Tuesday, 31 May 2016

TUESDAY, 31 MAY 2016

TUESDAY, 31 MAY 2016

Mr Speaker took the Chair at 2 p.m.

Prayers.

Oral Questions

Questions to Ministers

Budget 2016—Economic Outlook

1. NUK KORAKO (National) to the Minister of Finance: What do Treasury’s Budget 2016 forecasts show about the outlook for the economy, and how does this translate into more jobs and higher wages for New Zealanders?

Hon BILL ENGLISH (Minister of Finance): The outlook for the economy is positive. Businesses are investing, job growth is solid, and, on average, wages are rising faster than inflation. Treasury is forecasting real GDP growth of 2.9 percent over the coming year, and 2.8 percent, on average, over 5 years to June 2020. More than 200,000 more people are in work now than 3 years ago, and a further 170,000 jobs are expected by 2020. Over that period the unemployment rate is expected to drop to 4.6 percent and the average wage is forecast to rise to $63,000 a year—$16,000 per year more than it was in 2008.

Nuk Korako: How has the downturn in dairy prices affected the outlook for the economy?

Hon BILL ENGLISH: It is clear that the dairy sector is doing it tough, but it is also clear that New Zealand is a bit less dependent on dairy than we had all probably assumed. Despite the downturn in dairy, New Zealand’s exports increased by $2 billion last year and are expected to grow by another 25 percent over the next 4 years, driven by tourism, construction, the beef sector, ICT, wine, and much of the manufacturing sector, which is performing well. But there is no doubt that when dairy does better, New Zealand does better, and the faster growth in exports forecast in 2018-20 is driven, to some extent, by an improvement in dairy prices.

David Seymour: How much extra money will the Government take from income tax payers due to bracket creep over the coming 4 years?

Hon BILL ENGLISH: I cannot give the member the details about that. What I can say, though, is that at a time of relatively low inflation—and the term for it is “fiscal drag”—it is probably slower and lower than it has been for some time.

Nuk Korako: What is the outlook for surpluses and debt repayment given the Government’s continued focus on responsible fiscal management?

Hon BILL ENGLISH: Moderate surpluses are expected this year, ending at the end of this month, and also in the 2016-17 year. They will increase, according to these forecasts, to $6.7 billion in 2019-20. Net debt is expected to peak at 25.6 percent of GDP and to fall to around 20 percent by 2020. This gives us more room to support New Zealanders if we face another economic shock or natural disaster, and it also means that New Zealanders who are dependent on the Government for support know that the Government’s books are stable and in good shape, and therefore their support is secure.

David Seymour: Would the Minister appreciate me telling the House that the answer to my earlier supplementary question is $1.1 billion?

Mr SPEAKER: A marginal question—the Hon Bill English.

Hon BILL ENGLISH: Yes, I have appreciated that already.

Nuk Korako: What choices does Budget 2016 make to support the growing economy and strengthen our communities?

Hon BILL ENGLISH: There were four main packages. Innovative New Zealand delivers $761 million over 4 years for science, skills, and regional development, backing our innovators, scientists, and entrepreneurs. There is a $2.1 billion public infrastructure programme focused on schools and digitalisation within government. A social investment package provides $654 million to support vulnerable New Zealanders, and a $2.2 billion health package provides $550 million a year for the health sector.

Housing Market—House Price Inflation

2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he have confidence in his Minister for Building and Housing given that, since 2013, the number of owner-occupied homes has fallen by 7,000 while the number of rentals has increased by 14,000?

Rt Hon JOHN KEY (Prime Minister): Yes, and I would point out that if the member wants to cherry-pick from that particular data set, he should just go back one more year to 2012. He will see that since then the number of owner-occupied homes has risen by 20,000 and the number of rentals has decreased by 2,000, which just shows you that the Labour Party likes to be quite selective with its data.

Andrew Little: What was the average house price in Auckland when he came into office, and what is it now?

Rt Hon JOHN KEY: I do not have that information, but you would have to put it down to the Minister for Building and Housing, who would have that.

Andrew Little: I seek leave to table a data series from Quotable Value that is not publicly available, which shows that the average Auckland house price has increased by $440,000, from $500,000 to $940,000—

Mr SPEAKER: Order! The document has been very well described. On the basis that it is not freely available, I will put the leave. Leave is sought to table that particular information. Is there any objection? There is none. It can be tabled.

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

Andrew Little: Is he happy that since the brightline test and IRD number rules were introduced last year, Auckland house prices have risen by $1,750 a week on average?

Rt Hon JOHN KEY: Firstly, I would want to fact check the member, and, secondly, the brightline test is simply one measure that has been in place. In fact, the Labour finance spokesperson was talking quite positively on the weekend about the brightline test, I thought.

Jami-Lee Ross: Has the Prime Minister received any reports of house price inflation between 1999 and 2008, at all?

Rt Hon JOHN KEY: I have. House prices doubled over that period of time, and the actions taken by the Government of the day back then were absolutely zero.

Andrew Little: Coming forward 8 years to today, does he still agree with this statement: “We are facing a severe home-affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse.”?

Rt Hon JOHN KEY: At the time that I made it, yes.

Andrew Little: In light of that quote from him in 2007, does he seriously believe he has done enough to address the crisis he declared when, under his watch, Auckland house prices have increased by $440,000, homeownership has fallen to its lowest level in 65 years, and record numbers of New Zealanders are now living in cars and garages?

Rt Hon JOHN KEY: Homeownership rates have been declining since the mid-1980s, a point made by the Productivity Commission when it looked at it. I just simply make the point that there have been a tremendous number of steps taken by the Government. We know it is a lagging indicator, but today we saw record numbers of consents again—28,000. Forty houses are being built a day in Auckland. There are 154 special housing areas. As was pointed out earlier, the brightline test has been introduced. Twelve thousand families have been supported through KiwiSaver HomeStart. Yes, of course, there is some catch-up, but that catch-up is happening as a result of confidence in the economy and low interest rates under a National-led Government.

Andrew Little: Has blaming the councils, blaming Labour, blaming the Greens, blaming New Zealand First, and generally saying the buck stops anywhere but with him done anything to boost homeownership in New Zealand?

Rt Hon JOHN KEY: I am not quite sure we have blamed all of those people, but what is true is that, under Labour, house prices doubled and it was a complete failure. That is just a statement of fact. It is not an apportionment of blame. [Interruption]

Mr SPEAKER: Order! [Interruption] Order!

Andrew Little: After 8 long years and $440,000 of house-price increases in Auckland, is it not time to stop the excuses, stop coming up with half-baked, half-hearted measures, and just adopt Labour’s plan to implement a national policy statement on affordable housing, abolish the Auckland urban growth boundary, stop foreign speculators, and build thousands of affordable homes for Kiwis?

Rt Hon JOHN KEY: The Labour Party does not have a plan; it has a pipe dream. In fact, the last time I looked, the Labour Party was rapidly adopting the National plan. I think, over time, we will find it will get there on all of these wonderful things that we are doing. Since Phil cannot come up with his own ideas, he may as well just have ours.

Budget 2016—Innovation, Skills, and Economic Growth

3. IAN McKELVIE (National—Rangitīkei) to the Minister for Economic Development: How will Budget 2016 encourage innovation, skills, and economic growth?

Hon STEVEN JOYCE (Minister for Economic Development): A major initiative in Budget 2016 is Innovative New Zealand, a series of 25 programmes that will see $761 million invested over the next 4 years in science, skills, tertiary education, and regional development initiatives. These will help continue the diversification of the New Zealand economy and support jobs and higher wages for New Zealanders in the decade ahead. It includes $410 million for science and innovation, which will take the Government’s annual science investment to $1.6 billion by 2020, $256 million for more tertiary education and apprenticeship programmes, and $94 million to support regional economic development and investment opportunities in regional communities.

Ian McKelvie: Why is the Government investing more in growing an innovative economy?

Hon STEVEN JOYCE: We have been making very good progress as a country since the global financial crisis. We have been the world’s seventh-fastest-growing developed country over the last 5 years, but there remains more to be done to help strengthen and future-proof our future. The Innovative New Zealand packages focus on growing our science system with an additional investment of $410 million over 4 years in investigator-led scientific research, in mission-led research, and in seeding new companies that commercialise Kiwi innovations. We are also investing more in the regions through the regional growth programme, the regional business partners programme, and more regional research institutes to help regions build on their own unique economic opportunities. [Interruption]

Mr SPEAKER: Order! [Interruption] Order!

Ian McKelvie: What investment does Budget 2016 make in ensuring that businesses across New Zealand have the skills they need in order to grow?

Hon STEVEN JOYCE: New Zealand’s employment rate is already the third-highest in the OECD, but we do have to keep developing the skills of our young people in order to meet the future needs of our economy. We need more skilled people in disciplines like science, engineering, agriculture, and the key trades if we are to continue to grow a high-value, diversified economy. Budget 2016 invests $256 million of new and reprioritised funding in tertiary education, including $86 million to continue to make science, technology, engineering, and mathematics subjects a priority, making up for historical underfunding in this area. Driven by rapid advances in technologies, New Zealand has a constantly evolving economy. Innovative New Zealand will help ensure, as a country, that we stay ahead of change and are best placed to succeed in a competitive, global world.

Inflation—Forecasts and Average Wage

4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Is it correct that table 1.1 of the 2016 Budget Economic and Fiscal Update shows inflation rising faster than nominal wages in the next two financial years?

Hon BILL ENGLISH (Minister of Finance): Yes, but, of course, that depends on the inflation forecast turning into reality. I have to say to the member that over the last few years that was not the case. The effect of that has been that over the last 5 years the average annual wage has risen 14 percent and inflation has risen by 4.7 percent.

Grant Robertson: Why is his Government delivering falling real wages to New Zealanders over the next 2 years?

Hon BILL ENGLISH: I just remind the member of the figures for the last 5 years, where real-wages increases were delivered by the economy. There was a 14.1 percent increase in the average wage, and a 4.7 percent increase in inflation. So wages have risen faster than inflation. Whether they continue to do so will depend on whether the inflation forecasts come right. As the member knows, there is a connection between wage increases and inflation, and my guess is that if inflation is higher, wage increases will be bigger.

Grant Robertson: Will he meet his election promise that the average wage will rise to $62,000 by 2018?

Hon BILL ENGLISH: There is an election next year, as I understand it. The promise of that would be more of the same, and that is an economy growing faster than most developed countries, delivering moderate and consistent wage increases. We do not promise some specific level of income, because if we could, we would promise it would be much bigger than what they have got now.

Grant Robertson: In light of that answer, why did he promise at the last election that the average wage would rise to $62,000 by 2018?

Hon BILL ENGLISH: If the member regards Treasury’s forecasts as promises by a political party, then he is not fit to be the Labour finance spokesman.

Grant Robertson: Does the Budget now indicate that the average wage will be $59,400 by 2018, and where should working New Zealanders go looking for the missing $2,600 from his election promise? And please do not blame the Auckland Council for this.

Hon BILL ENGLISH: As I have pointed out to the member, if the Labour Party’s finance spokesman regards forecasts of the average wage as a guarantee by the Government that that is what will happen, he simply does not understand how an economy works. I would say that is a risk for the Labour Party.

Grant Robertson: If believing Treasury forecasts makes you incapable of being the Minister of Finance, why did he use a Treasury forecast to promise New Zealanders an average wage of $62,000 by 2018?

Hon BILL ENGLISH: I have dealt with that issue in the last couple of questions. What has actually happened in this economy is that inflation has turned out to be quite a lot lower than anyone expected, and, until now, wage earners have benefited from that, because, on average, wage increases have been considerably higher than inflation. Over the next few years it is still uncertain as to whether inflation will pick up at the rate specified in the forecasts and to whether wage increases will continue at the rate that they have. No one can be quite sure. Treasury has published its forecast. It has been wrong about inflation for the last 2 or 3 years; it might be in the next 2 or 3 years.

Rt Hon John Key: What was the Treasury forecast, approximately, of the budget surplus or deficit in Budget 2015, and what was the actual result that the country enjoyed?

Hon BILL ENGLISH: I think the forecast would have been something like minus $700 million, and it turned out to be higher. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Question No. 5—[Interruption] Order! I have called for some order now.

Budget 2016—State and Social Housing

5. METIRIA TUREI (Co-Leader—Green) to the Minister of Finance: He aha ngā tono Pūtea Tahua a Te Minita Hanga Whare, Whakawhiwhi Whare, a Te Minita Pāpori Take Whare me Te Minita Take Monī ki a ia mō Te Pūtea Tahua o te tau 2016, e pā ana kī ngā raruraru mō te whiwhi whare?

[What Budget bids did the Minister for Building and Housing, the Minister for Social Housing, and the Minister of Revenue make to him for Budget 2016, in relation to housing issues?]

Hon BILL ENGLISH (Minister of Finance): There is no translation.

Mr SPEAKER: I certainly received an interpretation, and it is as written on the sheet. If the Minister is happy to proceed—otherwise we can have it again, but I certainly got the interpretation.

Hon BILL ENGLISH: On the basis that it is the question on the sheet—the member will just have to wait for the release of all the Budget papers for the details about that, but I can confirm for the member that there were 11 successful bids: a $258 million package for more social housing places in Auckland, investment in the Tāmaki Redevelopment Company and support for 3,000 emergency housing places and a new special needs grant, a $100 million injection into the development of surplus Crown land in Auckland, a $12.6 million increase over the next 4 years for Māori housing, and an additional $36 million for the Warm Up New Zealand: Healthy Homes and Warm Up New Zealand: Heat Smart initiatives. In total, that is over $400 million of new spending on housing-related issues.

Metiria Turei: Did the Minister for Social Housing bid for more money in Budget 2016 for the building of more State houses to help address Housing New Zealand’s 4,500-person waiting list?

Hon BILL ENGLISH: As it happens, Housing New Zealand has got probably one of its largest ever capital investment programmes over the next financial year—probably close to $1 billion—but, of course, that is not the only answer; it is part of an answer. But the member needs to understand that the way the system works now is that we do not have to wait for Housing New Zealand to build a new house. The Ministry of Social Development can go and procure social housing from community housing providers and developers so that it can place people on the waiting list. In Auckland the problem is not a lack of money; it is a lack of houses.

Metiria Turei: I raise a point of order, Mr Speaker. My question was very specific about whether the Minister for Social Housing bid for a specific purpose; that was not addressed in the Minister’s answer.

Mr SPEAKER: It is a very marginal call because there was a figure then given, but I accept the point that the member, in her question, talked specifically about more State houses. I am going to invite the member to ask the question again.

Metiria Turei: Thank you. Did the Minister for Social Housing bid for more money in Budget 2016 for the building of more State houses to help address Housing New Zealand’s 4,500-person waiting list?

Hon BILL ENGLISH: No, because that is not her role. Her role as Minister of Social Housing is to bid for places. Those places can now be secured from community housing providers and developers as well as from Housing New Zealand. As I said to the member, Housing New Zealand has got an extensive investment programme, but the real issue in Auckland is not a lack of Government money; it is a lack of houses. When we go out bidding for social houses, we are competing with providers of emergency houses and with first home owners, and we need more houses on the ground so everyone’s needs can be more easily met.

Metiria Turei: Did the Minister for Building and Housing bid for a State-sponsored build of affordable housing in Budget 2016 given that everything that he has come up with so far has failed to produce affordable housing on the scale that New Zealand families need?

Hon BILL ENGLISH: The Minister for Building and Housing bid primarily for money for the use of surplus Crown land. But the member is simply wrong with her second assertion, and she seems to misunderstand, as the Labour Party does, that even if the Government wants to build houses, it cannot build one unless Auckland Council agrees to every single step. And, to be fair to Auckland Council, it is now seeing 40 new houses completed every day in Auckland, but that number needs to rise to 50 or 60 per day. But if the Government wants to do a redevelopment, say at Three Kings, it still has to deal with the community group that does not want that redevelopment to occur or that wants it modified and go through the Environment Court. That is the law of the land.

Metiria Turei: Did the Minister of Local Government propose anything for housing in Budget 2016 other than blaming Auckland Council for the growing housing crisis driven by National in that city?

Hon BILL ENGLISH: The Minister of Local Government did not put in a housing bid, because he does not have any capacity to do that. What he is doing, though, is going around the country, working with local government, trying to get it more focused on the growth opportunities that come with a growing population, because a number of councils have yet to fully adapt. I give Auckland Council the credit for lifting the rate of building from about 20 a day, 6 or 7 years ago, to 40 a day today. The Auckland construction industry is in its fourth year of 20 percent compound growth.

Metiria Turei: Did the Minister for Māori Development bid for more funding for marae in Budget 2016 so that they could better house families who are currently living in cars and garages?

Hon BILL ENGLISH: No, he did not, but he certainly did bid for more funding for housing, because the Minister for Māori Development wants to help all those iwi who can now see that they can participate as providers of social housing right across New Zealand. The Māori Party is building a social housing network that will mean that in the future we will not be reliant on one Government monopoly—that is, Housing New Zealand—to meet the needs of every New Zealander with serious housing needs.

Metiria Turei: Did the Minister for Social Development propose, in Budget 2016, wiping the debt that New Zealanders owe to Work and Income for emergency housing given the many months that beneficiaries are being forced to live in expensive emergency housing?

Hon BILL ENGLISH: The Minister for Social Development has pretty good insight into the often complex and challenging aspects of the lives of the people to whom the member is referring. The Minister for Social Development oversees the expenditure of $1.3 billion on accommodation benefit, part of the $2 billion that we spend every year subsidising housing. One of the reasons we want to change the Resource Management Act and want to see a proper unitary plan in Auckland is to reduce the pressure on the Government to continually increase subsidies because of poor and misdirected planning that prevents enough houses being built.

Metiria Turei: Did the Minister responsible for HNZC recommend to Cabinet that his State house sell-off programme should be stopped as part of Budget 2016 given that there are 4,500 people on the Housing New Zealand waiting list today?

Hon BILL ENGLISH: No, because that would not help. In fact, what is happening is that there is an increase in the social housing stock in Auckland primarily because we have been able to change the system to secure houses from organisations other than Housing New Zealand. The selling of State houses has been applied in those areas where there is less demand and certainly not large numbers of people on the register.

Tobacco Products—Legislation

6. Rt Hon WINSTON PETERS (Leader—NZ First) to the Associate Minister of Health: What is the real purpose behind his statements and legislation regarding tobacco product sales in New Zealand?

Hon Peseta SAM LOTU-IIGA (Associate Minister of Health): The real purpose behind my statements and legislation on tobacco product sales is that it saves many New Zealanders’ lives and it reduces the harm from cigarettes and tobacco.

Rt Hon Winston Peters: If he and the Government sincerely believe what he just said, then why does he and it not forgo over $1.6 billion in taxes on tobacco and cigarettes and just ban them now?

Hon Peseta SAM LOTU-IIGA: No—the intention is not to ban cigarettes; the intention is to reduce the harm from cigarettes. That member knows that 4,500 to 5,000 people per year die prematurely from tobacco smoking, and that is why we are putting in place these measures.

Rt Hon Winston Peters: Why has the Government, whilst filling its coffers with $1.6 billion in taxes, launched this further attack on consumers of a legal product, many of whom are poor and a disproportionate number of whom are Māori and Pacific Islanders?

Hon Peseta SAM LOTU-IIGA: That member knows that the direct cost of tobacco smoking can be up to $1.9 billion. That member also knows that the intangible costs have been estimated to be up to $11 billion. These measures that we are putting in place are about reducing the harm to New Zealanders.

Rt Hon Winston Peters: Minister—[Interruption]

Mr SPEAKER: Order! I have not called the member yet. I am just waiting for a bit more assistance from my left.

Rt Hon Winston Peters: If that statement was remotely true, why does he and his Government not ban the smoking of tobacco and cigarettes and leave off this PC attack on the working people of this country when, in fact, that Government gains $1.6 billion - plus in taxes and does not tax multinationals for their $10 billion of transactions in this country—what is honest about that?

Hon Peseta SAM LOTU-IIGA: We know that increasing the price on tobacco is only one tool to reduce smoking rates. That is why we have got face-to-face programmes in place for smoking cessation, that is why we have got the Quitline, and that is why we do media campaigns—in order to bring down the rates of smoking.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. From the start of the answer to my second question onwards, this Minister has not answered the question. I want to know why he does not ban it. All he is telling me is what he is not going to do.

Mr SPEAKER: Order! I have listened to every question. They have been quite sizable questions, and they have been addressed on every occasion.

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

Mr SPEAKER: I hope the member is not in any way—

Rt Hon Winston Peters: No, I am not.

Mr SPEAKER: Good. I will hear the fresh point of order.

Rt Hon Winston Peters: I would like to know, if I could, which part of the Minister’s answers gave me the answer to the question, which was: “Why will he not ban it?”.

Mr SPEAKER: Order! The member is now going back and relitigating a decision I have already made. Go back and look at the length of the question. The member, in asking questions, put plenty into his questions, giving the Minister a far easier job in answering those questions and addressing them, and he has done so. I do not want this matter relitigated.

Rt Hon Winston Peters: Point of order.

Mr SPEAKER: No. [Interruption] Order! The member is not attempting to relitigate where we have just been, is he?

Rt Hon Winston Peters: No. I seek leave to table from the Parliamentary Library the real facts on the excise duty being collected by this Government—

Mr SPEAKER: Order! I just want quickly the details of the information. I might put the leave.

Rt Hon Winston Peters: The details are that 80 percent of the cost of a packet of cigarettes goes to the Government; the other 20 percent goes to everybody else, including the tobacco companies.

Mr SPEAKER: Order! The documents being described may be of interest to members, so I will put the leave. Leave is sought to table that information from the Parliamentary Library. Is there any objection? There is objection.

Marama Fox: As a result of Māori Party lobbying and the introduction of four pieces of legislation by the Hon Dame Tariana Turia related to tobacco, how much have rates of tobacco consumption reduced since 2006?

Hon Peseta SAM LOTU-IIGA: The rates of consumption in the last 5 years have decreased by 25 percent. Smoking incidence in the last 5 years has decreased from 18 percent to 15 percent, and I would like to thank that member and the Māori Party and Dame Tariana Turia for the leadership and the vision that they have shown in this battle against this very large health issue.

Rt Hon Winston Peters: Is the Minister aware of the research of Dr Mārewa Glover on this matter, which utterly debunks the answer to the question that he gave to Marama Fox, as one would normally expect?

Hon Peseta SAM LOTU-IIGA: No, I am not aware of that member’s assertion. There is clear evidence that lower-income members of society are more price-sensitive, and that is how tax increases work. And I have taken Professor Blakely’s research on board, in that tax increases have been effective in bringing down rates of smoking.

David Seymour: In light of the Minister’s answer that 15 percent of New Zealand adults currently smoke, what does he believe the percentage will be in 4 years’ time, after the measures introduced in the Budget and today have been put in place?

Hon Peseta SAM LOTU-IIGA: I do not have a crystal ball to be able to see what is going to happen 4 years from now, but what I do know is that rates of smoking have consistently decreased since this Government has been in power. In fact, there are 37,000 fewer smokers today than there were 3 years ago.

David Seymour: If the Minister lacks a crystal ball, could he at least be good enough to give the House his best estimate on which he introduced these policies?

Hon Peseta SAM LOTU-IIGA: Well, history is a good gauge of what may happen in the future, and history has shown that this Government’s measures have led to a 25 percent reduction in the consumption of tobacco. They have led to a reduction in the number of smokers over the last 7 years.

David Seymour: Is the House to take it that he actually has no idea what the benefits of his policy will be even though the costs will be large?

Hon Peseta SAM LOTU-IIGA: I refute that assertion by the member. In fact, that member voted for these measures last Friday. So I put it to that member that what he voted for was clearly beneficial for New Zealanders, it is going to bring smoking rates down, and I suggest he thinks about why we voted the way we did last Friday.

Housing, Auckland—Supply

7. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: Does he support abolishing Auckland’s urban growth boundary and replacing it with a smarter way of managing urban growth that includes bond-financing infrastructure; if not, why not?

Hon Dr NICK SMITH (Minister for Building and Housing): The Government is systematically dismantling Auckland’s urban growth limit through special housing areas, the fast-track unitary plan, and changes to the Resource Management Act, and this week we will be furthering this work with a national policy statement on urban development capacity. On funding infrastructure, the Government reformed the system of development contributions in 2014. That enables a more flexible approach to development agreements that enable the use of infrastructure bonds. However, we need to be plain that the costs of water, sewerage, footpaths, and drainage of subdivisions should be met by the developer. It would be wrong for developers to convert bare land into sections, to take $450,000—the median section price in Auckland—and then get someone else to pay for the infrastructure works.

Phil Twyford: Which statement reflects the Government’s position: when Bill English said Labour’s proposals on infrastructure financing were “interesting and constructive” or when he said they were “creative accounting” and “nothing more than fool’s gold”?

Hon Dr NICK SMITH: The very changes that our Government made to the Local Government Act do allow appropriate infrastructure bonds to be used for infrastructure. Where I disagree with the member is this: the idea that you have an infrastructure bond or a special rate to pay for the sewerage, to pay for the water, and to pay for the footpaths in an immediate subdivision and bail out the developer, who picks up the big increase in value from sections, would, in our view, be a mistake. It would support the land bankers rather than supporting the ordinary Kiwi families that need an affordable home.

Phil Twyford: Does he agree with the New Zealand Herald that his approach to make more land available in Auckland without new methods of financing infrastructure is “simplistic and, on its own, won’t achieve much”, but that Labour’s infrastructure bonds plan is “a very good answer”?

Hon Dr NICK SMITH: Oh, if only the New Zealand Herald had said that! The member, as usual, makes it up. I would note this, though. At the last election, Labour said that the most you could get from KiwiBuild would be growth of 12,500 homes in home-building in this term of Parliament. We are on track to deliver double that—25,000 homes for Auckland—and that shows the progress we are making.

Phil Twyford: Does he think that Auckland Council’s plan to drip-feed 11,000 hectares of land into supply over the next 30 years is enough, or does he agree with Labour that getting rid of the boundary would do more to bring land prices down?

Hon Dr NICK SMITH: The irony in that member’s statement is that when the Productivity Commission came out with exactly that recommendation, he called it an ideological burp from the extreme right. When I changed that policy 3 years ago and started implementing it, he said it was an “idiotic policy”. So I say to the member opposite that he should listen to his own advice. He has come as a late conversion on the road to Damascus; we are getting on and doing the hard work.

Alfred Ngaro: What growth has been achieved in the rate of new home constructions?

Hon Dr NICK SMITH: The latest numbers out today show over 28,000 new homes over the last year, and $17.6 billion in building activity, which is an all-time high for New Zealand. In this term of Parliament, we are expecting to build 85,000 homes. That is 25,000 more than in the last Parliament, when 60,000 were built. Specifically in respect of Auckland, 36,000 homes are going to be built during the term of this 51st Parliament, and that is the largest number ever on record in Auckland.

Phil Twyford: In light of that answer, how does he intend to build the 37,000 houses, by the election, that it would take for him to equal Labour’s building record while in office?

Hon Dr NICK SMITH: We need to be honest about what occurred in 2008, because, with the global financial crisis, the rate of home construction collapsed, down to Labour’s rate last month, where only 10 houses per week were being built. We are now building 40 houses per week, and it shows the progress that this Government is making in building a record level of house construction. [Interruption]

Mr SPEAKER: Order! I will call the member; I do not need any assistance.

Rt Hon John Key: Has the Minister considered emailing his policies to Phil Twyford so that Phil can get and adopt those policies even quicker than taking the 12 months he normally takes?

Mr SPEAKER: Order! No, that question is out of order.

Budget 2016—Health Services

MAUREEN PUGH (National): My question is to the Minister of Health—

Mr SPEAKER: Order! The interjection between two members, both frontbenchers, must cease. Maureen Pugh can start again.

8. MAUREEN PUGH (National) to the Minister of Health: How will Budget 2016 continue to support greater access to health services, like the 26 percent rise in specialist appointments over the past 6 years?

Hon Dr JONATHAN COLEMAN (Minister of Health): Budget 2016 invests an extra $2.2 billion into the health system over the next 4 years, the biggest increase in 7 years and almost $170 million more than last year. This will increase access to services for more New Zealanders: faster cancer services, greater access to pharmaceuticals, more operations, and progress on bowel screening, to name but a few.

Maureen Pugh: How will surgical patients benefit from Budget 2016?

Hon Dr JONATHAN COLEMAN: This year’s Budget includes $96 million over 4 years to boost the number of elective surgeries by an average of over 4,000 per year. That builds on the increase in the number of patients receiving specialist assessments, including in orthopaedics, where appointment numbers have increased from 43,000 to 55,000, up 28 percent. However, there is always more to do.

Maureen Pugh: I would love to know how the West Coast will benefit—

Mr SPEAKER: Order! We will just have the question please, without the first part.

Maureen Pugh: Sorry. How does the West Coast benefit from increased investment in health?

Hon Dr JONATHAN COLEMAN: Very good question, and here is the answer. Last week the Government announced an extra $9.7 million for the new Grey Base Hospital, and I am pleased to say that construction work on the $78 million facility began yesterday. This new high-quality facility includes 56 in-patient beds, three operating theatres, and an integrated family health centre. The West Coast also received an extra $3 million in new money as part of this year’s Budget, taking the district health board’s total funding to $132 million for 2016-17. That is an extra $25 million over the last 8 years. I know that the Opposition will want to join the Government in welcoming this world-class facility for the people of the West Coast.

Race-Based Funding—Electoral Participation

9. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he still stand by his statement, “Let me be clear: there is no room for separatism in New Zealand”; if so, how?

Rt Hon JOHN KEY (Prime Minister): No need to shout; I am not losing my hearing. I stand by my full statement, which was: “there will always be extremists in the debate who falsely characterise things in a way that may even frighten you. Let me be clear: there is no room for separatism in New Zealand.” That statement was made in the context of the marine and coastal area debate when some people were arguing that New Zealanders would be unable to visit the beach and that New Zealand had become an apartheid State. I will leave it to that member to determine who the extremist trying to frighten and divide New Zealanders for political gain might have been.

Rt Hon Winston Peters: If, to quote the Prime Minister, “there is no room for separatism in New Zealand.”, why are millions of dollars being given out towards increasing electoral participation, not to the Electoral Commission, which is subject to both monitoring and performance criteria, but on race-based criteria?

Rt Hon JOHN KEY: The member would have to be clear about what he means.

Rt Hon Winston Peters: To be clear, Prime Minister, who is all over everything else in the past, why is he providing a slush fund of $5 million to Te Puni Kōkiri in a separatist approach to electoral participation when there are no performance requirements whatsoever?

Rt Hon JOHN KEY: The member would need to ask the Minister for Māori Development.

Rt Hon Winston Peters: Why is the Government pursuing a separatist, race-based spending policy when, for instance, as Marama Fox boasts, “Every Māori will be on the Māori roll, and it will be near impossible to get them off and on to the general roll”, where most Māori now are; why is he pursuing such a race-based policy?

Rt Hon JOHN KEY: The Government has legal responsibilities about people going on the electoral roll, whether it is on the general roll or the Māori roll.

Schools—Funding

10. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: When she accepted some responsibility for Hon Bill English’s statement that a lot of Kiwis are “pretty damned hopeless” and “can’t read and write properly”, was she referring to the findings of a survey that just 14 percent of secondary principals thought their school’s government funding was sufficient?

Hon HEKIA PARATA (Minister of Education): Tēnā koe. No, but it might mean that the member cannot read properly. I was last asked about Bill English’s statement in the House on 5 May. The New Zealand Council for Educational Research survey that the member refers to was published 2 weeks later on 19 May, so unless I owned a time machine, it would have been impossible for me to have been referring to that. It is naive to think that principals would not always argue for more funding, just as I always argue for more funding for Vote Education.

Chris Hipkins: Why did she freeze school operations funding in Budget 2016 when 46 percent of secondary school principals say that a lack of funding is forcing them to cut field trips, the number of subjects their school offers, and funding for curriculum resources—and that was before the freeze was even announced?

Hon HEKIA PARATA: I have not frozen any funding whatsoever. What I have done, instead of providing for a universal grant, is target that funding for those kids most at risk of not achieving, and, in fact, respond to this commentator’s quote that “The modern education system needs to address poverty and the enormous effect it has on student achievement, improve targeted support to those students who need extra help either because they are struggling or due to special needs”. The quote is from Chris Hipkins in December 2015.

Chris Hipkins: What specific poverty criteria will be used to allocate the additional funding?

Hon HEKIA PARATA: Specifically those young people who have been identified as coming from long-term benefit-dependent households.

Chris Hipkins: If school funding is sufficient, why is demand from schools for parents to fork out for donations rising at 10 times the rate of inflation?

Hon Dr Nick Smith: Because inflation’s so low.

Hon HEKIA PARATA: Well, as the Minister says, because inflation is so low. The donations, by definition—helping again with literacy on that side of the House—are voluntary. Funding for schools is provided for the delivery of the curriculum, and this Government has increased Vote Education every year that it has been in Government. The decision about what donations are asked for is between the board, which comprises mainly of parents and grandparents, and the school. That is not something I have, or wish to have, control over.

Tracey Martin: Can the Minister tell us whether any work is being done on the revaluation of the delivery of the New Zealand curriculum, considering the new technical advances that now have to be delivered inside that curriculum?

Hon HEKIA PARATA: I am not entirely sure I have understood what the question actually is.

Mr SPEAKER: Would it help if I asked the member to repeat the question?

Hon HEKIA PARATA: To repeat it? That would be helpful.

Tracey Martin: Is the Minister, or the ministry, doing any work around the revaluation of the New Zealand curriculum, considering that new technical advances mean that subjects such as art must be delivered in a much more expensive manner, when considering the investment into current New Zealand education?

Hon HEKIA PARATA: Again, in so far as I can answer the question—because I do not know where the assertion comes from; that delivering the art curriculum is more expensive—what we are focusing on—[Interruption] Perhaps the member would like to hear my answer. What we are focusing on is growing the quality of the curriculum, and we are seeing the result of that because we are seeing lifts in achievement, because we have transparent data every year.

Chris Hipkins: If school operations funding is sufficient, why has—[Interruption]

Mr SPEAKER: Order! Can the member please start the question again.

Chris Hipkins: If school operations funding is sufficient, why has the amount of funding contributed to schools by parents through donations increased by over 30 percent during the National Government’s tenure in office?

Hon HEKIA PARATA: Based on the actual returns by schools, donations by parents have remained at a steady 1.8 percent.

Budget 2016—Education Funding

11. Dr JIAN YANG (National) to the Minister of Education: What recent announcement has she made that demonstrates the Government’s commitment to investing in educational achievement?

Hon HEKIA PARATA (Minister of Education): This Government has invested the most money ever in education. At just over $11 billion, it continues this Government’s considerable investment in the educational future of all our children and young people. The investment includes an extra $396.9 million over the next 4 years in early childhood education, providing funding for over 14,000 more children in 2019-20; $42.1 million for children with special needs over the next 4 years; $882.5 million for school property for 480 new classrooms, nine new schools, two school expansions—

Tracey Martin: Even charter schools? Spending over private property, but with public money.

Hon HEKIA PARATA: —and the relocation and rebuilding of three schools and a kura; and $43.2 million over the next 4 years for schools educating students most at risk of educational under-achievement. Given the nonstop talking of the member from New Zealand First, I helpfully have a postcard here that sets out all of those numbers I have just read.

Dr Jian Yang: How will this investment ensure educational success for the most vulnerable New Zealanders?

Hon HEKIA PARATA: Budget 2016 uses a social investment approach to direct an extra $43.2 million of operating funding over 4 years to schools, educating about 150,000 students most at risk of educational failure. The schools targeted for this new funding have students who have spent a significant proportion of their lives in benefit-dependent households. Research shows that children aged between 6 and 14 who have been supported by benefits for three-quarters of their life have only a 48 percent chance of achieving National Certificate of Educational Achievement (NCEA) level 2 by age 21. By contrast, 73 percent of the general population will have NCEA level 2 by that age. Indicative modelling shows that the overwhelming majority of schools will receive some extra funding. This targeted approach to operational funding will increase these students’ chances of getting the educational qualifications they need and deserve.

Dr Jian Yang: What benefits will this investment bring to New Zealand children?

Hon HEKIA PARATA: Education is a passport to a better future. This investment will ensure that the children at greatest risk of under-achievement will get the support they need to succeed in education. This is intended to protect them from a host of poor social outcomes in their adult life, which lead to increased costs to themselves and to the Government in the future. It will ensure that New Zealand children grow up to be successful, productive, and confident Kiwis.

Chris Hipkins: What does it say about the Government’s priorities in education that the funding allocated in this year’s Budget for new charter schools is almost the same as the total increase in funding for all secondary schools in New Zealand?

Hon HEKIA PARATA: The first thing to say is that, overall, Vote Education has gone up by 2.5 percent. The second thing to say is that the member is comparing a very small part of the overall investment in education. The third thing to say is that the kids who are at the partnership schools are kids who have not been successful in other options and are now being successful. The fourth thing to say is that we are committed to choice and diversity in our education system, and no parent is being forced to send their kids to partnership schools.

Freshwater Management—Water Quality of Rivers

12. CATHERINE DELAHUNTY (Green) to the Minister for the Environment: What advice, if any, has he received on the economic, cultural, health, or environmental benefits of making rivers safe for swimming?

Hon Dr NICK SMITH (Minister for the Environment): My advice is that leaving water quality decisions totally to regional councils, without Government direction, as was the case for 25 years, was not working. That is why this Government developed New Zealand’s first national policy statement on fresh water, which, alongside the record investment of over $350 million in freshwater clean-ups, is providing health and environmental benefits. Earlier this year I consulted the public on further refinement of these standards and a new compulsory requirement to fence stock out of rivers and lakes, which will improve swimmability of our waterways.

Catherine Delahunty: Will the environmental benefits that the Freshwater Improvement Fund announced in the Budget include making rivers safe for swimming or just meet the Government standard of wadeable rivers?

Hon Dr NICK SMITH: Absolutely. It will be committed to the issue of improving swimmability as well. The national policy statement introduced by this Government in 2011 is actually the first national direction from any Government in New Zealand about the importance of our water bodies being swimmable.

Catherine Delahunty: Given the negative impact on water quality by intensive dairy farming and irrigation, how will opening up the Freshwater Improvement Fund to irrigators make our rivers safe for swimming?

Hon Dr NICK SMITH: My first point is that if we look at the swimmability of our waterways, let us not just talk about intensive farming. The region that has the least number of water bodies available to swim in is Auckland, where the principal pollutants are urban. So both urban and rural New Zealanders need to lift their game in respect of swimmability. On the issue of irrigation schemes, I would draw the member’s attention to a scheme that my colleague Nathan Guy is working hard on in respect of the Waimea, where, actually, an irrigation scheme that will involve converting dryland farming to apple orchards results in increased production, increased exports, and improvement in water quality. It is not synonymous to say that water storage and irrigation schemes reduce water quality, because that is not true.

Catherine Delahunty: What advice, if any, has he received on the amount of money that could be saved in river clean-up costs if we put a moratorium on dairy intensification?

Hon Dr NICK SMITH: I know the Green Party would want to put moratoriums on every possible activity, whether it be on bottled water, whether it be on horticulture, whether it be on water storage, whether it be on the dairy industry. A blunt tool like a moratorium does nothing more than stop export growth, stop jobs growth, stop economic growth, and that is where National and the Greens disagree.

Catherine Delahunty: I raise a point of order, Mr Speaker. My question—

Mr SPEAKER: Order! No, if the member’s question is whether the question has been addressed, it has certainly been addressed. [Interruption] Order! The question has been addressed.

Budget Debate

Bills

Appropriation (2016/17 Estimates) Bill

Debate resumed from 26 May on the .

Hon GERRY BROWNLEE (Minister supporting Greater Christchurch Regeneration): I am very pleased to speak in support of the motion moved by the Hon Bill English and to encourage my colleagues in their condemnation of the motion moved by Andrew Little. Budget 2016 has been entitled “A Budget for Growth”. It continues the approach of Prime Minister John Key, finance Minister Bill English, Cabinet, the caucus, and, indeed, the National Party in being responsive to the needs of people while balancing those expectations against the ability to deliver.

That, however, is not the big story of the day. The big story of the day is that the reaction to this Budget, positive as it has been from the general public, has caused the Labour Party and the Green Party to enter into some sort of Bachelor/Bachelorette - type production, handing each other a rose and indicating the grand coalition of Opposition parties into the future. I want to know who is Naz and who is Fleur, and I want to know, above all, who is Jordan. Who is Jordan? There can be only one leader. What have we got here? We have got Andrew Little with Grant Robertson—off shaking hands with him now. Grant is really the leader of the Labour Party. We have got Metiria Turei and James Shaw, who, of course is also the leader of the Green Party, battling it out for that Jordan role, and I guess that makes Grant Robertson Naz and, of course, Metiria Turei the lovely Fleur.

What does this mean long-term for politics in New Zealand? It has to mean that some of the dyed-in-the-wool views that there is only one way, the way of the left, to deliver prosperity for New Zealanders is going to continue. The really interesting thing about today, also, was that Grant Robertson, the Labour spokesman on finance, revealed to the House that he had read as far as 1.1 in the Budget. The sad news for him is that there are not enough question times between Budget 2016 and Budget 2017 for him to be able to indicate he has read all the way to the end of it. That, of course, will be evident to anybody who listens to him delivering some of his more crazy policy statements, and particularly anyone who wants to—and I am not going to suggest you go and look at the interview on the weekend, but if you have got insomnia, go for it. You are going to cure yourself in no time at all.

One of the most interesting things about the very impressive figures in this Budget is to have a look at some of the assumptions that are behind it. They are extremely conservative—extremely conservative. When we have questions today about what the average wage will be in 4 or 5 years’ time, etc., those sorts of questions can only be answered in time, but the questioner needs to look at the assumptions made in the Budget. They are conservative, which means that although there is optimism in the Budget, that is also constrained in the possibilities for New Zealanders. If they stick with the current regime and the current way in which we are delivering for them, then the outlook should be considerably better. For example, it is predicting only a very, very gradual easing in growth of trade by New Zealand into other countries. No other Government has pursued trading options with the same vigour as this Government, and it will continue to do so. So that is a conservative estimate of what trade may mean for us in the future.

The other point is that the Budget talks about recovery of commodity price on a very slow basis. We all know that we are about at the bottom, and that there is that slow rise, but it can take off at any time. The world is not getting smaller; nor is demand. There is absolutely no chance that oil prices will double in the next 4 years, yet that is the assumption inside this Budget. That has huge effect, potentially, on the savings that many businesses will make in their operation out to 2020. Migration flows are also strong in this country and predicted to fall off. But why would they fall off, when we are a country that is safe, that is stable, and that is predictable, and where life can be lived more freely than in any other nation in the world? It does not matter how many times our opponents like to go out and point out some of the less-desirable aspects of New Zealand society, the fact remains that comparative to other countries we are an absolute paradise.

I want to talk a little bit about the specifics in this Budget. The first one, I have got to say, is around the issue of science and innovation and the whole idea that research is going to produce more value for New Zealand. You have only to look in the Budget where it talks about some of the aspects of how the New Zealand economy grows, and particularly look in the area of non - service-based manufacturing, which is now equal to our dairy exports. It is now equal to our dairy exports. That does not happen without there being some kind of encouragement. So the $760 million - odd that is going into that over the next period of time is supporting an industry that, over a relatively small period of time, has become a $15 billion industry. That is the sort of investment that is smart and it is worthwhile. It is appalling that our opponents are condemning that sort of activity.

Then, looking at the core services—health is a huge winner in this Budget. All our opponents can say is that because we were putting in so much money and getting such a terribly ineffective service, and now National is getting more out of it, we must be squeezing it. Those deliveries of health services come from the professionals who respect the way the National Government has engaged with them over a period of time. This year Dr Coleman has been able to get a significant increase in funding—over $500 million for the year. I have pointed out to him on numerous occasions what others could have bought with that particular $500 million, but I want to assure him that there is no bitterness on my part. I think that getting that money for health is absolutely essential and is in line with the expectations of New Zealanders.

When it comes to education, there is an $880 million rebuild programme across the delivery of educational services in New Zealand. This recognises, as was raised today by an Opposition member in a half-hearted sort of way, that education is changing. The needs are changing, the modes of delivery are changing, and this Government is keeping well and truly ahead of that.

I want to speak specifically about Christchurch, where obviously we have had a big engagement over the last few years. Government expenditure in Christchurch, under this Budget, rises to about $17.5 billion. That is a huge amount of expenditure by any Government on any one aspect of its requirements. There has been no stinting of funding available for Christchurch. In fact, the generous way in which the Prime Minister has taken a personal interest in Christchurch is largely to do with the fact that we have successfully gone into a transition period where we are seeing a return to local government at all levels inside the Christchurch City Council. What I do want to signal is that inside that $17.5 billion there is all of the money that goes into the Earthquake Commission (EQC).

I want to congratulate the EQC on the work that it has done. It is very easily criticised. It is now down to about the last 200 or 300 cases, which are the hardest of all to deal with. The commission is making every effort to ensure that they will be off the books by the mid-part of next year. In a normal circumstance, if someone loses their house to a fire, it is around about 18 months before they get settlement and are able to move on, because of all of the various activities that have to take place around those investigations, etc. The EQC, inside 5 years, to have dealt with 167,000 repairs, as well as another 40,000-odd over-cap claims that have gone off to the private sector, is a huge undertaking and a great tribute to the board and staff of EQC.

I said earlier that this was a Budget for growth. That is how it has been characterised, and I think that is how it is seen by New Zealanders. I think the reaction today from our opponents, suddenly recognising that if they are to get some sort of movement forward they are going to have to hold hands, if not swap flowers—but there are dangers in that. I was just thinking before that Phil Twyford has managed to change his views on housing substantially over the last 18 months, swinging more towards the sorts of policies that National has. Now, you can expect him to come back to the House next week and say that the Labour policy is more houses, but they must have thatched roofs, be built of mud, and have jamjar windows. That is no future for this country.

CHRIS HIPKINS (Labour—Rimutaka): That was a contribution from a Government that has simply given up. It has given up on the plight of hard-working New Zealanders. It has already run out of material to talk about. When Government members spend most of the time in their Budget speeches talking about the Opposition, because the Budget gives them so little material to talk about, it is clear that they have completely given up. When the best that Gerry Brownlee can do to come up with some humour for his Budget speech is read the Twitter feed of the parliamentary press gallery and simply start reciting back the lines that were tweeted by journalists hours ago, you know it is a Government that has run out of ideas and run out of new material.

All Gerry Brownlee could do in his speech was to tell New Zealanders how the numbers in the Budget are wrong: the oil price figures in the Budget are wrong, the migration numbers in the Budget are wrong. What confidence can New Zealanders have in the Budget when one of its most senior Ministers gets up and devotes his Budget speech to questioning Bill English’s numbers? That says everything about this Government. This Government has given up on the major issues facing New Zealanders. I was waiting all the way through Bill English’s speech for the big announcement on housing. Everyone in New Zealand wants to know: what is this Government going to do about the housing crisis? And there was nothing. Then there was an urgency motion, and I thought “Here it comes. Here it comes. It is coming—the big announcement on housing.”, and again there was nothing on housing. It has given up.

Do you remember that this was a Government that was going to close the wage gap with Australia? Who remembers that promise? It was going to close the wage gap with Australia, and instead it has delivered a Budget that sees New Zealanders’ wages falling in real terms. That is, wages going backwards for most New Zealanders under this National Government—so much for closing the wage gap.

It is a Government that has given up on health care—given up on health care. The health system needed another $600 million just to stand still, and what did it get? It is $55 million short in this year’s Budget. Pharmac needed $103 million just to stand still. It got $50 million. In other words, in health care things are going backwards.

Let us look at education and what this Budget delivers for education: another drop—another drop—in the number of people undertaking post-school education. That is fewer apprentices. It is fewer people at university and fewer people at polytech—numbers going down under a National Government. We have seen school operations grants frozen—school operations grants frozen—which means parents are going to pay more. Parents will be putting their hands in their pockets to pay more for their kids’ education, because this Government is not willing to prioritise early childhood education and schooling. We already know that schools are under enormous financial pressure, because principals up and down the country are saying that they are cutting programmes. They are cutting programmes, they are cutting extracurricular activities, and they are cutting curriculum resources for teachers because they have not got the money, and this Government responds by freezing their funding. What does a freeze mean? It means the money is actually going backwards.

How do we know that schools are not making ends meet? Let us look, first of all, at the money they are asking for parents to contribute. That has gone up 30 percent during the tenure of this National Government. Who remembers Bill English when he was in Opposition decrying the fact that the then Labour Government was not putting enough money into schools, and that parents were having to pay more? Since he became Minister of Finance, that problem has got 30 percent worse. He has done nothing to actually address that financial pressure, and, in fact, he has made it worse.

Let us look at early childhood education, because that is, actually, probably the part of the education system that has been clobbered the most under this National Government. As child numbers continue to go up, the funding continues to go down. The dollar spend per child per hour has consistently gone backwards under this National Government. So who pays? Either parents pay or the kids pay. Parents pay through more cash, through more fees, and kids pay through a lower quality of care in early childhood education and care. That is simply not good enough. So much for Bill English’s investment approach; so much for investing in kids early on, to address issues before they become big issues. If the Government’s spending on early childhood education is any indication, and I believe it is, it does not actually prioritise investment in our kids at a young age.

This Government has given up on the notion of safer communities, and we can see that because the police needed $300 million to reverse all of the funding cuts that this Government has made. What did the New Zealand Police get in the Budget? It got $46 million—$46 million—and it needed $300 million. The Government has given up on the notion of safer communities through better policing. The police are under enormous financial pressure. They are closing police stations and reducing police officer numbers around the country, and it is not surprising, because the Government is not giving them enough money. So let us look at the National Party, and let us judge this Government based on its overall track record. Wages have been stagnant under this Government. Wages have been stagnant. People have seen their real disposable income, in real terms—their purchasing power—going backwards under this Government.

What is its solution? What is its answer for that? Blame someone else. Blame the global financial crisis. Blame everybody else but this Government. What about homeownership? It is plummeting under this National Government. More and more people are living in rental housing under the National Government. Fewer and fewer New Zealanders are owning their own home. What is the Government’s solution to that? Blame someone else. Blame the Auckland Council. That is its latest excuse—blame the Auckland Council, as we see homeownership rates plummeting under the National Government.

The number of students, as I have already mentioned, in post-school study is plummeting under this National Government. Its answer is to blame the students and say they are “pretty damned hopeless”, as Bill English did. As we are seeing participation in post-school education plummeting, Bill English’s answer is to say that those young people are “pretty damned hopeless”. There are 46,000 New Zealanders under the age of 25 who are doing nothing. They are not in education. They are not in training. They are not in employment. They are doing nothing.

What is the Government doing to target those people? Well, we know: Bill English is saying that they are “pretty damned hopeless” and that we need more permissive migration, because he does not think they should be able to get jobs, and those jobs should therefore go to other people from other countries through migration. That is actually what Bill English said. He was actually honest about that, and he meant it. He was honest about that. He was caught out telling the truth. He was caught out saying what he actually thinks. He thinks that those 46,000 young New Zealanders should simply be written off; he thinks that they are not valuable to the future of New Zealand.

He could not be more wrong. I do not think that those young New Zealanders are hopeless; I think that they need opportunity and they need support. Education would be a really good place to start, and that is what the Labour Party will do. That is why we have announced a plan for 3 years of free post-school education for all New Zealanders, so that when they leave school they can actually go on to do something meaningful and we will not have 36,000 people under the age of 25 sitting at home and doing absolutely nothing, as this National Government is quite content with—in fact, it has simply written them off. This Government has completely forgotten why it was elected to office and what it promised to New Zealanders.

Remember the brighter future that John Key and Bill English promised New Zealanders? That has not eventuated, has it. Remember all of those promises it made about how incomes would be going up, how the wage gap with Australia would be closed, how it was going to be doing all of these wonderful things. Has it delivered? Eight years down the track, has it actually delivered? The answer to that question is simply no. It has not delivered on the promises that it made. It has simply given up on the big challenges. It has no answers to the housing crisis. We have seen a further fall in post-school education participation. There is more financial pressure on parents to pay because the Government is not paying. This is a Government that thinks that a shortfall in Government funding for essential social services—like education, like health, like housing—should be met through charity rather than through an increase in Government funding.

I agree with Oliver Wendell Holmes Jnr, who stated in 1904 that our taxes are the price we pay for a civilised society. Instead, what we are seeing under this Government is that essential public services are being cut to the bone. New Zealand citizens are paying more and more for their vital social services so that Bill English and John Key, come next year’s election, can try to bribe them with their own money in the form of tax cuts, to get themselves re-elected.

I think that New Zealanders are smarter than that. I think that New Zealanders have higher hopes for the future than that. I think that is why you will see New Zealanders voting for a change of Government at the next election, because they know that this Government has run out of steam. They know that this Government has run out of new ideas. They know that this Government has simply given up.

Hon ANNE TOLLEY (Minister for Social Development): I must say that some people on the other side of the House seem to live on a different planet, because the reality is that the Budget that Minister English delivered last week—his eighth Budget—was indeed, for New Zealand, a great Budget. It was a Budget that signalled steady economic recovery and growth going out in the years ahead of us. It was a Budget that showed that this country has weathered the global financial crisis, which was followed quickly by the massive Christchurch-Canterbury earthquakes—a severe shock to the economy of this country. Throughout that time the Government was at pains to protect New Zealand’s most vulnerable. This Budget shows that those hard years were worthwhile, and that the Government’s steering of a steady economic course is starting—starting—to pay dividends for New Zealanders.

Look at the four significant packages that the Budget contained. Innovative New Zealand: investing in the economy of New Zealand, in research and development, and in backing science—$761 million. Public infrastructure: $2.1 billion of work in New Zealand in the years ahead. I want to spend my time talking about the Budget by focusing on the social investment package of $652 million over the next 4 years—that, of course, does not count the $2.2 billion being spent on health.

I have to say, in my electorate the major health issue that has been raised with me over the last year has been the bowel cancer screening, so the announcement in the Budget to roll that screening out to a national screening system has been greeted with joy and delight. In fact, we had the Bay of Plenty Mustang Owners Club display of cars on the reserve outside my house at the weekend. I went over—because I love Mustangs, I must confess—to have a look and drool over some of the cars, and the interesting thing for me was that the bowel screening scheme national roll-out was raised with me a number of times. So that was obviously popular.

However, Budget 2016 signalled that this Government is committed to making a significant change in the lives of probably our most vulnerable children and young people, with $348 million identified to get started on making that significant change. Just to take members of the House back, remember last year I appointed the expert panel to have a look at the overhaul of Child, Youth and Family so that we can get better results from it. Of that cohort they had a look at—at 21—90 percent of them were on a benefit, 25 percent of them were on a benefit with a child, almost 80 percent did not have National Certificate of Educational Achievement level 2, and more than 30 percent had a youth justice referral by the age of 18. So the State does not do a particularly good job of looking after those young children it takes on the responsibility for. I have released all of the documents that came from that expert panel, the interim report that built the case for change, and then the final report—and the Cabinet papers that went with it—that showed that this Government is determined to make a difference in the lives of those young people.

We have started work on the design of the new model based on five core services, from prevention to intensive intervention, care support, redesigning the youth justice system, and, of course, the transition into independence. The $348 million that was announced in Budget 2016 signals, as I say, this Government’s determination to get on with that job. About $145 million of that is to stabilise the existing Child, Youth and Family services. The number of children who are in care has grown, and they are staying in care for longer. But, more importantly, the complexity of the lives of those children has increased. So we are seeing far more children that have been diagnosed with things like foetal alcohol syndrome. For those children, a whole raft of care is needed and will be needed throughout most of their lives.

The other important issue that has come through the review is the understanding of the effect of violence on young children—not just when they are victims of violence but the effect of witnessing violence and the trauma that those children suffer. A major change in the practice delivery for this new operating system that is under design currently is how we deal with that trauma early on in a child’s life. As I say, $150 million is to stabilise the existing Child, Youth and Family service, but then $200 million will be invested to get this new system under design and under development, with the first part of that operating system to be in place by the end of March next year.

So a huge transformation programme is under way, and we will have the first bill in the House in the next couple of days, but the important part was the strong signal from the Budget that we are serious about this. We are serious about the social investment philosophy of investing early in children’s and families’ lives when there is dysfunction, and making a difference—making sure that the money that we are spending is actually effective; that the services we are providing are not duplicated, that they are culturally responsive, and that they are effective in making a difference in these children and their families’ lives.

Budget 2016 also meant that we were able to see several million dollars invested in ensuring that we support people to get into work, because we know that that is the best way out of poverty and we know that remaining on a benefit long term has long-term consequences not only for the family but for the children in that home. The liability of the welfare system has reduced by $12 billion over the last 4 years, and that is a result of the really targeted, thoughtful processes that Work and Income has put into place to get in behind supporting people to find work for themselves and their families. That means that over the lifetime of those people, almost a million fewer people will be on benefits.

We have in this Budget 2016, $111.5 million over the next 4 years to support people into work, and I think the most important part of that has to be the $61.5 million that is being put into the expansion of the Youth Service. The Youth Service currently works with young people—16 and 17-year-olds—who are not eligible for a youth benefit but, for some reason, are independent of their families. It is a wraparound service; it helps them manage their money and it makes sure they are in education or in training as a first priority. For some of them that is not possible, and we help them into work where we can. We are actually making some headway with these young people. The idea is to expand that Youth Service, initially supporting young parents who are now 18 and 19 and then, eventually, young people in that same age group to make sure that we pick them up and stop them falling through the cracks—stop them going on to a benefit in the first place because we know that if they go on to a benefit before they are age 20, they are likely to be on that benefit for 20 years. There is $26 million to maintain the targeted case management and to fund 3K to Work, which is now heading over the 2,000 mark—2,000-odd people whom we have helped move to find work, or to take up work opportunities. Then we have got some pilots that we are running, working with both health and corrections.

Finally, I want to just mention the $46 million in Budget 2016 for sexual violence work. I congratulate my colleague Alfred Ngaro and the select committee that has been working alongside us as we have designed a new system for sexual violence services in New Zealand that consists of, for the first time, a real focus on those first-response services. There is a 24/7 helpline. There will be professional assistance for the men and women—

Mr DEPUTY SPEAKER: I am sorry to have to interrupt the Minister, but her time has expired.

DAVID CLENDON (Green): I am pleased to take an opportunity to speak in this Appropriation (2016/17 Estimates) Bill debate. Like Mr Hipkins, I found the first comments we heard from the Government this afternoon, Mr Brownlee’s comments, quite revealing in some ways. He spoke of the temerity of a Labour member who changed his mind, as though that was a bad thing. I think it would be a very unfortunate situation if any of us, as politicians or as parties, were unwilling at any point to change our minds and to do so publicly. Change is often a good and positive thing. It is possible and often desirable, despite this constant refrain we hear from the Government that we are somehow at the mercy of external forces and, therefore, are not masters of our own destiny and must simply batten down the hatches and hide. I completely reject that proposition, despite it being quite fundamental and quite visible in the content of this Budget this year.

The Government’s thinking seems to be limited to how little can be done—perhaps without upsetting its electorate apple cart—rather than thinking of how much can be done, how much better we could do, and what we might do to do better in this country. The Budget lacks any recognition of opportunity for transformation, to do more, or to do things differently. We need to do better, we can do better, and the Greens in Government will do better than this rather poor offering we were served up last week. The claim that the Greens can do better is not a particularly bold claim, given the very low bar that has been set by this Government in all of its actions and, particularly, in terms of this Budget.

I would like to speak briefly to three aspects of the Budget under the general heading of the Justice portfolio. The police, first up. In about 2009-10, we started hearing about this new strategy, the Prevention First strategy—the idea being that, yes, let us nip it in the bud, reduce the number of victims, and reduce offending by a proactive prevention strategy from police. The Greens applauded that approach. It was clearly in line with our own policy over many years. But we also expressed a concern that in order for Prevention First to succeed as a strategy it needed to be properly resourced and funded. Sadly, 2010, the year the strategy was rolled out, was a high point in terms of police funding. Ever since then the police appropriation has been dropping in real terms. The police are being asked to do more and they are being given less with which to do it, and that is simply unsustainable and very unfortunate.

We are pleased to see in this Budget that there is a small additional amount to enable a very modest and long-overdue pay increase for the police. That is obviously a good thing. But what we are not seeing is any evidence that this Government has a clue, has a plan, about how to actively implement a prevention strategy—to invest upfront and over time reduce offending, reduce crime, and in that way save money in the long term. Sadly, the Government seems determined simply to keep making cuts and hoping the problem will go away, which it patently will not.

The police are stretched. It is reflected in the thinness of the police presence, particularly in the regional areas, in the provinces. It is reflected in evidence that morale in the police is not all that it should be. The police get very frustrated with being criticised for not achieving certain outcomes, when they do not have the wherewithal to achieve those outcomes. There are indicators like the amount of leave that is building up, the amount of time off in lieu that police are not taking, and their reluctance even to claim back reasonable expenses. It is all evidence of a police force under pressure, and that needs to be relieved very quickly or we will find ourselves in serious trouble.

Similarly with legal aid—there is some apparent good news in the Budget that the Government intends to commit an additional $54.5 million to legal aid. This is a nominal increase. It is a welcome increase—albeit long overdue. It is welcome because it at least does acknowledge on the Government’s part that there is a problem—something it has been in denial about for quite a number of years. The Opposition—the Greens of course—the legal profession, and some senior judiciary have all been pointing to major shortcomings in legal aid, support for people to get access to the justice system. At least the Government now admits there is a problem. Unfortunately, however, this apparent increase still means that the legal aid funding will be about $2 million less for the estimates for next year than what was actually spent last year, which was in itself completely inadequate.

We desperately need to look at the income thresholds for legal aid. Currently, to get civil legal aid for a single person, the threshold is set slightly above $22,000, which means in practical terms that a person working more than 30 hours a week at the minimum adult wage would be deemed to have too high an income to qualify for legal aid. That is a nonsense but it is a sad reflection of the lack of attention this Government has given to access to justice to ensure that people have access to our courts and are properly defended, if they do find themselves in the unfortunate situation of having to defend themselves in a court.

Finally, I would like to speak, in the time that I have, of the Department of Corrections and the state of our prisons. It is not a happy situation, as we know. There are some good strategies. There are some good documents. This Government has made some comments and indicated some directions that are positive and indicate potential to do better. But again and again it fails to put its money where its mouth is. It has come up with some quite good ideas and initiatives, but then it underfunds them. It does not allow them to succeed and therefore we are back to—this Budget is a prime example of that. It is massively overinvesting in punitive measures, in containment, and there is simply not enough there for rehabilitation or reintegration, which are the long-term solutions to our excessive incarceration rate in New Zealand. Our prison muster is at a historic high and it is forecast to continue to rise. We are bursting at the seams and this Government’s only real solution seems to be more double bunking, and now we are hearing talk of yet another new prison. That is completely the wrong approach.

Some justice reinvestment—a reallocation of the money away from steel and concrete and wire, spending it on people, spending it on programmes that will actually turn lives round, that will change the behaviour of offenders and potential offenders—that is where we need to be spending and that is where we ought to be spending. A year or so ago, of course, the Government would have told us that private prisons are the solution, and has that not worked out well for it! Serco, of course, is an ongoing boil that is yet to be lanced. We look forward with interest to the report. That is a conversation for another day, but clearly the expectation, the assertion, that privatisation of the prison regime would somehow give a better, more effective, improved outcome has been seen to fail and to fail badly.

One of the better ideas this Government has put in place is that every person entering into prison to serve a sentence will have a needs assessment, an educational needs assessment, a mental health assessment, and a drug and alcohol assessment. It is an excellent idea and long overdue but, to be done properly and well, that needs to be resourced. We need to have very well trained, experienced people doing that assessment. My information is that despite the best efforts of some very, very good people in the system, the level of assessment and the level of commitment to it are simply inadequate to generate the better outcomes that we might hope for. We all want inmates to leave prison better than when they went in. In order to achieve that, we need to get them on to programmes, and we need to get them thinking better, behaving better.

The big bugbear at the minute in corrections seems to be scheduling. The Department of Corrections seems to be incapable of ensuring that the appropriate programmes are available to inmates at the appropriate time in their sentence and that there is ongoing support for them on the day that they leave prison. The scheduling regime is a complete fiasco, and it seems to be something that the department is incapable of resolving. There is not one single dollar that I can see anywhere in the estimates this year that will serve to ameliorate that problem in terms of investment in better information technology, in terms of investment in people, and in terms of investing in and changing the culture within our Department of Corrections.

Corrections, a matter of just a few weeks ago, launched a drug and alcohol strategy, and it is an excellent strategy. It is perhaps not as good as it could be, but it is a damned good start to recognise that drug and alcohol abuse and addiction are major drivers of crime. It is a good strategy, but no money behind it. This is a Government that is frightened of its own shadow. It is frightened to commit to change. The Greens in Government will do that. Thank you.

CARMEL SEPULONI (Labour—Kelston): I had scheduled to be here in Wellington on Saturday, thinking that we would have work to do following the Government’s Budget announcement. But, actually, because the Budget was such a non-event, we struggled to be here even till 12 o’clock on Friday. So I think the general public would be a little bit concerned about the fact that here they had these huge expectations of the Budget, and were presented with nothing—and, actually, here we are supposed to be working on this big Budget, on any of the announcements that might have come out of it, and there was nothing. It was rather disappointing. I think the only highlight was—well, actually it was my 39th birthday on Saturday, and it was nice to be back in the electorate.

National has failed to deliver not only for New Zealanders who are experiencing hardship but also middle New Zealand on issues that matter: housing, health, education, and the economy. Budget 2016 does nothing to fix the housing crisis. It cuts health and education even further in real terms and sees middle New Zealand getting a smaller slice of the economy. The failure to meaningfully tackle the housing crisis tops off 8 years of failure from the National Government. A Labour Budget would have taken decisive action on housing, boosted funding for health and education, and ensured that middle New Zealand got its fair share of economic growth, as well as addressing the hardship that many New Zealanders are experiencing.

The fact that it was such a non-event of a Budget meant that what we have ended up with is an increase in costs to households. Because of National’s out-of-touch approach to Budget 2016, the reality is that households will pay more. Wages are not going up as quickly as inflation over the next 2 years. We already know this. Next year house prices are forecast to rise by 8 percent. Last year they rose at twice the rate that was forecast. Auckland’s first-home buyers are already spending more than half their income on mortgage repayments. Now they will have to pay more. Households will end up forking out more for insulation or heating after the Government cut back on insulation subsidies. Education costs are rising at 10 times the rate of inflation, meaning that parents will pay more.

I just mentioned there all the monetary costs. That does not even cover off the social costs that we as a country are going to have to pay. Talking about social costs, I really want to move over to the Government’s social investment approach. What is this social investment approach? Let us just discuss this social investment approach a little bit more widely. Child Poverty Action Group had breakfast the day after the Budget was announced. Our social services across the country are very clear that this social investment approach is not working in any way. The social investment approach that we have from the National Government is about short-term cost saving rather than investing in people, which will have long-term benefits. It really is about smaller Government, and that is all it is about. Social investment should be about making sure that families are better off, not just making sure that they come off benefit.

In so many situations that we have seen, people have come off benefit but have they gone on to do anything more that makes their family more successful or improves outcomes for their families? Actually, that Government is not measuring that. National’s social investment approach views people as liabilities rather than as the important asset resources that they are. Social investment should not be about managing risk; it should be about investing in people. I am so sick of hearing the National Government going on about its so-called social investment approach.

If we critique it a little bit more, it is not social investment but rather targeting those labelled by National as fiscal drains. For example, in Bill English’s Budget speech he picks on young parents, saying that the average 19-year-old sole parent will spend 18 years on a benefit. We still cannot find where he got that information from. In fact, I have had to put parliamentary questions in referring to Bill English’s quote to find out where he got that information from. I have worked with 19-year-old sole parents and I do not know of any of them who have stayed on benefit for a long term—particularly 18 years—so I really want to question some of the perceptions that the National Government is creating. This stigmatises young people, and we have seen it not only with its so-called social investment approach and the labels that it puts on people, including “fiscal drain”, but also the other labels we have heard those members use, like Bill English being quoted as referring to young people in New Zealand as “pretty damned hopeless”, in relation to them being able to get into employment. What hope do our young people have when they have got a Government that has so little aspiration for these young people?

In fact, going back to some of National’s 2008 slogans, we were supposed to have a brighter future under this National Government. It was supposed to be the party that was aspirational for New Zealand. Well, we have not seen aspiration for middle New Zealand or those experiencing hardship. The only people it seems to have aspiration for are the mega-wealthy, the people in the top 1 percent; those people who actually do not need any more help; those people who are doing OK by themselves but, actually, are probably doing a little bit better with help from their mates in the National Government.

Going back to the social investment approach and critiquing that, if we look at the testing that has been done around the package that it has introduced and we try to see whether or not there is any evidence of an approach to it at all, we see that there has been no testing. So what we have here is a $652 million package that the Government is looking to implement, when it has not tested it and there has been no critique of the design, and members on that side of the House have no idea whether it will actually work. The measure of success of the social investment approach from that side of the House is based on problematic outcomes.

Rather than aiming for an economic self-actualisation and the long-term well-being of children and families facing hardship, the short-term fiscal gains are the key priority. That is why those members have things like their Better Public Services target to reduce welfare dependency, but it does not go any further in terms of ensuring that those families are better off, because all it is about is short-term gain. Our concern on this side of the House is that if that is all the Government is focused on, then down the track we are going to see some pretty major social implications from that short-term view. We are going to see further cost to the country as we seek to resolve the things that the Government did not address at the time it had an opportunity to do so. A failure to invest in our future now will lead to higher costs in the future for children growing up in poverty with no or inadequate accommodation. The impacts this will have on them are huge and difficult to undo later in life. So hearing the Minister for Social Development, Anne Tolley, talk about her package and about wanting to address the needs of vulnerable children is all good, but if the children in these families do not have a roof over their head, then how much traction can any Government truly make?

If we want to talk about a social investment approach, then we really need to talk about investment in education. So I really want to touch on early childhood education funding. I have a 3-year-old, and the first thing that his centre manager said to me when I saw her on Monday this week was that she was so disappointed with what the Budget had to offer in respect of early childhood education. That Government has talked up the fact that it needs to invest in early childhood education and that it wants to increase participation, and yet it has not followed that up with any additional funding for early childhood education. In fact, what we see here is that because of the lack of funding offered by that Government, we are seeing centres having to subsidise what they should be getting from the Government with increased costs to parents. This is what I was talking about before with regard to the fact that many of the costs that have not been covered by that Government are now being pushed on to New Zealanders.

I am not going to get through the list of things I wanted to talk about, but I do want to touch on emergency housing. National’s Budget has failed to address the growing housing crisis. In fact, those members are fighting amongst themselves about whether or not it is a crisis or a challenge or something else. Their measures are insufficient to reverse the decline in homeownership, to stop kids living in cars, or to ensure homes are warm and dry. Every New Zealander out there knows that we are experiencing a housing crisis, so every time that Government tries to turn round and say that it is not a crisis and there is no housing crisis, people are rolling their eyes and saying: “How can you lie to us? How can you say that when it’s so evident?”—not only with regard to their own ability to be able to pay their rent or purchase a house but every day, when they go to their local shopping centres or walk out on their street, they are confronted with levels of homelessness that we have never seen here in New Zealand before.

This was a non-event—a non-event of a Budget. That Government should be ashamed of itself, and I think New Zealand will be judging it based on what costs the Government has now pushed on to middle New Zealand households.

Hon CRAIG FOSS (Minister for Small Business): I was wondering, and now I know, why all these Labour speakers today are so angry. They seem very excitable and angry, and, of course, with this new continued left takeover of Labour, as we have seen announced today with the Labour-Greens merger, or whatever they are calling it, I can see some of those members’ frustration and anger coming through. Mr Hipkins was very, very excitable in his speech earlier. You know, he is a good orator in the House, of course, but I guess he is frustrated at the thought that perhaps Catherine Delahunty from the Greens will become the Opposition spokesman on education.

Alastair Scott: Oh, imagine.

Hon CRAIG FOSS: As we go through that, we can start—or perhaps they will be joint leaders or joint owners, or whatever they are going to call it. It is quite interesting, what we have just seen today. I was just thinking that there are probably two people smiling from ear to ear at these announcements, as we discuss the wider ramifications of this Budget. I guess New Zealand First members are very comfortable and happy with today’s announcements because, actually, it shows that Labour has totally abandoned ground on a voting bloc that they perhaps thought was once theirs. I am sure that the New Zealand First MPs are smiling—yes, they are—from ear to ear at what they have seen with the colleagues they might sit with, but they can see a mile away, as we can, what is happening to the left of New Zealand politics. It is now becoming the far left of New Zealand politics.

I guess the only other person smiling here—though I am sure there are others—would, of course, be Nick Smith and perhaps Nicky Wagner, who are leading the Bluegreens in our National Party and are leading our concentration on actual things that matter in our environment, like pursuing policies that help our environment and preserve our awesome environment in New Zealand. Not like the Greens, who tend to endlessly pick up causes, be it Dotcom, be it Panama/Pelican Brief nonsense—

David Clendon: I raise a point of order, Mr Speaker. I am sure this contribution we are listening to is interesting to somebody, but to date the speaker is several minutes into his 10 minutes and he has not yet once referenced the appropriation bill or the Budget. I wonder whether he might contain himself and give us something on that.

Mr DEPUTY SPEAKER: Thank you very much for your point of order. Of course, relevancy is for the adjudicator to decide on. It is a wide-ranging debate, and those speeches have been wide ranging, but your point is well made and, no doubt, he will have a reference to the Budget forthwith.

Hon CRAIG FOSS: Oh, of course. As I am speaking on the Appropriation (2016/17 Estimates) Bill, interestingly, I could segue into—oh, I do not know. We could compare it with a Venezuelan Budget, actually, because the Opposition tends to be going down that track, but I might come to that later, as I wonder what its version of this same bill might be.

This Budget does continue National’s steady-as-she-goes, conservative, prudent management of our economy, of our future, and of our people, delivering fiscally, delivering economically, and, most importantly, delivering socially. It is delivering to those groups of New Zealanders—increasingly so—who most of New Zealand expect deserve or need or require our assistance as a civilised nation, and putting resources where they are needed most, which will pay dividends later in their lives for themselves and, of course, for our country. It reflects our country where we are now, growing in confidence—an open, trading nation. In fact, it would be interesting to have that debate with the other side now, with those parties’ merger and their continued opposition to free trade and the Trans-Pacific Partnership. As New Zealand is now growing in confidence and is an open, trading, innovative nation, it is reflected in the forecast of the bill and of the Budget and, of course, it is recorded in our outlook for New Zealand.

Interestingly, I am looking at Mr Little’s proposed amendment to the motion in the Hon Bill English’s speech. I look at that and, essentially, that says “and Opposition members will be voting against”, if they agree with that amendment—actually, they will be voting against business tax changes. These are the most fundamental changes in small business, particularly in taxation, in decades. The last one was probably when we lowered the business tax rate from 30c to 28c in the dollar. Every election, Opposition parties will talk about provisional tax, terminal tax, and Government compliance around tax. They all promise to do something, but in Government they never did—in Government, we have. We have committed, and we are investing in systems to allow changing the burden of compliance in and around provisional tax to a closer, pay-as-you-go—closer to a GST-type—model, widely welcomed by small businesses across our country.

The Budget delivers surplus, ongoing surplus to the tune of about $6 billion in a couple of financial years’ time—pretty good. It continues to deliver on low interest rates, creating an environment for certainty, creating lower interest rates for all New Zealanders. Remember, New Zealanders, those who are listening—imagine what their mortgage rates would be now if Labour had continued in office, or, in fact, if Labour was writing this Budget. There would be rampant inflation and rampant double-digit mortgage interest rates like there were when Labour was last in office.

Interestingly—and I have not heard other speakers on this one yet—the Budget delivers an improved current account. I recall the Hon Michael Cullen, who, perhaps, struggled against some of his spending Ministers in his time in Government, and who must have given up, I suppose, in his last 3 or 4 years, but he continued to talk about the need to fix or work on our current account, as have other Labour spokespeople over the years. Yet they are silent on this one because, again, it shows once forecast it becomes reality: this National Government keeps delivering.

The Budget talks about job growth: 200,000 new jobs, up from 170,000, as our economy grows over the forecast period. It forecasts lower Consumers Price Index, as I just alluded to. It also, though, as well as the fiscal side of things, delivers higher, more increased spending in education, in health, and across our social services. It is an outstanding Budget, an outstanding result, and outstanding forecast results in the OECD. With every single country we compare ourselves to, and commentators compare us to, it is an outstanding result. Even with those outstanding forecasts, as Minister Brownlee was talking about earlier, some of the assumptions in it are very, very conservative. So even getting about 3 percent growth, even with a forecast doubling of oil prices, and even with a decrease in migration to about 12,000 per annum—even with those constraints, we are delivering forecast surpluses, growing over the next many, many years, over the forecast period, up to about $6 billion in 2020. What a good problem to have.

One thing, particularly to that previous speaker, Carmel Sepuloni: why does the Opposition not embrace and value the social investment approach? Why does it not think it is a good thing that within the limited resources of Government those who actually need assistance now, need some wraparound now, to help them in their current circumstances and to perhaps get them on a better path for themselves and for our country, over many, many years to come—why does it not endorse that? I was thinking of Sir Walter Nash, actually, because what were the first State houses? They were social investment. A long-term investment, originally, for housing for those who need it, and yet Labour—is it now against that type of policy?

Carmel Sepuloni: That was social investment.

Hon CRAIG FOSS: I can absolutely assure the member, who seems to be complaining that it was something about “short-termism” or something like that—actually, the whole investment approach, as documents have shown, as Ministers have spoken about, is very, very long term. So, as MPs, we want to look those taxpayers in the eyes and say: “Actually, because of this social investment approach, we’ve helped so many New Zealanders, we’ve helped so many families. We are concentrating on helping them into a home—not necessarily a house. We’ve moved what you would have needed to pay in taxes over the next 30-odd years from $82 billion to around $70 billion.”

Carmel Sepuloni: You’ve increased it down the track, because you’re not addressing what needs to be addressed now.

Hon CRAIG FOSS: That is not too bad, and the member obviously did not even do bookkeeping 101, because that is actually what goes on the balance sheet—those kinds of numbers—and that enables better, more choices, and more options for the Government, whichever it might be over the coming years, to allocate the resources of the Government to help people through circumstances that are, by and large, not of their own making.

I do worry. We have had this announcement today, however it plays out, but as the Opposition lurches even further to the left, I suggest that if the Opposition parties were running this Budget—if we were wondering what it might look like—over time, what we see in Venezuela now is probably not too dissimilar: rampant inflation, no control over spending, no target of spending or resources or assistance, or whatever it might be, great rhetoric, but actually, on the ground, those who hurt the most from left, spend-up-large Governments, such as we seem to be hearing from on the other side, are the most vulnerable in our society. I am very proud and comfortable to continue to support this Budget, fiscally, dryly, economically, and socially. Thank you.

RICHARD PROSSER (NZ First): Here we go again. Another year has gone by, and another Budget—another one of Bill English’s “you beaut” Budgets. It has been foisted upon us—another burnt offering, you might say. He says it all very nicely. Mr English speaks with a very velvety voice. I actually find it quite soporific and I am wondering whether that might be a tactic on Bill English’s part. If you cannot convince your audience with the weight of your logic and the force of your argument, then just put them to sleep instead.

It is appropriate that he try that tactic now because it almost worked, but I found myself waking from the dream that he put me into to find that I was in a nightmare, because here we are yet again, another year gone by, talking about biosecurity and talking about this Government’s lack of a proper approach to biosecurity—yet again. It is almost like Groundhog Day. Budget time comes around and I find myself thinking “Ooh, what can I have a go at this year?”, and, again, it is biosecurity because, again, the Government still has not done anything about it. It still has not addressed the fundamental shortcomings in its approach to biosecurity. So Mr English’s velvety voice is actually the perfect illustration for velvetleaf. Velvetleaf is appropriate because it is the latest in this quite shameful litany of biosecurity failures that have happened under this Government’s watch. We have had Psa, we have fruit fly, black grass, Noogoora bur, guava moth—the list just goes on and on and on, and velvetleaf is the latest incursion.

The Minister for Primary Industries will tell us that more money is being spent, and through the smoke and mirrors of the appropriations it does look, at first glance, as if there is more money being spent, but, as always, that turns out to be a wee bit of a mirage when you drill down through the numbers. The total appropriation here, we see, has gone up by $9 million. That is great. Border biosecurity monitoring and clearance has gone up by $7 million. But then when we look at funding for departmental output expenses, the revenue from the Crown is actually down by $16 million, and when we look closer at border biosecurity monitoring and clearance we see that is down by 50 percent. It has fallen by $18 million—$18 million.

Minister Guy claims that biosecurity is his No. 1 priority, and I believe him. I believe he is genuine when he makes that claim. But there are two things that are working against him. One is the fact that his Cabinet colleagues just simply do not appear to grasp the importance of biosecurity to our primary sector. They do not seem to understand how vitally important having good biosecurity is to the sector that provides three-quarters of the economy. Maybe that is because the National Party is a shadow of its former self in terms of its roots. There are just not enough farmers on the Government benches at the moment and, certainly, not enough in Cabinet.

But help is at hand. When New Zealand First is in charge in 1½ years’ time we will bring quite a few farmers with us. They are flocking to us even now from the ranks of people who, traditionally being National supporters, are coming across to New Zealand First because they realise that we are the light and we have stayed true to the original vision that National started but has now thrown away. The second thing working against National is that the methodology that it is following is just plainly and simply wrong. It is focused in the wrong way, it is applied in the wrong way, it is based on theories that are incorrect, and there is just not enough of it. The slice of the pie that is allocated to biosecurity is simply too small.

We have seen the introduction of the new biosecurity passenger levy. The proceeds from that will begin to filter through, and I imagine that is where the difference comes in—the difference between what the total appropriation is and what the Crown revenue is—but we know that it is a replacement revenue stream; it is not new money. When the bill went through last year the Government insisted for a long time that it was going to be additional money. We finally got it out of them that, actually, no, it is just a simple replacement stream. So that system has failed. The approach the Government takes using risk-based assessment and, basically, pegging back what it does in terms of looking at potential ramifications of organisms coming in, has not worked. The danger in that is that every incursion that happens under this Government’s biosecurity regime that is not foot-and-mouth disease brings the incursion that is foot-and-mouth disease one incursion closer. When that happens—when that happens—that will cost us $20 billion. When that happens, it will be too late to say: “Oops, I told you so.”

When it has cost us $20 billion and put our primary sector on the back foot for months, if not years, a few more dollars on some quarantine sheds and a few more dollars on some extra lab tests will seem like chicken feed indeed. Chicken feed is important because, actually, the velvetleaf may well have got into the system through chicken feed because we have been using this risk-based assessment that assesses that imported maize—and this is where we suspect one of the pathways that has come in is, in this case—is destined for a process that will de-nature it and render any potential contaminants unviable. I have spoken to the people from the poultry feed industry, and I believe them when they say that they have gone through the processes that they think they have to go through. It is not they who are at fault; it is the Government, it is the system—

The ASSISTANT SPEAKER (Hon Trevor Mallard): The member’s time is up.

Clayton Mitchell: Ronald Reagan once famously said: “I have not left my party; my party has left me.”

The ASSISTANT SPEAKER (Hon Trevor Mallard): Clayton Mitchell.

CLAYTON MITCHELL (NZ First): Thank you, Mr Assistant Speaker. I started nice and early. Ronald Reagan’s quote is a very famous quote indeed, and I think that there are a lot of National Party members out there who feel the same way: they have not left the National Party; the National Party has indeed left them. Do not panic though. The National Party of the 1950s, 1960s, 1970s, and 1980s is a long way away from where the National Party that is in Government today stands.

As I travel around this country talking to constituents on a range of issues, one question that keeps coming up is “What do we pay our taxes for?”, which is actually quite a good question when you think about it, because what we used to pay our taxes for and what we pay taxes for now are two different things. I am talking about a time when our country prided itself on being a country with a strong economy, zero unemployment, low crime, and record homeownership figures—a time when we were considered to be one of the best countries in the world to live. I am talking about a time when this country understood the importance of State houses and knew that the Government was the best organisation to provide and maintain those State houses, not some foreign-controlled corporation. This was a time when we had watertight State housing and when more houses were being built in a single year than—can current Government members honestly put their hands on their hearts and say they are doing a better job?

This was a time when we owned our own banks, we owned our own insurance companies, and we owned our power stations and our telecommunications, a time when we saw education as an investment and we ensured that all New Zealanders had an opportunity to further educate themselves free of charge, and a time when heavy investment was put into rail as a priority over roads, and our Defence Force was well-equipped and ready to defend our sovereign nation. This was a time when health, and law and order, were never questioned, because they were well enough resourced to not go without, as we are currently seeing in today’s economy.

So how does that segue into the state of the nation today, and where does all of our hard-earned tax money go to? We have sold off our major banks. This Government refuses to bank with its very own Kiwibank, preferring to bank with Westpac, a foreign-owned bank, instead. This is a time when our Government has sold off our power companies, it has sold off our State Insurance, it has sold off our telecommunications, and who owns those now? Of course, foreign-controlled organisations and corporations own them. State housing is now being sold off too. To whom? That is right, it is being sold to foreign corporations because this Government—your National Party—is saying—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

CLAYTON MITCHELL: —that the foreign corporations are a better place for looking after social housing than the Government is. That is absolutely a living joke. We have got a Government triple-dipping when it comes to transportation too: taking road-user charges, adding fuel tax, and then putting on tolls to pay for new roads for profiteering long terms that more than pay for the original construction costs.

What about the Trans-Pacific Partnership agreement? We heard Mr Foss talking about it just a few moments ago. This is a conditional—and I underline that word—trade agreement, written by foreign corporations, not Governments, for the complete and utter benefit of those foreign corporations, where those companies can sue our Government under investor-State dispute settlement provisions if that foreign company feels that its profits are going to be marginalised by a democratic decision made by our Government. How is that democracy? This is not the National Party; this should be called the “International Party”. The next election campaign for this “International Party” should be “International Party: Working for Foreign Corporations”. That is a very good slogan, actually. You can take that—it is free.

This Government says that we cannot afford it when it comes to taking GST off food or paying 26 weeks’ paid parental leave for families with babies or spending money on bringing our State housing up to a reasonable code or a reasonable standard to live in. But this Government, at the hands of the “International Party”, can afford to pay $27 million on a flag referendum that nobody has asked for. It can afford to give $16 million to a Saudi businessman to build an abattoir in the Middle East that will not benefit New Zealanders one iota. It can afford to give a further $700 million to China to its infrastructure fund, and I am prepared to debate that at another time. It can afford to give $1 billion to South Canterbury Finance shareholders to bail them out of the proverbial crap. Let us not hear any more affordability rhetoric from this Government in terms of this Budget. A Government is, in my opinion, like oxygen. It only becomes important when it is not there for the people. Thank you.

DAVID BENNETT (National—Hamilton East): A Budget is a very important document for any country. It sets out the revenue, expenditure, and priorities for the year ahead. This Budget continues on that great trend set by the Minister of Finance, the Prime Minister, and the National team of having a prudent and important way of looking at our finances so that we actually do invest in the social infrastructure of New Zealand, we do invest in the economic infrastructure of New Zealand, and, at the same time, we do it in a responsible and fair-handed manner.

Not many countries in the world can say that they are now in surplus. In the Western World it is rare indeed. New Zealand is one, if not the only, country in the Western World that can say so. When we look at Canada, a $29.4 billion deficit; Australia, a $39.9 billion deficit. I will repeat those numbers for those listening: $29.4 billion for Canada; $39.9 billion for Australia. That is the reality of the modern world; that is the reality of the people who we judge ourselves against. They have Governments that are dealing with high expenditure, low income, and terrible Government deficits that at some time somebody has to pay back, or at some time there has to be a reduction in expenditure to meet the increased spending that those Governments have faced.

That is not the case in New Zealand. In New Zealand we have not got that hanging over our heads. We have a strong Budget surplus and we have strong Budget surpluses projected into the future. That means that New Zealanders have options. That means that all New Zealanders out there can be proud of the Government that they have elected, which has given them the options to repay debt, to actually go out there and spend more money on infrastructure, and to go and give more services to New Zealanders when and as the times permit. Those are options that very few other countries have and we should be celebrating that in this House.

There will be Opposition parties that will argue that everything and anything should be spent on everything and anything. That is their job, that is what they do, and we understand that and nobody takes any notice of it because they are in Opposition.

I just want to acknowledge that today was a very important day for the New Zealand Labour Party with its capitulation to the Green Party in their memorandum of understanding. Why a large party like that, which has such a strong history in this country and in this House, has flown the white flag today and given in to the Green Party, I will never know.

Dr Kennedy Graham: It’s a great deal.

DAVID BENNETT: It is a great deal for the Green Party. It finally means that the Labour Party admits that it no longer controls the left, and that is a sad day for all those Labour Party strongholds and those people who have given their lives to the Labour Party, who now find that they have been taken over by the Green Party. That is a sad day for that Labour Party over there. But it is a good day for the Green Party, and I acknowledge the work it has done over a number of decades now in building a brand that has actually destroyed the Labour Party—and it has achieved its purpose. New Zealanders will not be fooled by that because New Zealanders know what sensible economic management is. New Zealanders know what it is to run a household, and New Zealanders know that they cannot be voting for promises that are unrealistic. They are going for—

Carmel Sepuloni: They know what it means to run a household, because it is costing them more under National.

DAVID BENNETT: “Costing more under National.”—that is what the Labour Party member says. Well, the Labour Party is going to make it so much easier, is it not, because we all know what the Labour Party is going to do: it is going to introduce higher taxes on households. We know that that is the Labour Party policy. Grant Robertson has said that he will increase taxes on New Zealanders. He has not said the amount—and he will not say the amount going into the election—but we all know that he will increase income taxes on New Zealanders. That is the first thing the Labour Party has said.

The second thing the Labour Party has said is that it wants to bring in a capital gains tax. The Labour Party will bring in a capital gains tax. The third thing we know from the Labour Party is that it does not like the emissions trading scheme (ETS) as it stands, and it wants to change the ETS. We know that the Green Party will be the dominant party when it comes to environmental issues in this coalition agreement, and so we know that New Zealanders will face a carbon tax if that party—the “Labour-Greens”; I do not know what it is going to be called—actually gets elected in a future election.

Those three taxes are coming to New Zealanders. New Zealanders know that they will be getting higher income taxes, New Zealanders know that they will be getting a carbon tax, and New Zealanders know that they will be getting a capital gains tax under a Labour-Green coalition.

But under a National-led Government, what do they know they are getting? They know that they are getting investment in the innovation sector of the New Zealand economy—$761 million of investment that focuses on growing our science and producing the skills that are necessary for New Zealanders to succeed and prosper in the modern world. They know that there is a $2.1 billion infrastructure investment programme in this Budget.

Tim Macindoe and I, and the Waikato, are being very generously supported through that Budget at the moment, with the Waikato Expressway getting to the formative stages. We turned the sod on the $973 million project that is the Hamilton bypass earlier this year. That will be a game-changer for our area, and shows that there is a Government investing in the regions—an investment that never happened under Labour, an investment that can never happen under the Greens, and an investment that New Zealand First does not want to happen. The punters in Hamilton know—they know—who is delivering for them. They know who will never deliver for them, and they know who has stood up against that delivery, and that is the Labour and Green parties, which did not want to see that delivery in our city.

We see a social investment package to support vulnerable New Zealanders at their most vulnerable time, and that is something that has built on the last Budget and really reflects the approach that this Government has taken. It is looking after all New Zealanders. We have looked after all New Zealanders, and not just those voting bases that the left seeks to capture.

The fourth thing that you see is a significant investment in the health sector—a massive investment in the health sector, in fact. When we look at the health sector, it is something that all New Zealanders benefit from and that all New Zealanders have no problem with investing in. You see that the investment in the health sector includes some very important areas in providing top-quality health-care. Again, in Hamilton we have seen the benefit of that. We see it day by day in the great Waikato District Health Board and the work that it does in our city.

When you look at economic growth of 2.9 percent in the coming year—2.8 percent on average for the 5 years to 2020—that is a good-news economic story that New Zealanders should be proud of. When we look at 200,000 more people in work than 3 years ago, and another 170,000 new jobs by 2020, that is a good-news economic story that New Zealanders should be proud of. When you look at unemployment reducing to 4.6 percent and average wages expected to increase to $63,000 per year, that is a good-news economic story that New Zealanders should be proud of.

New Zealand has a great Government doing great things and providing strong economic management. Do not let that slip and let a left-wing coalition that would put New Zealand into high debt, high spending, and more taxes take any part in the future of this country, because New Zealand can ill afford that. We are on the right track to being a very successful member of the world and of the new world order and economy, and we do not need a shift back to communism and the left and we do not need a shift back to the nationalism of the New Zealand First Party. We need a future that is strong, reliable, and focused, and that is what you get out of this Budget. Thank you.

DAVID SHEARER (Labour—Mt Albert): Remember the days when the National Government talked about aspiration? It talked about a brighter future. Well, I have heard a lot of words describe this Budget, but “aspiration” and “brighter future” never featured. I heard “bland”. I heard “boring”. I heard “broccoli”. I heard “bollocks” from some person, and that is just the beginning of the alphabet, to describe this Budget. It is underwhelming—certainly underwhelming.

It is smart in one sense; I will give Mr English that. He has put aside money—your money; taxpayers’ money—for a big splurge in election year. Taxpayers’ money is squirrelled away so that National can spend up and try to win the election. He has done a second thing, and that is that he has paid off some of the debt that he has racked up in the last 8 years. More than $60 billion, the largest debt in New Zealand’s history, has been racked up by this Government in the last 8 years.

National inherited a surplus in 2008. In 2008 the Budget by Michael Cullen meant 9 years of Budget surpluses—year after year after year. We are finally back in surplus, and now Bill English is paying off the debt. This might be good for National, and it is crowing about it right now, but it is certainly not very good for everybody who might be listening here and at home.

Let us look at education, for example. The operational budget of schools—and what I mean by that is the money that the schools spend on sports gear, on computers, and on all those things that kids need to get a good education—has stayed flat despite the fact that the population has increased. Eighty-six percent of principals out there are saying they are not getting enough money, so we know what is going to happen now: parents will be asked to put their hands in their pockets again and fork out for schools. It is money that should be paid by this Government.

National should be funding our schools at the right level, but instead it is putting money into those charter schools—seven schools, to be exact. These are schools that soak up three to four times more money per child than State schools. They have no accountability, do not have to have trained teachers, do not have to teach to the curriculum, and are not accountable under the Official Information Act. They are the schools that this Government is preferring to put money into instead of our State schools.

Let us look at health. The Government is talking the big talk about how much money has gone into health—$2.2 billion, according to Dr Jonathan Coleman, except that he mumbles under his breath “over 4 years”, so it is only $500 million. Actually, if you do the maths on this one, which the Government, of course, has not done, you will realise that it does not keep pace with population increase and inflation. In fact, it is $200 million behind. What we are actually getting is less this year than we need to have. Our district health boards, in everybody’s own region, will have less to spend than they did last year. They will not be able to keep up with what is needed to be spent per person. That is health—that is the bad news in health, which you will not hear from this Government. It is falling behind.

I want to talk a little bit about something that is close to my heart, and that is Auckland. I am an Aucklander, and I like to live in that city. I grew up there. I grew up in South Auckland. I have lived all over the city. I was at Eden Park on Saturday watching the Blues. I still am a faithful, loyal Blues supporter. [Bell rung]

The ASSISTANT SPEAKER (Hon Trevor Mallard): Sorry, that was an accident. It was a bit premature on my part, with that topic.

DAVID SHEARER: That was a Highlanders fan who hit the wrong button there.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Hurricanes.

DAVID SHEARER: Hurricanes? Sorry, the Hurricanes. Whatever—it does not matter, they are not the Blues. Anyway, I hope I get a few extra minutes for that. There should be a penalty for the Assistant Speaker making a mistake like that.

Auckland has received nothing in this Budget. It has utterly failed this city. Auckland has one-third of the population, and it has got absolutely nothing. You might be perhaps one of those people listening to this debate who are trying to save for a house, and you will know that in 2008, when this Government came into power, houses were averaging out at about $435,000—still high, but $435,000. What are they today? What are they today after 8 years of this Government? They are $928,000 each, on average—$928,000.

Who can afford that sort of money for a house in Auckland? What is the Government doing about it? Nothing. The mumblings and fumblings and bumblings of Nick Smith have not done one thing—one thing—to make those houses more affordable. Has the Government, for example, excluded foreign investors from buying our houses? Why is our housing market like the New York stock exchange? Why can you trade and buy houses in Auckland in the same way you can do pork bellies on the New York stock exchange? It is not right, because those people are here and they want to live in those houses. Forty percent of houses that are being bought in Auckland are being bought by investors, and that is wrong.

You might be one of those people who are listening to this debate at the moment and are gridlocked in traffic, in your car, because a few years ago the road that used to take you to wherever you wanted to go in a few minutes now takes longer than an hour. Two billion dollars of value in Auckland is being lost by people in gridlock. It was only a few months ago that this Government decided it needed to fast forward the Auckland City Rail Link because it realised that, actually, putting more lanes in a motorway was not going to cut it. Up until that point, I had heard all the reasons in the world from Steven Joyce about why we could not afford to put a rail link in and improve rail systems in Auckland—up until Aucklanders said “For God’s sake! I’m sick and tired of sitting in a traffic jam for hours and hours and hours when the Government could be doing something.” It has done nothing.

You might be one of those people who are listening to this debate and living in a rental property, and you might have just realised that your rent has gone up by 37 percent and is now averaging about $520 a week. How can you possibly afford $520 a week and be able to put a little bit aside for, perhaps, the kids’ holiday or whatever? You are living on the edge the whole time.

I have people coming into my office day after day wanting help. There was a woman who came in in tears with her three children last week. She was desperate for a house. She was living in a garage. She was told she had to go over to a hostel on the other side of town. When she got there she found that she was living in a room with one double bed and one single bed with her family of four and sharing bathrooms with other male occupants of this hostel. She said: “No, I’m not going to do this. I’m going to go back to the garage I was living in because at least my kids will be safe there.” And what happened to her? Well, she got told that because she did not accept what was offered to her she went down to the bottom of the priority list. That is appalling.

We have those sorts of people in our city, in our country, who need our support and this Government and John Key, in particular, have not given it. Helen Clark said once that she did more for the health of this country by being the housing Minister than she ever did by being the health Minister. We have a finance Minister from Southland, we have a housing Minister from Nelson, and we have a Prime Minister who lives in Parnell and has forgotten where he has come from—a State house. As a result of that, we have got the appalling mess that we have today.

We have, on this side of the House, a plan that will build more houses, stop that speculation, and enable people to be able to afford their own house and get ahead. That Government has run out of ideas. It has run out of aspiration, inspiration, and any of those other words that it used to use, and now it is sadly and utterly losing for this country.

MELISSA LEE (National): I rise to support the Appropriation (2016/17 Estimates) Bill. I want to just start by saying what an excellent Budget the Hon Bill English has put up. We used to say he has put out as many Budgets as he has children, but he has surpassed that. He has actually delivered more Budgets than he has children. This is his eighth one and each one has been amazing, and I just want to congratulate him for his incredible hard work and for delivering a fantastic Budget.

Before I talk about some of the details of the Budget, I want to just address some things that the member who just sat down, David Shearer, the member for Mt Albert, has said. He actually said it is appalling. What is appalling and what people will find appalling is that Labour has actually given up. It has actually decided that it has given up and it has turned to the Green Party and said “Hallelujah! We will adopt everything that you say.”, and I think people will turn and look at the Labour Party and say: “What an appalling decision it has made.” The Labour Party will be ashamed of its decision one day. One of the things that Mr David Shearer loved to talk about was the trade policies that the Labour Party actually has had. I know that he and his good friend Phil Goff agree on the Trans-Pacific Partnership agreement and support this Government’s policy on that, but, no, they could not support that publicly because they had their knuckles hit. I think it was Phil Goff who was actually allowed to support that because he is standing for the mayoralty in Auckland.

One of the things that I feel passionate about in this Budget is Dr Jonathan Coleman’s health portfolio. In this Budget we have actually announced $39.3 million over 4 years for national bowel screening, starting with the Hutt Valley District Health Board and Wairarapa District Health Board. It will be spread right across the country. I was just interested in the bowel screening thing because, you know, as women we have cervical screening and we also have breast cancer screening as well. I was just interested in how many people are affected by bowel screening, and I was shocked to find out that bowel cancer actually affects more people than those who die on our roads through car crashes. We have more people dying of bowel cancer than breast cancer and prostate cancer put together. I think it is an amazing thing that we are doing for the people who suffer from cancer. For someone who has actually recently lost a good friend through cancer, I think any screening that provides prevention work in the health sector has to be really good. I support that.

On this side of the House we are actually committed and focused on achieving results for New Zealanders up and down the country. We are committed to supporting them and their families to achieve their goals, to have aspiration, and to actually set the goals for them to decide they want to own a home, to have certain educational goals, and for them to have aspirations for their families. Under National there are 40 new houses—earlier, other members actually talked about some of the issues with Auckland. I live in Auckland as well and I know that we have a major shortage in houses, but this side of the House, this Government, has delivered 40 new houses being built every day in Auckland. That is four times more than what was being delivered back in 2008 when Labour was in charge. So when Labour turns round and says we are not delivering anything, it is actually wrong. We are doing four times more than what it was doing when it was responsible for the Treasury benches.

We are growing social housing as well, so there are opportunities to support those needs right across the sector. Over the summer I was very fortunate to attend the sod-turning of the Chinese New Settlers Services Trust, which is investing in providing social housing for the senior members of the Chinese community. It is a partnership between the Government and the private sector. The trust was actually doing something about its own community’s need for social housing for its senior members. I congratulate the trust on the work that it does, because I think it is really important. This is just one of the many enterprising community groups, of all shapes and sizes, that are responding to the needs of their own communities, and I think we need to celebrate that.

More than 150 special housing areas have now been announced through the special housing accord to relieve the housing situation in Auckland. Hundreds of hectares of new housing, land designed for affordable homes for Kiwi families and for the development of new homes, has been released. It is freeing up over $100 million worth of land surplus to the Crown holding. It will help more families on to the property ladder and owning their own property, and I think that is really important. The housing market has now reached record levels for building growth. When you look at the number of houses that we are building, we have hit an 11-year high. Consents have been issued for more than 28,000 new dwellings around New Zealand. This is on track to be 15,000 more homes built than during the last Parliament—a total of 85,000 new homes to 2017. This will be achieved and it will help to grow the New Zealand housing stock to ease the demand on supply and give New Zealand families more opportunities around the country. This is excellent work done by the Hon Nick Smith, and we should be congratulating him on his work.

Some have been calling this Budget a little boring, but I think that sometimes boring can be a good thing. We need to be conservative. We are not into just taxing and spending, like the members opposite. We are about responsibly managing this Government, this economy, and making sure that we are frugal in the way that we spend our taxpayers’ money. What we need to do is spend it in the right places. I cannot see what is boring about getting more New Zealanders into jobs, building more affordable homes, and growing our economy. Helping to support the training of 42,000 apprentices across the country is actually not boring at all, and neither is $24 million being invested to support more training of apprentices—more aspirational young New Zealanders. Not everybody goes to university to study for a degree and become a fantastic architect, doctor, or an accountant. Some people are more suited to trade training, and I think the fact that we are spending $24 million on helping people into trades academies, into trades as apprentices to grow their skills and get them into a job, is a really fantastic thing. The training of 42,000 apprentices, up and down the country, is a fantastic number.

This leads me to an important point about the number of people who are leaving school with National Certificate of Educational Achievement (NCEA) level 2. Back in 2008 the number of students gaining NCEA level 2 was only about 68 percent. Minister Parata—every time I talk about Minister Parata I remember the look in her eyes whenever she talks about student achievement. She is so passionate about student achievement. I think when you look at the fact that we now have 84 percent of students who reach NCEA level 2—from 68 percent back in 2008, to 84 percent now—that is a fantastic achievement. I think we need to congratulate our Ministers of Education. The record $11 billion investment to support aspirational New Zealanders and their education cannot be boring and it should not be dismissed. I think we should celebrate that.

Congratulations to our Ministers of Education, and I thank them personally, as well. The Mt Albert electorate, although I am a list member based there, has had a lot of benefit. Balmoral School and Western Springs College have received a lot of money for the new building and renovation work that they are doing. The Community Education Hub in Point Chevalier is gaining benefits for the students there, and obviously for the families that are in the electorate as well.

The other thing that I feel really passionate about is the funding for Pharmac. There is $124 million more funding available for Pharmac. What that really means is more money for more medicines for more New Zealanders. When health care is at the forefront of our Budget, it is something that we should celebrate because ultimately health is really more important. We could grow the economy, but when we do not have healthy families and healthy children who can celebrate the wealth of our country, I think it is a sad country indeed. I think when we are providing better health-care, more funding for things like advanced melanoma drugs or hepatitis C drugs, when we are investing—I mean, we are the Government that delivered Herceptin to the women of New Zealand. When we are delivering more drugs that are relevant to growing healthier New Zealanders, I think we need to celebrate that. I actually welcome the decision that was made in respect of Pharmac. This is a great Budget, and I congratulate the Minister of Finance.

JULIE ANNE GENTER (Green): I moved to New Zealand in part because I love the land. I love the mountains, the forests, the beaches. But I also love the people. What I noticed about New Zealand, compared with America, is that New Zealanders really care about fairness and they care about looking after those who are the most vulnerable in society.

My parents first came to visit me here in New Zealand 10 years ago. They remarked how they did not see any people sleeping on the streets. Coming from Los Angeles, they were used to seeing the impacts of horrendous inequality and a lack of a social safety net. It is very common there for people to be living under bridges in cardboard boxes, and people are regularly bankrupted because they cannot afford to pay for health care. My parents thought it was wonderful that homelessness was so unusual in New Zealand because New Zealand had a social safety net and provided homes and shelters for those in need. When my parents came back to visit this year, they could not believe how much had changed since this National Government has been in power. After 8 years there is an ongoing housing crisis. There is a two-speed economy that is leaving the most vulnerable behind, and a growing number of people without homes, who are left with no choice but to sleep on the streets or in cars.

The Budget should have addressed both the housing crisis and growing inequality. It should be upholding that core value of New Zealanders, which is fairness. A fairer tax system would tax the capital gains from investment properties the same as any other income is taxed. It is not right that people who go to a job have to pay tax on their income, but people rich enough to own multiple investment properties pay no tax on the capital gains from that income. That is not fair. A simple change like that would help reduce the growing concentration of wealth in a smaller and smaller group of people, and it would mean that more homes would be available to first-home buyers.

The Budget could have introduced protection for renters, which is something that is common in every other OECD country. There should be security of tenure. There should be a warrant of fitness on rental properties that ensures that every child has a warm, dry house to live in, even if their parents rent instead of own.

Most important, this Budget should have invested more money in building State houses. If we have a supply shortage, the Government needs to step in and fill that gap, urgently. The number of State houses per capita is at a record low here in New Zealand, and that is part of the reason for the rise in homelessness—that is part of the cause. If we do not do something about it, more people will be on the streets and living in cars. If we build more houses, we can end homelessness. It is really that simple. It is housing first; it has been demonstrated around the world.

This Budget could have made real strides towards tackling climate change by putting a price on climate pollution, and that is fair. Polluters should pay for the costs that they are imposing on society. It should not be left to taxpayers and the rest of us to carry the weight while they make profits on our losses through polluting our atmosphere and our waters. Not only would it be more fair to put a price on that carbon pollution but that revenue could be recycled into a tax cut returned to families from the bottom, so that everybody benefits. That would make our tax system fairer and it would help transition towards a low-carbon economy and green jobs. That is what is needed for the long-term future of New Zealand.

The Budget could have introduced much more logical investment in transport infrastructure, which would result in not only safer roads and cheaper transport but also a massive reduction in climate pollution.

The National Government does nothing but give us excuses about why we cannot afford to solve the housing crisis, why we cannot take action on climate change, and why we cannot protect our rivers or get kids out of poverty. The National Party is the party of protecting the status quo. It is protecting the elite, it is protecting the rich, and it is making sure that the rich keep getting richer while the rest of the country is left behind. It is leading to a more unequal New Zealand. That is not fair. It is not smart. I do not believe that is in line with the values of most New Zealanders.

The truth is, we can be doing something to address all of these issues. We can, and we must. The Green Party has shown how we can do this through a wide variety of policies that are entirely practical, simple, and sensible. We need your help to make this happen. Thank you.

Steffan Browning: Mr Assistant Speaker—split call.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I am just assuming this is the second 5-minute speech. The member is quite a different member from the one whom I was told would be speaking.

STEFFAN BROWNING (Green): It is Budget 2016, and where is the vision for sustainable agriculture? There was nothing in this Budget for primary industries around genuinely sustainable agriculture. Where is the support for the fastest-growing food category internationally, which is organics? There was nothing. Go right through the Estimates—where are organics mentioned?

This Government is still pouring millions into overseas-owned Agria, PGG Wrightson, for forage development. What is the nature of that forage? Is it something we should be budgeting for? I do not think so. A forage that requires something like three different herbicides, a bee-killing insecticide, and others to make it, theoretically, work—is that sustainable? Is that the sort of thing the Government should be budgeting for, or should it be doing a Budget with vision for the fastest-growing sector internationally, which is organics? Do our communities want pesticides in their food—in their food chain? No, they do not. So why is National supporting what it calls innovation when it is actually not sustainable for New Zealand farmers? We do not want pesticides and toxins in our food chain; nor do our customers internationally. The fastest-growing sector of demand is organics.

Progressive countries have also, in their Budgets, put in pesticide reduction strategies. They aim to take pesticides out of their food chains, and out of the environments where their kids play, where the pets are, and where we are. They work on that. What does this Government do? Nothing like that. Where is the doubling or tripling or whatever is needed for our Environmental Protection Authority (EPA) to do proper risk assessments of—have a proper inquisitorial look at—the multitude of pesticides that are in our environment?

The National Government intends there to be a lot more. National has ticked through more than 270 new herbicide formulations in its time, 125 new insecticides, and 184 new fungicide formulations. Where is the strategy for balancing that up? There is no strategy at all. Do we want pesticides in our food? No, we do not. Do we want them in our children’s parks? Do we want them in the other parks? Do we want them in the streets? Do we want them in the air? No, we do not. We do not want them in the water either, but there is no strategy.

In this Budget there could have been vision, because this vision affects not only us and our children but also the perception of New Zealand in the world. Multiplying the budget of the EPA might have gone somewhere towards that. It would have helped when those tourists come in and see those golden street edges of glyphosate and wonder why we are using so much. We would have had a potentially better look. The EPA is so underfunded that it uses chemical company data to make its assessments. The last time it did an assessment for glyphosate was 2009, when it used Dow AgroSciences’ data. In 2004 it was DuPont’s, and before that it was Monsanto’s. We want independence. We would like to see a Budget that gives the EPA real independence to make good assessments, and we want a clean, green, “100% Pure” vision for New Zealand. Thank you.

SIMON O’CONNOR (National—Tāmaki): Love is in the air.

Hon Member: Oh!

SIMON O’CONNOR: I know. Love is in the air. What an announcement today. As most in the House know, I am actually getting married at the end of the year. I am quite excited about that, but I understand there is another union. Another union has been announced in Parliament today, a union that is meant to provide a contrast to the Budget that we are discussing today. Labour and the Greens are jumping into bed together. As I try to imagine that union in flagrante, I am struggling a bit. In some ways I apologise for introducing it to the House. Look, I do not remember Labour and the Greens fighting but they said they have been, and now they have started to work together. I guess now they can put aside their loopy differences and can focus on the loopy things that they have in common. I, for one, am welcoming the Green-Labour nuptials. I wish them a long, happy marriage, full of new taxes, legalised drugs, criminalised sugar, and the abolition of every industry in New Zealand.

In a very practical sense, it is not actually clear what either party is going to get from this deal, which is a great contrast in terms of the Budget, where I think New Zealanders are very clear what they are getting from that. With these nuptials, the Greens have been promised nothing. Maybe Green Party members are happy with that. Maybe they really did negotiate a deal for themselves to help Labour in return for nothing, and, look, that could be true. They did get left at the altar by Helen Clark in 2005, but, you know, they could fall for that again. As I have been told, love is blind. But there is more to come out of it. Maybe we have to hear more about this. Already there are ructions of noise from the other side—not a good sign, in these early stages of going steady. But really, to the Labour side, what are they going to see from this? Cabinet posts? Surely Andrew Little would not be selling his Labour colleagues down the river just for a shot at the PM’s office.

The real question is: what do the Greens get out of this deal? Is my colleague who just spoke, Steffan Browning, going to become the new Minister for Primary Industries? And, really, is Catherine Delahunty, at the expense of my Labour colleagues, going to become the Minister of Foreign Affairs? We have heard today directly from the Leader of the Opposition’s mouth that this will not be a monogamous relationship. He admits that the Greens are going to get screwed again. Labour and the Greens indeed are going to take us back to 2005. But I do hope that Labour and the Greens—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Take care.

SIMON O’CONNOR: —have signed a prenuptial agreement, because I think it is going to be a very messy divorce, and that ultimately is a huge contrast to what we have seen and heard in a Budget speech last week from a Government that is unified and that is focused and is heading down the right path, bringing along, if you will, the people of New Zealand, strongly wedded—to continue the puns—to a Government in the polls because it is delivering.

In my own area—I just want to turn to Tāmaki—I think there is an enormous amount of good news there. Obviously, there is a whole lot of stuff in health, and depending on time I will get to it, but we have heard about more funding in housing, and we need only turn our minds to the likes of the Tāmaki redevelopment project. I think it is an incredibly good project. I am not going to pull a colleague from the other side of the House into it just in case he gets into trouble, but it is actually a really good initiative. It is one that has actually been developed over successive Governments, but is bearing fruit under this present Government: 2,500 houses are going to be turned into 7,500 clean, dry, insulated, warm homes. Just going around Glen Innes in particular at the moment, what a transformation is already occurring as those new houses are popping up. For those of us who have been up around Sunhill recently—a really good example of infrastructure spending that this Government is leading—one only needs to think of the cycleway that is going from Glen Innes through to Tāmaki Drive. Stage one is almost completed.

We have heard from the education side of things that there is more money being pumped into education. This too has been manifest in Tāmaki, in my own electorate, when we think of the classrooms that were announced, particularly last year. But we now know that there is more money coming, not just, of course, for the likes of Tāmaki; it is actually for classrooms and infrastructure across the country. But I, for one, am hopeful that there is support in this Budget for more assistance in my electorate, particularly in education. When I go around talking to the various principals and teachers, it is very clear, first and foremost, that not only are they doing a fantastic job but also we have growing rolls. In fact, in my electorate and ward, intensification is already happening. By ward, the most housing consents across Auckland, I believe, are actually happening in the Tāmaki or the Orākei ward. So why that impacts on education is actually because the families are moving in, young families in particular. There is that growing pressure on our schools, so I think it is tremendous to have seen in this Budget that more money is on the way.

When we talk of infrastructure, it would be remiss of me to not talk about the ultra-fast broadband. Again, if you are travelling down most of the streets of Tāmaki at the moment they have turned a little bit orange as there are more orange cones than I care to count, and, primarily, this is for the ultra-fast broadband that is going in. For whatever reason, it has not quite reached my house in St Heliers yet—I am not sure whether I am to take that personally or not—but it is coming, I am told. And particularly to Ethan, who might be watching at home, I am told it is coming up the road very soon, Ethan. We will get up to a much higher broadband speed, both download and upload.

The other things that I quickly want to touch on, because I am conscious of time, are in the health space. I do this first and foremost as a New Zealander; secondly as a member of Parliament, of course, and as chair of the Health Committee. There is $2.2 billion of new spend into the health care sector in this Budget, and that is building again on a very strong—if I can continue from a bit earlier—relationship that the Government has had with the health sector and I think, fundamentally, from understanding the health sector. I know colleagues of mine, particularly on the National Party side of the Health Committee, are out and about engaging with the communities—my colleague Barbara Kuriger is nodding her head. In fact, we just had people from the Rural Health Alliance Aotearoa New Zealand come and talk to us recently. So more money is being made available to district health boards and the like, which is fundamentally important. More money is going into elective surgeries.

As a number of people are pointing out, there is more money going into the pharmaceutical budget, which I think is immensely important. I think it is useful for the House to note that the extra funding that has been announced obviously is for the likes of drugs for metastatic cancer in the melanoma space. We have heard about the remarkable drug in the hepatitis C market that does not manage hepatitis C but actually cures it, but there are five other drugs as well that are being looked at. So, again, there is a remarkable opportunity there. This is a very strong spend, and, I think, one that will continue to have to be looked at by Government. Those who have any interest in the health space will understand that these new biologics or immunotherapies are quite remarkable drugs. In fact, just thinking quickly and briefly, some of the drugs that have been put forward for the skin cancer of melanoma can also be used for the likes of lung cancer. I was very pleased to be talking to some people from the Lung Foundation recently about that. The whole pharmaceutical increase and the whole pharmaceutical spend is a perfectly good example of a Government that is listening and doing its best to not only respond to a growing economy but also be prudent around the spend and understand that there are limits.

The other area—and it is to do with health, but it also reaches out into our academic space—is the almost $100 million that was announced by Ministers Coleman and Joyce around health research funding. I think that that is incredibly important, as well. I am very fortunate to have several trustees from the Malaghan Institute of Medical Research in my electorate, along with professors, doctors, and academics from the University of Auckland, who are often chewing my ear on these matters. It is amazing what they are developing, be it at the institute or at the university. But more money provides more opportunity, not only to discover these drugs but also to do so in New Zealand, which I believe has flow-on opportunities.

Finally, I just want to quickly touch on the question of homelessness. It has been popping up a little bit here in conversations. I do so primarily as someone who has actually worked with the homeless many, many years ago. In fact, if I could link it to health, I remember clearing out some of the clothes that the homeless had left behind, and in doing so I found a nice used needle stuck in my thumb—one of those sorts of experiences you do not want to repeat. Why I mention it is that homelessness is something that has been around for a long time, under successive Governments. Some of the discussions here today seem to suggest that it is completely new; it is not. But this Government is continuing to address it and I very much commend this Budget to the House.

PEENI HENARE (Labour—Tāmaki Makaurau): Tēnā koe, Mr Assistant Speaker, thank you very much for this opportunity. I want to start my contribution by speaking about a well-known Māori woman, a woman by the name of Te Pūea Hērangi, otherwise known as Princess Te Pūea. She lived by a very simple mantra, which was: Ka mahi ahau, ka īnoi ahau, ka moe ahau, ka mahi anō. I work hard, I pray, I sleep, I wake and repeat it all over again. She was a driven woman. She was a woman who, by living by that mantra, served the people of Aotearoa New Zealand. She went up and down the country, serving—what we now call in Māori circles—te pouwaru, te pani me te rawakore [the widowed, the bereaved, and the impoverished ones]. She served those who were impoverished, those who were in need. She did this with nothing. She did this through sweat, toil, and blood. She provided a service for Māoridom from all corners of Aotearoa New Zealand.

I want to acknowledge her in my contribution because now I want to turn to her ingoa, or her namesake, Te Puea Marae in Māngere. Te Puea Marae is currently picking up the slack that has been left to businesses, left to families, and left to communities by this Government, in providing services to the most vulnerable, providing services to those most in need.

Te Puea Marae over the past week has received over 45 families, 45 families of varying sizes and of varying ethnicities: Māori, Pacific Island people, Pākehā people, Indian people, Asian people, and Somalian people. They have all been received into her warmth at Te Puea Marae. The marae did this with absolutely nothing. It did this with no support whatsoever from this Government. The people do this, they come together with a sustainable plan to help these people—something that this Government has failed to do. I want to commend Te Puea Marae at this point in time, because it is doing a fantastic job. I want to thank those people. Can I take this opportunity to thank the many families of Tāmaki-makau-rau and across Aotearoa who have given their love, money, and resources to assist Te Puea Marae with providing this essential service.

Can I also make commendable mention to Flick Electric, which has provided free electricity to Te Puea Marae, which is giving this service. Can I also acknowledge Mitre 10 for giving chest freezers to Te Puea Marae to allow it to freeze meat, because Te Puea Marae is not just about servicing the homeless people who come into the warmth of Te Puea Marae; it is actually serious about placing them into affordable housing, giving them a platform to reach the aspirations that every whānau in New Zealand has—aspirations that this Government has forgotten about. Te Puea Marae is doing a fantastic job, and I want to acknowledge it: Huri, the chairman; the whānau at Te Puea Marae; and the hundreds of volunteers who have made their way to Te Puea Marae over the past week to serve the people of Aotearoa New Zealand.

What this speaks to is, actually, this country does care. Although the speaker who has just finished his contribution, Simon O’Connor, might only make a very small mention in this House of homelessness, actually the people of New Zealand do care about other whānau. They care about families, they care about tamariki, and they care about mokopuna. Why? Because, in particular with our tamariki and our mokopuna, they are our future. So what we would have loved to see in this Budget is something that would allow those people—the most vulnerable in our society; those who are going into the warmth of Te Puea Marae today, tonight, and tomorrow—to have a platform to reach the lofty aspirations that they currently hold for themselves, for their children, and for their grandchildren.

Sadly, we did not see that in this Budget, and members on this side of the House have pointed to the many holes in this particular Budget. They have pointed out how it fails to meet the needs of our country at this point in time, but what is worse is that it also fails to provide some sort of a plan for the future, because this Government is simply living day by day.

Meka Whaitiri: Short term.

PEENI HENARE: Short-term thinking—policies made on the fly—despite those members waxing lyrical about having “a suite of measures” and “a suite of policies”. Well, in Tāmaki-makau-rau, housing is a serious issue, but we have not seen one coherent plan for that. We see them kicking people out of Tāmaki-makau-rau—in fact, giving them money to leave.

Pita Paraone: Take the problem somewhere else.

PEENI HENARE: “Go somewhere else. Take your problems elsewhere. We do not want to see it.” That is what is lacking in this Budget—aspiration. I can tell you that we on this side of the House are disappointed because although the Government may try to fudge many of the numbers, the reality is this: education spending is not there; health spending is, in fact, going backwards. And I can say this: in speaking with the many constituents of Tāmaki makau-rau and across Aotearoa New Zealand, Māori aspiration seems to be at the lowest level I have seen in many, many years.

I want to speak briefly about Te Reo Māori. I love Te Reo Māori—I have said it many times in this House. I get excited about Te Reo Māori, and I fail to see how, by fudging the numbers, you can say that there is going to be over $30 million poured into Te Reo Māori. Let us be honest here—

Pita Paraone: Peter had to pay Paul.

PEENI HENARE: That is right. We are robbing Peter to pay Paul. Let us be serious here. The money going to Māori Television is not for the aspirations of Te Reo Māori; it is simply capital expenditure. It is bringing Māori Television up to a level playing field.

Pita Paraone: Guilt money.

PEENI HENARE: That is exactly what it is—guilt money. It is bringing Māori Television up to a level playing field that has no aspiration for Te Reo Māori. Where is the coherent plan in the recent Māori language legislation that passed through this House? The questions are still there.

I also want to mention Te Ture Whenua Māori. This Budget actually set money aside for a bill that has not even been passed through this House—a bill for which submissions have not even been heard from the people and the stakeholders of that particular bill. So what does this tell us? It is a fait accompli. It tells us that processes made by that side of the House actually do not work for our people.

Pita Paraone: And two votes are very important.

PEENI HENARE: Oh, wow, we will talk about that very shortly. But what message does this send to our people? It sends this message: those members opposite do not care about the people, they do not want to engage with them on a level playing field, they do not care what the people have to say, and they do not care that the legislation made in this House is going to affect the people and their landholdings. They are simply going to bulldoze their way to economic prosperity without the people, and that is the key.

In closing, I say this to the people sleeping in cars, garages, and carports across Tāmaki-makau-rau and Aotearoa New Zealand: Labour cares. We care about them. We have a coherent plan. We want to do the best by them to make sure—as I have already mentioned—their aspirations are met. To my generation, to the people who are looking to buy their first home, to the people of my generation who want to have a warm, dry, safe home to raise their children in and to give them the best educational opportunities that this world has to offer, I say, on this side of the House, we have a plan. We want to see you in a warm, dry home for your children and for your grandchildren.

I say to the people who are struggling with health issues, we are listening. Labour and the parties on this side of the House are listening to you. We hear your cries. We understand the pain that you are going through because this Government is not listening. We are here for you.

I say to the parents who have aspirations for their children and for the future of New Zealand that if they are serious about the future of New Zealand, they will take a good, hard look at this Government and the Budget that was presented to them last week, and say “We don’t want it.”, and say to this Government: “This isn’t taking New Zealand seriously. It is not providing a platform for aspirations for the future of our country.”

In closing, I want to just return to the mantra of Te Puea Hērangi: Ka mahi ahau, ka īnoi ahau, ka moe ahau, ka mahi anō.

[I work, pray, sleep, and resume working once again.]

And I say to all of the whānau out there, kia kaha tātou.

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

BARBARA KURIGER (National—Taranaki - King Country): This Government does have a plan for the future. This National Government is very aspirational. If you on the other side of the House talk about the National Government not caring about the vulnerable people, I want you to look into some parts of this Budget that you have not actually set your eyes on yet—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

BARBARA KURIGER: —because what this National Government is about is giving people the courage and the confidence to be accountable for themselves.

We look at education. We are hearing all these questions about where the money for education is. Well, I can see two fantastic pots of money for education: $43 million for our most at-risk, vulnerable children, and $42 million for the children who have special needs. Every day in my electorate, when I am out talking to schools and visiting schools—and, I must say, in my electorate I have 80-something schools; somewhere around 85, and I am making an effort to get around them all—teachers say to me that, yes, it is really easy to measure the academics of those children who are doing really well, but the ones they are struggling with are the ones who have either special needs or some vulnerability, and they are most at risk of not achieving. It is really important for me that, in this Budget, this National Government has recognised that this is an issue and that these are the children we need to focus on, so that they can learn to build their courage and confidence and so that they can be aspirational. We see some fantastic teachers out there doing some wonderful things with these children, and this is about giving them a boost.

Secondly, as I am out and about up and down the electorate, I hear a lot from people who have jobs in our provincial areas. They have jobs in our regions and they are very keen to have young people turn up with skills and education. So on top of the courage- and the confidence-building, there has also been $257 million going into tertiary education, particularly around agriculture and around engineering—around the things that people in our communities are asking for. No one can ever let me say that there are no jobs in the regions, because there absolutely are. I see that every day. But what those employers are wanting are not only skills, which we are actually providing, but also the courage and the confidence for people to know that they can turn up to work every day and be confident, aspirational young New Zealanders who want to carry out the jobs that are available to them.

Next I want to mention health, because we seem to get this feedback all the time that there is no money going into health. There certainly is money going into health, and I really want to make mention of the $124 million that is going into providing dollars over the next 4 years for Pharmac to look at some of the new medicines. Being on the Health Committee, I am aware of the fact that medicines are changing. Things are happening with biological drugs, particularly around Opdivo, which is now being looked at for melanoma. We are starting to find options that we have never ever had before. We are starting to find answers to some of our health needs. It is really important that Pharmac is given the opportunity to explore those with some of the new biological drugs that are coming on the market. We have also heard a lot today around bowel screening, for which there is $39 million. That has been well received all up and down the country.

I also want to make mention of mental health—the extra $12 million that has gone in mental health. We have seen a lot of funding go into mental health. I have actually been extremely aware of that in my own rural New Zealand, as we support some of our farmers through the process that they are going through at the moment. Times are tough for them, but communities are really supporting each other.

Health, education, tertiary education—people standing up for themselves—come on top of the regional roading packages that we are getting. I just want to say, also, that the regional tourism in my area of Waitomo—for the Timber Trail, Pureora, there is $1.2 million for 80 beds. What is that going to do? It is going to bring more tourism and provide more jobs to those people. So we are aspirational. This National Government has a vision, and it is an aspirational vision for our people. I am really proud to be supporting the Hon Bill English, our Minister of Finance, in the presentation of his Budget. Thank you.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Todd Muller—5 minutes.

TODD MULLER (National—Bay of Plenty): It is great to be able to stand and support the motion moved by the Minister of Finance. Indeed, I think he will go down in history as one of the best Ministers of Finance that we have had, and this Budget talks to what he has achieved for this country.

As the MP for the Bay of Plenty, every now and again I do a survey of my electorate. I did one a month ago, and I asked people to give me feedback in terms of the direction of travel of the Bay of Plenty electorate. Seventy-five percent said they expected their economic conditions to be the same or improve over the next year. The same number, 74.5 percent, said that the Bay of Plenty economy is going well or extremely well, and this talks to the success of this Government and its policies and how it is playing out in my electorate. I did ask for feedback on the areas that they thought this Government should continue to work on, on their behalf. They gave me very clear feedback that we should be focused on roading, housing, health, employment, and education.

I went to two public meetings yesterday to discuss those five issues and others that were of concern. I could share the success of this Budget in terms of addressing those five areas. In roading I could talk to the total over the last few years and the planned over $1 billion of roading investment in the Bay of Plenty, including the $512 million recently announced for the Tauranga Northern Link, which I know is a critical piece of infrastructure for the Bay of Plenty economy. For housing—clearly that was an issue that they had raised in the survey—I could talk to the 3,000 emergency places that have been promised: 60 for 3 months, times four—that is 240 a year. In Tauranga, that is an immediate impact for those who are struggling. So those on the other side of the House—those who are part of the alliance of Green and Labour, who say that this Budget is doing nothing—are wrong. There is a clear demonstration there of our commitment to assist those who need more support in respect of housing.

The national policy statement will direct councils to allow more housing development, and the Bay of Plenty is already a test case in terms of being ahead of the game in terms of your strategic approach, and the Bay of Plenty Regional Council, the Western Bay of Plenty District Council, and the Tauranga City Council for the last 15 years have worked at identifying where the settlement patterns were likely to be and where the aligned industry needed to be based. That is why we have an economy that is pumping well, and that is why you can see that sort of approach being rolled out in Auckland.

Health was the third issue that my electorate said they were interested in. In terms of our ongoing focus on health, I can report $2.2 billion of additional spending over the next 4 years—$1.6 billion for district health board activity in particular. There was significant positive feedback on the $39 million to support the national bowel screening programme, particularly from my constituent Brett Morrison. He has been a hugely strong and staunch advocate for this programme, particularly since his wife passed away due to that dreadful disease.

In respect of employment, the fourth issue on the list, I could talk, of course, to an economy in the Bay of Plenty that is doing particularly well. We have 5.1 percent unemployment. It is the lowest in the North Island. So there was significant resonance in the public meeting when I talked about our forecast of 175,000 more jobs over the next 4 years on the back of an achievement, a collective achievement, with the people of New Zealand of 200,000 jobs over the last 4 years. So it certainly resonated with my community.

In respect of education, I could talk to the significant investment in schools and new buildings, and I have significant confidence that the Bay of Plenty will benefit both in schools and classrooms from that investment. Social services is an area that, I think, will be part of the reason why Bill English will be seen as being a great Minister of Finance in times to come. The thinking that has gone on to underpin our investment in social services has not just been the historical view that you achieve success electorally by just spending money. This is a Government that is focused on outcomes and does some deep thinking, in partnership with the sector, about how to fix complex issues that have structures that historically have not worked. Between us ourselves and NGOs, I believe we are going to make a significant difference to those who are most vulnerable.

I strongly support this Budget. It contrasts with the rhetoric that we have heard on the other side, which is becoming stronger by the day. Their vision of the future is—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! The member’s time has expired. The next call is a split call. Tracey Martin—5 minutes.

TRACEY MARTIN (NZ First): Kia ora, Mr Assistant Speaker. Just with regard to the contribution by the gentleman who has just resumed his seat, Todd Muller, the people of the Bay of Plenty—along, of course, with the rest of New Zealand—should actually drill down into some of the statements made by the National Government members this evening. If they have a look at educational investment, what they will see are things like nine new schools being promised, seven of them being charter schools. If I could just remind the public of New Zealand, that means that taxpayers’ dollars are being handed over to private individuals to create private schools funded with those dollars, with which they can actually keep all the assets. It would be interesting to know where in this Budget, if anywhere, the Whangaruru school return is, or how much of the money is being spent right now in the courts, with lawyers and so on trying to gain back for the New Zealand public the asset that was handed over by this Government to a private sponsor trust up in the far north.

But, actually, what I want to draw attention to is something that is not in this Budget. In February this year I spoke when the Prime Minister was in the House, and I mentioned to the Prime Minister that I would be looking at the 4-year projections that are in this Budget. I said that I would be looking specifically for the promise that this Government made in June 2015 to 10,000 orphans and unsupported children in this country, when it voted in this House for the Social Security (Clothing Allowances for Orphans and Unsupported Children) Amendment Bill, which was unanimously passed. It is not in this Budget. When I raised it in February of this year the Prime Minister, sitting in his seat on the other side of the House, shouted out: “It’ll be there. We’ll keep our word.” It is not in this Budget.

There is a $7 million increase in this Budget for orphans and unsupported children, which goes nowhere near the $16 million that was promised by that legislation and has to be delivered in the 2018-19 year. Please, let us not have the members of the Government get up and tell me that they do not put those sorts of numbers in. Of course they do. If they are going to announce surpluses and tax cuts in the 2017 year, it is madness not to have already written in a $16 million budgetary item that this Government agreed to and promised would be there for 10,000 orphans.

There are 10,000 orphans and unsupported children. The Government recognises they are going to increase in number, because on page 132 of the Budget document on social development and the housing sector the Government has put aside a net additional $7 million for orphans and unsupported children because there is an expected increase in the number of recipients. The only recipients can be more orphans and more unsupported children who are being taken from their families and placed with kin carers. That means more orphans and more unsupported children who will not gain the clothing allowance, whose grandparents—who, we know, predominantly live on below $30,000 a year, because they are on the pension—will not receive this support merely because they have a blood relationship to a child who has lost both parents or because they have a blood relationship to a child who has nobody else to support it, and Child, Youth and Family has come and knocked on the door and asked these kin carers to take these children.

I ask the Government: where is your promise? Where is it in this Budget? Where is your honour with regard to the promise not kept in this Budget? What will happen to these children? What will happen to these grandparents? These are the questions I ask. I hope that some member—and I take my full call on this because it is not a sideshow. It is incredibly important to a large number of New Zealanders out there. I ask any member of that Government to stand and say whether I am wrong—to tell me I am wrong. Point to anywhere in this Budget where that clothing allowance has been met and that promise had been made and that promise has been kept. I will guarantee you that not a single one of them will stand and be able to say that.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Pita Paraone—5 minutes.

PITA PARAONE (NZ First): Tēnā koe, Mr Assistant Speaker. I am glad I have got this opportunity to speak in this debate, knowing that the people of Auckland are locked in the gridlocks of the motorways in and around that big city, trying to get home, and listening to this debate.

Although members on the other side from the Government benches have waxed lyrical on how good this Budget has been for this country, can I say that it fails to respond to the real issues. Poverty, homelessness, unemployment, health, and education are all issues that this Budget has failed to address. It is often said that as the economic path of a country rises, so does the level of social injustice, and that is what we are seeing because this Budget is for only a few. It has often been said that this Government has helped only its friends, and the social injustices that we are seeing in this country today is evidence of that. Breaking news—at this very moment there is a 15-day-old, prematurely born baby living at Te Puea Marae, and that is a very, very sad indictment of this Government.

Although those members wax lyrical on what they have done under this Budget, can I say that they have an obligation to do that. For goodness’ sake—they are the Government—they are required to provide resources to meet the social injustices that this country is currently facing.

When the Budget was announced last week, we heard the Minister for Māori Development taking the opportunity to extol just how good he was, knowing that the previous year he took a humble approach. Well, can I say to the Minister that under his watch, unemployment for Māori has risen, homelessness rates have risen for Māori, and, similarly, for trends in health and in terms of education. The social indices show that it has not worked for Māori in terms of this Government, and I think it is a sad indictment for us to be extolling just how good our Budget for 2016 has been.

I have heard the comment about the Māori language. I too support the Māori language, but $34 million? And it is being given to a department to administer, when over the last 5 years it has underspent the budget that it has been given over that period. Thirty-four million dollars could house a lot of people. It can provide a lot of employment.

We have heard the Government say that people are coming back from Australia because the economy here is good. Can I say that they are coming back because Australia does not provide them with the same social services that we provide for its citizens who decide to relocate here. So the Anzac spirit is somewhat lost, and what has the Government done for our relatives who live on that side of the Ditch, so to speak? Nothing. And they are coming back to, what? Something similar.

Can I say that although this Government might say that it has an aspirational approach to improving the lot of people in our country, I say to those members that they have an obligation to do so.

I just want to conclude by saying that with regard to the partial funding for housing, the Westpac reports suggest that 11,000 new homes are required over the next 10 years. This Budget has provided only 11,000. So can I suggest to those people who are listening that this Government has not provided too much under this 2016 Budget. Kia ora.

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

GARETH HUGHES (Green): Kia ora, Mr Assistant Speaker. Ngā mihi nui ki a koutou. Kia ora. I remember my first Budget day in this place. It was about 6 years ago, and I was staggered as the parliamentary messengers rolled in boxes and boxes of official Budget documentation. It probably sat in the corner of the office for about a year. A few years later they turned up and—I guess they were a bit more innovative—they brought in memory sticks for all the Budget documents, and in 2016 all the documents were finally delivered to us online. So I guess Parliament has probably saved a small forest of trees, which is good, but the question I would like to ask in this contribution in the Budget debate is: does the Budget see the forest for the trees? Even though we have got this huge deluge of information and screeds and screeds of papers and forecasts and reports and models, it still treats people, communities, and the environment as if they do not count.

The problem is that the Budget and our complex economy is simplified into a few narrow measures like operating surplus, much like how our national success is measured primarily through GDP. It is kind of like a doctor measuring the health of their patient simply by looking at the contents of their wallet. This Budget measures gross domestic product, but it ignores quality of life. The Budget forecasts a carbon price, but it ignores the price of carbon pollution. The health budget focuses more on sickness than on actual wellness or health. National’s Budget is full of numbers, but you cannot measure the cost of the Government’s decisions. John Key is liberal when it comes to funding flags, but conservative when it comes to funding conservation, and, tragically, a species like the Māui’s dolphin gets given zero cost when it comes to accounting in the Budget. It counts the number of people in work, but ignores the quality of the work and the personal satisfaction of the workers, or their precarious insecurity.

It is a world that simply exists only on paper. It ignores the real world, where a child in Whangarei is unable to get the special support they need to do well in school, a family in Canterbury avoids swimming in their favourite river because they are scared of their kids getting sick if they put their heads under water, or a mother in South Auckland tucks her kids into bed at night in the back of a car. The Budget is the headline act of the year’s political theatre, and it is a classic case of reporting the cost of everything but knowing the value of nothing.

I agree with the pundits that it was a boring Budget. It was a political Budget to set up tax cuts for next year; it was a short-term Budget that advocates responsibility to future generations of political leaders; and I would agree that it was obscene that this Government spent an extra half a billion dollars on the military and the spies, and not a single State house is going to get built as a result. It was farcical that this was pitched as an innovation Budget when we see real-term cuts to tertiary education, and it is idiotic to be spending money on cleaning up polluted waterways at the same time as you are spending more money subsidising to pollute them.

There is an alternative, though—one that treats people, communities, and the environment as if they counted. The Green Party has been leading the charge for decades on genuine progress indicators; measuring the whole, not just a few narrow subsets—measuring what is important. The example I like to give is that once upon a time, this was one of the richest countries in the world. We had full employment, free education, and a caring State. We did not leave people begging on the streets or sleeping in cars. Now Kiwis work some of the longest hours for some of the lowest wages and pay some of the highest costs of living in the developed world. We see a whole generation locked out of homeownership, but these failures are ignored as long as GDP goes up by a few percent.

They say that you cannot manage what you do not measure, and until we start to measure the things that are important, like the quality of life, like communities, and like swimmable rivers, we are going to continue to encourage smoke-and-mirrors Budgets—moving money around to achieve a few narrow objectives.

A Green Budget would be a Budget for all. I have a vision that we can care about having a richer New Zealand, not just a wealthier 1 percent, and today, in the hall next door, we saw the beginnings of it. We saw history in the making and a new Government in the making when Andrew Little, Annette King, Metiria Turei, and James Shaw agreed to commit to working together to change the Government. Next year we can see a new Government govern in the national interest, not just in the National Party’s interest. There is a new Government-in-waiting, ready to deliver good jobs, share the economic gains with everyone and not just National’s corporate mates, and invest in people and education—a Government with values, not prepared for kids to go hungry at school or for families to sleep in garages. With New Zealanders’ support, National’s eighth Budget could well be its last.

The ASSISTANT SPEAKER (Lindsay Tisch): I call—[Interruption] No, you must stand and go for the call, and do not worry about anybody else. This is a split call. Marama Davidson—5 minutes.

MARAMA DAVIDSON (Green): Tēnā koutou katoa e Te Whare. Te Puea Marae in Māngere is working hard to house families who are without a home. My colleague from Labour Peeni Henare and I were privileged to be part of the Te Puea community in the weekend just gone, so that we could listen and see firsthand exactly the compassion and the systemic and vital work that Mangere is doing to house people. Te Puea Marae is responding to the absolute mess and crisis that is a result of the National Government failing to ensure that every whānau has a warm, dry, safe, and affordable home to live in. Te Puea Marae is leading and showing up the Government for its lack and its neglect of caring for our people.

While we were at Te Puea Marae I listened to the stories of the donations and of the people who have opened their hearts to drop off goods, and this is what I want to talk about in this Budget speech—what this Budget neglected to include. People know that it is wrong that our families are living in anything other than a safe, affordable home; not cramming into the homes of other friends, not living in garages, not living in cars, nor simply living in a home that is not secure because they have been asked to find somewhere else, because the market is privileging using houses as a business instead of a home. I would have liked to see the Budget prioritise the fact that houses are supposed to be for homes, not for a business.

That is the real political leadership in our Budget that this country needs right now and, certainly, needs going forward, because this mess has not happened overnight. This mess is a result of all of the previous seven failed Budgets. Wages and benefits have not kept up with the cost of living. This is why people are living elsewhere than in a good home, because the rents are too high and the wages are too low. This is not rocket science; this is just pure, basic, good economics and basic math. This mess has happened because of an aggressive drive to cut and remove people’s benefits without actually having a good place or job or employment for these people to move to. Again, people and organisations including Te Puea Marae are responding to a crisis and a failure of the National Government, and this Budget highlighted even more that the National Government’s Budget does not prioritise caring for our families and communities.

Real leadership would actually invest in the building of more State homes, but also have a programme for affordable homes for first-home buyers. So many people are going to be locked out of owning a home, but, already, people are locked out of even renting a home. Real leadership would be to also actually go and see for yourself exactly what is happening. As I am a resident of South Auckland, I have been to Bruce Pulman Park in Papakura, I have been to Te Puea Marae, and I have been to the parks in Māngere where people are parking up in their cars at night.

These are the things that should have been taken into account when planning our Budget, so that we have a capital gains tax, apart from the family home; so that we input measures to ensure that it is not more attractive to have a house for a business than it is to actually be able to live in one with your people and raise your family. Those are the sorts of investments that should have been essential and prioritised in the Budget. What else is a Government for if it is not prioritising our most vulnerable, because that will—and already has—come back to bite us all, anyway. Any good planning should take that into account. Again, and to finish off, in failing the most vulnerable in this Budget and the Budgets previously, the National Government has failed all of us.

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

ANDREW BAYLY (National—Hunua): What great times we live in. This is a very good Budget, but it is an absolute travesty that few people actually recognise the situation that New Zealand is in at the moment, and it is despicable how some people misrepresent the situation that we are in at the moment. Most finance Ministers around the world would give their eye teeth to be in the situation that New Zealand is in at the moment—their absolute eye teeth.

We have got an average growth rate of about 2.8 percent over the next 3 years forecast by Treasury. We have created 200,000 new jobs over the last 3 years and another 170,000 are expected to come to fruition over the next few years until 2020. We have rising surpluses—we are going to achieve a massive $6.7 billion surplus in a few years’ time—which I know most Opposition parties are dying to spend. We are reducing debt back to 20 percent by 2021, which, of course, puts us in a situation where we can deal with any downturns that may happen in the future—it is prudent. And we are going to see increasing wages, as we have already seen over the past few years.

This Budget is massive in the context of today: $1.4 million in increased capital spending and an increase of $1.6 billion of operational spend. It is a big Budget. It is a big Budget directed at the right areas, and it also means that the Government is focusing on delivering better public services and getting our public spending under control. Even with that bogeyman around the current account deficit, the projections look like it is well within reasonable levels, which is where we should be as a country.

But all that I hear from the Opposition is squealing—squealing. What I do not hear from the Opposition is the connection between the fact that if you have good, strong economic times, you have the ability to raise money and to spend money; and that you cannot spend what you do not have—unless you are an Opposition party. We are in Government. We can only spend what we have, and we have got to be prudent about it. This Budget follows last year’s Budget, where we invested $790 million on the vulnerable people that the previous speaker Marama Davidson was talking about. But when I look across the other side of these benches everyone seems to have a very short-term memory.

Let us look at the highlights. The first one, I think—and this is one that got very little media coverage, and I do not know why—is the $761 million that we are putting into creating an even more innovative New Zealand economy. We are putting $411 million into science and innovation, where this Minister just arriving—the Minister of Science of Innovation—is doing a fantastic job in helping us to get to our target of $1.6 billion invested in science by 2020.

There is also $257 million we are putting into tertiary education and, in my view, just as importantly, the apprenticeship schemes. Most New Zealanders do not realise the level of apprenticeship schemes in New Zealand. We are already putting through 42,000 apprenticeships every year, and this is going to increase it to just fewer than 50,000. Then, of course, there is the regional development that all my colleagues, if I look around, not only on this side of the House but on the other side of the House, are going to benefit from.

Then we have got the big investment in education: the $884 million that is going to go—most of it—into building new schools right across the country. There is the $42 million into helping children with higher needs—of course, everyone believes that we should be doing that, and here we have got a Budget that has allocated money to that. And the nearly $400 million package into early childhood education is getting us towards that target of 98 percent—we are just about there now, but we are forecasting and meeting the future needs of increasing numbers of students coming through.

For health, there is that staggering package of $2.2 billion.

In the areas that I think are really relevant, like the environment, I have just heard the previous speaker say that we are not doing enough. Well, I think that we are. I think the emissions trading scheme (ETS) change—removing the one-for-two subsidy on the ETS—is a very prudent, practical measure in today’s economy. We also have the $100 million investment in cleaning up waterways, the $21 million for targeted pest control, and the $16 million for plant species eradication.

I think this is a very prudent and sound Budget.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Chris Bishop—5 minutes.

CHRIS BISHOP (National): Marama Davidson is a new member of Parliament, but she really needs to do her research or sack her research unit, because some of the stuff that we have just heard from Ms Davidson beggars belief. What did she say? She said that wages have not kept up with the cost of living—wrong. Wages over the last 7 or 8 years are up 27 percent, compared with inflation of around 10 percent. It may have escaped her notice that we are in, essentially, a zero inflation environment, and that wages are increasing year on year. She is wrong.

What else did she say? “This is a Government that has cut benefits.” She literally said that. Well, I do not know whether she was here for Budget 2015, when we became the first Government in 43 years to raise benefit levels. What else did she say? She said that this is a Government that is failing the most vulnerable. Again, look at what we are doing in the reform of Child, Youth and Family—the hard work that Anne Tolley is doing in the reform of that dysfunctional organisation, which is funded in this Budget. Look at the enormous moves that we are making in terms of social investment, funding programmes that actually get results—not measuring things by how much money we chuck out to the agencies, but by whether or not they actually make a difference. So, none of those things she said are accurate.

It has been an interesting day in politics, with the political marriage between the Greens and the Labour Party. Clearly, James Shaw has lost the battle inside the Green Party for the strategic direction of the Greens. Clearly, James has lost, Metiria Turei has won, and they are rowing their boat and tying it to the Labour Party. James Shaw has lost—elected by the leadership but, essentially, no longer the leader. Metiria has won and has taken over. What have we got to look forward to—Steffan Browning as “Minister of Homeopathy” and Steffan Browning as “Minister of Growing Things in an Orchard in His Parliamentary Office” in a Labour-Greens Government?

But the real question that is before the House is whether it will last. Will this political marriage last? Literally three questions into the press conference, Andrew Little was asked: “Will this last?”. He said: “Oh, well, we are not going to be monogamous.” So this is a marriage in which one party is literally signing up to the marriage and saying: “Oh, but, just by the way, I may actually be an adulterer down the line. I actually cannot commit to you, even though I am throwing in my lot with you, and even though I am moving in with the extreme left—moving into a house and getting married”. They are actually saying that they might be an adulterer with the chap down the road—you know, the charismatic guy down the road with the twinkly eyes who has got a good way with words, sometimes, when he bothers to properly prepare? So it has been an interesting day in politics.

But this is a great Budget from a Government that knows what it is doing and knows where New Zealand is heading, and that is, heading in the right direction. It is also a particularly good Budget for the Hutt Valley. Firstly, this is because we are going to be one of the first regions that will roll out the National Bowel Cancer Screening Programme. I can say that that has been extremely well received in the Hutt Valley. More important, perhaps, is the big boost that this Budget gives to Technology Valley. Technology Valley is all about the Hutt Valley being the home for science, technology, engineering, and manufacturing, all of which are going to benefit from this $761 million boost—the Innovative New Zealand package—that Minister Steven Joyce has put together.

I have got to say that it has been very regrettable to see members opposite, particularly one member opposite, criticise this package and talk about political flunkies handing out the money and how that is not going to be good. These are funds that are administered independently. The Marsden Fund, which receives a 49 percent increase in this Budget, is administered by the Marsden Council. The Marsden Fund funds Jane Kelsey, so I do not think it is fair to say that the Marsden Fund is administered by political flunkies. She is writing a book—or writing a project, anyway; it will probably become a book—about the transcendental nature of neo-liberalism in the modern world. I venture to suggest that if the funding was actually, literally, approved by political flunkies, the National Government would not fund that project. It just gives lie to the claim that political flunkies do this.

There is the Endeavour Fund and the Strategic Science Investment Fund. The Government is increasing funding in this Budget for Crown research institutes, including for great Hutt Valley institutions like GNS Science, with the funding that used to be regarded as core funding. It is very important. It is not administered by political flunkies. We have struggled for years as a country to invest in science and invest in our research and development capability, and, more important, to commercialise the scientific research coming out of our great institutions. This is a Government that has finally done something about it, by increasing funding in science to $1.6 billion and by actually putting money into the projects that commercialise some of the scientific research that comes out, as well as increasing all the funding that goes into research and development. It is increasing business investment and leading us up the Global Innovation Index. This is a good Budget for the Hutt Valley.

Hon STEVEN JOYCE (Minister for Economic Development): I move, That this debate be now adjourned.

Motion agreed to.

Residential Tenancies Amendment Bill

Third Reading

Hon Dr NICK SMITH (Minister for Building and Housing): I move, That the Residential Tenancies Amendment Bill be now read a third time. This is a significant bill that will make for warmer, safer, and drier homes for tens of thousands of New Zealand families.

Let me emphasise the four key changes that are made in this bill. Firstly, from 1 July this bill will require smoke alarms in every one of our approximately 500,000 residential properties. That is a measure that is expected to save between three and four lives per year. The regulations that back it up require that all new smoke alarms that are being installed are the new 10-year long-life alarms. It is expected that there are approximately 120,000 homes that do not comply and for which we need to have an effective information campaign over coming weeks to ensure that they comply before the coldest period of winter. It is a good, practical measure that I hope every member of this House would support. I point out in the cost-benefit analysis that it is a no-brainer; it is going to be one of the least expensive ways in which we can make homes in New Zealand safer.

The second measure in this bill covers the issue of home insulation. It builds on the work of this Government where, in the very first Budget, we said that we need to get our State houses insulated. We got on with the programme of getting 30,000 State houses—every one that could be—insulated. We then set out with an ambitious programme of over $400 million being spent on providing generous healthy-home grants to get 290,000 homes insulated. What this bill does is it requires every rental property to be insulated by 1 July 2019, and it requires that the insulation of social houses, for which we pay a very high Government subsidy, must be done by 1 July this year. That is a further 180,000 homes. Put that alongside those other two measures and we are talking about over half a million homes that this John Key Government is going to ensure are insulated.

When I hear the feeble arguments from members opposite that this is not enough, or it is too slow, I remind them that in their 9 years in Government they did fewer than 50,000. That is, this Government is insulating 10 times as many homes as the previous Government, and those opposite have got the audacity to somehow say that these measures are not adequate. According to my officials, when fully implemented these measures are going to save 129 lives per year, on top of those saved by smoke alarms. So over the next 10 years this bill is expected to save the lives of 1,000 fellow New Zealanders, and it is a measure on behalf of this Government that I am incredibly proud to sponsor through the Parliament.

There is a third measure in this bill. Every member of this House is aware of the pressure that is on our housing stock. One of the frustrations is the issue of abandoned tenancies. What this bill provides for is a fast-track process for dealing with tenancies where the tenant has abandoned the property. Why is that a good thing? Well, actually, everybody is losing from abandoned tenancy homes sitting empty. The landlord is losing because they are not getting rent; the community is losing because those homes are sitting empty when others are desperate to get in there. The measures in this bill are part of a wider street—lots of things—that we are doing in housing, and this is just one of those common-sense, sensible provisions that get those houses that are abandoned by tenants back into the rental market as quickly as possible.

In my view, the fourth provision in this bill is equally important and is the sort of sensible legislation that this Government is advancing. I know that every member of this House will be concerned about some of the slum landlords—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable Minister. 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.

Hon Dr NICK SMITH: It is good to come back to the House to speak on this bill that is going to save 1,000 Kiwi lives over the next decade with the measures to require smoke alarms; insulation, which will greater enable the enforcement of our existing residential regulations; and the provisions that will enable abandoned properties to be able to be returned into the rental market more quickly. They are all good practical measures that this National Government is implementing in this important area.

I want to take a moment to rebut three of the Opposition concerns on this bill. The first is that they claim the insulation requirements are not tough enough. The bill and the associated regulations require all new insulation work to be done to the 2008 standard. It requires that any older insulation be in fit and proper working condition. It also requires that landlords must, from 1 July, include in their tenancy agreements a statement of the standard of insulation under the floor, in the walls, and in the ceiling. Members opposite have argued that this bill should be extended beyond the 180,000 homes that are uninsulated and include those homes that have got insulation either under the 1978 standard or the 2001 standard.

Phil Twyford: How many of them, Nick? How many?

Hon Dr NICK SMITH: Some hundreds of thousands. The problem is that the 1978 standard gets an 83 percent reduction in heat loss. The 2001 standard gets that up to 87 percent. The bit that Labour members miss is that every cost that we impose on the housing rental sector gets passed on in rents. We need to be careful that we do not impose more costs than there are benefits.

I challenge members opposite: why, when it comes to catalytic converters in our cars, do we put a new standard on existing but do not require every one of these members opposite—who I will swear will not have cars that meet today’s standards—to go back and retrofit? Why, when it comes to earthquake standards, do we have a view that says: “No, we are not going to require older buildings to meet today’s standards.”? If you follow the rhetoric of members opposite, they say that cost can have no part in the equation—that you just have to meet today’s standards. Well, they should tell that to owners of earthquake-prone buildings, because they would bankrupt the country. They should tell that to people who have got older log fires. In our view, it simply does not stack up that these are free goods and that the costs that we would impose on lower-income tenants would be more than the few percentage gains that we have.

Here is a further point: this bill is going to require 180,000 homes to be insulated over the next 3 years—that is 60,000 per year. Members opposite say that is too slow. Hang on a moment, these are the guys who did 50,000 homes over 9 years. They did 50,000 over 9 years, and they say that 60,000 per year is not enough. They cannot be taken seriously.

The second criticism that members opposite have had is that they are saying this bill should tackle issues of ventilation, of heating, of sanitary plumbing, of things like safe wiring, and of dampness. All those issues are covered in the current housing regulations. The issue is enforcement, and the enforcement provisions of this bill will make sure that we are able to deal with those slum landlords to ensure that they meet the standards that are already there. There are only two areas of Labour’s bills on this topic that differ from the Government’s, and that is with regard to temperature and that is with regard to the issue of having to have notices on their glass windows to ensure that they are safe. We think that is over the top. We think that is into nanny State. Yes, people may wish to put those in place. It should not be illegal to have a property.

The last point I make is that I turned the radio on this morning and Mr Little said: “Every bill that Nick Smith has introduced is rubbish.” On that basis, I challenge members opposite to vote against this bill. They will not, because they know that this is a good bill. They know this is a bill that will save lives. They know this is a bill that will make our homes safer, warmer, and drier. They know that this is the right sort of practical approach that typifies this Government: of getting on in an economically rational way, reducing incidences of diseases like rheumatic fever that we are successfully achieving, and achieving more with insulated homes than any Government in the history of this country. That is why it is a good bill that, despite all of Labour’s rhetoric, it will support and get through this Parliament, because it will make for a better country with warmer, safer, and drier homes.

PHIL TWYFORD (Labour—Te Atatū): I want to start with the positive aspects of this bill because I always like to be positive when I talk about Nick Smith’s tenure as the Minister for Building and Housing. Let us look at the good things about this bill. The first thing, I think, that has to be said and acknowledged is that smoke alarms will be in place in 500,000 rental properties as a result of this bill. That is a good thing, and I will not argue with that at all.

This bill does contain some insulation standards, and I will talk some more about those standards in the course of this contribution, but it is a good thing that there are insulation standards in this bill. The bill establishes the machinery for requiring monitoring and compliance activities for the quality of housing. The role of the Tenancy Tribunal, the requirement for the landlord to sign a statement that certifies that the property meets the required standards, and all of those things are useful. In fact they will be helpful when Andrew Little’s Healthy Homes Guarantee Bill (No 2) is passed and we need that machinery there to implement decent standards. That is why Labour members are voting for this bill. It is something—it is at least something—but it is just not enough.

The second thing I want to say is that this issue of healthy homes is so important. Otago University’s most recent calculation is that New Zealand is hospitalising 50,000 children every year primarily because of cold, damp, and mouldy homes, and the toxic cocktail of poverty and overcrowding in poor quality homes. An estimated 15 children a year are dying needless deaths because of the poor quality of New Zealand housing.

Generations of young New Zealanders have their lungs permanently scarred from bronchiectasis. We have some of the most shockingly high rates of rheumatic fever of any developed country, and that is because of poverty and poor-quality housing. We often talk about these issues in relation to the kids, and that is right. We should be ashamed of the way that we are blighting the life chances of young New Zealanders because of poor-quality homes. But we should think about the old people as well. We should think about the thousands and thousands of older New Zealanders all around the country, particularly in places like the central North Island and in the colder parts of the South Island, where people stay in their pyjamas or in bed all day because they cannot afford to heat their homes in winter. It is a depressing, soul destroying thing, and New Zealanders should not have to live in those conditions.

This bill will be particularly important for children who are growing up in rental properties. It needs to be said that 70 percent of children who are living below the poverty line live in rentals, both public and private. Fifty-three percent of children who are living in poverty live in private rentals. Those are the kids who will benefit from this bill, but not enough. They are the kids whose life chances could be so enhanced if this bill had decent standards.

I want to quote Dr Russell Wills again in this debate, because he came to this Parliament and issued a damning indictment of Nick Smith’s lack of ambition and this National Government’s lack of ambition in tackling what is probably one of the most pressing public health challenges this country faces. Dr Wills, the outgoing Children’s Commissioner, came to the Parliament and said: “When the 2013 Budget came out … Government made a promise to New Zealand children: We will make your house healthy. Three years on from that Budget promise, this bill”—which we are debating here tonight—“will do little for children living in cold, damp, mouldy housing.” He said: “It is a wasted opportunity and a broken promise to our children.” That is our view here on the Labour benches. This bill is a wasted opportunity because Nick Smith is not ambitious for the children of this country, who are growing up in cold, damp, mouldy homes.

Why is this bill yet another grudging half measure from this Minister for Building and Housing? It is one of such a long line of grudging half measures: the special housing areas, which have delivered only a thousand houses in 3 years; the Crown land initiative, which promised thousands of houses on 500 hectares of land and a year later has delivered only 13 hectares and no houses; the promise to remove the tariffs and dumping duties to lower the cost of building materials, which has had zero impact on building materials in 2 years; and the brightline test, which Treasury said would raise only $5 million, and which, it is very clear from looking at the Auckland housing market, has had zero impact on property speculation and sky-rocketing house prices. This bill is yet another in that long line of grudging half measures.

Let us talk about the insulation standard that Dr Smith spoke about. Dr Smith, with his lack of ambition for the children of New Zealand, is allowing, with this bill and the accompanying draft regulations he released, hundreds of thousands of rental properties around New Zealand that are insulated to the redundant, outdated 1978 insulation standard. With this bill Dr Smith is saying to landlords that that is OK. It is OK to continue with a redundant insulation standard instead of upgrading and insulating your rental property to the modern 2008 insulation standard.

You are passing a bill, Minister, so why would you not require the modern insulation standard in every rental property? It is an obvious question. Why would you legislate for a redundant insulation standard? That speaks volumes about Nick Smith and this National Government’s lack of ambition. Dr Smith’s main rationale for not including a modern insulation standard across the board, his rationale for not including ventilation or heating—the obvious things that would ensure a house is warm and dry for the people who live in it—is that it would put too much cost on landlords. I can barely cope with the absurdity of Nick Smith’s argument.

Think about this: if a landlord has to replace the roof on a house because it is leaking and the water is pouring in on the poor tenants and it costs $20,000 to replace that roof, is the landlord then going to be able to go and bump up the rent of that house and charge the tenants for fixing the roof? No, of course not. If the landlord has to re-pile a house because it is falling down the hill, can he charge whatever it costs to re-pile the house? Can he charge that to the tenants and try to recoup it from their rent? Of course he cannot. Rents are set by supply and demand; it is not up to the landlords. They are not able to just bump up the rent to recoup whatever expenditure they have outlaid to keep that house up to scratch. Rents are set by supply and demand, and if landlords do unreasonably put the cost of the rent up, the tenant will simply go down the road.

We have been arguing throughout this debate that heating should have been included in the standards. A heat pump would cost a landlord $3,000 to put in, and that expense would have a lifetime of 15 years, which is about the average lifetime for a modern heat pump. Over that period a rental property will generate between $300,000 and $400,000 for the landlord in gross revenue. So that is $3,000 for a heat pump and gross revenue over that same period of time for the landlord of $300,000 to $400,000, depending on where you are in New Zealand. That is not an unreasonable expense.

I say again to the House that we know from credible New Zealand - based research that every dollar you spend on retrofitting a house to make it warm and dry will save $5 to $6 in public health expenditure. With this bill, Nick Smith is standing alongside and siding with slum landlords—the bottom end of the rental market—who are happy to rent out houses that are cold, damp, and mouldy, and are a risk to the health of their tenants. This Parliament will have the opportunity to vote for Andrew Little’s bill again very shortly, and see it through this House. We will set decent standards for heating, ventilation, and insulation and we will ensure that every rental property in this country is warm and dry.

ALFRED NGARO (National): I rise to take a call on the Residential Tenancies Amendment Bill in its third reading. Can I also, too, commend the Minister for Building and Housing and the Social Services Committee for the process through which we heard submissions on this bill.

The previous speaker, Phil Twyford, talked about the issues around insulation, and also the issues around heat pumps, ventilation, and heating in houses. That member would know about that, because he was present with the advisers to hear that the Housing Improvement Regulations 1947, which still stand today, still stipulate, under that code, that there be provision for both ventilation and heating. So nothing has been taken away; those provisions are still there. We know we had the territorial authorities talk about the fact of enforcement. We have talked about that and, in a moment, I will talk about the importance of how we enforce those measures that are there in the bill. I just want to set the record straight: provision is in there, in the code of the Housing Improvement Regulations 1947, which still stipulate that there must be adequate ventilation and adequate heating. We know that on a number of occasions, for some tenants, it is the issue of just simply opening up windows, curtains, and so forth, so there may be some form of education and support and information that needs to be given.

Also, the previous speaker talked about aspects of insulation and heating. I want to say that in Budget 2016 there is the Warm Up New Zealand programme, which was part of the insulation of over 300,000 homes throughout New Zealand. This was a subsidy that allowed for different landlords and owners to be able to apply to have a subsidy for the insulating of their homes, whether they be rental properties or their own, and also, too, inside that subsidy there was a provision for heat pumps. I just want to put on the record that there still is that provision. It is continuing on. There is about $36 million for that provision that is continued on. Can I put on the record that what has happened, and is part of what this bill is ensuring, is that we want to make sure that homes are warmer and drier and, also, safer.

If we take the safety component of that, one of the things that is important about this bill, and one of its provisions, is ensuring that every single rental property will have a smoke alarm by 1 July 2016. That is critically important because we know that there have been tragedies. The reports on that show there are some 129 potential tragedies that have happened per annum—annually—because of the lack of having adequate response. Therefore, a smoke alarm is the first point of call to be able to warn the occupants of the premises. Now it is going to be mandatory. It is going to be mandatory right throughout, and it is not going to have to wait until 2019—it is going to be mandatory by 1 July 2016. We have to say that this is an important part of this bill.

The other thing I want to talk about is insulation. It is all very well to turn round and hold up big fluffy bits of insulation, and show the small bits and then the big bits. It can actually create an image and a perception that the bigger bit is warmer than the smaller bit. What that member, Phil Twyford, will not know—and, again, I can remember as a tradesman going through many houses and many homes, crawling up in ceilings and under floors, doing the wiring and so forth. The majority of homes built in 1978 did not have the fluffy green bits. In fact, those are called “green” Insulfluff, which is actually a new product. Those are not the original products that were used. The product that was used was what they called Insulfluff. It was a spray-on product. So it is not a correct perception to create of the two sizes of insulation. Insulfluff is what was actually used, back in 1978. Then came along Pink Batts, which is a fibreglass substance and the product that was used before we had that “green” Insulfluff. So that comparison is not really a true picture.

The other thing, too, is that if you look at the officials’ reports—if you think about the insulation from 1978; no insulation and 100 percent energy loss—it is in the report here. There is about 100 percent energy loss when you have no insulation. We know that; that is clear. When you have the standard from 1978 to 2008, the efficiency and the energy loss from that standard over that period of time was something like 58 percent, which is to be regarded. However, when you look at retrofitting in the current building code of 2008, energy loss was 48 percent. In other words, though the members on the other side are saying we should retrofit to the new code, you are talking about an efficiency of only 10 percent. The cost of that average form of retrofitting is going to be about $3,400 per home. That is for a standard three-bedroom brick and tile house. When we talk about the cost of making sure we are efficient and effective in what we are trying to do, this bill meets that.

The last thing I want to say in my contribution to this third reading is that the new Healthy Homes Guarantee Bill (No 2) that has come out from Mr Andrew Little talks about the fact that this bill will make standards mandatory, right across the board. If you read the details in the bill, the mandatory aspect of that bill will not come in until 2023, whereas in this bill it comes in in 2019. They have to comply within that 3-year period, to make sure there is insulation top and bottom and smoke alarms by 2016. This bill is going all the way. We have not done as the previous Labour Government did, insulating 50,000 homes in 9 years. In the National Government—the current Government—we are talking about 500,000 homes to be insulated to be warmer, to be drier, and to be safer. This Government is pragmatic and it is practical. It is doing the things that make a difference. All the rhetoric on the other side is smoke and mirrors. When it comes to the details and to the facts in the reports, they are what makes a difference. I am proud to commend this bill at its third reading, and look forward to its implementation. I commend this bill to the House. Thank you.

POTO WILLIAMS (Labour—Christchurch East): The one thing I can say about this Government is that it is not aspirational for the people of New Zealand. The Government is not aspirational for the tenants of New Zealand, and it sure as heck is not aspirational for those people who are looking for housing. Housing is a big hot-button issue at the moment, is it not, when you think of the number of people who are reported to be living in cars. I think I saw a report this morning that a 15-day-old baby is living in a car with her mother.

How did we get ourselves into this situation? It is because this Government is not aspirational for people, when it comes to housing. When we think about the whole suite of legislation and policies that this Government has put out for tenants in New Zealand we think about Housing New Zealand’s reviewable tenancies programme, for example, which forces people out of their homes. Whether they have lived there for a year or for 6 years, or whatever, it forces people out of their homes. It does not allow them to build up that social capital that they need, by living in and being part of a community.

This Government is not aspirational for tenants in New Zealand, and it does not take seriously the deaths of children, like Emma-Lita Bourne. That was a tragedy, but, unfortunately, she was not the only child to die in a house that was cold and mouldy and damp. We could take the huge step of insulating our properties better and forcing our landlords to meet some minimum standards for our kids in this country. There is no protection for tenants in New Zealand any longer. There is no security of tenure. The Government actually leads the way in forcing people out of their homes, by the reviewable tenancies programme. That is shocking.

There is no stability. There was a programme recently on television about transience and the impact that transience has on the social outcomes, the health outcomes, and the educational outcomes for young children. There was a mother who said that her child had moved to seven schools in the period of a couple of years. That is not the way that you set the foundation for a child to have the best start, to make the most of it, and to reach their full potential. You only do that by having them in a home that is stable, and in a community where they can then learn to reach out to those community networks and build that social fabric.

The Residential Tenancies Amendment Bill is about setting a minimum standard that will have a huge impact on the health of the children of New Zealand. The Children’s Commissioner told Parliament in a submission that there are 42,000 hospital admissions a year and 15 children a year dying due to cold, mouldy, and damp houses, and the Minister for Building and Housing wants us to insulate homes to a standard that is way below any recommended by any of the submitters who submitted on the bill. I do not see how the Minister’s argument—that he is wanting to reduce any further costs to the tenants—actually washes. When you weigh that up against the fact that you are committing children to unhealthy lifestyles, and potentially to death, from living in these cold, damp homes the arguments simply do not stack up. That is why I say that this Government is not aspirational for the tenants of New Zealand. Otago University showed that insulating to the 2008 standard would reduce hospital admissions for children by 6 percent. That is 3,000 children. That is an enormous number. Can you imagine? That is like 10 primary schools’ worth of children who would be saved from having hospital admissions, and it would impact on 19 percent of the rental properties.

I cannot buy the argument that the Minister presents. This Government has lost the Kiwi Dream. It used to be the Kiwi Dream that we could own our own homes. In one generation we have gone from being a generation of homeowners to one of renters. In one generation we have gone from homeownership to renting. We must, as a Parliament, be cognisant that there are people who are in a much more vulnerable position because they are now tenants, as opposed to being homeowners. We should do what we can to ensure that legislation actually supports tenure for those tenants.

Let us face it—there are some bad landlords, but there are some great landlords. There are some very good landlords who do everything they can, and to whom legislation does not need to apply because they already keep their homes to a really high standard. But, unfortunately, there are some landlords for whom the minimum standard will be all that they will ever want to achieve. And there are some other landlords who do not even meet those minimum standards. But we know all too well that unless you provide the standard, you provide the opportunity, landlords will not avail themselves unless they are compelled to do so.

The submitters were really clear, when they came to the Social Services Committee, that insulation was not the only part of the answer. It was half of the answer, and the rest of it was about providing appropriate heating. As Phil Twyford has already said, you could install a good quality heat pump to run, relatively inexpensively, for about $3,000 and that would go a long way to supporting the insulation. Having a home that has been insulated means that you can heat the home and keep it warmer and drier for longer. There are a lot of electorate MPs who go out and meet constituents. I know, and my colleagues here know, that when you go out to some of our constituents’ homes in the middle of winter—some of us who live in the South Island know that South Island winters tend to be colder than North Island winters. I know so many constituents who live in homes where they can afford to heat only one room. They will often all sleep in that room, particularly on very cold nights, because it is the only room they can afford to heat.

I think about when I was a young mum and I had a premature baby at home. Can you imagine what it would be like for mums taking their babies home to cold, damp homes? You give baby its evening meal, put baby in the bath, and you want to keep baby nice and warm so that they have a good night’s sleep. That is part of the issue that many of our young kids and our children have: they cannot sleep, because the homes are so cold. When you cannot sleep when you are a young kid, it disrupts your ability to learn. You are often ill, and it impacts on your ability to actually get a decent education.

When we think about the opportunity that has been missed here, let us look at what could happen. We could look at Andrew Little’s Healthy Homes Guarantee Bill (No 2). What does that include? Not just insulation. That includes methods of heating. It wants us to look at minimum indoor temperatures—so an ambient temperature of around, I think, 19 or 20 degrees. Homes heated to about that temperature are good for keeping us warm and also for keeping many of those bugs at bay. Good ventilation, so that we can have homes that are dry and that do not allow mould to grow; draught stopping; and drainage—these are all very important aspects to having a warm, dry home that have not been considered and that could so well have been considered.

We are supporting this bill. It is less than a half measure; it is probably a quarter of a measure. We could have done so much better for the people of New Zealand. Thank you.

MATT DOOCEY (National—Waimakariri): It is an honour to rise and speak in support of the third reading of the Residential Tenancies Amendment Bill. It is great to hear the support of the main parties in the House for this very important bill and the impact it will have on families and young children—and, really, what Kiwis would vote against a bill like this? I just want to touch on four key points in my call on the third reading tonight. For the first one, I want to talk about the Government’s activity in this space. I want to touch on the important aspect around smoke alarms. I also want to talk about the positive impact of the Social Services Committee, ably chaired by Alfred Ngaro, and the impact that had around the submissions and especially around increasing the penalty for unlawful acts, which will help redress that possible imbalance between vulnerable tenants and, maybe, intimidatory landlords as well. Then if I have time I want to talk about compliance and how this legislation will be inspected once it is implemented.

It is fair to say this bill needs to be passed tonight. This is a bill that will warm up a lot of houses in New Zealand and make a lot of houses safer by installing smoke alarms. When you look at the Government’s track record in this space—since 2001 we have invested $500 million insulating houses in New Zealand, we have insulated 50,000 State houses, we have got the Warm Up New Zealand programme, as well as retrofitting 280,000 private rentals. I know when I visit the Canterbury District Health Board and Community Energy Action those initiatives of warming up “frequent flyers” to the accident and emergency departments in our hospitals have great results not only for the community but in improving the well-being of those families and those children.

Currently, we know that under the Residential Tenancies Act there is no requirement around insulation or smoke alarms. It is great that 270,000 private rentals will be insulated because of this legislation. We know that 56 percent of them—or around 150,000—are low-income earners. So there we are: this is a Government that cares, a Government that listens and is responding to people’s needs, especially those of the most vulnerable. That is why regulation is the next step. We know once this bill is passed tonight that from 1 July 2016 social housing will require insulation, and we know that private residential tenancies from 1 July 2019 will also require it.

Can I just go on to talk about smoke alarms. In my home town of Rangiora—

Richard Prosser: Woo hoo!

MATT DOOCEY: There we go, Mr Prosser—a great constituent of mine in Rangiora.

Hon Nathan Guy: Does he vote for you?

MATT DOOCEY: Of course he does. We have got a hard-working 36-strong volunteer fire brigade, men and women who give their time. In the middle of the night they get up, and their employers allow them to leave work during the day, when that alarm goes off. I, fortunately, brought the Prime Minister in to have a look at the new $3 million Rangiora fire station. When you talk to our volunteer firemen and firewomen, who sacrifice a lot of time, the stories they tell us are about a lot of fires they go to that could have been avoided, a lot of fatalities that could have been avoided. It is great that we are supporting our volunteer firemen and firewomen around this legislation. We know that in New Zealand there are about 20 fatalities a year that could be prevented, and we know that this legislation, by putting smoke alarms in these 270,000 private rentals, will possibly prevent up to three fatalities a year. That is why I commend this bill to the House.

METIRIA TUREI (Co-Leader—Green): The Green Party is opposing this legislation. We really wish that it did what Nick Smith described. We really wish that it did adequately insulate New Zealand’s rental homes, that it would keep families warmer and drier, particularly over this winter but also for the winters to come, and that it would actually save people’s lives, but it is not going to. The standard in this bill is so low, the provisions in this bill are so poor, that the legislation is not going to do any of those things. Nick Smith has spent a great deal of time while this bill has been before the House telling myth after myth after myth about it, and I just want to deal with three of those myths.

One of those myths that Nick Smith is perpetuating is that there are existing legal protections for tenants that mean that they are entitled to live in warm, dry homes that do not have mould and so forth. But we know from quite recent research done through Otago University that the provisions of the Residential Tenancies Act fail. There is not an adequate standard set for New Zealand homes. Tenants are not able to hold landlords to account for those basic standards, and as a result tenants are paying in some places—because of the acute supply problem for affordable housing—top dollar for homes that are making them and their kids sick. What we are seeing, then, as a result, is that there are lots of families who cannot even afford to live in those kinds of shoddy homes—those kinds of homes that cause their kids to get ill—and they are having to live in their cars. We are seeing more and more New Zealand families, ordinary New Zealand families, some of them working—they have jobs, but they still cannot afford a house, even a miserable, cold one, and are having to live in their cars.

I was amazed that Nick Smith stood up earlier and talked about cars—some kind of weird reference about a warrant of fitness in cars and in houses. Warrants of fitness for cars that families live in have a much higher standard for those cars than is in place for the houses that so many other families are barely managing to live in. The warrant of fitness system for the cars that families live in is much, much better and to a much, much higher standard than even this miserable bill would put in place for the homes—the cold, damp homes—that too many families are forced to live in. How unbelievable that Nick Smith would come into this House, knowing the acute shortage of decent homes we have, knowing there are families tonight who are living in their cars in Auckland and in Christchurch and all over the country, and make that comparison here. It is a disgraceful display of how out of touch Nick Smith and this National Government are from the realities that New Zealand faces.

Richard Prosser: They don’t care.

METIRIA TUREI: My colleague from New Zealand First says they do not care. I agree with him. The Government does not care. It cannot see these families. No matter how often they come forward, bravely, to tell their stories to the New Zealand public and ask for help, this Government still refuses to see them.

Another of Nick Smith’s myths is that requiring a decent warrant of fitness standard for rental homes would be prohibitively costly for landlords, and therefore for tenants. I want to just go back a few years to the home insulation programme—the one that the Green Party negotiated first with Labour. The one that we negotiated with Labour—[Interruption] Let us just be really clear about the history of this, it was a $1 billion programme over 10-plus years to insulate a million New Zealand homes. That was the original programme—

Chris Bishop: It was never budgeted. What rubbish.

METIRIA TUREI: —that was negotiated between—well, this little man over here was not there, of course. So he has got no idea what was going on in those times. [Interruption] So let us just set aside the youngsters for a moment and listen to those who were actually there and were part of the discussions and negotiations. The original agreement—[Interruption]

Mr DEPUTY SPEAKER: Order! Calm down a little bit. Calm down. Take a call if you want to yell.

METIRIA TUREI: The original programme was a $1 billion programme over a decade-and-a-bit to insulate a million homes in this country, because that was what was needed. That was the investment that was needed. It was a commitment—a long-term commitment—to significant funding to fix the housing problem that we had, and that we still have, of too many cold, damp homes that make kids and families sick. As a result of the 2008 election we were able to negotiate a much smaller programme with National of around $300 million over a 4-year period. That was good; it was not as good as the one with Labour, but it was at least a start.

That programme was able to run for a number of years. It was assessed as having a nearly $1 billion value to the country—to the public purse of New Zealand, and the savings to health and employment for those families who had their homes insulated. So for that $300 million that we were able to set aside for the home insulation programme with National there was a nearly $1 billion return to New Zealand in just financial value, and an uncountable value when it came to saving the lives of children and, particularly, older people as well.

But what do we see in Budget 2016 when it comes to the financial support that the Government can provide to landlords and tenants who want to have their homes insulated? How far has this Government fallen in support for those landlords and tenants who need to get their homes insulated? Well, Budget 2016 set aside $18 million over just 2 years—that is 20,000 homes. For those homes, that is great. Out of the 180,000 homes that still need to be at least insulated in this country—at minimum—only 20,000 have been budgeted for, and only for 2 years, because this Government is killing off the home insulation scheme that would give landlords and tenants the support that they need to properly insulate their homes. So while Nick Smith and National Party people are standing up here tonight and proclaiming how fantastic this legislation will be in saving lives because it will insulate homes—they are removing the financial support to the families and the landlords who will need it to make sure that those homes are genuinely and properly insulated.

This is a Government that does not care to support landlords and tenants whose homes are cold and wet and damp and cause people to get sick. There is a clear opportunity here for National to put its money where its mouth is and actually make it possible for people to get the financial support to insulate their home. What has it done? Budget 2016 crashes that budget and it slams closed the door to the funding support for home insulation. It is due to finish at the end of June this year, for the existing scheme, and there is money for only a tiny fraction of the homes that are left to be insulated. In 2 years’ time this scheme will be gone. This is yet another reason why we need to change this Government.

Let us be really clear about this: if we want New Zealand homes to be warm and dry, if we want families to be safe in their homes from diseases like rheumatic fever that can kill children, then we need to change the Government. This National Government will not make it possible for families to live safely in their homes. What a disgraceful legacy, and this bill is part of that disgraceful legacy, National. You strip away the ability for people to live safely in their homes—little children and older New Zealanders. What a terrible day for National. Thank you.

DENIS O’ROURKE (NZ First): It is a very good time of the year for us to be considering a bill like this, because, as we know, winter is well and truly now upon us. It reminds us about what it would be like to permanently live in a caravan or a car or a garage or any property that is not properly insulated. Those are issues that are not actually being very well faced up to by this Government at this time. However, New Zealand First will support this bill, even though it could do so much more.

It does only three things, in fact. First of all, it provides for smoke alarms, and nobody disagrees with that; they are well worthwhile and they will save lives. It does improve insulation for some homes, but with standards that are inadequate. I will come back to that later. And it does provide for regulations for a number of things, like the chief executive being able to take cases direct to the Tenancy Tribunal for persistent breaches of the regulations. It streamlines the process for recovery of possession when a tenant has skipped, and it increases penalties for breaches of regulations up to $4,000.

All of that is good. I have no problem with that. But I would have to disagree with one provision for regulation, which is the one that allows a landlord to state in a tenancy agreement that, despite making reasonable efforts, they have not been able to satisfy themselves of the extent of insulation. I disagree with that. That will be a cop-out. It will mean that some landlords will use that as a means of escaping the regulations. It should not be there. They should have to come up to the standards like anyone else, and if they cannot establish what the insulation is, then that home simply should not be on the market as a rental property.

We could see much better from a bill like this. It is a lost opportunity, really, to improve New Zealand’s rental stock from what it is now. The two areas many have spoken about, and which I reiterate, are that insulation standards for properties built between 1978 and either the 2001 or 2008 standards will not be adequate, and, secondly, the lack of any worthwhile, genuine heating standards. This bill means that properties built between 1978 and 2001 with the insulation standards that were enforced over that period will be for ever, permanently, exempted from coming up to the 2008 standards. That is a great shame. I would have thought that, over time, all properties should have to come up to those standards, whenever they were built.

The rationale that we hear from the members opposite is that because around 80 percent of the two modern insulation standards would be achieved by the 1978 standard, it would be unnecessary and uneconomic to upgrade those properties to the higher standard. But I do not accept that that is actually even factually correct, because there will be a lot of properties that will be under even those standards, and, of course, some that will be over it. It will be patchy. I know that as a matter of fact, because I had my home built in 1984, shortly after the 1978 standards came in. I remember investigating methods of insulation and there were all kinds of things that complied with those regulations. Some were good and some were not very good. I hope that I chose a reasonably good one. But the fact is that there will be a lot of properties that were built to the 1978 standards that are clearly not very well insulated at all, and that is just a fact that the figures that are bandied about by the Minister for Building and Housing will not reveal.

The other claim made is that if the cost of upgrading to the modern standards was imposed on the properties built after 1978, then that would cause that cost to be passed on to the tenants, the rents would increase, and so on. That is actually completely untrue; that is not the way markets work. A regulation creates a level playing field, as they say, lifting all ships with the higher tide. There would be no grounds for one landlord increasing rents for this class of home over another, and they would not get away with it in the market.

What, of course, do increase rents are house prices, because rents are based on the recovery of the cost of capital of houses. That is what is driving the rent increases today and, therefore, it is entirely the fault of this Government for doing nothing about increased house prices and for its complete mismanagement of the housing portfolio in New Zealand. It is that that has caused the increase of house prices and it is that that has caused the increase of rents, not a regulation that would require a better standard of insulation. The members opposite who are trying to argue that are delusional over what really does cause increased rents.

In fact, if the Government really was concerned about rent increases because of increasing insulation standards for 1978 and newer properties, then it could, if it wished, allow landlords to expense the whole of the cost of insulation upgrades in the year that the expense was actually incurred. That would be a significant incentive for landlords to invest in insulation, and it would, therefore, not matter at all whether the property was built before or after 1978 or which standard of insulation applied to it.

As far as we in New Zealand First are concerned, when a property was built should make no difference for the purposes of insulation standards. But if a property was built after 1978 and had insulation standards that were too far below standard, it would be reasonable to have a longer period of time for compliance—maybe 8 or 10 years to do that. If that had been in this legislation, that would have been supportable, but what is not supportable is that those properties will never be required to come up to modern standards. In fact, looking further forward as technologies improve, what we should have is a regime that says we will act to improve all rental housing stock, progressively, up to whatever the modern standards of the day would be—allowing, of course, a reasonable time to do that. If every landlord was required to do that, then there would be no market penalty or advantage for any landlord over another. So there should be no problem in doing that. That is what we should be aiming for in this country.

Lastly, I simply want to say that heating and ventilation must also be subject to minimum requirements for performance of a property. There is not much point in having minimum requirements for insulation and then, over time, making sure that all rental properties come up to those standards unless there is also a performance standard for heating and for ventilation. That is just common sense, and why this bill does not move into that area I just cannot understand. The truth is, as many others have said and as many submitters said, the cost savings in the avoidance of illness alone and the avoidance of a whole raft of social problems that arise from inadequately insulated and inadequately heated homes are just so huge that it makes a bill like this, and much more, totally justified. Much more should be done, many more savings should be incurred, and much less illness would result. So the matter is really urgent.

In the end, New Zealand First is really disappointed that the bill does not go further in that respect. We would like to see it do so. As far as we are concerned, this is just a work in progress for the next Government.

Dr PARMJEET PARMAR (National): Thank you for the opportunity to speak on the third reading of the Residential Tenancies Amendment Bill. I am taking a short call to support this bill. It is a fact that different people react differently to their environment; people with lower resistance, elderly people, and young people respond sooner to any unhealthy conditions in the environment. Making homes healthier is important to this National Government.

The insulation requirement in this legislation is going to make the difference that we want to see. Although this bill addresses the insulation requirement, it also adds the requirement of having a functional smoke alarm in residential properties from 1 July 2016. This is a very important move because it is estimated that it will save around three lives a year, and it will save a number of families from fire-related incidents.

This is about the health and safety of people who live in residential rental properties, because the current standards do not go far enough to protect the health and safety of tenants in residential properties.

The previous member, Denis O’Rourke, spoke about rent and predicted that rent would not go up with what his party is proposing. Let us look at that. What we are proposing will increase the cost by $3.20 per week, and—yes, looking at $3.20 per week—it is highly likely that landlords will decide to absorb that cost because landlords also want to see that people living in their properties are safe.

But look at what the Labour Party and the Green Party are proposing, the warrant of fitness scheme, that is going to cost $100 million a year. Breaking that down to a per-house cost, that will be $225 a year, and, moreover, that is going to be an ongoing cost because these parties want to have regular inspections on an annual basis for warrants of fitness. Because that is going to be an ongoing cost, it is highly unlikely that landlords will absorb that cost; they will pass on that cost to tenants. It looks like the Labour Party and the Green Party do not care about tenants, but we in National do.

In this bill we are also giving tenants 28 days to go to a Tenancy Tribunal if they feel that the property they are in is not compliant. We are also sending a strong signal to landlords that it is illegal for them to give a tenant notice to leave if he or she is just exercising their rights. What we are proposing in this legislation will be supported by an information campaign to improve compliance with existing standards and with the new standards that will come through this legislation, and which will also help people understand how to make their homes healthier.

What we are proposing is practical and the benefits outweigh the cost. We know that warmer and drier homes are important to keep families healthy and this bill is to do the same. I support this bill and commend this bill to the House. Thank you.

Mr DEPUTY SPEAKER: A 5-minute call on behalf of the Green Party—Marama Davidson.

MARAMA DAVIDSON (Green): Tēnā tātou e Te Whare. Kia ora. The Green Party will be supporting the Residential Tenancies Amendment Bill because it is a step. It is a step and so we support it, but the Government is asking the wrong questions and using the wrong indicators for the standards that are required for families and the ordinary people of New Zealand to live in good, safe, warm homes. So whether or not we are talking about the standard of 19-whatever, or the houses that were built after or before 19-whatever, the real question that we need to be asking here is how we can ensure that every family has a warm, safe home to live in. That is the standard. That is the standard; that is the question that we need to be asking.

I rent my home. It is an old home, because at the time when I was looking for a home the only sorts of houses that were going to be available to me as a Māori woman with children on the waiting list trying to find a tenancy property were old, draughty, cold homes, which are incredibly difficult to heat. My home is so old that it is not guaranteed that it is going to be insulated under this bill. Last winter I was sending my children to bed wearing beanies and thermals, and with tons of blankets for fear of turning on the heater. We had a go at turning on the heater in our house, but the heat did not go anywhere except outside, because the house is draughty and heat just escapes. The power bill was incredibly enormous but the heater still did not heat my home, because the heat just disappeared. So after hours and hours of trying to keep my children warm, the heat did not heat my home. My power was cut off because I could not afford to pay my bill, because my home is not able to be heated without crippling us financially. You should not have to become an MP to be able to pay a power bill to simply turn on a heater to try to keep your children warm. Those are the questions and the measurements that our Government needs to be using whenever it is setting about setting legislation.

That is why I look forward to the Green Party and the Labour Party, and other parties that genuinely want a progressive Government, working to change this Government. It has had 7 years and still the result is that too many families are not living in warm, safe, dry homes, and this bill is not going to cure it. There are still going to be some houses that are not warm enough—and guess who they will be rented by. Guess who those houses will be rented by, and guess who cannot afford to turn on a heater to try to heat a house that is draughty and cold—guess who they will be rented by.

For one part, they will be rented by Māori and Pacific families, who have incredibly high rates of renting properties and rental tenancies in our country. There will be rented by people who are at the back of the queue when it comes to landlords who can pick and choose whom it is that they want to put in their warm, nice homes. The homes that are cold and draughty and not insulated enough, under this bill, are going to go to Māori and Pacific and lower-income families. I was working when I could not afford to pay my power bill and try to heat my draughty home. Those are the homes that are going to be left out of this bill, and those are the people who are going to be left to go into those houses.

The Government is asking the wrong questions. The Minister Nick Smith could take a lesson out of Sister Anne Hurley’s book. She made a submission for the Sisters of Mercy Wiri on this bill and this is the standard that she asked for: “1. The bill sets standards high enough to ensure that the health and wellbeing of all those residing in all rental accommodation is not compromised.” That should be the standard. Thank you.

Mr DEPUTY SPEAKER: A 5-minute call on behalf of the Labour Party—Jenny Salesa.

JENNY SALESA (Labour—Manukau East): Talofa lava. Happy Samoan Language Week. Fa‘afetai tele lava for this call on the Residential Tenancies Amendment Bill. This bill will introduce a few useful provisions for providing some standards for housing in the private rental market. However, it does not go far enough to address the dreadful circumstances in which many of our families are living, particularly during this time, as we go into the cold winter months.

Introducing minimum insulation standards, as proposed by this bill, for private rental houses is indeed a step in the right direction, but it is a wasted opportunity, because this National Government should be doing more. When a freezing cold house is insulated but there is absolutely no requirement for modern, efficient heating, that rental house still remains a very cold, freezing rental house. It does not magically become warm and dry. During winter it will still leave so many of our children, our families, and especially our elderly—who are prone to feeling the cold so much more than those of us who are younger—at risk of all kinds of respiratory illnesses. Our freezing cold houses are something that we should address in this bill but that, unfortunately, is an opportunity that this Government has not taken up.

Each year over 40,000 of our children, particularly our poor, vulnerable kids, are admitted to hospitals for all kinds of respiratory illnesses. That is also a cost that we see in a different part of society, in the health bill. This current Government is not considering that we could actually prevent some of that cost should we actually put insulation and heating in this bill. This is not acceptable. We know that the condition of many of the houses in New Zealand is that they are not warm, dry, and healthy.

We also know that too many of our houses are contributing to the deaths of some of our children. Research shows that over 70 percent of children, especially those kids who are living in poverty, live in rented accommodation, and most of them, around 53 percent, live in private rental houses. I have got to say that this percentage is even higher for Pacific and Māori, because for Pacific families only 18 percent of our people own houses; 82 percent of Pacific families rent either from the State or from private landlords.

No child should be living in a house that makes them sick, but the sad fact is that thousands of our children are admitted to hospital for respiratory illnesses and, worse, around 15 children each year die from pneumonia. Emma-Lita Bourne is an example of one of those children—a toddler from Ōtara, in my electorate of Manukau East, who, unfortunately, died a preventable death from complications of pneumonia. According to the coroner the condition of the house that she lived in, which was not an insulated house and was a freezing cold, mouldy house, contributed to her death.

The Hon Nick Smith, in his speech earlier on, in this third reading of this bill, stated that “Cost is important and we should be careful about imposing cost, that that cost imposed is not more than any percentage gains.” Where does one start with such a statement? The costs that are much more important to a local MP like me are children’s lives. Too many of our children die preventable deaths, and that is something that we as members of this House could do something about, especially in bills like this one. We should do everything, as members of Parliament, to ensure that we are saving as many children’s lives as possible, regardless of where they live.

In Budget 2013, 3 years ago, this National Government committed to mitigating the negative health outcomes of poverty and poor housing. The Children’s Commissioner, Dr Russell Wills, in his submission to the Social Services Committee stated that he was very disappointed in this bill. In his view, this bill will not improve the health of thousands of children living in poor quality housing. This is yet another example of another broken promise from this Government where it committed to doing something and it has not actually delivered on that promise. Thank you.

MAUREEN PUGH (National): It is my pleasure to stand in support of the Residential Tenancies Amendment Bill in its third reading tonight. Although I have not been a part of the Social Services Committee for the whole process around this amendment bill, I am very happy to have been part of it towards the end. Unfortunately, I have not heard a lot of the submissions, or any of the submissions, that relate to this bill. However, I have heard some news today that did interest me and it reminded me of my primary school art lessons. If my memory serves me correctly, when I mixed red paint with green paint I got a terrible muddy brown colour.

But not being one to muddy the waters, the Hon Nick Smith has delivered to this Parliament a very sensible, practical, and workable bill that covers a range of requirements that will improve the living conditions of 450,000 New Zealanders in rental properties across this country. It deals with one of the features of making homes warmer and drier, and that is insulation. A warm home starts with insulation, and this bill ensures that social housing will be insulated—floor and ceiling—by 1 July this year.

I have not heard any comments made around the other benefits of insulation. Being from the West Coast I can assure you that insulation also serves to muffle the sound of rain on the roof. I can assure you that there will be many West Coasters who will be grateful for this legislation when it comes into effect on 1 July. I just want to note too to the House that this Government leads by example. It got its own house in order, in terms of insulation, in its very first term, by insulating 30,000 State-owned homes, which had never in the history of this Parliament been insulated. It did take a National Government to get this in order.

The other key component of this bill is also around smoke alarms. As we have heard, smoke alarms are a first point of call, in terms of saving lives in rental properties. The highest incidence of fatalities occurs in those rental properties. We are very grateful to the Hon Nick Smith for bringing this bill to the House. It will deliver warmer, drier, safer rental homes to 450,000 New Zealanders, and I commend this bill to the House.

CARMEL SEPULONI (Labour—Kelston): I just want to start by saying that my colleague Megan Woods just pointed out a few names for National’s Government coalition over there. We had Maureen Pugh talking about muddying the waters between the red and the green, and I know how threatened those members are, so that is why they have to go there tonight. Actually, when you look at that coalition Government—National, Māori Party, United Future, and the ACT Party—I think my colleague Kelvin Davis described it best by saying it is “ménage à whā”, really. That is what that is, over there, so let us get that out of the way and get on to the important stuff—that is, the housing bill.

We are here for a third reading. This is our final chance to say anything about something that is really important—that is, housing. So, despite the fact that we have a Government over there that still denies the fact that we have a housing crisis, we are considering an important piece of legislation that, unfortunately, does not go far enough in addressing the health concerns of our people in housing. We are supporting the Residential Tenancies Amendment Bill, but we do have major reservations, and we have made those reservations known right from the start. We have reservations about the fact that this really is a wasted opportunity to set decent minimum standards that would ensure all rental properties are warm and dry.

Do you know, even just tonight we were looking at the news and seeing that we have such a housing problem in this country, not just in respect of the adequacy of the housing that we have but, actually, the access to any housing at all. Tonight we saw on the news a 15-day-old baby who was premature who is staying on a marae, and her family are there because of the fact that they have nowhere else to live. So on one hand it is the fact that we have a housing shortage, and on the other hand it is the fact that we have housing stock that is making our people sick. In 2016 it is unacceptable that Kiwi children are dying in houses that are unfit to live in. The time has come for Parliament to ensure that every rental house is fit for people to live in. We believe that the bill should also set a standard for ventilation and require there to be an affordable, modern, and fixed heating source. We also believe that the 3-year phase-in period is excessive.

In contrast, Andrew Little’s Healthy Homes Guarantee Bill (No 2) would provide that after a year, all new tenancies would have to meet standards for methods of heating, methods of insulation, indoor temperatures, ventilation, draught stopping, and drainage. We keep hearing from that side of the House that what Andrew Little is proposing is unaffordable. Well, actually, what is unaffordable is 42,000 children being admitted to hospital every year because of the state of the housing that they are living in. I just do not think that the National Government members know how to do maths, because if they added it up, then they would see that, actually, the cost of doing what Andrew Little is proposing would be far outweighed by the cost of the 42,000 children who are admitted to hospital every year. That is just the number of admissions into hospital—and the National Government MPs laugh. That is just the number of admissions into hospital.

We have also been told about the number of children who are dying every year because of the conditions that they are getting because they are living in unhealthy homes. Fifteen children a year are dying because of the state of their housing, and that is unacceptable. For those of us who are electorate MPs—

Hon Member: Not many on that side.

CARMEL SEPULONI: Lots on this side, actually—very few list MPs on this side, actually. For those of us who are electorate MPs, one of the biggest issues we have coming through our door every day is families with housing issues. The housing issues are not just a shortage of housing but they are also the actual adequacy of the housing and the fact that those houses are making them sick.

I have had people come through my office for support, with letters from the hospital and letters from their GPs saying that they must get transfers from their housing and they must get access to a Housing New Zealand house because the houses they are in are sending them back to hospital time and time again, and it is not funny. I had a mother come to my office for help. She said that she had just been let go from hospital with her 5-year-old daughter, because of the respiratory problems her daughter had developed because of the mould and damp in the house they were living in. She was concerned about her daughter having to go back in there. By the time I went to see her a day and a half later she had already been readmitted into Waitakere Hospital. Her daughter—that 5-year-old girl—had gone home from the hospital to that house and that house had made her sick and she was put back into hospital.

I mean, National Government members—I cannot understand how you cannot take this seriously, and why every time we have this debate in the House, you end up laughing at what is being proposed by this side of the House. Clearly, it is not just about doing these families a favour; it is about the cost to the hospital system every time these kids get admitted into hospital. It is about the cost in terms of lives. We have heard Nick Smith say that it would be too expensive to get slum landlords to upgrade their properties to a livable standard. He exaggerates the cost, but, more importantly, he seems to know the price of everything and the value of nothing. That is the truth.

We cannot reduce children’s lives and their right to decent housing to a monetary value. We do not need to calculate the number of children’s lives this bill will save, the hospital admissions it will avoid, and the better learning outcomes of having kids not missing school so often from being sick, and to then offset those benefits against the cost of fixing those houses. We just need to state a simple principle that every Kiwi will agree with: in 2016 no child should be getting sick or dying because their house is not fit to live in.

We make no apology for standing up for the simple idea that every Kiwi child deserves a decent place to live. That is at the heart of the Kiwi Dream. Research shows that just over 70 percent of the children in poverty live in rental accommodation, and the majority—53 percent—live in private rental properties. I want to go back to what my colleague Jenny Salesa was saying before, and that was about the Pacific community. She pointed out that we are more likely to be affected by legislation like this because we are more likely to rent property. Not only are we more likely to do that but I do need to point out that the decline in homeownership of Pasifika is much steeper than anybody else’s. We have gone from 26 percent in 2001 to only 18 percent now, in 2016.

Su’a William Sio: 16 percent.

CARMEL SEPULONI: Actually, Su’a William Sio was just saying that it has been reduced even further, to 16 percent. So we are affected by legislation around landlords.

I would point out the fact that, actually, most landlords are good landlords. Very few are the slum landlords whom we are talking about, but I have come across them in my electorate, and I am sure others have too. I have come across landlords who buy up leaky homes because they are cheap, but then they rent them out for a market rental to families who cannot afford to live anywhere else. I have been to one of those houses. Where it is damp, you can see the mould, and, actually, one of the children living in those houses has developed rheumatic fever because of the state of that housing. So we are having to support this bill because it does something, but it does not go far enough. It could have gone much further. It could have saved the lives of children, but instead what we have is kind of a half-hearted attempt to do something, or at least to be seen to be doing something—

Hon Dr Nick Smith: Always never enough!

CARMEL SEPULONI: —but, really, it is not addressing the real issues that we are facing.

Nick Smith is going on and on again. I can hear him out of one ear over here. Again, he seems to know the price of everything and the value of nothing, and he does not really seem to take this issue—or any issue around housing—seriously. In fact, the issue around homelessness, we have heard him say, is a figment of all of our imaginations. Well, actually, tell the average person who walks out to their shopping centre and walks out on to their main road every day and who is confronted with levels of homelessness that we have never seen in this country before. We have major issues in this country with housing. They are the shortage of housing, the adequacy of housing, and the level of healthiness that our homes provide for our children. It is just a pity that the National Government is doing so little to address those issues. Thank you.

BRETT HUDSON (National): It is a pleasure to rise in support of this, the Residential Tenancies Amendment Bill. The member who has just resumed her seat, Carmel Sepuloni, spoke a few minutes ago about the importance of maths. In a moment or two I will share some important maths with her. It is very telling, with what this Government is doing versus what the Opposition proposes.

But, firstly, this is a very, very easy bill to support. This bill will see a requirement for smoke alarms to be installed in all residential tenancies by 1 July 2016, just a few short weeks away. In respect of insulation, this bill will see a requirement for ceiling and underfloor insulation, where practicable, in all social housing—that is, a tenancy, or a rental, where income-related subsidies are given—again by 1 July this year, and in all other residential rentals by 1 July 2019. Those are very, very easy measures to support. They will make Kiwis healthier and will save lives.

The member opposite spoke about maths, and what was important. Let us contrast this bill and Andrew Little’s Healthy Homes Guarantee Bill (No 2). If we look at what this Government has done in this area of warming up homes and keeping people healthier, what this bill will do is this: by 1 July 2019, 180,000 homes will be insulated—180,000 rentals. If the Opposition’s bill in the name of Mr Andrew Little were to be passed, by 1 July 2019 there would be 30,000 homes—six times as many homes under the work of this Government than what the Opposition offers. That is maths that counts, Ms Sepuloni. This Government is one that is doing something to protect New Zealanders and to make them healthier. We are making a difference, we are the ones who care about New Zealanders, and I commend this bill to the House.

Bill read a third time.

Bills

Taxation (Transformation: First Phase Simplification and Other Measures) Bill

Third Reading

Hon MICHAEL WOODHOUSE (Minister of Revenue): I move, That the Taxation (Transformation: First Phase Simplification and Other Measures) Bill be now read a third time. As the name suggests, this bill focuses on removing some of the more immediate legislative obstacles to the Inland Revenue Department’s (IRD) reform of our tax system. Over the next few years the department’s Business Transformation programme will be implementing more customer-focused business practice and new technologies to make it simpler for people to complete their tax affairs and get them right.

Making it easier for businesses to get their tax obligations right and harder to get them wrong forms the basis of the Government’s new small to medium sized enterprise - friendly tax reform package included in Budget 2016. That is part of two very important budgetary measures that were announced last week. The first was $857 million to underwrite the IT system that will form the basis of these changes, and, of course, the $187 million measure, effectively, sees the end of provisional tax for small businesses that choose to use their systems to meet their tax obligations, not have to comply with Inland Revenue Department’s systems, which will change to suit small businesses.

This is a small measure. The measures in this bill are actually small—I am sure we will hear Mr Nash and Mr Cosgrove talk about what giant leaps these are not, and, indeed, they are not really intended to be. But the train is very much on the track for the transformation that is required, and we have now committed, over the next few years, to the sorts of changes that can only take place with those IT changes and with the Business Transformation project successfully implemented. It is a very large project—probably the largest Government IT project embarked on, in real terms, for a very long time, but I am confident—

Hon Clayton Cosgrove: Since INCIS.

Hon MICHAEL WOODHOUSE: Yes, it may well be since INCIS—not the exemplar, I would suggest, and, certainly, those sorts of things are learning experiences that I know IRD and the Government Chief Information Officer have taken on board. I am confident that we are very much on track to deliver the solution that will enable the small business community—in fact, all businesses and taxpayers—to, as I said, make it easier to get it right and harder to get it wrong.

Briefly, the changes in this bill will make it easier for employees to participate in employee share schemes, where an employer can make source deduction payments rather than rely on the employee to meet their tax obligations at the end of the period. It will allow IRD to prepopulate employee income, reducing the need for employees to file returns on this income, and, of course, it will change some of the outdated measures around the requirement to have signatures and the delivery of correspondence by IRD by old technologies like post or in writing. Certainly, we are now in a much more electronic and ubiquitous world where those sorts of modern digital communications will make it much easier and more efficient for both Inland Revenue Department and the taxpayer.

There are some other taxpayer-friendly changes proposed in the bill. It will allow Inland Revenue Department to give better service to its customers by providing a KiwiSaver scheme with the names and details of members who have transferred out of their schemes, in the name of the member’s new KiwiSaver scheme; halving the time that taxpayers with personal tax summaries will have to wait for their refund, providing they meet a new automated refund threshold, thus benefiting around 400,000 more taxpayers; and providing special tax codes directly to the Ministry of Social Development to help people receiving New Zealand superannuation or a veterans pension to meet their income tax obligations.

At the Committee of the whole House stage there were some small but important changes and provisions inserted into the bill. Those changes will allow the Canterbury earthquake provisions to continue to apply as intended despite the repeal of the Canterbury Earthquake Recovery Act.

In bringing the bill to its third reading I want to thank, again, those who contributed to its success so far, in particular the officials who worked on the policy details behind the measures, the drafters, the submitters, and the very good Finance and Expenditure Committee for its consideration under the guidance of its able chairman, Mr Bennett. This bill contains some very useful, taxpayer-friendly groundwork for the continued modernisation of our tax administration system, and I commend it.

STUART NASH (Labour—Napier): With a bill named the Taxation (Transformation: First Phase Simplification and Other Measures) Bill, you would expect something at least transformational, would you not? You would hope that a piece of legislation actually represents what it is, or that at least the name would represent what it is—transformational.

We are in an era where we have a whole lot of problems with our tax system at the moment. We are in an era where the Reserve Bank has said that 40 percent of all homes purchased in Auckland are purchased by speculators, and the Governor of the Reserve Bank said that they are bought for capital gain because the yields are so low—and yet, no capital gains tax. We have a brightline test that the Inland Revenue Department (IRD) said is insufficient to do anything with the housing market.

What we have also got is a massive risk to our global reputation by people who are seen to avoid paying their fair share of tax. It is a real problem. It is a problem to the point where reputable international newspapers and magazines are naming New Zealand as a tax haven. That is an issue. A bill that changed that, a bill that sorted out that issue, would have been transformational. I am not saying that the changes in this bill are not necessary. What I am saying is that they are not transformational. What I am also saying is that we have a whole lot of issues within our tax system at the moment that demand urgent attention on behalf of the Minister of Revenue, and, I would guess, urgent attention on behalf of the ministry to actually get this right, not only for the integrity of our tax system but also for the integrity of our global reputation.

Let us have a look at some of the things in this bill. As the Minister outlined, it does make some pretty common-sense amendments. For example, the commissioner can now receive emails or the IRD can send out emails, and that is acceptable. I have one slight concern about that. IRD has stated that “Cutting paper use and increasing digital services for Inland Revenue’s customers will see annual paper savings equivalent to 1,900 trees, or nearly 16 million sheets of A4 paper”. As our forestry spokesperson, I have a slight concern that we are actually not using trees and adding value here in New Zealand instead of exporting the logs overseas. But all this bill does is bring the system in to the 21st century. It should have been done a number of years ago. I am assuming that what it actually does is it codifies or legislates what is happening at this point in time.

There are a couple of amendments here that I would like to talk about. One is the requirement about personal tax summaries. This is reasonably important for a whole lot of people. Currently, what happens is that if a wage or salary earner needs an end-of-year assessment they can ask the commissioner for a personal tax summary to confirm any amounts of tax refund. They can get that within 30 days. If it is an unconfirmed summary for less than $200, then the IRD just pays it into a bank account. What the bill actually does is reduce the time from 30 days to 15 days, and it increases the unconfirmed amount from $200 to $600.

Why this is so important is that there are over 200,000 people in this country paying secondary tax. A lot of those people actually pay more tax than is necessary. I would suggest that this provision will actually help them. I have said it before and I will say it again to anyone listening to this debate: if you pay secondary tax I urge you to request a personal tax summary and to phone up the IRD—make sure you have got your IRD number—and you could be in for a very pleasant surprise. In the past, if you did not do anything, you might have got $200; now if you do not do anything you can get up to $600 within 15 days. So I urge people to do that.

The other thing is that there is a special tax code certificate. This may seem slightly minor but what it means is an employee can apply for a special tax code for their New Zealand superannuation or veterans pension income, or their employment income from one or more employers. What I am hoping this will lead to is actually the necessity to do away with secondary tax. Secondary tax is paid by people who work two or more jobs. Let us make an assumption—let us make the assumption that people work two or more jobs not because they love working 22 hours a day but out of economic necessity.

The problem we have got with the tax system as it stands is that they pay secondary tax in that second job. There is a good reason for it. It is a withholding tax. What happened in the past was that people who were working two jobs ended up with a big tax bill at the end of the year that they could not afford and which was a massive imposition. The withholding tax, i.e., secondary tax, is meant to have mitigated that, but it means that it is a major impost on people. The IRD at this point in time actually owes Kiwis about $750 million in overpaid tax. A decent chunk of that—it is hard to quantify how much—is secondary tax. The thing about it is that after 4 years it drops off. So again I would urge people who work two or more jobs and pay secondary tax to actually phone up the IRD to see whether they are owed any money.

Another interesting point in this bill is that it repeals special homeownership accounts. These are savings accounts that were closed in 1986, believe it or not. There was a provision in there saying that if you had more than $10,000 you could claim tax credits etc., etc., and the IRD says that there are still a number of these accounts in existence—amazing. A number of these will not have been operated for 25 years. What this bill does is it will allow the relevant financial institution—usually a bank; not always, but usually a bank—to close the accounts without having to pay back the tax credits as is currently the case. Again, I would urge anyone who is listening, or if you know of anyone who has one of these old homeownership savings accounts, to get to the bank as soon as possible to make sure that you claim those tax credits. As soon as this bill is passed into law those tax credits are no longer available.

We are supporting this bill because there are a whole lot of common-sense amendments here around things like automatic signatures. As I have said, it brings the tax system into the 21st century. But, yet again, it is another tax bill in this House that is certainly not transformational. It is a missed opportunity, but, most important, it does not deal with the substantive issues we have with our tax system in this country at the moment. They are New Zealand being seen as a tax haven and that posing a massive risk to our global reputation and the integrity of our tax system. That is a concern. The second one is the number of people who are actually avoiding paying tax because they buy a property not for a yield but for a capital gain.

This bill does not deal with the substantive issues that are afflicting our tax system, but we do support it; it is common sense. Onwards and upwards, let us hope. Thank you very much.

DAVID BENNETT (National—Hamilton East): It is a great pleasure to speak on the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. This bill is the first phase of the changes to progress the Business Transformation case.

Fletcher Tabuteau: Are you sure?

DAVID BENNETT: I am very sure of my idea. It includes things like electronic communication, simplifying the collection of tax on employee share schemes, information sharing, and there are some other tax simplification measures around KiwiSaver, foreign investment fund schemes, co-location of services, and special tax codes. As Minister Woodhouse has said, this is a bill that is part of a process. It is part of that simplification process. It goes through some of issues around communication that can always be made better, especially with a very complex and detailed system such as the tax system. I was interested in that last speaker, Stuart Nash, who in his comments once again reiterated that there is no capital gains tax—it is the firm belief of the Labour Party to have a capital gains tax. I know that it is somewhat contrary to the Green Party position where it wants to tax property each year on the value increase of that property, whether it is sold or not.

Stuart Nash: What? Rubbish.

DAVID BENNETT: No, that is true—that is what the Green Party wants to do.

Stuart Nash: Rubbish.

DAVID BENNETT: No, well, ask Julie Anne Genter. The Green Party would have a tax on the capital value increase of a property—that is what it wants to tax on. That is the Green Party policy. It has been enunciated a number of times by Ms Genter. It is one of those difficulties that you are going to see between the new coalition of the willing between the Labour Party and the Green Party. In the past, Helen Clark was not so silly. When the coalition was formed, she did it—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! This is a third reading speech. If the member refers to Speakers’ rulings on pages 136 and 137, it is very clear what is within the scope of a third reading. I will ask the member to come back to that.

DAVID BENNETT: In regard to tax there is a dichotomy of points of view.

Fletcher Tabuteau: Just wrap it up.

DAVID BENNETT: Well, it would be interesting to hear New Zealand First’s point of view on capital gains tax as well. I am sure we will come to that soon.

On the other side of the House we are hearing that the transformation of the tax bills that those members are seeking would involve that kind of tax system change. That is not being proposed in this bill. This bill is around transformation and simplification, in the sense of what is required to make the existing tax system work as well as possible. That is all part of the Business Transformation case that is going on, and the money that is being put into the Budget to enable that to happen is also an important part of that process. It is important that the public recognises that there is a difference of opinion on tax in this House. On this side we have a system that we are working to maintain and make the best of. On the other side of the House there are differences of opinion and that will soon show through in their agreements as we go through to the election next year.

Hon CLAYTON COSGROVE (Labour): Well, that was a cracker. That was a David Bennett special.

Fletcher Tabuteau: That was high-level stuff for him.

Hon CLAYTON COSGROVE: That was high-level stuff. That was a demonstration of how transformational this bill is. You would think, given the name of it, that it was a sort of motion picture: the Taxation (Transformation: First Phase Simplification and Other Measures) Bill 2015. I pay tribute to the Minister, who has expedited this bill far faster than one of his predecessors, the longest-serving revenue Minister in the history of a Commonwealth Parliament, Peter Dunne. I congratulate the present Minister. But that contribution from the chair of the Finance and Expenditure Committee (FEC) who pored over this bill, day after day, week after week, and who purportedly knows it backwards, shows the depth and detail and the huge transformations that are going to take place in this bill. He managed in his speech to talk about everybody else’s policy and every other party’s policy—which you then ruled against, Mr Assistant Speaker, and quite rightly so—and then sort of ran out of puff. That was it.

The one page of notes that the National Party—no, actually that Chris Bishop, a former researcher, would have scratched down for him, and said “Look, here’s a couple of lines. We’ve got to pad this out until 10 o’clock, so you’ve got to throw a bit of biffo around.”, and he ran out of steam—he ran out of steam. He managed to get out the four main points around the bill, but the depth, or lack of depth, of that speech shows that although we support the Minister’s efforts, to be fair he inherited this bill. He was probably told, as the new Minister, that this is his first big hit as revenue Minister. He could kick a goal in this Parliament in his first couple of days in the job, and the revenue handed him this. He said: “Hey, this has got a flash name. It’s transformation, so I’ll be able to spin a few lines to say this is a hugely authoritative bill, heavy on gravitas, and heavy on transformational detail, and we’ll give it a whirl.” That was the only bit of advice. It was working. He made a good third reading speech, until he handed it over to old humpty-dumpty who fell fair and square off the wall.

We support this bill. I bet the next tax bill that the Minister brings in—he will not make that same mistake again. It will be Chris Bishop leading the charge on behalf of the FEC for the National Party side. I say to the Minister that I hope you can put humpty-dumpty back together again.

This is, as previous speakers have said, a good, common-sense bill. It makes a number of changes, which I will not rehearse because I know the Minister quite rightly wants to get this through tonight, get the press statement out and talk about transformation. It makes a number of common-sense changes but I have to say, as other colleagues have said, they are small steps. They will indeed, as the Minister said, assist business and assist many of the players in our tax system, those in the provisional tax area and others, to be able to file electronic signatures, and for the Inland Revenue Department (IRD) to be able to send and receive emails. Although you have got to say, tongue-in-cheek, that in this day and age we are passing a bill giving the IRD permission to put down the rocks and stones, the chalks and slate, the pieces of paper, and actually get on the computer and send “Joe and Josephine Taxpayer” an email saying “Hey, it’s time to put your return in, and by the way if you would like to, you can send one back to us.”—transformational stuff. But I blame Peter Dunne. I do not blame this Minister, because this should have been done a hundred years ago, or whatever. This does bring the IRD back into the 21st century, or sort of pulls it into the 21st century kicking and screaming.

But I just raise a number of points, and I am sure the Minister will recall me raising some concerns in the Committee stage. One is that he made reference to the $800 million - plus allocation in the Budget for the Business Transformation IT programme. Although I accept, and it has been a fact for some time, that the IRD does need to have a modern, robust IT system to cope with the new technology and to make it easier for taxpayers, I made reference, I think by interjection on the Minister, to the last time the National Party put through a big IT project, pre-Novopay actually, under the Bolger Government, called INCIS. It went awry.

The place is littered, to be fair, with IT projects—I am sure it is cross-party, when we have been in Government—that have had some difficulties in terms of managing budgets. This is a massive amount of money and a massive business transformation IT project.

Fletcher Tabuteau: Call it infrastructure.

Hon CLAYTON COSGROVE: My colleague says that it is called infrastructure. Indeed he is right. My concern, and I just seek further reassurance from other National Party members, given that Chris Bishop is on top of this bill, unlike his chairman, that that money is going to be managed wisely and monitored very, very carefully.

We know, with some in the Public Service, that with these projects there is often a loss of specification control. You get to the end of these projects and the IT consultants turn to you and say: “You didn’t ask me to make it work. You just wanted all these things bolted on.” We want this to work. We want it to be appropriate, and we want it to assist taxpayers and the IRD. But we do seek assurances that the money, the huge amount of discretionary spending going to the department and senior management, is being monitored carefully, and we will not get to the end of this—somebody else will make a speech like this in years to come. We will find out we have got a dud, and a whole lot of taxpayers’ money has gone down the drain.

So I ask the Minister—I think he is a pretty diligent Minister, unlike some of his predecessors who were asleep at the wheel or maybe got bored with the job after 20 years in the job, as Mr Dunne was. I am sure this Minister will be counting the beans as every dollar goes through and monitoring that it is appropriate.

I think the point that my colleague made about the $750 million owed by the IRD—I would say to the Minister that that is a massive amount of money. It is almost equivalent to the Budget allocation for the Business Transformation project. I hope he will ask the department to be as vigorous in trying to repatriate that money to taxpayers as the department is as vigorous at taking money off taxpayers, appropriately so, in terms of their tax obligations. There must be a way, in this day and age, to hunt down those taxpayers and say: “Actually we’ve got a cheque for you because you overpaid; you paid too much. It’s sitting there in our bank accounts, and we’re going to help you.”

Hon Michael Woodhouse: Direct credit in the 21st century.

Hon CLAYTON COSGROVE: Indeed. Kiwis could probably, I think, do a lot with the $750 million that the revenue, therefore the Government, owes them, if that money could somehow be repatriated in part or in whole to those taxpayers.

The Labour Party supports the bill, as we have always supported practical tax measures. I congratulate the Minister on his diligence in powering this one through. I look forward to the transformational media statement, which will come out tomorrow, and I certainly look forward to Chris Bishop, who will speak next. God help us; I hope it is a better effort than his chairman’s at the FEC.

CHRIS BISHOP (National): I do not know about my colleague Mr Bennett, but I, for one, am going to miss Clayton when he shuffles off his political coil into whatever venture he journeys to outside this Parliament. I will miss Mr Cosgrove for his contributions. I was going to say “learned contributions” in the debates but I am not sure you could call them learned, but they are certainly amusing, and certainly he has provided a few comical moments in the debate on this bill with the other readings, and indeed, in the Finance and Expenditure Committee.

I was absent for various parts of the deliberation on the Taxation (Transformation: First Phase Simplification and Other Measures) Bill.

Hon Clayton Cosgrove: They were very long days when you weren’t there.

CHRIS BISHOP: Very long days when I was away, says Mr Cosgrove. Well, I am sure they were. They are very long days when I am here too, to be fair, because we are a very hard-working committee, the Finance and Expenditure Committee. I do just want to pay tribute to Mr Bennett because people listening on the wireless tonight, watching on Parliament TV, or watching online could be forgiven for thinking that Mr Bennett is not a diligent and dutiful chair of the Finance and Expenditure Committee, and nothing actually could be further from the truth. He is a very hard-working chair and he does do a great job. Despite all that we will miss Clayton when he goes.

I just want to pick up on one of the remarks that Clayton made. He said that I should have written David Bennett’s speech. Well, we now know what is going to be happening to Labour Party speeches going forward in that they will be written by the Green Party, because we have just had the tie-up of all tie-ups today, the political marriage—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

CHRIS BISHOP: —where one person promises to not be monogamous.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. With respect, you have given a ruling and I think Mr Bishop has got “David Bennett-itis”.

The ASSISTANT SPEAKER (Lindsay Tisch): That is not a point of order. I will just remind members that this is a third reading speech and the content of the debate is what has been referred from the Committee back into the House for the third reading. I mentioned earlier that there are Speakers’ rulings, a number of them, on pages 136 and 137. I will ask the member to come back to the bill.

CHRIS BISHOP: I apologise, Mr Assistant Speaker. I was just trying to wind Clayton up a bit, but—

The ASSISTANT SPEAKER (Lindsay Tisch): No, no. Just carry on with the bill.

CHRIS BISHOP: I do want to commend this bill because members opposite have said a few things—that it is not the transformation that the tax system needs—and they have tried to, I think, mitigate some of the actual expansive benefits that the bill does provide. For example, I think it is very good that with these amendments going through we are going to reduce the threshold for personal tax summaries, allowing for automatic refunds from 30 days to 15 days. That is actually, to be fair, going to be of substantive significance for a large number of New Zealanders. Thousands of New Zealanders are going to benefit from that. We are increasing the threshold for automatic refunds from $200 to $600 and we are reducing the wait time from 30 days to 15 days. That will be of benefit to a large number of people.

People might say “Well, look, it is just a small change.”, but, actually, sometimes it is the smallest changes that can have the biggest effect on people—actually, it is things like having to wait 15 days for your refund to come through and that threshold. Sometimes it is those small changes that are significant for people.

The other thing that I just want to quickly point out is that, as Mr Nash, I think, mentioned, the bill does, in some ways, bring our tax law and bring our Inland Revenue Department up to date with modern technology and up to date and into the 21st century. It is a little bit silly that certain communications have to be in writing or delivered by post even though, of course, delivering information electronically is by far the preferred means for many taxpayers and, of course, it is cheaper and more efficient for both the customers and the Inland Revenue Department. So that does make sense.

The bill also updates some of the language in our tax laws, and we had some very amusing conversations, I have to say, at the select committee about the various definitions of words and the various—

Andrew Bayly: Very technical—very technical.

CHRIS BISHOP: —cross-references into the literal mountain of tax legislation that this Parliament has managed to pass over the years. My colleague Andrew Bayly points out that it was very technical. Yes, we were really down—I think the colloquial phrase is “down in the weeds”. We were down in the weeds of the legislation, but, actually, that stuff makes a difference. As a lawyer—well, as someone who has a law degree; I am not allowed to say I am a lawyer—I know that words matter and, actually, you have got to get that stuff right. Andrew Bayly, in particular, did a really good job in the committee of sorting some of that stuff out. I think we have got a better bill as a result of the select committee consideration.

Look, members opposite might say that it is not the huge, great step forward—and we wait with bated breath as to what that new political marriage will deliver. Members opposite may condemn the bill a little bit but, actually, it is a substantive step forward, I think, for our tax legislation, and I commend the bill to the House.

JULIE ANNE GENTER (Green): Far from condemning the bill, as Mr Bishop was concerned that members opposite might be doing, I rise, of course, to speak in favour of the bill on behalf of the Green Party. It does make a number of very minor amendments that will make the tax system easier for ordinary New Zealanders to deal with every day. It will bring it back into the 21st century—I think Stuart Nash mentioned that earlier tonight. That is the sort of riveting stuff this bill does. It means that we can now use electronic signatures, get those automatic refunds a little bit earlier, and the Commissioner of Inland Revenue can now receive emails. All of that has to be done; there is no question. The Green Party is very happy to support that work in the House.

I will, of course, join with my Labour Party colleagues, and, no doubt, New Zealand First colleagues, in saying that this bill could be doing a lot more to make a substantial difference to New Zealanders. These sorts of below-the-radar amendments are necessary, but they are fundamentally not going to do anything to create a fairer New Zealand or a simpler, more transparent tax system. All of that could be done. The National Government has made a lot of excuses for why we cannot make those sorts of improvements to have a fairer tax system. It just says it cannot be done. For example, we cannot have a proper capital gains tax on investment properties, even though it is really clearly unfair that people who go and work hard from 9 a.m. to 5 p.m. for a pay cheque have to pay tax on their income and those who are well off enough to own a couple of investment properties in Auckland can make hundreds of thousands of dollars a year and not pay any tax on that income. It is unfair, it is inefficient, it is bad for our economy, and it is bad for financial stability.

The Reserve Bank has been talking about this for years now. Treasury has been talking about it for years. All the National Government has managed to bring in during its term is this brightline test, which applies only to residential land and applies only to properties bought and sold within 2 years. That was a very flawed piece of legislation, which really should have—well, I think we are going to see that the truth is that legislation will not have the impact it needed to have to cool the housing crisis in Auckland. It certainly does not make the tax system fairer or simpler. It makes it much more complicated, because it applies only to residential land and it does not apply for a long period of time to make a substantial difference.

Of course this legislation, because we were working on it for such a long period of time, tidies up all sorts of laws that exist. It makes a whole lot of amendments and tidies up the tax law and takes the language seriously. If only that level of detail and work had been applied to the brightline test, which was, clearly, a half-measure that National was forced to bring in at the last minute. It is that kind of very last-minute and, you know, just superficial approach to law-making, I guess, that really typically represents this National Government. It is more interested in doing things around the edges, tinkering here and there, doing things for public relations reasons to get the bump in the polls it needs, but not actually in addressing the substantive issues in our tax system that are long overdue for being addressed.

Of course this bill does not do anything to make our tax system more transparent, which is something the Green Party and, I am sure, other Opposition parties and most New Zealanders would like to see. I attempted to move an amendment in the Committee stage of this bill that would have cleaned up and increased the transparency around foreign trusts—

The ASSISTANT SPEAKER (Lindsay Tisch): No. The member cannot refer to that, because it was ruled out of order. So the member cannot refer to it in the third reading.

JULIE ANNE GENTER: Thank you, Mr Assistant Speaker. So this bill, of course, does nothing to improve the transparency around our foreign trusts, which is something that it could well have done. I think the National Government is going to find it is really not on the side of public opinion when it comes to New Zealand being used as a tax haven. It is because of this core value of fairness that New Zealanders have—and they would like to have a fair tax system. They would like to have legislation that ensures fairness, whether that is in New Zealand or overseas, and they probably do not think it is right that New Zealand is being used by wealthy foreigners to hide assets without having to declare any—

The ASSISTANT SPEAKER (Lindsay Tisch): I have brought to the member’s attention that you cannot refer to anything that is not in the third reading. This is a report back from the Committee. What the Committee has reported back, that is what we are debating now. The other information is out of order, and I ask the member to come back.

JULIE ANNE GENTER: You know, it is quite difficult for the National Government members that people should hold them to account for what they are not doing in their legislation, and so they try to shut down Opposition parties that would like to be able to speak about this. It is amazing—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! The member will sit. That is an attack on the Speaker, and I would ask the member to be very careful. It is not the Government that is making these decisions. I was the one who ruled your Supplementary Order Paper out of order in the Committee stage, not the Government. I was the one who ruled it out because I was the presiding officer at the time. That was a decision I made, and to bring that up now and to say that the Government was involved in trying to do something underhand is not acceptable. I would just ask the member to come back to the bill, otherwise I will have to terminate her speech.

JULIE ANNE GENTER: I raise a point of order, Mr Speaker. I just raise the point that we have heard about a wide range of topics related to tax in the previous speeches on this bill.

The ASSISTANT SPEAKER (Lindsay Tisch): No. I have ruled, and you were here when I brought other members to account for what they were doing and what they were saying. I have mentioned the Speakers’ rulings that are appropriate in this case. In your case, you have been referring to matters that are completely outside scope. I am the presiding officer; the judgment is mine. I have mentioned it to you on two occasions, and I will ask the member, in her final few minutes, to actually concentrate. The third reading speech is on what is reported back from the Committee to the House.

JULIE ANNE GENTER: One of the issues that have not been mentioned in this bill is the changes to KiwiSaver membership. The bill extends the provision for information sharing between the Inland Revenue Department and KiwiSaver fund providers in relation to email addresses and address contact details. It extends that to phone numbers and also may provide a scheme provider with certain information, including the names of scheme members who have transferred out of their scheme and the name of the members’ new provider and the names of the scheme provider’s new members. I am sure that people watching at home tonight would be riveted by this information in this bill, and they will think it is quite important.

Another incredibly important change that this bill makes is that it allows members who have been incorrectly enrolled in KiwiSaver when they were minors to now opt out of KiwiSaver, up until their 19th birthday. If they are under the age of 16 they must have the consent of one of their guardians, and if they are 17 or 18 they may withdraw without guardian consent. Those are the types of monumental changes that are in this Taxation (Transformation: First Phase Simplification and Other Measures) Bill. But I would say that New Zealanders are facing much bigger issues today, such as inequality in climate change, and the tax system could go a long way towards addressing those issues, while having broader economic benefits and making lives better for all New Zealanders. But we will not see that kind of change from this National Government, because it is protecting the status quo.

FLETCHER TABUTEAU (NZ First): It is my pleasure to rise on behalf of New Zealand First to support the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. I would just like to thank Mr Bishop. I did always –well “always” is a big term, but I listened intently to Mr Bishop’s contribution. He has got quite a background. He is a knowledgable young man. I just have to say he is kind of not standing up and stepping up to his usual standard. He was only slightly above par with Mr Bennett, and that is a low hurdle to jump over. Mr Bishop—next time.

Mr Bennett took the opportunity to attack the Opposition parties. He put the question mark out there about a capital gains tax. I just put it to him and to the National Party that you already have a capital gains tax. It is based on intent, and you choose not to enforce it or empower the Inland Revenue Department (IRD) to do its job properly, hence the mangled attempt at a clean-up, which was called the brightline, which made the legislation even worse. We had some good contributions from this side of the House outlining how that actually complicated and made the tax system more opaque and more difficult to deal with.

The Minister got up and spoke about removing obstacles to reform. That is kind of half the story. Actually, what he is doing is picking on people who have student loans and he is picking on people without fixed abodes, which seems to be becoming more and more of a problem, especially in Auckland but definitely around the whole country at the moment. It seems that this Government will let the problem grow, and continue to grow, into the future. Empowering the IRD to bill people without actually advising them, and breaching their human rights, is probably, in National’s eyes, a great way to go about trying to get those few pennies and the pound of flesh owed by New Zealanders.

The Minister spoke about the IT upgrade. It is quite amazing to describe in the Budget nearly a billion dollars of spend on an IT upgrade as a core infrastructure spend. It is bordering on misleading. It is an interesting use of phraseology and terminology. People would think that that huge sum of money—what was it; $2.2 billion or $2.8 billion—was about investing in the infrastructure of New Zealand. Actually, what we see from the past is that Mr Cosgrove spoke eloquently about Mr Dunne’s contributions as one of the longest-serving revenue Ministers. But under Mr McClay’s watch we had a supposed $35 million budgeted spend ballooning out to about $87 million. There were huge concerns around that. It was a blow out of the budget—I mean, it was more than double, for goodness’ sake. For the Minister to stand up and talk about nearly a billion dollars of expenditure on an IT upgrade—he put Dr Evil to shame.

We acknowledge as a party the need to upgrade the technology of the Inland Revenue Department, which is primarily the reasoning for our support tonight. We agree that the technology required is a necessity. There is a requirement for the IRD to upgrade its IT infrastructure in order to facilitate better communications, in two directions, with the New Zealand taxpayer. We need to get into that space.

Finally, for goodness’ sake, the commentary from New Zealand business on this legislation—more about the time it has taken to get to the House—has been unbelievable and quite derogatory of this National Government. It has taken way too long. It has taken 8 years too long to get here. For example, biometric scanning and things like that, so that you can ring and tell them on the phone who you are—under this legislation that is OK, and it is OK. We have seen banks, especially, lead the way, showing us that there can be security of content, and some security for users and the IRD that yes, the integrity of that system is in place.

What beggars belief, and I think this is the main attack on the Government’s slow move forward, is the need to simply allow businesses and individuals to communicate and do business with the IRD using email. We are only—I say “we”; the National Government is legislating for this only now. It is just unbelievable. So now the legislation allows—for example, I use an accountant. I can say to the IRD: “You can communicate with my accountant using email.” That is a reasonable form of communication. It does not have to be in writing. We do not need the signatures at the bottom. Let us facilitate meaningful communication in a fast and expedited manner. Let us get the business done, basically.

What I do want to touch on, though, and I alluded to it before—I think there were about 500 student loan cases where the Government cannot track down these people in Australia, so it is doing this two-way communication strategy with the Australian Taxation Office, saying: “We need your help. We need to track down these student loan dodgers who aren’t paying their loans back.” So we had a discussion about this in caucus. The fundamental thinking here is yes, fair enough. If you have got a student loan you used the New Zealand education system, and you need to pay that back. But what we see here is that the ideology and the focus of this Government is so misdirected.

The other case was—I do not have the numbers in front of me, but I am sure I will be corrected by the other side of the House if I get this wrong—there were about 174 cases that the Inland Revenue Department (IRD) provided to the Finance and Expenditure Committee when it identified the need to bill employers for the tax commitments of their employees, because it simply cannot find the employees. It cannot track them down. It cannot serve them notice in writing through a physical address, so it is going to do it for the employer. We were told this was a breach of human rights, but they are going to do it anyway for 174 cases. It just beggars belief, and it paints a picture of where this Government is getting it so, so fundamentally wrong. This is its priority list: 500 Kiwis in Aussie who are not paying their student loans—yes, we should get them—and 174 people who do not have a fixed abode and IRD cannot track them down.

I want to bring it to the attention of this National Government that there were many instances where IRD’s time could have been so much better spent in terms of digging into the big businesses that are avoiding their tax contributions—those that are using New Zealand not necessarily as a tax haven but overseas tax havens—and actually getting in there and communicating with not just Australia but other overseas jurisdictions, to make meaningful changes. The numbers are amazing when put in perspective. I think we are talking about a $700,000 tax take with the focus of this legislation versus 100 times that number, $7 billion, if we actually chased the corporate elite, but this absolutely goes against what this Government believes in and what it is trying to achieve. For the practical solutions that this legislation offers, New Zealand First will support the bill. We hope the Government sees that it is missing out on huge opportunities in terms of tax, compliance, and fairness as we move into the future. Thank you.

ALASTAIR SCOTT (National—Wairarapa): I would like to focus on the title of the bill—the “Transformation” word, the words “First Phase”, and the word “Simplification”—because today, coincidentally, there was an announcement of the first phase of the relationship between Labour and the Greens. Very simple—it is a nice simplification of what we now have to deal with in the Government vis-à-vis the Opposition, because now we are dealing with a much simpler Opposition. We no longer have to deal with the flip-flopping nature of Labour, because we know that we are going to be dealing with—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! The member has been here and I have made rulings in the course of this debate, and I will ask the member to come back to the bill. We are not interested in what is happening outside. We are interested in what has been reported by the Committee back to the House for the third reading. That is what we are focusing on.

ALASTAIR SCOTT: Thank you, Mr Assistant Speaker. We are dealing with transformation, and part of that involves change. That is what we are seeing from the other side of the House, and that is what we will be dealing with going forward. I commend this bill to the House. It is a very good bill. It makes things more convenient for the taxpayer through the simplification processes. It deals with electronic signatures. I commend this bill to the House.

Dr Megan Woods: Mr Assistant Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): Is this a split call?

Dr Megan Woods: This is a split call, yes.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Dr Megan Woods.

Dr MEGAN WOODS (Labour—Wigram): It is my pleasure to take a short call on this bill. The last speaker, Alastair Scott, said he was going to focus on the title of the bill, the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. I will come back to that. I think the reason the last speaker read it out is that really he had nothing to contribute to this debate. I think what we have seen in this House tonight is an incredibly low standard of debate, a low standard of debate where, actually, there is some political consensus around what should be—I mean, these are very simple measures.

If we take, for example, the flexible tax for business: this is going to be a popular policy. I know this because when I was out talking to businesses in Wigram when Labour launched this policy, they liked it and they thought it was a good policy. So to have the kind of standard of debate we have had in here tonight, where all that people can talk about is grown-up political relationships and what they mean, is disappointing. All I can say is that it smacks of someone whose relationship is going bad. After all, they have David Seymour, through all the Budget debate, telling everyone, in front of everyone—

Alastair Scott: I raise a point of order, Mr Speaker. I was talking about relationships and I was sat down.

The ASSISTANT SPEAKER (Lindsay Tisch): Look, I am the judge of this. The member Alastair Scott will sit, and I will ask the member Megan Woods to come back to the third reading.

Dr MEGAN WOODS: Thank you, Mr Assistant Speaker. I was just pointing out the absurdity of the level of debate and just how obsessed the Government is.

But if we are going to talk about this legislation—and other speakers have talked about this—I think that what this piece of legislation suffers from is a branding issue, because it has a very grand name. It purports to be transformational, and then we have some very micro changes. If we are thinking about the kinds of changes that we could have after 8 years in Government, is this what we would dream up? Is this the big idea that the Government has got? It is a tired old Government that has run out of ideas, has nothing new to offer, and cannot even string a 10-minute speech together from its backbenchers on a piece of legislation that should be a walk in the park. It should be a doddle, because there are some sensible measures in this legislation. I have talked about the flexible taxation for business. We are seeing some sensible measures, like the fact that the Inland Revenue Department can now send emails, and not a pigeon, to communicate around some of these issues, which is sensible.

This bill is about bringing our taxation system, in very small ways, into the 21st century, but it does not address some of the big transformational ideas about taxation that we on this side of the House would like to see. There is nothing in this legislation that addresses the very real and growing concern that New Zealand is being increasingly internationally recognised as a tax haven. That is because that is an issue that this Government will not own up to. It is an issue that this Government will not own. It says “Not a problem. Nothing to see here, look the other way.”, while all the time New Zealand is developing a reputation on the international stage as being somewhere where tax-dodgers can hide their money away and not pay their fair share. That is the kind of issue that we would see as needing to be addressed in a bill that purports to be about transformation issues, in terms of our tax system. We know that there are many things that we need to do in this country, and many of them do involve our tax system, because it is an important lever.

JAMES SHAW (Co-Leader—Green): It is my pleasure to rise on the third reading of the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. I wanted to just pick up on one of the points made by my colleague Megan Woods in her contribution just now, which is that for a party that is, nominally, the party of business, it does seem strange to me that this Government has made such anaemic efforts, in terms of tax reform. There is a lot more that it could have been doing over the lifetime of this Parliament and over previous Parliaments during which they have governed. But I would like to say that the Green Party, of course, will be supporting this bill.

The Green Party fought the 2011 and the 2014 general election campaigns on a platform of tax simplification, including measures similar to those that are contained in this bill, particularly the ones that are around making it easier for small businesses to simplify their provisional tax arrangements.

Having run a small business myself in a country with a relatively high tax burden, I can say it is very difficult. When you are a small business you have limited revenues and you do not have a lot of wiggle room to be able to manage your affairs in such a way as to be able to easily handle the provisional tax requirements. So this bill does go some way towards making it easier to run small businesses in New Zealand. As we all know, there are many hundreds of thousands of small businesses in New Zealand—many more people are employed in small business arrangements than they are in other parts of the economy. So that part of the bill we are particularly keen on—I am particularly keen on, as somebody who comes from that sort of background.

The other point that I wanted to mention was that the bill also allows employers to manage the tax implications of employee share purchase agreements, which I think is tremendous news, because there was a time when—particularly in the 1980s and in the early 1990s—businesses were much keener on including their employees in the ownership of the business than they have been over the course of the last 15 to 20 years.

Providing that kind of incentive, making it easier for both the businesses and the employees to participate in share ownership schemes, will help, I think. We all know that there is plenty of evidence that shows that businesses that have got employee share ownership schemes tend to outperform those that do not, because the employees are thinking not just about their take-home cheque at the end of the month but also about all of the conditions that make that business profitable and, therefore, what they will be able to participate in, in terms of dividends in that company; and that helps them to think about the overall business. So those businesses do tend to be more effective and more productive than companies that do not have share ownership schemes. So I am glad that there is a provision here that could lead to the expansion of share ownership schemes in small businesses—well, in all businesses—in New Zealand.

Of course, one of the bill’s main provisions is that it updates tax law to account for developments in electronic communications, putting them on the same footing as paper communications, which I am amused by, of course, because the World Wide Web was invented in 1990. So here we are, 26 years later, putting electronic communications on the same footing as paper communications.

So I commend this bill to the House.

ANDREW BAYLY (National—Hunua): This is a great bill. I am pleased to be part of the Finance and Expenditure Committee, which considered it. I have said before in the House that New Zealand has a wonderful, great, simple tax system. This is a further refinement of our tax system. It does the right things: it removes references to outdated communication, it allows earlier tax repayments, and it allows the Inland Revenue Department to share information. On that basis, I commend this bill to the House.

Dr DAVID CLARK (Labour—Dunedin North): We will be supporting this bill on this side of the House—not because it is true to its title in being truly transformational but because we support the small steps in it towards simplification and towards making our tax system more robust. Actually, across the House we like a robust tax system. I think there is a shared view that our tax system should be broad-based and fair, and should encourage people to pay their fair share. What we on this side consider to be a fair share and what they over that side consider to be a fair share might be different, and might be differently spread, but we all agree that we need a tax system to afford those things that New Zealanders really care about: health, education, and so on—the stuff of Budgets.

Of course, it has to be said also that although there are some simplification measures in here, there are things that are not addressed that should have been addressed in this bill. We could have had a fairer tax system overall. We could have had a system that worked for middle New Zealand, not just the wealthiest New Zealanders, which seems to be what this Government is hell-bent on achieving—a system that really is tilted towards those people who are engaged in the Panama Papers and so on. We on this side of the House would like nothing more than to have a fairer tax system where everybody pays their fair share and where opportunity exists for middle New Zealand to get ahead, but that, unfortunately, is something that is becoming increasingly difficult. We know we have got the lowest homeownership rates in New Zealand in 60 years, I think it is—50 or 60 years—and that is a disgrace. We would like to see more done in that area. We would like to see the health cuts that this Government has put through stop. We would like to see schools funded properly—you know, getting the basics right, rather than a focus on the super-rich.

Among the issues that have been raised in the Committee stage was one of particular concern about whether the Government is able to implement this bill. I was pleased to see the Government putting some money towards the transformation project that the Inland Revenue Department is undertaking, and I congratulate the Minister, Michael Woodhouse, on progress in that area. It has been a long time coming, and it is good to see some genuine progress being made. Time will tell what that system looks like and how well the money is being spent, but I do wish to offer my congratulations on the early steps to my colleague, who also resides in Dunedin.

We will be supporting this bill, as I have said from the beginning. We have concerns about the overall fairness of the tax system, the rating drop in the Transparency International Corruption Perceptions Index, and the way the tax system could be made better, but we do support the incremental steps being made here to make sure that breaches in our tax system are covered over and to make sure people can interact more easily with the tax system. We see that in this bill, for example, in allowing electronic communications where previously only a letter sufficed; that is bringing the tax system into the modern age. We do support that. Thank you.

TIM MACINDOE (National—Hamilton West): Somewhat unexpectedly, I find myself taking a call on the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. I do so with great pleasure, and I want to acknowledge the work of those members of the Finance and Expenditure Committee who have considered the bill. I thank the members of the House who have spoken tonight and, I think, in the main, have engaged constructively with the principles of the bill.

I am intrigued to follow Dr Clark, and I say to Dr Clark that when he first entered this House I saw in him a gentleman who I thought would go a very long way in the Labour Party, but I am disappointed to find that in recent speeches he seems to be resorting to clichés and dogma, and he is not speaking with great conviction. I would suggest to him that instead of trying to parrot out these lines suggesting that the National Party is looking after its corporate mates, that we have got a taxation system that is only looking after the fair, and all the rest of it, what he might actually consider is the fact that this is a Government that has lowered the tax burden for hard-working Kiwis on low and middle incomes to the lowest level ever. I am very proud of that. I was very proud to support that when we passed that measure through in 2010 with the tax switch.

Dr David Clark: You borrowed more than Muldoon along the way, though.

TIM MACINDOE: Instead of listening to me, Dr Clark, you simply decided to shout over me. I did not shout at you, Dr Clark, and it would be lovely if you might actually listen instead of just shouting while I am speaking. I do believe that Dr Clark is better than that, and I do know that he is an intelligent man who, I am sure, could understand the issues and could give a much more effective analysis of them.

Dr Megan Woods: This speaker needs some speech notes. Someone pass them.

TIM MACINDOE: No, I do not require any assistance from Dr Woods either. I am very happy to point out the fact that this is a Government that is committed to a fair tax system and understands that a low tax rate across the board is one that, ultimately, produces greater revenue because it is one that has incentives for people to work hard. The higher the tax burden—and you see that in many of the Third World countries—the lower the actual revenue that is achieved because there are far greater incentives to avoid tax and for corruption and all the rest of it. This is a bill that is contributing further to the fact that the New Zealand economy benefits from one of the best tax systems in the world.

I acknowledge my very good friend Mr Woodhouse, the Minister of Revenue, who has signalled through the Budget announcements that there are further significant transformations coming in the tax area. I look forward to that. I know that the business community looks forward to that. Ultimately, I believe that they will be of benefit to all New Zealanders. So it is for that reason that I am delighted to support this bill.

Bill read a third time.

Sittings of the House

Sittings of the House

TIM MACINDOE (Senior Whip—National): The House has made very good progress this evening. I understand that all the whips are in agreement that as we are very close to the House rising, I suggest that we knock off just a few minutes early.

The ASSISTANT SPEAKER (Lindsay Tisch): You have to seek leave.

TIM MACINDOE: I seek leave, therefore, for the House to rise a few minutes early this evening.

The ASSISTANT SPEAKER (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is no objection.

The House adjourned at 9.56 p.m.