Wednesday, 9 February 2011

Wednesday, 9 February 2011

Wednesday, 9 February 2011

Mr Speaker took the Chair at 2 p.m.

Prayers.

Business of the House

Business of the House

Hon SIMON POWER (Deputy Leader of the House): Following agreement in the Business Committee, I seek leave for the House to sit on the ringing of the bell on Wednesday, 16 February 2011, following the State luncheon in honour of the Prime Minister of Australia. Prime Minister Gillard will address members at 11 a.m. that day, and, in this regard, I also seek leave for select committee meetings to adjourn at 10.45 a.m. until the conclusion of questions for oral answer. I further seek leave for the bell to be rung at 10.50 a.m. for 2 minutes to summon members to the address to be given by the Prime Minister of Australia in the Chamber.

Mr SPEAKER: Is there any objection to that course of action being followed? There is none.

Questions for Oral Answer

Questions to Ministers

State-owned Assets, Sales—New Zealand Investors

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement on the sale of State assets that “we do want to sell to Kiwi mums and dads as a priority”?

Rt Hon JOHN KEY (Prime Minister): Yes. If we were to go ahead with a mixed-ownership model in some Crown-owned companies, we would want to sell shares to Kiwi mums and dads as a priority. There would, no doubt, also be demand from KiwiSaver accounts and other New Zealand managed funds, as well as from iwi, the New Zealand Superannuation Fund, and other Crown financial institutions.

Hon Phil Goff: Will the mums and dads be free to onsell their shares to foreign investors?

Rt Hon JOHN KEY: Yes, but history indicates that they are less likely to do that.

Hon Phil Goff: Actually, does history not indicate that when National sold Contact Energy, the shares to the so-called mum and dad investors that it talked about then quickly flowed to the corporates and to foreign investors, and that most of the dividends from that company now flow out of this country?

Rt Hon JOHN KEY: Unfortunately for Mr Goff, no. The proportion that was originally sold was 31 percent to retail investors. It will be remembered that 51 percent was sold to Edison Mission Energy. That has now fallen to 22 percent in 12 years. But interestingly enough, the member might be interested in the report that I am holding, and I suggest he takes it away and reads it. It is by Pattrick Smellie. Let me just quote a little bit from the report: “One of the least defensible criticisms of the Key Government’s partial privatisation plans have been regular references to Contact Energy as an example of a privatised company which lost control to foreigners. Yet nothing could be further from the truth. The reality of the Contact share register is it remains possibly the most widely held share by domestic New Zealand investors. What it shows is that many small-scale investors have piled into privatised companies like Contact precisely because they want to retain control and as much New Zealand ownership as possible.”

Hon Phil Goff: When the Prime Minister said “no” to my last question, was he denying that the majority of shares are now owned by foreign owners, and that the majority of dividends that are paid back therefore go out of the country?

Rt Hon JOHN KEY: No. What I was saying was that initial public offering started with a 51 percent offering to an offshore party. Any initial public offering that we might do would have 51 percent control by the Crown. On top of that would be the New Zealand Superannuation Fund with its $17 billion, ACC, 1.6 million KiwiSaver accounts, many New Zealand mums and dads up and down the country, and iwi who are interested in buying in. It will not be foreigners who will own those companies; it will be New Zealanders.

Hon Phil Goff: Is it not dishonest to talk about sale to mum and dad investors when in fact all Kiwi mums and dads currently own those companies and the result of his sale will be that those shares go only to those who can afford them and to foreign corporates?

Rt Hon JOHN KEY: No, because 51 percent will be controlled by the Government. There are 1.6 million KiwiSaver accounts. What is interesting about those KiwiSaver accounts is that, firstly, they need investments for the long haul, because they are largely dominated by younger people; secondly, the economic distribution of those 1.6 million accounts is very much skewed to low and middle income New Zealanders; and, thirdly, the New Zealand Superannuation Fund will be buying on their behalf, along with ACC. I think the member should give up and try another question.

Hon Phil Goff: I will, if I get a better answer than that one. Can the Prime Minister guarantee to mum and dad consumers that prices for electricity will not go up at an even faster rate, as the private shareholders seek to maximise their dividends and increase the directors’ fees, as in fact happened with Contact Energy when it was privatised, and as happened in Australia with privatisation?

Rt Hon JOHN KEY: I am pretty sure I can guarantee that they will not go up by 72 percent, as they did under the previous Labour Government in 9 years. Secondly, members need not take my word for it. We can check out the statements of Consumer New Zealand, which is an independent body. Its chief executive, Sue Chetwin, stated that she “agreed with Mr Key’s assessment that electricity prices would not increase with partial privatisation.”

Hon Phil Goff: If it is demonstrated that a clear majority of New Zealanders are opposed to these sales, will the Prime Minister ignore their views and go ahead and sell the assets off anyway?

Rt Hon JOHN KEY: On 26 November we are having an election. I think we will find that their views will be demonstrated through the ballot box.

Budget 2011 and Wider Economic Programme—Focus

2. CRAIG FOSS (National—Tukituki) to the Minister of Finance: What will be the focus of Budget 2011 and the Government’s wider economic programme this year?

Hon BILL ENGLISH (Minister of Finance): Today I have announced that Budget 2011 would be presented on Thursday, 19 May. It will focus squarely on taking further measures in the Government’s programme to build New Zealand’s national savings, increase investment, create jobs, and lift incomes, as well as reducing our vulnerability to foreign debt.

Craig Foss: How will Budget 2011 build on the National-led Government’s first two Budgets?

Hon BILL ENGLISH: In Budget 2009 we had to get on top of spiralling debt, which was out of control as a result of a recession and very poor management by the previous Government. In Budget 2010 the Government changed the incentives in the tax system to reduce the incentive for excessive spending and borrowing, and to increase the incentive for savings, and we will continue along that line in Budget 2011.

Rahui Katene: Is the Minister aware that in 2008 Treasury observed that the last recession, from 1988 to 1993, had had adverse social and economic effects on Māori that lasted for at least a decade, and what will he be doing in Budget 2011 to prevent the same scenario from reoccurring?

Hon BILL ENGLISH: The Government has moved to prevent that scenario from occurring again by supporting the economy through this last recession, and this year we are borrowing $300 million a week to pump into the economy to maintain transfer payments and income support, as well as to underpin publicly funded jobs. In Budget 2011 we will have a strong focus on investment—that is, getting businesses to invest their money so that they can create new jobs and lift incomes, and that will certainly benefit Māori.

Craig Foss: What specific measures will the Government consider to ensure that it contributes to improving New Zealand’s national savings?

Hon BILL ENGLISH: The Government needs to carry some of the weight of improving national savings. Households are doing their bit, because they are being careful with their spending, paying off debt, and increasing their savings—in fact, they are doing that faster than we expected. However, at the moment the Government is driving up our external debt. We need to get hold of Government spending in the first place, to improve its effectiveness and focus, and we need to get back to surplus as quickly as we can, so that the Government is not driving up New Zealand’s already very high level of foreign debt.

Hon David Cunliffe: Given that the Government’s books have deteriorated on the Minister’s watch from a surplus of $8 billion as at election day to a debt now of $40 billion, and given that he has just admitted that the Government may be taking the country into a double-dip recession, will he now admit that his programme has failed and he has no new ideas for jobs and growth?

Hon BILL ENGLISH: No.

Metiria Turei: Why will the Minister not increase the minimum wage to at least $15 an hour, saving around $1 billion in Government social services spending?

Hon BILL ENGLISH: The Government has made a balanced decision about the minimum wage. On the one hand we do not want to take measures that will lock young people, particularly, out of the labour market. On the other hand people on the minimum wage need to be able to deal with the rising cost of living. So the Government has announced about a 2 percent increase in the minimum wage.

Craig Foss: What Budget measures has the Government already rejected and why?

Hon BILL ENGLISH: A number of measures have been proposed that would significantly increase the need for New Zealand to borrow in financial markets that are increasingly reluctant to lend, particularly to countries with already high levels of total debt. So we have rejected the $1.3 billion cost of a tax-free threshold of $5,000, we have rejected the idea of taking GST off fruit and vegetables at a cost of a quarter of a billion dollars, and we are not going to be borrowing another $400 million to add to early childhood education spending.

Metiria Turei: Is the Minister of Finance, like John Key, proud of the 5 percent cut in full-time public sector jobs, given his concern about young people and jobs; if so, why?

Hon BILL ENGLISH: The Prime Minister has outlined his concern to ensure that we provide better public services and do so with fewer resources. Every other business in New Zealand has gone through that process, and most households in New Zealand have gone through that process; the Government has not. We will be investing in improved public services. In some cases that may mean there are fewer jobs but in many cases it will mean a better service.

Grant Robertson: Can the Minister confirm that the grand plan for lifting New Zealand out of economic recession is based on the merger of the Ministry of Fisheries into the Ministry of Agriculture and Forestry; if so, will it generate more savings than the $165,000 a year being saved by merging Archives New Zealand and the National Library into the Department of Internal Affairs?

Hon BILL ENGLISH: The Government is focusing on considering on a case by case basis how to provide better public services for less cost. In that case, the industry has suggested that such a merger would reduce the levy on the fishing industry. That would help it employ more people, grow more exports, and lift incomes across the New Zealand economy. So the Government is going to play its part.

Metiria Turei: Why is the Minister of Finance effectively subsidising the wage bills of large corporates like Foodstuffs and Burger King, rather than supporting families who need just a decent job with a living wage?

Hon BILL ENGLISH: When the Government came in, despite the fact that we faced significant deficits for a long time we maintained the Working for Families programme with only minor changes because we believe that those families need the certainty of the income support, particularly through a recession. Whether or not income support is a subsidy on wages is an old argument, but we believe that, regardless of what one thinks of that issue, those families need cash support, and this Government is borrowing $300 million a week to help ensure they get it.

Education Outcomes, Māori Children—Impact on Māori Unemployment

3. Hon CHRIS CARTER (Independent—Te Atatū) to the Minister of Education: Does she agree with the Rt Hon John Key’s comment at Waitangi’s Te Tii Marae last year that improving education outcomes for Māori children would help address rising Māori unemployment?

Hon ANNE TOLLEY (Minister of Education): Of course.

Hon Chris Carter: Can she explain, then, to the House how cutting Government funding to over 2,000 early childhood centres by some $285 million improves the educational outcome for Māori students?

Hon ANNE TOLLEY: First of all, I say that this Government is investing more in early childhood education than any other Government has ever done: $1.4 billion, which is up now over 10 percent of the education budget. The second thing I say is that under the previous Government, which that member used to be a member of, a considerable number of children, particularly Māori, did not access early childhood education. In some areas, up to 20 percent of Māori children were unable to access early childhood education. This Government is putting almost $100 million into early childhood education participation projects aimed at lifting Māori participation.

Colin King: What initiatives has she taken to improve Māori education outcomes, since becoming Minister of Education?

Hon ANNE TOLLEY: We are taking this issue extremely seriously. It is why we have introduced national standards and now whanaketanga rūmaki Māori to pick up struggling kids before it is too late and help them to read, write, and do maths. We are introducing the Youth Guarantee to help address the fact that more than half of Māori students are dropping out of school without a worthwhile qualification. We also have a number of Māori-focused initiatives—it is a long list; I will keep it as brief as possible—early childhood education participation projects and extending 20 free hours to kōhanga reo; $36 million to support schools with national standards and now whanaketanga rūmaki Māori; $45 million in this financial year alone on kura developments; extending Te Kotahitanga and He Kākano; helping to better manage Māori learner engagement and attendance of students; the parents, families, and whānau programme; the 43 iwi relationships; and more te reo teachers. This list compares with the Labour Government’s great initiative to improve Māori learning: the “Wassup!” badges. Do members remember them? That was Labour’s answer to Māori—

Mr SPEAKER: I allowed the Minister to go on for quite a while on that answer. I think we have heard sufficient.

Hon Chris Carter: Mr Speaker—

Hon Members: Wassup!

Hon Chris Carter: What is up is that education is being wrecked—

Mr SPEAKER: I intend to make sure that we start this year as we are going to carry on. I have just reminded the Minister that answers are not time for a speech. I listened while the Minister was giving information, but once she went on to attack the Opposition in response to a question from her own colleague, I interrupted her. I ask the member, when I have called him, to just ask his question, please.

Hon Chris Carter: Is she aware of Ministry of Education statistics that clearly demonstrate that increased early childhood education funding by the Labour Government between 2000 and 2007 led to an increase in participation of Māori preschoolers from 84 percent to 90.6 percent, and Pasifika preschoolers from 76.1 percent to 84 percent, and does that not just prove that educational success happens when we put in more resources, not cut them?

Hon ANNE TOLLEY: Yes, the Labour Government increased funding dramatically—in fact, three times. It trebled the money that was going to early childhood education. Unfortunately, across the board the children turning up at school having had early childhood education experience grew by less than 1 percent. So throwing money at something does not get good results. All it gets is an out-of-control education system.

Hon Chris Carter: I seek leave to table some statistics prepared by the Ministry of Education showing increased participation through the period that the Labour Government spent extra on early childhood education funding.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Hon Clayton Cosgrove: I seek leave to table a report in which the Swannanoa Preschool makes two points: one, that they are losing $100,000—

Mr SPEAKER: Order!

Hon Clayton Cosgrove: —a year in their budget.

Mr SPEAKER: The member will resume his seat immediately. He will not go on to make a statement like that without making very clear what the report or document is that he is seeking to table. He did not make the source of the document clear. Before he says what is in it, he will make the source clear.

Hon Clayton Cosgrove: Sure. The $100,000 cut is noted in the Northern Outlook community newspaper.

Hon Trevor Mallard: Widely read!

Mr SPEAKER: I am on my feet. That is exactly why the member should have identified what the document was before he sought to make his political point. I will not tolerate that kind of thing.

Sue Moroney: I seek leave to table a letter from the Minister of Education to the Matua Plunket Kindergarten, proposing that it increase fees for 20 hours’ free early childhood education to make up for her funding cuts to the kindergarten.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Egypt, Protests—Government’s Position on Presidential Resignation

4. KEITH LOCKE (Green) to the Minister of Foreign Affairs: Why is he not calling for the immediate resignation of Hosni Mubarak as Egypt’s President?

Hon MURRAY McCULLY (Minister of Foreign Affairs): Decisions about the future of Egypt are for the people of Egypt to determine. President Mubarak has announced he will stand down in September, and it is clear that a transition in Egypt’s leadership is under way. Along with Governments of many other countries, the New Zealand Government has called for that transition to be orderly and non-violent, and for the end result to reflect the democratic wishes of the people of Egypt.

Keith Locke: Does the Minister agree with the Nobel Peace Prize winner and democracy leader Mohammed ElBaradei that “Mubarak is a symbol of an outgoing regime … If he doesn’t leave, the regime would retrench and then come back … with vengeance.”?

Hon MURRAY McCULLY: The Government of New Zealand believes that decisions about the future of Egypt are for the people of Egypt to make. As I noted in my primary answer, President Mubarak has announced his intention to stand down in September of this year, commencing a transition process that the New Zealand Government hopes will be orderly and non-violent and will result in a situation that reflects the wishes of the people of Egypt.

Keith Locke: If, as the Minister says, the decisions are to be made by the people of Egypt, why is the Government not listening to the people of Egypt who are demonstrating in their hundreds of thousands—for example, today? Is the Government’s reluctance to say that Mubarak should stand down now because the Government is reluctant to take a different foreign policy position from that of the United States Government?

Hon MURRAY McCULLY: The Government of New Zealand is aware that Egypt is a Sovereign nation. Therefore, it is for the people of Egypt to determine their future. I note the demonstrations that the member refers to. I also note that a transition has commenced, which the New Zealand Government welcomes.

Keith Locke: Does the Minister agree with John Key, who said on Breakfast that Mubarak had provided stability for Egypt, and should a New Zealand Prime Minister be supporting a stability enforced by 30 years of suppressing all dissent?

Hon MURRAY McCULLY: I have read the Prime Minister’s comments very carefully. Clearly, he was reflecting on the long history of conflict in the Middle East and the constant risk of that conflict sparking other tensions around the world. The Prime Minister gave appropriate credit to President Mubarak for his role in achieving and maintaining peace between Egypt and Israel. The fact that that peace has held for over 30 years is indeed a significant achievement for which the Prime Minister quite rightly gave President Mubarak credit.

Keith Locke: I seek leave to table a document from the Hindu newspaper of 8 February 2011 quoting the Nobel Peace Prize winner Mohammed ElBaradei calling for Mubarak to go.

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

Vulnerable Citizens—Government Measures to Assist

5. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: In light of his statement “I have spoken previously of my concerns about a growing underclass, and vulnerable children are at the heart of that issue”, what specific improvements has his Government made to address both the underclass and vulnerable children in New Zealand?

Rt Hon JOHN KEY (Prime Minister): This Government has supported lower-income families and vulnerable children through a difficult economic time by maintaining benefits and income support payments, including Working for Families, and through additional assistance, such as the ReStart package and the 9-day fortnight job support scheme. The Government is also soon to increase the minimum wage from $12.75 an hour to $13 an hour. It has invested $125 million in the upgrade of State housing. It has seen 47,000 homes retrofitted for low-income New Zealanders. It has increased the number of under-sixes who are getting free access to doctors. It has increased significantly the number of infants who are being immunised. We have undertaken a range of other initiatives.

Hon Annette King: Is he aware that 30,000 more children are now living in severe hardship since he became the Prime Minister; and if his policies are so successful, why are more children worse off now than when he visited McGehan Close before the last election to highlight what he called the underclass in New Zealand?

Rt Hon JOHN KEY: It depends on how we define that; a lot of different measures are used. But what is true is that more people are on a benefit in the last couple of years, and that reflects the fact that we have been in a global recession. Those who have the lowest levels of skills are likely to be laid off first, and we have seen that being consistently applied around the world.

Hon Annette King: When he said he had the concerns of the underclass at heart, did he imagine that the number of people on all benefits would go up by almost 100,000 since 2008—as released in official statistics just a few moments ago—despite his so-called improvements?

Rt Hon JOHN KEY: What I did have concern about was the fact that so many New Zealanders find themselves in a position where they are living on a low income, and it is quite clear that we need to make significant changes to help those people. One of the ways to do that, of course, is to allow people to transition off welfare and into work, and the Government will be addressing that issue in the next few months.

Hon Jim Anderton: When the Prime Minister said in his speech to the House yesterday that a society should be judged by how it treats its most vulnerable citizens, how would he judge the actions of his own Government in cutting by 30 percent this year the funding for conductive education programmes and the removal of all funding by 2014, when by any measurement the seriously disabled and fragile children who are so badly affected by that are clearly amongst New Zealand’s most vulnerable citizens?

Rt Hon JOHN KEY: I am advised, in terms of that programme, that only a group of children got that funding. But overall, we have increased significantly the amount of money spent on education in that area.

Hon Annette King: When he said he had done “as good a job as we can” for low-income families, did he at any time consider giving up his or his mates’ $1,000 a week tax cut, to ensure that the children from the so-called underclass that he mentioned in his speech could have just a little bit more?

Rt Hon JOHN KEY: I am struggling with where the member gets a $1,000 a week tax cut from, because, without going into too fine a point, the last time I looked at the figure from the Remuneration Authority, I saw the Prime Minister of New Zealand earns $400,000 a year. The difference between the top personal tax rate, which was 38c in the dollar, and the new rate of 33c in the dollar is 5 percent, and 5 percent of $330,000 is about 15 grand.

Hon Jim Anderton: What responsibility does the Prime Minister take for the ever-widening gap between those at the top of the income scales in New Zealand and those at the bottom, with all the associated health, education, housing, employment, and social problems that are attendant on those situations, given that he said he believes that our society should be judged on how it treats its most vulnerable citizens?

Rt Hon JOHN KEY: There is always a debatable issue about that gap, and it is quite subjective. But I would say that one can go and look at the range of things that the Government has been doing, and I listed before a whole range of them that are helping lower-income New Zealanders. I also make the point that if we look at the advice from the New Zealand Institute of Economic Research about the 90-day trial period, which is something that I know members opposite are vehemently opposed to, we see that measure is likely to have created 13,000 jobs.

Tax System Changes—Effect on New Zealanders’ Earnings

6. AMY ADAMS (National—Selwyn) to the Minister of Finance: How did the Government’s tax package in October contribute to increasing New Zealanders’ real after-tax earnings?

Hon BILL ENGLISH (Minister of Finance): The figures recently released by Statistics New Zealand show that real after-tax average earnings in New Zealand increased 3 percent in the December quarter, reflecting the benefits of the Government’s tax package and ongoing wage increases. The tax cuts more than compensated for the rise in GST at every level of income, which is why the vast majority of New Zealanders were better off as a result of the tax switch.

Amy Adams: How have real after-tax wages grown since October 2008?

Hon BILL ENGLISH: If we use the measure of wages that is used for calculating national superannuation, which has been used in that way for quite some time now, we see that real after-tax earnings have grown 10 percent since October 2008. Prices have gone up by 6 percent over that time, while after-tax wages—that is, wages after tax reductions—have risen by 16 percent. The strong increase in after-tax wages is a result of three rounds of tax cuts combined with the normal annual movements in wages. This is a big improvement—10 percent since 2008 is a big improvement—on the 4 percent growth in real after-tax wages during the previous 9 years.

Amy Adams: How are the figures on real after-tax wages calculated?

Hon BILL ENGLISH: The figures used are data on average, weekly, ordinary-time earnings, from Statistics New Zealand’s quarterly employment survey issued last week. This is the official series used to calculate the wage floor for New Zealand superannuation. Householders do not do that calculation when they are out shopping. We understand the pressure that is on households, but we are determined to continue with economic policy that will support them by lifting their real after-tax wages.

Stuart Nash: Does he agree that inequality in New Zealand has increased due to tax cuts, where someone earning $1 million a year received a tax cut of $930 a week, yet someone on the median wage received about $15 a week; if not, why not? [Interruption]

Hon BILL ENGLISH: Labour members need to decide on their numbers, but that is not unusual. When the Government released the tax changes in the last Budget, it published a number of different measures of income equality—including Gini coefficients and other measures—all of which showed that the impact was roughly equal across the income distribution, taking into account all of the tax changes. As I recall it, no one in the Opposition questioned any of that substantial analysis.

Amy Adams: Has the Minister seen any reports on why real after-tax wages grew so slowly in the 9 years to October 2008?

Hon BILL ENGLISH: I could sum up those reports as saying that they are “bad policy”. Under the previous Government, in what was probably the most benign economic decade in about 50 years, it managed to achieve negative real per capita income growth—that is, real per capita incomes shrank. When people did get new jobs, they were funded by debt and were unsustainable. So people who relied on the Labour Government in the belief that their incomes were going up have now been let down, and we have to rebuild incomes and rebuild those families’ prospects.

Government Debt—Prime Minister’s Statements

7. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he agree with the Prime Minister’s statement: “New Zealand’s government debt as a percentage of GDP relative to the other countries is low, in other words we don’t owe very much”?

Hon BILL ENGLISH (Minister of Finance): Yes, of course I agree with the Prime Minister. Net core Crown debt is relatively low by the standards of many other countries, but what matters is that over the next few years that debt will rise sharply, and it would rise even more sharply if we did what Labour said. Secondly, the Government has now become the driver of the growth in our debt to foreigners, and our total public and private debt to foreigners is the highest in the world. We are already borrowing $300 million per week and borrowing more than that would be totally irresponsible.

Hon David Cunliffe: If the Minister inherited Government books that were in surplus, if New Zealand’s Government debt is now relatively low, and if private debt is very high, why is he not focused on reducing private debt instead of privatising State-owned enterprises, ultimately to foreign buyers, which will make it worse?

Hon BILL ENGLISH: The Government is focusing on reducing both. New Zealand’s total indebtedness to the world is up there with Portugal, Ireland, Greece, and Spain at about 85 percent of GDP. New Zealand households have started to reduce their borrowing. They are being careful with their spending, and are not rushing back to the housing market. The New Zealand Government needs to make the same effort as New Zealand households are making.

Aaron Gilmore: What measures of New Zealand’s indebtedness are of most concern to overseas lenders, and how do we compare with other countries?

Hon BILL ENGLISH: There are a number of ways of measuring our total indebtedness, but the one that gets used by those who lend to us—that is, the people who lend us $300 million a week so we can pay for Working for Families, and so we can keep our schools going and maintain our police—measures total indebtedness as a proportion of GDP. New Zealand’s is 85 percent, along with Spain, Greece, Ireland, and Portugal, which makes us among the highest in the world. A better level would be somewhere around 60 percent of GDP, which is about where Australia is, and internationally regarded as low risk.

Hon David Cunliffe: Given that 90 percent of that total debt is private debt, why is he, according to Professor Bowden of Victoria University, “spin doctoring” public debt as a pretext for privatisation and savage budget cuts instead of fixing the underlying private debt problem?

Hon BILL ENGLISH: Last year when we put up a Budget to increase taxes on consumption and on investment housing, which was designed to reduce demand for private debt, Labour voted against it. The previous question just illustrates that Labour members believe—alone in New Zealand—that the Government should go out and borrow as much as it possibly can, give it to anyone who wants it, and that that amounts to responsible economic management. I invite them to keep arguing that through the election year.

Aaron Gilmore: What were Treasury’s forecasts of net core Crown debt around the time of the 2008 election?

Hon BILL ENGLISH: The forecasts at that time were not that flash. Forecasts showed net debt jumping to 26 percent of GDP, as well as a decade of deficits. By December 2008, the forecasts were for net debt to soar to 50 percent of GDP by 2023, to never fall, and to show permanent Government deficits. So the impact of Labour’s bad policy and the global recession meant that at that stage our debt could have spiralled out of control. Fortunately, we got it under control.

Hon David Cunliffe: Can the Minister name any other OECD country that appears to be headed for a double-dip recession; if not, what is so special about his economic management?

Hon BILL ENGLISH: I would suggest Australia. Recent figures out of Australia show that that economy has to make the same adjustments as the New Zealand economy. There are very high levels of household debt. Australians have decided that they cannot get wealthy by buying houses off each other, and their consumer and housing markets are slowing down quite significantly.

Primary Growth Partnership—Successful Bids

8. SHANE ARDERN (National—Taranaki - King Country) to the Minister of Agriculture: What major developments in primary sector innovation has he recently announced?

Hon DAVID CARTER (Minister of Agriculture): Last week I announced a further round of successful bids under the Government’s Primary Growth Partnership, which will see $107 million invested in the aquaculture, wild fish, and timber industries. In less than 17 months, the Primary Growth Partnership has delivered close to half a billion dollars of investment in the primary sector. When it comes to boosting economic growth through innovation, this Government is taking real action.

Shane Ardern: What type of work will be funded under these latest projects?

Hon DAVID CARTER: The latest round of successful bids includes a $52 million project aimed at transforming New Zealand’s aquaculture industry through selective breeding, a $51 million programme to develop improved wild fish harvesting technology, and a $2.5 million project to explore alternatives to methyl bromide. These projects collectively demonstrate the wide scope of innovation that is being funded by the Primary Growth Partnership.

Shane Ardern: Why is the Government making such a major commitment to primary sector innovation?

Hon DAVID CARTER: This Government is absolutely committed to improving export performance and primary sector productivity through science and innovation. The $475 million invested by the Primary Growth Partnership so far demonstrates our firm focus on lifting economic growth and getting our tradable sector back on track after a decade of neglect by the previous administration.

State-owned Assets, Sales—New Zealand Investors

9. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Prime Minister: Does he stand by his statement yesterday about SOEs that “we want to give New Zealanders a chance to invest in these assets”?

Rt Hon JOHN KEY (Prime Minister): Yes. Of course New Zealanders would be a top priority. Can I just say how surprised I am that the member is asking me that question, because David Parker was reported in the Otago Daily Times yesterday saying that he would lead the charge on State-owned enterprises.

Hon Clayton Cosgrove: To the Prime Minister—[Interruption]

Mr SPEAKER: I have called the Hon Clayton Cosgrove. [Interruption] I say to Government members this time that I have called the Hon Clayton Cosgrove.

Hon Clayton Cosgrove: Can he specify which New Zealanders will get a chance to invest in State-owned assets, given that New Zealanders already own these assets via the Crown, through their taxes?

Rt Hon JOHN KEY: Yes. I daresay the providers of the 1.6 million KiwiSaver accounts are likely to be interested. I would have thought the New Zealand Superannuation Fund, which holds assets on behalf of all 4.4 million New Zealanders, would be interested, as well. I would have thought ACC would be interested. I would have thought quite a number of high retail investors would be interested. If the member taps his mate on the shoulder and asks him, he will find out that iwi are interested in buying some shares, too.

Hon Clayton Cosgrove: Will the New Zealanders who have a chance to invest in State-owned enterprises include those people who, according to Statistics New Zealand, received an average wage increase of 1.7 percent last year, which was then completely eroded by the 4 percent increase in prices, meaning they have little or no disposable income?

Rt Hon JOHN KEY: I remind the member that wages have gone up by 16 percent and costs have gone up by 6 percent. But putting that to one side, as I said earlier, one of the things that really surprised me was that the distribution of the 1.6 million KiwiSaver accounts is heavily skewed towards low and middle income New Zealanders. They are saving for the long haul.

Jacinda Ardern: Will the New Zealanders who have a chance to invest in State-owned enterprises include the 158,000 people who are currently unemployed and have little or no disposable income?

Rt Hon JOHN KEY: Yes, of course. They are free to do so, like any other New Zealander. But, of course, those who have very low levels of disposable income are not likely to do so, for that reason. That is one of the reasons why welfare reform will help those New Zealanders get into work. I say to that member how lucky those New Zealanders are that Labour is not in office, because if its emissions trading scheme had been rolled out they would be paying so much more, and if its air quality standards had been rolled out thousands of them would have lost their jobs. And, by the way, if they were working on The Hobbit, they would be working overseas.

Kelvin Davis: Will the New Zealanders who have a chance to invest in State-owned enterprises include those people who are paying $25 to $40 extra a week for early childhood education and have less disposable income as a result?

Rt Hon JOHN KEY: If there are those people, then, yes; actually, their children would probably be at 100 percent teacher-led centres, so they are likely to be higher-income New Zealanders. I ask that member to please have the decency to pass his supplementary question to David Parker, because so far we have gone from Phil Goff, to Shane Jones, right through to that member, Kelvin Davis. I do not know who is next. Does Jacinda Ardern or anyone else want to ask a question over on that side?

Mr SPEAKER: I call the Hon Clayton Cosgrove. [Interruption] I know that the issue is a hotly contested issue, but the member has the right to ask a supplementary question.

Hon Clayton Cosgrove: Government diversions aside, is it not actually the case that the only people who will be in a position to invest in State-owned enterprises are the wealthiest 10 percent of New Zealanders, who received, thanks to the Prime Minister and his Government, 42 percent of the National Government’s tax cuts last year, and, of course, foreign institutions, which already own many of the former State assets?

Rt Hon JOHN KEY: I remind the member that two-thirds of all the personal tax cuts actually went to lower and middle income New Zealanders. Secondly, let me run through this one last time: there are $1.6 million KiwiSaver accounts; if the providers are not investing in a blue-chip company like Meridian Energy, what are they investing in? I make the offer one more time: could someone please pass a supplementary question to David Parker? I am thinking about letting him answer the questions, if he is not allowed to ask them.

Mr SPEAKER: I call the Hon Trevor Mallard. [Interruption] I am on my feet. There will be silence when I am on my feet, on both sides of the House.

Hon Trevor Mallard: My question is to the “Prime Mincer”.

Mr SPEAKER: The member knows he cannot do that. He has just lost his supplementary question. But, indeed, he has got another one.

Hon Trevor Mallard: Is it his expectation that someone with assets of $50 million and a 2 percent current return, which results in a $1,000-a-week tax cut, will find this share offer attractive?

Rt Hon JOHN KEY: If there were such a mythical person, they might; I am sure there are lots of New Zealanders who would want to invest in those assets. Can I say to the member that I appreciate the fact that he has his hair very similar to mine—undyed and quite short, and grey on the sides.

Mr SPEAKER: Order! The House will come to order straight away! I have allowed too much misbehaviour today. Members who do not usually misbehave were quite disorderly there. I penalised the Hon Trevor Mallard for a very disorderly comment, and I do not think the Prime Minister’s comment at the end of that question was helpful. Labour has just regained its supplementary question.

Hon David Parker: Point of order. [Interruption]

Mr SPEAKER: I meant what I said to the House. A bit of fun is fair enough—the member will resume his seat for a moment—but we cannot be too disorderly. Today has been pretty noisy. It is the first question time of the year—I understand that—but I cannot let it go too far.

Hon David Parker: I seek leave to take up the Prime Minister’s offer that I answer the question that Clayton Cosgrove put to him.

Mr SPEAKER: Leave is sought for the member to answer a question that was put to the Prime Minister. Is there any objection to that? There is objection.

Hon Dr Nick Smith: I seek leave of the House to table the speech made by Labour’s finance spokesperson, David Cunliffe, supporting mixed-ownership of State-owned enterprises and private shareholding in those companies.

Mr SPEAKER: This speech—where was it made?

Hon Dr Nick Smith: It was made by the Labour finance spokesperson, David Cunliffe, in November 2010.

Mr SPEAKER: Whereabouts, though? Where was this speech made?

Hon Dr Nick Smith: The speech was made in Wellington.

Mr SPEAKER: Whereabouts?

Hon Dr Nick Smith: At Victoria University.

Mr SPEAKER: OK. Leave is sought to table that document. Is there any objection? There is no objection.

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

Employment, 90-day Trial Period—Effect on Job Creation

10. DAVID BENNETT (National—Hamilton East) to the Minister of Labour: What reports has she received regarding the effects of the 90-day trial period on job creation?

Hon KATE WILKINSON (Minister of Labour): I have seen a report from the New Zealand Institute of Economic Research that concluded that the trial period increased hiring from small employers by 6 percent above expectations. During tough times in the labour market, trial periods are helping Kiwis to get into jobs.

David Bennett: How many jobs has the trial period helped to create?

Hon KATE WILKINSON: Heaps. The New Zealand Institute of Economic Research has estimated that 13,000 New Zealanders have jobs they would not otherwise have, because of the trial period. That is 13,000 New Zealanders. These findings are consistent with earlier research from the Department of Labour. I expect the number of jobs created to grow as the trial period becomes available to larger employers from 1 April this year.

Darien Fenton: Is it not true that the conclusion from the New Zealand Institute of Economic Research that the fire-at-will law appears to be working is based on only 6 months of raw data showing that hiring has declined less in small firms than in big firms; if so, does the latest increase in unemployment mean the fire-at-will law has stopped working?

Hon KATE WILKINSON: I think it is fairly obvious to everybody that the trial period is working and is creating jobs for New Zealanders. It is giving New Zealanders opportunities to get their foot on the employment ladder, which they might not otherwise have been able to do, and it is giving businesses the confidence to take on people whom they might not otherwise have employed.

Health Care, Affordability—Primary Health Care for Under-sixes

11. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Health: Does he believe affordable access to primary health care for children under 6 is important for delivering health outcomes; if so, how much does he believe parents should pay when they take children to see a doctor in 2011?

Hon TONY RYALL (Minister of Health): Can I start by congratulating the member on his new role. Yes, it is important that children under 6 have the best possible access to primary care, and that is one of the reasons this Government has increased funding for primary care by $144 million over 4 years. Some of that extra money is going to increasing subsidies for the under-sixes scheme. The proportion of children under 6 years of age who qualify for free doctors’ visits has risen, from 70 percent in 2008 to 83 percent today, under the National Government. Despite this progress, the cost of after-hours care at some practices has been, and continues to be, a longstanding concern.

Grant Robertson: I raise a point of order, Mr Speaker. This was a question on notice, and it had two parts to it. The Minister certainly dealt with the first part of the question, but he did not deal with the second part, when he was asked how much he believed parents should pay when they take their children to the doctor.

Mr SPEAKER: The member will be aware that when he puts down a question on notice, there is no particular answer to what the Minister believes. The Minister told the House what he believed about that, and it was not exactly what the member was seeking, but that is the problem with seeking opinions.

Grant Robertson: Does the Minister agree with the Ministry of Health that $15 or more for an after-hours visit for a child aged zero to 7 represents “a high fee”?

Hon TONY RYALL: I am not aware of the correspondence that the member is referring to, but what I can say is that of course these things depend on the various circumstances surrounding the practice that provides the service. What I can say, though, is that 94 percent of high-needs children are going to a free under-sixes practice.

Grant Robertson: Does he think it is acceptable that it cost Kapiti coast resident Linley Williams $41, or 20 percent of her family’s weekly grocery bill, to get treatment for her 20-month-old daughter’s badly cut lip at 5.30 p.m. last Thursday?

Hon TONY RYALL: I am aware of that correspondence from the lady concerned. It is a matter that we are looking into. On the Kapiti coast, of course, there is a major problem with the supply of doctors, a problem that we inherited from the previous Government. Certainly we think that the Government’s move to make sure that more and more people are getting access to free under-6 health checks is a benefit, but there are, no doubt, parts of the country where there are problems. That is one of the reasons why in Auckland, for example, we are developing a network of 10 extended-hours clinics, which will provide targeted support for lower-income people.

Grant Robertson: Would the Minister rather that the Williams family drove to Wellington Regional Hospital and clogged up the emergency department, or is he prepared to actually address the cost of taking young children to after-hours care on the Kapiti coast?

Hon TONY RYALL: The Government is concerned about the cost of after-hours care, and a number of initiatives are being taken. As I said, in Auckland within the next 6 months we will have a network of 10 after-hours clinics providing lower-cost access to health services for many children in particular areas—

Charles Chauvel: How’s that going to help anybody on the Kapiti coast?

Hon TONY RYALL: The issue on the Kapiti coast remains the longstanding shortage of general practitioners that we inherited from the previous Government, and that is why a number of initiatives are under way, and more and more people in Kapiti are getting access to care.

Grant Robertson: Will the Minister commit to making access to after-hours care for all under-sixes free across New Zealand, to give Linley Williams, as she says, “a fairer system for working families”, or is it just, as John Key said in 2007, a matter of letting the market decide?

Hon TONY RYALL: New Zealand is living in very tough economic times. Mr Robertson’s predecessor as spokesperson on health promised an extra $500 million to pay workers who had a claim under sleepovers, and now we hear another promise of tens of millions of dollars being made off the hoof. But this Government is concerned about making sure that more and more young New Zealanders get access to the free under-sixes scheme, which was started under the National Government, and 83 percent of young New Zealanders under 6 now have free access to a general practitioner, compared with 70 percent when the party opposite was last in Government.

Rahui Katene: What will he be doing to respond to the increasing number of hospital admissions from socioeconomically sensitive conditions, particularly for Māori and Pasifika children, estimated at approximately 2,000 additional such admissions in 2009?

Hon TONY RYALL: A number of initiatives are under way to address the issue that the member has raised. Of course, the first is the leading-edge programme Whānau Ora, which will provide much better cross-agency support for families, and the second is the before-school checks programme. When I became Minister of Health something like about 8 percent of kids were getting a before-school check; I have now got that figure up to 70 percent. Here is the really important message: we now have more Māori kids being immunised at age 2 than ever before in the history of New Zealand. I am not prepared to tolerate the poor immunisation rates of Māori kids that the previous Government did.

Tax System Changes—Rate Required to Implement Policies

12. Hon RODNEY HIDE (Leader—ACT) to the Minister of Finance: What would the top rate of tax need to be to implement a $5,000 tax-free threshold, reverse the Government’s spending cuts, remove GST from fresh fruit and vegetables; all while not increasing New Zealand’s debt track any further?

Hon BILL ENGLISH (Minister of Finance): Such a rate is very difficult to calculate, because, in theory at least, the rate we would need to strike in order to raise $1.55 billion would be around 58c to 60c in the dollar, which would be the highest rate in the world. Of course, if we struck that rate, we would get many times over the rash of avoidance that occurred when the previous Government put up the top rate to 39c in the dollar. I suspect that Labour would not be able to go to 50c in the dollar, and that it would have to put up tax rates right across all income ranges in order to pay for the $5,000 tax-free zone. That is before we get to raising tax to pay for all the other promises in addition to those two.

Hon Rodney Hide: How would that required tax rate compare with taxes around the world and, in particular, in Australia?

Hon BILL ENGLISH: The comparison would show it to be the highest tax rate in the world. If we have learnt one thing in recent years, it is about the mobility of income and the ability of people to organise their affairs in order to avoid paying a top tax rate. Even the highest personal tax rate in the world would not be anything like enough to raise the revenue required to fund the tax-free zone. In fact, Labour would have to increase tax rates right across the income range to pay for that promise.

Hon Rodney Hide: Has New Zealand ever had tax rates at that level; if so, what were the comments of the Government of the time that reversed that figure?

Hon BILL ENGLISH: Mr Speaker—

Hon Annette King: It was 66c under Muldoon. Under a National Government it was 66c.

Hon BILL ENGLISH: That is exactly right. It was 66c in the dollar, and that was progressively reduced to 33c in the dollar by the Labour Cabinet of the time, of which Phil Goff was a member as well as a strong advocate of reducing the top tax rate, for all the reasons that I have just said. If we put a tax rate at 66c in the dollar, hardly anyone would pay that, and that would undermine the integrity of the system. What Labour would have to do to pay for the tax-free threshold would be to lift the tax thresholds for all working New Zealanders, and that would mean they would not be better off.

Questions to Members

Question Nos 1, 2, and 3 to Member

Mr SPEAKER: Honourable members, the three questions to members set out on the question paper are now out of order. The questions relate to the Marine and Coastal Area (Takutai Moana) Bill and are addressed to the chairperson of the Māori Affairs Committee. When the questions were accepted at 10.30 this morning the bill was before the Māori Affairs Committee. The bill has now been reported to the House and is no longer before the committee.

Although the questions were properly accepted this morning, they are now out of order. A question to a chairperson of a select committee must relate to a matter for which the committee has charge. I refer members to Standing Order 370(1) and Speaker’s ruling 149/2.

Questions ruled out of order.

Hon DAVID PARKER (Labour): I raise a point of order, Mr Speaker. Members of the Opposition are in a difficult position here, because the normal procedures of the Māori Affairs Committee have been severely truncated. We have only one House in this Parliament, and therefore we are reliant on good select committee procedures in order to get good law. What remedy do I have but to ask questions about those poor processes?

Mr SPEAKER: Now that the Marine and Coastal Area (Takutai Moana) Bill has been reported back to the House, the member will have ample opportunity, I am sure, during what I am sure will be significant debates in this Chamber, to raise all the concerns that he has about that.

Debate on Prime Minister’s Statement

Debate on Prime Minister’s Statement

Debate resumed from 8 February.

Dr CAM CALDER (National): This Government is committed to helping and protecting the most vulnerable in our society and 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 in a better society. 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 and a research climate that encourages innovation. We are pursuing an ambitious free-trade agenda, led by the very able Minister of Trade to my right, to expand our markets for our products, and we have introduced a growth-friendly tax system that rewards effort. Alongside that we are hauling back on new spending allowances and confronting the challenges of lifting our national savings rates so that we can reduce our debt to overseas lenders—a fiscally prudent, economically literate plan.

Contrast our plan with the Labour spiral of spending promises, costed so far at $5 billion and still climbing steadily towards the stratosphere. Although many New Zealand families are being prudent, being careful with their money, and paying down debt, Labour is talking of doing exactly the opposite. It is behaving fecklessly, recklessly, and irresponsibly. Where is the money coming from? So far the search for answers to this fundamental question has been singularly unrewarding; no answers have been forthcoming because Labour does not have an answer. How will Labour grow the economy? Labour is offering a pot-pourri of policies made on the hoof; it is a case of fruit-loop thinking leading to fruitcake policies with absolutely no sound economic foundation. Maybe that is an explanation for why Labour would remove GST on fruit and vegetables, even though this policy has long been discredited, even by its own caucus, as a meaningful intervention at any level, let alone as a driver of a nation’s economy.

What exactly is Labour’s mechanism to encourage economic growth? Sadly, it is a continuation of Labour’s old tax, borrow, spend, and hope philosophy that served New Zealanders so poorly in the past. Perhaps it is using a carrot and stick philosophy: reduce GST on carrots, and whack with a big stick—in the form of increased taxes—many of those helping to create jobs. Labour’s recipe of loose spending, more borrowing, and higher taxes is a clear contrast to this Government’s responsible programme to keep debt under control, promote savings, and get the economy working faster to create a better society for all New Zealanders.

I would like to talk about education. Education is at the root of our belief in the need to unlock the potential that lies within all New Zealanders. We have never spent more than we are spending now on education.

Hon ANNETTE KING (Deputy Leader—Labour): The Prime Minister’s speech at the beginning of a political year is often eagerly awaited by commentators, the media, politicians, and even by some of the public, and I suppose even more so in an election year. The speech is seen as the Prime Minister’s chance to put forward his Government’s vision, to outline his plan and programme to make New Zealand a better place in which to live, to show that he has command of the issues that we face in the very unstable world that we live in, to give reassurance to the vulnerable members of our society—children, disabled people, the sick, the elderly—and to show that he is in touch with the real issues that New Zealanders face today. There is always a certain amount of expectation about what will be in the speech, and, of course, for this speech we had the usual hoopla and hype about this showcase piece. In fact, one commentator went so far as to predict that the Prime Minister’s speech would plot the course that the Government would take and acquire a strategic direction.

I have to say to that commentator that he must be feeling very, very disappointed. We did not get a vision, we did not get a plan, and we did not get a strategic direction that would, perhaps, give us a brighter future, maybe. Or what about a direction that would turbocharge the economy, or perhaps something that would be ambitious for New Zealand, or maybe even something about catching up with Australia—let alone something that would give us a step change for New Zealand? What did we get? We got a hastily cobbled-together announcement that the way forward, the breakthrough, the way to cut through the issues was to restructure the Public Service. We were told there are too many employees and a bloated Public Service, so National will get rid of a few public servants and replace them with a few consultants—in fact, a lot of consultants. You see, consultants do not count when we are counting up public servants. It is the old National Party trick: smoke and mirrors; smoke and mirrors. It is the usual merry-go-round that National runs when it is in Government.

This morning, on Morning Report, John Key could not even name which departments were on the block, how many jobs would be lost, how much would be saved, how much the restructuring would cost, or even when it would be done. We then had to listen to a chorus of the usual sycophants saying it was an amazing plan, and we had an amazing Prime Minister. If I have ever heard anything like the emperor’s new clothes, it was listening to all those people. They had been rung up and told to put out statements that said how wonderful the plan was.

Well, I say that what we got from John Key was more like a political circus. He walked the tightrope between lies, damned lies, and statistics. He juggled the latest unemployment figures. He even dropped the ball on job creation. The unemployment figures are ballooning. They are now at 6.8 percent, with 265,000—I will say it again: 265,000—people in New Zealand officially jobless, according to the latest household labour force survey. What did John Key say about that? He said people should relax. He said they should not give up hope as it is just a survey, the information is old, and the survey is notoriously volatile. Then we had the doozy of them all, which came from the “Minister of Unemployment”. She chimed in and said a slow recovery fits the Government’s focus on the economy. Do members know what we say? Hear, hear! That is what we say. The Government’s focus on the economy has been about gimmicks and slogans, and it is no wonder that the economy has been slow to recover.

Unemployment in New Zealand is going up; unemployment in Australia is going down. Today, just before we came into this House—in fact, as we came into this House—the Minister released the latest unemployment and benefit numbers. She has had them for 5 days. She slipped them out as we came into the House, and what do they tell us? Almost 100,000 more New Zealanders are now on all main benefits since 2008 under that Government.

Hon Phil Goff: That’s their welfare reform policy.

Hon ANNETTE KING: That is the Government’s welfare reform policy: to put more people on the benefit.

John Key did acrobatics over the rising cost of living and the drop in real wages that has occurred under his regime. He said people are getting more, when they are getting less. He said prices are going down, when they are going up. He said people are better off, when they are going backwards. I am very, very sure it is a long time since he walked down McGehan Close and talked to the people there. If he did, he could have heard what they had to say about this National Government. They said it has done little to help the poor: “He’s just making everything better for high earners and not the low-income ones … Bread, milk, everything that we need that is a basic necessity for us is going to be more expensive. It’s going to be harder for us to feed our kids.” So whom do we believe? Do we believe John Key, or do we believe the ordinary struggling family that lives in the street that he made a feature of at the last election?

Then John Key did the high wire act over his plans to sell off our State assets. He told us we would own more of our own country if we sold a few shares to mum and dad investors, who already own those assets. I do not quite understand that. How will we own more if we sell to mum and dad investors something that we already own? I would really like him to tell us how that works. Mind you, it is a risky move. It is a risky move by the Prime Minister, because he has removed his usual safety net: the U-turn that he does when things get a bit politically hot. He has said he does not give a damn whether New Zealanders care about selling the assets; he is going to sell them.

To complete the political circus, John Key has acted like the clown. I am not talking about his mincing down the catwalk; I am talking about the poor joke that he has played on the most vulnerable members of our society: children in this country of New Zealand. They received a fleeting mention as a postscript, a sort of afterthought, in his speech. Someone said to him that he had better throw a few lines into the speech about some kids, because Labour has set out a comprehensive policy to lift our children and our families out of poverty; to give every child in this country a good start—

Hon Dr Nick Smith: All mush.

Hon ANNETTE KING: —to put support at the beginning of their lives, I say to Dr Smith, and not to waste millions of dollars on putting them into boot camps 14 and 15 years later; and to value caring for children. We value those who care for, nurture, and look after children, and we do not reduce that to only the rich, those who can afford to stay home and look after their children, while struggling low and middle income families and sole parents are told that they do not count.

If this Prime Minister truly believed in a real future, and if he had put forward a vision for this country, it would have been about growing the economy, and growing jobs so that people could go into them and gain the dignity that comes from work and opportunity, and it would have been about giving a future to our children. It is not about just the economy; it is about the economy and giving people a future in this country. He would have taken notice of his Chief Science Adviser, Professor Gluckman. He would have gone to Anne Tolley and told her to reverse the cuts in early childhood education. The $250 million - odd he is stripping out of early childhood education must go back in, because our young children matter in this country. It is a right for them to have education.

Why is it that when this Government made its first cut, it picked on the smallest, most vulnerable kids, who have no voice in this country in that Government? They have no voice at the Cabinet table in this Government. The first moves that it made were against those who have no voice. John Key should have listened to his adviser, Dr Gluckman. He should have addressed child poverty in New Zealand. The shame of that Government and of that Prime Minister was to say in this House before Christmas that they had no intention of eradicating child poverty in this country. Child poverty is a shame for this country, and when we were in Government we lifted 130,000 families out of poverty through Working for Families, which John Key called “communism by stealth”. But I notice that he is scared to get rid of it.

HILARY CALVERT (ACT): It is good to be back in the debating chamber for what promises to be an interesting year. I hope all members had a great Christmas and New Year break and are feeling refreshed. The parliamentary year has barely begun but we have already witnessed plenty of drama and sideshows. We cannot let what the media deem important distract us from the reasons we are here. We should not worry about catwalks and campaigns but about how to enable the conditions whereby all New Zealanders can get ahead.

ACT and National have worked well together in many areas. We in ACT are pleased to have ensured a stable centre-right Government since 2008. We are a party of principles, and when we see National stray from its principles it is our duty to call it out on that. A key principle for ACT is one law for all New Zealand—that is, one law for all, regardless of race, religion, income, or location. We thought that that was National’s view too, but since 2008 we have seen National, under the influence of the Māori Party, move us further down the path to separatism.

One such example is the Marine and Coastal Area (Takutai Moana) Bill, which is scheduled to replace one racist piece of legislation with another. The Prime Minister promised to replace the Foreshore and Seabed Act only if there was widespread support for doing so, but it is plainly obvious that the new bill is massively unpopular with almost everyone. The bill divides up our coastline, minerals, and access along tribal lines.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I know this is slightly unusual. The Marine and Coastal Area (Takutai Moana) Bill is not actually on the Order Paper, but we have had an assurance from the Speaker that the bill is a matter that is now set down because it has been reported back. If that is the case, then it is a breach of the Standing Orders for the speaker to anticipate an order of the day.

The ASSISTANT SPEAKER (Hon Rick Barker): The member is technically correct, but it is a breach only if it can be reasonably expected that debate on the bill will be reached on the same sitting day.

Hon Trevor Mallard: Well, come on.

The ASSISTANT SPEAKER (Hon Rick Barker): Excuse me. There is no chance that we will get to that bill today, so it is perfectly in order for the member to make reference to that particular legislation. I invite Hilary Calvert to continue.

HILARY CALVERT: If one is not in the right iwi, one misses out. National says that up to 10 percent of our coastline could wind up under customary title. We could ultimately have a situation where our entire coastline—just like our longest river—is under co-governance. Some may ask what is wrong with that. The Treaty of Waitangi, which was signed a little over 171 years ago, promised that all—Māori and non-Māori—would be equal before the law. Everyone would have the same rights and responsibilities as one another. That promise has long since fallen by the wayside. The Treaty has been twisted into a form that pits them versus us. No longer is it about equality of opportunity for all; instead, it is now focused on taking what we have and divvying it up along racial lines.

For ACT, one law for all goes beyond race. It is about empowering all New Zealanders to get ahead and better ourselves. It is about acknowledging that focusing on equality of outcome is impossible and irresponsible, but that we can and must work to ensure equality of opportunity. We see children trapped in bad schools, ill people forced to linger on public waiting lists, and the jobless lost in an archaic welfare system. As our leader, Rodney Hide, said, ACT finds unacceptable the thought of 12,000 new entrants per year ultimately leaving school functionally illiterate. It is abhorrent that those in the central North Island cannot get the same level of chemotherapy treatment as those in other parts of New Zealand, and locking our young people out of the workforce through impossibly high minimum wages borders on criminal.

The current system locks too many into a lifetime of inferiority and missed opportunities. ACT has policies that will enable people to choose the education and health systems that suit them best. We are desperate to lower barriers into the workforce that past Governments have been only too happy to erect. We want an economy that rewards those who raise our living standards through hard work and innovation. We will fight against the divisive Marine and Coastal Area (Takutai Moana) Bill, and fight to restore the sanctity of property rights for all, regardless of colour and as determined by centuries of common law. That is what one law for all New Zealanders means to me and to the ACT Party. We look forward to continuing to work with National where our principles match, and to speaking out when they do not.

Hon HEATHER ROY (ACT): Welfare reform is something the ACT Party has spoken passionately about since its inception. I congratulate John Key on his focus in his speech yesterday on welfare reform. He said that a Government is judged by how it cares for the sick and vulnerable. That is too true. He said that 200,000 children are trapped in welfare homes—that is 200,000 children too many. He said that those who can work should work, and he is right. But it is easy—very easy, in fact—to stand up in this Chamber and say these things, and much harder to do the real work and to act.

I was very disappointed, I have to say, in the Hon Annette King’s address. She decided to spend 10 minutes whacking Mr Key around the chops for what he said yesterday, yet whenever she is given the opportunity she talks about the wonderful policy work she is doing in the area of welfare reform. Well, where was the talk of that in her speech? She had 10 minutes to positively put forward what she wants to do. The truth of the matter is that in 9 long years in Government, Labour did not manage to get on top of the issue. Here is the situation: in 1970 we had 37 workers for every person on a benefit. In 2000 there were five workers for every person on a benefit. In December 2010 there were six workers for every person on a benefit. Under the current Government at least things have improved slightly, but it is a shameful position to be in. We have 2.2 million people employed in this country, but 353,000 people are on welfare benefits—a ratio of 6:1. Welfare dependency amongst working-age New Zealanders is reaching unsustainable levels financially and it has done huge damage to this country socially. Far from reducing the number of people on welfare, subsequent welfare policies from National and Labour Governments have taken the opposite path. They have increased the number.

We are seeing at the moment an increase in the minimum wage; both National and Labour Governments are responsible for that. National has steadfastly refused to reinstate youth rates, which pushes people out of work and on to welfare. This has been coupled with the entrenching of middle-class welfare by refusing to alter the Working for Families policies, which make more people than ever dependent on the State.

The Welfare Working Group has put forward some very sound proposals. There are a lot of them. Some of the proposals are excellent and are things that the ACT Party has proposed for a long time. Some are considered to be a tough love approach. That may well be the case, but it is time that we got tough. It is time that we had the courage to do the things that will make a difference. This might mean lifting the age at which a young woman can get the domestic purposes benefit. It might mean having time limits for benefits. These things might be tough, but they put the incentives in the right place and allow people to take ownership of their lives. These are the decisions that we have to make.

When we talk about what is tough, and again I congratulate the Prime Minister on focusing on this issue in his speech yesterday, it is too tough to stomach the environment in which far too many of our precious young children live, where they are abused and in some cases—too many—are killed. The Lillybings, the James Whakarurus, the Nia Glassies. Welfare dependency has created an environment where there are abusive relationships and children suffering, and none of us in this House should be comfortable with that.

ACT is the only party committed to true welfare reform and we will push the Government as far as we can to get the incentives right. There are many things we could do to send the right signals. We could be purchasing our own accident and unemployment insurance, which would put the emphasis in the right place. We need to get the economy to be in a position to support the truly vulnerable, where welfare functions as a safety net, not a hammock that is so distended that we cannot tell the truly vulnerable from those who would like to climb out on their own. Michael Joseph Savage would turn in his grave. He was popular because he offered people hope. He said that we should let people govern themselves, and when we think about welfare reform, that should be foremost in our minds.

Hon BILL ENGLISH (Deputy Prime Minister): In the House yesterday the Prime Minister outlined the next steps in the Government’s programme to get the economy on track, to strengthen it, and to raise incomes. All of us need reminding every now and again of the scale of the change and adjustment that the New Zealand economy needs to go through, and we are by no means alone. Most of the countries that followed the same policy prescriptions as New Zealand over the last 10 years have found themselves in the same position.

I will use for example the discussion about debt levels, because there will clearly be an important public debate this year between the Government’s interest in getting New Zealand’s debt—

Hon Lianne Dalziel: Talk about public debt.

Hon BILL ENGLISH: —and Government debt down, and the Labour Party, which takes a different view. Labour seems to think that if debt is cheap, then we should have endless amounts of it.

The average household in New Zealand owed $61,000 in 2003. That amount is an average, and it includes all types of credit, of which mortgages are obviously the largest, but it also includes credit card debt, consumer debt, and overdrafts. Of course, debt is not distributed evenly across households. Some households are debt-free. Older households tend to be debt-free; younger households tend to have a lot of debt. But in 2003, on average, household debt was $61,000. By 2008, just 5 short years later, it was $107,000. That is by far the fastest rise in debt burden that New Zealand has seen over any reasonable period. The average household now owes $107,000.

New Zealanders have, fortunately, understood the risks of that debt. They understand that if interest rates are rising, it will eat into their standard of living, because they will have to pay more interest on what is now a much larger stock of debt than they had before. Much of that debt has been incurred in buying houses from each other or buying consumer goods, none of which generates a return to the economy. New Zealanders are now being careful with their spending and are trying to pay off debt, but we have barely made a dent in that $107,000. In the meantime, the people who lent the money to us still want us to pay interest, and we have to keep going back to them through the banks to roll over that debt.

If we thought that $61,000 was enough debt per household, then every household in New Zealand would have to pay off $40,000 of debt. That would have an enormous impact on this economy, because it is money that would not be going into the job-rich areas such as the retail sector, or into building new houses. Even if we think $107,000 is about the right amount of debt, that figure still represents a lot of constraint in this economy. The burden of debt that households have built up has now become quite a considerable drag on economic growth. Until households believe that they have their debt at the right level and that they can cover the risks of interest rates rising on that debt as the economy recovers, they will not go out and spend up.

In the agricultural sector it is worse. The agricultural sector debt per farm more than doubled over the period from 2003 to 2008. Despite the fact that we have record commodity prices, we are not seeing that money flowing into the shops in Hamilton and Invercargill, because people in the farming community have to pay down the debt that they ran up, some on productive investment, but mostly on bidding up the prices of farms and buying them from each other. Again, although conditions are favourable, with very high commodity prices, it will take some time for those conditions to filter back into the economy because the debt hole on our farms is so large. They will be pouring their profits into that hole for some time yet.

The same kind of scale of rebalancing is evident when it comes to job growth. We can think of the economy as being 80 percent non-tradable—that is, domestic, which is not competing with the rest of the world—and about 20 percent making up the export sector and the tradable economy. The non-tradable sector was delivering a lot of new jobs over the last decade. But far too many of them were funded by the debt that I have just talked about and by big increases in Government spending. That spending simply cannot continue, and it is not continuing. New Zealanders have decided that it will not continue. The Government has been a bit slower, and we are deciding that we will have to tighten up.

Substantial job growth will not come from that 80 percent of the economy. There will be some growth, and there has been. In the last 15 months there have been 35,000 new jobs in the non-tradable sector, but that is 80 percent of the economy. The sustainable job growth has to occur in the other 20 percent. In the export sector in the 5 years to 2009 the number of jobs shrank by 55,000. We had 55,000 fewer people in the export sector 5 years on from 2003. That trend has just turned round, and with high commodity prices it should keep turning round. So 20 percent of the economy needs to grow very fast to offset the fact that the other 80 percent of the economy, which generated all the jobs, is now heavily constrained by debt and will not be growing nearly as many jobs as it used to grow. There is a long road ahead of us to get a vibrant, job-generating export sector up and going when it has been on its knees for a fair bit of the last decade, shrinking in production and shrinking in jobs.

That brings me to the issue of the public sector, which the Prime Minister addressed in his speech. We are very keen to see an enthusiastic, professional, and innovative public sector. Not only are we keen to see it; it is an absolute necessity. New Zealanders’ demands and expectations for public services have not shrunk because of a recession; those demands and expectations have continued to grow. In fact, those expectations are probably lifting: people expect better health care, they expect better education, and they expect more effective law and order from the police and prison system. So the Government is focusing on producing more and better public services, knowing that it will have to do so for less.

I expect Opposition members will rant on about cuts, as they usually do, but in the time since they left office we have reprioritised $4 billion—

Sue Moroney: Cuts.

Hon Member: He means cuts.

Hon BILL ENGLISH: There we go: they call it cuts. Any dollar spent in the public sector under Labour is a dollar that cannot go anywhere else. They are the only people in New Zealand who think that. Every household and every business in New Zealand has had to reorganise its affairs, and the public sector will need to be reorganised in order to produce more and better services. We are determined to do that.

The Government will go about this task as it has so far: in a very considered and thoughtful manner. We have already initiated quite a lot of change across the public sector. Increasingly the public sector is taking leadership of that change because its members can see that to have satisfying professional lives, and to meet their strong ethic of public service, things will need to be done a bit differently. It will be the Government’s role to support them in that task. They are aware of the financial constraints; they have heard that message for a couple of years. The rest of the community is aware of the financial constraints, which is why people take no notice of Labour’s ranting about cuts. They know, actually, that Labour oversaw a pretty bloated public sector, which is now being brought into line.

I, along with the team in the National-led Government, look forward to participating in a process that sees improvements in public services at the same time as we get Government finances into line, reduce our record-breaking liabilities to overseas lenders, and get this economy up and running and producing more jobs.

GRANT ROBERTSON (Labour—Wellington Central): Yesterday when John Key spoke in Parliament he told us that a society is judged on how it protects the vulnerable. It perhaps will not surprise members in the House that he did not get the quote quite right. The quote comes from an American politician named Hubert Humphrey, who said that the test of the morality of a society was the way in which it looked after those in the dawn of life, the twilight of life, and the shadows of life. If we put the National Government’s record to that test in just one sector of our society, the health sector, we can see a total failure by the National Government. We can look at those in the dawn of life, the young. Today in question time I raised with Tony Ryall whether it is acceptable for someone living on the Kapiti coast to have to spend 20 percent of the weekly family grocery bill on a visit for after-hours treatment for their daughter’s cut lip. Is that acceptable?

Hon Nanaia Mahuta: How much?

GRANT ROBERTSON: Twenty percent of that family’s weekly grocery bill was spent on one visit for after-hours care, and this was from a Government that said that under-sixes and the treatment of our young children would be a priority. So those in the dawn of life are not receiving the kind of treatment in the health sector that we would expect.

Research last year told us that there were 2,000 more admissions of children to hospital in 2009 than there were in 2007. That is 2,000 extra admissions to hospital for diseases of which many would have been preventable if the Government were prepared to invest in primary health care, if the Government were prepared to invest in the well-being of our young people. The fact that we have rheumatic fever in New Zealand, at all, is a disgrace. We need investment in those who are in the dawn of life because that is a test of the morality of the Government, but we have seen that this Government is failing that test. Again, we see it with the cuts to early childhood education as well. Young people are being left behind in the health system because Mr Ryall is obsessed by his focus on elective surgery. He is obsessed by looking good in front of this House when it comes to the health sector, but the reality for some, like that young family on the Kapiti coast, is that the health costs they are facing end up putting them and other families in a situation where it is a choice between food on the table or health treatment.

Well, in this country we do have choices. That Government has choices, and it has chosen to give tax cuts weighted towards the top 10 percent of earners. The Government could have made a choice to invest in health and education and to ensure that care for under-sixes could be free for people all around New Zealand, but it made a choice to give those tax cuts to the highest-income earners.

If we take Hubert Humphrey’s quote further, we may consider those in the twilight of life, the elderly. The record on elder care in the health sector from this Government is appalling. I could not believe that in a country like New Zealand I would have a constituent come to me about her 92-year-old father, a World War II veteran, who had had his home-help hours cut over the phone. This man has hearing difficulties and sight difficulties, but his home-help hours were cut over the phone. That is not the kind of New Zealand I want to live in. I want to live in a New Zealand where we look after each other and where we make a priority of looking after one another, not a priority of rewarding the top 10 percent of earners with a tax cut that they did not need. So those in the twilight of life have not been treated well by this Government.

What about those in the shadows of life? I take that to mean people, for instance, who are receiving care under the mental health system. What kind of treatment have they seen from this Government? There have been cuts to funding right around New Zealand for mental health. Here in my own area, the Capital and Coast District Health Board in Wellington has cut mental health funding over the last 2 years. That means that two community clinics in Wellington city will close this year—two mental health community clinics will close this year. It means that right across the health sector, non-governmental organisations that provide vital support to people in our community are losing money.

An organisation like the Phobic Trust of New Zealand, run by a wonderful woman named Marcia Read, who has been lauded by parties on both sides of this House, is losing a funding contract here in Wellington to support people with phobic disorders. Is that the kind of country that has a good morality? That is the kind of message the Government is sending. It is failing the test of looking after the vulnerable. It is failing the moral test of a Government to look after its citizens in the dawn of life, the twilight of life, and the shadows of life. That is a shame upon this Government, and it is more evident in the health sector than anywhere else. It is a question of priorities.

The Government has already said that it will cut the spending allowance in the next Budget down to $800 million of extra spending. If the health budget stands still, it will take up $600 million of that $800 million—if it stands still. Actually, that is still not enough. In fact, over the 4-year Budget cycle that the Government likes to do its Budget on, there will be a $750 million hole in the health budget. One whole year’s worth of new health spending will have gone, across those 4 years. That will inevitably lead to more service cuts. It will inevitably lead to more pressure on district health boards not to provide those services to the young, to the elderly, and to those patients in mental health. That is not good enough, because the kind of country that I want to live in is one where we invest in health and education. It is one where we actually make the choice to say that we will look after our fellow citizens to enable them to achieve their potential, whoever they are and wherever they are from.

Instead, we have a message from John Key that he cares more about the private insurers who will benefit from the privatisation of accident compensation, the top 10 percent of income earners, and the foreign investors who will get hold of our State assets than he does about ordinary New Zealanders. The message to New Zealanders is that John Key does not care about them. He cares about all of those other people—the foreign investors and the overseas-run insurance companies—because that is where the value is going in New Zealand today. That is the value that has been put on this. It is the accountant’s view: the cost of everything and the value of nothing. That is the message that is coming out of John Key.

Hon Trevor Mallard: Hey!

GRANT ROBERTSON: Not all accountants, I tell Mr Mallard.

From a Labour point of view, we want to focus on investing in our future in this term, because it is vitally important when the people of New Zealand see the choices being made by the National Government that they know there are other choices that can be made and that they know it is possible to invest in our future through a relentless focus on children. I totally reject what Heather Roy said in this House today. Annette King is bringing forward a programme on investing in the early years that will make a fundamental difference to the future of New Zealand. It is not about putting an ambulance at the bottom of the cliff as the Government have done with boot camps; it is about building those fences at the top to allow young children to flourish, wherever they are and whatever families they are born into. That is an investment in our future, and, yes, it will take resources to do that. It will absolutely take resources to do that, but resources are better spent there than on tax cuts to the top 10 percent of income earners. Resources are far better spent on investing in health and education.

If we want to invest in our future, then we need a fairer tax system. We need a system where people pay their fair share. It is not about punishing people for success; it is about encouraging success for everybody by ensuring everybody pays a fair share as part of a fair tax system. It is about having a monetary policy that supports exporters, and that actually says we want export growth. Where was the message on export growth in the Prime Minister’s speech yesterday? It was just words and no action on that issue.

On this side of the House we know that when the Prime Minister comes here to make a statement he should be setting out a vision. He should be setting out his vision for the future of New Zealand. What we got yesterday was a directionless statement. The Prime Minister is all map and no compass. He has all the polling and all the focus groups, but he has no idea where he wants to take New Zealand. He has no vision for the future of this country. This year Labour will be presenting a positive vision about investing in our future and investing in our young people, in contrast with National members, who see the cost of everything and the value of nothing.

Hon Dr NICK SMITH (Minister for the Environment): This political year got off to a decisive start with Prime Minister John Key setting out a very ambitious and focused plan for how we can shift this economy and secure the sort of future we want for New Zealanders, by getting out of the debt and consumption cycle and moving to an economy that is based on productive investment and exports. In contrast, what we have heard from Phil Goff and from Labour’s most recent speaker, Grant Robertson, is all that stuff about big spending and about the borrow-and-hope policies that actually got New Zealand into the pretty fragile position we are in today. It is noteworthy that in the month of January Labour spokespeople promised over $5 billion of new spending. The cash register was ticking over in bulk as Grant Robertson just gave that speech. I will give an example. Mr Robertson has said: “Free after-hours care for all New Zealanders.” I have a simple question for Grant: where is the money coming from? Where is the money coming from? Can Mr Robertson and Mr Goff tell us where their money tree is? Where is their money tree? There is absolutely no fiscal credibility in where the money is coming from to fund the extravagant and unsustainable spending commitments we are seeing from Labour members, across the board.

Grant Robertson: Do you not believe in free care for under-sixes?

Hon Dr NICK SMITH: You see, during Labour’s years in office, I remind Mr Robertson, sure, Labour doubled the amount of money it spent on health, yet there were negligible additional services. Labour members can go on about the care of children, but the reality is that Labour had an appalling record on something as basic and important as immunisation. I congratulate my colleague and benchmate Tony Ryall on achieving the highest-ever level of immunisation of children in this country, and particularly on the high levels for Pacific Island and Māori children. They are the things that count and that show that this John Key Government is serious about getting good-quality public services, but not a bloated Public Service.

The biggest growth in health during Labour’s years was in the number of bureaucrats in the health ministry. I make no apologies for being part of a National Government that wants to focus our public services on the front line, on our police, on our nurses, on our doctors, and on our teachers. That actually will make a material difference, rather than the bureaucrats whom Mr Robertson always wants to see getting a bigger slice of the funding.

I will focus also on some of the issues relevant to my portfolios that expose the contradictions in Labour’s approach. Let me take employment. In 2009 we had the Job Summit. A big concern for a large number of employers and councils around this country was the ridiculous air-quality rules the previous Labour Government put in place that would see 17,000 New Zealanders—17,000 New Zealanders—lose their jobs. Let me tell members why. Despite the fact that our biggest problem with air quality is actually households and cars, the only people to be punished under Labour’s air-quality policy were going to be those in industry. You see, it is very simple for Labour; they are anti-business. It does not matter what the problem is. If there will be punishment, it has to be businesses that pay. What they do not understand is that those businesses employ the very New Zealanders whom it is more important than ever we keep in jobs. I was pleased to announce at the Bluegreen conference in Akaroa the new air-quality standards that will save 17,000 jobs—a policy change that is backed by the Parliamentary Commissioner for the Environment, who said that Labour’s policy unfairly targeted business. I say to members opposite: “Don’t stand on your feet and talk about jobs, when the very regulations that you passed and you continue to support to this day would see thousands of New Zealanders, in cities all over this country, lose their jobs.”

Then there was the other contradiction. I heard members opposite crying crocodile tears about the cost of living. Let me take just one example. On 24 December Labour made an announcement on climate change policy. Labour said it wants to move the emissions trading scheme to full obligation immediately—immediately! Let us be honest about what that means for the cost of living. It means that it will put 3.5c on the price of both petrol and diesel immediately. It means an extra 5 percent on the price of power. So I say to members opposite: “Don’t cry crocodile tears about the cost of living when you are, at the same time, announcing policies that will push up costs for ordinary New Zealand families.” I make no apologies for members on this side of the House having a sensible, balanced emissions trading scheme that has reduced the costs that Labour’s scheme would have imposed on families and on businesses.

Let me take another area. I was interested today to get advice about what sorts of things would happen to the cost of living for families, under Labour’s ACC policies. Let me put it simply. For the first time in years this National Government said: “We’re not going to put the ACC levies up on motor vehicles, on earners, and on businesses.” We have been able to do that because we, as a Government, have been able to get on top of the costs that were occurring in ACC. Those costs were going up by 12 percent every single year from 2003 to 2008. If there is a 12 percent increase each year in claim costs, who pays that? It is ordinary New Zealanders. When they register their vehicle, and every week when they receive their pay, those ACC levies are taken out. If we had let those costs continue to grow, those levies would have had to rise by $200 per New Zealand family. In other words, every single New Zealand family would have had to pay another 30 bucks when they registered their car, if we had allowed Labour’s policies to continue.

Every New Zealander on the average wage would have been up for another $150 a year—another $3 a week—in terms of the earners levy, if we had allowed those costs to continue to rise at 12 percent per year. Members opposite talk as though they are concerned about costs on New Zealanders, but during their period in Government over and over again they had policies that simply drove up costs. Those costs end up falling on households and businesses. The changes that this Government has made are consistent.

I make one further important point. The Prime Minister started this year with a very bold call on the mixed-ownership policy in respect of State-owned enterprises. That policy will extend the investment opportunities for New Zealanders who are being burned off the finance companies. They do not want them investing more and more in residential property. We will provide opportunities for them to invest in good New Zealand companies. But I want to expose the double standards of that. I quote David Cunliffe, the Opposition finance spokesperson, from 25 November 2010, who said, in a very important speech at Victoria University: “We can unleash State-owned enterprises—”

Hon Member: Unleash!

Hon Dr NICK SMITH: Unleash—“to create and grow new businesses with private partners and private shareholders.” That was from the speech made by Mr David Cunliffe, the finance spokesperson for Labour members opposite.

I have a simple challenge for Phil Goff and the other members of Labour’s team who have ranted and raved against this policy. Well, why did they not rant and rave in November? I will tell members why. It is because they are absolutely hollow in their vision for New Zealand. They want to play politics with the issues that are so important to this country: getting efficient public services, reorienting our economy towards exports, getting quality education services, and making sure that our environment policies are supporting the growth and the jobs that New Zealand needs, as well as in areas like agriculture where my colleagues have made big announcements about the Primary Growth Partnership.

This Government has a positive plan for New Zealand, whether it is for jobs, whether it is for the cost of living, or whether it is for mixed ownership for State-owned enterprises. The mixed signals, the confused policy, and the straight pure politics that we see from the Labour Opposition show that Labour is into opportunism, but it has absolutely no idea what is required to make New Zealand strong.

SUE MORONEY (Labour): Yesterday when the Prime Minister gave his statement to the House it was confirmed once and for all, beyond a shadow of a doubt, that that Government has no plan to lift this country’s economy. The Prime Minister told us last year that he was going to aggressively bring the country out of recession. By the end of the year he had the country pretty much convinced that things were going pretty well, economically speaking. Then suddenly this year, it has gone to hell in a basket—New Zealand has become a basket case, according to the Government this year. I do not know what happened over Christmas, but everything was ticking over, and now this year the Prime Minister is out there saying “Sorry, everyone, we’re actually a basket case.”

If this country is a basket case, then it must be the Government that we have to blame. This Government inherited one of the lowest Government debts in the OECD when it took office, but suddenly it is now trying to convince other New Zealanders that the country is a basket case. It is such a basket case that I ask members to guess what the solution is from this National Government. Surprise, surprise! It is exactly the same solution every National Government has had in my living history. It is to flog off the family business and sell off the State assets. It is the same old theory that National has always had; it has not worked in the past, and it will not work now.

The second thing that a National Government has always done in every single situation is to give tax cuts to favour the wealthy in this country. So that is the formula to get us out of this situation. The Prime Minister said yesterday that he was sorry he had led folks down the garden path, but that the country was actually a basket case. He said to forget what National told people last year, but New Zealand is a basket case under National, so it will have to sell off the family silver and flog off our State assets. New Zealanders already own them, but National will flog them off. It will have to do that because the Government has borrowed to pay for tax cuts that favour the wealthy—that is the situation we are in.

But then the Prime Minister said something else that was interesting. He said only about three or four things that were interesting. The next thing he said was that we should judge his Government’s performance on how the vulnerable are treated in our society. That is what he said. If that is how we are going to judge his Government’s performance, then I am afraid it is an epic fail. It is a fail on all counts, because the vulnerable in this society are struggling more and more as every single day of this National Government goes on.

I will talk about both ends of the spectrum, from the cradle to the grave. If we look at how our children are faring in this country under this Government, we know that one of the first areas it has taken the funding-cut knife to has been early childhood education. Those funding cuts are ringing out as we speak, because they only came in on 1 February this year. On 1 February many, many thousands of families in this country learnt that they will have to pay more to take their children to early childhood education, and some of those families, quite frankly, cannot afford it. They cannot afford it because that Government has put up GST on everything that moves. They cannot afford it because that Government has let doctors’ fees keep increasing for families. But National is now saying to those families that they will have to pay more for early childhood education. We have heard Government member after Government member get up and wreck their own credibility by claiming that there are no funding cuts in early childhood education. Kate Wilkinson is one who said that in her electorate alone—

Hon Lianne Dalziel: She doesn’t have one.

SUE MORONEY: —oh, not her electorate; the electorate where she happens to live—there was going to be only $29,500 lost from her entire area in early childhood education funding cuts, the cuts that her Minister and her Prime Minister have told her do not exist. I am sorry to tell her, but if she just wanders down the road a little bit to Swannanoa Preschool centre, which I understand is not 50 metres from where she lives, she will find out that that centre alone has had a budget funding cut from her Government of $100,000.

Hon Lianne Dalziel: How much?

SUE MORONEY: It is $100,000 for just one centre, which is not 50 metres down the road from where a Minister of this Government lives, a Minister who was trying to tell her community that the funding cuts did not exist, and that if they did they were going to be only $29,500. So I think those members opposite have to be very, very careful that they do not keep undermining their own personal credibility every time they step out on the street and try to convince voters in their electorates that there have been no funding cuts to early childhood education. They have only to go and visit any kindergarten, or visit most of the early childhood education centres in their areas, to find out that those funding cuts are real. The cuts have not been made up by the Labour Party and they have not been made up by the sector.

Why is it that families are now facing increased fees of between $2 and $80 per child per week? That is the effect of that Government’s funding cuts, yet the Prime Minister had the gall to go on national TV and tell the nation that on 1 February fees would not be going up for families because of his funding cuts. That is what he told the nation. Well, I would like him to go and speak to a few of the people in that sector. He should get out and speak to some of the families. Has he spoken to Debra Bullock, for example? Debra Bullock is from Wanganui. She has two preschoolers who attend Durie Hill’s Polson Park Kindergarten. Her fees are going up by $35 a week. In fact, they are doubling. She was initially paying $35 for her two children to attend kindergarten up until the time that the Government took the knife to early childhood education, the sector with the most vulnerable children in our society, and caused her fees to go up to $70 a week. That is a 100 percent increase in early childhood education fees for that family alone. But she is not alone. About 100,000 children and their families are affected by these early childhood education funding cuts in New Zealand, right across the board. Has the Prime Minister spoken with Lisa Kingsford? I challenge him to speak with Lisa Kingsford, because she has a child going to the Newlands Childcare centre in this region, here in Wellington. She has said that she has had a fee increase of an extra $25 a week for her 4-year-old daughter, Caitlin, to attend preschool. Yet the Prime Minister is on national TV trying to convince the country that his funding cuts to early childhood education will not increase costs to families. Well, that is absolute rubbish.

That is our Prime Minister, getting up on TV and telling the nation something that is blatantly untrue. It represents a broken promise from his National Government. He is embarrassed about it, and he should be. Not only have fees gone up but also his promise that 20 hours’ free early childhood education would stay in place, that the subsidies would stay the same, and that the rules would stay the same has been completely and utterly broken. In fact, the Minister of Education was caught out this week writing to a kindergarten specifically to recommend that it increase the fee for 20 hours’ free early childhood education. She recommended that that was the way the kindergarten should deal with that funding cut. Anne Tolley wrote to it and asked whether it had thought about increasing fees for 20 hours’ free early childhood education care; that was the way out of it.

We cannot believe anything this Government has to say about early childhood education. We cannot believe those members when they say that those funding cuts have not occurred, because anyone who goes out and about in the community and visits early childhood education centres knows differently. I am starting to wonder whether the National whips have issued an instruction that no National MPs are to go out to the early childhood education sector. I certainly have not seen one at the many early childhood education centres that I have visited. I challenge Government members, the Minister of Education, and particularly the Prime Minister to talk to those families who face increased fees, and to go to the early childhood education sector and dare to front up and tell them there has been no funding cut in their sector, because they are living it, day in, day out.

Those families now have to find that extra money out of their very tight budgets just to make sure that their children can get a preschool education—a preschool education that is their right; it is an investment in their future. Labour will restore that funding cut from that unkind Government.

Hon PAULA BENNETT (Minister for Social Development and Employment): I am going to stand up today and have a bit of a chat about unemployment and employment in New Zealand, and where we are at. I would love to talk about welfare and the Prime Minister’s statements on that, and also about vulnerable children, protection, and where we can go further there. However, I cannot help but respond to the previous speaker, Sue Moroney. Really, if we cut down to it, we are talking about some fundamental differences. This side of the House legitimately feels that to have a teacher-led early childhood education centre where 80 percent of teachers are qualified is fair and reasonable in the early childhood sector. Eight out of 10 teachers being fully qualified and two not being qualified is OK. The way we were heading under Labour was that pretty soon parents themselves would have to get degrees to look after their own children. To have eight out of 10 early childhood teachers with a degree at an early childhood centre for under-5-year-olds is OK by most New Zealanders. Under-5-year-olds are different. There is the word “play”, and there is the word “love”, which is very, very seldom used by Labour when we talk about those children. For those children to be nurtured and loved by teachers, a small percentage of whom are unqualified, is perfectly acceptable. I will stand up and advocate that on behalf of the National Government every time, and I think parents see the sense of that.

Unemployment has increased in a recession, and that is a fact. January numbers for the unemployment benefit, and for benefits overall, have just been released. The number of people on the unemployment benefit went up by just over 1,000 for the month of January. That is the smallest increase we have seen for the month of January for more than 3 years. We have also seen the lowest increase for the month of December that we have seen for 3 years, as well. Those figures are not saying that more people are not going on the benefit and that there is not a lot more work to be done; they are saying that we are seeing some changes in the labour market, and that jobs are coming on line. We have also recently seen reports of more jobs being on line. At Work and Income alone we saw more than 6,000 jobs come in for the month of January.

Because the member of Parliament Jacinda Ardern is in the Chamber, I will mention the issue of youth, because I know that issue is very dear to her heart, as well. One thing that I am particularly proud of from last year is that of the 56,000-odd young people that came into Work and Income to go on a benefit, 45.5 percent of them did not go on, because they either found work or they went into training. So we actually managed to triage off 45.5 percent of them by steering them in the right direction. There are a number of reasons why and how that has worked. Some of that has been around job opportunities—that is, making sure we linked in better with employers, and giving a subsidy for those young people. So far about 13,000 places have been taken up in both Job Ops and Community Max. Of those 13,000 places, the Job Ops component is about 9,500 places. So the $5,000 goes to an employer for 6 months, paying around half of the young person’s wage, and making a big difference.

Industry relations have been strengthened between Work and Income and employers. We are also able to direct young people into training more quickly, and, as a consequence, we see fewer of them go on to benefits. There is no doubt about it, that has been a huge bonus.

We also have to consider benefit numbers, and my colleagues will appreciate this. During the 2000s we saw the number on the sickness benefit increase by nearly 50 percent, and the number on the invalids benefit increase by over 50 percent. So while the number on the unemployment benefit was going down, the number on the other benefits was going up; Labour was transferring people from the unemployment benefit to the sickness benefit and the invalids benefit. Actually, we were not getting a heck of a lot sicker. We certainly were not getting 50 percent sicker, and that is for sure. In what were supposedly the best of times, which were completely squandered under the previous Government, we saw beneficiaries just moving from one benefit to another.

In the last 2 years, we have seen the lowest percentage increase between those benefits since the early 1990s. We have been honest about the numbers on benefits, about what is happening, and about the type of benefits they should be on. We are not seeing the transfer from the unemployment benefit to the sickness benefit and on to the invalids benefit, from where, quite frankly, someone’s chances of going into work would be very poor. Under the mechanisms put in place by the previous Labour Government, people were more likely to go on to superannuation than into work when on the invalids benefit. We want to turn some of that stuff round.

We believe that people are worth more than a lifetime on welfare, and, yes, that will mean some changes. I personally understand some of the concern that comes from the sector that depends on welfare. I understand some of the frustration and the fear that comes from the possibility of coming changes. I also understand the way that Labour has chosen to absolutely scaremonger and play on that fear. Labour would like people to stay victimised and stay on welfare, because, quite frankly, it thinks that keeping people down is the way to do it. We are saying that we believe in people being worth more. We believe in backing people to get themselves either into work or ready for work.

It is about recognising that 85,000 people are on the invalids benefit for 10 years or more—which is the likelihood and which is certainly what we have seen in the last 10 to 15 years—and that is not the place for them to be. So we are going to back those people, and it will mean some changes. We have already made some changes to welfare around obligations and incentives and evening that up. Changes were made to the domestic purposes benefit in October last year, and we have seen 1,800 people go off the domestic purposes benefit and into work in that period. As tough as times are, one must say that that is a great achievement. I can take no credit for it, though, because it is the people themselves who have got the jobs, and it is those who have worked with them who have made that happen for them.

I want to talk about issue of teen parents, which is dear to my heart and drove me to get into Parliament in the first place. There is no doubt that I am now in a position to be able to do some stuff. Budget 2010 introduced a $14.9 million spend in this area. It was the biggest spend ever in one lump on this group of young people. I was in Rotorua on Monday night and opened one of the supported teen houses. It was absolutely cool to be there. This is voluntary housing. It is not one of the tough kinds of housing for teens who are having lots of troubles and are being made to go there to sort themselves out or else there might be dire consequences. This is a housing situation for teens who have said that they would like a bit of help and that they do not quite have the family and the whānau support around them. They ask to live in the house for a while, bond with baby, learn how to run a house, learn how to manage a budget, learn how to be a mum, and learn a bit about relationships—all of those things are often what our own parents would do for us if we were young and a bit scared. I reckon having a new baby is terrifying, no matter what age one is. It is putting teens into supported housing like that. Te Arawa were predominantly there, and they will do a fantastic job of running this house. We have put money into helping teen parents, we have certainly supported teen dads, and we have also put in more intensive caseworkers, and there are heaps of positive stories arising from that. But we do need to look again at the issue, and that will be part of this Government’s work. The Prime Minister touched on this issue yesterday. I say that 4,670 babies were born to teen parents last year. There are definitely spots where there are predominantly more teen births, such as Gisborne and Kawerau, and Rotorua is certainly one of those areas.

We cannot talk about teen parents without talking about some prevention measures, as we want to see teen birth numbers come down. The statistics are pretty daunting. I hate doing the statistics, but teen mothers are nine times more likely to have no qualifications, twice as likely to suffer from depression, twice as likely to be substance dependent, and three times more likely to be suicidal at times. Those statistics are pretty ugly and pretty awful. So we need to put in resources, provide support, and introduce prevention measures. Teen mothers will also, on average, spend 7.1 years out of 10 years on a benefit, and stay on a benefit for longer. They are also almost 30 percent likely to have another baby while on a benefit. We can do better. We can do better for them, we can do better for their children, and, quite frankly, we can do better for New Zealand, because they are ours. We will look at what we can do, as far as front-loading that support, getting it in place, and then making sure that we back them. That is what I think it is about. I am so proud to think about where we are going this year with this vision, under this Government. I am so proud to be a Minister in the John Key - led National Government.

JACINDA ARDERN (Labour): It is my pleasure to follow the Minister for Social Development and Employment, and it is quite timely, given that the issues I wish to focus on also sit around unemployment and will touch on youth unemployment as well. The Minister said at the beginning of her speech that she was not playing politics, and implied that Labour was. She then went on to say that we did not have enough love for the people whom we are here to represent.

Hon Paula Bennett: That’s not actually what I said. If you’re going to quote me, do it properly.

JACINDA ARDERN: I summarise what the Minister said, because that is certainly what was implied. All I point out to the Minister is that if that is not playing politics, then I do not know what is.

I also point out a couple of issues that I have with quoting some of the statistics that the Minister has around young people going into Work and Income offices and not moving on to benefits. Young people, of course, do not become eligible for the unemployment benefit until they are 18, and as we know, the NEET figures—those youth not in employment, education, or training—in New Zealand, which I am happy to go through later on in my speech, are incredibly high. A number of the young people who will be presenting to Work and Income will not be eligible for a benefit, because the Government has also made it very hard for young people to go on to an independent youth benefit, which is the only other benefit they would be eligible for.

I have also heard anecdotal evidence of young people being told that they will not be put on to a benefit, even if they are 18, unless they go on a Limited Service Volunteers programme, even if it is held several hours away from where they live. They see that as a barrier to their getting further support. There are issues with quoting statistics willy-nilly, and if the Minister is happy to provide more evidence I would be happy to see it.

In the Prime Minister’s speech yesterday I think all of us were looking for a vision, some hope, and a plan. The Minister may claim that Labour is scaremongering. What scaremongering is there in asking the Prime Minister to present a plan as to how we will stimulate the economy and grow jobs for Kiwis? That is not scaremongering; that is our responsibility as the Opposition. The fear comes in when there is a blank answer from the Government as to what its plan is. That is scary. It is absolutely frightening that after 2 years of recession the Government still does not have a plan to bring us out of it, and to start creating jobs for the 6.8 percent of Kiwis who are currently unemployed.

That is not just a statistic. On 3 February, when we found out that unemployment had increased, that statistic represented 158,000 Kiwis who are currently unemployed. That is 52,000 more than when the Government took office. We know, as we always do, that with these kinds of figures there will always be some who are overrepresented in the statistics, and in this case it is young people. Twenty-five percent of 15 to 19-year-olds are looking for work—25 percent. The last time the figure was as high as that was decades ago. I also point out that the last time it was as high as that we had a youth minimum wage. That is a message for the ACT Party. It should stop trying to bring back policies of the past that did not work.

Hon Heather Roy: It works.

JACINDA ARDERN: I say to Ms Roy that it did not work. The last time youth unemployment was as high as that was when we had a youth minimum wage. There is no robust evidence to suggest a correlation between lowering unemployment and giving youth a lower wage for doing the same job as an adult.

What about the figures for youth not in employment, education, or training? There are 34,000 fifteen to 19-year-olds not in employment, education, or training—34,000. That is the figure that frightens me. The Minister is content to talk about unemployment benefit numbers, but those numbers do not include those young people. Predominantly the young people in that category are not having any contact with Government services, training, education, or anything that will give them a long-term future. They are the young people we should be most concerned about.

In the 20 to 24-year-old range 11.2 percent are unemployed, according to the latest household labour force survey, which is 39,000 not in employment, education, or training in that category. These represent a group of young people who often have come out of training or education and have failed to find work. Again, the longer that those young people are unemployed, the more difficult it becomes for them to find work. The Minister should have addressed that issue in her speech today when she told Parliament and New Zealand that an extra 1,000 people are drawing benefits. She should have given us a plan. If she did not give us a plan, the Prime Minister should have. But we have heard nothing from either of them.

Instead, we have heard excuses. Of the five times that the Prime Minister mentioned employment in his speech, once was in reference to employment for people who are in prison and once was in terms of employment law and removing people’s employment rights as a way, apparently, to get them into work. That leaves three times. In those three times did we actually hear anything concrete? Well, across the range of statements we heard from Paula Bennett and the Prime Minister about unemployment figures, we have heard that the figures are volatile. We have heard statements that there are not enough jobs. We have heard statements from Minister Bennett that job seekers just need to keep a positive attitude. Kiwis do not want to be told that their attitude needs to change in order to find work; they need to be told there are jobs. They are looking. We know they are looking, but if the jobs are not there it is a futile exercise.

Labour has always said that things can be done to stimulate the economy in order to create employment. We have talked about a systematic change to the way the Government intervenes in the economy. Of course, this falls on deaf ears because ideologically we perceive these things very differently. We have asked the Government for a plan around economic growth. Instead, what have we seen from the Government? I am willing to acknowledge that the Government threw up Job Ops very early on. So far, almost the entirety of the Government’s plan is Job Ops. The New Zealand Institute of Economic Research gave the Government a C on youth unemployment, stating that Job Ops, at best, would hit about 8 percent of young people who were in need of work. For those who were affected by the scheme, most of the jobs turned out to be short term, because there were only short-term incentives for employers to take on subsidised young people, and the jobs were not necessarily long-term opportunities that would exist beyond 6 months. Essentially, that is what we have seen from the Government in terms of a plan: Job Ops. Beyond that, we have seen very little.

What about the second area that the Government could have contributed in: skills and education? The Government has not invested in skills and education as the Australian Government has done, and which now has unemployment in Australia at a level of 5 percent. The last time we saw a level of 5 percent unemployment was when the Government decided to have its Job Summit, since which time we have been hurtling towards higher unemployment, so obviously it has not had the outcome that was intended.

Instead of investing in skills and education, what did we see? In real terms, we saw cuts to tertiary education. There is less funding, so universities are now unable to provide the number of placements to meet the demand among young people. The Government has also made it difficult to stay in tertiary education by tightening up student loan requirements, and it has essentially cut $50 million out of skills and trade training, which is the exact opposite of what most sensible Governments have done in the face of a recession and unemployment.

What about job creation? We saw the 9-day working fortnight, but that was a preventative; it had nothing to do with creating work. The one thing we are left with at the end of the day is the cycleway. Labour never said the cycleway was a bad idea, but we said that if it is the only idea, it is a shocker. It has created about 200 jobs. When we have 158,000 people out of work, 200 jobs is not a plan.

I will be happy to come back to the issue of the 90-day trial period, because there is much more to be said on that issue.

As an alternative, Labour has said all along that we must make systemic change. We need a Government that will take an active role in the economy through monetary policy. It is not enough to talk about trade deals if our exporters are struggling to deal with our volatile New Zealand dollar. It is about a fairer tax system, and about bringing back incentives for research and development, rather than cutting $620 million out of tax credits and $700 million out of the Fast Forward Fund. PricewaterhouseCoopers has told us there are billions to be made in cleantech, if only New Zealand would capitalise on that opportunity. If there are no jobs there, where are they?

Turning to skills and trade training, Labour has always had a plan for youth transition; it is just a shame that the Government came in and cut it. We have also said that we need to invest in apprenticeships, and we need to deal with the 70,000 young people who are not in employment, education, or training. But instead of hearing a plan from the Government we have heard the consequences of not having a plan, with just this afternoon 1,000 more people joining the dole queue. Enough is enough. If Kiwis want a plan, Labour will deliver it.

RAHUI KATENE (Māori Party—Te Tai Tonga): For the average New Zealander the world of politics must be really hard to fathom. Over recent months the news that has captivated the headlines has been about whether particular politicians have dyed their hair, whether the Prime Minister should have minced on the catwalk or admitted that Liz Hurley is “hot”, and what sort of behaviour is befitting of MPs.

What seems to have slipped below the radar is the fact that a crisis is occurring in our hospital admissions. It is a fact that medical conditions, which occur more frequently for tamariki living in poverty, have been increasing over recent years, particularly for our Māori and Pasifika mokopuna. Close to 250,000 tamariki are living in homes reliant on the benefit for their income.

My colleague Te Ururoa Flavell last night spelt out some of the consequences for families living in severe or significant hardship: families who go without fruit and vegetables, put up with the cold to save on heating costs, delay going to the doctor or the dentist, live in cramped conditions, or tell their children that the opportunity to go on a school trip or play sport is a privilege that they can ill afford. Is this a nation fit for our tamariki? We need to heed the research that shows us there can be a different life for our babies, if we make it a priority.

Last year I spoke at the launch in Dunedin of The New Zealand Children’s Social Health Monitor Report 2010. That report revealed the inevitable, showing that economic recessions have affected children’s health in other countries. We have seen research showing the close correlation between recessions and high hospital admissions for children here in New Zealand. However, the report also reported on the experience of Sweden in the 1990s when, despite large numbers of children living in low-income families, there were no significant increases in childhood hospitalisations for poverty-related illnesses.

I remind the House of the question I asked the Minister of Health earlier today. In question time I noted that in 2010, 2,000 more children were admitted to hospital with poverty-related illnesses than during 2007-08. We are talking about admissions for respiratory problems, infectious diseases, and other conditions with links to poor housing and economic hardship. Those are all diseases of poverty, which could have been prevented if children had been taken to see a doctor earlier. The Prime Minister said earlier in this debate, when talking about those very children, the children who suffer the consequences of long-term dependency, that the “Government is not prepared to leave those people behind.” That was welcome news for the Māori Party, but statements are at risk of becoming platitudes without a plan being put in place. Slogans and placards are great for the cameras, but where is the strategy to put the words into action?

I tell the House that it is in the relationship and in the confidence and supply agreement between National and the Māori Party. In that document we spelt it out in black and white: “The Maori Party seeks significant outcomes in whanau ora, through eliminating poverty”. Not content with that, we then made child poverty a key platform in our economic policy. In our policy approach to end child poverty by 2020 we stated that successive Governments and their policies have created policy problems in our land of plenty. We put the time and effort into investing in the promise of prosperity. We called for seven simple solutions to support children, whānau, and families. We will set a deadline to eliminate child poverty by 2020. We will designate an official poverty line at 60 percent of the median household disposable income after housing costs, and set net income for those on benefits at this measure to prevent poverty. We will increase the minimum wage to at least $15 an hour. We will raise core benefit levels, including superannuation and veterans pensions. We will simplify Working for Families, including extending the in-work payment to all families. We will investigate the reintroduction of a universal child benefit. We will establish a neighbourhood renewal fund, which may include incentives to encourage people to live more collectively by, for example, encouraging the use of community gardens, after-school care, and post-natal support for parents.

There were other cross-sector priorities that we have brought to the attention of this Government. We have talked about the adoption of the genuine progress index, rather than the continuing reliance on GDP as the only measure of the health of a nation. We proposed the establishment of an “every child matters” fund, which would be a targeted and time-limited grant to ensure, among other things, that no child starts school without shoes or a raincoat. We have put pressure on the Government to expand retrofit programmes in order to ensure houses can meet the achievable warm house standards target.

I would love to say that we have achieved in all of those areas, and that life for our children has improved. There have been some big gains, which have come directly from our relationship with the Government. One of the most significant things we have achieved has been the investment of $320 million in retrofitting to insulate and heat homes built before 2000. We were pleased to know that priority would be given to homes with families suffering poor health, a disproportionate number of whom will be whānau Māori. The opportunity for community services cardholders to be eligible for a grant of up to $3,000 was also really important. Eighteen months ago the Government put $320,000 into the KidsCan StandTall food in schools programme, which will make a difference for something like 7,500 children. The minimum wage did increase, but only by a mere 25c an hour. Yes, benefit and superannuation payments did increase by some 1.96 percent, but it was an April Fool’s Day increase, which just kept pace with the cost of living. But as for any substantial, meaningful difference made in terms of addressing child poverty, we are still waiting.

But the Māori Party is not a party that sits and waits for another day, nor is it our party’s policy to wail and weep if we do not have a strategy in mind. Our policy approach has always been to face the risk, take a step forward, and do all that we can to make gains and create a positive difference. Just before Christmas members will have noted that I wrote to every one of the members of the House seeking their support to hold parliamentary cross-party talks on child poverty. It was not just my bright idea; at the Children’s Social Health Monitor launch last year, members of the audience asked whether politicians could work together to eliminate that disgrace. It is the opportunity we all need to turn round the public perception of politicians and to work together collectively on the things that really matter.

We know that by investing in education, social services, and access to free health care, the impacts of poverty and recession on children can be dramatically reduced. I have a raft of ideas, I have the enthusiasm to match, and I have been following matters up with individual members. Now, all I am waiting for are the remaining responses from right across the House declaring our collective concern about the well-being of our mokopuna.

Hon MAURICE WILLIAMSON (Minister for Building and Construction): I will start today with what I think is one of life’s most delicious ironies. It is just dripping in the most delicious irony. It is to do with the nomination of candidates in the Botany by-election. In Botany, which is next to my electorate of Pakuranga, as some people will know, a debate has been raging for many years about the need for better roading networks. We do not have the luxury of a rail network like west Auckland does, or a dedicated bus lane like North Shore does; we in east Auckland do not have those. But the Greens, in particular, and also others from the green movement, have absolutely railed—and I used that word guardedly—against the building of the eastern motorway. They say we do not need it, it is not necessary, people should use public transport, and we do not need new roading in east Auckland, especially in Botany.

Yesterday, if people listened carefully, they could hear the sound of flapping wings as the chickens came home to roost. Yesterday the Green candidate got caught in a dreadful traffic jam on Ti Rakau Drive and did not make it to the returning officer in time to get his nomination registered. Now, sadly, there is no Green candidate standing in the Botany by-election. Why is that? Because, as people who know the area will know, one can go out there and get stuck in unbelievable traffic jams.

Simon Bridges: Was he not bicycling, then?

Hon MAURICE WILLIAMSON: No, he was not bicycling—that is true. Someone else asked why he did not take the train. There is no train out in east Auckland to take. I thought that if there is something in the world called delicious irony, then it has to be when the Greens fail to even register their candidate. I do not understand why they did not get him to go the day before, or the day before that. It was not as if he was told he had 10 seconds to get there—ready, set, go; no, stop—and that is it. The Greens decided to leave it until the very last minute, and their candidate actually did not get there at the last minute because the traffic jam cut him out. That is a shame, because it would have been good to have had a Green candidate in the race, but he could not even get there to register. It is more proof that in the eastern suburbs of Auckland, more investment will be required in roading.

One of the most fabulous quotes I ever heard from Maggie Thatcher—and she was my favourite politician—was when she said that the Good Samaritan did not do what he did just because he was good; he also had the money. I think that is so important for people to get their heads around when we are debating—

Simon Bridges: Twyford doesn’t get it.

Hon MAURICE WILLIAMSON: No, Twyford does not get it. But any other family in this country other than Mr Twyford’s understands that if they spend more than they are earning, then the day of reckoning must come. Eventually, if they are spending more than they are earning, the day of reckoning will come.

What Labour members who have spoken today have never, never brought into their equations is the fact that something ghastly happened to the world a couple of years ago. [Interruption] It was not their world; something ghastly happened to their world a long time before 2 years ago, but 2 years ago something ghastly called the global financial crisis happened to the world. Just like any family who has a plan, maybe, to upgrade their house, change their car, or spend some money on a holiday would have to change all those plans if, say, the breadwinner in the family became unemployed and there was no income, so this nation has to relook at absolutely everything being done and consider, first of all, how we buffer our citizens from the really harsh, sharp edges of the global financial crisis. Bill English deserves unbelievable credit for what he has done as Minister of Finance to make that happen.

Secondly, we have to ask how we cut our cloth accordingly so that we can still keep spending money on essential services and also try to get some economic growth going in the market place. The socialists on the other side of the House—and this is how socialists think—say that what we should do is tax the rich. They say the rich have lots of money, so let us tax them.

Simon Bridges: What rich?

Hon MAURICE WILLIAMSON: No, that is their attitude. What they do not get is that once we go past a certain level of taxation, we actually get less money, because any people worth their salt when it comes to the financial markets know they have green screens with keyboards. They can move money out of this country, and they can change their circumstances accordingly. We cannot just tax the rich until the cows come home, and say make it 60c in the dollar, make it 70c in the dollar, or how about 80c in the dollar. That is what the socialists would do. All I can say is that the old definition of socialist—somebody who has nothing and wants to share it with everybody—rings true to me, because that is what we are hearing from members on that side. They say we should put up taxes. It does not matter that doing that will stifle economic growth; they say we should just keep taxing people.

What this Government did, which should be applauded as far as I am concerned, was the whole tax shift that occurred last year. We said that we should move away from taxing the good things in life, like earning income, as quickly as we can and tax some of the not-so-good things in life, like spending. Consumers can still buy a plasma screen, they can still spend money on certain things if they wish, but at least the Government is giving them the chance now to keep more money in their pockets. They can decide what to do with that: invest it, save it, or be taxed by spending it.

I was gobsmacked again while listening to some speeches in this debate from Labour members, because one of their mantras has been to ask where the Government is creating all the jobs. I have real news for that lot: the only place where jobs were created under their Government was in government. I agree. The bureaucracies of health, education, and just about everything else went through the roof. In fact, I saw a figure that in 2008, the increase in floor space for core Public Service offices here in Wellington—core Public Service office space—was 14.5 hectares. That was the increase in floor space.

Simon Bridges: Bob Jones will be happy.

Hon MAURICE WILLIAMSON: Yes, Bob Jones would have loved that Government. Accompanying that 14.5 hectares of floor space came all of the bureaucrats, with their desks, their computers, and so on. That is where job creation occurred under Labour. Well, I have sorry news for those members: that does not add wealth to the economy, and it does not make the place function well. Yes, there is a core Public Service that is vital. That is the front-line service: teachers, nurses, doctors, health services are all at the very front end, doing jobs.

Grant Robertson: What about Biosecurity New Zealand? Customs officers—what about customs officers?

Hon MAURICE WILLIAMSON: Customs officers—gotcha! Absolutely gotcha.

Grant Robertson: Biosecurity officers?

Hon MAURICE WILLIAMSON: Yes, biosecurity. But growing the bureaucracy of the head office and having more desk space for all of the dead weight that is added is just not good enough.

The real generator of jobs in this country is the private sector. If we get the fundamentals of the economy right and private sector companies feel that they can begin to employ and invest again, they will, and the benefits will flow. Kate Wilkinson gave a fantastic example of that today at question time, when she talked about the 90-day probation period. The jury is already in on that measure, because the survey results show that that has a created substantial number of new jobs. It has given employers the safety to go ahead and hire someone and to take the risk that that person will work out to be a good employee. So they have and it has worked. The dreadful old, trade union - driven Labour Party mantra is that the 90-day probation period is evil and we cannot have it. Well, it has worked, and a lot more people are in work because of it.

One of my other personal favourites that has come to light in the area where I live is what Judith Collins has done in the area of police. Counties-Manukau was in crisis. Counties-Manukau had more robberies, more burglaries, and more beatings than anywhere else in the country on a per capita basis, and Judith Collins, our Minister of Police, saw that. She comes from the area, so she knew it firsthand. I can tell members that the 300 extra police that this Government has delivered into my patch in Counties-Manukau have made a huge difference.

Our candidate in the Botany by-election is Jami-Lee Ross. By the way, he did get there on time. He got his paperwork in and signed up. Jami-Lee Ross—I will repeat his name, because members will hear it a lot in this Parliament over the coming years—is a fantastic young man. He is already basking in the glow of things like the 300 extra police. I went out with him into the Botany shopping centre on the weekend, and a number of people commented that one of the best things our Government has done in the last 2 years is putting the 300 extra police into this area. It has made those people feel safer; it has made them feel well. Jami-Lee Ross will win the Botany by-election. I tell members one person who will not even come in third place: the Green candidate.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): After National’s 9 years in Opposition and 2 years in Government, that speech by Maurice Williamson is as good as it gets. It absolutely shows that National did no thinking, after 9 years in Opposition and 2 years in Government, as to what will take this country forward. In fact, the Prime Minister’s speech given yesterday was lacklustre. It failed to show leadership on the real issues facing everyday Kiwis throughout New Zealand. It was a case of great spin, a lot of mincing, but more smoke and mirrors. The thing about listening to this debate is that although Government members have used the recession to hide some of their most blatant objectives, such as selling off State assets, they really do not have any new ideas to address the real issues affecting New Zealanders throughout the country: no plan to grow the economy, no new jobs, and no response to lift young children out of poverty. Of everything that I have listened to throughout this whole debate, the failure to articulate that response clearly is the most disappointing. One would have thought that a Government leading the charge, or so it says, on a brighter future would be able to spell it out quite clearly—quite clearly.

On this side of the House we have raised issues that have affected those everyday New Zealanders: the rising cost of living, and things like petrol prices, food prices, power prices, rent increases, rates increases, and mortgages. Those types of things are affecting real families, and those families are starting to feel the pinch. Every member of the Opposition will be able to dive into their electorate and give members numerous examples of where people are starting to feel the difficulties under a recession and a jobless recovery. The Government cannot articulate clearly enough to the people in those communities how it will lift their sights above the parapet.

I point to some examples. Rents, for example, have increased in some areas by 9.5 percent. In my electorate in Ngāruawāhia, which would be seen as a very humble community, we are seeing an average rental of about $320 for a three-bedroom home. In Hamilton that figure is up to about $350, so there is not much difference. In Raglan, in Kāwhia, in Whitianga, and in Whangamata people will tell you—and pensioners will tell you—how much their rates have increased over this period of time, how much their power bill is, and that as a result of their limited fixed income they are struggling to make payments. Those are the stories I hear when I go out and about, and I am concerned. In a recession people generally understand that in difficult times people have to pull their belts in. I think that is well understood across the House. But when we have a jobless recovery where those pensioners are starting to see their kids put out of a job, having to take redundancy, and with no job prospects in their immediate community, the whole whānau starts to become a little bit stressed.

General practitioner fees, for example, are going up, sadly. I got an example in the weekend where an elderly person who is over 80 is paying $35 to go to her general practitioner—$35. It is unbelievable. Grant Robertson, our spokesperson on health, is absolutely right that the amount of money one pays to go to after-hours care just does not stack up, and people put it off until they can afford it. It costs $69 to go to accident and emergency if one accesses services after hours. People will wait, and sometimes waiting makes all the difference between being in hospital and having something more critical wrong. That is the type of choice people are making.

I will read a real-life story from a constituent; she will not mind that I am reading this. Ann Newland, who lives in Taupiri—I do not know her—talks about the pressures on her family about the cost of living. She says: “The health system has become a joke. Engari, we are not laughing. To make a decision to go to the doctors has become a burden. Knowing you have to go to the doctors but there are other things you have to buy like kai, pay bills like the power, have petrol in the car, and trying to meet the needs and wants of your children, going to the doctors gets moved right down the list. Due to the price of the doctors, one puts their own well-being last. I have experienced in the last year that if you have money, people will jump to help you, but if you don’t have any money or not enough, nobody really wants to know, except the Salvation Army, may God bless them. And when it comes to our young people, well, that is a really sad reality of what is happening. Unskilled, lack of motivation, some have no dreams for their future, and some of this is to do with the education system. There seems to be no solution or methods to help whānau with their young people, who are already feeling the burden by society.”

We hear the Minister for Social Development and Employment talking about all the good things that are happening in the area of youth employment. Yes, Job Ops and Community Max are short-term opportunities, but they are just that—short-term responses to some very challenging needs of our young people. We need to invest in their skills. We increased the investment in Modern Apprenticeships training, which was a long-term investment to ensure that we were lifting the skilled workforce of the next generation. Under this Government that is not happening. Community Max is a short-term response to the long-term challenge of making sure that we invest in the skills of our young people. Quite frankly, on the youth unemployment front we are sadly lacking in the way we are meeting the needs of many young people—Māori, Pacific, and Kiwis alike—throughout the whole country. We have to do better on that front. I was quite dismayed at the fact that the Minister did not show any lead on what the opportunities might be in terms of pathways beyond Community Max into further training and tertiary study. In fact, in the tertiary sector we see many universities having to turn students away, and polytechs as well are under pressure in terms of their enrolments because of the policies put forward by this Government.

In early childhood education we heard a number of representations from the Government that 80 percent teacher-led services are OK—they are OK—and that parents would understand that. That is a direct quote from the Hon Paula Bennett. But I tell you what. If National had campaigned on cuts in the early childhood education sector and parents had a real choice between quality, 100 percent teacher-led education and 80 percent teacher-led education, I bet members that every time parents would have chosen 100 percent teacher-led quality education for their kids. Every parent wants to know that they are putting their young people in the hands of people who are qualified to look after them. Paul Quinn went on to ask about kōhanga reo. If he had visited kōhanga reo they would have told him that they struggle to reach 80 percent Māori language teachers in their kōhanga, so actually they are not doing too badly by this. But they will always, always want to try to lift investment to increase the number of qualified Māori language teachers into kōhanga.

We need to set the record straight because, quite frankly, we have not heard the Government members articulate its plan to grow the economy, to grow new jobs, and to stop people getting into the dole queue. One hundred and ten people were released by AFFCO in Horotiu today. That is not good enough. They are seasonal workers who will be hurting as a result of a recession that has a jobless recovery, and there has been no response by the Government to try to address the real needs of real families out there. Time and time again, Labour has been putting those issues in front of the Government, because, quite frankly, the Prime Minister’s statement has fallen short of identifying the Government’s plan. If privatisation is the Government’s answer and National members are saying that Māori will be the big investors and will cash up their relativity clauses to be able to invest in State-owned enterprises, they can think again. Those issues will have to go back to iwi before any decision like that is made. It is all huff, all puff, more smoke, and more mirrors. The Government has failed good, working New Zealanders and good families in our country because it has not shown a clear plan for the future.

Hon STEVEN JOYCE (Minister of Transport): Here we go: members on the other side are once again showing that they have not learnt the lessons of the last 2 years. It is interesting to listen to Labour members in this Chamber. They constantly put the cart before the horse. They keep thinking up new ways to spend more money that as a country we do not have. That is Labour’s solution. It was Labour’s solution for the 9 years it was in Government, it was the solution that got us into this mess, and it would be the solution Labour adopts at the end of this year if it gets back into Government. That would be a disastrous situation for this country. In fact, it would be economic vandalism.

Let us look back in history to the so-called boom times of the previous Government, when we had runaway consumption, government spending, and property speculation. We had a tradable sector that was in reverse for 5 years. Labour members never talk about that situation, but that is actually what was going on. Inflation hit 5 percent just before Labour left office. We were in recession in this country before the global financial crisis came, and when the global financial crisis came, the tide went out. As Warren Buffett is fond of saying, when the tide goes out, we see who is swimming naked. The previous Labour Government was swimming naked and it was not a pretty sight. As well as that terrible thought, when we became the Government we inherited a decade of deficits projected forward for 10 years because of Labour’s horrible increase in spending. In the last 5 years of the Labour Government, it increased spending by $2.8 billion more every year. So it was $2.8 billion the first year, then $2.8 billion plus $2.8 billion the second year, and then $2.8 billion plus $2.8 billion plus $2.8 billion the third year. That is correct; Labour managed to push up Government spending by 50 percent in 6 years. Labour Government members were economic vandals then and they are economic vandals now.

The National Government has come up with a very strong plan to build for stronger growth in this country. It is interesting that Labour members cannot decide whether they do not like the plan or that National does not have a plan. They are still flip-flopping between those particular lines of Opposition argument. It is either that they do not have a plan or that they do not like the plan, but they cannot make up their minds. We have a very strong plan. Let us be blunt; Labour members do not like it because it is the solution for real growth in our economy. They do not have those solutions. They ignored them for 9 years when they were in Government, and they want to ignore them again and to go back. They talk about foreign ownership. They want to go back and hock themselves off to the foreign banks so they can spend some more money and make themselves more popular in the short term—

Grant Robertson: How much are you borrowing?

Hon STEVEN JOYCE: —in exactly the same way they did when Mr Robertson was in the Prime Minister’s office. They were spending money like there was no tomorrow. Labour members just want to go back and do that again at the end of this year. Thank goodness there is no sign that the people of this country will fall for that a second time. There is absolutely no sign of that. Members on the Labour benches will have to come up with a new songbook, because there is no sign that the people of this country will fall for that rubbish twice.

We have a plan to build for stronger growth, and it starts with building stronger Government accounts. We have to have tighter fiscal control, which will stabilise and reduce our Government debt and which will lead to lower exchange rates and interest rates over the cycle. Opposition members will not do that by having a little group get-together and saying it is terrible that the exchange rates are high; it is actually done with practical economics, which takes the pressure off the Reserve Bank to lift interest rates and for exchange rates to rise. Those guys in Labour do not understand that.

The second thing is that we have to build exports in this country. We are a trading nation. Members opposite forgot about trading for 5 years. We have to get back to focusing on building exports. How do we do that? We cannot just magic companies out of thin air with a task force, which is basically what Labour tried to do over 9 years. We have to send out talented Ministers like McCully and Groser to lead our discussions on free-trade agreements, which we are doing. As I said, we have to get the exchange rates right, and we have to encourage business and give business confidence. How do we do that? We have to show we understand business. We have to build business confidence by controlling the costs of doing business and by reducing red tape in the business sector, like with the Resource Management Act, the Building Act, and some of the things that have been done in local government in Auckland. We have to deliver more competition in the utilities market, like electricity, which Mr Brownlee has been working on. We also have to deliver things that provide flexibility in the labour market, encourage employers to employ, and give people the opportunity to have those jobs. People will look back on the debate about the 90-day probationary period and ask what all the fuss was about, because it created great jobs in this country. People will not be interested in the ideological rubbish from the Opposition.

We have to build infrastructure for growth. I heard the pending leader of the Labour Party, Mr Andrew Little, on Radio New Zealand last week.

Chris Tremain: He’s got to get into Parliament first.

Hon STEVEN JOYCE: Well, he is on Radio New Zealand, so I suppose he is almost there. He was saying that the Government should build some infrastructure. Hallelujah! Hallelujah to Mr Little! The Government is investing massive amounts in the national electricity grid and massive amounts in the roads of national significance—indeed, according to the Greens, way too much. We are investing in the KiwiRail turn-round plan and in ultra-fast broadband and rural broadband—a whole range of things. In fact, we have ring-fenced some spend—although past Governments have said they could not afford to spend on infrastructure—to commit to that infrastructure so that when we come out and get stronger growth, we do not have the bottlenecks that we had going in. That is the foresightedness of this Government.

We also have to build skills for growth. This is where Labour members really are telling porkies with all this rubbish about the Government cutting this and cutting that. The Government is spending more on early childhood education than has ever been spent before in this country. That is a simple fact. It is a simple fact, and no matter how many times Labour members say that it cannot be true and that the Government is cutting it, all they have to do is look at the books. We have more places in tertiary education in this country than we have ever had. We will have 16,000 or more places than there were 3 years ago. Who was in Government 3 years ago? It was Labour. Labour was in Government 3 years ago, and there were 16,000 fewer places at universities than we have today.

We are building skills for growth and we are building savings and investment. The plan is to lift minority stakes in State-owned enterprises. Labour is against that too. Labour members think that somehow the State-owned enterprises will be sold off overseas. They have a little problem there with percentages, for a kick-off, because 51 percent in Government ownership is more than half—at least, it was when I went to school. It really is time they sorted out their maths in that respect. At least 51 percent is being held by the Government of the day. As the Prime Minister says, priority will be given to New Zealand investors so that New Zealand mums and dads can share in the upside for these companies. It gives these companies the opportunity to invest overseas, which they cannot do now. It really is a win-win for all parties, except for the ideologically bound members over there on the Labour benches.

We have a plan. Labour does not like the plan. Labour would rather we went away and did not have the plan. Labour’s plan is to spend more money. Labour’s plan is to find a money tree and to just keep cutting the money off the money tree. That is the extent of its plan. It is economic vandalism.

In the first month of this year—this election year—the leader of the Labour Party shot right through the roof on the economic desperation index with a couple of billion dollars of promises for more spending. This was before the end of January. He is making promises worth over a couple of billion dollars yet he has no idea where it is coming from. He has some plan to soak the rich or something like that. Of course, he does not realise that labour mobility was another thing that killed the economy through the 2000s, with the 39c tax rate that sent a whole bunch of people overseas. But that is OK; he is proposing something like a 50c tax rate for the top earners in this country, so we would lose all the people we need for our hospitals and schools. We would send them all overseas. This is remarkably reminiscent of Labour in the 2000s. There is no surprise there, because those members from the previous Labour Government are all still over there and are all running the same song. In fact, they are fighting the wrong war. They were fighting the war when they all had money to burn in 2005. They were fighting not the last war but the one before it, and now they have to wake up and get into the second decade of the 21st century. They are acting like economic vandals.

Labour members are also being xenophobic. I heard the Leader of the Opposition say yesterday that it was outrageous that some Germans had bought a little bit of rural land in the South Island. That shows the desperation of this Opposition. Those members have to work out that New Zealand is interested in how we grow the economy, and we have to do that before we start working out how to spend the money that we do not have.

This Government has a plan to build stronger growth. This Government has a plan to build a brighter future for this country. New Zealanders support the plan, and that is what we will be focusing on this year.

CATHERINE DELAHUNTY (Green): He mihi nui ki a koutou katoa. Today I will talk about education; something the Prime Minister mentioned several times in his opening speech yesterday. He probably did not want to talk about education, as his Government has such a woeful track record, but he had to, because, in a country with nearly 25 percent of young people unemployed and high rates of illiteracy and poverty, we cannot ignore education. What did the Prime Minister talk about? He talked about cuts to early childhood education, he talked about the shambolic national standards policy, and he talked about opening up our schools to corporate management in the form of public-private partnerships. This Government’s education policies are failing our young people.

Let us start with early childhood education. All the evidence shows that nothing could be more important than investing in early childhood education. Overseas evidence shows that for every $1 we spend on early childhood health and education, we save up to $3 immediately and up to $17 by the time the child enters adulthood in reduced health, justice, and other spending. We do not get that kind of cost-benefit ratio from any roads of national significance; in fact, we get negative returns. But the Government is not interested in making a meaningful investment in our children’s future. This Government has cut funding to early childhood centres with the most qualified teachers, actively discouraging the goal of having all our children taught by qualified teachers in the early years, and we would never get away with that in schools—never. Those members can bandy around the $1.4 billion figure for funding all they like, but the reality is that parents are already pulling their kids out of early childhood centres because John Key’s Government’s cuts mean they can no longer afford the fees. I know this because centres are emailing and calling me every day. This Government’s cuts to early childhood education are failing our children, they are failing our families, and we will all pay the price in the long term. Early childhood education cuts do not heal.

I will also talk about national standards. John Key is still clinging to this flawed policy, despite all the evidence against it. Never mind the international experts who say that national standards do not produce the best educational outcomes for our children. Never mind the 38,000 parents who signed a petition expressing concern about the impact of national standards on their children. Never mind the more than 200 schools that have refused to implement the standards because they are concerned about the rushed way they have been developed and rolled out. Never mind the New Zealand principals who have formed a campaign against national standards because of their concerns about what they will do to schools and kids. Never mind the voices of children and young people and what they want out of education.

It is too easy for politicians, and even parents and teachers, to forget that those most affected—young people—have strong opinions and valuable ideas about what they need from a real education. I have always valued the opinion of students as much as that of parents and teachers. That is why I started a high school students’ union when I was 15 years old. Even now I cannot forget the boredom and frustration of being a high school student in some of my classes, and I was a relatively privileged Pākehā girl whose family ate Western literature for breakfast. The education system was designed for people like me, but many thousands of young people going through it are not like me, and their voices are important.

That is why when I came into Parliament in 2008 I set out to find out what young people need from a real education. I called this the real education project. Over the course of 2 years, I have visited 17 schools and learning centres around the country and have spoken with young people directly. I asked the same questions at every meeting: what young people love about school, what they hate about school, what they need to know, and what a real education would be like. I launched the findings of this project last week in my report What is a Real Education?. Strangely, nobody raised the issues of National Certificate of Educational Achievement versus the University of Cambridge International Examinations, or national standards. Nobody saw assessment as being the central issue for their learning. All the young people from all kinds of cultural backgrounds, no matter how alienated from school, wanted to learn and wanted literacy. They were crystal clear about what the barriers were to their learning, and they knew what they needed from teachers to help them progress.

The young people I spoke with stressed the importance of the three Rs, but they were not reading on its own, or writing, or arithmetic. They talked about respect, relationships, and relevance. They wanted their opinions and their culture to be respected. They wanted good relationships with teachers and other students. They wanted an education that is relevant to them in terms of both content and methods of learning. Recognition of their culture, language, and identity were particularly important to Māori and Pasifika students. Also, the fourth R that many of them brought up was resources. I will never forget students at a public school asking me whether it was true that some schools had swimming pools. There are vast disparities in the levels of resources available to students at different schools. These kids were amazed to hear about a private school I had visited in Auckland that had a heated swimming pool so that students in new wetsuits could learn kayaking on warm water.

The idea of a free education was very important to the young people I spoke to. They were not preoccupied with our aspirational jargon and measuring methods. They were preoccupied with what it feels like to have someone teach them respectfully and with passion, and they identified some great teachers in their lives. However, I will never forget the boy who said to me: “How can I learn if the teacher hates me?”. We might well ask John Key how our kids can learn if the Government does not value them—and a few Aspire Scholarships to private schools will do nothing to change that.

But it is not our kids the Government values; it is big business and it is narrow ideology. Instead of listening to the views of young people, John Key’s Government is preoccupied with a privatisation agenda, or, to use the new euphemism, a mixed-ownership model, which can be applied to schools. The Ministry of Education did a cost-benefit analysis of public-private partnerships in education that showed it would cost up to $6 million to set up the public-private partnership model and would save just $800,000 over 30 years, which is hardly a great investment. The business case has been found wanting, yet we can expect the tenders for the first public-private partnerships in our schools to start in the next few months because this Government values free-market ideology over all else. The Green Party has consistently opposed any moves towards public-private partnerships in our schools and, for that matter, in other key areas—unlike the Labour Party—and we will continue to do that. The international evidence and the Government’s own business case show that public-private partnerships have no place in our schools. Of course, this could all be moot if we sign up to the Trans-Pacific Partnership and find that we have to allow overseas contractors access to all kinds of public contracts, or risk being sued.

These education policies are failing our young people. Combined with the signalled attacks on welfare, the failure to make the minimum wage a living wage, and the move to restrict university access, they will widen the gap between those who have the most and those who need the most. But what did we expect from a National Government? We should not be surprised by these policies, but we should not pretend, as John Key does, that he has the underclass in mind. Let us be honest and just admit that increasing inequality is seen by this Government as the natural order. Much could be done in the area of education to close these gaps. I think particularly of students with what they call special needs, children with disabilities, fighting for inclusion. I think of the children whom I met on my discussions around the country talking about bullying, homophobia, and racism, and calling for a respectful environment—an environment where they felt that it was safe to call for a real education. They are not obsessed with employment, but they want practical skills for a real world, taught in a respectful manner.

We could start with a Te Tiriti - based analysis of our education system, because there are issues to resolve there, and then we should also commit to universality of access for everyone. From early childhood through to high school and university, universality is better at targeting the vulnerable than particular niche policies that sound nice in the media but do nothing for the overall vulnerability of more and more poor families in need. But, in fact, if we were to do that, we would have to admit something very fundamental—that it would have to matter more to spend that money in education than to build roadways of national significance, and it would have to matter more than tax cuts for our mates. Kia ora koutou.

Hon ANNE TOLLEY (Minister of Education): On reading a children’s book over the Christmas holidays I came across a fantastic quote: “It is our choices, Harry, that show what we truly are, far more than our abilities.” It is our choices that show who we really are; this Government has made the choice to invest in education. We will not tolerate one in five children leaving school unable to read, write, or do maths anywhere near the level they need to succeed, both as individuals and in employment, as the previous Labour Government did for 9 long years. The 2009 Programme for International Student Assessment results that were released before Christmas showed that our top 5 percent of students are up with the best in the world. As a matter of fact, they showed that our top 25 percent of students are up with the best in the world. But the gap between our top 5 percent and our bottom 5 percent is the worst of the top-performing countries, and the gap between our top 25 percent and our bottom 25 percent is also the worst of those top-performing countries. The reading achievements of our 15-year-olds have remained unchanged for 10 years, and maths achievement has remained unchanged for 6 years.

There is no doubt that we have a very good education system, but this John Key - led National Government has made the choice to ensure that it becomes a great education system. We can do that only by addressing the needs of those children who are being failed by the system, and who have been failed consistently by the previous Labour Government: the one-in-five kids who do not learn to read and write and do maths, the 50 percent of young Māori who leave school without even passing National Certificate of Educational Achievement level 2, and the 37 percent of Pasifika children who also leave without that same qualification. It is the very qualification that we know is the minimum they need out in the wider world if they want to go on to further training, become an apprentice, or go on to further employment. This Government, under John Key, has said that that is simply not good enough. We have made the choice to make changes.

The Labour Government actually knew it needed to make some changes, and I refer to comments from Labour education spokesman Trevor Mallard in 1998, who said “A national system of benchmark testing was needed so principals and teachers could significantly raise standards in schools and help New Zealand to regain its status as a world leader in education.” In 2000 that same person, who was then Minister of Education, said “This Government is going to make a difference. We want high standards, not low standards. We want tests that occur week by week and are reported to parents regularly, rather than the 4-year approaches taken by the previous Government.” That sounds familiar—it sounds familiar. So what happened? Well, that Government backed down. It made the choice to kowtow to its union mates instead of toughing it out for the sake of the kids. It made the choice instead to put quite a lot of money into a programme for just a few schools. It was a very effective programme, but it was so expensive there was just no way that it could ever reach enough schools to truly make a difference.

Well, this Government has made the choice to introduce national standards in reading, writing, and maths, and to get system-wide change so that children right across New Zealand will benefit. Amongst my Christmas correspondence were a couple of comments from principals. One says “We had been working with the staff on moderation of writing for the last three years and we used that experience to provide guidance for staff in all three standards. It was still a challenge for some but we do need to move out of our comfort zone to raise the standards of teaching.”—a fabulous principal! Another one said “We have reported against the National Standards twice this year and the achievement of students in the second part of the year was exponential and amazing—almost unbelievable. These benchmarks actually focus teachers on deliberate and targeted teaching which leads to improvement.”

As the economic crisis bit hard on our community, this Government made the choice to stop funding middle-class adults to learn Moroccan cooking, gardening in the wind, wine tasting, and the like; instead, we funded places for the growing number of disengaged youth. Two thousand Youth Guarantee places last year were provided at tertiary institutions around the country, and we added another 500 this year. In fact, it is almost 700. These places provide school-level qualifications for young people in a tertiary setting. They include some pastoral support, and we are seeing some great results. We are re-engaging young people for whom school seemed irrelevant. The Government made the choice to go out to the education sector for ideas to provide better training opportunities for those kids who work better when they are working practically with their hands, making something. We call them trades academies. We promised five, but we made the choice to fund eight, which are opening this year, and another four are lined up to open next year. They bring the resources and the expertise of schools, tertiary institutions, industry training, and workplaces together to meet the needs of students—not of the system but of the students.

Finally, this Government made the choice to address behaviour and truancy. Students cannot learn if they are queued up for most of the day outside the principal’s office, or if they are wagging downtown. The Positive Behaviour for Learning: action plan, designed and overseen by the education sector itself, was originally given $45 million, but in the last Budget I added another $15 million to that. It focuses on a few effective programmes that work with parents, teachers, and schools. There are currently 119 programmes running around the country for parents; almost 2,000 parents will take part this year. We are targeting 7,000 teachers, with a third of them coming from the early childhood sector, and almost 200 schools are currently participating in the school-wide training.

Truancy—well, this Government made the choice to face the problem. The first thing we did was reinstate the survey that the previous Labour Government had cancelled because it did not want to know—it did not want to know. What did we find? We found that 30,000 kids were missing on any one day from school—30,000. That is the population of my home town, Gisborne. For goodness’ sake! Students cannot learn if they are not at school, so this Government made the choice to double the funding to fight truancy. We are building capacity in schools to track and monitor students. We have funded a determined reduction in the number of kids who are completely disengaged from school, and we are working to get them back into the system. We are trialling several initiatives around the country and evaluating their results. We are working closely with the sector and social services to build our knowledge of what actually works, and we have given the district truancy services a pay rise. I think that is the first one they have had since Labour came into power 10 long years ago. We have also started to lift the quality of alternative education to get better results for students. That sector got extra money for the first time in 9 years.

So this Government will work with the education sector, unions, business, the community—with anybody who is interested in getting better results for kids to make our education system great. And Dumbledore, whom I quoted at the beginning, was right, because it is our choices that show who we are, who we really are, and this John Key - led Government’s choice is to get better results for kids.

KRIS FAAFOI (Labour—Mana): As the newest member in Parliament, I must admit to having had a sense of expectation about the Prime Minister’s speech yesterday. Yes, I did have a sense of expectation. As it was the first of what will be many Prime Minister’s speeches I will sit through, I thought I might not agree with everything, or anything, of what the Prime Minister had to say but that I might finally get an idea of where this Government is taking us and what course it will take to try to improve the lives of New Zealanders. But what a disappointment. It was a huge disappointment, which would have been shared around New Zealand by Kiwis in their homes, because we got nothing. We got absolutely nothing. Yesterday Phil Goff got it 100 percent right—2 years on and this Government has no ideas. It has run out of ideas. It has no ideas and no plans and has created no jobs. What a disappointment it was that it took 22 pages for John Key to tell us nothing. Twenty-two pages—what a waste of 11 pages of A4 paper.

National has reverted to the tired old policies of old. It has gone back to the vault, pried it open, and what do we have? We have State asset sales, cuts, and slashes. National has reverted to those, because it has no ideas and no plan.

The fact that this Government has no ideas and no plan just shows how out of touch it is with normal Kiwis—with the people whom I see at the Porirua markets, who go down there to make sure they can get the best deal because they are struggling to make ends meet, and with the parents whom I saw at the early childhood centres who are worried about their kids’ education. The Government is out of touch with the people whom I saw at the league, who all came up to me and said that they are really worried about what is happening with prices rising faster than wages. This Government is out of touch.

Those people are worried about simple things, such as their power prices going up, which will only get worse when this Government sells off our State-owned power companies, and rising petrol prices, which have gone up to nearly $2 a litre thanks to John Key’s increase in GST to 15 percent. Their grocery bills are going up, because John Key broke his promise not to raise GST. Those people are also worried about early childhood centres, and what the cuts mean for them. Some parents in my electorate will be forced to pay $25 more a week for each child, and some of those parents have three children in early childhood centres. I wonder where the Minister will tell those families to get that money from.

Yesterday we all sat here, hoping for a bit of help and a bit of hope for the people in our electorates, but what did we get? We got nothing. What did the people who were sitting around the kitchen table, looking at the bills piling up and wondering how they will pay them, get from John Key? Well, they got no ideas, no plan, and, for lots of them, they have no jobs, because this Government does not care about them. It cares about the 42 percent of tax cuts it gave to the top 10 percent of earners. The Government does not care about the people who are sitting at the kitchen table, wondering how they are going to pay the bills. Those families are struggling because this Government has done nothing about jobs. It has no ideas and no plans to create them.

Members of the Government sit over there thinking they are the great guardians of the economy. Well, great; last week unemployment went up to 6.4 percent. There are 158,000 Kiwis now without jobs—158,000 breadwinners who cannot support themselves or their families. There were 1,700 more unemployed in the last quarter just in Wellington alone, and, unfortunately, I am sure that plenty of those people are in Mana. They have become unemployed because this Government has no ideas and no plans to create jobs.

Government members will sit over there and say: “Hey, we have done heaps.” What have we had? We have had a cycleway, launched at the hastily arranged Job Summit in early 2009.

Grant Robertson: The big idea.

KRIS FAAFOI: It was to be a huge idea, with thousands of jobs. Well, excuse me, but I do not think I have seen thousands of tourists riding around on any cycleway, and I have not seen any jobs created by that scheme, which John Key was praising to the hills in early 2009. National has done nothing but window dressing.

What does that mean in the community? It means plenty of hurt, but no hope. On Monday I visited a number of community services in Porirua that are picking up the pieces of this Government’s lack of plan and lack of ideas. I travelled up to Family Budgeting Services, which is flat tack. The people there told me they are seeing more single men—the kind of people that Mr Key is trying to attract when he goes on Radio Sport. He is doing nothing for them. The budgeting service told me it is seeing more breadwinners, and more couples where both people are without jobs. There is no end in sight for those people, because there are no jobs to go to because this Government has not created any.

If we pop up to the citizen’s advice bureau, it tells us that people are getting more desperate. When a factory closes in my electorate, there are deluges of people asking for help, but what can we do for people when there are no jobs to go to? Not one thing. We say: “Hey, just sit around and wait for a job to come.”, but this Government is not doing anything about it. It has no ideas and no plans to create jobs.

What the Government should be doing is investing in education, training, and innovation, and giving tax cuts to people who need them by stimulating the economy and feeding that money into the economy so that the people who need help are stimulating the economy and creating more jobs. Did we get that? No; we got 42 percent going to the top 10 percent. This Government is not helping those Kiwis who are struggling at the moment.

This Government also does not care about giving our kids the best start in life. The Minister of Education’s example of early childhood education cuts is the perfect example of that—$400 million is being taken out of early childhood education. I tell the Minister that those kids might not have voices, but their parents do. We have been visiting those early childhood centres, and we know that the parents are unhappy. I am not surprised the Minister is not visiting those centres at the moment. In my electorate, as I said, one centre is increasing its fees by $25 a week. One family has three kids, so that is 75 bucks a week.

Hon Anne Tolley: That’s outrageous.

KRIS FAAFOI: It is outrageous, and that Minister is doing that. It is outrageous, and the penny has finally dropped for the Minister. It is outrageous that early childhood education fees are going up, and she is doing that. That family has three kids at the centre, which will cost $75 more a week. I ask where they will they get that money from. What goes? Will it be the food or the clothes? I ask which bills pile up on the kitchen table at the end of the week so that those parents can give their kids the best start in life—so that those kids can go to early childhood education between the ages of 2 and 5 and have the best start in life. What is going to go? What is going to go? Those are the questions I am facing in my electorate because of the decision this Government is making.

Some early childhood centres need to be congratulated, because they will not be increasing their fees. The kindergarten association needs to be congratulated, because it will not increase its fees. But the kids are indirectly affected, because we must ask what else will go. Cuts in staff mean teacher to student ratios will go through the roof. We can kiss goodbye the trips for the kids, because they are not happening any more. We can kiss goodbye the building maintenance for the kids, because that is not happening any more. We can kiss goodbye the resources. What will we have? Will we have early childhood centres with no crayons and paint because this Government is so stingy and does not want to invest in early childhood education? That is the reality of what is going on.

Tim Macindoe: What was the investment, Kris—what was the investment this year?

KRIS FAAFOI: This is about priorities, and we will make early childhood education a priority because we care about the future of our kids. Government members know the cost of everything but the value of nothing, as many of my colleagues have said today. Those centres will be cutting staff, cutting resources, and deferring maintenance for our children in the earliest stage of their lives.

The Kapi-Mana News got it right this week with its headline “ECE cuts a ‘backwards step’,”. What did we get from the National list member for our area? She stated that “more effective spending in the tough economic times will benefit in the long run.” What a load of rubbish. We know that for every dollar we spend on early childhood education we save $17 down the line, and I think that is a great investment.

On this side of the House we care about our kids. This Government has no ideas and no plan to create jobs. This Government has no ideas and no plan to give our kids the best start in life. This Government has no ideas and no plan to help struggling Kiwis. But we do.

Hon GEORGINA TE HEUHEU (Minister for Courts): I think there is at least one thing on which I agree with the previous speaker this evening, Kris Faafoi, and that is the importance of education. He is absolutely right. He is Pacific, I am Māori, and we come from a tradition where some of our people have not gained the best out of the education system in the past. Also, we are from families who value education. That is hugely important, but it is also why it is a great shame that he has joined a party that went out of Government in 2008 with one in five Māori leaving school without literacy and numeracy. Over 50 percent of Māori boys were leaving school without National Certificate of Educational Achievement level 1 after 9 years of a Labour Government. So, yes, I can identify with the previous speaker, absolutely. He is Polynesian; I am Polynesian. Our families put great store on education, but he has joined a party that put nothing, absolutely nothing, into the education of young Pacific Islanders and Māori. If it had, we would not have inherited the results it bequeathed to us in 2008.

When I say that Labour did that, I liken it to committing a crime. Labour committed a crime because it ran surpluses and it was in a position to invest more in the education of young Pacific Islanders and Māori and it did not. It is no wonder that when the recession came 2 years ago, young Māori and Pacific Islanders were hit hard by the loss of jobs and by the inability to get new jobs. Where were those young Māori and Pacific Islanders 9 years previously? They were coming through a school system that Labour was in charge of, and Labour refused to use the surpluses to build the knowledge, the learning, and the skills of young Pacific Islanders and Māori.

National has a plan. It is important to have a plan—absolutely. Our country can do so much better, and it will do so much better pursuing the plan that John Key, leader and Prime Minister, unveiled last week and which he presented to this House earlier in the week. The plan is not rocket science.

Hon Member: It definitely isn’t that.

Hon GEORGINA TE HEUHEU: No, no. It is easy to understand and I will tell members why it is easy to understand. Thousands of New Zealand families have to manage their household budgets daily. That is what they have to do. In the same way, this Government will grow and manage our economy so that we can get the best out of it for those young Pacific Island and Māori children who missed out—many are young adults now—when that member’s party was in power. The plan is this: people cannot spend what they do not earn, we cannot live off the borrowings of others, and we have to pay our way in the world. That is what households have to do, and that is what we as a country have to do. Interestingly, up at Waitangi, where one would expect Māori to be saying “Well, Georgina, what are you guys doing?”, many of them understood the plan we outlined. We must save. We will build savings, we will boost investment, and we will boost exports.

The other thing I found interesting is the way the previous speaker talked about jobs. He said that there were no jobs, as if we can just grab jobs out of the air. The economy has to be rebalanced to make sure there are permanent jobs, so businesses will invest in jobs. To do that, we have to support businesses. They should not be loaded up with red tape and regulation. National has cleared a lot of that. We do not get more jobs by creating a bloated public service and that is what that party did in Government. It created a bloated—

Grant Robertson: What would you cut?

Hon GEORGINA TE HEUHEU: We will not cut anything—and we have not, particularly in areas where we have returned value for money to taxpayers. There will be no cuts where we can see that front-line services are hugely important to New Zealanders. They deserve to have services where value can be extracted, and not to have, as under the previous Government, a public sector that grew just willy-nilly to create jobs, and New Zealanders were living on a whim. Labour had New Zealanders living on an idea that they were doing well when actually the country was going down. That was 9 years of a Labour Government. So basically we build a stronger economy. We build the conditions that will get growth in the economy—something that that party does not know anything about. Without growth we cannot get the jobs—there you are.

Sue Moroney: Where is your plan for growth?

Hon GEORGINA TE HEUHEU: New Zealanders understand what we are doing. We will encourage and build savings. We will spend only what we earn. Sue Moroney can shake her head. She does not understand the basics. We will build the skills and the knowledge of our youngsters.

Hon Members: How?

Hon GEORGINA TE HEUHEU: By investing in education—members heard the Minister of Education previously—by building the skills and knowledge of young people, young New Zealanders. They are our future.

The member Kris Faafoi knows that within 25 years one out of every second baby born in New Zealand will be either Māori or a Pacific Islander. That is why we have invested $91 million—nearly $100 million—to specially make sure that the participation of young Māori and Pacific Island children in early childhood education is increased. They are the future workforce of New Zealand, and unless we want to see them have a wasted life, then we have to invest in their future. That is what National is doing. That is what National has done. We have put more money into early childhood education. Anybody who says that we do not care about a good start for young children needs their head read. That is so untrue. No matter how many times those members say that this has been cut or that has been cut, it is not true. I am looking at those who want their Pacific Island and Māori children to have a decent start in life—

Sue Moroney: Go and visit them.

Hon GEORGINA TE HEUHEU: Yes, members can go out to some of the church-based early childhood education centres, which know exactly the importance of this plan. We will support them. We will build on what is happening in that sector.

I turn to national standards. Teachers ask why we are forcing national standards on them. I ask what the composition of Māori children is in their school, how they are doing, and whether they are succeeding. The teachers cannot tell me whether they are succeeding. So I say that our national standards will make sure that children do not leave school without literacy, numeracy, and the learning they need to come out of college with qualifications and to go on to tertiary education.

There is a plan. It is a very simple plan, but it is a very important plan. People cannot spend what they do not earn. We must encourage savings. We will build savings, we will encourage investment, and we will build assets that grow the economy. That is what we are doing. In my 2 years as Minister for Pacific Island Affairs I have been hugely, hugely impressed by the willingness and the understanding of parents, mums and dads, who want to work with our Government to make sure that their children do well. Of 60,000 children who started school 2 weeks ago, 12,000 of them will leave school without basic literacy and numeracy unless we do something pretty determined—those are the children we are aiming for. We are doing that right throughout all sectors: education, health, and the justice system. Our Addressing the Drivers of Crime programme is in order to ensure that we stop the flow of youngsters into the courts—and as Minister for Courts that is of huge interest to me. We are growing initiatives that will make sure that we cut the numbers of youngsters who enter the court system, and cut the number of youngsters who end up in prison.

National is doing a lot. We have more to do. The potential for New Zealand is huge, and we can realise that potential only through our young people.

IAIN LEES-GALLOWAY (Labour—Palmerston North): During this debate a lot of members of the House have focused on what the Prime Minister said. Of course, that is appropriate; it is the debate on the Prime Minister’s statement. But I will not focus on the Prime Minister, because, as my colleague Kris Faafoi said, the statement was 22 pages that said absolutely nothing whatsoever.

I will focus on one of the true acolytes of the National Party, David Bennett, because last night David Bennett managed to say in 10 words what the Prime Minister could not bring himself to say in 22 pages. Members can check Hansard and have a look at what David Bennett said. He said this: “The Government is not there to make your life better …”. That is what David Bennett said. It is fantastic that we finally have a National Party member who is prepared to tell the truth about this Government’s agenda. I will say it again: Mr Bennett said: “The Government is not there to make your life better …”. Ain’t that the truth, because we have seen cuts to front-line health services, and we have seen cuts to early childhood education. I will pause on that for a moment.

The Minister of Education says that if parents are not happy, they should change centres. If the early childhood centre where parents send their kids is putting its fees up because the Government has cut its funding, then they should change centres. Well, guess what! The parents of kids who are going to kindy, to early childhood centres, send their kids to a particular centre because it is part of their community, or because it is close to where they work. They do not want to have to change centres; they should not have to go to the other side of town. The Minister just shook her head nonchalantly, as if it is no big deal, no problem. The Minister is saying that she is not there for the parents of children in kindy or early childhood centres. She would prefer that they go to the other side of town if their centre has to put its charges up because she has decided to cut the funding.

We have seen increased GST. We have seen the Government let unemployment go through the roof. It has no plan to grow the economy. It has no plan for jobs. It has no plan for manufacturing. It has no plan for clean technology. It has no plan for New Zealand’s future. Why? Because David Bennett is right: the Government is not there to make people’s lives better. What the Government has done is create public debt. Net public debt was zero when the Government came into office. It has let that skyrocket, too. Why has it done that? Because it wants to sell our State-owned assets. That is why it has let that debt get out of control. This Government wants to sell off assets that belong to every New Zealander. John Key got up and said the reason he was doing that is that we need to take ownership of our future. I think the Prime Minister has been hanging out with Prince William a bit too much. He is clearly using the royal “we”, because it is only people like John Key who will be able to take ownership of New Zealand’s future if we continue to sell off our State assets.

John Key’s message to hard-working New Zealanders is simply this: “The National-led Government is not working for you.” Whom is it working for? Well, it is working for the tiny number of people who have the most—those with millions of dollars in the bank who receive interest hand-over-fist—because they got the tax cuts. John Key got $1,000 a week in tax cuts. National is working for the foreign banks and the finance companies. They will be the ones that get to buy shares in our State-owned assets; they will be the ones that take over ACC. They will be the ones that sell us health insurance because this Government will not take its responsibility seriously and will refuse to provide proper health care.

This Government is certainly not there for people who need proper health care. It should not cost a parent in New Zealand 20 percent of their weekly budget just to take their child to the doctor after hours. But those parents are not a priority to this Government. The cost of going to one’s general practitioner, no matter what time of day it is, should not be going up—but it is. That means it is harder for everybody to see their doctor—everyone except, of course, the very few whom this Government is working for. Wages went up 1.7 percent last year, and general practitioner fees increased by 6.5 percent in 2009. They went up again in October last year when National’s GST hike kicked in. But that does not matter, because this Government is “not there to make people’s lives better”—David Bennett said so.

Hard-working Kiwi families know that the Government is not working for them. This Government is working for someone else. The Government is planning to cut $750 million from health over the next 4 years. That means cuts to the services hard-working Kiwis rely on. It means hard-working New Zealanders will not get the treatment they need. What will National say then, if it is still in charge? It will say that health care is in crisis and that we need to privatise, privatise, privatise. The insurance industry will be licking its lips at that idea, just as it was when Merrill Lynch told it to expect a $200-million-a-year windfall when National privatises ACC. That is whom this Government is working for.

In health care there is a test coming up very soon for this Government. We are negotiating a free-trade agreement, the Trans-Pacific Partnership, and a number of American pharmaceutical companies are putting the pressure on to make sure the cost of medicines in New Zealand goes up. Who will the Government go into bat for? Will it be New Zealanders? Will it be hard-working Kiwis who appreciate the fact that pharmaceuticals in this country are inexpensive? Pharmac has provided the cheapest medicines anywhere in the world. Or will it be the overseas corporations? Will it be “Big Pharma”? Is that who the Government will go into bat for? That is a huge question, and people will be asking that as we get closer to those negotiations.

The track record of this Government is not good. If someone is in need of health care, that person’s costs have gone up and his or her services have been depleted. If someone is a parent who has a child in early childhood education, that person’s costs have gone up and the quality is going down. Those people are facing higher prices at the supermarket. There is a greater chance that they have lost their job. There is no plan—there is no plan.

That is why constituents are coming into my office, such as the two who came in last week. One has just completed her teaching qualifications. She has applied for 25 teaching jobs and has been turned down for every single one. She is not lazy, and she is not sitting on her backside at home. She is out there working extremely hard to try to find a job, but there are none. What is the Government’s message for her? It is: “We are not working for you. You are lazy. That is why you do not have a job.” That is the Government’s message for people like her. I met a gentleman who was made redundant last year. He gets no support from the Government. He is out there working hard to try to find a job, but he feels labelled and stigmatised by this Government, because it is not working for him, either.

This Government is not working for New Zealanders; it is working for someone else, and it is about time that it came clean. It is about time that we heard more people like David Bennett get up and tell it like it really is. Here are his words again: “The Government is not there to make your life better …”. That is true; the Government is working for foreign finance companies, for foreign landowners, for insurance companies, and for people who have the very, very most—the tiny, tiny percentage in this country who have the very, very most. National is working for its mates.

This Government needs, maybe, to take a leaf out of the Opposition’s book, because we will invest in skills development. We will support New Zealanders to make the most of themselves. We will invest in early childhood education. We will make sure health care services are available for everybody, accessible for everybody, and of the very highest quality.

New Zealanders need to know that the National-led Government is not working for them; it is working for someone else. New Zealanders need a Government that is working for them, and that is a Labour Government.

MICHAEL WOODHOUSE (National): Happy New Year, Mr Deputy Speaker. I just say how much the member for Palmerston North is looking more and more like my colleague Tim Macindoe with every passing day. Perhaps he wants to have a chat with his leader about some strategies to remedy that.

Hon Members: Or Murray McCully.

MICHAEL WOODHOUSE: Perhaps Murray as well—and many others in the House, I have no doubt.

As I was gathering my thoughts and myself to come from the office to the Chamber—

Iain Lees-Galloway: Where do you get your Grecian from, Michael?

MICHAEL WOODHOUSE: Being such a young fella, I do not have to worry about these things yet. I was thinking as I left my office to come to the Chamber that the last thing I wanted to do was to leave my speech notes behind, which happened to be the last thing I did do before I came to the Chamber, but there is just such fertile ground on which to build an election year speech.

I really did think that I was parachuted into some parallel universe a couple of weeks ago when I heard—

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

MICHAEL WOODHOUSE: Mr Assistant Speaker Barker, I know you have been waiting with bated breath through the adjournment to hear what happened to me a couple of weeks ago.

I had the distinct feeling that I had transferred into some parallel universe following Labour’s announcement of tax cuts, which it would borrow heavily to fund. That is right—a tax-free zone of $5,000 for every single New Zealander, including the very rich, the spouses of the very rich who work part time, and the middle-income earners whom Labour claims it wants to help. Labour will have to plunge New Zealand more deeply into debt to fund it. It will cost in the region of $1.55 billion to fund that and the dropping of GST on fruit and vegetables.

Mr Goff said in his speech: “I won’t make any promises that I can’t keep or that the country can’t afford.” Then he mumbled something about loopholes and taxing the rich. He said that Labour would deal with the loophole in respect of the ability to offset unrelated income from salary, through loss attributing qualifying companies I presume, from rental property losses. I have news for the Labour Party. That loophole was closed in Budget 2010. The tax losses that were generated are largely from non-cash offsets through depreciation. What happened to depreciation? It has disappeared. So there is nearly no help there.

The other so-called tax loophole that will be closed is in respect of high-income taxpayers who, according to Labour, are not paying their way. We will be returning to Labour taxing the rich, but Labour members cannot have read the Tax Working Group report very closely. The report said the problem with the tax system was that it was distorted and misaligned—that the top rate of income tax of 39 percent and the trust rate of 33 percent created arbitrage. So National has fixed the loophole, but Labour wants to bring back the loophole—an envy tax.

But this time Labour says it will not tax the rich, it will tax the really rich. Who the really rich are and what rate of tax Labour will charge them, heaven only knows, but it would have to be around 60c in the dollar or more. Last time Labour’s envy taxes hit the uber-rich, like teachers, the police, doctors, and nurses, the really rich went to their tax accountants, but the doctors and nurses went to travel agents and booked their tickets to Australia. It would happen again if Labour got the chance. At this rate the $1.5 billion tax cuts would be funded out of pie-in-the-sky loophole closures that do not bear up to close scrutiny and raise very little offset revenue to fund it.

So if there are no cuts to spending, there is only one other way to fund those cuts and that is to borrow. The Labour Party is promising to borrow to pay for tax cuts. Voters will have a choice at the end of this year—more envy taxes, more spending on bureaucracy, and more debt to be repaid by future generations, or fiscal discipline, less bureaucracy, a plan for growth, and a determination to reduce debt, not to grow it.

I will paraphrase from a recent speech where one leader said we need to “freeze annual domestic spending for the next five years … this would reduce the deficit … This freeze will require painful cuts. Already, we’ve frozen the salaries of hardworking federal employees for the next two years. I’ve proposed cuts to things I care deeply about, like community action programs.” Who said this? Was it some extreme, right-wing leader, hell-bent on destroying social policy? No. It was Barack Obama in his State of the Union message. So if Mr Obama gets it, if countries with similar debt profiles, like Ireland, Greece, Spain, and Portugal, get it—left-wing administrations proposing austerity measures far beyond anything this Government is proposing—what is up that the Labour Party completely failed to get it? The spending frenzy went on for the last 3 years of Labour’s administration, and if Labour gets back on to the Treasury benches, God forbid, Labour proposes to continue it. But it simply cannot continue.

Whatever the policy question is, the answer cannot be to burden this country with more debt. When we are talking about how to improve the quality and volume of our health services, the answer cannot be more debt. It is a lazy approach—a tax-and-spend approach that is past, populist policy. We need to think smarter about it, and that means looking at quality control, looking at systems and processes, looking at new technologies, and avoiding waste and error. I know that is possible in our health services. They are actually doing it. The results of the last couple of years of excellent progress in elective surgery discharges and reductions in waiting times for emergency treatment and cancer treatment is evidence of it. But there is plenty of scope for more. It needs to be done because the answer to the question cannot be to burden this country with more debt.

Our early childhood education funding changes are a very sensible example of not doing that. But Ms Moroney, Labour, and their union mates are running around like Chicken Little, saying that the sky is going to fall in because of a small change to the staffing model that the Government is prepared to fund in these straitened times. At the same time they are ignoring those very positive contributions for our Māori and Pasifika kids—Mr Davis knows exactly what I am talking about—some of whom around the country have no more than about 60 percent access to early childhood education. He will sit by while his party promises to send about 1,000 early childhood educators to the wall, for the sake of an ideology that says an experienced parent or grandparent, or an experienced teacher aide or caregiver, cannot possibly look after a child under the age of 5. It absolutely beggars belief. They insult those parents and grandparents. It is stupid and it is ideological.

But nowhere more does this ideology get in the way of doing the right thing than in the belief that the only way for a business to run is if the Government is the only one running it. The best example of that is ACC. We have waited nearly 2½ years for Labour to apologise for the $7.2 billion hole it left in the accident compensation scheme. But the public should not hold its breath. I am very proud of the scheme, but it is not a sacred cow. It is not something that can be hermetically sealed for all time. Choice is a good thing. It will reduce costs, and levy payers will have the choice to stay with ACC if they wish.

On Monday night I attended a function in Hamilton when the city’s economic development agency launched the various TechNZ research and development investment programmes. It was a great night.

Hon Darren Hughes: What were you doing there?

MICHAEL WOODHOUSE: I happened to have been in Cambridge that day. The Government has invested more than $320 million in those programmes. They are a hell of a lot more effective than a lazy research and development tax credit programme that benefits tax accountants more than it benefits the economy. Mr Goff trumpeted the release of Labour’s action plan for jobs and growth, and the only thing he could think of to announce was the return of the research and development tax credit. It was the one lazy lever that Labour could think of.

But there is not just one lever to pull. Real, meaningful growth comes from innovation funds. The 90-day probation period was recently found to have had a very positive impact on small businesses. We have kept Hobbit jobs in New Zealand, we have committed billions of dollars to infrastructure development, we have reduced the barriers to doing business by unwinding red tape, and we have built on the free-trade agreements we had already developed to drive the export-led recovery we need. We will campaign on competition and partial floats. There is a plan. It is a really good plan on many fronts, and I will put up that plan against the tax, spend, and borrow promises of the Labour Opposition, any day.

Hon DARREN HUGHES (Labour): I rise to speak against the confidence motion that was moved by the Prime Minister yesterday. Now, more than ever, New Zealand needs a Government for the many, not a Government for the few. The speech we heard yesterday from John Key was all about governing for the few in our country, at the expense of the many. We need a Labour-led Government in New Zealand that can make sure there is a plan for the future in our country, not just a gimmick for tomorrow morning’s New Zealand Herald or Dominion Post. We need leaders in this country who understand that prices are going up faster than wages, whatever statistics, dodgy as they may be, the Government chooses to put forward. Families in this country know that when their wages come in every week, they are being outstripped by the prices that are going up at the supermarket, the petrol station, and in so many other areas where families need to be able to spend money.

Hon Dr Wayne Mapp: That’s not true.

Hon DARREN HUGHES: When the member for North Shore says that that is not true, we know how far out of touch Government members have become when they believe that prices are not going up faster than wages. They are, and if we ask anyone in a supermarket they will tell us that that is true. It is absolutely true. [Interruption] Hekia Parata stood in the Mana by-election and was all in favour of low and middle income families just last November, but within 6 weeks of being in Cabinet she now says it is untrue that prices are going up faster than wages. But people listening to this debate know that instinctively. It is true in their eftpos accounts, it is true in their cheque accounts, and it is true as they struggle to pay off the credit card they are having to put their groceries on. It is staggering how out of touch this Government has become.

We need higher incomes and better jobs in New Zealand, and we need to put children at the centre of our social policy. The re-election of the Prime Minister should not be at the centre of what Government policy is about. We do not need a Government that is cutting the social wage as this Government is, and making a mockery of the Kiwi idea that we should all be able to get a fair go. What is clear from this debate, and from the Prime Minister’s speech yesterday, is that after 9 years in Opposition and 2 years in Government, the party opposite has no plan for what to do with, and for, New Zealand. The results are in; having no plan has failed. On the key social and economic indicators that people know are real for their lives—not on opinion poll results—indicators such as unemployment figures, wage-increase figures, and cost of living pressures, having no plan has failed our country and it is failing our people. Stumbling from gimmick to gimmick might have got the Government through the first 2 years, but it will not get it through this year. We need a Government for all the people.

The only ideas that were in the Government’s plan yesterday were either more gimmicks or ideas that went back to the crypt, back to the idea that we should sell off our assets one more time, just in case we were not totally convinced of the failure of doing that the first time around. It pays to have a memory like an elephant when it comes to our country’s assets, and members opposite have forgotten just what a disaster those things were.

Hon Dr Wayne Mapp: All you’ve got is memories.

Hon DARREN HUGHES: I hear Dr Mapp speak up. It is no wonder he is retiring, because he is embarrassed about being part of a Government without a plan. He thinks it is a disaster.

I listened to the Prime Minister tell us why asset sales would be a good idea. Apparently Kiwi mums and dads could then own the assets. I thought every single Kiwi mum and dad did own them, along with every brother, sister, aunty, uncle, grandma, grandpa, and cousin—every single person in this country owns them. But there was the killer: John Key said that the Air New Zealand model was what we should base our asset ownership on, because that gave us the best of both worlds. But which party opposed the buy-back of Air New Zealand? It was National, which here in this Parliament fought tooth and nail against the buy-back of Air New Zealand. But it turns out that if we are prepared to wait just 7 years, National can tell us whether it is in favour of buying back an asset. The problem is that we have to check in for our flights slightly before 7 years; we have to check in for our flights 15 minutes before we go. Being in Government is about making tough decisions, and when that tough decision was there National opposed the buy-back of Air New Zealand. Today, of course—just stop and wait—7 years is how long it takes the conservative forces in New Zealand to catch up and say that the Air New Zealand model gives us the best of both worlds.

We are now told by the Government, which has spent 2 years making appalling choices for our country and our people, that we are back to “tina”, which means “there is no alternative”. Speaker after speaker from the Government is standing up and saying that the Government is having to do things because it is borrowing money, it has made all those bad decisions, the economy is in the cart, and it has to carry on now with its economic and social decisions. National MPs say “tina”; well, this is New Zealand, this is Aotearoa, and in this election campaign Labour members say “tama”, which means “there are many alternatives”. The alternatives being put up by Phil Goff, Annette King, and the Labour team are the sorts of things that can make a major difference to the lives of New Zealanders up and down this country. We can now see the effect of having no plan at all.

First of all, we were going to be the international hub for financial services. That was the first thing we were going to be, but that sort of fell apart. In fact, the last time we heard John Key talking about Ireland, he was saying we should model New Zealand after Ireland. That is what he said. He went up and down the country saying we should be the “Celtic tiger of the South Pacific”, and of course National MPs got up, as they do, unthinkingly, and repeated all those lines from the research unit that John Key had said. We were challenged, as a Labour Government, to make sure we were like Ireland and that we were following the Irish model. Now I sit here in this debate and listen to the same MPs—or to a few new ones, who know nothing about political history—get up and say that we cannot run New Zealand like Ireland because that would be a disaster, and that we would go to hell in a handcart if we followed Ireland. But that was exactly what National members had said should happen.

Then there was going to be a cycleway; we were going to cycle our way to success. Well, that has been a complete disaster, so now our economic recovery is based on the brand new idea of privatisation, an idea that has never been heard of before. We will privatise our way to success. That will stop all the problems that we have in our country, and power bills will go down because we will sell power companies. Yeah, right! There is not a single person who can honestly say that power prices will be lower for families and pensioners as a result of privatising our power companies. What the Government is saying is absolutely ridiculous.

We are listening to members opposite say that taxes are a major issue for the campaign. In fact, that party opposite reduced the entire economic debate in our country to one that was simply about taxes. It cut taxes more than we could afford as a country, and now we are borrowing money because of its decisions. Eighteen months ago I used to listen to the same speech 58 times over, when members opposite complained about borrowing $250 million a week. That was a terrible figure, and nothing more could be done in New Zealand because we were borrowing $250 million a week. Now the figure is $300 million a week, which is $2.5 billion extra a year. What is the difference? It is the tax cuts that the National Government put in place and that we could not afford. Now the Government is saying that $300 million a week is the ceiling, and that we cannot afford any more than that. As this economy continues to go down the gurgler we will have to borrow more because of that Government’s decisions, and because having no plan has not worked for our people. It is like saying that we should extend the mortgage, buy more new items, put more on the credit card, and get more hire-purchase agreements, then go and ask the boss to pay us less in salaries and wages to pay for those things.

Members opposite inherited a Government net debt of zero. Do members know when that had last happened in New Zealand? Never! From 1854, when we started having a Government, to the time of the Clark-Cullen Government, there had never been a net debt of zero, but that is what National inherited. Those members on the other side of the House also inherited the lowest unemployment rate in the world, but they have ruined both figures. Yet they get up in this Chamber and try to argue that nothing else can be done, that there is no alternative, and that although 68,000 people are out of work it is their fault. They say that Labour created jobs only by hiring people in the public sector. Is that how 68,000 people have been added to the dole queue since the last election? Have 68,000 extra people all come from the public sector? I do not think so; I do not think the National Government is aware of what it is doing.

It is in education that we see the party opposite making bad choices for our country. Education is in a mess. Cuts in early childhood education have been hitting families this week and last week, with families having to pay more per week per child. The best single start we can give any young New Zealander is a quality public education that invests in our people to make sure they can reach their potential, and unleashes them for a big, brave world in which they can, as individuals, achieve and be the best they can be. Members opposite have a timid view; they believe in cuts, and they believe that early childhood education is baby-sitting. I tell National members something: parents are involved as volunteers at primary school as well, so under the logic that we are hearing from National members, which states that because parents and grandparents are involved as volunteers in early childhood education we need to have only 80 percent qualified staff, we might as well have only 80 percent qualified staff in primary schools. When the Rugby World Cup comes along later this year we would never say let us have only 12 qualified professional All Blacks and three really interested and avid fans of rugby to help them out and make up the full 15. We want 100 percent qualified All Blacks to win the Rugby World Cup later this year, and we should have 100 percent qualified staff working with parents and grandparents to start making sure that kids get the best start at ages 3 and 4, if we want to make this country the cleverest it can be. But members opposite are not interested in that; they see early childhood education as baby-sitting.

The Government is putting costs on families, prices are going up faster than wages possibly can, and the social wage is being broken. Education will be a big issue in this campaign, because Labour has a vision for a bright future.

JOHN HAYES (National—Wairarapa): There was a huge amount of fuss and bluster from the previous speaker, Darren Hughes, a person who had a bit of a cheek in saying that my colleague Wayne Mapp should feel embarrassed about being in this House because he is retiring. I think that Darren Hughes should feel very, very embarrassed about being in this House—his electorate voted him out, yet he is still here. I tell him to explain that to his people. He was full of criticism of the Government, but he was a member of the Cabinet that cost this country $700 million in the failed purchase of Tranz Rail. That is how smart he is!

Then what did that man’s Government do? It left us, I say to Mr Hughes, with a $2.5 billion underfunding problem in the ACC account. There was a shortfall there, and in 9 years of that man’s Government what did he do as a Cabinet Minister? He increased the number of Public Service employees by 50 percent. What an absolutely appalling Cabinet Minister he was! That speaker has, this evening, followed a long line of other Labour speakers who have—

Hon Dr Wayne Mapp: Communists.

JOHN HAYES: Yes, they are communists, as Dr Mapp says, and basically their plan for this country is to borrow and hope. That man, his party, and his colleagues are about borrowing and hoping. As my Prime Minister, John Key, said 2 days ago, the annual cost of Labour’s spending promises is $5 billion and climbing. A succession of Labour speakers, followed by Mr Hughes today, could explain to one person in this country how they are going to pay for this plan.

Hon Darren Hughes: We are going to cut your Public Service pension.

JOHN HAYES: I say to Mr Hughes that his leader spent 7 hours in a beauty salon over the summer and that was just to get the estimate for colouring his hair. Every time Phil Goff opens his mouth in this House he confirms Labour’s borrow-and-hope recipe, but it will add hundreds of millions of dollars to Government borrowing.

This man, Darren Hughes—Mr “Whatever He Is”; a list MP in Levin—and his leader would saddle New Zealand with more debt to foreigners, who would have to be paid back—guess what—with interest. That is Labour’s plan. They borrow more, and then New Zealand gets a credit downgrade. What will that do? That will push up interest rates for Kiwi families, it will push up interest rates for business, and it will cost jobs. How dumb is that!

In a state of the nation speech last month, Phil Goff announced a $1.3 billion promise to make the first $5,000 of annual income free of tax, including for the wealthiest New Zealanders, like me and like every person in this House. He wants to give us all a tax cut. It is the most expensive way of providing a benefit in this country. It is totally dumb, I say to Mr Hughes. It is totally dumb, I say to Mr Goff. Although many New Zealand families are careful with their money and pay their own debts, Labour is promising to do the exact opposite. But they will not do it with their money. Oh, no! They will do it with taxpayers’ money.

At least Mr Goff has done New Zealanders a service early in the electoral year. He has contrasted Labour’s lack of a plan, loose spending, more borrowing, and high taxes with National’s responsible plan to bring debt under control and to get this economy growing faster.

Darren Hughes lives over the hill from me. My community suffered for 9 long years under Georgina Beyer and Helen Clark, and we are in a recession now because they squandered the good times. [Interruption] They squandered their money in the good times. Why are our businesses in recession? I say thank you to Georgina Beyer, Helen Clark, and Cabinet Minister Darren Hughes—they did a wonderful job squandering our taxes.

The farmers in my electorate, and the manufacturers in Dannevirke, like Metalform, and the Fonterra milk powder plant in Pahīatua need world-class infrastructure to ensure that they can compete efficiently and productively on the global market. I am really supportive of Minister Joyce and his efforts to ensure that our schools in Porangahau, Eketāhuna, and Pirinoa can get on board the broadband train and make the most of this great technology. Minister Joyce has ensured that the work gets done.

I heard Georgina Beyer promise for 9 years that the Labour Government would fix the Rimutaka hill road, and what did it deliver with Helen Clark? It delivered nothing. What did Mr Hughes deliver in Cabinet? He delivered nothing—absolutely nothing. Steven Joyce has not only fixed the Rimutaka hill road, as everybody can see when they drive by, but is also working on the highway between Woodville and Dannevirke in my electorate. Furthermore, he is working very hard to help KiwiRail become more competitive, and I know from the Greater Wellington Regional Council that the Wairarapa train service is the most profitable in New Zealand. In my electorate we are also providing help to people with leaky homes. Why? Well, what did Labour leave behind?

The Wairarapa and Hawke’s Bay farmers in my electorate, who earn this country’s foreign exchange, were left, after 9 long years of poor governance, with dial-up Internet compromised by electric fence interference and no plan. Industry paid the telecommunications levy for improving rural broadband but there was no accountability about how it was spent.

Labour set up a $325 million broadband investment fund, which was all about giving piecemeal grants to operators. It was not about building a solid broadband network. Labour called for tenders before the 2008 election. Did I see anything come of it in my first term in this House? Not a jot. This country’s Prime Minister, John Key, is swapping a $325 million grant scheme for a $1.8 billion investment.

When one looks at science and innovation, with my good friend Wayne Mapp, we see that a new ministry, the Ministry of Science and Innovation, has been established. It will be a far more effective bridge between science and industry in helping to turn great ideas into export successes. What did Mr Mapp inherit when he became the Minister in this area? He inherited a system that was overly complex and bureaucratic, and businesses were not investing enough in research and development. Tax credits were open slather for accountants, with no guarantee that the money would be used for research.

Hon Hekia Parata: Dr Mapp is on to it.

JOHN HAYES: Absolutely, he is on to it.

In the last 12 months, through the work efforts of Murray McCully and my colleague Tim Groser, this country has signed a trade agreement with China, which has generated about $850 million of new exports to China. That is the same as finding a market the size of Indonesia, and who does that help? It helps every farmer.

Hon Steve Chadwick: Labour started it.

JOHN HAYES: Labour started it, but Labour did not finish it, did it?

I was particularly pleased to be on the Government select committee that dealt with the Rugby World Cup legislation. As we have seen in the last 2 months in the Wairarapa, the air show run by Tom Williams brought in about $8 million to our area, and the La De Da concert brought in huge amounts of money and saved the Masterton south area from total economic devastation over the summer period. The Rugby World Cup will do the same for the Wairarapa when we host the Georgian team. This Government has a plan. The plan is to increase the accountability and the efficiency of the bureaucracy, grow the economy, promote exports, and get rid of waste.

This afternoon I heard a lot of comments from Opposition members about cutting early childhood education. I can tell members that that budget has actually been increased by $400 million and that although there are some readjustments, we are trying to help the people at the bottom of the pile, not at the top. I can tell members that in my electorate fewer than 40 percent of childcare centres are actually impacted by that change. When I have written about it in the paper—

Hon Steve Chadwick: So that’s all right, is it? That’s great for parents.

JOHN HAYES: I can tell the member that it has strong community support. I have had only complimentary comments, except from two people in the Labour Party who are busy writing to the local newspaper on that issue. This Government has a plan and this plan is going to be implemented over the next 6 years. Thank you.

JO GOODHEW (National—Rangitata): The constituents in the Rangitata electorate have already realised that 2011 will be a big year for New Zealand, and not just because of the Rugby World Cup. It will also be a big year because decisions will be made that will have a big impact on our economy, our prosperity as a country, our health, our safety, and the future for today’s job seekers, for tertiary, secondary, and primary students, and even for those who are younger than that. This year will be a year of stark contrasts.

This year the National Government—led by popular, hard-working, pragmatic real person John Key—will need to pull out all the stops to prevent New Zealand heading for, at best, a mediocre future, and, at worst, a similar fate to countries such as Spain, Greece, Portugal, and Ireland—those countries with very high foreign indebtedness. This year the National Government will try to improve our economic performance in order to get the books back in order, because continuing to borrow $300 million a week and then gifting that debt to our children is not OK. We have had to borrow to blunt the sharp edges of the recession, but now is the time to get the books back in order.

I send out a warning to the Labour Opposition: New Zealanders are far from stupid. They knew when they had had enough of the nanny State and the arrogant Clark era. New Zealanders knew that we enjoyed economic golden weather for 9 years under Labour, but only now are New Zealanders realising how hard it is to climb out of recession when so much of Labour’s legacy—and it is not a case of no plan; this is about Labour’s legacy, I say to Mr Darren Hughes—is economy-sapping, unproductive, and promotes dependency on the State. That is what Labour left us. Labour spent way too much time on calculating how to spend money to create a culture where the voters depended on the Government’s largesse, but New Zealanders saw through that in November 2008.

Unfortunately, we hear the same claptrap now over the fiscally prudent announcement to raise the minimum wage by 2 percent to $13 an hour. Labour tells us it should be higher; even the Greens are telling us it should be higher. Guess what! We wish it was higher too, but the trade-off for a $15-an-hour minimum wage would be almost 6,000 jobs lost. Labour’s rhetoric is simply an endless promise to spend, without an admission that to spend more than National is doing now simply means borrowing more—more than $300 million a week.

While I am on the subject of promises to spend lots of dosh, let us look at the borrow-and-hope Phil Goff and his Labour spendthrifts. Phil Goff’s state of the nation speech revealed two things. The first of these was a decidedly unrealistic sense of the challenges facing New Zealand, and the genesis role that his party actually played in creating those challenges. The second was a staggering $1.3 billion promise to make the first $5,000 of annual income tax-free. I have a message from my constituents for Phil Goff: my constituents just love that policy. The students who work in the holidays say thank you for thinking of them. The part-time workers whose partners are on really high incomes say thank you very much to Mr Goff for thinking of them. The kids who work in their parents’ businesses say thank you for thinking of them. But I have a question for Phil Goff: are they really the people he meant this policy to help? It is not the way he talks about it, anyway. It is yet another stunning example of Labour throwing a dart at the dartboard of vote-catcher ideas without any thought of targets or of what a policy should actually achieve. Since that speech, Labour’s interim leader has promised another $400 million for early childhood education—but more about that soon.

Last year Labour promised to take GST off mangoes, raspberries, bok choy, boysenberries, and peas and carrots—as long as they are not frozen. That was at a cost of $250 million a year. Added to that is a whopping $2 billion a year on the Superannuation Fund, so this temporary Labour leader has amassed more than $5 billion a year in promised extra expenditure. But New Zealanders are not dopey; they know we cannot afford that. If we venture down that track, then we are assured of worse than negative watch from Standard and Poor’s. So maybe we need to remind Labour that a downgrade means paying higher interest rates in return for all of that. I tell the spendthrift Labourites to explain that to New Zealanders.

While I am on that thread, there is another woeful example of chucking buckets of money at a sector without analysing whether it really, truly improves the lot of New Zealanders who really need Government assistance. National is spending the most money ever—$1.4 billion—on early childhood education, but we are actually targeting projects to markedly improve participation in it. That is a far cry from the ill-targeted Government policy under Labour that would have seen 1,000 early childhood education centres close because they could not meet the mandated 80 percent registered teachers. That was going to be a whole lot of kids who would have been out of luck, was it not? In my electorate some centres face choices as to how they will have to tighten their belts, but many are unaffected by National’s policy change to fund only up to 80 percent of a centre’s teachers being registered teachers. Some centres are actually nowhere near the 80 percent; some have a mix of qualified and unqualified staff, or qualified and training teachers.

The public should also get their heads around the thought that quality staff is really important, but the children attending the centres are aged 0 to 5 years, so a mix of education and childcare is what happens in those places. Surely there is a role for those who are trained in childcare as well as registered teachers. A mixture of skills—

Hon Steve Chadwick: Jo, this is about our children.

JO GOODHEW: Well, childcare is very important—very important, I say to Ms Chadwick. A mix of skills and qualifications can still mean there is quality early childhood education. What is wrong with registered nurses working alongside nurse assistants and enrolled nurses, or lawyers working alongside law clerks and interns? I can think of many examples of groups of people who have different skill sets working together to complement each other’s skills. So Labour should just quit the slogans and admit that its focus was never on maximising participation in early childhood education, but that National’s actually is.

I mentioned at the beginning of my contribution this evening that there will be a stark contrast between the offerings to voters on 26 November. On one hand we have a National Government that knows that building a brighter future will entail determination and some tough calls. National’s vision is for stronger Government accounts, where we will move away from the debt-fuelled consumption and Government spending towards savings, investment, and exports. This vision is in stark contrast to recent proclamations from Labour spokespeople, which in effect add up to massive job losses, and all for the sake of Labour Party ideology. Without the 90-day trial period 13,000 New Zealanders would not have had the opportunity of a job. Labour’s unrealistic time frames for clean air would have seen thousands of job losses in industry, as industry was penalised for domestic polluters who were not meeting the deadlines.

Charles Chauvel: So you’ll kill 500 people instead?

JO GOODHEW: Mr Chauvel needs to remember that failure to meet a deadline certainly does not save any lives. Hello? Wake up! As I have already said, had the minimum wage been raised to $15 an hour it would have resulted in 6,000 job losses. When we add to that more than $5 billion worth of promises, under Labour ideology we would have increased debt, increased taxes, and higher unemployment. Is that what New Zealanders want? I think not.

National is taking significant steps to alter the environment in which New Zealand’s businesses exist, to allow them, and therefore our economy, to grow. What does it mean when the economy grows? It means more money for health, more money for welfare, more money for education, and more jobs. It also means more money to spend on safety and law and order. We are building world-class infrastructure to help businesses compete. We are building skills and knowledge for future-proof jobs. We are helping exporters to produce more valuable products more efficiently, and to sell those goods for a higher price. We are giving businesses confidence and certainty so they can invest in new businesses, take on more workers, and pay them more. What a stark contrast this is to the borrow, promise, and hope approach from the spendthrift Labour Party.

The National Government plans to address all the reasons that New Zealand is not as productive, as healthy, as wealthy, or as safe as we aspire to be. We have the guts and determination to tackle the hard issues, like a bloated Public Service that grew like Topsy under Labour at the expense of front-line services. New Zealanders instinctively know that if the biggest business in town is the Government, we will never build ourselves a brighter future. In Rangitata and around the rest of the country the question will be about which political parties have the ability and the courage to build a brighter future for New Zealand, and which political parties will try to buy a brighter future for only themselves.

KELVIN DAVIS (Labour): Nothing in the Prime Minister’s speech yesterday gave me any confidence that John Key, the National Government, its Māori Party supporters, or ACT have any plan whatsoever for the future, to create jobs, or to ease the cost of living. In fact, in the time it took for Jo Goodhew to finish her speech, the National Government borrowed an extra $300,000. It is borrowing $30,000 a minute. It is borrowing $500 a second. The borrowing is all to pay for the tax cuts that this country cannot afford.

We heard Jo Goodhew ask what is wrong with enrolled nurses working alongside registered nurses. Well, why do we not just have volunteer nurses? National expects us to have volunteers in early childhood education centres. Why do we not all just go up to the local hospital and start administering injections? Let us start dishing out pills. Let us start doing all that sort of stuff. It is the stupidest thing I have ever heard in this House to ask what is wrong with having volunteer nurses going up and administering medicine.

I also heard in John Key’s speech that he wants to help solve social problems and improve the prospects of the next generation. I ask John Key how on earth he expects to improve the prospects of the next generation when he is cutting hundreds of millions of dollars from early childhood education. For Anne Tolley to stand in the House tonight and say that that is not happening is a disgrace. Anne Tolley needs to crawl out of the cave she has been hiding in, come up north with me to Kaitāia, and visit the early childhood education centres I visited last week on 1 February when their funding cuts kicked in. She should hear from the people themselves on the ground that the funding cuts are hurting them.

One early childhood education centre up in the far north is losing $160,000 a year—$160,000. That is being taken from the kids of that particular early childhood education centre up in Kaitāia. We are talking about Tai Tokerau here. We are talking about Northland, one of the most socioeconomically deprived areas in New Zealand. The Government thinks it can cut $160,000 from that early childhood education centre.

What will happen? That early childhood education centre has two choices. I heard the Minister Anne Tolley talking today about choices; this early childhood education centre has two choices. The first choice is to reduce the education options it is offering the kids. I ask Mr Key how it will improve the prospects of the next generation if the Government reduces the education options of those kids. The second choice is to charge the parents to make up the shortfall in the funding. The parents in one of the most socioeconomically deprived areas in New Zealand can expect to pay an extra $20 or $40 a week to have their kids go to an early childhood education centre.

Those parents also have choices: they can choose to pay to have their child attend an early childhood education centre, or they can choose to feed their kids that week. Those are the choices that parents are being forced to make: food, shelter, and clothing over early childhood education. Yet the Prime Minister said in his speech that he wants to improve the prospects of the next generation.

It is just ridiculous. The research is adamant that if we give children the best start in the years from birth through to age 6, then we will see improved outcomes throughout their life at 10 years of age, 12 years of age, 16 years of age, and through into adult life. But the Government is cutting the support. National members sit there and defend cuts to the kids—the little kids in early childhood education, who are the most vulnerable sector of our society.

The Prime Minister minced up to the marae at Waitangi on the weekend and told Māori that they have to set aside grievance and take hold of education. Those are the exact sentiments that I have. We as Māori need to set aside grievance and focus on education. In my maiden statement I said that we can achieve more with one generation of fully educated Māori than we can from another 171 years of grievance. I still hold to that view, and I am glad to hear that the Prime Minister supports my sentiments.

The problem is that we have seen the Government actually entrench grievance. We have seen no better example than today at the Māori Affairs Committee, when the Marine and Coastal Area (Takutai Moana) Bill was rushed through the select committee process with indecent haste and with a full disregard for democracy. That is saying to Māori, who absolutely loathe the bill the committee is pushing through, that it does not care about their submissions or about their thoughts and opinions on the Marine and Coastal Area (Takutai Moana) Bill. It is saying: “Stuff you! But please do not be angry with us.”

Another example of the Government ignoring Māori opinions is on exploration rights and the issuing of permits for oil exploration off the west coast of Northland. Exploration permits have been issued for 100,000 square kilometres of seabed in the Northland Basin. There are 150,000 square kilometres of seabed off the north-western tip of Northland in the Reinga Basin. There are tens of thousands of square kilometres of seabed in the Raukūmara basin. Māori have had no say in it. The Government has said that it does not care that Māori have opinions and interest in the seabed. It is saying “Get stuffed! But please do not be angry with us.”

The worst grievance that is being perpetrated on the Māori people is that our parents cannot afford food, cannot afford to pay the rent or the mortgage, and cannot afford to clothe their kids because the cost of living is rising so much. That is the real grievance. That is what is really affecting Māori people these days. So it is a bit rich for the Prime Minister to mince on up to Waitangi and tell us to put our grievances aside.

He says that Māori should take hold of education. What has the National Government actually offered in terms of education for Māori? It has offered the national standards. The national standards will not make a single iota of difference. Bill English proved that towards the end of last year when he said in this House that over the next 10 years the biggest Government department will be the Department of Corrections. I say to him that if national standards are to make an iota of difference, the Government needs to address the one child in five who is leaving school without a qualification. That will mean those children will go on to higher education, which means those kids will get better jobs and will have better social outcomes. We will be locking up fewer kids if national standards are to make a difference. But Bill English has stood here in this House and said that over the next 10 years the Department of Corrections will be the biggest Government department. Bill English has proven that national standards are a waste of time. He has no confidence in them. They are just another joke perpetrated on the people of New Zealand by the National Government.

John Key also said that New Zealand needs to build up the pool of Kiwi-owned savings and investment. That is really good, but what happens to all those Māori parents who are struggling to put food on the table, to pay the rent, and to make the choice between early childhood education and buying food for their kids? It is an absolute joke, when Māori are struggling with everyday bills and with just buying groceries, for John Key to say that Māori and New Zealanders need to save. It is an absolute joke.

He went on to say that the Government wants to address the drivers of crime. Let me tell him the drivers of crime: poverty first, poverty second, and poverty third. If the Government wants to address the drivers of crime, then it needs to do something about addressing poverty. It needs to create jobs. It needs to come up with a plan that will actually make a difference for New Zealanders who are out there on Struggle Street and who are having a hard time just making ends meet. Kia ora.

AARON GILMORE (National): That was a wonderful speech from the previous speaker, Mr Davis, who prior to that speech had a future in the Labour Party. I think Mr Goff saw that he had a future. But it only goes to show the one underlying factor I have picked up from speeches from Labour members in recent days, which is that they cannot add. I know that Mr Davis was a good teacher in the far north, but his speech showed me that Labour members cannot add.

In the last 2 days we have seen a whole lot of choices being presented to New Zealand—a future of choices. There is a choice between having a balanced, prudent fiscal position—a sustainable position for my children and grandchildren to live in in this country in the future—or one where a bank from somewhere overseas comes and takes us over because we do not have the ability to pay our bills.

Under a Labour Government we would have the situation of another generation of extreme borrowing, and a crisis would occur. Under Labour we would have a situation where we would be borrowing—

Kelvin Davis: $3,000 a minute you’re borrowing.

AARON GILMORE: —whatever the amount is that Mr Davis might think is the right number—another $5 billion a year. What might that mean? Labour members are telling people not to worry because Labour has a plan. I would like to hear it, and the public would like to hear it, but we have not heard it. We heard Mr Darren Hughes talk earlier tonight about his plan. He said we should cut Mr Hayes’ Government pension and that that would save $1 million. That just goes to show us that Labour members cannot add. The last time I heard, Mr Hayes did not get $1 million a year.

We have heard Labour MPs—and I can talk about the one whom I ran against, Ms Dalziel—say they would go and get another job if they could but they would not get one paying what they are being paid now. That shows us the future that the Labour Party sees in New Zealand.

Today at question time we had a question about the decade of deficits that was coming at the point of the 2008 election. What did Labour members do? They went quiet, because they knew it was true. They knew that New Zealand was facing a bankrupt position, which is why New Zealanders voted in a John Key - led Government.

Do members know what another $5 billion under Labour would mean to the mums and dads back home? It would mean a situation where interest rates would go up by about 4 to 5 percent per annum, just like they did in Greece, Ireland, and Portugal. On the average house mortgage in New Zealand, which is $150,000-odd, that rise would shift repayments from $100 to $150 a week, depending on where people live and how much they borrowed. That is what Phil Goff will give New Zealand—not 10 bucks a week from his $5,000 tax-free income but an increase in people’s mortgage that they cannot afford. That would not be a sustainable position. It is not a position that I want, nor do the majority of New Zealanders, from what we have seen in the polls.

We also heard today the rhetoric about early childhood education. I know a bit about early childhood education. I have two young kids. I have been through the sector. My mother was the founder of a playcentre. I went to a playcentre. I have been involved in the movement. My children have gone to everything from community-led centres and parent-led centres through to private centres with fully trained staff. Do members know what? Those centres all have positive aspects to them.

In the last 6 months I have visited 16 centres in various parts of Christchurch. What I heard when I went and talked to those people was that people like choices. They like having the ability to say that if they are parents, they do not care whether they have a degree, but they want to be able to raise their children in some way. That is why we put in place 20 hours’ early childhood education for playcentres and kōhanga reos. Under Labour those centres were discriminated against because they were not run by union members. If people were running a playcentre or a kōhanga reo, they did not get the right amount of money because they were not part of the early childhood education union. I thought that situation was outrageous. That is one of the reasons we are part of the Government that brought in equalisation that treated centres across the country the same. That is what we believe in. We believe that all people are equal.

We have inherited a situation under Labour where 40 percent of the kids in the country cannot get access to early childhood education—right now it is 40 percent. There was a meeting 2 or 3 weeks ago in Christchurch that the Labour Party summoned me to go along to. I turned up in Christchurch. I had a whole bunch of union people screaming and yelling at me and saying that we need 100 percent qualified teachers because that was the right way to do things. I said that that was OK and that was fine, but I asked who would pay for it. They said that somebody else could pay. That is the problem with Labour: it is always that somebody else can pay.

The problem we have with the union mentality is that there are not enough people to pay for all the things it wants them to pay for. I will show members a couple of things. The wonderful Ministry of Education has this great pamphlet for early childhood centres about early learning. It states that young children are readers, writers, and mathematicians. Given the numbers that we have seen from Labour members in recent times, I think they could do with a bit of mathematician training. This pamphlet states that parents, family, and whānau are important parts of a child’s learning. It does not state anything about union members in here. I challenge the Labour members to look at this early childhood curriculum for parents at home and see what it means for early childhood centres.

We have had record spending in early childhood education this year, more than any other Government has ever spent. That means 3,500 kids around New Zealand will gain access to early childhood centres who did not have it previously. I challenge Labour members to go to those parts of New Zealand that are getting money for a new centre and say that they cannot have that money because a guy down the road wants a better-quality education and he does not want to pay for it. I do not think that is fair. We will have 3,500 extra kids accessing early childhood education in New Zealand because of this Government, and that is a wonderful thing.

One of the other wonderful things we have talked about is the area of science and innovation, of which I am a big fan. We have Dr Mapp in the Chamber. He is a wonderful proponent of the great work that is being done in this area. We inherited a ridiculous policy on what was called a tax credit. I will tell members about some of the stupidity that occurred under that policy. Every accounting firm in New Zealand thought it was Christmas—every accounting firm. Every senior tax accountant in New Zealand suddenly ratcheted up his or her rates. They were suddenly making $300,000 or $400,000 extra in billing, because they were going to anyone who had any form of research and telling them not to worry about it and that they would fill in the forms and get them some money and they would take a cut. That is what we saw. We saw not one extra dollar of research and innovation, but we saw every accounting firm in the country make money. I know that that was the case, because lots of my friends did it and they were very open about it.

Under Dr Mapp and our John Key - led Government we have seen a move towards innovation. We have seen some wonderful movement in terms of grants to incredibly innovative companies, a couple of which I have very fond knowledge of. One company is based on rockets and the other makes jet packs. They are wonderful companies that have a great future in New Zealand.

Hon Dr Wayne Mapp: YikeBike.

AARON GILMORE: And YikeBike. YikeBike is an innovative biking company in Canterbury. Those are the sorts of businesses that will grow New Zealand, create our wealth, and perhaps give us innovative jobs. The challenge for us is to create real, sustainable jobs. People will pay taxes, and that will get New Zealand back into a sustainable position.

I will talk briefly about a series of disasters that we have encountered, particularly the earthquake in Canterbury. In Christchurch, where I live, a series of significant problems has occurred, as members will know. With regard to my family, my brother’s home has been destroyed, my mum and dad’s home has been destroyed, and my home has been damaged. Mrs Adams’ house has been damaged. One of the major aspects of the situation for us is rebuilding the infrastructure of Christchurch. I am looking forward to the big presentation on Friday, a blessing for the first part of the infrastructure rebuild in Christchurch.

I will tell members a little thing about some of the reasons why the people of New Zealand will re-elect a John Key - led Government on 26 November. When I was first elected, a lady called Joan knocked on my door. Joan lives in a State house not far away from my electorate office—my out-of-Parliament office, sorry; I am not allowed to call it an electorate office—and she had been trying to get her fence fixed for 8 years. She was a former Labour Party member. She could not get the fence fixed. She had a dog and a 2-year-old grandchild who kept running through the fence. She could not get it fixed. I rang the Housing New Zealand Corporation, which said something about there being problems, problems, problems and massive bureaucracy and that it would take all these forms being filled out before the fence could be fixed. Do members know what we did? We asked the local people to come down to fix the fence, or we would have fixed it ourselves. For 9 years Joan had been dealing with the local Labour MP, trying to get things fixed. The crazy thing was that we got it fixed and in 5 minutes she went from being a Labour voter to a National voter because we changed a little bit of her life in some way.

Carol had a different situation. Carol’s heater had gone bung, and she could not work out how to make her house warmer and better. We arranged to have her house insulated. She ended up putting an energy-efficient device into her home. The result of that help is that she thinks the National Government is the greatest thing in the world. For 9 years she tried to get help from a Labour Government that would not give her help but told her time and time again that she was not important enough and that she was not of the right group for it to help in any way.

Those are the reasons why a National-led Government will be re-elected on 26 November. It is all about science and innovation, investment in infrastructure, smarter public services, a fairer and better tax system, and smarter regulation. That is why on 26 November we will see a John Key - led Government and a return to prosperity for New Zealand. Thank you.

CAROL BEAUMONT (Labour): I rise to speak to the Prime Minister’s statement to Parliament. I listened to the Prime Minister present his speech and I have listened to the speakers since, and I think I will not be alone in this country in asking “Is that it? Is this the plan? Is this what many New Zealanders—the overwhelming number of New Zealanders who are not the rich, and who are struggling with ever-rising prices, with job losses, and with reductions in income—are going to get from this National Government?”. Of course, the answer is that, yes, that is what they are going to get—not much.

There are 265,000 New Zealanders currently jobless. This document, this so-called statement, is an insult. It is a document full of platitudes and focus-group-tested spin. I ask this question of members opposite: does this Government think New Zealanders are stupid? Well, I can assure those members that New Zealanders are not stupid and that they are increasingly seeing through the spin. They are increasingly questioning the ability of this Government, a Government with no plan, a Government that governs for the rich and ignores the rest. What does the so-called statement include? It has privatisation, it has cuts to public services, and it includes bashing beneficiaries—all the usual things. Maybe they are dressed up in slightly different language, but that is what is there.

It is outrageous that the Prime Minister and Government speaker after Government speaker have tried to blame the state of the economy and the ever-burgeoning debt on Labour and on the recession. That is absolutely outrageous coming from a Government that borrowed to fund tax cuts. It cost $2.5 billion to fund tax cuts for the top 10 percent of New Zealanders, the very group who did not need that assistance, and the group who would not use the money in a way that would stimulate our economy. That was from a Government that has taken a hands-off approach to economic management, and that has had no plans for jobs or economic growth. I listened to the Prime Minister on Morning Report, again spinning the same old line, but the reason there is such huge Government borrowing is to cover the costs of funding tax cuts for the rich. It is simple; that is what it is about.

The Prime Minister’s statement will give no comfort to low and middle income New Zealanders who are struggling to make ends meet. Some New Zealanders are doing it harder than others: Māori, Pasifika, young New Zealanders, and women. We will be making sure we talk to the Minister of Women’s Affairs and raise every single issue in relation to the difficulties that people are facing in the job market, in trying to make ends meet, and in trying to ensure their kids have uniforms to go to school in and food in their bellies. There are many, many people like that.

There is no plan in the Prime Minister’s statement. There are no ideas to deliver growth and jobs. In fact, there is quite the contrary. This statement provides a prescription for job losses in the public sector, job losses for New Zealanders who work as public servants. As a consequence, there will be reductions in the services for New Zealanders that those public servants provide. Those losses will be on top of the 265,000 New Zealanders who are already jobless. That is a disgrace.

But what is truly disgusting is that the Government is so obviously twisting the facts. No matter how many times it is denied, the Government’s own actions have led to the need to borrow $300 million per week. The Government’s own actions have led to that, and the public are getting that message. This is about priorities; it is about choosing. The Government chose to make unaffordable tax cuts that benefit a small minority of New Zealanders, rather than investing in our people—in skills development, job creation, and economic development. In other words, that was the choice the Government made. It was the Government’s priority to give tax cuts to the top 10 percent of earners. It was a choice.

The Prime Minister and all of the National members who have stood up have asserted that the problem of Government debt is because of the previous Labour Government or the recession, but they cannot really believe what they are saying. I do not believe that those members opposite really believe that. Similarly, I cannot believe that they can stand up over there and talk about a tax switch, and claim that New Zealanders are no worse off under a National Government. If members opposite believe that, then clearly they are not talking or listening to low and middle income New Zealanders. Members across the House must spend their time with the top 10 percent of earners, who are better off under this Government—the rich rather than the rest.

I see people in my office, I see people out and about in the Maungakiekie electorate, and I consistently hear their concerns about how hard it is to make ends meet. I was talking to staff of one of the budgeting services near my office, and they said that if people rang up and said their electricity was going to be cut off that day, they would say to those people that they could see them in 2½ weeks, because that is how busy they are. I spoke to staff of a church in the electorate, and they said they have just had the busiest January ever with their food bank. People are hurting, but members opposite seem not to care about that. That was a choice; it was a choice to put resources elsewhere.

Housing is also a huge issue, certainly in Auckland. The New Zealand Herald has recently provided some pretty good coverage of what is going on with the rental housing market in Auckland. Housing is the issue that people most often come to my office about. They have difficulties in getting into a State house. There are big waiting lists for State houses because people do not have the income to pay for private rentals. What is the Housing New Zealand Corporation doing? It is referring those people back out into the private housing market. There are people sleeping in garages throughout Auckland. This week the Salvation Army will be making its annual state of the nation report, and it is my expectation that it will say that the problem has become even worse since it identified it last year.

Why was the choice not made to spend money on housing instead of tax cuts for the rich? Why was the Government not looking at building more houses as part of a stimulus package—more Housing New Zealand Corporation houses or affordable housing options in partnership with other organisations? That could have been used as an opportunity to build our skills base, to train people in building skills—skills that we are no doubt losing to Australia, and will lose at an ever-increasing rate with wages being 30 percent higher there and with the demand in Australia for a whole lot of rebuilding to be done.

I will move on and talk about skills. The previous speaker mentioned skills in passing, as he was sitting down. Well, the reference to skills in the statement of the Prime Minister was bland rhetoric. That is what was in there. In response to a real skills shortage and crisis in New Zealand we have bland rhetoric. Despite the needs of many who have lost their jobs or who are working in struggling businesses, and the need we have in our country to lift our skill base, to improve workplace productivity, and to strengthen our economic performance, National continues to take a limited and unambitious approach to the issue of skills development. Investing in upskilling our people would pay huge dividends for people individually, for their families, for their communities, for their workplaces, and for our economy. Significant investment needs to be made in those who are already in work or who have recently been in work. National cut over $50 million from industry training in 2010, and in 2011 it is clear that there will not be bold initiatives in this area. That $50 million could have funded 55,000 more students in industry training.

What does the Prime Minister’s statement say about skills? Well, it makes reference to examining and improving existing provisions. Although no one would argue with the need to improve the quality of what is already in place, the magnitude of the skills shortages and the increasing number of people becoming unemployed require a great deal more than that. This Government continues to support a low-wage economy, and continues to support workplaces competing in reducing wages and conditions. That will not provide the framework necessary to lift both skills acquisition and skills utilisation. In fact, there is just about more about the 90-day fire-at-will provisions in the Prime Minister’s statement than there is about the issue of skills development. Of course, hand in hand, we have seen the recent announcement of a 25c per hour increase in the minimum wage.

I just want to say there has to be a commitment to provide more opportunities to retrain those affected by the current economic situation, but they will not get that from this National Government.

AMY ADAMS (National—Selwyn): Yesterday I sat here in this House and listened to the Prime Minister deliver one of the probably rarest things in politics, which was an honest and very upfront assessment of where New Zealand is and what we actually need to do if we are going to get ahead. I think that is one of the reasons New Zealand is coming so strongly behind John Key and his Government, because it is such a breath of fresh air to have a Prime Minister who does not play games and try to score points. He stood here and said very clearly to New Zealand: “This is what we need to do if we are going to build the sort of country that New Zealanders should have, that New Zealanders want, and that New Zealanders are looking forward to us delivering.”

We could see that, could we not, when he stood up at our first caucus of the year, and in front of the media, and said: “Election: 26 November.” There was no mucking around, hanging on until the last minute, game playing, or trying to give the other side a bit of an advantage. He said: “Look, New Zealand needs to know. We’ve got a busy year. Let us make sure that everyone knows early on where they’re going.” I think New Zealand likes that. He stood up and said: “If you vote for me, you won’t get Winston Peters in our Government.” He said: “A vote for Winston Peters is a vote for Phil Goff.” Why would he not? New Zealanders want to know what they are going to get. New Zealanders want to know what their vote will give them. New Zealanders can make that choice, they can make a decision, but at least they know with us what they will get. They will not get a whole lot of smoke, mirrors, game playing, and desperate clinging to power. We will put out what we are doing. If New Zealanders want us to get this country back on track, they will continue to back us as they have since November 2008.

What is really interesting to me, though, is that if Labour members cannot debate with us on the merit of our policies, which clearly they cannot, they simply resort to misleading the public. They mislead the public on the grounds that if they say it often enough, maybe people will forget that it is not true. Let us go through it—let us go through it. What have we heard over and over in this debate? We have heard about tax cuts for the rich. Let us look at that, shall we? There were tax cuts for everyone, actually. [Interruption] I ask Mrs Chadwick to listen; she might learn something. Seventy-five percent of taxpayers in this country now pay half the tax, and have half the top tax rate, that they had under Labour. Seventy-five percent of all taxpayers pay at that rate.

Then Labour members said that the tax cuts were funded by borrowing. They said the tax cuts were funded by borrowing. Let us look at the truth there. The tax cuts are fiscally neutral because they were paid for by putting up GST. Do members remember that, or remember the “Axe the Tax” bus that they have conveniently forgotten about now because they will actually keep that new GST rate?

Aaron Gilmore: What are they going to do about that?

AMY ADAMS: Oh, well, they will be keeping that now, because they need that. They need that, plus a whole lot more tax. So rather than debate with us on what we are actually doing, they mislead the public and hope that if they say words like “cuts” enough, it will sink in. But, you know, I have more respect for New Zealand than that. I think New Zealanders know they are paying less tax now than they ever did. I think they know that when we lowered their tax, we funded it through increasing GST to discourage consumption. I think they know that New Zealand cannot afford the sorts of reckless borrow-and-spend policies that are all Labour has. All Labour knows to do is to throw the money around and never mind about the debt. That will be someone else’s problem: “Let us just get back into power. We will deal with anybody, we will get into bed with anybody, and we will promise anything; we just have to get back into power.”

That is not what National is going to do. That is not what this Government is going to do. The nice thing about this election campaign is that already we have a clear distinction between the two parties. We have a clear distinction between the two parties. If New Zealand backs National it will get sound financial management. It will get a Government that prioritises the spending of taxpayers’ money—because that is what it is: it is not our money; it is taxpayers’ money—as if it were our own. We will not throw it around; we will make sure we get value for every dollar.

We will create productive jobs—productive jobs, not jobs in the public sector and jobs the unions want. We will get jobs that actually add to the wealth of this country and raise incomes. Do members know how we will do that? We will do it by having an environment that encourages investment in New Zealand businesses. It is not rocket science, but that is what we will do and what the other side has failed to do. Actually, on that point, one of the statistics that jumped out at me was the fact that thanks to the labour law changes that Kate Wilkinson has brought in, and thanks to the 90-day trial periods, 13,000 new jobs have been created—13,000 new jobs—because we are creating an environment that makes businesses have confidence to invest in New Zealand. What is Labour’s answer? Those members will put up the minimum wage. What will that do? It will cost 6,000 jobs. Six thousand jobs will be lost, but that is their policy for job creation.

This National Government fundamentally gets the point that money has to be earned before it can be spent. It has to be in the bank. It is only when we get back to surplus that we will have any sorts of choices, and any ability to start spending and looking at the wish list. If we cannot get back into surplus, this country will be on a downward spiral. That is why we are working so hard to get us back there.

Labour has promised to borrow and spend—borrow and spend. Already it is only early February, and it has promised $5 billion more in spending than this Government. We are borrowing $300 million a week. I hate that; I hate that we need to do that. But we have a party over there that wants to borrow $5 billion more, and it has not even started its campaign promises. Those members are clearly going to promise everything to everyone. The most amazing thing is that they obviously have a good source of magic beans to pay for it all. That is the fun bit—the pixies at the bottom of the garden making the money. But do members know what that really is? It is irresponsible, it is self-serving, and it is shallow, petty politics at its worst. That is the message Labour has given to New Zealand: “Don’t worry about whether you can afford it; just keep spending. Just keep spending it. You want it? Go and get it. Don’t worry about whether you can pay for it. Live beyond your means. Get into debt. Keep spending, and don’t spend it on assets. Don’t spend it on infrastructure and stuff we need. Spend it on consumables. Spend it on stuff that won’t work.”

Do members know what Labour left this country with after 9 of the best economic years we have ever had? A decade of deficits—a decade of deficits! It left us with 5 years of recession in the productive sector and a devastated export sector. My electorate of Selwyn relies on exports, tourism, farming, and manufacturing, but Labour devastated those industries. It devastated them. It left us with an appalling shortage of infrastructure. My communities cannot get ahead with the poor state of roading, broadband, and cellphone coverage in our area. What do we have now under Steven Joyce’s Rural Broadband Initiative? Some 86 percent of rural households will shortly have high-speed broadband and cellphone coverage. That is the sort of infrastructure spending we need in order to get ahead.

Labour’s management left families vulnerable, it put workers at risk, and it did just what it needed to do to cling to power. Everything Labour members have said since then makes it very clear that they have no intention of running things any other way. The external indebtedness of this country puts us on a par with Spain, with Portugal, with Greece—

Kris Faafoi: Oh!

AMY ADAMS: Kris Faafoi is laughing. He has clearly never looked at the numbers. I invite Mr Faafoi to come along to the Finance and Expenditure Committee one day and learn how perilous the situation is; Labour members could not care less. Are they really incapable of seeing the damage that their promises would do to this country? Are they really incapable of seeing it or do they just not care? That is what I wonder—do they just not care or can they really not see it? I find it interesting, though, that Labour is so focused on how much money we are spending on something: “How much money are you spending?”—as if how much we spend is the only good measure.

Aaron Gilmore: They don’t care about the outcomes.

AMY ADAMS: That is right. Do members know what I care about? I care about the fact that every year we now have 20,000 more elective surgeries than there were under Labour.

Hon Steve Chadwick: People are getting sicker!

AMY ADAMS: I care about the fact that 20 percent of our children leave school with no future, I tell Mrs Chadwick, because her Government was happy to sit back and let the unions run the education system rather than having a system that prioritised children learning to read and write, which is what this Government will give. Labour members can talk about cuts if they like; they are not happening. We are spending more on early childhood education than ever before, and we will make sure the children of this country can read, write, and get ahead. We will not preside over wasted opportunities. First we will fix Labour’s mess, and then we will turn this country into the best it can be.

CARMEL SEPULONI (Labour): All I have to say to Amy Adams is this: no plan, no progress, no ideas, no ability to control what is going on, no vision for this country, and no way this Government should be re-elected in 2011. That side of the House had 9 years—9 long years—to think about how those members might run this country, yet here they are, 2 years into their term, and they still have no plan. They still do not know what they are doing.

I have only 10 minutes to comment on the very uninspiring speech that was delivered by John Key yesterday, and from the get-go it is impossible to know where to start and how to cover everything that needs to be said. We could start with the rising cost of living and the impact that is having on ordinary Kiwis. We could add to that the fact that wages are not going up despite the cost of living going through the roof. We could start by reminding everyone that the Government pulled millions of dollars out of research and development—money that could have gone towards investing in clean technology, which is something New Zealand should lead the world in. We could talk about the State assets that that side of the House intends to sell off. We could talk about the fact that National intends to eventually sell off the assets to foreign investors with no regard for the real mums and dads who currently own them. We could talk about the fact that National has continually bashed beneficiaries over the course of its time in Government to try to shift the attention away from the fact that it has been unable to create jobs and the fact that the real problem is there are no jobs for New Zealanders to go into. We could talk about the fact that last month alone 1,000 more people joined the other 68,000 people who are on the unemployment benefit.

Where do we start? There are so many examples of why the National Government is not fit to govern this country. But I do think that a good place to start is its tinkering with our education system and the damage it has caused. I visited a number of early childhood education centres in the Waitakere electorate over the last 2 weeks—most of them were second visits; I had visited most of them last year. All of them stand to lose because of the Minister of Education’s decision to cut $400 million out of early childhood education, yet we have to listen to just about each and every National MP telling us that no money has been taken out of the early childhood education sector and that $91 million of additional funding has been added to it. We on this side of the House know that is not true, and every single educator working in that sector knows that it is untrue, as well.

I have been to public meetings and I have listened to the commentary from MPs on the National side about the positive benefits that our Pacific community can look forward to because of the cuts made to early childhood education, or, as they like to say, the additional funding that has been put in. National MPs like to go out there and say that no gains were made for Māori and Pacific early childhood education under Labour, and right here I have information that tells me straight away that not only did the participation of Māori and Pacific children go up but also, from 2001 to 2008, qualified Pacific early childhood educators increased by 534. That came directly from an investment by the previous Labour Government. Also an additional 479 Pacific early childhood education centres opened during the Labour Government’s term. That was because the Labour Government saw it as a priority. We have to sit here and listen to Anne Tolley tell us that National plans to build an additional five centres—five centres after 2 years. Under the previous Labour Government 479 centres were built for the Pacific community alone. That side of the House has its priorities in the wrong place. The early childhood education sector knows, and very soon every single parent and grandparent who has children in those early childhood centres will also know, that that is the case.

When we look at the early childhood education sector, we see the Government does not understand there was not just an investment by Labour but an exceptional commitment by the Pacific community to ensure that Pacific children have the same start as anybody else. The Pacific population is one of the fastest-growing—and the youngest—populations in New Zealand. Any adverse changes to the accessibility of educational resources, like National’s slash and burn of early childhood education funding, will have a disproportionately negative impact on Pacific communities.

Let us go from education to welfare. Last year the Social Services Committee had to sit painfully through the changes that the National Government’s Minister for Social Development and Employment pushed through, yet it seems that we have even more to not look forward to. John Key has revealed plans for radical welfare reform, including pushing people off the domestic purposes, sickness, and invalids benefits. He said that it is a source of shame that people remain on a benefit for years, even though work is available to them. The Government says it will provide more detail about its changes when a welfare reform working-group reports back later this month, but the areas that we know are likely to be targeted include getting beneficiaries with children back into work, along with invalids and sickness beneficiaries, and tackling youth skills.

We believe, even on this side, in welfare reform. But the best reform we can possibly aim for is the type of reform that creates jobs for people to go into. We cannot tackle a welfare problem if we are not creating jobs for people and growing the economy. That has been the failure of that side of the House. It has done nothing to create jobs, and nothing to build the economy in this country post-recession. In fact, John Key has admitted that we are slipping back into a recession, when countries like Australia do not seem to have gone through one at all, and other OECD countries seem to have come out unscathed, unlike us. The only plan that we have seen from John Key and his National Government is to borrow billions of dollars in order to give tax cuts to the top earners, to hock off our valuable State assets to foreign buyers, and to slash and burn essential public services like hospitals and schools. Labour does have a plan. We stated it very clearly. We will stop the asset sales, we will introduce a tax-free zone to help all New Zealanders cope with the rising cost of living, and we will create a stronger export economy, a fairer tax system, and strong public services. Those are all things that the National Government is unable to promise New Zealanders at this time.

The Prime Minister’s statement to Parliament—this is something I found really interesting—included a claim that his Government had placed a special emphasis on the rights of victims. He failed to state that that emphasis has been negative and detrimental to the rights of victims. One example of that is National’s refusal to enact the Domestic Violence Reform Bill, which was introduced by Labour during its previous term of Government. We know, and National knows, because the bill has been through a select committee, that it was a culmination of extensive consultation with organisations and key stakeholders who support victims of domestic violence. Instead, whilst our bill, which was very thoroughly consulted on, languishes on the Government’s Order Paper—National passed its own watered-down version—the National Government has done nothing to give domestic violence victims the protection and support they need moving forward.

In the last year, the National Government added insult to injury by slashing counselling and support for victims and survivors of sexual assault. Previously they were able to access counselling support via ACC on the recommendation of their counsellors or therapists. The National Government imposed more stringent measures, which included the requirement that victims/survivors be subject to multiple interviews with different health professionals. The Minister for ACC on that side of the House knows very well that when an independent report was released, it criticised the Government and the actions that it had taken. The Government was then forced to do a turn-round and cut back on some of the more ruthless aspects of what it tried to do, but by that time it was too late and the damage that had been done was immeasurable.

Over the past 2 years that side of the House has caused New Zealand a lot of pain unnecessarily and it will only get worse. New Zealanders recognise that that is the case. Labour does have a plan, Labour is progressive, and Labour has a vision for the country. Watch this space, I say to Ms Goudie, because Labour will be re-elected to Government in 2011.

JONATHAN YOUNG (National—New Plymouth): As I came to the Chamber, I passed an exhibition about Anne Frank. I am sure that many of us here in this Chamber will recall studying her or hearing about her life. She said that everyone has inside them a piece of good news and that good news is that we do not know how great we can be, what we can accomplish, and what our potential is. That remarkable young girl lived and experienced utter hardship yet prevailed to be one of the great examples of courage, as seen through her writing. She died of typhus in a concentration camp in 1945 at the age of 16. She said: “I finally realised that I must do my schoolwork to keep from being ignorant, to get on in life, to become a journalist because that’s what I want! I know I can write. … but it remains to be seen whether I really have talent. … When I write I can shake off all my cares. My sorrow disappears, my spirits are revived! But, and that’s a big question, will I ever be able to write something great, will I ever become a journalist or a writer?”.

I tell members this story because no doubt many of us have walked past her exhibition on display here in our Parliament this week. She has become great, and the greatness we celebrate was already there in the words she was writing as a teenaged girl.

The education of our young people is incredibly important not only for their success but also, I think, for the success of our country and its future. We are very committed to the education of young New Zealanders, who burgeon with the same promise and potential. The tragedy for many of those young people is that their potential gets buried by a lack of achievement at an early age, and they carry through with them that lack of achievement into every following year and level of their education.

Our Minister of Education, the Hon Anne Tolley, says that the findings of an international study by the OECD show that more needs to be done in our nation to lift achievement for all New Zealand students. The 2009 results from the Programme for International Student Assessment compared the performance of 15-year-olds in reading, literacy, maths, and science. New Zealand continues to have a disproportionate number of lower achievers, and that has not changed in the past 9 years. Further, there has been no change in our reading performance since 2000, and no change in maths since 2003. That is grim news, and it is what has empowered National’s education policy.

There is some good news as well. Our top students are some of the best in the world. In reading, maths, and science we performed well above the average for OECD countries. This is a credit to our teachers, students, parents, and our education system. However, we are faced with this challenge to work together to address the issues raised in this report. It is why our Government introduced national standards in education, which is not a test but an assessment to discover difficulty early on so it does not become entrenched, and so we can see a shift in the disproportionate number of lower achievers.

I speak to educationalists all the time. They tell me they already know who the people are who are in that failing tail. My answer, then, is that, obviously, identifying them has not brought the solution. The solution is to ask what we do next. National standards are a tool to assess where a child is on their educational journey, compared with where they could be or ought to be. It is a measure of progress against potential. That is the point. Educational achievement is built upon the foundation of previous learning, but if previous learning does not exist or is deficient, and if no rungs are climbed on that educational ladder, it leaves our young people aspiring for things they cannot reach. We have discovered that one in five students is leaving school without the literacy and the numeracy achievements to take them on to an apprenticeship or to further training in order that they may engage in the modern economy.

We have also discovered that one in five 15 to 19-year-olds cannot find employment at present. It is an interesting correlation. Twenty percent of young New Zealanders are struggling to learn and struggling to find employment. As the OECD report stated, and Opposition members are usually so keen to quote the OECD, we have a disproportionate number of low-achieving young people—young children who have intelligence and potential but who, for many reasons, have been disconnected from learning. It is because we believe that they have intelligence and potential that we have put national standards in place, which has relevance in diagnosing those disconnects, and which then assists educators to determine the next step in those young people’s educational journeys.

Our policy regarding early childhood education is very much part of discovering and releasing the potential of young children. We value early childhood education because we know it helps to prepare children for future learning and assists parents to participate in the workforce. Our policy is to broaden our reach to those who are disconnected from learning. In some parts of the country, up to 40 percent of our children are missing out on attending early childhood education centres. As proud as members of the previous Government have sounded on this, the statistics from both the Education Review Office and the OECD tell us that there are and have been gaps that children have been falling through for some time—for 9 years, up to a decade. Under the previous Labour Government’s watch, no significant progress was made with those young people who were disconnected from learning. It starts with early childhood education. There are masses of young children missing out on taxpayer investment in their future. This Government is making a significant investment. There is more invested per child in early childhood education than in primary school education or secondary school 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. This compares with an average of $5,528 for a primary school student and $6,733 for a student at a secondary school. Investment in early childhood education has never been higher before. This is the big news: it is reaching more children than ever before. We on this side of the House are proud of that.

Earlier this year John Key said: “This Government views our education system as one of the fundamental tools for creating an egalitarian society where all New Zealanders have an opportunity to succeed.” That statement was made at the beginning of the year. We are creating greater educational opportunities for more young New Zealanders than ever before, to give them the best possible start in life so that they do not end up being a sad statistic in the bottom 20 percent. Under the early childhood education system we inherited from Labour, the Government will this year spend a record $1.4 billion, up from less than $400 million a decade ago. Despite this, the number of children starting school with some form of early childhood education has barely increased at all, and in some parts of the country up to 40 percent of children are missing out altogether.

We have prioritised building a stronger economy and building skills and knowledge in our young people so that children can be future-proofed as they look to their working futures. Thank you.

Hon Sir ROGER DOUGLAS (ACT): The new year is an opportunity for a fresh start. Traditionally, people make resolutions that seek to cut back on the excesses they indulged in the year before. It seems that the National Government has yet to decide on its New Year’s resolutions. I decided that maybe I could save them the hassle, so I put together a list of resolutions that National could adopt, which would help New Zealand.

The first resolution should be to slim down. The National Government, after 2 years of bingeing, has made government bigger than ever. Total Government expenditure reached just over $81 billion in 2010. That is almost 43c in every dollar earned. Such expenditure is financed by borrowing around $300 million every week, simply because the amount of tax that goes into the Government coffers is less than it spends. With government so big, is it any surprise that our economy is not getting off the ground?

Growth in the New Zealand economy remains at around 1 percent. When the economy is leashed to a weight that spends over 40c in every dollar, it is easy to see why we are going nowhere. In the meantime, we see other countries such as Singapore float away, with average annual growth rates of 4 percent or more. The Singapore Government spends a mere 17 percent—17c in every dollar. That might be all right if we were getting better services than Singapore. The reality, however, is that not only does our spending make us poorer than Singapore but across the board we also have worse poverty, worse education, worse health care, and more crime—and the list goes on.

Forecasts show that Australia will be 42 percent wealthier than New Zealand by 2025. Because of this, 412,000 New Zealanders, the equivalent of all the residents in the Wellington region, are likely to leave New Zealand for Australia over the next 15 years. The first New Zealand resolution that we should have is clear: slim down.

I find it unbelievable that National, which rightly complained so bitterly about the years of wasteful spending by the Labour Government, suddenly, when it gets into power, cannot find any wasteful expenditure to cut. To the contrary, National seems to have borrowed more money to spend. The simple truth is we will never spend or tax ourselves to prosperity. It is a shame that National still needs to learn that basic lesson.

The second resolution should be to focus on what really matters. Core services, such as education, health, and welfare—65 percent of core Government expenditure—are very important Government services. However, the Government has been increasingly bad at providing them. Our education system is failing our young people. A third of school-leavers fail to achieve National Certificate of Educational Achievement (NCEA) level 2 or higher. For Māori, 56 percent will not gain NCEA level 1 or above before they leave school. Some of our schools are so unsafe that the police are stationed within them. A classroom surrounded by police officers is not a proper learning environment. It is hardly surprising that 30,000 schoolchildren cut class every day. Children are voting with their feet and are choosing to be away from dilapidated classrooms, rigid curricula, violence, and the monotony of the classroom environment. In education, the Government should resolve to empower parents.

In welfare, 13 percent of the adult population are receiving a benefit. That is compared with 2 percent in 1960. Approximately one in five Kiwi children will live in a benefit-dependent household. Recent figures show over 350,000 people are on some type of benefit. For every six workers, one person is on a benefit. Add in superannuation and the ageing population and it is likely that our children will live in a world where every one person receiving a Government handout will be supported by just two workers. This is simply not sustainable.

In health, the number of practising physicians is 2.3 per 1,000 people. This is almost one fewer per 1,000 people than the OECD average. The number of hospital beds per 1,000 people is 6.2. This is over one hospital bed fewer than the world average. Every year hundreds of people continue to die while on waiting lists because our health system is overstretched.

If Government tax-funded money could solve all these problems, New Zealand would have solved them already. We spend vast amounts on all these areas, but get substandard service in return. We have made ourselves poorer to afford all this. But do we get the kinds of services we want? We need to rethink the approach in all of these areas.

In welfare, the Government should resolve to get two-thirds of the people on benefits back to work. Despite unemployment reducing sharply between 1999 and 2008, expenditure on welfare soared. Part of this was done by transferring people on to sickness and invalids benefits. We will never solve the problem by just moving people around. The number of people on sickness and invalids benefits has increased by almost 70 percent in the last decade. In that period the population increased by 12 percent, and spending on health almost doubled. It is very difficult to argue that these figures represent a declining level of health in the population. Rather, it seems that for some it has become a lifestyle, rather than a transition.

In health, the Government should resolve to restore the right incentives. If we look at other places around the world we can find practical templates to model our health care system on. Singapore has one of the best health-care systems in the world. Its infant mortality and life expectancy rates are amongst the best in the world. However, what makes it amazing is its cost-effectiveness. Its Government spends very little money on making it a good system. It spends between 1 and 3 percent of GDP annually on health care. In contrast, New Zealand spends between 8 and 9 percent of GDP. Singapore makes it compulsory to have health savings accounts in which individuals pre-save for medical conditions, and they have a catastrophic insurance on top of that.

New Zealand’s outlook is bleak. Today we sit in a position similar to the one we had in 1984. The difference, though, is that in 1984 we made tough decisions. We outlined the goal we wanted to achieve, and moved swiftly to attain it. The public were supportive because they were able to see what we wanted to achieve, and returned the Government with an increased majority in 1987. The point is that we did this by pursuing the right policies, not by doing what might be popular in the short term.

If members cast their minds back over the last 2 years of the National Government, can they think of one piece of quality reform that has made New Zealand better off and will be remembered by anyone in 10 years’ time? I find it somewhat amusing that a party that has spent 9 years in Opposition arguing against most of the changes brought about by Labour, such as Working for Families, the lack of privatisation, the abolition of youth rates, the freezing of tariffs, and the re-regulation of the labour market, amongst others, then does nothing about them when in power. National does not seem to get it, and until it tries to set the agenda, rather than follow blindly what Labour leaves in its wake, National will continue to fail New Zealanders.

Dr PAUL HUTCHISON (National—Hunua): Sir Roger Douglas is absolutely correct in quoting Singapore in terms of the remarkable results that it gets from its health system. As he said, Singapore’s current expenditure is in the order of 3.5 percent of GDP, compared with New Zealand’s at 8 percent, Australia’s at 9 percent, and the USA’s at 15.5 percent, yet Singaporeans live longer and the infant mortality rate is less than half of ours. It is underpinned by a variety of very clear principles that were worked out in a white paper in the 1990s. But I must add to that. I do not believe that the New Zealand ethos would quite accept the autocratic way that Singapore works. But we certainly have lessons to learn, and we can learn enormously from the remarkable outcomes that Singapore has achieved.

Yesterday Prime Minister John Key was clear and concise in his speech. National will focus on building a strong economy, which is vital for an excellent health, welfare, and education system. National will focus on building better results from our public services, and, goodness me, it needs to. We have Labour’s record over 9 years of spending double the amount of money, for absolutely no increase in productivity.

John Key’s speech was in sharp contrast to that of Phil Goff, who presented a somewhat vein-popping, shaking-hand charade that proposed everything that was the reverse of what he said he believed in back in the 1980s. He failed to acknowledge that the last Labour Government had built up the Public Service by 50 percent, over 9 years, into a creaking bureaucracy with very poor productivity. As I said earlier, that was particularly the case in the health sector. Contrary to the advice of the Savings Working Group, Mr Goff wishes to spend, spend, spend, and so far the cost has been tallied up to over $5 billion, and there is still much of the year left. He has not explained how he will get the money to pay for his promises—all in an environment in which the Savings Working Group says New Zealand’s level of debt is too high. Net foreign liabilities, public and private, amount to 85 percent, leaving New Zealand vulnerable to economic shocks. According to the group, it is absolutely vital that we increase savings as an essential component to reducing our vulnerability.

National is taking a prudential and measured approach to the economy, in stark contrast to Labour’s somewhat reckless and irresponsible policy to spend and bribe the vulnerable, just as it did back in the 1980s and repeated over the last 9 years. I was astounded but not surprised to listen this afternoon to that veteran shroud-waver, the Hon Annette King. She was complaining that the Prime Minister should have talked about growing the economy. I tell the Hon Annette King that she was given a copy of his statement. She could have read it, but she continues to be in denial about what has happened over the last few decades. I am very happy to present her with another copy.

Why did I call her a shroud-waver? In 1998, when she was the Opposition spokesperson on health, she said it was criminal that the then Minister of Health had allowed waiting lists to expand out to 86,000, yet 2 years later she had presided over the building of one of the most complex, cumbersome, and lowly productive health systems in the history of New Zealand. Waiting lists had blown out to 140,000, and she was culling the waiting lists in lots of 10,000 at a time. In very sharp contrast to that, over the last 2 years Minister of Health Tony Ryall has achieved some very remarkable results, which are shown up in the health targets. They include shorter waiting times in emergency departments and improved access to elective surgery, with something like 400 extra elective surgeries per week. We have shorter waits for cancer treatment, with 99 percent of people who were referred for radiation starting treatment within 6 weeks. I can vividly recall under Labour literally planeloads of patients going across to Australia for radiation therapy. We have increased immunisation, with 87 percent of 2-year-olds now fully immunised. In the Lakes District Health Board there has been an increase in immunisation of 22 percent in just the last year. There is better help for smokers to quit, and better services for people with diabetes and cardiovascular problems.

Those are objective advances that have occurred in the last 2 years, and they are quite remarkable. It is a good thing that, at least, Labour voted with the Government on the recent New Zealand Public Health and Disability Amendment Bill, which has allowed for greater national and regional coordination of our health system, and the introduction of the very important Health Quality and Safety Commission.

I was also very glad that the Hon Annette King said in a speech in October 2010 that she had been “thinking and re-examining all of Labour’s policies.” I believe it will be very good for New Zealand if she stays in Opposition and continues to think for a very, very long time. I was also glad that she had decided to work on a policy she called “Putting Children First”. There is no doubt in my mind that over the last few decades, or even longer, New Zealand’s record at putting children first has failed miserably. Successive Governments have failed them, and it is hugely important that that situation is reversed.

I sincerely ask Mrs King to look carefully at the excellent policies the Government is evolving. They have to be cross-sectoral, they need to be evidence-based, as is so strongly advocated by Sir Peter Gluckman and people such as Professor David Fergusson, and they need to operate from pre-conception onwards. I note that Annette King talks about the child from the age of nought to 2, but she must think prior to that. I am sure the Hon Stevie Chadwick would agree with me, because, after all, the toll on foetuses in New Zealand from alcohol, drugs, and tobacco is hugely profound and substantial. National will very shortly bring through yet more legislation to progress measures reducing tobacco and alcohol, along with our coalition partner the Māori Party, in this country. That has to make a huge difference.

Hon Steve Chadwick: Not alcohol labelling? Oh great!

Dr PAUL HUTCHISON: I am very sad to see Stevie Chadwick not taking this issue extremely seriously.

Annette King must be realistic. I note that in the beginning of her October speech she said detailed announcements, including costings, would be made in due course. Once again, we see from the Hon Annette King a situation where she talks, and her rhetoric is extraordinarily voluble, but we do not see the record. In stark contrast we have a National Government that has a proud record of evidence-based improvement in the health system.

DAVID SHEARER (Labour—Mt Albert): That speech from Dr Paul Hutchison was 10 minutes of my life that I will not get back. It is not often that I agree with Sir Roger Douglas, but his analysis of this economy as bleak was exactly on the button. His leader’s belief that the economy is broke is exactly right as well. Rodney Hide agreed that he needed to be with a National-led Government, even though the Government had broken the economy, for his own political survival and that of his party. His party agreed with him so wholeheartedly that one of them even stood up afterwards and gave him some applause.

This country is going backwards, and it is not good enough. We deserve a lot better. I remember that last year—and this has been said before in this House—John Key said we were aggressively coming out of recession. In the Budget John Key talked about a step change, but this time he said that there could be days when it is a step forward and half a step backward. That is a step change John Key - style. He got it round the wrong way. What he really meant to say was that some days there will be half a step forward and a full step backwards, because that is where the economy is going. That is what a step change means to this Government.

We are an increasingly unequal society. I was amazed in the House today when the Minister of Finance said that somehow, as a result of his tax switch, we were not a more unequal society. Those people earning $1 million a year get a $1,000 a week wage increase and those people on the median wage get $15 a week. That means that the person earning $1 million gets $52,000 a year and the other person gets $850 a year—not even 1 week’s increase—and somehow that will not make us a more unequal society.

Hon Dr Nick Smith: How much are you going to put up tax?

DAVID SHEARER: The analysis, I say to Dr Smith, is fine, but people listening to it will say that that analysis is simply mumbo-jumbo. Quite frankly, it is simply mumbo-jumbo. We are becoming a more unequal society. The policies of this Government are making it that, and inequality is an unhealthy situation for this country. We deserve better, but this country is going backwards.

Then we talk about the aspiration to catch up with Australia. It used to be a goal, then it became an aspiration, but it was not mentioned in John Key’s speech this time around. It is not really an aspiration; it is more an aspirator—a machine that sucks fluid out of the body, only this time it is Australia sucking our best brains and our best talent out of New Zealand. That is what aspirational means for the National Government. That is what aspirational means. Then the Government has the audacity to turn round and tell Labour members that somehow our economic policies are all wrong.

Let us look at some of the economic policies that Australia has put in place. In Australia the upper tax limit kicks in for those on $180,000 at 45 percent. We are talking about raising the upper tax limit. Is that radical? The Australians have exactly the same thing; Australia has no tax under $6,000. We are talking about bringing it in under $5,000—is that radical? We are aspiring to be as rich as Australia, but we do not want to take on any of its policies. Here is another one: Australia has a capital gains tax. This Government ruled out capital gains for the Tax Working Group when it came to put provisions into its report. So what are we going to do? We are looking at ring-fencing the losses on property. Then the big kicker of the lot—and the Minister of Science and Innovation, as the portfolio is now called, is in the House—scrapped the 15 percent tax credit on research and development.

I will tell members what happened: we put the tax credit in place here. What did the Australians do? As soon as the Labor Government got into power in Australia it came over here, copied the tax credit in its entirety, and put it in place in Australia. What did we do? I will tell members what we did: we put in vouchers and grants to replace it. Dr Mapp and even his adviser Professor Gluckman—the real Minister of Science and Innovation—told me that the policy is grossly oversubscribed; there has been such a great take-up. Of course there is a great take-up. There is $2 million for those companies out there to get from the Government. What company is going to be stupid enough to say no? The big question is how many of those companies out there did not get the grants and vouchers that they would have been eligible for under the tax credit. That is stifling the very growth accelerators that this country needs.

I tell members that all of those things are in place in Australia and are working well, and this country wants to be like Australia. The New Zealand Herald noted in its editorial yesterday morning that there was a 16 percent increase in people going to Australia. This Government campaigned in 2008 on stopping that flow, and last year it was 16 percent higher than in 2009. That is a testimonial of the failure of this Government in respect of the economy. People are going over because Australia is sucking them there because of the things it can provide. Their policies are the very economic policies being proposed by this side of the House for when we come into Government later this year.

This country is going backwards, it is stuffed, and we are not going anywhere. What is the answer? When Kathryn Ryan interviewed John Key on Radio New Zealand he gave the example of Asia—a high tech, high-growth economy roaring ahead, and with manufacturing and all of those things roaring ahead. He said that we could supply them with food. Is that not visionary! Is it not extraordinarily visionary that, after all of this time, after 9 years in Opposition, and in 2 years in Government, the only vision we have for New Zealand’s future is to supply Asia, which used to be behind us—well behind us—with food? That is extraordinary.

We need, in addition to our primary products, a high-growth, a high-value, a high-tech, and a green economy that will keep our children and our young people here and stop them moving to Australia. That is not to say that our primary products are not important, but we have to do a lot more to make sure that that happens. That means changing many things in the science and innovation area. Dr Mapp knows that although he changed the name from the Ministry of Research, Science and Technology to the Ministry of Science and Innovation, it is only a name. It was heralded as a step change in science and innovation, when it is simply a 5 percent increase and a whole lot of welfare to corporates who are just shifting—and I know this because some of them told me—a lot of their expenditure from the research and development that they are doing to buy all the other bits and pieces. Then they go along to Dr Mapp and apply for the vouchers and grants that will give them the money to replace them. That is exactly what they are doing. Talk about rorting! My God, I cannot believe that this Government is so naive not to see what is happening.

If Dr Mapp wants to see real step change, I tell him to have a look at Finland, or Denmark, which he quotes prolifically in every single speech he gives. But this Government is not doing anything like Denmark did. I say to Dr Mapp that if he is going to quote Denmark, then how about backing it up with a bit of action? He is not getting anywhere close to what the Scandinavian countries are doing. They have 3 percent of GDP expenditure on research and development and we have something like 1.25 percent.

Dr JACKIE BLUE (National): The simple fact is that this country is broke. It ain’t got any money. We cannot keep on borrowing $300 million each week; it is just not sustainable. That is why John Key has outlined a plan for building on the recovery. The Government makes no apology for that—for continuing to build a brighter future for New Zealand. The Government’s 2011 programme will focus on building the foundations for a stronger economy and building better results from the Public Service. Building a strong and solid economy will be absolutely critical going forward, and a strong economy will give New Zealanders jobs, increased incomes, and a better standard of living. Compared with other countries, our Public Service is bloated. New Zealand needs and deserves an efficient and responsive Public Service that will ultimately improve the lives and the well-being of New Zealanders.

At this stage, I congratulate the Minister Tony Ryall on the fantastic leadership he is showing in the health sector. The immunisation targets were well ahead of schedule, and the district health boards are achieving the cancer waiting list targets. Under Labour there were terrible stories of women having to go to Australia to get radiotherapy, which was devastating to them and their families at a very vulnerable time. The emergency department targets are being achieved by district health boards around the country. The voluntary bonding scheme has been unprecedentedly welcomed by doctors, nurses, and midwives. The voluntary bonding scheme will be one solid way we will keep our professionals in New Zealand. It has been fantastic.

In electives, again, unprecedented numbers have been achieved by district health boards around the country. We heard today in the Health Committee from Lester Levy, who is now the chair of the Waitematā District Health Board and also, more recently, the Auckland District Health Board. When Lester became the chair of the Waitematā District Health Board, it had terrible problems. There was a deficit, morale was low, and the culture needed changing. There were terrible problems with the emergency department, with long waiting times. The Waitakere emergency department had problems opening 24/7 for both children and adults. That has all changed. There was daily bad press in the newspaper of patients having bad experiences. We were delighted to hear that that has changed, and that is all due to leadership by Lester Levy. He is doing a wonderful job, and I congratulate him on that.

But it goes back to the economy: if we are to get the money to buy the medicines, and to invest in new technologies to help New Zealanders stay healthy and to keep them well, we will need a strong economy. The fact is that that is really what this Government is about. A key cornerstone of where we need to go is a solid economy to build for a brighter future.

The simple fact is that when the Government came into power after the 2008 election the economy was in recession, and had been so for almost a year. That was with the backdrop of a worsening international economic crisis. So the most immediate focus this Government had after the election was to steady the economy and pull it back on to a growth path. That is why building the foundations now for a stronger future is so critical. It is the only way we will get people jobs, higher incomes, a better standard of living, and the New Zealand that they deserve.

We are rebalancing the economy away from debt-fuelled consumption and Government spending, and towards savings, investments, and exports. We are reducing new spending in Budget 2011 so we can return to surplus sooner. We are getting better value for taxpayer money, including considering ways to streamline and improve the performance of the bureaucracy. Our other priorities include building world-class infrastructure to help businesses compete, building skills and knowledge for future-proofed jobs, helping exporters to sell more of their goods to the world at a better price, and giving businesses confidence and certainty to invest in and create new businesses, to take on more workers, and to pay them more. That is so important.

We know we have made progress. The economy is forecast in 2011 to grow in excess of 3 percent, which will result in better job prospects and higher incomes for many New Zealanders. Although the immediate crisis is over, our focus is now on repairing the systemic imbalances, and that is why it is so important that we keep on steering that economy away from consumption and spending, and towards savings, investments, and exports.

The extension of the 90-day trial period is part of building the economy. It will give, and is giving, businesses the confidence to hire, and will give job opportunities to those who do not have a track record or work history, such as migrants, youth, and women returning to the workforce. National is a party that backs businesses and backs workers, because we know that without jobs New Zealand and New Zealanders will not get ahead. Having a job is crucial for self-esteem, giving people choices and independence. That is why the Government has an unrelenting focus on getting people into jobs, and we make no apology for that. Increasing the number of jobs, when they are not available, does not magically happen out of thin air. A business needs to see the opportunity to expand and have the confidence to hire new staff.

Our nation’s backbone, quite frankly, is small to medium sized businesses. The fact is that 99 percent of New Zealand businesses, which employ 60 percent of our workers, are small to medium sized businesses and enterprises. These businesses generate a big part of our wealth. When they prosper, we all prosper, and our plan for small to medium sized businesses links with our plan for growing the economy. The 90-day trial period is an integral part of our 2008 election promise, and we have followed through with that promise. Recent research has confirmed that the trial period has been a positive experience. It has shown that the trial period has a positive impact on job numbers for small employers at a time of rising unemployment. The analysis by the New Zealand Institute of Economic Research looked at the impact of the trial period over 6 months following its introduction in March 2009. The review was due at a time when the actual labour market overall was shedding workers due to the recession. Indeed, unemployment peaked at 7.1 percent that particular year. The research by the New Zealand Institute of Economic Research showed that the total job numbers for the firms reviewed were higher by about 2 percent. Although it is early days for this policy, it is still very encouraging and promising that this proposed extension is showing this small benefit quite early on.

Goodness me! The near hysteria when the 90-day trial period was extended was really quite astonishing. Anyone would have thought sweatshops had been introduced and that we had been transported back to the 19th century. The ill-informed critics who call this policy “fire at will” are really ignorant of the commercial facts of life. A business that wants to compete and get ahead will not be relentlessly hiring and firing. That is an utterly ridiculous suggestion. It costs money and time to train staff. It is evident from the research that has been done that employers are now more willing to take a chance on someone whom they otherwise would not have been. That is where the trial period is valuable. It is worth noting that many other developed countries have similar policies and go further than we have with our particular 90-day policy.

Under the previous Labour Government the economy got way out of balance and out of kilter. The National Government is determined to reduce our reliance on foreign lenders, and build Kiwi-owned savings and investments. We are considering advice on extending the mixed public-private ownership model for our four State-owned enterprises. That will be a way we can release money that can be reinvested and, in turn, give the opportunity for New Zealanders to invest. Instead of money going offshore to be invested, ACC, the Superannuation Fund, KiwiSaver, and iwi will be able to invest in these State-owned enterprises. It will be a win-win situation, and this Government is determined about building a brighter future for New Zealand. That is why the Government’s focus this year will be on two main goals: first, building the foundations of a stronger economy; and, second, building better results for the Public Service. Thank you.

Mr DEPUTY SPEAKER: Dr Rajen Prasad, welcome home.

Dr RAJEN PRASAD (Labour): Thank you, Mr Deputy Speaker, and likewise to you. The battle-lines for the upcoming November general election could not be clearer after the speeches yesterday from the Prime Minister and the Leader of the Opposition. Mr Key’s Government is asking the country to trust it while it plans to sell assets already owned by New Zealanders to private investors and corporates. As sure as night follows day, that plan will result in overseas ownership in a relatively short period of time. That is a fact, and in their speeches members opposite have not excised that fact from the debate, at all. Overseas ownership will happen, and it seems that the other side knows it and is quite happy with it.

National Governments have always been keen on hocking off assets rather than creating them. When National did try to create some assets once, under Think Big—

Shane Ardern: Most of them were sold under Labour.

Dr RAJEN PRASAD: The member’s own electorate had some benefits out of it. Think Big felt flat on its face except for one or two successes. Most of its projects were unsuccessful, and it took years for that debt to be paid off.

The Government is asking the country to trust it when it guts early childhood education. It believes that costs have increased so much that the level of support provided is now unsustainable. That is what members opposite have been saying. The Government is not telling New Zealanders under what conditions the subsidies will be increased. Maybe the next speaker might take up this matter. When will it be OK for us to support our families with children whose parents have to work and require early childhood education and childcare for their children? When will that happen? The Government is not telling New Zealanders what level of support is acceptable for working parents with young children requiring care. Maybe the next speaker will tell us that. All the Government is telling New Zealanders is that what was available under Labour is now unaffordable, so it will cut it. That is what the Government members opposite are telling us.

The Government is asking the country to trust it when it scraps home help for thousands of elderly people. What a mean-spirited Government. Does it really care about these people? For hundreds of them, thousands of them, that little bit of care and assistance that made life bearable has been cut. The Government has denied victims of sexual assault access to counselling, and it has dumped thousands of people from access to surgical procedures under the accident compensation scheme. The Government is asking us to trust it when it makes those kinds of cuts.

The Government is asking New Zealanders to trust it when it cuts over $50 million from industry training and uses it to fund the shortfall in university places. The Government effectively has no plans for upskilling New Zealand’s workforce, because it has dumped the $180 million skills training strategy developed by industry and institutions together. They should be at the table. They are the workers. They developed it; they agreed on it. It was funded by the previous Government. That was not good enough for the anti-worker Government opposite, so it cut it. National should be ashamed that half of all Māori and Pacific teenaged girls leaving school are unemployed and not in further education or training, and the same is true for more than a third of the boys.

Shane Ardern: How could that happen after 9 years of Labour?

Dr RAJEN PRASAD: Well, what is the answer from members opposite? New Zealand has seen previously what happens when the Government is prepared to write off a generation of young people. National has done this before while in Government. It is not concerned about young people migrating from underachievement to unemployment and to crime. Those members talked about crime a lot in the election campaign, but when there is an opportunity to actually ensure that the bedrock assistance required by our young people and our children is there, they are not interested. When National cut assistance from a previous generation of youth, it took a long time for those young people to recover and many never recovered, and we may still be reaping the downside of that. The fact we are revisiting those risks on the present generation of young people beggars belief.

Sometimes it feels like this Government is playing a game. This is most evident in health. Day after day, when questions are asked and the answers are given, it is a game. The Government has presented its targets for elective surgical procedures, emergency department waiting lists, and cancer treatment times as progress, when in many cases this progress is absolutely manufactured. What happens is cuts are made in one area of the hospital and the resource is moved to another area to increase performance there, and the Government says: “Look how well we have done.” But the Government is not intellectually honest enough to show us the full picture. No, that would be too difficult. After National’s 2¼ years in Government, people are beginning to suspect that it has no plans for increasing the workforce to address these issues, and it is becoming very, very hard to trust. Why should people believe this Government, which already has a track record of a long and growing list of broken promises?

Many will remember that State services were not going to be cut. John Key said that he would cap the number of State servants, but it has already been cut. In the next period, National intends to drive it down further. Now, all of a sudden, the Public Service has become bloated, inefficient, etc., etc. Well, National has cut it before, and subsequent Labour Governments have had to rebuild the Public Service. National promised not to do it, but that is what it will do.

This Government promised that GST would not be increased. No matter how the Government tries to resile from that promise by circumscribing the context in which it was made, no one believes the Government. Higher GST is disproportionately affecting the less well-off and those on limited incomes. That is the group that this Government does not care about.

Hon Dr Nick Smith: Show some courage and promise to reverse it.

Dr RAJEN PRASAD: Dr Smith has seen plenty of figures. He knows where those people are. He can talk to them in his electorate. He can go and see those who are on a limited income and ask them what the effects of the tax switch and the GST increase are, and he will know. If the member keeps on talking to just the wealthy in his electorate, then maybe he will not see that.

Essentially, this Government does not have a plan that the country can identify with and accept at all. Perhaps what is most alarming is that this Government does not have a heart. No one believes that the Government has an intimate understanding of the pain that many New Zealanders are feeling, and that many more will feel as these cuts bite deeper. The plan that has been presented is formulaic, predictable. That is what conservatives do; they do not create but cut, slash, and burn, give tax cuts, and expect the market to perform. It never performs, and somebody else has to come back and fix it.

Labour’s vision is for a society where everyone has the potential to achieve to their fullest. Labour believes in investing in people. Labour believes that it is our families who produce our workers, and they must be factored into everything we do. We believe that focusing on just the economic side of the argument, the investment side of the argument, is not enough. It has happened before and in the end our people suffer, difficulties emerge, and our society is less safe in the long run. We believe in a strong economy, we believe in creating jobs, but we also believe in supporting our families and our communities that partner capital to develop a great society. Let the speakers from the Government side balance that equation. At the moment they are talking about just a few factors in the economic area. Labour believes that we should all contribute in a manner consistent with our means, and accepts that in many cases we need to invest in our human capital to get a return as a society. Our policies will be fair. They will not ask some people to wait until good times return to get attention. We will use all our resources for all our people.

The battle lines have been drawn; the battle will unfold this year, the unbalanced approach of this Government will be exposed, and we will see what happens on 26 November. Thank you.

SHANE ARDERN (National—Taranaki - King Country): It is always a privilege to follow the previous speaker, Dr Prasad.

We are here today because 70 percent of New Zealanders support the direction that the John Key Government has taken. So for the 30 percent of the House who have been putting up a debate against that direction tonight, I say that this is what the John Key Government has proposed for its work programme going forward. [Interruption] Seventy percent support the current economic direction of the John Key Government.

In 2011 the Government will focus on two key areas. We will build foundations for a stronger economy and build better results from the Public Service sector. I think those comments just strike fear into the hearts of Labour members. We will build better results from within the public sector. Their mates, the guys they employed, the thousands of people who were put on the payroll under the Labour Government will be asked for the first time in a number of years to front up and say how they will do better without coming back to the Government for more money.

We listened to a number of speakers from the other side of the House, and it is interesting to note that one in particular gave a life story of hardship and oppression in her childhood. She rounded it off by saying that the National Government intended to make things worse for people like her. Members make those comments in a way that suggests they are unique and have the total franchise on growing up poor. They make comments about those kinds of things as though they are the only ones who have knowledge of what it is like to come up on the lower socio-economic side of the track. I just inform the House that one or two of us on this side have been in those circumstances ourselves.

I have not heard, but I have waited throughout this debate to hear it, what those members are going to do about those circumstances going forward, and how they will fund the social policies that everybody in this House wants to see: more social policy in the low socio-economic area. How will they do that? The only answer I have heard from speaker after speaker is that they will charge more taxes. A number of those members have been school teachers; thank goodness they were not mathematics teachers, because they certainly cannot count. When they do the sums on those figures, they will find out that there is no way they can fund the type of social spending they are talking about without growing the economy.

Debate interrupted.

The House adjourned at 10 p.m.