Tuesday, 8 February 2011

Tuesday, 8 February 2011

Tuesday, 8 February 2011

Mr Speaker took the Chair at 2 p.m.

Prayers.

Debate on Prime Minister’s Statement

Debate on Prime Minister’s Statement

Rt Hon JOHN KEY (Prime Minister): I move, That this House express its confidence in the National-led Government and commend its programme for 2011 as set out in the Prime Minister’s statement to Parliament. The year 2011 will be a very important year for New Zealand. For one thing, it will be the year that New Zealand hosts the Rugby World Cup 2011. Eighty-five thousand tourists from overseas will enjoy the finest of New Zealand. There will be a thousand events up and down the country, and, of course, the mighty All Blacks will be on display on their home turf, trying to win the Rugby World Cup in 2011.

The year 2011 is also likely to be a year in which the world grows at a faster clip than it has done in the last 3 years. It will be a year to cement in the structural changes that are so necessary for our economy. It will be a year in which we must continue to move from having a debt-fuelled, consumption-based economy to having one in which there are savings, investments, and exports. The year 2011 will be a year in which we must continue the rebuilding of the New Zealand economy—an economy that must be competitive. But maybe, most of all, 2011 has to be a year in which we do not write cheques that the New Zealand taxpayer cannot afford to cash. It is a not a year for wild promises; it is a year for good, strong economics. There is no room for “pixienomics” in 2011.

The year 2011 will also be an important year for the families of the 29 men who lost their lives at the Pike River mine. It is a year in which they deserve to be given answers, and the royal commission will have good work to do. It is a year in which we will start in earnest on the rebuilding of Canterbury after the devastating earthquake, and we will start the work on the 175,000 claims that have resulted from that earthquake. It is a year in which we will tackle some very long-term problems and some long-term issues, and in which will we turn round from the very expensive years of the previous Labour Government. The year 2011 will be a year in which we continue to work hard for the hard-fought gains between Māori and Pākehā. It is a year in which there needs to be hope and promise and aspiration. The year 2011 needs to be New Zealand’s year.

There are some very positive signs. The global economy is starting to look much stronger, and we are seeing higher commodity prices: the Fonterra auction was up by 7 percent just last week, lamb prices are starting to rise, and wool prices are starting to rise. Of course, the Rugby World Cup is likely to have a big impact on the economy, and we will have the stimulus impact from the earthquake rebuilding work. That may well be the case, but we also need to lock in the trends that we have seen in the last 2 years of the National Government. Despite the fact that we inherited books that were a complete mess and despite the fact that we had to contend with the worst recession since the Great Depression, in the 2 years that our Government has been in office after-tax wages have risen by 16 percent, while costs rose by 6 percent. That is a 10 percent net gain in 2 years. I am ashamed to even talk about Labour’s record, which was a miserable 4 percent gain over 9 long years.

There are risks, of course, to the global economy. We have seen that in recent weeks, with the risk that there will be a great period of unsettledness in the Middle East. There are also risks, of course, in China if there is an asset bubble. There are risks around the global capital markets. We saw that last year with regard to Portugal, Greece, Spain, and Ireland. There is the risk that our exchange rate will continue to rise against a very weak US economy. There is the risk—although one would not know it was there, from listening to the Opposition—that comes from a rating agency like Standard and Poor’s, which has put New Zealand on negative outlook. So the situation could be patchy, and there could be periods when it is a case of one step forward and half a step back, but overall this economy has to change from being one based on consumption and property to being one based on savings and exports.

One of the first things the Government will continue to work on is getting its books back in order. Over the last 5 years of the previous Labour Government, spending increased by an average of $2.8 billion a year in every single year. My Government has managed to pull that back to $1.1 billion a year in the last 2 years. In Budget 2011 that increase is likely to be $800 million. The message is pretty simple: we are going to spend less, we are going to borrow less, and we are going to take the pressure off the Reserve Bank and off New Zealand interest rates. Any political party that has not even got out of January before promising $5 billion worth of more expenditure, and that thinks this might help the New Zealand taxpayer, is completely wrong. We have to get our books back in order. We cannot afford the decade of deficits that we inherited from the previous Labour Government.

One of the places where we will be starting is in relation to the Public Service. New Zealanders deserve to have better value and better service. We have started to work on that. In the 2 years that we have been in office we have reduced fulltime-equivalent staff in the State sector by 5 percent. We have started the process of merging Government departments: Archives New Zealand and the National Library have been merged into the Department of Internal Affairs, and the Ministry of Research, Science and Technology and the Foundation for Research, Science and Technology have been merged into one new Ministry of Science and Innovation. But we have a long way to go. There are 80 Crown entities, all with their own boards; 38 Government departments; 70 portfolios; and 60 separate Budget votes. We are, by international comparison, bloated and inefficient. So there has to be change. We have put together a group of officials, asking for advice on how we can streamline the Public Service. There will be core principles, and they are simple: we need to ensure that, in costing less, we ultimately deliver more to the taxpayers of New Zealand. So a big focus of attention will be around the State sector.

The second thing we need to do is to move towards having greater savings and investment. We cannot, as a country, continue to have external liabilities that are at 85 percent of GDP. We cannot be in the same company as Portugal, Greece, Spain, and Ireland, and, if we are, we will know what that picture looks like. We are prepared to be responsible economic managers; the Labour Opposition, quite simply, is not. For that reason we will be looking at not only the operating budget but also the capital budget. Late last year we recognised that New Zealand taxpayers have about $220 billion worth of assets. As a Government we want to acquire $33 billion worth of new assets over the next 5 years. We have a number of options. One is to borrow more. That will not be acceptable to the rating agencies. The second option is to not build that infrastructure. That will not deliver us the jobs and the economy we want. The third option is to release some capital from assets that we already own. Through the course of this year we will be finalising our policy on mixed-ownership models whereby we will be looking to control 51 percent of Meridian Energy, Mighty River Power, Genesis, and Solid Energy.

Let us understand the tests in those models. The first test is that the Crown will always, as a minimum, retain 51 percent control. The second thing is that we will be asking Treasury to provide advice to us on how we can ensure Kiwi mums and dads are at the top of the list for buying any of the equity that we release, and that includes the $1.6 million KiwiSaver accounts. It is interesting that we as a Government want those $1.6 million KiwiSaver accounts and New Zealanders to invest in our economy and in our future, and Labour wants them to invest in Australia. That is what Labour wants; Labour does not want to let them invest in New Zealand. We will ensure that the Crown financial institutes, the Accident Compensation Corporation, and the New Zealand Superannuation Fund invest in those kinds of assets, along with iwi.

So Budget 2011 will have a focus on savings and investment, and it will take on board the information that we have received from the Savings Working Group. Again, the message is very simple: we need to own more of our own future, we need to fund more of our own upsides, and we need to have a stronger economy. Although the members on the Labour benches cannot add, the issue is quite simple. When we own $220 billion of assets, we maybe release $8 billion to $10 billion of capital, and we buy another $33 billion of assets, we will end up owning more assets over 5 years, not fewer.

The economy has to change and become a more export-led economy. We have to get away from the position we inherited from Labour, which was quite simple. It was a world where we bought more from the rest of the world than we sold to it. It was a world where, in 9 years, Labour created no new jobs in the export sector.

Hon Phil Goff: Oh, rubbish!

Rt Hon JOHN KEY: It is not rubbish, actually. It was the period when Labour spent so wildly that interest rates rose and the exchange rate rose. Maybe overall the way to test Labour’s commitment to exports is quite simple: turn back the clock to 2007, and look at exports under Labour in that year. Labour did about 10 things, and do members know what happened? Exports fell in 2007. Why did exports fall? It was because in the end, if we want to have a competitive economy we have to allow it the freedom to be competitive. We have to reform the Resource Management Act, we have to have a flexible labour market, and we have to be prepared to build the infrastructure and invest in science and innovation.

This year the Government will be focusing its attention on extending the free-trade agreements that we have been working so hard on. At the top of the list, of course, is the Trans-Pacific Partnership, which is an opportunity for New Zealand to have a free-trade agreement with the United States. We will also be looking to make further progress on our free-trade negotiations with Korea and on an exciting opportunity that is presenting itself in Russia.

The next area in which the Government will be spending and doing some more work is infrastructure. This year we will begin the roll-out of the $1.5 billion Government investment in ultra-fast broadband—not just in urban communities, but in rural communities right across the country. We will be building more roads, including the seven roads that we have prioritised as roads of national significance. That will include the Waterview Connection, which is the largest roading project to be undertaken in New Zealand. There will be more investment in public transport, in roads, and in rail, particularly in Auckland and Wellington, and the rebuild of KiwiRail and the KiwiRail Turnaround Plan will continue.

In the end, though, the challenge for the Government is to continue to build confidence in the business sector, so that it will grow, invest, and prosper. Maybe in the end that is the single biggest difference between the National Government and the Labour Opposition. We trust the private sector to create jobs. We do not think the only place where we should create jobs is in the core bureaucracy. We back New Zealanders to back themselves in order to invest and to employ other Kiwis. We will do all of this for a reason: we will build a strong economy so that we can build better outcomes, with better value for money and better services.

One area where we will be undertaking significant work is that of welfare reform. I say that one should judge a society by how it looks after the sick and the vulnerable, but one should also judge a society by how many sick and vulnerable people it creates. The Labour members do not want to talk about their record when it comes to the sick and the vulnerable, because this is what they did in 9 years: they increased the number of people on the sickness benefit and the invalids benefit by 50 percent. That is what they did. There was no mutual obligation whereby taxpayers agreed to look after others who were down on their luck, and there was no attempt to take the 200,000 children who are currently trapped in welfare-based homes and give them a better future. There is a simple message from the National Government: if one can work, one should work. But that does not mean that we will necessarily cut costs on day one; we have to tackle the difficult issues of childcare, of increasing skills, and of making sure the required jobs are there.

The year 2011 will also be a year in which we will focus on vulnerable children. There will be specific legislative changes to support children who are in State care. There will be legislation that will protect children from abuse. There will be tougher penalties for those people who fail to protect children at risk, particularly in relation to those children who face death, serious injury, or sexual assault.

There will be more progress made on Whānau Ora and on housing. Our yardstick will be how many people we can get into housing that they can afford; it will not be a yardstick of how many State houses we own. From 1 July 2011 reviewable tenancies for all new State house tenants will be a feature of our programme.

In education we will continue to make gains. This year we will spend $1.4 billion in early childhood education, which is up from $400 million a decade ago. The interesting thing is that under the previous Labour Government’s policy, it increased the spending on early childhood education—we all accept that—but there was no significant change in the number of children who were being educated, and there was nothing for those in the poorest communities. Those kids deserve to have better outcomes. This will be year 2 of national standards. We will continue to demand that every young New Zealander leaves school with the ability to read and write properly. The future of those students in secondary schools will be enhanced by our eight trade academies. We will harvest the fruits of the 16,500 additional places in tertiary education.

In health, the message is pretty simple: less bureaucracy; more front-line services. No longer do we have 81 primary health organisations; we have 46. No longer do we have the bloated numbers in the Ministry of Health or in district health boards. There will be less bureaucracy. The results that we will achieve will continue to go in the way they have done, with an increase in elective surgery. Four hundred more people per week will be seen for elective surgery—20,000 people a year.

The Government will retain its focus on law and order, on the police, and on the courts, and on making the system more efficient. We will continue to be tough on gangs and tough on hardened criminals, and to make sure that we have a focus on P.

Let me finish with this: 2011 will be a big year. It will be the time when we work on reshaping the economy, on delivering better services, and on delivering better outcomes. At the end of the year we will go to the polls and put ourselves up against the Labour Opposition, which has learnt absolutely nothing in 9 years. It has not recognised that the world has changed its shape in one way or the other. Labour is an Opposition that is in denial. We are the economic managers who are responsible and careful, and who have a plan for the future. The Opposition wants future generations to pay for more and more debt. In the end, when one is Phil Goff and one is not prepared to rule out anybody, what is the message? It is that one is so desperate for power that one does not care what one has to promise, with whom one has to get into bed, and what one needs to do. We will be the Government of responsible economic management. Labour will be, as John Roughan described it recently, the “coalition of losers”.

Hon PHIL GOFF (Leader of the Opposition): In my time I have sat through a few Prime Ministers’ speeches on their statements, but that would be the worst. That would be the worst. That was a do-nothing speech from a do-nothing Government that has sat on the sidelines while New Zealand has gone backwards. Do members know that the Prime Minister’s big claim to fame was when he began that speech? It was the Rugby World Cup 2011—all his own work! Helen Clark and Trevor Mallard got the Rugby World Cup for New Zealand. We will win that cup—and Labour was responsible for getting it.

I remember when, a year ago, the Prime Minister came into the House for the same occasion. He promised us something. He said that New Zealand would come aggressively out of recession—aggressively out of recession. I was watching the Prime Minister on television yesterday morning. Do members know what he said? He said that he could not rule out that New Zealand was slipping back into recession. Mr Key and his Government have been in office for 2¼ years, and Mr Key and his Government are responsible for this country going backwards. He came up with all sorts of figures. They say there are lies, damn lies, and statistics. Let us have a look at them.

The Prime Minister said that the rate of participation in early childhood education under Labour had hardly moved forward. Well, in due course I will seek to table the document I am holding. It shows that the rate of Pasifika participation in early childhood education went up nearly 10 percent. During the last few months I have been going around the early childhood centres for our Māori, Pasifika, and Pākehā kids, and people there are saying that Mr Key’s Government is forcing up costs while dropping the quality. In the last week mums and dads were paying $25 a week more for their little ones to have quality early childhood education—and that is Mr Key’s work. Every year under Labour participation went up.

Mr Key tried to tell us that everyone was better off. The figures on wages came out last week. There was a 1.7 percent increase in wages in the last calendar year, 2010. The figures on inflation came out before that, and they show a 4 percent increase in prices last year. What is it that the Prime Minister does not understand about the fact that prices went up at twice the rate of wages last year? Then he came out yesterday with a big increase for people on the minimum wage—the vulnerable, he said. He said he would stand up for the vulnerable. Do members know what he gave the vulnerable yesterday? He gave them 25c an hour—25c an hour from the man who took $1,000 a week from his own tax cuts. He says he stands up for the vulnerable, and he gave them 25c an hour.

I wonder about those vulnerable people in McGehan Close and the vulnerable little girl whom he exploited by taking her up to Waitangi. Where is she, where is her family, and why did Mr Key not front up on television on Friday night to explain to the people of McGehan Close why their power prices were up, why their petrol prices were up, why their food prices were up, and why they were worse off? He would not front up to answer their challenges. He exploited the little girl for Waitangi Day 3 years ago but he will not front up, just as he did not front up to the Pike River families and give them the news that he was not going to see the recovery of the bodies. That is what the families told me. They said the Government would spend $400,000 on Television New Zealand so it could cover the great man’s speech but that when the hard decisions had to be made, no one from the Government was to be seen. Those decisions were passed off to the coal company, to the receivers of the company, and to the police—

Hon Gerry Brownlee: Making it up again.

Hon PHIL GOFF: —and Mr Brownlee knows it.

The economy of New Zealand has stalled. Unemployment figures, I say to Mr Key, are up 8,000. Mr Key and Ms Bennett told us that they had peaked a year ago, but they were up 8,000. Seven hundred New Zealanders—700 Kiwi breadwinners—joined the unemployment scrap heap each week over the last 3 months. What does Mr Key say? He said they were old figures. I say to Mr Key that they were the latest figures to 31 December 2010. Then he said it was just a survey. Well, New Zealand has relied on that survey for 25 years as the most accurate portrayal of what is happening in terms of unemployment.

Let us look at those figures. He talks about the weak and the vulnerable. I ask Mr Key why it is satisfactory that one school-leaver in four goes out of school and on to the unemployment scrap heap—one school-leaver in four. The Prime Minister talks about the vulnerable, but what about teenage Māori girls? One in two goes out of school and on to the unemployment scrap heap. What about the Youth Guarantee? What was the Youth Guarantee about? Our young people should be either learning or earning, I say to Mr Key. One in four of them should not be going on to the unemployment scrap heap.

I listened to the stuff about welfare reform; Mr Key wants them to work. Mr Key should look at the front page of the Waikato Times from Saturday. The headline states: “Where are the jobs?”. I believe in welfare reform, I say to Mr Key. The best type of welfare reform is to have jobs that people can go to. He is chasing around after the people whom he and his Minister for Social Development and Employment would like to call bludgers, but what about Petarina Slater? She is on the front page of that paper. She has had 150 job interviews, and she has been turned down every time. People in my electorate understand that. There were 150 jobs available in a supermarket, with 2,500 people chasing them.

I want to know why Australia could create 1,000 jobs a day last year when New Zealand went backwards. Was it not the boast of the Prime Minister that we would catch up with Australia? Was that not the boast of the Prime Minister? The Prime Minister will say: “But they have minerals.” Mr Key knows that our dairy prices, our lamb prices, our beef prices, our forestry prices, and our wool prices have never been higher than they are today. That money is rolling into New Zealand, but where is the plan for employment? We have had enough of the gimmicks: the Job Summit and the cycleway. In the last quarter 7,000 or 8,000 people joined the unemployment queues, and Mr Key’s cycleway created 200 jobs—200 jobs.

We want a plan from this Government that would see people back at work. Why does the Government not listen to Sir Paul Callaghan, New Zealander of the Year? Paul stood up and asked why, with our “clean, green” brand for New Zealand, we would follow a plan to mine our national parks. Why did National waste 2 years on a plan that would have destroyed and undermined our image when it should have been talking about using brain power—high-skill, high-tech, and high-wage?

I say to Mr Key that I go to the cleantech industries, and they ask what this Government is doing. It is the fastest-growing area in the world. PricewaterhouseCoopers says we could earn at least $8 billion a year from cleantech. And what is this Government doing? In 2 years it has set up a committee. It is a little bit like savings, is it not? We know we need to save in order to invest in our future. National had 9 years in Opposition to work out a plan for saving. It has had 2 years in Government. After 9 years in Opposition and 2 years in Government, it has set up a committee. It is not good enough, I say to Mr Key. It is not good enough by a long run to have 158,000 of our fellow New Zealanders out of work. There is no plan from the Government to do anything about it.

Then there is the question of prices and wages. How can people possibly be better off, I ask Mr Key, when prices have gone up by 4 percent and wages have gone up by 1.7 percent? Mr Key said in his speech that incomes had gone up. Well, I listened to Statistics New Zealand representatives, and what did they say? They said that median income fell last year. Median income fell last year, I tell Mr Key. New Zealanders are not better off. The Government has ignored the middle-income earners of New Zealand. At best, middle-income earners stood still. Most of them went backwards.

The Government has forced low-income people below the poverty line. The only people who benefited from the National Government’s tax swindle were the top 10 percent, who got most of the money. That is the truth. [Interruption] That is the truth and Mr Key knows it. The people who go through the supermarket checkouts know it, and they will not listen to the National Government’s spin on this issue. They know when they are not better off because of the policies of this Government.

Mr Key talked about the block of cheese. Do members remember the block of cheese? I ask Mr Key how much that costs now. Does the Prime Minister have any idea?

Rt Hon John Key: Less.

Hon PHIL GOFF: “Less.”, he said. It has gone up 20 percent in the last year—20 percent in the last year. What about food prices? They have gone up 5 percent in the last year. What about power prices? I have constituents who have come to me and said they have had two letters from their power company in the last 4 months: one on 1 October, when Mr Key’s Government pushed up the price with GST and the emissions trading scheme, and another one last week to say that the power prices are going up again.

The great plan of the Government to solve our problems is to slash spending on health and education, and to sell off our assets. I wonder what the private sector investors will do when they have bought up our power companies. [Interruption] The National members say they are going to the mums and dads. What about the mums and dads who cannot put money together to save because of the rising cost of living? They will lose ownership of our assets. They will gain nothing.

Do members know what happened to the Contact Energy shares that National promised for the mums and dads? Those shares went to the big corporates. They have ended up with the big corporates. And not only that, I tell Mr Key, they have ended up in the hands of foreigners. Most of the $1.5 billion in dividends from Contact Energy does not go back to New Zealanders who once owned it; it goes overseas. That money is going overseas. It makes our country worse off.

Recently I read a newspaper article by an economist. He was asking where Mr Key is at in thinking it makes sense to sell the assets. Where is he at? The economist says we pay 5.5 percent on the debt and we get a 7.3 percent return on the investment. How does it make business sense to sell off our assets? What is the Prime Minister’s next trick when he has sold them? And he can sell them only once, and we will not get them back. Oh, hang on! We might get them back. I recall being a member of a Labour Government that had to buy back Air New Zealand and New Zealand Rail. Do members remember the National members talking about selling Air New Zealand, and the private sector—

Hon Simon Power: You sold Air New Zealand.

Hon PHIL GOFF: Yes, but we learnt. We learnt, but this National Government has learnt nothing. Labour did not sell a single asset in the fifth Labour Government. For 9 years we did not sell those assets. We had to buy them back. When National sold New Zealand Rail to Mr Fay and Mr Richwhite, they asset stripped it. They ran it into the ground. It was sold at bargain-basement prices by a National Government, and we had to buy it back. I say to this Government: “Go to the electorate in November this year and talk about selling assets—because you will listen to what New Zealanders are saying.”

Last week Mr Key arrogantly said that he did not care what New Zealanders thought. Is that not what the member said?

Rt Hon John Key: No.

Hon PHIL GOFF: Well, maybe we will table the transcript. He said that he did not care what New Zealanders thought. But New Zealanders care deeply about a Government selling assets that New Zealanders own. They care about the assets and the benefits that come back to us. Then there was that other issue: farmland. I heard something that Mr Key said that I agreed with.

Hon Lianne Dalziel: What?

Hon PHIL GOFF: Well, that is not totally surprising. He said that New Zealanders should not be tenants in their own land. I wonder why German interests bought up, in the last couple of weeks, $100 million worth of dairy farms—more than that country had spent in the 5 years previously. We are losing those assets. I wonder whether the National Government will stop the Chinese consortium from buying up the Crafar farms. I wonder whether it will do that.

I say to Mr Key that yesterday I went to Rotorua and met with a big forestry company. Does he know what they said to me? They said that what they were really worried about was whether the American interests that own the cutting rights to the forests would think it was more profitable to sell the logs overseas, without processing them in New Zealand, rather than keep the 290 jobs that the company provides for people in Rotorua. That is what New Zealand enterprise is worried about. This Government has mouthed the words and the rhetoric but it has done nothing about the sell-off of New Zealand to overseas interests.

This Government has failed. It has failed to create growth, it has failed to bring unemployment down, it has failed to keep people’s incomes ahead of the cost of living, and it has failed to make New Zealand a more equal and a fairer place. For 9 years a Labour Government reversed the trend to a more unequal country, and we treated New Zealanders inclusively. We brought in the Working for Families package, and there were decent rises in the minimum wage. But Mr Key has turned the clock back to make this country less fair, less equal, with fewer opportunities for every New Zealander to make the most of what he or she can contribute to this country.

After 2¼ years, this is Mr Key’s responsibility, and this election will be about restoring to New Zealanders a fair go, making sure that people pay a fair share and get a fair share in return, and making sure we do not attack the vulnerable—our children at early childhood education, whose parents are paying higher fees; adults who want second-chance education in adult and community education; and the old people from whom Mr Key has taken the home care that enabled them to live in dignity in their own homes. There will be a Labour-led Government and we will return fairness to New Zealand. We will return growth, living standards, and jobs to this country.

METIRIA TUREI (Co-Leader—Green): I am here for my father. I am here for my father and for the many thousands of New Zealanders just like him. My father was an ordinary guy from Palmerston North who just wanted to have an ordinary life. He wanted a decent job, a decent take-home pay, and he wanted a secure home where he could raise his family. What he got was a lifetime of hardship, and he died of a stroke at age 48—at just a handful of years older than I am now. I dream of a world in which my dad is still alive. What would have given my father a better chance at a long and satisfying life? What would have made his story more like mine?

Like my dad, I did not do too well at school; I left school at 16 with no qualifications and few prospects. I worked here and there. I spent time on the dole. After a few years, I found myself as a solo parent on the domestic purposes benefit. I had the good luck to go to university and I got my law degree. I used the training incentive allowance to help with my study costs. I shared childcare with family and friends. I sometimes had to use the special-needs grant—do members remember that—to pay my power bill and to buy food when things got really tough. I got support when I needed it. My dad did not, so I am here for my father.

I want every man, woman, and child in this country to have the chance of a good, ordinary life. We can do so much more to help New Zealanders just like my dad. We can build a fairer society, an equal society that does not require the sacrifice of our people, or the sacrifice of our environment, to an economic dead end.

The Green Party is known as a champion for the environment. We love our country, and we want to protect it. We are passionate about protecting our rivers, our land, our forests, and our oceans, but we also want to look after all New Zealanders, and today that is my focus. How do we mind the gap between the haves and the have-nots? What can we do about inequality in Aotearoa New Zealand? The first thing we can do is make sure that everyone gets a fair go at decent work with a living wage. My dad was a labourer all his life. He worked on farms and in orchards, he shot deer, and he worked in a bread factory, but in the 1980s the work dried up. There were 300,000 people unemployed, just like him. As time went on, it became harder and harder for a 40-year-old, working-class Māori man to find work. Poverty took everything from my dad, including his home.

Here we are, just a couple of decades later, with 156,000 New Zealanders unemployed, 100,000 New Zealanders underemployed, and 180,000 New Zealanders working at or near the minimum wage. The economic reforms of the 1980s failed my dad, and those same ideas, those same plans, are now failing our children and grandchildren. We have hundreds of thousands of New Zealanders struggling to survive, just like my father did.

Wage growth has kept up with the rising cost of living—John Key talked about that—but that is good news only for those who still have their jobs. John Key’s talk simply hides what is actually happening to families today: his Government is not protecting families from the rising cost of living.

Unemployment has increased by 50 percent since John Key took office—in just a few short years. Families affected by unemployment are falling behind at the fastest rate, unable to find jobs while having to meet the rising cost of fuel and food. The Government’s answer to job losses in the private sector has been to cut jobs in the public sector. That is the extent of John Key’s Government’s jobs plan. The Prime Minister took great pride in pointing out today that his Government has reduced the number of full-time staff positions in core Government administrations by 5 percent. In reality, many of the workers whom John Key boasts about sacking will be driven to the wall. That will mean less spending and it will mean more job losses, and John Key boasts about those job losses.

Hon Tariana Turia: I raise a point of order, Mr Speaker. My apologies to the member for cutting in on her speech, but there is somebody up behind us who is constantly shouting things and making it very difficult for us to hear. We do want to listen to this speech.

Mr SPEAKER: I appreciate the honourable member’s point. In fact, I particularly ask members on the Government benches to please show a little more courtesy to the House. There are so many conversations going on, including one right now on my right. The member is clearly taking no notice of what the Speaker is saying, whatsoever. I ask the Government whip to make sure members stop the endless, quite loud conversations. To the person interjecting regularly down the back, please show the House some courtesy. When members are listening and interjecting, that is one thing, but when they are just carrying on loud private discussions, it is discourteous. I apologise to the honourable member.

METIRIA TUREI: Thank you Mr Speaker. Tēnā koe e te whaea. John Key is boasting about job cuts. Our minimum wage in this country is so low that Kiwis who work full-time still need top-ups from the Government just to cover the basics—food and rent. The current take-home pay for a 40-hour-a-week job on the minimum wage is $409 a week, and in April it will go up by about $28. Meanwhile, the average rent in Auckland is $416. One simply cannot support a family on 400-odd bucks a week—one cannot. The minimum wage must go up to $15 an hour as soon as possible. The minimum wage must go up immediately to help the poorest and most vulnerable families in our community. We know that lifting the minimum wage is good for the economy. There is an increased demand for goods and services, because people on low incomes spend most of their money. We know that lifting the minimum wage would also save the Government money. It would save a billion dollars in the Government’s social assistance budget. But instead of saving this money, we are subsidising employers who pay low wages. Their workers will put in 40 hours a week, but they will still need help to pay the rent and put food on the table. Businesses who employ the most low-wage workers are big corporates: supermarkets such as New World, and fast food outlets such as Burger King. Last year Foodstuffs supermarket companies made $16 million in profit while their minimum wage workers continued to struggle.

My dad was a kind man, he was a decent man, and he was a peaceful man whether he was in work or out, just like the thousands of New Zealanders who now find themselves out of work. John Key’s Government suggests those people are bludgers, but New Zealanders use support when they need it and they move on when they can. That is what I did, that is what my dad tried to do, and that is what thousands of New Zealanders are doing today. About three-quarters of those people on the dole are on it for less than a year.

John Key has outlined major reforms to welfare that will severely hurt families and children. I want to describe what that means in a real life. If John Key’s reforms were in place when I had become a solo mum, I would have been forced to work in an unskilled, low-paid job instead of being able to care for my daughter. Because I had no school qualifications, John Key would have considered me unsuited to university, and I would probably never have been able to go to university, let alone go to law school. Even if I had made it as far as the university door, with no training incentive allowance I simply could not have made ends meet while I studied. That is the ladder of opportunity that Paula Bennett kicked out from behind her. That is the ladder of opportunity that John Key would have taken from me and my dad’s first moko. Our vulnerable families are not the enemy, I say to Mr Key. They are families just like mine, and they are families just like yours.

Since the Green Party arrived in Parliament we have said that benefits must go up, and we are firmly opposed to the benefit cuts that are signalled by the Prime Minister today. Instead of suggesting that we need to punish the victims of the recession and punish the victims of poverty, let us talk about how we can help them.

John Key talks about the importance of early childhood education, but his cuts in that sector have already seen parents pulling their kids out of early childhood education because they cannot afford the increased fees. There is no better investment in our families and our children than in early childhood education. For every single dollar that we spend—every dollar—in early childhood education, we save up to $17 in health costs, justice costs, and other social costs. That is a better return than a hundred roads of national significance.

John Key talks of the 220,000 children who are dependent on benefits as if that is their own fault and as if they are to blame. We can help by extending to those families the Working for Families support to help them pay rent and power bills and pay for food and warm clothes. Instead we are staring down the barrel of changes to welfare that will widen the gap between those who have the most and those who need the most.

We will pay for John Key’s mistake in hospital bills, in new prisons, and in future welfare payments. We will pay for John Key’s mistake in the lives we will lose to poverty.

Growing up, one of the challenges that my parents faced was finding us a decent place to live. When my parents went out looking for a house to rent, they would always send my mother. My mother is Pākehā. If my father went with her, we would not get the house, because he was Māori. One time when we were very small, my mother had managed to find us a good house. But over the next few days, the landlord came to visit and he met my dad, and within the week we had an eviction notice. We moved from that house into our car. We lived in our car for a period until we could find another home. We moved out into a house in the country. My family lived in a lot of country houses because my Dad could work on the surrounding farms and those houses were very cheap.

Housing remains a critical problem in this country. We have more than 10,000 families on the waiting list for a State home. We have exceptionally high rents. We have poor-quality rental properties. We have severe overcrowding. We have Third World rates of rheumatic fever that come from that overcrowding and cost our health system some $10 million a year. Poor housing costs lives—the lives of men and women in their prime. The Green Party has long said that a comprehensive State house building programme to increase the stock of State houses by 6,000 over 3 years is the right thing to do. This building programme not only would provide homes for our families but would create some 28,000 jobs. This building programme would help New Zealanders who need a home, help New Zealanders who need a job, and help our struggling construction industry.

I tell members that my dad would have loved a job like that—a job where he was building homes for the people and the communities he cared most about. But last year John Key cut the State house building budget by $100 million. What we have heard from the Prime Minister today suggests that he does not care enough about the 20,000 New Zealand families with chronic housing problems to bother to solve the problem. John Key aims to shuffle existing housing stock around and to push people out of their homes through the reviewable tenancies process. That will do nothing for the problem. There are not enough homes for the families who need them.

This Government’s lack of compassion and absence of solutions for our families is gutting. We can be a better country than this. There are other choices that we can make. We can help our families.

One of those areas where we can help is with power bills. It is not just rent or food that is the problem but power bills, too. One way to do that is with progressive pricing, which would lock in a low electricity price for every household up to a certain threshold of around 4,000 kilowatt hours a year. In many homes, that would be enough to keep people warm and dry at an affordable price. In New Zealand we are unique in that we still own the majority of our electricity generation assets, the big renewable projects that our grandparents built. We have the ability to look at progressive pricing schemes, which would help our most vulnerable families stay healthy and warm. Ensuring fair power prices for families is just one of the reasons we must maintain full public ownership of our power companies. Selling our power companies, as National is promising to do, will make it harder to achieve cheaper and sustainable power for those who need it the most.

MMP is also part of the solution. I know that my being in Parliament would have blown my dad’s mind—he did not live to see it. No one in this place ever talked about the reality of his life. No one in this place ever saw him as a person to whom they were responsible. No one in this place bothered to reflect that their decisions would determine the course of his life. That was until MMP allowed people like him to be here and to speak on his behalf. So in this year’s referendum I am voting to keep MMP and to improve it.

The gap between rich and poor grew very rapidly here in Aotearoa between the mid-1980s and 2000. Real incomes for lower and middle income families fell while the income of wealthy households soared. Work dried up for my dad in the mid-1980s; he died in 1995. When my dad had a stroke, he could not even get decent help from the hospital. He was disbelieved, he was discounted, and he was even dropped on the floor. This was not intentional mistreatment; it was just the same casual disregard that dogged my dad for his whole life. At the hospital in those last hours of his life, he really needed to be treated with some dignity, just as he deserved to be treated with dignity and respect throughout his whole working life as he sought to take care of his family. My dad was sacrificed to dead-end economic ideas. He did not live to see the shift to smart green economics. I wish he had, because smart green economics does not demand the sacrifice of our environment, smart green economics does not demand the sacrifice of our people, and it would not have demanded his.

Our Government plays a key role in shaping a fair society. This Parliament can help to guarantee the essentials and make sure that every New Zealand person—man, woman, and child—gets a fair go and a bit of respect. So I am here for my father, Richard Ropata Eruera Turei, and I am here for the many thousands of New Zealanders just like my dad. Kia ora.

Hon RODNEY HIDE (Leader—ACT): I wish everyone in the House a happy New Year. First of all, I express ACT’s support for the John Key - led Government and the Māori Party’s role in Government. I say, further, that like the great many New Zealanders in this great country of ours we think that we are very lucky to have John Key as Prime Minister at this time.

Why is that? It is because John Key knows a simple thing. He knows that a country, like a family and like a business, cannot spend a dollar until it has earned a dollar. That is precisely the situation that New Zealand confronts. It is also the case that, unlike many politicians, John Key has some real-world experience in the area of business and making a dollar. I say that we are lucky at this time to have the Prime Minister that we have. Before the previous election the ACT Party promised the people of New Zealand that we would support National, and we made that promise again on election night. The ACT Party has been true to its word.

But there is a lot more that we have to do, as a country and as a Government. We have to work much harder to get jobs for our young people in this country, and to provide them with opportunities. We have to do much more to lift wages in this country, so that we can enjoy the standard of living that we aspire to. It is especially important to point this out, with an election coming up.

It is also ACT’s role to tell it like it is. I know that Labour members want to live in fairyland, but let me make this point. The country is broke; there is no other way to say it. The Government is borrowing $300 million a week. Let me explain what that means. It means $200 a week for every household in New Zealand. For every family in New Zealand, the Government alone is borrowing $200 a week. Debt is set to triple in the next 5 years.

What is Mr Goff’s solution? It is to spend more. Mr Goff needs to give—and he owes—an explanation to the people of New Zealand, and indeed to the Labour Party, about where the money is coming from. If we want to see what can happen in New Zealand if we do not reverse that borrowing, we can just look at the economic and social chaos in Ireland, in Italy, in Greece, and in Spain.

It is also ACT’s role to be part of the solution in terms of addressing this nation’s problems, and that means working with the National-led Government. I am proud to say that under MMP we have a Prime Minister who has had the confidence, in election year, to set the election date already, at 26 November. That shows the trust and stability that John Key has in the support parties. He knows that we can continue to deliver good centre-right policies.

It is also the ACT Party’s job to be bold, to be courageous, to nudge National along towards doing the right thing, and to stick to its principles. We support the mixed-ownership model that National has announced, but it is not enough. We cannot indefinitely sell assets and hope to cure our problem of borrowing $300 million a week. Like a household, like a business, and like a family, we have to get spending under control. That is why the ACT Party will be bringing to Parliament measures to get spending under control this year and to take the squeeze off families and off businesses. The ACT Party believes that the Government has to live within a budget, just as everyone else in New Zealand has to.

We need to do so much better for business in this country. Business is being squeezed. Business is where the jobs come from, where the wealth comes from, and where the wages come from, but businesses are being squeezed by red tape, high taxes, and Government debt. What is the ACT Party doing? ACT is bringing to the House the Regulatory Reform Bill, which will update 13 separate Acts in order to reduce compliance costs, and the Regulatory Reform (Repeals) Bill, which will eliminate 31 Acts and will include an executive order to eliminate 206 redundant regulations.

All that is good, but it is not enough. We need to do much, much more. That is why the ACT Party has been working with National and the Māori Party on a Regulatory Responsibility Bill to set a higher standard for ourselves, in terms of bringing ever more legislation to this Parliament.

I think it is important that we do much, much better on the economic front. I think it is important that the Government gets its spending under control. But for the future we all have to do much better for education. Recently I was at a function where the Prime Minister announced a statistic that was truly horrific. It was so horrific that I had to get it checked, and I found that it was true. It showed that last week 60,000 New Zealand children started school, and, on present statistics, 12,000 of those students will leave school unable to read and to write at a level sufficient for the workplace. That is 20 percent of new entrants—20 percent.

What horrified me was that for Māori, horrifically and sadly, that figure was one in two. On present statistics, 50 percent of Māori students turning up to school aged 5 will have years and years at school, but will leave without the ability to read and write sufficiently to enter the workforce. If one wants to know the cause of crime, I think that is a big issue. If one wants to know the cause of poverty and of disparity, that is a big one. I say that I am proud—and the ACT Party is proud—to be working with the National Government, with the Māori Party, and with teachers and professionals up and down New Zealand to get a better result for those kids and our country. I believe that the parties that want to deny the facts should hang their heads in shame, because they are letting down our kids.

It will be a great year for the country. We look forward to continuing to contribute to the solution, and to not being part of the problem that the previous Labour Government left us.

Hon TARIANA TURIA (Co-Leader—Māori Party): Tēnei te mihi atu ki te whāene Pīmia We’i kua ngaro ki te pō, e takoto ana ki Waihīrere Marae, te wā’ine o Ngāpō We’i. Nā reira, e te māreikura, e te kuia, ’aere atu rā.

[I acknowledge the death of aunty Pīmia Wehi, beloved wife of Ngāpō Wehi, who lies in state at Waihīrere Marae. Farewell, noble matriarch and grandmother.]

First of all, I take the opportunity to mihi to my colleague Metiria Turei for sharing with us the story of her dad, who was a mokopuna and uri o te Kāhui Maunga nō Hiruhārama, no te awa o W’anganui. Ka nui te mihi rawa atu ki a koe, Mētīria.

[a grandchild from Jerusalem and the W’anganui River, and a descendant of the Cluster of Mountains. I acknowledge you greatly, Mētīria.]

The Māori Party implores this Parliament to wake up to the age-old crisis associated with the lack of social investment. It brings no joy to my heart to see headlines such as those in the Taranaki Daily News just 3 days ago: “Maori worst-off in jobless figures”. The Māori unemployment rate is now more than double the unemployment rate for all ethnicities, and it is particularly marked for our young. I stand here feeling almost ashamed, given that I have responsibility for young Māori and young Pacific unemployment.

But as every politician in this House knows, the appalling statistics of Māori unemployment are not a new song of the last 2 years only. When we cast our minds back over the past decades we see that the figures have been consistently depressing, the worst being those of the 1980s. There was high youth, Māori, and Pacific unemployment during the years of so-called plenty in the 2000s. As for Māori nurses working in the non-governmental organisation sector, there was no pay parity for them in the years of plenty. Those issues represent Governments that have routinely failed Māori and failed this country.

The Māori Party spoke of that history when we were a party of one member and when we were a party on the benches of Opposition, and we speak of it now as a party in a coalition arrangement with the Government. We speak of that history to remind the House that we must all own the structural factors that have led to system breakdown. Why is it that in a time of plenty the previous Labour Government did so little to address the collateral damage of Māori and Pacific unemployment? Why is it that in a National Government so ready to talk about building the conditions for more enduring and better-paid jobs there is seemingly such an unwillingness to be bold enough to invest in rangata’i Māori, to equip them to be the leaders of tomorrow?

Of course, I could take us back much further to assess the impacts of the price of citizenship, the loss of land, the myth that employment would come from the waves of urban migration, the pain of betrayal from political parties, which carried our boat with careless disregard, and generations of aspirations unfulfilled and expectations unrealised. But we have always known that it could be—it should be—so different.

In the very first Māori Party speech in this Parliament on 27 July 2004 I spoke about why a Māori Party was so important: “Ko tēnei te wa o te Ao Māori. It is time to look to ourselves. That is how we are different from other political parties. We are a political movement, creating change from the people up, and our policies reflect that. Our politicians will not be telling you what is good for you. Our politicians will be listening to you for that.” Those words are as relevant today as they were then. We are a proudly self-determining people who were devising our own solutions and creating our strategies long before the State considered welfare reform to be the answer.

It is time for a bold Government to orientate itself to the biggest challenge of our time—social investment in our future. What we put off today will threaten our tomorrow. Every party knows that there is a large number of young people who have been failed by the system. Anyone can point the finger at families, at Government, and at politicians for where we have all gone wrong, but who will be brave enough to turn that finger back on themselves to face up to their responsibilities, and to make decisions on what is right, fair, and just, rather than out of political expediency?

What we really need are solutions that will be enduring. We all know that so many of our w’ānau, both tangata w’enua and Pacific nations, are fighting for their survival. They are working two or three jobs just to tread water, and their income levels are insufficient for them to stay afloat. That is why the Māori Party has consistently raised with both Labour and National the point that if they really wanted to make a difference, they would raise the minimum wage. We called for the minimum wage to be lifted to at least two-thirds of the average wage, which, conservatively calculated, would be at least $15 an hour. If we are really dedicated to our pursuit of economic transformation, low wages cannot be tolerated.

And what do we get? A miserable 25c. The argument is always the same: that minimum wage growth above $13 will constrain employment growth. We need to be able to demonstrate that we will protect workers on low incomes, that we will value fairness, that we will reduce the gross income-inequalities, and that we will incentivise workers to maintain participation in the labour market.

But we need to do more than raise incomes and create jobs. We must take seriously all the evidence that tells us that education will be the driver of opportunity and that culture counts. We know what works, but we must provide authentic cultural learning environments for our children. We must acknowledge that this is a systemic issue and that we have the power to change it.

We need to focus on science and innovation to create long-term jobs for our rangata’i, who have a right to be included and seen for their potential and for what they can do, rather than for what they cannot. We need to learn from the example of schools like Clover Park Middle School and Te Whānau o Tupuranga in Auckland, which take up the responsibility to right the wrongs. They understand the importance of contributing to the development of a strong, secure cultural identity in their students as integral to successful participation and achievement.

I want to address some of the misinformation that has come into the public arena about the coalition arrangement that our members agreed to take up. Our constituents thought long and hard about whether it was better to spend our days in anger, bemoaning what could have been, or whether we should do all that we could to make a difference for our w’ānau, hapū, and iwi by taking on the challenge of government.

Let me assure the House that we have not been a docile partner by any means. We have fought the line, and we have put the case with all the vigour that our people expected of us to set a better foundation for our tamariki and mokopuna. All I want to say is that the Labour Party is in no position to exploit our situation for political gain. There would not be a party in the House that has not experienced conflict within its midst.

Finally, I return to the challenge given to us by matua Whatarangi Winiata, who told us that the most important task we had in Parliament was to work for the survival of our people. We will do whatever it takes to focus on that goal. We will form alliances, we will reach agreements, and we will demand the very highest standards of ourselves as a team, because this is the greatest opportunity that we have to make a difference. We know that if our people survive and flourish, our country will only be the better for it, and that is why we have travelled so constantly and so far afield in order to bring the people’s voices into this Chamber.

We have sat in the company of Māori providers, we have seen at firsthand the success of Māori businesses, and we have learnt about the innovative approaches being taken by w’ānau Māori. We have brought those stories to the table, and we have trusted our people, investing in their sense of self-belief and building on their impressive resilience in the context of their w’ānau, hapū, and iwi. All that we ask of any Government is that it, too, invest in our success by placing its trust in the power of the people to do for themselves. Kia ora.

Hon JIM ANDERTON (Leader—Progressive): Mr Key told the House today that a society should be judged by how it treats its most vulnerable citizens. By any measurement the young seriously disabled children in conductive education programmes across New Zealand must be counted as amongst the most vulnerable of New Zealand, and, despite promises to the contrary by Mr Key himself, the funding for those conductive education programmes has been cut by 30 percent this year and will be entirely ended by the year 2014. If members wanted a measurement of the most vulnerable kids in New Zealand, those kids would be it, and the National Government has completely ended their funding in spite of pleas from all over the country about how successful and important those programmes are.

The front-page headline in the Christchurch Press from the weekend asks “Does this look like the road to recovery?”. The obvious answer is that it does not. In my electorate office area of Selwyn village every single business on the opposite side of the road has left its premises. Nothing has changed or been done since 4 September, and the only answer we get from our urgent inquiries is that the council is talking to the owner, who I understand lives in Taiwan. Those talks have been going on for 5 months and not one single action has been taken except to cordon off the whole area, and every single business has gone. All the businesses on the other side of the street—except mine, which happens to be funded by Parliamentary Service—are at risk as we speak.

If we fast-forward the headline “Does this look like the road to recovery?” to New Zealand’s economic recovery, how do John Key’s words about an aspirational Government and heroic television appearances pledging progress and prosperity match up with the same kind of rhetoric we saw night after night on television at the time of the earthquake in Christchurch? Again the obvious answer is about the same: lots of hype and no action.

Here are the problems that the Prime Minister should have talked about this afternoon. After more than 2 years in Government, economic growth has stopped. Any so-called recovery has stalled. Unemployment is going up, not down. The co-leader of the Māori Party has a very short memory as to the reduction in unemployment for Māori around New Zealand in the 9 years of the Labour-led Government: it went from 28 percent to 4 percent. I would have thought that was something to be celebrated, not to be castigated for. Jobs are being lost, not created. The cost of living is increasing, but incomes are not keeping pace, particularly for low-middle income New Zealanders.

What is the Prime Minister’s strategy to tackle these problems? He does not have one. He has had all summer—in Hawaii, even—yet he comes to this House with a plan to just muddle through. It is a shopping list that will not create jobs, will not lift incomes, and will not help. His economic policy consists of asset sales. That is not an economic policy; it is a surrender of the sovereignty of New Zealand. Not one new job will be created by selling off the people’s ownership of power companies. But every one of us will be paying the new overseas owners higher prices for power. We know this because we have seen it all before. John Key was not in New Zealand for most of the 1980s and 1990s; he was helping speculate against the New Zealand dollar on the international market. But I was here, and I heard all of the arguments for asset sales last time around. The arguments for asset sales were fatally flawed then, and they are just as fatally flawed now. I walked out on the then Government caucus because asset sales were a bad idea, and the idea has not got any better. That is why we had to buy the assets back.

We had to buy back the rail system because National privatised it for less than the price of the wooden sleepers. The rail system was an integral part of the transport system, and it had been wrecked by overseas owners who disinvested and saw it ruined. We had to buy back Air New Zealand because it was privatised into the capable hands of private owners, who sent it bankrupt. We were in danger of not getting our planes back from wherever they were, because they were leased and we could not pay the rentals on them. That is how bad privatisation got for our most strategic industry.

We had to start a new bank because the foreign owners of our entire banking industry sucked New Zealand’s banking industry dry. They closed 1,300 branches, and they increased fees and their own profits. These profits were shipped overseas at the rate of $1,300 million a year. How do we get a better level of indebtedness and a level of ownership of our own country if we are exporting all our money to overseas owners? If anyone can square that circle, I would like to know what the answer is. I have not seen one single rational explanation. Why would selling our power companies be any different? Why would the new foreign owners suddenly discover the virtue of charity over shareholder profit? Why would the assets not fall into foreign ownership just like the last lot, which were going to be kept for Kiwi mums and dads? If I ever hear “Kiwi mums and dads” again, I think I will scream into the television set. Kiwi mums and dads? Get a life! The first thing that happens is that the overseas buyers turn up with a bit better offer for the Kiwi mums and dads, who sell the shares, which are then owned by overseas companies quick smart. If anyone thinks that owning 49 percent of a company does not give one some right to a say in how the company is run, they must be dreaming.

The same tired old lines from the past are being trotted out, and the same promises that will be made this time will fail exactly the same as they did last time. I am here to bear witness that the same mistakes are being proposed as were made last time a Government paid for tax cuts by selling off public assets. I was told—and we all were—that if we sold $19 billion worth of assets, debt would be ended: it would be a new nirvana. New Zealand ended up owing more money after we sold the assets than we did before we sold them. How does that work? Now we talk about the indebtedness of New Zealand. Let us talk about the indebtedness of the whole of New Zealand, not just the public debt. If anyone is to be thanked for the public debt being in a position where we can borrow money in a recession, it is former Minister of Finance Michael Cullen, not Bill English or the National Government.

The only thing that has restrained the rapaciousness of the power companies in the last 10 years is the hold that the Government has on board appointments. The fact that the Government will potentially give that control away and have no control over power prices should be a scary fact for all New Zealanders. When the power companies are sold and the boards are free to do what they like, even worse is what they have to do by law, which is actually to cede to the minority interests of shareholders before any other interests. If that does not ring alarm bells in somebody’s head, I do not what would. Those companies will have to protect those shareholders’ interests in terms of earning as much money as they possibly can from monopoly interests, which actually, ironically, are served if they make less power available, because they can charge more for it. How bright does one have to be to figure that one out? I do not know—it does not seem to have occurred to anyone on the other side of the House.

I said in last year’s Budget debate that a few things would happen in New Zealand. Let us look at what I said and what has happened. I said that the average New Zealander would not be better off, because if people are not on high incomes, this Government will not help them. That is exactly what has happened. People who are on average or below-average incomes, which is the majority of New Zealanders, are worse off now than they were a year ago. I said that unemployment would be higher, and it is. Unemployment is higher today than it was when National took office. It is higher than it was last December. We were going to stop all New Zealanders going to Australia, yet more people are going to Australia than ever before. We cannot even get people to fix the buildings in Christchurch, because they can earn more in Australia. Where is John Key now? I tell John to come back. All is forgiven if he can actually prove that he can fix that one. The Government has stopped even pretending it has any idea where the new jobs will come from.

What happened to John Key’s bike trail? That was going to fix everything with 4,000 jobs. Nothing the Prime Minister said today will increase exports; nothing he said today will boost investment in research and development or help productivity. Last year I said that the gap between rich and poor would increase. One does not have to be a rocket scientist to work out that if the Prime Minister gets $1,000 a week in tax cuts and the poor people in New Zealand get nothing from tax cuts, the income and wealth gap between rich and poor actually increases in New Zealand. Surely it is bad enough.

The Leader of the Opposition has already mentioned what happened in McGehan Close, where John Key went in 2008 to pretend he was compassionate about child poverty. The poor kid is now in Child, Youth and Family care. John was going to fix all that, too. What was announced today that would make her better off? The answer is nothing. A respected professor of epidemiology in New Zealand said last year: “In New Zealand social injustice is killing and maiming our children on a grand scale.” We top the scales in the OECD for rates of whooping cough, rheumatic fever, pneumonia, and other diseases in children. Twenty-eight percent of our children still live in poverty. What do they have to hope for? There is more unemployment, more GST, more price rises, higher rents, and a Government that does not care a fig about what happens to 90 percent of New Zealanders, as long as the 10 percent at the top are looked after.

Hon PETER DUNNE (Leader—United Future): The Prime Minister properly spoke earlier this afternoon of his aspirations for New Zealand, and he couched them in very positive tones. But the reality is that this country today—like many others around the world—is in the doldrums. This country is feeling buffeted by all of the consequences of the hugest international economic recession since the 1930s. Right around the world, jobs have been shed. Right around the world, debt has increased. People have struggled to overcome adversity. In Australia we have seen huge natural disasters. We have seen the Christchurch earthquake and the Pike River tragedy in this country. All of those impact on the ability of this country to pull itself up and move forward for the future. When we start to hear people offer easy solutions—more of the same: borrow and hope, and tax more—we condemn New Zealanders today who are feeling uneasy to more uncertainty, to more unease, and to a greater lack of confidence in the future. That is the distinction to be drawn from the two opening speeches today.

When we look at what is happening in other countries, as they face the same range of problems we face, we are starting to see some extreme reactions occur. Sadly, the usual trend is for people to become set against one another, to try to find a scapegoat within and blame that as being the cause of all our problems. To some extent, we are seeing that in this country today with aspects of debate on the foreshore and seabed. It is a tragedy in that New Zealand we are starting to see division created amongst the people of this country for political ends. If we go and talk to people over their barbecues at summertime and speak to our neighbours, friends, and associates we learn what people actually want and that their aspirations are unfailingly positive for the country, for themselves, and for their children. They line up with the sort of thing the Prime Minister is talking about, but they want to see an opportunity for them to have some say at the national table about the things that are of concern to them. They want a reassertion of a sense of nationhood and national unity, because the continuation of either the ignoring of their situation or the setting of one against the other simply feeds national disharmony and prevents a stable, cohesive, and enduring recovery from occurring.

It is against that background that I think it is important that New Zealand takes the opportunities provided this year to start to focus again on the sort of country we wish to become. In recent days the issue of our national day has come back on to the national agenda. People want to be involved, they want to be included, and they want to have the opportunity to celebrate what being a New Zealander means to them. We have seen too much of the division, too much of the sideshows, and too much of the capture by certain interests of particular parts of our nationhood. What in fact the people of New Zealand are saying is that we are all, by force of history and nature, in these islands. We are all by those same forces part of the solution, not part of the problem. We all have an opportunity and a right to contribute. What New Zealand really lacks is that sense of purpose and national unity.

We look across the Tasman. In the depth of the despair caused by the Queensland floods and the fires in Western Australia, that country came together on 26 January to celebrate being Australian and to celebrate what being an Australian means to the various peoples who make up Australia. Why can we in New Zealand not have a similar enduring national opportunity where all of us—whatever our particular heritage and lineage—talk about why we are proud to be Kiwis, where we bring our particular features to the national table, and where the country benefits from the collective goodness that endures from that? What we have instead, if one believes the polls, is either a sense of vast indifference to the fact that a national day is occurring, or a sense of betrayal and alienation and a feeling that a series of meetings and occasions are being captured by a particular vested interest. It is not good enough. A country set against itself is one that will not endure and will not survive. New Zealand is proud externally to portray a certain image. But why as New Zealanders can we not start the process of working with each other, celebrating the cultures and backgrounds that make this country the unique place it is, putting those on display and sharing them, and learning from each other, rather than what we have seen to an extensive and unacceptable degree over the last weekend?

New Zealand does face some very difficult challenges. There are going to be some hard debates this year about aspects of economic and social policy, and some choices will need to be made that inevitably create the argument about winners and losers as we come out of a recession and position this economy for the future. Those debates and choices can occur positively only if they do so against the backdrop of a real sense of identity and purpose about what it is to be a New Zealander today. Why can we not approach this subject with the same boldness that in so many other areas we have lauded individual New Zealanders for demonstrating? Why in talking about our nationhood can we not show the spirit and indomitability that Hillary showed in conquering Everest? Why can we not show the sense of innovation of Peter Jackson or Paul Callaghan in terms of looking at the sense of our national purpose and our national identity? Why can we not bring these strands together to say to all New Zealanders that these remarkable individuals, for instance, whom we laud as being our great achievers, did not do that necessarily by their own dint, that there was something in their national psyche that as New Zealanders made it possible for them to be so innovative and successful? Why can we not nurture that feeling in terms of taking this country forward?

Alongside the opportunities that events like the Rugby World Cup 2011 and other similar spectacles provide, the opportunity to take forward New Zealanders’ abilities and to carve and forge a new sense of nationhood based around the unique potential of everyone in this country is one we cannot afford to lose sight of. As the world comes out of economic crisis and as the world starts to reposition itself for the first half of the 21st century, that sense of identity will be far more powerful and far more important to demonstrate than ever before.

I say that as this Parliament resumes its business for 2011, alongside the particular matters that will be on the Government’s agenda and will be debated, the issue of nationhood, the issue of our identity as a people, and the issue of ensuring that we proceed united and cohesive and do not succumb to the sorts of divisions we are starting to see occur in similar jurisdictions elsewhere that are facing the same pressures will be important and powerful issues for all of us to focus on. As this year unfolds, I want to see New Zealanders not only feel better economically but also, perhaps far more important, feel better in themselves about who they are, what they can contribute to their country, and what their country means to them.

Hon GERRY BROWNLEE (Minister for Economic Development): I am pleased to support the motion moved by the Prime Minister today in support of his statement to the House. The Prime Minister outlined the programme for the Government that will lead us into the November election. The Prime Minister made it very clear that this is a Government that is not prepared to mislead New Zealanders about the difficult economic circumstances that we live in. It is not prepared to mislead New Zealanders about how tough it is at the moment to make progress and it is not prepared to go to New Zealanders with outrageous promises of expenditure, without any plan for where that money may come from.

In reply to the Prime Minister’s speech, Mr Goff essentially outlined—if I may paraphrase his 20 minutes—a pile of what one could say were the worst aspects of his 9 years as a Minister in the previous Government with all of the misfortunate events that occurred during that time. Mr Goff outlined the rise in so many bad social statistics during that time, then said that Mr Key had had 2¼ years to fix them, but he had not and had failed. Mr Goff said that was why New Zealanders would go running back to the Labour Party. Well, that shows the headspace that the Opposition is in. It shows that those members are not connected to what New Zealanders are thinking and feeling on a daily basis.

It is no wonder, then, that at the end of Mr Goff’s speech he failed to move a vote of no confidence in the Government. He knows that when it comes to the simple thing of the wages that New Zealanders collect today, those on the average wage are taking home $64 more a week than they were in 2008. He knows that the rise in wages for New Zealanders over the last 2 years has more than twice outstripped what Labour achieved in 9 years of Government. In those 9 years, wages rose by 4 percent for those on the average wage. After 2 years of a National Government, the increase in the average wage is a bit over 10 percent. Mr Goff knows that, and that is why he was not prepared to move a vote of no confidence against the Government.

Mr Goff went on and talked about some of the pressures that New Zealanders face in their lives and his abhorrence of the concept of asset sales. Everyone knows that this country has a very heavy borrowing programme. This country is deeply, deeply in debt. Our debt is 85 percent of GDP. As measured against other countries, we are a Portugal, we are an Ireland, and we are a Greece. Our country is in significant economic difficulty. Mr Goff and his party goes out there and freely promise $5 billion of extra spending a year, without telling New Zealanders where that money will come from. New Zealanders are not silly. They know it will come from that $64 a week extra that this National Government has ensured they get each week in their pay packets. [Interruption] That is not a bad title. Mr Goff talked about the asset sales issue as if his own hands were completely clean in that matter. He was a Minister in a Government that sold hundreds of millions of dollars worth of New Zealand’s assets, and got nothing for them. Mr Key and this Government have outlined to New Zealanders the prospect of asking why we should not sell off a little bit of the assets that we have, if that enables us to acquire bigger assets.

The interesting thing is that the Opposition lauds the fact that it bought back New Zealand rail. That is like buying a lame horse and telling everyone that it will win the Melbourne Cup. It is not credible for the Labour Party to run a policy that says not to look at that particular aspect. David Cunliffe knows that; he said it in a speech just recently. Mr Goff himself has repeatedly said that a public-private mix in the asset portfolio would not be a bad thing. We have quotes from him, but I will not go into them today.

The most extraordinary thing is his suggestion that if there was a minor shareholding sold in the State generating assets, power prices would go through the roof. I ask New Zealanders to consider why power prices rose by 72 percent under 9 years of Labour, when over the same period of time we saw only 28 percent inflation. That is the sort of extortion that comes from State-owned enterprises at the present time. Before Christmas Mr Goff went out with a policy that said that Labour would not take dividends from State-owned enterprises. He said it would not take any dividends from electricity companies and that that would keep prices down. Then after Christmas he came back and said: “Oh no, we need that $700 million a year to pay for part of our programme.” I tell him that he cannot have it both ways. Mr Goff cannot go out with a record like Labour has on power prices and make the sort of claims he is making.

The last 2¼ years of a National Government have seen a considerable slowing in the pace of power price rises. This Government conducted the most comprehensive reform of the electricity industry that this country has seen in 20 years with the Electricity Industry Act passed last year. That legislation will lead to stable prices. The record speaks for itself. Between November 2008 and November 2010 the price in real terms was a 1.1 percent increase. That excludes GST and excludes the costs of carbon that are applied to those things, but, none the less, it is an extremely impressive record for the Government to date.

If we couple the regulatory environment with that record, then New Zealanders should not fear that they will not get the opportunity to invest in those companies. I want to answer Mr Anderton in respect of his suggestion that somehow those companies will end up in foreign ownership. For a start, the Government has made it clear that if New Zealanders return National to these benches beyond 26 November, the Government will continue to hold 51 percent of those companies. Today Contact Energy is 24 percent owned by New Zealanders and 16 percent owned by local fund managers and local funds, including ACC, the New Zealand Superannuation Fund, and KiwiSaver providers. That is a significant amount of Contact Energy where there is no protection for the majority of the shareholding. The same could be said of Auckland Airport. New Zealanders currently hold 35 percent of it, the fourth-biggest company in New Zealand, with a further 9 percent held by institutions. Air New Zealand is 70-odd percent owned by the Government and 26 percent owned by New Zealanders. That is the model that we should be following. That is the model that we will follow, and we will give New Zealanders that opportunity.

The irony in all this, of course, is that the Labour Party says that New Zealanders must save more. They pushed forward the KiwiSaver programme, which has proved very good, but where are the KiwiSaver funds invested? By and large, they are invested offshore. So it is an utterly—

Hon Trevor Mallard: Safe.

Hon GERRY BROWNLEE: “Safe”, says Mr Mallard. The financial genius on the other side of the House says “safe”. I tell him to have a look at what has happened to the financial markets internationally over the last couple of years and see just how safe they are. Mr Mallard forgets that, as I said at the start of my speech, New Zealand is heavily indebted.

I suggest to the Labour Party that it might like to think about this: no one owns the family silver if the debt is bigger than its value. It is wrong for the Labour Party to even try to convince New Zealanders that they can have their cake and eat it too. We are a Government that is led by an extraordinary Prime Minister, who is straight-up with New Zealanders and will give them a good opportunity to prosper beyond the 26 November election.

Hon DAVID PARKER (Labour): That was not a great speech made by Mr Brownlee, who is also the Leader of the House, but at least it was better than John Key’s speech. John Key’s speech had very, very little substance on the economic plan for this country, because in reality John Key’s Government does not have an economic plan for this country. It has only one policy: tax cuts weighted to the rich.

We heard today how the battle lines will be drawn for the election. The theme we have heard from Mr Key—and repeated, no doubt by arrangement, by the ACT contribution from Rodney Hide, by United Future’s contribution from Peter Dunne, and again by Gerry Brownlee—was the accusation that a Labour-led Government would be fiscally irresponsible and that Phil Goff would borrow and spend. That is the rhetoric they used, but New Zealanders will not be fooled by it. They know that in Phil Goff they have a man who has been in 15 Budgets as a Minister in Labour-led Governments and that he, of all people, cannot be accused of being fiscally irresponsible. Mr Goff is not a spendthrift in either his public life as a 15-year - Cabinet Minister or his private life. That rhetoric will not run. Phil Goff—

Hon Trevor Mallard: It’s the opposite.

Hon DAVID PARKER: That is right; some people might say the opposite. He is not a spendthrift. He would never put this country’s finances at risk, and neither would Labour. Let no one be fooled by National’s rhetoric to the contrary.

It is because of the prudence of the previous Labour Governments that New Zealand’s Government debt was reduced between 2000 and 2008, or else we would be in the position of Greece, we would be in the position of Portugal, and we would be in the position of Great Britain and Italy, where there is high Government debt. But New Zealand does not have high Government debt because the last Labour Government reduced Government debt. Who opposed those Budgets? National! Every one of those Budgets, where the Labour Governments ran Budget surpluses, was criticised by the National Opposition. They were criticised by Bill English, who said that Labour was being greedy and for it not to run Budget surpluses but to give more tax cuts. If Labour had done that, we would have further fuelled inflation, debt, and the asset bubbles that New Zealand and the rest of the Western World was experiencing at the time.

It was National members who called for irresponsible Budget tax cuts that would have reduced those surpluses. It was National, when it was in power under Muldoon, that left New Zealand with staggering levels of Government debt. It is National that this time has put through unaffordable tax cuts, weighted to the top 10 percent of earners, which means that the Government is borrowing billions of dollars every year. As a consequence, Government debt is rising under National.

Members do not just have to believe me on that, because I have here an article from the New Zealand Herald of 18 December 2008. That is about a month after the 2008 election. We have Bill English, who is quoted here in an article from the New Zealand Herald by Audrey Young: “Bill English had to swallow the proverbial dead rat this morning and effectively acknowledge that Michael Cullen had done something right in his stewardship of the Government’s finances in the past nine years. Having condemned his predecessor for many years for paying off debt too quickly, English said: ‘I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook. … In New Zealand we have room to respond. This is the rainy day that Government has been saving up for.’” But that was not his Government; it was the prior Labour Government. We were the ones who ran surpluses and reduced debts. He told that to reporters and it was reported in the New Zealand Herald on 18 December 2008. He could also have said that his incoming Government inherited either the lowest or second-lowest rate of unemployment in the world.

It is once again a National Government whose poor economic performance—with 42 percent of income tax cuts going to the top 10 percent of earners—has contributed to a large deficit and a stagnating economy. As I have said previously, the current Government has only one major plank to its policy: tax cuts for those who already earn the most. That is what the Government believes in, but plainly its plan has failed. The economy has stalled and deficits have grown. There is little good news in terms of exports. The current accounts deficit is projected by Treasury to widen to over 6 percent of GDP again.

Having undermined the country’s finances, the National Government is now trying to convince us that the last card in its hand that it wants to play is right, which is the one that Gerry Brownlee spent some time on. He said that New Zealand should now sell the family silver or borrow against it. The Government is proposing that we flog off schools into public-private partnerships. Schools have always been run on the Government balance sheet because Governments do it cheaper than if they are leased from the private sector. Now the Government is coming out and saying that we should flog off half of the State-owned electricity enterprises, and we had the audacity of Gerry Brownlee in pretending that that would not result in an increase in electricity prices. Who believes that the profit motivation to maximise price will overcome? We know that those markets are not properly competitive. We have had reports from the Commerce Commission to that very effect within just the last couple of years. People should make no mistake: Labour will be highlighting the fact that if the National Government gets its way, returns to the Treasury benches, and flogs off those State-owned enterprises, electricity prices will go up.

We are 2½ years into this Government—2½ years. The economy is stagnating, and it is time to ask whether the Government is performing. How should we judge that? Well, we should judge that upon the promises it made when it was elected. First off was to narrow the wage gap with Australia. Is it doing that? Of course it is not. The Government is exposed on that promise. It has become a meaningless promise that the Government cannot be judged on by any milestone. Next, the Government promised an aggressive recovery from recession. Are we getting that?

Hon Members: No!

Hon DAVID PARKER: No. Then it said that it was going to have a step change in the New Zealand economy, but that phrase has disappeared from Government members’ lexicon. They do not even talk about that now. They have even taken it off their publications. If we look back a few months, we see that National sought a step change in the economy, but if we look at its current plans, we see that that phrase is nowhere to be seen. National has given up on its rhetoric about a step change.

Last year some of the commentators at the Labour Party conference said they thought that the next election might be about economic policy, and they are absolutely right. They will see a difference between National and Labour, because Labour believes in truly resetting the economy on an export focus. You know, the National Government’s Tax Working Group actually got close to ring-fencing losses. It is pretty evident from its papers that some people in National thought that that was necessary because we over-invest in the speculative economy, but National could not do it. It could not bring itself to ring-fence losses. It left the tax preference in favour of that $200 billion of private residential rental investment, which returns nothing to the taxpayer; those investors offset their losses against other losses. Even worse than that, the Government misdirected precious investment funds that should be going into the export economy into residential property.

Already this year Labour has announced more economic policy than National. Last year we announced changes to monetary policy to help things for exporters, and we will see that through if we get elected. This year we have already had two major announcements. The first was in respect of the ring-fencing of losses. There has been a lot of emphasis on how that will pay for a tax-free zone for every New Zealander, and that is good, but for me the second most important part of that is that it resets the investment signal in New Zealand so that some of that $200 billion that is presently in residential rental investment will be redirected to investment in the export economy. We can make a difference to growing this economy by growing exports and by giving the right signals through the tax system. It will not be by continuing to prefer the interests of a small financial elite, who own more than their share of property and use that tax advantage to offset losses against their other income. Most importantly, that tax advantage drags money away from the export sector, where it is best invested for new jobs and higher incomes.

The other announcement that Phil Goff made was that we need a research and development tax credit. We all know that. Everyone else in the OECD has one except for New Zealand. We even had one in New Zealand for a brief time under the previous Labour Government, but then the National Government axed it. Now, of course, research and development investment increasingly happens in Australia, where there are deeper capital markets and research and development tax credits. So, belatedly, what is our Government’s response? It is another committee on savings. After 2½ years, we need a proactive Government. We need a Government that will help New Zealanders to save more, to invest in the export sector, and to become wealthier.

There is no doubt that there is very little substance in the National Government’s economic philosophy; it is tax cuts, tax cuts, and tax cuts. That is all it has. It has nothing to grow the economy. The cupboard is now so bare that the Government is going to flog off State-owned enterprises and increase electricity prices.

Hon CHRISTOPHER FINLAYSON (Attorney-General): Let me begin on behalf of the Wellington MPs by welcoming everyone back to Wellington, where we have had a great summer. I say to the previous speaker, David Parker—Labour’s rising star—that I was disappointed in that contribution because I do not think he listened to what the Prime Minister said. The Prime Minister outlined policies today about building a stronger economy, building savings and investment, building exports, building skills and knowledge, and building infrastructure for growth, reducing the cost of business, and getting better results from the Public Service—an exciting vision. We are here to build a better New Zealand, and to act on behalf of the people of New Zealand in a positive way; as usual, Labour members are stuck in the past with higher taxes, more regulation, and less freedom. New Zealanders have heard it before, and they do not like it.

A few days ago Mr Goff announced a reshuffle of his caucus, and it reminded me of what was once said of Harold Macmillan’s Cabinet reshuffle in 1962: “greater love hath no man than this, that he lay down his friends for his life.” To be fair, Phil Goff has shown us in renewing his front bench that he has at least some intestinal fortitude, propelling Ruth Dyson from her lofty position at No. 4 down to the infernal depths of No. 5. As I understand it, her poison tree is already working overtime. It is great to see Mr Jones back in the Chamber. Last year Annette King said he would have to work very hard to rebuild his reputation, and I think all Labour colleagues who were demoted or passed over for the shadow Cabinet will agree with Phil Goff that no one has worked harder than Mr Jones over the last 6 months. It is great to see him back.

We heard that Mr Jones was apparently one of the new generation of Māori leaders. The next day we learned that this new generation of Labour Māori leaders would also include Winston Peters, whom Labour hoped to have on its team after the election. Let us face it, that is not rejuvenation, it is not even rebranding; it is an exercise in nostalgia. Mr Goff’s attempts to seize momentum this year have been not so much Back to the Future as “Full Steam Ahead to the Past”.

Interestingly, Labour now has a grand total of three arts spokespeople—

Hon Steve Chadwick: Three! Taking New Zealand by storm!

Hon CHRISTOPHER FINLAYSON: —as a result of its reshuffle, and I am so delighted Mrs Chadwick is still there, leading this disparate team. If I knew that their party was struggling to keep up that much, I would have offered to slow down, but there is just so much damage that needs to be fixed up as a result of the previous Labour arts Minister.

But I have a bit of time in which to offer some advice to Mrs Chadwick, to Ms Ardern, and to Mr Robertson, and it is this: there is important policy work, which this Government is addressing. For many years the Arts Council had a pretty ropey bureaucratic structure, and that is now being refined through legislation that we will debate this year. [Interruption] I am very disappointed to hear that Mrs Chadwick and the other Labour members are opposing that measure, because the artistic community wants those changes.

Last year, the Government managed to get some extra funding for the Historic Places Trust, which had been neglected for 9 years by Helen Clark. We are now reviewing that legislation to make sure the structure is appropriate for the Crown entity that the Historic Places Trust has now become.

A very important area we worked on last year was saving The Hobbit, and I pay a particular tribute to the work of the Prime Minister and the Minister for Economic Development. Their work ensured that The Hobbit would stay in New Zealand.

Hon Steve Chadwick: At what cost?

Hon CHRISTOPHER FINLAYSON: It will bring in hundreds of millions of dollars, I say to Mrs Chadwick, and it will create thousands of jobs. Where was Annette King—the self-proclaimed MP for Weta Workshop—when Labour’s union friends were trying to destroy The Hobbit? Where was she when Sir Peter Jackson was being abused by her own colleagues? That is another issue I am very much looking forward to debating on the hustings with Mrs King in the marginal seat of Rongotai this year.

I now turn to Treaty negotiations, and I am sorry Mr Parekura Horomia is not with us, because I want to express to him my very best wishes. He was out on the road with me on 17 December last year, first in Mōhaka when the Crown signed a deed of settlement with Ngāti Pāhauwera, and later that day at Muriwai Marae just south of Gisborne, when the Crown initialled an agreement with Ngāi Tamanuhiri. They were great occasions, and I really valued his being with me.

Then on 22 December the Crown signed a deed of settlement with Ngāti Porou here at Parliament. Again, Mr Horomia was present, and he spoke, and I thank him for his support on those and other occasions. I very much look forward to keeping him fully informed of Treaty settlement work, because at least he, in Labour, understands how important it is.

Let me say something about Treaty settlements, because, try as they may, Labour members cannot escape the cold statistics. Labour managed only about 1½ settlements—1½ settlements—per year in its last term of office. When visiting iwi, I have been told on more than one occasion that the last Minister who spoke to them before me was Sir Douglas Graham, and I think that that is a shocking record.

This Government takes the matter seriously. Since the previous election we have achieved over 90 milestones, an average of one every 9 days. That includes 21 agreements in principle, and 13 deeds of settlement. In just 2 years we have achieved more than Labour did over 9 years.

This will be a very busy time for settlement legislation in this House. I know Mr Jones, who always makes a tremendous contribution in those debates, will be looking forward to those bills being debated. The Human Rights Commission noted the significant increase in Treaty settlements and the benefits they bring to New Zealand. Last year was the most productive year in settlements history, exceeding the previous most productive year, which was 2009.

That is not the work of an individual, it is the work of a team, and in that context I particularly mention my colleagues in the Māori Party. Their contribution to Treaty settlements has been substantial. I thank them for the good work they have done, and I very much look forward to working with them again this year.

The battle lines are drawn. The themes appear to be emerging. Does New Zealand want a forward-looking Government addressing issues that matter to New Zealanders—

Phil Twyford: Selling assets!

Hon CHRISTOPHER FINLAYSON: —issues such as growth, I tell Mr Twyford, the importance of front-line services, and developing our infrastructure? Or are New Zealanders more interested in Mr Twyford’s prescription of bureaucracy, of regulation, of waste, and of “Nanny knows all”?

Do they want a Government that goes out and supports the creative industries such as film, I ask Mrs Chadwick, or do they want a Government that is beholden to the unions? Do they want a Government that enthusiastically gets on with the hugely important job of achieving just and durable settlements with iwi, or do they want a Government that could achieve only 1½ settlements a year—1½ settlements a year? Do they want an aspirational Government led by principled, pragmatic, and youthful leaders, or do they want a Government of retreads from 30 years ago who have embraced every position on the political spectrum, from far right to far left?

Most of all, do they want a Government that is upfront with the people, does not play funny games with election dates, spells out a clear and articulate vision such as that outlined by our great Prime Minister this afternoon, and refuses to deal with people such as Winston Peters? Or would they prefer a coalition of the absurd: Labour, the Greens, New Zealand First, and Chris Carter? Enough said.

Hon SHANE JONES (Labour): Kia ora anō tātou. Firstly, Mr Assistant Speaker Barker, I greet you and your colleagues for the beginning of this year, and our colleagues throughout Parliament for what will be—as the previous speaker, Chris Finlayson, just said—a battle. I will start by identifying a few of the themes that will ripple through our discussions as parliamentarians—our debates this year in the Māori area. Then I will talk about the tawdry speech and the very dismal performance given by the Prime Minister, as reflected in his failed attempt to appear as hot as Liz Hurley.

Firstly, let the record show that that very pompous speech given by someone who currently enjoys his lifelong dream of being the Attorney-General, for a mercifully short period of time, overlooked one single fact. This side of the House and Dr Cullen brought into this House and passed through this House the largest single restoration of land and the largest single restoration of capital into Māori hands, through the Kaingaroa Plains claims—multiple iwi. He may be able to say, boasting to his legal friends and endeavouring to curry favour as our friends from the Māori Party slowly implode, that he has lots of little hapūs and iwis. I mean not to deprecate any of them, because they all know this year that the votes they directed in that direction over there have dashed their hopes and expectations.

So let the record show that it is all very well to identify the large number of iwi, but one should deal with the facts, because those iwi all know that this year’s debate is about a split society. Our leader said it. Now, I am not talking about Rodney Hide’s rubbish, etc., about Pākehā and Māori. I am talking about the fact that the only people in New Zealand who will enjoy the opportunity to enrich themselves are merchant bankers and their attendant parasites—otherwise known as corporate lawyers—and a narrow cast of New Zealanders who enjoyed a disproportionate benefit of the tax giveaway under John Key’s tax policy. They are the only ones who will be in a fit state to come forward and gobble the share that will be made available in a garage-sale style. They are the ones who will be rewarded for continuing to support those very foul policies.

It could be said that the State-owned enterprises need to be sold for purely fiscal reasons. Well, Bernard Hickey and an economist working with Dr Gareth Morgan said this morning those are not the reasons. There are no compelling reasons as to why the descendants of Fay Richwhite need to enjoy privileged access to this bout of State-owned enterprises sales. OK, so if it is not purely for fiscal policy, maybe it is—

Hon Christopher Finlayson: What about iwi?

Hon SHANE JONES: Do not worry; I will get to iwi very soon. It may be about social transformation—that is, turning New Zealand into a share-owning democracy. Well, if that is what the Prime Minister is promoting, then let us have that debate, but he should not mask it under $300 million of borrowing a week when in actual fact the Government’s finances in comparison with those of a host of other nation States are in quite a strong state, purely because our previous deputy leader, Michael Cullen, took the hard route.

The sale of State-owned enterprises masks the fact that there is no economic strategy and that this is a reward for the shadowy forces that have always supported that Prime Minister. They want to come back and get hold of monopoly rent-gouging assets, which, for a short period of time, may be with mums and dads, but the instructiveness of the Contact Energy episode shows that the assets will soon disappear into foreign ownership. So not only will that worsen the vulnerabilities, etc., around our energy estate and worsen the amount of capital that disappears overseas but it will worsen the split. A narrow cast of people will enjoy a disproportionately growing percentage of the nation’s wealth—and somehow that will make us all richer. All that will do is widen the chasm. So this is an election debate that we look forward to. We will love having it. The reality is that New Zealanders will hear from this side of the House that there is just a very, very tiny percentage of people who will enjoy it.

I want to talk as well about the most recent United Nation’s report, a report that received a submission called Tamariki Māori: A Māori view of children’s rights. It is a report that lambastes the current Government and reminds day-to-day New Zealanders that the well-being statistics of our most vulnerable people—and that is who they are, I say to Mr Key—children, are being shafted. Now, there was not a single word from Dr Pita Sharples, who paraded, kapa haka-ed, haka-ed, yelled, and took all sorts of characters with him to the other side of the world to boast his credentials about a UN declaration on indigenous rights.

This is the UN report that really counts. This is the one that shows that the very people who sent him here to Parliament are not enjoying a single element of well-being growth. They are actually enduring worsening employment statistics, worsening health statistics, worsening housing situations, worsening criminal statistics—and what do we hear? We hear that it is all Hone Harawira’s fault. There is not a single reason why that person should celebrate his association with the UN when this report shows that under the Māori Party’s stewardship things have got significantly worse.

I have to continue with this theme of split. It was evidenced while we were in Waitangi that the co-leader of the Māori Party used an opportunity to go touting and scouting for alternative candidates to run against their colleague, the sitting member. He was suspended, but before the suspension notice hit the media, the Parliamentary Service was told to find a new office for this guy. That is evidence of the duplicity. But we know that there will be those double standards because the architect sits next to Dr Sharples—the person who, when she was in association with us, found every single reason as to why she was the victim. She is continuing on, and thinks somehow Māori voters will view that party as a stronger proposition, and Māori voters will view that party as a more credible bunch of representatives for their interest. No, the split society is splitting them, and when a house is split, that house eventually falls. It may not completely fall at this election, but fall it will.

At that point, what the Māori will say is something that we do on the marae in our oratory. The political representatives misled their people, practised duplicity on their own, and showed an inordinate level of grovelling to the Prime Minister—acting as if they were like the lion in The Wizard of Oz who found the courage, after the Prime Minister said he wanted to govern again with the Māori Party—and not an hour went by before Dr Sharples begun his character assassination of Hone Harawira in order to prepare as bride for the Prime Minister the next time around. So the Māori voters will say, as we say on the marae, that they will go to Hawaiki nui, Hawaiki roa, Hawaiki pāmamao. What mainstream voters will say to the Prime Minister, who is worsening the splits and hocking off the assets, oblivious to the wrongdoing of his Ministers in terms of their policies to the average whānau, and increasing the misery, they will say to him, as the Māori go to political Hawaiki nui, he will go to Hawaii nui, Hawaii roa, Hawaii pāmamao and to his apartment and he can enjoy a pampered life over there, because New Zealanders want to see the rear end of this Prime Minister. Kia ora tātou.

Hon KATE WILKINSON (Minister of Conservation): It is a pleasure to be able to speak today and reinforce our Prime Minister’s message to all New Zealanders. It is 2011, and New Zealanders now have a choice. The contrast is stark; the choices are obvious. New Zealanders can choose this year. They can choose to vote for National, with a focus on spending less, borrowing less, and growing the economy, or they can choose to vote for Labour, which wants to focus on spending more, borrowing more, taxing more, and shrinking the economy.

This Government has worked hard over the past couple of years to introduce policies that will be conducive to long-term economic growth in order to build a stronger economy. We have been focused on a creating an environment that provides New Zealanders with opportunities to succeed in life, because we want to see families prospering. We want them to be proud of this country and what it has to offer, and we want them to raise their children safe in the knowledge that they will have every opportunity to achieve great things. Already this year we have seen a stark difference laid out between this Government and the Opposition. On the one hand we have an aspirational Government with a proven track record in managing the economy in tough times. On the other we have a tax-and-spend Opposition that wants New Zealanders to be depend on the State for everything, including their jobs.

New Zealanders have a clear choice this year, and just recently we have again seen a prime example of a policy that clearly distinguishes National from Labour. The 90-day trial period was one of the first policies that the Government introduced following the 2008 election. It came into effect on 1 March 2009. At that time we spoke at length about how trial periods would provide opportunities for New Zealand workers and how they would give businesses the confidence to take on workers that they might not otherwise have taken on. This policy was aimed, and had always been aimed, at getting more New Zealanders into work. It is used all over the world, and we know from international experience that it actually does work. Under the previous Labour Government small businesses were scared of hiring people. They did not want to run the risk of taking someone on only to find out the person was unsuitable and then to end up in court. They needed to be given the confidence that this National Government gave them by introducing a 90-day trial period, so that they could take on workers whom they might not otherwise have taken on. Without that trial period there was a huge hindrance to growth for small businesses. Business owners were reluctant to expand their operations because of fear and a lack of confidence, and jobs that could have been created were abandoned.

National set out to fix that. Labour’s own Small Business Advisory Group had found that the introduction of trial periods was the single most important change that could be made in employment legislation. That advisory group was right. The 90-day trial period has been a success. Everywhere I go businesses tell me success stories about how they took someone on whom they would not have taken on otherwise. The Department of Labour report Trial Employment Periods: An Evaluation of the First Year of Operation backed that up. It stated that 40 percent of employers said the last person they hired on a trial period would not have been taken on if this measure had not been available.

Recently the New Zealand Institute of Economic Research analysed data from the first 6 months since the introduction of the trial period. Its conclusions are worth reading. The economist who wrote the report spoke on the radio about what the data showed. The impact was in terms of job numbers, and that impact was 13,000 jobs—13,000 jobs. The data indicated that the 90-day trial had the positive impact of creating 13,000 jobs in small businesses. That is 13,000 people who would not have had jobs otherwise. That is 13,000 families who are not standing in the dole queue. That is 13,000 people who were given a chance to prove themselves. The Opposition’s response, and the Council of Trade Union’s response, was to say that was feeble. To call 13,000 jobs feeble, I think, is ridiculous. I think we need to ask Helen Kelly why she is so opposed to small businesses wanting to hire new staff. What does she have against people getting jobs with these companies? We know that 96 to 97 percent of businesses in New Zealand are small to medium sized enterprises, yet Labour does not want them to succeed. It would take away one of the very instruments that has just resulted in an extra 13,000 jobs.

Why does Labour not like small businesses? Why does Labour not want small businesses to succeed? Why does Labour not want them to hire more people and create more jobs—why? I think Labour needs to answer that, because the analysis says there are 13,000 more jobs because of one of National’s policies. That is only one of our policies. If Labour had its way, none of those 13,000 people would be in work. I ask Labour members to pick up the phone and be up front with every one of those 13,000 families, and to tell them that Labour would sacrifice their livelihoods on the altar of ideology. I ask Labour members to tell them that Labour does not believe they deserve to have jobs. They should ring them up and tell them why Labour does not believe they deserve to have their jobs. Labour members should tell those people that Labour will make it harder for them to get a job in the future.

While I am at it, I say that Labour should call another 6,000 New Zealanders. It should ring them up and tell them to join the dole queue, so that Labour can introduce a $15 an hour minimum wage—it should tell them that. It should tell that to the 6,000 people who will lose their jobs if Labour has its way and increases the hourly minimum wage to $15 an hour, which we know is simply not sustainable. We wish it was sustainable, but unfortunately it is simply not sustainable. We are not prepared to jeopardise 6,000 New Zealanders—6,000 jobs—for ideology. We will not allow that to happen.

Suddenly the Labour members had another idea. They said “Let’s bribe the public. We’ll give them another holiday. We will Mondayise it.” This is Labour’s solution in respect of the issue of productivity. This is its great new idea. Do members know what it means? Because this year Anzac Day falls on Easter Monday, Labour wants to Mondayise it. Does the House know how many times Anzac Day has fallen on Easter Monday?

Amy Adams: Is it once?

Hon KATE WILKINSON: Never! Never before has Anzac Day fallen on Easter Monday. Does the House know when this will next occur? When will Easter Monday next occur on Anzac Day? It is in 2095! This is Labour’s great idea!

Our trial period works well. This Government backs New Zealanders. We set out to give small businesses the confidence to take on new staff, and they have responded. Employers want to take people on, and they want to take a chance on someone whom they might not otherwise have taken on. We all know that there will always be rogue employers that will make the rest look bad. I have no time for bad employers. The Labour Opposition will know that we have doubled the penalties relating to bad employers, because we do not condone bad behaviour by bad employers. But the majority of employers are fair-minded, hard-working Kiwis who want to see their company, or their business, and the people whom they employ succeed. I back them to achieve that. Trial periods will be extended to all employers from 1 April this year, because we want to create more jobs. If this policy created 13,000 jobs in small businesses, members can imagine what it could do for all businesses.

This policy has made a difference in New Zealand, just as it has overseas. It is one of many policies that this Government has introduced to assist New Zealanders with the choices and opportunities available to them. What we do is to allow flexibility and choice. We are also allowing New Zealanders to actually cash in 1 week of holiday, if they want to—only if they want to. If they do not want to do so, they do not have to. They might be told that, no, they cannot do so, as—

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

CLARE CURRAN (Labour—Dunedin South): John Key’s vision is dull. It has no substance. There is no other way to put it: he is out of touch with real New Zealanders who are struggling to cope with skyrocketing power, petrol, and grocery bills. He does not have any new ideas. The ideas he has had are questionable in terms of whether they can be delivered on, and whether he is committed to delivering on them. After more than 2 years in Government the pressure is now on John Key and National to deliver a stronger economy, and once all the spin and promises are stripped away, they will be judged on their results. John Key’s speech to Parliament today spelt out National’s plan for the year, and I heard no plan to grow jobs in the economy or help families under financial pressure. National’s big idea is to sell our most valuable public assets to the highest bidder, which means that more and more of our wealth will go offshore. Only Labour will stop asset sales.

Labour has a plan for a strong export economy, a fairer tax system, and strong public services. We will introduce a tax-free zone to help middle and lower income families with the rising cost of living, and we know that it is jobs that matter.

What do New Zealanders want? They want certainty of incomes and direction, not more of the same. They want to know where we are headed as a nation, and they want to know that we have a plan involving jobs for them now and securing jobs of the future for their kids—good jobs with a future. I recently asked people in my electorate in Dunedin South to tell me their three biggest issues, and they told me that those issues were the rising cost of living, the cost of electricity, and rising inequalities. It does not sound like a step change; it sounds more like a step backwards. What will National do? It will provide 25c an hour extra for the vulnerable, it will make more cuts to services, and it will sell our energy companies so that electricity prices will go up even further.

John Key talked today about the fact that New Zealand needs world-class infrastructure to ensure that our workers and businesses can compete as efficiently and productively as possible. He said that broadband is the revolutionary technology of our country and that the Government wants New Zealanders up and down the country to have access to ultra-fast services at an affordable price. Well, I agree with him. But will we get it? It does not look like it. The ultra-fast broadband policy was No. 2 in John Key’s top 10 pledges before the 2008 election. He gave his personal guarantee to deliver ultra-fast broadband fibre to 75 percent of New Zealand homes, for $1.5 billion. People thought that sounded good, but wondered whether they would get it and just how committed the Government is to ultra-fast broadband. A recent Dominion Post article quoted from a Cabinet paper that was released under the Official Information Act, under great duress. The paper said that the ultra-fast broadband roll-out would proceed in three or four phases, but then it said: “The roll-out could halt before the third phase—the widespread deployment of fibre across suburbs—if factors such as a lack of demand made the project too financially risky.” Too risky? Does that mean that the poorer parts of New Zealand might not get ultra-fast broadband? Does it mean that the more remote parts of New Zealand will not get rural fibre? Does it mean that the Government is not really committed to its election pledge? What is the Government’s plan, then? What is its vision? Is it to deliver on the biggest commitment that it made before the election?

Well, I am not even sure the Government will do that. Yesterday Steven Joyce announced that the Government was negotiating a $300 million contract for rural broadband with a consortium of Telecom and Vodafone, which are the two biggest players in the telecommunications scene. They are the incumbents. National’s decision is to negotiate rural broadband contracts with the incumbent providers, which have repeatedly failed rural customers. This is not being anti-Telecom or anti-Vodafone; they are important companies in our telecommunications industry. But the industry is evolving fast. It is rapidly merging with the broadcasting industry with new technologies. The Internet is the future.

There has been an outcry about yesterday’s decision. Federated Farmers, National’s mate, has questioned whether there will be a step change, and has suggested the policy is not ambitious enough or competitive enough. Conor English, Bill’s brother, who works for Federated Farmers, said: “If you’ve got two incumbents and they’re just going to get bigger, then naturally that does raise competition concerns.” So there are big concerns from Federated Farmers about this issue.

A couple of weeks ago Selwyn Pellett from the Productive Economy Council wrote about the long-term consequences of asset sales. Labour has learnt that lesson. He wrote about the sale of Telecom, which saw a dividend stream flow out of this country that could have seen broadband infrastructure in place a decade ago. Labour tried to do something about that. He said that Telecom’s monopolistic pricing effectively became a foreign tax on all New Zealanders and a handbrake on economic development. Now we are proposing to hand over our newest and most important piece of infrastructure to Telecom and Vodafone not only in rural areas but, likely, in urban areas too. Let them have a role, but do not give them a monopoly. There are innovative solutions available to deliver broadband faster to the 800,000 rural New Zealanders who are crying out for it. They are people like the man who contacted me last year from Winchester, near Timaru. He had moved there from Auckland. He now needs to move back north for personal and health reasons, but he cannot sell his home. Why? Because he cannot get broadband. The response from Telecom and the Minister for Communications and Information Technology was that he would have to wait 5 or 6 years. Winchester is not remote. FX Networks already runs fibre straight down State Highway 1, right near his house. That company was part of a bid for rural broadband that committed to delivering a fourth-generation wireless network in 2 years with better speeds and at a lower cost. That man cancelled his life insurance. He was told by the local National MP to go on a benefit. How innovative was that? There has been too much secrecy, not enough transparency, and too many questions about this particularly important infrastructure. There is no evidence of a wider plan about what the Government will do with broadband.

Labour wants New Zealanders to have ultra-fast broadband, but broadband is just part of what is needed to deliver a digital transformation strategy for this country. We need a digital vision and a concrete digital agenda. Under this Government and this Minister we do not have either. Instead, there is the absence of a cohesive regulatory environment to enable New Zealand to take advantage of broadband investment, the destruction of New Zealand - developed content, the lack of a clearly articulated vision for New Zealand as a 21st century digital economy, and the failure of our education system to equip young Kiwis with the digital skills needed to transform this economy.

The way the Government spends its money is important. How can we provide New Zealanders and our children with the knowledge that we can have sustainable jobs and industries? The Government, as the biggest purchaser of goods and services, has the capacity and the responsibility to develop domestic industry from the way we spend our money. This Government is committed to big deals that cut out local suppliers at lowest cost. We have seen it in this Government’s approach to spending $500 million of taxpayers’ money on building trains for Auckland. The objective is a lowest-cost bid, which is unlikely to see that money spent inside New Zealand, to sustain and build our rail engineering industry. That is despite the Prime Minister’s claim that National will build the financial durability of KiwiRail. It is a joke. National’s reluctant commitment to KiwiRail is the sign of a Government that would prefer to see more heavy freight on our roads than on rail.

I want to talk about how the Government spends its money on information and communications technology. Members might be surprised to learn that the information and communications technology industry in this country contributes $20 billion a year to our economy. It is worth $5 billion in exports a year and is second only to the dairy sector. It employs around 40,000 people and invests on average around 9 percent of revenue in research and development. It attracts $2 billion worth of Government procurement, which is 7 percent of all Government procurement. It is on the precipice of vast opportunities with ultra-fast broadband and rural broadband. These are the industries of the future, and finding skilled workers is that industry’s biggest challenge. But what does the Government say? It says: “It’s not our problem. We’re not investing in training. That’s the industry’s responsibility.” So what is this Government’s responsibility? What is its plan? People need to know that they can trust their elected representatives to have their best interests at heart, and to have a plan. That is not using the tired-old strategies from the past, but some new ideas, some innovative solutions that build confidence in our local industries, and create jobs for the future for our kids. We are not a corporation, I say to Mr Key. We are a country.

Hon Dr WAYNE MAPP (Minister of Defence): New Zealand has a clear challenge ahead, and that is to build exports and growth. That is the critical issue facing this nation, beyond all else. Opposition members spend all their time talking about social issues. They did that during 9 years in Government. What happened during that period? New Zealand exports since 2005 have gone backwards. That is what happens when we take the eye off the ball. The previous Government did that, and that is why we are in our present situation. That is why this Government has a relentless focus on the economy. We are dealing with a global financial crisis. We are dealing with debt—$300 million per week. I know that Opposition members just airily dismiss it as if it is of no particular consequence and no particular constraint on their $5 billion of promises in just 1 month. They are truly in la-la land on that issue. That is why National is building the conditions for growth. That is why we are building on science and innovation.

I heard Mr Goff talk today about Sir Paul Callaghan. He obviously does not read what Sir Paul writes. This is what he wrote in the Dominion Post today; today, I note: “… our thinking is too often mired in fashionable cliché rather than serious analysis. Ten years ago we went for ‘biotech’ … Now politicians tout ‘clean-tech.’ ” What did we hear Mr Goff talking about today? I think it was about cleantech. Fashionable cliché, rather than serious analysis, is exactly where Mr Goff is mired.

Sir Paul went on to say: “Our future lies in the niches of a world economy … We will creep up on our competitors in the odd spots, in respiratory humidifiers”—such as Fisher and Paykel Healthcare—“in crystal-controlled oscillators for GPS on a chip”—such as with Rakon—“in magnetic resonance sensors for the oil industry.”—such as Magritek.”

Building science and innovation has been my central focus as a Minister. I have been systematic in this regard over the last 2 years. In 2009 there was a focus on fundamental science, building up the Crown Research Institute Capability Fund, building up the Marsden Fund, building up the Health Research Council and establishing the Prime Minister’s science prizes, and also arranging the appointment of Sir Peter Gluckman as the Prime Minister’s Chief Science Adviser.

Early in 2010 we then moved to the reform of the Crown research institutes. We established a taskforce, gave them clear objectives and bulk funding for core science and a clear recommendation from the OECD. That has been rolled out. Also last year in the Budget there was building business support for science and innovation. This year on 1 February the Ministry of Science and Innovation was established. Members will hear a great deal more about that over the next few months. However, I note that when Labour published the new appointments, Mr Shearer, who apparently supports the Ministry of Science and Innovation, still described himself as a spokesman for research, science, and technology. All I can say to David is “Catch up.” That is indicative of Labour, really. It has to catch up all the time. That is just one small microcosm.

The programme, in each of those 2 years, essentially rolls out over 4 years. I shall focus on some of the key initiatives. The technology development grants will grow from $22 million this year to $62 million 3 years from now. The commercialisation transfer budget will grow from $4 million this year to $8 million, 3 years from now. The Rutherford Discovery Fellowships, primarily for advanced post-doctorates, will grow from $1 million this year to $9 million, 3 years from now. That will fund in that year alone 50 new Rutherford Discovery Fellowships. That is 50 scientists who will be able to stay in New Zealand, building their careers as they advance on from post-doctorates. That is a significant change. Also the science infrastructure fund will grow from $7 million this year to $15 million in 3 years.

This week we announced $30 million for the national supercomputer project, an infrastructure project spread across the University of Canterbury, the University of Auckland, the National Institute of Water and Atmospheric Research, and GNS Science, and using other infrastructure as well. I will give members an insight on the companies that get those technology development grants, because that is where the rubber hits the road. These are the sorts of companies: Fisher and Paykel Healthcare, $500 million of sales last year; Gallagher Group, $160 million of sales last year and the one New Zealand company mentioned in a publication in German by Hermann Simon called Hidden Champions of the 21st Century, about companies that dominate in their field; Rakon, with sales of $144 million; Tait Electronics and security, $200 million of sales; and the list goes on, including Skope Industries, Weta Digital, and 27 other companies.

Each of these companies has its niche, the kind of approach identified by Sir Bill Gallagher. Each of these companies are leaders in their fields. Our challenge is to grow these companies, and a whole range of other companies around them, much faster than we have done in the past. That, in a sense, points to New Zealand’s future. We are already strong in primary industries. That has been the foundation of the New Zealand economy for 150 years. There have been good prices for those primary products in recent years, but it is not enough.

We are strong in tourism. That generates jobs across all the skill levels, but with a particular concentration of employment in lower-skilled opportunities. It is a huge sector of our economy. These sectors will grow, and, particularly in the tourism sector, they are job rich. But in truth we also need to add a third sector, loosely called high technology. Some of that might be in biotechnology; some might be in information technology or digital media. Much of it, however, will be in niche manufacturing. Today those companies generate $5 billion of exports. Some, as I have said, are quite large, like Fisher and Paykel Healthcare; many are in the $30 million to $100 million range of exports. They are all listed in the Technology Investment Network publication, known as the TIN 100. I know this is well known to various members around this House, including, I note, Mr Shearer.

The companies in this publication are the ones we need to grow. We need to see the Fisher and Paykel Healthcares grow to be billion-dollar companies. We need a hundred companies to grow from $50 million of exports or thereabouts up to $100 million. That way we would get to $10 billion of exports. That would be just the start of the challenge. Many of the companies are yet to exist or are in their infancy. That is why we also have the technology vouchers, a pilot programme with $5 million this year, but it has been oversubscribed. We will grow it according to demand. That really sets out the challenge for this nation to grow a new sector of our economy. That is the way we will close the gap with Australia over time. That will be a very substantial challenge in its own right.

The new Ministry of Science and Innovation also has an innovation board. We have included on that board some of New Zealand’s leading science entrepreneurs, including Dr William Rolleston, who also runs a company within the TIN 100 group, South Pacific Sera, a biotechnology company in the Canterbury area. My colleague Amy Adams will know that company particularly well. Also included on the board is Mr Grant Ryan of YikeBike, also another Canterbury company. Why have I mentioned that company? The YikeBike was one of the 50 top inventions.

DARIEN FENTON (Labour): In the next month my son and his partner will join the exodus to live and work overseas. Like many of his generation he is going for better opportunities, but that is not the only reason. He and his partner are tertiary qualified, and both have good and relatively well-paid jobs. So it is not money that is driving them away; it is a lack of confidence in the future of our country under John Key’s Government, and a growing belief that they would have a better future elsewhere.

John Key promised the New Zealand electorate in 2008 that his Government would stop our children leaving the country. He talked it up, he melodramatised it, and he said he would stop our best and brightest leaving our shores. But only 2 days ago the Weekend Herald reported that there was a net loss of almost 22,000 Kiwis to Australia last year. All the signs are there that this exodus will only get worse. So that is a broken promise among the silly slogans, the empty promises, of John Key and this National Government. John Key promised there would be a step change. We still do not know what that means. He promised there would be a brighter future. He promised that New Zealand incomes would catch up with Australia’s. He promised to tackle what he called the growing underclass in our country, and what a sad indictment there was about that this week, with the story about Aroha and her mother.

The Prime Minister’s statement to Parliament today signals a Government that has run out of ideas, if indeed it ever had any. He is finding out the awful truth: promises are easy to make, but it takes a lot more than words to deliver on them. There is no brighter future, for example, for the 2,500 families on the North Shore and Rodney who have had to apply for non-benefit special-needs grants in the last year. I think that is symbolic of just how widely and deeply felt this Government’s inaction has spread. We are talking about the North Shore and Rodney, the home of five National MPs, including the Prime Minister. There is no brighter future for families who are struggling with the rising cost of living, which has actually been caused by National. GST and rents have gone up, rates are going up, general practitioners’ fees are going up, early childhood education costs are rising, petrol has gone up, ACC costs are going up, and power prices are going up. How are families supposed to cope with these increases, when their wages have hardly moved, and in many cases have actually gone backwards?

There is no brighter future for the 178,000 people who have no jobs. There is no brighter future for the 100-odd workers who were laid off in the wood industry over the holiday period, when John Key was in Hawaii sunning himself. There is little hope for the thousands of workers who have lost their jobs in the manufacturing sector during the period of this Government. Every worker who loses a job represents a social tragedy. There is the humiliation and loss of self-esteem from getting the sack in the first place. There are the consequences for a family’s income, and the indignity and degrading experience of having to seek assistance from Work and Income. There are the hundreds of job applications that are never answered or even acknowledged. There are the little bits of work from time to time—casual, temporary, minimum wage jobs—as people scratch around to make something in order to put food on the table.

I think we all agree that a job is the best poverty eradication measure available, provided that it is a decent, well-paid job where training, skills recognition, and the contribution of workers are acknowledged as an important part of our economy. But, unfortunately, this Government lacks the imagination to really develop job creation and stimulus. It has decided that New Zealand workers are lazy, untrustworthy, and need to be punished through harsher labour laws. National really believes that the removal of rights for all workers in their first 90 days of employment will encourage employers to take workers on. It cites research that is, quite frankly, baloney, and it absolves itself of any responsibility for skills training, for industry development, and for doing something about the large and growing number of our young people who are not in a job or even in training.

I note, after the contribution from the Minister of Labour, Kate Wilkinson, that in the UK David Cameron, the Prime Minister, is now proposing a 2-year trial period. The UK has had a 1-year trial period for years, and David Cameron is using exactly the same language that we are hearing from that Minister about it. Obviously a 1-year period did not work, so there will be something else.

National is developing a narrative that says employers are saviours, and workers, particularly low-paid workers, should be grateful for any job, and if they are not, the Government will punish them. Not all employers agree with this, and I want to make that clear. I know that since we have had the 90-day employment law many employers have entered into agreements with unions, because they say they do not need to have those sorts of tools. They have relationships with unions, and they have the ability to think beyond harsh measures like that.

But this Government is now telling workers in the State sector—and has been for at least the last 2 years—that they are worth nothing either, that they can expect nothing from this Government, and, again, that they should be grateful to keep their jobs. No one has a problem with regard to improving efficiency and productivity, but the National-ACT Government believes that a job in the public sector is not a real job. I ask the Government to tell that to the nurses and see how it gets on.

I heard the Greens and the Māori Party calling today for there to be a higher minimum wage. I have to say it seems as though the phone is off the hook when it comes to the Māori Party talking to National about such important measures. But I say good on the Greens and the Māori Party, because Labour agrees with them. If Labour had not been in power for the previous 9 years, I believe that the minimum wage would still be sitting at around $10 an hour and $7 an hour for under 20-year-olds. I am grateful for small mercies: at least the minimum wage for our lowest paid has not gone backwards. But how will a 1.9 percent increase in pay cover 4 percent inflation? That is all that workers on the minimum wage will receive. That 25c an hour will not add up to the cost of a litre of milk at the end of the day, let alone a block of cheese at the end of the week. We are talking about an increase of $8 a week. A person who works full-time on the minimum wage will now receive $437.24 a week after tax, while John Key gave himself and his wealthy mates $1,000 extra per week in tax cuts. [Interruption] I tell National members not to lecture members on this side of the House about the minimum wage.

It is no wonder that more and more people in New Zealand are talking about the growing inequalities in New Zealand, and no wonder that young people like my son and his partner are feeling disillusioned. John Key promised that life would be better for all Kiwis under National, but his bonus for those who slave for the minimum wage is $8 a week. It is $8, and then we have to add in all of the extra costs that those workers have to fork out on. The increases in the cost of power that workers read about in the notices that they received in the mail in the last week will absorb that $8 a week, for a start. That promise has been broken, as well. John Key said all New Zealanders would be better off under National. They are not; things are getting worse, not better.

John Key also promised that we would catch up with Australia. Its minimum wage is now NZ$19.75 an hour—more than 50 percent greater than our minimum wage—and that is just the minimum wage. Actually, most industries in Australia have a higher minimum wage set in its modern awards system based around the industries. So again we can see why more and more people are moving over there.

What is really galling for low-paid workers is that when South Canterbury Finance needed to be bailed out, money was no problem. Money was no object when John Key gave tax cuts to the wealthiest people in the country and gave himself $1,000 a week. Money was no object when the Americans came calling with their threats about The Hobbit, nor was the removal of rights for thousands of workers in the video and film production industry. That was not just for the actors but for the tradespeople, the cleaners, and the catering workers. It was a disgusting sell-out of New Zealand sovereignty and a sombre message for New Zealand workers.

Hon Dr Wayne Mapp: It was not. Labour was prepared to sell out the whole industry.

DARIEN FENTON: It was a disgusting sell-out, I say to Dr Mapp. But for this Government money is always a problem when it comes to the lower-paid and the struggling middle-income families in New Zealand. Money is always a problem for them, but not for the better-off. The message to the large number of New Zealanders in this situation is that their contribution does not matter. So our children will leave, because John Key’s claim that he is ambitious for New Zealand has been shown to be just a lot of hot air.

Hon TIM GROSER (Minister of Trade): The gloves are starting to be taken off as we face up to the choice at the end of November. I have to say that the choice has become rather clearer a lot sooner than I would have expected.

From the Government’s side, the Prime Minister has laid out what we represent today for New Zealanders. Essentially the centrepiece from an economic perspective is, to use his own words, that we must move this economy away from debt-fuelled consumption. There are other ways of putting it but that is as good as any way one could find. What does that mean in practical terms? It means a number of different things. First of all, it means continuing with what I would describe as a very moderate programme of fiscal consolidation. We know what happened with 9 years of Labour: core Crown expenditure went from $32 billion to $60 billion as truckloads of money were deposited outside Government agencies’ doors. We know that the average annual increase in core Government spending was $2.8 billion and we have tried to hold it to a tad under $1 billion. It is not an extreme position but fiscal consolidation is an absolutely central part of moving away from debt-fuelled consumption.

Secondly, we are trying to streamline the public services and although we will hear an enormous amount of rhetoric from other political parties on this issue, it is actually entirely possible to do that while delivering better services to New Zealanders with fewer resources—not radically fewer resources, but we are essentially seeking efficiency gains. In the last 9 years of the Labour Government, the public sector was not asked seriously to face up to the need to produce more with either the same or slightly fewer resources. Seeking efficiency gains is the second objective. It is the way that we will try to move this economy away from debt-fuelled consumption.

Thirdly, we are absolutely 100 percent serious about not letting this very delicate international economic situation spook us. We are proceeding with further investment in the infrastructure of this country. We must invest in our own future in order to generate the growth that New Zealanders will need to pay for all the social services, education, and other things that we all want and value. Part of that process will involve, in terms of capital expenditure, looking a little more creatively at mixed-ownership models. Again, we will hear from Labour for the next 10 months that we are selling off the family jewels and silver, blah-blah-blah, but that party is not listening to the conditions that the Prime Minister and Mr English have so very clearly laid out. We will retain 51 percent Government ownership of those assets, and we will deliver good services. When Labour talks about electricity prices, we are reminded that the average annual increase in electricity prices over the 9 years of the previous Government was 9 percent per annum. Yet Labour talks about the threat of electricity price rises.

The next element carefully laid out in the Prime Minister’s speech on our programme for this year—a programme in which he said that 2011 must be the year for New Zealand—is that we will vigorously promote export growth. We have some advantages now of a very good pattern of trade opportunities. We have excellent commodity prices. Let us back ourselves. Let us back ourselves to shift more and more resources into the export side. As the Prime Minister pointed out, when we look at the last 5 years of the Labour Government, we see that not one new net job was added to either the efficient import-competing or export sectors. It was all in the consumption side of the economy, fuelled by debt.

The next element in our choice for New Zealanders is that we will continue—again, in a very moderate and sensible way—to simplify, which is the word I use, the regulatory frameworks. Members heard the Prime Minister outline the key elements around more sophisticated work on the Resource Management Act and more flexible labour markets. This work will actually end up creating jobs for companies that need the flexibility to take the risk of employing people as they move forward in the uncertain environment that New Zealand, along with all countries in the world, faces.

Finally, I instance that we are about incentivising middle New Zealand. We are about creating a basis where middle New Zealanders can see a way forward for themselves and their families. Since September 2008 the average after-tax income of all New Zealanders on the average wage has increased by $64 per week, which is a 16 percent increase.

Hon Steve Chadwick: Rubbish!

Hon TIM GROSER: The member should just look at the statistics. That is a 16 percent increase in the average after-tax salary. After taking away 6 percent in price increases, it means that a Kiwi on the average wage is earning after tax 10 percent more today than they were in September 2008. That is on the Government side.

I talked earlier about a rather clear choice that I think is emerging for the public to make in late November. So what does it look like on the Labour side? I was reading an offbeat article in the New Zealand Herald by Mr Brian Rudman. I was reading it carefully. I cannot say that I always agree with Mr Rudman, but I thought he made a very interesting point. His thesis was sort of like this: the summer holidays are over, it is back to work for everyone including the politicians, and what is the first thing that the new white hope of the Labour Party, Grant Robertson, thinks would be a great idea to kick off the year with? It is to have a new holiday, paid for by somebody else.

The same debate is going on about the minimum wage. We have made a very modest adjustment that preserves the after-inflation current minimum wage. Labour wants to add $2 or something to it.

We have to try to reduce this debate to the actual reality of New Zealand. By normal international standards, we do not have many genuine small and medium enterprises; we have micro enterprises. According to one study I recall, in 2005, 86 percent of New Zealand enterprises consisted of 5 people or fewer. Grant Robertson is asking companies like that to pay for another day’s holiday and a massive increase in the minimum wage, if they happen to be employing minimum wage workers, which would immediately generate demands for relativity from the other workers they employ. How could anyone believe that our companies are in a position, under the circumstances facing New Zealand along with all developed countries—this very uncertain international environment—to just sign a cheque with no consequences for the viability of either their company or continuing the employment of those people? I am just absolutely astonished by that.

When we put those two examples in the current debate alongside Labour’s emerging programme, what does it really add up to when stripped of all rhetoric? I think it is very clear what it adds up to. It is a policy of spending more Government money and taxing more. We have to ask ourselves what is going on here. If I look, for example, at the interim report of the Savings Working Group, I find a couple of quotations that nail the underlying position that I think we as a country are facing. We can have different views on what adjectives to use about New Zealand. We can have different views about the specific policies that the interim report of the Savings Working Group, chaired by Kerry McDonald, puts forward. That is legitimate. But I do not understand how anyone could seriously have a different view about the underlying driver of what the group is talking about. I will give members a couple of quotations: “The bottom line is that New Zealanders collectively have been spending too much and saving too little … Its credit is about maxed out. It’s time to get real … we’ve had the fun, the big spend-up … it’s time to pay and lay a more secure foundation for future sustainable wealth.”

What is going on with Labour? Is that really a tax-and-spend policy? As the Prime Minister pointed out in his concluding comments, it suggests Labour has learnt absolutely nothing from its last 9 years in Government. What is going on here? Is that seriously an alternative Government policy structure that it is asking New Zealanders to endorse at the end of November this year? One could provide different explanations, but I am rather inclined to think that the real motive here is to avoid an electoral catastrophe. It is about shoring up the core vote to position itself for a possible win in 2014, not 2011.

Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti): That was a very interesting speech from the previous speaker, Tim Groser. There were some very interesting points in there about shoring up the votes. He takes the flip side of the pain and poverty that is being felt by a lot of families in this country and decries more tax or whatever else. When one has ideologies that mean that 82 percent of the tax cuts recently given went to 3 percent of the people in this country, one has to ask what that is about. What is that about, when we are talking about balancing the books and whatever else? That is about looking after a certain clique, and making sure that it travels through.

It was very interesting that he talked about power prices. There has been a haphazard return to the 9 years of Labour—the problem supposedly is the 9 years of Labour. Let us talk about the power prices that he talked about in relation to the figure of 9 percent. Is it not funny that Genesis Energy recently increased its prices to consumers in Gisborne by 10 percent? That came on top of the 2.5 percent rise in GST. Genesis Energy is about to raise the price again, by 2.7 percent. Doing the maths quickly, in a very short time the price will be nearly double the increases that the previous speaker purported had happened under the last Labour Government. That is not counting all the other times it has happened. At the moment it is a bit like cuckoo-land and like the king with no clothes. National members are saying that everything is great, that all these jobs are going to manifest out of space and out of the fog, that we will all be happy chappies, and that we should just trust the Government.

There was so much talk about the national cycleway. I say that the only bike that will be parked up around here in November is the one that the previous speaker, Mr Groser, will get on and leave that building. Then he will be back here sitting on this side of the Chamber.

What are the costs and what are the realities for people? With these sorts of rises in power prices the old people will not turn on their heaters over winter. They will snuggle up in the blankets to get warm. We heard a lapdog speech from that member opposite, in the sense of sucking up to the Prime Minister along with that lot over there, knowing full well that they have achieved the 90-day employment legislation that is stymying people’s rights. It has cost a lot of our people their jobs.

Hon Tau Henare: Oh, rubbish!

Hon PAREKURA HOROMIA: Tau Henare knows that. In my electorate the average wage is $15,000. It does not even come close to the $24,000 figure. National members want to huff and puff about the unemployment rate. When the previous National Government moved off the Treasury benches it left behind a 28 percent unemployment rate. In some places around this country, like Wairoa and parts of Hastings, unemployment is 50 percent. Members should ask Craig Foss and Mr Tremain about that rate. It is high, and Craig Foss knows that. Members should then ask Mr Foss—because I know it pains him, and I respect him for that—about the closure of the small businesses in Hastings and Napier at the moment. They total nearly 32.

If the Prime Minister’s statement is supposed to be a platform of policy that gives surety to small and medium sized business, then something is going chronically wrong in Napier and Hastings, I tell Mr Foss. Even the good old latte drinkers are suffering from a 3 percent rise. Coffee has gone up 15 percent. Poor people do not even have the chance to have a go at that.

One of the most fascinating debates out there is about the great Public Service. National members create all this doom and gloom. They slip out of the framework of proper budgeting and decent fiscals and instead make people poorer, make people suffer, and make them miss out. If we go to the chemist in Camberley at the moment or the chemist in Kaiti and have a look at all the bloody medication that people—

The ASSISTANT SPEAKER (Eric Roy): Order!

Hon PAREKURA HOROMIA: I am sorry, Mr Assistant Speaker.

The ASSISTANT SPEAKER (Eric Roy): Your speech will be terminated if you are going to use that language.

Hon PAREKURA HOROMIA: The Assistant Speaker should have a look at the bottles of medication that are piled up there that people cannot afford to collect. It is a disgrace. Members should go to Wairoa and go to the chemist. That is what they will see. That is how we can measure things.

Simon Bridges: Why aren’t you sitting over here?

Hon PAREKURA HOROMIA: That is how we can measure things. That is why I am sitting in this seat and that member is still sitting on the backbenches on the other side. He will learn these things as he goes along, as I did in Government for 9 years. That is why I am sitting here and the member is sitting there.

At the end of the day, that is the sort of pain the Government has been inflicting on our people. It is a shocker. The fact that the Māori Party signed up to the 90-day legislation, which punishes the freezing workers and all of those other people, is quite dippy. The previous National Government left us with 28 percent unemployment. Labour brought it down to 4 percent. National members should put that in their pipe and smoke it. Labour brought it down to 4 percent and generated skills. When this Government came in, it cut in half the money for skills and training.

Hon Tau Henare: Rubbish!

Hon PAREKURA HOROMIA: Oh yes, it did. Rents have increased by 9.5 percent. Rates have increased by 9.3 percent. Doctors’ fees are up by 6.5 percent. Early childhood education costs have risen. The price of petrol has risen. I filled up the car the other day and it cost $141. Boo hoo hoo! How is the average family going to manage that? That is success? This economic adjustment is causing most people to be scared about their jobs.

The previous speaker, in a mean-spirited way, said we should not Mondayise public holidays. Let us not care about the people. Why was every embassy in this city, representing other countries, closed yesterday? They gave their staff a holiday. Do members know why? It is because we have a mean-spirited Government that believes that the people do not deserve an extra break. It would not hurt the majority of companies. We have the highest price being paid at the moment for stock in this country. We have the highest return on logs for 16 years in this country. The milk butterfat price is up higher than it has ever been. It is nearly double. That is good, but what is happening with the wealth? Who is sharing it?

A lot of parents have been through agony and pain. The ones I talked to over the last 2 weeks cannot afford their kids’ school uniforms. What is that about? That is real stuff. That is also about people wondering about what they should eat. They buy more spuds than anything else. It is an indictment on this Government.

The tertiary institutions are announcing an increase of 4 percent. The universities have capped the entries. Guess who suffers? Guess who misses out? It is the Māoris and Pacific Islanders. It is all right for the balding eagles who sit around, whose policies pervade this country, and who believe they are helping people. Early childhood education costs are going up. A lot of the kids are not getting the early childhood education support. The Minister of Labour said a very interesting thing about the labour market. She said the 90-day bill was the principal platform that would help. So we have all the skill sets being cut. Labour is clear on developing skills, on training, and on ensuring that our economy is much like the Australian economy and that our people stop jumping over the ditch to live there.

Why are they leaving? One of the things we often heard in this Chamber when the current Prime Minister was in Opposition was that everybody was leaving to go to Australia. He has forgotten that tune. More people have moved to Australia in the last 2 years than moved in any of the last 18 years. What does that tell us?

Hon Dr Wayne Mapp: Rubbish!

Hon PAREKURA HOROMIA: The member who interjects wants to spend hundreds of millions of dollars on putting skyrockets on ships and planes. That is what he wants to do. He wants to waste taxpayers’ money on bombarding other people. He is in cuckoo-land. He wants to go to war. At the moment the Government is warring on the people in this country. It is making them poorer. He does not want the Government to give money to support the social services; he wants to put skyrockets on warships and on tanks, and to play “boys’ army” with them. That is a disgrace; it really is. The member should reconsider that stuff.

I know that Mr Foss is dying to get up and explain why small and medium sized businesses in Hawke’s Bay and Napier are closing down. He can explain why the unemployment rate in Wairoa is between 40 and 50 percent, and why in those areas the people do not know how they are going to pay the bills over the next week.

National members think they can use their old trick of gutting the Public Service. Good old Public Service, we do not need it! But if the Government inflicts more bills on people and puts more people into the poverty trap, then it will need the services of those professionals and everybody else to help those people along the way.

National has a policy for saving money: put skyrockets on the blinking frigates and close down the Public Service. What a mess!

CRAIG FOSS (National—Tukituki): It is an absolute pleasure to follow the Hon Parekura Horomia because no matter what I say, it will make more sense than what we have heard over the last 10 minutes. I suppose there was some kind of revelation there that Labour is looking at privatising the frigates or skyrockets or something, or that it is trying to Mondayise Guy Fawkes Night or something. What is it up to? Members over there are focusing on the issues that matter!

I say happy New Year to you, Mr Assistant Speaker, and to colleagues in the House. It is 2011, and I am sure members opposite will join me in backing the ABs this year. I am sure they will. Like them, I am backing the “All Blues”. I am backing National and I am backing the other ABs, the All Blacks, for Rugby World Cup 2011.

Hon Parekura Horomia: Oh, cut it out!

CRAIG FOSS: The Hon Parekura Horomia has joined me in backing the other ABs, the “All Blues”, this year for election year 2011.

I must put some things straight. I have heard screeching from members on the other side about borrowing for tax cuts or something ridiculous. There was a tax switch, which kicked in last 1 October with some balance on 1 April this year. Yes, revenue was lost from making the PAYE rates more fair and equitable. The losses of revenue there were picked up by increasing GST, by changes to loss attributing qualifying companies, which the members opposite suddenly seem to have discovered, and by various other changes to depreciation, etc. The fiscal cost—both sides of the balance sheet—of the tax changes introduced by this Government and implemented last 1 October and this coming 1 April are actually fiscally neutral. So to hear screeching from various members on the other side that there is borrowing for tax cuts or something somewhat absurd is exactly that: just absurd.

I have heard some other points from members opposite that I need to correct, for the benefit of listeners out there. The early childhood education spend by this Government is the highest on record. It is $1.4 billion—the highest on record—and the Minister announced another $100 million just the other day. But members opposite somehow construe that increasing spending from $400 million to $1.4 billion over about the last 7 to 10 years is a “cut” in early childhood education. To be fair, the previous Government put a lot of that spending in place. I do not know how members opposite get there with that claim. It shows that further work on numeracy and literacy standards is demanded, if they cannot even work that out.

I want to correct another point made by the Hon Phil Goff in his speech. He talked about early childhood education and I think he said there had been a 10 percent increase in participation by Pacific Island children in the last few years of the previous Labour Government. He is totally wrong. There was a 10 percent increase in the number of enrolment forms filled out for various institutions. In fact, the parents of a child could have filled out many, many forms. The actual participation rate by children in the Pacific Island sector in particular, because the member brought this up in his speech, was basically stagnant. That is appalling given the increase in fiscal spend on early childhood education. I note, for the record, how quiet members opposite became once the brutal, hard facts hit the floor.

In 2011 National will continue to focus on the issues that matter. Members on the other side will continue to disguise themselves with their tinkering and reshuffling of the fresh new faces of Labour. But even Mr Goff is somewhat of a slow learner. I understand that in his speech he did not move an amendment to the motion, to show a lack of confidence, which is traditional for the Leader of the Opposition to do. So after 26 long years in Parliament he did not even get that bit right. He is still learning, and maybe after another 26 years he will get going.

In 2011 this Government will continue to rebuild the New Zealand economy, after the demolition job by the previous administration in its 9 long, wasted, fiscally rampant years. However much members opposite try to reinvent history, the numbers speak for themselves. It was a decade of deficits, when thousands upon thousands of New Zealanders abandoned this country and moved offshore. The previous speaker mentioned migration numbers but he was absolutely wrong.

We will continue to reallocate resources from head offices, headquarters, and bureaucrats and move them to the front line. We have found $4 billion of savings so far. That is $4 billion that does not have to be borrowed or raised by taxes. That is $4 billion of better allocation of taxpayers’ hard-earned money, exactly as householders have to do every single day. We will continue to keep interest rates lower. Members will recall mortgage rates at 10 percent under the previous administration. They are nowhere near that under this current administration, because of our prudent fiscal management.

The “borrow and spend” and “borrow and consume” game is over. It is no more. It does not happen. We will continue to constrain the growth of the Government sector, which constantly crowds out the real sector that creates real jobs and real income for real families. We will keep an eye on new spending. Members will recall that the Hon Michael Cullen had about $2.8 billion of extra spending each and every single year under that administration. We have brought that $2.8 billion down to $1.1 billion and now we are targeting $800 million to $900 million. That is still huge money but it is on top of us discovering and reallocating $4 billion within the economy. We will continue to get more value from each and every single tax dollar and we will treat it as preciously as every single household has to. We are transparent about this.

I congratulate the Hon Bill English on the investment statement on the accounts of the Government of New Zealand. For the first time we have some hard numbers where we can make some hard or difficult choices on the allocation of scarce capital, which is basically borrowed money. I agree with the quote made by Hon David Cunliffe just before this House rose at Christmas. He said that New Zealand needs “to unleash State-owned enterprises to create and grow new subsidiaries with private partners and shareholders”. That was said some 50-odd days ago. What has changed? I agree; we should unleash the awesome potential that is in our balance sheet. When we allocate capital in the wrong place, that means the non-development of a hospital or less for our health sector. I do not know whether Mr Goff agrees with this, and it appears he does not, although maybe that is part of the leadership stuff going on over there, but I cannot believe that Labour members oppose such things. Why do they oppose the ability of New Zealanders to invest in their own future—in their own assets? Why do they oppose the ability of New Zealanders to have a model to invest in for 20, 30, or 40 years for their own future? Why do they oppose the changes proposed to allow KiwiSaver accounts to allocate investments within these borders?

The previous Government set up KiwiSaver, and I say: “Good on them.”. Members opposite should claim that, but they will not allow KiwiSaver to be all that it could be. Why would they do that? I do not understand. They introduced it, to be fair. They should watch this space because we will be concentrating on savings, investment, and better management of every single taxpayer dollar this year. But I guess it is part of the confusion about why they are opposing it. Mr Goff now says that the asset sales of the 1980s and 1990s by a former Labour Government were all a mistake. Yet the previous Labour administration had 9 years to buy those assets back. It did not, although it had 9 years to buy back those assets that it says now should not have been sold. Their past 9 years in Government were the best economic times and they blew it. I will not go into too much detail about the facetiousness of, and lack of integrity in, Mr Goff’s observation.

The world has changed over recent years. It is no longer an option to spend, borrow, and consume. The global financial crisis or recession has put a brutal focus on countries’ balance sheets, both private and public, in terms of their total debt. Whether or not they like it, the creditors are watching very, very carefully. If this Government is able to do what the Prime Minister outlined in his speech—to start to bring the spend down, to bring back more efficiency to the taxpayers’ balance sheet—then we will be in a much, much better place and we will begin to build a much better and stronger economy. Thank you.

CHRIS HIPKINS (Labour—Rimutaka): How quickly those members opposite forget about the people who put them into Government. How quickly they forget about the hard-working New Zealanders who pay their taxes, who are doing it tough, and whom the Government now talks about as if they are simply numbers. They forget about the personal lives that lie behind those numbers. When Bill English comes down to the House and talks about the increase in unemployment he talks about the numbers but he forgets the people who are behind those numbers. He forgets the people, their families, their mortgages or rents, their supermarket shopping bills, and their power bills. He forgets the people who are doing it tough.

This Government has already forgotten about those people. It has forgotten about them because Government members are interested in only one thing: they are interested in rewarding people who are like themselves—that is, people with money. They are interested in the people who backed them. That is where this Government has been focusing its efforts. It has focused its tax cuts on the people on the highest incomes while the people on the lowest incomes and other ordinary, hard-working New Zealanders—middle New Zealand—get clobbered with an increase in GST that more than cancelled out the tax cuts they received under the National Government. Those people get clobbered. The people in the middle and the people at the bottom of the heap get clobbered by this Government—by the “Paris Hilton” economics espoused by people like Wayne Mapp. They get absolutely clobbered by the National Government, while the people on the highest incomes get rewarded.

That is the first message that this Government is sending through the Prime Minister’s statement this year. It does not care about the people at the bottom. It does not care about the people in the middle. It cares only for the people at the top. Bill English inherited an economy in very good shape, and he set about running it into the ground. New Zealand had record low debt when Bill English became the Minister of Finance. What did he say? He said this is the rainy day we have been saving for. The previous Labour Government saved. It paid down debt. What has this Government done? It has given out tax cuts to the people who needed support the least, and now it is borrowing—what is it—$300 million a week to pay for the tax cuts for those at the top of the heap. This Government inherited a record low unemployment rate, which was either the first or second-lowest unemployment rate in the developed world. That is what National had when it became the Government, but what has it done? Well, it has turned that round. It has turned that round well and truly. This National Government wanted to catch up with Australia. Well, it has caught up with Australia in respect of the unemployment rate; we now have a much higher unemployment rate than do the Australians.

So what is the Government’s solution to the problems of the New Zealand economy, and to the fact that we are borrowing $300 million a week? It is to sell some stuff: “Let’s sell some stuff! We’ll sell the SOEs.” The Government will sell the energy State-owned enterprises, it will privatise accident compensation, and it will privatise prisons. It says “Let’s sell things.”, because that is what people do. When they cannot afford to pay the mortgage they sell the house. But they can sell the house only once, and then where do they live once they have sold the house? That is not a solution to our economic woes and our financial difficulties. We should not sell stuff, because it can be sold only once. What will the Government do? What will Bill English do once he has sold those assets that first time? Actually, Bill English will not need to worry about it because he will be long gone by the time that eventuality rolls around.

This Government is clobbering the people at the bottom, and it is clobbering the people in the middle. John Key said in his speech that a society could be judged by how it treats the most vulnerable. Well, let us judge this Government on that. Let us judge this Government on that sentiment expressed in John Key’s speech. Children are pretty vulnerable; what has the Government done for children? It has cut funding out of early childhood education, and as a result kids will either not participate in early childhood education or have a lower quality of early childhood education, or their parents will have to pay more for that education. Those are the only three outcomes from the Government’s funding cuts to early childhood education—pay more, get less, or simply have a lower quality. Those are the things that will come out of the cuts to early childhood education.

The Government has cut home-help time for elderly people. They are vulnerable, so what has the Government done for them? It has cut their home-help hours. It has cut support to some of the most vulnerable people. Victims of sexual abuse have had their cover under ACC eroded away under this National Government. It has cut the training incentive allowance for people who are trying to pull themselves up by their bootstraps and get themselves back into the workforce. This is a Government with no plan, but what it is very good at doing is spin, and nothing illustrates its spin more than what it has been doing in accident compensation. It is very clear that from the day this Government came into office it had an agenda to privatise our accident compensation scheme, and it has set about trying to destroy the credibility of that scheme in order to justify more cuts and privatisation.

When people come from overseas they look at our ACC and our Pharmac, and they say that they wish they had schemes like that. Those schemes take lawyers and big pharmaceutical drug money out of the health system, which means that health dollars actually get spent on health care. But this Government wants to erode that and to do away with that. How is it doing that? First of all, it is attacking ACC’s credibility. Government members have talked up a crisis. They have manufactured a crisis. ACC does not have a financial crisis. In fact, it is on track to have a $2 billion surplus this year, so there is no crisis despite what the Government is trying to do. But what is it doing? It hiked up accident compensation levies so that people would get annoyed with ACC. The Government did not need to hike up the levies, but it has done that anyway.

Then the Government cut ACC entitlements. It cut entitlements so that 90 percent of sexual abuse victims have been denied cover for counselling—90 percent of sexual abuse victims have been denied cover through ACC for counselling. Government members have nothing to say about that, because they know that if we judge them on the sentiment that John Key expressed—about judging a society by how it treats the most vulnerable—there are not many more people more vulnerable in society than someone who has been the victim of sexual abuse. Yet 90 percent of them under this Government cannot access counselling; 90 percent of them have been turned down for counselling because of this Government’s cuts in ACC.

So why is the Government doing all this? It is doing all this because it wants to privatise ACC, and because it wants to open up accident compensation to competition. Why does it want to do that? Well, we can look at Merrill Lynch. Is Merrill Lynch connected to the Government in any way? I cannot think of any. I think that Merrill Lynch may have some passing connection to the Government. Merrill Lynch let the cat out of the bag when it said that the privatisation of ACC under a National Government would result in $200 million a year of windfall profits for the private insurance industry—$200 million a year of money would be transferred from hard-working taxpaying levy-paying New Zealanders to the coffers of private insurance companies. That is why the Government wants to privatise ACC. That is why it wants to do it. It wants to increase the profits of private insurance companies. It wants to do that by opening up ACC to privatisation, which will result not in money going into health care or into injury prevention and rehabilitation, but in money going into the bottom line—the profits—of private insurance companies. What will the private insurance companies do? Of course they will erode cover and erode entitlements.

Any New Zealanders who have made claims to an insurance company, whether it is for a burglary or a car accident, will know that those insurance companies will screw them down for every possible dollar they can, but that is what every New Zealander now faces under a privatised accident compensation scheme when they have an accident. So when people are at their most vulnerable they will be on the phone to a private insurance company that will try to screw them out of every possible dollar it can. I think that that is not good enough, and Labour members think that that is not good enough, which is the reason why we will oppose, tooth and nail, the National Government’s plan to privatise ACC.

We have a good accident compensation scheme, despite what the Government is trying to do in order to ruin its credibility. Why do we know that? PricewaterhouseCoopers was given a brief to go anywhere in the world and find the Government a scheme that was better and cheaper. Do members know how many they could find? Not one! PricewaterhouseCoopers could not find a single scheme anywhere else in the world that was cheaper, more efficient, or provided better cover than ACC—

Hon Dr Wayne Mapp: I can tell them one—the scheme we had in 1999.

CHRIS HIPKINS: Rubbish! That is not right; I will tell members about the scheme in 1999, which was partially privatised. What happened to one of the insurance companies that was offering cover under that scheme—HIH? It went broke, and the Australian Government had to bail it out for $500 million worth of Australian taxpayer dollars. It bailed out one of the schemes that was delivering cover under National’s privatised accident compensation scheme. That is what we can expect: the Government will privatise the profit and socialise the losses. That is what the Government will want to do to ACC, but it will have a fight on its hands because Labour is opposed to the privatisation of ACC and we will not have a bar of it.

DAVID BENNETT (National—Hamilton East): Just before I start I think the public of New Zealand need an explanation of the tactics that Labour and Green Party members have been using today. It is a very common tactic, which those parties use when they are in this House: they try to build on the fear factor. They try to take advantage of people in a time of weakness, and they try to have a submissive country of people who will just listen and be told what should be done by the Government or political party that those members attempt to be. They use personal stories about people who are in trouble, and about their family members, and all that. They are really saying that a person has been in a situation but that it is the system’s fault. It is the system’s fault that that person has been in that situation, it is the system’s fault that that person has not had help, and it is the system’s fault that that is the situation we have as a country, when there is actually a bigger and deeper reason for a lot of those situations.

People have choices in life, and in life people do make some choices. But Labour members stand there and use fear tactics on people. They go out there and say that this is the big bad system that is against people, but that Labour members are there trying to save people from the system. But the reality is that Labour wants people to be under that system so that it can control them and control that system.

Labour and Green members today have not wanted people to think for themselves; they have wanted them to be told what will be done, because people can trust them. That is their motto—people can trust those parties to deliver what is needed in their lives. These guys are so good; they can deliver all of that to people. That is just not reality. It is not life, it is not how it works, and it is not how the Government works.

The Government is there to provide services when it can. The Government is not there to make your life a better place, necessarily. One has some choices in how one does that; one has some choices in the education one gets, the job one takes, and the career one makes. It is not all about the Government and the people in this room deciding that. People need to look at that. They understand that, and that is the fundamental problem that Labour has at the moment—they do not trust New Zealanders. They do not trust the instinct of New Zealanders to recognise that New Zealanders can build their own future, and they want a Government that gives them the tools to build their own future. They do not want the Government to give them that future, but to give them the right to build that future for themselves. There is a big difference there, and it is a difference the public understands and the public wants. They do not want us in this room to tell them, or to make their lives. But they want us in this room to let them live their lives and build those futures.

That is what National has done in the last 3 years, and that is what we will continue to do. We will continue to give people the tools to build a better future for themselves. That is the guts of why people will vote for National at this election, because they know that and, instinctively, that is what they want. That is human nature, and that is what National stands for.

Labour said they left this economy in good shape. Let us have a look at this. This country was in recession before the rest of the world. Labour put this country in recession before the rest of the world. Before we had the world meltdown in financial markets, Labour had put New Zealand into recession.

Hon Steve Chadwick: The Government inherited the books in a wonderful state.

DAVID BENNETT: Oh, the wonderful start! We were in recession when we came into power because Labour had put us there. They had put us there, and in the best of times. Those were the best of times—those times were the golden years that people were talking about in the House earlier today. Labour managed to squander those golden years and put this country into recession. Then we had a world recession on top of that. If we had had Labour in power when we had that situation, it would have worsened. We would not be dealing with the unemployment rates we have to deal with, we would be dealing with the unemployment rates the US and England have to deal with. That would be the legacy of Labour if they had their power.

But the reality is that National came in. We actually delivered a situation and a system that will enable New Zealanders to go through this recession and to deal with it in the best manner they can so that there is the least impact on our lives and on our country’s finances, while at the same time setting up the structures and the vision for a stronger country. That is what John Key was talking about over the last year or so when he talked about infrastructure, when he talked about those changes in the tax system, and when he talked about using outside capital and investing in Government enterprises.

It is about building a new system, a system that will enable New Zealanders to take advantage of their opportunities—for example, when we look at the tax switch where we have taken away from consumption and given people a return for their income. It is about sending a signal to New Zealanders that they do not have to spend to have the lifestyle they want; they can invest and get the lifestyle they want. If they earn money from having a good job and a good education, that can lead to prosperity in the future for themselves and their country, rather than going for the consumption, debt-driven approach that Labour has been portraying.

That fundamental difference has been portrayed when talking about investment in Government assets. It is about giving New Zealanders the ability to invest in things for their retirement, and it is about giving them the opportunity to put money into constructive, growing enterprises that deliver real goods, real services, and real jobs for New Zealanders. It is about building a stronger country so we do not have the Government of the day going in there, nicking those assets, and taking the cash out of them when they desire to pay for petty election promises. That has happened in previous administrations. It is about building a new culture, a new attitude to investment, and a new attitude to how we approach the way we deal with our economic and personal lives. That is something that was very strong in what the Prime Minister has been going through, and that is a message that is coming together.

New Zealanders are seeing that message, they understand what it means, and they understand that they have been given that opportunity by the Government. They have been given a chance to take advantage of their circumstances. They will do so because we are backing them, and New Zealanders are fundamentally going to take advantage of those opportunities.

When we look at the economy at the moment we see that we are getting good prices overseas for our commodities. That will continue; that is part of where we live in this world. We have those Asian economies doing so well, and we truly need to take advantage of that. But we cannot take advantage of that if we do not have the infrastructure in our country to enable those industries to actually provide those products at the best possible quality and at the lowest possible cost. We also need to provide the infrastructure so that other industries can develop and grow around our fundamental core industries.

National has been doing that, and I would like to pay tribute to the Hon Wayne Mapp in the science and innovation field. He has done a tremendous job in that area, and it will be a shame to see him leave Parliament. His contribution to that area is very important, because it delivers those industries that will actually build on our fundamental core industries, and give New Zealanders a lot of opportunity and direction going forward.

We live in very difficult times, but these difficult times have been navigated by this Government as best as was possible. We have not only navigated those very difficult times but we have set up a vision for New Zealanders that they can share and be part of. It is not a vision based on fear, or on submissive tactics of saying that somebody has something and other people should have it, even though they have not earned it. Our vision is not that the world is some kind of fearful place, or that everything just drops down from the sky—we are not saying that. We are saying that people have the chance to go out there and make the most of their opportunities in this country and in this world. It is our job to provide the infrastructure and the ability for New Zealanders to do that. That is what we are doing.

We are not providing people with the solution in their hands so they can eat it then and there; we are giving people the seeds so they can go out there and make their own solutions and their own visions and directions in life. That is a big difference; New Zealanders want that, and New Zealanders will vote for that at the end of the year, because they understand that that is a fundamentally more important thing for them to have than for them to be given. They want to earn it, not be given it.

Hon PHIL HEATLEY (Minister of Fisheries and Aquaculture): I endorse the comments from my Hamilton colleague David Bennett. He outlined the reasons why those tax-and-spend and tax-and-consume days are over. He understands that New Zealanders now understand that we can no longer have a Government that sprays cash around every 3 years, and then spends its last year explaining why things have not improved. We are not going to enter this election in a competition with Labour members about how we can lolly scramble out there more than they can. I tell those members to listen: we surrender. Labour members can throw cash around this country better than we can. All of them in Father Christmas uniforms look much more convincing than we do. Goff running around, looking like Father Christmas with his 30 or 29—or are there 17 MPs left, I do not know—elves left on that side of the House, spraying around lollies and cash, looks much more convincing than John Key doing it, because people expect from John Key, Bill English, and this Government a lot more thriftiness, a much more conservative approach, and a much more frugal and sensible approach than they expect from Phil Goff. So we surrender—we surrender. We are not going to spray cash, we are not going to throw out presents, and we are not going to tempt the public with sweets; we give in. We are quite simply saying that the days of tax-and-spend, consumption, and increasing borrowing are over. I think the member from Hamilton put that quite succinctly.

I would like to explain something else to Labour colleagues and those who are listening. I have been extremely concerned as to why Labour members are asking questions about housing, and perhaps their questions are why the Prime Minister decided to address housing in his speech today. They are asking why rents are going up. I remember that when they were in Government they were asking why the prices of houses were going up, so I will back up to quite basic, straightforward economics. Nothing has changed. The more houses there are on the market, the lower the price of the houses.

Hon Member: Say it again?

Hon PHIL HEATLEY: The more houses there are on the market, the lower the prices of the houses. That is because when there are plenty of houses to choose from and there are just a few buyers, house vendors and people building houses have to drop their prices. So that is the first concept for Labour. The second concept is that the fewer houses there are and the more buyers, then house prices will go up more. The fewer houses there are on the market, the more buyers there are, then house prices go up. Why is that? That is because there are very few houses and lots of buyers, and, therefore, people are competing for the houses, so the house prices go up. I want to explain that to the Labour members.

Labour members might ask why, when they were in Government for 9 years, house prices went through the roof. Moving back to what I previously said, that is because over the term of the previous Labour Government we were not building enough houses. Builders found it hard to build houses. Why? First, it was because consents—building consents and resource consents,—took so long to go through the system because of the bureaucracy. Second, it was because land was not released. The previous Labour Government had the view that there was no land in New Zealand around any town or city that would be useful for housing. Even if land was covered in gorse or tea-tree or had no other use whatsoever, Labour was very scared to open up new land to housing. The third reason was that interest rates during the period of the previous Labour Government, particularly during those middle years, were around 8, 9, and 10 percent, so people were not prepared to borrow money to buy or build a house. House prices went up because fewer houses were being built and more and more people wanted them. Why were fewer houses being built? It was because the consenting process was difficult, no land was made available to build the houses on, and interest rates were high.

Now Labour members ask why rents are going up, particularly in Auckland. It is quite simple. I will go back to those initial principles. More people want to rent houses than there are houses available to rent. So what happens is that 10 houses are available to rent but 100 people want them, so the rents go up. Why are there fewer houses to rent? It is because fewer houses have been built. So we need to build more houses; whether one is buying or renting, the fact is that in New Zealand we need to build more houses. The first way we will be able to do that is simply to maintain interest rates at a level where people want to borrow to either build or buy. Maintaining interest rates at 6 or 7 percent, which we have now, would be a good thing for New Zealand. John Key and Bill English have laid out their economic plans to make sure that we keep interest rates low and at a reasonable level—at the moment about 6, 6.5, 7 percent—in order for people to be prepared to build and to buy. The second thing we can do—as we are talking about Auckland—is start talking about what areas of land we can open up for new housing. Do not be afraid of this. There are areas around Auckland where we could have some new housing. In Auckland we could also demolish some housing that is old, cold, and mouldy and make housing denser—in other words, not have so many quarter acre sections, and perhaps put two houses on those quarter acre sections. The third thing we can do is look at the Resource Management Act and the Building Act and look at the way we allow the consenting process to drag on for 2 or 3 or 4 years.

National has made its views pretty clear to people. We want to make sure that house prices remain stable and no longer spiral out of control into the future. We want to make sure that rental prices are kept under control, and the only way we will do that is to build more houses. In fact, colleagues might be interested to know that over the last decade, including the period of the recession, builders have not been building enough houses across New Zealand to keep up with either immigration or population growth. Even before the recession, each year we needed about 22,000 to 23,000 houses, but builders across the country were building only 15,000 or 16,000 houses. So we have a housing shortage. Keeping interest rates under control, managing the economy, making sure that we are streamlining consenting processes, freeing up new land for housing developments, and allowing densification in towns and cities is the only way we will get more houses.

Why does Labour insist on maintaining the red tape of resource consenting, the red tape of the Building Act, insist there is no land in New Zealand for residential housing, and maintain policies that spray cash around in an election year and can only ever have the result of sending interest rates sky high to 8 or 9 or 10 percent, where they were roughly when Labour left office. I do not know why Labour is coming out with these solutions. All I say is that we surrender. We will not run around with bags of cash trying to bribe the public this election. Labour is better at that then we are. We are not going down that road. Labour can compete alone. This election will not be a contact sport if Labour is going to spray cash, because National will not engage in that at all.

It is fair to say in talking about housing that the Housing New Zealand Corporation, which owns about 65,000 houses across New Zealand—almost one in 20 houses—is making sure that it is better using the land. It is subdividing quarter acre sections now and building two houses on those sections instead of one. It is keeping an eye on interest rates and making sure resource consent processes are timelier too. So National is doing its bit. John Key and the National Government will continue to do its bit in housing, and we will not compete with the Labour when it comes to spraying cash around.

Hon TAU HENARE (National): E te Kaihautū o te Whare nei, tēnā koe. E ōku rangatira, e ōku tuākana hoki, tēnā koutou katoa. Ngā mihi nui o te tau hou ki a koutou katoa. E tū pōuri ana au mō te matenga o tō tātou rangatira a Pīmia Wehi, e takoto ana i waenganui i tōna hapū me tōna whānau. Nō reira, e Pīmia, haere atu rā, haere atu rā, haere atu rā.

[Greetings to you, Mr Assistant Speaker of this House. Greetings to you, as well, my leaders, and honourable members. Huge greetings of the new year to you all. I stand saddened at the death of one of our illustrious ones, Pīmia Wehi, who lies in state among her subtribe and family. So to you, Pīmia, farewell, goodbye, depart.]

I want to first of all congratulate those who got a promotion and commiserate with those who got a demotion. I have certainly known and experienced both of those emotions. I ask the wannabe Prime Minister why he thought it was important to demote the Hon Parekura Horomia to No. 10 or 9—basically, down the back end of the first row—and not consider using his vast experience. When the notice came out I wondered why my good friend and colleague had been demoted unceremoniously from his position as Labour spokesperson for Māori affairs.

Hon Mita Ririnui: Our kaumātua.

Hon TAU HENARE: I will get back to that one. Then I saw the Hon Parekura Horomia deliver his speech in the House today, and now I understand why he was demoted.

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

Hon TAU HENARE: To continue on from where I was rudely interrupted by time—

Hon Darren Hughes: Time has been so unkind to the member.

Hon TAU HENARE: It has. I used to have a full head of hair. I want to say a few more things. One of them is about the previous Labour Government’s ability to play around with unemployment figures. I congratulate Labour on getting unemployment down—it is no mean feat—apart from it employing thousands and thousands more public servants. The only job creation in the 9 years of the Labour Government was in the Public Service.

Hon Darren Hughes: The member got a job in the public service.

Hon TAU HENARE: I was a public servant once.

Hon Darren Hughes: In here. It got you off the dole queue.

Hon TAU HENARE: Oh, that is right. This is the new education spokesman for Labour. He has not left school! He has not had a proper job! He has been at college, he has been at university, and that is all he has done.

Hon Darren Hughes: Never been a union organiser.

Hon TAU HENARE: He has never been a union organiser, never worked for the Department of Internal Affairs, and never worked on the streets—sweeping the streets. He has never had a proper job in his life, and now he thinks he can get up in this House and pretend that he is going to be the Minister of Education. Well, I have news for that man: it ain’t going to happen. Come 27 November, what will happen is this: there will be no change on this side of the House, and there will be a few changes on that side of the House. Some of those members will be gone for ever, and some of them will be back for another 3 years in Opposition.

I will now talk about something I think deserves a good debate in the House, and that is vulnerable children, that is child abuse. It is an issue that we in this country should all hang our heads in shame about. Child abuse is not our fault, and it is not their fault; it is not the fault of anybody other than those who perpetrate it on our babies. Quite frankly, there is a way out of it. Child abuse does not happen in a strong culture. Child abuse does not happen among Māori in kapahaka. Child abuse is not part of the norm of a culture. My wish is that we take hold of a renaissance of Māori culture and run with it. I lived through the last recession, the big recession—in fact, I was one of the people who were laid off in the 1980s. In that recession, people in the Māori community thought to themselves: “OK, what about the rejuvenation of our language?”. Members should look at kōhanga reo and look at kura kaupapa Māori. I will stand in this House and say that, yes, the odd one or two graduates from kura kaupapa Māori have gone off the rails, but that it is very rare—very rare indeed.

I am talking about a part of our community, the Māori community, that is continually under the spotlight. My cousin—my relation, or whanaunga—Hone Harawira got on TV tonight and spouted on, blaming National for poor statistics in housing, education, and the economy. I was the Minister of Maori Affairs way back in 1996 and the unemployment figures then were no different from what they are today. We have had three or four Governments since that time.

It is time for our people to rise up, take the bull by the horns and do it themselves as they did back in the 1980s, as they did with kōhanga reo and kura kaupapa Māori, and not rely on handouts or any sort of goodwill from Government—of either party. We can do it. Culture is all about the good things. It is not about the nasty stuff. Culture is about the good things: waka ama, kapahaka, te reo classes, kura kaupapa Māori, kōhanga reo—they are all the good things that our tūpuna, our ancestors, have left us. So my call to our people is if they are not happy with the system, by all means they should go out on their own. They should look at what happened in the 1980s, they should look at people like Dame Iritana Tāwhiwhirangi, they should look at the kōhanga reo movement, and they should look at the kura kaupapa Māori movement for what I consider to be some of the answers staring us in our faces.

My hat goes off to those people in our community who, on the smell of an oily rag, were able to run an early childhood centre. Here is something that the Labour administration did. It required 100 percent of the staff in an early childhood education centre to be qualified.

Hon Darren Hughes: Good idea.

Hon TAU HENARE: It might be a good idea in la-la land, but who will pay for it?

Hon Darren Hughes: The same people who paid for primary education.

Hon TAU HENARE: Hang on. There have been $5 billion in promises so far. Under Labour’s regime, it will steal money hand over fist from good working people, just to pay for some promises it made to get back into power. At the end of the day, my mother-in-law’s early childhood centre does not need 100 percent qualified staff; what she needs is qualified staff and the support of mums and dads and her community. That is what she needs, and she gets it. She does not need 100 percent of the staff to be qualified.

I think it will be a great year this year, notwithstanding our massive win on 27 November.

Hon Darren Hughes: 26th.

Hon TAU HENARE: The day after. I will be suffering from a hangover after beating Twyford in Te Atatū.

KEVIN HAGUE (Green): Of course I hung on every word of the Prime Minister’s speech today, and what a disappointment it was to hear him utter no word about the environment or conservation. I have to say that last year it was similar, although we did have that little coded section of the Prime Minister’s statement that was entitled “Unlocking Resources”, where the Prime Minister laid out his plans for mining our schedule 4 conservation lands and expropriating fresh water in Canterbury for further industry. I think his words were that any drop of water that reached the sea was wasted—such a profound understanding of the New Zealand environment and ecology! So it was a disappointment to hear the Prime Minister’s speech, a disappointment that was only deepened, I am afraid to say, when Kate Wilkinson, the Minister of Conservation, got up to speak. She uttered no word in her speech about conservation, either. She may well have been under instructions not to show up the Prime Minister’s omissions, of course.

Sandwiched between those two statements from the Prime Minister last year and this year we have been living through the International Year of Biodiversity. I guess the idea of that international year was to celebrate the success of the Rio Declaration on Environment and Development. But the way it has turned out in New Zealand and around the world has been more of a requiem for the thousands of species that we have lost and are still losing rapidly. Lester Brown has talked about the crisis in biodiversity the world is going through as the “sixth great extinction”. The last was some 65 million years ago when an asteroid hit the Earth. This one, of course, has been caused by the actions of human beings. He calls it a “massive evolutionary setback and a wholesale impoverishment of life on Earth.”

New Zealand is a biodiversity hot spot and one of the world’s treasure chests of unusual and fascinating life forms. Our plants and animals are utterly unique—they are not found anywhere else—and this is one of the reasons that we love species like kiwi, kereru, kahawai, kauri, and all of the other species that we work hard to protect. Unfortunately, New Zealand also has a long record of extinctions. Many of our plants and animals remain now on the verge of extinction. We have a special responsibility to protect the plants and animals that we love. The Department of Conservation has identified some 2,788 species in New Zealand as being under threat. That includes all of our frogs and bats, 89 percent of our reptiles, 65 percent of our freshwater fish, and 57 percent of our birds. They could disappear for ever within our lifetime. There are thousands more native species that we simply do not know enough about to know what their level of risk is.

For over 100 years New Zealanders have been achieving some remarkable successes in conservation against this tide, but right now only 6 percent of those threatened species identified as being at risk in New Zealand are actively managed to avoid extinction. The risk to the remaining 94 percent is acute. It is true that the Wildlife Act makes it an offence to intentionally kill a native animal, and there are similar protections for some plants. But the major threats to our plants and animals are introduced predators, invasive weeds, and the ongoing loss and disruption of habitat. So far we have failed to respond effectively to even one of those factors.

I have been in Parliament for only a short time, but I have already witnessed this Government taking major backward steps in the protection of these native plants and animals that we love. The most horrifying of these was the Government’s step to cut $54 million from the Department of Conservation’s budget over 4 years, which has massive implications. But that is not the only one. National has also cancelled the $4 million Community Conservation Fund that the Green Party established, in conjunction with Labour, to fund community involvement in local environmental conservation work. National has closed an important possum control research programme, based at Invermay, that was close to delivering new forms of possum control. National has failed to move decisively to protect the Mōkihinui River from Meridian Energy’s proposed 85-metre high dam. National has allowed commercial eeling of the endangered long-finned eel, a species that is found nowhere else in the world and is listed by the Department of Conservation as a threatened species in gradual decline. That is the same status given to the great spotted kiwi, the little blue penguin, and the rifleman.

The Government has issued a new business-focused statement of intent for the Department of Conservation, which has left major questions around the Minister’s statutory responsibility to be the primary advocate for the conservation estate. The statement of intent is entirely about commercial objectives for the department. The House is about to debate—probably next week—the Regulatory Responsibility Bill, which will tie the department’s hands even further when it comes to issuing businesses with concessions on the conservation estate, with the department losing statutory responsibility to put the interests of our plants and animals first. At a time when New Zealand is facing arguably the greatest crisis in biodiversity in the history of human habitation, one might have expected the Government’s priorities to emphasise a response to these problems, rather than preparing the conservation estate for greater exploitation and further losses.

Green Party members set themselves up to be the champions for the environment, working alongside committed individuals and organisations right around the country, to try to turn this tide on biodiversity loss. One small practical measure has been to launch the $4 million pilot project—in conjunction with the Government, which I recognise—that aims to protect New Zealand forests and native species with better pest control, using resetting traps. If that project is successful, it will reduce the costs of pest control and the reliance on poisons. But the most significant work we are doing is yet to come. I am working on a new member’s bill to enhance the protection of our most treasured plants and animals. The United States, Canada, and Australia have all passed benchmark legislation to protect and secure their native flora and fauna, and the critical habitat that they rely upon. New Zealand, by comparison, lacks similar legislative protection.

The Wildlife Act is antiquated and offers no effective legal protection against the biggest threats. Even our native fish are left without legal protection, or a plan for their recovery. In the United States 85 percent of their threatened species are now covered by a recovery plan. In New Zealand the comparable figure is the 6 percent I mentioned. My bill will amend the Wildlife Act by revising the purpose of the original Act to extend the legal protection to all native flora and fauna, including fish. The bill will give effect to the Rio Declaration on Environment and Development and the New Zealand Biodiversity Strategy. The Minister will be required to develop and implement a thorough and science-based recovery plan for each of these native species that is identified as threatened.

Like most New Zealanders, we in the Green Party love this country and all its people. Our environment and our natural heritage are what makes this country unique and precious. We are committed to doing whatever it takes to protect these features. It is important for its own sake, of course, but also because so much of our economy, everything that we sell on the international stage, is dependent on that clean, green image. We set out to make that clean, green image real. No environment; no economy. If we trash the environment we sabotage our economy and, more important, we rob our grandchildren of their birthright. It is another form of borrowing from our grandchildren to pay for short-term profit today, incurring a debt that neither this Government nor any Government ever will be able to repay.

Hon JOHN BOSCAWEN (Deputy Leader—ACT): It is a pleasure to rise on behalf of the ACT Party to respond to the Prime Minister’s speech. I take this opportunity to acknowledge and congratulate the Government on much of what it has done during its first term. I say “much”, but not all. However, amongst the achievements have been the reform of the Resource Management Act, which the ACT Party has participated in, and the rationalisation and streamlining of various Government departments, and I should also mention the passing of ACT’s “three strikes” law, which has already started to make New Zealand citizens safer in their homes and on their streets. I say it is ACT’s “three strikes” law because no one can deny that that law would not be on our statute book but for the promotion of it by the ACT Party. The Prime Minister freely acknowledges that the “three strikes” law would not have been passed without the ACT Party nudging and cajoling the National Government at every step along the way.

The ACT Party and National have also implemented, and then expanded, the 90-day trial period for employment contracts. This has helped to align our employment practices with those of the rest of the developed world. But, more important, it has given employers the opportunity to take on new employees in the confidence of knowing that if they make a mistake, they are able to find an alternative employee. It is important to give confidence to employers so that new employees can be taken into the workforce. The ACT Party, once again, was instrumental in getting that policy extended to cover not just employers of fewer than 20 employees but all employers in New Zealand, to give all employers the opportunity to improve their productivity and employment of New Zealanders.

Although unemployment, at 6.5 percent, is higher than Australia’s rate, we can take some comfort from the fact that it is not around the levels of the United States and the United Kingdom, which have rates of around 9 and 10 percent. We are told informally that if we included those people who are looking to work full-time in the United States, the level would be closer to 15 percent. But the fact that our unemployment rate is higher than Australia’s should be a concern to us. Already we have seen in the last week the New Zealand Herald report that net outwards immigration to Australia is back on the increase. We need to focus continually on our relationship with Australia, because unless we do and unless we move to reduce the income gap between New Zealanders and Australians, we will see ever-greater numbers of New Zealanders move overseas, and move overseas permanently. It is a fact that for generations young New Zealanders have travelled overseas to gain experience: to gain job experience, and to seek out new endeavours and new experiences. Traditionally they have always returned to New Zealand, but increasingly they are not doing so. That should be a concern to all New Zealanders, as more and more of our children and grandchildren grow up in countries other than New Zealand.

It was this concern about the declining living standards of New Zealand versus those of Australia that caused the ACT Party to campaign on reducing that gap. We made it a fundamental plank of our 2008 election campaign. In fact, we put out a 20-point plan to reduce that gap. As part of our confidence and supply agreement with National, we got National to commit to the concrete goal of reducing that gap, eliminating that gap, and bringing our living standards alongside those of Australia by 2025. The ACT Party, once again, was instrumental in nudging National, and in convincing National to appoint the 2025 Taskforce, chaired by Don Brash. It is a big challenge. As the task force pointed out in its most recent report last November, if we continue on as we are doing now, we face the risk that a further net 400,000 New Zealanders will leave our shores for Australia by 2025.

It is interesting, then, that we have in this morning’s New Zealand Herald an editorial entitled “National needs new policy for closing the gap.” The New Zealand Herald reminds us that from the convenience of Opposition, National was able to make promises, and was able to criticise the previous Labour Government’s position on the economy. But the New Zealand Herald points out that the challenge of raising our living standards is still there. It says the Government knew, and certainly knows now, that comparative success relative to Australia would require bold and disruptive interventions. The New Zealand Herald says National is standing up and making that commitment. Making a commitment to a concrete goal of lifting our living standards to the levels of Australia’s requires bold policies and courage. The ACT Party has always led the way in promoting policies to raise New Zealand’s living standards and align them with those of our closest neighbour. The editorial concludes by stating: “For its own sake, New Zealand needs bold economic initiatives that will position the country for sustained growth.” Let me repeat that to the members in the House from the National Government tonight: “For its own sake, New Zealand needs bold economic initiatives that will position the country for sustained growth.”

It is the role of the ACT Party to advocate for those bold initiatives and to promote those policies. When I first rose this evening, I congratulated the National Government on much of what it has done. Tragically, it has done some things that have not been helpful for the economy, and that have not moved the country in the direction of reducing that gap. I think of youth rates. I think of the National MPs voting against Sir Roger Douglas’ member’s bill to reinstitute youth rates. I will remind members for a brief minute of that debate. We saw the previous Labour Government legislate to abolish youth rates: legislate to require employers to pay 16 and 17-year-old young people the minimum wage. What is the natural reaction of an employer when faced with employing someone who is, say, 30, who has life experience, who has had jobs and has gained skills experience, or when faced with employing a 16 or 17-year-old? It is a lay down misère; it is obvious. Anyone who has spoken to employers knows that an employer will go for the most experienced person.

Young people are being denied the chance to get on to the bottom rung of the ladder. This Parliament has denied young people, young 16 and 17-year-olds, the opportunity to go out and get a job at $11 an hour, $10 an hour, $9 hour, or whatever their economic value is to an employer. We have said we will throw them on the scrap heap and give them the unemployment benefit of $4.50 an hour. How does that help to raise New Zealand’s productive capacity? How does it raise our prosperity? We have seen that there has been a significant increase in youth unemployment since the previous Labour Government first passed the legislation that abolished youth rates.

We have also seen a very significant cost to the economy from the emissions trading scheme. This scheme was introduced by the previous Labour Government. It came into effect on 1 January 2008, and it operates as a massive subsidy to foresters—a massive subsidy to foresters. Essentially, what the previous Labour Government put in place was a massive grant, a grant that essentially gives tree planters a one-off gain of about 230 tonnes of carbon. Mr Chauvel knows that is about $5,000 a hectare. The previous Labour Government put into place a grants system that requires New Zealanders to pay some $500 million a year more for their electricity and petrol in order to subsidise those massive subsidies. Nothing annoys me more, nothing makes me laugh more, than to hear Mr Goff stand up and talk about the price of electricity and the price of petrol going up. Mr Goff knows full well that the emissions trading scheme established under the previous Labour Government would have resulted in not a 5 percent increase in electricity but a 10 percent increase—a 10 percent increase in the price of electricity.

We can be thankful that the emissions trading scheme was modified by National, but it should not have been put there in the first place. It should not operate as a $500-million-a-year subsidy to foresters. Mr Chauvel thinks that is funny; he thinks it is funny. But I tell him that his Government put into place a system to pay massive subsidies to foresters, and the National Government carried it on. Anyone in the industry who is smart knows that. All New Zealanders are paying for that subsidy with their electricity and their petrol costs. If anything contributes to the gap between New Zealand and Australia, it is the emissions trading scheme. Thank you.

CHARLES CHAUVEL (Labour): This afternoon John Key told the House that he thought Governments should be judged on how they treat the most vulnerable people in the community. I would like him to know that that is exactly how this Government will be judged on 26 November. If fairness is to be the benchmark, then the record of National, ACT, the Māori Party, and Peter Dunne is shameful—it is shameful. No matter how many catwalks John Key struts down, he will not be able to hide the fact that his Government is just failing hard-working Kiwis. No amount of smiling and waving will be able to hide the most worrying gap that New Zealanders face, the rapidly widening gap between what John Key promised in 2008 and the grim reality that we all now face. That reality is that now, under National, ordinary people are just worse off.

No amount of spin from the Prime Minister’s public relations team can hide the fact that prices are rising faster than wages. He can smile all he likes about raising GST, but at the end of the day Kiwis know that the real effect is that they have to pay a lot more for a lot less at the supermarket checkout. Mr Key can smile all he likes about rebalancing the economy, but at the end of the day Kiwis feel in their pockets that prices are rising a lot faster than their wages. The Prime Minister can smile all he likes about leading a Government of aspiration, but at the end of the day Kiwis know that there are no jobs and that there is no plan. They know that the brighter future he promised is not coming.

I had to laugh when I heard Mr Boscawen talk about the promise to stem the net migration to Australia. A thousand Kiwis a week are leaving these shores for Australia at the moment. Two jumbo jetloads of Kiwis are leaving, because they know that there is no plan for recovery in this country.

Hon John Boscawen: What’s the price of electricity in Australia?

CHARLES CHAUVEL: Mr Boscawen asks about the price of electricity in Australia. He needs to understand that when Australia puts a price on carbon, as it undoubtedly will, New Zealand’s renewable advantage will finally be recognised, and a lot of people who think that the grass is greener on the other side of the fence on electricity prices will have a big surprise coming.

On 26 November New Zealanders will have a very clear choice. They can stick with the Government that has got us to the point where 158,000 people are out of work, including 25,000 Māori and almost 40,000 young people. The Government claims that it is aspirational, but to have almost 30,000 young people aged 15 to 24 out of work and in no form of training or education is shameful. People could choose to stick with the Prime Minister who promised not to raise GST, and who then did, and with the Prime Minister who said that he would make sure that early childhood education remained free, but who then cut its funding so that fees have to rise far beyond what a lot of ordinary families can afford. They can choose to keep a Prime Minister who obviously has no plan to create jobs or grow our economy, but who is hell-bent on selling off assets that all New Zealanders already own, cutting Public Service jobs and benefits to all New Zealanders, and borrowing hundreds of millions of dollars at the expense of ordinary Kiwis in order to fund unaffordable tax cuts.

But there is a fairer option—a Labour-led Government. Governments should be judged, as Mr Key said earlier, on how they treat the most vulnerable members of our society. The difference is that our actions will match our words. A Labour Government will not borrow for tax cuts or to raise GST, or sell off assets that we already own. Our team has a plan. We will put middle-income New Zealanders at the core of what we do, and create jobs and growth by investing in research and development, by boosting skills and trade training, and by changing the way in which monetary policy works so that we actually support our productive exporting sector. We will make sure that we own our own future by preventing the indiscriminate sale of farmland and other strategic assets that ought always to stay in Kiwi ownership.

I have the privilege of being Labour’s environment spokesperson, and I was delighted to be here in the House earlier to hear the excellent contribution from Kevin Hague, when he spoke about the shabby record that this Government has on environmental matters. Anybody listening to the outcome of the so-called Bluegreens’ conference in Christchurch a couple of weekends ago would absolutely despair at the direction that this Government is taking New Zealand on the environment. I do not know how John Key and Nick Smith expect us to have a brighter future if they are bent on destroying the environment that our future and our economy depend on.

It is amazing to me that National is so undemocratically pushing through so-called national standards in schools while at the same time Nick Smith wants to relax the standards for the air we breathe and to allow more air pollution for a longer period of time. Members on that side of the House need to know that the New Zealand Institute of Economic Research says that we will see 635 avoidable deaths from respiratory illness—Jacqui Dean thinks that is funny, but I think that anybody looking at it objectively would not have that smile on their face—as well as 505 unnecessary hospital admissions and over 1 million extra sick days. That is not a laughing matter, I say to Ms Dean; that is something that any Government putting in place those decisions ought to hang their head in shame about. The fact that John Key can talk about looking after the sick and the vulnerable while allowing decisions like that speaks volumes about the utter lack of compassion from members on that side of the House.

What I think is most telling about National’s lack of commitment to the environment is the refusal to set a 2020 target for reducing greenhouse gas emissions. Any Government can wax lyrical about window dressing and statements, as Nick Smith did a couple of weekends ago about a 2050 target years and years away in the future, but that is not showing real commitment to putting immediate actions in place to match the Government’s words. Of course there is a reason why we are not going to see a 2020 target for greenhouse gas pollution reduction. This Government would not be able to meet one, because every policy that it has implemented in this term will make pollution rise rather than fall, in the long term. The Government has watered down the emissions trading scheme—and Mr Boscawen very conveniently failed to mention that—so that it effectively operates as a—

Hon John Boscawen: I did—I did.

CHARLES CHAUVEL: He says that he did, but it was so hard to understand what he was saying that I did not realise it. The Government has watered down the scheme so that it effectively operates as a massive subsidy from taxpayers to big polluters. The Government has done away with Labour’s biofuels obligations, and it has scrapped Labour’s plan to have 90 percent of energy generated from renewables by 2025. There has been an absolute failure to invest in public transport—

Jacqui Dean: It’s not possible.

CHARLES CHAUVEL: Ms Dean, the genius on the benches opposite, says that it is not possible. It is possible, I say to Ms Dean. I ask her to read the Energy Strategy that her Government has watered down, where there was a plan to get to exactly that target. But what happened? Gerry Brownlee abolished it, because he has no commitment to the environment, just like all of the Ministers in that Government on that side of the House.

In Government, Labour would commit strongly to supporting industries like the cleantech industry, which has the potential not only to help to save our environment but to add value in the order of, say, 10 percent extra to our economy. But things like cleantech are jeopardised by National’s approach to policy. Many fledgling cleantech companies just cannot succeed without access to research and development assistance, like the tax credits that National slashed. There is no point trying to sincerely market New Zealand’s cleantech businesses when the other Government policies that I have mentioned already are fast destroying the clean image that we rely on to trade internationally. The cleantech industry is something amazing that should be nurtured, but I fear that it may never get the head start it needs when National is in charge.

Nobody looking at the record could rationally have any confidence in this Government, because it has failed Kiwis and it has no plan. There is no plan and no regard for the well-being of ordinary working New Zealanders. I am proud to be part of a team that does have a plan and that will offer Kiwis a real alternative on 26 November.

JACQUI DEAN (National—Waitaki): That contribution from the member Charles Chauvel just highlights what an ideologically driven party Labour is when its members talk about the ordinary New Zealander. Mr Chauvel says that Labour will put middle New Zealanders at the core of what it does. Well, that is a very interesting thing to say in the context of the report that came out very recently from the New Zealand Institute of Economic Research, which looked at the impact of the 90-day trial period over a 6-month period following its introduction in March 2009. The results of that trial period are very interesting, and I will read from a section of the press release about the report: “Unemployment peaked at 7.1 percent that year and considering the economic conditions small businesses”—that is, ordinary New Zealanders to the ideologically driven members—“were operating under, the indication that hiring was almost 6 percent points higher than expected is extremely good.” Furthermore the report said that total job numbers for these firms were also higher by about 2 percent.

In her contribution earlier today in this debate the Minister of Labour, Kate Wilkinson, told the House that figure represented some 13,000 jobs. That is, 13,000 good, ordinary New Zealanders so beloved by the ideologically driven Labour members have jobs. That, in my eyes, is success, but how did Labour and Helen Kelly react? They hated it. Why did they hate this initiative, this 90-day free trial that has provided 13,000 jobs and has saved jobs for ordinary New Zealanders? Why did they hate that, I ask Simon Bridges—

Simon Bridges: Because we did it.

JACQUI DEAN: It was because we did it. If that is not ideologically driven to the detriment of ordinary New Zealanders, I think it is a shame that Labour has the blinkers down.

Charles Chauvel also talked about some other aspects of policy that National can be very proud of. Minister Nick Smith relaxed the rules around air-quality standards. Do members know why? It was because they were simply undoable. Those air-quality standards were going to adversely affect places like Ranfurly and Alexandra down in the South Island that have inverted air sheds over them and that were due to breach those air standards a number of times per year. They simply could not conform to the standards. We would have ended up with regional councils prosecuting district councils and citizens, and for what? Because the citizens in those towns could not afford to buy clean-burning fuel. What is this Government doing about that? We are providing subsidies for people to put clean-burning wood fires into their homes. That is a success.

Simon Bridges: That’s Bluegreens.

JACQUI DEAN: That is a Bluegreen initiative. What does Labour think about that? It cannot stand it. Why can it not stand it?

Simon Bridges: It doesn’t involve more taxing.

JACQUI DEAN: It does not involve more tax and more borrowing, and because National did it.

The drinking-water standards are another example where National is in good touch with the needs of community. Under the Labour Government, the drinking-water standards were unaffordable and were not doable. National is the Government that has put the interests of the good New Zealand Kiwi—Charles Chauvel’s middle New Zealanders—first. It has taken a National-led Government to do that.

This year the National-led Government will continue the work of the previous 2 years under the leadership of Prime Minister John Key. Our focus will be on building a stronger economy. This year the people of New Zealand will have a clear choice. Come 26 November, they can choose. They can choose the tax-and-spend policies of the back-to-the-future Labour Party, where taxing the so-called rich and either driving them out of business or driving them over to Australia is its recipe for economic success. Or New Zealanders—even Charles Chauvel’s middle New Zealanders; I thank Mr Chauvel—will have another choice. They can have the choice of a Government that is focused on building a strong economy and moving away from the debt-fuelled consumption so beloved of Labour towards real and enduring economic growth. This is the year for good, strong economic policy and for growing the pie, if you like—to put it in the simplest terms—rather than just cutting it up a different way, which is the sum of Labour’s lack of aspiration for New Zealanders. Shame on Labour! Shame on Labour for its lack of aspiration for New Zealanders. Building a stronger economy is the only way we will provide New Zealanders and their families and kids with better jobs, higher incomes, and improved living standards.

I want to talk about education. We need to make sure that New Zealand kids have the skills that they need to succeed. Our early childhood education investment has increased by $100 million above the original 2010 Budget allocation.

Simon Bridges: $1.4 billion.

JACQUI DEAN: I thank my colleague Simon Bridges, who is so on the ball about these issues—$1.4 billion is now being invested into our kids through early childhood education. We are now at the stage where the taxpayer is subsidising early childhood education centres at an average of $7,600 per child per year. Is it not interesting that although early childhood education funding has trebled over the past 5 years, the number of little kids receiving early childhood education has increased by only 1 percent. It makes no sense that in some parts of New Zealand up to 40 percent of preschool kids receive no early childhood education before they go to school. So National is bringing spending under control and targeting funding at children who need it most.

Members should not tell me that tired old story of mothers, grandmothers, and aunties who cannot make a contribution to their child’s learning. They should not tell me that sad old story that we need to have 100-percent trained early childhood teachers in early childhood centres. They just should not tell me, because as a mother and a grandmother I know that I can make a very good contribution to my own children, my grandchildren, and anybody else’s children who care to have that contribution to their early childhood education. Labour should try selling that story to the parents of the kids who go to Papakaiō School, whose kids in a little country town mostly went to parent-led early childhood centres—they went to playcentre. They should not give me that story. Of course, Labour has said that it will reverse this Government’s sound financial decisions, but it has no idea how it would pay for it.

Let us talk about national standards. Let us talk about a story about a mother who came into my office to tell me about her little 8-year-old kid. This little 8-year-old boy brought home his first national standards report. Mum and Dad were surprised and a little concerned to learn that their 8-year-old boy was falling behind in his mathematics. What did they do about it? They went straight to school and they talked to the teacher. The teacher was a little surprised and a little concerned, but said: “Why don’t we try this?”. So the parents and the teacher worked out a plan for that kid. They went home, they did the Cuisenaire rods—my colleague Simon Bridges will not even know what Cuisenaire rods are.

Simon Bridges: I thought you said “questionnaire” wrong.

JACQUI DEAN: They are little counting sticks. They did the homework, and in about 3 weeks’ time that little 8-year-old boy was re-tested—[Interruption] Labour does not like to hear this. That is the thing about Labour: it does not like to hear the truth. That little kid, after about 3 weeks, was re-tested, and guess what! He was back up to doing maths at the normal standard. That is national standards, and that is why Minister Anne Tolley is absolutely on the right track and has the support of parents and students up and down the length of New Zealand.

Members should try telling otherwise to the parents who go into the schools, talk to the teachers, and fix the problems for these kids, who know they are not achieving. The mother said this little kid knew he was not doing so well, and he did not feel very flash about it. Actually, I was not very good at maths—I still am not, but never mind. This kid knew that he was not doing so well. Now he is. His self-confidence has come back up. That is a success, and under this National-led Government, led by John Key, we will continue this good work. Thank you.

Hon CLAYTON COSGROVE (Labour—Waimakariri): That was an interesting speech.

Jacqui Dean: It was a very good speech.

Hon CLAYTON COSGROVE: It was a good speech for the evidence that it provided, and will provide, to the Opposition. I asked my colleague Pete Hodgson whether this was the first Government since the Lange Government of, I think, 1986-87—

Hon Pete Hodgson: 1987-88.

Hon CLAYTON COSGROVE: —1987-88, which professionalised the whole industry, that has believed in cutting early childhood education. I think it is. That member, I think, failed to acknowledge, or did not know, what H2O or water was, so for that member to stand up in this House, bag early childhood education, and say that the Government has not cut the funding is absurd. I challenge that member to answer this question: if the Government has not cut the funding, why has Swannanoa Preschool, which has publicly stated that it loses $100,000 per year, lost that money?

Michael Woodhouse: Blind ideology.

Hon CLAYTON COSGROVE: Well, here is another bit of blind ideology. That early childhood education centre happens to be 300 or 400 metres from the residence on Tram Road of the Minister of Labour. Ms Wilkinson came out and said that the Ministry of Education has said that the 34 early childhood education centres that would receive a cut in funding—there were about 54, but 34 would receive a cut, which equates to around $800,000 to $1 million a year—would lose in total $29,500. At least she acknowledged it was a cut! Yet the centre closest to where she lives—as Jacqui Dean has a giggle on a laptop or a BlackBerry—loses $100,000, which is three times what the member said the total amount would be. Redwood Early Childhood Centre loses around $70,000 to $75,000. If it is not a cut in funding, can the member with her Cuisenaire rods tell us why those two early childhood education centres are losing a total of $174,000? She should get out the abacus, borrow the Cuisenaire rods from Gerry Brownlee—I am sure he is still using them—and answer that simple question. Will the member answer me?

Jacqui Dean: I’ve got you going.

Hon CLAYTON COSGROVE: She will not answer the question. Anybody with half a brain—I know that member may struggle—knows that if an early childhood education centre loses in their budget $100,000, $74,000, or $1, that is a cut.

I want to talk about abandonment. That member talked about aspiration. I recall John Key a year or two ago talking about aspiration. He said we need to aspire to greatness as a country—we need to pick ourselves up, believe in ourselves, do better, and upskill ourselves.

Returning to the great early childhood education debate, the National policy states that if an early childhood education centre like Swannanoa Preschool, which is 300 metres from where Kate Wilkinson lives, though I do not think she has ever visited there, decides it will upskill and go for the aspiration of having 100 percent qualified staff, that does not mean—Jacqui Dean is a silly member—that parents will not take part in the education of their children. For goodness’ sake! Of course they will. But because the early childhood education centre says it will have 100 percent qualified staff, what signal does the Government send about aspiration? It says if early childhood education centres are going to go for gold and for 100 percent qualified staff, it will cut their funding.

I ask the member Jacqui Dean whether she would tolerate her children going to a secondary school, university, polytech, or primary school in this country where the principal fronted up and said that about 20 percent of the teachers who are teaching her child will not be qualified. Would the member tolerate that situation, get out her Cuisenaire rods, and say that she is qualified as a parent to teach children algebra, mathematics, English, or geography and prepare them for the National Certificate of Educational Achievement and all those things? I do not think a parent in the land would accept that. Maybe the Cuisenaire rod expert at the back of the Chamber would accept it, but I do not believe that any parent—and I have talked to many parents—would accept it.

So we had the politics of aspiration. What are the politics of aspiration from John Key, 2 years down the track? There is $2.5 billion worth of tax breaks to the top 10 percent of income earners, and 1,000 Kiwis a week are leaving the country. Remember the election campaign? Everybody was going to come home. Everybody was going to aspire to greatness and come home to New Zealand because John Key and National were in office. Well, we know the immigration statistics: 1,000 people a week are leaving the country, and 158,000 people are unemployed. What a great statistic of aspiration that is for the member over there, as she has a wee giggle. Every week $120 million is being borrowed to fund a tax cut primarily for the top 10 percent of income earners. I ask the member to show me something that is aspirational about those statistics. They come from the member’s own Government departments and agencies.

Then we come to the doozy that is State-owned enterprises. The person who has played the most ghost-like role in the whole State-owned enterprises debate, the person who has been transparent, absent, AWOL, and not in the debate at all has been the Minister for State Owned Enterprises, Simon Power. He is a smart guy. I will tell members why. This guy does not want his fingerprints on anything that is negative, anything that the people do not like—

Hon Darren Hughes: He’s focused on the future.

Hon CLAYTON COSGROVE: He has an eye to the future, as my colleague Mr Hughes says.

Hon Trevor Mallard: He’s got a 3-year plan.

Hon CLAYTON COSGROVE: He has a 3-year plan. Do members remember the “three strikes and you’re out” legislation? It was a justice bill, but the member Simon Power was invisible. The legislation was reasonably popular with some in our communities—especially with David Garrett, of course. We know where he ended up, although he is back on the ACT payroll, Trevor tells me. Now we have the State-owned enterprises debate. If we go round the communities we learn that people have worked it out. People say “Hang on a minute! Mr English says generously that the National Government will be so benevolent that it will offer State-owned enterprises, which the punters, the community, already own, to Kiwis, ordinary men and women.” The Crown—that is, the community—purchased these State-owned enterprises over generations with our taxes, but Mr English is going to be very generous and benevolent and say to folks that they can use their own money to buy them back for a second time. People ain’t silly. So the ordinary mum and dad Kiwis have so much disposable income that when the energy companies go on the block they will be rushing to the New Zealand Exchange with all their free money, all their disposable income, to shell out and buy shares. Where are these people? Are they some of the 158,000 people who are unemployed? Are they some of the people on the minimum wage who got a measly 25c extra an hour? They must have a heap of disposable income, because there are going to be hundreds of thousands of mums and dads, ordinary Kiwis, flocking to the New Zealand Exchange to use the discretionary money they are awash with to buy these shares.

That is a fantasy; that is an utter fantasy. We know that the only people who can afford to buy a share in State-owned enterprises, which of course they already own as taxpayers, are the top 10 percent of people earning a thousand bucks a week whom Mr Key and National cut into the deal of the tax cuts. They will be there, of course, along with the big institutions and the foreign owners. People are not sucked in by the view that mum and dad Kiwis can get a slice of it. I say to National members that mum and dad Kiwis already own State-owned enterprises and they do not have the disposable money to buy them back for a second time.

Then we come to the other interesting issue in respect of State-owned enterprises, which is whether it is logical to sell them off. People say: “Did the National Government not try that last time?”. It did, and it told everybody in New Zealand that if it sold those assets, then everybody would be better off. We know the truth of the 1990s. People were not better off and we lost more and more of the family silver. We know, through precedent, who will buy those assets, we know they will fall into foreign hands, and we know that any dividend stream—even it is only 49 percent—will not go back into the Crown coffers to pay for education and to reinstate the early childhood education cuts, the adult and childhood education cuts, the health cuts, and all the other cuts that Government members have put in place. That will be lost, and it will be lost offshore.

I say to members that people are not silly. Simon Power is a smart guy. He has kept his fingerprints absolutely away from this issue. He has not put out one press statement as Minister for State Owned Enterprises. He has left it to Bill English and John Key. He has been utterly, 100 percent invisible, and we have to ask why. It is the same with the “three strikes and you’re out” legislation. He did not want a bar of it. He knew it was wrong. He kept away from it. Why? He does have a 3-year plan. He can say “It was not me.”, when the people roll up and say they do not want this as it was tried before and it failed. I ask National members where the aspiration is for the 158,000 people who are on the dole as we speak—the one in four young people on the scrap heap, as Phil Goff said. They are going straight on to the dole queue. Where is the aspiration for them? I say to Paula Bennett, who loves kicking beneficiaries around, that the headline on the Waikato Times, which featured on the news tonight, is true. Where are the jobs? Where is the Job Summit? Where are the 40 jobs that were created from the cycleway? Where is the plan? Paula Bennett can boot the beneficiaries around, tell them they are bludgers, and tell them to get off their backside and get a job, but there is one problem. If there are no jobs, then that presents a terminal obstacle to them. There is no aspiration in this, there is no plan, and John Key has abandoned ordinary New Zealanders.

PAUL QUINN (National): Thank you, Mr Assistant Speaker Roy.

Hon Clayton Cosgrove: There’s a genius!

PAUL QUINN: I will be a genius at the end of this speech, as the previous one was made by Clayton Cosgrove.

It gives me great pleasure to stand and support the Prime Minister, following his speech to the House this afternoon, in which he laid out how this Government intends building a strong economy based on real, enduring growth. One thing Labour has failed to understand throughout the previous 9 years of its administration—appalling as it was—as demonstrated by the throwaway lines that its members have shared with the public since the start of this year, and the shopping lists and lolly scrambles it has created, is that it has learnt nothing. Labour has learnt nothing from the mismanagement of its previous period in Government, which left this country with a decade of deficits.

Let us briefly, by way of example, look at the wool Labour pulled over our eyes in just its last year in office. When the then Labour Government presented the Budget and economic statement in 2008 it forecast a surplus of $1.3 billion. Even in the Pre-election Economic and Fiscal Update it published it basically tried to hoodwink the public and say that there would be a balanced outcome in 2008. Of course, the people saw through this and elected John Key as their Prime Minister and National as the Government. We received notification from Treasury in the December update that there was a deficit. That deficit had been hidden from the people by the Labour administration, which now wallows in the benches of the Opposition. As we have seen, we have been left with a decade of deficits.

How could that be? It basically came about because the focus of members opposite during their time in Government was to dish out lollies. Productivity decreased every year during the time they were in Government. There was a current account deficit throughout that whole period. If this country is to survive and have enduring growth, it needs productive investment. The previous administration did absolutely nothing to create that opportunity.

When Labour was finally kicked out by the people of New Zealand, household debt had risen from $5 billion, when it came into power, to $19 billion. The interest charges that the average householder was paying on that debt had risen to 14 percent of their disposal income. That amount was going to service the debt that those vagabonds on the other side of the House had created by showering lollies on their so-called supporters, thereby creating a mountain of debt.

That is why we find ourselves in the situation today where this Government is not scared to address the debt issues. That intention was announced by the Prime Minister, John Key, in his state of the nation speech and again today in the Prime Minister’s statement. His focus is on restoring equilibrium, just as the householders of New Zealand have come to realise and understand that they have to reduce debt and create savings, not create a whole lot of debt. Members opposite have not understood that fact, and in their lust for power they have decided that they will send the country into even more debt with programmes that, so far, cost over $5 billion. Labour has already announced programmes that will require $5 billion additional debt. Does Shane Jones really think that the people of New Zealand will be as gullible as that? Of course he does not. He should jump now.

If we are to have enduring growth in this country, we will have to base it on productivity gains, investment, and getting businesses to invest. It is the businesses in New Zealand that create the job opportunities. The Government’s job is to create a framework to enable the economy to grow. It is not the Government’s job to be the economy, to employ all the public servants, and to dish out handouts to all and sundry so they can go and spend lots of money. The Government’s job—

Hon Darren Hughes: Whose job is it to hire the public servants, if not the Government’s?

PAUL QUINN: Oh, Labour’s new spokesman on education, who is wearing lovely professorial glasses, interjects. I look forward to his contribution.

I turn briefly to the contribution made by the co-leader of the Green Party Metiria Turei this afternoon. Although I have no doubt that she was sincere in her contribution, I was not moved by it. The simple reality of life is that many people on both sides of this House no doubt have a similar story to tell. I do not agree with her solution, which, like Labour’s solution, is to throw the lollies out there. Her solution was to increase the minimum wage to $15, which would create all sorts of jobs, but that solution just does not work. The only way to deal with the issue that Metiria Turei describes is to create a sustained economy. I was not moved by her contribution.

A classic example is our own Prime Minister. He has a similar story to tell, but he chose a different path. Those on this side of the House believe that that path is the way to prosperity and the way to getting this country back on the road to recovery.

The National Government is about investing and prospering—investing and producing. The Labour Opposition is about spending and consuming. With those few words it gives me great pleasure, once again, to endorse the outstanding leadership of the Prime Minister of this country. Thank you.

Dr KENNEDY GRAHAM (Green): I acknowledge Mr Quinn’s hardness of heart and meanness of spirit. I acknowledge Simon Bridges’ comment that Metiria Turei’s speech was a good speech. We know who has a political future.

The Prime Minister’s statement is simply a reiteration of Government policy enunciated first in the Speech from the Throne 2 years ago and recycled every February and May. The Government identifies as its principal goal building the foundations for a strong economy. That is the platform upon which our aspirations are said to rest. There was no mention of what those aspirations actually are. There was no mention here of a decent society, a far-sighted nation, or a globally responsible citizen—just a strong economy. I thank the Prime Minister for his far-sighted statesmanship. What is meant by a strong economy? Building a strong economy is based on “enduring growth”. The immediate task is to stabilise the economy and put it back on a growth path. Putting the economy back on a growth path is taking longer than expected, but that is good because the Prime Minister has no clear insight into the relationship between a growth path to a strong economy and a level path to a sustainable economy. Can a sustainable economy be a strong economy? Of course it can, but not the way this Prime Minister sees it. The Prime Minister has no conception of the causal link between his plans for a growth economy today and a failed economy a few decades after his departure.

He talks about the emissions trading scheme and wanting to ensure that it is working as well as possible. He believes that the emissions trading scheme prepares New Zealand for a carbon-constrained future by providing business and consumers with the incentives and encouragement they need to reduce their greenhouse gas emissions. Of course the emissions trading scheme does nothing of the sort. It is accurately described by Geoff Bertram and Simon Terry as a mechanism not for reducing emissions but of transferring wealth as emissions increase. They say that the scheme has not been designed to promote economically efficient abatement; it has been designed, first, to protect and promote the position of vested interests that are unwilling to shoulder the asset write-downs required to recognise a price on carbon, and, second, to transfer the costs of this to future generations. Although the original design of the emissions trading scheme, they conclude, aimed to confront polluters with the full cost of a nation’s obligations under the Kyoto Protocol, the scheme legislated for in 2008 went only halfway towards this and the 2009 amendments all but abandoned the concept.

The original concept, of course, was the carbon tax, but that foundered on vested interests. So we all converted to a cap-and-trade system, except that here in God’s own we forgot the cap. But we kept the trade, so that we can all succumb to the siren call of auctioning off free credits for next to nothing. The Kiwi brand of the emissions trading scheme is now a licence to pollute without restraint. It allows industry to pass on today’s modest costs within this generation to households and small business, and to allow all of us to pass on the much larger cost to our children. Are we too blind to see what is going on? The classic example of the insanity of what we are doing is Solid Energy and its Government-backed plans to utilise lignite in Southland, the lowest grade of coal that is possible to mine. Solid Energy’s plans include four projects for the extraction of lignite over the next decade. The projects are diesel plants, a urea plant, a briquette plant, and an electricity plant. Each of these is certain to increase our national greenhouse gas emissions.

In 2009 the Government committed New Zealand to a 10 to 20 percent cut in emissions off the 1990 level. This is inadequate in light of the UN prescription of 25 to 40 percent cuts by 2020. But let us at least address the weak target the Government has adopted for itself. At present, with the emissions trading scheme in place, our emissions are projected to be 30 percent above the 1990 level by 2020. That is a national shame, yet that excess is calculated without the massive injection into the atmosphere that will come from Solid Energy’s cheerful contribution to the betterment of humankind. The two lignite-to-diesel plants alone will increase that 30 percent emission overshoot by half as much again—that is to say, they will increase the 30 percent overshoot to a 45 percent overshoot. The other projects will make the total worse. How clever is that?

What pride are we to take as a nation in that magnificent plan for low-carbon energy at the pure cost of the planet? A country that has been requested by the UN to cut emissions by some 30 percent by 2020, but consciously plans to engage in fossil-fuel extraction, and whose emissions will result in an overshoot of the 1990 level by 45 percent, is a country without shame, a country with no moral integrity, and a country with no sense of global responsibility. But never mind. Who is looking? We can make some money by extracting this atrocious material that will choke the life forms on this planet, and we can export some of it so that it will not appear on our national carbon account. What is more, we hear the claim from Solid Energy—clearly an objective authority on the subject—that the plans for these projects will result in a reduction in greenhouse gas emissions. How do we understand this breathtaking claim? How are we to credit Solid Energy with any credibility on that? And how are we to reconcile the increasing inconsistency in the various statements being put out by the Hydra-headed creature that this Government has become? The Government has become victim to its own timidity in the face of global climate change, national responsibility targets, and local interest group pressure.

Mr Brownlee is Minister of Energy and Resources; Dr Smith is Minister for Climate Change Issues. We would think that as Ministers in the same Cabinet, serving under the erstwhile Mr Key, they would speak with one voice, or at least with harmonious voices, singing melodically from the same song sheet, but what do we hear? What faint melodic harmony do we discern in New Zealand’s official thinking in early 2011? Dr Smith said the following: “It is ironic that while we try and design pricing instruments to recognise the environmental cost of emissions, the world spends hundreds of billions of dollars a year subsidising fossil fuels and pollution. If we are serious about addressing climate change in the most efficient way, we need to be discussing a phase out of such support.” Mr Brownlee, who prefers energy security to climate responsibility, said the following: “The PCE report on the emissions increase to be caused by the lignite projects is a separate report. It has nothing to do with the Energy Strategy.” Well, I suggest to the Minister that he revise the draft energy strategy and make sure that it does. I suggest to the Prime Minister that he devotes his considerable analytical skills to reconciling what his Ministers are saying, because his Government is approaching dysfunctionality in policy. Senior Ministers are saying irreconcilable things. They are saying things that cannot be matched in logic, and, after all, this is a logical and rational—if visionless—Government.

So when the Prime Minister said in his speech this afternoon that “This year’s election will be about which party has a realistic plan to achieve faster economic growth for New Zealanders.”, we agree. Where we disagree is over his blithe assumption that raping the planet for 19th century - style profit is a realistic plan. It is unrealistic to the point of criminal negligence, and this Prime Minister, whether or not he enjoys it, presides over a group of Ministers who are meant to be saying the same thing.

Let me say to the Ministers and to Solid Energy that the amount of fossil fuel remaining on the planet is finite. If all the remaining fossil fuel is extracted and burnt, we shall massively exceed the planet’s climate-change boundary. Neither energy efficiency nor renewable energy will save us, unless most of the fossil fuel that would otherwise be mined stays in the ground, and stays there forever. It is implausible that any conventional oil will be left in the ground, but it is possible and necessary to phase out coal, on a straight-line basis, up to 2030. That is an unpalatable truth, I say to anyone who thinks that coal is sexy and dirty coal is the sexiest of all. It remains a truth none the less, and this Government had better get over it. We simply cannot afford to be, in the 21st century, “filthy” rich.

I say to the Government and to Solid Energy that every tonne of coal that stays in the ground in New Zealand forever is two tonnes of carbon that will never reach the atmosphere. Both the Government and Solid Energy have an obligation to ensure that the lignite never sees the light of today, lest tomorrow’s daylight becomes clouded by a hot and stifling atmosphere. It is time we came to our senses.

SIMON BRIDGES (National—Tauranga): That intervention from Kennedy Graham was cool. It was calm; it was cerebral. Some would use another “C” word—crazy, say—but I would not say that, I tell Kennedy Graham. But I would lay down a challenge to Kennedy Graham. His party, it seems, has in the past been bound to Labour, and there is every chance that Labour would like that to happen again. My challenge to Kennedy Graham is that if he thinks Labour, with its big tax, big spend, big borrowing programme, is the answer to any kind of environmental question that this country, and indeed this world, faces, then I tell him that he is sadly mistaken. Maybe it is for different reasons, but I think the least we can say about National is that we on this side of the House accept things cannot go on the way they are, with borrowing, spending, and taxing in the unsustainable way—and maybe we mean different things by “unsustainable”—that Labour wants them to go on.

There will be a very, very clear contrast at this election between the two major parties. We could dress up all of this. On the one side, we have prudent financial management, fiscal prudence, etc—

Phil Twyford: On the other side, people who talk sense.

SIMON BRIDGES: —and on that side, from Phil Twyford and the rest of them, there is more debt. On this side there will be less debt. We have a guy there, Phil Goff, who, in the first month of this year, I think—I ask what promises he was getting up to.

Hon Trevor Mallard: Mr Goff to you, Simon.

SIMON BRIDGES: Mr Phil Goff promised $5 billion worth of borrowing. OK, we will come to how he says he will pay for that, but there was a stage when every day we had new spending pledges. I wonder, and I ask Phil Twyford, whether he had talked about those spending promises or whether they were off the hoof, because they certainly seemed to be just rolling out of his mouth. There was a new one every single day when he was under pressure from interviewers.

We all know what that spending means. Ultimately, it means a downgrade by the credit rating agencies, it means higher interest rates because money costs more, and then for ordinary Kiwis—those middle Kiwis whom Charles Chauvel was talking about earlier—it means higher interest rates and higher mortgage rates, which are not good for anyone. It probably means even more people will go to Australia and overseas. Phil Goff says: “Yes, but we could pay for this by taxing the rich more.”

Phil Twyford: I thought you were going to fix that thing about people going to Australia.

SIMON BRIDGES: Those so-called rich probably left when Labour was last in Government. I have news for Phil Twyford. The real rich do not pay tax anyway, so we are not talking about the real rich. When we are talking about those so-called rich, who are they? They are doctors, lawyers, accountants, engineers, information technology professionals.

Hon Member: Police officers.

SIMON BRIDGES: As my friend here says, they are police officers. They are all sorts of ordinary New Zealanders, who will be forced to rearrange their affairs as a result of what Phil Goff wants to do when he taxes these so-called rich. They already got used to doing that under Labour. That is not good for anyone except lawyers and accountants. They will rearrange their affairs or they will leave this country. I acknowledge that we still have that problem of people leaving this country, but the policies of Phil Goff will make that problem worse.

Phil Goff’s other policy, the other thing we have heard from him—and the next speaker from Labour can correct me if I am wrong—is that he is effectively saying that we just will not spend money on our military force. He is saying that we do not need a military force. We do not need a navy, an air force, and an army, so that is where we will find the money. Well, we on this side think that having a military force is kind of important. It is not actually about being jingoistic, nationalistic, or anything like that. Those are some big words that Phil Twyford may know from his time in Oxfam. I tell Phil Twyford that it is about playing our part in the world. That is why we are in other countries around the world. We want to play our part as a little country down at the bottom of the world.

We have Phil Goff on the other side with unsustainable spending pledges. He says that we should tax the rich, which will not bring us anywhere near the money, and that we should slash the military forces. That is no recipe. The recipe for this country—and ordinary New Zealanders are learning this and know this; they are getting this—is to spend less, to slow down the growth of spending that went up by over 50 percent under the previous Labour Government—

Phil Twyford: Sell off the family silver.

SIMON BRIDGES: —and, yes, to explore the mixed-ownership model. Here is something that Phil Twyford does not understand. Actually, Phil Goff understands it, because he is the guy who has more expertise in selling off the family silver than anyone else in this House. Someone said he has been around for 26 years; I read that somewhere. But there are different ways to do these things. We are not talking about trade sales, such as those that Phil Goff and the Government he was a part of specialised in.

Phil Twyford: Contact Energy was a great success.

SIMON BRIDGES: Tens of thousands of New Zealanders in this country, I tell Phil Twyford, have shares in Contact Energy. I am not saying that that is the perfect model, but I would remind members opposite that they were the ones who sold down Air New Zealand.

Hon Member: They did.

SIMON BRIDGES: Yes, because they had to, and we can look at the success of that. There are plenty of other successful models like that, such as the Port of Tauranga. There is also TrustPower, from which social dividends are paid.

Hon Trevor Mallard: Air New Zealand a successful model as a private-public company—you’re joking.

SIMON BRIDGES: Oh, here we go. I ask whether Trevor Mallard is saying that Air New Zealand is not working. Right now, ordinary Kiwis—yes, that is the phrase Jim Anderton does not like: ordinary mum and dad Kiwis—own shares in Air New Zealand, and the Government has the majority stake. It is working. In fact, not only is it working; it is thriving. It has had all sorts of innovative ideas for its seats, such as its “cuddle class”. I do not know whether Phil Twyford may have experienced that already on one of his trips to the Third World, to do good in other parts of the world. Air New Zealand is thriving, and we can do this. Yes, we have some explaining to do, but we will do it, and people will know.

It is not just about economics; that is not the only matter we differ on. It is not just that we understand the economy and know we cannot spend, spend, spend, and that members on the other side of the House want to do just that—spend, spend, spend—and go on a lolly scramble, as my friend Paul Quinn said. It is also a question of style, and I am not talking about the way that someone walks down the runway, or anything like that. We have a Prime Minister at the moment who, unlike Phil Goff, is a non-traditional Prime Minister. He is actually prepared to give away tactical advantage. We have seen that in the way he has given away the election date for the good of this country, for the certainty of this country. He has been straightforward with the public in the lead up to the Rugby World Cup and then, after that, we will have the election.

Chris Hipkins: He just doesn’t want to be interrupted while he’s waving for the cameras.

SIMON BRIDGES: We would never have seen that from Chris Hipkins’ “mother”, Helen Clark. We never would have seen that.

Chris Hipkins: You keep my mother out of this.

SIMON BRIDGES: Ha, ha! If I had more time we would go into that, but we do not have the time. But we would never have seen Helen Clark give away that tactical advantage, yet we saw it from this Prime Minister.

Then there was the ruling out of Winston Peters. Labour said that that was arrogant. I say that the public of New Zealand have the right to know what the parties will do and where we stand on these issues, and we have ruled him out. It would be good to see some of that clarity coming from Labour.

Phil Twyford: Will you come to Te Atatū and explain your asset sales policy?

SIMON BRIDGES: Unlike Phil Twyford, I have lived in Te Atatū. Unlike Phil Twyford, I know Te Atatū. Phil Twyford does not know that he is lucky because his middle-class TomTom tells him where Te Atatū is, but I grew up in a place called Gloria Avenue in Te Atatū North. When I grew up there, it was called Te Atatū North, not Te Atatū Peninsula. It became Te Atatū Peninsula when Laila Harré and all her middle-class lefty mates moved in, but when I was there, it was called Te Atatū North. I then moved up in the world, to a place called Te Atatū South—Strid Road—and that may be part of the electorate Phil Twyford is standing in. I would be happy to come and talk to the people of Te Atatū about our mixed-ownership model, because we have the Prime Minister and the policies that will see this country through the bad times into the good times, and I am proud to be part of this Government.

Hon LIANNE DALZIEL (Labour—Christchurch East): I was very disappointed in the Prime Minister’s statement, because it confirmed to me that the pre-2005 election promise about being ambitious for New Zealand had really turned out to be the empty slogan I thought it was. I always thought they were empty words, that he never was ambitious for New Zealand—he was certainly ambitious for John Key, but he was not ambitious for New Zealand.

I should be grateful because, of course, this makes our task easier as an Opposition determined to win back the confidence of New Zealand, and to restore the principles of fairness that underpin our way of life. The New Zealand way of life is actually about those principles of fairness. That is what we believe in as a nation, and that is what we need to have restored. I am not grateful, however, because I see the consequences for so many people that I am privileged to represent in this House of the betrayal that this National Government has represented to those who put trust in it. I see the people in the supermarket struggling with the reality of the tax switch that was not a switch for them at all. They are paying more, and they are getting no more than they were getting before in their hands. John Key told them that not one person would be worse off as a result of the tax switch. That is why we can say it was a tax swindle, because it was not capable of delivering what he said.

I have to say that a lot of people in Christchurch East, when they hear that nobody will be worse off after this tax switch, have the riposte yeah, right! They are not only the people we would expect me to be talking about—the lower socioeconomic group. I am talking right to middle New Zealand when I say that they are feeling the pain at the till, the pain at the pump, and the pain when they pay for their power. I am talking about those people who do not feel better off since 15 percent became the new GST rate, and when National decided to squander over 40 percent of the tax cuts on only 10 percent of New Zealand’s highest-income earners.

I ask members to talk to homeowners in one of the five particularly damaged suburbs in my electorate, and to ask them what they think of the Prime Minister’s reassuring words now, 5 months after the earthquake has occurred. He and all the Ministers who were so happy to parade through the streets of my electorate when there were photo opportunities to be had are now nowhere to be seen.

Gerry Brownlee will make a statement tomorrow or the next day about what the Government will do for those whose alternative accommodation funding has run out. Guess what has brought on this sudden burst of energy from the Minister of Energy? Guess what has done that? The first group of people to run out of money will run out of money in 3 weeks’ time. Three weeks’ time! It is absolutely disgraceful that he has kept all of those people on tenterhooks for month after month after month, knowing that the first ones would run out when their 6 months’ period after the earthquake was up. It is absolutely outrageous.

I have been asked by many constituents to lobby the Government for choices to be made available. What does one say to the 80-year-old who stands up at a public meeting and asks whether they will still be alive when their house is rebuilt in 3 to 4 years’ time? What does one say to somebody in that situation? What about the couples who have split up and their mutual ownership of a wrecked property is holding them back from getting on with their lives? These are cases I have written to the Minister about. One knows that something needs to be done when people need to move to another job and to another town. What do they do with the equity in their land when they have to walk away from their land in the meantime? It is clear that those circumstances require some form of intervention.

I have said to the Government that it does not have to be funded by the taxpayer, or the ratepayer, or by either of them alone. Maybe there is a private sector solution that could be facilitated, or maybe even a public-private partnership. We hear the Government talking about it, so here is a classic example of where we could get everyone working together and singing off the same song sheet. But I am very fearful that nothing will happen and we will see something that is evidenced internationally in situations like that, which is called desertification. The house is bowled, the cash settlement is taken from the insurer, and then the empty section is sold later on. What does that look like for the people remaining in their houses in the meantime while the suburb is being rebuilt?

I arranged for a local group called Project Employment and Environmental Enhancement to come and tidy up some of the frontages of the abandoned properties in Seabreeze Close and Pacific Park, but it is a major task and it needs ongoing attention. I wonder whether the Prime Minister has been back to look at the mess in Seabreeze Close. He was certainly happy to front up with the television cameras, but I wonder whether he is willing to front up now. In fact, I challenge the Prime Minister of New Zealand to come back without the cameras and see how the people are feeling now, 5 months on after the earthquake. But if he has to bring the cameras, then maybe that would be a good thing. There are a few things those constituents would like to say to the Prime Minister, who is happy to be there at the time of the event, but not happy to front up when times are getting tougher.

The trouble with the Prime Minister is simply this: during his first few weeks as Prime Minister he earned himself the nickname “Mr Smile and Wave”. No matter what the circumstances, he just smiles and waves. He seems to think that everything can be managed with comforting words, a reassuring hug, a warm handshake, and a smile that never quite makes it to the eyes. But that is not leadership. That is not how one delivers an ambitious agenda for the country, and it certainly does not do anything for my constituents in Christchurch East.

I wrote a book review on Red Alert about a book I had read over the break called The Gods that Failed: How the Financial Elite Have Gambled Away Our Futures. The original version of the book was called The Gods that Failed: How Blind Faith in Markets Has Cost Us Our Future. The metaphor within the narrative of that book is inspired by the 12 gods of ancient Greece who lived on Mount Olympus. Elliot and Atkinson have styled the super-financiers and the international organisations—the central banks, the International Monetary Fund, the World Bank—the “New Olympians”, and the 12 gods of the modern Mount Olympus are globalisation, communication, liberalisation, privatisation, competition, “financialisation”, speculation, recklessness, greed, arrogance, oligarchy, and excess.

One of the last chapters in that book is called “Last Tango on Wall Street”, which has a very simple explanation of how the “New Olympians”—and that is the Prime Minister’s background—found ways to make money out of nothing, creating securitised financial products like collateralised debt obligations out of the subprime market and then hiding the risk behind triple A rated institutions. The “New Olympians” made personal fortunes, as we know, with bonuses they never had to repay when it all turned to custard, and they were happy to see the taxpayers of the world pick up the tab for their multitrillion-dollar insanity. The financial elite referred to in this book do not create wealth; they amass wealth for themselves personally and their mates.

The book reminded me of a comment I made about John Key when he was Leader of the Opposition. The only difference between a gambler and a money market trader is that a gambler is a money market trader who has lost his or her edge. I guess that is why he has retired from that chapter in his life, but the instinct is still there. It is no wonder he wants New Zealand to be the Wall Street of the Asia-Pacific. He wants to sell our country’s assets to the financial elite he left behind—and make no mistake that that is exactly whose hands it will end up in. I do not know about members, but I do not know any mums and dads who sit around the kitchen table wondering when the Government will allow them to invest in assets they already own. The mum and dads I know are sitting around the kitchen table trying to work out how to make their budget stretch to the end of the week. There is an old saying that to make real money one needs to make real things, and that is what New Zealand need to be doing as a nation.

LOUISE UPSTON (National—Taupō): Today the Prime Minister, John Key, talked in his speech about opportunity, and outlined this Government’s priorities for 2011. Just last week the Prime Minister announced the date of the general election, 10 months ahead of the date, which is 26 November. It is pretty clear to those who have been watching or listening to the debate today that there is a clear divide between those over there and those of us on this side of the House. I think it is also fair to say that listeners have probably heard that the gloves are off.

If we look at the National side in the blue corner, we see a clear focus on spending less and borrowing less, and a focus on building the foundations for a stronger economy and for building better results from public services. If we look at the Labour side in the red corner, we see that the focus is on spending more and more, and borrowing and creating debt, not just for our generation but for the next generation and the one after that. Labour has already idly promised to spend another $5 billion, and I am sure that that amount will go up as the months creep towards the election. But it has not told us how it will pay for that extra spending. We have heard—even from the previous speaker, Lianne Dalziel—criticism of the Government’s tax switch. But Labour is not promising to reverse the tax cuts or to reduce GST. I am looking forward to hearing that from that side of the House: if those members hate the tax switch, they should make a promise to reverse it.

Tonight I will look at the priorities that this Government has laid out today through the eyes of my constituents, whether they be a chef in Cambridge, a plumber in Pūtāruru, a labourer at Kinleith, or perhaps someone who owns a shop in Taupō. Those are the people I am listening to every day. Those are the hard-working New Zealanders who, although they may be doing it tough today because we have been in a global economic recession, hope for, and aspire to, a better tomorrow.

Let us look at that small-business owner; there is a large number of them in my electorate. I am sure many of us deal with these constituents every day. Do members know what they are telling me? Do members know what they are actually saying? They know that if they are in business they have to do better business. They have to work smarter, they have to be more efficient, and they have to look at ways that they can streamline and improve the performance of their business.

Earlier today we heard Prime Minister John Key talk about the fact that the Government needs to look at reforms that will streamline and improve the performance of the Government bureaucracy. It is not rocket science. Small businesses are doing it, so why would we expect that the Government would not do it? John Key says that by international standards, New Zealand’s Public Service is bloated and inefficient. We need to be lean, quick, and nimble. We believe that it is possible to have a public sector like that. Small businesses, medium-sized businesses, and large businesses up and down this country have been forced to do that in the economic recession that this country has faced. The Government sector is no different. We will not let it grow at the rate that it grew under the Labour Government of 9 years. We need to make sure we have a high performing public sector.

It is interesting that when I talk to people in Taupō they are quite clear about what they expect the Government to provide. They expect a world-class health service, not a Third World one. They expect an education service that provides for every single New Zealand child, not four out of five. They expect a strong and effective justice system and social services that protect the most vulnerable.

Just last night I was in Hamilton at the launch of the Regional Business Partners initiative, which is TechNZ’s regional technology partner working with Waikato Innovation Park. The whole conversation was about supporting businesses to grow through using research and development. The presentation covered things like our technology transfer vouchers for small companies and the technology development grants, which give more research and development investment to research-intensive industries. We all know that Kiwis are great at inventing things, but we are actually not as great at turning those ideas into opportunities that raise money for companies and, more important, turning them into export dollars for our country. Growing businesses is how we create jobs, and that is how we are able to increase our wages. We know that this is what improves the lifestyles of hard-working New Zealanders.

I will now focus on education. We on this side of the House know that improving education and skills is critical to lifting the standard of living for every single New Zealander. As a mother of three young children I want my children to be well prepared and to be able to take the most from every opportunity that is before them. I believe that every New Zealand child should have the opportunities in life that come from a great education.

I will start very deliberately with the early childhood sector and set the record straight. National is spending $1.4 billion this year on this sector. That is the largest amount of money ever spent in early childhood education. So when that side of the House tells us that we are cutting the funding, I say that that is absolute rot. We are spending $1.4 billion. That is right—members opposite can look up. That is three times as much as the Labour Government was spending 5 years ago.

Let us look at this sector in a bit more detail. We have tripled spending, so one might think that we would be getting a bit more for what we are spending. Actually, the number participating has not increased by even 1 percent. On this side of the House we believe that young children should be able to access early childhood education regardless of race or income. That is why our priority is to lift participation. In some areas 40 percent of 5-year-olds start school having had no early childhood education whatsoever. I have talked to teachers who have faced those 5-year-olds in schools, and it is incredibly difficult for those children because they are already behind. We need to target Māori, Pasifika, and children from low-income backgrounds, and that is exactly what we are doing with our investment of $91.8 million into these targeted spaces, providing 3,500 extra spaces.

I will also touch on national standards, because it would not be a good day in the House if I did not stand here and mention national standards. I think they are absolutely stunning. After 9 years under Labour, four out of five children left school without sufficient skills in reading, writing, and maths. If we think about the number of children who started school last week—60,000 five-year-old kids started school last week—we see that 12,000 of them would spend 10 years at school and not be able read, write, or do maths. I say that that is just an absolute disgrace. With national standards, if parents have a report come home, they will find it a damn sight easier to understand, and their children can understand it as well. I think that is a really important part of the learning journey: the parent, the child, and the teacher all working together to improve the child’s outcomes at school.

With National it is pretty clear. We get a Government committed to building a better future, and we get responsible economic managers creating the conditions for growth, which leads to better lifestyles for every single one of us.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe, Mr Deputy Speaker, ngā mihi o te tau hou ki a koe; otirā, ngā mihi o te tau hou ki a tātou katoa. Hei whaiwahi haere i te āhuatanga o te kōrero i te ahiahi nei, ka tuku i āku poroporoaki ki te hunga kua ngaro ki te tirohanga kanohi. Ko tērā o ngā kuia o te Waihīrere kua ngaro atu i te tirohanga kanohi i ēnei rā. Waiho ia kia moe i te taha o ōna mātua tūpuna. Ka huri mai ki a tātou o te Whare, huri noa, tēnā koutou, kia ora tātou katoa.

[Greetings to you, Mr Deputy Speaker. Acknowledgments of the new year to you, and indeed to all of us. To follow up the address on this afternoon’s statement, I express my condolences to those who have passed away and will no longer be seen, particularly that one of the elderly womenfolk of Waihīrere of recent times, who will not be seen any more. Allow her to remain there with her ancestors. I turn now to us throughout the House; greetings to you, and to all of us, greetings.]

There has been a lot of talk today in the House about a very special group of New Zealanders. They are the 60,000 children whom we call the Year 1 cohort. They are children, one might say, who are on the brink of opportunity and children with the promise of a big huge future in the world ahead. One in four of those children is Māori; that is 15,000 people who have every potential to be the entrepreneurs, the innovators, and the breadwinners—the talent pool of our labour market.

Now let us look at another group—the 800,000 children throughout the school sector. Of these, 160,000 are classified as living in poverty. I wonder how it could be that in the Prime Minister’s address to the nation today he failed to acknowledge a report that has been widely aired across the nation. That is the United Nations report that has described as staggering the rates of child abuse and poverty in Aotearoa. Let us break that down a bit. Presumably, that is what was implied by the recognition in the Prime Minister’s statement that “Despite decades of good intentions from government, we’re still failing too many of our kids.” I have to ask how good those intentions have been for all of our children.

There are two groups: tangata whenua and children living in poverty. Unfortunately, those groups are both closely linked together. As a teacher and a former principal myself, I can say with some authority that much of the poorer performance and disengagement experienced in the case of Māori children is correlated with their socio-economic status. How can any Government, red or blue, live with itself knowing that the rate of poverty for children in households with no full-time worker is six times—six times—higher than it is for children living in homes where there is at least one full-time worker? What that translates into is levels of hardship that have immediate consequences.

This is how a group of young New Zealanders described living in poverty in a report entitled A Fair Go for all Children: Actions to address child poverty in New Zealand “Can’t afford school uniform … Lack of books … Can’t go on school trips … No lunch … Not accepted by their peers … Left out … Get picked on at school … Stress … Shame … Low self-esteem … Unhappy … Lonely … Feelings of worthlessness.” We are not talking Charles Dickens here; this is from a 2008 report of the Children’s Commissioner, which is a report that Labour will for ever be judged against, a report that should have, but has not, become the blueprint to make the National Government take bolder action in the interests of our tamariki—children who are born in homes that have endured long-term poverty, have poorer health, and do less well at school. Those same children will achieve lower earnings if indeed they are equipped to leave school without any substantial qualifications. Tragically, childhood poverty is associated with a higher risk of antisocial and criminal behaviour, which Mr Goff alluded to this afternoon.

Taking the cycle of despair even further, it was pretty depressing to hear the views of my brother-in-law, Ruakere Hond, in Taranaki, who has been involved in Māori education since the 1980s. In an article in the Taranaki newspaper he talked about the fact that a lot of unemployed Māori lacked motivation from being trapped in “a cyclic paradigm” that filtered down through older members of the whānau. In fact, he described this cycle as becoming “culturally ingrained in certain family groups”. Where does this come from? What can we do to address the seemingly intractable problems that lead to underachievement and under-participation? It is not about just a poverty of income. It is also about a poverty of spirit, demonstrated in schools in which the culture of the school and the attitude and expectations of teachers have been shown to contribute to their students’ disengagement.

There is a longstanding recognition that there is a clear disconnect between the majority of teachers and Māori students. We recall two separate surveys. One was conducted by the New Zealand History Teachers’ Association, and the other by the academic Richard Manning. They indicated that Māori content was often sidestepped, and this has had major educational and political implications for Māori.

I come back to Mr Key’s view about good intentions. I presume he is talking about the Taha Māori programme of the 1970s, the various interventions, such as the bilingual units in general-stream schools, perhaps the marae on school-grounds, Treaty clauses in the charter, and the like. They were all great, but they actually benefited Pākehā students more than the target group of Māori. But what Russell Bishop of Waikato University has demonstrated so effectively is that recognition of our language, culture, and identity is an essential part of the pathway to success for Māori. But the Māori edge is not just about having a Māori name or the school pupils being able to sing “Tūtira mai ngā iwi”.

The Māori edge is to understand that whānau are the critical factor to ensure achievement in education. Whānau, hapū, and iwi have a special role in making success happen. We call it whanaungatanga, where everyone who is involved with the people who care most about our students, their whānau, are welcomed at the door. It is about allowing Māori to have a space and providing support, but still allowing Māori to have our own say and to take up models that work for us, like Tū Toa in Palmerston North. It is about celebrating Māori innovation and initiative.

Politicians on both sides of the House have spoken about the importance of literacy and numeracy programmes, and of our kids being able to speak well, count well, read well, and write well. What is new? That is the same catchcry that New Zealanders from all ethnic backgrounds have been calling for since the missionaries arrived with their pencils and slates.

But literacy and numeracy on their own are but one part of the solution. If we really want to make a difference for Māori education, we must understand that Māori solutions are required. The Māori Party has talked about cultural competency. We have called for responses that reflect Māori aspirations for education—aspirations that inevitably include the social, political, economic, and cultural sustainability of Māori as a people. It is about including Māori culture in meaningful ways. It is about incorporating Māori knowledge, culture, and perspectives inside and outside of the curriculum. Ultimately, it is about Whānau Ora. This is fundamentally what Tariana intended would happen with Whānau Ora—that the education sector would take on the challenge of working with whānau.

Although we could easily identify the success factors inherent in kura kaupapa Māori, we must as a nation apply those same conditions for success in the mainstream school system. In my electorate of Waiariki, for example, Māori children comprise approximately three-quarters of the school role in the areas of Kawerau and Ōpōtiki. What about them? A revolution is not impossible. The results of Te Kotahitanga show us that the academic engagement of Māori students dramatically improved. Their completion levels of work increased, there were higher levels of Māori student attendance, and short-term achievement rose.

The State, principals, teachers, and, for their part, whānau need to be held to account. Whānau must play their part, but it is also about time the education sector was put on notice, too. They are paid to do the job. Fifty percent - plus of Māori boys leaving school without qualifications is just not good enough; in fact, it is a disgrace. We have to invest in the success that is the Māori edge that the Māori Party is pursuing. We are determined to make a difference to achieve the change that our nation needs. We will do it, but not just for the 15,000 Māori children who started school last week but for the future of all descendants who will carve out a future for Aotearoa. Tēnā tātou.

MELISSA LEE (National): Before I begin I would like to wish everybody a happy New Year. We have had a long break over Christmas, and I hope everybody has returned safely and well rested. To those celebrating the lunar new year, I would like to greet them in their mother tongue. Gong xi fa chai. Xin nian kuai le. Sun nin fai lok. Akemashite omedetou gozaimasu. Se hae bok mani baduseyo. Those greetings were in Chinese, Japanese, and Korean, wishing those people a happy New Year. May they receive lots of luck and blessings in this Year of the Golden Rabbit.

Lianne Dalziel is right, and that is probably a very strange thing for members to hear. She said that New Zealanders got empty promises in 2005, and she is right. She probably meant to say 2008, but maybe it was her subconscious that was talking. She said that New Zealanders got empty promises in 2005. That is right. New Zealand voted for the wrong party to become Government in 2005. Labour returned to Government and continued to mismanage New Zealand’s economy. Had New Zealanders voted for National back in 2005, perhaps growth would not be as small as it is now. If a John Key - led National Government had been in power in 2005, we would have implemented the recovery process sooner and the growth would have taken better, faster steps. Perhaps Ms Dalziel is seeing 20/20 and in hindsight realises in her heart of hearts—and she does have a heart; I know, I serve on a select committee with her—that John Key is doing so well that she wishes National had been in Government in 2005. Maybe she realises that in 2005 the Labour Government gave New Zealand the empty promises and raw deal that she was talking about.

Building a brighter future is the key for New Zealand, and that is the message our Prime Minister, the Rt Hon John Key, gave in today’s statement to Parliament. I am right behind him in his vision to make New Zealand a much better place for all New Zealanders. To make New Zealand a better place for all of us to live in we need a stronger economy. To achieve a stronger economy we need to build the foundations. It is like growing vegetables. We cannot just throw seeds on to rock and hope they will grow. We need to prepare the soil, sow the seeds, water them so that they do not drown, have a good amount of sunshine, and for me, since I am not much of a gardener, I suppose a little bit of prayer as well, so that the seeds will turn into something yummy that one can harvest and put on the dinner table.

Labour leader Mr Goff, in his state of the nation speech, promised to make the first $5,000 of annual income tax free for everyone, including the wealthiest of Kiwis. That is a $1.3 billion promise. That is like throwing seeds on to rock and hoping they will turn into a fruitful harvest. Well, he is dreaming. This is Labour’s borrow and hope recipe—borrow more, owe more overseas, and hope for the best for this economy. It would add hundreds of millions of dollars more to the Government’s borrowing. How else will he pay for his spending promises? They are currently sitting at around $5 billion and climbing as the days go by. Labour will borrow, borrow, and borrow more and hope that everything will be OK. That is what Labour did in its 9 long years in Government. Where did New Zealand end up? In the best economic times, we did not have the growth we should have achieved. New Zealanders are not going to be hoodwinked again. The only way New Zealanders and their families can get better jobs, higher incomes, and achieve the living standards they aspire to—and actually deserve—is to make sure we build the foundations for a stronger economy.

One of the ways we can achieve a stronger economy is to rebalance the way New Zealand has operated for a long time. Earlier, other speakers mentioned that we cannot spend until we have earned. That is one of the basics that we teach our children. No one in this whole House would even dream of managing their own finances in that way. It is so irresponsible to earn nothing but to go on a spending spree. But that is what Mr Phil Goff is hoping we will do. We cannot afford debt-fuelled consumption and Government spending. We need to save. We also need to invest in sectors where we can earn export dollars. Anyone who runs a household budget knows that if one has overspent in one month, one must tighten the belt and reduce spending for hopefully the next month. That is what New Zealand must do as well, so we can return to surplus sooner rather than later. We must get out of the habit of spending more than what we can earn.

Let me speak about the Korean community in New Zealand for a little while. They came here with great hopes. My parents were among the very first to settle here in the late 1980s. They came with great hopes, but settled into a new country where there were language issues, cultural issues, and no friends or family to turn to for support in difficult times. They had nobody to turn to. When our migrant communities, like my parents, settled here they did not turn to the Government and say “Give me money.” They worked hard. Most of them learnt. They had this attitude: they would work their normal job, and they would get a second job, even a third, even a fourth to make sure they could secure a brighter future not just for themselves but for their children and their grandchildren. They do not want the taxes they paid through sweat and tears to be pilfered away to pay for the interest we will owe if we keep borrowing more from overseas, as the Labour Party is suggesting we do in its spending promise.

Labour is promising to borrow another $400 million to increase spending on early childhood education. Earlier my colleague Louise Upston mentioned that the National Government is spending $1.4 billion on early childhood education this year. That is more than anything that Labour has ever done for early childhood education. They keep talking about the apparent cuts that the National Government is making to early childhood education. That is an outright lie. It is a lie.

Mr DEPUTY SPEAKER: The member cannot say “That is a lie.” Speaker’s ruling 42/5 says that you cannot use that word. I ask the member to withdraw that comment.

MELISSA LEE: I withdraw that comment. It is wrong to claim that we are cutting, because we are not. We are spending more on early childhood education than Labour has ever done.

What about Labour’s promises to cut GST on fresh fruit and vegetables? That is another $250 million a year. What will honest, hard-working New Zealanders who work hard for their money to pay taxes say about their money being pilfered away like that? They will not accept it.

Under the previous Government one in five New Zealand children left school without reading, writing, or maths skills. That is a disgusting legacy of the previous Labour Government. There were 30,000 people culled from surgical waiting lists across New Zealand; that is the legacy Labour left behind. Doubling the health budget, doubling the bureaucracy, reducing services—that is what Labour is known for. In the 2 years that National has been in Government it has provided elective surgery for 20,000 more people a year—20,000 more people a year are getting elective surgery, like joint replacement and cataract surgeries. That is 400 extra New Zealanders getting surgery every week. That is how this Government is turning round the terrible legacy that the previous Labour Government left behind.

We need to grow this economy. We need to grow this country. A National-led Government is the way to go. I stand by our Prime Minister, the Rt Hon John Key, in his vision for delivering and building a brighter future for all New Zealanders. Thank you.

Hon DAMIEN O’CONNOR (Labour): The best I could say about John Key’s speech would be that it was disheartening. I think anyone in this country who has played a part in their community, who has worked in any part of government, or, indeed, just goes out to do a decent, honest day’s work would have been absolutely disheartened by that pathetic speech.

John Key puts himself up as an aspirational leader for this country. Well, the first thing he should do is get his facts straight when trying to explain a few things to this country. Firstly, this country has an issue with debt because this National-ACT Government is borrowing $300 million every week. The reason it is having to do that in part is because it has given $14 billion in tax cuts over 5 years, with the vast majority of that going to 10 percent of the population—the wealthiest 10 percent of the population. That money should still be in the Government coffers and it should be spent on the things that have been cut in the last 2 years.

National Governments have always harmed this country. I go back to Mr Muldoon; he had Think Big projects, but he at least left us a legacy of some infrastructure. We had Jim Bolger, who did not think at all. His Government just cut benefits and privatised anything it could. Now we have John Key, who wants to think small. He thinks that Government should be doing less, spending less, and that the private sector should be doing more. The basic flaw in that is that the debt problem of this country is in the hands of the private sector. John Key will not acknowledge that. I do not think any Government will intervene in basic private property rights unless it feels there is a good reason to, so our ability to limit private sector debt is limited in itself. But John Key’s solution to the debt problem it is to take assets from the State—State-owned enterprises—which have a low level of debt.

I can just see Michael Cullen fuming as he listens—he is probably not watching TV tonight—to this debate. He spent the surpluses—the additional money that we had over and above Government spending—on lowering debt right down to, I think, 22 percent of GDP or thereabouts. It was one of the lowest levels of Government debt in the OECD, and that put this country in a very good position to take on the international financial crisis. That was where we had left it when the Tories came into Government. But their flawed philosophy, which is one of doing less in Government and allowing the private sector to take over, means that we will have less ability to lower the debt of this country overall. I have to say that that private sector debt was fuelled by the banks, most of them foreign-owned. They were quite happy to take the profits when things were going well, but they are now showing a little bit of caution, indeed a bit of fear, in their inability and reluctance to fund capital, particularly in the primary sector.

I think we are in a shocking situation, and this Government has shown absolutely no plan as to what it is going to do to get us out of that. It has cut $14 billion from the Government spend and handed that back to about the top 10 percent of the country. It has increased GST. It has increased the cost to each and every New Zealander across this economy, and we are starting to really feel that.

Mr Key, the so-called aspirational leader of this country, aspired to take us along the path of Ireland. In fact, in 2008 he was still championing the wonderful benefits of Ireland as an economy. The “trappings of a considerable economic success story” is what he said. Well, it is a measure of his poor judgment that just over 2 years ago he was claiming Ireland as an amazing success story.

The thing I agree with Mr Key on, which I cannot quite reconcile with his policies, is his saying that “we need to own more of our own future”. He then set about to justify selling off our State-owned enterprises. What a bizarre situation and contradiction to put before this country. I do not think New Zealanders are conned in any way at all. I do not think they are fooled for one moment about the so-called 49 percent threshold and the so-called preferential allocation to Kiwi mums and dads. I have been challenged not to use that term, because, as we know, that will not happen; preferential rights will be given to the wealthy people who can afford to buy shares, and they will onsell them to foreign investors. The New Zealanders I have spoken to up and down the country are not fooled for one moment. They know that it means effective privatisation, the selling off into private hands of our State-owned enterprises, starting with the electricity sector—notably, Solid Energy.

I say to members—National members have been too scared to say it—that Landcorp will be next, of course. David Carter has said a number of times that he does not think the Government should be in the business of farming. That means that Landcorp will be on the blocks, as well. The question is where that will leave us as a country. If the private sector is too keen too often to sell shares to foreigners—because there is a nice handsome profit in it; because it might see a windfall gain somewhere—what path does that lead us down? It certainly does not take us to John Key’s stated aim of our owning our own future; indeed, we are heading in the wrong direction.

John Key, David Carter—though David Carter less so, of course—and a few others made statements against the sale of the Crafar farms to the Chinese. We should be very concerned. John Key has made other statements about not wanting us to become workers in our own land. He also said he would not want to see the “wholesale sale of New Zealand’s land productive sector”. Well, I agree with him, but what has he done about it? Zippo, nothing! What happened after his statement of 7 March 2010 raising concerns about the sale of the Crafar farms? Indeed, on 1 February this year we saw that Germans had paid $109 million for 10 farms down in Southland, and what did he say about that? Nothing, absolutely nothing! If he is passionate about our owning our land, then perhaps he should stand up, be true to his principles, and be consistent for a change.

It is not only the sale of land that Labour has indicated we will move to restrict. We want New Zealanders to have some control over our future, but National has refused to move in that area. In fact, it is refusing to move in the area of PGG Wrightson’s potential sale, as well. I have not heard a squeak from the National Government about whether it thinks the purchase by Agria of PGG Wrightson, the No. 1 agricultural service company in this country, is a good or a bad thing. Maybe it should be taken over by Agrium, another foreign-owned company.

It goes on and on, and the problem is that National members sitting over there think the private sector will deliver a wonderful future for this country. We have to acknowledge their wonderful efforts, but Government has to ensure the provision of core infrastructure, so that we can pay for early childhood education, adult and community education, or the Treaty settlements of the Minister for Treaty of Waitangi Negotiations—if he ever has one that was not negotiated by the previous Labour Government—

Hon Christopher Finlayson: More in 2 years than Labour had in 9.

Hon DAMIEN O’CONNOR: We will wait and see how he performs tomorrow with his legislation, I say to the Minister. We will see how well he does negotiating with his coalition partners. I say good luck to him. We will be pointing out a few double standards, I guess, in the position that National has taken over the issue of the seabed and foreshore. That Minister should be very, very quiet. In fact there is an “h” word that is a wonderful description of his position on many, many issues.

The National Government has to stand up and provide some plan, some real aspiration, and some true control over our economy; otherwise, the Prime Minister’s claim that we need to own our future will be a fallacy, along with most of the other policies and claims that the National Government has made while it has been in power.

CHRIS AUCHINVOLE (National—West Coast - Tasman): I remember in 2005 being at a meeting in Blackball with the member who has just spoken, Damien O’Connor, prior to the election. I said I had written to the then National spokesperson on finance, Mr John Key, and proposed that Solid Energy shares be made available for West Coasters to buy. The member opposite will probably remember the meeting. It was the one in which the Blackball people told him they were going to vote him out—indeed, they did.

Hon Darren Hughes: Not that time.

CHRIS AUCHINVOLE: Well, it did not take long. The member is quite right: he lost only 5,500 votes at that time; he lost 3,800 the next time.

West Coasters have an affinity with mining. I know that members on the Opposition side of the House do not like mining. I know they do not like success. The problem, of course, for Solid Energy, as far as a Labour Government goes, is that not only does Solid Energy do mining but it does it successfully: $600 million, I think, comes from the Stockton Plateau—$600 million. Indeed, Solid Energy is a community sponsor to a great extent.

I was delighted when I heard the Prime Minister say he was looking at a proposal for a partial sell-down in Solid Energy, Meridian Energy, Genesis, and Mighty River Power. Mixed ownership, a partial sell-down, and a guaranteed 51 percent Government investment—it is a win-win-win. It wins for the families who can invest in proven companies. What a wonderful opportunity that is. Why should New Zealanders be denied that opportunity? Why should West Coasters be denied that opportunity? The companies get fresh capital. Jobs, security, and everything else gets better. The Government reinvests in new assets: schools and hospitals—and health will determine the outcome of the election on the West Coast. What is wrong with that? What is wrong with those things?

What does Labour have a problem with? Why are there the panicked headlines? It was even in the paper today, I think. The list member opposite said the Government was going to sell Landcorp. When will he learn that people do not like to be panicked? Indeed, the very people whom he is trying to impress will bite him where it hurts for constantly crying wolf. Labour does not like mining, and it does not like success. Mr Goff says he wants the Government to keep the profits. Mr Goff would probably like the Government to keep everything. Those members have not changed. What was it that they used to say—the old socialist cry? It was about controlling the systems of production, distribution, and communication. The Labour members have not changed at all. They certainly would love to keep controlling all of that.

We on this side of the House ask why we should not let hard-working Kiwis reap the benefit from Kiwi companies: more capital and more assets. I am glad to report that from the work we have done we find that that message has gone down well on the West Coast, in spite of a Labour list member saying we would sell Landcorp and other things. Again, that member needs to learn that constantly striving to cause panic—and there have been a number of instances of that in the last few months—will only bring criticism from those whom he tries to alarm. There is no risk of overseas ownership, which is the other bogey that Labour puts up. A 51 percent Government shareholding is guaranteed. Kiwi investors will have a preference, be they individuals or investors through KiwiSaver. Air New Zealand has done well with mixed ownership—it has done well—and will continue to do so.

Another factor has to be taken into account, and it will be the clear difference between the Government side of the House and the Opposition side of the House. It has been mentioned by a number of speakers tonight, and I make no apology for repeating it: debt. Debt, debt, debt—there are clear differences between National and Labour on it. Goff is rushing to cause panic, yet he promises to spend $5 billion—$5 billion—on Labour’s promises. That would be a disastrous policy. Those practices are not reflected by business in New Zealand, and they are not reflected by families in New Zealand. Labour wants us to become like Portugal, Ireland, Spain, and Greece. We need to get the books in order, and it is policies from the Government side of the House that will do that.

Labour’s policy of promising that there would be more spending is irresponsible. It is not designed for economic good; it is not designed for the country’s good. What, then, is it designed for? It is the same stuff that I have heard from successive Labour leaders from Rowling onwards. It is what they trot out when they face electoral disaster. That is what they will be facing this time, if they persist with this programme. If members do not believe me, they should look at Sir Wallace Rowling’s pre-election speech in 1975. Goodness me! It was full of promises that could not be paid up. Some of them are highly amusing. And here we go again, with Labour pursuing a political strategy that takes away our economic future and prosperity for our children, for the sake of a desperate grab for power by a leader with an old team whose members know that this is their last chance as individuals. It is a strategy that takes a risk with our future, simply to secure an electorate respite for Labour.

What is the risk? A major risk of not bringing our debt under control is the risk of a credit downgrade from the international credit rating agencies. Standard and Poor’s has New Zealand on a negative outlook as we speak. The only countries with worse foreign debt than New Zealand are Spain, Portugal, Ireland, and Greece. Those are not the economies that we should be comparing ourselves with. Foreign debt, a negative outlook, and lower international credit ratings may not be a concept that most people will be familiar with. That is what Labour, frankly, is depending on. Labour knows the very real risk that poses in relation to personal financial situations. With a credit downgrade interest rates rise, increasing the cost of mortgages. That will hit everybody.

Dr Cam Calder: Everyone.

CHRIS AUCHINVOLE: Everyone. Starting a business becomes harder. We should not forget that business creates jobs.

I think of a young couple in Westport who have scrimped and saved for a deposit for their first house. A Labour-inspired credit downgrade might be what puts it out of reach. I think of a solo mum in Motueka with a great business idea. A Labour-inspired credit downgrade could be what makes it too hard for her to get a business loan. I think of an employer in a small business in Greymouth who would face rising interest costs. A Labour-inspired credit downgrade could mean downgrading his business and redundancy for some of his staff.

These are not complex economic issues; they are basic, real situations for real people around the country. There are people who need economic leadership, which they will get from this side of the House, not from the prospect of a Labour Government taking risks with everybody else’s future in order to try to secure its own. Those are the risks that would be taken by a Government that embarks on a programme of increasing debt at this crucial stage. It is no wonder that the members over there are ashamed. Those are the risks that Phil Goff wants to take. Those are the risks that the National Government will not take. New Zealand needs to have sound financial leadership and management. That is what it is getting from John Key and Bill English. They are charting the path. For the last 2 years they have provided the economic leadership that this country has benefited from, and they will continue to do so.

Dr CAM CALDER (National): Ehara taku toa i te toa takitahi engari, he toa takitini taku mana e. One’s strength is not purely a result of one’s own efforts but of the many people who have helped along the way. This Government is committed to helping and protecting the most vulnerable people in our society and to creating an environment where all New Zealanders can dare to dream our dreams, unlock the potential that lies within us all, and achieve our goals and aspirations. Despite the Government having to deal with the ongoing ripple effects of the worst global recession in seven decades, we remain committed to building a brighter future for all New Zealanders and their families.

We have insulated over 85,000 homes in New Zealand. Tens of thousands of New Zealanders are living in healthier, warmer, and drier homes. Residents of Manurewa tell me they feel safer in our community. In the course of this year we will be extending and supporting our police in communities the length of New Zealand, with the provision of more uniformed officers to protect the vulnerable in our society. Neighbourhood policing teams based in communities are helping young people to find jobs and go on training courses, to divert them from involvement with gangs and a life of crime.

The Youth Guarantee scheme is providing pathways for young people in relation to a host of skills. The innovative tertiary high school programme at the Manukau Institute of Technology is providing a template for allowing year 11 pupils, who otherwise might have chosen to leave education altogether, to undergo flexible education with a mix of secondary and tertiary subjects that interest and inspire them. They may be able to study National Certificate of Educational Achievement level 1 English and level 1 maths, and also do a study course in boatbuilding or automotive engineering. Those skills will stand them in good stead in their future life and help them to become productive members of our society.

Our health services are providing over 400 more elective procedures each week—more hip operations, more cataract operations, more gall bladder operations. More New Zealanders are receiving the health care that they need when they need it.

There are no simple, easy answers in this economic climate, and we do not have a magic wand. We cannot change things overnight, but John Key’s principled, pragmatic Government is putting in place the many building blocks necessary in order to lift New Zealand’s economic performance and provide a better future for all New Zealanders. It is only by lifting our economic performance and growing a bigger economic cake that we can deliver the jobs, the higher incomes, and the better living standards that New Zealanders aspire to and deserve.

Our 2009 Budget concentrated on cushioning New Zealanders from the worst effects of the recession. In last year’s Budget we concentrated on reforming the taxation system. This year a likely dominant theme will be savings and investment. We realise that just as a household that runs up a bill at the corner shop cannot continue to do so forever, no country can run up bills forever. We have a proven track record of responsible management of our economy, and we will continue to take a considered and responsible approach to building a platform for sustainable future growth.

We have made considerable progress. Over the last 12 months we have introduced the biggest tax reform in 25 years, tilting the economy in order to encourage investment and savings. We have improved public services by freeing up about $4 billion for front-line services, by reducing back-office services and ineffective programmes. We have invested billions of dollars in roads and have begun the roll-out of ultra-fast broadband, which is a crucial development for the future prosperity of this country. We have started New Zealand’s first public-private partnerships. We are focusing on improving education in schools, with the development of national standards. We brought about the amalgamation of eight councils into one in Auckland, very successfully. We have a considered, logical plan to grow our economy. We are delivering world-class infrastructure to unblock the arteries of the economy, and we are demanding better, more efficient public services. We have introduced a number of regulatory changes to make it easier to do business, and we are fostering better skills in the workforce.

Debate interrupted.

The House adjourned at 10 p.m.