenant of the Housing New Zealand Corporation can be a non - New Zealander.”, and how many of the 1,508 non - New Zealand citizen applicants granted tenancy in Housing New Zealand Corporation properties during the 2005-06 financial year were refugees?

Hon CHRIS CARTER (Minister of Housing): Yes. As I stated to the House on 22 March 2007, a tenant can either be a resident of New Zealand or a citizen. The member may not know that all refugees are granted permanent residency when they arrive in New Zealand. One hundred and fifty refugees were housed in 2005-06, or 1.45 percent of the total number of people we housed that year. New migrants other than refugees must wait for 2 years before they are eligible for either an ordinary benefit or a Housing New Zealand Corporation property.

Pita Paraone: Does the Minister stand by his statement to the House that, with the exception of refugees, Housing New Zealand Corporation’s allocation policy “should look after the needs of New Zealanders first”; if so, why are around 1,000 migrant families who arrived here on points systems being given State houses each year, while thousands of New Zealand families sit on the waiting list?

Hon CHRIS CARTER: I remind the member again that in each of the times I have answered this question from him I have stressed that one must be either a New Zealand citizen or a New Zealand resident to be a Housing New Zealand Corporation tenant. New migrants, even though they are New Zealand residents, must wait 2 years before they are eligible for a Housing New Zealand Corporation house, unless it is an emergency.

Ron Mark: I raise a point of order, Madam Speaker. It might well be that you feel that the Minister addressed the question adequately, but New Zealand First is wanting to know from the Minister why around 1,000 migrant families who arrived here on a points system were given State houses. We have been asking this Minister questions on this line now, I think, for over a month, and we really would like a clear answer if at all possible.

Madam SPEAKER: I thank the member. The Minister did address the question. It may be that that is the question that should be asked.

Russell Fairbrother: How many people were housed by Housing New Zealand Corporation in the 2005-06 financial year?

Hon CHRIS CARTER: Housing New Zealand Corporation housed 10,326 applicants in State houses in the 2005-06 financial year, of which 1,508 were either refugees or other migrants with permanent residency. During the same period we also added a further 1,043 homes to our rental stock, helping, of course, to rebuild our State housing stock, which was decimated in the 1990s by National, which sold 13,000 of our houses.

Pita Paraone: Is it true that the Housing New Zealand Corporation does not record the citizenship status of current occupants of its properties; if so, how can the Minister say “You have to be a New Zealander or become a New Zealand citizen to get a State house.”, when the system does not even record whether foreign applicants become New Zealand citizens after they are given State houses?

Hon CHRIS CARTER: To be eligible for a Housing New Zealand Corporation house I stress again that an applicant must be either a citizen or a permanent resident. A permanent resident is not eligible until he or she has been in New Zealand for 2 years. There can be no question that people who are not residents or citizens are eligible for New Zealand State houses. If the member knows of anybody who has a State house and who is not a New Zealand resident or a New Zealand citizen he should tell me and I will deal with it.

Ron Mark: I raise a point of order, Madam Speaker. How can the Minister’s two different statements be true? I am asking the Minister, through you, how can he say, in one quote, “No tenant of Housing New Zealand Corporation can be a non - New Zealander.”, and then stand there and give the House an answer that says one can be if one is a resident?

Madam SPEAKER: That is not a point of order; the member is starting to debate the issue. The Minister has addressed the question.

Pita Paraone: I seek leave to table an answer to a written question showing that more than 1,500 foreign families were granted State housing in 2005-06.

Document, by leave, laid on the Table of the House.

Pita Paraone: I seek leave to table a statement by the Hon Chris Carter stating that the reality is that one has to be a New Zealander or become a New Zealand citizen to get a State house.

Document, by leave, laid on the Table of the House.

Pita Paraone: I seek leave to table a statement about the allocation system by the Minister of Housing stating: “It should look after the needs of New Zealanders first.”

Document, by leave, laid on the Table of the House.

Hon CHRIS CARTER: I seek leave to table a copy of my full answer to the question the member is quoting—question for written answer No. 5729—which explains that one has to be lawfully in New Zealand, either by citizenship or residency, to get a State house.

Document, by leave, laid on the Table of the House.

Finance, Minister—Confidence

2. JOHN KEY (Leader of the Opposition) to the Prime Minister: Does she still have confidence in the Minister of Finance?

Rt Hon HELEN CLARK (Prime Minister): Yes.

John Key: Why does the Minister of Finance retain her confidence when the Budget shows that 15 percent of income tax earners—that is, 456,000 people—now pay the top income tax rate of 39 percent, after he initially had assured the nation that only 5 percent of income tax payers would pay that rate; and why does he still have her confidence, given that he has had eight Budgets to fix that position?

Rt Hon HELEN CLARK: Obviously, people’s incomes have risen, so they have gone into that bracket. But I agree with Bill English, who said barely 2 months ago that now is not the time to be giving out extensive tax cuts.

John Key: Why does the Minister of Finance retain her confidence when, in the 2005 Budget, he stated unequivocally that personal income tax thresholds would be adjusted, yet in this year’s Budget, miraculously, those adjustments are taken away, robbing New Zealanders of their only hope of ever getting a tax cut under a Labour Government?

Rt Hon HELEN CLARK: Those crocodile tears from the member are totally unconvincing. He was the first to say that that was not enough and no one would notice it. How do people notice it if it is gone?

Darren Hughes: Has the Prime Minister received any reports of business reaction to Budget 2007?

Rt Hon HELEN CLARK: I have seen many, and very positive, reports, starting with a report from the stock exchange, which says that the Budget moves to reduce company tax rates, and the tax-related incentives for New Zealanders to go into KiwiSaver, mean more future certainty for businesses and individuals, and which specifically describes the enhanced KiwiSaver as “strongly encouraging”.

Sue Bradford: Is the Prime Minister concerned that under KiwiSaver the least well-off New Zealanders will be subsidising those who can afford to save; and does she agree that while Labour and National fight it out over middle New Zealand’s votes, the children growing up in our poorest families have yet again missed out?

Rt Hon HELEN CLARK: No, I do not agree with that contention, at all. As the member knows, Working for Families has done wonders for families with children, all over New Zealand.

John Key: Why are low-income working people, who cannot afford to save, being given the triple whammy in this Budget: they do not get a tax cut, they have been told they will not get a pay rise going forward, and, most important, they are having to cross-subsidise, with their taxes, higher-income earners?

Rt Hon HELEN CLARK: Under a Labour Government, low-income people know for sure that New Zealand superannuation is safe, the public health system is safe, support for housing is safe, and public education is safe. A Labour Government is the guarantee that low-income people are looking for.

John Key: Why does the Prime Minister have confidence in her Minister of Finance when he has been receiving reports from Treasury for years indicating that the 50 percent of people who might save under KiwiSaver are already saving; and what is she saying to working New Zealanders who are middle to low income earners, who do not get a tax decrease, who do not get a pay increase, but who do get to give more of their taxes to high-income people, who the Minister of Finance already knows can save?

Rt Hon HELEN CLARK: There was hardly a hard bit of information in that question. I ask when the National Party is going to work out whether or not it is for tax cuts, because we had Mr English on Saturday morning refusing to confirm that he supported them, Mr Key saying the next day that Mr English would do it, and, again, Mr English, as reported in today’s paper, refusing to elaborate. What is their strategy?

John Key: Well, despite the Prime Minister saying there is not a hard bit of information, maybe she needs to read her Minister of Finance’s own Budget speech—

Madam SPEAKER: No. Would the member please be seated. It is important to start questions with a question and not to preface them; to do otherwise leads to a certain amount of disorder.

John Key: Would the Prime Minister care to read her Minister of Finance’s own Budget speech, wherein he says he is taking away the only tax cut that was ever on offer—in 2005—and, for the record, is silent on any future tax cuts, and quite clearly states that there will be a reduction in wage demands going forward, at the suggestion of the Minister of Finance, because of compulsory matching? So, for the record, working New Zealanders are a lot worse off under Labour; no wonder they are voting National in their droves!

Rt Hon HELEN CLARK: I would think that, right now, the National Party is trying to wriggle out of the hole it has dug for itself on KiwiSaver, because at every point in this House that party has voted against it, and the people of New Zealand want to vote for it and for a Labour Government.

Hon Dr Michael Cullen: Can the Prime Minister confirm that the most recent votes in Parliament on tax cuts occurred on Friday afternoon—to cut the corporate rate of tax, to cut the maximum rate of tax on savings in widely held vehicles, and to institute a tax credit for people saving in the KiwiSaver scheme—and that the National Party voted against all three?

Rt Hon HELEN CLARK: I can confirm that the National Party voted against the $20 tax credit for workers. I can confirm that the National Party voted against the business tax cut. I can confirm that National members did indeed fall through the trapdoor constructed for them.

Jeanette Fitzsimons: Does the Prime Minister agree with business commentator Rod Oram, who wrote in the Sunday-Star Times that the Budget will do very little to repair the environment, even though our future wealth depends on its health—and I am sorry that Michael Cullen is so bored—if so, for how long does she think the economy and people can continue to prosper while the economy’s physical base is eroded?

Rt Hon HELEN CLARK: As the member knows, there is $650 million in this Budget for rail, which is very sustainable transport. As the member knows, there is considerable funding in this Budget for energy-efficiency measures and related measures. As the member knows, far-reaching energy and energy-efficiency and conservation strategies are being consulted on, and the Government will be making decisions on them. As the member knows, a “cap and trade” system is being formulated to bring to this House. As the member knows, far-reaching policy for sustainable land management is being looked at. In other words, a Labour-led Government is serious about the environment.

John Key: Why does she think that, when National announced its policy of removing the cap on charitable donations, Steve Maharey described it as Tory charity, the Prime Minister described it as tax cuts for the rich, and Michael Cullen went out and gave a speech in which he said he did not believe in charity, and that only the redemptive power of the State could be trusted, then all of a sudden that policy turned up in Budget 2007—why did that happen?

Rt Hon HELEN CLARK: The member is getting a reputation for never quoting anything very accurately—never. I am happy to say that Mr Dunne and Dr Cullen had already made decisions on this matter before the National Party belatedly woke up and started grandstanding.

John Key: I seek leave to table the newspaper report where Mr Dunne said that, miraculously, they made the statement on the very day I—

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Fiscal Strategy—Alternatives

3. SHANE JONES (Labour) to the Minister of Finance: Has he received any reports on alternative fiscal strategies?

Hon Dr MICHAEL CULLEN (Minister of Finance): I have seen lots of them, nearly all emanating from the National Party. In particular, I have seen a report suggesting that the Government should have run lower surpluses over the last few years—that is, adopt a more expansionary fiscal approach. This report came from Bill English, who for months has been saying we should be running a tighter fiscal stance.

Shane Jones: Has he seen reports on the impact such alternative fiscal strategies would have on monetary policy?

Hon Dr MICHAEL CULLEN: Yes. Adopting a more expansionary fiscal approach would have increased inflationary pressures and led to high interest rates and a high exchange rate. I have also seen a report stating that the Reserve Bank should have moved sooner and more dramatically on interest rates. These reports all come from Bill English. I do not support his high interest rate, high exchange rate, spendthrift approach.

Hon Bill English: Can the Minister name the current Minister of Finance who is running a high exchange rate, high interest rate, high spending policy?

Hon Dr MICHAEL CULLEN: I can name the current Minister of Finance who has been running a policy of substantial surpluses, leading against inflationary demand. I also note that the same Minister of Finance, Dr Cullen, presented a Budget last Thursday that the financial markets concluded did not place further pressure upon the Reserve Bank. I can name an Opposition finance spokesperson who had two positions on fiscal policy last week, and, when asked what his position was on tax cuts, said: “Well, look, that’s a hypothetical question.”

R Doug Woolerton: Would the Minister be prepared to at least review other nations’ monetary fiscal policies, with a view to amending the Reserve Bank of New Zealand Act to potentially better the economic outlook for exporters and businesses in New Zealand?

Hon Dr MICHAEL CULLEN: My understanding is that the select committee is finalising terms of reference for an inquiry. No doubt that will be looked at. I note that if we look across at Australia, we see that it does have multiple objectives within its relevant legislation, but in practice the Reserve Bank of Australia does actually target inflation as its primary target.

Dr Pita Sharples: Kia ora, Madam Speaker. What work is the Minister aware of in progressing the genuine progress index as a comprehensive measure of the economic accomplishment of our nation?

Hon Dr MICHAEL CULLEN: I am aware of significant work in that regard; in particular, my colleague Maryan Street has shown a very strong interest in this area and has brought proposals forward for discussion. I am aware that under such measures, for example, those countries that are often praised by members opposite as being highly successful have shown very, very modest—in fact, negative—increases in genuine progress over the last 30 years.

Judy Turner: Are the expected benefits from United Future’s business tax cuts (a) better wages for workers, (b) improved international competitiveness with Australia, (c) a more innovative and dynamic economy, or (d) all of the above; and can the Minister confirm that United Future pushed for this package?

Hon Dr MICHAEL CULLEN: I think that all of those benefits can be expected. The package is an outcome of the confidence and supply agreement with United Future, which was also mirrored in the confidence and supply agreement with New Zealand First. It was supported in the House by Labour, Progressive, United Future, and New Zealand First. It was opposed by the National and ACT parties.

Taxation—Personal Tax Rate Projections for 2008

4. Hon BILL ENGLISH (Deputy Leader—National) to the Minister of Finance: What percentage of people with taxable incomes of $1 or more are expected to be paying the top personal income tax rate of 39 percent in the 2008 financial year?

Hon Dr MICHAEL CULLEN (Minister of Finance): I should say that Inland Revenue Department data does not separate $1 from zero in terms of its own data, so the best answer I can give is that 12.9 percent of taxpayers are expected to pay the top income tax rate in the 2008 income year.

Hon Bill English: Does the Minister believe that he has kept faith with all those New Zealanders whom he told back in the year 2000 that 95 percent of New Zealanders would not face any increase in taxes as a result of his policy?

Hon Dr MICHAEL CULLEN: That statement was true at the time it was made. Of course, we also promised people that, unlike under a National Government, they could expect reasonable wage increases, as well.

Charles Chauvel: Has the Minister seen any reports that show how much savers are better off under KiwiSaver tax credits and other enhancements, compared with other tax proposals?

Hon Dr MICHAEL CULLEN: I have seen a report that shows that at every income level, savers receive more in their KiwiSaver accounts from tax credits and employer contributions than from the National Party’s 2005 proposed tax cuts, which Mr English believes were unaffordable at the time and are unaffordable now.

Judy Turner: Is the Minister aware of any immediate impacts of the new charities regime, which was secured by United Future?

Hon Dr MICHAEL CULLEN: Indeed. Jan Cameron, who announced that she had gone to Australia because of the previous charities tax regime, promptly announced that she was coming back to New Zealand. So we look forward to her charitable giving going into New Zealand charities rather than Australian ones in the future.

Hon Bill English: Can the Minister confirm estimates by Treasury and others that up to $1 billion of current tax revenue comes from people moving into higher tax brackets because of the effect of inflation on their incomes?

Hon Dr MICHAEL CULLEN: It depends on how long the period of time is that the member refers to, in that particular regard. I note that in the much-vaunted Australian comparison 20 percent of Australian taxpayers pay their two top tax rates of 40 and 45 percent.

Charles Chauvel: What reports has the Minister seen comparing enhanced KiwiSaver with the proposed indexation of income tax thresholds?

Hon Dr MICHAEL CULLEN: I have seen a report that shows that middle and high income earners will be between $10 and $14 better off by contributing to KiwiSaver as opposed to indexation.

Hon Bill English: Why did the Minister withdraw the tax cuts he had promised for two Budgets, which would have adjusted thresholds for the affected people’s rising incomes, and why did he think that the people who might benefit from that were the ones who should pay for the company tax cut?

Hon Dr MICHAEL CULLEN: I thank the member for his confirmation that National opposes the corporate tax rate cut, and would put it ahead of any personal tax rate changes. It is, of course, the corporate tax rate cut that is more likely to lead to increased economic growth, increased productivity, and increased real wages in the future. The reality is that indexation changes would have delivered very, very little to anybody earning under $38,000 a year. The sum that comes to mind, I think, is 67c a week. That is itself, of course, one-thirtieth of the amount that such people can gain from contributing to KiwiSaver.

R Doug Woolerton: Is the Minister aware of any reports suggesting that most New Zealanders would rather pay higher taxes, provided they have good essential services; if so, what are those services?

Hon Dr MICHAEL CULLEN: There have been many such reports over many long years. Indeed, we need to cast our minds back only some 7½ to 8 years to realise the alternative. In 1999 tax rates were proposed to be cut, and New Zealand superannuation was cut to pay for those tax rates.

Hon Bill English: Can the Minister confirm that he has argued that any tax cut would lead to teachers and doctors being sacked, and how many teachers and doctors will be sacked to pay for the company tax cut he has just announced of over $1 billion?

Hon Dr MICHAEL CULLEN: It would indeed be true that there could have been a personal tax cut instead of the corporate tax cut. It is hard to understand why a right-wing party would choose that particular option when a corporate tax rate cut is more likely to deliver increased economic growth. But if the member cares to come to the next business meeting I have—I had one last night and one this morning—I am sure he can explain his strange views to business people at that point.

Hon Bill English: Why did the Minister not answer the question I asked about how many teachers and doctors would be sacked to pay for his tax cut, or is it the case that a Labour tax cut is one that can be done out of surpluses, while a National tax cut is one that has to be financed out of expenditure—what kind of ridiculous economics is that?

Hon Dr MICHAEL CULLEN: If the member cares to do his numbers, he will find that the corporate tax rate cut has an effect of just over $1 billion a year. That sum includes the money for export subsidies and the money for skills training. The member seems to have forgotten that his party was proposing personal tax rate cuts alone of $4 billion a year.

Hon Bill English: Can the Minister confirm that he has consistently argued that any tax cut will lead to the sacking of nurses and doctors, and will he tell us which nurses and doctors Labour will be sacking, or will he stop running that stupid argument?

Hon Dr MICHAEL CULLEN: I can confirm to the member that I have consistently argued; it is a virtue I recommend to him.

KiwiSaver—Membership by 2011

5. HEATHER ROY (Deputy Leader—ACT) to the Minister of Finance: How many Kiwis are expected to join the KiwiSaver scheme by 2011 and what proportion of the working-age population will this be?

Hon Dr MICHAEL CULLEN (Minister of Finance): The Budget numbers are based on the assumption that some 830,000 workers—about 41 percent of the workforce—will have joined KiwiSaver by 2011-12.

Heather Roy: Why not roll the State-run Cullen fund into KiwiSaver, which by 2011 would give every working-age Kiwi, including those not employed and those at home raising children, at least $8,000 as an endowment fund, which would guarantee an uptake of every New Zealander, and which would provide all Kiwis with a real stake in the country?

Hon Dr MICHAEL CULLEN: For a very simple reason: the New Zealand Superannuation Fund is there to guarantee the long-term viability of New Zealand superannuation. For many people that is the ultimate guarantee of a reasonable standard of living in retirement. I do not think this country wants to return to the days of right-wing Governments threatening, yet again, the future of New Zealand superannuation.

Darren Hughes: What reports has he seen on support for KiwiSaver, particularly on how it will benefit low-income earners?

Hon Dr MICHAEL CULLEN: I have seen very considerable support from the business sector, but particularly there is considerable realisation, as time moves on, that in fact those on modest incomes get substantially greater proportional benefits than those on high incomes. For people on $26,000 a year, for every dollar they save $3 goes into their KiwiSaver account.

Rodney Hide: Would he consider it a breach of the commitment made in schedule 4 of the New Zealand Superannuation and Retirement Income Act 2001 if National, or another party, decided to roll the State-run Cullen fund into the KiwiSaver scheme in order to benefit all Kiwis, including those not in work and on low incomes, and what would be the implication of such a breach?

Hon Dr MICHAEL CULLEN: Schedule 4 is not enforceable. If a future right-wing Government decides to get back, yet again, on the track of cutting future New Zealand superannuation by removing its funding, then in fact the verdict will lie with the people at the subsequent general election, and they will have to start all over, yet again, in building a secure future for future retirees. What people have to remember about KiwiSaver is that it will also significantly reduce the call on the State for income-tested supplementary assistance over and above New Zealand superannuation, because people will be self-reliant. In the future there may be significant calls on that, particularly if we are not able to lift home ownership.

Health Services—Value for Money

6. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Are there any areas in the health system where he is not getting value for money; if so, where?

Hon PETE HODGSON (Minister of Health): Yes, there are. Although the New Zealand health system is one of the most cost-effective in the Western world, seeking better value for money is a continuous process across the sector.

Hon Tony Ryall: Why has the number of first specialist assessments and follow-up assessments provided by the public health system fallen by 28,000 in the past 6 years despite an extra $4 billion a year of health spending?

Hon PETE HODGSON: I would hope that that was the case. I suspect, actually, that it is not, but I hope that one day we can look forward to reduced hospital admissions and reduced first specialist assessments, because this Government is putting so much time, effort, and money into building a primary health care system. We are pretty proud of that, and I think it is the way of the future.

Lesley Soper: Can the Minister justify his assertion that New Zealand has one of the most cost-effective systems in the Western World, and how does he measure cost-effectiveness?

Hon PETE HODGSON: The usual way to measure cost-effectiveness, or value for money, internationally is to compare life expectancy with the annual cost on health per person. For example, the United Kingdom spends more than New Zealand per person, but we in New Zealand live longer. The United States spends about three times per person on health each year than New Zealand does, yet we live longer than people in the United States.

Barbara Stewart: Does the Minister consider that taxpayers are getting value for money for elective surgery when, in 2005-06, public hospitals performed 105,784 elective procedures against Southern Cross’s 126,300; and does the Government have any philosophical objections to making more use of private providers?

Hon PETE HODGSON: This is not a reflection on the member at all, but her public sector figure happens not to include surgery undertaken in an outpatient setting. But, none the less, the member is right to point out that the private sector provides a lot of surgery, both privately and publicly funded. When I increased funding for surgical services recently I made it clear again that district health boards could certainly contract the private sector to undertake that surgery if they wished.

Tariana Turia: Tēnā koe, Madam Speaker. Tēnā tātou katoa. Is the Minister aware that the dental health care of adults in rural Otago is an issue of particular concern, and what response would he give to a woman who sent an email to my office yesterday, advising me that adults, particularly Māori and those from lower or middle socio-economic groups, are not accessing dental care because: “The high cost of dental treatment and the increasing costs of travel are barriers for the marginalised groups.”?

Hon PETE HODGSON: The member is right to raise this matter. It is a matter of fact that adult dental care is not part of the public health system. It is just not part of it, and it never has been. This Government is preoccupied in the first instance with improving child and adolescent dental health. The member will be aware of that; she will be aware also that in the 1990s, we stopped training dental therapists—almost unbelievably, the previous National Government stopped training dental therapists. My predecessor, Annette King, opened two schools. We now have dental therapists again. We have money flowing into dental clinics. They have been put into community settings, not just in schools, so that in the future we can improve care for adolescents and maybe, as the costs allow, we can start looking afresh one day at whether this country can begin for the first time to look at providing adult dental care.

Hon Tony Ryall: How can it be that after 6 years and $4 billion a year extra on health, 28,000 fewer people got an appointment with a hospital specialist last year, compared with 6 years ago, which was the first full calendar year that data was available?

Hon PETE HODGSON: The member continues to mine the hoards of data that are sent to him each week until he finds a figure that suits him. I just remind the member that since 1999 immunisation rates are up, infant mortality is down, 28 new or refurbished hospitals have been announced, breast screening is up, cervical screening is up, mental health services have improved very significantly, there are about 4,000 extra nurses in our system, there are over 1,000 extra doctors, doctors’ fees have come down, prescriptions that used to cost $15 now cost $3, and, interestingly, every year the life expectancy of a woman in New Zealand increases by almost 3 months and the life expectancy of a man in New Zealand increases by almost 4 months. That is the sort of response one gets when one invests in a health system, as we do.

Hon Tony Ryall: Does it surprise the Minister that 14 of the country’s 21 district health boards provided their populations with fewer specialist appointments last year than 6 years ago, and is it acceptable for district health boards like Capital and Coast District Health Board and Whanganui District Health Board to provide 20 percent fewer specialist appointments than they did 6 years ago, despite the hundreds of millions of dollars he shovelled at the health system?

Hon PETE HODGSON: I will just say again that the member is well known for going through data until he can find two data points that give him an attack position. He has been doing that for the last year and a half. I would say to the member that if the health system is getting poorer, why is it that we have a thousand more doctors in our health system, why is it that we have a primary health care strategy that is now starting to get on top of issues before people need to go to a specialist, and why is it that New Zealanders are living longer if we are in so much difficulty? The member must look at the system as a whole. I invite him to try, for the first time, to do so.

Hon Tony Ryall: Why is it that we have those thousand extra doctors in the hospital system but fewer people are getting appointments to see them, and does the Minister realise that to qualify for elective surgery, people need to get a specialist appointment; is it not the case that the Government is making it harder for sick people to get a specialist appointment, as one of the Minister’s sneaky ways of controlling the surgical waiting lists?

Hon PETE HODGSON: We have now moved into the realms of fantasy. The fact of the matter is that the amount of elective surgery in this country is going up, and that does not even include out-patients—it is going up. What is more, it will continue to go up. The member continues to rock up with figures that he chooses very carefully to show his point of view, and fails to look at the overall trend. He should start becoming a little more honest in the way that he phrases his questions.

Dr Jonathan Coleman: Would the Minister explain why in the 2006 calendar year there were 6,000 fewer first specialist assessments performed across the Auckland regional district health boards than in 2001, and should the public be concerned that that number represents a decrease of 8 percent over 5 years when the population of the region actually increased by 12 percent over the same period?

Hon PETE HODGSON: I just gently say again that my hope is that we reach a health system—and we have not yet, frankly—that is so good at the primary level that we can reduce the amount of first specialist assessments. That would be a good aim. The question is whether someone is not seeing a specialist when he or she should, and the member has not asked that question. As far as I am aware, generally speaking there is no particular difficulty across New Zealand, across all specialties, in people getting to see a specialist. Certainly, if anyone has an acute need to see a specialist, this health system is particularly good at delivering it.

Hon Tony Ryall: I seek leave to table a table showing that there were 28,000 fewer specialist assessments in the last 6 years.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Hon Tony Ryall: I seek leave to table a table showing that fewer people received elective surgery last year than 6 years earlier.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Auckland Passenger Transport—Improvements

7. Hon MARK GOSCHE (Labour—Maungakiekie) to the Minister of Transport: What significant advances are being made to Auckland’s passenger transport network?

Hon ANNETTE KING (Minister of Transport): Aucklanders will see new electric trains that provide faster, cleaner, and quieter trips, with less crowding, by 2013 at the latest, thanks to a joint central government - Auckland initiative to fund $1 billion of Auckland rail electrification. At peak times trains will run at 10-minute frequencies. There will be better links to other public transport, and safe, modern facilities at train stations. There will be integrated ticketing, and additional bus and ferry services to meet the demand of the wider Auckland region, including the north. Also, the northern busway will open next year.

Hon Mark Gosche: What reports has she seen on proposals for a regional fuel tax in Auckland to help fund a range of land transport projects?

Hon ANNETTE KING: I have seen some hugely positive press releases, and let me share some of them with members. The Mayor of North Shore wanted to thank the Government formally for what he called a watershed day, and the Mayor of Papakura has said that the provision is extremely positive for Auckland in the long term. We have had the Mayor of Rodney District saying he is absolutely delighted. We have also had the Mayor of Auckland saying it was a momentous day for Auckland. We have even had the chamber of commerce say the regional petrol tax of up to 10c a litre will kick-start electrification of the rail network, progress the western ring route, and allow long-debated projects like Penlink to get moving.

Hon Maurice Williamson: Can the Minister tell us why her first reaction is always to reach for the “increase tax” lever, even when this Budget shows a $1.7 billion cash surplus, and can she please explain what sort of fuzzy logic she used to come to the conclusion that long-suffering motorists in Auckland—many of whom will never have a railway line even within cooee of their suburbs—who sit locked and blocked in traffic jams, and truckies, taxi drivers, ferry operators, bus operators, and even boaties, will be asked to pay this tax to electrify some mythical railway line in some part of town that they will never see or use?

Hon ANNETTE KING: Can I thank the member for the question. He has explained just exactly why we want to remove off the road the cars, the trucks, the boats, and everything else. The way to do that is to get people on to public transport. When it comes to the member’s question about why we always reach for the tax lever, Mr Williamson has announced that, under National, the people of Auckland could look forward to having all their roads tolled. Is that a tax or not?

Jeanette Fitzsimons: How much of the $600 million over 6 years identified in the Budget for Auckland and Wellington urban rail will be spent in Auckland, and how much of that will be interest and how much will be principal?

Hon ANNETTE KING: It is all principal. Around $500 million will be spent in Auckland and around $100 million in Wellington.

Keith Locke: When the Minister said in her press release last Thursday that the Government will raise infrastructure bonds to pay its share of Auckland’s rail electrification, in round dollar terms how much capital repayment was she envisaging as part of that contribution?

Hon ANNETTE KING: I am unable to provide the member with the answer at this point.

Transport Strategy—Vision Statement

8. Hon MAURICE WILLIAMSON (National—Pakuranga) to the Minister of Transport: Does she stand by the vision set out in the New Zealand Transport Strategy that “By 2010 New Zealand will have an affordable, integrated, safe, responsive, and sustainable transport system.”; if not, why not?

Hon ANNETTE KING (Minister of Transport): Yes, the vision is one this Government believes in, and that is why it has invested so heavily in the New Zealand transport system. For example, we have seen increases in investment from around $1 billion in 1999-2000 to an estimated $2.9 billion in 2007-08. Considerable progress has been made on all the objectives in the New Zealand Transport Strategy and more will be made in our next term of Government.

Hon Maurice Williamson: Can I ask the Minister how she believes that the goals of the New Zealand Transport Strategy could ever be met while her own ministerial advisory group on road costings said that the current system lacks rigour, that projects are exploding beyond their real cost, that no one seems to be being held accountable for value for money, and, in fact, it is a complete indictment on the roading system; that is the opinion of her own advisory group and not the National Party?

Hon ANNETTE KING: The ministerial advisory group report is a very good report that the Government has taken seriously. We will hear an announcement about that in the near future. However, to take one report, which took the member 1 month to even find that it had been released, and it took another month for him to find when we had released the Cabinet committee on Government expenditure and administration reports, is to ignore some of the very good things that have happened in terms of implementing such a strategy. For example, public transport boardings have increased by 16 percent between 2000 and 2005-06, more construction is taking place than has ever been seen in decades in this country, a coastal shipping strategy is being developed, railway networks are being revitalised, and we even have more than 200 walking school buses in Auckland—something we did not have when that member had absolutely no interest in Auckland at all.

Hon Maurice Williamson: How does the Minister believe that the goals of the New Zealand Transport Strategy can ever be met when her own Cabinet committee on Government expenditure and administration internal investigation found that the New Zealand Transport Strategy objectives are set at too high a level, lack specificity and do not contain measurable targets, that there is little sense of interrelationship between the strategy objectives and whether and how they will meet the needs of the industry, that the Ministry is not fulfilling its role of strategic policy advice and leadership, and that there is scope for a dramatic increase in the precision of accountability; this is a second report, on top of the first report by a ministerial advisory group—now an internal Cabinet committee on Government expenditure and administration report says the place is completely dysfunctional?

Hon ANNETTE KING: It is totally overcooked for the member to say that it is totally dysfunctional. In fact, it is absolute nonsense to say it is totally dysfunctional. Mind you, he talks in that very flowery language, but never did anything as Minister of Transport, and let me just say this: was there a transport strategy under Maurice Williamson as Minister of Transport? No, there was not. There was no plan; they were going nowhere, and Aucklanders knew it.

Hon Paul Swain: Has the Minister seen any reports on a proposal to corporatise and ultimately privatise the roads in New Zealand; if she has, how would those help with the strategy of having an affordable, integrated, safe, responsive, and sustainable transport system?

Hon ANNETTE KING: Yes, I have seen such suggestions. In fact, that is the policy of the National Party transport spokesperson—his policy was to privatise the roads of New Zealand. There would have been a backlash around this country like members have never seen before, if he had ever got the opportunity to privatise our roads. It certainly is not our policy.

Hon Maurice Williamson: How does the Minister believe that the goals of the New Zealand Transport Strategy can ever be met when her own chairman of Transit told a select committee 2 months ago: “One of the difficulties is that we are finding we are having to do a lot of things to gain consent under the RMA and the environment court that is adding a lot of cost to each project, and getting consents is now costing Transit a lot more than could have ever been expected, project by project.”?

Hon ANNETTE KING: Yes, I think it is fair to say that there are difficulties in terms of being able to spend all the money the Government has been putting in. For example, National was able to spend a total of $145 million a year in Auckland when it was in Government. Compare that with today, with $1.4 billion spent in Auckland. Transit is finding it difficult to spend; it does have to go through consultation. But put the record of this Government against the abysmal record of a National Government that never cared about transport and still does not today—otherwise, Maurice would not have the portfolio.

Hon Maurice Williamson: Can I just get the Minister to clarify: is she telling this House that in the light of a ministerial advisory group report, which is scathing about the lack of value for money—

Hon ANNETTE KING: It’s not scathing!

Hon Maurice Williamson: If the member would like, later on in the general debate I am really happy to read out what the report says. In the light of the Cabinet committee on Government expenditure and administration report, which basically says the place is dysfunctional and needs a complete redo, in the light of the chairman of Transit saying that costs are now blowing out such that every project they are trying to do is costing way beyond what could be expected, is the Minister telling us that apart from all of that, everything is OK?

Hon ANNETTE KING: No, this Government has said that we can always do better. We have spent the last 7½ years investing money into transport, ensuring that we have projects being implemented, that we have passenger transport taken seriously. We have said that we can always do better, however; therefore, the next step is a review, and I will be pleased to announce to the member very shortly the results of that review.

Hon Member: Oh, another review! That’s what we need!

Hon ANNETTE KING: Oh no, it will be more than any written review we saw out of National. It did not even review anything.

I seek leave to table a document showing that National spent $40 million every year throughout the 1990s on public transport.

Document not tabled.

Exporters—New Markets

9. MARYAN STREET (Labour) to the Minister for Economic Development: What steps is the Government taking to support New Zealand exporters to expand into new markets?

Hon TREVOR MALLARD (Minister for Economic Development): Lots and lots of steps, including the extension of the very successful Beachheads programme into South-east Asia and India. Budget 2007 invests $4.4 million over 4 years to give our exporters access to strategic advice and executive networks in those new Asian markets.

Maryan Street: What reports has he seen on increasing New Zealand’s current export capacity?

Hon TREVOR MALLARD: I have received one report stating that there will be an $87.8 million boost to the Market Development Assistance scheme to enable New Zealand firms to export into new markets, including Asia. I saw an alternative report that stated that all New Zealand Trade and Enterprise business development grants would be axed. The first, excellent report was from the Labour-led Government’s 2007 Budget, which was delivered by the Hon Dr Michael Cullen, and the second report was from John Key.

Chris Tremain: Can the Minister please explain how the steps he is now taking will address the current and real problems faced by export businesses such as Design Spun Ltd in Onekawa, Napier, which has been forced to lay off 25 export workers because the Government sends important decisions on monetary policy to select committees and continues to overwhelm businesses with compliance costs?

Hon TREVOR MALLARD: Yes.

Hon Brian Donnelly: How does the appropriation of an extra $87.8 million for the export Market Development Assistance scheme over 4 years complement Export Year 2007, which was secured by New Zealand First as part of its confidence and supply agreement?

Hon TREVOR MALLARD: It extends the very good work that was agreed as part of Export Year 2007—the Market Development assistance scheme extension, which was developed by this Government but fitted very well with Export Year 2007. It extends it out into the baselines, so that under a Labour-led Government—clearly, supported on an ongoing basis by New Zealand First—it will be there for ever.

Benefits—Single Core Benefit

10. JUDITH COLLINS (National—Clevedon) to the Minister for Social Development and Employment: What progress has been made on the implementation of the single core benefit?

Hon DAVID BENSON-POPE (Minister for Social Development and Employment): Good progress is being made. As I believe the member is aware, the job search service has now been rolled out to all Work and Income service centres, as at the end of April this year. Additionally, phase one of the Working New Zealand work focus support package is currently before the House in the form of the Social Security Amendment Bill. As the member knows, these changes are not about just renaming benefit categories; they are about extending support services to clients based on what they can do, not what they cannot do, and on clients needs, not the name of any benefit they might be entitled to. The bill appeared to be supported, indeed, by the National Party at the select committee and in the select committee’s report back to Parliament, but, for reasons that are difficult to understand, National now appears to be opposing extending those support services to all Work and Income clients.

Judith Collins: I raise a point of order, Madam Speaker. The Minister has not addressed the question, which was about the single core benefit, not everything else.

Madam SPEAKER: The Minister addressed the question.

Judith Collins: Does the Minister agree with the comments of his predecessor, Steve Maharey, who said of the single core benefit: “I have been exploring the idea of a single benefit since I first took up this portfolio. It has been a theme for many years.”, and: “The changes are a world first, and would be the most significant reforms of New Zealand’s welfare system since 1938.”?

Hon DAVID BENSON-POPE: Indeed I do. The member will be only too aware of the capacity that now exists in Work and Income because of, in particular, the drop in the number of unemployed from 161,000 under that member’s party in Government to around 25,000 now, and the 35 percent reduction in the number of all working-age benefits. But I say to that member that, as the number of beneficiaries reduces, the people we are working with are New Zealanders who need the greatest amount of support and assistance. We are tackling the hard end of the social problems that are the legacy of that member’s party in Government. This Government does not apologise for investing in the most vulnerable members of society, to give them the assistance they are entitled to.

Lynne Pillay: How are the changes to the upfront work-focus service assisting Work and Income clients?

Hon DAVID BENSON-POPE: In the past 8 months at least 34,648 unemployment benefit, 16,638 sickness benefit, and 484 invalids benefit clients have participated in the new pre-assessment process, and have indicated therein that they want to return to work. and want to engage with planning and support services to help them to that end. Over the same period 59 percent of clients participated in the upfront work-focus service—which is voluntary at this point—and that shows how well-received that approach is. The Social Security Amendment Bill will, of course, make that engagement process a requirement for work-tested clients, and I look forward to National supporting those changes in the House.

Judith Collins: When will the single core benefit, the so-called most significant reform of New Zealand’s welfare State since 1938, be implemented, as promised?

Hon DAVID BENSON-POPE: I thought by now that it would be obvious to the member that phase one of those developments is already in place, and phase two will be introduced when Cabinet makes appropriate further decisions.

Judith Collins: Why is there no detail of the single core benefit in the 2007 Budget, when, apart from its having been a “theme” for many years, Steve Maharey promised Cabinet in 2005, in this Cabinet paper I have here, that it would be implemented this year?

Hon DAVID BENSON-POPE: Because, as I have just said to the member—and I am delighted to repeat it—Cabinet is yet to make decisions about phase two of that introduction.

Judith Collins: Does the Minister stand by his statement that he has received so many reports on the single core benefit that “compiling a list of all these reports would involve substantial manual collation”; if he does, why, after 20 years of “theming”, 7 years of reporting, and the passing of two definite roll-out dates—2002 and 2007—is there still no single core benefit as promised in the Cabinet paper, which was approved in 2005?

Hon DAVID BENSON-POPE: I have twice explained, for the benefit of that member, that phase one includes the Working New Zealand package, which is now implemented, and is mandated by the bill that she and her party refuse to support. Cabinet in due course will make further decisions about further phases of that policy.

Rates Rebate Scheme—Budget Allocation

11. JILL PETTIS (Labour) on behalf of MARTIN GALLAGHER (Labour—Hamilton West) to the Minister of Local Government: What funding has the Government allocated, in Budget 2007, for the Rates Rebate Scheme?

Hon MARK BURTON (Minister of Local Government): [Interruption] Yes, heaps—as the Minister of Finance said. In Budget 2007, in recognition of the growing support for the Rates Rebate Scheme, up to $70 million has been allocated. Since last year’s significant improvements, the scheme has been extremely successful. To date, more than $45 million has been paid to over 102,000 households, which represents an estimated 276,000 New Zealanders.

Jill Pettis: How does the average rates rebate granted to date in the 2006-07 year compare with the average rebate for the 1998-99 year?

Hon MARK BURTON: The average rebate in 1998-99 was $159.32—for the few who got it. We can compare that with the average rebate granted to date in the 2006-07 year, which is $448. That is an increase of more than 280 percent in the average rebate, and a 34-fold increase in the number of recipients since this Government updated the scheme.

Hon Brian Donnelly: Is the Minister aware that many eligible elderly people are not applying for the rates rebate, because they do not like the idea of having to reveal their personal incomes to local council staff, as reported to the rates inquiry panel; if he is aware of this problem, what is he doing about it?

Hon MARK BURTON: I am aware that despite the extraordinary success of the roll-out of the scheme, which is still in its first year, there are some challenges, such as the one the member outlined. I have officials doing a running review of the process, and we are looking at ways to further streamline and further improve the scheme to ensure that those who are eligible and want to make use of that eligibility can do so.

Greenhouse Gas Emissions—Deforestation Levels

12. Hon Dr NICK SMITH (National—Nelson) to the Minister responsible for Climate Change Issues: What reports, if any, has he received on the levels of deforestation this year, and what impact will these have on New Zealand’s greenhouse gas emissions?

Hon DAVID PARKER (Minister responsible for Climate Change Issues): I have received the 2006 Deforestation Intentions Survey, which has long been available on the Ministry of Agriculture and Forestry website. The deforestation that occurs this year will have only a minimal effect on New Zealand’s emissions during the first Kyoto period of 2008 to 2012.

Hon Dr Nick Smith: Can the Minister give a simple answer to a critical question on the minds of foresters, as they contemplate the coming planting season of June, July, and August—that is, will plantation forest owners get the carbon credits into the future for new plantings this year?

Hon DAVID PARKER: The Government’s proposed policy options to control deforestation and to encourage afforestation are well known, and decisions on which options will be proceeded with will be made in the next few months. What is abundantly clear is that Dr Smith’s ideas will not work. Just weeks ago Dr Smith was promoting a “cap and trade” scheme with no cap.

Hon Marian Hobbs: What recent reports has the Minister seen on developments that will impact on New Zealand’s greenhouse gas emissions?

Hon DAVID PARKER: Two stand out. The first came from John Key, trying to pour scorn on New Zealand becoming carbon neutral. His press release was headed “Carbon neutrality—where is it?” Embarrassingly for him, the answer came the very same day from National MP and Environment Canterbury councillor, Nicky Wagner. Her press release championed progress towards Helen Clark’s goal of carbon neutrality through the introduction of biofuels in Christchurch’s public transport system. So, despite John Key’s wish to the contrary, carbon neutrality continues to break out everywhere and is now being promoted by his own MPs.

Hon Dr Nick Smith: What sort of incompetent Government is it when it has been in office for 7½ years and it cannot tell foresters who are about to contemplate planting trees in June, July, and August of this year whether they will get credits for those trees? I say to the Minister that they do not want options or discussion papers but a simple answer: will they get credits or not?

Hon DAVID PARKER: This Government has already devolved carbon credits for permanent forests. Our discussion documents propose the adoption of one of two options. One is the devolution of carbon credits for new production forests; the other is a grants-based scheme of similar effect. Foresters can have comfort that New Zealand is at the forefront internationally of devolving carbon credit benefits to forestry.

Hon Dr Nick Smith: I ask the same question of the Minister so that we might get an answer. This matters, because we have lost 8 million trees since he has been the Minister. Will forest owners, when they go to plant trees in the normal season of June, July, and August, be eligible to receive the credits for those; if he does not know, then why would people bother to plant commercial forests when they can wait until next year and get the credits—and how does that help either the environment or our economy?

Hon DAVID PARKER: The Government’s proposals on this are absolutely clear. The final decisions will be made within the next few months, the Government having already devolved carbon credits for permanent forests and proposed devolution for production forestry. What National needs to come clear on is Mark II of its “cap and trade” scheme. I ask Dr Smith whether it includes the 50 percent of New Zealand’s emissions that come from land use. Does it or does it not?

Hon Dr Nick Smith: Can the Minister explain to the House what is clear—crystal clear to a forester—about a policy that states that there are options for the next 3 months, when this very day nursery and forestry contractors are making decisions about whether to plant commercial trees this season; why can the Minister not give a simple answer that they either will or will not receive those carbon credits, and can he not see that that is critical to their making investment decisions?

Hon DAVID PARKER: The Government’s proposals have as alternatives the full devolution of carbon credits for production forests, in addition to the devolution that has already happened for permanent forests, or a grants-based scheme that is of similar economic effect for foresters. Foresters are not in doubt as to the direction in which this Government is heading.

Hon Dr Nick Smith: Is the Minister aware that 8 million trees have been felled and not replanted since he became the Minister responsible for Climate Change Issues, and that this has added $200 million to New Zealand’s climate liabilities under the Kyoto Protocol; and why does he not announce today that every tree planted will gain carbon credits for the owner so that we might reverse those appalling records?

Hon DAVID PARKER: The Government has long been aware that 50 percent of New Zealand’s emissions come from the land-use sector. We are proposing a “cap and trade” scheme and other measures that will control emissions from the agriculture sector. National has yet to show its hand.

Darren Hughes: I raise a point of order, Madam Speaker. Recently, National members were on their high horse about the use of swear words in the Chamber. During that exchange of questions, Dr Nick Smith, a National MP, stood at his microphone and clearly blurted out a swear word. I think that if those members are so interested in consistency, then he should withdraw and apologise.

Hon Dr Nick Smith: I used the word “bull”, when the Minister said that National said—[Interruption] I said “bull”. I said it in response to the Minister saying that National promoted an emissions trading system without a cap. I would simply seek the leave of the House to table National’s A Bluegreen Vision for New Zealand document that mentions an emissions trading system and specifically uses the word “cap”.

Madam SPEAKER: We will handle the leave question first, then I will come back to the point of order. Leave is sought to table a document. Is there any objection? There is objection.

Hon Dr Michael Cullen: Maybe the member’s memory is failing him, but I suggest that if he gets the tapes and looks at the play-back on television, he will see that he got four letters of the word he mentioned right. There were another four added on the end.

Ron Mark: This is the same member who went out of his way to bring to the attention of the House my indiscretion, and I can assure that member that I have received a text message stating exactly what he said. So he might like to consider Standings Orders and tell the truth.

Hon Dr Nick Smith: I honestly do not recall which word—

Hon Members: Oh!

Hon Dr Nick Smith: I honestly do not recall whether I used the word “bull” or added additional words to it. But I will apologise to the House so that we can get on with business. I formally apologise for whichever phrase I used.

Budget Debate

Bills

Appropriation (2007/08 Estimates) Bill

Debate resumed from 17 May on the .

Hon TREVOR MALLARD (Associate Minister of Finance): This Budget focuses on investing and saving as a way of transforming the New Zealand economy. It is a Budget that has vision; it is a Budget that looks forward; it is a Budget, with a combination of KiwiSaver and a business tax package, that will make New Zealand internationally attractive as a place to live, to work, and to do business.

Hon Maurice Williamson: Stadium boy!

Hon TREVOR MALLARD: I hear an interjection from Maurice Williamson. I want him to ask John Key whether he told me, in front of five other people, that he supported the waterfront stadium. Did he, the same day, tell a business breakfast that he supported the stadium? Did he tell a business lunch the day before that he supported the waterfront stadium? I do not mind fronting up for supporting something that did not work and that did not get there, but what I do not like is John Key telling lies about it afterwards. That is what I do not like. A bit of honesty would be good.

The ASSISTANT SPEAKER (Ann Hartley): Please be seated. The member cannot accuse another member of telling lies. Please withdraw and apologise.

Hon TREVOR MALLARD: I apologise. I would like John Key to front up and say inside the House what he said previously.

Hon Bill English: I raise a point of order, Madam Speaker. I think you know what my point of order will be. The member is required to withdraw and apologise.

Hon TREVOR MALLARD: I apologise. I withdraw and apologise, as well—all of that.

The ASSISTANT SPEAKER (Ann Hartley): Just withdraw and apologise.

Hon TREVOR MALLARD: I withdraw and apologise, but I challenge John Key to front up in this House and tell the truth—to say what he said outside, otherwise people will wonder where his backbone has gone. Where is his backbone, or does he say one thing to people when they want to hear it up in Auckland and another thing when he comes down here? One of the things we know is that when people tell the truth in one place and say something else somewhere else, they will get caught. I can tell John Key that there are people who like integrity. One of the requirements for being a politician is integrity and telling the truth, and telling the same truth from one place to another is absolutely vital. I see John Key with his head down. He is not prepared to get up and deny that, because he knows it would result in a breach of privilege. At least a hundred people have heard John Key support a stadium, and for him to chip back on that issue is enough.

I want to get on with KiwiSaver. Just like the Tories were on the fence with the stadium issue, they are on the fence with KiwiSaver. I want them to get just a few facts straight. Members opposite seem to ignore the fact that when workers start a new job, they worry about their take-home pay. Frankly it is the amount in the hand—the amount that goes in the pocket and the amount that goes into the bank account—that counts, not what the gross is, not what the accident compensation levy is, and not what the PAYE is. Can anyone be more hypocritical than to oppose over $300 a week as part of the family tax credits? The Tories opposite wanted to stop workers from getting money, then they say, when people go to put $20 a week into KiwiSaver, that they are opposed to it. How can they possibly say that it is not fair for families to get over $300 a week and to vote against it time and time again? How can they oppose something that would secure the future of a low-income family—a family on $500 a week gross pay before KiwiSaver—and triple their savings? Even a family on a higher income—around an average of $75,000—in 35 years will have nearly $400,000. In real terms that family will have its superannuation effectively doubled as a result of having KiwiSaver.

And the Tories do not want it! No, the Tories do want it, but they are too chicken to say. I say to John Key that he should get a bit of backbone and say what he thinks. He should pretend for just a while that he has the gumption to stand up in this House and say what he believes. When John Key does that he will say: “I support KiwiSaver.”, because he does. He supported the business tax cuts, but he voted against them; he supported the research credits, but he voted against them. It is about time that the National Party got itself a leader who is prepared to get off the fence. Fences are a very, very uncomfortable place to sit for a period of time, especially if one has dropped from a height through a trapdoor. No one has ever been left in any doubt as to my opinion on things.

I also want to focus on the threat to universal superannuation. The last time Bill English was in Government and in a Treasury portfolio he cut national superannuation, and he has signalled that he wants to do it all over again. John Key wants to take a different approach. John Key wants to put the age up and to put in a test—almost like the old universal test in the past. National members are dropping hints all over the place about scrapping universal superannuation. I look forward to having an election campaign based on that debate. Let us have an election campaign that is based on that debate. This side of the House says it will have universal superannuation and the Opposition side of the House says it will cut it. Bring it on! I will go around Eastbourne, Naenae, and Wainuiōmata with National members. I will go to Tauranga. I would love to spend some time with “Bob the Builder” up in Tauranga, and have an argument about whether we will have universal superannuation. I will go to the North Shore with one or two of the members over there, because that is the sort of debate that I would love to have on the North Shore. Those are the people who for years and years have been contributing through their taxes in the belief—through a solemn promise—that they will have national superannuation, and we have a Tory party opposite that has indicated that that policy is on the way out. It is on the way out.

This is a very good Budget. It is a Budget not only for the present but for the future. It is a Budget that is visionary. And what do we have? We have a bunch of no-hopers who are not prepared to stand up in this House and say what they really think. We are not allowed to call them hypocrites, so I will not do so, but I say that they are a group of people who do not have the courage of their convictions. They will not come to this House and honestly say what they believe. Frankly, they are stupid. If those members had come to this House, cuddled up to this Budget, and said “me too”, they would have been all right. But the problem was that they listened to Bill English. He is a whinger. When asked what his position was on tax cuts, he said it was a hypothetical question. Poor old Bill English! The question is not hypothetical, at all; what Bill English means is—

Hon Lianne Dalziel: He doesn’t want people to know what they’re going to do.

Hon TREVOR MALLARD: No, what he means is that he disagrees with John Key. John Key and he cannot get a common position on tax cuts. It is better to say nothing and think one is arguing than to say something and have it absolutely proven.

Hon BILL ENGLISH (Deputy Leader—National): The one thing we learned from this Budget is that Labour is preparing for retirement. If Trevor Mallard is the next Minister of Finance, many other New Zealanders will be deciding to retire from New Zealand and go elsewhere. Today in question time we saw Dr Cullen’s real credibility problem. He has been arguing for months that any tax cut means a cut in doctors and teachers. In fact, his office said it again just last night to the Dominion Post or the New Zealand Herald. It said: “Ask National which teachers and doctors it will sack if it reduces taxes.” I asked Dr Cullen that today—a simple question. He has just given a $1 billion tax cut, so I asked him which teachers and doctors would be sacked to pay for that tax cut.

Hon Members: What did he say?

Hon BILL ENGLISH: He did not say anything, actually. I think he was flummoxed. He did not know what to say, because he suddenly realised how stupid his argument was.

Chris Auchinvole: He fell through the trapdoor.

Hon BILL ENGLISH: That is dead right. We can only infer—to use a word that he would understand but that Trevor Mallard would not—what he means. What he means is that if Labour cuts taxes, under severe pressure from the electorate and one of its coalition partners, then that does not mean there will be any changes to public spending—because it is a Labour tax cut. But if National cuts taxes because it is good for the economy and will lift productivity, then that can happen only if doctors and teachers are sacked.

So I challenge Dr Cullen again. I want him to tell the country why he can have a tax cut with no impact on public services—no sacked doctors and teachers—but if National says there is one, then that means doctors and teachers will get sacked. Clayton Cosgrove does not understand the fundamental error that Dr Cullen made today. That is that Labour cannot argue that any more. It cannot spend the next 18 months saying that National will ruin the public services if it gives tax reductions. [Interruption] Well, he will try. Do members know what will happen to that member? He will lose his seat. That is what will happen. He is the one man who took a safe Labour seat and turned it into what will be a safe National seat after the next election. And he is the one with real potential! At least Judy Keall got her majority to go up.

You see, the reality in any Budget is that a Government gets to make choices about its priorities. In this Budget Labour came up with not just $1 billion of tax cuts but another $1 billion of KiwiSaver sweeteners. So that is $2 billion where Dr Cullen had the choice of what to do about it. He had $2 billion worth of choices. That, of course, gives the lie to all the arguments he has raised. He has always said there can be no tax cuts, because there is not enough cash, it is too inflationary, and it will affect Government spending. Yet in this Budget he came up with $2 billion worth of tax cuts and savings sweeteners.

So the argument now is about the priorities. Does a Government spend all its time giving out cash that it earns from this economy—[Interruption]

I raise a point of order, Madam Speaker. I have generally good hearing but I am getting somewhat of a pain in my ear from the consistent interjections by the person back there.

The ASSISTANT SPEAKER (Ann Hartley): That member interrupted during a point of order, but so did a member here. I will give a warning. There was a fair bit of barracking during the previous speech too, Mr English, but I take the point that consistent barracking is not acceptable.

Hon BILL ENGLISH: That is why National is arguing for a more balanced approach to economic management. With every Budget, every Government gets a choice. Labour has consistently chosen to treat the economy like a cash machine—take the public’s cash card along, get the cash out, and then spread it around. That has become more and more about Labour using the public’s cash to maintain Labour in office. We are saying that there should be a more balanced approach to economic management.

Darren Hughes: What does that mean, Bill? Give us some figures.

Hon BILL ENGLISH: It is a bit like the Australian Budget. Even with smaller surpluses than we have, it is quite clear that over time, Australia has delivered lower taxes, higher public spending, and more investment in infrastructure. Those are the choices that Dr Cullen could have made but because he is so deeply opposed to New Zealanders using their own money, he would not do it.

I tell the House today that National will do it. When there are surpluses in the economy, we will put forward a credible programme of tax reductions. There will be more investment in infrastructure. There will be enhancements in public services. We will be focusing on the productivity and growth of the economy, not just on savings. Of course, savings are a good idea and the country needs some, but they do not mean much if there is nothing to invest them in. The people who are running KiwiSaver will face the problem of the lack of productive, profitable investment opportunities. The mums and dads who do take up KiwiSaver in the end will need good returns on those investments. They will want to invest in New Zealand and they will need good returns for it to come to much. [Interruption] I point out that a lot of people who voted for Mr Hughes will not be able to use KiwiSaver, and that is the other big question that Labour needs to answer. What is it that it has done for those low and middle income people who have been loyal supporters and who are among the many people who do not have children aged 0 to 18 years?

Darren Hughes: Working for Families, minimum wage. How many of those?

Hon BILL ENGLISH: I will tell the nearly former member for Otaki how many there are. Only about 400,000 people in New Zealand qualify for Working for Families, out of a workforce of over 2 million. In fact, most people do not receive Working for Families and most of the low-income ones will not get KiwiSaver. In fact, it is even worse. That member—and Dr Cullen—promised those people a tax cut in two Budgets in a row, and in this Budget Dr Cullen took it away. Today, I asked Dr Cullen why he decided to take away the “chewing gum” tax cuts worth $400 million, but he would not say. The reason is that he could not even bring himself to give a tax cut that he had already promised.

John Carter: Twice he promised it.

Hon BILL ENGLISH: Twice he promised it, but could not bring himself to do it. So the wrong people are paying for KiwiSaver. Those who are paying for it will be worst off in three ways.

Jill Pettis: You lot haven’t done that since 1966.

Hon BILL ENGLISH: That member’s voters in Wanganui are worse off. They cannot take up the KiwiSaver sweeteners, because they cannot afford to save. Labour has forgotten that it used to represent people who could not afford to save. Those people will not get the KiwiSaver sweeteners, and they lost their “chewing gum” tax cuts. When they go to the boss to ask for a pay rise, he will say: “Labour has already put it in your savings account for the next 4 years. Go away!”. They will be much worse off under Labour.

Darren Hughes: Voted for corporate tax cuts.

Hon BILL ENGLISH: The member will regret this. Labour is preparing for retirement. It has written a whole Budget about it. This is all about retirement. I say to that member that New Zealand is not retiring. New Zealanders want growth opportunity and dynamism. We are not winding down. National is going to wind this economy up, not wind it down. It is just a shame that Labour has taken an economic strategy that reflects its place in the election cycle.

Darren Hughes: Voted for corporate tax cuts.

Hon BILL ENGLISH: Labour members are headed for retirement. All they are worried about is their post-retirement income; and they should be. What prospects does the member opposite have?

Hon Members: Not many.

Hon BILL ENGLISH: Not many! The economy is not heading for retirement.

Hon CLAYTON COSGROVE (Associate Minister of Finance): What a rooster! That member asked a question, and I am happy to answer. He asked why the Labour Government can give a $2.1 billion corporate tax cut—which he voted against but forgot to remind everybody about. He has been wandering around Wellington—he does not go to his electorate—telling everybody, and trying to explain to his business mates, why he voted against a 3 percent reduction in the corporate tax rate. The question he asked was how the Labour Government can give a $2.1 billion tax cut and not slash and burn public services, and how it can say that National will give a tax cut but will slash and burn public services. That is basically what he said. Well, I will enlighten that economic genius, who could not do the numbers, to save his own backside, on the back of his hand. It goes like this: $2.1 billion versus $7.4 billion of tax cuts, half of it based on borrowing. That is the difference.

Darren Hughes: He is off now.

Hon CLAYTON COSGROVE: Oh, yes! “Scuttle away!”, I say to him. Scuttle away like the turtle that he is. I say to him—

Hon Bill English: I raise a point of order, Madam Speaker.

Hon CLAYTON COSGROVE: He does not like it.

The ASSISTANT SPEAKER (Ann Hartley): There will be silence during points of order.

Hon Bill English: The member might get his ideas about what to say in Parliament by looking in the mirror in the morning, but he has broken the Standing Orders in two respects. He is not allowed to refer to the absence or presence of members in the House. His second remark, which was inspired while he was having a shave, is simply offensive.

The ASSISTANT SPEAKER (Ann Hartley): The member knows that he is not allowed to refer to absence, but I did not quite take it as that. I could ask the member to withdraw that remark.

Hon CLAYTON COSGROVE: I withdraw. The difference is $7.4 billion, half of it based on borrowing, against $2.1 billion of real money, with all the social and economic infrastructure centred around it. He told us today that not only will he cut personal tax and corporate tax—although he did not say by how much, or whether the $7.4 billion policy that he campaigned on is on the books—and give a massive corporate and personal tax cut, but also he will keep all the popular policies of this Government and all the costs that go with them in this expenditure, and will lump on every spending commitment that his colleagues have made, to date and beyond. That is what he said.

There are two reasons why we can still say that if the National Party gets into office it will slice, slash, and burn public servants—from nurses, to teachers, to police, to doctors, to hospitals. The first reason is that his economics do not add up, and he proved it today; and the second reason is this wonderful thing called history. I say that actions speak louder than words, and that goes for both sides. We have a Government on this side that has put a Budget on the Table—KiwiSaver, tax cuts, more money for health, more money to back our businesses, research and development write-offs, more write-offs for charity, all costed, all done. Seven years of Budgets prove that. Then we have that member and his crew over there who have to go to the country with a legacy of what they did and what they did not do.

And what did they do that they are so proud of? They are proud, as my colleague Trevor Mallard said, that when Nick Smith was in Cabinet he oversaw the biggest cut in defence spending history—10 percent. When Nick Smith was in Cabinet, and as a backbencher, he oversaw the biggest slash and burn made to the superannuation system in the history of this country when National cut superannuation three times—and Nick Smith sits and pontificates. That is part of the history those members have to live up to.

Bill English cannot add up. Bill English thinks that everybody out in the marketplace and in the community is silly. Gerry Brownlee once said a profound thing on radio—I know that that is rare, but it is true. I was on the ZB network with him, on a show called Yardley. He said some years ago that people do not understand Budgets. I looked him in the eye and said: “Gerry, if any Kiwis out there can balance their grocery bill and their housekeeping bill and make ends meet, then in my view they have a PhD in economics. They do understand budgets; it is called the family budget.” But, of course, this crew on the Opposition benches—the stunned mullets over there—say arrogantly that people do not understand, and they think they can hoodwink the people all the way to the election. Well, it does not add up. It does not add up, and that is the reason we will continue with authority to say that if that crew get into power again, people will have to watch out if they are nurses or pensioners.

I will tell members another inspired thing that Gerry Brownlee said on CTV when I debated with him about the Budget last Friday. He was asked a really interesting question on KiwiSaver. It was simply this: “Gerry, if you get into power, what will you do? Will you tinker with it? Will you reverse it? What will you do?”. Well, a splutter, a cough, a burp, a belch, and every other noise emanated from him except a straight answer, and we know what that means. It is the same legacy and history that National has lived up to since 1976, when, under Rob Muldoon, it pulled out the carpet from under every pensioner in this country when it did away with the Norman Kirk scheme. That is a fact. Old buggerlugs over there has to put that in his pipe and smoke it. That is something he cannot rebut, because it is a historical fact.

The ASSISTANT SPEAKER (Ann Hartley): The member cannot refer to another member like that. The member needs to withdraw and apologise.

Hon CLAYTON COSGROVE: I withdraw and apologise. It is a fact that the member Nick Smith—who expends a lot of heat in this Chamber; I am told by scientists that 80 percent of heat comes out of one’s head, and that could be apt—has to live up to. That is a historical precedent. Then we had Gerry Brownlee, who was asked a very similar question. So if we could have thousands of people going into KiwiSaver saying that it is great—for 20 bucks down, and with the employer and the Government putting some money in. When a 35-year-old now on about $35,000 or $40,000 a year is 65, that person could be looking at $40,000 a year when he or she retires.

But what would National do if it got into Government? Oh, there is no certainty there, of course. No, no; those members will wait and will promise anything they think will get them over the line. They think people will not add up or cost their policies, and that people who are in KiwiSaver to meet their financial needs in their retirement will not worry about the fact that National members will not tell them today whether they will pull the rug out from under them. I think our communities know the answer—Nick Smith will. He will pull the pin on them. Bill English asked what this Government was doing for workers who are not eligible for it. Yet again, he has a lack of awareness of history, does he not? With Working for Families, 350,000 families today are getting, on average, $98 a week. What would his tax cut have given them?

Hon Dr Nick Smith: More.

Hon CLAYTON COSGROVE: There we see Nick Smith trying to con the people. He said that a tax cut would have given people more. Again, he cannot add up. What the tax cut proposal of National showed was that he, on his fat salary, would get about $100 a week more, and the average Kiwi—and the member would not know one if he fell over one—would be lucky to get between $10 and $20 or $30 a week. But here we see the arrogance, the deception, and there is another word I will not use. Dr Smith thinks he can just say anything. He thinks he can pop his cork occasionally in Parliament, blow off a bit of steam, and say what he likes and people will believe him. Well, I am sorry; the economics do not add up. A hole was blown in that member and he was slashed apart at the last election by financial analysts who gave people the facts.

The facts are that with Working for Families, 350,000 Kiwi families today, on average, are receiving $98 a week—and then we pile on KiwiSaver, and we pile on the extra health spending, including $3 prescriptions and cheaper doctors’ fees. We pile it on. The difference is that when we pile it on—and the last 7½ years prove it—it adds up. There are no voodoo economics on this side of the House, because our Budgets add up. The problem that that member has is—as he prepares to blow some steam out of his ears in the debate—that he has to stand up and tell us what he will do. He has to stand up and tell us why he did not do those things when he was in Government, and tell us why he slashed the pension. I challenge the member Nick Smith today, before he blows—because he will take the next call; he has to let off some steam and pull the pin—to tell Kiwis whether he will alter KiwiSaver. Will he get rid of it, will he amend it, or will he alter it? What will he do? Because if he is consistent with his third-ranked, former deputy leader Gerry Brownlee, he will hedge and say that he might tinker with it. Even Bill English has come out and said that if people are in KiwiSaver, then they should keep hold of their shirt because National might take it off them. That is what he said.

Hon Dr NICK SMITH (National—Nelson): Four months ago, in February, Prime Minister Helen Clark delivered her statement to this Parliament on the Government’s priorities for the year. It was “sustainability” this, “sustainability” that, and “sustainability” everywhere. In fact, she mentioned the word “sustainability” 39 times. She said that that was the Government’s priority for the year. As National’s environment spokesperson, when I picked up the Budget for this year, I looked forward to the follow-through. I wanted to see the action to follow up the words. I searched through the Environment vote and the Conservation vote and I went through the Minister of Finance’s speech. I searched under the tables. I went through the cupboards. Was there anything in this Budget to back up the rhetoric around sustainability that Prime Minister started the year with?

Well, I found that it was all alone. This Prime Minister, we have seen, has one theory after another, and there is never follow-through. Do people remember when she promised that New Zealand would get into the top half of the OECD by 2010? We are not allowed to talk about that any more, because she failed to do that. Then we heard from the Prime Minister that the big strategy for the Government was closing the gaps. We have to forget about that; we are not allowed to talk about closing the gaps any more. Then we had economic transformation, which was the next big theme for the Government—and there was no follow-through. The Government never did anything about it. And now we have all this spin from Prime Minister Clark about sustainability—and there is absolutely nothing in this Budget to back that up.

The really embarrassing part for David Parker and for Labour is that they have failed so badly on all of the issues. Labour was elected in 1999 on a promise to reduce greenhouse gas emissions by 20 percent by 2005. Well, did it? Did it get, maybe, 5 percent? No. Not only did emissions not drop by 20 percent; the official figures show that they went up by 12 percent, such was the Government’s failure. In fact, right now emissions are growing at over a million tonnes a year. The reason that the public has lost confidence in the Labour Government is that we cannot believe what it says. The Prime Minister gives a speech on carbon neutrality while our emissions are growing at a faster rate than any other country in the OECD—twice the rate of Australia, and three times the rate of the United States. The Government talks in this Parliament about carbon neutrality, and then it funds a wicked great oil-fired power station in Napier. It has built the big, fat E3P gas-fired coal station in the Waikato. You see, it will require a massive change simply to stabilise the emissions.

What do we have in this Budget? Where is that Prime Minister’s statement backed up? Well, on page 496 I found it. The public service in New Zealand is going carbon neutral. Well, well, well! The bureaucrats in Treasury are going to go carbon neutral. What will that do for us? That is not 1 percent, 0.1 percent, or even 0.01 percent of a reduction in emissions. So how can the Prime Minister have the audacity to race round New Zealand, parroting on about carbon neutrality, and then deliver a Budget that has $14 million to be spent on the public service becoming carbon neutral? Let me just explain to the House how foolish and stupid Treasury going carbon neutral is. We know that right now, in New Zealand, there is a chainsaw massacre. More trees are being cut down now than at any time in New Zealand’s history. In just 10 minutes, during the course of my speech, more carbon will be emitted from deforestation than the entire benefits of the initiatives in this Budget to achieve carbon neutrality. That shows just what sort of fraud it is.

I asked the Minister in the House today what he is going to do about trying to halt deforestation. There are nurseries and forestry contractors out there right now, sitting and waiting, ready to go and do some good stuff and plant some trees. I simply asked the Minister whether they would be able to get the carbon credits for those trees that they planted. The Minister said that he did not know, there were some options, and the Government might make a decision in a few months. That is a great damn help. The planting season is June, July, and August. Telling the foresters in August: “Hey guys, we’ve made a decision. We’ve decided you’re going to get the credits.”, is too damn late.

I say to Government members opposite that they have been in Government for 8 years. Why can they not answer a basic question being asked by those foresters as to whether this year they will receive the credits for those trees that they plant? Let us just be reminded that the Prime Minister’s Government of carbon neutrality has overseen the clear-felling of 8 million trees, and not one of those is to be replanted.

But carbon neutrality and this business of New Zealand being a “world leader in sustainability” goes further than just the issue of climate change. Labour was elected on a platform. Labour said it would deliver a national policy statement on biodiversity. In 2003 I asked when Labour would do it. It said it would be in 2004. In 2004 I asked when it would deliver on its promise, and Labour said it would be in 2005. In 2006 Labour said it would deliver it in 2007, and after the Prime Minister’s great speech in which she said that we are going to lead the world in sustainability, the Government said: “Sorry, we’re not doing it.”

I take an important issue, like that of energy efficiency. The Government launched a strategy in 2001 that said it would get a 20 percent improvement in energy efficiency by 2010. Yet, when the official figures came out, energy efficiency improvements have been going backwards, not forwards. In fact, the Government has spent $100 million on feel-good—

Hon David Parker: Rubbish!

Hon Dr NICK SMITH: The Minister says: “Rubbish!”. Let me tell the House what the Treasury report said. It said that from 1995 to 1999 we had energy efficiency improvements of 0.8 percent per year. Since the Minister has had a strategy, it has been 0.4 percent per year—half of that. It is hopeless.

Let us take renewables. One would say that as part of New Zealand being a “world leader in sustainability” we might have seen some progress there. Yet, over the 7 years that Labour has been in Government, we have seen a declining amount of renewable energy. Then, I thought, what about the electrification of rail? Let us just make the generous assumption that every electron that drives those Auckland railway trains comes from renewable energy, and not from one of the Government’s new oil or gas-fired power stations. Even if we make that assumption, the amount of carbon emissions it will save will reduce the growth in emissions—not reduce the emissions themselves—by just 2 percent, meaning it will take 50 years simply to stabilise emissions, and it will take a further 900 years to achieve that mythical goal of carbon neutrality. It is no wonder that all over the country people are “taking the p” out of that policy.

Then we look at issues like water quality, and the oceans policy in terms of water quality. Every single one of the deadlines that has been set for the Government has failed. It was all meant to be done. Is there anything in these Budget documents about water quality, given that we are going to be a “world leader in sustainability”? The Budget is absolutely silent. The oceans policy work was meant to be concluded in 2004. Is that concluded anywhere in this Budget? It is not. It has fallen over. If we look at waste strategy—here it is—we are going to be a “world leader in sustainability”, according to the Prime Minister, because in this Budget we are going to build some recycling bins at tourist spots. There it is.

Hon DAVID CUNLIFFE (Minister of Immigration): It has been rather amusing to watch that speech being given. For those who are listening at home, we have had the spectacle of Nick Smith working his hardest to lift the volumes of Supplementary Estimates and to wave the Budget documents around the House in a manful show of force. He has exclaimed that he just cannot find anywhere in these documents any evidence of sustainability. He has looked high and he has looked low. He has said he has thumbed through all the pages, and he has spent hours on it.

Darren Hughes: Unlikely.

Hon DAVID CUNLIFFE: Unlikely. What part of $600 million worth of electric trains for Auckland and Wellington that are highly efficient and contribute to a sustainable transport future did he not understand? What part of $50 million to upgrade the national track system did he not understand? What part of $23 million for an interest-free loans scheme to help homeowners pay for energy efficiency and clean heating upgrades did he not understand? What about the $14 million for the EnergyWise grant scheme, the $15 million for the Home Energy Rating Scheme, the $7 million for home energy-efficiency and heating research, or the $3 million to communicate to homeowners how to heat their homes safely, affordably, efficiently, and sustainably? That leaves out the $28 million to improve sustainability in the primary sector, the $4 million for international collaboration on agricultural research, the $11 million for sustainability research in Antarctica—for example, core ice samples that will give us better data on carbon dioxide concentrations in the atmosphere—the $24 million for the Healthy Housing programme, the $6 million for the household sustainability awareness campaign, and so on, and so on.

But the best strap line that the member could come up with after a week of studying the Budget documents is that he just could not find anything on sustainability. Well, it is only because I want to talk about some other things, including KiwiSaver, that I will not do him the favour of reading out the rest of it. But listeners will get the idea. There is plenty of it in there.

This is a great Budget. It is a Labour Budget. It is a Labour-led Government Budget, and it is so different from anything members opposite would have come up with. It is a Budget that shows real leadership—real political courage, actually. It does not respond in some English-Key flip-flop, focus-group driven, spur of the moment way to whatever people think they wanted last week.

This is a Budget that understands at its heart the macroeconomic challenges facing our country for this generation, and puts in place a generational solution to take us sustainably to our shared future. It understands that although there is a decent fiscal surplus this year—and cash deficits for the next 3 years—we should not increase spending or give additional tax cuts this year, because that would expand demand. If we expand demand when we already have the world’s lowest unemployment rate, that would simply push up inflation. If we push up inflation, what happens? The Governor of the Reserve Bank has to raise interest rates, and as Mr Key well knows that is simply a magnet to the hot money—the carry trade of billions of dollars that swishes around the world—and will simply drive up our exchange rate. Then what happens? New Zealand exporters suffer, our current account balance worsens, and we only perpetuate the imbalances that have led to the current account deficit that we inherited from members opposite.

What is causing those imbalances? Probably the single biggest problem is New Zealand’s savings gap. It was about 2003 when I started giving speeches on behalf of Dr Cullen and myself on the savings gap. It was a controversial idea back in 2003. But New Zealanders spend $1.11 for every $1 they earn. We have one of the worst—if not the worst—savings performances in the OECD. How do we fund that gap? We fund it by borrowing money from foreigners, and, surprise, surprise, they want something in return. Members opposite would have to be idiots to miss the wave of private equity funds sweeping New Zealand at the moment. They are buying up just about any small company that is not bolted down. If we do not have our savings funds in circulation in New Zealand, we can kiss goodbye to any sense of ownership of our own future. New Zealand for New Zealanders means we must have the ability to fund our own investment. That is why we need KiwiSaver, and that is why we need the Cullen fund—as well as the fact that we need to provide for Kiwis in retirement.

This Budget is incredibly strategic; it hits all the right buttons. It avoids creating additional inflation by stimulating demand in the economy. It raises the speed limit by contributing to productivity through the business package, which I will come to. It provides for ordinary New Zealanders in their retirement. We have used the example of a married couple on $70,000, which is the average household income, roughly speaking. If they start saving under KiwiSaver plus when they are 30, how much do they have when they retire at 65? In today’s money—in 2007 buying power—they have around $400,000 that they did not have before. That $400,000 provides them in their retirement with another $20,000 to $25,000 a year in interest. That is roughly double what they currently would get under New Zealand superannuation. Anyone aged 30 who goes into KiwiSaver and is earning around the average income will double his or her retirement income. What could be wrong with that? Such people are helping their country, they are helping their family, and they are helping themselves.

There are a few people, including Mr Key—although it is not really the Opposition’s intent, as members know—who have said that, yes, but “poor people” cannot afford it. Actually, “poor people” know that they have to save because no one else will look after them when they retire other than this Government. They know they cannot flog off their fourth or fifth house or their luxury yacht; they have to be prudent. That is why around half, at least, of the people participating in an AMP survey who earn under $30,000 said that, yes, they were in.

Another common attack on the KiwiSaver plus programme has come from the whingers in the business community. They say they will have to pay for it. Rubbish! For the first 2 years, they are completely indemnified by a subsidy from the taxpayer of up to $20 a week, and their total contribution, on an average wage basis, rises to 1.2 percent after 4 years—net. That is hardly a back-breaker, especially when we figure that allowance is likely to be made for it in wage negotiations. So the KiwiSaver plus scheme is incredibly strategic. It is incredibly important to New Zealand from an economic sovereignty point of view and a national welfare point of view, as well as from an individual savings point of view.

What, then, is the National plan? I will give members a small example relating to my own portfolio of information and communications technology. Two weeks ago, John Key said: “Hey, we’re going to shell out to fund broadband.” A week later, Bill English said: “No, we’re not!”. A week after that, Maurice Williamson rose from the dead to say: “Yes, we are.” Maurice Williamson wants us to adopt the Australian Labor Party policy. The Nats are all over the place. National looks like a party rightly consigned to perpetual Opposition because its members cannot get their act together. They are short-run driven and focus-group driven. Their attitude is: “Let’s think of something popular just to get ourselves elected, and then we’ll worry about the country’s problems when we get there.” That is what it looks like because that is what it is.

New Zealanders are too smart for that. They have seen that cynical kind of Government before. They saw it when Muldoon ditched Dove-Meyer Robinson’s public transport plan in the 1970s, and when the same National Prime Minister ditched the Kirk superannuation fund the last time we built one. Every New Zealander has reason to look forward in gratitude to a securer climate thanks to the Cullen superannuation fund and KiwiSaver plus, and knows that he or she personally can never afford the prospect of a National-led Government. It is not just superannuation; it is social services, and it is productivity—all the reasons Labour should and will remain in Government.

Hon TONY RYALL (National—Bay of Plenty): There comes a time in the life of a third-term Government when, as Mike Moore once put it, the phone gets taken off the hook. I think that for Labour, after 8 years in office, the phone is off the hook. New Zealanders have come to the conclusion that this Government is not listening any more. Nothing could sum that up more than the headline in the New Zealand Herald a week or so ago that stated: “Government says NO to personal tax cuts”. What made that even worse was the headline a few days later stating that the minimal tax concession provided in the “chewing gum Budget” was also going to be wiped. There comes a time in the life of a third-term Government when the people have taken the phone off the hook. I think the phone is now taken off the hook well and truly with this Labour Government.

What was lacking in this Budget was a sense of purpose, and a sense of direction for the future of our nation. This is a time when New Zealanders are looking to Europe and to Australia to see the success of economies there. They see the economies of countries in “new Europe” that have pulled themselves up by the bootstraps and are becoming countries that many people want to live in. Even then, this Government cannot provide the sense of purpose and vision that New Zealanders want.

Labour’s purpose and vision is completely discredited. Do members remember the Prime Minister saying we were going to get into the top half of the OECD? The fact is that under Helen Clark we have dropped from 20th to 22nd; Portugal, Hungary, and the Czech Republic are snapping at our heels, and Slovenia and Slovakia have overtaken us. They are countries that only 10 years ago were considered basket-case economies. Here in New Zealand 700 people a week are moving to Australia. In an article in the New Zealand Herald this morning, Mike Moore, the former Labour Prime Minister, bemoans the wasted opportunity of New Zealand in the last 8 years and that in Australia incomes are now 50 percent higher than they are in New Zealand—in Western Australia the figure is 75 percent. Those are figures that should be damning and worrying for this Government because the risk for New Zealand is that the people here whom we need to drive our recovery are being attracted elsewhere.

There are great benefits to living in New Zealand: the lifestyle and the opportunities for the young people in the future are fantastic and should be recognised as such. But they are not enough to keep our people here in New Zealand any more, when they see the opportunities in Australia. Australia has rewarded hardworking Australians by allowing them to keep more of their money in their pockets, with 5 successive years of tax cuts. Look what that has done to the economy! It has put Australia on to the fast track, to where it is right up the OECD levels; I think it is something like seventh in the OECD. Members should remember that Australia started this decade at just a couple of points above us—I think at about 18th. And now they are seventh. We were 20th, and we are now down to 22nd. We are losing. We are losing because this Government has no sense of purpose and no vision.

After 8 years of Labour in Government, what does this Budget present? What in the Budget would be the thing that New Zealanders would say shows us where we are going? Retirement savings? Is that providing the vision to get the economy moving? Retirement savings? A little bit of money for household insulation? Is that the sort of big-picture item that says to young New Zealanders: “Stay in this country and get ahead.”? Young New Zealanders see that this is a Government that is running an economy based on high interest rates, a high exchange rate, and low returns for workers. This is being cemented in by what this Government is proposing with KiwiSaver.

Did you hear what the finance Minister said, Madam Assistant Speaker? He said that workers in the future will sacrifice pay increases to pay for the employer’s KiwiSaver contribution. That is incredible, when only half of the workers will be in the KiwiSaver scheme, according to the Government. The other half, who will not get any benefit from KiwiSaver, will sacrifice pay increases to pay for employers’ contributions. How unfair is that? But that is what this Government is proposing. This Government has really lost touch with the people who brought it here.

This is a party that says it represents ordinary people, but it is led by a couple of university lecturers who probably talk to fewer ordinary people than does anyone else in this House. They are so completely devoid of representing the people they claim to represent. They have no sense of purpose for this country and they have no aspiration for the future of our nation.

Instead of trying to grow New Zealand’s capacity and lift its productivity, this Budget was focused entirely on the Labour Party’s legacy. We know that it was, because Labour’s own pollsters, UMR Insight Ltd, has been ringing people and asking them what Helen Clark’s legacy is. This is true—UMR Insight Ltd has been ringing people and asking them what Helen Clark’s legacy is! Well, I think we know what the answer is. That is the reason she is desperately trying to find one. The public wants the Government to cut taxes, but the Labour Party has cut taxes just for a few businesses. Everyone will feel the effect of Labour’s petrol price rise. New Zealanders also want lower interest rates.

R Doug Woolerton: When did National cut tax?

Hon TONY RYALL: National cut tax in the 1990s on a number of occasions. New Zealanders want lower interest rates, but they will get higher interest rates for longer and an extra $4 billion in mortgage payments so far. New Zealanders want an economy that can provide better jobs, better incomes, and a better standard of living, but the Government is completely bereft of any ideas to improve those areas.

Members should look, for example, at the health budget. Today the Parliament learnt that despite $4 billion in extra spending on health, fewer people are getting to see a specialist in a hospital. The Minister of Health says: “Oh, it is because everyone is healthier. They don’t need to go and see a specialist any more.” Well, tell that to the tens of thousands of people who were culled off the waiting list to see a hospital specialist. Tell that to the general practitioners who are finding their patients turned away from the front door of the hospitals while they try to get a specialist appointment.

The real shame is that many New Zealanders who need an operation need to see a specialist to be put on the waiting list. But the Government wants to run down the availability of those specialist appointments so people cannot get referred into the elective surgery waiting lists. Members should also look at the fact that despite the $4 billion, fewer people are getting elective surgery. We know that, because the Minister has given answers in the House through written questions that confirm that fewer people received elective surgery in the last year compared with 6 years ago. How can that be? Well, it is to do with the issue of productivity that is spoken of so often in this House.

The real reason why we are putting so much money into health and not getting the extra services that people want is the massive explosion in bureaucracy. There is a strategy, vision, hui, or consultation document for everything in health under Labour, repeated 21 times. In the last 7 years there has been an increase of over 2,000 hospital managers and administrators—2,000. That means that for every one doctor that is employed in the hospital system, we have more than one manager appointed—for every one doctor in the hospital system, they have also employed one extra manager plus. That is incredible. That is where the money is going. That is why people are finding it so hard to get to see a hospital doctor.

In the North Shore, for example, we have so many cases going into the offices of electorate members about people being turned away from seeing a specialist, about people being culled off the hospital waiting list, and about people being unable to get the care they need on the North Shore or in Waitakere. That is shameful. It is shameful that so much money is put in and so few people are benefiting.

The lack of vision in health has been repeated throughout this Budget. What does this Budget do for ordinary New Zealanders? What does it stand for? If we went out on Lambton Quay today and asked people what the Budget stood for, they would be very hard-pressed to answer. As I said, there comes a time in the life of a third-term Government when people take the phone off the hook. We have been there; we recognise the signs. It is so clear that this is the second to last Budget of this Government. Frankly, it is a Budget that should never have been delivered, because it is a huge, wasted opportunity, reflecting on the 8 years of wasted opportunities from a Minister of Finance who is very uncomfortable in his own skin.

Hon PAUL SWAIN (Labour—Rimutaka): That really was a disappointing and pathetic speech from what was actually one of the high hopes of the National Party, Tony Ryall. He was part of what they used to call the brat pack in the good old days. He was one of the ones National put a lot of hope in that he might be part of a new-breed team. Well, of course, he demonstrated in that speech that he is tired and it is about time he moved on, as well.

He asked what we would find if we went out on to the pavements and asked people what this Budget was about. The people who have been interviewed about it have said it is about the future and about savings. They have answered the question that Tony Ryall asked.

His speech had no fizz. In the old days he used to have a bit of fizz and a bit of sting. It was a tired, tired speech that, once again, did not talk about anything that National would do.

He talked about tax cuts. The bizarre thing that the National Party keeps doing is that one member says that now is the time for tax cuts, then another member says that now is not the time. Bill English, for example, says that now is not the time for extensive tax cuts; that is what he said. Tony Ryall, on the other hand, comes into the Chamber and says that people want a tax cut and National will deliver it to them. So the question we always ask of the National Party is what its policy on tax cuts is now. I have no idea. No one has any idea. I think that is really, really disappointing.

Then Tony Ryall had the gall to compare Labour with National on health policy. What an outrage that is! People have possibly forgotten that National introduced charging for hospitals. Do members remember? National called hospital stays bed nights—at one stage it toyed with calling them hotel nights—and tried to work out what a night would cost. As one went into hospital, the hospital staff did not feel one’s pulse; they felt one’s wallet. We were heading towards the Americanisation of our health system. National will return to these things in the future if it ever has a chance. Thank goodness it is not likely to be in my lifetime, but if it ever has a chance, we will go back to those things of the past.

I think the debate to date has been very, very disappointing. The Budget debate is probably the most important debate we have in Parliament during the year. It is an opportunity for the Government to present its Budget, to look at where it is going and where it sees New Zealand going, and to look at the kinds of policies we should be implementing—the policies for the future. It should be a debate about vision, about direction, and about policy. This is the seventh term of this Government, and each of them has built on the previous one. This Budget is the one for our times. It talks about the importance of savings and investment for New Zealand at a time when the economy is really roaring along.

That is what the Labour-led Government has promoted, and we expected the National Party initially to oppose it because that is what Opposition parties do—they just oppose. They say: “We don’t like that. We think that’s wrong. We think that’s stupid.” What we expect then, and what I think people listening to the debate expect, is that the National Party will go on and say what it would do. We have constantly asked the National Party to tell us what its policies are and what ideas it has, instead of it just opposing.

R Doug Woolerton: What do they say?

Hon PAUL SWAIN: Well, it does not have any idea at all, actually. There are no ideas at all. For example, National is saying that KiwiSaver is not the right thing to do, that it is an outrage, and that National would give people tax cuts. That is what its members are saying. I have two things to say about that. Firstly, they have not acknowledged that swamping the economy with tax cuts would mean that ultimately, following a few lines down the track, those tax cuts would be completely absorbed through mortgage interest rate rises. That is what happened in Australia. National members do not add to their glib tax-cut argument: “Oh well, if we do that, of course your mortgage will go up.” One never hears that bit. The Minister of Finance has said that we have some surpluses, and we do want to create some opportunities for people, and the best way is to put that money into people’s savings so that they are planning for the future, on the one hand, and so that we do not undermine people’s mortgage interest rates, on the other. That is a clever and smart piece of economics. But all we hear is that National would give tax cuts.

We heard originally from the National Party that there would be huge tax cuts, then we heard there would be little ones, and now we hear there would be cuts over a period of time. Bill English said just recently that now is not the time for extensive cuts. Tony Ryall says that now is the time for tax cuts. All that anybody in this House wants is to hear National members say what the policy is now. If the National Party ever came into Government, would there be tax cuts in its first Budget, by how much, who would get them, and who would get what?

Hon Brian Donnelly: That policy will be changed by election time!

Hon PAUL SWAIN: Yes, but National members are supposed to be working through this policy. Remember, they called for a thinktank, I think it was, a thinktank of ideas. They were getting some people back to try to help them with the policy development. The issue really is if the economy were really pumping along and overheated as it is at the moment, would National propose tax cuts that would increase the heat of the economy and increase mortgage interest rates? That is an interesting question. If the economy had softened and slowed a bit, how would National afford tax cuts? No one in the National Party is giving New Zealanders any view that that member has any understanding of how the economy is working at the moment. Those members have no understanding of, or view about, what they should be doing in terms of leading New Zealand forward.

Then National members attack KiwiSaver and the whole retirement programme. If one looks at what the Labour-led Government has been doing over the last few years, one sees that we have been saying that one of the things we cannot have is elderly and retired people being uncertain about their income. We cannot have that. At a time when people cannot go out to work to supplement their income—and most of them cannot—they need to have some certainty. What they know, what is ringing in their minds, is that National cut superannuation the last time it had the chance. The National Party is now talking about raising the age of eligibility. That is all right if one is an office worker, but if one is a builder with a back that is shot, it is no good.

The Labour Government has made it quite clear. We have established the floor under which New Zealand superannuation will not go, and we have said that we will not raise the age of eligibility. We have also said that we know that a whole lot of baby boomers are coming up for retirement during the next few years, so we need to plan for that, and that plan is called the New Zealand Superannuation Fund. As I recall, the National Party, I think, was opposed to it for a while.

Moana Mackey: I think so, for a little while.

Hon PAUL SWAIN: For a little while it was. National members said it was an outrage sucking all that money out of people, and we should give it back to them in tax cuts. But I think now, as I recall—

Moana Mackey: The focus group did.

Hon PAUL SWAIN: Yes, the focus group told them it was a bad idea. But now I think they support it, do they not? I think they do. This week they support it. So we have a good superannuation scheme going forward, with a floor and increase in the age of eligibility. We have the Superannuation Fund there, and are making sure that the interest off the earnings of that fund are poured back into superannuation, to make sure that when the baby boomers come to retire we can afford to pay their superannuation.

Add to that the KiwiSaver scheme. People starting new jobs contribute 4 percent of their income, they get 4 percent from the employer, and they get a 20 percent tax credit. What would National do about KiwiSaver? One would think that it was a central piece of the Labour-led Government’s Budget, so one would be interested to know what National was saying about it. People want to know. Well, this is what Bill English said on 19 May: “We reserve the right to have a look at it.” This is the National Party finance spokesperson. He really is nailing his colours to the mast! He really is getting off the fence—“We reserve the right to have a look at it.” He went on to clarify, if one was not really certain about that: “If the government changes then the Government can look at the policy.”—if the Government changed, the Government could look at the policy—“They (savers) cannot assume that is going to be exactly the same in every detail if the government changes.”

Well, I think people now have got the hang of KiwiSaver. They like the idea and they want to hear from National what the changes would be. Would National scrap it? Remember, National had said it would scrap the Superannuation Fund. Is it going to scrap KiwiSaver or is it going to make changes to it? What would the changes be? Is it going to increase the entitlement, or is it going to reduce the employers’ contribution? What would the changes be? People need to know these things. The National Party needs to know that no one is going to treat it seriously until such time as it starts to spell out some of these things. We know that it has opposed things in the past then supported them in the end.

The debate is disappointing. We want to hear what National would do, and what it would do if it ever were in Government, which fortunately will not be in my lifetime.

Hon BRIAN DONNELLY (NZ First): The one thing that can be said for this Budget is that it was no lolly scramble. If we look at education, for example, we do not find dollops of money distributed across a range of causes to placate a multitude of lobby groups. There is money for school buildings, which have to be built anyway, money to move staffing in year one to an already committed pledge of a 1:15 teacher-student ratio, and money to ease pressures that can no longer be denied in the levels of operational funding for schools—all inevitable, all just maintenance of the system. Where there has been considerable annual expenditure has been at the tertiary level—$129 million extra over 4 years for the university sector to support current reforms and for the university tripartite forum to build capacity; industry training providers, industry training organisations, and wānanga get an additional $37 million of operating funding over 4 years, and $90 million more for—

Darren Hughes: I raise a point of order, Madam Speaker. I am not sure whether there is a Standing Order requirement for there to be at least one member of the National Party in the House while we are debating the Budget. I know there is sensitivity in that they voted against a corporate tax cut last week, but to have not one member present does seem a little odd. There is a requirement for Government members to be present, and we are—a Minister has to be present—but does there have to be—

The ASSISTANT SPEAKER (Ann Hartley): No, there is not a requirement.

Hon BRIAN DONNELLY: As I say, there is $90 million more for capital funding over 2 years. But the expenditure is all about establishing a framework for the future of tertiary education, and that is what this Budget is about. It is about establishing a framework for the future. Nowhere is this more clearly defined than in Vote Foreign Affairs where New Zealand First has established a very large and very indelible footprint. When the party was established in 1993 its purposes were enshrined in 15 fundamental principles, one of which included the following statement: “New Zealand foreign aid will focus on the region in which we live.” As a reflection of that principle, our manifesto at the last election stated that New Zealand First will make the Pacific its major focus of attention and will review the level of overseas development assistance and ensure that it is focused on facilitating priority projects and the alleviation of poverty, particularly in the South Pacific region.

As opportunities have arisen, New Zealand First, over time, has delivered in health and education, and in law and order to the elderly, but this is the first opportunity that enables us to meet our longstanding commitment on aid. And, oh, has our leader, the Rt Hon Winston Peters, delivered in this case! There is a 20.2 percent increase in overseas development assistance. I will say that again—a 20.2 percent increase.

The Christchurch Press has never been particularly kind to New Zealand First, but this is what its editor had to say: “Winston Peters has enhanced his reputation with the announcement that New Zealand is to increase its foreign aid by $70 million over the next four years. … it was unlikely the Government would have moved so substantially on the aid budget were it not for Peters’ advocacy. The resulting boost demonstrates his growing authority as foreign minister.”

Investment in our future through aid programmes, just like any other investment, has to be well-placed, and it is true to say that in the past our investments have been spread too thinly to get a real bang for our bucks. By focusing on the Asia-Pacific region, and particularly on the Pacific, we are able to punch way above our weight. The Pacific is our natural sphere of influence—firstly, because of our location and, secondly, because of the composition of our population. The Pacific, the largest region in the world, I might add, is made up largely of small, newly independent nations, and some of these nations struggle to provide just rudimentary services. There are certainly no surpluses in their coffers to fund capital development in order to provide such fundamentals as clean water, let alone health education and transport infrastructure.

Those whose only experience of the Pacific Islands is a luxury resort do not know the daily struggle of the people in the villages, where even quenching one’s thirst is a lottery with disease and death. I well remember visiting a health clinic in the Solomons, which treated children affected with a waterborne disease that turned them into rag dolls with no semblance of life other than their breathing. As I held an 18-month-old youngster’s hand, as she lay limp in her mother’s arms, I looked into those black, black eyes and I swear there was a flash of recognition. It was a sad but magical moment as humanity bridged a divide. The clinic was made of bush materials, and the massage treatment was carried out on a pandanus mat on the floor.

New Zealanders, because of the people we are, will gladly say: “I don’t mind helping those kids. I don’t mind cleaning up the water supplies in their villages so that other kids don’t get that disease.” Is there any wonder that Pacific Island Governments turn to whom they can for support in developing infrastructure, and is there any wonder that emerging superpowers are increasingly viewing Pacific nations as a means to their own ends. Winston Peters is thinking 20 years, 50 years, ahead into New Zealand’s future. This Budget is setting a framework for the future, and no more so than in Vote Foreign Affairs, which will significantly move us from our embarrassing position of spending 0.27 percent of gross national income on aid, to the recommended target of 0.7 percent. I conclude by saying that the credit for this must go to New Zealand First, and in particular to its leader, Winston Peters.

RON MARK (NZ First): It is a pleasure to speak, on behalf of New Zealand First, on the Budget, and particularly on the aspects of the Budget pertaining to Vote Police. How good is it when one enters into an agreement with the Government, as New Zealand First has done, to increase the fulltime-equivalent strength of the police by 1,000, in fact, and eventually to negotiate it to 1,250 police? We hear all the criticisms coming from National, as to how these things are not progressing and how police officers are not hitting the beat, but then we look at the cold, hard facts by reading the Budget itself. If we go to the second volume of B5 in the Budget documents, we can look at the figures in there, in terms of increasing front-line capacity and showing Budget increases.

I draw the House’s attention to the Budget increases not just for this year but also for outgoing years 2008, 2009, and 2010. I raise that because therein lies the completion of the second part of New Zealand First’s agreement with the Government—that is, to bring up police numbers, per capita, to a level equal with Australia. A lot of noise comes out, and I have to laugh—New Zealand First has to laugh—because we have had so many law and order spokespeople in National that we have lost count. We do not care to count any more. Now we have Chester Borrows there, prattling on alongside Simon Power, but the only two complaints we are reading about in the papers now from Chester Borrows and Simon Power are that we are catching too many crooks and there are too many in jail—the streets are too safe. It is getting easier to lock people up, because there are more cells to put them in. In fact, we are bulging at the seams.

Well, New Zealand First has one fundamental difference from National. When we say we are going to increase the fulltime-equivalent strength of the police force, we do it. We do not increase police capacity by buying a dud computer for $200 million. We do not increase police capacity, as National did, by slashing 480 from the number of fulltime-equivalent police officers on the street; we increase that number by a thousand.

Let me just say to Mr Chester Borrows that this is not a gimmick. National policy last election was to increase the number of front-line police—rubbish! It has always said that, but history shows that it has never ever done it. To the contrary, National in Government has always cut police numbers. The only time it increased the fulltime-equivalent strength of the police was when it merged the police with the Ministry of Transport and put a whole lot of traffic officers in the police force. That is how National did it—by sleight of hand; it was underhand.

But National has said that our proposal is a gimmick. Well, I tell the House that it is no gimmick, and this Budget reflects that. We are on track to achieve our 1,000 extra police, and on track to achieve the extra 1,250. Before we get carried away, let us remember New Zealand First’s policy at the last election: it was to double the size of the police force. There will be not just an extra thousand; we have a bigger objective for full-time policing. There will be no mealy-mouthed little token gestures, as National continues to prattle on about, or worries about how many crims we catch and lock up. We are not ashamed of catching crooks. National has said we cannot afford to catch them—so what are they proposing? Will it slash the police force as it did in the 1990s, and not catch them?

It is a bit hard for National members to be running around and saying how terrible it is that grannies are getting attacked in their homes, when they are now crying and bleating that we have too many people in jail. That does not make sense; what does make sense is that we now know National is clearly not serious. New Zealand First is proud of the policies we have pushed through with the Labour Government. We are proud to see that the Labour Government is honouring those commitments, and the figures are here in the Budget—out-yeared to 2009. We are also proud of the $2.5 million that we have put in to address Māori crime, and Māori juvenile delinquency on the streets, by bolstering the Māori Wardens Association. We are putting $2.5 million into strengthening the organisation, putting coordinators on the ground, appointing full-time staff, and providing vehicles, radios, and uniforms. And all of that will help to deal with the lawlessness we see on our streets. The next step is to try to get someone to be serious about dealing with organised crime and gangs. New Zealand First will focus its attention on that particular area next year, and we are looking for someone who will be serious, to talk to. Because, clearly, we are not hearing a lot of serious stuff coming out of National’s law and the order spokesman these days.

JUDITH COLLINS (National—Clevedon): I look forward to seeing Mr Mark and New Zealand First actually deliver on the doubling of police numbers, given that those members are supporting the current Labour Government, and their party is quite happy to have the Papakura police station filled up with prisoners. There suddenly are so many more prisoners, I tell Mr Mark, because there is so much more crime under this Government. That is a pretty simple fact.

One of the things I want to talk about, in relation to this Budget, is what it is not going to do. On Sunday I attended a very sad little gathering for a family who is shifting to Australia. This is a family of young people in their 30s with a little child. Both parents are working. One has a trade, and the other works in a bank. They are people we should be keeping in this country. They have said that there is nothing in this Budget for them—there is absolutely nothing in this Budget for them. With two incomes and one child, and living in Massey, in west Auckland, they really did not have enough to come and go on. They did not have enough to join up with KiwiSaver. They did not have enough for anything else. So they, along with 698 other people this week, are shifting permanently to Australia. That is because there is simply nothing in the Budget for them.

They were all excited to hear they would get 20 hours free childcare for their child, until, of course, they worked out that their child, aged 18 months, would not actually be able to get those 20 free hours. In fact, the cost of having their child in childcare went up $14 each week; it was not the other way round. They were looking at a cost of $7,000 a year to have a little child in childcare. Working full-time, as they both do, they simply could not manage. What they really would like to have had was a little bit more of their own tax back. They would like their childcare costs to be tax deductible. They would like to get something back—something for themselves. They are the sorts of aspirational people this country should have. Instead, they have sold up everything, switched their money to Australian dollars, and shifted to Australia. And they will do well there. They will do very, very well in Australia, because the opportunities in that country are better and they will be able to do all the sorts of things we have just been talking about.

There is nothing wrong with superannuation, and many people will, in fact, sign up to the KiwiSaver scheme. Many of them will be saying that at least they then will get back some of their own tax, which is what they really want. They think they may as well get something back. Those people can afford to save.

But there is nothing in this Budget for those who are really, really struggling. There is nothing in this Budget for people who, under this Government, have seen interest rates go sky-high, who bought properties they thought they could afford, who have two or three jobs, who are doing their very best, and who are trying to be good parents, as well. There is nothing in this Budget for them. It is all very well for the Government to say that those people benefit from Working for Families. They often do not qualify for Working for Families because their combined incomes put them out of that limit. Unless they stretch themselves and have five or six more children, they simply will not qualify for Working for Families.

This Budget will suit some people but not very many. We have seen no indication that the flow of qualified, experienced people going to Australia will stop. It certainly will not stop under a Labour Government. A couple of years ago Don Brash gave a speech in which he talked about the 500 people who were leaving this country every week to go to Australia. Some people thought that figure was a bit high. Now, 700 people a week are going, and all that Government members can do is to go around saying we need better immigration. Well, it is fine to have good immigration, but why is our biggest export at the moment New Zealand - trained, New Zealand - qualified people who love New Zealand—people who work, who save if they can, and who have children whom they look after? We are exporting those people when we should be doing something to keep them here.

Instead, this Government is happy to have 1 million New Zealanders living outside New Zealand. We should just look at the proportion: we have a population of 4 million people, and 20 percent of New Zealanders live outside New Zealand. What do Australians have? They have a population of 20 million people, with only 800,000 Australians living outside Australia. That gives us food for thought, I think. Australians do not feel they have to leave their country in order to do well. We should not have to be exporting our people. There was a time when it was the other way round—when people were coming to New Zealand. In the 1960s people came from Australia to settle in New Zealand. Now it is the other way round. It is not just about Australia being a bigger market and having bigger opportunities; it is about an attitude that people can do better in that country, because the more they work the more they get.

Productivity is something this country has not addressed. A National Government will have to address it, because Labour has had 8 years of Budgets that have all been about dishing out other people’s money—about taking money off people who are productive and rewarding those who choose not to be.

One of the concerns raised by the Minister of Finance today was the issue about business tax. He said that Labour is giving a business tax cut to some companies. Who will benefit from it? Of those businesses that actually employ people in New Zealand, how many are even set up as companies? In fact, most business in this country is conducted by sole traders and small partnerships—by mum and dad businesses, by small businesses. The reason is that they want to keep compliance costs down. They do not want to be another entity. Most of those businesses in New Zealand that actually are companies end up getting their tax money paid to them as wages or dividends. They have to pay tax at the higher end, anyway. So who is really going to benefit from this cut in company tax? Primarily, it will be the big companies—the international companies that have branches here. Those companies are more likely to benefit than the little old Kiwi business, the mum and dad business. Small-business people will not benefit.

Instead, not only are they told that they will contribute towards their staff members’ superannuation; the Minister of Finance said in the Budget speech that he expects wage rounds to be less now because of that superannuation payment. So he is telling Kiwi workers not to ask for too much in their pay packets, because if they ask for too much they will not get it, because their employers are having to pay into their superannuation fund. How is that fair? How is that fair to people who are struggling? At the same time the Minister of Finance is quite happy for interest rates to be moving up to around the 10 percent mark. He is quite happy for that to happen, and to tell Kiwi parents who have mortgages, kids to pay for, and everything else to pay for that they have to stop their spending.

Does he stop his spending? I heard him on Agenda on Television One on Saturday saying that we now spend less on welfare because of benefit losses. Utter rubbish! We now spend more on welfare than we have ever spent on it. More money is now spent on welfare under this Government than ever before. About $16 billion is now spent on welfare, and that is right up from about $13 billion a couple of years ago. Where does he get off telling everybody that less money is being spent on welfare? No, more is being spent.

One of the other interesting things not in this Budget is the single core benefit. What happened to that? This Government has committed—we presume—millions and millions of dollars’ worth of reports on, and investigations into, a single core benefit. There are so many reports that the Minister for Social Development and Employment says he cannot count them. He cannot count them because there are so many—obviously, more than the number of fingers and toes he has. He is saying that he cannot tell me how many because there are so many of them. Labour has talked about this policy for 20 years. The Minister cannot tell us how much money has been spent on it. What we do know is that today in the House, when asked some pretty simple questions, such as when is it happening and whether he sticks by Labour’s 2005 policy of having a single core benefit, which it went to the election on, he could not answer. He talked about anything except the single core benefit. At no stage did I hear him use the term “single core benefit”. Steve Maharey, whose baby it was—whose child it was—sat there seething, and saying to himself: “I’m fed up with you, Judith. I’m fed up with your saying those nasty things about my single core benefit baby.” In fact, that poor little baby has been abandoned now, like a little orphan on the church steps, by Mr Benson-Pope, who clearly does not want to support Mr Maharey’s single core benefit any more.

This Budget is interesting really for what it does not deliver rather than what it does. What it does deliver is 700 more people going to Australia this week.

Hon MARK GOSCHE (Labour—Maungakiekie): Talofa lava. That previous speech was from National’s spokesperson on social services. One would not have known it, because she was more obsessed with somebody shifting off to Australia. She was knocking New Zealand, as usual—because that is all that the National Party is good for. There was not a single jot about what National would do for the poorest and lowest-paid people in this country—the people she should be caring about. But could we expect Judith Collins to care about anybody but herself? Not a show!

One would have thought that the National Party would wholeheartedly support this Budget, because it is the party that once claimed to be the “party of business”. But National members will sit in this House over the next week and slam this Budget—a Budget that gives the biggest tax cuts to businesses that we have seen in a long time. It is such a long time that we have to go back to the previous Labour Government to see anything of this kind. Yet National will vote against the package for business in this Budget that will see a $2.1 billion cut in the company tax rate, from 33 percent to 30 percent, effective from 2008-09. It will vote against that, even though it is supposed to be the “party of business”. It will vote against the $630 million package for research and development tax credits for business, and it will say that it is not enough. But what did that party ever deliver in its 9 long years of Government through the 1990s? It delivered much the same as it did in transport—zip, zilch, nothing!

Hon Maurice Williamson: What a load of “dooey”!

Hon MARK GOSCHE: The former Minister of Transport is over there. Poor old Maurice Williamson. In 9 long years, did he open a single piece of motorway in Auckland? None, zip, zilch—he did not open a single piece of motorway. What did he spend on public transport? He froze the spending for 5 to 6 years at a miserable $43 million. He allowed the railway system to go to rack and ruin. He said to the bus companies: “Don’t buy new buses, just let them run out.” The National Government does not believe in public transport. It thinks the railway lines should be pulled up because they are a waste of time.

Let us look at what this Government has done. I am somewhat bemused by the Green Party’s attitude on this one because I see a figure in front of me stating that there will be $600 million for upgrades to Auckland and Wellington passenger rail. That includes electrification of the Auckland rail and replacing the worn-out infrastructure in Wellington. I would have thought that the Green Party, like the Labour Party, would applaud the Government for that. I am really disappointed that it does not see that as a major victory for green policies, because it is. It is a major victory for Auckland and a major victory for this Government. The Green members should be jumping on that train and saying: “We helped to achieve that.”, because they did. I cannot understand their attitude on this one because it is an important development.

We saw Maurice Williamson wreck rail, and we have seen this Government restore it and now improve upon it. Auckland will be the beneficiary of that, including all those trucking companies that are whingeing at the moment. If we get people off the roads and into trains and buses it will get trucks moving through Auckland at a much more rapid rate. At the moment they have to go to the wharf at night because that is the most economical time to do it. I am sure that those truckdrivers will welcome the idea of being able to work day shift as well. Having a decent transport system that takes people off the roads and out of their cars, where they sit one by one on the motorway, and into a decent, modern train system is something that should be applauded by all of us. But it will be voted against by the head-in-sand National Party, which votes against tax cuts for business and tax cuts for research and development, which opposes this money being spent on rail, and which opposes the sorts of things that any sensible Government that wants to grow its economy would do. National will vote against every single one of those things.

National members do not like KiwiSaver because they cannot knock it. The vast majority of New Zealanders say that KiwiSaver is great. They have struggled to save, but they now have a Government that says to low-paid workers as well as to those on middle incomes that if they are earning $26,000 a year and they put up 4 percent, they will save three times as much. The Government will put in money and the employer will put in money, and the Government will help employers to do that. I have heard all the rubbish from members opposite about the underclass and the poor people and how they want to give them charity. This Government does not want to give them charity; it just wants to give them a helping hand. It says that if people are prepared to put in 4 percent, it will stick in its $20, the employer will stick in its 4 percent, and those people will have three times as much in their account at the end of the year.

The Government is chipping in about $1,000, and I think that is a great thing, particularly when we think about the difficulty people have trying to buy houses. This is a great little story. It is a story that I think many New Zealanders would be interested in. If we have a couple—we will call them Meg and Jack, because that is what it says on the piece of paper in front of me—who are aged 30 years and earn $37,500 a year each, which is the average combined income for many, many households, and if they each contribute 4 percent of their salary into KiwiSaver from 1 July this year, at the end of a 5-year period they will have a $35,000 deposit to buy a house.

That is why the National members opposite are cringing and do not want to attack KiwiSaver; it is because they know they would be attacking the opportunity for New Zealand families to buy their first homes. That opportunity was stripped out from under people in the 1990s when the Housing Corporation mortgages were sold off to the private sector, which continued to rip off the poorest people in this country. That is the disgusting legacy of the National Party.

Hon Maurice Williamson: What a load of “dooey”.

Hon MARK GOSCHE: National took away the opportunity that Maurice Williamson’s family had, and my family had, to get a State Advances loan to buy their first home. All of those people in our generation had it. The National—

Hon Maurice Williamson: What? We never had a State Advances loan.

Hon MARK GOSCHE: Maybe Maurice did not have to worry about it. Maybe his parents were slightly better off than my parents. My parents got the 3 percent State Advances loan. The parents of a large number of members in this House would have got that loan. National took away that wonderful legacy put into place by a past Labour Government. It was stripped away by a National Government. Michael Cullen has said: “We don’t quite have the loot to do that one any more, but we will have KiwiSaver and we will allow families on $37,500 a year each to have a $35,000 deposit after 5 years of saving to put on a house.”

But it gets better. If those people continue to save with KiwiSaver, at the age of 65 years they will have $390,000 in savings in their account, plus they will have bought a house along the way. That is why KiwiSaver is so popular out there. That is why people will be lining up. It will not be just middle-income families; it will be low-income families. I sat on the Finance and Expenditure Committee and heard from the people who looked into this matter that the best savers in New Zealand are our lowest paid. They do not have any other choice. Nobody runs up to them and says: “Here’s a credit card, I’m going to lend you a whole heap of money.” They have to save. They have a savings habit and they will benefit from KiwiSaver and this Government’s assistance to do that saving. They look forward to putting aside some money for their retirement, and to maybe buying a house along the way.

How can the National Party oppose that? How can it oppose business tax cuts? How can it oppose the building of a rail system and better roads? How can National Opposition members, in all seriousness, sit over there 18 months out from an election and have not a single policy or answer, but oppose all those wonderful measures that every New Zealander knows are sensible? National members think they can sleepwalk to the next election. They are so arrogant they think the country will elect them because they have that fresh young face called John Key. John is not running the show; he is a puppet—Bill English is behind him, and we all know what Bill did in the 1990s. He was responsible for all the things we have talked about, and he will do that again if given a chance. But I think New Zealanders are much wiser than that. That is why this Budget is a wonderful Budget for New Zealand and a wonderful Budget for this Government.

Hon MAURICE WILLIAMSON (National—Pakuranga): First, I apologise to commercial radio in Auckland for again taking away its drive time audience, because my adoring drive time audience wait with bated breath for me to speak around this time at night. Those Pakuranga residents who want to be home to watch Coronation Street at 7.30 p.m. will have already begun their trip, leaving the central city about half an hour ago in order to make it back to Pakuranga by 7.30 p.m. The good news about giving a drive time speech in this House is that one can start any time from about 4.30 p.m. through until 8.30 p.m. or 9 p.m. and one will still pick up the drive time audience.

Because it is the one thing Labour members never address when they say: “We’ve done this and we’ve done that, and when National was in power they did not do that.” One simple question they could answer is: has congestion got better or worse in Auckland since Labour has been in power? I know the answer because I have seen some quite good public polling, but I would like to hear a Labour member answer it. Here is the question again—I will take it slowly and use big letters so that Labour members can understand it: has congestion got better or worse since Labour came to power? Let me tell them—and this will not be a surprise to my drive time audience stuck out there—it has got way worse.

Labour members can use all the weasel words in the world about what they have done and what they have achieved, while the one measure that the ordinary motorist will use—it is the only measure that motorists will use—is whether congestion has got better or worse. Let us take the road up the Kapiti coast and ask Nathan Guy, the next member for Otaki. Actually he is the member for Otaki in waiting, because he is already that now. We can ask him to ask his constituents whether traffic has got better or worse up the coast road.

Nathan Guy: Worse.

Hon MAURICE WILLIAMSON: Exactly. I am happy to bet my salary against Harry Duynhoven right now that we will commission an independent survey group to survey 1,000 people in Auckland asking that question. I win if those people say it has got worse, and Harry gets our total annual salary pot if that independent survey company says that the Aucklanders say that it has got better. Every one of those people who are locked, blocked, and stopped in their cars right now knows that congestion has got worse.

It is no wonder that things have got worse. What we have today, and I referred to it at question time, is a ministerial advisory group report. Members should read it. When I say my “gast” was completely “flabbered”, I really mean it. Here is some of the stuff in the report. This is the report of the Minister’s own officials. It is not a case of the Tories having a slap at the Minister. It is not a case of the National Party trying to score some ground. Here is what the Minister’s own people said about how roading is handled. Members should listen to this—it is beautiful: “Under pressure to deliver, it seems that decision making in relation to scope and project definition has not always had the robust scrutiny that might have been expected.”

There is Another statement: “Value for money was not identified as a key objective in the SOIs for the Ministry of Transport, Transit NZ, and Land Transport NZ …”, and so on. So value for money was not taken into account. The report goes on to state—it is just incredible—“the change in project evaluation criteria away from solely using BCR means that Transit NZ has less incentive to contain project costs.” And it does not.

The Ministerial Advisory Group on Roading Costs report is a 51-page report. It is damning about the wastage, the scope-creep, and the project cost overruns, and there is a graph showing what has happened to projects going through the ceiling. So it is just not good enough for this Government to come in here and say that it is all OK and under control.

The next question, which the National Party has raised with several Ministers of Transport and Ministers for the Environment along the way, is why this Government will not make some modest changes to the Resource Management Act—just some modest changes—to stop some of the appalling cost impost that has been put on building roads. Every one of the transport and environment Ministers has said there is nothing wrong with the Resource Management Act, it is fine, they will not change it, and the National Party is deluded. That is what they said: the National Party is completely deluded, there is nothing wrong with the Resource Management Act, and it does not need to be changed. Well, here are some quotes. If these quotes were from the Tories, or the National Party Opposition, then one could say they were just trying to score some points. These quotes, from the Transport and Industrial Relations Committee hearing of the financial review of Transit, come from the chairman and the chief executive of Transit.

They are lovely—members will like them. “One of the difficulties is that we’re finding we’re having to do a lot of things to gain consent under the RMA and under the Environment Court jurisdiction that is adding a lot of cost to each project.”

Hon Mark Gosche: You’ve driven those drivers to sleep, Maurice, you’re so boring.

Hon MAURICE WILLIAMSON: Well, I am actually happy to read it a second time, because Mr Gosche is enjoying this so much. “One of the difficulties is that we’re finding we’re having to do a lot of things to gain consent under the RMA and under the Environment Court jurisdiction that is adding a lot of cost to each project.” The next quote is even better: “Getting consents is now costing Transit a lot more than could be expected.” So, here we go, here is the question again—we will ask a second question in our survey about this. Do Government members agree with this man? The Ministerial Advisory Group on Roading Costs is obviously wrong, and the public is wrong when they think congestion has got worse, not better! But let us get down to this question: is the Chairman of Transit, Mr Bryan Jackson, wrong when he says that the Resource Management Act is the problem and that it is adding huge cost to each project?

I love the following quote; it is a little specific example: “Take the Victoria tunnel. Some of the conditions that have been applied in the first round are extremely onerous. For example, moving an historic building to make way for the port of the tunnel is going to cost Transit an extra $6½ million.” Just one element of the Resource Management Act that is blocking the development of a tunnel is that a historic building has to be moved for $6.5 million. That is clear.

Hon Pete Hodgson: So what would you do?

Hon MAURICE WILLIAMSON: The member really fell into that trap. We have said what we would do all along, including at the last election. On the National Party’s website at www.national.org.nz there is a list of 12 specific changes that, if made to the Resource Management Act, would still give people a say, would still provide a proper consenting process, but would take away the frivolous, the vexatious, the time delay, and the extra cost that—and it is not me saying this—the Government’s own chairman of Transit says is the major problem. He will probably be gone as of tomorrow—he will probably be sacked because he spoke out like he did.

At that same committee, the chief executive, Rick van Barneveld, said: “Some of the conditions sought in particular by the ARC are onerous and unreasonable in their cost, in our view.” So that is what they are saying. So, yes, we would significantly amend the Resource Management Act to streamline the consent process to actually see some roads get built.

But now we come to the doozy of them all in the Budget. In the Budget we see a Government that is really keen on increasing taxes. That is what we see—a Government that announces a $1.7 billion surplus in cash—

Hon Mark Gosche: Who’s voting against the tax cuts?

Hon MAURICE WILLIAMSON: I say to Mr Gosche that that is after the corporate tax cuts, so he should get his numbers right. There is a $6.3 billion operating surplus, but then the Government says it will put on a new tax of 10c a litre—an extra tax. Here is what people will love. This is why my drive time audience has been waiting for me to reach a peak, to get to this crescendo, and to lay it on them. Here is the news for those motorists on the motorway trying to work their way out to Pakuranga so they can be there in time for Coronation Street at 7.30: they will pay 10c a litre extra for an upgrade of the rail network. I can hear them already shouting, with their cars coming to a grinding halt on the motorway: “What rail network? There is no rail network in our part of Auckland, so if a rail network were upgraded, how would that affect us?”. We hear the Minister saying today that what would really help is that if we upgraded the network we would get people on to trains and it would free up the roads. There is no rail network in the eastern suburbs where I live. There is no rail network on the North Shore, and this Budget is a complete hoax for every motorist out there.

CHARLES CHAUVEL (Labour): I was very proud to sit in the House last week and hear the Minister of Finance read the Budget speech. It was a bold and strategic speech. It tackled not only the short-term challenges facing this country, like inflation and the high dollar, but the important issues, like managing our ageing population and climate change, by building a platform to make New Zealand more resilient and flexible over the long term. That Budget speech and the content of the appropriations provide savings and investment initiatives that will help our economy become more dynamic and responsive to the challenges ahead.

I was very sad to sit here and hear Mrs Collins’ speech about immigration. The speech echoed the same wrong information rattled off by Dr Lockwood Smith on Friday during his speech. The reality, according to Statistics New Zealand material released last week, is that New Zealand is in a net gain situation as far as migration is concerned. It is a myth that people are leaving this country in droves. That is the sort of thing we hear from the National Party all the time, and the sort of thing we heard on the hustings during the last election. Our net gain from immigration in New Zealand in the year to April was over 11,000 people. So let us have some reality in the debate, not pretend that things are so bad in this country that people are leaving. Things are looking up, and we are gaining people—the sorts of migrants we need to have in order to build a strong future.

It is disappointing to hear a party try to talk down the prospects of this country. This is a great country with a lot going for it, and it will be even greater once the effects of this Budget start to wash through. I think it is a shame when people try to talk down our national prospects, just as Dr Brash did in Sydney a couple of years ago, when I was working there. He came to Sydney, spoke to a group of business investors and told them all the things that he said were wrong with the New Zealand economy. That is just treason. An Australian would never go to another country and do that. We should be talking up the good things about this country, not trying to talk down our prospects. I look forward to the time when members opposite start doing that and acting in what is truly the national interest.

Unlike those pessimists on the other side, I can see that this Budget supports families young and old through a continued investment in their health, education, safety, and well-being. The enhanced KiwiSaver scheme is a good example. As we have heard from previous speakers, it gives tax credits of up to $20 a week for savers, and establishes employer contributions to be phased in over 4 years, beginning in 2008 and going up to 4 percent when we get to 2012. Those contributions are offset by a tax credit of up to $20 a week per employee. People whom I spoke to over the weekend are just delighted that the Government is encouraging them to save. It is a habit that we have lost, and we needed to reactivate it. There is a public yearning to be encouraged to save.

As I said last week, there are numbers of surveys that show that New Zealanders really needed a leg-up and some incentives to help them get on the savings ladder. It was interesting to read in the New Zealand Herald of 24 February that there was a survey conducted about people’s superannuation and retirement savings habits and aspirations. The survey asked, firstly: “Do you personally belong to a retirement savings scheme?”. The answers were: yes, 31 percent; no, 68 percent. That is a terrible rate of saving, and we plainly had to do something about that. This Budget starts to deliver on the need to address that issue.

The next question asked: “Will you join KiwiSaver when it starts in July, if you don’t already belong to a scheme?”. Of the 68 percent who had said they did not belong to a retirement savings scheme, 23 percent said “yes” and 28.4 percent said they did not know. So nearly half the population was either going to do it or giving it some thought. The third question was really interesting: “Do you think saving for retirement should be compulsory?”. The answer “yes” was 63.4 percent. So plainly, in that survey Kiwis were saying they really needed incentives to begin to save. This Budget and the alterations and enhancement to KiwiSaver will provide those enhancements and incentives, not by placing compulsion on employees but by giving them the encouragement that is required to join KiwiSaver and begin a proper savings scheme.

I do not want to see these bold moves that the Budget has put in place put at risk. We all know that with Labour in Government universal superannuation will not be questioned. Every New Zealander has a right to a decent, publicly provided pension when he or she hits 65. We have tried to ensure that, in part by making sure the rates for superannuation are decent and able to be lived on but also by building up a strategic level of investment with the Cullen fund to make sure there is actually a future for superannuation in New Zealand. KiwiSaver is clearly designed as a top-up to superannuation, not a replacement. So the dual investment programme—KiwiSaver on the one hand and heavy investment in the New Zealand Superannuation Fund on the other, both of which were opposed by members opposite—is all about trying to guarantee a decent standard of living going forward for retired New Zealanders.

Indeed, people should be worried that National has dropped hints about scrapping universal superannuation. It is clear that the only way to guarantee superannuation is to keep a Labour-led Government in office, because we remember that the last time Bill English was in Government, National cut superannuation rates. Labour believes in a non - means-tested universal pension, and the National Party does need to come clean about what its plans are.

I spoke briefly, on Friday, about some of the business reaction to the Budget, and more interesting reaction has come in since then. I want to read to the House a couple of the reactions from some of the commentators. John Shewan, chair of PricewaterhouseCoopers, in the Dominion Post of 18 May stated: “The Government is to be applauded for having the resolve to reduce the rate in spite of stiff opposition from close quarters. The tax cut will result in more investment, growth and productivity.” David Skilling, from the New Zealand Institute, in the New Zealand Herald on the same day stated: “Encouraging savings will have a range of benefits. For individuals, increased savings will strengthen their financial position as well as providing them with a more significant ownership stake in the economy, helping to ensure a nation of owners not just employees. Increased savings will also strengthen the business environment. Over time, increased personal savings will strengthen the capital markets and provide a much larger domestic pool of capital to finance company growth.”

The National Business Review was also interesting on Friday, 18 May. There were a number of commentators: John Cantin, Paul McPadden, Brahma Sharma, and Jan Dawson, all from KPMG, and Donal Curtin from Vestar investments gave very positive commentary about the way this Budget was very positive for business, very positive for ordinary New Zealanders, and very positive for the country in general.

It is not just in the area of the economy and in savings incentives that the Budget has a good set of measures. In the education sector there are big gains. The Budget allows for 700 new year 1 teachers, the building of 14 new schools, and 180 new classrooms. There will also be an increase of 4 percent to schools’ operations grants, and an extra boost of $50 million for early childhood education. That is real money being spent in an area that matters to Kiwis. Those operations grants are always stretched, but this Labour-led Government has listened to schools and increased operations grants by 10 percent above normal inflation over recent years.

In health the Budget committed an extra $3 billion over 4 years to the sector—again, investing real money on real areas of service that matter to New Zealanders. Some of those initiatives include expanding elective surgery by $238 million worth of expenditure and increasing the focus on obesity and healthy eating by nearly $64 million. The Budget will also ensure that we improve services for people with disabilities and older people, including workforce issues arising from low-paid workers. Some of the neediest employees in our society work hard doing some of the most unpleasant jobs and they will benefit by $356 million—again, real money. We have increased the pharmaceutical budgets for district health boards by $80 million and expanded the immunisation schedule to protect people from disease with the sum of $68 million.

As my colleague Mark Gosche has said, transport infrastructure is another area to receive a huge boost in expenditure—again, real money—with $500 million contributing to the electrification of public transport, the Auckland rail network, and the upgrade of Wellington’s existing rail system, which is actually already very good. The Budget also addresses the area of sustainability in many ways. All in all, it is an excellent Budget and I am proud to get up and support it.

Hon DAVID CARTER (National): This Budget was an important Budget for the Labour Government. The Government had a chance to produce a Budget that would be a circuit-breaker for the Government, after the months and months of very bad news that it has enjoyed. I listened with interest to the second response made to the Budget, after it had been delivered last Thursday by Dr Michael Cullen. The three words uttered by that contributor summed it up. Those three words were: “Is that it?”. Is that it? Those words were uttered by none other than Helen Clark, Prime Minister and leader of the Labour Party. She knew, when Michael Cullen sat down, that the Budget was not going to be the circuit-breaker she so much wished for. She knew, as Michael Cullen sat down, that, as the Christchurch Press said in the editorial the next day, there had been a huge opportunity lost. That is what the Christchurch Press said in its editorial.

Helen Clark knew that, because Michael Cullen had again been too clever by half. He took the opportunity in this Budget to make what was originally a relatively simple KiwiSaver scheme extremely complex; what is worse, he then insisted on compulsory contributions from employers. That is what took the business community by surprise.

So Helen Clark uttered the words: “Is that it?”, and sat down and realised that Michael Cullen had delivered his last Budget in this House. He has delivered eight Budgets; eight Budgets that have not done anything to lift the standard of living for New Zealanders. But the real hassle for Helen Clark is who she will replace Michael Cullen with.

Hon Pete Hodgson: Michael Cullen.

Hon DAVID CARTER: Pete Hodgson interjects to say she will replace Michael Cullen with Michael Cullen. He may well be right, and the reason he may be right is that when we look across the front bench of the Labour Government, we see that there is no one else. Those members gave Mr Mallard the opportunity as an Associate Minister of Finance to get out amongst the business community and try to demonstrate that he had some credibility. But Mr Mallard lost the opportunity. He went off with some harebrained scheme to build a billion-dollar stadium on the Auckland waterfront and he lost his opportunity to build any credibility. Those people who are now listening to this debate on the radio knew that when Mr Mallard was talking about a billion dollars to build a fancy rugby stadium, a billion dollars less would be used on Auckland roads. So Mr Mallard blew his opportunity to be the next Minister of Finance and to deliver Labour’s last Budget. Mr Hodgson may well be right—there may well be nobody who is credible within the Labour Government now to deliver the next Labour Budget; the last Budget before the country gives us a change of Government. Helen Clark was absolutely right when she sat down in absolute exasperation and said: “Is that it?”.

I will talk about the employer contributions and what they will mean to lower-paid New Zealanders. When he delivered the Budget Dr Cullen said, as an excuse to employers, that they would not have to offer pay rises to workers. That is all very well for the 50 percent of people that Treasury says will sign up to the KiwiSaver scheme, but what about those people on lower incomes who simply cannot afford to save—the sort of people who, traditionally, Labour used to represent. Mr Mallard the other day yelled out across the Chamber: “What about the workers?”. I say to the Labour members here in the House tonight: what about the workers?

When that question was asked again earlier today by Bill English, Darren Hughes interjected across the House to say that Labour had looked after the workers because it had given them $11.25 an hour. I think that that is the very reason that Darren Hughes now has only about 12 months left in this place. It is the arrogance he shows when he thinks he can tell lower-paid workers that $11.25 is their lot in life. I say to Darren Hughes that they are the very people who gave him a very slim majority in the Otaki electorate. They will not forget, because Nathan Guy will take the opportunity of reminding those people at every chance he gets that Darren Hughes said this Budget was good for them because Labour gave them $11.25 an hour. I say to Darren Hughes that he should try to raise a family on $11.25 an hour, because that is how out of touch this Labour Government has become.

Darren Hughes: That’s where Working for Families can help out—I agree with the member. I voted for it.

Hon DAVID CARTER: Oh, there goes Labour’s orange boy, chipping in again. I tell Darren Hughes to listen, because the only thing that he is good for is bringing on the oranges at half-time. The Labour Government will not even let him play a full game.

But I want to talk about the Budget and about the previous tax cuts that the Minister of Finance offered. He offered to adjust the thresholds in the Budget of 2005. He offered personal tax cuts in 2005, but, true to his word, this time—again—he could not deliver them. He has taken away the chewing gum tax cuts he offered previously. Mark my words, Dr Cullen has said that tax cuts are inflationary, but next year, when the Labour Government is further sunk in desperation and about to deliver its very last Budget, suddenly Dr Cullen will come good and decide that tax cuts in an election year are not that inflationary after all. But people will not believe him—that will be the difference next time. He has offered personal tax cuts once, and when he was called on to deliver them, he used this Budget of 2007 to remove the promise of those tax cuts. So I say that when he offers them again, nobody in New Zealand will believe him.

I also remind the House of an earlier comment made by Helen Clark in this House that I well remember. She promised to raise the living standards of New Zealanders and to put New Zealanders back into the top half of the OECD. That was a great statement. I thought that if she were to do that, then I was supportive of her doing that. But then when we asked her when she would do it, she suddenly forgot that she ever made that comment in this House. In the meantime, under the desperate management of the Labour Government, we have seen this country actually slip further behind in the OECD rankings. That might not worry Darren Hughes, because he sits here arrogantly on a little more than $11.25 an hour—I am never too sure why he deserves more than $11.25, but that is what he gets.

Darren Hughes: I work for my money.

Hon DAVID CARTER: The member says that he works for his money—he should tell that to the people he let down in the Budget.

But anyhow, I say that 700 New Zealanders leave this country each week because they find that life in Australia is better than it is here. That is the greatest challenge this country has. The reason people are leaving in those sorts of numbers is that they can earn significantly more money after tax in Australia than they can here—50 percent more. [Interruption] Darren Hughes nods his head in agreement.

I will finish with two comments on agriculture and biosecurity. I refer to Vote Agriculture and Forestry. I looked through what Mr Anderton was going to do for farmers and I found one item: $1 million for a New Zealand primary industry congress.

Nathan Guy: Talkfest.

Hon DAVID CARTER: Mr Anderton’s solution to New Zealand’s agricultural problems is another talkfest of $1 million being spent in November. That will not achieve a thing, I tell Mr Anderton. The farmers in New Zealand are fed up with Mr Anderton’s talk, and they want some real solutions.

The other vote I will quickly refer to is biosecurity. Again, Mr Anderton put out a surprising press release in the week leading up to the Budget that stated that he had increased biosecurity spending by $37 million. When I look at the figures, I see that the out-years for biosecurity spend go down from $186 million to $168 million. That is a decline of $17 million, not an increase of $37 million. I tell Mr Anderton that it is time he stops being economical with the truth and actually serves the portfolios that he has been given. Biosecurity in this country is in a mess, agriculture is under real pressure, and Mr Anderton has failed to deliver anything in this Budget for those two industries.

DARREN HUGHES (Labour—Otaki): What a great pleasure it is to follow David Carter—the one-time failed finance spokesperson for the National Party. National has had him participate in the Budget debate, even though he took National members into the 2002 election as their finance spokesperson only to be promptly sacked afterwards. That speech summed up exactly why that man is a three-time loser to Ruth Dyson in the South Island.

Hon Mark Gosche: He could get a part in The Munsters.

DARREN HUGHES: Mr Gosche thinks that he could get a part in The Munsters. I am not sure whether it is the new hairdo or what it is, but I am not going down that track, because all we are hearing so far from the National Party is the same old Tory arrogance that we expect to hear from those members when they think they are doing all right. But we will make sure, by putting up solid policy on the Government side of the House, that people will have a real choice. They will see that substance counts for quite a lot, as opposed to this nonsense of style that we tend to see from the National Party.

When I was watching John Key give his right of reply to the Budget speech, it seemed as if he was trying to do a stand-up comedy routine at the National caucus party. It was as if the speech was intended only to make the National backbenchers laugh. This is the man who is offering himself as an alternative Prime Minister—he had not one specific policy. We heard from National’s deputy leader today, who is meant to be the guy with all the substance—the co-leader. He could not offer us anything either. It was all talk and no substance.

So I am proud to stand up and support a Budget that is very, very heavy on substance and on focusing on this country’s future. Clearly, the Budget takes a very long-term view of where our country is heading, and I think that is important. There is a temptation when Budgets come up for all of politics to stop and look at it as though this one single event, this 1-hour speech, will be the answer to every single problem that ever existed in New Zealand. Of course, we know our country’s challenges are far more complex than that. But Budgets do set a scene. If there is one thing I am grateful to Dr Cullen for in this Budget, it is that it sets a scene for a proper national debate about how we lift our savings rate and how we try to make sure that New Zealanders have a stake in their future. That is the thing I think this Budget will be remembered for, and it is what I want to talk about this afternoon.

But I quickly want to say that one of the local issues I was so pleased to see in the Budget, as the member of Parliament for Otaki, is the fantastic investment that will be made into rail in the Wellington region, which will see electrification of our rail line through to Waikanae, and substantial double tracking from MacKays Crossing through to Waikanae. The long-term goal I have for my electorate is that we will see a substantially double-tracked and electrified rail line that will run from Wellington City right through to Palmerston North City, thereby giving the districts of Horowhenua and Kapiti, in the middle, economic, educational, and employment opportunities. I think that putting that money into the rail system, as we are doing, is very important. I know there has been a lot of discussion about Auckland, but the one I am most interested in is the Wellington investment, including putting in more stock and making sure that the infrastructure, including tracks and electrification, is done. [Interruption]

I hear David Carter interjecting. Of course, David Carter’s party in the last Government sold the railways, and everything with them, so that National’s mates from Fay Richwhite could roll all the money out of them and force this Government to come back, buy it for $1, and put substantial amounts of taxpayers’ money into making sure the tracks were up to date. I am glad we are doing that. But it is a bit rich for National members to come down to the House and complain about too much Government spending when it is their own legacy of neglect and betrayal of the people of this country that forces us to put hundreds of millions of dollars—given to us by taxpayers and entrusted to us by them—into the rail network.

National Party members, of course, will not be able to wait to jump on to these trains. After the next election, that is how most of them will have to get to work. But the point is that we are investing in our public resources and infrastructure once again, and I am glad about it because I know what a difference that makes for my constituents. It will be great to continue to see that happen. So I support it. I think it is great. I want to know from National Party members—the Auckland and Wellington people—whether they are going to vote for or against the rail improvements. I think they will vote against them. But they will go out around the country and say that they think the Government should be doing far more about transport. Yet when it does, and when its members bring transport measures to the House, they are not interested in supporting them.

Clearly, the key aspect of the Budget is the KiwiSaver extension. It is in this area that I think there is a real economic opportunity for New Zealand to turn round a pretty shameful savings rate. We have spoken in this House before, in the different contributions of different members, about the fact that for every $1 a New Zealand household earns, we are spending about $1.18. We cannot continue to go on like that.

Hon David Carter: What did that member say about Mike Moore?

DARREN HUGHES: David Carter chips in. The only thing he has to say is to talk about somebody who left Parliament in 1997. We are here trying to talk about the future. Members might recall that Mike Moore supported a savings scheme for New Zealand. Mike Moore actually campaigned on that. He was a member of the 1972 Labour Government that put in place the Kirk savings scheme, which, if it had been kept in place, would have billions of dollars in it today. I am glad David Carter brought that up. It was the Muldoon Government, which came in in 1975, that ripped apart that pension plan, and by doing so ensured that all the money we could have available to us today as a country has gone. National Party members have had one chance in the lifetime of most adults in New Zealand to rip apart our pension savings for our country. They are not going to get the same chance to do it again, because for us it is not just about being in Government for power, unlike those arrogant Tories over there; it is about high principle and doing something right and proper for the future of this country. With KiwiSaver we are going to put that in again.

We know that household debt has doubled in the last 5 years. We are concerned about that. We know we have to try to achieve a generational culture change around saving, and putting KiwiSaver in place, starting on 1 July, will make a huge difference for ordinary people. Of course, KiwiSaver was good on its own. The KiwiSaver scheme we campaigned on in 2005 was fantastic, but Michael Cullen has made it even better by making sure that the Government puts money from its resources into people’s individual savings accounts, so that it does not overheat the economy but does have an effect on broadening the capital markets of the economy and making sure that people have extra money for their retirement. Employers are to make a contribution as well, and that will be a good thing.

National members, of course, are so opposed to that. Yet in all their speeches they talk about how wonderful life is in Australia. Mr Chauvel will tell me what percentage Australian employers put into savings in Australia.

Charles Chauvel: 9 percent.

DARREN HUGHES: It is 9 percent. Here we are, asking employers to put in a maximum, when it is rolled out, of 4 percent, of which we will front up with $20 to help them out. Employers in Australia, the country so lauded by Tory Opposition members, have to put in much more than 4 percent; in fact, they have to put in 9 percent. [Interruption] Mr Chauvel has pointed out that there is a payroll tax there, as well.

Let us take someone who is on the average wage—the kind of person whom the Labour Government has always been worried about, worked for, and delivered to. That person earns $35,000 a year and puts in $27 a week out of his or her own salary, the Government puts in $20, and his or her boss puts in $27. But of the $27 that that person’s boss puts in, he or she gets $20 back from the Government as a tax credit. So the cost to the boss is $7 a week. There is $1,000 that gets put in when people start their KiwiSaver fund. That means that by the end of the first year, when it is fully rolled out, a saver on the average wage would have nearly $5,000 in the KiwiSaver account, of which the worker has put in only $1,400. The employer, so strongly defended by the National Party, which voted against employers getting a tax cut just last week—the bosses whom the National Party is so keen on looking after—will have put in only $362 of that $4,850. So we can see just from that one example of a person struggling to get by on the average wage in New Zealand that for the cost of $1,400 a year, he or she will get $4,850 into their account to help them get ready for the age of 65. I think it is fantastic.

In the business area, of course, we have lowered the corporate tax rate to 30c. We have the research and development tax credit of 15 percent, and it does not matter whether or not businesses are making a profit—they get that 15 percent back. We have changed the amount that people can donate to charities. We have taken off the limit for the rebate in that regard. We have put a lot of extra money into offshore investments and offshore market assistance, which I think will be of help to our manufacturing sector. We have increased superannuation by $40 for a married couple a fortnight, and $26 for a single person. In this Budget we have put money into aged care, to try to lift the wages of those people who work in residential care facilities and do home-based care for people in our communities, which will mean that our lowest-paid New Zealanders will be helped out in a big way.

National Party members talk all of a sudden, with their typical Tory arrogance, of this new-found concern about low-income people, but where were they when we were putting up the minimum wage, from the $7 that they left it at to the $11.25 it is today, and, hopefully, to the $12 it will be next year? Those members opposed it. Where were they when we were introducing 4 weeks’ annual leave for workers, and when we were introducing the primary health organisations in order to halve the cost of going to the doctor and lowering the cost of pharmaceuticals to $3? Where were they when the Government introduced the Employment Relations Act to make workplace fairness a reality for working families and working people, so that they could get a decent day’s pay for a decent day’s work? Where was the National Party when we were guaranteeing the pension to be delivered to people at age 65 at 65 percent of the average wage for married couples?

The National Party opposed all those things, just like its members opposed interest-free student loans. They opposed New Zealand being nuclear-free, they opposed the New Zealand Superannuation Fund, and they opposed income-related rents for State house tenants, only for us now to find that they support these great policies. They said at the last election that these policies were a bribe, and that they were corrupt and terrible. They are now in support of them. My point in saying that is simply this. For all the crocodile tears being shed by the National Party about KiwiSaver during this Budget debate, I just say to members to wait. Give it time. Within a year it will be National Party policy. Those members have no ideas of their own. They adopt Labour policies. How can we trust people who change their minds so easily?

SUE BRADFORD (Green): As I think has become fairly apparent by now, the Green Party is not entirely delighted with the entirety of the 2007 Budget, despite some of its more worthy aspects. We are not only unhappy about the Government’s failure to seriously face up to our country’s obligations in the face of the coming impacts of climate change, we are also disturbed by aspects of KiwiSaver and the corporate tax changes. We acknowledge that for many workers the KiwiSaver scheme will mark the first time they have ever been able even to dream of saving towards their retirement or towards a deposit on a house. However, at the same time, the fact that those who are on the top 39c tax rate can take advantage of the corporate tax cut, divert money into portfolio investment entities, and gain a considerable tax advantage at 30c in the dollar is but one feature of the scheme that epitomises yet again a certain basic unfairness in what Labour is doing, despite its good intentions.

Yes, KiwiSaver will be of benefit to hundreds of thousands of families and individuals, and I welcome that. But at the same time, like the Working for Families Budget package that was introduced several years ago, this scheme also serves to embed even further the gap between rich and poor in this country, and will do even more to entrench structural discrimination against beneficiaries. Anyone who spends a substantial part of his or her life outside of the workforce, on income support, or on a low wage will—as usual—in old age not ever be able to catch up on what he or she has lost. Existing discrepancies over lifetime earnings will continue and, in many cases, increase. The people who are still paying the heaviest price now for the restructuring of our economy in the 80s and 90s will continue to pay the price while others get a boost. The children of the poor—a large proportion of whom are in beneficiary households—will miss out once again.

Just as beneficiary families are not eligible now for the in-work payment provided by Working for Families, beneficiaries will find it very hard to get anything from KiwiSaver. Although they are theoretically entitled to join the programme there will be, of course, no employer subsidy. For most beneficiaries their income is usually so low, compared to what they need to survive, that putting aside even 2 percent—much less 4 percent—of their income is just not a realistic possibility. The most serious issue with KiwiSaver is that the people who most need assistance from it—those on very low wages or on benefits—will never be able to afford to contribute to their savings. At the same time the scheme is a disincentive to wage increases, and it locks in low wages because employers will attempt to offset their KiwiSaver contribution against wages.

There are already reports of union negotiations with employers in which wage rises are being traded off more or less exactly against the employer contribution. This may be fine for people on medium to high salaries but for those at the bottom end it is potentially disastrous. They are sacrificing a much-needed wage rise now for what are much-needed savings in the future. Perhaps one way round this would be that if the scheme is to permit low-income earners to save and at the same time is not to act as a disincentive to raising low wages, the employer contribution could be doubled in cases where employees are earning less than, say, three-quarters of the average wage, which is currently around $16.50 an hour. That is just an idea.

Ideally, the KiwiSaver scheme should also be put alongside other measures to urgently reduce inflation in the housing market; for example, through a capital gains tax on all but the family home, by addressing the tax avoidance that takes place through the use of loss attributing qualifying companies, and by legislating to control foreign ownership of land and houses. Dr Cullen’s cutting of the corporate tax rate will, in the end, place more of the revenue burden on to wage and salary earners, and on to consumers who pay GST.

Now that medium to large businesses have the tax cuts they have been after for so long, the Green Party believes there is an onus on them to invest productively. Our major listed companies need to take advantage of the tax breaks offered in this Budget for research and development, rather than paying out such a huge percentage of their profits in dividends to shareholders. We would also like to see a review process put in place to check out whether, in fact, research and development has actually happened. Otherwise this risks being just another tax rort.

This Labour Government has just given business a $1 billion tax cut. It has given people who are in work, and can afford it, a useful savings scheme. But what has it done for those who have missed out so many times already—even under the last 7½ years of a Labour Government? What of the risk that the KiwiSaver scheme will open the way for a future right-wing Government to lower superannuation rates and raise the age of entitlement, or even, heaven forbid, get rid of national superannuation altogether?

We do not wish to be totally negative about the boost to savings that this will be for many. But the Green Party believes that the Government should also be raising the minimum wage immediately to at least $13 an hour, and that the even lower youth rate should be abolished forthwith. The Government should be raising benefits to levels that are at least equivalent to those pre-May 1991, so that people dependent on income support do not live in an endless cycle of debt and desperation. Working for Families should be amended so that it does not discriminate against beneficiary families. All children deserve a fair start in life, not just some. A whole package of measures, including those I have already mentioned, should be introduced to address the crisis in housing affordability, which is not only locking out an ever-increasing number of people from the chance of ever owning their own home but is also driving our high dollar, which is so negatively impacting on our manufacturing base.

The second area of the Budget I would like to address today relates to some of its implications for the community and voluntary sector. The most significant announcement, of course, was Dr Cullen’s lifting of the cap on rebates for donations to charities made by individuals and companies. This means that for each dollar people give to a registered charity, they will get 33c back. Although the Green Party has always supported lifting the very low cap on the rebate that has existed up until now, and although we also recognise the hugely significant boost this measure will give to the encouragement of philanthropy in this country, we still have a number of reservations about where this dramatic policy shift will take us.

Our first concern is that this total removal of the cap could also fuel a future right-wing shift towards tax cuts and to parallel cuts to health, education, welfare, and the social wage overall. The United States is a prime example of a country where private philanthropy is encouraged and maximised but where, at the same time, there is widespread privatisation of health and welfare and a huge and growing poverty-stricken, often homeless, population of the disenfranchised and dispossessed. It is not a good example to follow.

Secondly, it is the better-off who will benefit most from the new rebate regime and, of course, they will want to put their charitable giving into the type of voluntary sector organisations with which they feel comfortable. With a few exceptions, it is likely that, on the whole, the recipients of this new generation of munificence are likely to be organisations that do not, in any real way, threaten the interests of these donors and that therefore maintain and succour the status quo, socially, economically, and environmentally. A virtuous circle of deserving charities will be propped up by the Charities Commission definition of charitable purpose, by the political inclinations of the comparatively well-off donors, and by the preferences of the private pokie trusts that are still pouring their billions into their preferred organisations. Groups that challenge the status quo and that do not hesitate to stick their heads above the parapets to advocate for social or environmental change, or that represent the interests of the dispossessed or radical, are the most likely to miss out—if they can even get charitable status in the first place. This risk will be exacerbated even further should a future Government decide that, because of the influx of private philanthropic giving, it should withdraw the support it currently provides through grant funding like the Community Organisations Grants Scheme and other sector-specific grants and contracts, perhaps as the converse of massive tax cuts to individuals.

Thirdly, as many people in the community sector are aware, poorer people actually proportionately give the most and the most often. However, such giving is usually informal and does not leave a paper trail. Those on low incomes or benefits are also the least likely to claim anything back from the Inland Revenue Department as they do not usually make an annual tax return and it is not a simple business to claim the rebate without doing one. Thus, once again, the better off people are, the more they gain from every charitable dollar spent. The more impoverished people are, the less likely they are to accrue any financial benefit whatsoever.

In saying all this, however, I do not want to disrespect the enthusiastic hope with which the not-for-profit sector has greeted the news of the removal of the cap on rebates for charitable giving. I know it will bring good news for many organisations. It is just that I think there are a few things people active in this sector need to keep in the backs of their minds as they eagerly await the inrush of those first large cheques.

PAULA BENNETT (National): The only thing I would say to Green Party members is that I do not understand why you talk about problems and what you do not agree with, yet you have come into the Chamber to abstain.

The ASSISTANT SPEAKER (H V Ross Robertson): Order!

PAULA BENNETT: I will not use the word “you” at all. It just seems a little perplexing. We have a party that says it has problems with the Budget, yet its members have come into the Chamber to abstain. That just does not make sense at all.

I was thinking, as I was looking at the Budget, that people wanted tax cuts and instead they got a “money-go-round Budget”. There is a lot of rhetoric. Earlier, we heard a speaker from Labour talking about those crocodile tears about people on lower incomes. But there has been nothing more about crocodile tears from this current Government than there has been for many, many years, when its members talk about lower-income people. This Government had an opportunity to offer those people tax relief, but instead it has given them increased costs.

Let us see if we can discuss this in a rational way. So the Government has turned round and said that it will offer people the opportunity to pay into KiwiSaver and have something for their future. But have Government members actually spoken to any of those people whom they are mostly talking about and whom they profess to be looking after?

When people looked at what this would mean for them—and we were speaking to some of them in the weekend—they said that they were thinking about what the future holds for them, because that is supposedly what this Budget is about. The Budget is about the future, and they were thinking about their future and what it would mean. Those lower-income families, particularly the Pacific Island families I talked to, said that when they thought about the future for themselves, they thought about their families. They thought about how their families would look after them in their old age. That was what was important and that was how their families worked. But for that to happen, they needed to be looking after their children and feeding their children now. We talked to them about paying $20 a week into KiwiSaver for when they are 65. They said they did not have the 20 bucks a week. One woman in a Pacific Island family said: “Get real, man. Twenty bucks a week for me is five loaves of bread and three dozen eggs. I could actually feed my children lunch every day, which they could take to school, for 20 bucks a week. That’s what I could do with 20 bucks a week. I don’t have the money to be putting aside. I am barely able to support the family I have now. And I don’t want to be on a benefit; I actually want to be looking after mine and my own.”

This particular woman said that to try to look after hers and her own—because being a beneficiary is not what she is about and not what she wants to be doing—she had taken on a second job of cleaning at night. Then she started talking about secondary tax and what that meant for her, how it gave her so little in her pocket, and what she could do. She said: “Don’t tell me, Labour Party—that’s been telling me how you care, for so long—what this Budget will do for me and my future. What I need to be doing is looking after my family now. It’s that sort of assistance that I needed.” She kept saying that she needed tax breaks. She wanted an extra 20 bucks a week in her hand of her own money—that would make a difference.

I said to her: “Well, hold on a moment. Working for Families is constantly being touted as the saving grace for people like you. You get a bit more money from it when you put your relief in—you’ve got to fill in a form.” And she said: “But I don’t want to be dependent on the Government for what I get every week.” She was saying—as lots of these lower-income families are saying—that she does not want to be dependent. These families do not want to have to fill in a form. They do not want to go cap in hand for their own money back. It is quite simple; they know that it is their money.

This Government, of course, does not know that it is those people’s money. We need just to hear Dr Cullen, who keeps referring to “his” money and the Government’s money that it is spending—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry to interrupt the member, but there is far too much noise. I remind members of Speakers’ rulings 57/3 that interjections are out of order unless they are rare and reasonable, relevant, and restrained. I add that one of the former Deputy Speakers, the honourable Geoff Braybrooke, said of interjections: “Let’s hope they are witty.”

PAULA BENNETT: Thank you, Mr Speaker, but in all fairness I was feeling quite comfortable. I could hear members sort of yapping over there; I know the truth hurts, and I know they do not like to hear someone talking about those families whom they profess to be looking after all of the time.

When it really comes down to it, it is about the level of dependency. You see, it absolutely suits this Government to have people dependent on it. It absolutely supports its rhetoric; it makes it all worthwhile. This is exactly what Working for Families is about. The Government takes these lower-income families and tells them they can have KiwiSaver, and how they can make a bit more money, but the reality is that they ain’t going to be able to do it. They need every penny they have. One needs just to hear a colleague of the Government, Mike Moore, who wrote in today’s New Zealand Herald: “Useful steps in the Budget will help with savings. Good, but they will cover just half the workforce.” Just half the workforce. What happens to the other half? Mike Moore wrote that.

Just on that note, I will talk a little more about Mike Moore. I was absolutely amazed earlier today—about 40 minutes ago—to hear Mark Gosche, I think it was, making comments about the differences between New Zealand and Australia and how he does not like us talking about them because it is bad for New Zealand, and what it does and everything—

Hon Member: That doesn’t sound like him.

PAULA BENNETT: He did! But, evidently, Mike Moore likes to talk about the differences between Australia and New Zealand—Mike Moore is quite happy to. I will just read one little piece to the House, quoted from Mike Moore in today’s New Zealand Herald: “It’s difficult for a Kiwi to accept,”—he may have added in there “Mark Gosche”—“but Australia is doing better than New Zealand. Since 1990 Australia has moved from 17th in the OECD rankings to 7th; New Zealand has dropped from 20th to 22nd.” He then goes on to write more about what it means to be in Australia and what it means to be in New Zealand.

This Government had an opportunity to turn things round. This Government had an opportunity to give people a bit of aspiration and a reason to want to be here. I am amazed that the whole attitude from Government members is: “It is our money to dish out how we feel is right. We will take more money off those lower, middle, and higher-income people than we need, and then we will turn round and decide who gets it, and we will dish it out if they come begging.” But they have to come begging in the right way, because this Government likes to dish it out as if it is its own little savings bank. Dr Cullen has his own little money box, and he decides who will get money and how they will get it, without any real recognition that this is their own money. These are the people who are working hard and who are making the system work, day after day, week after week. They know how to spend their money better than anyone else. Quite frankly, these people deserved a bit of money back.

You know, I will not stand here and say that the Labour Government does not care, because I do not think that is right or fair. Some of my colleagues would—I have certainly heard it said before that there is a degree of “Labour does not care”. I do not think that is true. I actually think that at some level there is a level of caring. I think Labour members have just forgotten. I think they are just out of touch. They have had 8 years of it. They have Dr Cullen, who stands up and talks about “his” money and how he will dish it out, and we have just heard Darren Hughes talking about taxpayers and giving them some of the money. But it is the taxpayers’ money. They make it, they turn it round, and it is their money—it is as simple as that.

We need to be looking at the fact that they want some of their own money back in their own pockets. It is not a big ask; it is not a big ask at all. The Government can throw in fancy things like KiwiSaver, and we can all cross our fingers and hope that there will actually be something there for those lower-income families at the end of it, but what people really want is the opportunity to get ahead. They do not want to be dependent on this Government. They do not want to be dependent on us, either—they just do not want to be dependent. They wish to be making their own money; they wish to be turning it round; they wish to be supplying for their own.

Certainly, I am happy for Government members to stand up in reply to this debate and talk about the $20 and $27 a week we keep hearing about that people can pay into their KiwiSaver accounts. I am sure that some people will be quite happy about the system. But what about those who cannot find that 20 bucks? What about those who do not have that $27 a week? What about those who turn round and say that that money will feed their kids, and that is where their priority is? Those people have been left behind. They have been forgotten. They have been totally turned away from this Government, who no longer cares about them at all.

I say, thank God and thank goodness that next year we will see a National Government coming through, a Government that can actually raise productivity, turn it round, and give people more of their money in their own pockets, which is what they deserve.

MOANA MACKEY (Labour): What an extraordinary speech, Mr Assistant Speaker—what an extraordinary speech! Let us be clear: Paula Bennett, National member, is advocating a zero taxation policy for New Zealand. Of all members on that side of the House, that member should understand a little more about what it means to be a low-income New Zealander. She stood up in her maiden speech and gave us the typical Tory line: “When I was on the benefit it was because I had to be; all those other people are on a benefit because they are too lazy.” That is the typical Tory approach to beneficiaries—to bash them with statements like: “But of course when I was on it, it was because I couldn’t support my family.”

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

MOANA MACKEY: Before I continue my speech, Mr Assistant Speaker, can I wish you a very happy birthday today on this most auspicious occasion.

The ASSISTANT SPEAKER (H V Ross Robertson): Thank you for telling everybody.

MOANA MACKEY: I am sure that everybody wishes you a very happy birthday.

I was talking about the outrageous revelation from National MP Paula Bennett about the zero taxation policy she is now promoting on behalf of the National Party, which is quite astounding. I am not quite sure what she thinks is going to happen. Maybe people are going to pool their money together to build their own hospitals and pay their own teachers, but I am sure it will all become clear as we see some policy emerge from the National caucus.

This is a very significant Budget, and it is a very important Budget for New Zealand, not just for today but for many, many generations to come. This Government is the kind of far-sighted, visionary Government that we have come to expect under this Labour-led leadership.

I think that what has emerged since the Budget last Thursday is that New Zealanders know that they need to save. We know that we are bad at it. We know that we need to save. We know that the fact we have such a low rate of savings causes incredible imbalances in our economy, but until now we have never really had any great incentive to do it. New Zealanders are great for putting off things to do on another day and, as we have seen, TV and newspaper reporters have gone out and found that the response from many New Zealanders has been: “This is great, this is something tangible, and it is well worth my while doing; I have known for a long time that I needed to do that, and now I’m going to start doing it.”

I think that this is particularly important for my generation and those younger, because, of course, we cannot guarantee—unless Labour stays in Government there is no guarantee—that New Zealand superannuation is going to remain universal, at the same age of entitlement and at the same level, if it exists at all, by the time we reach retirement. We remember, only a few years ago, the then leader of the National Party, Don Brash, telling people that if they were under 50 they should not rely on there being New Zealand superannuation when we retired. The sad thing about that was that I think he was meaning that to be comforting. I think he was saying that to make people feel better—that those people who were under 50, under a National-led Government, maybe could probably still rely on New Zealand superannuation. Of course we cannot trust National on that either. But what he was saying essentially was that under a National-led Government, all those under 50 could not be guaranteed New Zealand superannuation.

I want to highlight the Labour Government’s commitment to New Zealand superannuation at the age of entitlement and, of course, along with our supply and confidence partners in coalition, the increased rate of superannuation. Let us not forget that just prior to coming into Government in 1999, National cut taxes. How did it pay for that? It cut the rate of New Zealand superannuation. Well, Labour restored that as soon as it came into Parliament—and Labour did not just do that, it increased the rate, because Labour is committed to universal New Zealand superannuation.

We have heard a lot about low-income families and about how KiwiSaver does nothing for low-income families. It has been pointed out, by members who were on the Finance and Expenditure Committee when the original KiwiSaver bill went through, that various surveys had shown, in fact, that low-income families had some of the best savings culture—because they have had to. If a low-income family wants to buy something, the family has to save. That family does not have any other choice. People are not going to give out credit cards if they know families cannot pay money back.

Again, I think that it is also important to reiterate that under Labour we see KiwiSaver as supplementing New Zealand superannuation. Under National, I believe, its members see it as replacing New Zealand superannuation. I think that National needs to be clear and honest about that going into the next election—that it has a commitment to New Zealand superannuation, and then to uphold that should it ever become the Government—and let us hope that it does not.

But let us not forget KiwiSaver. We would almost think, to hear some of the debate out there about the take-up of KiwiSaver in low-income communities, that it was the only policy that the Labour-led Government has ever rolled out in the seven Budgets prior to this Budget. Of course, that is simply not the case. Labour has, over progressive Budgets, aimed to reduce costs for low-income and middle-income families, and also to increase the income going into those families. I want to highlight some of the policies. With our primary health organisations we have seen lower doctors’ fees and prescription charges. That is saving a lot of money for low-income families, particularly for families with a large number of children who may have to go to the doctor quite a lot. We have seen the rates rebate scheme, as well.

We have raised the minimum wage every year that we have been in Government. I point out that in the 1990s the minimum wage was raised only once, and that was done only because New Zealand First insisted on it. It was raised by $1. We have been progressively raising the minimum wage. I wish we did not have to do that as a way of raising incomes in New Zealand, but for some of our lowest-paid workers that is the reality.

We have also brought in fair industrial relations legislation that actually allows workers to negotiate a fair wage. Let us not forget that the gap between New Zealand and Australia really opened up under a National-led Government. Of course, when we look across the Tasman—and we hear a lot of comparisons between Australia and New Zealand when it suits the Opposition, but we do not hear those comparisons when it does not—we see there is still very strong union representation and union power in Australia. In New Zealand that was all but decimated in the 1990s, and wages fell behind, as well as job security, which is also important to our families.

This Budget, of course, also continues the Government’s Working for Families package. That package is putting tax credits back for those families who need it most. Labour makes absolutely no apology for targeting this money where it is needed. We know that the expenses that come with raising children put a lot of families close to the breadline, including those families we might suspect were well off or very comfortable if we simply looked at their household incomes. In fact, that is not the reality for a lot of families. Labour targets that money where it is needed most, because if it is targeted we can give more.

If we were to spread tax cuts across everyone, as National is proposing, then those high-income earners who need it the least get the most value from those tax cuts. I do not want my $100-a-week tax cut from the National Party. National seems to act as though that is a sacrifice it is prepared to make for the greater good; it will take that $100 and do its bit for the country by doing that. But the fact is that that money could be far better used if it were put where it was needed.

Labour has also brought back income-related State house rentals, which has saved a lot of money for low-income households—a lot of money. We do not quite know where National stands on income-related rents for State houses; it has flip-flopped all over the show. I suspect that National will not support that policy, because it does not really fit with National’s philosophy, at all, but that does not mean that National will not go into the election promising that it will keep income-related rentals.

Labour has also brought in interest-free student loans, which is making a huge difference to a lot of families, and it will make an even bigger difference as time goes on and we get more people who come into that category. We have raised superannuation, and made early-childhood education available to all families. It is all very well to say that we should give a tax rebate for childcare. That would be fantastic if families could pay for it upfront, but if families cannot pay upfront they cannot get the tax rebate, and that is an argument that National has yet even to address.

Let us not forget that National gave us two recessions in the 1990s, and nothing hurts provincial New Zealand more than a recession. National members are now going around telling New Zealanders, and coming down to the House and saying, that they are going to give tax cuts—and they have said that they will definitely do that, even though they know the cuts are inflationary. But now we have this bizarre argument from Bill English, who cannot understand why we are saying that the $2 billion worth of business tax cuts that have come through Labour are not inflationary, and will not result in cuts in services, without his explaining the fact that National’s tax cuts will cost—what—$8 billion.

I think that that probably explains a lot about the National Party economic policy that we have seen. National MPs across the whole country are promising to pay for everything. They are scratching every itch and saying that a National Government will pay. I look forward to seeing National’s alternative Budget, including every single spending promise that every single one of its MPs has made. I look forward to them explaining their huge tax cuts. Let us be clear: when Bill English comes down here and tries to compare what National was planning to do at the last election and what Labour has done, we are talking about a four-fold factor difference. That is the difference.

When Labour cuts taxes, as it has done, New Zealanders know we can afford it. And let us be clear again that National never cut business tax when it was in Government; the last time that happened was under a Labour Government, and this time it has happened under a Labour Government. New Zealanders trust a Labour-led Government that when it cuts taxes, it will be good for the economy, and it will not run us into a recession. National does not care about recessions because its guys at the top who earn a lot of money do fabulously well out of the boom-bust cycle. They make lots of money in the boom, and in the bust they are protected. But we know who suffers the most. I say: “Stop the crocodile tears for the poor people of New Zealand!”, because when it comes down to it, our history tells us that National does not care for them, and it never will.

LINDSAY TISCH (National—Piako): The only bold statement I will make tonight is “Happy Birthday!”, because it has been said that this Budget is bold. Well, it is certainly not bold in terms of growth and productivity and, as the eighth Budget that Dr Cullen has presented, it is ill-disciplined and lacks the opportunity to progress the fortunes of New Zealand.

I was sitting here watching the body language of members opposite, and it was interesting to see what a sorry sight it was when they were hearing a Clayton’s Budget—a Budget when one is not really giving a Budget. It was a sorry sight indeed, because that Budget was a lost opportunity to get New Zealand moving forward in the OECD, and a lost opportunity to say that here we had a Budget surplus that could be shared around by way of tax cuts. But, no, what has happened is that the most vulnerable in our communities will now be hit. They will be hit because they do not have the means by which they can save and put in to the KiwiSaver scheme. So they will miss out—and this is the first hoax of the Budget.

We have a scheme to be implemented where only 50 percent of eligible workers will have the means, the resources, to be able to save, and the others will have to carry the can. They cannot afford the scheme. Their priorities are in paying the mortgage if they own a home, paying the rent, putting food on the table, clothing the family, and providing for the necessities of life. That is where their priorities lie, and unfortunately they will not be able to participate in the KiwiSaver scheme because they do not have the resources.

In fact, in question time the Government was asked how many people would take up the scheme, and it has been identified that only 50 percent of those in the working environment will be able to take it up. So it is the most vulnerable who will miss out—those people who in the past would have supported this minority Government. Well, I can tell you what, they will not be supporting it in the future, because they have been ratted on. They have been ratted on by this Government, and in relation to what this KiwiSaver scheme does, who knows in 30 or 40 years what living standards will be, and what the money put aside will do. We would argue that having money in the hand today is worth more than putting money aside in some scheme for retirement when we do not really know what the costs will be.

The worst part of this, of course, is that workers have been told not to come along and ask for a wage increase. Employers will take 4 percent gross out of the salaries of those workers who want to join the scheme, but workers should not then come around and say: “Hey, I want to be compensated for that. I want to have more money in my hand because I have committed to the scheme and 4 percent is coming out.” No, they have been told not to do that, and not to ask for increases. Sadly, once again it is hard-working Kiwi workers who will miss out. That is the hoax of the scheme—that those who can least afford it will be supporting those who are comfortably off and who will, of course, take advantage of it and take up the opportunity there.

Government speakers argued in a previous debate before dinner that they had raised the minimum wage to $11.25—whoopee! How does that actually make it easier for someone to save? You see, this is about a cross-subsidisation. This is about those on lower incomes supporting those who do not need the support because they have the means to save. They will be continuing—

Jill Pettis: Like all ex-MPs.

LINDSAY TISCH: Like MPs—the member is right.

Jill Pettis: Ex-MPs.

LINDSAY TISCH: Well, we will be able to participate in this KiwiSaver scheme, and the “ex-member” over there will certainly be able to do that.

The second hoax, of course—and this was never identified earlier on—is that employers will compulsorily have to contribute to the scheme, and that was certainly not identified in earlier debates or discussions on KiwiSaver. There are about 300,000 small businesses or small to medium sized enterprises in New Zealand, and 60 percent of them—that is, 180,000—are either sole traders or partnerships. So they will not get the tax break because they are not incorporated. The 40 percent of the 300,000 that are incorporated will be able to get the corporate tax rate reduction from 33 percent to 30 percent, which is a 3c saving. But the cost of implementing the scheme, and the cost in compliance that it is going to take for those people will be well in excess of the 3c that will be saved. This is a hoax, because it is another compliance cost on business, and business had no part in it. What will happen is that we will find that businesses will say they are not going to take on staff . They will say they are going to retrench. That is what they will do, because this is a huge cost on top of other increases that have happened just recently.

Back in mid-April the official cash rate was moved up, because of Labour’s spending binge. That put pressure on small to medium sized enterprises, because a lot of those businesses used their homes as security for working capital. So as soon as the interest rate went up, what happened? There was another compliance cost. That is what is happening. So along with KiwiSaver, that is another huge compliance cost to be dealing with. Of course, if people are exporters they have to deal with the high dollar. But then we had road-user charges go up—another compliance cost—where there was only 48 hours’ notice of those costs going up. If I am a transport operator, I have to enter into forward contracts, and I set prices. As soon as I am hit with increased road-user charges, then I cannot pass those costs on because of those contractual arrangements. So that is another example, along with KiwiSaver, where the compliance costs for businesses will be very horrendous.

Labour hits small to medium sized enterprises because it does not understand what makes the world go around. Labour members do not understand that this scheme affects growth and productivity in our communities, so they are prepared to go out there and say to employers that it will be a compulsory scheme: “You are going to have to contribute; it is going to be a compulsory scheme.” The latest survey by KPMG said that the costs for a small business—a small to medium sized enterprise employing fewer than 19 people—is about $3,000 per employee. That is a huge compliance cost. For larger operators it is about $300.

Jill Pettis: Rubbish!

LINDSAY TISCH: Well, members have only to look at the survey to see that I am right—this is not me saying it; this is KPMG coming out with these latest figures. But let us have a look at what was in the Dominion Post yesterday—I like this one: “Labour may have lost SME vote”. That referred to a survey done before the Budget, which said that businesses had little confidence in the Government, and that 41 percent of businesses gave Miss Clark the thumbs down. And that was before the Budget. The headline states: “Labour may have lost SME vote”; I can tell members that Labour now has lost it. Labour has absolutely done its chips on this and it deserves to be out. It is going to be out, anyway.

The Budget fails to realise—and this is what I said earlier on—the aspirations of what could have happened. In the area of tourism that I have responsibility for, the vote has actually gone down from what it was last year—it has absolutely gone down. In fact, over the next 4 years Vote Tourism—if members want to look at it, it is there on page 1209—will go down, with a cumulative decline in funding for tourism of $40.5 million. This is New Zealand’s biggest export earner. Tourism is the fastest-growing business in the world, and this Government has not taken it seriously. In fact, its projections over 4 years show a reduction, and Vote Tourism is going down from $80 million, with a $40.5 million decline.

This Budget has not met the expectations of New Zealanders. It does not provide for growth and opportunity. It does not provide for the productive sector, to make it attractive for Kiwis to stay and invest here. That is why we are seeing 700 Kiwis a week deciding that Australia’s prospects are better than the prospects are here. I think Mike Moore’s comment in the paper today that it is better across the ditch than it is here is a telling indictment on this Labour Government, which will be out very, very shortly. This Budget was an opportunity lost.

SUE MORONEY (Labour): It is excellent, indeed, to be able to take part in the Budget debate. If only the member for Piako, Lindsay Tisch, put that same amount of passion and energy into actually representing his constituents, then it would not have been this member of Parliament who secured the $9.8 million to clean up the Tui mine in the Piako area. That member has not advocated on that issue and has not represented the local constituency. I was the one who actually went after the $9.8 million that was announced in this Budget to clean up the Tui mine.

The problem was that the toxic tailings that had been sitting up there had been hanging over the heads of the Te Aroha residents for 30-odd years. It was the second-most contaminated site in New Zealand, and that member—the member for Piako—did nothing to secure the funding for the clean-up of the Tui mine. However, I took it upon myself to secure this funding, because immediately after my election into Parliament—and I am not the electorate MP for Piako, but I have very strong ties to that area—I recognised that the clean-up of the Tui mine was an absolute priority for that community. It was a priority because, as I said before, this was one of the orphan contaminated sites. It is an orphan site because the mining company that had been mining on Mount Te Aroha about 30 to 40 years ago had left that mine in a terrible state. It had left toxic tailings behind—

Dr Jonathan Coleman: What about the Budget?

SUE MORONEY: That is right—$9.8 million in this Budget. The member should read his documents. That $9.8 million is for the clean-up of the Tui mine. I just tell the member opposite, who seemed to be so passionate about what was going on in this Budget, that he could not advocate even for his own constituents on this issue.

The issue was so serious because a minor earthquake or a weather bomb over Mount Te Aroha would mean that those tailings would end up right in Te Aroha township. These are the immediate issues—the good, practical local issues that, yes, a Labour Government does get on top of, with advocacy from good Labour members of Parliament.

But I want to continue, because although those are the little things that have been achieved in this Budget, there are other massive things for all New Zealanders that have been achieved in it. I think that the speeches from National members have really shown the difference between the two major parties.

Simon Power: The member should tell the House a little bit about herself in her maiden speech.

SUE MORONEY: I will tell the House all about how that member over there has not done a thing about the Tui mine—that is for sure.

Lindsay Tisch: Tell us how to win an election.

SUE MORONEY: I raise a point of order, Mr Speaker. I am about to talk about other events apart from those in Piako in my speech on the Budget, and I would appreciate having the opportunity to do that without the barracking from the Opposition benches.

The ASSISTANT SPEAKER (H V Ross Robertson): Can I just say that, strictly speaking, a member can be heard without interruption, but members may ask reasonable questions to elicit further information. That is in Speaker’s ruling 57/2.

Simon Power: I raise a point of order, Mr Speaker. Members who are present in the Chamber will know that this is a place of robust debate, and my learned friend Jill Pettis on the opposite side of the House is well known for her interjections and for the lively way in which she engages in the debate—and that has always been valued by members on this side of the House. It is fair to say that she was in full flight during Mr Tisch’s speech. The member nods in recognition, as she is wont to do, because she is a fair and honourable member. All we are asking is that the rule be applied evenly to both sides of the House. I am interested in what the member has to say, but I am sure she would not want to admit defeat and ask to be heard in silence.

The ASSISTANT SPEAKER (H V Ross Robertson): I thank the member for his contribution. I again refer him to Speaker’s ruling 57/2. Also, I say that this is Parliament. The member with the call is not speaking from her own seat and must accept some interjection.

SUE MORONEY: Of course I would not wish to be heard in silence, because I am interested in what defence the members have for not representing their own constituencies. But, of course, nothing they have interjected on has been on that particular issue.

This debate is very enlightening, because National members are full of saying what will not work. That has been their whole tenor throughout this debate. According to them, low-income people will not be able to save because they do not have the wherewithal to understand that they actually have the opportunity under a Labour-led Government of putting about $30 a week into a savings scheme and working out that that turns out to be about $87, with all the contributions that go in alongside it. Of course, the Opposition does not understand that low-income people would be able to understand what a very good incentive that is for saving for their future.

But this is not the first time that those Opposition members have hoped and hoped that things would not work out well for New Zealanders, particularly New Zealand families, because at the moment they also keep telling us that providers of early childhood education will not provide the 20 hours free early childhood education. They really, really wish that New Zealand families could not actually get 20 hours free early childhood education for their 3 and 4-year-olds. They are desperate to make sure that families do not get that. Of course, they are the same National members who also said that the way Labour chose to go about lowering doctors’ fees would not work—and it has. It just goes to show what a lazy Opposition the National Party is when it cannot even work out how such a scheme would work to contain the lowering of doctors’ fees. But, of course, they have no interest in those sorts of issues in respect of making health care affordable for ordinary families.

Another thing that has come out in this debate is the issue of National Opposition members talking about how they believe that workers should not get any wage increases if they are involved in superannuation through the KiwiSaver scheme. What a load of rubbish! That may be the National Party’s stance, but the Labour Party’s stance is that we hope KiwiSaver will become part of a package to be negotiated by workers in their workplaces. It is a very, very positive step forward. It might be the National Party’s view that workers are not entitled to a wage increase, but it is not the view of the Labour Party or of the Labour Government.

One of my favourite aspects of the Budget announcements has been the extra $400 million—yes, read it—into aged-care funding over the next 4 years. National members have been vocal in this area from time to time, when it has suited them. But have we heard them once say what a great idea it is that an extra $400 million is to go into aged-care funding? I am a little bit suspicious about their silence on this issue. This is how I read it. Labour has quite clearly said that the vast bulk of that money will be going into aged-care workers’ wages. That is right. National members feel quite squirm-ish about that, I am sure. This Labour Government understands how those systems work, and it will ensure that that happens.

As a past advocate for—

Sandra Goudie: Yeah, right! Sure, sure!

SUE MORONEY: I say to Ms Goudie that for about a dozen years I have been advocating for workers in the aged-care sector. I do know a bit about what I am talking about—yeah, right! I know how one actually gets those mechanisms right in order to make sure that the predominantly women workers actually get the lion’s share of that $400 million going into aged care. So it is really excellent news not just for those workers and their families but for the people who are the recipients of aged care. It ensures that the support they get will be from people who are well valued in their work and who have good training opportunities. It will also decrease the very high level of turnover that goes on in that sector. That has to be good for the care that is offered to people who are in need of aged-care services. So it is great news all around, and the whole sector has acknowledged that. We are yet to hear the acknowledgement from the National Party about that.

Ann Martin, Chief Executive of Age Concern New Zealand says: “We’re glad to see the extra allocation for older people in this year’s Budget … we know many older people will be really pleased with the extra $20.3 million per year for home-based support.”—and that is just home-based support. She continues: “Better resourced well-trained home support staff will mean more people can remain in their own homes for longer.” That is exactly what we want. John Ryall, the National Secretary of the Service and Food Workers Union, says: “The Government is to be congratulated for responding to the submissions of sector unions and providing funding that should provide caregivers pay increases of more than double the rate of inflation for each of the next four years.”

That is real progress. It is not pie in the sky, and it is not a case of standing up and making speeches that sound passionate when one does not even advocate for one’s own constituents. It is real progress—

Sandra Goudie: Haven’t seen it yet.

SUE MORONEY:—and I can tell Sandra Goudie that the sector knows it. The people intimately involved in this care know that it will work, despite National’s attempts to hope it does not work. By the way, what do National members have against older people? I do not know.

The last thing I want to tell people about this particular Budget that is close to my heart is just how good it is for families. As the mother of young children, I know that this Government is putting in place a really, really bright future for my children and for the children of their generation. They will have a savings culture as a result of what the Government has done in this Budget. They will have healthy families to participate in and to grow up in. As a result of this Budget they will have better access to public transport and access to healthy, sustainable homes. Just today in the Waikato Times it was very encouraging to see a report about a group of students—and this is the sort of impact that this Government is having—talking about cultural change. At Pukenui School, 27 9-year-old students have sat down and designed an energy-efficient classroom. That is the sort of cultural change happening under this Government. It is great for families and it is great for the future of New Zealand. Thank you.

Dr JONATHAN COLEMAN (National—Northcote): The House is still reeling from the vicious personal attack on the member for Piako, but what was interesting about that speech was that it was a real flashback to the old Labour thinking of the past.

There is no doubt that this is a bad Budget for the people of New Zealand, but there are some people for whom this will be a good Budget, and they are here in this House. It will be a great Budget for Shane Jones and for Maryan Street, because after the performance of Michael Cullen, and the inept performance from front-bench Ministers, for whom we have seen everything go to pieces over the past couple of weeks, those members will have to become the future of the Labour Party, and they will have to become it pretty quickly.

I can tell members now that Michael Cullen is gone. That was his last Budget. He has blown it. Budget 2007 signalled the point at which he gave up on any prospect of growing the New Zealand economy. It is now all about dividing up the pie. Michael Cullen and Helen Clark said that they would take New Zealand back into the top half of the OECD. There will be many more members—

Jill Pettis: What have you been smoking in those cigars?

Dr JONATHAN COLEMAN: —like the former member for Whanganui, who will be leaving this House. She will be out. She should be looking pretty closely at KiwiSaver, because it will be the reason for her demise. It is pretty unlikely that list member Moroney will be back, either, on the back of that performance.

The ASSISTANT SPEAKER (H V Ross Robertson): Speakers’ rulings 26/6 and 26/7 state that members must use a member’s full name. Thank you.

Dr JONATHAN COLEMAN: Ms Sue Moroney is pretty unlikely to be back.

Simon Power: What about Lesley Soper?

Dr JONATHAN COLEMAN: Frankly, I do not know why Lesley Soper even bothered turning up again; she was here 5 minutes. She is a member the Labour Party just cannot get rid of—she keeps on coming back. Hopefully, the next election will be the end of it. Mita Ririnui is laughing, but there is nothing in the Budget to laugh about for Mr Ririnui because he will be going, too. There will be an all-out cull, and at the end of it very little will be left. There will be the bare bones of an unlikely future renaissance of the Labour Party.

Dr Cullen has had 8 long years in the job. He promised so much to the people of New Zealand. He was going to take us into the top half of the OECD. What has actually happened? We have gone backwards two places. That is what he has delivered. We are now down with Iceland, Hungary, and the Czech Republic. There is nothing in the Budget that provides any incentives for New Zealanders to stay in this country, to build a career, to build a business, and to lay down a future here. We have heard about closing the gaps and carbon neutrality. They were empty slogans and they have gone. They are empty slogans, just like economic growth.

Jill Pettis: Why aren’t you out taking people’s temperatures?

Dr JONATHAN COLEMAN: People who are at home can hear the soon-to-be-former list member from Whanganui carping away again. The lack of sense this woman makes really reflects the poor quality of people that the Labour Party is able to attract to come into Parliament. Andrew Little has it right. He is not coming in. He said no thanks to standing for Labour in 2008. He did not want to come and join this mob. He said that maybe he would in 2011. No one wants to join this sinking ship because everyone knows it is going down.

We talked about the failed effort to get into the top half of the OECD. Government members have given up on that. Mr Barnett may be contemplating contesting the mayoralty in Christchurch again before too long. The reality is that labour productivity has more than halved since this Government came into office. So much for raising productivity levels. Jill Pettis talked about raising labour productivity levels; it just has not happened. The basic fact is that under this Government economic stewardship has gone down the drain.

The Government has brought us tax-bracket creep. We heard today that 15 percent of taxpayers now pay the top tax rate in New Zealand. Michael Cullen said that it would never get above 5 percent, but it has. The reality is that we have people finding themselves in the top tax bracket and paying more and more tax, even though they cannot afford it. We have had an increase in fiscal drag. No adjustment for inflation has been made to the tax brackets. The people of New Zealand are labouring under a heavier and heavier tax burden.

The reality is that there is a growing wage gap with Australia. In the last 6 years in Australia the average after-tax income has grown by 33 percent. In New Zealand it has grown by 18 percent. That is underperformance, and New Zealanders know that. As we know, 700 New Zealanders are leaving for Australia every week and they are not coming back. People do not need to ask us about this; they can just ask Mike Moore. Mike Moore wrote an article in the New Zealand Herald today asking why 100 talented and smart New Zealanders are leaving this country every day. He says that it is difficult to accept, but Australia is doing better than New Zealand. The reality is that since 1990 Australia has gone from 17th to seventh in the OECD. Australia is going forward; New Zealand is going backwards. With Australia’s per capita income a third higher than New Zealand’s, it is no wonder Kiwis are voting with their feet.

The reality is that this is the Government’s last-legs Budget. Helen Clark and Michael Cullen have given up on economic growth. They are now worried about how they will go down in the history books. I can tell the House that they will not be remembered for a heck of a lot. That is what KiwiSaver is about. They literally want something to write on their tombstone: “We brought in KiwiSaver”. Well, it will not be enough, because Labour has absolutely ignored one of its core constituencies—low-paid, hard-working people.

When the lady from Waikato was giving her rant before she said: “It’s going to be great. Low-wage, hard-working people can put aside $30 a week.” If anything shows us how out of touch some Government members are with the real people on the streets of New Zealand, that statement does. Thirty dollars in the hand is a lot of money for those people. They do not have $30 to put into KiwiSaver. We know that 50 percent of workers will not be able to enter into this scheme because they cannot wait until they are 65 to get the money. They need the money to feed their families now. They need money to put food on the table.

What is in this Budget for older workers? There is nothing at all. I will read a quote from the New Zealand Herald website. It is from a lady just north of Auckland: “In regard to Kiwisaver. I am 61 and am trying to work towards being as self sufficient as possible by retirement. I have little money and have purchased a property … At present I have to pay my mortgage … insurance, power, rent … my share of expenses, petrol & car maintenance, … I don’t go out, I buy secondhand clothes.” She said that she does not have $20 left each week to put into anything, and that she is sure a lot of families with young children do not have $20 spare in their budget, either.

It is all right if one is a list member from Whanganui who comes here, does nothing, collects a fat salary, and, frankly, does not do anything in one’s constituency—for which reason that member has been replaced by Mr Borrows—but it is not so good if one is like the lady I quoted, living on the breadline, working hard, but getting nothing from this Government apart from being told she has to save with KiwiSaver.

The 50 percent of people who cannot go into KiwiSaver will not get a wage rise from their employers. They will be cross-subsidising all those who have gone into KiwiSaver. So those people will have no wage rise, no tax break, and they will not be able to go into KiwiSaver.

Does Mrs Pettis know what she has done? She has carved out a great new constituency for the National Party. Low-paid, hard-working, blue-collar workers, whom her party has completely shafted economically through the health system, the education system, and the law and order system, will turn to National in their droves. I will tell members what will happen. Those who sign up to KiwiSaver will say thank you very much, then go into the polling booth and tick “National”. You will be out on your ear—it will be the end of you.

The ASSISTANT SPEAKER (H V Ross Robertson): Order!

Dr JONATHAN COLEMAN: Not you, Mr Assistant Speaker. I was referring to Ms Pettis.

If people are living in northern Auckland, in my electorate—now a National electorate—they will also be paying a fuel tax of 10c a litre. Two-thirds of that will go to trains. But we do not have any trains north of the bridge. So members can imagine how happy people are with Maryan Street and the crowd at the electorate office of Labour North—not that they are ever there. One can imagine what they think: Labour is gone; it is not coming back.

In conclusion, I say that with this Budget Labour has totally given up on growth. The Budget is a vain last attempt at a legacy. The 50 percent of people who are the poorest workers will not be able to afford to go into this scheme and they will have less in the hand. This scheme is carving out a whole new constituency for National. As I say, the 50 percent who do go into the scheme will be taking KiwiSaver, saying thanks to Dr Cullen, then voting for National at the next election. It is the end of the line for this mob, and the sooner it comes, quite frankly, the better.

SHANE JONES (Labour): Tēnā koe, Mr Assistant Speaker. As is my wont, I will not indulge in the rhetoric and hyperbole that we hear from the other side of the House. I shall begin by referring to the fact that today, Mr Assistant Speaker, is your birthday. Aotearoa has received a great birthday present in the form of the Budget. In fact, candles are being lit up and down the motu from the four winds celebrating the final arrival of security through extended savings initiatives and progress through business incentives. I want all the listeners in Aotearoa to know that the Assistant Speaker is having a birthday this evening. Ngā mihi nunui ki a koe, hari huritau.

[Huge greetings to you, and happy birthday.]

Mr Assistant Speaker, you will be around for many birthdays to come, watching Dr Cullen and others deliver Budgets of a similarly fantastic nature from this side of the House. I have to point out that I am not allowed to note the absence of a member from the House, but I do note the absence of the good doctor who is in the parliamentary rugby team. We toiled away, we knew that he had gone home—

The ASSISTANT SPEAKER (H V Ross Robertson): I just say to the member that the absence of a member cannot be referred to, because we actually have to leave the Chamber sometimes.

SHANE JONES: I note your counsel, Mr Assistant Speaker. However, I was referring to the fact that Dr Coleman, despite his expending a great deal of air—it has disappeared like a puff of smoke—has offered not one constructive element as to what National proposes to do as an alternative Budget. I was commenting on his interest in rugby. We lamented his absence but we won in spite of it.

However, let us come back to what New Zealanders are really saying. There are no ideas, no policies, and no remedies from the Opposition side of the House. [Interruption] No, there are not. There are predictable criticisms, hackneyed phrases, and tired shibboleths; that is what we find. National members are hoping to sleepwalk their way to the next election. That will not happen. The fact is that our Budget is growing not only in stature but in popularity.

Some facts cannot be changed. The demographic fact cannot be changed. We are confronting an ageing population. However, in the form of Mr Clarkson I accept that his brilliant crop of grey hair is reflective of the deepening ageing process in his intellect, and we wait to hear him declare that he will stand again in Tauranga. He will not. Every single Tauranga family and whānau are wandering around, wringing their hands, and wondering what on earth possessed them to send such an ineffectual politician to Wellington.

I will give Mr Clarkson his dues. He knows the back end of a bulldozer, he knows how to deal with the bank manager, and he also knows how to offer remedies to boy street racers hoping to sell tickets so they can take their clapped out cars to his racing rink. But one needs a hell of a lot more than that to represent New Zealanders in this institution. That is why every time Mr Clarkson opens his mouth there is not one single word or sentiment that adds substance to what he said when he came here—“I’ll go to Wellington and teach the buggers a lesson. I’ll go to Wellington and teach them about the real world.” He has been reduced to following David Bennett, who I earlier said was Borat without the intellect or the looks. When we hear from Mr Clarkson we know that it is a poroporoaki—a haere rā—because his party will not let him stand, he has embarrassed it, and it now regrets the fact that it cannot see him off as quickly as it saw off Don Brash.

Let me come back and offer testimony as a young parliamentarian to the brilliant Budget put forward by Dr Cullen. I have a question for my friends on the opposite side of the House. Some of the members opposite are my friends, because in a parliamentary sense there has to be a certain level of consensus. We accept that no one can be friendly with Dr Nick Smith, because he is the only one who belongs to the Scientology religion. We cannot be friendly with Mr Ryall, because he is incapable of speaking the truth when it comes to race relations. But others—

The ASSISTANT SPEAKER (H V Ross Robertson): The member can never challenge a member’s veracity when it comes to truth. The member will withdraw.

SHANE JONES: I certainly withdraw. Mr Ryall can certainly not be regarded as a friend by us, and every word he says is inversely related to the development of the health system or the advancement of our people.

To come back to our Budget, I say that I have just come back from a brief session with a group of businessmen. They are over the moon about the 15 percent entitlement in relation to research and development. They are the ones who are reciting the fact that National never cut company taxes, despite the existence of that gargantuan figure Bill Birch and others in the past. Of course, they are all gone and replaced by pygmies, none of whom are intellectual—I refer to Lindsay Tisch. None of them are willing to admit to the fact that over the period of time since the mid-1960s they have never moved to reduce company taxes—never—and they have had a lot of opportunity to do so.

Jill Pettis: 1966!

SHANE JONES: OK, sorry. It happened when they were living in the world of pounds and halfpennies. It happened before dollars and cents. That is so long ago that a new generation has come forward. That new generation is afflicted by an insecurity as to whether it has a stake in the future. The reason their affliction is subsiding is that the last Budget actually reduced the amount of the interest bill on student loans, and this one lays down the platform for No. 1, employer contributions towards savings; No. 2, State contributions towards savings; and No. 3, the enhancement of an ethic of savings. It is possible that Mr Bill English is saying that National’s plan is to strip away the savings scheme and replicate what Muldoon did in the past.

I say to all Kiwis that this Budget gives them an opportunity to back a team that is investing in their security and will not offer initiatives that will suddenly be snatched away, as has happened in the past with our friends from the Opposition. Business and corporate leadership know that we not only have invested successfully in social infrastructure but are enabling the pools of capital to grow, because enterprise knows that it needs access to capital. More foreign capital has the effect of increasing our reliance on the international lenders of the world. More domestic capital allows us to manage better our current deficit and have a more positive influence as a country on the nature and the level of our dollar. Those are two key things that people are already beginning to respond to us positively about.

Of course, we are reduced to hearing not only predictable but very destructive contributions coming from the other side of the House. They are mostly from those members who either nurse a wound, in the form of Mr English, and I could put in that group Mr Power, or they are the young ones whose ambition is inversely related to the content of their speeches. They have inordinate levels of ambition but they are not allowed to admit to what policies they might bring forward. No, they are hoping to leave that until the period of time when the next election is very close.

The fact of the matter is that New Zealanders will not fall for that. New Zealanders realise that Labour has laid down its kaupapa—its programme. It will deal with business and it will deal with infrastructure. It is dealing with savings and is pro-social development. It also contributed $170 million towards Māori development. In Rotorua people at the craft and science institute at Whakarewarewa are carving abacuses, so the Māori Party can add properly. Kia ora tātou katoa.

Hon GEORGINA TE HEUHEU (National): Fortunately, New Zealanders do not fall for anything. The member Shane Jones, who has just resumed his seat, should have learnt that by now; he has been in this place for nearly 2 years. They do not fall for anything. They know exactly what is going on here. They know very well that Dr Cullen treats them like they are nincompoops. They have been working their guts out for the last 8 years and they have not been rewarded in the last eight Budgets. In eight Budgets they have had no reward. They do not fall for anything, and they are not about to fall for anything over the next 18 months.

Unfortunately for that member, he made a choice to come into Parliament with the Labour Party, and he probably will not make it into Government again. I have a lot of regard for Shane Jones, but it is unlikely he will make it into Government again, because this Budget finally puts the nail in the coffin for that side of the House, and National will be delivering its first Budget after the 2008 election. And it will be a good one; it will be a Budget that respects New Zealanders, that rewards hard work, and that recognises their desire to get on with their lives.

I was waiting for Shane Jones to talk a little bit about the Māori affairs appropriation for this year, but he did not, which was a pity. He threw in a couple of sentences at the end of his address. I think it was he who just last month, during the adjournment, was saying that Māori housing is at a very low state, and that Māori should be doing more to get themselves into homeownership. This Budget has nothing that says to anybody, least of all Māori—44 percent of whom are in owner-occupied homes compared with over 70 percent of the rest of New Zealand—that this Government is worried about the housing situation. It is bad. It is poor. Poverty means that families will go nowhere, and that member’s speech was about poverty of ideas. There was nothing for Maori people.

This year’s appropriation for Māori affairs increased by only $12 million. There are about $18 million of cuts, which means that a lot of activities will be cut. When the Minister of Māori Affairs comes to the Māori Affairs Committee we will be closely examining him on those programmes that he intends to cut. Mind you, a lot of the spending in that organisation is pretty low value anyway. It is typical of Parekura Horomia to throw around millions of dollars and do a lot of shadow boxing, but when we look at the detail we see that some money has been cut out of the operational budget. As I say, we will want to know what that means for Māori people.

The Budget puts money into Māori Television and I guess that is a fair thing to do. It gives $1 million a year to iwi radio, to be shared among 21 iwi radio stations. Saying that $4 million will be given over the next 4 years sounds slightly better, but when we break it down to $1 million for every year, we find that it is $45,000 for each iwi radio station. We have to ask how committed this Minister is, how committed this Labour Government is, to Māori.

One other amount I want to make a comment on, although it represents only half a million dollars, is the funding for the Treaty 2 U programme in schools. Parekura Horomia announced it as part of his initiatives, and I have to ask him how it helps Māori people. How does that programme help anybody, actually? It is a good public relations exercise but I tell the Minister it is not working. Why he should put even that amount of money into that programme beats me. I am sure Māori will not welcome that initiative, anyway; not when their health is still poor, their housing is appalling—

Bob Clarkson: It is.

Hon GEORGINA TE HEUHEU: My colleague knows all about housing and has some good ideas about how we could house those on low incomes. Shane Jones was wasting his speech in talking about that programme.

The other thing in the Budget that was disappointing in so far as Māori are concerned, and that this Government fails to realise, is that there is no support for small and medium sized business—none whatsoever. If there was one thing that happened in the 1990s especially, and that Māori continued off their own steam into the 21st century, it was the high numbers of Māori people becoming self-employed and setting up small and medium sized businesses. This Budget hits them in a big way. It shows that this Government does not understand that the things it can do that will do the most for any group of people, and particularly Māori, are to make skills acquisition a priority, to help small and medium sized business, and to improve education. Education should be No. 1. There is nothing in this Budget that suggests that Māori children, those who keep dropping through the cracks, will be addressed by this Government. That is disappointing. There is money for kōhanga reo, but it has been shrinking in recent years, anyway. In terms of any initiatives that will ensure that those Māori children who are not succeeding in our school system actually get through the school system—learn reading and writing and get some qualifications—there is no certainty that this Government even thinks about them, let alone cares for them.

Christopher Finlayson: Did the previous speaker say anything about that?

Hon GEORGINA TE HEUHEU: The previous speaker, Shane Jones, did not say one word about that. There was not one word about education, not one word about housing, not one word about improving health outcomes for Māori, and not one word about lifting the incomes of Māori people, which lag scandalously behind those of mainstream New Zealand. Shane Jones, of anybody, knows that one of the biggest issues facing Māori is lifting Māori incomes. If we can do that for a family, we are doing a whole lot to make sure they have a decent future. He did not say a word about that. I know that Shane Jones likes to talk about business in generic terms and about a whole lot of other things, but there was very little specific about Māori initiatives and how to help those people.

Christopher Finlayson: What about wrecking the fisheries commission?

Hon GEORGINA TE HEUHEU: There you go! “Wrecking the fisheries commission”, my colleague says. Well, Shane Jones is in Parliament now, so, hopefully, he cannot do too much of that, but who knows. He is still on the board.

Treaty negotiations are the other disappointing part of the Budget. The Waitangi Tribunal will get an extra $7 million over the next 4 years “to help the Government push its objective of settling all historic claims by 2020”, but if we look at the statement of intent, we see that it does not look like there will be much more activity. Three agreements in principle were done in 2006-07, and only another three are projected for the coming year. There were three deeds of settlement, and there will be the same number in 2007-08. Two settlement bills were made ready for introduction in 2006-07, and there will be only two in 2007-08. There is no increase in the number of deeds of mandate recognised, and no increase in completing terms of negotiation. The Government has no idea whatsoever about how to get some momentum into Treaty settlements and how it might achieve its end target. The Government’s target is 2020; ours will not be quite that far out, because we will have a Minister of Treaty negotiations who knows what he is doing. He will be hands-on and he will treat Māori with respect.

All in all, this Budget is disappointing. [Interruption] Oh, the Minister is here. Thank goodness! Let us see how he throws those numbers around, as he tends to do during question time in the House. Māori people listening would have been disappointed in Shane Jones’ speech. Hopefully, the Minister will be able to explain his numbers better. But, however he tries to explain them, he will have to deal with us on the Māori Affairs Committee and tell us what activities he is going to cut. This is a disappointing Budget. It treats New Zealanders with derision, and they deserve better than that.

HONE HARAWIRA (Māori Party—Te Tai Tokerau): Tēnā koe. Tēnā tātou katoa e te Whare. This year’s Budget is like a bad blind date—one gets someone to go out with, but she turns out to be kino rawa te hanga pēnā i taku whanaunga a Shane Jones, e noho mai nā ki tērā taha.

[badly put together like that relative of mine Shane Jones sitting over there on that side.]

Setting a Budget might seem like a mammoth task, but it ain’t really. Neither should it be. Budgets are simply a reflection of a Government’s priorities in its management of the nation’s affairs. Some Governments like to put their money into people, and some like to put an emphasis on business. The tough part for the not so well off is that this Government seems to have a fixation with corporate tax cuts, while providing little of value to those at the bottom of the economic ladder. Sadly for Māori people, the last few Budgets confirmed the fact that this Government has little respect for the Treaty and for Treaty rights, and that it has no genuine regard for the health, education, and employment needs of Māori. In the land where the Treaty is called the founding document of our nation, this progressive downgrading of funding for Māori initiatives, and the reduction of targeted funding to reduce disparities between Māori and Pākehā, is a chilling message to all New Zealanders who care about justice.

But let us not be mean. The sum of $19.5 million tagged for Māori is not something to turn up one’s nose at—or is it? When one sees that the Budget total was actually $3.3 billion, that is when one starts looking at one’s date and wondering whether it was worth the phone call at all, because 0.6 percent of the Budget adds up to being even uglier than one first thought. Yes, we heard a trumpeting from the Minister of Māori Affairs that the Government was spending $172 million on Māori, but the reality is way different. For a start, although the Minister said that the Government will be spending $102 million on kōhanga and kura over the next few years, in fact there are no line items in the Budget to confirm that, at all—none, whatsoever. That leaves $70 million, which does not sound too bad either, except that it is to be spent over the next 4 years and not next year at all. That means that if the Government is spending $20 million this year, then it will be spending less and less over the next 3 years if it is saying that the total will be $70 million.

When the shim-sham game of the Minister of Finance and Tonto is finally exposed in the light of day, the reality is far from the promise. I remember the summing up of my defence in the Patu squad court cases arising from the Springbok Tour, when I attacked the police for trying to weave a spell of innuendo to con the jury into convicting me of some very serious charges based on the flimsiest of evidence. I remember a phrase I used to describe their tactics, which describes exactly the Government’s spin on Māori funding in the Budget now—if one cannot dazzle them with brilliance, then bamboozle them with pūru tiko.

But let us give credit where credit is due—and there is precious little due to this Government for anything Māori in this Budget, so this bit will be short. We welcome the $4.4 million for Vote Education, the $2.5 million for Māori Wardens, the $2.5 million for the Waitangi Tribunal, and the $7.6 million for Māori broadcasting—although splitting a million dollars amongst 22 radio stations will not go very far. But we note that there has not been one cent, not one brass razoo, and not one penny targeted specifically to reducing the major health problems for Māori—smoking, diabetes, and heart disease—not one cent. Diabetes is so bad amongst Māori that we call the diabetes ward up in Whangarei the Māori ward, because we can catch up with whānau from all over the Tai Tokerau there, either visiting or as patients. The Minister of Health himself will tell people how much it is costing the nation to deal with diabetes, smoking, and heart-related problems for Māori and Pasifika people all over Aotearoa.

This Budget was a prime opportunity to deal with the massive health problems being faced by Māori, and the massive financial drain being caused by them, yet, as the Associate Minister of Health Mita Ririnui himself admitted on Radio Waatea: “There is no flagship Māori health initiative in this year’s Budget.”—nothing to deal with what Professor Paul Zimmet calls “a disproportionate toll of diabetes amongst indigenous peoples, a tragedy threatening to consume world economies, and bankrupt health systems.”

Hon Mita Ririnui: Tell the truth.

HONE HARAWIRA: I will just repeat that comment: the Associate Minister of Health Mita Ririnui himself admitted on Radio Waatea: “There is no flagship Māori health initiative in this year’s Budget.”—nothing for heart disease, nothing for tobacco control, nothing for diabetes, and nothing for Māori.

Hon Mita Ririnui: I raise a point of order, Mr Speaker. The member seems to be quoting from a document. I invite the member to table that document in the House, because it sounded quite damning.

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

HONE HARAWIRA: At a time of top-heavy death rates amongst Māori children, and at a time when kaumātua and kuia still die nearly a decade before Pākehā, this Government chooses to offer nothing for Māori health. At a time when Australia has just announced a $280 million indigenous education direct assistance programme, including $105 million targeted specifically to help Koori students with their literacy and numeracy, and $42 million targeted specifically to help Koori kids stay at school, our Government is spending how much? A measly $4.4 million! At a time when more than 50 percent of Māori students leave school without getting even National Certificate of Educational Achievement level 1, and when Māori attendance at schools is alarmingly low, and when Māori are nearly 50 percent of all suspensions, this Government is spending nothing—nothing—on Māori educational development programmes, and nothing on Māori student retention programmes in its new Budget. In fact, there is quite simply nothing at all in this Budget to address the recommendations of the United Nations special rapporteur that the Government must deal with this complete failure to address Māori underachievement in education.

And as for the “KiwiSlaver Bill”, for Māori it is just another sad little joke. First of all the statisticians tell us that the average Māori income is $20,000, yet the Budget projects that to maximise benefits, one will need to have an income of at least $25,000. So that is already about 60 percent of Māori who will miss out. Then we find out that for those on low incomes, the immediate effect will not be savings at all. In fact, it will be more like a tax increase because the Government will be taking another 4 percent out of their wages. Four percent does not sound like a lot, but when one is on a low income, it is gold. Then we find out that the scheme is not even a Government scheme, at all. Then we find out that our hard-earned dollars are going into the hands of private companies to be invested in company shares and properties. Effectively, this Government has privatised superannuation and has turned it over to financial institutions whose primary goal is not client welfare but corporate profit.

Then we find out that the Government does not guarantee these schemes, so if the investments go belly up, so do our “KiwiSlave” dollars. Then, finally, if one is Māori, one realises that Māori in the KiwiSaver scheme will be paying all their lives and then dying 10 years before their Pākehā colleagues, so they will not get any benefits anyway. If that is the legacy of this Government, then heaven help the poor! Savings are cool, but helping the rich get richer and hoping they do not blow one’s money sucks.

But the Māori Party is not here just to praise or to condemn current practice. We take seriously our role of defending Māori rights and advancing Māori interests for the benefit of the whole nation. So here are a few ideas, but our Government might have targeted funding to Māori to address Treaty rights and to reduce disparities. We call for the Government to open the books so that we can all see how much money is actually being spent on social rescue programmes for Māori and what results are being achieved. Taxpayers deserve to know, and Māori are sick and tired of being blamed for departmental incompetence.

Unbundle the funding! John Tamihere got a mention before from the Labour member. He got blasted by Labour for daring to say that social problems are managed better by communities than by bureaucrats, but he was right. The Māori Party believes that community control of social funding will generate far better returns for society than the bloated social budgets that this Government uses to control people’s lives. If it is true that kura kids do so well, then why is the Government cutting off funding to Māori language teachers? The Māori Party calls for the immediate employment of 1,000 new Māori language teachers, because successful teaching leads to successful students, and successful students become successful citizens.

Statisticians confirm that most social problems come from Māori on the dole, so why does not the Government focus on reducing the current Māori dole level of 36 percent? Folks, Budgets are not rocket science. They are about priorities. The Māori Party’s priorities are people. Unfortunately, Labour’s Budget promises of corporate tax cuts suggest that its priorities lie elsewhere. Kia ora, Mr Speaker.

Hon PAREKURA HOROMIA (Minister of Māori Affairs): Kia ora, Mr Assistant Speaker. First of all, I will say what a wonderful opportunity this is to talk about this great Budget again, and especially how it invests in Māori. I am proud to say that it does invest in Māori in a significant number of ways, even if some of the Māori MPs in this House are having trouble acknowledging that. We all know that Tau Henare had written his Peanuts lines well before the Budget. Actually, knowing Tau, he probably still has not read the Budget.

We all know the Māori Party was supposed to come up with a Budget last Tuesday, and we have seen zero. They did the same thing with their co-leaders’ trinkets. In the Māori Party’s case, its co-leaders cannot even agree on their Budget lines. Pita Sharples has one figure and Tariana Turia has another, and both figures are very, very wrong. That is why I feel sorry for my friend Hone Harawira, because that is where he is taking his advice from. So it is great to have another opportunity to explain how great this Budget is.

Let us start with the health budget—the $60-plus million for obesity, dare I mention it. Who do we think the target is, in relation to diabetes, as Hone leaves the Chamber?

The ASSISTANT SPEAKER (H V Ross Robertson): The member cannot refer to the absence of another member. All of us, at one time or another, leave the Chamber. The member will withdraw.

Hon PAREKURA HOROMIA: Thank you, Mr Assistant Speaker. And then there is KiwiSaver, which I am calling “IwiSaver”.

Eric Roy: I raise a point of order, Mr Speaker. I thought I heard you say that the member will withdraw.

The ASSISTANT SPEAKER (H V Ross Robertson): No, I did not say that, at all. I just told the member that he could not refer to the absence of another member, and he has acknowledged that.

Eric Roy: Mr Assistant Speaker, I heard you say that the member will withdraw. Whether or not you meant it, I heard you say that.

Hon PAREKURA HOROMIA: Mr Assistant Speaker, I withdraw.

Then there is KiwiSaver, which I feel comfortable enough to recognise as an “IwiSaver”. I was pleased to note in the Waikato Times over the weekend that Tainui is looking at developing its own “TainuiSaver”. Ngāi Tahu already has its own similar initiative, so when I hear naysayers talking about how this will not be good for Māori, I get annoyed. At the end of the day, some Māori are capable of writing their own speeches.

We have a growing youth population. We have record rates of employment. When we came in, after the last lot who left us behind, benefit dependency was running rampant—not just with Māori, but with Pākehā. Who was getting the tax concessions? It was the well-off people in Tauranga. On current trends, young Māori who leave school over the next few years are likely to be employed, and employed on increasingly higher incomes.

Hone Harawira is picking out figures about the median income for Māori from way back, about 6 years ago. KiwiSaver will provide them with an important nest egg, as well as offering substantial help, up to $5,000 per person to buy a house. Those who join KiwiSaver will enjoy the benefits.

Bob Clarkson: Do I get them?

Hon PAREKURA HOROMIA: No, that member should not get them. But if his party was in office, it would ensure that the tax cuts would be looking after just the very, very wealthy people, like that member over there, and it would forget about the working classes and those people who need the money. That is the edict of this Government. There is a strong conviction to ensuring that wealth and equity is shared around quite evenly.

The last census shows that the median income for Māori in 2006 was $20,900, but let us not forget that census 2006 also showed that the overall median income was $24,400—a difference of only $3,500. The most important point is that Māori experienced a greater increase in median income than the overall population did between 2001 and 2006.

Let us not hear the crocodile tears from the Māori Party about not caring about the working class. There is a simple sum. When the National Party was last in Government, it did not even raise the minimum wage by $1 over a span of 9 years. Those mean-spirited, low-down people never added to it. This Government has increased the minimum wage how many times? Not two times, not four times, not six times, but seven times. It has taken the average wage from $13 to $18.88. We have not yet finished. Let us get these sums right, because Hone Harawira was picking them from out of the sky.

What is in the Budget for Māori? Let me start with the specific new initiatives for Māori. There is $170 million. Some of those initiatives are funded for just 1 or 2 years, but the Māori Party has simply split the funding by four and come up with two different figures. It is $19.19 million a year from Pita Sharples and $18.57 million a year from Tariana Turia. Let me help—$170 million divided by 4 is $42.4 million. No wonder the Māori Party decided not to release its alternative Budget a week ago today. We can imagine what the sums would have looked like. If they were like their Treaty policy, there would not be any figures anyway, because that is a little bit too hard.

I come back to Labour’s fantastic Budget. It is a great Budget. It is a Budget that will ensure populations such as Māori will be on a different pathway forward. There is a range of new funding initiatives in Vote Māori Affairs. I must say I find it laughable that those people on the other side of the House try to hustle me about successful Budgets. When Minister Tau Henare was in office, his Government knocked down the Māori Affairs budget by $100 million.

There is $23.1 million in this new funding for Māori Television and another $4 million for the iwi radio network, which Hone Harawira benefits from. There is another $2 million to follow up the Hui Taumata programme, which has been one of the few forums, if not the only forum, that even other organisations cannot put together. We have Business New Zealand, the union, and Māori. Certainly in the sense of retention and youth development, they have put in a whole lot of effort. There is also $2.5 million to support our Māori wardens, which is much deserved in the range of our funding measures to strengthen core Māori institutions like Te Taura Whiri i te Reo Māori, the Māori Trust Office, and Te Māngai Pāho.

Māori-medium education is a big winner in this Budget—so it should be. We are putting $14 million of new money into our kōhanga reo, because we do care about our language. There is $6 million for Māori-specific research in our wānanga, and $102 million over 4 years for kura and wharekura.

We are putting an extra $7.7 million into the Waitangi Tribunal. There is a 25 percent annual funding increase. I am pleased to read that the tribunal’s chairman says that this should enable him to complete the hearings by 2015.

Then there is the $2 million we are investing into preventing violence. I want to recognise the cross-party committee that is taking the team into preventing violence and Te Whakaruruhau.

At the end of the day, Māori are thankful for this Government. One of the issues to understand is that we have targeted them in the health and education areas very, very well. In the sense of obesity, diabetes, and meningococcal disease, which relevant and level-minded Pākehā agree with, this Government has supported those areas very, very well.

That is what the Māori Party wants to deny. That is what Georgina te Heuheu wants to deny—that this is not good for the rest of the nation. If we have any sense, we know that there are two specific parts in the Budget. There are those initiatives that are specifically targeted in isolation or collectively for $170 million, and there are all of the other big budgets, such as education and health.

I am not a convert or a student of Harvard; Shane Jones is. He knows more about the macro- and the micro- than I will ever understand. But I certainly understand trends, and I do know that tax cuts are about looking after the rich spinners—those people who have all the dosh, who build car raceway tracks and so on, and who have plenty of money. That is what it is about. The simple thing that Māori are starting to understand, because we are going around the country to tell them, is that if one starts ripping into big-time tax cuts for the big boys, one takes money from the service areas like health and education, and from those areas where working-class families need it.

I feel very sorry that my colleagues on the other side of the House cannot appreciate how great a Budget this is. Even the talk has changed. It is not so much about—

Sandra Goudie: What would he know—the member who couldn’t even justify his own ministry’s expenditure.

Hon PAREKURA HOROMIA: Here we go, the member is talking about a member who cannot do that. One thing about being a Māori in this job is that one understands diabolical cynicism and one understands when people are not being straight. They say: “Let us love each other. Let us live together. Let us be friendly. I have some Māori friends, you know.”—and it is possible to tell when people are dipping into the gutter in the sense of their view on Māori people.

This Government has been supportive of Māori people. When Labour came into Government, we were running at a rate of 21.8 percent unemployment and 16 percent of Māori were dependent on benefits. What are the figures now? They are down by 7 percent. Those members are lucky that Labour is in Government, because their families will get a job, good health, and good education.

ERIC ROY (National—Invercargill): In case listeners out there in radioland are wondering what exactly is happening, let me just refresh things for them. We are debating the Budget that was presented on Thursday of last week by Dr Michael Cullen. I have to say that it is not in my nature to be vitriolic and to be critical; I like looking at the positive in life. So I looked at this Budget to see what positive thing I could say about it. I can find one positive thing in this Budget and that is that it is a valedictory. It is one of the last Budgets that this Government will get to present.

I want to talk about the directional vision of what a Budget should do. What is the road map that is laid out in this Budget? That is my question. We have gone through a variety of Budgets from this Government. We have had what I might say were aspirational goals set out. We get a speech at the start of each parliamentary term, then we have a Budget that does not actually match that. It is very easy for anybody to come up with the rhetoric and say: “This is what we want to achieve. We want to be in the top half of the OECD.” That is a goal that National would identify with—

Chris Auchinvole: Aspirational!

ERIC ROY: No, it is not aspirational as far as National is concerned. We know that if we want to continue to provide the services, to continue to provide the opportunities for our young people, and to continue to be a competitive nation in this global economy, then we simply have to do better than we are doing.

When I pick up this Budget and I look at it, I say: “What does it have in it that will actually improve the lot of New Zealanders?”. When I look at this Budget I see a Budget that continues to create dependency. It is quite interesting. I looked in my old diary and 20 years ago today I was at the James Cumming Wing in Gore talking about a future for the lamb industry. We had a number of speakers and I chaired the function. About 600 irate farmers arrived and the topic was how we could get a $20 lamb. I remind members that the Government in power at the time was Labour again. Out there at the moment there is huge anguish across the primary production sector as issue after issue erodes the viability of what people in that sector are doing. In the primary sector we have the best product in the world, be it fish, trees, dairy products, deer, sheep meat, wool, or whatever, yet those people, who are in a vital part of the New Zealand economy, are struggling.

If I look in this Budget, what do I find? I find nothing there. Let me now draw an analogy that I think is quite significant. In the late 1980s, we had supplementary minimum prices. That system was reviled by people all over New Zealand, including the Opposition at the time, because we were saying to our farmers: “You are now dependent on the Government because we need to pay you supplementary minimum prices.” Yet when Working for Families was brought in, a name was chosen that was much more acceptable. It is called Working for Families, but in essence it is no different from supplementary minimum prices.

I am the first to admit that it is important that every sector of New Zealand is viable; that every sector is able to participate and do the things it wants to do. But this Government has chosen any form other than tax cuts or growing the economy to ensure the viability of families. The way it has done it has been by a Government handout. Why did we revile Government handouts to a productive sector in the 1980s—some 20 years ago—but today the Government is patting itself on the back? It has almost become inverted in its self-congratulation and adulation that Working for Families and dependency are great things, yet it is killing the aspiration of the people.

I ask what the aspiration of this Government should be. It has aspirational goals that it never meets. If we seriously want New Zealand to grow, to feel good about itself, and to have a sense of pride and achievement, then it will not be achieved by making people dependent. Why would a Government want to make its citizens dependent upon it? It comes down to what the reaction might be at the ballot box; it is as simple as that. We have a Government that has said: “Let’s make as many New Zealanders as we can depend upon us.” If we look in this Budget we see a continuation of that theme. Yes, there are some tax cuts—not the “chewing gum tax cut”, but a tax cut to a very limited section in order to equate us with Australia. I applaud that but it does not go far enough, and I will speak more about that in a minute.

We need to make New Zealand families want to achieve more. As soon as we say that the top limit that people can climb to will be some sort of support from the Government, then we kill off that aspiration. We are then giving a message quite loud and clear to the families of New Zealand that they need only to get to a certain point and we will top them up. There is no goal, no aspiration to go on. Some 400,000 families have now been made dependent through that. We now have a continuation of that policy with the Government saying that it will not only top up families, but also it will make people save, and it will make them save at the Government’s own bank—Kiwibank.

Chris Auchinvole: Whether you want to or not.

ERIC ROY: It will make people do so whether or not they want to. It does not matter whether it is the best thing for them to do. People cannot now make decisions about whether it is good for them to pay off their mortgage, whether it is better to spend some money on education, or whether they want to spend a bit of money on research or whatever. People are not going to get an increase in wages. The Government is saying that this is what they will do. Employers throughout the country will now find that they cannot afford to give a wage increase because the Government has said the money is going into KiwiSaver for people’s future. It is a kind of retirement package.

I know we should all save. I have a great story to tell of my own case. For whatever reason, I started saving on a regular basis and I have managed to achieve in terms of the sum saved. Yes, we should save but to take the decision away from people who may have a mortgage, or who may have some other issues that they want to deal with, and have the Government say that they will do that, is taking away the aspirational goal that any individual might have.

In respect of the tax breaks that have theoretically been handed out for companies, I say yes, we should do that, because it is important that we do not have Australia getting further away from us. But they should have been much wider and further across the board. To a degree I represent an area that is very dependent on primary production. Most of those people who are serviced out of Invercargill are in the farming sector; that is the viability and the wealth of that city. Most of those farmers are not in a company structure. They get no help out of this. In fact, only about 15 percent of those people who own businesses have a kind of company structure. So this falls far short of encouraging the aspiration of actually doing better.

This Budget does not have a road map. It does not have a road map that New Zealanders can identify with, aspire to, or be enthusiastic about. This Budget gives us a road map of increased dependency, more bureaucracy, increased compliance costs, and more difficulty in doing business. It will drag us further down the OECD list. I have to say that this is not a Budget that will be causing any excitement anywhere in New Zealand, particularly not in my electorate of Invercargill. The one good thing about it is that it is a valedictory Budget.

DAVE HEREORA (Labour): I take this opportunity to take a call in support of Budget 2007. The Budget provides for an increase in resources to foster a greater sense of national identity. It recognises the importance of Māori culture in reinforcing the dynamic and unique identity of Aotearoa, both nationally and internationally. Key investments have been made in Māori broadcasting, in Māori language and culture, and in understanding the Treaty and the Treaty settlement processes to enhance the place of Māori in the building of our distinct New Zealand identity.

I think it is important to place on record what that means, by giving a detailed description of that allocation. If we look at future-proofing for Māori broadcasting, we see that Māori language and culture are inextricably linked to the maintenance of Māori identity. Significant investments have been made in the Māori broadcasting sector over the last 5 years, with the establishment of Māori Television and greater coordination by Te Māngai Pāho of the Māori radio network. Budget 2007 provides resources to complete the expansion of this sector and better enable Māori to share stories, culture, and language across Māori communities and New Zealand. These are key investments.

The Budget provides for $23.1 million over 4 years for Māori Television to transition into digital technology and programming, $4 million over 4 years in additional resources to strengthen the iwi radio network, and $160,000 for Te Māngai Pāho to enable it to complete infrastructure changes within the organisation.

The other initiative to support te reo Māori is significant resourcing across Government to support the promotion and use of Māori language. In relation to iwi radio there is some background that I think needs to be raised in this debate. In 1990 the Government reserved frequencies for the promotion of Māori language and culture to enable the full coverage of iwi tribal areas. This was in response to Wai 11—that is, the te reo claim—and Wai 26/150, which was the claim on the radio spectrum. There are currently 21 Māori radio stations operating on a Māori-reserved frequency that are funded by Te Māngai Pāho. These are the stations that will be the recipients of this new funding. Funded stations are required by Te Māngai Pāho to broadcast for a minimum of 18 hours per day, at least 4 of which must be in the Māori language.

In 2004 Te Māngai Pāho was successful in seeking funding for training for iwi radio employees through the Budget bid process. The bid was for $1 million over 4 years. Punga.net, the radio distribution service and switching system, is a web-based switching service implemented in April 2001. It was used by iwi stations to access national programmes—that is, the news service—funded by Te Māngai Pāho, and linked to each other to share locally produced programmes. Punga.net allows iwi stations to access the distribution service 24 hours a day, 7 days a week. Te Māngai Pāho sought funding for an additional $1 million per year for the operational costs of iwi radio. This will enable an increase of $50,000 per iwi radio station funded by Te Māngai Pāho.

The reason for increasing the amount of operational funding to iwi radio is that iwi radio has not received an increase in operational funding since Te Māngai Pāho assumed responsibility for funding of the 21 iwi radio stations in 1995. The advent of Māori Television has made it difficult for iwi radio to retain staff and attract high-quality broadcasters. Iwi radio needs to remain competitive. Cost increases in compliance measures, a commitment to ongoing staff development, and station overheads have been met through cost cuts in other areas, predominantly salaries and wages. Inevitably, this has led to an industry-wide reliance on the goodwill, enthusiasm, and commitment of staff and volunteers, which is not sustainable in the long term.

An increase in operational funding will help to strengthen the labour force and the outcomes of Māori radio broadcasters by building, maintaining, and retaining capability skills within the industry. An increase in operational funding will enable iwi radio to build on the quality of the programmes iwi stations currently broadcast and assist them to create new, exciting, high-quality programmes. Te Puni Kōkiri is currently refining the strategic direction of Māori broadcasting. This work programme will likely look at what the optimal landscape is for iwi radio and determine funding thereof for iwi radio to enable the ongoing quality of broadcasts on iwi radio.

Iwi radio stations provide a vibrant and innovative place within the broadcasting landscape, and play a vital role in promoting Māori language in the community and in the Māori language revitalisation efforts. An increase in operational funding will help to strengthen the labour force and the outcomes of Māori radio broadcasters by building, maintaining, and also retaining capability skills within the industry. An increase in operational funding will enable the stations to build on the quality of the programmes they currently broadcast and assist them to create new, exciting, high-quality programmes.

The other area that I think is important to put on record is in relation to understanding the Treaty of Waitangi and processing Treaty settlements. Budget 2007 provides further resources to increase process on Treaty settlements. Last year the Government increased funding for the Office of Treaty Settlements to further progress Treaty settlement negotiations. This Budget adds to that by allocating an annual funding increase of 25 percent to the Waitangi Tribunal for the key role it plays in Treaty settlement processes. The Budget provides for $7.664 million over 4 years to the Waitangi Tribunal. Understanding the place of the Treaty of Waitangi in New Zealand is important for all members of our society. The Government has focused resources this year into extending the Treaty 2 U exhibition to enable it to tour schools in partnership with the ASB. The Government has provided an additional $530,000 to the exhibition along with an equal contribution from the bank.

The other area is the makeover to Te Rerenga Wairua, which is in Cape Reinga. The Budget provides for $6.5 million to develop Te Rerenga Wairua, which is already one of New Zealand’s premier tourist destinations. The development project has been under discussion for several years with local iwi and other agencies and is expected to deliver significant economic and social benefits to the far north.

Efforts to conserve newly found Māori artefacts that by law are deemed to be prima facie owned by the Crown will be supported through an additional $121,000 over 4 years via the Arts, Culture and Heritage vote. A further $120,000 over 4 years is provided through the same vote to authenticate protected objects such as taonga through an authorised certificate of examination from the museum.

I move on to supporting our whānau—that is, our young and our old. The Budget does focus on whānau through Māori preschoolers who will benefit from increases in a range of funding rates for early childhood services, including kōhanga reo. This will reduce the need for costs to be passed on to parents and further increase Māori participation in the early childhood education of their choice. There will be a major expansion of facilities for kura and wharekura, with over $100 million budgeted for property development.

A 10-minute opportunity to take a call to put on record a detailed description of what Budget 2007 provides for Māori is not enough time. So I want to take this opportunity to talk about KiwiSaver in my closing comments. KiwiSaver is an opportunity to promote vision. It is about saving. It is about painting a message to our population to consider saving as a real option for the future, particularly for Māori who have not had the opportunity to have money to save in the past. This is a great opportunity to promote that discussion nationally so that people are focused on thinking about their future. I do think it is a wonderful opportunity. It is a policy that has vision. I find it quite hard to accept that National is opposing this policy, as it does possess the opportunity for us to take care of our future and allow the opportunity for our children to think seriously about the true principles of saving and the benefits of it. Kia ora.

SANDRA GOUDIE (National—Coromandel): One could be forgiven for wondering what the last speaker was talking about, and one could be forgiven for wondering whether he supports this Budget, because he showed no enthusiasm for the things it promotes. There was no enthusiasm, no passion, and no advancement of any ideas. We could hardly hear him. There was no emotion or words that remotely resembled any support for what this Budget is supposed to be doing. And he is one of the Government’s own members!

No wonder my most excellent leader, John Key, in his first response to the Budget mentioned the UMR Insight poll. I was really taken with the UMR Insight poll. I thought it was absolutely gorgeous, because it showed that the Labour Party had conducted a poll about itself. How wonderful! The poll asked what the legacy of Helen Clark and Michael Cullen would be. If that is not a case of: “Well, we’re off now folks. How will you remember us?”, I do not know what is. They will not be remembered for this Budget.

So what are the public saying? Shane Jones commented on what people are saying, but clearly he is not listening. They are not saying what he thinks they are saying. The public of New Zealand are saying they have become tired. That is what they are telling this Parliament, but what do they mean by “tired”? I have here some quotes from people. “Tired” says: “The last financial year I earned $120,000 through a lot of hard work and overtime, but $40,000 of this went to Dr Cullen through tax. After paying increasing rates and petrol taxes, putting food on the table, paying for my children’s education, and other Government expenses, I will be expected to find more money to put towards saving, but not till it’s been taxed first. I thought that having a good job and investing for our future was a good thing. But the more you earn, the more the Government takes. It’s no wonder some people choose to just stay on the benefit, have their rent paid, food, debt, travel, etc. all paid for by the Government. Australia is looking really, really good.” We all know that heaps of people are heading off to Australia. I think the tally is up to about 700 a week, but can we blame them, after seeing this Budget?

I would like to pick up on the comments of my learned colleague Eric Roy about this Budget and what it actually does for farmers. He said that Crown spending will rise from $53 billion to $65 billion in 2010-11, and this growth in spending will continue to keep pressure on the economy. He said that other disappointments for farmers were the Government’s decision to abandon movements in thresholds in personal income tax rates, and the imposition of another tax on fuel, including diesel. Although State highways and public transport continue to get big funding increases, the funding of rural roads continues to decline.

Craig Macalister, tax director of the Institute of Chartered Accountants, estimates 115,000 partnerships and sole traders will be missing out on these latest company tax cuts. He said: “This kind of structure is particularly popular for rural-based businesses and farmers. Business tax rates should not be changed in isolation, especially in the New Zealand context. We’ve got a large number of sole traders and partnerships operating in New Zealand, and lowering the company tax rate does nothing for them.” He went on to say: “But there is a real cost, particularly for New Zealand farmers when it comes to moving assets from one entity to the new company. Assets needed to be realised when moved over to the new company—which could mean tax being levied on profits when they were transferred. This might not make much difference to a sole-trader painter or builder, but for a farmer this could mean paying tax on hundreds of thousands of dollars of profit being realised on the livestock.” Do Government members understand any of those implications? I do not think they appreciate the huge contribution that the agricultural sector makes to this country.

I have another quote from the public: “Flown the socialist coop to Singapore—It is little wonder after Cullen’s smoke and mirrors Budgets, that many of us have left the country. This week’s effort from the finance Minister provides no further motivation to stay or return. After more than 40 years grafting in my homeland, I now work in a country with a low tax rate and an economic optimism that is no longer visible in New Zealand. What a relief it is to be rewarded for personal effort, rather than having a nanny State grudgingly offering small crumbs of gratitude.”

And nanny State it is. Just the other day I heard an elderly couple say: “Well, if people are going to buy their own home, perhaps they could ask the Government what house they should buy.” The Government is telling them how to do everything else—not to smack their children; “save this” and “do that”. Perhaps it should be telling people how much to spend on their groceries at the supermarket. This is nanny State par excellence, extraordinaire; call it what you will. The Government’s actions are certainly driving people out of the country or causing them to want to see the back of this Government and vote for National. We will give them that opportunity. We have some vision; clearly this Government does not. We can see that, because it is trying to pinch all our policies—[Interruption] Oh, yes, our charity policy.

Hon Mita Ririnui: Ha, ha!

SANDRA GOUDIE: The member may laugh, but the New Zealand public are not that dumb.

I shall quote the view of George Lim: “This Budget is not worth reading. Wait for the one next year! That should be interesting. This Government has been in power too long, and besides continually displaying their arrogance they have gone totally deaf to public opinion. Replying to criticisms both from the Opposition and the public, Cullen’s reaction has frequently been to insult those as either totally stupid or just plain dumb.” That is George Lim’s opinion of this current Government.

The Government is not listening to public opinion. It just ignores it. Look at its Therapeutic Products and Medicines Bill. There is huge public opposition, but is this Government listening? No, it went headlong into signing that agreement with Australia. Annette King really did the business on that one. There was no proper consultation with the New Zealand public through the Parliament, or whatever. She just went ahead and did it. What about the smacking legislation? The Government totally ignored public opinion on that one, as well.

Then someone signed “Gunner” asks: “Why didn’t Labour offer a personal tax cut in the form of the portion we are required to invest in KiwiSaver? Many families can’t afford to contribute that percentage, as they are facing higher mortgage costs, petrol costs, and increases in water rates and council rates. This sort of cut would mean Labour would still maintain their Stalinist control of our bleak lives, and the country would save more as KiwiSaver would be compulsory and free.” He is wanting, obviously, to get rid of this current Government—and rightly so, let us face it.

A comment by “Wellington” states: “1.6 percent growth in 2009 is an absolute disgrace, and Cullen and Bollard should resign immediately. The only creativity that Cullen can muster is how to cynically plan to buy votes to maintain a lame administration.”

We know that Cullen has no vision. We know that all he can do is to be cynical. Well, he has reached a dead-end street; he will be off the roads very, very soon because he is not getting warranted or registered for his vehicle, in the next year. He is out; we will take him off the roads. He will have no rubber left on his tyres by the time the next election comes.

Someone called Peter says: “The concept of a savings scheme that has both a Government and employer top-up is nice. Finding 4 percent of your gross income to spare to pay the required contributions is another matter, especially in the face of inflation fuelled by out-of-control public sector spending. It’s not going to get much voter approval. Labour are on the way out.” With that, we absolutely agree. In the famous words of Donald Trump, is it not—

Chris Auchinvole: Yes.

SANDRA GOUDIE:—Chris Auchinvole, Chris Auchinvole, Chris Auchinvole; I did manage to squeeze his name in there three times. I would like to be able to say to them: “You’re fired!”.

“Kiwi John” says: “The Budget proclamation says it all. This Government’s management of the economy will ensure that real gross domestic product growth will slow to 1.6 percent in the March 2009 year. Banana republics are doing better than this.” This is what members of the New Zealand public are saying. They know. And what comes after a banana—a lemon. That is what he is saying—get rid of this outfit before it is too late.

Time after time members of the New Zealand public are saying that this is a bad Budget, that it does nothing for New Zealand. There is no vision, and there is nothing in it for the bulk of the population. I went to a Grey Power meeting and members asked what was in it for them. They cannot wait for the day to see the back of this Government, and I will applaud that day.

Hon MITA RIRINUI (Minister of State): That member just spent the last 10 minutes quoting other people. In other words, she does not have an original idea of her own. But I have to admit that her speech was very happy and animated—very animated. There is a reason for the high level of animation. You see, those members have spent I do not know how much of taxpayers’ money standing in this House, condemning Michael Cullen’s 2007-08 Budget. They are very happy about it, because they think, and that particular member thinks, that New Zealanders have short memories. Well, they have not.

New Zealanders remember the National Government of the 1990s, and they will never forget. Members of that party should not stand up in this House and talk about low wages. Have they forgotten the Employment Contracts Act, where they deliberately took away the right of negotiation for New Zealand workers, or how they drove down wages to the level where families were actually struggling, on a day-to-day basis, with no relief whatsoever?

Bob Clarkson should appreciate what I am saying, because Tauranga during the 1990s had the busiest food bank in the entire country. It was supposed to be the most affluent city in the country, but it had the busiest food bank. So I wonder what National members have to say about that—that is their legacy to future generations.

They talk about low wages. Well, the Employment Contracts Act made sure that wages were low during the 1990s, but this Government has attempted to lift the household income of the average family to a suitable level. But it will take time. Members of that party cannot stand up in this House and condemn this Government for its positive efforts.

I want to acknowledge this Budget. It has been described in my area of Tauranga, or the Bay of Plenty overall, actually—and Bob should know this—as being futuristic and supportive of the development of our families throughout the country. I heard some very scathing comments about Bob Clarkson earlier on, but I cannot say that I support those comments. He is pretty well known in Tauranga, but he is becoming less and less known as time goes on.

Bob Clarkson: Oh, rubbish!

Hon MITA RIRINUI: He knows that. He will have to lift his act if he is to survive the next election. But I hear from within National Party ranks that that will not happen, anyway. He is on his way out.

David Bennett: How is your seat going?

Hon MITA RIRINUI: Oh, David Bennett made a noise—was he not over here? I have also listened to what the Māori Party has had to say in these debates over the 2007-08 Budget. I am very disappointed in the contribution by the member from Te Tai Tokerau, Hone Harawira. He actually stood in this House and quoted me incorrectly in terms of the commitment of this Government to Māori health. I told him that he had misquoted me; in fact, I did not make any such comment on Radio Waatea. As he left the House he said that he was going to check, and that he would come straight back and apologise to the House if he was wrong. He is wrong, but he still has not come back and I am still waiting. So if he is listening right now, I tell him that I am waiting. He had better get down here. He has 35 minutes.

The previous Labour speaker, Dave Hereora, touched on a range of issues in the Budget for Māori, particularly the Treaty settlements process and also Māori education and Māori broadcasting. Is it not interesting that a party that deliberately established a Māori television network in the 1990s to fail is now condemning the great efforts by this Government in terms of its commitment to Māori Television? Māori Television has been recognised in this year’s Budget, and its channel is being valued by almost all New Zealanders—Māori and non-Māori together. So that is one of the positive initiatives that this Labour-led Government has introduced over the last three terms.

I think I heard Eric Roy say that he cannot see the plan in terms of Labour’s direction. Well, he has to go back to the first term of this Labour Government, and its attempts to turn round the economy and lift the living standards of all New Zealand families, particularly Māori, in the areas of employment, housing, education, health, and business. As an Associate Minister of Health, I want to touch on the commitment of this Government to Health in general. Budget 2007 commits an extra $3 billion over the next 4 years, but I will give the House some examples of Budget 2007 initiatives that are high in Māori priorities.

I have heard speakers in this House over the last couple of days saying that there is nothing specific in the Budget for Māori. I reiterate what Shane Jones said in this House—that just because it does not have a moko on it, it does not mean that it is not healthy or good for Māori. If we look at the Māori health network and the way it has developed over the last 10 years, anyway, we will find that Māori do not target Māori-specific funding to encourage their initiatives and deliver services to their communities. They actually target the mainstream Budget, and there is a reason for that. It is a much more contestable fund, and the benefits in terms of programme delivery are much more robust to meet the needs of their communities. Budget 2007, as I said earlier on, commits an extra $3 billion over the next 4 years, and will contribute to Māori health priorities in terms of increasing the focus on obesity through Healthy Eating – Healthy Action and regular checks.

Hone Harawira took it on himself to say that obesity in the far north was a very serious problem, but I am pleased to tell that member that over the last 6 years that I can recall in my visits to the far north, and particularly in visits to Māori health provider networks, this particular area of Māori health is a priority for them. I encourage him to visit them himself sometimes, because he might appreciate some of the initiatives that are actually going on within his own electorate.

As well, Māori feature very highly in terms of cancer statistics, and the Budget commits an extra $26 million to that particular area. I notice that when we launched the cancer strategy here at Parliament some 12 months ago, National members did not feel it necessary to attend and to celebrate a great initiative. That is a pity, but I encourage them in future to take notice. They will never know what Māori health priorities are if they do not pay attention to what is actually going on, and pay close attention to this Government’s commitments to those initiatives.

I want to move around the country a bit more, and move away from the far north, because Healthy Eating – Healthy Action is a commitment that this Government took on earlier in this term in areas like Rotorua and Tauranga. I have visited some very strong initiatives in the Whanganui District Health Board area, where Māori health providers are running education programmes within schools. The Fruit in Schools programme is also being promoted in the same area—so much so that the attitude of whānau and tamariki in schools is changing now to an attitude of people taking greater control over their health, and understanding that healthy eating and appropriate activity lead to better health status. As I said earlier on, we could talk for some time about the benefits of this Budget in terms of commitment to Māori.

Earlier on, Georgina te Heuheu mentioned the progress that had been made in the area of Treaty settlements. I think she did us a service when she said that progress was slow, because although the National Government of the 1990s, of which she was a member, settled only two claims, they were quite large claims. Credit has to be given for that, but 9 years have passed and people tend to forget and to look forward. I wonder whether members opposite—if they are so concerned about progress in the Treaty claims settlement area—will be supporting all the settlement legislation that comes to the House. I can see that Chris Finlayson is quite keen to do that. I know he has a bit of a track record as far as the Ngāi Tahu settlement is concerned, so we look forward to his support in the future, and also to that of his select committee colleagues—the Hon Tau Henare and the Hon Georgina te Heuheu.

There is a commitment by this Government to attempt to complete all Treaty settlements by 2020, and there has been an incredible commitment to support the Waitangi Tribunal to ensure we are able to achieve that. This is a very difficult policy area, as all members of the House will appreciate. Although from time to time negotiations can be slow, or even stall to some degree, there are good reasons for that, and this Government does not want to pressure any group into entering a Treaty settlement it is not happy with. The majority of members opposite have no idea what a Treaty settlement looks like, or know too much about the process in terms of getting claims settled, but, as I said, I look forward to their support in the future. Kia ora tātou.

CHRIS AUCHINVOLE (National): Having listened to the previous speaker, and indeed to the speakers before that from the other side of the House, I have for members a very apt quote from Oliver Cromwell, who called himself Lord Protector, and who seems to be a model for the modern Ministers on that side of the House. It is a quote we can apply to the present Government. It is: “You have been sat too long here for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go!”.

I rise to join in the Budget debate, which is the second reading of the Appropriation (2007/08 Estimates) Bill. What is the best way to describe this Budget? It is a sad Budget. It is a bad Budget. It is a mad Budget. It is a dad’s Budget. It is an “Ever been had?” Budget. It does not really do what it could have done, and that is very sad indeed.

If we look at why it is sad, we see it is because—I am sure—it represents the best efforts of the present Minister of Finance to produce what he thought would be received as a spellbinding Budget. Well, the only spell it casts over the New Zealand economy and New Zealand society is one of mediocrity.

Indeed, when the Labour Party public relations company is asked, and analyses, what the legacy will be of Dr Cullen’s and Helen Clark’s governance, I guess that ultimately history will judge it as a long period of mediocrity. That is what this Labour Government likes, that is what it enjoys, that is what it produces, and that is what it is comfortable with. The only trouble is that it presumes everybody else will have the same attitude towards it—that we will be just as enthusiastic as it is. But the people are not enthusiastic, so this is a sad Budget.

John Hayes: Deeply depressing.

CHRIS AUCHINVOLE: Well, this Government does think it knows best. Again, though, it is a sad Budget because it represents an opportunity lost—the opportunity to have a Budget based on production and a productive economy, which is what National would have produced. It is sad that the present Minister of Finance has worked so hard to achieve so little. I think I have said before that in my mind Dr Cullen is to Helen Clark what Hugh Watt was to Norman Kirk: he does the work and she allocates the blame. The trouble is that for all the work that has gone in, the result has been one of sad mediocrity.

In the last 6 years there was a time when tax cuts were an opportunity to be had. There was a time when infrastructural spending was affordable. There was a time when the gap in the top half of the OECD could have been closed. The opportunities were there, but they have been lost, and we are now heading in the wrong direction. All those opportunities are presented only for a while. Although I would never pretend to be an economist, I have been involved in business for long enough to appreciate that when opportunities do present themselves, one should not expect them to stay around if one does not take advantage of them. That is what has happened to this particular Government in this particular Budget.

Like other speakers from this side of the House before me, I join in saying that this Budget is for a wind-down economy, for a retiring economy, and for a country of future retirees, without doing anything for present retirees. It is using the levers wrongly, and I suggest that Dr Cullen and his Associate Ministers have pulled the levers and opened the trapdoor under their own feet.

John Hayes: Pulled the plug on the taxpayer.

CHRIS AUCHINVOLE: Quite right. The sad thing is that the whole country now falls through the trapdoor. So it is a sad Budget.

But it is also a bad Budget. Why is it a bad Budget?

Chris Tremain: Why is it a bad Budget?

CHRIS AUCHINVOLE: I will tell the member. The reason is that although it is a time of pretending to increase export opportunities, the reverse appears to be happening. Entrepreneurialism does not respond to the endless proclamation of regulations. Entrepreneurialism measures risk, timing, and mood, and moves fast to achieve those opportunities. I am not sure whether New Zealand wants the Government to be particularly entrepreneurial, but I will tell members that this Government is not, and it has not been over a period of tremendous entrepreneurial opportunity for this country’s development.

Let us look at the country as a business.

Christopher Finlayson: They hate business.

CHRIS AUCHINVOLE: As Mr Finlayson says, the Government hates business. We have just been through, say, 6 years of larger cash incomes than any Government has ever had in New Zealand. To put it in a business capacity, if one has a small business, that business has just done far better than it has ever done before, year on year. So surely that is the time to invest in the business, to improve its infrastructure, to enhance its assets, and to use one’s capital to maximum advantage. Has this Government done that?

Hon Members: No!

CHRIS AUCHINVOLE: Has it done it? Well, the infrastructure is not particularly rosy in terms of roading, health, or, indeed, schools. And, please, do not even allow me to start talking about the Grey Valley school changes introduced by the Hon Trevor Mallard. He could not even get it right to fix a school in a small community of a few hundred people. Lord knows what would have happened if he had had his way with a waterfront stadium. Even in things like conservation, the West Coast - Tai Poutini conservation area still lacks a strategy after 11 years of being told it should have one.

Christopher Finlayson: How long?

CHRIS AUCHINVOLE: Eleven years, I say to Mr Finlayson. This is a bad Budget because over the entire period of well-being and improved commodity prices, Labour has treated the economy as a cash cow, regularly milking it. It has missed so many opportunities.

So it is a sad Budget and it is a bad Budget, but it is also a mad Budget.

Chris Tremain: Why is it mad?

CHRIS AUCHINVOLE: It is mad because savings alone do not do much. If we look at Japan, which has been through a period of deflation for decades with huge levels of savings, we see that it did not produce productivity or profitability. Let us go back to the little company analogy. If one has a little company and puts all of its money into the bank, how on earth will it expand its profitability and earning capacity?

It is a sad, bad, mad Budget, but it is also a dad Budget. I use that term because it is a sort of elderly father’s Budget that one might do for younger people. It takes no account of the sheer vibrancy, the enthusiasm, and the energy of modern, young New Zealand, which wants to get into business. It simply says: “No, no, put it away so that you can use it for your retirement well-being.” Surely retirement should not be the nirvana of success. Surely it is a wind-down after a great period of success. It looks to me as if this dad Budget—with dad having grey hair—is denying a whole generation, or perhaps two younger generations, the opportunity to benefit from an expanded level of well-being within their own time.

Finally, it is an “Ever been had?” Budget, because it puts the money into a situation where one cannot use it. Fifty percent of workers get nothing from the Budget. The working poor get to subsidise their better-off workmates and they probably will not get pay rises or tax cuts ever. They have been had. Those nearing retirement get nothing, and everyone gets low-quality public sector spending. Indeed, a new spectre was introduced by Gareth Morgan, writing in the Press. He stated that the Government should make KiwiSaver safe, before savers are seduced by tax benefits and Government subsidies, and protect them from fund managers contracting out of fiduciary positions of trust.

The tide will continue to change. The tide is very much against Labour. The tide will continue to ebb and flow, but the flows get stronger and Labour’s ebbs get weaker. The most tragic thing about this Budget, though, is that ultimately it will fall short of the expectations of its own author. I am sure that in putting this Budget forward it was seen as protecting the people of New Zealand.

Dr Cullen talks of the redemptive power of the State. I am put in mind again of Oliver Cromwell, Lord Protector of the State. The pamphleteers, after Cromwell started to do Budgets, wrote that the Protector was King spelt big, and that that was a Protector’s Budget. I wonder whether Dr Cullen might reflect on Oliver Cromwell’s plea to the intransigent Scots—and I will cut out some of the quote that might be offensive—when he said to them: “I beseech you … think it possible you may be mistaken.” So, as a Scot to the self-proclaimed Protector, I echo that back and I beseech Dr Cullen to consider the possibility that in this Budget he may be mistaken.

Hon NANAIA MAHUTA (Minister of Customs): Sad, mad, bad—Chris Auchinvole summed it up. That amounts to what National’s policy is about. He summed it up when he said that all the solutions the National Party had were sad, mad, and bad solutions for this country. This Budget is a great Budget. It is an excellent Budget. It is forward-looking and it is investing in all the right places. This Budget secures small steps forward for long-term gains. What do we have from members opposite? They have nothing but sad, mad, bad solutions that will not work for this country.

This Budget builds on gains over time. Since 1999 this Government has continued to make a difference in the lives of real people, real families, and real communities, who continue to gain benefits and opportunities under a Labour-led Government. What is the solution from Opposition members? All they can offer are sad, mad, bad solutions. Instead, the Government wants to ensure that every New Zealander, every family, has real opportunities and can walk confidently into the future. This is about having a strong economy. It is about ensuring that we have a confident national identity. It is important that we continue to care for our families and for all members of our communities, young and old. That is what a Labour-led Budget is about—not like that of the Opposition. The Opposition’s solutions are sad, mad, bad solutions that will not work for New Zealanders.

Let us summarise—let us look at how we propose to go forward. It is about driving the economy forward. Dr Cullen made a very fine speech on Budget day when he set out an agenda about how that might be achieved. We are committed to globally competitive firms, so growing that competition is really important. How might we do that? One of the things Dr Cullen has set out is a 15 percent tax credit to promote investment in research and development. We know that we have to make a fundamental shift in the way we do things to ensure that we are competitive and have high-value gains in terms of our export sector. So the 15 percent tax credit to promote investment in research and development will move some way towards that. The Budget is a forward-looking Budget that recognises that the way we can make a difference in terms of supporting growth in our country is to invest in this area—a big research investment to transform our economy and make a difference for all New Zealanders.

The Budget invests in world-class infrastructure. A lot has been said by former speakers about how we propose to do that, but these are some of the ways. We want to have a sustainable rail network. There is $600 million for upgrades to Auckland and Wellington passenger rail, including the electrification of Auckland rail and the replacement of infrastructure in Wellington, which is fantastic. The Budget is forward-looking. We are trying to ensure that we can have a sustainable option in terms of transport in our two largest cities. A whole lot of changes also ensure that we are creating greater funding certainty for transport. Dr Cullen has proposed a regional fuel tax to be able to fund transport projects. That is forward-looking, and this Budget ensures that regional economies can continue to work positively in terms of growth opportunities in their areas.

This is a good Budget. We propose to develop innovative and productive workplaces that are underpinned by high skills and education. A lot can be said of this area, but I say in particular that it is under a Labour Government that we recognise we need to invest in the skills of every New Zealander. For far too long, through the neglect of the previous National Government, there was no concern about increasing the skills of people in our workforce. Labour cares. We know that that has to be done, and we want to ensure that New Zealanders have opportunities to work in our economy and businesses.

So what have we done? We have provided $76.3 million in operating funding over the next 4 years to meet skills shortages, and to raise skill levels within the workforce. That will make a real difference to young people in particular. Over the next 4 years $53 million will be put into industry training, $15.8 million will be put in to support industry training organisations and to help them respond to industry needs, $7.5 million will be put into operating funding, and $2.2 million in capital will be provided for the development and implementation of national assessment tools for adult literacy, numeracy, and language. More important, it is in this area that mature Māori and Pacific workers will benefit. We know the appalling issues around numeracy and literacy, especially amongst the more mature in the workforce. This is a case of investing in the right places, because we are saying that people in our workforce need to be invested in, in terms of their skills and training, and literacy is fundamental to that.

This is a good Budget because it sets ambitious targets by investing in environmental sustainability and sustainable business, and makes a large investment in warmer and healthier homes, just to name a couple of areas. Why? Because that can make a fundamental difference to people’s lives. How many of us know old people in our communities who have health problems that are exacerbated by poor insulation in their homes? Retrofitting in our communities has made a difference to old people in particular, and to young families, especially in relation to respiratory issues.

This is a good Budget—it is forward-looking. It sets out opportunities that make us think as a nation about where we are going and how we can confidently build and secure our future. The biggest part of this Budget, I think, and one of the things that Dr Cullen will certainly be recognised for, is his attempt to push our thinking, and push every one of us as New Zealanders, into a savings type of mind-set. That is not easy for everybody. I am sure that a lot of people in this room might not have come from a savings background, and others could have had quite a background of being savers. But I know a lot of New Zealanders will be pushed and stretched a bit more in what they have really thought about by this. The Budget is forward-looking and ambitious. KiwiSaver provides a real opportunity for New Zealanders to invest in their future and provide a secure future for themselves and their families. The investment in that future, in itself, will speak multitudes, because we know that far too few New Zealanders actually save. So KiwiSaver is a really great opportunity for us all.

We could go on about other parts of the Budget in very positive ways, but I really want to focus on what I think will set a platform to improve Māori development in particular. The way out of poverty has to be through education. If people are well-educated, they can walk confidently into the future. So a Labour-led Government asked what was happening in this area, and what it could do.

We needed to lift participation rates in early childhood education. One of the things that we did at the very beginning was to initiate a participation project to ensure that we were targeting areas that would help lift Māori and Pacific Island education in that area in particular.

Now we are starting to implement opportunities to increase early childhood education. We have increased the subsidy rate for kōhanga reo, we are moving towards free early childhood funding rates, and we are ensuring that those funding rates recognise quality of service by having teacher-led services, which is really important. But we are also increasing the number of teachers in new entrants’ classes. We are providing 702 additional teachers, which will reduce the ratio of those classes to 1:18. That will enable fundamentally improved foundation-learning opportunities for those young people.

In particular, Māori and Pacific Island students will undoubtedly benefit from this opportunity, because there can be a greater focus on their learning outcomes and on increasing their potential opportunities going forward. We have increased funding for wharekura and schools in general. We are providing greater support for schools in terms of extra staffing, especially in those hard areas—South Auckland and Counties-Manukau, in particular—because we know that the quality of the learning experience has to ensure that we have kids at school. That is why we have invested more in the district truancy services in areas where there are high truancy rates. We have ensured that we are putting quality teachers in front of our kids. We have the Te Kōtahitanga programme, which looks at improving the way in which teachers and young people interact to improve the quality of that learning environment.

These are all the types of initiatives that will continue to add to the learning opportunities of young people growing up in New Zealand but, more important, that say to every young person: “You matter; your future matters; we care.” What do we have from the Opposition? We have sad, mad, bad solutions that will not work for New Zealanders.

DAVID BENNETT (National—Hamilton East): Today we saw the real intentions of the Labour Government. Today during question time we saw Bill English get Labour in a corner and we saw its true colours. Bill English asked which Government services will be cut by this Labour Government. Which health and education services will be cut for a billion dollars in tax relief? The Government could not answer. Michael Cullen could not answer. His mind was working overtime. He worked out that if he answered that question, that would destroy Labour’s campaign in the next year, it would destroy its arguments made in the last campaign, and it would show the true colours of Labour. Labour people say one thing and do another. They are not true to their word, and they are not true to the New Zealanders whom they are supposed to be governing in this Parliament.

Bill English found that out today. The public saw that today. The media saw that today. The backbenchers in Labour saw that today. Michael Cullen is in his office, knowing he is in trouble. He can never use that argument again. There can be no excuse for not having tax cuts in the future. Tax cuts are part of what a Government should deliver, and what National will deliver when we are next in Government. Labour can say all it likes: the reality is that the people want tax cuts, the people need them, and the people will get them.

This Budget has been disappointing for even the most hardcore Labour supporters. Even Matt McCarten has been writing in the paper how disappointed he has been with the Budget and the Labour Government. I shall quote: “The breathtaking paradox is that under a workers’ government,”—supposedly, the Labour Government—“corporates get tax cuts, while workers effectively receive a tax increase. The tax cuts for businesses could have been used to fund electric trains in Auckland, solving the infrastructure and transport problems in our biggest city.” That was Matt McCarten. He is on one side of the line of the rail network; he is on the left of any argument and he is saying that Labour has forgotten its own people.

Labour has stomped on the people who voted it in. Labour has ignored the wishes of its constituents by giving tax cuts to the rich. That is what Labour members have done. They have given only a corporate tax cut. Why did they not give a tax cut to ordinary New Zealanders? Why did they not do that? Why did they not make it a compulsory scheme and give a tax cut to all salary and wage earners?

Hon Member: Why not?

DAVID BENNETT: Because Labour members are not that smart. They have to rely on the National Party to give them policy. They have to rely on the National Party to go out there and say that the company tax rate should be reduced from 33 to 30 percent. It takes them about 4 or 5 years to work out what that actually means, but, after that time, they can dress it up and use it in their own way.

The policy on charities was another example of theft and stealth by the Labour Government. Those members took a policy that we had gone out and sold to the public of New Zealand. It was a policy that was being received well and that people were getting in behind. Local churches and local sports organisations were looking forward to that policy. It was the way they could get under way building programmes that had been sitting there for years. It was the way to enable people to donate, with the generosity that we expect from New Zealanders. National was going to give them that opportunity.

Chris Auchinvole: But what happened?

DAVID BENNETT: Labour stole it from the National Party. Those members stole it from our hands. They did it themselves. They were the great pretenders, and they said that they would deliver it.

But they did not help their own people on Budget day, did they? How can Labour members go on the hustings next year, look at their own people, and say that they have delivered for them? They cannot, because they know that they have not delivered, and they know that they never will, because they are after only one thing in this Parliament—that is, to stay in power.

Let us look at what Matt McCarten also said in that interesting article he wrote for the New Zealand Herald: “Effectively, the compulsory levy on workers for their own pensions is intended to reduce spending with the hoped-for side effects of reducing inflation. The money can be used by professional investors to buy company shares and properties. But the Government has put this money into private, corporate hands to invest in businesses—mainly overseas,”. Do members know what will happen? The same thing will happen that has happened with our Superannuation Fund. That money will go to the US stock exchange. It will take the Green Party about a year to work out that the money is buying mines and other military equipment from US companies.

But the reality is that that money will not be invested in New Zealand, because there is nothing much to invest in here now. Whatever is decent the Government owns, and whatever is left the Australians own. So there is nothing here for New Zealanders to invest in. They have to invest in overseas interests, because that is the rational, prudent investment policy. New Zealanders will lose out in that the money will not be used in New Zealand.

If the Government members want an idea, why do not they use that money for infrastructural development? Instead of making people pay another 10c if they drive through Auckland, why does the Government not actually build some roads and electrify some of the rail system in Auckland without having to make motorists in the rest of the country pay for it? All the other regions will see that opportunity and they will do the same thing now. They will all put on a 10c petrol tax because they want the ability to build their own roads.

New Zealanders will not notice that until we have a flow-on effect when the dollar drops. When the dollar drops, our petrol prices will go through the roof, and every 10c in petrol tax that we have on top of a high petrol price will hurt the low and middle income New Zealanders who have to travel to work, and who are dependent on jobs in the transport industry, anyway. They will feel it again. Labour voters will feel it again. They will lose their jobs because transport companies will not be able to afford to continue to pay those prices, and exporters will not be able to continue to use the infrastructure they need, because they cannot afford the fuel prices. And what is happening in this Government? Those members are sitting there ignoring that problem. They are ignoring it, but it will hit them and it will hit their own people.

Chris Tremain: What about lost wage opportunities?

DAVID BENNETT: There will be huge lost wage opportunities because Dr Cullen has said that there will be no wage increases. Dr Cullen has said that there will be no wage increases at the next round. Do people believe that? Can people actually believe that he would have gone to Andrew Little and said that there would be no wage increases in the next round? Forgive me, but I do not believe that. I cannot believe that that is the deal that the Labour Government made with the unions.

Debate interrupted.

The House adjourned at 10 p.m.