Tuesday, 3 May 2016

TUESDAY, 3 MAY 2016

TUESDAY, 3 MAY 2016

Mr Speaker took the Chair at 2 p.m.

Prayers.

Visitors

France—France - New Zealand Parliamentary Friendship Group

Mr SPEAKER: I am sure that members would wish to welcome members of the France - New Zealand Parliamentary Friendship Group led by President Mr Philippe Vitel, who are present in the gallery.

Points of Order

Points of Order

Leave to Move Motion Without Notice—West Papua

CATHERINE DELAHUNTY (Green): I raise a point of order, Mr Speaker. I seek leave to move a motion without notice or debate on the call by International Parliamentarians for West Papua for a fair and independently supervised referendum on independence and self-determination in West Papua.

Mr SPEAKER: Is there any objection to that course of action being followed? There is objection.

Oral Questions

Questions to Ministers

Prime Minister—Overseas Trusts Review

1. JAMES SHAW (Co-Leader—Green) to the Prime Minister: On what dates did he discuss with the Minister of Revenue his conversation with Ken Whitney on foreign trusts, and what specifically did he say to the Minister?

Rt Hon JOHN KEY (Prime Minister): There is no record of when I spoke to the Minister of Revenue, but it would have been between 27 November 2014, when the New Zealand Herald story first appeared, and 2 December 2014, when Mr Whitney emailed the Minister. I informed the Minister that there had been an approach by Mr Whitney, who acts for me in my personal capacity; that Mr Whitney was part of an industry group working in the New Zealand foreign trust industry; and that I had told Mr Whitney I was unaware of the issue in the New Zealand Herald story that he had raised, and his group should meet with the Minister.

James Shaw: Did he tell the revenue Minister to expedite his meeting with the foreign trust industry?

Rt Hon JOHN KEY: No.

James Shaw: Did he tell the revenue Minister to ditch the recommendation of the Inland Revenue Department (IRD) to review the foreign trust sector?

Rt Hon JOHN KEY: No.

James Shaw: Is he comfortable with the fact that his revenue Minister told foreign trust lobbyists, in his first meeting with them on 16 December 2014, that “the Government had no intention of conducting a general and public review of foreign trust rules.”?

Rt Hon JOHN KEY: That would have reflected, obviously, the view in the advice that he has got. It is consistent with IRD actually saying that a review would have taken away from work that it wanted to do that was about the New Zealand tax base. But that is not what I instructed him to say, because I did not instruct him to say anything in that meeting.

James Shaw: What evidence does he have that it was Inland Revenue Department officials, and not the Minister, who recommended that there not be a review of foreign trust regulation?

Rt Hon JOHN KEY: I was not part of the meetings; I was not involved in that. My only involvement was that my lawyer at the time came to me and said that there had been a story in the New Zealand Herald. I was quite clear, and said: “I have no idea what you’re talking about, but you need to go and see the new Minister, as part of the lobby group.” They went, and that is quite standard practice. Actually, people come and approach me every day, and I point them towards the Ministers. Just as an example of that, if the member was to ever—

James Shaw: I raise a point of order, Mr Speaker. My question was: what evidence does he have about that decision? He did not address that—

Mr SPEAKER: No, I think that on this occasion he clearly did. When you said “What evidence?”, the Prime Minister was laying out the evidence that he had for the statement made.

James Shaw: Given that it was his own lawyer who asked for, and was granted, a guarantee that there would not be a review of foreign trust regulation, is he not concerned about the perception that lobbyists can influence Government policy on behalf of vested interests in New Zealand?

Rt Hon JOHN KEY: The member is misrepresenting the situation. I was asked about a story that was in the New Zealand Herald. I made it quite clear that I did not know the details of that story, nor do I handle that—that is handled by Ministers. I did what is the fully and totally appropriate thing: I told the person and their lobby group to go and speak to the Minister. That happens every day. If the member was to ever get into Government, is he saying that if Russel Norman ever came up to him and said there was an issue in relation to the environment, he would not tell that person to go and speak to the environment Minister? In New Zealand we are a small country; people know other people.

James Shaw: I raise a point of order, Mr Speaker. First of all, Russel Norman is not a lawyer—

Mr SPEAKER: Order! [Interruption] Order! If the member wishes to raise a point of order, he is welcome. Could I have the point of order, please.

James Shaw: Certainly. My point of order is that my question was whether he is concerned about the perception that lobbyists can influence Government policy—

Mr SPEAKER: No, no. There was a lead-in to the question, along the words “given that his own”—there was “given a guarantee there wouldn’t be a review”, or words to that effect, so there was quite a lot more in the question, to which the Prime Minister took the opportunity to respond.

James Shaw: Will he consider following the UK Government’s practice of publishing Ministers’ diaries so that it is transparent to the public who, at least, is lobbying whom?

Rt Hon JOHN KEY: No, but my diary and the things that I do are pretty publicly known. This was a situation where someone came up to me and asked me about a story in the paper, and I did what I think most New Zealanders would expect me to do, which was to say: “Go and speak to the Minister.”

James Shaw: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! Is this a point of order?

James Shaw: Yes. My question was about publishing Ministers’ diaries, not his own diary.

Mr SPEAKER: And the very first word given by the Prime Minister was “No”, he would not consider it.

Overseas Investment—Silver Fern Farms

2. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Finance: Does he stand by his statement on 11 November 2015 regarding Silver Fern Farms, “The parties to the deal have every incentive to ensure that it is a good deal, and actually, every incentive to ensure that it is lawful”?

Hon STEVEN JOYCE (Acting Minister of Finance): Yes.

Rt Hon Winston Peters: If it was lawful, why have shareholders taken legal action to ensure the board of Silver Fern Farms abides by the Companies Act and its own constitution by demanding a special resolution on the selling of our largest meat exporter to majority Chinese State-owned enterprise control?

Hon STEVEN JOYCE: Because I imagine that in this country we are allowed to have shareholders take approaches to the courts or to their companies, and they are allowed to do that on any day of the week.

Rt Hon Winston Peters: So if it was lawful at the time he gave that answer, why would it be lawful now for the company to carry on as though it is all too late, which is what the chief executive officer is boasting at this point in time?

Hon STEVEN JOYCE: I should clarify that I do not have direct responsibility for this company, but I may be able to help the member out. There is a press release that is headed “Correction to Mr Peters’ Misleading Statements”, released by the company today, which perhaps the member has not seen. It makes some observations about there not being a U-turn, that this particular resolution has not been set aside, and that the company is calling a shareholders meeting because it has received the requisition notice requiring it to do so. If the member has not seen a copy of it, perhaps I could supply it to him.

Mr SPEAKER: Order! That will not help. [Interruption] Order! Supplementary question—the Rt Hon Winston Peters.

Rt Hon Winston Peters: It might have fooled you, sunshine, but it will not fool me.

Mr SPEAKER: Order! Now can we have the supplementary question.

Rt Hon Winston Peters: Most certainly, Mr Speaker, because the company’s press release—

Mr SPEAKER: Order! Lead with the question.

Rt Hon Winston Peters: If section 129 of the Companies Act 1993 requires a company not to enter into any “major transaction” unless it has been approved by a special resolution, then will the Ministers ask the Overseas Investment Office to suspend determination of Shanghai Maling’s application; if not, why not?

Hon STEVEN JOYCE: No, because the supposition in the member’s question is, I understand, incorrect. Again, I think he should read the press release, because contrary to what he thinks, it is he who is being taken for a ride.

Rt Hon Winston Peters: Does the Minister from a Government that claims to be supportive of farmers think it is a good deal and lawful when shareholders were threatened with liquidation because profits were massively understated by 84 percent and debt seriously overstated in information given to the shareholders just before they voted?

Hon STEVEN JOYCE: I understand there was a meeting where this particular transaction was put to the vote, and 82 percent of shareholders of this particular company voted in favour of it. I suspect—

Rt Hon Winston Peters: A tissue of lies.

Hon STEVEN JOYCE: Well, the member says it is a tissue of lies. He has the opportunity, and I understand he has made a complaint to the relevant authorities. He should just let that complaint continue, but as far as I can see the company has voted and it has actually passed the transaction.

Rt Hon Winston Peters: What does it really say about his Government’s approach to the law, whether tax or corporate, that shareholders were told lies in a financial document so misleading that it is now the subject of a complaint to the Financial Markets Authority and in which information was corrected 25 days after shareholders voted?

Hon STEVEN JOYCE: I understand that complaint is the member’s complaint. We actually have this old-fashioned notion in this country of due process, natural justice, the law; we do not adopt what is known as the Brendan Horan approach to justice, or the Tracey Martin approach to justice. We actually have the law. [Interruption]

Mr SPEAKER: Order!

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I seek an extension of time, because we like a good joke, for the Minister to carry on.

Mr SPEAKER: That is not a point of order.

Prime Minister—Overseas Trusts Review

3. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Why, on 13 April, when he told reporters that he had been approached by someone in the foreign trusts industry who was concerned that the rules for trusts were about to be tightened, did he not reveal that person was his personal lawyer?

Rt Hon JOHN KEY (Prime Minister): Because the name of the person was redacted in the information that was to be released under the Official Information Act. The member may like to note that there were six people who met the Minister; none of their names were identified in the official information.

Andrew Little: So what specifically, if anything, is inaccurate about this brief time line: first, his personal lawyer writes to revenue Minister Todd McClay claiming that the Prime Minister had told him that foreign trusts would stay protected; next, Todd McClay immediately meets the Prime Minister’s personal lawyer and says that foreign trusts will be protected; and, finally, Todd McClay directs the Inland Revenue Department (IRD) to drop its existing review of foreign trusts?

Rt Hon JOHN KEY: A more accurate reflection is that somebody who is involved in an industry lobby group, who is my lawyer, asks me a question about something that was in the paper. I did what any professional Prime Minister would do, and referred them to the Minister. I do not have a sign around me that says: “If you know me, don’t talk to me.” And, by the way, if the member ever gets into Government, is he now telling us that he will not talk to his union mates if they come and ask him a question, or send them to a relevant Minister? [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I have got to ask for a little less interjection from my left.

Andrew Little: I seek leave to table two IRD documents from August and November 2014, both of which confirm that IRD is planning to review foreign trusts.

Mr SPEAKER: Leave is sought to table those two IRD documents. Is there any objection? There is no objection. They can be tabled.

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

Andrew Little: When the Prime Minister’s lawyer went to a junior Minister and said: “The Prime Minister says you will protect my business.”, does he think that this just might have influenced that Minister’s decision making in this case?

Rt Hon JOHN KEY: The member is making it up. That is not what I said. I did what anyone would expect me to do. If I am approached by someone, whether I know them or whether I do not, I refer them to another Minister. That is also true, by the way, when constituents come to me and ask me about IRD matters, immigration matters, or ACC matters—I write on their behalf to the Minister. But the member does not say that I should not do that, in case that junior Minister is influenced by what I do. We live in New Zealand, it is a small country, and when people ask me questions I refer them to Ministers. [Interruption]

Mr SPEAKER: Order! [Interruption] Order!

Andrew Little: When he, as Prime Minister, spoke to revenue Minister Todd McClay and said: “My personal lawyer wants to lobby you about protecting his business.”, does he think that that just might have influenced Todd McClay’s decision making in this case?

Rt Hon JOHN KEY: See, this is the problem. The member loses credibility when he makes stuff up. It is a well-known and established fact that my personal lawyer is involved in trust businesses, and those are businesses established under the rules of a Labour Government. And those rules have been there for a long period of time. I did not establish those; Labour did. So Labour were the ones that set them up, not me.

Hon Annette King: You’re on thin ice there, John.

Mr SPEAKER: And so will the member be if she continues to—[Interruption] Order! [Interruption] Order! A reasonable amount of interjection, I will accept, but a barrage—[Interruption] Order!

Andrew Little: Does he see that New Zealanders are not surprised that we are gaining a reputation as a tax haven when the Prime Minister’s personal lawyer is able to influence Ministers to protect the tax-dodging industry?

Rt Hon JOHN KEY: New Zealand is not a tax haven. In 2013 the OECD did a review of New Zealand and gave us a fully compliant rating. New Zealand is a country that discloses information, and all information, either directly to Australia or to any other inquiry we have had. The only people who think New Zealand is a tax haven are the Labour Party members, who want to propagate that myth.

Andrew Little: Can he not see New Zealanders do not like it when people with connections to the Prime Minister get special treatment and that denying this is just plain out of touch?

Rt Hon JOHN KEY: Those people did not get special treatment. They are the industry group that represents an industry in New Zealand that was established under rules set up by a Labour Government, and they are quite entitled, whether they know me or not, to actually raise their points with a new Minister. That is what happens all the time. The member had dinner with the people who make Keytruda and then went out and advocated for it. Does that mean he is crooked? [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Both front benches will cease when I rise to my feet. [Interruption] Order! That is probably one interjection too many. I will have to deal with it next time.

Andrew Little: Why will he not be straight with New Zealanders about what he said to his lawyer, what he said to his Minister, and what he said to anyone else in his efforts to protect the tax-dodging industry, rather than constantly changing his story and blaming others? Kiwis deserve—

Mr SPEAKER: Order! The question has been asked.

Rt Hon JOHN KEY: I have been completely straight, and the member does not like it because it does not suit his wild conspiracy theories. Well, I am sorry; yes, I am an available Prime Minister, I do walk around, and people do talk to me, including people who know me, and there is no particular reason why somebody who knows me should not actually be able to go and talk to Ministers. That happens, and it should be that way.

Economic Outlook—Growth and Budget 2016

SCOTT SIMPSON (National—Coromandel): What reports has he received indicating continuing economic growth in 2016, low inflation for New Zealand households, and increased business activity?

Mr SPEAKER: I have a point of order—I certainly hope it is a genuine point of order.

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Mr Speaker. Of course it is a genuine point of order. The fact is that he has not read the question properly.

Mr SPEAKER: I did not detect that it was inaccurate, but to move matters forward, I will ask the member to ask the question again

4. SCOTT SIMPSON (National—Coromandel) to the Minister of Finance: What reports has he received indicating continuing economic growth in 2016, low inflation for New Zealand households, and increased business activity?

Hon STEVEN JOYCE (Acting Minister of Finance): I have received Treasury’s Monthly Economic Indicators report. Treasury’s report of recent indicators, including solid growth in retail spending and strong tourism flows to areas such as the member’s own electorate, indicates the economy experienced reasonable growth in the March 2016 quarter. A net 18 percent of businesses expect increasing trading activity above the long-run average. The cost of living increases for New Zealand consumers remained low, at 0.4 percent in the year to March, well below average weekly wage increases of 3.1 percent.

Scott Simpson: What recent reports has he seen updating the global economic outlook?

Hon STEVEN JOYCE: The International Monetary Fund has recently released its World Economic Outlook. In this report, it has downgraded its forecast for the global economy to 3.2 percent in 2016 and 3.5 percent in 2017, which are reductions of 0.2 percent and 0.1 percent respectively. These downgrades in the global outlook reflect a softening in the outlook for advanced economies, which are, as a group, expected to grow 1.9 percent this year, and some weaknesses in emerging economies, particularly Russia and Brazil. Notwithstanding this, the IMF expects the New Zealand economy to grow 2 to 2.5 percent over the next 2 years, compared with average growth of less than 2 percent across the other advanced economies. [Interruption]

Mr SPEAKER: Order! The Minister is not helping the order of the House.

Scott Simpson: Given this outlook for the global economy, what are the expected consequences for New Zealand?

Hon STEVEN JOYCE: New Zealand’s major trading partners are concentrated in some of the emerging Asian economies these days, particularly China, as well as newly industrialised economies, and also Australia. These account for more than half of New Zealand’s goods exports. They continue to perform relatively well, with growth rates that are above the world average. But that will, of course, not always be the case, which is why the Government believes opening up new markets through the Trans-Pacific Partnership is important. New Zealand is expected to be relatively well placed to benefit from China’s rebalancing from investment to consumption, because it will raise demand for the sorts of goods that New Zealanders are more specialised in. This rebalancing will be of benefit to exporters around the country, including in the Coromandel electorate.

Scott Simpson: How will Budget 2016 deliver on the Government’s commitment to support the growing economy despite global economic uncertainty?

Hon STEVEN JOYCE: The Budget will deliver on the Government’s four priorities, which are responsibly managing the Government’s finances, delivering Better Public Services, rebuilding Christchurch, and building a productive and competitive economy. Budget 2016 will lift the Government’s commitment to businesses, employment, and growth, alongside further support for core public services, in particular health and education, where funding for both is already at record levels. Government spending is around one-third of the economy, and so public sector productivity matters to overall growth. The Government is investing in understanding the different services and how they work, which is part of its increasing commitment to social investment in this coming Budget.

Housing Market, Auckland—Affordability and Overseas Investment

5. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that we are “on the cusp of something special” given the median Auckland house price has risen by $100,000 since January?

Rt Hon JOHN KEY (Prime Minister): Yes, as it related to the many opportunities that New Zealand has under a National-led Government, which I would be more than happy to go through. They include falling unemployment in New Zealand, rising growth in New Zealand, greater opportunities for New Zealand, a wealth effect that is going across the country, rising business confidence and consumer confidence, but also, based on Real Estate Institute of New Zealand data, the median Auckland house price has increased by that amount since March 2015. That is an annual increase of just under 14 percent, which includes some months when the median price fell.

Andrew Little: Given that only one in five Aucklanders under 40 now owns their own home, does he still think there is no crisis in homeownership in New Zealand?

Rt Hon JOHN KEY: There is no question that, generally, the Auckland housing market has been rising a little faster than the Government would want, and that is why the Government has taken a wide range of steps, which include helping 12,000 people through KiwiSaver HomeStart. That is why we have seen the highest level of building consents in more than 11 years, at 9,500. That is why we have had over 120 special housing areas in Auckland. That is why the Government is trying to reform the Resource Management Act. That is why the Government has tightened up the tax rules around the brightline test and why the Government is releasing land. These are all things that this Government has done, whereas the previous Government saw house prices double under its watch and—

Mr SPEAKER: Order! The answer is very long.

Andrew Little: Is he so out of touch that he thinks most Kiwi families can save the $160,000 needed just for the deposit on a house in Auckland?

Rt Hon JOHN KEY: I think it is important to understand that a lot of first-home buyers will not go into a medium-priced house in Auckland. Many young couples will start in a one- or two-bedroom apartment in Auckland. That is consistent with large cities all over the world. There are still many homes in Auckland that are under $500,000. The Government does support them through KiwiSaver HomeStart and through good economic management, which has seen the lowest interest rates in New Zealand on display in the last 70 years.

Andrew Little: Does his latest half-baked policy of a land tax on only foreign buyers mean that his previous policies, which include discount nails, brightlines, and building houses in cemeteries, have all failed?

Rt Hon JOHN KEY: The Government has not made a decision about applying a land tax to foreigners, but what we have said is that if people were concerned about the level of overseas ownership of New Zealand houses, that would be a far more effective model than the crazy idea Labour has got of banning foreigners, because, as we know, Australia has tried that, and it did not work.

Andrew Little: Why let foreign speculators buy houses in New Zealand at all?

Rt Hon JOHN KEY: I think you would find that the bulk of people who buy houses in New Zealand, in my best guess, are people who live in New Zealand or have a connection with New Zealand. But we will have much better information on that in the next few weeks.

Andrew Little: I raise a point of order, Mr Speaker. My question was about—

Mr SPEAKER: Order! I am going to invite the member to ask that question again. [Interruption] Order! I do not need help from Dr Lockwood Smith—Dr Nick Smith. I probably do not need help from either of them.

Andrew Little: We still enjoy the help of Dr Lockwood Smith even to this day. Why let foreign speculators buy Kiwi homes at all?

Rt Hon JOHN KEY: We do not ask people specifically why they buy a property, because they buy them for a wide range of reasons. They may buy them to rent them because one day they want to move into them, or it may be that they want to holiday in them. As I said, we will have a lot better information on this in the weeks, months, and years to come, and we can make a call on whether we think this is a significant issue or not.

Andrew Little: Why will he not just stop faffing around and do what Labour would do: restore the Kiwi Dream of homeownership by banning offshore speculators and by building thousands of affordable homes for Kiwi families?

Rt Hon JOHN KEY: I think the member needs to wake up and have a look at the facts: house prices doubled under the previous Labour Government, interest rates were 11 or 12 percent, and inflation was out of control. That did not help the property market one little bit.

Horticulture Industry—Exports

6. Dr JIAN YANG (National) to the Minister for Primary Industries: What reports has he received on growth in horticulture exports?

Hon NATHAN GUY (Minister for Primary Industries): New research by Plant and Food Research shows that horticulture exports increased by 9.5 percent last year to a record $4.27 billion. Key sectors that have increased include kiwifruit, which is up 27 percent, by $251 million; wine, which is up 6 percent, by $85 million; apples, which are up 5 percent, by $25 million; cherries, which are up 87 percent, by $24 million; and avocados, which are up 22 percent, by $22 million. With domestic and export receipts at now over $7.5 billion, when combined, they are on track to meet their target of $10 billion by 2020.

Todd Muller: In what ways is the Government supporting this extraordinary growth?

Hon NATHAN GUY: That is a very good question. The Government will continue to support this growth through research and development, and by enabling greater market access through free-trade agreements. For example, the Government is partnering with the industry on a $17 million programme called Lifestyle Wines and the $8.6 million New Zealand Avocados Go Global Primary Growth Partnership programme. The Trans-Pacific Partnership will save our fruit, vegetable, and winegrowers an estimated $50 million in tariff savings once implemented, and the Korean free-trade agreement has eliminated tariffs on wine and cherries. Apples and exports to Taiwan are up 250 percent since 2013.

Dr Jian Yang: How is our free-trade agreement with China supporting growth in horticultural exports?

Hon NATHAN GUY: That is a very good question. Total exports to China have increased by 1,400 percent, by over $350 million, since 2008. I was in China recently on a very successful trip with the Prime Minister, the Minister of Trade, and the member Jian Yang supporting our primary industries. It was great to see Zespri celebrate the start of the new kiwifruit season in China, and its new status as an importer of record. It has also partnered with two major fruit producers in the Shaanxi province, the world’s largest kiwifruit-producing region.

Tax System—Overseas Trusts Review

7. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Revenue: Why was the review of foreign trusts proposed by IRD in 2014 not undertaken?

Hon MICHAEL WOODHOUSE (Minister of Revenue): The view at the time was that this would have required the Inland Revenue Department (IRD) to dedicate significant resources to an area that did not affect New Zealand’s revenue base, and that other issues on the tax work programme were deemed more important by both IRD officials and the then Minister. At the time the Government made it clear that a future review was possible if it appeared that New Zealand’s regulatory settings may facilitate inappropriate behaviour in other jurisdictions, and that is what the Shewan review is.

Grant Robertson: Is it correct that in its 15 August 2013 paper, accepted by the Minister of Revenue and the Minister of Finance, IRD identified a review of foreign trusts as one of a series of initiatives that should be “a key focus” in the tax policy work programme?

Hon MICHAEL WOODHOUSE: There was a reference in that 2013 document to a review of the tax treatment of foreign trusts, at about paragraph 22, after a very, very long list of the other work that was considered high priority by IRD. It also said that the decision to proceed with any proposals for reform relating to base erosion and profit shifting needs to be evaluated more generally in the context of all of the Government’s priorities on the tax policy work programme. That is what the Government did.

Grant Robertson: Further to that answer, is it correct that in a report dated 14 November 2014 and entitled Timeline for BEPS-related tax policy work IRD lists, under the heading “Action Plan Items”, “Review taxation of foreign trusts”, with a date of December 2014 for that?

Hon MICHAEL WOODHOUSE: Yes it did, and it also included things like strengthening the non-resident withholding tax rules, which would have positively affected the New Zealand tax base, and GST on online purchases, which would have positively affected the tax base, and it proceeded with those things, because that was good for the New Zealand taxpayer. The other is not and could have been negative.

Grant Robertson: When the Minister told foreign trust industry representatives in January 2015 that the Government had no plans for a review of foreign trusts, why did he not tell them that it was actually already on the IRD work programme?

Hon MICHAEL WOODHOUSE: The IRD work programme had a massive list of things that it was doing. The question of the review of foreign trusts was a footnote amongst the significant Business Transformation project, loss grouping, resident withholding tax, non-resident withholding tax, the brightline test, PAYE deductions, the business tax green paper, and many, many others. Those are the things that were proceeded with.

Grant Robertson: I seek leave of the House to table Appendix A of the IRD report dated 14 November 2014, Time line for BEPS-related tax policy work, which includes a list of 1, 2, 3—

Mr SPEAKER: Order! [Interruption] Order! The document has been well described. I will put the leave. Leave is sought to table that particular IRD time line dated 14 November 2014. Is there any objection? There is none.

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

Grant Robertson: Is it not true that IRD had, in fact, already started a review of foreign trusts because it considered it a key focus, but only after the Prime Minister directed his close confidante to the Minister, who shut down the review? That is actually what happened, is it not?

Hon MICHAEL WOODHOUSE: In respect of the second part of that question, absolutely not.

Transport Infrastructure—Rail Network

8. DENIS O’ROURKE (NZ First) to the Minister of Transport: Is the Government committed in the long term to a sustainable railway network for New Zealand?

Hon SIMON BRIDGES (Minister of Transport): Yes, because after years of under-investment this Government has invested nearly $4 billion in rail and is committed to investing more as appropriate.

Denis O’Rourke: With a 60 percent increase in road freight since 2000 and with thousands of additional trucks expected on State highways in coming years, how will the Government ensure that rail takes a much greater share of the national freight burden in the future?

Hon SIMON BRIDGES: I suppose we could arrest people who do not use rail, but, frankly, we are allowing these different modes to play to their strengths. Rail does have a real strength over the long-haul and bulk commodities, and in the last year it has, in fact, seen its proportion of freight as exports go up. I think that as we see more big ships and as we see more inland ports, it will continue to be able to play to the strength that it has.

Denis O’Rourke: In addition to the four options in the KiwiRail commercial review for 2014—the trimmed network, the separate islands network, the upper North Island network, and exit—will he request consideration of an expansion and improvement option for the whole country; if not, why not?

Hon SIMON BRIDGES: The member may not like the fact, but we have invested nearly $4 billion. That is comparable to what we have invested in the roads of national significance, which he and his mates next to him—the Greens—love to hate so much. We are investing, and we continue to do so with projects that stack up.

Denis O’Rourke: I raise a point of order, Mr Speaker. I specifically asked whether the Minister would—

Mr SPEAKER: Order! The question was so long, it would be very easy for the member to address any part of it. If the member asks a short, sharp question, I can help him get a straight answer. Supplementary question?

Denis O’Rourke: The question was not long—

Mr SPEAKER: Order! The member will resume his seat immediately. I have ruled. I am giving the member a chance to complete his questioning; if he does not want to, we can easily move to the next one.

Denis O’Rourke: I raise a point of order, Mr Speaker.

Mr SPEAKER: If it is a fresh point of order, I will hear it. If it is any attempt to relitigate where I have just got to, I will be asking the member to leave.

Denis O’Rourke: I am simply asking: if that question was too long—

Mr SPEAKER: I have dealt with that matter. I am asking Denis O’Rourke to—[Interruption] Denis O’Rourke will leave the Chamber. I gave him an absolute, clear warning. [Interruption] Order! The member will leave.

Denis O’Rourke withdrew from the Chamber.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My colleague asked the question: if it was too long, then how would you have phrased it yourself? Can I just finish my point of order. I have barely spoken a few words—

Mr SPEAKER: Order! [Interruption] Order! The member can raise a point of order in line with the Standing Orders and I will hear it, but he had better do it succinctly.

Rt Hon Winston Peters: That is precisely what I am doing. My colleague asked the question—[Interruption]

Mr SPEAKER: Order! This is a point of order—[Interruption] Order! The member will resume his seat immediately. This is a point of order, and I want to hear it without any interjection from my right-hand side.

Rt Hon Winston Peters: My colleague asked: if the question was too long, then how would you have phrased it? I think that he was seeking some clarity, because if the question was too long, you would have ruled it out at the very start when he finished asking the question. That is why my colleague was a bit—

Mr SPEAKER: Order! The honourable member will resume his seat. I have been relatively lenient in light of the way the—[Interruption] Order! The member is very likely to be leaving the Chamber and joining his colleague. I have been relatively lenient with questions coming from New Zealand First today, but when those members ask a—[Interruption] Order! If the member interjects again while I am on my feet, he will be asked to leave. I have been relatively lenient, but when a question is as long as that, it is very difficult for me to actually decipher the specifics of the question, and, therefore, I ruled that the Minister had addressed the question. Mr O’Rourke took exception to that. I warned him that if he continued to relitigate a decision I had made, then he would be asked to leave the Chamber. He did then immediately relitigate the ruling I made.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

Mr SPEAKER: If it is a fresh point of order—[Interruption] Order! No, the member will also resume his seat. I have ruled on that matter. The member is going to raise a fresh point of order, but if I consider that it is in any way an attempt to relitigate the decision I have just made, which the member does not have to like but must accept, I will not hesitate to ask the member also to leave the Chamber.

Rt Hon Winston Peters: First of all, it is a fresh point of order.

Mr SPEAKER: What is it?

Rt Hon Winston Peters: That is why I am raising it. It arises from your comment that you have been lenient on New Zealand First in question time today. As a matter of clarification, could you point out on what occasions and at what time have you been lenient on us?

Mr SPEAKER: That is, effectively, an allegation of bias, and that is a contempt of this House. The Rt Hon Winston Peters will also leave the Chamber. [Interruption] The Rt Hon Winston Peters will immediately leave this Chamber. [Interruption] Order!

Rt Hon Winston Peters withdrew from the Chamber.

Air Services—India - New Zealand

9. Dr PARMJEET PARMAR (National) to the Minister of Transport: What steps has the Government made on strengthening New Zealand’s air links with India?

Hon SIMON BRIDGES (Minister of Transport): As part of the recent visit to New Zealand by India’s President Pranab Mukherjee, I had the honour of signing a new air services agreement between our two countries. The most significant change in the new agreement is that New Zealand airlines now have the opportunity to code-share with any partner airlines to six cities across India. In addition, New Zealand airlines can code-share to New Delhi, with Air India. By signing this new agreement we have further strengthened our already very strong ties and history with India.

Dr Parmjeet Parmar: What benefits will the new air services agreement with India bring to New Zealand?

Hon SIMON BRIDGES: India is one of the world’s largest and fastest-growing economies; as an emerging global superpower and with a population of 1.3 billion people it presents enormous opportunities for New Zealand. Our annual trade with India is now worth more than $1 billion, and in the year to March 2016 almost 52,000 Kiwis travelled to India and close to 60,000 Indian visitors came to New Zealand. I am very excited that the New Zealand air services agreement will boost tourism, create new trade opportunities, and strengthen the existing strong personal ties between our two countries.

Tracey Martin: Did part of the conditions requested by the Prime Minister of India include 35 scholarships paid for with taxpayers’ money for Indian students to study in New Zealand?

Hon SIMON BRIDGES: No, that is a little bit silly.

Renewable Energy—Huntly Power Station

10. GARETH HUGHES (Green) to the Minister of Energy and Resources: Does he stand by his statement that Genesis Energy’s decision to stop burning coal at Huntly is “a sign of the times and reflects the growth of New Zealand’s world-leading renewable energy industry”?

Hon SIMON BRIDGES (Minister of Energy and Resources): Yes.

Gareth Hughes: If announcing the end of coal in 2015 was “a sign of the times”, does last week’s decision to keep burning coal at Huntly mean more climate pollution and no new renewable generation is the real sign of the times?

Hon SIMON BRIDGES: No, not at all, because as the parties to the agreement made very clear, it is a short-term solution to the security of supply to ensure that when the wind is not blowing and when it has not been raining for some time, actually, New Zealanders can have their lights on and can have their showers hot. Otherwise, there are no emissions. I would remind the member that in terms of Huntly, when Labour was in power—when his mates were in power—12 percent of our power came from Huntly. Now it is some 2.6 percent, and decreasing very sharply.

Gareth Hughes: Had the Minister received a commitment from any power company before he said last week that coal units at Huntly will be used only as back-up power supply and “I think it is going to be used very, very infrequently.”?

Hon SIMON BRIDGES: I do not need an undertaking—it is there in black and white in their press releases.

Gareth Hughes: I seek leave to table information unavailable to members from the electricity Market6 website, which shows that today Huntly has been burning coal every hour for the last 24 hours, and at near capacity, despite no—

Mr SPEAKER: I will put the leave, but if it is available on a website I honestly cannot see why it is not available to members. I will put the leave anyway. Leave is sought to table that information. Is there any objection? There is none. It can be tabled.

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

Gareth Hughes: Is the Minister’s definition of burning coal “very, very infrequently” actually every hour for the last 24 hours, or is this just spin to hide the embarrassment of committing to burning more coal for the next 6 years only 5 days after signing the Paris climate change agreement?

Hon SIMON BRIDGES: My definition of “infrequently” is that when his party was helping the Labour Party, it was 12 percent of power; now it is 2.6 percent and going down. By the way, since we have been in office it has gone from 65 percent renewables in electricity to 81 percent. That is a very strong record of success.

Justice System—Social Investment Approach

11. JACQUI DEAN (National—Waitaki) to the Minister of Justice: What recent announcements has she made on the social investment approach to justice?

Hon AMY ADAMS (Minister of Justice): Today I announced how the Government is implementing the social investment approach to the criminal justice system. The investment approach gives justice sector organisations involved in crime prevention access to high-quality data analytics and modelling, helping them to make better-informed decisions about where to invest to make the biggest difference. It will help agencies across all areas of Government to try to prevent vulnerable young people from ever becoming offenders in the future. This builds on the social investment work under way across Government to improve the lives of New Zealanders by applying rigorous and evidence-based practices for social services.

Maureen Pugh: What do the early results from the investment approach to justice show?

Hon AMY ADAMS: Early analysis brings hard numbers to some of the long-held truths that people working in the justice sector have known. For example, analysis shows that although 11 percent of the general public have used mental health services, that figure is 40 percent for those charged in court. We also know that for children who were exposed to family violence in 1993, 44 percent of them had left school before 17; 57 percent did not get National Certificate of Educational Achievement level 2; and before the age of 19, 52 percent had received a main benefit. This sort of analysis re-emphasises the intergenerational importance of these issues, and will help us to identify the areas in the justice sector where we should target our efforts and do more of what works.

Housing, Rental—Standards

12. JACINDA ARDERN (Labour) to the Prime Minister: Does he have confidence in the Minister of Building and Housing in light of the Commissioner for Children’s criticism that the Government’s Bill on rental standards “will do little for children living in cold, damp, mouldy housing”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Jacinda Ardern: Does he accept that the loophole in the Government’s bill will allow houses to be insulated to a standard from 1978, and will mean that hundreds of children will be hospitalised unnecessarily?

Rt Hon JOHN KEY: No, I do not accept that. What I do accept is that this is a Government that has insulated 320,000 homes—many of them in the last few years—and that with our upcoming residential tenancy changes a further 180,000 homes will be insulated. With the changes that we are making to the healthy homes, they will start by 1 July 2019, compared with the recommendations by Mr Little, when they will begin in 2023.

Jacinda Ardern: Does he accept, then, Philippa Howden-Chapman’s findings that all rentals should be insulated to the 2008 standard—the standard used in Andrew Little’s healthy homes bill—particularly given that Ms Howden-Chapman was the winner of the Prime Minister’s Science Prize for her work on healthy homes?

Rt Hon JOHN KEY: I think the moves that the Government is making are ones in the right direction. This is a Government that will have, effectively, seen the oversight of 500,000 homes being insulated, compared with the woeful record of the previous Labour Government, which was 50,000 homes.

Jacinda Ardern: Does he agree with Nick Smith’s response to Otago University’s findings that properly insulated homes would reduce child hospitalisations by thousands of children a year, which was that he would not adopt that policy because it would cost more than it would save; if so, how many children need to be hospitalised for his cost-benefit analysis?

Rt Hon JOHN KEY: The Government takes the issue very seriously, which is why it has insulated 500,000 homes, or will see them insulated in the next few years. But we do not think that the flimsy bill proposed by Andrew Little will work. What it will do is it will “attempt to regulate indoor temperatures”. Well, that will be people walking around other people’s lounges and bedrooms with a thermometer, measuring the temperature. And while they are—

Mr SPEAKER: Order! [Interruption] Order!

Jacinda Ardern: If the Government is taking this issue seriously, why will he not include in his Government’s bill any requirement for a heating source, when everybody knows that an insulated house still needs to be heated if you want to stop children from getting sick?

Rt Hon JOHN KEY: The Government has taken a number of steps in that area, but when it comes to private sector rentals—it has when it comes to Housing New Zealand and others—the question has to be asked about the trade-offs between the cost of those rentals, and if those rentals go up even more in cost, it will be even harder for those people to use any heating device that they have.

Jacinda Ardern: If it is down to “trade-offs”, what has changed since 2011, when the Prime Minister stated “I am prepared to commit Government resources to try to lift children out of poverty.”, and now, when he cannot even put in place decent housing standards or vote for Andrew Little’s Healthy Homes Guarantee Bill, when the majority of children in poverty are living in private rentals that are often substandard?

Rt Hon JOHN KEY: Unfortunately—the member might want to grandstand on the issue, but when the last Labour Government was in it did absolutely nothing. This Government has insulated 320,000 homes and has a programme for a further 180,000 homes.

Annual Review Debate

In Committee

Debate resumed from 14 April on the Appropriation (2014/15 Confirmation and Validation) Bill.

Health Sector (continued)

Hon Dr JONATHAN COLEMAN (Minister of Health): To resume from where we were 2 weeks ago—look, if you look at the wider picture in health, over the last 7 years this Government has put an extra $4 billion into the health sector. We have been very much focused on delivering increased access to services at the same time that, globally, most other Governments in the Western World have actually been decreasing their public service spending, and their health services have been massively under pressure. So if you look at the achievements of this Government in health, not only have we kept spending at about 6 percent of GDP, which is higher than that in Australia, but we have also been very focused on delivering those services that really matter to the people of New Zealand. If you look at first specialist assessments, they have increased by 26 percent over that time. They have gone up from 430,000 to 540,000 per year. At the same time we are delivering an extra 50,000 surgeries per year. When we came into Government there were 118,000 elective surgeries performed each year; we are now doing 168,000 per year. At the election we pledged that we would continue to raise that by an average of 4,000 per year, and, actually, we have exceeded that target.

Very recently we announced the first ever results of what happens to a referral when it goes from a general practitioner through to the hospital. There has been a lot of debate around this area over time, and no Government has ever traced that path. The only evidence we have was back in 2006 when Pete Hodgson, the Minister of Health, estimated that about 25 percent of patients were returned to their GP, and at that time that would have been 65,000. We have looked at the figures, and the first lot of preliminary data released last week shows that 87 percent of patients who have been referred by their GP to hospital services are getting an appointment. There are about 5 percent who do not meet the threshold, and there are 8 percent who have to be held for further information to be sought. If you look at this area of unmet need, no Government has ever been able to deliver every operation and every appointment that every person in New Zealand could benefit from, but the only answer in the end is to do more and more. That is exactly what we have done. In the area of doctors and nurses, we have now got 5,500 more doctors and nurses working in the New Zealand health system than 8 years ago. That is a considerable uplift in the number of personnel.

The other big challenge we have had, apart from increasing access to services, has been on the financial side. When we came into Government, district health boards were spending about $150 million more than they received in revenue each year. So they were in massive deficit, and the whole place was sliding out of control. Through a progressive approach we have brought those deficits back to about $50 million, and we are determined to continue to reduce those. If you take Southern District Health Board—where we have a commissioner in place—out of the equation, those deficits are even lower. So the fiscal discipline does really matter, and the point I would make is that if you look at that whole picture of access to services and the change in the financial picture, it has been only a National Government that has been able to increase access to services as well as manage the finances. That is very important because we are never going to have an unending pool of finance for the health system. No one is ever going to say: “Stop sending dollars.” It just will not happen. But what we do need to do is make the very best use of the finance that we do have in the health system.

We have taken a very focused approach, as well. For the last 7 years we have had health targets for the sector, and that has given very clear direction to the system. If you look at the approach in emergency departments, when we came into Government there were ambulances queuing in the carpark at my local hospital, North Shore Hospital. That does not happen any more, because we set this target of 95 percent being in and out of the emergency department within 6 hours. We have actually been very successful in reaching that target. We are no longer, also, sending people to Australia for cancer care. When we came into Government, 700 people had been sent to Australia for cancer care. We are also providing the elective surgery that people in this country need. The other thing we have done is, for the first time, we have launched a comprehensive New Zealand health strategy that lays out the plan for the health system for the next 5 to 10 years and beyond.

Actually, what we need in terms of the health system is a change in approach whereby we are focusing more on the community. We are focusing on prevention and earlier intervention because, actually, it does not really help the patients if the only point of intervention is once they get to hospital. We want to deal with things much, much earlier. We want to keep people well and in the community and we want to deliver care closer to home, and all that has to be enabled with the best use of technology in the long term.

If you look at the investment approach in justice, which my colleague Amy Adams was talking about earlier today, this Government is very conscious that what we do in these different social sector portfolios is all linked. In health, if we want to keep kids out of hospital we have got to have well-insulated homes. That is 270,000 homes that have been insulated under the course of this Government. If children are getting their immunisations, if they are staying out of hospital and staying well, they are actually going to do much better in the education system. If they come through the education system successfully with the skills that you need to actually function in a modern economy, they are actually going to have far better long-term social outcomes. If you look at the statistics for people who end up in the justice system, they have fallen off the wagon at some point along the way.

So all these things are interlinked, and what we do know from the political point of view is that the health system is one of those things that the public really does care about. This Government has been very committed to making sure that health has been the largest beneficiary of new money at each Budget, and I am sure that will continue to be what happens into the future, because in the end we know that well beyond the political arena, health is one of those things—in fact, it is the most important thing—that counts for New Zealanders, and we are determined to deliver on that.

Hon ANNETTE KING (Deputy Leader—Labour): I must agree with the Minister of Health that the public does care about health. Members of the public do care about their health, their family’s health, and the health system. But, Minister, I do not know where you have been, because there are a lot of New Zealanders who are very worried about their health, very worried about their access to health services, and very worried about the health system. Part of the problem is that a Minister must actually be accurate with the information that he provides.

I have listened day after day as the Minister tells New Zealanders that under his Government 50,000 more elective surgeries have been done. He then quotes the 2007-08 figure as the base point. Who had the Budget of 2008-09? It was the Labour Government; it was not the National Government. In fact, there were 12,000 additional procedures done in that year that he counts as National’s. I am just pointing out that honesty and truthfulness in figures is very important, and that is one of the ones that is not being presented in the correct way. Saying that one Government did something when it did not is not being straight with the public.

The second issue I want to raise is that Minister Coleman constantly says that former Minister of Health Pete Hodgson said that about 25 percent of patients were being sent back to the doctor. Pete Hodgson never said any such thing. I have asked the Minister—in fact, I did an Official Information Act request; several of them—to provide the evidence. There was no evidence that Pete Hodgson said that, and I could read out the exact quote that has been interpreted by this Minister for political purposes. So I have to say to the Minister that if he is going to bring up these issues, he should at least tell the story as it is.

Let us take the issue of cancer treatment in New Zealand. Yes, we are no longer sending 700 patients to Australia, but I ask the Minister, when were they sent, Minister? They were sent between 2000 and 2002. Why, Minister? The answer is in the very report that the Minister would not release when he had it. It was a 1998-99 report into cancer services in New Zealand, which I received as the Minister of Health, that said our cancer services in New Zealand were in a dire position, that we did not have enough linear accelerators, that we did not have enough radiation therapists, and that our health cancer services were likely to crumble. That was the truth—not the truth that the Minister will tell the people of New Zealand, but that was the truth. Then the Minister said we needed to do more.

Well, I have got the figures, Minister, on what has happened since 2011 to 2015 to those old people who were waiting for their hip and knee operations around New Zealand. In that time eight district health boards did 2,181 fewer operations, not more operations. So, then, let us look at the evidence. The evidence that came out of Otago University said that there is explicit rationing of joint operations in Otago, and it is worsening—it is worsening. The research paper went on to say that “we have noticed an increase in the severity of disease of those patients who do qualify for surgery.” That is the evidence, Minister. It is not the nice rosy picture the Minister would like to paint to New Zealanders, but what the public are actually seeing and what our professionals and our researchers are finding.

I have to say that I am very disappointed in the Minister’s approach to the health budget. Unless this Minister is able to show New Zealanders that he has sufficient in his budget in this 2016-17 Budget, he will be a failure. And he will continue to have New Zealand Doctor magazine—this comes from doctors—writing things like this about him: “Who is Dr Coleman? What does he look like? Try Labour.” That is what they say in New Zealand Doctor magazine, and that is because he has been missing in action when it comes to supporting New Zealanders in terms of the health budget.

I will be looking to see how much money goes into Pharmac, because Pharmac says there are 20 drugs that need to be funded before a drug like Keytruda. So there needs to be a sizable increase in that budget. There needs to be a sizable increase in order to do more elective surgery. I would like to see more money going into public health, because what we have had is a lot of fancy words about obesity. [Bell rung]

The CHAIRPERSON (Hon Chester Borrows): The Hon Annette King.

Hon ANNETTE KING: No, Mr Chairman, I will sit down and let the Associate Minister of Health have a go.

Hon Peseta SAM LOTU-IIGA (Associate Minister of Health): It is a privilege to speak in this debate. We have heard the member opposite, Annette King, ask for facts, and then she proceeded to slander the Minister of Health, who is doing a fine job, I may add, compared with the former Minister. I think that that may be the problem here—that it is the former Minister having a go at a Minister who is doing a fine job. Now here are the facts: in Labour’s last Budget, it was $11.8 billion—she knows that; she was part of that Government—and that has gone up to $15.9 billion.

Scott Simpson: Eh?

Hon Peseta SAM LOTU-IIGA: $15.9 billion, Mr Simpson. So that is over $4 billion more in the health budget under this National Government—under this National Government—and those are the facts that she should appreciate. But it is not just the amount of spending that matters in Government; it is the quality of the spending—it is the quality of spending, and it is New Zealanders accessing those services that are demanded by them. And the Minister of Health has already pointed out that under National an average of 6.5 percent has been spent as a percentage of GDP. So the actual amount spent by National as a percentage of our gross domestic product is 6.5 percent. Under Labour, under Miss King and her mates—5.7 percent. So it has gone up by about 1 percent, on average.

But it is not about that; it is actually about front-line services. We campaigned in 2008 that we would be putting more police on the front line, that we would be putting more teachers on the front line, that we would be putting on more nurses and GPs and doctors to serve New Zealanders, in terms of the quality services that they expect. Dr Coleman has already outlined 5,500 more doctors and nurses. And what does it mean?

Hon Annette King: And what are they saying about the health system?

Hon Peseta SAM LOTU-IIGA: Well, what they have said is that there are 50,000 more elective surgeries, which she seems to try to debunk, but those are the facts—110,000 more first specialist appointments. Do you know that? Miss King knows that. What I can say in terms of the Pacific health portfolio, you know, we have spent millions in terms of getting more Pacific people to that front line. In terms of the Aniva Scholarships, over $1.19 million, in terms of getting more Pacific people on the front line—and that includes 58 doctors in the last year, 27 nurses, and four oral health and dentistry specialists. It is also about the nursing graduates.

A couple of weeks ago I attended a scholarship presentation evening where Pacific people were being trained. They were being trained to become nurses, physios, doctors—and, you know, that is a beautiful thing. Miss King supports that but she will not acknowledge the—

Hon Annette King: Oh yes, I do.

Hon Peseta SAM LOTU-IIGA: —fine work that we are doing. Oh, she does acknowledge it. Well, thank you, I am glad you do.

I am glad that we also support health sciences academies, because it is not just about doctors and nurses; it is also about getting the kids at an early stage in their lives and to promote health sciences and to promote medicine and science in our schools. One of them—my local high school, Onehunga High School—has got a health sciences academy, which is a collaboration between the local district health boards and the Ministry of Health. When I talk to the students in those classes, what it is doing is promoting a subject that they would not otherwise be exposed to. It is allowing them to project their dreams and their aspirations to be in the health sector. These are young boys and girls, but they will be the men and women who will deliver health services into the future.

We also know, in terms of facts—you wanted facts; we are going to give more facts—our immunisation rates under National are mid-90 percent. What were they under Labour? Mr Simpson, do you know?

Scott Simpson: Very low.

Hon Peseta SAM LOTU-IIGA: Mid-70 percent—they were in the 70s. So we have lifted immunisation rates right across the board, from the mid-70 percent under the Labour Government to mid-90 percentages.

Hon Annette King: Do you know when it started? With meningitis B. That’s when it started—when we started to train all the immunisers.

Hon Peseta SAM LOTU-IIGA: Oh, here she goes—here she goes. She is denying it again, but those are the facts. We can look at all the health statistics you like; the National Government has done a great job to deliver these types of services.

One of the other statistics that I am particularly proud of is the reduction in rheumatic fever rates. Again, in investment, we put millions up front—

Hon Annette King: Bronchiectasis.

Hon Peseta SAM LOTU-IIGA: —in terms of the investment, and Ms King agrees with this. I have heard testimonies from Māori and Pacific kids and their parents who have said that without that investment, without their exposure to the type of treatment to reduce these rheumatic fever rates, they would be suffering right now. So these things are important, these are the facts, and this is why—

KEVIN HAGUE (Green): I want to talk about one particular area in health, and that is the area of mental health, which is one that, historically, has been poorly dealt with by Governments right around the world, including ours. Perhaps it is because of our fear of mental illness—that we may be affected by it—that we have chosen instead to put people in the bin, and to put them out of sight in those big psychiatric institutions. I am thinking of Kingseat Hospital, Seacliff Lunatic Asylum, Seaview Asylum, Carrington/Oakley Hospital—successors of Bedlam. They were nasty places to be.

In the 1980s and 1990s in this country we had two forces that were changing that: one was the process of deinstitutionalisation, and the other was several reports led by Judge Ken Mason. The Mason reports led to a very substantial increase in funding for mental health services, and led to the creation of the Mental Health Commission. The commission itself did an extraordinary amount of good work. It developed the Blueprint for Mental Health Services in New Zealand: How Things Need to Be, it developed a ring-fence for mental health funding to ensure money that was intended for mental health services could not be spent elsewhere, and it ensured there was ongoing oversight of the implementation of the blueprint. Under the watch of the Mental Health Commission we saw steady improvement. We saw more services, we saw greater capacity, and we saw a pretty substantial increase in people’s health.

The commission moved on to primary mental health with Blueprint II, but now things are going backwards. They are going backwards because the ring-fence does not really exist any longer, and so district health boards, which are under substantial financial pressure, are choosing instead to use dollars that were intended for mental health services for other services. Things are going backwards because there is no longer a top-line target for mental health services. The point of targets is to increase focus and effort on those particular areas, with the consequence that those areas that are not targeted will have less focus, less resource, and less effort, and, sadly, mental health is one of those. We have seen the Mental Health Commission disbanded and replaced with a single Mental Health Commissioner, whose focus is on individual complaints and not on the kind of systemic oversight and improvement that we actually need.

The Ministry of Health recently conducted a review of the Waikato District Health Board’s mental health services after a series of tragic events under that district health board. It found that staff working in mental health had very low morale, it found that the planning and funding department was paying a price below the national price for mental health services, it found that staffing ratios meant that clinical staff in mental health were having to try to care for more people than was appropriate, and it found that vacancies in mental health staffing were being held open to enable the district health board to save money. Those shortcomings are echoed amongst other district health boards: Northland, Capital and Coast, Southern, Canterbury. They are the signs of a sector that is under severe financial pressure—severe financial pressure that is stretching our mental health services not only to breaking point but beyond breaking point.

People like Nicky Stevens have paid the price for that underfunding, for having that eye off the ball, with their lives. It is now time for an urgent, nationwide inquiry into the state of this country’s mental health services.

BARBARA STEWART (NZ First): I am pleased to rise to take a call on behalf of New Zealand First on the annual review of the health sector. The Minister of Health continues to tell us, on every opportunity that he can, that the health system is in good shape and that we are heading in the right direction. We are hearing the increasingly loud voices of the people out there who are telling us that this is definitely not the case. We, and they too, hold grave concerns for the future of our health system because the ambulance at the bottom of the cliff is ailing, which is a very unfortunate situation.

The chronic underfunding is basically putting a huge strain on our health services and putting our system at risk. Many district health boards are not able to fund a safe level of staffing in our hospitals or even keep annual leave at a manageable level, and we have read this many times in the newspapers. The medical staff are saying that their workloads are unsustainable and that they are being forced to do more and more with less. It is not a safe situation and patients are, basically, being put at risk.

I had a very fortunate meeting with somebody on a plane going back to Hamilton—

Scott Simpson: I bet.

BARBARA STEWART: —yes—who said that, in his opinion, the nurses and the doctors go beyond the call of duty to look after the patients. Despite the fact that they are stretched, they do far more than they actually should. In high-dependency units and intensive care units we know that staff go beyond the call of duty. The gentleman I spoke to said that the care his son received was absolutely outstanding and could not be faulted. He also praised the hospital air service that flies from New Plymouth to Hamilton, and, again, the care in there was outstanding. So we have got our staff working to the best of their ability despite the lack of funding.

We know too that district health boards are unable to cope with the demand for elective surgery. Although the number of surgeries has increased, and the Minister tells us that every day, it is simply not enough to keep up with demand. We have got an ageing population, we have got a sharp increase in chronic illnesses, and all of this is putting pressure on the health system. And what have we seen? We have seen the district health boards having to raise the threshold to ensure that people have to jump through higher hoops to actually qualify for surgery. The result is that more and more people are becoming more and more disabled, and more are left in chronic pain to try to cope until they can have surgery.

Performing operations when they are needed makes sounds economic sense and, of course, it saves money. I had one instance recently of a gentleman coming to visit me in my Hamilton office. He said that he needed a heart operation, but the hospital had told him that it did not have the money to actually carry this out. This does not sound like the health system that we have had in the past.

Pharmac too is severely underfunded, meaning that more and more New Zealanders are missing out on vital medicines. Those who can afford to pay for them privately or through private health insurance definitely receive them, but for the rest of the people it is just about impossible. They are left to manage as best they can. We have never ever had a two-tier health system here in New Zealand where those who can afford treatment get it and those who cannot basically go without.

When we look at cancer, we see that we are lagging behind Australia in this area too. Up in the Waitematā District Health Board the bowel cancer screening programme is absolutely outstanding, saving many people every year. Why has this programme not been extended to other district health boards? It is actually saving lives. I am hoping that the Minister is going to announce this in the Budget this year. An election promise is too late. We will lose another 1,200 people to this disease.

When we have a look at obesity, the number of cases is reaching chronic levels.

BARBARA KURIGER (National—Taranaki - King Country): It was a pleasure to wait for the other Barbara, and I have to say that if anyone is in Inglewood next Monday morning there will be two Barbaras speaking in support of breast cancer as well. This National Government is making each health dollar go further. There are 5,500 more doctors and nurses with 1,000 fewer managers and administrators. What that means for me is there are more people in our community shifting primary health care out to where the people live.

An example that I just want to give to you around this today is that the half a million dollars that was put into rural mental health has been widely used in terms of training people to pick up problems and help with cases early, before people get to the stage where they need to be in hospital. So it is about more identification and more knowledge around that.

I agreed with Kevin Hague when he talked before about the things that we used to do to people with mental health issues in years gone by, and I am pleased that we are past that. When I see 480 people coming out in Hāwera to listen to John Kirwan speak on mental health, I do believe that the stigma is lifting. So I am really pleased that the community is totally aware of it.

Other things are happening in terms of shifting health care out into our communities. This week all of you here in Parliament will have the opportunity to visit on the forecourt the mobile health care units. They are visiting Parliament. I am really pleased to have them here. There will be a lot more than there used to be. We are going to be looking at the mobile breast-screening unit, the mobile dental unit, and the mobile lithotripsi—and for those of us who do not have medical backgrounds and who are lay people, that is about blasting your kidney stones. The mobile surgical unit will be there. I have been lucky enough to watch an operation in that surgical unit, and it is an absolutely brilliant concept.

But what is actually even more exciting is that there are more technologies in the making. The diagnostic technologies that we are going to be looking at, which are traditionally in the realms of hospitals, are more and more being brought into our communities. These are things like prostate function; respiratory function; mole-mapping; endoscopy, which is about your digestive tract; and skin lesions—those sorts of things. It is going to be a real pleasure to be associated with those surgical buses and health care units that are coming to Parliament.

The other thing that is happening this week is that I am opening the Rural Nurses Meeting on Thursday night. It is a real pleasure to be doing that. The Rural Health Alliance Aotearoa New Zealand is coming to Parliament—and to Wellington as well—and will be talking to us tomorrow. So there is a whole lot going on in our communities that is taking primary health care closer to where people live. You would have heard the Minister of Health talking before about integrated data and people’s health. You know, if someone is not doing well, is it a health issue, is it a learning disability, or is it a hearing issue? There is a whole range of things that we can pick up with integrated data.

I was very impressed last week when I joined the Prime Minister and the Māori Party in Te Kūiti. We had the Taumarunui Community Kokiri Trust in Te Kūiti demonstrating all the services that it offers, but the best service that it actually offers is that when people go in its door, they end up with a one-stop service. So this is the beginning of some of those integrated community services. Whether it is a health issue, a social support issue, or a housing issue, people come in very confused about where they need to go. That business has a source of navigators, who are totally there to help people work on whichever issue they need to and connect them to the right place so their health and social well-being is taken care of. They also have these wonderful groups of people who go out in their blue T-shirts. They do dancing in the community, they are fit, they are active, and they are working a whole lot on prevention as well as cure.

So I am really heartened with what is happening in health and with what I see in my communities. I am very pleased to be standing here in support of the National Government today and I look forward to all the things that are happening. Thank you.

Report noted.

Justice Sector

The CHAIRPERSON (Hon Chester Borrows): Before I call the member, I will just remind members that the Business Committee has given permission for the chairs of select committees to lead each debate on the basis that they are recapping evidence that came before the committees that they have taken over time, as opposed to future projection, in their speeches.

JACQUI DEAN (Chairperson of the Justice and Electoral Committee): With those words echoing in my ears, thank you, Mr Chairman. There are many divisions across this House over a number of issues. There are some things that we all agree on, however, and one is that we want New Zealanders to feel safe in their communities and to feel safe in their homes together with their families. Sadly, for some people this is not the reality of their lives. Family violence in this country is far too high. The Minister of Justice, the Hon Amy Adams, has made tackling family violence a priority for her in her time as justice Minister. Also, the other issue in the justice sector that has been under review is around reducing reoffending within New Zealand prisons and the number of people who go to prison. I am going to briefly touch on both of those things.

In terms of family violence, early last year the Ministerial Group on Family Violence and Sexual Violence commissioned a stocktake of family and sexual violence services across all Government agencies. We should note that the Government spends around $1.4 billion each year responding to family and sexual violence issues. That is a large amount of money to spend on a number of very important programmes. The stocktake found that although a whole lot of good work was being done there is certainly room for improvement, and the figures, of course, underline that. There is duplication of some services, there is fragmentation of other services, and all these things were noted. So a new family violence work programme has been under development and is developing a whole-of-Government strategy to tackle these issues and provide better services and better results for victims of family violence.

So I will just run through a number of the initiatives that have been undertaken in the past financial year and are ongoing. A Chief Victims Advisor has been appointed to provide independent advice to the Government—that is, an independent voice to Government on family violence. There has been a $3.6 million contract for a National Home Safety Service and that was awarded to the National Collective of Independent Women’s Refuges. That is being rolled out across New Zealand and that will now assist up to a thousand victims a year with better security so that they can remain in their homes and they can feel safe with a much lower risk of serious physical harm or violence.

There is now new regulation to give judges better access to more information about perpetrators’ family violence history so they have the best information possible when they are making decisions. We are trialling ways where we can speed up family violence cases that are progressing through the courts. That is happening in two pilot locations. Why? Because Family Court issues need to be resolved quickly, mostly for the benefit of the children involved. Police will soon start testing improved portable safety alarms and fixed alarms for high-risk victims.

The Ministry of Justice is looking into how to improve the information judges receive about defendants’ health where that is relevant to bail conditions and sentencing decisions and, for example, alcohol and drug dependency issues. That segues quite neatly into the reducing reoffending programme, which is so dear to the Minister’s heart. The Justice and Electoral Committee visited the alcohol and other drug treatment court in Waitakere. There is a trial going on into how the judicial system can better deal with people who have recidivist offences in the realms of drug and alcohol offending.

The pilot that the committee attended in the Waitakere court was under Judge Tremewan, and I want to acknowledge Judge Tremewan’s work in the alcohol and other drug treatment court. I want to commend her for her vision and for her passion and for her commitment to those offenders who have been referred to her court. What happens is that a recidivist drink-driver is facing charges. They apply to appear in the drug treatment court. They will be sentenced but not until they have undergone a programme of treatment. This is a great initiative. Thank you.

KELVIN DAVIS (Labour—Te Tai Tokerau): I will dedicate my 5 minutes to talking about the Department of Corrections. When we look at the annual review of the department, where do we start? There is just a wealth of material to go on, so let me start where it needs to start, and that is with the Serco debacle. The Department of Corrections had a terrible year last year, and Serco was the poster boy for incompetence and mismanagement.

I remember walking down the main street of Kaikohe in 2009 or 2010—about that time—when the Government first mooted the idea of privatisation of prisons. I walked down the main street of Kaikohe with corrections officers from Ngāwhā prison. They said to me at the time: “This is going to be a disaster. Privatisation of prisons doesn’t work overseas. There are going to be more assaults, prisoner on prisoner assaults. There are going to be more prisoner on staff assaults. There is going to be a whole heap of things covered up.” Let me tell you, every single prediction they made was 100 percent accurate. In fact, we could not have imagined that it would be worse, but it certainly was.

On 24 June last year we had the then Minister of Corrections in front of the Justice and Electoral Committee talking about the Estimates, and even then he had his head in the sand. He was talking about what a great job Serco was doing, saying that everything was fantastic, it had been monitored, and it was just swell. Within 7 months Serco was gone. Its contract was not going to be renewed. OK, so it is still managing the prison for the next 12 months, but, basically, all it is doing is just providing the staff to run Mt Eden Corrections Facility. The Department of Corrections has taken it over, and so it should.

Let me just remind everybody what the Minister who set up Serco said in 2010—and, of course, that Minister was Judith Collins. She stated in 2010: “Serco has a strong track record in managing prisons. I’m confident that the company will bring the high standards of professionalism, safety, rehabilitation and security expected by the Government to Mt Eden/ACRP.” Well, are those not famous last words? Everything she said there has been totally wiped.

Nothing that she said in terms of high standards, of professionalism, of safety, of rehabilitation, or of security measured up to what she said at that time. We have heard the story of contraband being brought in, we have had the fight clubs—and the fight clubs have been videoed and put on Facebook. Everything was a disaster. And now that the “tough on crime” rhetoric is not working, we are heading towards having a muster of 10,000 people in our prisons before the end of next year. We start to wonder why it is that our muster is getting so high.

Let us take a look at the programmes that they have in prisons, but, first of all—and I am reading from the annual report here, at page 134, talking about the programmes—“The rates of some programmes reported are small and below the level of statistical significance;”. Imagine that: programmes in prisons are performing and getting results below the level of statistical significance. In other words, they are not working. Then the report goes on to say: “however, this does not necessarily mean that the particular programme has no impact on re-offending.” Of course, a programme needs to help only one person to not reoffend, out of all the hundreds of thousands who might attend the programme, to say that it is having some positive effect. So that is just nonsense.

The programmes have what they call a rehabilitation quotient, and after a 12-month follow-up only one of the rehabilitation quotients, when it comes to preventing reconvictions, gets to double figures. There is one rehabilitation quotient for the reimprisonment of offenders, and this is the Special Treatment Unit - Child Sex Offender programme. It has a rehabilitation quotient of minus 2.2. I thought, well, what does that actually mean? Because people will read the annual report and ask: “What do these figures actually say?”. I asked written questions of the Minister of Corrections: what does that figure of minus 2.2 mean in terms of offenders? How many offenders has it helped?

Hon AMY ADAMS (Minister of Justice): It is a great pleasure to come down and take a call in the 2014-15 annual review debate. First of all, I want to begin by just acknowledging the Justice and Electoral Committee, which does a huge amount of work in this space, and, of course, the Law and Order Committee. I see that the chairs of both committees—Jacqui Dean, who chairs the Justice and Electoral Committee, and Kanwaljit Singh Bakshi, who chairs the Law and Order Committee—are present. The members on both of those committees do a huge amount of work in this sector, and I do want to acknowledge all of the members on those committees for their diligent work.

The role of the justice sector, in my view, is really about reducing harm and victimisation wherever we can and, of course, maintaining trust and confidence in our institutions, and recognising that when people are in contact with the justice sector, it is generally not somewhere that they want to be. It is not something that they have chosen for themselves, and it is our job, I think, to make sure that we deal with them as fairly and as efficiently as possible and allow them to get on with their lives as soon after that as we can. I think, in that regard, a huge amount of work has been going on under the radar that I want to take a moment to reflect on. It is obviously not only about the people using the sector but also about the taxpayers who fund it, and my view is that we have to work very hard to ensure that our services are as supportive and enabling for our customers and as effective for them as they can be, and efficient for the taxpayers.

When I came into the Chamber I heard Jacqui Dean speaking very eloquently about a lot of the work we are doing in family and sexual violence, and members of this Committee will know that I have made this my No. 1 priority in my time as the Minister of Justice. There is a huge amount that we could talk about in that space alone but, actually, in this contribution, having heard the contribution from the chair of the select committee, rather than repeat much of what she touched on, I thought I would focus instead on some of the areas in the justice sector that perhaps do not get as much visibility, because often it is the smaller, less newsworthy, or less exciting initiatives that we do that make a significant difference. I think some of those really do deserve a little bit of visibility.

I talked about the fact that when people come into the court system, they generally want to get through it as efficiently and as fairly as possible, and one of the big focuses for us has been on reducing the times through the courts. I want to acknowledge the work of my predecessor in the role of Minister of courts in this regard, Judith Collins, who really kicked off this piece of work. There has been a focus for some time on saying we need to get the court system operating more quickly and more efficiently than it has been, and I am pleased to report to this Committee that we have made significant progress. If you look at the category of District Court criminal trials alone, over the past few years we have managed to reduce the number of cases that have been there more than 2 years by 73 percent—a 73 percent reduction in aged cases.

In fact, those sorts of reductions of time are not unique to District Court criminal cases. The Māori Land Court aged cases are down 35 percent, Employment Court is down 30 percent, Environment Court is down 22 percent, and District Court civil originating applications aged cases are down 41 percent. So there has been a tremendous focus from all of the staff who work in our court system, and I want to acknowledge them because up and down this country we have thousands of people who work incredibly hard in our courts, all around New Zealand, and they really have a very, very strong focus on getting a better, faster resolution of issues for New Zealanders. Their work has paid significant dividends and they deserve acknowledgment.

I also want to comment on the increased use of audiovisual links. Over the year in question that we are discussing, we saw the continuation of the roll-out of audiovisual links across our courts. As well as being a very efficient and effective way to use technology and reduce cost, one of the unspoken—well, certainly spoken by me, but perhaps unrecognised—benefits has been the reduction in the number of prisoner transports. So it is a reduction in the security and the court time and—actually, helping the victims to find the process easier—through not having to move the prisoners back and forward often quite long distances. When I was visiting Ms Dean’s electorate in Ōāmaru we found that youth offenders were being transported from Christchurch, from the youth justice residence Te Puna Wai o Tuhinapo, all the way to Ōāmaru every time there was a call-over. So, obviously, that is a significant impact.

In the use of audiovisual links, just in the area in question, we saw a 25 percent reduction in prisoner transports just from having that system. These are the sorts of figures you do not hear a lot about, but they make a significant difference to both the offenders in the system and, as I say, the victims, and also the cost and safety of all of our corrections and security staff. I can tell this Committee that since the year in question the use of audiovisual links has gone up and up. So we have gone from about 9,000 instances of use in the year in question—that is increasing and we are now up to around 1,000 a month, which I find very encouraging. The most recent court to get its audiovisual links upgrade is the Waitakere District Court, as part of a $3.8 million refurbishment, which we are going to visit shortly. I am very proud of the work that we are doing in this space.

JACINDA ARDERN (Labour): I am aware, in rising to speak on activity within the justice portfolio, that the justice sector is a really fundamental part of ensuring you have a fair and just society. That may be seen as a given, but not all justice systems are built equal. In fact, what is incredibly important is that in terms of building a society where people have faith in their institutions and ensuring that your justice system is transparent, accessible, and representative, we must ensure that we are keeping a constant check on each and every one of those measures. If people cannot have faith in their institutions, then everything is under threat. I think we are seeing examples—Mr Chair, if I could be so bold—with the chaos that ensues if citizens no longer, for instance, feel faith in institutions like those that gather tax revenue. This is another reason why, for instance, Transparency International uses 12 data sources when assessing a country’s level of corruption and relative corruption, and uses the World Justice Project Rule of Law Index as part of its measure.

Taking that into account, in terms of how fundamental it is to ensure that we have a transparent, accessible, robust justice system, how have we fared over the past year within a New Zealand context? I fear that if you survey across the corrections system, policing, courts, and justice, we have a system where people are feeling increasingly like they are unable to access the justice system that is meant to serve them. Where is the evidence of that? Well, it is pertinent that the Minister of Police has taken the chair, because we have seen a cut in the policing budget in real terms—in real terms, absolutely. The police are having to absorb $300 million in most recent times into their baseline in terms of a cut, and that is having a tangible impact on the front line—and I know that my colleague will expand on that further. There has been a departure from the notion of community policing, and burglary resolution rates are at an all-time low.

But that is not the only the measure of an accessible justice system. If you are a small business owner, for instance, and you have someone who breaches a contract with you as a small business and you are left out of pocket, how are you meant to seek redress on that matter other than through the ability to access our court system, our civil court regime? If you are unable to do that in a cost-effective manner, what happens? As a small business, you cut your losses. You shrug your shoulders. Fundamentally, the rule of law in New Zealand requires that people are able to access the justice system to ensure that the law is upheld. It is not just about criminals; it is also about those situations where if someone sees that the cost is too high, they will not access our courts, and the rule of law collapses.

We have a situation now where to access our legal aid regime you basically have to be on an income of $22,000 or less, essentially. It is becoming increasingly less accessible—I know Louisa Wall will speak on this—but, again, that feeds into this growing problem we have where people have distance from their ability to access justice. That is something that should worry each and every one of us. It expands right across the sector; not just contracts. Even in the Family Court, with the incredible role that it plays as a court of last resort when it comes to custody and property matters, increasingly, there are massive problems, particularly stemming from the reforms that this Government has put in place. These may have been established with the very best intentions—the desire to keep access to the court cost-effective by not having to use a lawyer and by using mediation processes—but what have we seen as a result of those ill-planned reforms? People are making without notice applications to the court in order to (a) access a lawyer and (b) get to the court quickly, and, as a result, we have an absolute backlog—we have an absolute backlog.

The judiciary has been crying out, saying that it is seeing constant failures and that people are coming to the courts representing themselves in unsafe situations. It is a disaster all round, and the Government’s response? “We’ll review it in 2017.” We have massive problems—

KANWALJIT SINGH BAKSHI (Chairperson of the Law and Order Committee): Thank you, Mr Chair, for giving me the opportunity to speak in this debate on the justice sector. First of all, I would like to acknowledge the Ministers for this sector, the Hon Amy Adams and the Hon Judith Collins, for their leadership and the work they have been doing in this sector. I would also like to acknowledge Jacqui Dean, the chair of the Justice and Electoral Committee, who is doing a fantastic job in that select committee.

This Government has been working hard to reduce crime, and I would also like to acknowledge the police as well as the Department of Corrections for the work they are doing in helping this Government to achieve its targets in reducing crime. The Government has been taking steps to prevent crime from happening, supporting the vulnerable in our society, and preventing them from being victimised. It is the National-led Government’s priority to provide safer communities and focus on reducing the crime rate in this country.

I would also like, once again, to say that this Government has been very successful by adding an additional 600 front-line policemen to reduce crime. Mr Chair, you are one of those members who have been a policeman. As well as being a member of Parliament, you have been a lawyer and you have seen the court system. Under your leadership of the Justice and Electoral Committee—

The CHAIRPERSON (Hon Chester Borrows): Don’t bring me into this debate, thank you.

KANWALJIT SINGH BAKSHI: I would like to mention that during the select committee process of the Law and Order Committee there were issues raised by the Opposition in respect of burglaries in New Zealand. A wide range of crimes is dealt with by the police from time to time, and when the police are called for an offence like a burglary where the offender is still present, the response is immediate. Sometimes the police have to go and handle other cases such as homicides or serious violence cases, and these take priority over crimes like burglary. But wherever the evidence is provided, the police have been successful in their resolution, and they really work hard to make the community safer.

I would also like to touch upon a very important area that this Government has been focusing on, and that is the corrections system. In the select committee process we saw that the Department of Corrections has been doing a fantastic job of reducing the reoffending rate, which has fallen 6.8 percent since June 2011. This means 1,250 fewer offenders returning to the department’s management. The amount of reoffending is down 24 percent as of December 2015, compared with 2011.

The vast majority of prisoners will be released back into our communities, which is why we are committed to ensuring that they do not create one more victim. Through our commitment to prisoners’ education, mental health support, training, and addiction treatment, our work in prisons is making a lot of progress. There is no magic bullet for reducing reoffending. We are tackling the drivers of crime in a number of ways, and we will continue to do so. Thank you.

Hon JUDITH COLLINS (Minister of Corrections): It is a pleasure to be able to take a call on this matter. I would like to acknowledge my ministerial colleagues involved in the area, particularly Amy Adams, and also the chair of the Law and Order Committee, Kanwaljit Singh Bakshi; the Justice and Electoral Committee chair, Jacqui Dean; and all of the members of those committees. I know that they are all very hard-working committees. I am particularly pleased that the Law and Order Committee is also helping us come up with some solutions—hopefully, cross-party solutions—to some of the issues around gun crimes and the increasing use of guns, particularly by gang members and serious violent offenders. So it is one of those things where it is good to see a committee working so hard to come up with something, hopefully, very sensible—

Tim Macindoe: The public welcomes it.

Hon JUDITH COLLINS: —and the public does welcome that sort of contribution from us.

Can I say that it is great to be back in the justice sector, and it is particularly great to be able to say that one of our four big priorities when we first came into Government was around reducing crime. One of the first things we did was to bring 600 extra front-line police into the New Zealand Police. It made a huge difference, particularly the 300 going into the Counties Manukau, or South Auckland, policing district. What we have seen is a reduction in the crime rate. We sought to reduce violent crime by 20 percent and reduce youth crime by 25 percent by 2017. We have exceeded two of those targets. Since the base period of June 2011, the recorded crime rate has fallen by 16 percent, violent crime has fallen by 8 percent, and youth crime has fallen by 38 percent. There are 52,448 fewer crimes now, since that time. This is a huge improvement, and in addition to that we can always look to do better, as well.

I think one of the things that has been very helpful is the use of technology, particularly in the police, around the use of smartphones—first off, iPads, and then smartphones—and actually being able to access information about offenders and being able to input information as the police are at the job and not afterwards.

I saw very recently a very good innovation with the smartphones. The police were able to record, with a victim’s consent, the statement of a victim of family violence at her own home immediately following the police having arrived at the house and finding out what had happened. This saves the victim so much effort in having to leave the home, often with children in it, and going into a police station. After all, she has not done anything wrong. It also helps to prevent the offenders and family members from getting to the victim, or trying to stop the victim from continuing to give evidence. This is something that is being trialled in Palmerston North. I have been really thrilled to see that it seems to be making a real difference already—particularly for victims, who are then spared this very difficult and tortuous process of having to give a written statement to a police officer, often in times of deep distress.

One of the good things with this process is that the police are looking at the technologies they have and thinking about different ways of using them. Often when we look at some of these really good innovations, it is not rocket science, but it does not happen unless we have the technology available and we have an attitude that says that actually police officers can come up with great ideas. Let us trial them and, if they work, let us help them.

Family violence is one of our big frontiers when it comes to dealing with crime. We have 41 percent of police front-line staff time spent on family violence issues. It is around about 20 percent of all police work. It is far too high. At least in this country, like Australia, we do actually acknowledge that it occurs and that it is a very serious problem. But, frankly, we need to do a lot better, and that is why the Minister of Justice and I, and other Ministers—17 of us—are involved in cross-Government work in this area. It is something that should be concerning to us all.

In addition to that, I can say I am very pleased with some of the work that has been going on in the Department of Corrections. I know that the Committee will be thrilled to know that Serco paid us $8 million yesterday. It is so much better to actually get the money than to say it is coming. Guess what? The cheque was not just in the mail; it was there. That was great.

Also, we are seeing some really good work going on in rehabilitation, particularly drug and alcohol treatment. I am really pleased to see that we have been able, in the first term in office, to double the number of prisoners who can access drug and alcohol treatment from the measly 500, which we inherited, to 1,000, and now that is going to be growing by up to 4,000, hopefully, starting next year. So we are going to put a big effort into that.

There is a lot going on in our prisons, too, around working prisons, so that all of our prisons are becoming working prisons. I know that all Kiwis will join with me in a silent cheer when I tell them that some prison directors who have come from overseas—OK; it is the UK—have said to me things like: “In New Zealand prisoners want to work.” That is, apparently, unusual, but not in New Zealand—our prisoners want to work. I was really proud of them when they said that. I thought: “They are good, our Kiwis. Well, OK, some of them are very badly behaved, but they want to work.” So that is a good thing. They see work as being of benefit to them, and of course it gives them something—skills—that they would not have otherwise.

Just recently I was at Rolleston Prison in Canterbury and saw the 34th house that the Department of Corrections has rebuilt from, in some cases, very damaged properties—Housing New Zealand Corporation houses. It was being trucked out the gate, off to its new home and to its new tenants. That is the sort of work that I think New Zealanders want to see our prisoners doing—learning new skills, getting a great outcome, and helping other people who are actually, in some cases, worse off than themselves. I hear that that was very well received.

We often hear quite a lot about the prison population in New Zealand. I am often hearing it quoted that it is the second-highest in the world. Well, that of course is complete rubbish. What it is is that we are ranked seventh in the OECD for imprisonment rates, and 72nd in the world. We are nowhere near the second-highest in the world. What would be great is if we were to have fewer people in our prisons, but while they continue to commit violent crimes and where they continue not to be safe on remand, then they will continue to be sent to prison. When they are, then I will be happy to help house them. We have had to deal with that, and I think it is probably a good thing that we have been prepared to do that. It is not a good thing that they are committing crime in the first place.

There are lots of things, too, that we could do further in this portfolio, and I am really pleased that the Department of Corrections has agreed with me, and I have agreed with the department, that mental health is one of the areas that we need to do better in, in our prisons. So the House can expect to be hearing more on that. It does not take a rocket scientist to work out that in the late 1980s and early 1990s when, essentially, modern Western countries decided to empty out the mental institutions, we actually ended up filling up the prisons instead. That should not have been a surprise to anyone, really, but that is what happened.

I am not saying “Let’s go back to those days.”, because these mental institution patients did not have the same rights that people in our prisons have. I think it was a pretty horrendous situation for many people. But do we need more beds for those forensic patients? Yes, obviously, we do. But, unfortunately, it is the sort of thing where, in some cases, prison is going to be the safest place. We are working on something right now, at Auckland prison, at Pāremoremo, where there is a very secure unit being built. It is, in fact, going to be able to house and to treat prisoners with mental health issues who do not pass the threshold where they need to go to the Mason Clinic, but who exhibit very serious behaviours, including self-harm and harming others. I am very pleased about that.

I also want to see more work in the Department of Corrections—and the department certainly agrees—on making sure the Out Of Gate care is better as prisoners leave prison. We do not want to see them back again. There has been a huge improvement in that over the last 7 years, but there needs to be even more. In particular, we could spend all the money that there is, but actually that will not solve the problem until we deal with the issue of gangs and their influence. If you want to look at who reoffends more, it is gang members. They are twice as likely to reoffend as non - gang members and are twice as likely to be in prison for serious violent offences and for the selling of methamphetamine. These are the sorts of situations we are dealing with. This is not just a Department of Corrections problem, it is not just a police problem, and not just a justice problem. Basically, the way I see it, when families fail, Child, Youth and Family and the social welfare system comes in, and when that fails, so does the justice system.

Hon PHIL GOFF (Labour—Mt Roskill): I am really glad the Minister of Police is in the chair because the ethnic communities have asked me to raise directly with her, in the House, the concerns they have about their security, particularly those who are retailers. What they tell me about is the gross inadequacy of the response they are getting to protect them in their communities and on the streets when they have raised matters with the police.

Just a week ago we had the Indian Central Association conference. The president raised with me, and with three National colleagues who were there, the fact that they had had a gutsful of the sort of complacent response they were getting from the Government. It says “It’s all OK because crime is coming down.”, and we have heard that again from the two previous National speakers in the Committee. The ethnic communities say that this is a Government that is increasingly arrogant and out of touch with what is happening in the community.

Let me give the Minister an example of what happened at the meeting we held last Friday night. A lady got up. Her name is Mrs Smruti Patel. She has a superette, the Island Superette, in East Tamaki Road, Ōtara. The day before—last Thursday—a robber had broken into the shop, attacked her husband with a hammer, and left him bleeding and seriously injured. She told the meeting that when she rang the police, they said they were too busy to respond. I find that inexplicable. I am not sure that that can be right, but she said that, and I had hoped there would be a policeman at that meeting to respond to her because I had written to three Ministers—the Minister of Police, the Minister of Justice, and the Minister in charge of Child, Youth, and Family—and said: “We have got this growing concern. The ethnic community wants your representatives to come along to answer the questions, to respond, to have dialogue with them, and to hear their concerns.” You know, not one of those departments turned up. They all said no. They declined to be there. The request we made, and I had made through the Ministers, was respectful; their response was not.

We had the case last week of a young Thai girl who had had her iPhone robbed off her. She has a “find your iPhone” app on her iPad. She found out where the offenders were. She rang the police and said: “Come with me and get my phone back, and arrest the offender.” They said: “No, we won’t.” She had to turn up herself with her taxi driver to retrieve the phone, and with no police to arrest the people who had robbed her of that phone.

I had another case referred to me of a man whose home had been burgled and the burglar had taken his credit card. A service station rang him up and said: “Your credit card’s been used to buy petrol.” He rang the police up and said: “They’ve got it on closed-circuit television. We can find the identity of the offender.” Do you know what happened? The police said “We’re too busy. You’ll have to go down there and retrieve the footage.”, and he did. He went down and he got it, he took it the police, and they said: “No, that’s not enough evidence. You’ll have to find some more.”

Another man who was at the meeting, Indy Purewal, has a superette in the Minister’s own electorate. On a Friday night 3 weeks ago, the assistant, who was asleep upstairs in his bedroom, was woken up by an offender trying to break in through the window. He rang the police while the man was still there trying to break in, but the police said they were too busy.

On the Sunday, again, the same shop assistant was behind the counter when seven teenagers came marauding into the shop, stealing cigarettes, trying to open the till, and taking the goods. I have seen it all on closed-circuit television. He rang up the police and the police said: “We’re too busy to come.” The offenders were still in the vicinity. It was only when the owner, Mr Purewal, turned up and said: “I’m going to go out there with a gun and get these …” that the police then came immediately. But I ask the Minister why that shopkeeper had to do that to get a response.

The police tell me that they are too busy, too stretched, and too under-resourced to respond in the way that every New Zealand citizen has the right to have the police respond to them when they are under attack. New Zealanders have had a gutsful of this, and they have had a gutsful of the arrogance and the complacency and the fact that this Government is so out of touch that it will not respond other than by saying what the Minister of Justice has just said, which is: “It’s all right, crime’s coming down.” If you are the person who is the victim, if you are the person who has been attacked, then that response is not adequate.

I say to the Minister that it is time she got the resources to the police to get, for example, more than 6 percent of all burglaries resolved. If you are a crook in Auckland and you are stealing from houses, you have got a 94 percent chance of getting away with it. Those figures have got worse every year.

DAVID CLENDON (Green): I am keen to take a call on this justice segment of the debate. We live in a constitutional democracy. We have a robust judicial system, apparently. We respect the rule of law. It is unfortunate, however, that in recent times, particularly in the last couple of years, the whole question of access to that justice system has gone to the forefront of a lot of people’s thinking, particularly in terms of the cost of accessing the justice system and issues of geography. The fact is that where you live in New Zealand—your physical location—can be one significant determinant of whether or not you can get a fair shake from the justice system. I think that is unacceptable.

The justice community—the judiciary, the legal fraternity, and the like—is an inherently conservative community. By the very nature of what they do they are conservative, which makes it all the more significant that some of the language emerging from that community of interest has been arguably quite radical and quite outrageous in some views. We have been hearing from lawyers themselves and from judges, we are hearing from people who work in the courts, we are hearing from probation officers, and we are certainly hearing from the people who are endeavouring to engage, for whatever reason, with the justice system that the cost is simply too high. There is insufficient support for the least well-off, who often have the highest needs. We are in real danger of finding a situation where New Zealanders will get the best justice that they can afford. That is an untenable situation for a country like ours to find itself in.

One example of that is legal aid. Most people, if you ask them, will assure you that “Yes, for those who cannot afford a lawyer, we have a good legal aid service.” The threshold for legal aid is set at such a rate that if a person is working, on average, more than 30 hours a week on the minimum wage, then they are above the income level for legal aid assistance. That is a ridiculous proposition. For somebody who will be barely surviving, 30 hours a week on the minimum wage puts you above the income threshold to qualify for legal aid. That is a ludicrous proposition. It is not only the least well-off; even middle-income families are finding it increasingly difficult. Where you get separations and the like and you need the intervention of the courts, it is becoming extremely problematic for people to get into that justice system, and that is unacceptable. It is a result directly of policy and of budget decisions. We need to do better; we can do better.

Even in terms of legal aid, a lot of the larger partnerships that historically have done a significant amount of work—some of it pro bono—are starting to back off because they simply cannot afford the level of contribution that they are making to subsidise the inadequate budget that is going to the judiciary, to the justice system. Smaller partnerships, particularly around Family Courts and the like, are simply struggling. They cannot take on work where they will be constantly losing money—that is an unacceptable situation.

One of the safety nets, the community law centres—and I have engaged with a number of them in just the last 4 to 6 weeks—are all over-stretched and under-resourced. They are working on goodwill, and inevitably that pool of goodwill will diminish over time when they have simply reached the point of exhaustion and cannot continue to meet the level of demand. In fact, they are not meeting the level of demand now because their funding is often insecure and insufficient, and it really leaves people with nowhere to go.

I think our Labour colleague Jacinda Ardern was commenting on the Family Court issues, particularly the matter of self-representation. That is a very real and growing problem, as is the phenomenon that so many more people are now claiming urgency in order to have legal representation when they enter the Family Court. That is a perverse outcome, but an entirely predictable one, of the poorly thought-out reforms that we saw in 2014—18 months to 2 years ago. We need to do a lot better in that sense if we are going to continue to be a country with an accessible and a robust justice system. We need to put the resources where they need to go, and stop pretending and stop denying that there is not a problem. Sadly, that is largely this Government’s response—“There’s nothing to see here. Everything’s roses.” When talking to people on the ground, in the community, and in the judicial system, we know very well that is not the case.

I would like to speak briefly about the Department of Corrections. Again, I make it my business to visit the prisons regularly—[Bell rung] Mr Chair.

The CHAIRPERSON (Hon Trevor Mallard): David Clendon.

DAVID CLENDON: Excuse me, Mr Chair, I will finish there.

The CHAIRPERSON (Hon Trevor Mallard): OK. Scrub that—by leave. Ron Mark.

RON MARK (Deputy Leader—NZ First): Well, it is interesting. Looking at page 596 of this report, regarding the 2014-15 annual review of the Department of Corrections, there is a part of me that says that this is like déjà vu, is it not? I think back to the time when I was in Opposition over here and I was looking at the Hon Paul Swain, who was the Minister of Corrections. Labour was in Government, and we were talking about the Department of Corrections and what an absolute debacle it was. I look at this report here and I see the mention of the advanced control and restraint training, which has been very successful. It brings back visions of the “goon squad” in Christchurch, which, among other things, became very infamous for having initiation tests that required new members to put their penis on the bar at the West Melton pub and withstand it being bashed with a beer bottle. That was the type—and we had Justice Ailsa Duffy’s judicial inquiry into what was known as the “goon squad” in Canterbury, but it was the emergency response team. Thankfully, those days have gone.

I have to say that, looking at this report, it does beg a question. In those days, the Department of Corrections was a debacle. There were many across the House who questioned the view, which the National Party and the ACT Party touted, that we should have private prisons. Looking at this report here, in this era, in 2016, we see where this Government has indeed privatised a couple of prisons. We read that the private management of prisons has likewise turned out to be a debacle, with the Minister herself saying that she has just received an $8 million cheque, being payment from Serco for its failings, some of which are covered in this report.

So, today, in 2016, what does it lead us to think? It actually leads us in New Zealand First to think that, actually, the Department of Corrections has gone through a serious adjustment. The public management of our prisons has improved. The leadership team in the department has definitely improved since the days of Mr McCarthy and the like. But it is this experiment that has fallen over drastically.

I read in this report here that “Serco was fined for failing to meet performance targets in accordance with the contract,”, and then, further down, I see that “The department acknowledged that it was responsible for overseeing the prison and emphasised that it was now focused on making future improvements”, and the Law and Order Committee itself questioned the questionable international reputation of the prison management that actually won this contract. Question: what does this Government intend to do? It has tried its experiment. In actual fact, it is the publicly managed prisons that seem to have picked up their game and are doing better, and it is the private prison experiment that has turned out to be a disaster.

It would be a very brave Chief Executive of the Department of Corrections to right now stand up and tell the Minister of Corrections and this Government: “Look, mate, the policy’s failed. It doesn’t work. All the predictions that were made about privately managed prisons have come home to roost, and we’d be far better off having prisons managed by the prison service, the Department of Corrections, as was always the case.” But, unfortunately, New Zealand First does not see any indication that the Government is getting that message or that the department’s management is giving it that message. Indeed, if we read on further, what do we find? We find: “We heard from the department that it has a contract with Secure Future to design, build, finance, operate and maintain the Auckland South Corrections Facility …”. What do I get from that? I get the message that the Government is wedded to its privatisation policy and it will not change, despite what we have seen.

Going further into this report, there are a couple of things that we can agree with. I agree with the Minister’s comments about rehabilitation, looking at the many drivers around—and here is the comment—the increasing prison population. We are always hearing from this Government that crime is going down and that crime is at record low levels. Match that statement against a later statement that actually says that the prisons are overflowing. Well, it does not say those exact words, but what it does say is it is “reported that the average prison population in 2014/15 was 8732, which is an increase from 8,460 …”, which in 2013-14 was an all-time high. It goes on: “This is largely the result of a steady increase in the population of prisoners on remand, and represented 23 percent of the prison population in 2014/15,”.

Essentially, that paragraph is saying that although the Government has been insistent that crime is going down, our prisons are overflowing. One of these things cannot be true. We cannot have overflowing prisons and we cannot be moving to full prisons, talking of building new ones, and having double-bunking if crime is going down, surely. Match that against the comments that we have just heard from the Hon Phil Goff about police—and I want to get to that as well. If you look at the Department of Corrections and the police hand in hand, and you look at this report and read it, are we succeeding at reducing reoffending? No. We had a reduction rate peaking at 12.5 percent and it has decreased now to 8 percent, so we are failing at rehabilitation.

We talk later on in the report about the effectiveness of rehabilitation programmes that offenders complete, and then, ironically, we talk about how difficult it is to achieve these targets because reintegration is proving to be extremely complex and difficult. But look at the numbers. Out of a $1.25 billion budget, the department is spending only $10 million on reintegration. Go figure. If we are not pouring money into reintegration, if our rehabilitation programmes are not working, and if they have dropped from 12.5 percent down to 8 percent, is it any wonder that our prisons are overflowing? It has to be that, because it cannot be that crime is increasing because the Government tells us every day, ad nauseam, that crime is reducing. It is down to something like 32 percent, I think I heard was one figure.

Let us get real. Let us be honest and truthful about it. Crime is not reducing.

Did anyone watch television last night and watch the news? Four of the five most dangerous places to be are in Auckland. Why? Because you are liable to get the bash. We hear day after day after day about storekeepers, corner dairy owners, and superette owners being attacked at their place of business and police not responding. We hear continually that in rural provincial New Zealand police stations are—well, they are not quite being closed; they are just not open for business. We are hearing continually that people are calling police and getting frustrated that no one responds.

What does all that mean? If, fundamentally, you are not responding and if you are not reacting and catching bad guys and charging them, then crime will go up and your prisons will overflow, and if the reintegration and the—crikey, I am losing my track now. If the reintegration and the corrective programmes are not working, then your prisons will fill up and overflow. Fundamentally, if we were to do a report card right now, in 2016, on this Government’s performance on the Department of Corrections—on its rehabilitation programmes and on its reintegration programmes—it has failed. No amount of fluff and bumf and denial from the Government can change this report. It is what it is.

I would say to the Government that it is time, actually, if we want to get crime down and if we want to get reoffending down, to seriously focus on reintegration programmes. We do have to step up the game on the rehabilitation programmes, and we do have to make sure that we are catching people and locking them up, and make sure that justice is being seen to be done and that law and order is being seen to be maintained. If we fail to do those basics, we will continue to build more prisons, we will continue to double-bunk, and we will continue to sit in this House—it does not matter whether it was 2002, 2005, or now, in 2016—arguing amongst ourselves as to who has done better with law and order and arguing as to whether the public in general is safer and better off for it.

This report is a sad report. It is a fail. I would say to the new Minister of Police and Minister of Corrections that she has got a big task on her hands. I feel sorry for the former Minister of Corrections. I think he got a hospital pass. Some might say that he was unfairly set up to fail. But the facts speak for themselves. We have failure in law and order at both ends—

STUART NASH (Labour—Napier): Let me tell you a story about a member in this House who was driving on a street in Whangarei on Friday evening at 5.30 with his wife, his 4-year-old daughter, and his 13-year-old daughter. A woman ran a stop sign, smack into the side of his truck, and it wrote the truck off. He phoned up the police. Heaven forbid—there was no one injured, thank goodness. He phoned up the police. The police said: “We’re too busy to come.” This was one street away from the brand new Whangarei police station that the Minister of Police had opened—one street away from the police station, and the police said to him: “We’re too busy to come, but make sure you report it to the police within 72 hours.” The witnesses who came over, and this member himself, smelt alcohol on this woman’s breath, and the police were too busy to come.

I ask you, is this the sort of service we expect from our police? Is this the sort of society we have now come to?

Mr Goff has told about six stories of New Zealanders in trouble—in trouble. What do New Zealanders do when they are in trouble? We learn, from as soon as we can dial the phone, to dial 111. Every single one of Mr Goff’s people did that, and no one turned up because the police are too busy.

Whenever a Minister assumes a portfolio, he or she is given something called a briefing to the incoming Minister. Judith Collins got one when she reassumed the police ministry in November, and the No. 1 priority in that briefing was not solving crime, was not resolution rates, was not more cops, and was not more stations. It was fiscal sustainability. The police sent a very clear message to the Minister, saying: “We are in trouble. We do not have enough money to do the job.” We can see this in the crime statistics, and we can also see this in the messages the police themselves are sending us.

I want to say that I have immense respect for the police officers who keep our community safe. They are hugely committed. They are very passionate about their communities, but they are stretched. In the biennial Police Association survey, last undertaken in December of last year, 74 percent of Police Association members said that they were dissatisfied with the number of front-line staff—74 percent were dissatisfied with the number of front-line staff. And 86 percent of Police Association members—so these are the police themselves—are saying that front-line officers are under-resourced. But even worse, I think, is that 27 percent of police—that is, one in four police officers—believe there is a risk of service failure at the front line due to recent cuts. We have a real problem, and this needs to be addressed by giving the police the resources they require to do the job.

Recently, the Counties Manukau crime prevention manager blamed the media for the increase in burglaries in March of this year. He said: “The media around burglaries has been one of the contributing factors to the increase of burglaries because people think it’s a crime they can get away with.” I do not believe that criminals undertake a detailed risk analysis to determine what they can and cannot get away with.

What I would say is that the media’s analysis of this has perhaps led to a general waning of confidence in the police, and this is something that needs to be addressed under urgency. In fact, from 2013 to 2015 the public’s trust and confidence in the police dropped from 81 percent to 75 percent. Admittedly, that is a lot higher than, say, the 25 percent that politicians get, but firemen have a public trust and confidence level of 93 percent and ambulance officers 92 percent.

Sir Robert Peel said that the public are the police and the police are the public. The police do operate well when the public believe that communities are safe. When members of the public see that only 8.7 percent of burglaries in Wellington are solved, then they have good reason to be concerned. When they see that about 6 percent of all burglaries in Auckland are solved, then they have reason to be concerned.

There are basically two facets to policing: you have got the traditional “let’s lock ’em up” facet and then you have got the community policing. What we have seen just recently is the community policing—

LOUISA WALL (Labour—Manurewa): It is a privilege for me to speak as part of Labour’s “Team Justice”. I would like to acknowledge Jacinda Ardern, Kelvin Davis, Phil Goff, Stuart Nash, Su’a William Sio, Peeni Henare, and myself. My particular delegations are in the courts and legal aid areas, and what I have been really interested to find out, actually, is that the whole objective of the justice reforms has been about saving $250 million.

In 2011 the Ministry of Justice oversaw legal aid. I would like to acknowledge my colleague the Hon Phil Goff because in 2005, when he was the Minister of Justice, what Labour did was actually expand eligibility for legal aid because we wanted to ensure that low-income working families had access to this money as well. When National came in it saw it as a liability—a $173 million liability—so the first thing it did was change the eligibility criteria. For National, the imperative was to get the cost down to $100 million. What has that seen? Actually, you now have to earn under $22,000 to qualify.

One of the big issues we have in the area is around protection orders. If you are a woman who needs a protection order, you do not automatically get eligibility to apply for legal aid to get a protection order. The Minister of Justice’s response was that women can do it for themselves, but if you go on the Ministry of Justice website it actually says you should engage a lawyer—it is a legal process.

One of the other unintended consequences—who knows—of this whole reframing of access to legal aid has been an increase in self-representation. One of the first things I did was go and talk to an expert, a woman called Bridgette Toy-Cronin. She is a PhD graduate from the University of Otago. She works in the legal issues centre, and I want to commend Mark Henaghan and his group from Otago University for actually highlighting a whole lot of issues in our criminal justice system. What she said was: “There is a difference between access to courts and access to justice. Self-representation allows access to courts, but access to justice within the system is an entirely different matter. It is one thing to get in the door and another having the ability to get the necessary resources or advice to understand the legal system.” This was reinforced by Chris Moore, President of the New Zealand Law Society, who actually said that this phenomenon had happened because of an inability of people to get legal aid.

The other interesting commentator, in March last year, was Chief High Court Judge Justice Helen Winkelmann, who actually sounded a warning about under-represented litigants, or people representing themselves in court. She actually said that this posed “a serious challenge to the civil justice system”. It makes it less efficient, and from some of my meetings with judges and other people engaged in this sector, I think the reforms have been a complete debacle.

Yesterday I was with Judge Harvey. He has got a particular passion for access to justice through IT. I think there is merit in some of his proposed reforms. Actually, if I look at the reforms that have been incredibly successful in the justice system, they have actually come about because judges, who know the system intimately, have proposed some of the reforms that are working.

One such reform is the alcohol and other drug treatment court that—I am just trying to remember her name; she is from west Auckland—Judge Tremewan has championed. The whole objective is about reducing reoffending and reducing dependency on alcohol and other drugs. It is about reducing imprisonment and it is about being cost-effective, and I think that the findings so far have been that it has been an incredibly important addition to the justice system and is actually treating people who need help. So that is kind of the medical aspect of the justice system. It is not making them criminals or treating them as criminals, but it is actually addressing the underlying causes so that we can address issues such as recidivism. In terms of my courts portfolio, it has been really interesting to actually think about the court.

I went to the Manukau District Court only the other day. I intend to go to the courts as part of my responsibility and to get a feel for what being in a court is like. I have never been in one myself, but I look forward to doing that.

One of the issues that has been highlighted is that the centralisation of the Family Courts in Auckland has been a complete disaster. Some clients cannot get into Auckland City, and those who do have to pay $24 to park there for the day.

I think what we are finding is that a lot of the reforms that this Government has introduced in the justice sector have been completely driven by economic imperatives.

Reports noted.

Māori, Other Populations and Cultural Sector

The CHAIRPERSON (Hon Trevor Mallard): Nuk Korako. It is necessary to say some words, as well as nod.

NUK KORAKO (Chairperson of the Māori Affairs Committee): Kia ora. I was just rising to my feet and waiting for you to finish. Tēnā koe. Huri noa i Te Whare nei, e mihi atu ki a koutou katoa.

I am happy to lead the debate on the annual reviews for the Māori, other populations, and cultural sector. As chair of the Māori Affairs Committee I want to focus my contribution on the Māori development portfolio, and specifically those annual reviews undertaken by the Māori Affairs Committee.

We carried out annual reviews of Te Puni Kōkiri, Te Reo Whakapuaki Irirangi, and Te Taura Whiri i te Reo Māori. When it comes to Te Puni Kōkiri, this is a ministry that is doing well, and we have seen further progress on its restructuring and better results around the use of contractors last year. I do want to note that I think there is more that can be done to promote the development of the Māori economy.

In carrying out the annual review of Te Puni Kōkiri, it is very clear that this is an agency that is very comfortable, and for the most part does a very good job, with its role in promoting Māori culture, education, and health. What would be good, though, to see in the future is a greater focus and greater drive applied to the ministry’s responsibilities for promoting growth in the Māori economy.

The other agencies we reviewed came before the committee against the backdrop of Te Ture mō Te Reo Māori / the Māori Language Act. Te Reo Whakapuaki Irirangi, or Te Māngai Pāho, as it is better known, is anticipating a role in developing Maihi Karauna, the Crown’s Māori language strategy, under the Māori Language Act. We were impressed by the agency’s readiness to work under the new legislation and to work positively to influence how the broadcasting sector responds to this strategy.

There were several other areas for which the agency deserves real recognition. One is the way that it is looking towards the future of radio, which is in the digital sphere, and pushing iwi radio stations to embrace technical technology and the change that comes with it. I was also particularly impressed with how focused the agency is on increasing the normalisation of Te Reo Māori in everyday life. For example, it rejected the suggestion that a quota for Māori language content should be imposed on radio, and instead reiterated its focus on increasing normalisation of Te Reo Māori.

Te Taura Whiri i te Reo Māori—the Māori Language Commission—also discussed the Māori Language Bill when it appeared before the Māori Affairs Committee. Like Te Māngai Pāho, Te Taura Whiri i te Reo Māori expressed its readiness for the enactment of the new legislation, and its willingness to change in response to it. There were a number of issues raised in Te Taura Whiri i te Reo Māori’s review. The chief executive role was vacant for over a year, until last September, and there has been some instability in other staffing, possibly resulting from the vacancy at the top. Last year Te Taura Whiri i te Reo Māori told us that the appointment of a new chief executive would, hopefully, decrease the staff turnover. It appears that this was the case, and the agency is once again fully staffed.

The new chief executive has also been working on staff morale and the office’s performance and preparing staff for a change under the Māori Language Bill. We also believe that the appointment of a chief executive and the other new staff who have come on board would put Te Taura Whiri i te Reo Māori on track to rectify some of the deficiencies identified by the Auditor-General. I look forward to seeing continued improvement in these areas when Te Taura Whiri i te Reo Māori comes to the Māori Affairs Committee next year.

It has been pleasing to see all of these agencies making progress towards their objectives over the year. I commend the hard work that their leaders and staff have been doing. I finish with this whakataukī: He huka mata anō mō te pouka—fortune favours the brave. That is exactly what this is about. Kia ora.

MARAMA DAVIDSON (Green): Kia ora, Mr Chair. It is my absolute honour to be the second speaker, after our chair of the Māori Affairs Committee, Nuk Korako, delivered the initial speech—this is a first. Kia ora to the Committee and to all of my colleagues.

Māori well-being is what I would like to focus on. Māori thrive when we are connected to our land, our language, and our people—being our marae, our hapū, our iwi, and/or our communities. So Māori understand this. Well-being, then, for Māori, requires us all to believe that a fairer future is possible—a future that will keep us connected and will reconnect us to those very things that make us who we are and keep us alive. So I want to focus on the Green Party as being a big part of what is possible, because good change is absolutely 100 percent possible.

Now I am going to reflect on why we need change. Too many people are struggling and Māori are overrepresented in those who are struggling, and that includes Māori children. If we look at housing, I came in on a platform of reminding us about the hardship, particularly for Māori women and children, in housing. I have said constantly that I think about friends of mine who are Māori mothers with their children living in the garages of my other friends, living in cars, and struggling to just get by every day. That is simply not good enough. We know that, for example, the number of food parcels being given out to families has increased, and the work of the Salvation Army I completely acknowledge here. But also, again, that is not good enough.

Just in question time today we had the Prime Minister quite gleefully reminding us about how the economy is supposedly growing. So why then have we still got too many tamariki living in poverty, too many of whom are Māori? Why would we ever stop and even say that our economy is growing while these things continue to happen to Māori? So, in my role as spokesperson for Māori development for the Green Party, I absolutely want to stand and remind us that a fairer future is possible, and why that is necessary. It is necessary for me as a Māori woman in Parliament to remember that all of us have a responsibility to make good change.

Māori, as kaitiaki, understand that our hopes and dreams include a cleaner environment that we are having to look after. I welcome the news of my Tai Tokerau colleague Kelvin Davis and his survey in the north of my Tai Tokerau people, where 86 percent oppose deep-sea oil drilling, because Māori also understand that deep-sea oil drilling can never be part of a sustainable economy and can never be part of a just society. So I am pleased, and have always seen, that Māori are capable of leading the way in good change. Thank you.

Although I commend the work of Minister Te Ururoa Flavell and the changes and the positive steps with things like Whānau Ora, unfortunately, the Minister is hampered by a National Government whose economy is not working for everybody. And if an economy is not working for everybody, then it is not working. That is all that can be said about that, so I put it back to this Government.

The solutions are there, and the Green Party has long worked on them. We can build the smartest houses, the best houses. We can have the smartest, cleanest, and most sustainable economy. We can protect our rivers and clean them up for our children to swim in. The Greens have long understood that the solutions and the ideas exist, and we see the ideas and the leadership in the community. In Glen Innes, for 4 years in a row, I have supported river talks, where the community—

The CHAIRPERSON (Hon Trevor Mallard): Order! I am going to interrupt. I have signalled to the member before that she has to stay closer to the debate than she has been.

MARAMA DAVIDSON: Fair enough, thank you. So I want to emphasise that when it comes to the well-being for Māori, the Green Party understands what that requires. The Green Party understands the political will and leadership that is required for us to ensure—

PEENI HENARE (Labour—Tāmaki Makaurau): Excellent choice, Mr Chair. Thank you very much for allowing me this opportunity to contribute to this debate.

The CHAIRPERSON (Hon Trevor Mallard): I might do it again.

PEENI HENARE: Te Puni Kōkiri, sadly, does not know whether it is Arthur or Martha. Once upon a time, the direction and the leadership for Te Puni Kōkiri was very clear. It knew what its job was—its job was to grow a sustainable Māori economy. Today Te Puni Kōkiri is being asked to be a social services arm. It is being asked to become a Te Reo Māori assessor. It is being asked, also, to continue its work in the economic space. I take the words of the member and the chair of the Māori Affairs Committee, Nuk Korako, who would like to see more of that take place at Te Puni Kōkiri. But, sadly, that is not going to happen under the current leadership. It is not going to happen when you are forcing a traditionally excellently performing ministry, in Te Puni Kōkiri, to do so many other things. It does not know whether or not it is Arthur or Martha.

Te Ture mō Te Reo Māori Act has just come in. The member has spoken about Te Taura Whiri i te Reo Māori and some of the problems that were faced by Te Taura Whiri i te Reo Māori around staffing, and, of course, we know that the chief executive position was vacant for some time. However, it got a chief executive and I do understand that it is back to a full complement of staff. But this means nothing when its budget has been slashed to create a new entity, Te Mātāwai.

Although I am all for progressing and revitalising Te Reo Māori—I am a huge Te Reo Māori champion—I do not believe, however, that Te Reo Māori is going to reach the pinnacles that we hope it will. Why I say that is because there is a lack of leadership on this matter. We have talked about a Maihi Karauna strategy, or a Crown strategy, and a Te Reo Māori strategy. Well, the legislation does not give the strategy. The Government is yet to work the strategy out. It is prepared to give Te Mātāwai 3 years to see whether or not it will come up with a strategy, and to see whether or not the number of speakers of Te Reo Māori will lift or continue to decrease, as trends have shown.

Our research has shown that in that 3 years the number of conversational Māori speakers will drop by 1 percent, falling to a very critical level of just under 20 percent. We know that in order for Te Reo Māori to grow and to thrive, you need a critical mass speaking Te Reo Māori. Experts in the field tell us that that critical mass must be at 35 percent. So why, then, under this Minister for Māori Development and this Government, did we not have that aspiration play out in the set-up of Te Mātāwai and the debate of the bill—that we want to see Te Reo Māori speakers in this country grow to a number of 35 percent? I am afraid there is a lack of leadership on that matter.

Back to Te Puni Kōkiri. I think it is doing a great job. It, just like Te Taura Whiri i te Reo Māori, has had issues around staffing. And it is not just any old staff member; it has had vacancies in the leadership group of Te Puni Kōkiri—in key positions to lead and drive Te Puni Kōkiri. The ministry told the Māori Affairs Committee that it will work hard to fill those, and I understand that it has made some progress there. But if it has made progress there, then why is it that in the past financial year Te Puni Kōkiri has spent $8 million on consultants—$8 million on consultants—to carry out the work of Te Puni Kōkiri instead of focusing on filling those key leadership roles to provide leadership from this Government and the Minister to Te Puni Kōkiri to allow it to do its work correctly? All of this $8 million to consultants—we have raised several times since the last election this issue about the excess being spent on consultants. And what are they giving? What are they providing? Well, we would argue, on this side of the Chamber, that what they are actually providing, in many instances, is flawed advice. I say that with respect to Te Ture Whenua Māori Bill.

I want to mention Te Ture Whenua Māori Bill because all of the advice given to the Minister has just allowed him to fool himself into thinking he can bulldoze this piece of legislation through the Parliament and that he can force it on to the people, despite the people being very clear to this Minister and to this Government that what they are proposing is wrong and that what they are proposing is actually going to further alienate Māori land. That is not acceptable. I am on a trust that administers a large amount of Māori land, and we have looked through the bill that is to be proposed by the Minister, and we too have very strong concerns about the intention of the bill. Why do we not listen to the experts? Why do we not listen to those who actually work with the bill every day—organisations like the Māori Land Court, people like the judges in the Māori Land Court, and people like the lawyers who have forged careers in this space? Why do we not listen to them?

Well, I can tell you that this Minister and this Government are not listening to them. Instead, what they gone and done is said: “Let’s have hui across the country. Let’s just go through a box-ticking exercise. We’ll engage with the Māori people on Te Ture Whenua Māori Bill, but, I’ll tell you what, let’s meet at the Langham Hotel.”—that must be the flashest marae I have ever seen, the Langham Hotel—“I know another place where we can meet. Let us meet in a bunker at an airport in the hope that we can have meaningful consultation with the Māori people around Te Ture Whenua Māori Bill. Once that is all done, and we have ticked all the boxes, we are now going to say that the Māori people agree.”

I beg to differ. That is not the view of our people with regard to Te Ture Whenua Māori Bill. Sure, they want to be able to feel empowered to make decisions for themselves. Sure, they want to be able to manage their land to make sure that they receive benefits from it. But it works only if you go through a solid process—a solid process—that will create a foundation for that to happen and create a foundation to empower our people, the Māori people, to make meaningful contributions to the economy, to seek self-determining means by way of building their own value and their own assets. But what the exercise of Te Ture Whenua Māori Bill has actually proven to members on this side of the Chamber, and, of course, to the rest of the country, is this Government’s overall failure to make sure that you go through due process.

We have sat in this House many times now explaining to many iwi who come here to settle their Treaty grievances—and we look them in the eye and we say to them—“Kia kaha. This is full, this is fair, and this is final.” Yet what we are seeing now is all of a sudden there is a flip-flop from this Government, which says: “Oh, heck. Actually, we may have rushed this through. Maybe we didn’t quite get it right the first time. So let’s revisit it.”

What have we seen? We have seen the right of first refusal on homes and on land in Tāmaki-makau-rau. That is a classic example. What else have we seen? Te Ohu Kaimoana going to court over the Kermadec Ocean Sanctuary. This, after the fisheries settlement in 1992 that said it was full, fair, and final. Now, all of a sudden, because of the decisions made by this Government, Māori are feeling like victims again. Their rights are being taken away from them. Their ability to voice their concerns is being silenced, and what this points to is this Government’s failure to lead properly and to lead correctly on true Māori development. What exactly does that mean? It means allowing Te Puni Kōkiri to do what it is supposed to do.

Also, in conclusion, I want to just briefly mention Whānau Ora. We all agree with Whānau Ora. We want Whānau Ora to work. Recently, we have heard of the tragic case about that young Māori boy called Moko, who passed away through tragic circumstances, through people not caring for our most vulnerable. We want Whānau Ora to get into these houses and to get into these communities to make sure that those people—the most vulnerable in our country—are protected and that those who need the help get the help that they need. However, I do not believe this is happening under Whānau Ora. I do not believe that this Government is showing true leadership on Whānau Ora to make sure that those people, like young Moko, and the families who are dealing with a lot of our most vulnerable get the service and get the help that they require.

Hon Peseta SAM LOTU-IIGA (Minister for Pacific Peoples): It is a privilege to speak in this debate, and I am particularly honoured to speak to Whānau Ora, which the previous speaker, Peeni Henare, referred to. He said he did not know what Whānau Ora is doing. Well, Whānau Ora is touching over 5,000 whānau and families across New Zealand in the 2015 financial year.

I cannot talk for the two Māori commissioning agencies, but I can talk to Pasifika Futures. In Pasifika Futures there were over 2,200 families connected via navigator support. Its focus was on giving families financial independence—giving them financial independence. It reported that of those families that it connected with where they prioritised economic independence, 29 percent of them reduced their debt during that period. So it is helping families get independence. We are helping families into jobs, and we are helping families and their children, their whānau, become independent. Pasifika Futures also engaged with over 200 families in terms of giving small grants projects. Those grants projects were to assist those families with a hand up, not a handout. They are working alongside other agencies to help those whānau become enabled and become more self-reliant.

I want to turn to the Pacific portfolio because as the Minister I am proud of the work that our ministry, the Ministry for Pacific Peoples, has done over the last year. I am proud because Pacific New Zealanders have become better educated. Under the National Government, more and more Pacific people are working than at any time in our history, and we know that it starts with education. It starts with early childhood education, where Pacific participation rates are now over 90 percent. The participation rates in early childhood education are over 90 percent, and that is something that we can be proud of. We know it starts young. We know it starts in the families, at home, and we know it starts in our churches. It is done through support by those early childhood education providers—and I have visited a number of Pacific providers in my time as Minister. They are people with good hearts, good intentions, who are providing our kids with not just an early childhood education but language skills in our aoga amata, and they are teaching them Pacific values and Pacific language, culture, and heritage.

I want to talk about the work that the ministry does in terms of the seven Pacific language weeks that are conducted throughout the year. The Samoan Language Week will begin again at the end of May, leading into Samoan Independence Day. Our ministry works alongside community organisations in order not just to promote the language among Pacific people but also to promote Pacific languages to other New Zealanders—non-Pacific people who can enjoy, who can thrive, and learn a Pacific language—because we are a Pacific nation. Aotearoa New Zealand is a Pacific nation. Pacific people contribute to and they are part of the rich social and economic fabric of this nation. The Pacific language weeks are an opportunity for all New Zealanders to enjoy that Pacific language, enjoy the Pacific culture and heritage, and also enjoy Pacific dance, arts and craft, and rich Pacific food, which I am quite partial to.

It starts with early childhood education, and our Well Child before-school check rates are some of the highest in New Zealand. It starts with immunisation rates that are over 90 percent. They are over 90 percent because Pacific health providers and Pacific family and whānau see the value in giving our kids the best start that they can get, not just in early childhood education but also in terms of immunisation and health care and health provision.

We also know that Pacific employment is up. Around 123,500 Pacific people are currently employed in New Zealand today. That is the most in any time in our history. It is a 10 percent increase, year on year, for the year to the end of December 2015, and it is because we have a strong focus on education. This Government has a strong focus on employment. We are about growing our economy, growing jobs, and growing families and supporting families. The best way we can support our families is to give them a job, because all our families are looking to do is to raise their kids in this great country of ours, feed them, clothe them, nurture them, care for them, and love them. The best way they can do that is when they are meaningfully employed. When they are not meaningfully employed, we can support them too because we are the first Government to raise benefits in the last 42 years. We have the compassion to look after those people who cannot look after themselves. But, having said that, we are about promoting Pacific employment.

I am proud that there are more Pacific people now working in this country than ever before. The reason is that we have seen a huge increase in Pacific achievement in education. When National became the Government, our National Certificate in Educational Achievement level 2 rates were around 50 percent. They are now around 75 percent, so we have seen a 50 percent increase in those achievement rates. We have seen the number of Pacific students enrolled in qualifications at Bachelor level or higher. It was about 9,000 in 2008 and it is now well over 13,500. So we have seen another substantial increase in the number of those taking up tertiary level study. We have also seen that course completion rates at all levels are up to 74 percent in 2014.

This is one of the success stories of this National Government—that we have promoted and we have encouraged and we have supported Pacific and Māori people to succeed and achieve. Is our job done? No, there is a long way to go, but what I can say is that we are doing remarkably well under this National Government compared with under the previous Labour Government.

One of the areas that we need to work on—but that is coming down—is the area of “neets”. For those who do not know who “neets” are, it is those who are not in employment, education, or training. One of the more innovative things that this Government has done is support those organisations that support young people into jobs or into training. The Pacific Employment Support Services scheme, which was run under our National Government—over 5 years this programme had just under 1,500 individual Pacific youth who participated in the programme, and the statistics are quite encouraging. Of those 1,400, 709 were placed into employment, with 463 of these achieving sustainable employment—“sustainable employment” is 6 months’ continuous employment—450 were put into training, and 72 percent of those participants achieved an employment or training placement. Those are the types of interventions that this Government has engineered, that this Government has put together, alongside Pacific providers.

We have got a strong Pacific health sector. We have got a strong sector around social services. It is that type of investment, using the investment approach that we do in justice, that we have done in social welfare, and we are doing right across the social services sphere. It is that type of investment where we put in $4.88 million that will result in long-term liability to the Government being reduced by $18.8 million. This is not just about the numbers; it is about people being put into training, being put into jobs, and being better able to support their whānau and families. Ultimately, that is what this National Government stands for. We stand for stronger families, stronger communities, and, ultimately, a stronger nation. Thank you.

JOANNE HAYES (National): I stand to make a brief contribution on the Māori, Other Populations, and Cultural Sector*. I just want to talk about some areas around the Treaty settlements, because since 2008, when this Government came into power, it has dedicated itself to completing as many Treaty settlements as it could, based on the number of iwi who wished to settle with this Government. Currently, we have 86 percent of claimant groups that are now mandated. We have 79 deeds of settlement with iwi, of which 53 have been signed since 2009. The Crown is in settlement work with 60 groups at the moment. We have 10 Treaty bills in the House at the moment, and by 2017 we are looking to have achieved our target of settling with all of those iwi who wish to settle.

I want to talk a little bit about the Māori economy through the He Kai Kei Aku Ringa, which is a group put together by the Minister of Māori Affairs and the Minister for Economic Development in 2011. It is an independent Māori economic development panel and it is tasked with developing Māori economic strategy and an action plan. While it has been pulling together this particular strategy, which was released in 2012—and around about that time the Māori economy was about $36.9 billion. Today, as I stand here, the Māori economy is worth about $40 billion and rising, and it ranges across a number of classes: 40 percent in forestry, 38 percent in fishing quota, 30 percent in land production, 12 percent of beef and sheep units, 10 percent of dairy production, 10 percent of kiwifruit, with further ownership in geothermal, digital services, education, and tourism.

This is a Government that has been doing a lot of work with Māori—with them, for them—and we should be celebrating that in this Committee today. When I start to look at the Māori farming side of things through the Federation of Māori Authorities—known as “FOMA”—we have, as of 30 June 2011, 140 members in that group, with 568,000 sheep, 79,000—nearly 80,000—beef cattle, and about 40,000 dairy cattle. We have forestry plantations. We have iwi who are part of the central North Island, or what they call the “Treelords”, deal. There are so many excellent things that have been happening through the Māori sector that have not been actually celebrated in these annual review debates in this House, and I stand very proud of the work that has been going on.

Let us also have another look at the regional growth programmes. We have regional plans in Tai Tokerau, Northland—they have been released—the Bay of Plenty, East Coast, Gisborne, and Hawke’s Bay, Manawatū, Whanganui, and the West Coast. We have digital platforms, ultra-fast broadband, the Rural Broadband Initiative, and infrastructure through Māori through the Mātihetihe Marae in Mitimiti in Northland. There is the Māori Information and Communications Development Fund and the digital literacy initiatives. We have education success happening for our Māori people in this country, and it has all been because of the policies that have been going on with the National Government.

As I stand here, again I want to say that we have a $4 million innovation fund. It is an investment for Māori innovation and Māori-led science and innovation. This fund invests in programmes because we want to see our Māori kids picking up science and technology like any other child in this country. We have it innate and inborn in us. I am a science student myself. I have got a science degree. It is all part and parcel of who we are. It comes naturally. Biological science, physics, chemistry—you name it, we are there. So some of that fund is going into some indigenous innovation around the environment, health, and also mātauranga—exploring indigenous knowledge.

I am pleased to stand here. Again, I am pleased to stand here and talk and raise the roof off this Chamber, because what we are doing for Māori has been much more than what the previous Government ever did for Māori. Thank you very much.

PITA PARAONE (NZ First): It is my pleasure to participate in this debate on behalf of New Zealand First and to talk about the Ministry of Māori Development. Can I say that I must be living in a different world in Whangarei and in Tai Tokerau because, as Māori, we feature highest on the social indices. Unemployment is the highest in terms of Māori. Economic development, although it is making some headway, still has got a long way to go. The other most important social thing is housing.

I can recall an era when the Department of Māori Affairs used to provide 200 homes where families actually moved in and owned the home. What are the figures that are available in terms of homeownership for Māori today? Can I say that it is not very high. Look, if we are wanting to look at the social plight of Māori, all we need to do is walk up Lambton Quay and see the number of people begging. I am quite ashamed to say this: many of them are Māori. In the north, although we have not got to the stage of begging because those of my relatives who live at home are able to live off the land, at the end of the day many of them do not have access to the proper house services, they do not have access to good housing, they do not have access to employment—and so it all goes on.

Can I suggest that one of the reasons for this is that Te Puni Kōkiri is not doing its job. Last year it underspent its allocation by $1.7 million, and that just follows a number of years when it has underspent. I think that it is criminal that a public department like Te Puni Kōkiri should underspend its allocation when the needs of the people whom it is supposed to be serving are still as strong as if it was the last century.

One of the other things that we heard during the select committee review was that there was a restructuring, that over a lengthy period it had 30 vacancies, and that as a result of the restructuring it now has 11 vacancies. It is quite easy: if you just remove positions, then of course you can reduce the number of vacancies that you have. The other thing is that we have heard the discussion about the amount of money that was used for consultants. Can I suggest to you that many of those consultants became consultants as a result of restructuring not only in the last financial year but in previous years, and all those ex-staff members are laughing all the way to the bank. I think it is a poor commentary that the annual vote for Te Puni Kōkiri should be remitted to consultants rather than on the work that it is supposed to be doing.

I can recall that in the days of the former Ministry of Māori Affairs, the staff, without exception, lived in and were much closer to the community they served. Although I congratulate Te Puni Kōkiri on the academic level of achievement of the present staff, I would suggest to you that many of them do not have the life experiences that former staff used to have. I would suggest that that is part of the reason. If we look at Whānau Ora, they talked about how successful it is and yet they still need another year before they can quite accurately comment on how successful Whānau Ora is.

Another issue for me is the issue of Māori wardens. We know that the Māori wardens are one of the few groups that actually work out amongst our community and are aware of the challenges facing our people, yet the allocation that was made to that particular programme has been underspent. [Bell rung] Mr Chairman.

The CHAIRPERSON (Lindsay Tisch): I am happy to give the member another call, but can I just remind the member and your party that you have only two calls left in the balance of the debate. If you take another call now, you will have only one call left, so I just bring that to your attention.

PITA PARAONE: Thank you. I will forgo it.

JENNY SALESA (Labour—Manukau East): Tēnā koe, Mr Chair. May I take this opportunity to acknowledge a legend. New Zealand has claimed him, but he is originally from the Kingdom of Tonga. Bill Sevesi, who is a musical legend, passed away, and we laid him to rest a few days ago.

My comments today are going to be focused on the Ministry for Pacific Peoples. This ministry has an important role to play, and the Minister for Pacific Peoples earlier on in his comments spoke extensively about how we have improved educational outcomes, especially for early childhood education. When we are talking about participation, the Minister stated that we now have a 90 percent participation rate for kids. That is actually a wonderful statistic. However, what about the quality of the kind of experience that our children are having in those early childhood education centres?

What the Education Review Office has told us in its report is that over 50 percent of these early childhood education centres are not, unfortunately, currently providing services that are of great quality, which is a big issue for me, particularly for those of our kids out in South Auckland. When we read in the New Zealand Herald today that under this current Government the money that has been invested in early childhood education has been tripled to $1.5 billion, one just has to question whether that investment in early childhood education is actually really monitored and whether we are getting the best investment out of our taxpayers’ funds.

When we look at the priorities that the Ministry for Pacific Peoples has, it has education, employment, entrepreneurship, and improved living conditions, including housing. I would like to focus on that last point. Are Pacific people in Aotearoa New Zealand today experiencing improved living conditions, especially when we are talking about housing? I have got to say that from where I sit, and from where the people whom I serve in South Auckland sit, the answer to that is absolutely not. We are seeing so many people come through our offices not even having a house that they can live in with their children.

Just last night I went around with a couple of people. We went because we had been informed by other folks in our community in Manukau East that there are so many more people now living in cars, and we wanted to see for ourselves these locations, whether it is indeed true that there are so many people now living in cars. I am sad to say that we did see just this. There are so many families out there living in cars. Some of them are Pacific and some of them are Māori, but I was actually surprised to see that some of these people are Pākehā—Pākehā who have full-time jobs; Pākehā who have a degree—and they are living in cars.

To get back to the Ministry for Pacific Peoples, can I also acknowledge another person who, unfortunately, has just passed away. The Chief Executive Officer of the Pacific Business Trust, Mr Rob Neru, passed away just a couple of weeks ago—very untimely, at 46 years of age. I saw Mr Neru here in Parliament just 1½ weeks before his untimely death, and one of the conversations that we had was focused around what we should do in terms of policies to ensure that our young Pacific people are equipped, that they are skilled, and that they do have the correct training now.

When the report that the New Zealand Institute of Economic Research gave us a few months ago projected that here in Aotearoa New Zealand we are going to lose 46 percent of all of the current jobs that we have, we had this discussion. One of the things that Mr Neru said to me was that it is really, really important, particularly for Pacific people, who are featuring too highly in the unemployment statistics and who are featuring too high in not actually getting trained, that we ensure that they are getting skilled and they are getting trained now, so that they do not miss out even more in the future. I would just like to acknowledge Mr Neru this afternoon.

The Pacific Business Trust is a not-for-profit organisation that was established in 1985. It was set up to provide economic development services for Pacific businesses and for Pacific people here in New Zealand. But I would like to ask this of the Minister for Pacific Peoples: why is it that this Pacific Business Trust, a lifeline for Pacific communities, is being ripped apart and sold off without—

Reports noted.

Primary Sector

STUART SMITH (Deputy Chairperson of the Primary Production Committee): I would like to move that the report for the Primary Sector be noted. I think it is a fantastic report card, which we can spend some time exploring. We have an aspirational goal of growing exports for the Primary Sector to $64 billion by 2025, and the question is how do we get there if we accept that goal. I think it is great to have a stretch target; it is something that we can aspire to. We have such great performance now starting to come through in other sectors, like the horticultural sector and the wine industry, which is really driving exports. In fact, although the dairy sector is going through a difficult time, we have increased exports, and that is underpinned by those other sectors. So it is a pretty good story.

But what I want to focus on today are some of the areas in irrigation that the Ministry for Primary Industries, through Crown Irrigation Investments and the Irrigation Acceleration Fund, has helped to drive some irrigation schemes on. In particular, Crown Irrigation Investments has a fund of $400 million available for direct capital investment for regional-scale irrigation schemes. What does that mean, and how does that help? There is often talk about how irrigation schemes should be able to stand on their own two feet, and they will in time, but the issue is that there are so many moving parts to get an irrigation scheme up and running.

There is a funding hump to get over—and the Flaxbourne Community Irrigation Scheme, in particular, comes to mind. It is a scheme in which individual farmers would have to fund a 15-kilometre pipe to storage, and an individual farmer could not afford to put that in—even two farmers would struggle to make it past the feasibility stage. The council funding has helped in that particular scheme by providing a mechanism for the farmers to get together and get their scheme over that hump, but also there has been some great help from the Irrigation Acceleration Fund, and the Minister for Primary Industries made a very good announcement on that not so long ago.

To demonstrate the benefit of that irrigation scheme, you really only have to look at the example of a farmer like John Hickman from Taimate, which is in the Flaxbourne region. Three percent of his property, a sheep and beef property, is irrigated and growing grapes. That 3 percent of the area provides 40 percent of the revenue for that property, and if you look at it on the basis of profit, it is an even greater advantage to have irrigation there—it is closer to 50 percent of the overall profit, from just 3 percent of that area.

Viticulture, as we know, is a very environmentally friendly industry, and it goes on to have great value-add through the wine-making process, where all that value is added to the grapes that leave this shore in a bottle of wine with “New Zealand” on the bottle. It is actually a great advantage to New Zealand in other industries, because it really gives us a reputation overseas as a producer of high-quality, world-class products, and I think that is a wonderful example of what can happen through an irrigation scheme.

The Flaxbourne scheme still has to go through the process and get the final tick-off by the farmers, but I really look forward to it growing, by many millions of dollars, the export potential from the Flaxbourne region. In fact, the Marlborough region has just done a labour market survey and, based on surveying all its members, 7,000 hectares are proposed to be planted by 2020 in the Marlborough region. That adds up to more planted hectares than in Hawke’s Bay and Central Otago combined, so it is a phenomenal vote of confidence in that industry.

If we go further south to the Hurunui water project—the Hawarden-Waikari area, which is the main command area for the Hurunui water project—there are some fantastic soils there. Anyone who is a cricket fan will have heard of Waikari pitches. Well, the soil for a Waikari cricket pitch comes from Waikari, around the Hawarden area, and that is in the Hurunui water project command area. It has fantastic soils but it is a very dry area. It is drier now than it has been in the last couple of years. It has been 2 years of drought, and it is really getting worse as every day goes by. That area just wants an irrigation scheme. Thank you.

Hon NATHAN GUY (Minister for Primary Industries): Can I thank Stuart Smith for his contribution. I would like to take a call this evening on the Appropriation (2014/15 Confirmation and Validation) Bill, covering the primary sector. It is a huge part of the New Zealand economy. We have set an aspirational target out to $64 billion by 2025—

Hon David Cunliffe: How’s that going for you? How’s that going?

Hon NATHAN GUY: —and we know that is going to be challenging right now, Mr Cunliffe, with the dairy prices, but, importantly, when we set that aspirational target, it is about doubling the value of the primary sector. If Mr Cunliffe had been listening this afternoon he would have heard me talking in the House at question time about how the horticulture sector is going gangbusters.

A new report out from Plant and Food Research shows it is worth about $4.3 billion of exports. Now Mr Cunliffe has gone quiet. Actually, the Trans-Pacific Partnership (TPP) agreement, which Mr Cunliffe—I am not sure where he sits personally, but his party is all over the place on it. It cannot come out and support the Trans-Pacific Partnership agreement, whereas in the past, the two big political parties in the New Zealand Parliament have supported free trade and market access opportunities. So here we have Mr Cunliffe, who is saying “How’s it going for our aspirational target of doubling the value of our primary sector exports?” when, on that side of the Chamber, the Labour Party cannot support what we want to do, which is to open up new market access opportunities to 800 million consumers. The biggest benefactor of the Trans-Pacific Partnership is the primary sector, so I think it is fantastic that a lot of the primary sector is actually doing very, very well.

What else is doing well? The red meat sector. We have just come back from a very successful trip with the Prime Minister into China, where we have made some rapid progress on the chilled meat protocol. That is going to be fantastic. Instead of our meat products going into the chilled market frozen, we have an opportunity to put them in the best restaurants in Shanghai, Beijing, and all the other cities in China to continue to add value. Also on that trip we made significant progress, and further discussions have been had in terms of tourism, and it is great that Amway has signalled plans to bring a whole lot of its professional staff down into Queenstown in the off-season shoulder peak. We have an opportunity with these air links coming down to New Zealand, planes full of tourists, to put some of this wonderful chilled meat product into the back of the planes. The seafood industry is also growing and so is the forestry sector, so, actually, a big part of the primary sector is going pretty well.

Importantly, it is pretty tough right now for the dairy industry, but a lot of the things that are happening in the dairy sector are beyond the Government’s control. I have just been to an OECD meeting up in Paris with a whole lot of other agriculture Ministers. When I talked to my colleagues in many of the bilateral meetings that I had, they said that their farmers are feeling the strain as well with the global milk price. Actually, the European farmers, who are subsidised, are finding it very, very tough, even with subsidies. The milk price is below the cost of production for European farmers, just like it is for New Zealand farmers, and we know the reasons for that. Of course, the Russian ban means that European products that used to go into that market, like butter and cheese, are now going into other markets. We also know that the oil-producing countries have less buying power. We also know that the European farmers, since their quotas have come off, are producing more milk—up by about 2.2 percent in the last 12 months, and forecast to grow by another 1 to 1.5 percent. That is a 157 billion-litre market, so it is significant.

The fundamentals of the dairy industry across the world, with global population increasing—when you get back to the China market, it is fascinating when you see that 250 million to 300 million people are now in the middle class in China, and that is forecast to grow by another 150 million people in the next 10 years. When you think about China’s softening of its one-child policy, where it is forecasting 38 babies to be born a minute, from memory—that is about a New Plymouth a day. So they are significant—the opportunities in China. It was a very successful visit by the Prime Minister and the Minister of Trade up there, leading a strong trade delegation.

We also heard, when we were up there, from Jack Ma, who is the founder of Alibaba. Alibaba is an online trading mechanism—goods in, goods out; people buying and selling—and he is very focused on New Zealand products being showcased there. There are 407 million consumers in China who shop on Alibaba. The New Zealand Trade and Enterprise - Alibaba memorandum of understanding was signed when we were up there, and this is going to be significant to showcase New Zealand products through Alibaba. As we know, we produce a premium product. We know that we are world leading in our food safety standards and our overall systems. We know that our animals are predominantly farmed outdoors, all year round, hormone-free—all of those things. We have got an opportunity to add more value, particularly in these markets like China.

What I also want to talk about—and it was touched on a little bit earlier by Stuart Smith—is the focus that this Government has on doubling the value of our primary sector exports out to 2025. The important point here is the value—there is no way that we will be able to go and double the production. You think about our oceans. There is no way that we can go and catch, sustainably, double the amount of fish. The opportunity for us is to continue to add value. The opportunity for us is to have more water storage projects. We collect and store only 2 percent of the rain that falls in this country. The rest of it gets in the local streams and rivers and heads out to sea. We have got a huge opportunity to store more water in this country and to use it reliably. Right now, you just look at the Tararua Ranges—the average rain up there is about 5 metres a year. Look at Martinborough; from memory, it is about 700 mm a year. You could almost throw a stone, if you were a good cricket player, from the Tararuas and hit Martinborough. So on one end we have got huge amounts of water, but not at the right place at the right time.

That is why this Government is very focused on water storage projects. I know the Greens hate it when I talk about water storage projects being good for the environment. They are good for the environment because you take the pressure off groundwater aquifers. That is hugely important. Look at Central Plains Water recharging into Lake Ellesmere/Te Waihora. We know that we have got an opportunity to store more water in this country, and we know that it is good for the social fabric of society, we know it is good for economic growth, and we know, fundamentally, it is good for the environment.

What we have also done as a Government is we are investing more in biosecurity, and I am very proud of the fact that we are investing more. I am very proud of the fact that we have got more dog detector teams now. Actually, for those interested, any school pupil in New Zealand can get involved and name one of the beagle puppies right now. I think, from memory, it is the “G” litter, so they are out there talking to every school in the country, and it is a wonderful opportunity for schoolkids to get on board. These beagle puppies, and others that we have now got trained, are an important part of the overall multilayered biosecurity system that we have in New Zealand. We are investing more in terms of dogs. We are investing more in terms of people.

We have brought in the border levy, which now means that passengers—and about 55 percent of passengers who travel are foreigners—need to pay for our border services. As we have an increase in passenger numbers, which we are experiencing, at about 3.5 to 4 percent a year, that means that the cash will follow and we can do more in terms of those very important biosecurity services, particularly at our airports and for cruise liners.

Also, we are out there consulting right now on animal welfare regulations. This is hugely important for us as an exporting nation. It is worth about $23 billion, and I know that about 66 percent of New Zealand families own a pet, so it is important that we strengthen our animal welfare regulations. It is fundamental to us as an exporting country, and I know that New Zealanders care about their animals. So, in summary, it is a great opportunity to be able to talk about the primary sector, which is a big part of the New Zealand economy. Actually, fundamentally, the primary sector is doing pretty well and we are doing what we can to support our dairy farmers through a pretty tough patch.

Hon DAVID CUNLIFFE (Labour—New Lynn): In speaking to this section of the annual review debate, the Primary Sector, it is a good opportunity just to acknowledge, on behalf of the Labour Party, all of the hard-working men and women of our primary sector—our farmers, who get up early every morning and go and milk the cows, till the fields, and provide the backbone of the New Zealand economy. So we want to acknowledge them.

The Minister for Primary Industries has talked about water management. I want to talk a little bit about water management too. I am not going to talk about the white elephant that is the Ruataniwha Dam, which the Government cannot make pay, nor am I going to talk about the white elephant that is brewing in Ashburton, where the Ashburton District Council is doing a sweet deal, by the sound of it, for somebody while bearing the risk of having an aquifer that might go bad. I am going to talk about a river that I am rather fond of: the Manganui River in North Taranaki. When I was a kid, I used to fish for trout in the Awakino, which is right next door.

The Government has approved the sale of 1,300 hectares of iconic land on the side of the Manganui River to a Panamanian-registered company called Ceol and Muir. That has come to New Zealanders’ attention by a thing called the Panama Papers. That sale was approved by a Government agency, under Minister Louise Upston, called the Overseas Investment Office. You might call it the “Overseas Investment Optimists”, because this is the kind of office you have when you do not really have an office. That office accepts the word of foreign investors that they are of “good character”, and it does it through a thing called a statutory declaration.

The CHAIRPERSON (Lindsay Tisch): We are on the Primary Sector debate, and I would ask the member to come back to it—the primary industries; the primary sector. This is what it is about.

Hon DAVID CUNLIFFE: I raise a point of order, Mr Chairperson. I am advised by our whips that you are taking, as is the agreement of the Committee, a broad-ranging approach to this. We are clustering related groups of portfolios—

The CHAIRPERSON (Lindsay Tisch): We are clustering them. This is to do with the Primary Sector. [Interruption] When I am on my feet, the member will sit. You must relate whatever you are saying back to the Primary Sector. I have not yet heard one word on the Primary Sector in the time you have taken.

Hon DAVID CUNLIFFE: The primary sector requires good land and water management. The Manganui River borders the Onetai Station in North Taranaki, in the primary sector. It was purchased by Rafael and Federico Grozovsky—two gentlemen from Argentina and Italy who have criminal convictions for toxic waste pollution in the Luján River in Argentina. But the Overseas Investment Office thought that was no threat to our primary sector. It was happy to tick off the sale of iconic primary sector land bordering the Manganui River to a group of people who have criminal prosecutions and who have been held criminally responsible for toxic waste pollution—really bad pollution, carcinogenic pollution that made people seriously ill, for which they were criminally responsible.

But our Overseas Investment Office did not protect our primary sector, did not protect our land, and did not protect our awa, the Manganui River, from this purchase because it did not even check the bona fides of the investors. In fact, it may be that the particular people it thought were the ultimate shareholders of the purchase of this land in the primary sector were not, in fact, totally the shareholders at all, and it has said it cannot tell. Furthermore, we now have information sourced from the UK Companies House and from a Florida court that shows that one of the directors of this company that purchased this land in our primary sector was tied up, through another Panamanian company, with a large-scale scandal involving the possible non-payment of tax in relation to the football sector in Europe, to the tune of tens of millions of dollars.

The CHAIRPERSON (Lindsay Tisch): Back to the Primary Sector.

Hon DAVID CUNLIFFE: My point is that the supposed watchdog of the sale of iconic New Zealand primary sector land is not doing its job. It is taking an investor’s word for it, and it cannot even, by its own admission, do a simple Google search to find out whether somebody is who and what they say they are. It cannot do a Google search. The proof of that is that the office has announced today a review, finally—what Labour has been calling for, for weeks now; an independent review—and has said itself that amongst the things it wants to find out is how to use Google. It is unbelievable. This is the Government agency presiding over the sale of thousands and thousands of hectares of New Zealand land. In fact, it has turned down only one sale in the last 5 years. It has approved 99.85 percent of farmland sales. The only one it turned down was Lochinver Station, and that was after weeks of public attention and ministerial intervention.

EUGENIE SAGE (Green): I am pleased to take a short call on the review of the appropriations in the primary sector. I think the speech we heard from the Minister for Primary Industries summed up the Government’s arrogance and its lack of understanding of the fact that when rain falls on the land and drains into rivers, that sustains life. Rivers are not to be captured always for irrigation. The fact that the Minister was claiming that irrigation and big storage schemes are good for the environment shows what little understanding he and this National Government have about what rivers are really important for—for sustaining life, for sustaining a lot of our indigenous plants and wildlife, and for their recreational values.

We cannot exist without water. This Government wants to direct it into big irrigation schemes, and that is what I would like to talk about this afternoon, in terms of the Irrigation Acceleration Fund, which is a major part of the Ministry for Primary Industries’ promotion of more intensive agriculture. This Government has helped to create the perfect storm that we are now experiencing in dairying. With funding for things like the Irrigation Acceleration Fund and the handouts that it and Crown Irrigation Investments give to irrigation, it has encouraged a very high-input, high-cost model that has a high environmental impact. It relies on imported feed, like palm kernel expeller, and very high levels of debt. So when you have had the change in the dairy supply payouts, that has helped to create the perfect storm.

Under the Ministry for Primary Industries, through the major investment in the Irrigation Acceleration Fund—$35 million over 5 years, with another $25 million pumped in, in last year’s Budget, to be spent from 2016—this Government is making it very easy for these think-big storage projects to go ahead. To date we have had that fund spend $27 million in handouts to 18 irrigation projects. We have had $6.5 million go to Ruataniwha, $8.7 million go to Central Plains, $7.6 million go to Hunter Downs, and another $1.8 million go to Hurunui. Even just one of those grants exceeds the amount that the Ministry for Primary Industries allocates for sustainable farming through its Sustainable Farming Fund.

It just shows the Government’s priorities. It gives big handouts to irrigators and agribusiness, and yet in 2015 it provided only $7 million for the Sustainable Farming Fund. It just shows how little weight the Government gives to sustainability, and that is despite one of the ministry’s stated outcomes being to increase sustainable resource use. The focus seems to be more on increasing resource use, rather than on improving sustainability. What we have seen with this whole growth in irrigation and intensive agriculture has been a disaster for our rivers, our streams, and our aquifers, and that is what National is failing to take into account.

We want to have a reputation overseas for producing safe food—food that people can trust because it comes from a clean and healthy environment—yet the Government, with its very weak standards for the regulation of land and water use, its very permissive National Policy Statement on Freshwater Management, and these big handouts to think-big irrigation projects like Ruataniwha and Central Plains, is encouraging more intensive agriculture and more water pollution. In Canterbury, where a lot of this has happened, and where a lot of these irrigation grants have gone, we have got the medical officer of health warning midwives to warn pregnant mothers to ensure that if they are bottle-feeding their babies, they do not take the water for that infant formula from their local bores, because nitrate levels exceed the World Health Organization standards. Nitrate is not like E. coli. You cannot boil the water to get rid of it; it is there permanently.

Hon Jo Goodhew: Scandalous—you want to scare pregnant women.

EUGENIE SAGE: It is not scaremongering, Minister. Environment Canterbury’s monitoring of water supply bores is showing an increasing spike in nitrate levels that exceeds World Health Organization standards. The medical officer of health has warned midwives. The Government is in denial about the impacts on our human health and the environmental health that its policies, through the ministry’s handouts to irrigation, are having.

So the Irrigation Acceleration Fund is not about promoting sustainable land and water use. It is all about allowing agribusiness—

Hon JO GOODHEW (Associate Minister for Primary Industries): I rise to take a call in this debate and to try to balance some of the ridiculous assertions that are so broad-sweeping, and scandalous in that respect. The first thing I want to say is that the member Eugenie Sage is just the teeniest little bit right when she says that midwives are warning pregnant women about the risk of wells in contracting blue-baby syndrome. Where the member is just completely off the planet is in thinking that this is widespread. The member knows it is not. It is a very, very small number, and every single farmer who takes well water that is affected in this way knows about it already. This was a very general warning that went far wider and scared many of the pregnant women in my electorate unnecessarily. But that actually is the modus operandi of that particular party sitting over there.

I want to talk about the record that we have in terms of the support for the forestry sector, and then in general. What we have heard today is about how the economy is benefiting from primary industries in very many ways. I want to start by reminding members of the benefits that certainly accrue, through free-trade agreements, to the forestry sector. The free-trade agreement with Korea will see 99 percent of exports duty free within 10 years, and then the Trans-Pacific Partnership agreement will see $11 million worth of savings every year, and once it is fully implemented, it will be tariff-free.

So that is the return back to our forestry sector. But, in fact, the forestry sector will say it needs to grow in other ways too, so we are planting more forestry through the Afforestation Grants Scheme—$22.5 million over 5 years. In addition to that, we are updating the timber standard because there is much more to be gained economically through engineered timber. So although this is the economic side of things, I think it is really important that we put on the record today that for many in the primary industries sector—not all—it is a pretty tough time right now. In my electorate we have certainly seen that, and we have seen it further afield, up in North Canterbury as well.

But this Government has put out support for the mental health of rural communities—for the rural support trusts it is $150,000 extra. You know, most of the rural support trusts people are volunteers. They are fantastic, warm, caring, skilled volunteers who are out there supporting their neighbours, and out there responding to need. It is very much a neighbourly thing. In the next 3 or 4 weeks we have got two events—one in South Canterbury and one in mid-Canterbury—to support farming families to come together, enjoy a bit of time together, and gain that support. I was with Annabelle White—she was doing the entertaining; I was doing the listening and the laughing—in North Canterbury on 1 April when a well-supported rural support trust meeting had 300 women there, a few police members, who were not women, and, in fact, a waiting list of 60 as well. So there was fantastic support—people coming together. We see banks, we see vets, and we see transport companies linking arms. They are all out there, doing their level best to support some farmers who are finding it really challenging. And we are not talking just about dairy; we are actually talking about other farmers as well. But this is very different from the 1980s when that support did not seem to be there; it certainly is there now.

I particularly want to mention the $500,000 that has gone towards mental health support. There have been an extra 60 rural support trust facilitators trained, and also 14 regional mental health clinical champions and a medical director appointed. So it is not just money that is floating around. What we know is that the rural support trusts have helped to train a number of people in what is called Mental Health 101 training, so that they can recognise when people in rural communities are feeling under pressure—under the pump, so to speak.

Suicide is always considered to be a problem, but what we know across New Zealand is that it is more frequent in rural areas, when you look at it on a population basis. This, of course, causes concern, but what we also have out there is a much better understanding now of how to recognise when people are feeling under pressure. Putting aside those people, those rural support trust facilitators, and getting around the country, both Minister Nathan Guy and I have been able to catch up with rural support trusts from the top of the North Island earlier in the year, in February, to the bottom of the South Island at the Southern Field Days, and then at A and P shows as well. They are doing a fantastic job and I want to lay it on the record here today.

RIA BOND (NZ First): I am pleased to rise on behalf of New Zealand First and take this call in the Committee of the whole House on the annual review debate examining the performance of the Ministry for Primary Industries. I want to say that in the last 12 months it has been quite a woeful performance from the Ministry for Primary Industries. It has been painful to watch, and New Zealand First knows that this is not the fault of the ministry at all, or the fine people who work within it. The blame solely lies on this Government. This National-led Government has become so distant, so divorced, and so detached from the grassroots of its farming foundation, where the genesis of the party itself sat, that it now no longer actually understands what makes the primary sector tick. This is to the point where it has lost touch with its origins, and those origins are beginning to realise that fact, and that this will be a damning fact at the 2017 election.

Every day in New Zealand First we are receiving phone calls from one end of the country to the other, and right across the farming and agriculture spectrum—good people who have become completely disenfranchised with the attitude of this Government due to lack of proper understanding of the most important sector of our economy. The consequence is inadequate funding for the Ministry for Primary Industries, which is tasked with looking after the safety and security of our agriculture sector. Where is the support to our farmers right now? Where is the support that this National-led Government has promised to this fundamental sector, right now? It is no secret that the dairy industry is experiencing the deflation of a bubble that was always going to burst, because, ironically, trends tend to repeat themselves over a period of time.

You have an out-of-touch Government that is also unfocused; a Government that has forgotten about the farmers at the gate who are having to wear the biosecurity risks that are contaminating their very livelihoods, such as the velvetleaf incursion, not only in Southland but also in Canterbury, and also in the Waikato region. This biosecurity breach will see farmers at their gates having to detect velvetleaf weeds themselves, from their own resources that they should be putting back into their farms in order to ride out this tough time. I am not just talking about now; I am talking about the generations to come, from the farmers’ families. I am talking about potential buyers of the contaminated farms that we will see in the future, and that is a real problem.

It has been said that this National-led Government did not see it coming. There is a well-known saying, woven within the fabric of our society, that no man, no woman, no child should get left behind. In the case of the farming and agriculture sectors, the Government has bolted and pigeon-holed itself amongst the wine and tourism industries. It has been dropping the ball on traditional New Zealand - based bread-and-butter sectors. In other words, the marriage is over, and the men, the women, and the children in the farming sector have been left out in the dark. Come this time next year, the Government will be back on its high horse, out rallying for the votes of farmers when it has shut its door on them now. It has failed to listen to the farmers’ needs or even protect them from basic biosecurity threats.

Now let us talk about Fonterra—the great old elephant in the room. Although we think we can blame Fonterra’s senior management, it has to be remembered that Fonterra exists as a creature of statute. Fonterra came to the Government and said: “We want to be a virtual monopoly because that will give us the size and the strength that will benefit the entire country.” The Government said yes, and Parliament realised that having the great bulk of our dairy industry condensed into one single entity of global proportions would be a good thing. But the Government also has a responsibility to ensure that Fonterra stays true to its original aims, and that the ministry tasked to oversee and look after this is adequately resourced.

It is clear that the Ministry for Primary Industries does not get resourced adequately to allow it to do the job that it is entrusted to do. The Government’s meddling hands in the financial structure of Fonterra, with the 2013 Dairy Industry Restructuring Amendment Act and the cynical Trading Among Farmers scheme, have only made things worse. New Zealand First said so at the time, and we have been proven right by what is happening here today, and what is happening now. But the greatest failing that this Government has heaped upon New Zealand and the primary sector is, of course, an utter lack of anything remotely realistic in terms of resourcing for our biosecurity. Minister Guy said that it is his highest priority, but John Key’s Auckland-focused, finance and banking - prioritising Cabinet simply does not seem to realise how essentially important the line of defence is in New Zealand.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Kia ora. E ngā mema o Te Whare nei, tēnā tātou katoa. In the time that I have got remaining—probably 30 seconds—I am happy to take a call on the Appropriation (2014/15 Confirmation and Validation) Bill, focusing on the primary sector. We had the Minister talk about the wonderful strategy that he has under way—his vision for 2025—but my contribution is going to be about the cost of that progress. It is the cost of the progress that I want to highlight. So what has been the cost of progress in the primary sector? We only have to look at the dairy sector, and the dairy sector is in crisis. Milk prices are down—

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.

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

MEKA WHAITIRI: Before we broke, I was taking the honour to make a contribution on the 2014-15 annual review of the primary sector. I started off by acknowledging the Minister getting to his feet and explaining how pleased he is with the performance of his particular sector, and I thought I would offer the cost of that progress. I started to talk around what is happening in the dairy industry in terms of the prices around low milk production—and, obviously, auction prices are hurting farmers—but I also want to talk about the whole sector’s performance around water management.

It has been mentioned by previous speakers on this particular sector that we really do want a quality that means our water is swimmable, as opposed to the current quality standard, which is wadeable, which this Government is promoting. I fully support the Minister’s ambition to double the value of our primary sector by 2025, which is merely 9 years away. I guess the offer to the Minister, to be the progressive Minister I believe that he thinks he is, is that we seriously have to clean our rivers, because one of our added advantages of doubling the value in our primary sector is that we actually have clean rivers. That is our economic advantage on the international stage—that we are a primary producing country that actually values the clean, green image and the added value it brings to our exports.

We also want a country that offers and implements robust and world-class labour laws so that when our workers in the primary industry go to work—and there are many, many workers who derive their livelihoods from the primary sector—they come home. So they go to work, they come home, and they are safe while they are at work. Obviously, in that space, we want to ensure that the jobs that the primary sector is creating actually go to Kiwis first. I did want to say, from this side of the Chamber, that the progress terms of the primary sector is fairly wanting in terms of water management, but the area that I am particularly keen on is actually the land issue.

We have had numerous applications to the Overseas Investment Office and only one application has been turned down. So there are some concerns around how robustly we are checking overseas investors when they are coming to, obviously, buy up our land—land that is part of our country, which is really important. It is part of our psyche, it is in our DNA, and we want to ensure what land we have left in New Zealand remains in New Zealanders’ hands. So in this part of the annual review, there are some issues, seriously, that need to be addressed around the role of the Overseas Investment Office.

But one report that has come from the Minister’s own department, the Ministry for Primary Industries, is about growing the productive base of Māori freehold land. That, to me, is one of the reasons why I have come into Parliament as the member for Ikaroa-Rāwhiti, one of the largest holders of Māori freehold land. It is important that we ensure that land that is in Māori hands remains in Māori hands. I draw that reference only because we do have a bill coming later to the House, Te Ture Whenua Māori Bill, and I will leave that for that time.

I actually want to draw the Committee’s attention to the Auditor-General’s own audit of the Ministry for Primary Industries. If I can just mention his report to the select committee, he talks about an area of performance for the ministry that I am sure the Minister is going to take care of, and that is performance information and associated systems and controls. Although the audit has noted its general performance as good for the previous year, it did make a comment that the primary industries, including Māori, have greater access to capital and have skills needed to grow and innovate. It noted that the indicators of progress that give a view as to whether industry has found access to capital more or less challenging over the review period were missing. So we need to do better in this space.

MOJO MATHERS (Green): I want to focus my comments on animal welfare. Last year our reputation for being world leaders in animal welfare took a really big hit. We saw broadcast on TV compelling evidence of animal cruelty to farm animals occurring in nearly every sector—dairying, pig farming, and the egg-laying sector. Undercover footage showed baby calves, laying hens, and mother and baby pigs either being violently handled or kept in appalling conditions.

Last year TV One’s Sunday programme aired appalling footage of baby calves being seriously mistreated on farms, in transport, and in a slaughterhouse. Earlier this year Story aired footage that showed conditions on a brand new colony-cage farm as bad as any I have seen on battery farms; scenes of dead, dying, de-feathered hens crammed in cages in appalling conditions. Add to this the hundreds of deaths of mother pigs and their babies packed in farrowing crates in a piggery farm and it clearly has not been a good year for farm animals.

What really did it for me, and gets many others, is that despite the compelling video evidence and witness statements that have been handed over to the Ministry for Primary Industries of suffering to the animals, hardly any have actually resulted in the Ministry for Primary Industries following up with a prosecution. It is particularly shocking that it has said that it will not prosecute the colony-cage farm that was aired on Story. If footage of dead, dying, and suffering hens in overcrowded cages is not enough evidence for the Ministry for Primary Industries to prosecute, then something is seriously wrong. That level of suffering that was shown should have resulted in more than a slap on the wrist with a wet bus ticket.

So in my view, and in the view of the many thousands of New Zealanders who really care about what is happening to our animals, and not just our pets but what is happening on the farms to farm animals as well, the Ministry for Primary Industries is failing them on several fronts. It is failing our animals by leaving it to members of the public to go undercover and film the footage of what is happening behind closed doors on factory farms and in cage slaughterhouses to expose the cruelty that is happening there. It should not be up to members of the public. If the Ministry for Primary Industries was proactive enough and doing on-the-spot audits of these farms without notice, then it would be on top of this and there would not be anything for undercover footage to reveal.

The ministry is also failing our animals because it is still saying it is OK to keep hundreds of thousands of animals in cramped cages even when these systems are clearly in breach of the Animal Welfare Act, as farrowing crates are. Keeping animals in confined cages is doubly cruel because they are not set any requirement for there to be fire sprinklers, which means that these poor animals not only suffer miserable lives in these cages but are at risk of horrible deaths by being burnt alive when a fire breaks out, as happened in the Waikato piggery and on multiple occasions on factory farms over several years. We need to be able to trust the Ministry for Primary Industries to ensure that all our animals are treated humanely and our international reputation is protected.

As I said before, the Minister is right; New Zealanders do care about our pets, but we also care about farm animals, and what we are seeing on our TV screens of what is happening to these farm animals is not OK. Especially, these colony cages are not a humane alternative to battery cages. If McDonalds and Wendy’s and Burger King have all committed to going cage-free—if these major fast food companies can afford to ditch cruel eggs—then the Ministry for Primary Industries can say that we can ditch them too, as a country. We do not need them. They should go.

IAN McKELVIE (National—Rangitīkei): At the risk of repeating some things that have already been said, in taking this call—unfortunately, I was away today attending the funeral of a Shannon primary school teacher who was 27 years in the business in, of course, the previous territory of our Minister for Primary Industries. I need to start these few words by congratulating Martyn Dunne and his large team at the Ministry for Primary Industries on doing such a great job in producing a very good annual report. The organisation has moved very quickly from amalgamation to become a real force in the sector. As I commented in my opening remarks to the director-general, Martyn Dunne, this sector has made great strides in the past year, producing a very good annual report and facing some very interesting challenges in the biosecurity, animal welfare, and food safety sectors—coming through them all with flying colours.

The first of these challenges was named Operation Concord and managed the blackmail threat over the 1080 scare, one of the most distressing in New Zealand’s history. But it was satisfactorily resolved, and at the same time it gained New Zealand great credibility for our food safety response capability worldwide. The second major challenge was, of course, the fruit fly outbreak in Auckland—again managed extremely well by the Ministry for Primary Industries.

I want to get on to the issue that the last speaker was talking about—that of animal welfare. Although, unfortunately, the Ministry for Primary Industries was well tested by a major animal welfare inquiry in the treatment of bobby calves in the last year—this will result in some prosecutions, but for those of us with a lifelong love of animals it is very disappointing to believe someone could treat animals in this manner—it is reassuring, of course, to know that the Ministry for Primary Industries has an extremely efficient system, and that the Animal Welfare Amendment Act (No 2) passed last year will enable effective action to be taken against these inept and irresponsible people. I want to defend the sector’s record in animal welfare, however, because I think that many of the issues raised by the last speaker, Mojo Mathers, are in fact not applicable. I think that almost all sectors of New Zealand farming take their animal welfare issues extremely seriously and do a great job with them, and I think we should be proud of our record in that area.

We also should be proud of the fact that we produce food in a very competent and caring manner, which is great for our animals, great for our farming sector, and great for our international reputation. Our industry should not be measured by the inept behaviour of a few renegades. Our farming practices are world-renowned for our animal welfare, care, innovation, and many other things. To maintain and improve our place in the world market, we must ensure all of our practice relating to environmental matters, food safety, animal welfare, and biosecurity is the very highest it can be, and we must continue to root out of the industry those people who cannot perform. There is no room for complacency here—the Ministry for Primary Industries is well aware of that.

It is also very reassuring to witness the new biosecurity agreements adding significant value to our response capability, as noted by the Office of the Auditor-General in its recent report to Parliament, a report that documented the great progress made by the Ministry for Primary Industries in this area. I want to thank all members who have served on the Primary Production Committee in the last 12 months. We have a very consensual select committee. I think we do a pretty good job, and we do a pretty good job of reviewing some pretty important legislation and important issues for New Zealand’s future.

I just want to take one issue, though, that has been in the news again today. I think it is a shame that political interference occurs in a process around Silver Fern Farms that was democratically taken by the shareholders of that company. We now have a whole lot of politicians jumping on the back of it, thinking they know better than the 82 percent of the shareholders who voted in the course of that event. I think it is extraordinary that we think we know better, in this Parliament, than the shareholders of that company. I think it is a tragedy for New Zealand, and I think it is plain silly—irresponsible, frankly.

We in the Primary Production Committee also review Land Information New Zealand, AsureQuality, Landcorp, Crown Irrigation Investments, and animal products. I will briefly comment on the performance of Landcorp, as it is a very large asset in the Government books and is currently demonstrating the challenges faced by many of us in the agricultural sector. We certainly hope it can turn the current situation round, because if it cannot, the rest of the agricultural sector will not. Notice that it has abandoned further dairy conversion on the central volcanic plateau. It is worth noting that this was the subject of a petition to the Primary Production Committee, which enabled us to better understand the challenges facing our region. Thank you.

Hon DAVID CUNLIFFE (Labour—New Lynn): I acknowledge Ian McKelvie, the member who has just returned to his seat, and I acknowledge the hard-working Kiwis who are out there in our primary sector every day, doing their work and ensuring our country moves forward.

Mr McKelvie mentioned Silver Fern Farms, and I am glad that he did, because the 82 percent who voted in favour of that merger, we will call it—what is of issue is whether they voted so based on accurate information, and whether the Overseas Investment Office also had accurate information and had done due diligence. I think that is, it is fair to say, an issue that we will be returning to in weeks to come. The member opposite has rightly noted that land information is part of the review for us today, and, of course, the land information portfolio takes in the Overseas Investment Office, which has been much in the news of late and not for good reasons.

Our primary sector, as with the rest of New Zealand, faces a choice. Are we going to be simply a hard-working producer of relatively raw materials, where we do not get very much share of wallet, or are we going to add value and knowledge and are we going to be world-beaters for premium products that we can put on restaurant tables and shelves around the world? If it is the latter, then we are going to need several things. We are going to need knowledge and information all the way along that value chain, from the farm to the table, and we are going to need high-quality investment along the way—high-quality investment.

The Labour Party is in favour of having high-quality foreign investment in New Zealand business. We believe we should be international traders. We believe that we should be out there in the world, but not in a stupid way.

That brings me back to the Overseas Investment Office, because today it has—by the Minister for Land Information’s own admission—been the case that the Overseas Investment Office got it badly wrong in the case of a sheep and beef station in North Taranaki called Onetai Station, where it did not properly do a due diligence test on the foreign investors who were buying it. This station is alongside a sensitive riverway in Taranaki, and the guys who bought it just happen to have criminal prosecutions in their background for toxic dumping into their local river before they bought the Taranaki station—not ideal.

What is worse is that in the first place our watchdog, the Overseas Investment Office, which New Zealanders depend upon to keep our country safe from investors of ill repute, relied upon them saying they were clean. The office tried to do a quick Google search, but, according to documents that we have seen, it did not find anything. That is why in the review that the Minister has, belatedly, announced today, the terms of reference include helping the Overseas Investment Office to find someone who can actually work Google. That is extraordinary. New Zealand’s official watchdog of investment quality into our primary sector could not find criminal convictions that the Labour Party took 30 minutes to find—30 minutes to find. And, if it is true of that case, how many other cases are sitting in the Minister’s problem pile? I will bet you this. The Minister would not opt for a full external review if she thought everything in that box was hunky-dory, and, in the farm language that is around out there in this sector, I would say “Bugger!”.

Something is very wrong in the Overseas Investment Office, and it is going to take members across both sides of this House to fix it. We want good trade. We want our primary sector to move forward. We want high-quality foreign investment that will add skills, knowledge, distribution chains, and market access, but what we do not want is sensitive New Zealand land sold off without so much as a wet bus ticket to people who actually do not have the credentials that they are required to have under our New Zealand law. That is sloppy. That is not appropriate. That is not doing justice to the hard-working farming people up and down New Zealand, who get up every morning and work their guts out to make a decent living. It is not honouring them to allow their land to be bought up by people who may or may not have been fully frank about their criminal records when they made those investments. [Bell rung] Mr Chairman.

The CHAIRPERSON (Hon Chester Borrows): The Hon David Cunliffe.

Hon DAVID CUNLIFFE: If people out there in New Zealand think that this is an isolated case, then I think that the Labour Opposition has news for them. This is a system failure. Where does this go now? Where it goes is very simple. The Onetai Station scandal is the tip of an iceberg. It is one of many approvals that the current Government let past the goalie over the last 5 years. Do you know that only one overseas investment application into New Zealand farmland has been turned down in the last 5 years? Only one.

Tracey Martin: Unbelievable.

Hon DAVID CUNLIFFE: “Unbelievable.”, my colleague says. Unbelievable—only one. That was Lochinver Station—the Crafar farms—and that was after weeks and weeks and weeks of media attention and of Opposition work, and only then, reluctantly, did Ministers say: “Oh, it’s too hard.” But the Overseas Investment Office probably would have ticked it off, just like it ticked off every other application, without exception, during the period. Why? Is it that it thinks that it is appropriate to rely upon a statutory declaration—the word of investors who may or may not have come through shell companies run by Mossack Fonseca and others? Does it think that that is good enough for New Zealanders? Does it think that it is OK to do a 5-minute Google search, find nothing, and say that it has done its job? Or is it more sinister?

Is it possibly the fact that the current Government is so intent on keeping the tap of cash open that it does not really care where it comes from? Could it be the case that the National Government is more intent on looking after the interests of the powerful—

The CHAIRPERSON (Hon Chester Borrows): Order!

Hon DAVID CUNLIFFE: —and the moneyed—

The CHAIRPERSON (Hon Chester Borrows): Order! If the member could resume his seat momentarily. We have noticed that the Labour Party has exhausted all its supplementary calls and all its calls on this particular sector. So unless the honourable member is using a call from a subsequent debate, then we should probably pause it there. He has had a free hit for about 2½ minutes. [Interruption] Sorry, you do not have another call. You have had 2½ minutes of the next one.

Hon NATHAN GUY (Minister for Primary Industries): Was that not a fascinating contribution from David Cunliffe? What he has forgotten about with the Overseas Investment Office is when his mate David Parker was in, signing off these large tracts of agricultural land. Last time I had a look at a time-frame level, Labour had, proportionally, sold about twice as many as what the National Government has sold. He has got short-term memory loss. He has forgotten all of that, and he stands up here and talks about: “We want high-quality foreign investment and we want good trade.” And yet on that side of the Chamber they do not support the Trans-Pacific Partnership, and so I cannot believe that anything that David Cunliffe says actually has any credibility.

What I want to talk about this evening, on this final call from the Government’s side on the Primary Sector—

Hon David Cunliffe: I raise a point of order, Mr Chairperson. I take offence at the fact that the member who has just resumed the chair could possibly infer from a rational opposition to the Trans-Pacific Partnership—

The CHAIRPERSON (Hon Chester Borrows): No. No, the member will be seated. That is a frivolous point of order. He knows it is not a genuine point of order. A man of his extensive experience should never have called it.

Hon NATHAN GUY: Is it not great when you get under David Cunliffe’s skin? Anyway, what I wanted to do, moving right on to the issues that really matter—it is about the leadership of the Primary Production Committee. I want to acknowledge Ian McKelvie and the great job that he does, and the reviews that he has done over the last 12 months. I also want to talk about—because it has not been touched on this evening—having had contributions while I have been in the chair about animal welfare, about irrigation, about water quality, about biosecurity. Those sorts of things are very important. But what we have not touched on in the primary sector is, actually, research and development, and how we are going to see the aspirational goal of doubling the value of our primary sector exports by investing wisely in research and development. The Primary Growth Partnership is a classic example of where the Government is partnering with industry, and we are starting to see some really tangible results.

If I think about the Precision Seafood Harvesting net design—recently I was up there applauding the commercial sector in the Hauraki area, where they have now got 100 percent camera-coverage and vessel monitoring systems, which is basically the GPS. As a result of that—and we link in with the fantastic net design—fish are able to be selected for size at sea, which is fundamental to the overall ocean sustainability of our fishing stocks. They come on board the vessel in a better shape—another selection process there. Boats are now being designed with holding tanks to hold these fish in a pristine condition. This is all about sustainability. This is reaching into these very important lucrative markets that, of course, Labour and New Zealand First and the others do not want to support through the Trans-Pacific Partnership. This is about New Zealand investing in world-leading net technology, and I am really excited about it.

Another one that is really important for the forestry sector is the steepland harvester. It has been so successful that it has now been exported around the world. It was designed by a couple of Kiwi guys in Nelson. Basically, it is a digger that operates on a steepland slope. And now they have designed it so that you do not need to have an operator working this machine. Is that not fantastic? Just last year I saw the guy—and my kids are not bad on the PlayStation, but I saw this operator and he was even better—working remotely, offsite. The digger was operating, felling trees, a cable coming down with a sensor on the end of it and a grapple picking up these trees—not a human on site. You think about the productivity advantages from this technology, but we should not forget health and safety as well. So, once again, New Zealand is leading the world in research and technology.

Also, we have just recently celebrated nearly $7 million in the Sustainable Farming Fund. It has been going, actually, since Labour’s time, and it has been very successful. In 16 years $125 million has been invested in grassroots programmes. Very, very successful, whereby farming groups and arable groups come forward to the Ministry for Primary Industries with ideas, and they are appraised by a technical group deciding which programmes get funding. But this is about grassroots research and technology: farmers and growers and foresters making decisions for themselves to actually help us to realise our aspirational goal of doubling the value of our primary sector exports out to 2025. There is a huge amount happening and I am very excited and very supportive of a big part of the New Zealand economy, which is our primary sector.

Reports noted.

Social Development and Housing Sector

ALFRED NGARO (Chairperson of the Social Services Committee): It is an honour and privilege to speak as the chairperson of the Social Service Committee this evening in regard to the annual reviews. We know the Ministry of Social Development delivers two particular services. One is the social support service that it delivers, both in the delivering and purchasing of services, and the other is social policy advice. This advice is quite important. It also administers benefits and superannuation throughout New Zealand, and it delivers that to over a million New Zealanders every year. So it is an important role that it plays. Also, it is the largest Government department in New Zealand at the moment, with 10,100 full-time staff.

I also want to commend the work of the chief executive, Mr Brendan Boyle, his senior management, and all the work that they do. They came to the committee and presented their report, and I would like to speak about some of those things in particular. The ministry’s total revenue in 2014-15 was $1.392 billion, which is a 10 percent increase. It is a 10 percent increase on the 2013-14 Budget, and that is quite significant. It shows that as a Government we have recognised the needs that are currently there and are providing for those needs as well.

The areas of focus that were reported on were threefold: operating of the benefit system and supporting people into work; carrying out social housing assessments and supporting projects relating to social housing reform; and working to protect vulnerable children. I want to talk about some of those facts in my speech this evening. Reducing welfare dependency and supporting vulnerable children is a key priority of this Government under its Better Public Services programme.

We have talked about some of the cross-sector leadership and agency work that has been happening, and some of the work conducted has been quite significant. In the year ended 30 June 2015 the number of people receiving a main benefit decreased by 2.8 percent. That is something to be celebrated. In numbers, that is 8,237. There are 285,345 people currently receiving a benefit. The most significant reduction—and I think this is something that is quite important and has been the focus of the ministry—is around sole parents. That is down to 6.5 percent. The job seeker numbers declined to 2.5 percent. I know there is not a lot of cheering on the other side, but we on this side—

Darroch Ball: Job seeker, work ready. Are you sure about that, Alfred?

ALFRED NGARO: —know that it really is making a difference. Yes, Mr Darroch Ball, these are the figures; I know they are hard to accept. They are the figures that are there. Let us talk about sole parents—down to 6.5 percent. Why is this making a difference? I visited the teen parents unit at Henderson High School. Helen Peke was there, and she was talking about the difference that this Government is making to some of the teen parents there. Young mums, as young as 16, 17, 18, are going there. The focus on upskilling, the ability to be able to take their young children there to be cared for and looked after, and giving those teens the opportunity to move on—not to be dependent on welfare but to move into educational and employment opportunities—is significant. That is a fact. That is the reality. That is what is happening out there. [Interruption] I know that has got Labour members excited for all the right reasons, and I know they love this.

Here is another thing that will get you excited. Under this Government, we have set what is called an aspirational goal. I know that previously there have not been a lot of goals. The aspirational goal is this: we want to reduce the overall number of working-age clients by 25 percent. That is right. It is an aspirational goal. Why? Because we on this side of the House truly believe that the longer that our people and our communities are on welfare, the worse off they are in terms of their futures. So there is a significant goal that is really important as well.

Here is some more evidence that measures the significance of the role that the Ministry of Social Development is playing—long-term beneficiaries. At 30 June 2015, 65,550 beneficiaries had been receiving job seeker support for more than 12 months. This is 3 percent fewer than the previous year. That is making a difference. Why? Because, again, the role we are playing is about wanting to make sure—

Darroch Ball: What does the Salvation Army say about that?

ALFRED NGARO: Well, let us talk about the Salvation Army. Let us talk about the Faith Factory down in View Road in Henderson. You may not have visited, but, actually, we go out and visit these places—real people and real places. We are talking to them about the roles that they are playing. That is right. We can name a place and name a person. We have actually been there. We have been to a soup kitchen to see the work that is happening, and it is making a difference. It is changing lives—we have seen that as well. Thank you.

PHIL TWYFORD (Labour—Te Atatū): Last week in Tauranga I attended a public meeting, and in the course of the meeting a woman in her 60s stood up and told about living in her car because the Golden Grove Holiday Park, where she has been living for the last 6 months or so, is being redeveloped. She has been on the emergency housing waiting list for 6 months, and is simply unable to find an affordable place to live.

Another woman, a solo parent with two teenage children, has been living in the Silverbirch Holiday Park for the last 6 months. She is a 42-year-old kindergarten teacher. She has put her name down with four letting agencies—no sign of anything she can afford. The Silverbirch Holiday Park owner, Sharon Makai, the next day told the Bay of Plenty Times that the holiday park was full, with up to a dozen people living in its cabins and caravans. The majority of them, she said, were looking for an affordable place to live. This is John Key’s New Zealand.

In Tauranga, one of our most affluent cities, the median rent is now $425 a week. The city is rated as severely unaffordable. The median house price is now more than eight times the median household income in that city. People are desperate. You only need to look at the pages of the Bay of Plenty Times every day of the week to know there is an acute housing shortage. So what is this Government doing with the 1,200 State houses that it owns in Tauranga? It is selling them. Is it building more houses, the obvious thing that you do when there is a housing crisis and a housing shortage? No, it is selling them off. This Minister for Building and Housing, Nick Smith, and Paula Bennett, the Minister for Social Housing, are so out of touch. Nick Smith said yesterday that the housing crisis is a media beat-up. It is not a crisis, apparently—it is a challenge.

Well, Tauranga is one of two areas to get its housing sold off, and there are two short-listed consortia of groups. Remember these names. One consortia includes John Laing, the United Kingdom - based public-private partnership investor; another British company, Pinnacle Group; and a Canadian real estate investor, Brookfield Real Estate Services. The second consortia includes local iwi and Trust House Charitable Trust, but it also includes the investment firm Morrison and Co., two Australian property management companies, and investors. So for all of the talk about selling State houses to the Salvation Army and non-profit groups, which were going to do such a great job of managing them, this Government is selling off billions of dollars of land and housing to merchant bankers, to foreign companies, and to property investors.

If that was not bad enough, this National Government has already, in this process of privatisation, displayed the Wall Street ethics that are its trademark as it has gone about selling off State housing. Merchant banker Andrew Body was paid $2.3 million in contracts by this Government, first, to advise it on developing the policy to sell off State houses, and, secondly, to advise it on how to actually go about selling them—$2.3 million over 5 years. One of his clients throughout that process was John Laing, the UK private-public partnership investor, who had expressed an interest in buying the houses and is now one of the short-listed parties to buy over a thousand State houses being sold in Tauranga. Is that a conflict of interest? Is that a conflict of interest? The Government said “No. There’s no conflict of interest.”, and it took an investigation by the Office of the Auditor-General to show that the Government had broken its own procurement rules time and time again by not tendering that $2.3 million worth of contracts to Andrew Body, the merchant banker. The Office of the Auditor-General said the Government had failed to follow proper procedures in relation to the conflict of interest, and it was rapped over the knuckles.

This is what makes it so disturbing that the National Government recently legislated to give the Ministers—in this case it is Bill English and Paula Bennett—extraordinary unfettered powers to sell off billions of dollars of State houses to whomever they like on whatever terms they like. It swept away all of the normal legislative safeguards for the sale of State assets in this kind of situation.

Hon JO GOODHEW (Associate Minister for Social Development): I rise to my feet with the privilege of being the Associate Minister for the social development portfolio. I want to cover off on a couple of things this evening. The first thing I want to say is that this landscape is changing, and it needs to. That is because this Government is tackling some really hard things. I refer to the Child, Youth and Family reforms. I refer to the fact that instead of chucking money at people who are, for whatever reason, relying on a benefit, or chucking money at young women who are pregnant at a very young age, we are assisting those people to realise the full potential in their lives.

In my home patch of Rangitata we have seen an enormous drop in the number of teenage pregnancies. In fact, we have a unit at Timaru Girls’ High School, which not so long ago had 17 young women and, I understand, has only about four there now. In fact, what I also know is that for those who were there, they now have a goal. They will achieve what they want out of their lives. They will finish their education and they will therefore have a far better future for the children in their lives. What we are doing is not just simply dreaming up an inventive solution or a way of getting into the lives of these people and trying to help; we are also requiring that we measure what we do and that we make sure that the taxpayer dollars that we spend assisting people actually have an outcome—that it is measurable and that we have some research and evaluation going on, which has been woefully lacking in years gone by.

I want to bring this around to just a short commentary on the social policy evaluation and research unit. We are, within that unit, developing an effective evidence base for the social sector so that those making decisions can actually improve the lives of vulnerable New Zealanders. This is our social investment approach. It is about increasing the use of targeted evidence-based investment that will get better long-term results, not for some ephemeral sort of group of people but for real New Zealanders, for real vulnerable children, for vulnerable adults, for vulnerable families—real results.

I have to say, though, that the work that is going on within this portfolio and across Government is not easy. It is much simpler to just throw some money at it and hope it works, or even to instinctively think that it works, when the reality is that going out there and seeking the evidence and then channelling the funding through to where that evidence shows us we are making a difference in the lives of New Zealanders is really much tougher. But it is worth it. It is absolutely worth it. And we have seen that with the way that we have assisted young teenage mums, wrapped around them the assistance to keep them in education, to keep them in training, to assist them into jobs, to help them with budgeting, and to help them with parenting skills. I just know, because I have seen it and I have met them, that it makes a real difference in their lives.

Within the community investment portfolio we spend more than $330 million a year. Now we are doing a line-by-line review of what we spend, to ensure that it is directed towards the most vulnerable New Zealanders—those vulnerable children who really need us to make a difference in their lives, not just pat their mothers or fathers on the back and say: “There, there, you have our sympathy.” They need real interventions—real interventions that result in changes in their lives. We need to get better results from what are in fact billions of dollars that we are currently spending. We know the Opposition hates it, because what it shows is that the Opposition did not measure outcomes. It was too afraid because what that really meant was it is not intentions—it is outcomes. So, in fact, what we are doing within the Government is tackling the hard stuff. It is not that easy to work out how to measure whether what you are doing is actually being effective, and so that is a challenge for us.

GARETH HUGHES (Green): Kia ora. Ngā mihi nui ki a koutou, kia ora. Around the country tonight, there are couples sitting around their dinner tables in their rented kitchens going over their household budgets and wondering how they are ever going to own their own home. They are probably not reading this Social Development and Housing Sector report. They are probably more likely watching reruns of The Block or Mitre 10 Dream Home. Kiwis, we sure do love our home renovation TV genre. But the fact is that for too many Kiwis this is not reality TV—this is fantasy TV. These are people who work hard, who want to raise a family in a home of their own. They are working, they are saving, but they are finding the deck is stacked against them. These people also have a name—these people are now called Generation Rent. This is a generation stuck in poor quality rental accommodation with out-of-date tenancy law.

It is not an accident. It is not a force of nature. This is the result of deliberate policies—deliberate policies skewing to screw the scrum, deliberate policies that benefit and profit property investors over first-home buyers. These are policies that discriminate against Generation Rent and present clear economic and social risks to New Zealand. It is no way to run a country—to reward property speculators over people investing in productive enterprises and employing new workers. It is clear that something is out of kilter when a house can earn more in a matter of months than someone can earn working over 1 or 2 years.

Simon Bridges last week said that the country does not have a housing crisis. But, Mr Bridges, say that to someone working on a minimum wage, paying the 12 percent before-tax compulsory student loan repayments, trying to save 20 percent for a loan-to-value ratio deposit—someone who is told they have got to start saving for retirement too. Mr Bridges says that there is no housing crisis, but say that to someone in Auckland, where house prices have risen by $100,000 since January this year. Try saying that to someone in Ōtara, where 80 percent of people buying houses there are, in fact, estimated to be investors. Try saying that to someone stuck in a cold, damp rental house, when the official estimates say that we are seeing 1,600 extra deaths and 40,000 child hospital admissions because of our poor quality housing. Try saying that to the couple who do not go to Bali twice a year, do not drive a BMW on lease, do not have a 42-inch plasma screen, and do not spend 200 bucks at the bar on a Friday night, but are told in the media that it is their fault, that they are not disciplined enough to buy a house.

There are thousands of New Zealanders locked out of homeownership, Kiwis and families living in the holiday parks and living in the garages, and thousands of Kiwis literally sleeping on our streets. Anyone who says that is not a crisis has their head in the sand, and they are completely out of touch. In this country we used to be called the half-gallon, quarter acre, pavlova paradise. Since those days our homeownership rates have now dropped to where they were in the early 1950s. Homeownership used to be called the New Zealand dream. But today it is just that: a dream.

For my generation—we are called Millennials or Generation Y or Generation Rent—housing unaffordability is in fact one of the highest-profile symbols of the wider generational inequities we see. My generation, and the broader generation, could, in fact, be the first generation that is worse off than their parents’ generation. This is a generation that is burdened with $15 billion of student debt, gifted from a generation that had free education. This is a generation working in an imbalanced and indebted economy whose glory days were in fact 50 years in the past. This is a generation facing and inheriting unswimmable rivers, species going extinct, and the very real possibility of runaway catastrophic climate change. For my parents’ generation there was State support to get into a house, free education, and a job as good as guaranteed for life. Today a good job, an affordable education, and a house to call your own are considered luxuries.

These are some pretty big issues facing the country, but what is the Government focused on? Well, its flags and its foreign trusts. A great president once said that a house divided against itself cannot stand, and what we have seen in New Zealand in 2016 is generations divided by housing. I believe in fair and affordable housing as a basic human right for all New Zealanders. If you work hard and you save, you should be able to get into a house for yourself, even in our biggest city. The solutions are not rocket science: (1) we need the Government to build a lot of new homes, like we used to; (2) we need a comprehensive capital gains tax, excluding the family home, to remove the unfair tax incentive to invest in property; and (3) we need restrictions on foreign property, as we see in other countries.

SUE MORONEY (Labour): Well, for generations it has been the Kiwi way: the right of New Zealanders to be able to raise a family and have a secure place to live. Even through the Depression years that was something that New Zealanders were able to aspire to and to do, but not under John Key’s National Government—no more.

I am not talking about people at the lowest end of the income bracket even. I am talking about people who regularly come to MPs’ offices who are on decent wages, who are in the middle brackets of income, who are telling us that they cannot afford the unaffordable housing costs that are going on under this John Key National Government. The Government members opposite are so out of touch that they have used this debate to explain to New Zealanders that it is not even happening—that their reality is not a reality at all. That Government is arrogant and it is out of touch.

We have the Government members, in this debate about social development and housing, celebrating the reduced number of people who are receiving benefits. Well, the Labour Party members would join them. They would join in that celebration if those people were coming off benefits, to go into paid employment. But they are not, and there is no celebration in celebrating people being denied benefits only to end up at the food bank. Alfred Ngaro in his contribution recognised that that is what is happening. He talked about going to visit the Salvation Army to find out how much the food bank needs are increasing in the communities that it serves. That is nothing to be proud of.

Alfred Ngaro: And then you go into National policies.

SUE MORONEY: That is nothing to be proud of, Mr Ngaro. Your Government is putting more and more families through the food bank system—off benefits and straight into the food bank. That is not the vision that the Labour Party has for a brighter future for this country.

When talking about housing, we cannot ignore the unaffordability that is continuing to creep right throughout New Zealand, under this National Government. It used to be confined to Auckland, but because of that Government’s failure to fix or even recognise the Auckland housing crisis it is ending up in many other communities.

In respect of my own community of Hamilton, today the New Zealand Herald announced that in the last year house prices in Hamilton have gone up by 34 percent—in 1 year alone. That is on the back of the previous year, when house prices had jumped 21 percent. So do the maths: 21 percent the year before last and on top of that another 34 percent. It is no wonder MPs are seeing people coming through their doors in droves, saying that they cannot afford to buy into the market and they cannot afford the increasing rents that come off the back of that.

But at the same time—and here is the big kicker—the Government is selling off State housing stock. So the people who normally would fall out and drop out of the private rental market now have no safety net with State housing. Those Government members are pretending that they are not privatising; they are absolutely privatising the State housing market and they know it.

Here is a cautionary tale. Normally these tales come from overseas, but this is a cautionary tale from New Zealand. The Government is doing exactly what it once did with the rest home sector. It pretends to give it to charitable organisations. Those charitable organisations do it to the best of their ability, but find that they struggle quite quickly, and guess what? Within a decade we found that those rest homes are almost all now in private hands. That is exactly the path that that Government is using to privatise State housing stock and to get it into their private investor mates’ hands.

So we continue to see a Government that is focused on actually supporting people who want to hide their money and to find taxation loopholes in a country like New Zealand. We are becoming a tax haven, for goodness’ sake! That is where that Government’s priority is lying, rather than in actually addressing the issues that are affecting everyday New Zealanders—hard-working New Zealanders who, as I said before, are on modest incomes and on middle incomes, and increasingly are finding it hard to make ends meet on even the higher level of incomes, because of that Government’s failure to act.

It is not rocket science. When there is a housing crisis we need more houses. We need more decent houses and we need the Government to act. The market is not fixing this one, National. It is not fixing it. And we know that the National Party members sit on their hands and believe that the market will deliver.

DARROCH BALL (NZ First): If we were to listen just to the Minister and to the Government benches about what was going on in social services and Housing New Zealand, then the public of New Zealand would be led to believe that everything was hunky-dory and tickety-boo. But, as we all know, that is not the case.

I just want to concentrate on one topic, which is Housing New Zealand and the State houses and the state that they are in at the moment. At the moment we are actually entering crisis point and we are going to epidemic levels in regard to the P contamination of State houses. The main fact is that this Government has done nothing since it has been in Government, since 2008, and it is still continuing to do nothing about the P contamination of State houses. In the 2013-14 financial year there were 28 State houses found to be contaminated with P. In 2014-15 that jumped up to 230 houses found to be contaminated with P. And in just the first 6 months of this financial year alone that number is 280. That is in just the first 6 months of this financial year alone. That is epidemic levels. That is crisis point, but this Government is not even acknowledging that there is a problem with P contamination of Housing New Zealand State houses.

Not only that, add the fact that a quarter of all new State houses that were built in Christchurch have already been contaminated. In 2014 of the 196 houses that were tested, 101 tested positive and, like I said before, already 280 in the first 6 months of this financial year have tested positive. If you compare that with the hundreds of people on the waiting list because of these State houses being empty because of the contamination, then you can see where we are, with the issues with the waiting lists adding to that fact.

But how does that translate into costs for the taxpayer? Well, luckily enough we have got a poster here. In 2013-14 it cost $700,000 to the taxpayer, in 2014-15 it cost just over $2 million, and just for the first 6 months alone of this financial year it cost almost $6 million. That is what you call an exponential curve—that is what you call an exponential curve. There are two questions that fall out of this poster. Firstly, what is going to happen next year, 2016-17, if this Government continues to do nothing? The answer is that it will continue to exponentially increase.

The second question is this: why is there data only to 2013-14? That is because this Government did not even bother to collate the information prior to 2013-14. Even though it knew that the evidence was there that this was going to be a problem, that it was a problem since 2008-09, yet it chose to still do nothing about it.

In 2008 to 2012, prior to Housing New Zealand even collating the data about P contaminated State houses, there were no fewer than 16 major stories and articles about P contaminated State houses: from “P labs” to “Scientists telling of P house shock”, “P lab findings”, “Taxpayers carry can for P lab State house tenants”, and “P homes clean-up costly”. That was in 2012. If we talk about official documents that Ministers were given, there were no fewer than five official documents that Ministers were given between 2008 and 2015—the official reports stating the concerns with the P contaminated State houses.

So the Government has known. But what has been done? What has been done—nothing. It is zero. The only thing that the Government brought in in 2011 was a stand-down period of up to 12 months for a State house tenant who was caught using or manufacturing P in a State house. Bill English has already said in this Chamber that that is not a firm enough measure and that they are looking at things that are firmer. But nothing has been done.

Just out of some written questions—in fact, what I will go to, as I have got only a short time left, is looking at the responsibilities that Housing New Zealand actually has, as the country’s largest landlord. The Government’s own tenancy services state that if landlords rent out property that is contaminated by P they are breaching their obligations under the Residential Tenancies Act 1986, as well as other legislation such as the Building Act and the Health Act. This Government has let this crisis occur; it has known it was going to occur since 2008. The only thing it is planning on doing is selling off these houses.

Hon ANNE TOLLEY (Minister for Social Development): There has been an awful lot of emotion and accusations thrown around the Chamber in the annual review debate on the Social Development and Housing Sector so far, but, I would have to say, based on very few facts.

I want to start off tonight by recognising the outstanding contribution of the staff who work for this Government, and this country, at Work and Income. As I get around the country and meet and talk with staff and the clients sitting in their offices, either waiting for an appointment or working with a case manager, I have to say I am continually impressed by the absolute dedication of those staff in working alongside those people who for one reason or another have found themselves in difficulty, helping them solve what at times seem like completely insurmountable problems. I am always impressed by their enthusiasm, by their compassion, and, most of all, by their professionalism in working alongside those people to support them through the tough times, always with a focus on helping them into work and, therefore, into independence. Because that is what coming off a benefit means: it means you are independent of reliance on the State to maintain you and your family, and you cannot underestimate the benefit of that.

The week before last I was absolutely delighted to announce that the number of people in this country who were dependent on a benefit had fallen below 280,000 for the first time since 2008. Did we get a celebration in this country from across this Parliament that that was an amazing achievement since the global financial crisis—that all those people have gone, for one reason or another, from relying on a benefit to being independent? All we heard from the Opposition was carping that we could not prove they had gone into work. Well, let me tell this Committee that most people go into work, but, funnily enough, people do not willingly give up a benefit if they have no other way of surviving. They can alter their circumstances; in fact, some people go to prison and therefore they do not need a benefit, but the vast bulk of them are going into work and that should be celebrated by every single member in this Chamber.

If people do not go into work; if they go off the benefit and not into work and there is not a valid reason for them to go off the benefit, then you have to ask why they would do that. I have asked that question of the Work and Income staff. I have asked that question, because the accusation has been made tonight that they go off the benefit into the food banks. I have asked that question of the Salvation Army, too, and some of the other food bank providers around—and that is nonsense. That is absolute nonsense. Some of those people have gone off the benefit because they have not fulfilled the obligations that the taxpayers have of them. In other words, they have not been out looking for work consecutively. This is a small number of people, but we do have obligations. If you are supported by the taxpayer, you are expected to do a number of things. In some cases, it is to look after your children well; in some cases it is to be out finding work, but the vast majority of people go off the benefit because they have gone into work.

One of the most successful schemes we have been running is 3K to Christchurch—1,900 people. I remember when Minister Bennett announced it, and she was targeting 1,000 people, particularly young people, moving down to Christchurch, where there was a huge need for construction workers. Actually, when you talk to them today, 1,900 people have accepted that challenge and moved down to Christchurch, and by far the majority are now going into the hospitality sector, are going into the care sector—not construction any more. And that is to be celebrated. Did we hear celebration across this Chamber for those people who had moved off benefit and into work? No, of course we did not. The Opposition went out and found some employer who said they stayed only for 3 months.

This Government is working hard and the staff in the Public Service, in the Work and Income offices, are working hard to support those people into independence, because we know that work is the best way out of poverty, both for those people and, most importantly, for their children. Every step we take should be celebrated.

Hon Members: Mr Chairman.

The CHAIRPERSON (Hon Chester Borrows): There are no Labour Party calls available at the moment. The Green Party has four left.

JAN LOGIE (Green): I believe every family should have enough to sustain themselves, and that all children in this country should be safe and able to develop to their potential. Supposedly to deliver that goal, this Government’s top-line Better Public Services target is reducing welfare dependency by 25 percent by June 2018. But despite all its media releases telling us how much money it has saved and how many people it has got off benefits, there is no way, on current projections, that it will achieve this target.

Work visas match or outstrip new jobs, and job growth is projected to slow and unemployment is projected to increase. Government policies do not support beneficiaries getting into the workforce; they just tell them they need to do it. The Government has refused to pick up my member’s bill to provide workplace protections for victims of domestic violence, something that could significantly reduce the need for income support at all. The reality is that even the chief executive officer of the Ministry of Social Development described this target of 25 percent as aspirational, and not in the sense that the Minister in the chair, Anne Tolley, suggested as a positive thing, but rather a “we’ll never make it” sense.

Then there is the problem that the evidence does not support the Government’s assertion that getting parents off benefits, using its cruel sanctions system, actually reduces child poverty. The Government does not measure the impact of its interventions on families or children. It cannot even tell us what happens to people once they are off a benefit, and it dismisses the growing number of children in relative poverty as irrelevant. Let me remind you, as we have heard from previous speakers, that this is the Government that says it is all about the data. It tells us that it is all about the outcomes and proving it can do it, yet it does not measure the things that matter.

The chief executive officer of the Ministry of Social Development told us that it thinks its case management system will reduce the number of people on benefits, despite the evidence that was presented to the select committee showing that it was not likely to. So it does not have the targets that are appropriate, it does not have the measures to improve any positive benefit, and then it tells us that a method is going to work to be able to achieve this, which the evidence says otherwise.

Then the Commissioner for Children clearly told us in their hearing that this is the wrong target if we want to improve the well-being of children. He told the select committee that we need to set four targets: (1), reduce relative poverty; (2), reduce material deprivation and hardship; (3), reduce violence; and (4), improve housing quality. If we set those targets, we would ensure that our children were safer and healthier and out of poverty.

I think we might also need to add another target to that, if that is not too arrogant of me, to suggest that we have a target of ensuring people are accessing their legal entitlements. Because despite the Minister telling us that when she visits the offices she is hearing that everything is fine, that there is no problem, we do not actually have evidence to tell us that. In fact, what we had in this last year was evidence that despite two court rulings over a period of time, Work and Income refused to change its policy to abide by the actual law, that it refused to give people their legal entitlements that had been twice established by the court.

We have no ability to be secure that people are able to access their legal entitlements. And I think that was reinforced again by the fact that last month in Auckland, community advocates helped over 700 people at just one Work and Income office over 3 days—700 people, at one office, who had not been able to access their legal entitlements. That, to me, is an indicator, and, at the very, very least, it is smoke. The Government should be taking that seriously and putting in systems to audit whether people are able to access their entitlements, because we are hearing so many stories, and there is growing evidence that they are not currently accessing their legal entitlements.

If the Government was serious about addressing actual social harm and improving the health, well-being, educational outcomes, and life opportunities of our families, it would start by ensuring that people got their legal entitlements. Then, I think, it would start listening to the advocates for children and the experts in our society, and follow the advice of the Office of the Commissioner for Children. But it is not serious and, as a result, child poverty remains entrenched. Children keep dying from living in cold, damp houses and from other low-income-related diseases at a rate of more than one child a week, in this country that we used to call the land of plenty, where there are so many who still have plenty but who are not sharing.

To go back to the Office of the Commissioner for Children, it was deeply disturbing to hear through the annual review process that the commissioner, who is tasked with the absolutely essential role of monitoring the safety of children in State care, say so clearly that his office does not have the resources to be able to do this properly, that there have been negative audit results where there were concerns for the safety of children, and that it is not able to follow up properly.

This is in the context of a 56 percent increase in recorded offences against children in State care since 2009 and a 40 percent increase in sexual abuse against children in our collective care, where the absolutely critical role of the watchdog of that system has been so underfunded that it is not able to do its job properly. That is a result of this Government’s policy—a Government that has promised, again and again, that this is not OK and that it would fix this. All we have had is report after report, an expert group, and a reduction in funding, and children have suffered in our collective care while that has been happening.

It is time to move forward. Good change is 100 percent possible. It may not be achievable overnight, but it is achievable. The Green Party would institute policies based on expert evidence and a fundamental belief that family, community, and society can thrive when the safety and other basic needs of our children are guaranteed—when our society is in balance. Currently, the policies of this Government are out of balance. I look forward to the Green Party rebalancing the policies in this country in favour of our children and the future of this country, to give all our families a decent go to be able to sustain themselves.

JONO NAYLOR (National): I know that the Labour Party members were keen to take some more calls, and I was almost tempted to actually give them one because I was missing out on my dose of fiction this evening, after two weeks of adjournment and having the opportunity to watch a bit of fiction on television. I was getting a good dose of it from listening to the Labour Party speakers, and it was tempting to listen to a few more.

Can I just say, being able to stand up and talk on this subject as a Government member is incredibly heartening. I feel incredibly proud to be able to stand up and talk about some of these things that have been achieved over the last 12 months in this review process. We have a Government that is not afraid to tackle the hard issues. We have Ministers in these portfolios who are prepared to face up to where things could be better and to actually do something about it, and I stand here with a sense of pride in being part of a Government that is doing some great work in this area. There are almost too many things to talk about. Some of them have been touched on, but, actually, there is an incredible number of things that are really great that are going on that we can be proud of.

For a start, I just want to touch briefly on the overhaul of Child, Youth and Family. This is a critical thing that needed to be done. It was long overdue, and I think we would all agree that the results of the things we were seeing for children in care simply were not good enough. Over the years, as the Minister for Social Development has said, we have had fantastic people who have worked on the front lines in our social services. They have been doing great work with the tools that they have had, but it is time for us to actually realise that some of the processes that we have got do need to come together and work a little bit better.

I have reflected on this when we were talking about other legislation. I remember being a social worker 20 years ago—and I still now have the dilemma in my own head—and, when you uplifted children, wondering whether you were actually, in fact, inflicting more harm on them by bringing them into State care than if you were to leave them in that situation. It is a horrible dilemma to be in, so that is why we have got a Minister who is leading the charge to ensure that Child, Youth and Family will have the overhaul that is required to ensure that we put children at the forefront of what we are doing and that we improve the level of care and we improve the outcome for those children, if they are going to have the State providing them with the role of parent. I am looking forward to seeing those changes as they come through.

We have heard a lot of talk this evening about housing, and there is this myth that has been put out there that the Government is sort of flogging off every single State house that is out there. The way it has been talked about—

Louisa Wall: Not every single one; just 6,000 of them.

JONO NAYLOR: No, but the way it has been talked about is overinflated in terms of proportion. You know, we are talking about approximately 1,500 houses out of the 60,000-odd houses that are in Government stock. I for one have got to say that just because we had the really good idea some years ago that, actually, there would be a State housing service provided—it has been a good service. It has meant that people have been able to get into housing, and it has done reasonably well. But that does not mean it was the last great idea when it comes to social housing. We are looking to do some other things around social housing. We are looking to improve the service that people receive from the wraparound services that will be provided by community housing providers, and it is just great to see that, actually, some foresight and some forward thinking is occurring.

I went to Auckland the other week because I have heard so much about Auckland housing.

Hon Simon Bridges: What were you doing?

JONO NAYLOR: Well, it was something that someone has got to do—you have got to go up there and have a look. I had heard so much disgruntled conversation and talk about the Tāmaki redevelopment programme. People were saying what a terrible thing this was, and I thought that I should probably go and at least have a look to find out what was going on there and to see what the fuss was about. Well, what I saw there was a whole lot of quite rundown, not-fit-for-purpose, old State houses sitting on pretty large sections that were not really necessarily being up-kept because they were too big for people to look after. But actually what is happening now is that those 2,500 houses that are sitting there are becoming 7,500 houses over time. There will still be the same amount of community social housing provision there, but there will also be another 5,000 houses that will be warm, that will be dry, and that will be fit for purpose for the people who will occupy them. This will ensure that we are starting to address the need for more houses in Auckland.

There are good things going on in this space, and this Government is making sure that we are moving ahead, not stuck in the past, not just sticking to the old ways of doing things—

METIRIA TUREI (Co-Leader—Green): A fairer future for this country is 100 percent possible. Fixing the housing crisis in this country created by National is also 100 percent possible. Solving child poverty, largely caused by National, in this country is also 100 percent possible. It comes down to a choice—the choice of having the fairer, cleaner, more sustainable country that New Zealanders want to build, leaving behind the disgraceful record of the National Government, which is driving this country well into the past. It is time for us to move forward, and away from these old policies of the past from National, which drive our families backwards, and into the good green changes that can be made for our families and for our communities.

I have to say I found the Minister’s speech tonight disingenuous and disgraceful, frankly. When she stood up to say how great it was that all these people were moving off the benefit, she could not say where those people have gone. We have asked her for this information before. She does not know whether or not a person who has left the benefit has gone into a great job and is doing well—and we all hope that that is the case; we all want that to be the case—or is now living in a car with their kids, desperate for a place to live, desperate for a regular and decent income, and desperate for some respect from the State agencies for which she has responsibility. The thing is, she does not know because her department does not ask, and it does not ask because it does not want to know. It does not want to know because it is interested only in the half measures that make it sound good; meanwhile, our New Zealand families are still living in terrible houses that make them cold and sick, and living on miserable incomes so they cannot afford to pay the power bill and the rent, and feed their kids. That is the reality for New Zealand families under the National Government. That is what National has driven this country to, but it need not be like that. New Zealand can choose a different way.

I want to address two issues out of these reports. The first is the Children’s Commissioner’s report and then also the Housing New Zealand report. Let me first congratulate Andrew Becroft on his appointment in the future as Children’s Commissioner. [Interruption] That is one of the better decisions made by the Minister—yes, I agree with that. He will be a very fierce advocate for children and young people. He understands—she does not, but he does—how poverty impacts on children, the kinds of choices it constrains them to, and the difficulties they get into because poverty has exacerbated the risks that they face in their lives. He does not judge them and punish them and their families in the way that the Minister and her policies do. He is always looking for constructive ways to make sure that these children, these young people, have a path out of the circumstances into which they have been driven. I am really looking forward to his contribution as Children’s Commissioner.

Let me also say that our team in the Greens and I have really enjoyed working with Russell Wills and with his people as well. Russell Wills has played a critical role in making sure that child poverty is on the political agenda. It is on the agenda of New Zealanders, and that is part of the reason why New Zealanders over the years are increasingly saying that the gap between rich and poor, and child poverty, are major issues for them in this country. New Zealanders do not want to live in a country where children are going to school hungry. New Zealanders do not want to live in a country where they can see the gap increasing between them and their neighbours and their friends and their families. They want to live in a country that is inclusive, that is supportive of children, that does not judge people on the basis of their income, and that does not punish them when they are poor. That is what National does. That is not what New Zealanders want to do. Russell Wills, through his work with the Expert Advisory Group on Solutions to Child Poverty and through his continual advocacy around the effects of child poverty on New Zealanders, has been exceptional and has really helped to put child poverty on the agenda.

National has traded away the potential of thousands of New Zealand children by allowing child poverty and the gap between rich and poor to stagnate at an all-time high. Under National in the 1990s child poverty and inequality rose to record highs, and it has stayed there because National’s policies continue to drive families down.

Hon ANNE TOLLEY (Minister for Social Development): I want to take another call because I think, again, we need to put some facts on the table. A number of my colleagues have said that this Government has not been afraid to face the hard issues, and I concur with that. We have not been afraid to face the hard issues. We have not been afraid to invest early in prevention and rehabilitation. We have been a brave Government that has done things that other Governments have not been prepared to do. I would have to say that we have not been afraid to admit that some things are not working.

In fairness, in last year’s Budget we recognised that there were too many children living in this country who were experiencing hardship. Despite the emotive rhetoric of the previous speaker, Metiria Turei, this National Government was the first Government in 43 years to raise the benefit for families—the first Government in 43 years. That is amazing for any Government to do. When Labour went right through the 2000s with all the money that it had, surplus after surplus, which it told us about, how much did it put into the very poorest in this country? Absolutely zip. This National Government last month started paying $25 a week after tax to those families dependent on a benefit. And, what is more, we did not stop there. We said: “Aha, but there are also families who are working, on the lowest of incomes, who also have children who are not experiencing the sort of New Zealand life we want for all New Zealand children.”, and we increased their Working for Families payments as well.

That is what this Government has done, and last month that money started being paid out to those families. I have to say—I do not know about my colleagues, and I certainly do not know about the Opposition—that I have had people in my electorate offices saying: “This has made an enormous difference to us. We hadn’t realised how much difference that extra $25 a week will make to us and to our children.” I come back to the fact that you cannot escape the difference it makes in people’s lives when you help them into independence, so they are not reliant on the State for a benefit. What is more, it makes a difference for their children. This Government has not been afraid to tackle the appalling record of Child, Youth and Family in looking after the children who need State care. We know that we are in for a complete overhaul of that system.

This Government has not been afraid to tackle the issue of the harm caused to women, to children, and to their communities that gangs impose. The Minister of Police and Minister of Corrections, the Hon Judith Collins, and I have announced a whole range of issues, not just from a law enforcement point of view but as a social development hand as well. I have announced two community pilots where we are trying some stuff to see whether we can make a difference in the lives of mainly the families of gang members who feature too highly in all the deprivation statistics, in all the family violence statistics, in all the notifications to Child, Youth and Family statistics, and I have to say in all the statistics around arrests, prosecutions, and criminal sentences.

I come back to the fact that I say that this Government has not been afraid to tackle some of those hard issues, and accept that some of the tried and true things in the past are not working. They are simply not making a difference in people’s lives, and we should stop doing them. We should try to experiment and try to find better ways of changing people’s lives, with the taxpayers’ money that we are investing. This Government will continue to do that because we are determined to make a difference in the lives of those New Zealanders who rely on the Government to help them when something untoward happens to them.

METIRIA TUREI (Co-Leader—Green): Yet another half-truth about a half measure from this Minister and this Government. Let us make no mistake. Let us talk about the $25 increase in the benefit, shall we? What percentage of beneficiaries is getting the full $25? It is about 50 percent—right? Only 50 percent of those who are entitled to that $25 are actually getting $25, because this Government has given with one hand and has taken with another. And 22,000 of those families will be losing money because of the income-related rents. About 40 percent of beneficiaries will be losing money from that $25 because of other services or other funding they are getting through the Ministry of Social Development that they will not be entitled to. So when this Minister stands up and says that beneficiaries get $25 extra, she is not telling the whole truth. That is the problem with this Government: yet another half measure that does nothing. Her ministry and Treasury have all said that that $25 will not solve child poverty. So we know that it will not have an appreciable effect on families or bring families out of poverty.

Let us talk about another half measure, shall we? This is about housing. As we know, housing—particularly rental housing for poor families—is a key driver to entrenching their poverty because it is expensive, and driving more costs, and because their kids get sick and have to go to hospital. We know that a warrant of fitness—a proper, comprehensive warrant of fitness—for rental properties, to make sure that those rental properties are safe for the families and for the children who live in them, will save lives. It will save lives. Otago University has just in the last couple of weeks come out with a report saying that insulation to 2008 standards and a heating device saved 19 percent of children in those rental homes from going to hospital—a 19 percent reduction in hospitalisations because of high-quality insulation and a heating device. What is this Government going to do with its miserable insulation bill—

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member but the time for this debate has expired.

Reports noted.

A party vote was called for on the question, That clauses 1 to 7 and schedules 1 to 4 be agreed to.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Clauses 1 to 7 and schedules 1 to 4 agreed to.

House resumed.

Bill reported without amendment.

Report adopted.

Bills

Appropriation (2014/15 Confirmation and Validation) Bill

Third Reading

Hon AMY ADAMS (Minister of Justice) on behalf of the Minister of Finance: I move, That the Appropriation (2014/15 Confirmation and Validation) Bill be now read a third time.

A party vote was called for on the question, That the Appropriation (2014/15 Confirmation and Validation) Bill be now read for a third time.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Bill read a third time.

Bills

Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill

Third Reading

Hon MICHAEL WOODHOUSE (Minister of Revenue): I move, That the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill be now read a third time. For the benefit of the members, I will briefly recap the three main items contained in this bill.

This bill proposes a new tax, a residential land withholding tax, as a means for collecting tax under the brightline test on the sale of New Zealand residential land by offshore vendors. Members will recall that this new tax is the third component of the Government’s suite of changes to address tax compliance in the property market. The brightline test introduced earlier ensures that the gains on property bought and sold within 2 years are taxable. This new tax is aimed at offshore vendors because it can be difficult for the Inland Revenue Department to collect tax from the proceeds of such sales from foreign owners with no or limited presence in New Zealand. The new residential land withholding tax will, therefore, be collected by the conveyancing agent from the offshore seller at the point of sale and becomes payable from 1 July 2016. There will be an exemption for disposals of inherited property as well as relief for property transfers as part of a relationship agreement. The residential land withholding tax supports the effectiveness of the brightline test and contributes to the integrity of the tax system.

I now turn to the GST measure in this bill. The strength of our GST rules is that the tax is applied equally and with very few exceptions. This helps to ensure that the tax is fair, efficient, and simple. However, GST is not currently collected on most cross-border services and intangibles, including internet downloads and online services. Therefore, this bill proposes that GST be applied to cross-border remote services and intangibles, including e-books, music, videos, and software purchased from offshore websites, supplied by offshore suppliers to New Zealand resident consumers by requiring the offshore supplier to register and return GST on these supplies. This would come into force on 1 October 2016. New Zealand is not alone in seeking to address the issue, and the proposals are in alignment with the OECD guidelines and similar rules that apply in other countries, including the European Union. The proposals in this bill also align with Australia’s proposed rules. The proposed amendments are sound measures that will address the non-taxation of cross-border purchases of intangibles, maintain the broad base of New Zealand’s GST system, and also help to level the playing field for domestic and offshore suppliers.

The third item in this bill aims to help ensure that student loan borrowers living in Australia meet their loan obligations. Most student loan borrowers do the right thing and repay their student loans, but borrowers living overseas have a lower rate of compliance than those living in New Zealand. Not surprisingly, keeping in contact with borrowers is an important way to keep borrowers engaged with their loan obligations. This bill, therefore, contains a proposal to allow current contact information on student loan borrowers living in Australia to be shared between the Inland Revenue Department and the Australian Taxation Office.

In bringing this bill to its third reading I thank the policy officials and drafters who worked on the detail of the bill, the organisations and individuals who made submissions on the proposed legislation, and the Finance and Expenditure Committee for its consideration and recommendations. I commend this bill to the House.

STUART NASH (Labour—Napier): The Minister of Revenue outlined a couple of points there that I think will require clarification. First of all, he talked about the GST on online services. He said that what this bill does is it levels the playing field. If only it did level the playing field it would be a fantastic piece of legislation that we could support wholeheartedly. We are supporting this piece of legislation but only because it is better than nothing. There could have been so much more that the Government did with this legislation because the real tale here is that New Zealand consumers are buying so much more over the internet than purely online services. What about all the retail stores? You could have gone hard on the retail stores, Minister.

Hon Michael Woodhouse: Work in progress, Mr Nash—work in progress.

STUART NASH: Work in progress—we hear this the whole time. Why bring dribs and drabs into the House? Why not do this all at once? Why not just say: “OK, we understand the issue.” As the Minister said, the OECD understands the issue. The OECD is working incredibly hard on this, with a whole lot of other issues in terms of global tax problems, but the OECD has said this is a major problem. Other jurisdictions are implementing such rules, but we are doing this in such a piecemeal way.

The issue that really needs to be addressed is not so much the online services, and at least we have started somewhere, but it is the clothes, it is the books—and I am not talking about e-books—it is the shoes, and it is things that New Zealanders are now going online to buy because this is the 21st century. This is what 21st century commerce looks like. What this does is to immediately give overseas suppliers a 12.5 percent competitive advantage over New Zealanders. People may say: “Oh no, well, you know they have got to post them to New Zealand. Therefore, that is more than 12.5 percent.” That is not right. That argument does not hold water because New Zealand retailers have imported things themselves.

Hon Michael Woodhouse: 15 percent now, Stuart. Keep up.

STUART NASH: Fifteen percent—there you go, it is even worse. It is even worse. That is interesting because the reason I said 12.5 percent is that I have this line that keeps playing in my mind the whole time. When John Key stood in front of the cameras in 2008 and said “No new taxes.”, he then implemented a new GST tax, and he has got a new tax here. So I just keep thinking that, no, no, Mr Key does know what he is talking about, but Mr Key is so out of touch that he keeps implementing these new taxes and keeps hammering middle New Zealand—hammering middle New Zealand.

We have got to remember that a whole lot of the retailers who own shops selling stuff on main street to Kiwis are middle New Zealanders. They are struggling at the moment, and the reason they are struggling is that their main competition is not the bloke the next street over and not the bloke the next city over but the faceless person on the computer over in some other country, who has a 15 percent competitive advantage already. We should have closed this down. I would have thought that if this Government was working for middle New Zealand, what it would have said is: “We understand there is a problem here. Let us level the playing field.”

The Minister has said that it is a work in progress. We hear this too often. What does it mean and when is it going to be here? And why did you not just deal with the issue in one chunk? Why deal with it in a piecemeal way that just sends the wrong message? I just think it is a missed opportunity—there is no doubt about that.

Let us have a look at the residential land withholding tax. It was good to hear the Minister say that this is a new tax. We all heard him, and it is a new tax. It is one of those new taxes that Mr Key said he would never bring in, but it is a new tax. But the Minister did say that this brings integrity to the tax base. It does not bring integrity to the tax base. This is the problem. In New Zealand tax law there is something called the intent test. This test is about the intention of the investor when they buy a house. If the investor buys the house to make a rental yield, then there is no tax in it. If they buy a house to make a capital gain, then they pay. But it is not working, and this is the reason why we have had to introduce this new tax, which is a withholding tax to ensure that people who are buying properties for capital gain actually pay the tax that is due to the New Zealand tax system.

The interesting thing is that the Inland Revenue Department (IRD) believes that the rorts going on are worth—I am not too sure; the Minister will know—I think it is about $250 million to $300 million to our tax base. These are people who are buying properties, under the law, for capital gain, but just not paying capital gains tax. I think I am right in saying, and, again, the Minister can correct me if I am wrong, that the IRD has prosecuted one person—one person—in the last 5 years under the intent test. The reason it has prosecuted only one person—and let us be honest, various Governments, including Labour, gave the IRD a significant amount of money to chase these guys—is that it is incredibly difficult to prove intent. In fact, all you have to do is say to your lawyer, say to your accountant, and say to all your mates: “I buy this house with the intent of making a rental yield.” Then, 18 months later, you sell it for a massive capital gain and the IRD says “Are you sure you bought this for that intent?”, and you reply: “Absolutely. Ask my accountant and ask my lawyer. Thank you very much for the $200,000—but it was all intent. They offered me a price I could not refuse. Oh well, never mind.”

We have to do something about this. There is a real problem with overseas speculators purchasing houses in the New Zealand market. It is distorting the market. It means that New Zealanders are being priced out of the market. What we do know is a lot of this overseas speculation results in houses remaining empty. We are marketed overseas as not having a capital gains tax—that is how the New Zealand housing market is sold to overseas investors—so we have stuck in a 2-year brightline test. The IRD wanted 5 years, and the reason why it wanted 5 years is that it did a scenario analysis. It wanted 5 years because it knows that you can hold on for 2 years and 1 day and sell it and you are fine—there is no problem whatsoever. It did not think—and I agree with them—that 2 years was long enough. I do not think 2 years is long enough. We are supporting this bill because at least it is better than nothing, but it could have been so much better.

The interesting thing is that if you watch the faces of the Nats on the other side of the Chamber who were on the Finance and Expenditure Committee, they know that this is not very good at all, because these guys are smart—they know how business runs, and they know that this is just a rort. I do not blame the Minister—I do not blame the Minister. He came in and he was given a hospital pass. This Minister was given a whole lot of hospital passes, actually; it is quite interesting. He must be wringing his hands. But he inherited this bill. I would like to think that this Minister would have said: “No, no, 2 years does not work—5 years.” The Minister whom he replaced is off around the world—we never see him—so he is not held to account, whereas this Minister has got to implement this bill, which everyone knows really just does not address the problem in any way, shape, or form. In fact, the interesting thing about this is that even the Minister of Finance himself said: “Well, I do not know how much money this is going to bring in. I do not know whether this is going to make a difference.” Why are we wasting everyone’s time when the Minister of Finance himself has said: “I do not know whether this is going to make a difference.”?

Surely, when we talk about the integrity of the tax system, we have to introduce legislation that actually does make a difference. That is what we are about over here, but not those guys, who have tended to forget about middle New Zealand and about how middle New Zealanders are struggling to afford a house and how they see these overseas speculators coming in, cutting the guts out of the Auckland housing market, and just pricing it way out of reach. It is just not right.

The other thing that I will talk about are two missed opportunities relating to GST. “Online services” should have included charging GST on everything imported. The other thing is the residential land withholding tax—it could have been so much better.

Student loan stuff: we all agree that if a student borrows money from the Government they are under a contractual obligation to repay it. We have set up a deal with Australia, but why Australia? We all know that there are a whole lot of Kiwis who go to the UK. Why did we not do this with the UK? Why did we not say that these are the top four countries that New Zealand students go to and abscond from their obligations?

If we had done this, then that would have brought integrity to the tax system, and that is what we need. We need a tax system that is seen not just by New Zealanders but by everyone overseas as having integrity. I am just really concerned that what this is going to do is put another piece of piecemeal legislation on our books that we are going to have to come back and revise, I would say, within 18 months to 2 years. We heard the Minister say: “Oh, we will deal with the other issues later.” That is just not good enough. I can tell you that in the Finance and Expenditure Committee, if we had had a bill that dealt with all GST on all imported goods, we would have supported it. We would have gone hard.

We are supporting this bill, but it really is a bill of missed opportunity for charging GST on imported goods, which would have helped our retailers. And for the residential land withholding tax we should have done something better to help New Zealanders, and also for student loans. Thank you very much.

DAVID BENNETT (National—Hamilton East): It is amazing: when it comes to a tax bill, the Labour Party is all about “could have, should have”, and “want to” and “do more”. It is all about doing more, is it not? Well, let us have a look at that speaker, Mr Stuart Nash. He is the member who is the Labour spokesperson on revenue and he does not even know the GST rate. What is the difference between 12.5 percent and 15 percent? Tell us the difference. What is it? Mr Nash, what is the New Zealand GST rate? This is the man who wants to be the revenue spokesperson, and he does not even know what the GST rate in New Zealand is. It is not hard. It is 15 percent. It is not 12.5 percent; it is 15 percent.

But I will give him credit—you know, everybody can make one mistake, but Mr Nash has made a number of mistakes in the tax policy. Let us remember the last big mistake Mr Nash made, and that was when he wanted to tax farmers on their gross income. He did not want to have any businesses taxed on net income. A business does not need net income; if a business earns this amount of money it should be taxed on that amount of money. It does not matter about the expenses—they are not relevant, are they, Mr Nash? That was the other great piece of financial advice that we got from the revenue spokesperson from the Labour Opposition.

So we have seen two great pieces of information from Mr Nash. One is what the New Zealand tax rates would be in GST—maybe Labour is going to drop GST. Maybe that is what it is going to do. But what we know from the third fact is that the Labour Party wants to increase New Zealand’s taxes. The Labour Party will go into the next election without any definite policy around the promises that it will make, and it will be increasing New Zealanders’ tax rates to over 40 percent. You can guarantee that. New Zealand’s high-income earners will be paying over 40 percent, maybe over 50 percent, under Labour. That is what it intends to do.

But there is more. There is one more thing—

Andrew Bayly: There’s more?

DAVID BENNETT: There is one more thing. That member’s leader has gone out this year and made it very clear that there would be no capital gains tax under a Labour Government. Every time we hear a speech from the Labour Party around taxation, Mr Stuart Nash and Mr Grant Robertson always hark back to the need to increase taxes on the sale of property. Those two members want a capital gains tax—

Stuart Nash: No, we should implement the law.

DAVID BENNETT: —and he says: “No”. He says: “No”. Well, look at his words today: “We have to do something about this.” He wants a capital gains tax. Those are his exact words. New Zealanders, beware, the man wants to reduce GST if he could—if he actually knew the number—the man wants to tax you on your gross income, the man wants to tax you at 40 to 50 percent, and the man wants to bring in a capital gains tax. What a great revenue spokesperson, in the mould of the Phil Twyford and David Cunliffe model of Labour Party spokespeople. Thank you.

GRANT ROBERTSON (Labour—Wellington Central): For those who still have some ability to hear after Mr Bennett’s speech, can I just make the point that Stuart Nash made a small error when he mentioned the GST rate, and the reason he made that error was that he made the mistake of believing John Key. He made the mistake of believing John Key, who told New Zealanders there would be no increase in GST. It was his “read my lips” moment. He said “Read my lips: there’ll be no increase in GST.”, and what did he do when he got into power? He increased GST to 15 percent. This is the same John Key who, when David Bennett gets up and says “Oh, be fearful of what new taxes might arrive.”—well, look in the mirror, Mr Bennett. Actually, do not look in the mirror—a very dangerous exercise if you are David Bennett.

Look across the caucus, Mr Bennett, and you will see the new taxes that the National Government has brought in. Let us just run through the new taxes that it has brought in. Firstly, we have, effectively, with the brightline test, a new tax, albeit a tax that is going to be completely ineffective in the job that it was asked to do of trying to control the out-of-control speculation in our property market. In fact, the Finance and Expenditure Committee, during the process of this bill, heard that the brightline test will probably bring in—what was it—around $5 million.

Fletcher Tabuteau: If that.

GRANT ROBERTSON: Maybe $5 million, if that. The Government was told by Treasury to make it a 5-year brightline test. It has made it only a 2-year one, so it is a new tax, albeit an ineffective one as well. Then we have also got the border tax that was brought in by the National Government in the last Budget—the tax on all passengers coming over the border. But, of course, there were “no new taxes”—that was what David Bennett told us. Then we have also had the levy on telecommunication providers, and we had John Key speculating about another new tax: the land tax. So John Key has now introduced a fourth tax, and then this bill creates the fifth new tax from the National Government. So for David Bennett to stand up in front of this House and say “Be fearful about people making promises about increasing taxes.”, he needs to own the fact that his Government has broken the promise that it made to New Zealanders on that score.

On this bill, there are two or three things that I want to say. The first of those is that we will be supporting this legislation, as we have done with other pieces of tax legislation brought forward by this Government, because it takes steps—timid steps—towards dealing with some of the issues that are affecting our taxation system. In particular, it is one of the new taxes: the introduction of GST on online services. As other colleagues have said during this debate, the goal stated by the Inland Revenue Department (IRD) and by the Government was to create a level playing field—to create a level playing field—when it comes to taxation.

Some companies in New Zealand will be delighted when this bill passes. I am thinking here particularly of Spark, which will be looking and saying: “This is great. We are going to be able to put our offering in terms of Lightbox on the same footing as Netflix.” Absolutely terrific. Well done—put a tick in that box. But if Simon Bridges goes down to Unity Books in Wellington and he makes sure that he buys the—

Phil Twyford: Good to see you here tonight, Mr Bridges.

GRANT ROBERTSON: Well, you know, he would go down there. He wants to get the complete set of Nancy Drew novels, because that is what Simon has been looking for all these years. They are good books, do not get me wrong—they are good books—but he has gone down there to get the complete set of Nancy Drew novels. He fancies himself as a bit of a detective. He is going down there to do that.

When he goes down there to do that, he might stop for a minute and think: “Hang on, can I order these as an e-book? Can I order these as an e-book for my Kindle?”. That is what Simon Bridges might be thinking. When he goes and says “Right, I am going to get the Nancy Drew novels as an e-book on my Kindle.”, the charge will apply. But then if he decides to order hard-copy books—because we know he likes to have them beside his bed at night, piled up there, the Nancy Drew books. We all want them, do we not? Yes, that is right, but Simon Bridges particularly wants them. If he goes and buys those and gets them imported over here, there will be no GST there—no GST there, but there will be at Unity Books.

That is the problem: the level playing field has not been created. For the main street booksellers, it has not been created. Some of the best submissions we got in this committee were from Retail New Zealand and members of Retail New Zealand, who came and said: “We’re finding it hard to compete. We want some support from the Government. We understand and we accept the logic of a level playing field, but that did not happen.”

So there is no level playing field for those main street retailers, who cannot ensure that GST is charged on imported goods coming overseas. So by all means charge GST on intangibles. That is a step forward, but the Government has missed out here when it comes to truly creating a level playing field.

The other matter I want to refer to is the introduction of a residential land withholding tax. It has been mentioned before by my colleague Stuart Nash that this fits into the broader tax programme that the Government brought in in terms of the brightline test and the other issues that we will soon see some information from around the requirement for people to have a bank account and an IRD number when, from offshore, they are purchasing property. Very soon we will have that information about the impact of foreign buyers. John Key is softening up the New Zealand public—it is suspicious that he might actually know how many people are going to be identified in that list of foreign buyers. He is concerned about the New Zealand public’s reaction to that, and so might he be, and that is why he has raised the idea of a land tax.

But, as a package, this is weak. It is not really going to deal with the speculation that is pushing house prices up, making them utterly unaffordable. It is pushing up the house price to income ratio to 10:1 in Auckland—one of the highest in the world. Property values are going up by $100,000 this year, out of reach of most New Zealanders. The National Government continues to act in the interests of the speculators and act in the interests of those who are not part of the productive economy, those at the very top, but not act in the interests of the majority of New Zealanders—the New Zealanders who want to get into the property market. These measures are inadequate when it comes to trying to deal to that.

They are part of a tax work programme. The residential land withholding tax is part of a tax work programme that the Government had put to it by the IRD through 2014 and 2015. It accepted the residential land withholding tax, but what is not here is action to crack down on those who avoid their tax and those who evade their tax. That has sat in the very same work programme as the residential land withholding tax and the Government has ignored the advice that the IRD has given it.

It is worse than that. The IRD started a programme of work to review the taxation of foreign trusts. It started that programme of work in 2013 and 2014, along with the residential land withholding tax, and it was going swimmingly until about November 2014, when a report went to the Minister of Revenue that said: “We’re going to be with you on this review of taxation in December 2015.” And right there, at the end of November 2014, along came John Key and his personal trust adviser, Ken Whitney. They intervened. They intervened, they got to Todd McClay, and Todd McClay got to the officials, and all of a sudden—all of a sudden—the work programme that the IRD had, where it said that the review of foreign taxation rules was a key focus, was gone. Respected officials from the IRD who had worked hard on legislation like this were forced to write to their colleagues that the Minister had stopped the review of foreign trusts.

What we should be seeing is legislation coming to this House that cracks down on those multinational companies that do not pay their fair share, that restores New Zealand’s reputation as a place of integrity when it comes to tax, and that gets rid of our reputation as a tax haven in respect of foreign trusts. That is the legislation that should be in front of the House today. That is the work that was in the work programme of the IRD until Todd McClay got his riding instructions from the Prime Minister’s trusted adviser to get rid of that.

This legislation is a missed opportunity. This should have been about our tax system being robust and being ready for the 21st century, supporting our main street retailers, and restoring our reputation, and it fails on all counts. The National Government is out of touch, in my view, when it comes to the impact of taxation and how to make the best of taxation to support a productive economy in New Zealand. This is a piecemeal, tokenistic effort from the Government. It is one that the Labour Party supports, but reluctantly so.

ANDREW BAYLY (National—Hunua): As members probably know, I have just returned from a little trip up north, skiing around the North Pole. It is an absolute pleasure to be back in the House with all my wonderful colleagues and, of course, the members of the Opposition. Just before I talk a little on this bill, I want to compliment the Labour Opposition because, contrary to all the talk that we have just heard, it actually supports this bill. It supports this bill and the good work that has gone into it. And it is a good bill.

As the Hon Michael Woodhouse said, it has three elements to it. One is around finalising the residential land withholding tax for foreigners, the second is GST on intangibles, but the third element is around student loans. And I thought I might just talk about this because in all the previous speeches no one has actually mentioned that aspect. So the student loans—it is interesting that back in September last year there were about 725,000 students owing money to the Government, of which 15 percent were offshore. What this bill is about is making sure that those people living offshore who have a student loan meet their commitments. It is estimated that there is about $3.2 billion owed by students living offshore, and this bill is about making sure that they do meet their commitments.

What we have agreed through the Australian tax office is that it can share information around contact details with the New Zealand tax office so that we can make sure that people are meeting their obligations. This is another way of not actually increasing taxes but actually making sure that the Government receives the revenue it should, and making sure that it can apply that money to meeting our social commitments and all the other good things around education, health, and infrastructure that everyone wants to see take place in New Zealand. So I think it is an excellent bill. I am glad to support it, and I thank the officials for all their help. Thank you very much.

JULIE ANNE GENTER (Green): As the previous speaker, Andrew Bayly, pointed out, some of the Opposition parties, including Labour and the Green Party, are supporting this bill, and that is because it is relatively uncontroversial. I do think the officials did good work, but the changes that it makes are not fundamentally going to change New Zealand for the better. I think that is the story of this National Government—ultimately, it does not have the courage to take on the big issues that we are facing in the 21st century. It is not doing anything about climate change. It is not doing anything about reducing growing inequality in New Zealand. It is not doing anything to tackle the housing crisis.

In this bill, there is a tiny bit that is related to the brightline test, which is National’s too little, too late measure—a very mini - capital gains tax—which it has tried to use to curb the out-of-control house price inflation in Auckland. But, of course, there are huge problems with the brightline test bill. This bill implements the residential land withholding tax, which is a method of collection for anyone who has little or no connection with New Zealand who buys or sells property within 2 years and, therefore, has to pay the tax on any profits they make. The real issue is that we do not have fair taxation on property. Anyone who holds on to a property for longer than 2 years will not have to pay any tax on it, and that is the reason we have this incredibly unbalanced housing market in Auckland right now, where the vast majority of new mortgage lending is going to property investors, not to first-time homebuyers.

We do have a problem, undoubtedly, with a lot of foreign capital coming in, because there is no restriction on the ability of foreigners to purchase property here in New Zealand. We are going to find out for the first time—after many years of asking for data on this, the Government finally acquiesced and realised that we do have to collect data on it in order to understand what the impact is. This is not because we in the Green Party are opposed to immigrants or to people from other countries coming to New Zealand. Obviously, as an immigrant, I can say that we are absolutely supportive of immigration, but having a whole lot of foreign capital coming into New Zealand and bidding up the value of our properties is not good for those people who want to live in New Zealand. That is why we think that the sale of property should be limited to residents and citizens of New Zealand. If someone is willing to take the steps to become a resident or to become a citizen, then, why not?

Of course we should allow those people to come to New Zealand and make their home here, but that is quite a different proposition to what is happening at the moment and what is driving up house prices in Auckland. That is a consequence of a shortage of supply, which the Government is doing nothing about, and it is also a consequence of the fact that our tax laws favour investment in property, which is very inefficient for our economy on a number of levels. It is bad for first-home buyers and renters, but it is also just bad more generally for the economy, for growing a smarter, more diversified economy. If we have a lot of people investing in property—just buying and selling each other existing houses—that does not do anything to make us better off.

Hon Simon Bridges: Yes, it does.

JULIE ANNE GENTER: Interesting assertion from the Minister Simon Bridges there that it does make us better off—just a group of people buying and selling houses. It is interesting.

The other part of this bill is extending GST to online services, and we can agree with that. That is rectifying an uneven playing field so that New Zealand purveyors of services are no longer disadvantaged by online service providers who do not have to pay GST here in New Zealand, and that is fair enough. At the Finance and Expenditure Committee we heard a lot of submissions in favour of this change, but we also heard submissions in favour of making the changes so the same thing would apply to goods that are bought online—that GST should apply to goods that are being purchased online from outside New Zealand. That is not impossible—many other jurisdictions are doing it. There really is no reason why New Zealand should be lagging behind so far.

So we support those aspects of bill—that is, the residential land withholding tax, which will now apply to brightline test properties that owe tax because they have been bought and sold within 2 years. But in both of these cases, this legislation does not go far enough. With the brightline test it should have been at least 5 years, not 2 years. Five years is what Treasury recommended. Most other OECD countries have a withholding period of 5 to 10 years. I was just speaking with parliamentarians from France who said their withholding period is 30 years. So you pay tax on your property if it is not your family home, and when one buys and sells a property and makes profit on it, one has to pay tax. I think that is fair enough. I think that makes sense. But, unfortunately, this National Government has not shown us the leadership and courage to do what is right in this situation.

The final aspect of this bill is enabling information sharing with Australia on student loans. The previous speaker, Andrew Bayly, also spoke about this. Effectively, what the Government is doing here is taking steps to make it easier to track down people who have student loans who are living overseas who may owe us money, and, look, fair enough. People took out a loan; they made a commitment to pay it back. The Green Party disagrees with the student loan scheme. We think it probably makes a lot more sense to invest in education and to have a knowledge-based economy, not to load up students with a lot of debt, which will make it much more difficult for them to be entrepreneurs, to start up businesses, and to take risks when they finish their education with this big debt hanging over their head, and will make it incredibly difficult for them to buy a house as well, particularly if they live in Auckland.

This younger generation is seriously disadvantaged compared with previous generations who did not have student loans and did not have out-of-control house prices. We do not support the student loan scheme such as it is, but we could understand and accept this particular change that is enabling information sharing. But I would also say that the Government needs to apply this principle much more widely. I mean, we would get a lot more money from multinationals that are currently avoiding paying tax in New Zealand, if the Government would actually take action on that, than we are from student loan defaulters who live in Australia.

Speaking of information sharing, obviously we have a special relationship with Australia, because that is the case with New Zealand foreign trusts as well. With New Zealand foreign trusts we do provide additional information to Australia when the settlor is resident in Australia. We do not even collect the information when the settlor is resident in another country, which makes it impossible for us to honour our tax treaties—our double tax arrangements with other countries—because there is no way that a country with which we have such a treaty could ask us for the information about how many New Zealand foreign trusts have a settlor resident in their country who may be using a New Zealand foreign trust to avoid paying tax or, perhaps, for even more nefarious activities. The total secrecy surrounding the New Zealand foreign trust regime makes it very attractive to those who are involved in criminal activities or who simply want to avoid paying tax. There is no doubt that it is only the ultra-wealthy who are involved in setting up New Zealand foreign trusts in New Zealand. Nobody with less than $5 million would find it worthwhile to do such a thing.

So although the Green Party is supporting the bill, I came to Parliament because I believe that New Zealand can be a better country. It can be a country that is responding to the challenges of the 21st century, investing in smart solutions and a smart Green economy that is actually going to lead to real prosperity for all New Zealanders, not just the top 10 percent—the mates of this National Government. We want a fair, smart Green economy that is good for everyone, and we know that that can be achieved.

FLETCHER TABUTEAU (NZ First): It is always a pleasure to stand on an evening such as this one to be speaking for the only party in the House opposing token gestures and waste-of-time legislation that achieves nothing. You think I am just using my own words, but those are quotes from most of the accounting firms in New Zealand.

I will get to the detail of that soon, but, first of all, I would like to acknowledge the Minister Michael Woodhouse. What a detailed, comprehensive, and lengthy contribution he gave to the House tonight. It was certainly, certainly, appreciated by the members on this side of the House.

Andrew Bayly: And you probably learnt a bit.

FLETCHER TABUTEAU: It was elucidating, Mr Bayly. Mr Bayly, it most certainly was. As for Mr Bennett, it is always a pleasure to see Mr Bennett stand up and make a contribution in this House. I will tell you why. It is because every word he says makes any National supporter question why on earth they are supporting the National Party, when Mr Bennett speaks—on just about anything, actually. His contribution, as always, as the chairman of the Finance and Expenditure Committee actually spoke about nothing to do with the legislation at hand tonight. It was wonderful—it was wonderful! I was sitting there, and Mr Bayley said that he would speak to the student loans element of the legislation. So I was sitting there with bated breath, and then he stopped. It was 30 seconds of build-up, and then huge disappointment because nothing actually came of it.

But can I speak to this omnibus bill. I just want to say that there seems to be no rational reason why these very disparate parts of legislation are joined together in one piece of legislation. They are very distinct. Had the Government done its job properly and actually submitted legislation on those parts, New Zealand First would actually have been standing here tonight, and on whatever other nights it would have taken, to support two-thirds of the legislation. We think that in all parts the Government has not gone far enough, but, actually, in two parts it is almost there. So let me speak to those piece by piece.

GST on online services—I have actually had to go out, because of the nature of this omnibus bill, to retailers and small businesses and explain our stance on this legislation. We absolutely support the necessity to level the playing field for New Zealand business. It is an absolute necessity. We have gone out there, and we have talked to business.

I have said it in this House before that the Government’s apathy has been hurting New Zealand small business for the last 9 years. We have seen businesses close up shop. We have seen businesses dismiss staff, get rid of staff, because they literally cannot compete on what is supposed to be an even playing field. That 15 percent may not sound like a lot to you and me, but it is when you are talking margins of certainly less than that of most small retail operations—the margins on most of the products in those shops are minuscule. So having to have that 15 percent disadvantage has been holding back New Zealand retailers for a long time. I am sure the members on the other side will agree that as the internet capabilities expand and as New Zealand consumers become more savvy in their buying habits, they see that difference, and their buying behaviour reacts to the advantage afforded to foreign corporates, essentially. Why has this Government, which small businesses see as an advocate and a spokesperson for them, taken 9 years to get to this point? Can I say that it is a half measure at best.

I will just try to find a quote here from several of the contributors who spoke to the Finance and Expenditure Committee: “The bill further delays addressing the issue of low-value goods, which is a longstanding and significant problem that disadvantages domestic retailers and has negative repercussions for the whole economy.” This spills out not just to our retailers but to the whole economy. We are talking about closed shops and staff members being fired from these small businesses for lack of a fair, competitive playing field for New Zealand businesses. There is no dispute about the fact that that level playing field has been tilted to the advantage of the foreign corporates. It just makes no sense whatsoever. What New Zealand First says is that if that had been a piece of legislation unto itself, we think it is a step in the right direction.

We think the arguments against a full implementation for intangible and tangible goods do not make sense in terms of customs funding. They do not stack up. Given the likes of Amazon and other online retailers being ready and geared up to implement our GST at the click of a button, we think that it could have done it straight away, and maybe 95 percent of those goods could have had GST placed on them and the level playing field would have been a meaningful one in terms of The Famous Five—the book or the e-book. It is a half measure and, as submitters noted, it does not go far enough and we are just going to wait for years more for that playing field to be levelled. It is just not acceptable and it is not right.

New Zealand First cannot support the residential land withholding tax legislation. The brightline test is actually a new capital gains tax on top of an existing capital gains tax that everyone on that side refuses to call a capital gains tax for some bizarre reason. Mr Nash spoke eloquently about the intent of the existing legislation, and that is the reality of it. New Zealand First would argue that the empowerment and adequate resourcing of the Inland Revenue Department (IRD) to enforce existing legislation would have been a huge step in the right direction of addressing the issue of ludicrous housing prices in the Auckland market. We have seen it.

So this is the third part of the supposed triumvirate of brightline legislation. We have seen the implementation of the first two parts, and what we have seen already in the Auckland market is that there was a slow-down. There was an initial reaction to those first two pieces of legislation, and the market actually slowed down for a very brief period. But those foreign investors saw what the requirements were and said: “Don’t worry about it. Let’s go back full swing. It’s not going to affect us, we can get around this—no worries whatsoever.”

So the housing market in Auckland continues to spiral out of control and what we are seeing is that spillover outside that super-city region down into Hamilton, down into Tauranga, and even into Rotorua, my home electorate. So it is a non-attempt—a non-attempt—from this Government to deal with a very, very real issue. We cannot support such a token gesture. Empowering the IRD, like I said, would have addressed most of the issue and would have had a meaningful impact on the continuing problem, especially in Auckland.

This bill is flawed. It is half measures in all parts and, as such, New Zealand First cannot support such a waste of time for this House. It is a token gesture to allow for managed spin. It is a spin campaign so that this Government can say it is doing something, which it absolutely is not. It is not dealing with a very real issue with meaningful legislation. We cannot support this bill. Thank you.

ALASTAIR SCOTT (National—Wairarapa): Thank you, Mr Assistant Speaker, for pushing the bell 2 minutes ago. It got me up and listening for the last 2 minutes, at least, of that rather unfortunate contribution. But can I just clarify one thing for Mr Tabuteau: this is not a capital gains tax. This is a tax that taxes people who are trading in properties. So it is just like you are trading in sheep or in wool or in beef or in marbles. If you traded in marbles you would be taxed on the gain of the tradeable income that you gain from the tradeable item. This is all that the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill is clarifying. It is clarifying and determining the fact that these people are trading in property, and therefore they are taxed, and this is the withholding tax part of that to deal with foreign vendors. So there is quite a difference between a capital gains tax and tax on income derived from trading.

The second part I would to address is this. Miss Julie Anne Genter got it partly right when she said that New Zealand is short of capital. It does need foreign capital. It does need capital investment from offshore. But then she does not want it. She does not want it because she does not want foreigners to invest in this country.

Julie Anne Genter: Not in property.

ALASTAIR SCOTT: Well, what is the difference between property and shares, bonds, farms, logs, sheep, or beef? These are all things that foreigners are able to invest in, but for some reason they are not able to invest in houses, according to the Opposition. The Opposition members across all parties are talking about a level playing field, and I guess that means that they want everyone to be the same, unfortunately. That would be the ideal: for everyone to be the same, everyone to earn the same amount and to be equally—

Hon Simon Bridges: Because they’re communists.

ALASTAIR SCOTT: Exactly—exactly. Of course, they brought up the idea of a universal income. They have got the idea of a universal income where everyone does get paid the same amount—it is about $11,000 a year. It is about $11,000 a year, or 200 bucks a week, so that we can all be the same. But they forget to tell us who is going to pay for this universal benefit idea.

There are a lot of issues that have been brought up tonight, but, focusing on the bill, I commend this bill to the House.

The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Gareth Hughes—5 minutes.

GARETH HUGHES (Green): If there is one thing that has baffled me in my political career, it is staggering speeches like that. For some reason, National members can still, with straight faces, go to the people of New Zealand and say that they are good economic managers. This is despite all of the voluminous evidence, the staggering amounts of data, and parliamentary contributions like that. This is a quote that will go down in that member Alastair Scott’s history; I hope he raises it in his valedictory speech. The member asked this House: “What is the difference between investing in property and shares, factories, etc.?”. He should go and talk to some New Zealand businessmen, New Zealand businesswomen, and investors, and they might be able to tell him. The difference, of course, is that a dollar invested in a house is not a dollar invested in growing the economy, developing the regions, or creating employment. It is a dollar invested in a house.

This is what the Green Party wants to see: a prosperous New Zealand that is investing in its economy, that is investing in factories, and that is investing in innovation. But this is the problem—and if you look at the data, just this year the median Auckland house has appreciated in value by $100,000. That is more than the average Kiwi can earn in a year or two—$100,000. And that is because with all the economic signals under this Government—under, no doubt, conscientious members like that, with contributions like that—that is exactly what we will see: a New Zealand that is entirely imbalanced when it comes to the economy and people investing in speculating and not investing in productivity.

I was also going to criticise the member for not talking about the speeches and talking about other parties, so I had better make sure I actually talk about this bill, which is the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill.

Hon Member: We need an acronym for that.

GARETH HUGHES: We do need an acronym for this one. It has got three main parts, which my colleague Julie Anne Genter very competently discussed, such as the online purchases goods and services tax, the new brightline withholding tax, and then, of course, the new information-sharing provisions relating to the student loan scheme.

This is the part that I would like to touch on, because this year we have seen some milestones. We have seen an economy underperforming and we have seen the rapid, unsustainable, out-of-control housing crisis—particularly in Auckland, but in other centres as well—but we also passed a milestone, which is $15 billion in national student loan debt. Fifteen billion dollars is a huge sum. It is a figure on the Government’s books, written down on bits of paper, but you must remember, this is a figure worn like a millstone around the necks of hundreds of thousands of real New Zealanders—hundreds of thousands of real New Zealanders, with their own letters in the mail and emails from the Inland Revenue Department explaining how many thousands or tens of thousands, or, in some cases, hundreds of thousands, of dollars of student loan debt they have. Fifteen billion dollars is the real story that Kiwis face. This bill is all around one side of it, which is how the Crown accesses the information relating to New Zealanders offshore, whether or not they are fulfilling their contractual repayment obligations.

This is the problem, because when you come to the student loan crisis, that $15 billion, this Government is more focused on token scare tactics, such as the arrest at the border of the single, potentially offshore New Zealand resident from a New Zealand dependency. That single act alone was of dubious legality. The fact is that the Government is focused more on scaring New Zealanders with student loans who are offshore than on working out sustainable, pragmatic, practical solutions. This Government could instead be focusing on making it easier for New Zealanders offshore to pay their student loan repayment obligations.

The fact is that I believe carrots work so much better than sticks, and when you see the real crisis that is affecting New Zealanders with student loans you have to question, decades on from the establishment of this scheme, whether there is, in fact, a better way. This is what the Green Party stands for: an affordable, world-class, high-quality tertiary education system and more affordable education where the costs of a more educated, prosperous knowledge economy is not all borne on the shoulders of students. That is exactly what is happening at the moment as the Government reduces, in real terms, funding for tertiary education but also, in real terms, increases the costs faced by students with their fees by 20 percent. The Green Party believes in a more affordable, world-class tertiary education—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair.

Debate interrupted.

The House adjourned at 10 p.m.