Tuesday, 9 August 2016

TUESDAY, 9 AUGUST 2016

TUESDAY, 9 AUGUST 2016

Mr Speaker took the Chair at 2 p.m.

Prayers.

Oral Questions

Questions to Ministers

Question No. 1 to Minister

METIRIA TUREI (Co-Leader—Green): Tēnā koe, Mr Speaker. Tēnā koutou e Te Whare—and happy birthday, Prime Minister. [Interruption] You have got to be polite. I seek leave to have this question transferred back to the Prime Minister, to whom it was originally directed.

Mr SPEAKER: No. [Interruption] Order! I have ruled on this matter many times. I am not prepared to put the leave. It is the prerogative of the Government to determine who is best to answer the question. The member can proceed if she wishes; otherwise, I am happy to move to question No. 2.

Housing Market, Auckland—Affordability

1. METIRIA TUREI (Co-Leader—Green) to the Minister for Building and Housing: How many years will it take for a median-priced Auckland house to be affordable, at three to four times the median Auckland household income, with Auckland house prices growing almost six times faster than wages?

Hon Dr NICK SMITH (Minister for Building and Housing): The ratio of incomes to house prices is too simplistic and ignores the impact of interest rates, which are at 40-year lows of 4.5 percent. House prices have never been three or four times incomes with interest rates this low. There are too many unknowns, like what interest rates will be in the future, to state what future ratios of house price and income will be.

Mr SPEAKER: Order! Can I just have a little less interjection, please?

Metiria Turei: Does the Minister agree that for houses to be more affordable, the gap between house prices and incomes needs to reduce?

Hon Dr NICK SMITH: That is just part of the equation. Of course, having the lowest interest rates in more than 40 years actually makes housing much more affordable than the 10.5 percent that interest rates were when National came into Government. This Government is also committed to growing incomes, and that is why, for instance, it has had to increase the income caps on its HomeStart scheme—because my colleagues are doing such a good job of growing the economy and growing wages.

Metiria Turei: What was the Auckland median house price-to-income ratio when he became the Minister for Building and Housing 3 years ago, and what is it now?

Hon Dr NICK SMITH: I do not have those exact figures on me, but what is interesting is that, nationally, the ratio of income to house price is less than what it was when National became the Government.

David Seymour: Is the House to take it that the current high ratio of house prices to incomes is high purely because interest rates are low?

Hon Dr NICK SMITH: No, house prices are affected by a significant number of factors. One of the most important factors in Auckland is that a metropolitan urban limit and bad planning policies have made it very difficult for new houses to be built, and that is why this Government is putting so much work into reforming the Resource Management Act. That is something that the Green Party has consistently opposed, and it opposed the very policies that will make houses more affordable in a city like Auckland.

David Seymour: What, then, would be housing affordability by the Minister’s measure if interest rates were to return to, say, 8 percent, as they were less than a decade ago?

Hon Dr NICK SMITH: I give credibility to the independent indexes around housing affordability, produced by both Massey University and interest.co.nz. They split the limit at which a portion of an average person’s income is spent on a mortgage, and the sort of affordable range for those is about 35 percent. That is not where it is in Auckland and that is why we have work to do.

Rt Hon Winston Peters: If the Minister and his colleagues are doing such a great job to grow the economy, how come senior economists now say that extracting mass immigration and consumption sees the growth rate at less than 0.5 percent, and how will such a non-productive export economy failure provide the housing in the future?

Hon Dr NICK SMITH: I trust those who vote with their feet. Record numbers of people are voting with their feet, particularly New Zealanders returning to this country, because it is doing well. And I challenge that member to state a Western economy that is doing better than the New Zealand economy.

David Seymour: Can the Minister confirm that mortgage interest rates hit 11 percent in each of the periods 1996 to 1999 and 2005 to 2008, and can he identify any common factor in those two periods?

Hon Dr NICK SMITH: It is correct that interest rates were very high particularly during the term of the last Government, and that drove housing affordability in the years 2006, 2007, and 2008 to the worst levels ever under those independent measures, and despite the high house prices that we have now in all regions of New Zealand, by those independent indexes that measure and include interest rates, housing is surprisingly more affordable than when we became the Government.

Andrew Bayly: What was the core reason identified by the Productivity Commission for the sustained rise in house prices in Auckland since 2000, and what is the Government doing to address this problem?

Hon Dr NICK SMITH: The Productivity Commission identified that the core problem was restrictive planning policies from fragmented councils that consistently blocked new housing developments. That is one of the reasons why the Government merged the Auckland councils and provided a streamlined process for a new Auckland plan that is close to completion. I do note that both the Green and Labour parties opposed that streamlined process for a new unitary plan. That core work has been complemented in the short term by special housing areas, and in the long term by the National Policy Statement on Urban Development and the Government’s Resource Management Act reforms.

Rt Hon Winston Peters: Why is the Minister blaming everybody but the Government and himself for a result that sees us building less houses now than we built 42—

Hon Member: It’s fewer.

Rt Hon Winston Peters: —or fewer; many less. Call it what you like: it is a crisis, sunshine.

Mr SPEAKER: Order! I think—

Rt Hon Winston Peters: Forty-two years ago—we are building fewer houses now than we built 42 years ago—[Interruption]

Mr SPEAKER: Order! The question has been asked. The question can be answered.

Rt Hon Winston Peters: No, no. Point of order, Mr Speaker.

Mr SPEAKER: Order!

Rt Hon Winston Peters: I have not got to the punchline yet.

Mr SPEAKER: Well, the member will have to wait and use another supplementary question and be far more concise.

Hon Dr NICK SMITH: When I became the Minister for Building and Housing, New Zealand was building 14,000 houses per year. The latest figure is that we are building more than double that—29,000 houses per year. The main crisis that I hear in the building industry is a shortage of skills, and that is why the Government is investing in a record number of apprentices. Only a blind man would not recognise the building boom under way in New Zealand right now.

Andrew Bayly: What impact would a policy of halving house prices in Auckland have on ordinary New Zealanders?

Hon Dr NICK SMITH: A policy of the Government directly halving house prices in Auckland would have a devastating impact on hundreds of thousands of Auckland families, who would be left in negative equity. This policy from the Greens was rejected by Labour, and shows their memorandum of understanding is already in tatters. [Interruption]

Mr SPEAKER: Order! [Interruption] Order!

Economic Outlook—Growth

2. ALFRED NGARO (National) to the Minister of Finance: What is the outlook for economic growth, given elevated business and consumer confidence, rising export values, and higher consumer spending?

Hon BILL ENGLISH (Minister of Finance): In the last month we have seen a range of measures that point to some strength and resilience in the New Zealand economy despite ongoing international uncertainty. Business and consumer confidence continue to run above long-run averages, supporting business investment and consumer spending. Firms are reporting relatively high capacity utilisation. Residential construction and commercial construction intentions are high and rising. The most recent business outlook survey from the ANZ shows a net 16 percent of firms are optimistic. ANZ also reports that advertised jobs are up 9 percent over the past year.

Alfred Ngaro: What are some of the main drivers of economic growth?

Hon BILL ENGLISH: What we are seeing in the recent data is reasonably broad-based economic growth. Both volumes and values of exports are rising, with seven of 10 export categories increasing in value in the June quarter. Overall the trade balance is around a billion dollars better than expected. New Zealand received 3.3 million visitor arrivals in the year to June—a new record—up 11 percent in the year. The manufacturing sector is growing, with the most recent performance of manufacturing index showing reasonable growth.

Alfred Ngaro: What other sectors are supporting growth and jobs through increasing exports as part of building New Zealand’s broad-based, resilient economy?

Hon BILL ENGLISH: Growth across a range of exports is fairly positive. For instance, ICT exports have more than doubled since 2008 to $930 million per year, and now employ 23,000 more people in the last 5 years. Horticulture exports are up 17 percent over the last 3 years to $4 billion. Horticulture is now employing 9,000 more people than 5 years ago, a 15 percent increase.

Alfred Ngaro: How is business confidence in the building and construction sector translating to more houses where they are most needed?

Hon BILL ENGLISH: The ANZ reports that confidence in the construction sector, particularly residential construction, is very high, with a net 57 percent of firms reporting a positive outlook for growth in their own activity. Employment and investment intentions in the construction sector are both strongly positive. This is consistent with confidence at a reasonable level across the wider business sector.

Rt Hon Winston Peters: When he was asked about the biggest driver of economic growth, why did he not refer to what the Reserve Bank, Treasury, other banks, and people like Kerry McDonald are saying—that the biggest driver is mass immigration, which cannot be sustained?

Hon BILL ENGLISH: Because the member is not correct. If he breaks down the immigration numbers, he will see that the biggest single influence is that New Zealanders have stopped leaving. Four years ago there was an outflow of 39,000 to Australia; this year this was a net inflow of 2,000. We regard that as success. The member seems to think he should boot them out to try to drop house prices.

Housing—Affordability and Availability

3. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he have confidence in the Minister for Building and Housing, given that, after 3 years in the job and numerous policies that were supposed to make housing more affordable, he now says it’s “probably not a good time for a young family to buy” and they “should be patient”?

Rt Hon JOHN KEY (Prime Minister): Yes. I am pleased that the member acknowledges the Minister has advanced numerous policies as part of the Government’s comprehensive housing plan. They include a new $1 billion Housing Infrastructure Fund, over 210 special housing areas for 70,000 new homes, an expanded HomeStart scheme for first-home buyers, the national policy statement on urban development, Resource Management Act reform, a raft of extra tax measures, a new unitary plan for Auckland, more tools for the Reserve Bank, and independent urban development authorities for areas of high housing need. By any definition that is a comprehensive housing plan.

Andrew Little: In light of that answer and moving on from good intentions, does he agree it is a bad time for young families to buy, especially given Bill English’s estimate that only 500 affordable homes were built in Auckland last year?

Rt Hon JOHN KEY: I think the point the Ministers have been making is it is important for every person who buys a house to consider all the factors and to do so with their eyes open. We have interest rates that are at a 60-year low. Of course, we have a very strong economy with strong wage growth, and that makes it more affordable. But house prices do go down as well as going up, and I think it is important that people just are observant of those facts.

Andrew Little: Given Auckland house prices have doubled on his watch from $496,000 to $992,000 does he now accept that the average Auckland house is out of reach for most families?

Rt Hon JOHN KEY: No. If you look at the year to 31 March 2016 in Auckland there were 31,963 sales. Sales in the under $600,000 category of existing homes were over 30 percent of that—9,638 sales. For new houses under $650,000 there were 11,842 constructed—37 percent of sales.

Andrew Little: After 8 years why has he failed to stabilise house prices and build enough affordable houses?

Rt Hon JOHN KEY: As I said to the House before, in the early part of the term of this Government there was not strong demand for housing, but because of the economic programme of the Government we have now seen New Zealanders returning from overseas, we have seen New Zealanders not leaving, and on the back of all of that we are actually seeing the biggest housing boom in New Zealand’s history. An enormous number of houses are being built—and, yes, of course it is taking some time to work its way through the system. It is not unique, I should say: if one looks around the world at cities like Melbourne, Sydney, London, Dubai, New York, and many others, they are also experiencing quite high house price increases.

Tim Macindoe: How is the Government’s comprehensive housing plan translating into new houses around New Zealand, where they are needed most?

Rt Hon JOHN KEY: We are now in the middle of the biggest housing boom New Zealand has seen. We are on track to build 85,000 houses across New Zealand in this term—

Mr SPEAKER: Order! [Interruption] Order! I apologise for interrupting, but the level of noise now coming from my left is at a level where I am going to have to deal with it rather severely. I do not mind some interjection, but just because members may not like a question or like an answer it does not need to lead to a constant barrage coming from my immediate left.

Rt Hon JOHN KEY: The construction industry is the biggest it has ever been; there are around 40,000 more people working in the sector than 2 years ago. In the year to June residential building consents increased 16 percent to over 29,000—the highest for a June year since 2004. The Government’s comprehensive plan is boosting housing and supply, and we need to build on this good momentum.

Andrew Little: Why is Auckland City 40,000 houses behind what it needs to accommodate today’s population?

Rt Hon JOHN KEY: Primarily, actually, it is because of bad planning rules, I think, around Auckland. But the good news is that those planning rules are about to be reformed under the new Auckland Unitary Plan.

Andrew Little: Rather than hoping that the problem will fix itself, is it not time that he got off his backside and he and his Government got in behind Kiwis who want to own their own homes, and just built some bloody houses?

Rt Hon JOHN KEY: The only person who is in hope is Andrew Little, who hopes that one day he will poll higher than Winston Peters.

Tim Macindoe: What reports has the Prime Minister seen about whether alternative approaches would succeed in controlling house price inflation?

Rt Hon JOHN KEY: I have seen one report, which was completely inconclusive about its chances of controlling house price inflation. It said: “It’s hard to be specific about that.” That was, of course, Andrew Little on his pipedream of building 100,000 houses for just $2 billion.

Andrew Little: Why does he think that the majority of New Zealanders now back Labour’s KiwiBuild plan to stabilise house prices and build 100,000 affordable homes for families to buy?

Rt Hon JOHN KEY: A sound bite does not make a plan. [Interruption] If the best that New Zealand can do is 100,000 houses over 10 years then we are in serious trouble, because this Government will see 100,000 constructed over 4 years.

Andrew Little: Is this not the truth: his half-baked policies, his bumbling Minister for Building and Housing, and all the hollow promises will not solve the housing crisis, and that he leads an arrogant and out-of-touch Government that has given up on the Kiwi Dream of homeownership?

Rt Hon JOHN KEY: No. If one looks at the activity that has taken place, the enormous amount of action that we are actually seeing—and actually the inaction that we saw in the 9 years of the previous Labour Government—then we can actually see a credible plan to more houses being built. And that is the reason why most New Zealanders actually can see that that is working. Of course it is going to take some time, but that is a factor that we are working our way through. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Mr Twyford, please, less interjection from you specifically.

Metiria Turei: Does he agree that for homes to be more affordable for families, the gap between house prices and incomes needs to reduce?

Rt Hon JOHN KEY: Well, as the Minister for Building and Housing said earlier in the House today, that is a factor—but there are many other factors, including interest rates. One thing I will say is that if house prices in New Zealand were to halve, that is a war on the poor. It is the poorest New Zealanders who, in percentage terms, borrow the most against their houses. Metiria Turei has been telling New Zealanders—and the Opposition is supporting her—that halving house prices will actually see the poorest New Zealanders have all of their equity eliminated. That is a war on the poor.

Metiria Turei: Given that house prices are rising at more than 10 percent nationwide but Treasury predicts wage growth at less than 3 percent, when does he expect that housing will become more affordable for families in Auckland?

Rt Hon JOHN KEY: There are a number of factors. Firstly, very low interest rates, stronger real wage growth than we have seen for a very long period of time, and strong employment markets actually are supporting young people and, actually, people across the board to be able to afford housing. That is the reality—that they have got the confidence of doing that. One of the reasons why more people are interested in buying houses in New Zealand, particularly in Auckland, is that they do feel that confidence in the Auckland market.

Metiria Turei: How many of the 400,000 Aucklanders aged between 20 and 40 will be locked out of the housing market because of low wage growth and skyrocketing house prices?

Rt Hon JOHN KEY: By any definition, you cannot say there is low wage growth in real terms. When one looks back at the previous Government, there was virtually zero real wage growth in New Zealand because inflation was high. Inflation is running at extremely low levels, interest rates are extremely low—in fact, they are at a 60-year low—and employment markets are very strong. They are the conditions that support young people to get into a property. What we will see, I think, is a change in the nature of the sorts of properties that young people buy—more of them buying apartments and the like. That is an international trend that we are seeing. But to say that someone cannot buy a house in Auckland at under $600,000—which is where the Government’s KiwiSaver HomeStart scheme is set—is not true: there are many apartments, townhouses, and some homes in that category.

Metiria Turei: Given that when he became Prime Minister the median Auckland home cost six times the median household income and now it is almost 10 times that, when does he expect that that number will stop growing?

Rt Hon JOHN KEY: When I became Prime Minister, 35,000 Kiwis a year net left for Australia. When I became Prime Minister, interest rates were 8 percent, and 11 percent in some retail numbers. When I became Prime Minister, there was a significant recession and a decade of deficits. One of the reasons why New Zealanders are coming back to this country is that they see the opportunities that are being created. I think most New Zealanders would prefer the conditions they see today than those in 2008 when I first became Prime Minister.

Construction Activity—Residential Building and Build Quality

4. JAMI-LEE ROSS (National—Botany) to the Minister for Building and Housing: What reports has he received showing construction activity has topped $18.3 billion and that this is the highest rate ever in inflation-adjusted terms?

Hon Dr NICK SMITH (Minister for Building and Housing): The reports for the year to June—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I seek your guidance on this question. If one reads it, it is simply unintelligible; for example, $18.3 billion—when? Over what period of time? On construction activity—what? None of that is explained, and the Minister is being asked a question that, in terms of what you would expect from any First World Parliament, is simply below par.

Mr SPEAKER: Order! No, I—[Interruption] Order! I find the question intelligible enough for it to be answered, and it can be.

Hon Dr NICK SMITH: The reports for the year to June do show construction activity across New Zealand is now at an all-time high, and 20 percent higher in real terms than any previous peak. I am particularly encouraged by the increased investment in residential housing, at nearly $12 billion per year, and the June figures for consent in Auckland being up 30 percent on the previous June last year. We have now had five consecutive years of strong growth in Auckland house building, taking the rate from 3,500 per year to over 9,500 per year—or, to use the Leader of the Opposition’s language, we are building a bloody lot of houses.

Jami-Lee Ross: What reports has he received on further projections of new house construction, particularly in Auckland, and how does the number of houses projected to be built compare with historic numbers?

Hon Dr NICK SMITH: The latest pipeline report, which is independently produced by the Building Research Association of New Zealand, on housing construction in Auckland shows that the equivalent of two Whangareis, or 80,000 homes, are in the pipeline to be built over the next 6 years. It is projecting over 13,000 homes being built in Auckland next year—and that is an all-time high—and it is staying above those record levels all the way through to 2022. The track record of 4 consecutive years of strong growth in housing construction plus this independent report showing continued record construction shows that the Government’s programme of increasing housing supply is working.

Jami-Lee Ross: What steps is the Minister taking to ensure that standards of work are maintained through this building boom?

Hon Dr NICK SMITH: There are risks to the quality of building work with the record levels of activity, which are stretching the skills base, the industry capacity, and councils’ quality assurance systems. We are making a record investment in new apprenticeships in the building sector, we are reforming the accreditation system for building consent authority so as to raise standards, and I announced over the adjournment changes to 32 building code compliance documents to help ensure that we maintain the very best practice and latest building research in ensuring that we get quality as well as quantity.

Trade, China—Steel Imports and Retaliatory Export Restrictions

5. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that threats of trade retaliation by China if New Zealand investigates substandard Chinese steel imports are “unsubstantiated rumours”, given his Government has been discussing that threat with China since May?

Rt Hon JOHN KEY (Prime Minister): Yes. Every time the issue of possible retaliatory action against our exports has been raised, New Zealand has sought, and received, assurances from China.

Andrew Little: Was the Government’s decision not to investigate substandard Chinese steel imports connected to trade threats from China, or is that just a coincidence?

Rt Hon JOHN KEY: I am not aware of the decision that the Government has made in regard to that.

Andrew Little: Is it just another coincidence that our kiwifruit exports are now blocked from China after Chinese threats of trade retaliations if we investigate its steel dumping?

Rt Hon JOHN KEY: My understanding is that the issue holding up imports of Zespri kiwifruit into China is a technical matter. It is a technical matter related to some rot that was found on fruit that was imported some weeks earlier. My understanding is that Zespri has voluntarily decided not to export the fruit, because it is going through, now, a pre-examination process that will ensure that when it restarts the exports to China, they are rot-free.

Andrew Little: Why is it acceptable for China to ban New Zealand exports for containing a fungus that poses no health hazard and has been present on our kiwifruit exports to China for years?

Rt Hon JOHN KEY: The member is Leader of the Opposition and, on the basis of that, he has some responsibility at least to get the facts vaguely correct. The fact is that Zespri voluntarily stopped sending exports of kiwifruit to China for about a week. They have not been banned by the Chinese.

Andrew Little: How has he let the relationship with China get to the point where it is allowed to send us shoddy steel but we cannot send it top-quality kiwifruit?

Rt Hon JOHN KEY: The member is just making this stuff up. He does himself a disservice.

Northland—Roading Projects and Police Resourcing

6. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements; if so, how?

Rt Hon JOHN KEY (Prime Minister): Yes; and by celebrating my birthday by having such a wonderful working relationship with the member.

Rt Hon Winston Peters: Oh, so he has become delusional as well? He has become totally delusional all of a sudden.

Mr SPEAKER: Supplementary question, the Rt Hon Winston Peters.

Rt Hon Winston Peters: In Northland, which of the 10 double-lane bridges he promised is under construction; how many metres of the Pūhoi to Warkworth highway, promised 7 years ago, or metres of the Warkworth to Wellsford highway, promised 17 months ago, have been constructed; and how many cell towers have been built, as promised by Steven Joyce and himself 17 months ago?

Rt Hon JOHN KEY: I do not have all of those details with me, but if the member spent a bit more time going around his electorate he would probably see them.

Rt Hon Winston Peters: That’s the problem; I can’t see them. Supplementary question—

Mr SPEAKER: And I will have the supplementary question.

Hon Member: Maybe you should pay a visit.

Rt Hon Winston Peters: I have been there more times in one month than the whole time he has been the MP for Helensville, and that is a fact.

Mr SPEAKER: Order! I do not need the interjections, to assist the order of the House, from the right-hand side. Would the member like to ask his supplementary question.

Rt Hon Winston Peters: How does the Prime Minister explain his 2008 policy of “more police on the beat” as there are many fewer police on the beat per capita right now than there were when he made the promise?

Rt Hon JOHN KEY: I know the member struggles a bit with maths, but 600 more police is 600 more police officers on the beat—not to mention the changes in technology, which have seen about an additional 300 extra police in terms of hours than they spend on the beat. There are more police officers in New Zealand and more of them working on the beat.

David Seymour: Were any of those new police on the beat immigrants per chance?

Rt Hon JOHN KEY: Yes. We like to draw from all sorts of New Zealanders, from different backgrounds, to be part of the police force. In fact, in the Diplomatic Protection Squad I noted the other day, just to the group who were with me, that all three of them had come from the United Kingdom and were there, providing great service to New Zealand. I am sure that they would be police officers whom Winston Peters would support in his open policy on migration into New Zealand.

Rt Hon Winston Peters: Enough of that boring crap! Supplementary question, Mr Speaker.

Mr SPEAKER: Well, if the member wants one, just lead into it.

Rt Hon Winston Peters: Does he think that his Government is providing Northland police with the resources, when the total number of burglaries in 2008 to 2015 was 17,319, with an arrest rate of 3 percent?

Rt Hon JOHN KEY: If one looks at the crime rate in New Zealand overall, it has been fraught. This is a Government that committed to having more police officers. There are 600 more. There has been greater technology available to police officers to allow them to do their jobs more easily. As I said this morning, over time, as the population grows, the Government is committed to increasing police numbers.

Rt Hon Winston Peters: Why has his Government not given the Northland police the resources to deal with the crime rate increase of over 66 percent, from these police figures given to us, since he has been the Prime Minister?

Rt Hon JOHN KEY: My understanding, although the member might want to ask the Minister of Police directly, is that extra police have been earmarked for Northland. We have added extra resources already this year, and a further six will be added soon.

Rt Hon Winston Peters: I seek leave to table a letter dated 2 August from the police themselves with background information verifying the questions today. [Interruption]

Mr SPEAKER: Order! Can the member just describe it again, for the benefit of the House, and then I will put the leave.

Rt Hon Winston Peters: It is a letter dated 2 August from the police—events selected by type code, closure result code, and year, for Northland; pages of that, including—well, there are so many crimes up there, but they are all in this list.

Mr SPEAKER: I will put the leave and if it is tabled, the House will then be able to decide what it is about exactly. Leave is sought to table that particular letter, dated 2 August. Is there any objection? There is objection.

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

Mr SPEAKER: Order! This is a point of order, and I wish to hear it in silence.

Rt Hon Winston Peters: Apparently Mr Brownlee demurs, on the basis that he could not hear what I was saying—not known for diction himself, of course.

Mr SPEAKER: Order! Nobody has to give a reason for denying leave. Leave is put, and any member has a right to deny it. It has been denied.

Broadband, Ultra-fast and Rural—Progress

7. TODD BARCLAY (National—Clutha-Southland) to the Minister for Communications: What recent announcements has she made on the progress of the Government’s broadband initiatives?

Hon AMY ADAMS (Minister for Communications): Yesterday I was pleased to announce that more than 1 million households, businesses, schools, and hospitals are now able to connect to the ultra-fast broadband (UFB) services. This means 2.4 million New Zealanders can now connect to UFB, which is an outstanding achievement at this stage of the build. There are now more than 830 new households and businesses connected every working day—more than one every minute. And, we have completed more than 19 towns across regional New Zealand, the latest being Queenstown in that member’s electorate.

Todd Barclay: How has the Rural Broadband Initiative (RBI) contributed to faster broadband for rural New Zealand?

Hon AMY ADAMS: Our objective for the RBI build was to deliver faster broadband to rural communities, and the programme has been incredibly successful in achieving this. Prior to the RBI, only 20 percent of rural lines were capable of speeds of around 5 megabits a second. Rural Broadband Initiative 1 (RBI1)—phase 1—increases to 90 percent of rural New Zealand households and businesses, and speeds are, in fact, well in excess of that, and in many cases around a hundred times faster than in 2008. Now that RBI1 is complete, I look forward to continuing to improve connectivity in our rural communities with the second phase of the RBI.

Fishing Industry—Deaths of Marine Mammals

8. EUGENIE SAGE (Green) to the Minister for Primary Industries: Is it acceptable that an estimated 530 dolphins have been killed by fishing trawlers in the last 6 years on his Government’s watch?

Hon NATHAN GUY (Minister for Primary Industries): I think everyone would agree that even one death of a dolphin is unacceptable; however, estimated captures have decreased significantly since the early 2000s. The Government wants to protect these unique marine mammals, and the fishing industry realises that its social licence is just as important as its fishing licence. That is why we have doubled the number of observers over the last decade, prosecuted fishers when presented with reliable evidence, and are fast-tracking cameras and GPS on every vessel, but there will always be more work to do.

Eugenie Sage: Does he agree with George Clement of Seafood New Zealand that dolphins, seals, and seabirds are “putting themselves at risk near fishing boats and causing themselves harm”; if not, why not?

Hon NATHAN GUY: I think the wording of Mr Clement’s statement is regrettable, but the point is that fishermen do not actually want to catch dolphins, seals, or other protected species, and they do what they can to avoid this accidental bycatch.

Eugenie Sage: Will he introduce sustainability measures under the Fisheries Act to prevent dolphins being caught and killed in commercial trawl nets; if not, why not?

Hon NATHAN GUY: There is a lot of work that has been ongoing, to do with research and development and new technologies and methods. The fishing industry is very aware that it should not put out or haul its nets in in the early hours of the morning, between 2.30 and 4.30 a.m. They are already looking at using—and some are—the dolphin dissuasive devices commonly called “pingers”, where some fisheries overlap with where dolphins may be. These are common-sense measures that the fishing industry is choosing to implement as we speak.

Eugenie Sage: When an estimated 81 dolphins were caught in the 2013-14 year, how many dolphins have to be killed in the jack mackerel fishery before he considers closing that fishery, or parts of it, to prevent further dolphin deaths?

Hon NATHAN GUY: I do not think there is a clear number. What I would say is that the Environment Aotearoa 2015 report shows that significant progress is being made in reducing seabird capture, which is estimated to have fallen by around 40 percent since 2002. I understand that there is still more work that needs to be done.

Eugenie Sage: I raise a point of order, Mr Speaker. My question was about dolphin deaths in the jack mackerel fishery; the Minister answered in relation to seabird deaths.

Mr SPEAKER: As I listened to the question, the member said “What is the specific number?”, and the Minister answered immediately by saying that there was no specific number he could give. The question was addressed.

Health Services—Doctors’ Fees

9. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: Does he stand by his statement that changes to doctors’ fees is “a problem actually that can’t be solved without more money”; if so, why did he not put a Budget bid in as “pushed” to by Treasury?

Hon Peseta SAM LOTU-IIGA (Acting Minister of Health): I did put in a Budget bid for increased subsidies for doctors visits, and with the strong support of the Minister of Finance and the Prime Minister we received an extra $25 million for primary care. This means that under this Government, subsidies for doctors visits have gone up over $230 million to $900 million in this year’s Budget. That is an increase of 24 percent.

Hon Annette King: So is the Minister saying that additional funding was put in for primary healthcare that will address the 434,000 high-needs New Zealanders who miss out on affordable primary healthcare; if not, why not?

Hon Peseta SAM LOTU-IIGA: No. What I am saying is that the Government subsidies for doctors visits have gone up $230 million over the last 8 years—that is what I am saying.

Hon Annette King: What would move him to seek additional funding for the 501,000 adult New Zealanders who, according to the 2014-15 New Zealand Health Survey, are not accessing a doctor due to the cost, with fees going up from $29 a visit to $40 a visit and some paying $70 a visit under this Government?

Hon Peseta SAM LOTU-IIGA: What I can say about that health survey is that the unmet need due to GP costs for adults is unchanged for the last 3 years, and I can also say for Māori—particularly for Māori—the unmet need due to GP costs actually decreased from 22.5 percent to 19.7 percent, and that is where the funding is going.

Hon Annette King: Why would Dr Andrew Miller, chair of the Manaia Health primary health organisation, be wrong when he said recently that looking after high-needs patients is not worth as much as non - high-needs patients, and that it is an appalling inequity, entirely unethical, and illogical?

Hon Peseta SAM LOTU-IIGA: I cannot speak for that doctor, but what I can say is that for very low-cost access practices there has been an increase in the last year of $1.5 million, and over the last 8 years, in terms of those high-needs patients, there has been an increase of over $20 million.

Hon Annette King: Why did he not make a bid for additional funding for high-needs patients in this Budget, when people like Dr Tim Malloy, president of the Royal New Zealand College of General Practitioners, said on Sunday: “Having to decide between whether you eat or go to the doctor is actually a reality.”?

Hon Peseta SAM LOTU-IIGA: I want to reiterate what I said in terms of the primary question: there was a Budget bid put in and that resulted in $25 million being received for primary care over and above the amount that was paid last year.

Student Achievement—Public Achievement Information

10. SARAH DOWIE (National—Invercargill) to the Minister of Education: What reports has she released recently highlighting national and regional educational achievement?

Hon HEKIA PARATA (Minister of Education): Tēnā koe e Te Mana Whakawā, otirā, ki a tātou e Te Whare kua hoki mai nei.

[Acknowledgments to you, Mr Speaker, but at the same time to us in the House who have returned here.]

I was pleased to release today the 2015 Public Achievement Information (PAI). I would like to pay tribute to the students, their parents, and teachers for the excellent rise in National Certificate of Educational Achievement (NCEA) level 2 achievement rates among 18-year-olds. The latest data shows that 51,299 18-year-olds achieved NCEA level 2 in 2015. That means that since 2008 around 38,000 more young people have achieved the minimum qualification for success than if the achievement rate had remained at the level it was at under the previous administration. For the first time, Public Achievement Information data also includes information on school-leavers. This information tells us that in 2015 more school-leavers undertook tertiary study than those who did not, and 19,270 of those were enrolled in degrees. This is exciting news because it means that more young people are getting better qualifications and much brighter prospects.

Sarah Dowie: How does this information assist young New Zealanders in achieving educational success?

Hon HEKIA PARATA: Public information about how the education system is serving our young people is vital for students, their parents, educators, and employers. Under our Government, student achievement continues to rise. However, we can always do better, and we strive to ensure that all our students are given the best opportunity to do so. Parents can use PAI to ask their children’s school what it is doing to raise achievement. It also helps teachers to give the right support to the right child at the right time, and it assists schools, employers, and training providers to work out what skills are needed to boost local economic performance. We are endeavouring to provide this information in many different formats so that it can be useful to communities to celebrate their success and identify their learning challenges.

Chris Hipkins: What confidence can New Zealanders have that increasing rates of NCEA attainment reflect a genuine lift in student achievement, given that participation in core subjects like English, maths, and science has decreased, with schools reporting students taking easier subjects to accumulate the necessary credits for an NCEA qualification?

Hon HEKIA PARATA: They can have absolute confidence that these numbers are real, that young people are achieving, because we provide this data in a very transparent way. There are anecdotal stories that some of the things the member is talking about are occurring, but more and more we are targeting actual information to actual young people and ensuring that they are getting meaningful qualifications. So I am confident—[Interruption] Yes, I use “actual”, because, of course, the member is not familiar with that term.

Wage Rates—Labour Cost Index

11. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he think that the economy is delivering a fair share to working New Zealanders when the latest Labour Cost Index shows wage growth is at a six-year low?

Hon BILL ENGLISH (Minister of Finance): The Labour Cost Index (LCI) is a very limited measure of wage changes. Another measure is the chain of changes, the quarterly employment survey, which measures the incomes people actually get paid. That is why it is used as the basis for calculating national superannuation—legislation requires it to be related to wages and not to the Labour Cost Index. In any case, if the member looks at the Labour Cost Index, what is striking in the last few periods is the way in which it has now become well ahead of the inflation rate, when usually it is pretty close to the inflation rate.

Grant Robertson: If the economy is growing at between 2 and 3 percent as he claims, why are working people not receiving the benefits of that growth in wage increases?

Hon BILL ENGLISH: The LCI is not evidence of that statement, even if it was correct, because the Labour Cost Index just measures changes in constant prices. What people actually get paid—that is, taking into account changes in productivity, promotions, responsibilities, shifting to a new job—is actually going up, at a rate not dissimilar to the rate of growth.

Grant Robertson: Is it correct that the number of workers who got a pay rise of less than 2 percent in the last year has increased by 6 percent to 67 percent of workers getting a pay rise of less than 2 percent, and does he think that is fair in current economic conditions?

Hon BILL ENGLISH: When we have the lowest inflation in decades—which is reflected in the lowest interest rates in, I think, over 50 years—then the nominal wage increases are likely to be lower. And New Zealand is, fortunately, one of not many economies where there are consistent but moderate real wage increases occurring. In the current worldwide episode of potential, of actual, and of some deflation, that is actually not bad going.

Grant Robertson: What comfort is it to working New Zealanders for him to invoke Consumers Price Index inflation when that does not take into account the full housing costs, which New Zealanders have experienced, meaning that in Auckland housing costs have risen at four times the rate of wages over the last 8 years?

Hon BILL ENGLISH: The Consumers Price Index does take into account housing costs.

Hon Members: No, it doesn’t.

Hon BILL ENGLISH: It does. And as my colleague has mentioned earlier, the fact that interest rates are at record lows is one of the reasons that New Zealanders are showing stronger demand for housing. But there is no doubt that in the long run poor planning, such as has occurred in Auckland, does have an impact on housing costs as a proportion of income, and the Auckland Council has the opportunity to put that right.

Grant Robertson: Does he think that working New Zealanders are getting a fair share of economic growth?

Hon BILL ENGLISH: By and large, yes. By and large, whatever indicators you use—whether they are income inequality, real wage increases, or measures of employment—they are actually doing reasonably well. It does not do us any harm to compare that situation with many other developed countries where the working population in some parts is not doing so well.

Pest Control—Predator Free New Zealand 2050

12. MAUREEN PUGH (National) to the Minister of Conservation: What recent announcements has she made about making New Zealand predator-free by 2050?

Hon MAGGIE BARRY (Minister of Conservation): Last month the Prime Minister, Minister Joyce, Minister Guy, Minister Smith, and I announced that we have committed to the most ambitious predator-control project ever before seen in the world, and that is to rid New Zealand of the top three predators by 2050. This is a very ambitious aim. Rats, stoats, and possums kill around 25 million of our native birds every year. They cost this country, in terms of lost productivity, around $3.3 billion, and it has to stop. This Government will invest an initial $28 million over 4 years, and we are looking for support from other partners to contribute $2 for each dollar we do. This is a very ambitious scheme, but we are confident we can achieve it in collaboration.

David Seymour: Can the Minister confirm that the new Government funding attached to this announcement amounts to $1.56 per New Zealander per year?

Hon MAGGIE BARRY: The cost to the taxpayer of New Zealand in terms of what we have given—for $28 million over 4 years—is minimal. But when we grow this—and we have already had very strong indications that we have millions of dollars coming in from philanthropists and others—and when we set up the Crown-owned company Predator Free New Zealand, that will enable and allow philanthropists and businesses to put a great deal of money in. So in terms of the calculations that that member is asking me about, the sky is the limit. I would aim to keep the cost of money that the taxpayer pays to a minimum amount. Thank you.

David Seymour: I raise a point of order, Mr Speaker. She just needed to say: “Yes.”

Mr SPEAKER: Order! That may be the member’s opinion, but it is not a point of order.

Maureen Pugh: What opportunities will a predator-free New Zealand present?

Hon MAGGIE BARRY: A predator-free New Zealand would create a vast safe habitat for our native animals. It will also boost regional economies. It will help with tourism. It will provide jobs. It will have a lot of positive impacts for our primary sector. It will eradicate possums, which, of course, are one of the main carriers of bovine TB; that is a terrible disease for both cattle and deer. It is a game-changer, it is ambitious, and it has been heralded worldwide, if not by the rabble in the Opposition benches, who just do not get a vision like this because they are so unimaginative. [Interruption]

Mr SPEAKER: Order! Can I have a little less interjection now from both sides of the House.

Richard Prosser: Is it rational to believe that New Zealand can be predator-free for just $28 million of Government funding over 34 years, when that total would provide less than 50c each for the rats and possums present this year alone?

Hon MAGGIE BARRY: I address my answer to one of the less rational people in this House.

Mr SPEAKER: Order! The Minister will stand, withdraw, and apologise, and then just answer the question.

Hon MAGGIE BARRY: I withdraw and apologise. When it comes to rational thinking, this predator-free New Zealand goal is a tremendous one. The amount of money that it will cost us is negligible compared with the amount of gains this country will have as a result of this predator-free goal. The amount of money that it is costing—$28 million over 4 years—is an initial investment. It will be matched by imaginative, visionary people who have already indicated to us that this is where they also would like to assist and where New Zealand needs to go. So I have every confidence that it is achievable.

Maureen Pugh: What projects and technologies will serve as a template for a predator-free New Zealand?

Hon MAGGIE BARRY: Project Taranaki Mounga and Cape to City in Hawke’s Bay are both great examples of what great things can happen when people work together and join forces towards a goal. Department of Conservation staff are very good at clearing predators out of offshore islands—Campbell Island and Zealandia prove that—so our inventors, our conservationists, and our scientists have also developed a self-resetting trap, which will reset 24 times. These are the kinds of things, along with the Biological Heritage National Science Challenge, that will be integral to developing newer, more effective and efficient forms of control. Now is the time to do it.

Urgent Debates Declined

Housing New Zealand Corporation—Dividend Not to be Paid for 2 Years

Mr SPEAKER: I have received a letter from Phil Twyford seeking to debate, under Standing Order 389, the announcement by the Government that Housing New Zealand would no longer pay a dividend in the next 2 years. The announcement is a particular case of recent occurrence involving ministerial responsibility. The business of the House ought not to be set aside just because a ministerial announcement has been made, even though it may be important. There must be such an element of urgency that the matter must take precedence over other business. The Speaker must also consider whether there is another opportunity to debate the matter.

I am not convinced that the matter does warrant the setting aside of the business of the House. In any case, the business currently before the House is the Estimates debate, which is an opportunity to debate the Government’s spending plans. The Estimates debate is currently on the Social Development and Housing Sector. That debate, and the third reading of the Appropriation (2016/17 Estimates) Bill, which must follow shortly afterwards—and I refer members to Standing Order 340(1)—give ample opportunity to debate the matter that is the subject of the member’s application. The application is therefore denied.

Estimates Debate

In Committee

Debate resumed from 7 July.

Social Development and Housing Sector (continued)

The CHAIRPERSON (Hon Chester Borrows): Members, when we last interrupted the Estimates debate we were debating the votes in the Social Development and Housing Sector—B.5, Volume 10—and the question that Vote Building and Housing and Vote Social Development stand part of the schedules. Kris Faafoi had the call, and he has got 34 seconds remaining.

KRIS FAAFOI (Labour—Mana): I have got only 30 seconds, so I am going to get straight to the action. A lot has happened since we were last here in this debate. During the adjournment the Government signed us up to “NATO” principles—not the North Atlantic Treaty Organization, but “NATO” in terms of housing—the “no action, talk only” principles of this Government. We have got a “NATO” Government when it comes to housing.

On this side of the equation, though, we announced some policy during the adjournment that will make sure there is building of more affordable homes, cracking down on speculators, and support for those in need. I talked about the Porirua experience when I was last speaking in the Committee, and I think that is a good thing.

PHIL TWYFORD (Labour—Te Atatū): I want to talk about the issue of Steven Joyce’s $92 million tweet. It has gone down in history as probably the most expensive tweet that has ever been made. It has pioneered a whole new way of delivering the Budget for the Government, and I am sure the Minister of Finance would agree it is a much more efficient way of announcing Government finance policy than we have seen from this Government at all in the last 8 years.

It was an extraordinary backflip by the Government after 8 years of treating Housing New Zealand as some kind of cash cow. It has made a net withdrawal from our public housing organisation of more than $560 million, that is when you net out the capital contributions against the dividends—more than half a billion dollars in net taken out of our State housing organisation in the middle of a housing crisis. Day after day Bill English has stood up in this House and said “Well, the dividend’s very important because it’s how we impose, kind of, financial discipline on Housing New Zealand.”, but that discipline went out the window. In a fit of pique on a Sunday afternoon Steven Joyce decided to tweet that the Government would no longer be extracting dividends from Housing New Zealand. That was a $92 million announcement made by Steven Joyce in a tweet, and that speaks volumes about this Government’s housing policy. It is completely at sea. It is making it up as it goes along. You can see the panic in those members’ eyes.

Paula Bennett announces a policy on the eve of the Budget to offer people $5,000 to leave town, and Bill English does not even know about it; nor does the Prime Minister. It is the day before the Budget. This is what is going on with the Government’s housing policy. A few days later, Paula Bennett announces that Government officials have gone out with the Salvation Army to knock on the car doors of homeless people at Bruce Pulman Park in South Auckland—the so-called flying squads, which never existed. They have gone down in history with the unicorns and all manner of other mythical creatures—the Government’s homelessness flying squads. But this is what is happening with the housing crisis and this Government’s panicked response to it. It is desperate. It is making it up as it goes along. It is a comedy of errors. It would be funny if the consequences of this Government’s negligence were not so tragic in the effects that they are having on the people of this country.

I want to say something about what I thought was one of the most shocking stories that the media covered over the last 4 weeks: the way that the Government has been paying thousands of dollars a week to one of the worst slum landlords in South Auckland and referring desperate families to this slum landlord. The Government is shelling out in bond and advanced rent and weekly rent to this woman called Debbie Iskandar, who had at least 10 properties in the South Auckland suburb of Manurewa. She was putting people into unconsented garages. There were entire families living in unconsented garages. There were entire families crammed into single rooms in shared houses, and for that privilege people were paying up to $500 a week in rent. The Government was condoning this and actually referring these desperate people to go and live in unconsented garages and single rooms with no toilet facilities, no bathroom facilities, no kitchen facilities.

This illustrates how bad the housing crisis has got and how absolutely morally and politically bankrupt this Government’s response to the housing crisis is—that it is referring people to the worst slum landlords. It is a total abdication of the Government’s responsibility to treat people with decency and to put a decent roof over people’s heads. It shows the piecemeal tinkering that epitomises this Government’s housing policy.

A few weeks ago Paula Bennett announced $41 million over 4 years for emergency housing. Actually, you know, we did not criticise her for that. Good on her for making some contribution. But she was forced to come to this House within a few days and acknowledge that that financial commitment would not provide a single new bed; it would only fund the existing houses.

DENIS O’ROURKE (NZ First): This Government has claimed that it has a comprehensive housing policy, but, quite clearly, the people of New Zealand have not bought into it. The recent polls that have been published only last night or yesterday show that there has been a significant slump in the support for the National Government, and the reason given—and I agree with it—is that the Government has not adequately dealt with New Zealand’s housing crisis.

If the Government has a comprehensive housing strategy, then most people in this country say that it is a failed—a comprehensively failed—housing strategy. It is a strategy that has, apparently, been aimed at accelerating house prices in Auckland to almost $1 million, and nobody in Auckland—apart from a few speculators—wants to see that. It is a policy that has, apparently, been designed to force skilled workers to leave Auckland, or to stop them moving there, simply because they cannot afford to own a house there. It appears to be a strategy that intends to have people on low incomes living in cars or in tents or under bridges or in anything other than a decent family home. That has been the result of this claimed comprehensive housing strategy. The Prime Minister said today: “A sound bite does not make a plan.” Well, the Government’s plan does not even make a decent sound bite, and that is the truth of it. It is a failed and minimalist strategy, if it is capable of being called a strategy at all.

This Budget actually shows that that is the case because it pays very, very little attention to the housing crisis and, in fact, the Government does not even admit that it is a housing crisis, but a housing crisis it certainly is. And it is particularly cruel when so many poor families are really struggling to find somewhere to live—especially in Auckland but also elsewhere—and large numbers of them have to move continually as massive rent increases force them out of one property after another. So it is a reverse ratcheting sort of an effect, where a person gets a property they can afford, the rents go up, they move downmarket to a worse property to chase lower rents, and this goes on and on and on, and, eventually, they end up living in cars. If that is a strategy, then it is not a strategy that this country needs.

There are clearly a number of significant causes behind this awful outcome and the first is, obviously, the Government’s awful housing management, which has caused house prices to increase to a level where very few people can afford to buy them anymore. It is caused by a Government policy that encourages uncontrolled immigration to the point where it causes New Zealand far more damage than it does good. It is a strategy that sees the selling off of State houses in the absence of an adequate State housing programme. Nobody would mind if State houses were sold and if more and better State houses were put in their place, but that is not the situation that is happening in New Zealand today. In fact, all the Government is trying to do is to cast off its responsibility for State houses to community organisations, and that is clearly not going to work.

When you look at the particular Estimates for the next 4 years you will see little or nothing that will solve the chronic New Zealand housing shortage. A total of $257 million over 4 years averages only $64 million a year, of which $200 million, or an average of $50 million a year—the lion’s share of it—is simply to top up the income-related rent subsidy. So there is really, actually, nothing much new in that. There is also a provision of $41 million for emergency housing over 4 years, but that is only about $10 million a year. That is a drop in the bucket when you consider the sheer magnitude of emergency housing in New Zealand at the present time.

Hon ANNE TOLLEY (Minister for Social Development): I would like to take this opportunity to talk about Budget 2016 in part of the appropriations debate, because in social development we have made two significant changes that are reflected in this Budget. The first one, of course, is that this Government is committed to making a significant change to the way that we look after children and young people in care. And just to remind the Committee, we spent last year with an expert advisory panel (EAP) really lifting up every stone and having a look at the way the system works as we look after young people and children in care. I set up a group of young people who had actually been in care, some of whom were still in care, to advise that process, and, of course, myriad people throughout the country—practitioners, social workers, health workers, and a wide range of NGOs—were consulted. During that process we found that we have a system that is actually broken; a system that, despite the best efforts of some highly motivated, highly professional staff, is not delivering to the children in our communities who probably need help the most.

What we found was that—they took a particular cohort of young people who were born in the 12 months between June 1990 and 1991 to look at what had happened to them in their lives as they had gone through this State care system. At age 21 almost 90 percent of them were reliant on a benefit—90 percent of those young people were reliant on a benefit. About 25 percent of them ended up on a benefit with a child. Almost 80 percent of them did not have that minimum qualification of National Certificate of Educational Achievement level 2, so they did not get a good educational start to give them the opportunities to live good lives. More than 30 percent of them had a youth justice referral by the time they were 18, almost 20 percent had had a custodial sentence, and almost 40 percent had had a community sentence.

These are the most vulnerable children, who, through no fault of their own, have ended up not in families that love, support, and care for them. They have relied on the State then to step in, keep them safe, and make their lives better. What the EAP report showed, and what those statistics show, is that the State failed those children. So this Government is determined to make a difference to that. Governments of different colours have to take responsibility, but this Government has stepped up.

The first thing we did in this Budget was to actually make sure that we were giving financial stability to the existing Child, Youth and Family (CYF). Over the past few years it has had some one-off funding. As we have been reviewing we have had the process around the green paper and the white paper, and there was one-off funding given to CYF whilst that process was happening. That could not continue because, actually, we had more children in care who were staying in care for longer and that costs more. So the first thing that we had to do was stabilise that funding for CYF, and we did that with $145 million going in to stabilise CYF over the next few years. The risk is, of course, while you are redesigning a system that the existing system flounders a little, gaps open up, and children fall through it. We were absolutely determined to make sure that that existing CYF was well supported financially whilst we designed that new system, and so $145 million has gone in to meet those cost pressures and that increased demand, and also the changes that came into force on 1 July this year as a result of the Vulnerable Children Act.

Then, because we are designing a new system and that has costs, and we need to make provision for the design of the system and we want the new operating system up and running from 1 April next year, there is almost $200 million in this Budget to make that happen and to support that new entity. I have to say that I am absolutely indebted to my Cabinet colleagues and caucus colleagues for their huge support for this change, because this Government is determined. I know that there is support right around the Committee for us to get this right. It is absolutely critical for these children and young people that we get this system right. We have had 14 different restructures over the years, but this time, if we all work together, we are determined to make that happen. This Budget set the scene. It is not the endgame—there will be more costs, and I will be back in Budget 2017; I have made that very clear—but this was a good start.

I think the second-most important part of this Budget for 2016 was the way that we have then focused in on supporting more and more New Zealanders into work. In the latest valuation—remember we have an actuarial valuation that is done every year. It is reported publicly and anyone can access it on the ministry website. Some of the Opposition members seem to not be able to find it, or they cannot be bothered digging into it to find out. It is all there, all the assumptions that are made and how it is all worked, so that people can understand what it is that this Government is doing, using the investment approach—that is, we use that information to determine where to best put the priority for our resources, who the group of people are who most need support to get into work, and how we go about doing that.

What we have seen as a result of that is a reduction in that long-term liability, which is not our liability; it is the liability of New Zealanders whose dreams and hopes and lives are crushed by living in endless poverty and relying on a benefit. We know that the best thing for them and their families, not only financially but emotionally and socially, is getting into work. So Budget 2016—we have seen in that a reduction of $12 billion of that liability over 4 years. As a consequence of that we saw the number of people reliant on a benefit fall below 280,000 for the first time since 2008—the global financial crisis.

I see my colleague Nicky Wagner sitting here in the Chamber, and I want to pay tribute to her because she led a project in Christchurch that was focused on helping those people with a disability who we know are reliant on a benefit. They are put on a supported living benefit because they have a disability that means that they are not expected to work, but we know that so many of them want to work. They want to work because they know that it is better for them and it is better for their families. So my colleague Nicky Wagner led that project, which saw 600 people—we set a goal of 300, and we thought that that was ambitious, but it was 600 people—who went into employment as a result of that. That was a result of working with employers and talking to them about how they could support people with a disability into work.

I think that is a glowing example for the rest of New Zealand, and I know that that project is now going out further. We are going to try it in the Bay of Plenty with a different group of employers. It is about showing employers that these are people who can actually be some of their best workers. The research is very clear: they take fewer sick days, they are much more loyal, and they can be much more productive. So it is really important.

We have got $61.2 million in Budget 2016 to extend Youth Service to include 18- and 19-year-olds and $26 million to maintain and increase that intensive case management that we know is so successful in helping people and supporting them into work and then keeping them in work. We are now starting to do quite a lot more work on how we can support them for longer in their jobs to make sure that they have got all the childcare support that is necessary, and that the employers are comfortable to ask for help with people who have a disability or who might have mental health issues before they are disengaged from work. So it is about how we keep people in work through those difficult times, some of those being the first 4 or 5 months of work.

Then we have two very small projects that are very exciting: one working with prisoners getting out of prison, and one working hand in hand with the health sector on addressing the issue of mental health, which is such a growing problem. It is a terrific Budget, I think, for changing the lives of thousands of New Zealanders.

Su’a WILLIAM SIO (Labour—Māngere): Earlier today during question time I suspected that the general public who observed our question time would have noted the way that Andrew Little questioned the Prime Minister over the housing issue. They would have noticed the stark difference in style and manner towards this particular issue. Andrew was probing and showing that he cares and is taking this issue very seriously. On the other hand, when you looked at the Prime Minister, you would have seen that he did not take this issue seriously. He evaded, as he always does. He does not take this issue seriously. He shows he does not care. In fact, he continues the blame game, and today we heard him blame local government for the failure to erect more houses.

I would say that is a reflection of how he and his Government continue to behave and treat this issue—the crisis that we currently have. I would say it is also a reflection of the arrogance that he continues to display and the fact that he does not care about ordinary working New Zealanders, who are struggling to make ends meet and who are nervous about their future and nervous about how they house their families. We have seen lately how this Government’s arrogance and out-of-touch attitude is reflected by the polls.

My colleague Denis O’Rourke from New Zealand First said that this Government does not have a comprehensive plan. This Government uses those words, a “comprehensive plan” for housing, when in reality nobody in New Zealand believes it. If the Government did have a plan, I suspect that these are the elements of that particular plan: emergency housing grants that cover only 7 days when it takes the Government 155 days to house the homeless—that is one factor—or funding for new emergency housing places, which turn out to be largely existing places; or paying the homeless $5,000 to get out of Auckland; or special housing areas, which have built only 1,000 houses; or cutting building tariffs, which led to prices going up; or the surplus Crown land policy, which promised 500 hectares and delivered only 13.

Those are the elements of what the Government is calling its comprehensive plan, which has amounted to zilch for the general public, who are struggling with housing today. This is one of the reasons why community workers up and down this country are demanding results from this Government, voicing their opposition in the media, and organising and supporting community protests up and down the length of this country. It is because of their desire to impress upon this Government that its lack of action and its use of these sound bites about the comprehensive plan are not reflected at all in the quality—or lack of quality—of the standard of living that the general public are receiving.

Why would people who would not protest normally, protest during the cold winter at Park Up for Homes? Why would they protest in Māngere? Why would they protest in Ōtara? Why would they protest here in the capital, Wellington? Why would they be supported by very high-profile sportspeople like David Tua, who see with their own eyes just how hard things are for many ordinary families, and particularly families with children?

The most damning report issued by Statistics New Zealand—which reflects the lack of interest and the lack of care from this Government—is the report on net worth that we saw prior to the adjournment: net worth for Pākehā families, $144,000; net worth for Asian families, $33,000; net worth for Māori families, $23,000; and net worth for Pasifika families, $12,000. That is reflected in what we see on the streets, where we have 42,000 people who are classified by their own Government department as being in homeless situations. When a family with children is forced to live in a car, those children are not in a position to reach their full potential. A child who is living in a car does not have space to properly rest, does not have space to learn and to do their homework, and is not going to be able to reach their full potential in school. So the point is that this Government has got it wrong.

METIRIA TUREI (Co-Leader—Green): How dare that Minister, Anne Tolley, stand here and say that the State is going to do right by our children with the reforms to Child, Youth and Family alone? We all know that this is a Government that has tolerated low wages, that perpetuates low benefits, and that keeps families trapped in severe poverty in this country, and that poverty is the greatest risk to our children’s well-being in this country. It is the greatest risk, and we have a Government that keeps those families in poverty and drives more there. That is what the housing crisis is showing us. So when this Minister sits here and says the State needs to take responsibility for the well-being of New Zealand’s children, I wish it would.

The first thing that it could do is to make sure that families have got enough of what they need to live a decent—not flash—life in this country. How dare that Minister stand here and say that work is the solution to their poverty? It might have been under a different Government; it certainly is not under National. Under National, we have seen increasing numbers of working families driven into the streets, driven out of their homes and into their cars. How many times have we seen, night after night on the television, families whose kids are going to school and doing their best to succeed, whose parents are working full-time jobs but who do not have the income to afford a decent home in which they can take care of their children? That is what this Government has driven our country to. It is intolerable for that Minister to stand there and say that she will do better for New Zealand’s children and ignore the single greatest threat to their well-being.

Housing has become, in the last few years, the key point at which those issues of poverty, those issues of low wages and of family insecurity and instability, have made themselves real. We have a Government that is failing one of its core responsibilities as a Government, and that is to provide a stable housing market with warm, dry, and secure housing for every one of the families who live in this county. No society can operate effectively if its citizens are sleeping under bridges, are living in cars, and are in substandard housing that causes their kids to get sick. That is a symbol of a failing society, a society being failed by its Government. We have a Government that is in denial about one of the most fundamental roles that it is required to perform, which is to make sure its citizens are safely and securely housed.

So how did the National Government let this become its Achilles heel? How did housing become the Achilles heel of National? How did National bring itself to abandon New Zealand families to the vagaries of a market that is pushing house prices way beyond what an ordinary family can afford, because abandon families is what National has done. And it has not just allowed it, actually, but it has encouraged it over the last 8 years. The lowest homeownership rate in 65 years is under National. The biggest gap between incomes and house prices in decades is under National. The highest level of homelessness—[Interruption] Well, you can sigh, sir, but your Government—the Government you are part of—has overseen the highest level of homelessness, of some 40,000 New Zealanders, in a generation. Over 8 years the country has been driven to this under this National Government.

We heard quite a bit today about National’s supposedly comprehensive housing plan. It was a long list of things that have, clearly, not worked. We have Auckland house prices at 10 times the median household income, the highest rate of homelessness, and high rates of child poverty that continue to remain high. At even six times or 10 times the household income, we know that the economic risk of this housing bubble is likely to cause more problems for families in the future, so where is the plan to deal with that? We have economists from the banks, from councils, from consultancies, and from the media all saying there is a serious economic problem coming, with housing being priced so out of families’ reach, and where is the Government’s plan for managing that? Where is the Government’s plan for managing that?

National has overseen the biggest increase in house prices in decades. It has no concept of when those house price rises are going to end, and people are warning of a crash. A crash in the housing market is totally unacceptable. The harm that that would cause to families and to the economy is totally unacceptable, so where is the plan from the Government to protect New Zealanders, to protect our economy, and to make sure our families have access to a fundamental human right, which is warm, dry, and secure housing? How could this Government let this country get to this point?

The only way that we can protect New Zealand families is to make sure that there is a plan to both increase incomes and bring house prices down so that there is a soft landing in time. That is the hard truth. It is a hard truth. Nobody likes to say it, but it is the truth and, unfortunately, this Government will not even address the fact that there is a housing crisis, let alone the reality that in order to be a responsible Government you have to have a plan for managing that so that families do not get hurt. It is not a big ask, actually, for New Zealanders to ask the Government to manage the housing crisis in a way that will protect them. How has that gotten so complicated? How has that gotten so ideological by National that it cannot even make sure that New Zealand families are warmly, safely, and securely housed?

The plan does not have to be complicated. New Zealanders will accept that it will take some time—we are talking 10, 15 years. People know that these kinds of policies need time to come into play, but what they cannot see—and understandably so—is that this Government will take their family issues seriously. They are concerned about their kids not being able to buy a home. They are concerned that their grandkids will not have warm, secure, and stable housing for them to grow up in. These are the real concerns of New Zealanders every day, and they look to the Government for some leadership and they see nothing—look, blank faces—from National, because National has nothing to offer because it has deliberately created this mess. I mean, was that the point of the comprehensive housing plan, National—to actually drive us into the worst housing crisis we have seen in generations? Was that the point of your plan? Because that is what has happened.

And the National members are not the ones who are going to be suffering for it, right? It is ordinary New Zealand families, it is the working poor who are living in their cars, and it is people on benefits, who are continually harassed by this Government because of their poverty. They are the ones who are suffering every day. This is why we need a change of Government. This is the only option that we have got. A change of Government is what will turn this around.

Dr David Clark: Hear, hear!

METIRIA TUREI: We will provide a plan—thank you. We will provide a genuine plan to protect families, to raise incomes, to provide housing affordability for New Zealanders, and to reduce and then eliminate child poverty from this country. Only a change of Government will deliver on that because, as we have seen, National members have had their go, they have failed us, they have failed families, they have failed our kids, and they have nothing new to offer. We saw that today. Even after 4 weeks away, they still had nothing new to offer. And, in fact, National is just recycling Labour and Green policy, as we saw with the tax holiday, the dividend holiday, for Housing New Zealand.

Housing should not be such a hotly contested political issue, because there should be consistent approaches across parties around housing because it is so fundamental to New Zealanders and to families’ well-being. It has become a hot political issue because National’s ideology is driving families into their cars and on to the streets. That makes National fundamentally irresponsible and incapable of governing for the benefit of the country as a whole, and the sooner it goes the better. The sooner we get a change of Government the better. New Zealand families deserve better. Thank you.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Chair. Over the adjournment break, Māoridom lost one of its iconic leaders: Dr Ngāpō Wehi, affectionately known as Uncle Bub. E te rangatira, me ngā mate katoa o te motu, haere, haere, moe mai rā!

[Esteemed one, and all the deaths of the nation, farewell, depart, rest there indeed!]

This Budget has failed to deliver for middle New Zealanders. This Budget shows that we have a Government that has lost touch after 8 long years in office. It is too often focused on the few at the top and has completely forgotten about everyday New Zealanders. This is a Budget that demonstrates that National does not know what is going on and that it has no answers to the problems that our people are concerned about. This is a Budget that continues to underfund and put pressure on our health, education, and housing systems.

In the adjournment Hawke’s Bay played host to the Minister for Social Housing, the Hon Paula Bennett, where, of course, she expressed what was good about this Budget. But at that meeting hosted in Hastings, things turned quickly for the many attendees there to the real issue of housing confronting people in the Hawke’s Bay area. I took the opportunity to remind the Minister at that meeting that Hawke’s Bay had lost some 377 State houses since 2011 and it had built seven. Do the maths: we have lost 377 and we have built seven homes in Hawke’s Bay. That has dislocated over 300 families in Hawke’s Bay. And, of course, we did the decent thing and asked the Minister what her plans were for addressing the real issue facing many people in Hawke’s Bay, and I want to quote the Minister’s response. When asked “We need more housing—what are you going to do about it, Minister?”, her response was, well, clearly we need them “right now”. But then she added: “It’s kind of where’s the line of it being enough. I’m sure for some it will never be enough.” Well, the message is really clear to that Government, through the Minister, that there are not enough houses in Hawke’s Bay. We do not have the supply to meet the need.

Dr David Clark: Seven is not enough.

MEKA WHAITIRI: Seven is not enough. But, further, the question was asked “When will new housing be provided in Hawke’s Bay?”, and Mrs Bennett said this—

Carmel Sepuloni: Miss—it’s Miss.

MEKA WHAITIRI: —Miss Bennett, apologies—“I don’t want a country full of State houses.” That is what she said at the meeting: “I don’t want a country full of State houses.” What people said was that if it was good enough for the Minister and if it was good enough for the Prime Minister in their time of need to live in a State house, then why is it not good enough for everybody else?

I want to talk about the sharp end—the over 1,648 Māori families on the waiting list, according to the social housing register. This is 100 more than in the previous quarter and a whopping increase of 21 percent of Māori who have been waiting since last June. In the Waiariki electorate of the Minister for Māori Development there are 422 people waiting for homes, of whom 261 are in very serious need. In late 2014 his co-leader of the Māori Party, Marama Fox, called National’s plan to sell off State houses “disappointing” and “an abdication of Government responsibility”, yet, just 3 months later, the Māori Party changed its mind and voted with National to flog them off. This is a disgraceful move, especially in the middle of a housing crisis. But Labour has a comprehensive plan to tackle the problem. We will build more affordable homes. We will end National’s State house sell-off and stop using Housing New Zealand as a cash cow. Whānau camping in cars or garages will be helped into temporary accommodation, through extra funding to emergency housing providers.

During the adjournment I constantly heard this catchcry: “Change the Government. Change the Government. Change the Government, because it has got out of touch and stopped listening to ordinary New Zealanders.” This is what we need to do. We need to present Labour’s comprehensive housing plan. It will make a difference to many of the people throughout my electorate of Ikaroa-Rāwhiti. All I say is, bring on next year’s election.

MATT DOOCEY (National—Waimakariri): It is an honour and a privilege to rise and make a contribution to the Social Development and Housing Sector part of the appropriations debate. Can I start by just acknowledging the great work of our Minister for Social Development, the Hon Anne Tolley, in this space. She is totally committed to the young people of New Zealand and to the vulnerable young people of New Zealand, making a difference in their lives, and being aspirational for them so that they expect what every Kiwi kid expects—a great upbringing.

If I can reflect on the last week, I attended the Grey Power meeting in North Canterbury. There were 200 senior citizens who turned up to that meeting. I was able to have a talk to our superannuitants in North Canterbury. It is fair to say that in North Canterbury our superannuitants are fairly buoyant. I know the member across the House from Waimakariri will be down there tomorrow, just to touch base in North Canterbury. They are thinking that things are looking good. It was great, in these appropriations and in Budget 2016, to see an extra allocation of $41 million for the SuperGold card. When you look back, it was not that long ago, in 2008, when there were only a few hundred services available on the SuperGold card. That has been expanded now to about 12,500. That is great for superannuitants across the country, but, of course, in my home patch of Waimakariri they are grateful for that.

It was interesting over the adjournment to see a quite confusing press release from Phil Twyford, the Opposition spokesperson on housing. He has a sort of scattergun approach to putting out press releases. He put one out about the temporary housing village in Kaiapoi—that it should be used for homelessness. Well, I suppose, possibly that is a good idea. One detractor from that is that it is on council land, and I am sure it can do what it wants with that. Secondly, the temporary housing was sold to community providers. But, most importantly, someone wrote in to the paper—because Phil Twyford said it could address the waiting list in Christchurch—and said: “When will Phil Twyford realise that Kaiapoi is not in Christchurch?”. So it just goes to show that you can have this scattergun approach, but, really, you need to drill down and understand the need.

In the “Waimak” we have one of the lowest percentages of people on the waiting list, per head of population. When you look at the $41 million that was invested in Budget 2016 for this appropriation, it is much needed and it will do great work in that space. But what we have got to remember is that it is about ensuring that there is housing provision along the whole housing continuum, whether that be community provision, State housing, or private tenure.

I met with Housing New Zealand. We in the “Waimak”, in North Canterbury, are going to have more Housing New Zealand houses post-earthquake than we did pre-earthquake. A large part of that is because this Government fought very hard to free up land in Canterbury, to increase supply to equal demand. It is as simple as that. When you look at annual house price inflation, “Waimak” is the third - fastest-growing electorate in New Zealand, and annual house price inflation is only 2 or 3 percent. In Canterbury it is about 5 percent. Then you get the double-digit annual house price inflation that we are seeing nationally. I think that Waimakariri is a good example that we can roll out to the rest of the country. By freeing up land, it increases supply and equals demand. That is around private but also community housing, and State housing as well.

I just want to touch on something that has been missing in this debate, to balance it up. It is the acknowledgment that we spend $25 billion a year on social services—about $12 billion or $13 billion on superannuation, $7.5 billion on benefits, and a couple of billion on student loans—but the reason we can do that is that we have such a strong and stable economy. We are back in surplus. There is very low unemployment, high workforce participation, low core Crown debt, and a GDP growth rate that is the envy of all other OECD countries.

We can have the most ambitious social policies, which the Opposition will pitch up to us, but the reality is that if you cannot pay for it, it is all pie in the sky. The reality is that because of the good management of this Government we can spend $25 billion a year under the social services appropriation. I would like to take the time to acknowledge our finance Minister and all the great work he does. Thank you.

DARROCH BALL (NZ First): It is a pleasure to rise on behalf of New Zealand First to speak to the Social Development and Housing Sector part of the appropriations. There are a couple of things that I would like to get through if I have enough time.

First, I would just like to mention one thing that Minister Tolley said, which was that the best thing for beneficiaries is to get back into work. The question I have for her is that if that is the case, then why has the Government demonstrably failed especially in regard to youth, those youth who are unemployed, and those youth who are disengaged from society? So we are talking about those youth who are not in any sort of education, employment, or training. At the moment we are looking at over 82,000 of those across the country. That is actually the highest it has been in the past 3 years—the highest that it has been in the past 3 years. That is youth between 15 and 24 years of age who are totally disengaged from society. It has never been lower than pre-2008 levels. So we have got a Government that is preaching one thing, and delivering another. The Government is saying that the priority is to get beneficiaries and disengaged people, if we are talking about youth, back into work. It is demonstrably failing.

One thing that the Minister mentioned about youth and about the way the Government was addressing youth unemployment was the extension of the Youth Service that has occurred. We saw the legislation go through the House, last month I believe it was. New Zealand First has a number of issues with that. First and foremost was the fact that the fundamental principle behind all of the social policies that the Government is pushing through at the moment is the social investment approach. The main purpose of the social investment approach is to ensure that the financial cost to the State of any individual in New Zealand is minimised. That is the sole purpose of the social investment approach. It is not about the need of the individual. It is not about what that individual or the family needs. It is about how much that individual costs the State in the long term, and about those decisions that are made now that will affect that later on. It is not about the need.

It is demonstrable that the Government’s approach is not working. We have not only got “neets” at record levels but we have got youth unemployment, which is chronic.

Hon Steven Joyce: It’s not at record levels at all. That’s rubbish.

DARROCH BALL: Mr Joyce, it is the highest level in 3 years. The “neets” rate is at the highest level it has been in 3 years. Not only that but it is the highest rate increase of young males. What we heard at the end of last year was the likes of Mr Joyce standing up in the House and saying that it was at record lows for 15 to 19-year-olds.

Hon Steven Joyce: It was.

DARROCH BALL: It was. The fact that he was failing to mention was that we were 18th in the OECD, and that was something that he was standing up and saying was a good thing. We have got a record level—the lowest level in New Zealand history—but we are still 18th. We have got 17 countries in the OECD with lower levels of “neet” rates than us.

But where does that go? Where does that end up? What does that mean? Eighty-five percent of all youth in the youth justice system actually have no qualifications or have dropped out of school. We are talking about 15-, 16-, and 17-year-olds. They have got no qualifications, or have dropped out of school. Not only that, but 60 percent of those who have gone through the youth justice system end up back in prison within 2 years and 80 percent reoffend. What we are talking about is the fact that those kids are inactive and have got periods of inactivity when they leave school. They have a greater chance of being inactive and being on a benefit 10 years later.

So where is the social investment approach from this Government when addressing those issues with our youth? One of the youth courses that has been effective is called the Limited Service Volunteer (LSV) scheme. What this Government has done over the past 4 or 5 years is to slowly cut away, every single year, the funding to that scheme and the numbers to that scheme. It was at 2,000. If we can recall, the Prime Minister actually campaigned on it in 2008 and 2010, and the Government has cut away from 2,000 places on the LSV down to 500. The Government has closed the Trentham base and it is looking at closing the Christchurch base, as well, and having only a small course in Auckland. What that does is it takes away one of the main courses that has been successful for the youth and for the “neets” over the past few decades. This Government preaches one thing about unemployment and about getting them into work—

Dr MEGAN WOODS (Labour—Wigram): It is my pleasure to take a call on the Social Development and Housing Sector. I think when we look at Budget 2016, we can see the clear denial from this Government that we are in the middle of a housing crisis. We can see that the Kiwi Dream of homeownership is slipping away from more and more New Zealanders. I think, if you actually have a look at the Government’s activity post-Budget and the flailing around on the issue of housing that we have seen, with bungled announcement after bungled announcement—some of them by tweet—from this Government, we see that this is a Government that has no answers to the housing crisis.

I want to take issue with the comments that the member for Waimakariri, Matt Doocey, made in his speech, because I think what we had there was another example of post-fact politics. We have the repetition of the idea that Christchurch and Canterbury can be held up as some kind of exemplar of how things can be done to solve the housing crisis. This really speaks to the fact that this Government does not get it—that what was in Budget 2016, and the bungling about since then, is really not going to address the problems we have with housing in this country.

We had this holding up of an exemplar, with Matt Doocey saying that we had only single-digit growth in house prices in the Canterbury region in the last financial report. That may be the case, but let us look at the bigger picture. The period of hyperinflation before that has seen house prices in the Canterbury region rise by more than 30 percent on pre-quake levels. If that is what this Government thinks is affordability—and thinks is having a good hand on the tiller of housing—then we really are in trouble. And that is what we have been saying. This is what it thinks equals success and what it thinks can be held up as an exemplar—that when housing has risen to 5.5 times the median income in Canterbury, this will be held up as some kind of exemplar. This speaks to a Government that has absolutely failed on the issue of housing.

What we do have in Canterbury—and I am dumbfounded that Mr Doocey does not see it in his own electorate office—is an ongoing issue with overcrowding. We have an ongoing issue with more and more Cantabrians being shut out of ever hoping to own their own home, because, Mr Doocey, when you are going to get a mortgage, inflation of 30 percent over 6 years makes things unaffordable for many New Zealanders. For many New Zealanders that puts the dream of homeownership out of their reach, and more and more Cantabrians have been put out of reach. In the 8 years that this Government has been in power it has done nothing to address the housing crisis, and it has exacerbated it.

A month ago Labour celebrated its 100th birthday, and we did not just look at our glorious past; we actually talked about a bold vision for the future. We talked about what we are going to do in our next 100 years, and tackling the housing crisis is one of those. We talked about setting up an affordable housing authority. And when we look at how this will play out in Christchurch, in terms of the way in which the money in Budget 2016 could have been used—alternative ways that it could have been used—you see that there is an alternative way.

If you take the issue of the East Frame in Christchurch, where this Government will claim a victory despite this being another bungled anchor project that is sitting with nothing happening on it after one already residential anchor project has already fallen over, we could do this in a different way. We could have a Government that is not content to sit back and make some zoning decisions and think that the houses will magically appear. What we could have is a Government that is willing to work alongside developers to make sure that we actually get houses built. If we take the residential development that was planned for the East Frame—which was around 900 inner-city apartments, which I think is actually a pretty exciting prospect for Christchurch and something that I want to see built—I think that we can look at alternative ways that this could be done. We could see that we would not rely on traditional development models, like this Government has done. This Government is so stuck in 20th century thinking that it is out of ideas and is not willing to look at different ways of doing stuff. Instead, it is content to see projects fall over.

Votes agreed to.

Economic Development and Infrastructure Sector

The CHAIRPERSON (Hon Trevor Mallard): Members, we now come to the votes in the Economic Development and Infrastructure Sector—Volume B.5, Volume 1. The question is that Vote Business, Science and Innovation, Vote Labour Market, and Vote Transport stand part of the schedules.

MELISSA LEE (Chairperson of the Commerce Committee): Thank you so much for calling me before my learned colleague opposite, David Clark. I am sure that he will make a great contribution. We do actually belong to the same Commerce Committee.

It is a great pleasure to contribute on the Economic Development and Infrastructure Sector, Vote Business, Science and Innovation segment of this debate. The vote itself is $2.2 billion, and we as the select committee undertook hearings with five Ministers of the Crown. The Estimates process is an important part of the proceedings of this House and Parliament, and our democracy, as it gives the members of Parliament an opportunity to hear from Ministers about their vision for the Budget process and what they are going to be doing with the money for their departments. Ministers also undertake questions from the Opposition, obviously—and our Opposition had many questions.

I would like to take this opportunity to thank my colleague Brett Hudson, who actually chaired one of the Commerce Committee meetings when I was away. I would like to recognise his good chairmanship. I hear that he actually did a wonderful job. I would also like to thank the wider committee for making sure that the Commerce Committee actually ran very smoothly, and the secretariat providing the support, which is very valued—it is great assistance that it provides to the committee, as well. I also want to commend the work of the Office of the Auditor-General. I would like to take the opportunity to thank it for the work that it does, because it is actually very important work that it provides to the members. It looks at the votes and how they might actually be utilised, and it gives us some heads-up on some of the grey areas. I think it provides a tremendous service to New Zealand and to members of Parliament.

The Commerce Committee, as I have just stated, heard from a number of key Ministers of the Crown, and I would like to note, for the Committee of the whole House, some of the matters that were actually raised during those hearings.

The Hon Amy Adams, the Minister for Communications, spoke to the committee about a wide-ranging number of initiatives that she is tackling as the needs for better technology across our country continue to grow. As many members will note, technology has grown so fast in the last couple of years that even our elderly community is enjoying the fast speeds of the internet, and is utilising technology to communicate with family across the oceans in countries away from New Zealand, as well. In particular, the Rural Broadband Initiative (RBI) was raised by the Minister, with an emphasis on over 300,000 households in rural areas that are now able to connect to fixed wireless or improved copper services. Minister Adams also noted that 4G capability of the RBI is at speeds of up to 100 megabits per second, and that this is well in excess of the target speed. We often talk about some of the countries that are more advanced in internet speeds, and we can proudly say that New Zealand actually does better than those countries. I am very proud of the work that Minister Adams has been able to provide for this country.

Another key area raised by the honourable Minister was the roll-out of ultra-fast broadband (UFB) to 90 percent of businesses, schools, and health services across targeted parts of New Zealand. The extension of the UFB roll-out is now hoped to extend to up to 80 percent of New Zealanders by 2022, and not just key agencies. This is due to the overwhelming influence that ultra-fast broadband is able to have on the technologically innovative island nation that New Zealand is. As I mentioned, senior members of our community are now utilising technology like mobile phones. Instead of just calling people, they can actually talk to them using technology like Skype and FaceTime. I think that having ultra-fast broadband will make these connections faster and more frequent, and I think people will probably feel the distance a little bit less.

The Hon Paul Goldsmith also spoke to the committee about the key work that he has been achieving to protect New Zealand’s consumers and to help make businesses and New Zealanders smarter in their transactions and financial capability. The Minister outlined a number of key activities that he has been undertaking to support those with rights, through to creative sector study, as well as new initiatives and support, such as the 25.5 percent increase in funding for 2016-17 to assist in the enforcement of general market regulation and better support our fair trade and consumer protection laws. I think that is something that we should congratulate Minister Goldsmith on.

Also, Minister Steven Joyce spoke in the hearing on the economic development appropriations—

Dr DAVID CLARK (Labour—Dunedin North): Budget 2016 and the Estimates we have examined do nothing to fix the housing crisis in New Zealand. They cut health and education expenditure further in real terms, and they see middle New Zealand—

The CHAIRPERSON (Hon Trevor Mallard): I am just going to interrupt the member right now to make sure that he is aware that we have gone past the housing and health sectors.

Dr DAVID CLARK: Certainly.

The CHAIRPERSON (Hon Trevor Mallard): All right. Well, I suggest that he begins with a reference to the debate that is currently being held, rather than the previous one.

Dr DAVID CLARK: The remainder of my first sentence will directly address the Estimates hearing. Both those cuts and the fact that middle New Zealand gets a smaller slice of the pie show that we have not got an economy that is working for New Zealanders. That is what we examined in our Estimates hearing. We looked at whether this economy is benefiting all New Zealanders.

Mr Joyce told us about his regional economic development initiative. He is putting $11 million per year for the coming years into regional growth programmes. That amounts to a few hundred thousand dollars for each region in New Zealand. That is not going to change the dial on an economy that is failing to deliver for most New Zealanders. Unfortunately, as we began the hearing, Mr Joyce was able to give us absolutely no confidence that his target of 40 percent of GDP being made up of exports would be reached in the foreseeable future. He would give us no commitment to any intermediate targets and described it as an aspirational goal. When Mr Joyce announced that plan originally, he said we would get there. He believed that, year by year, we would see exports grow as a percentage of GDP, but, in fact, we are now down below 30 percent—we are solidly below 30 percent and projected to stay there for some time to come.

Mr Joyce and his Government have failed to grow the economy. What we looked at when we looked at the Estimates were the initiatives of the Government to change that situation. We looked to see whether it would create an education system that would benefit New Zealand in terms of the skills it needs to grow the economy. We looked at whether the Government would make a health system that would make sure every New Zealander was productive. We looked to see whether these regional economic development initiatives would turn the dial locally to make sure that New Zealanders had opportunities to give of their best and grow the New Zealand economy, and we got no reassurance at all. In fact, we know that since National took office the share of the economy going to wage and salary earners has fallen. In real terms, that amounted to a $50 cut for families each week in terms of their income, and Budget forecasts show that that trend is set to continue. Unemployment has grown under this Government. It is higher, and projected to stay higher, than when the Government took office.

In the regional growth plans that we saw—which were going to allocate a few hundred thousand dollars per region and which were not going to grow the economy in a way that was really going to change the picture we have got now of an economy that is driven by immigration, largely, rather than by productivity gains, and in a situation where now $37 out of every $100 that the economy grows goes to wages and the rest goes elsewhere, where it used to be 50 percent—we took no confidence. If we look through regional New Zealand, we will see that everywhere, and across New Zealand, this Government is failing the regions. Let us not forget that if the regions succeed, New Zealand succeeds—60 percent of New Zealanders live in the regions that Mr Joyce’s initiative wants to support. It is just not enough, and there is not the framework there to help change the dial on New Zealand’s earnings. If we want New Zealand to succeed, we need our regions to succeed.

If we look across a series of regions—in the Bay of Plenty, the number of people on benefits has increased by 13 percent under this Government. Transport spending in that region has been cut by 40 percent—$86 million in real terms. Against that, the few hundred thousand in that Budget is nothing. That few hundred thousand is not going to make up for $86 million in under-investment in infrastructure. In Gisborne, the unemployment rate is the highest equal in the country, at 8.4 percent—18 percent of working-age people in Gisborne are on benefits, the highest level in the country. There, again, transport spending was cut $22 million—a few hundred thousand on that regional development initiative will make very little difference indeed. Gisborne also has the lowest homeownership rate in the country, and police statistics are going off the chart. This undermines confidence and undermines that growth in the regional economy.

Likewise, in the Hawke’s Bay, it is a very similar story. In the Manawatū, under National, joblessness doubled while incomes have fallen to the lowest in the country—again, the economy is not working for those people in the regions. These initiatives, this few hundred thousand dollars will not make a difference when, in that region, they get just $492 of transport funding per person compared with a national average of $700. Those are New Zealand Transport Agency figures, which the Minister can look up if he cares to.

National has underfunded services in the top of the South Island, too. We see there burglaries on the increase, we see net jobs down by 200 in the past year, and we see cuts to the district health board that supports the workforce. There, again, we see police statistics: burglaries up 49 percent; police assaults—assaults recorded by the police—are up 44 percent in the past year alone. The economy is not working for the regions.

National has underfunded these things in Northland as well, and there the economy has shrunk by 1.8 percent in the March quarter alone. Northland’s unemployment rate of 8.4 percent is, again, the equal highest in the country. That region has lost a net 100 jobs in the past year, and the median household income has fallen by $37 a week. This initiative that the Government is promoting to grow the regions is not going to change the dial on that. I am interested to hear the Minister speak further on it, because he failed to convince in the Estimates hearing on that.

In my home town of Otago the number of jobs across the region fell by 2,500 in the past year. Household incomes fell by $98 a week, according to the New Zealand Income Survey, and National has cut over $100 million from the district health board over that period. If you fail to invest in infrastructure in the regions, you cannot expect a few hundred thousand here and there to make a difference, Mr Joyce. National has failed.

Of course, the Southland economy, as well, as we know, has shrunk by 10 percent in the past year—10 percent—and the average household income in Southland fell by $49 a week in the past year. Unemployment has more than doubled in Southland—more than doubled—since 2008, when the National Government came into office. Of course, the cuts to health have impacted there too.

Taranaki is in a recession. Its economy shrank by 3.3 percent in 2015, and it has already shrunk a further 1.8 percent in the first quarter of this year. They lost 700 jobs in Taranaki last year. The Minister smiles, but these figures are hurting people in the regions. They are hurting people in the regions, and the failure to invest—this few hundred thousand dollars that the Minister has trumpeted in his Budget, in his regional development programme—is not going to change the dial in the Taranaki, and nor will it in the Waikato. There, we have another situation where the economy has shrunk by 2.2 percent in the last year and by a further 0.3 percent in the first quarter of this year. These are the Minister’s own statistics, through Statistics New Zealand. Of course, the loss of 900 jobs in the Waikato region in the past year is not lost on the locals, either.

Wairarapa, West Coast—I could go on. These places desperately need regional development programmes. The Estimates ought to be the place where we look to see the investment of the Government in those regions, recognising that if the regions do not succeed, New Zealand will not succeed. We cannot afford a two-speed economy in this country.

We need a Government with vision, not a Government that has been in office for 8 years and is content to see wages decline in real terms in these regions—not a Government that is out of ideas, out of touch, and increasingly described as arrogant by the people whom I talk to. We need a Labour Government with an aspiration for the future, backing the Kiwi Dream, addressing the housing crisis, investing in the regions, and making sure that real New Zealand—that middle New Zealand—is benefiting from any gains in the economy that are over and above an economy driven purely by immigration.

Hon STEVEN JOYCE (Minister for Economic Development): The member David Clark needs to get out more. A daisy chain of slogans does not actually make a speech, but never mind. I could suggest that he go, for example, to Hawke’s Bay. He mentioned Hawke’s Bay. But, actually, a couple of weeks ago in Hawke’s Bay we launched the regional growth programme for Hawke’s Bay, which has been put together by the local businesses, the community, the iwi, and central government agencies with the people of Hawke’s Bay. It has been exceptionally well received—

Hon Todd McClay: Praised by Mr Nash.

Hon STEVEN JOYCE: —by Hawke’s Bay people—and praised by all the local MPs, actually: Mr Foss; Mr Nash, dare I say it; and others—although Mr Nash is in hot water at the moment, so we probably should not share that with the group.

The CHAIRPERSON (Hon Trevor Mallard): Order!

Hon STEVEN JOYCE: This programme is doing a huge amount for Hawke’s Bay. What it is—and I think the member misses this; he also missed it at the select committee—is the collection of a whole lot of Government activity, focusing it on the growth of individual regions.

So, for example, we announced $25 million for the port access to the Hawke’s Bay, between the expressway and Napier port. Napier port is growing very strongly. We announced working with Napier City Council on the expansion of the National Aquarium. We announced a programme that I am very excited about, which is Project 1000, because you have a horticultural sector in Hawke’s Bay that is growing dramatically. It is planting thousands of new apple trees. It has also got the wine sector, which is growing very strongly. So we got together and said that we can do a project that would bring 1,000 people from being on a benefit or otherwise unemployed in the region into work—full-time work—over the next 3 years. We have got the employers, we have got the iwi, we have got the Ministry of Social Development, and we have got the Eastern Institute of Technology all working together to achieve this goal. That is the real on-the-ground work that gets stuff done, not running around parroting slogans in Wellington and trying to sound interesting.

And it is not just Hawke’s Bay—a couple of days later I was in Northland with Minister Guy. The Ministry for Primary Industries (MPI) has got a great programme up there, working with farmers to improve the productivity of their farms and obtain more income. It is a fantastic project. We went and saw a farm that is doing exactly that. It has got a whole mentor programme around the region and demonstration farms being put together—a tremendous programme. We also have the Queenstown Resort College up there—yes, that is right, QRC—working with the people of Te Tai Tokerau to train young students out of school for the tourism industry, for the first time. That is real activity in that region. We also have the Northland College mānuka plantation, which is being done by Northland College with MPI and with some unemployed people who have come into work to plant that plantation so that we can train young apiarists for the growing mānuka industry up north.

Then, of course, you have the opportunities in further horticulture in the far north. Plant and Food Research in Kerikeri showed Minister Guy and me the work that it is doing in that space. Then, of course, you have international investment—which I appreciate that the Opposition has a sort of fairly plus and minus view on. But we have Shanghai CRED Real Estate, which has come and bought the Carrington Resort and wants to put in 800 rooms. We have got 40 rooms now and it wants to increase that to 800 rooms and hire lots of locals, and we are encouraging that sort of investment.

But it is not just about Northland or Hawke’s Bay. If you go to the Bay of Plenty—a few weeks ago I had the privilege of being part of the Bay of Connections people, who are there working on their regional growth strategy, again with the support of central government agencies and central government money. I note that the member said: “Oh, you know, the Bay of Plenty doesn’t get any money.” He obviously has not been there, because if he had he would know of a project called the Tauranga Eastern Link, which is the biggest single investment in infrastructure in that region, ever—it is only about half a billion dollars, but he has already forgotten about that. Also, of course, you have got the broadband investment that is going on.

Then you can go farther, to Manawatū-Whanganui. That is a really important region, as well, and later this week we will be launching the Manawatū-Whanganui regional growth study, put together by the region with the support of central government—by businesses, by iwi, by everybody working together to make things happen. I am prepared to bet money that, actually, most of the MPs, if not all, will be supportive of that, because they see it working in their region. So the member can sit quietly in Wellington—

JULIE ANNE GENTER (Green): Tēnā koe, Mr Chair. Tēnā koutou e Te Whare. I rise to speak about infrastructure. After the historic Paris Agreement, which occurred in Paris at the end of last year, I attended an OECD conference on green growth. The keynote speaker there raised a really important issue, which is that the outcome of this historic Paris climate agreement is that all of the countries in the world agreed that we have to do something to limit dangerous climate change and, in order to do that, we have to reduce carbon pollution and other greenhouse gas pollution.

What the keynote speaker at the OECD conference I attended said was that he and his colleagues at Oxford University had crunched the numbers on what would be necessary to achieve the limits to pollution that were agreed to, so that we could get to that agreed limit to global warming in time. In order to do that, basically every piece of new infrastructure we invest in from next year—that is, 2017—has to be carbon-zero. That means that we cannot continue the status quo of increasing carbon pollution or emitting it further at a lower rate. This is a reality that this National Government has completely failed to engage with. There is nothing in Budget 2016, in transport infrastructure in particular, that is going to enable us to achieve this goal. In fact, it is quite the opposite. We are continuing the same pattern of increasing spending on road transport, as opposed to offering the complements to the road network, which are what is needed in New Zealand to reduce carbon pollution and to get better economic outcomes.

Here is this incredible opportunity, an opportunity to get better outcomes for the climate and for the economy, and yet this National Government is completely neglecting it. Why would it do such a thing? The only reason I can think of is that this group of people who are currently in the National Party, particularly the most influential power brokers, are just very wedded to the status quo, out of touch with reality, and backward-looking. That is the only explanation that I can see, except for, of course, where the current Minister of Transport, Simon Bridges, appeals to an as yet completely unproven technology that will somehow save us, like driverless buses.

In this Budget, in the Estimates—it is quite clear—92 percent of the transport budget is on roads. When we raise questions about that, the answer we get back from this National Government is that if you think that less than 92 percent in the budget should be spent on roads, you are completely against roads. I have news for them—92 percent is nearly 100 percent. You could still spend a considerable amount of the budget on roads and spend two times, three times, four times, five times as much on the complements to the roading network, like the rail network, like passenger transport, like more coastal shipping for freight. That way we get better outcomes for those people and goods that are able to use that new infrastructure to move around and we take the pressure off the existing road network. It is not rocket science. It is not that difficult.

The Green Party is here to actively campaign on clean, fast, modern transport that will make it easier to get where people need to go. In fact, this type of balanced transport investment is far more cost-effective than what the current National Government is doing. So here is an example. We recently launched our campaign for rail for the North Shore. It is very popular. The vast majority of Aucklanders support it. In fact, a tiny minority would support the Government’s proposal of a road-only crossing. It makes sense because it will move three times more people than the road-only option while costing $1.5 billion less. I am not even including the enormous cost on the existing road network of dumping an additional 20,000 cars on it or needing to find parking somewhere in the city centre for 20,000 cars.

If we had a rational approach to transport planning and funding, one that did not limit itself to considering new highway expansions, and had instead asked “What is the most cost-effective way to move the next bit of people and goods and how can we do that in a way that meets our agreement in Paris and reduces carbon pollution?”, we would come up with some fantastic answers. They are all right there in the Green Party’s positive plan, which will be better for the economy, better for people, better for cities, and better for the climate.

PEENI HENARE (Labour—Tāmaki Makaurau): Thank you very much for this opportunity. Nau mai, hoki mai e Te Whare. Welcome back. It has been a bit of a long break and we are back into the swing of things.

I have heard many times today people talking about this amazing broadband roll-out, this investment into infrastructure that sees the internet become more and more accessible. Well, a recent report has Māori access to internet still at around only 64 percent. In fact, it is the lowest in the country, and we argue that most of those Māori are actually in the city, believe it or not. We do say that there is a significant lack of development for broadband usage and infrastructure in the regions, but I would argue that in Tāmaki-makau-rau, in fact, much of the Māori population is a transient population. That is a population that cannot afford to get on to the network, let alone access it. You will find them down at McDonald’s accessing the free Wi-Fi. So 64 percent—is this the kind of progressive economy that we want and that the Māori people are looking for to engage in an economy that will provide sustenance, provide sustainability, for them and their families?

I want to turn right now to He Kai Kei Aku Ringa. He Kai Kei Aku Ringa is the Māori economic development strategy. I am going to argue that despite seeing trade delegations go overseas, despite seeing all of this rhetoric around iwi settlements, I can tell you that the Māori people in the regions are not benefiting. Certain people are. Fat cats are. There are people eating at the trough, but I can tell you this: the majority of the Māori population are not benefiting—they are not benefiting. We know that the settings in the National economy are broken, because they are not filtering out to the regions. They really are not.

So what is the answer from this Government? “In Northland, I tell you what, we will settle with Ngāpuhi and that will fix the entire economic issue in Te Tai Tokerau, in Northland.” Well, I do not think that that is responsible economic management, nor do I think it is sustainable, nor do I think it is something that will engage the entire region; it will just put the onus on Māori to lift the regions out of the doldrums, because that is what its plan is. That is what the plan is. Let us utilise all of these settlements. Let us utilise He Kai Kei Aku Ringa. We will pull in a few of the Māori leaders and we will tell the Māori people that the economy is booming for them and when they are ready they can come and plug into it. They can receive the benefits from this growing economy—He Kai Kei Aku Ringa. More than five trade delegations offshore—that is fantastic. The culture is being seen in China, Asia, all over the show. What has come back to the beneficiaries here in New Zealand Aotearoa? Nothing—nothing. I argue that it is absolutely nothing. So what is the plan? Like I said—oh, well, we will give the iwi more settlements and expect them to do the job that we are failing to do. I have spoken about the He Kai Kei Aku Ringa strategy.

Why is it, then, that Māori unemployment still remains above 12 percent—above 12 percent? We also know too that the majority of the Māori population are young people, rangatahi. So approximately 80,000 young people are not engaged in employment, education, or training. This tells me that the settings are broken. This economic plan, this great hope for this country, is not working. It is not working for the people in the regions. It is definitely not working for Māori—that is for sure. I have already mentioned the unemployment statistics. Let us not talk about the poor housing-ownership rates. Let us not talk about the low wages. Māori and Pacific Island people in Tāmaki-makau-rau are filling a lot of those low-skilled jobs.

What does this Government do? It has no plan to raise the wages—none whatsoever. We talk about poverty. All of the issues that we have just discussed and debated around housing come back to this: a really poor economic plan. We need one that will provide a vision for Aotearoa New Zealand, one that will see us all prosper; not just the people at the top but everybody—Māori, Pākehā, in the regions, in the cities. That is the challenge in front of this country, and this Government is failing to meet that challenge. It is failing to come up with a clear plan for prosperity.

Hon STEVEN JOYCE (Minister for Economic Development): Well, the member who has just resumed his seat, Peeni Henare, obviously did not listen to my last contribution, when we went through some of the things that were happening in Northland as part of the Northland regional growth strategy. And yes, I think that it would be great to get the Ngāpuhi settlement over the line in Northland, but the suggestion by the member that that is the only thing that will have an impact in Northland is wrong.

Actually, there are 50 or 60 initiatives, and I would recommend that he do the people of Northland the honour of actually reading the regional growth strategy that they put together rather than bagging it and saying that there is no plan, because all of these regional growth strategies were put together by the relevant regions, not by Government agencies or Ministers. So every time the member turns up and says that there is no plan, he is basically going to each region and saying: “I don’t like your plan.” The member can say that if he wishes, but I do not know that that will be a particularly mana-enhancing experience in each of those regions.

He also mentions the need for employment in parts of South Auckland. I happen to agree with him. The great thing is that there are huge opportunities in that part of Auckland, and it is about matching the young people to the jobs. I want to tell him about an initiative called Ara, at Auckland Airport, which is a skills exchange, modelled on one in Australia, that has been developed for New Zealand. We have 39 companies working at this site out at Auckland Airport. They are training people. We have got apprenticeship coordinators. We have got the Ministry of Social Development there matching people into jobs. We have got a whole bunch of training for drivers’ licences so that people who need to get to and from the airport to work can actually get their driver’s licence quickly in order to do so. The whole idea of that is to help put the people into the jobs, of which there are something like 20,000 more over the next 10 years in that part of Auckland alone. So it is all about working collaboratively and locally.

I wanted to note a very important part of the Estimates, which is the Innovative New Zealand package: $761 million over 4 years to invest in innovation. I note particularly the biggest investment ever over 4 years in science: $114 million for the Ministry of Business, Innovation and Employment Endeavour Fund, which is the contestable, mission-led fund that is all about funding the sorts of sciences that solve issues like water quality, climate change, gas emissions, and all those things. For discovery research—for the bright scientists who start out and have ideas they need to follow, which so many New Zealand scientists have been successful in doing—there is a big investment. There is a big investment in what we call the Strategic Science Investment Fund. Health research is another one, and there is investment in start-up companies as well.

Hon David Cunliffe: Smoke and mirrors.

Hon STEVEN JOYCE: So there is a huge amount of investment, which Mr Cunliffe, who holds his calculator up the wrong way, is misunderstanding. There is also a big investment in tertiary education. The good news is that that is really working. We are seeing big growth in the sorts of skills that we need for a modern, innovative economy. We are seeing big increases—40-odd percent—in the number of engineers being trained at university, and increases at the polytech level. We are seeing big increases in the number of ICT students who are being trained in software engineering at our universities—an increase of about a third over 7 years.

We are seeing increases in the trades. BCITO in the last couple of weeks came out and said it had passed a milestone it had never reached before: 10,000 apprentices in the building trades—10,000. It has never had that number before, and that is a tribute to the hard work of that sector. We have more people working in construction than we ever had before. We are training around 38,000 more for that sector, and that is where the rubber really meets the road. That is where you have to sort of get away from the slogans and talk about what is actually going on and the work that is being done.

Regional New Zealand and those industries that need these workers know that the work is being done. I met a senior construction executive—one of the most senior in the country—the other day, and he said: “Look, that stuff the Government’s doing in tertiary education for engineering and for the building trades and so on is fantastic.” We have never had the level of response by the tertiary sector that we have had this time around in the construction boom that we are in today, which is the biggest that this particular gentleman has seen in 40 years. That is doing the work for economic growth.

IAIN LEES-GALLOWAY (Labour—Palmerston North): It is no surprise that New Zealanders are feeling increasingly uneasy about the way this Government is running our immigration system. It is not just something that has appeared to New Zealanders out of thin air. Of course, we have already had Treasury tell us that the Government is running the immigration system inappropriately. We have had Immigration New Zealand itself tell us that the Government is getting it wrong on immigration. We have had the Reserve Bank warn that the way the Government is running its immigration system is causing problems in the housing market in Auckland. A number of Government departments have said that immigration is being run incorrectly, improperly, and not in the best interests of New Zealand—and New Zealanders are feeling it.

If any member opposite thinks I am wrong, watch the 6 o’clock news tonight. New Zealanders know that what an immigration system should be about is bringing in the skills and experience that this country needs to grow our economy and to grow our society. But what are the main jobs that this Government is using the immigration system to bring people in for? The main jobs are for dairy farm workers. In New Zealand, of all places, this Government has prioritised bringing people in from overseas to work on dairy farms. It is bringing in retail managers, cafe managers, and retail supervisors. I ask members opposite, (1) do they seriously think that those are the jobs that are going to grow our economy and to provide good wages and good living for people in New Zealand, and (2) do they seriously think that we cannot train people here in New Zealand to take on those roles? Of course we can. But what the Government is doing is using the immigration system to subsidise employers who are not prepared to pay decent wages and provide decent conditions so that New Zealanders will want to train and get into those jobs.

That is what Immigration New Zealand and Treasury have been saying to this Government—that there is an increasing focus on using the immigration system to bring people in with low skills to do low-wage jobs, and they are pushing New Zealanders out of those jobs, which are the first rung on the ladder. Do not just take my word for it. The chief executive officer of the Auckland Chamber of Commerce, that well-known lefty Michael Barnett, came out today and said that he is concerned that there is a disconnection between the immigration system and the skill shortages that we have in New Zealand. He says the roles that we should be encouraging people to come to New Zealand to fill are in construction, in engineering, in electronics, and in ICT. Instead, what has this Government focused on? Retail, cafes, and working on dairy farms.

That is where this Government sees the need for immigration, at a time when we have over 80,000 young people not in education, training, or skills development—or work, for that matter. At a time when 80,000 young people are not working and they are not training and they are not in education, we are bringing people in from overseas who will do those jobs in poor conditions and at poor pay rates rather than encouraging employers in New Zealand to actually invest in their own industries and to invest in New Zealanders.

Of course, we know that immigration is one of the factors contributing to the housing crisis that this Government will not face up to. I would say to that that migrants are voting with their feet. Migrants are settling in Auckland because this Government has stifled growth in the regions. Migrants do not want to move to the regions because they do not see opportunities there, and that is one of the reasons that there is so much pressure on the Auckland housing market—because migrants are voting with their feet. They know this Government has failed on regional development, and so they see their only opportunities as being in Auckland and Christchurch, even though I have to say, as a regional MP, we would welcome more people coming to our region, seeing opportunities in our region, starting businesses, and taking up jobs in those high-skill areas that are going to support regional economic development. But that is not where this Government’s focus is. This Government’s focus is on providing a large pool of people to take up low-skill, low-wage jobs and to suppress wages for ordinary working Kiwis. That is what it is using the immigration system for.

We should aspire to much better things than that. Yes, immigration is important to New Zealand. Yes, we are a nation founded on immigration, and immigration is an important tool and can be a very successful tool for economic growth, but not the way this Government is running it.

JONATHAN YOUNG (Chairperson of the Transport and Industrial Relations Committee): I am very pleased to stand to speak on the particular area of transport under this debate, which is touching on appropriations that come to the Commerce Committee and to the Transport and Industrial Relations Committee.

The infrastructure in our country is absolutely critical if we want to see the sustained, continuous economic growth that we are seeing right now carry on for years to come. One of the commitments that this Government has made is to ensure that we have a transport infrastructure that is indeed going to fuel that economic growth, particularly in the regions. We know that there has been a huge investment in the Waikato Expressway. That affects regions such as the Hawke’s Bay, such as Taranaki, and such as King Country, because when our exporters take their products to ports they travel down those roads of national significance. Those roads that are outside of our region are our regional roads to our export ports.

I want to just acknowledge the Minister of Transport, the Hon Simon Bridges, and the former Minister of Transport, the Hon Steven Joyce, and the commitment that these Ministers have made over the years to ensure that we have a state-of-the-art, modern transport infrastructure.

We often hear the comparison made between road transport and rail transport, and we have at times competition between those two modes of transport. However, the Road Transport Association, in assessing the freight demand and the freight load it carries, says that there is a very small percentage of freight that is competitive between road and rail—something like less than 5 percent—and that these modes are actually more and more complementary, because we know that there are freight loads that rail can carry very efficiently, but there are also services that it cannot provide efficiently, such as door-to-door delivery, which is needed and is where the Road Transport Association and that sector are very, very efficient.

We are seeing a continuous investment by this Government in the transport portfolio. This year we have seen an increase of 4.13 percent and in the 2016-17 year an investment of $4.265 billion of not just taxpayer funding but funding that comes through road-user charges. A huge proportion of that comes through tax revenue collected by the Crown—something like $3.4 billion. One of the, I think, great initiatives that the Minister of Transport is leading is this whole area around electric vehicles. What we are aiming to see, and what the Minister is leading, is a doubling of electric vehicles in our country by 2021, up to 64,000 at that point in time. This is going to be important because it is the way of the future.

There are multiple different fuel sources for vehicles. Here in New Zealand we have the ability to have the most sustainable supply of clean energy to vehicles—more than just about any country in the world. Eighty percent of the energy utilised in running an electric vehicle and building it and also running it comes from renewable sources, whereas in other parts of the world that figure is only 60 percent. And why is that? It is because our electricity is generated by wind, by water, and by sunlight, whereas in many other countries in the world electricity is generated through thermal, oil, and coal. So we have the great opportunity to have an electric vehicle fleet that has the highest level of sustainable energy supply to it of just about any nation in the world. We look forward to seeing this increase. As of 29 February this year we had 1,057 light electric vehicles in the country. So lifting that to 64,000 by 2021 is an ambitious goal, and just getting these vehicles into the market is going to be very important to see the uptake of that. So the Minister, of course, has announced many initiatives around that, and we look forward to seeing that continue in the future.

One of the strategies that we as the Transport and Industrial Relations Committee saw was the regional State highways, and we see an accelerated regional roading programme being delivered.

FLETCHER TABUTEAU (NZ First): Thank you for the opportunity to speak in this appropriations debate. I am grateful that the Minister for Tertiary Education, Skills and Employment was here to stand up and contribute to several facets that were brought up by my colleagues on this side of the Chamber—and yet again there was a kind of a manipulation of the facts. I would not dare to say that he is incorrect or that he is completely misrepresenting, but it is about choosing to put forth this, and then obfuscate with this bit or knowledge or this bit of fact over here. It paints an incomplete picture for the public of New Zealand. They are being sold a line—that is basically what I am telling New Zealanders today.

The Minister talked about, for example, his regional development plans and how successful they will be in the regions. Well, little does he know that as those plans came out I actually followed him around and went into those regions to ask the people on the ground what they thought of the regional development plans. I just wanted some honest feedback, because if it is an opportunity for this country to jump on board with, then New Zealand First would like to be a part of that. We want to see our regions grow—and the public of New Zealand knows that absolutely. So if there is a good idea out there, we want to be part of supporting it. Unfortunately, the reality was, apart from some of the economic development agencies—and only some of them—the message was pretty grim.

I then went and spoke with private individuals or privately funded groups whose mandate is to grow economic activity in those regions, and really the feedback was that the Minister and his team there have created, basically, a missed opportunity. The research and the data that went in to inform these plans were lacking, to say the least, and took headline options that had already been discussed at the ground level and put them in these plans and said how wonderful they were. Never mind that the people on the ground in those regions had already examined them, looked at them, and dismissed them as a waste of time, resources, and energy. This is what the Minister presented to the people of New Zealand in the regions and said: “We’re looking after you, we’re going to help you.” The reality is that the feedback was that it was an opportunity for this National Government to create a marketing campaign on regional development and to maintain a spin around claiming it is doing something.

I think some of the members next to me over here on this side of the Chamber have spoken eloquently about unemployment numbers, the decrease in regional growth numbers—it is happening across the country. I would highlight that there are some positive numbers out there; it is great to see. But I put it to you that those positive numbers are despite this Government—this Government, which is not doing anything and is missing the point completely.

I just came from the top of the South Island—a great little part of the country—and I spoke to businessmen there. Basically, they said this Government would not know how to invest or create good infrastructure for actual and meaningful growth if it fell over it. They spoke about New Zealand First’s concern about how this Government is using immigration to simply top up the numbers—in the short term. Research tells us that immigration in the long term will not contribute to the growth of an economy. So in the short term it is masking the reality of this country’s economic growth, in that, basically, we are not growing—and everything that this Minister and this Government are attempting to do is more about placating the masses and selling a story. It is not achieving anything that is tangible or measurable in our regions. It is completely, completely unacceptable.

Minister Joyce accused someone on this side of misrepresenting the facts about this appropriation bill. Actually, what I would say to the Minister is the terminology used around the Budget this year has been incredible. It has been impressive—the name changes for research funds and other pools of money that have been moved from here to there to make it look like things are happening. We were sold a headline number on infrastructure of $761 million. What a figure to grow the infrastructure of the New Zealand economy—that would be amazing. The reality is, actually, just over half of that was in applied research and academic research, which we should be funding anyway out of those pools.

Hon SIMON BRIDGES (Minister of Energy and Resources): It is great to take a call. Was that not a pessimistic speech that we just heard? I do not blame the member, Fletcher Tabuteau, but, you know, there are so many good things going on in science and innovation and infrastructure. In terms of the things that we are talking about here, there is so much to be excited about—

Hon David Cunliffe: Yeah, just keep messaging until reality bites you.

Hon SIMON BRIDGES: —in this great little country of New Zealand that it makes you want to shave your beard off, Mr Cunliffe. So, Mr Cunliffe, I am really excited that we are part of a Government and that I am part of a Government of infrastructure. When you think about it, people do not take infrastructure for granted when it is going well, as it is in New Zealand, and we are a party of infrastructure that is making a really significant difference.

I am, of course, the energy Minister, and when you think about energy and the issues on which all of the international experts judge a country—whether it is competition, reliability, sustainability—we have a remarkable success story in New Zealand. On competition, it has never been more competitive than we see today. We have the companies fighting it out hammer and tong in electricity—offerings of $250, and sometimes more than that, for switch-overs. They are the kinds of incentives we have never seen before and, for the first time, actually—since 2001, I think it might have been—the power prices went down. I am really proud of that. I think it is because we set up an electricity authority that has got in, has taken competition seriously—What’s My Number is one that many will be aware of, and there are many other initiatives making a real difference here.

Reliability: the reliability of the supply—when Mr Cunliffe was in Government, every couple of years there was a blackout, a brownout, or a serious threat of that. I was still at school, that is true, but there were blackouts, brownouts, and threats of them, and rationing, every couple of years. There has not been one since this party has been in Government. The reason for that is we have got the incentives in place, we have got the competition in place, and we have fixed the system. New Zealanders can be really proud of that.

Of course we still do have issues, and they are not man-made or human-made, if you like; they are God-made. We look at what is happening around Taupō right now and so on, where the power is out, and Unison—I want to thank the people involved in that—is working really hard in the snow and in quite difficult weather conditions to get it back on. But, in terms of the things we can control, it has never been more reliable in New Zealand.

Sustainability: when we came into Government—this is the bit the Greens hate to hear—65 percent of our electricity came from renewables; today it is well over 80 percent. That has been because, again, the market incentives have got things right. We are a party that recognises the fantastic renewable advantage that this country has, and we are playing to our strengths. We see solar rates going up exponentially in New Zealand, despite the scaremongering campaigns we see from the likes of the Greens and Greenpeace. Under the model that we have at the moment, we see batteries starting to be taken up. It has been great to be involved in a number of launches around batteries, both in the actual commercial grid down to the great lines company Alpine Energy in the South Island, looking at the biggest—

Hon David Cunliffe: Where in the South Island?

Hon SIMON BRIDGES: —grid-scale battery—Timaru; I think the member was born there, was he not—in the southern hemisphere, I think, through to the kinds of home-style ones we see Tesla doing with Vector.

Electric vehicles: we have heard a bit about them, but the numbers, again, are growing exponentially, so that we are well on the way to meeting this year’s target. They will keep going up and up, and I am looking forward to having more announcements later this year in relation to electric vehicles, as we roll out that strong package, which is making a difference in that area. In transport, again, it is a story that is stronger than perhaps it has ever been. We are investing in the right areas, but in all areas in fact in the transport area.

Hon David Cunliffe: Have you been to Auckland lately?

Hon SIMON BRIDGES: I will get to that. We are investing more than ever before—$14 billion of investment over a 3-year period. Mr Cunliffe mentions Auckland. We are investing over a billion dollars a year in Auckland. That is more than was spent 10 to 15 years ago, in the early 2000s, across the entire country. Whereas the projects when Mr Cunliffe was in Government were $100 million or $200 million, right at the moment we have the western ring route nearing completion—

Hon David Cunliffe: With no bus lane. Where is the bus lane?

Hon SIMON BRIDGES: —the biggest transport project ever in New Zealand. Auckland Manukau Eastern Transport Initiative is working through it, with a fantastic bussing network, Mr Cunliffe. The East-West Link, which the Greens oppose, is a critical project to the biggest industrial hub in New Zealand—from $1.25 to $1.85 billion. It is going to be a game-changer out there. The City Rail Link—the biggest, most complex project ever—has started, and the Government is ensuring it is a success. Pūhoi to Warkworth—the point is this: there are multiple multibillion-dollar projects that are making this country move.

It is not only roading. A critique that we get from the lot over the other side is that that is all there is. Actually, in rail we have invested, under this Government, $4.2 billion, and that is making a significant difference. I actually think in terms of KiwiRail that although it is a business that is subsidised, it has got a bright future. Rail has a bright future as a result of what we are doing right now. Regarding passengers—because members over the other side mentioned this—we have seen metropolitan passengers go from 2.5 million in the early 2000s to over 16 million. Those numbers will only increase as we invest more in the networks in places like Auckland and Wellington. In freighting: it was great earlier last week to be in Masterton, where KiwiRail—and we are seeing a lot of this around the country, with CentrePort, in this case—just out of Masterton, has a logging hub. The logging is coming together up on to those trains and going through to the port.

We are seeing bigger ships—we are seeing later this year the biggest freighting ships we will have ever seen in New Zealand come into Tauranga—as other ports also deepen their harbours, as we see that more intensified freight, and as we see these inland hubs, again, where the freight is coming in. Rail, if it plays to its strengths, has a strong future. We will always need the trucks, because they are important in getting those local goods around, and for a number of the jobs that trains cannot do. We have a truly integrated system, and we have the New Zealand Transport Agency, with KiwiRail, working really hard on that.

Of course there are many more areas that are receiving unprecedented investment under this Government. In public transport: there is $2 billion going into that. It is not a financial issue, but I have been really proud of some simple changes that we made to allow for the heavier buses. Now in Auckland, as a result of those changes that Craig Foss and I made, there are double-deckers all over Auckland. When I am seeing them they are full with passengers getting around that city, and that is a great change that is being made.

Hon David Cunliffe: It’s because they can’t drive on the roads because of the gridlock, you nana.

Hon SIMON BRIDGES: Cycleways—“you nana”.

Hon David Cunliffe: You nana—it’s the technical term.

Hon SIMON BRIDGES: The level of debate in this Chamber: “you nana”.

Cycleways—you cannot travel by nanas, Mr Cunliffe.

Hon David Cunliffe: Aucklanders will try anything because they can’t use their cars. They’d go faster on a banana.

Hon SIMON BRIDGES: There is $333 million, a real step change in funding, so that we are seeing urban cycleways pop up—not like bananas, Mr Cunliffe—in every urban centre with over 30,000 people, with the exception of Invercargill. They are making a significant difference in terms of safety, in terms of environment, and in terms of health benefits. It was a great pleasure—not in my electorate, but in the electorate of Todd Muller, actually—to see a $7 million or $8 million cycleway from Ōmokoroa into Tauranga. It is going to be a stunning success from a health perspective, environmental perspective, safety perspective, and commuting perspective, but also from a tourism perspective, so I am really proud of that. What a difference in infrastructure this Government is making for New Zealand.

GARETH HUGHES (Green): Kia ora, Mr Chair. Ngā mihi nui ki a koutou, kia ora. It is great to see all the members back after a 4-week adjournment. I want to take this opportunity to wish our Olympians the best of luck for Rio.

If anyone is watching the parliamentary broadcast and not watching the Olympics right now, they would see some pretty pure political athletes on that side of the Chamber. They would see some gold medal candidates when it comes to pole-vaulting over facts, in terms of political spin and mental gymnastics. I have just been spun out by all the political spin I have heard from the Government benches tonight, because there has just been so much bunkum that we have heard. We heard Steven Joyce stand up and say: “Well, you know, I’ve been doing an innovation Budget.” You cannot call it an innovation Budget when you are seeing real-term cuts to tertiary education, and when the investment is not even pushing the needle on our woeful research and development statistics, which see us in the bottom half—half the developed-world average—when it comes to research and development spending.

We saw Jonathan Young angling for a medal for the fact that we are 80 percent renewable. We have less renewable electricity in New Zealand than we had in 1980, than we had in 1990. This Government does not deserve a medal to say: “We’re 80 percent, and aren’t we doing well.”

Then Simon Bridges got up, and Simon Bridges was trying to trumpet that for one measure for 1 year over 25 years, prices for one component went back—never mind line charges and all the other fees that keep going up. For one measure, one component over 1 year after 25 years, we saw the generation component of electricity bills decline. He was trumpeting that as a great success. There was a quote a former energy Minister told me, and I think it is quite applicable to the energy portfolio. He said that no one has ever made their reputation as the energy Minister, but plenty have lost it having that portfolio. I think Minister Bridges has taken that to heart, because what we see—ironically, it is called the energy portfolio—is someone with no energy whatsoever, who has taken an approach to talk a big game and do absolutely nothing. He is absolutely risk-averse and he is refusing to look at the global trends. When it comes to electric cars, allowing them to drive in busways is not going to cut it.

This is a Minister who has continued the tens of millions of dollars of tax breaks and subsidies for last century’s fossil-fuelled, polluting oil industry. This is the Minister who sat on his hands when Huntly went back to burning more 19th century coal. Ironically, this is the Associate Minister for Climate Change Issues but he seems to have all the portfolios where it comes to increasing emissions, be it fracking, subsidising oil drilling, seeing more coal burnt in Huntly, more motorways, more trucks, or closing down regional rail lines. We saw a Minister who was quite prepared to see the Energy Efficiency and Conservation Authority use taxpayer funding to slam solar energy in a recent report, a Minister who is standing by and refusing to act when the electricity industry, to protect its profits, is trying to discourage customers—and it is customers in regions like the Hawke’s Bay, Taupō, and Rotorua who are facing these arbitrary, unfair, discriminatory new solar charges. This is the Minister who has seen power bills go up and up, more than the rate of inflation, and has seen people scared when they see their power bill when they go to their letterbox, because they know it is going to go up and up.

A single component of a single measure of a single year over 25 years is cold comfort for those customers. Talking about cold comfort, this is the Minister who has seen the smallest amount for energy insulation in years and years and years. This is a Minister who asked for more at Cabinet but delivered the lowest amount of insulation funding we have seen for years and years. This is despite the fact that we see 15 New Zealand kids dying and 42,000 kids hospitalised every year as a result of our cold, damp housing in New Zealand. Yet this Minister spends his money on providing tax breaks for the oil industry. What we see is a Minister missing in action, someone with no vision, no leadership. He is not acting, and it is a tragedy because we have got such tremendous opportunities.

There are four times more jobs when it comes to clean energy than in fossil fuels. We do have a good energy story to tell. Once upon a time we were leaders and pioneers. We should be the ones selling those solutions—the intellectual property, the software—around the world because, currently, unlike New Zealand, more people are investing in clean energy than fossil fuels. We are missing the opportunities because our Minister is missing in action.

Hon DAVID CUNLIFFE (Labour—New Lynn): New Zealanders face a stark choice. They have a choice between a Labour-led Government that will manage the economy in a way that is inclusive—a place for everybody with returns to everybody—that is sustainable, and that is a high-value economic strategy, or they can have more of the same. More of the same means declining productivity, it means public relations spin from the Government, and it means that most New Zealanders are getting poorer, stung by a crippling housing crisis. So let us first name the game, then let us look at the effects, and then let us look at how we change it.

The Government’s game is pretty obvious to most Kiwis: open up the gates to immigration and unrestrained foreign investment, pump up the dollars, do not give a damn about the impact on individual Kiwi families, but just go for the headline number, that total GDP. OK, it is increasing by about 3 percent a year, but GDP per person is declining to flat. Productivity is declining to flat. We are stuck with all our cows in one exit, making commodities that are worth less and less, and now, after the fact, the Government is talking about diversifying—something it should have been talking about a decade ago. So the game is to pump up that headline number by letting in as many people and as much investment as you possibly can, and ignore the effects on the ground.

What are those effects? The first is that most New Zealanders are getting poorer. Here are the numbers, and they are from the Government’s sources and from the Parliamentary Library: working families’ share of GDP—that is, New Zealand’s total income—has fallen by $50 a week per family under National. Under Labour, around 51 percent of all extra growth went to working families. Under National, that has declined to 37 percent. The difference is about $50 a week that families should be getting but they are not.

And 50,000 more Kiwis are unemployed under this Government than under the previous Government—50,000. Unemployment is 144,000 now. By the Government’s own numbers it was 96,000, which was, admittedly, too many, but it has gone up by nearly half, another 50,000, and many of those are young people—80,000 young Kiwis are either not in employment or not even in education and training. The Government has left them behind. If they did have jobs, then they would discover that it does not really matter, because the Kiwi Dream for them has gone because National’s housing crisis is crippling middle New Zealand—absolutely gutting it.

People hate living in Auckland now, for two reasons: (1) the “Minister for Gridlock” has not fixed the traffic because the Government is pumping up the immigration numbers to make GDP growth look better. There are 40,000 more cars on the road in Auckland, and you cannot take that many people on to the trains. It is getting worse—ask any Aucklander—not getting better. And what are they driving to? Well, it will not be a house that young people can afford to buy, because the housing crisis has become a national shame. People are leaving Auckland in droves. It is getting hard for schools to recruit teachers, hard to employ nurses, and hard to get cops to go there, because they cannot afford to live there.

Think about the impact on superannuation when a generation from now most people will not have paid off their home because if they have one at all they will get into it later in life and they will not have time to pay it off. New Zealand superannuation was not built to pay mortgages and it was not built to pay rent. The elder poverty in New Zealand because of this Government’s housing crisis is going to be crippling—yes, Mr Chair, it is the Estimates debate, and we are lifting the lid on some of the underlying economic problems that are driving New Zealand backwards. You cannot get past the housing crisis, and all New Zealanders know that is true.

The third key issue is that there is no plan for sustainable economic growth. You get rich as a country by lifting productivity and by making sophisticated products and services that people want to buy. Do you know that in Fonterra, in the last 5 years, the proportion of milk going into high - value - added products has not shifted at all? Under this Government’s watch, no more product is going into high-value—

ALASTAIR SCOTT (National—Wairarapa): I would like to reflect on a couple of points made earlier by Dr Clark and Mr Lees-Galloway, when it was quite obvious that they had not been to the regions. They did not know what was going on. There were contributions of woe and misery. I just want to reflect on what is happening in the region that I represent, the Wairarapa region.

People are coming to the Wairarapa. They are coming to the Wairarapa from Hawke’s Bay and from Palmerston North. It has a GDP growth above average in the Wellington region. It has a GDP growth rate that is above the Wellington region’s average, and that is because of several things. Tourism is on the up: 2.5 million people came to New Zealand as tourists in 2010, and 3.3 million last year. Whether it is tourists from the boats that sit in Wellington Harbour driving over the hill to enjoy the wines, the balloon events, or the aerodrome events, tourism is one of those diversified industries that Mr Cunliffe says that we do not have in this country. We have it, and it is succeeding and it is contributing massively to the region. I am sorry to tell you the good news, guys, but the regions are doing well.

Capital Precut Solutions is a company in the Wairarapa. Here is what it does. It takes laminated wood product from Juken New Zealand and Kiwi Lumber, which is another local business. It cuts it into bits, it forms framing solutions, and it sends them to Auckland. That is what regions can do. They export to the larger cities, and to Christchurch, where the building activity is progressing. We know that we are in a construction and building boom—the biggest construction and building boom ever—and the Wairarapa is contributing to that building boom. Waingawa log hub—the Minister mentioned it earlier. That hub has doubled in size. That is a hub where thousands and thousands of trucks—

Hon David Cunliffe: “Truck lovers”.

ALASTAIR SCOTT: —truck lovers—truckloads of wood are going on to the rail. That hub is saving 16,000 truck movements—16,000 truck movements are not going over that hill because of the railway network. So that is what is happening in the regions.

Watson and Son’s honey is another example. We have heard about mānuka honey, the thriving industry that it is—particularly along the east coast of the country. Watson and Son’s honey is 50 percent owned locally and 50 percent owned by Ngāi Tahu. That is demonstrating that new money is going into the regions. That business is looking for doctorate and Master’s graduates, to build its employee numbers in its laboratories. We are not talking low-skilled jobs here; we are talking high-skilled jobs in the regions. Karaka Whips is a simple business. It is a family-owned business. It exports whips throughout the world, all from the Wairarapa.

I do not know where these guys have been, but they certainly have not been in the regions. They do not know what is going on in the regions. I do, and other MPs here who represent regions do. Those members talk about immigration funding the economy. Well, it has been said before, but it is not the number of immigrants coming in; it is the people who are not leaving that is making the difference. It is people who are not leaving who are making the difference.

Hon David Cunliffe: That’s bunkum. Give us the numbers.

ALASTAIR SCOTT: For decades we have been bringing in 40,000 to 50,000 new immigrants, and we have been doing that for ever. The difference is that people are voting with their feet and they are choosing to stay. I tell you what, despite these guys on the other side blaming immigrants, I will tell you the facts. Last week I was in Nelson speaking to a group of people, and I asked them: “How many of you were not born in New Zealand?”. I was quite surprised. About a third of them were not born in New Zealand, let alone in Nelson. So then I asked this question of the same group: “How many of you were not born in Nelson?”. Virtually none of them were born in Nelson. They were all internal immigrants.

Hon David Cunliffe: I can’t bear this any more. I’m leaving.

ALASTAIR SCOTT: Immigration and people are what makes this country great, Mr Cunliffe. Immigration is what give this country character and diversity and brings in new ideas and entrepreneurial spirit. That is what we need in this country. We want to encourage it, not discourage it.

JAMES SHAW (Co-Leader—Green): I am delighted that Simon Power, the Minister of Transport, is here—

Tracey Martin: Simon Bridges.

JAMES SHAW: —because he has—Simon Bridges, sorry. We do miss Simon Power in this House, I think, but I am very glad that Simon Bridges is in the Chamber, given that one of his colleagues was formerly extolling the Government’s policy around electric vehicles, where the Government has a lofty vision—a grand goal, if you like—of doubling the number of electric vehicles. There is huge growth in that area, but no real plan other than to allow them to drive in bus lanes.

I do feel sorry, I have to say, for the Minister of Transport. I do not know how many Cabinet papers he has taken to try to get the Government to come onside with some kind of plan to really increase the uptake of electric vehicles and has had them just batted back over and over and over again. But having a group of people who can afford electric vehicles to be able to drive in the bus lane is not going to significantly increase the number of electric vehicles in this country. If you want electric vehicles in New Zealand, you have to address the fact that they are very expensive. You have to bring down the price and the best way to do that is to get rid of fringe benefit tax on them so that corporate fleet buyers bring in electric vehicles, and then, 2, 3, 4 years later, those vehicles enter the second-hand market, which is where the vast majority of New Zealanders get their cars. That policy is something that has not been able to get through this Government, because it just does not believe its own hype, as with so many things when it comes to its economic development strategy.

We have a choice between the Government’s economic development strategy and a Green economic development strategy, and I just want to talk about what distinguishes those two things apart from each other. Mr Cunliffe was making a few points before about how we have pursued over the last decade or so in New Zealand a commodity strategy of low productivity—low-wage, simplified products that are easy to compete with on the international market. An example of this is in dairying, where we have pursued a volume over value strategy for years and years now, and it is not something that we are immune to competition on. The Americans produce about twice as much milk per cow as New Zealand does. They actually have way higher productivity because they use all sorts of terrible ways of maximising that product, but in the commodity market, where it is low value, they can actually out-compete us on volume. The American Dairy Association has a strategy of displacing New Zealand in the Chinese market, which is where we have pretty much got all of our eggs in that particular basket.

The other thing about this strategy, coincidentally, is that it treats the environment and the economy as two things that need to be balanced against each other—that there is a trade-off between those two things. So the Government’s economic development strategy is commodity, low-value, simplified products. If you look at the manufacturing over the course of the last decade, although manufacturing export volumes have increased marginally, the proportion of those products that have gone offshore is trending towards simplified, low-value products rather than towards more complex, high-value products. So even in an area where you have got what you might say at first blush is a pretty good-news story, what is happening is that the majority of that is actually going down the value chain rather than up the value chain.

On the other hand, the Greens’ economic development strategy is for high-value, niche, Brand New Zealand products that are hard to compete with because they trade on the very thing that underpins Brand New Zealand, and that is actually the environment. So, actually, rather than treating the environment and the economy as two things that are to be balanced against each other—where there is a trade-off against each other of those two things—there is, in fact, a multiplier effect between the two, where you actually have businesses that enhance and restore the environment, and that actually creates the value in them.

So, for example, in the heart of the Waikato, in the heart of dairy country, there is a tea plantation on a former dairy farm: Zealong tea—100 percent pure, organic New Zealand tea. They can sell tea in China—this is a New Zealand company selling tea to the Chinese—for NZ$300 for a 135 gram tin of tea. It is good tea, right, but that is pretty bloody pricey for a tin of tea. They do small volumes of the world’s best tea, but if you talk to the people who run that company, they will tell you that 90 percent of the value of that is in the air and the sun and the soil that make up New Zealand, because we are the only country in the world that can produce tea without—

CLARE CURRAN (Labour—Dunedin South): All I can say is that Alastair Scott walks around with rose-coloured glasses on in the Wairarapa, Simon Bridges walks around with his fingers in his ears, and Steven Joyce—one of these days he will fall off his wall, and all the king’s horses and all the king’s men will not be able to put him back together again. Everywhere across New Zealand—everywhere—this Government is failing the regions. Many regions’ economies are shrinking, with incomes and employment falling. It may be of interest to members that of the hundreds of constituent cases that come through my office, 26 percent of them come from outside my electorate. Of that 26 percent, most of them come from Clutha-Southland, which is the electorate next to mine. Most of those cases are housing-related and health-related, exacerbated by low incomes and unemployment, and this tells me two things: (1) that the local member is not doing his job, and (2) that people are hurting.

If you do not believe me, then how about this? Southland is in recession. Southland’s economy shrank by 9.9 percent last year. The average household income in Southland fell by $49 a week in the last year. The number of people who are unemployed in Southland has more than doubled since 2008, under National. Southland’s homeownership rate fell 4 percent between census 2006 and census 2013, which is the biggest fall in the country, from over 73 percent to under 70 percent. The Otago economy has stalled, with zero percent growth in the March 2016 quarter, and of course Otago includes Queenstown and Central Otago, which are growth areas. But its economy as a whole has stalled. The average household income in Otago fell by $98 a week in the last year.

In the meantime, in both Otago and Southland $94 million has been cut from the Southern District Health Board since 2010, and last year nearly 3,000 people in both of our regions—Otago and Southland—were denied operations after being referred by their GP.

I went and did a survey of parts of Clutha-Southland, given that so many people were coming into my office with cases—Milton, Gore, Balclutha, Lawrence, and Kaitangata. Guess what the majority of those people said? They said that the issues they were most concerned about were growing inequalities and the gap between rich and poor, not enough available jobs, affordable housing, and access to health services. These regions are hurting. They are really hurting. There is not enough opportunity in these regions for young people. There are not enough opportunities for people for employment, to give them hope in their lives.

This leads me on to my next point, which is around infrastructure, given that this is the Estimates debate around infrastructure. I want to touch on another vital aspect of regional economic development that could provide a kick-start to our regions but which this Government is sorely neglecting, and that is rural broadband, which is absolutely holding back regional New Zealand.

I have got two communities quite close to Dunedin that have written very well-written reports pleading for resources to help them kick-start their connectivity, one on the whole of the Otago Peninsula and the other includes the whole of the Strath Taieri, which includes Middlemarch and Hyde. Both are areas of strong tourism: ecotourism on the Otago Peninsula, and the Strath Taieri, which is the beginning of the Otago Central Rail Trail. Neither of those communities can get any funding, despite Amy Adams’ claims about rural broadband and how fantastic it is and how much it is delivering to rural New Zealand. They say how much this is holding them back as communities—not giving hope to young people to get jobs, holding back their core industries, and farmers not being able to log on. These issues are holding these communities back.

BRETT HUDSON (National): It is said that economics is the dismal science, and it is true that Fletcher Tabuteau has told us all that he has an economics background. But I have to say, listening to the members on the other side this afternoon, it is clear that they are all aspiring economists doing their very, very best to talk down New Zealand, to talk down the opportunities for New Zealanders, and to cherry-pick figures out of thin air to try to show that things are not as good as the facts actually point out.

The reality is that the backdrop of the 2016 Budget is set against sustained, solid economic growth, and Treasury is forecasting stronger growth to come. So it is forecasting, for instance, that over the coming year real GDP will rise 2.9 percent—

Sarah Dowie: How much?

BRETT HUDSON: It will rise 2.9 percent—thank you, Ms Dowie—and in the 5 years out to June 2020 it will average 2.8 percent. That is solid and sustained growth. But, more than that, there were 200,000 more people in work over the last 3 years, and Treasury again is saying that a further 170,000 jobs are expected by 2020. In that same period the average wage is forecast to rise to $63,000 a year. That is $16,000 more than when National took office. This is also set against a backdrop of record low inflation, where, basically, the news headlines are saying that inflation is effectively zero. It is not quite, but they are saying it is effectively that. Interest rates are also at 50- or 60-year lows. The Opposition tries to tell us that people are going backwards. People are not going backwards; they are going forwards at a great rate of knots under this National Government. Let us keep the good times rolling for all New Zealanders.

But on top of that I also have to point out Mr Shaw’s comment. It was a newsflash moment. He was talking about electric vehicles and how bus lanes will not help. Mr Shaw, a Green MP, stood up in this Chamber and said that bus lanes do not work.

Simon O’Connor: What?

BRETT HUDSON: He said that bus lanes do not work. Of course, the main reason for having bus lanes is that having a dedicated lane where that traffic can flow more freely will motivate people to take that form of transportation. But Mr Shaw said it will not work. So—newsflash—bus lanes do not work well. It is an interesting headline for tomorrow’s Dominion Post. Perhaps we should just get rid of them all in Wellington, according to Mr Shaw.

But back to the Budget. Looking forward, why Treasury is saying that the economy will grow so strongly is because it knows that this Government has plans particularly around an innovative New Zealand economy—diversifying, in addition to our traditional primary sector strengths. We do not believe that a country or an economy is a zero-sum game. We believe that we can continue to have strength in our primary sector, while also diversifying and growing strengths in other areas, such as ICT, which is my background. This is an industry that, incidentally, in export terms, has been growing at about 13 percent per annum, and even the complete sector, including domestic, has grown at 9 to 10 percent, year on year, which is great news.

This Budget saw an investment of $761 million for an innovative New Zealand. I am very, very pleased to see investment in both applied but also very basic, foundation research. As we can all understand, the private sector will have incentives to get involved in applied and experimental research because there you can see a much stronger link to a commercial outcome. The work we have been doing with Callaghan Innovation, as research and development performers and also as grant administrators, is helping to motivate those companies to invest more of their own cash and their shareholders’ equity into research and development, particularly in those areas where they can see the link to a commercial product.

But it is still important for us as a country that we do not lose sight of that most basic research—research that traditionally has been performed by universities both in New Zealand and also in other countries—and that has been funded by Government because of that non-clear link to a commercial outcome. I am very pleased to see, for instance, the additional $66 million over 4 years into the Marsden Fund. I have heard representations from the Institute of IT Professionals that would like us to lobby for the Marsden Fund to prioritise some more of that research into ICT areas. Given my background, I am very pleased to champion that.

Another area of infrastructure that I want to touch upon, as I conclude, is ultra-fast broadband. This is opening up opportunities for New Zealand businesses and New Zealanders, and 2.4 million New Zealanders can now connect. The build is almost at 70 percent—great news.

DENISE ROCHE (Green): I am pleased to take a call on behalf of the Green Party in the Estimates debate. I will confine my comments to the whole issue around immigration. Immigration has been used by unscrupulous demagogues like Marine Le Pen in France or Donald Trump, basically, to beat a loud drum and scare citizens. But the Greens have a consistent stance on immigration. What we think is that when immigration is properly supported and managed sustainably it has clear benefits beyond and above the economics, through enriching our culture, providing new ideas, and bringing needed skills to our country.

Many of us here in this House, whether we arrived by boat or by plane, have an immigrant somewhere in our history. But the problem that has become clear to me, after spending the last year meeting with various migrant groups, with unions, with multicultural associations, and with other stakeholders right across the country, is that National has let down migrants and National has let down New Zealand by prioritising the quantity of immigration over the quality of support. From international students to migrant workers to permanent residents, this National Government is letting New Zealand down.

I recently met with the Auckland University Students Association (AUSA) about international students, and what they had to tell me was pretty bleak. It seems as if the push for the export education market has been at the cost of the quality of life of international students, and also at the quality of education. Many of the international students who come here are paying four to five times what domestic students pay. Those fees are unregulated by universities’ fee maxima policies. At the same time, these international students are unable to access pastoral care, including access to some of the health services. AUSA has said that international students are disproportionately more at risk of being exploited than anybody else. We just have to look at the whole scandal earlier this year about students offering sex for rent as an example of how that plays out.

So when you look at the evidence, AUSA is right: a 2013 report from the Ministry of Business, Innovation and Employment estimated that one in 10 international students are being paid below the minimum wage. A 2010 Auckland University of Technology (AUT) report backed that up and found that 38 percent of those surveyed received below the minimum wage, and a 2011 thesis found that 42 percent of Chinese international students were also being paid below the minimum wage, as compared with about 7 percent of domestic students. None of these students should be paid below the minimum wage. Perhaps most shamefully, a 2012 AUT report on the experiences of international students and recent graduates on job search visas working in the horticultural industry in the Hawke’s Bay found that a shocking 93 percent of those students were being paid below the minimum wage, and nearly half of them did not have formal agreements.

We have got a lot of work to do to ensure that our minimum employment standards are met. Is this the sort of country we want? Is this the manaakitanga that we offer? Because it falls well short of what we should be doing. When we invite people here, we really should be treating them with dignity, with respect, and with compassion, but the Government’s focus is on quantity of immigrants over the quality of support. What that means is that our public services are stretched, our infrastructure is stressed, and our migrant support centres are stretched. The labour inspectorate’s annual report stated that nearly one in five investigations into suspected breaches of employment standards are not completed within 6 months of receipt of the complaint.

A party vote was called for on the question, That Vote Business, Science and Innovation, Vote Labour Market, and Vote Transport be agreed to.

Ayes 63

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

Noes 57

New Zealand Labour 32; Green Party 13; New Zealand First 12.

Votes agreed to.

Education Sector

The CHAIRPERSON (Lindsay Tisch): Members, we now come to votes in the Education Sector. The question is that Vote Education, Vote Education Review Office, and Vote Tertiary Education stand part of the schedules.

TRACEY MARTIN (NZ First): Kia ora, Mr Chair. [Interruption]

The CHAIRPERSON (Lindsay Tisch): Oh, sorry. I have already called. I should have called the chair. I have called Tracey Martin.

TRACEY MARTIN: Kia ora. Minister Parata made an announcement that this Budget provided an extra $8.9 million for the Intensive Wraparound Service. This amount included $1.5 million for the specialist equipment and technology. So that means that the actual amount in this Budget—the increase for our most vulnerable students—is $7.4 million. This amount is spread over 4 years, so that works out to be $1.85 million per year. The announcement went on to say that this would correlate to an expansion of the intensive wraparound service to an extra 50 students. This would make the capped number of students able to access this total fund up to 335 throughout the whole of New Zealand. No more than 335 students with the highest and most complex behavioural and learning needs can access this funding in New Zealand.

So if the Minister’s numbers are to be believed, and an extra $1.85 million per year will support another 50 students, that works out to be an average of 37,000 students per year. But—hang on a minute—the Minister is currently out in the media telling the public of New Zealand that “the average cost of providing intensive, localised support through IWS is $27,000.” So which number is to be believed—the Budget document or the Minister’s statement—as she tries to justify her desire to close New Zealand’s only single-sex residential high-needs school for girls?

Let us take the Budget figures, to be on the safe side—this budget of $37,000 per student per year. Under this document, what does it pay for? Well, if a family is very lucky and after 2 years of trying, after 60-plus hours of paperwork, if you manage to get through the Intensive Wraparound Service (IWS) committee, which will not make its application criteria public, so as to avoid parents and schools tailoring their applications to meet their secret criteria—if you get through all that, what support does your extremely high-needs child get? Well, this amount of money pays for, one hopes, full support for your student for the 6 hours that they are at school.

In this Budget, according to the Minister’s own figures in her press release, there is an amount of just under $2 million for Salisbury School. The Minister points out that the current roll of Salisbury School is nine girls. There are in fact 10 girls at Salisbury School today. So, using the Minister’s number, this equates to $200,000 per student at their current numbers. However, the Minister neglects to tell the New Zealand public of the sinking lid she and her Government have forced on this school, these parents, and these girls. If this Minister and this Government had allowed parents to apply directly to Salisbury—rather than using the IWS committee as a roadblock to artificially lower enrolment numbers, even up to the 2015 cap of 30 students—this figure would drop to approximately $66,000 per student, not for 6 hours of teacher-aide time, but for 24-hour, 7-days-a-week, highly specialised and highly qualified teachers, social workers, and caregivers in a suitable and safe environment.

Now let us break down those figures. The Budget figures say that the cost of the IWS equates to $37,000 per annum per student. If we take this amount and divide it by 6 hours a day, 5 days a week, for 41 school weeks in a year, we get a spend of $30 per hour. There are teacher-aides all over the country sitting down in shock that they are getting paid $30 an hour. Let us take the amount of $66,000 per annum per student, which would be the cost if the Government removed the sinking lid on Salisbury School. If we take this amount and divide it by 24 hours a day, 7 days a week for 41 school weeks of the year, we get a spend of $9.60 per hour. But let us be generous—let us do the same equation but use the highly inflated, manipulated dollar figure used by the Minister. Let us take the $200,000 per student at Salisbury. Let us divide that by 41 weeks, and then divide this by 168 hours per week, as Salisbury provides 24/7 education and care of these young women. What we get is an hourly rate of $29 per hour. So using the Budget’s numbers, Salisbury School is cheaper at delivering its specialist care than the current IWS programme. Yet the Minister continues to use those numbers to try to persuade the New Zealand public that it cannot be afforded.

I want to switch over to another little topic around the $11 billion in this Budget that this Government quite correctly says that it is spending on education. I want to make sure that taxpayers understand that $68,243,000 of this money is being paid out to integrated school proprietors for them to modernise their private assets. This funding is being recorded as being used to assist them to expand their privately owned network.

JIAN YANG (Chairperson of the Education and Science Committee): Education is a huge responsibility for any Government. In New Zealand we have almost 3,000 schools with close to 1 million students from early childhood education to primary and secondary education. We also have over 400,000 tertiary students. These people are the future of New Zealand; for that reason, we pay special attention to education.

The National-led Government has invested heavily in education since it came to Government in 2008. For example, in 2011 we spent 22 percent of all public expenditure on education—the highest percentage in the OECD in that year. In 2016-17, the appropriation for Vote Education has increased by 2.4 percent to over $11 billion. This is yet another record, and Budget 2016 uses the social investment approach to direct an extra $43.2 million for operating funding over 4 years to schools, educating about 150,000 students most at risk of educational failure. Most schools will receive a funding increase as a result of this new social investment funding approach.

I would also like to highlight the Investing in Educational Success initiative. At its heart are communities of learning, which are groups of schools and other providers that come together to raise achievement for children and young people. At the moment about 120 communities of learning have now been formed, involving about 1,000 schools teaching more than 320,000 students. These communities will receive additional funding to enable teachers and principals to share teaching and leadership expertise. Now we come to special-needs students. Budget 2016 delivers yet another $42.1 million over the next 4 years for students with high and special educational needs. Additional funding for these students has increased 29 percent since 2009.

Then we come to digital education and, just as Minister Parata has said, digital fluency is the universal language of the 21st century. To be successful and get the jobs they want, Kiwi kids will need to be confident using a broad range of digital technologies in a variety of settings. That is exactly the future. Just yesterday I visited St Joseph’s School in Queenstown, along with my colleague, local MP Todd Barclay. Firstly, we went to a year 8 classroom and we saw that every kid was using a laptop, tablet, or iPad, doing all sorts of designs like jerseys and stadiums, and they were very creative. Then we went to a year 2 classroom and, to our surprise, we also saw these little kids using laptops, iPads, and tablets and doing all sorts of digital stuff, including doing mathematics. So these kids are well-equipped for our future.

In terms of property, Budget 2016 provides $882.5 million for school properties. This is a huge investment across New Zealand to ensure communities have better facilities for students and teachers, and also the classrooms and schools needed to meet the growing population. By mid-2017 we will have invested almost $5 billion in school property since we came into Government. All this shows that we are committed to providing the best education we can in innovative, stimulating, and safe school environments.

Tertiary education—that was my background, of course. We are continuing to invest in tertiary education, particularly in science and engineering areas. The availability of highly skilled people is crucially important to meeting the aims of the Business Growth Agenda and encouraging competitive businesses to invest and grow. Thank you.

CATHERINE DELAHUNTY (Green): Tēnā koe, Mr Chair. Tēnā koutou e Te Wharenui. The Estimates debate is an important opportunity to talk about a portfolio that many of us in the room tonight think is critical—the most critical—so it is disturbing to see that the Budget this year put a freeze on the operations grant and opted for a funding model that is unproven and very, very hard to understand. Schools have been saying to me: “How do we know whether the targeting approach”—which sounds great, because we know that there are great needs in our schools—“will actually work when the criteria are supposed to protect the family and the child from identification but are extremely specific criteria that we are not necessarily sure are the criteria required to identify need?”.

It is quite interesting from a social analysis approach—rather than an investment approach—whether those criteria are good. I could talk at length about that, but, actually, there is a more important funding issue that I wish to talk about in terms of the Estimates. It was very, very important today because, for the first time in quite a long time, the two largest teachers’ organisations came out and soundly rejected it. They rejected this funding, which is called the global funding budget when, really, it is bulk funding—cash up a teacher. If in doubt, if you are running out of money, cash up a teacher.

It is not often that the two teachers’ organisations actually get together and reject the Government with the same voice. Sometimes they reject the Government with different voices. Sometimes they agree with the Government, or one of them does and one of them does not. But this time, when the parents realise this is about bulk funding and the risk, again, of increasing class sizes, they are going to be with the teachers’ community and many of us who are concerned about this model.

The reason there is so much disquiet, too, is that there was a funding advisory committee set up, and I was told today by people from that committee that they never saw this proposal—they never saw it. They said it did not go to their committee, and so they do not feel that this part of the funding review was run past them. There is no better way to annoy people than to have a negotiation or a consultation and then come up with a big surprise that actually leads to this kind of disquiet right across the education sector. It is not about jobs—it is not necessarily about anything like that—it is about whether children will benefit from bulk funding. That was tried before and it failed.

Will children benefit from increased class sizes through this so-called global funding budget? No, they will not, and no one is convinced. So what has happened now is that the Government, for reasons best known to itself, has picked a fight with parents and teachers—just before the election—in a way that is foolhardy and unnecessary. We need to get a long-term plan for education that works for all our children. We do not need the privatisation model that says flexibility and choice is what is going to make everything work.

The only guaranteed money the schools are going to get—absolutely guaranteed—is the money that will protect their property, their assets. They cannot trade that off—good. But is that as important as protecting the need to keep staffing at certain levels? I can just hear the speech now: “It will all be about choice. The schools can decide. It’ll be awesome.” But, actually, that is not what the schools want. They want guaranteed protection for their child-teacher ratios. They want to know they have got the funding to do this properly and not have to have a trade-off between a school nurse that they might need, or an extra couple of school support staff, or new gymnasium equipment—anything. They do not want to trade that against class size. They do not want to trade that against “cash up a teacher”. That is not what the schools want, and that is not what parents want.

I am sure we all remember what parents had to say to the National Government a few years ago when the National Government said that class size is irrelevant. Strangely enough, the people who send their kids to private schools know very well that class size is relevant, because small groups of people learn better than huge groups of people. Schools are not universities. You do not go there to hear a lecture; you go there—sorry, not you, Mr Chair—to engage, and they engage better when the class size is smaller. So this is a great way for the Budget, in this Estimates debate, to alienate the very people you would think the Government wanted to be on side with on the funding review. The funding review was initiated for a good reason, but it is not a good idea.

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

CHRIS HIPKINS (Labour—Rimutaka): I am very pleased to take a call on the Education Sector in the Estimates debate. A Government that was truly committed to quality educational outcomes for kids would be just as focused on the quality of the education they are receiving as they would be focused on the quantity of the education they are receiving. However, that is, sadly, not the case.

Let us start with early childhood education and let us start right at the beginning, with the most vulnerable kids—the kids under 2 years of age. When the previous Labour Government was in office there was a plan to reduce the ratio of teachers to kids under 2 in early childhood education. To its credit, the National Party picked up on that and put it in their 2008 election manifesto. Would you believe that the ratio as it stands today, which is exactly as it was when the National Government took office, is 1:5? Can anybody imagine a teacher in an early childhood setting dealing with five under-2-year-olds? Imagine what would happen in an emergency with five under-2-year-olds—trying to get five under-2-year-olds out the door, say, if the fire alarm went off. It would simply be impossible.

To its credit, the National Party in 2008 promised to do something about that, and they are still waiting in early childhood education for National to deliver on that promise. What have they seen instead? They have seen funding on a per-child, per-hour basis frozen for the entire duration of the National Government’s tenure in office. What that has meant is that in real terms their funding has gone backwards. On a per-child, per-hour basis early childhood centres are getting less funding now than they were when National became the Government. What has that meant? It has meant that the cost to parents has gone up by 32 percent, and the quality of that early childhood education is undeniably being diminished as a result of the lack of funding during the tenure of this National Government.

Let us move further up the system, into the primary school system, where the National Government introduced new standards: national standards. They are neither national nor are they standard, and they have delivered no discernible lift in student achievement. There is no statistically significant lift in student achievement as a result of national standards. They have simply been a massive form-filling exercise that has distracted students and teachers from the core job of teaching and learning.

Let us go further up the system, to the secondary school system, where it is fantastic that more kids are getting their National Certificate of Educational Achievement (NCEA), and I fully—fully—support the Government’s moves to increase that, but I am also interested in the quality of the qualifications they are getting. We have seen declines in the core subject areas like English, maths, and science, and a particularly large drop in the number of students who are studying maths under the current National Government. There have been 12,000 fewer students during the tenure of the National Government enrolled in maths across years 11 through to 13. That is a significant drop.

We wonder why we are struggling to attract people in the tertiary system into the STEM subjects. It is because they are not doing them in school, and then we are not going to get more people doing them in the tertiary education system if we do not encourage them to do them in school. We have to not only focus on getting more kids achieving NCEA but also focus much, much more on what actually makes up those qualifications, because, at the moment, there are kids who are setting themselves up for disappointment once they leave school because they are not getting the prerequisite requirements to go on to do further study or an apprenticeship or to undertake employment in the areas in which they have an interest. That is simply not good enough, and we must do more about that.

We have over 64,000 people under the age of 25 in New Zealand who are doing absolutely nothing. They have finished their journey in the compulsory education system. They have not gone on to further education. They have not gone on to employment; they are simply doing nothing. That is a sign of failure. That is something that we must do something about. Yet what we hear from the National Government is that it wants to write those people off. Bill English calls them “pretty damned hopeless”. That is the attitude of this National Government. I do not think those members should call them pretty damned hopeless. I think that they should provide them opportunity. I think they should be focused on getting them into education, training, or employment, and not doing what Bill English said he is doing, which is being permissive around immigration policy and writing off the future of that 64,000-plus group who are currently sitting at home doing nothing during the tenure of this National Government.

Hon LOUISE UPSTON (Associate Minister for Tertiary Education, Skills and Employment): It is my pleasure to speak for a few minutes in this Estimates appropriations debate on the Government’s tertiary education budget for 2016. Unlike Chris Hipkins, the member before me, I think we are proud to have a whole range of initiatives that support learners throughout their lifetime.

My colleague Minister Parata will talk about the primary and secondary sector, but I want to focus my comments on tertiary education because in this Budget alone we have seen an investment of $265.5 million over 4 years in tertiary education, and that is part of what we have called, in an umbrella, our Innovative New Zealand package, which is worth $761 million. I wanted to just talk about a couple of them because the member before me talked, really unfortunately, about a group of learners in New Zealand who do have challenges—we recognise that.

I think one of the fantastic initiatives of this Government is the Māori and Pasifika Trades Training Initiative. We have drawn down $9.6 million put aside for the Budget last year to provide additional places—2,500 young Māori and Pasifika learners—in the Māori and Pasifika Trades Training Initiative. So some of these learners have not done well in the compulsory sector, but unlike that member prior, we have absolutely not left them on the side of the road. We have made sure that there are educational opportunities that fit the range of learners across the spectrum in New Zealand. I think this is a particularly great initiative that is really delivering not just jobs but careers.

There was a young Māori gentleman whom I had the opportunity to meet in South Auckland a couple of months ago, and it was clear to me the difference that this Government has made to his life and his future by setting him up for a career—not just writing him off; not just saying that any job is good enough, but actually putting him into a position where he has a lifelong, rewarding career that supports him and his family. That is what I am proud of as a Minister in this Government.

Unlike the member previously, we are also looking at foundation education at levels 1 and 2 that are fees-free for eligible learners from 2017. It is $14.6 million over 4 years. So I absolutely refute the comments that the speaker before me made, because this is very directly aimed at second-chance learners to gain the very basic skills that they need to progress into higher study or to gain employment. We also look at another challenge—unfortunately, something that was left and we have inherited from the previous Government—around literacy and numeracy challenges. But, again, have we left a large group of New Zealanders unable to cope in our modern workplaces? No. We have said that we will focus on adult literacy and numeracy. In fact, New Zealand ranks fourth in the OECD now in adult literacy, which is a lift. We are continuing to fund more places for those who are in employment and who need additional assistance.

I want to speak about apprentices. In Budget 2016 there is an additional $14.4 million over 4 years to meet what we know very clearly is an increasing demand for apprentices. Up and down this country, talking to learners, talking to families, talking to employers, and talking to industry training organisations, they are clear about the fact that this is a Government that is supporting those people to learn as they earn with apprenticeship schemes in a whole range of different areas. I thought it was useful just to give you a bit of a snapshot. If we look 20 years ago, in 1992, there were only 16,000 people in industry training, and, of course, we had no industry training organisations. Fast-forward 20 years, and last year there were almost 136,000 trainees and 11 fantastic industry training organisations that support them. So we have seen significant improvements in terms of learning outcomes, which I think is really important.

We have also seen an increase under our Government in completion rates of up to 72 percent, and what we are looking at very specifically is the occupation in areas in New Zealand where there is clearly high demand. We have had a couple of examples recently. One, of course, is primary industries. One of the figures that I am sure lots of New Zealanders are not aware of is based on the industry and is really looking at its future capacity and capability needs, along with the Ministry for Primary Industries. It has projected the requirement for an extra 50,000 new roles between now and 2025. I think the real challenge, though, is that there are some who think that the majority of those 50,000 jobs are people pulling on gumboots each day and working on a farm. But, actually, no—they are requiring even higher levels of qualifications and skills, which our Government is committed to ensuring that the industry receives, whether it is environmental engineers, whether it is soil scientists, whether it is people who are ready to repair robotic milking machines, or whether it is geneticists or pasture managers. Primary industries, alone, have a significant requirement and they are working very closely with the Tertiary Education Commission to ensure that we support them in that role.

Construction—of course, I could not talk about skills opportunities if I did not talk about construction, because we know, clearly, that to grow even further we are going to need an extra 10 percent of the current people employed in construction. If we look at specific areas in Canterbury, I am really proud of how the Government responded to Canterbury to ensure that it had the construction workforce it required. One of those areas was, of course, quadrupling the number of women working in construction over a 2-year period, which I have not seen replicated anywhere in the world. That is the sort of thing that we are now looking at and saying: “Right, so if we are looking at South Auckland”—it has got a significant building programme there—“how do we make sure that young New Zealanders who live and have been educated in South Auckland are first in line for those jobs?”. That is what this Government is committed to and that is what we are doing.

So if we look at this, part of the mix is ensuring that young people have good tools to enable to connect them with where those opportunities are. We have seen the design of the vocational pathways and the Occupation Outlook app, which means you can very quickly have a look at what the career opportunities are, what the demand is, what the pay is, what the training is, and what it will cost. Recently, we have also launched MyPath, which is another tool to help young people and to support them and how they navigate—very much aligned with where the opportunities are, which I think is fantastic.

In addition to that, of course, science, technology, engineering, and maths—STEM subjects—continue to be areas that we are focused on. Whether it is more funding into Engineering—Education to Employment, which is the engineering workforce support, or whether it is in science, with funding things like the Nation of Curious Minds, it is all about making sure that we as a country are growing our own and supporting them with the skills they need in the industries that are high-growth, high-demand, and high-wages, through a whole range of different initiatives. Whether it is Callaghan Innovation’s Futureintech, Techlink, or the ICT Graduate Schools, of which we have launched three—again, it is very, very closely connected to industry. This is a Government committed to ensuring that we are delivering the young people who have the skills and attributes and capabilities that our employers have been telling us that they need, and we are investing exactly in those spaces.

I am also proud of the regional growth study and the work with the programme called Growing Regional Opportunities through Work. That is focused very much on a group of young people who are not in education, employment, or training in Kaikohe. It is a 12-month project that is very much focused on those whom perhaps the member before me, Chris Hipkins, would have been quite happy just to leave to do nothing, but we have worked really intensively over a 12-month period. And I cannot tell you how amazing it is to meet those young people, who have never, ever gone to a job interview, let alone held down their very first job and brought their very first pay packet home—and that was the pay packet that housed and fed their families.

That is the very pointy edge of what this Government is doing. We are tackling the young people who are harder to educate and employ. We are setting them up for a lifetime of opportunity and a lifetime of success. We are unwilling to leave young people behind, and, equally, we are also focused on ensuring that older New Zealanders, in terms of their training opportunities, are also ready for a changing workforce. We have seen significant growth in adult apprentices, which is probably not something that the Opposition would dare to focus on, but if you look at the over-35s, there is a 17 percent increase on the numbers last year in apprentices and a 25 percent increase on those aged 55 and above. So we are training from one end of the scale to the other.

MOJO MATHERS (Green): I am pleased to take a call on this debate. I wish to focus on an issue that is really close to my heart, which is special education. At the moment I am very aware that inclusive education is something of a buzzword. I support it. The Minister of Education has held up the Ministry of Education’s Intensive Wraparound Service as the gold standard for persons with disabilities and complex needs. It would be great if every child was able to get the support they needed to participate, flourish, and learn in our education system, but we know that that is not happening.

The current cap on the Intensive Wraparound Service has been set at 335 students, and that is woefully inadequate. Too many children with complex needs are missing out on the Intensive Wraparound Service and the support that they need, and many more students are also missing out on the support that they need and on reaching their potential because special education is under-resourced and is not well suited to meeting their needs.

What we know from the number of parents who have approached us is that it is an absolute nightmare for parents to navigate the systems of accessing the funding and the support that they need for their child. That means that many children are missing out. Access to special education should not depend on a parent having to fight for their child and take up the fight on their behalf. It should not depend on parents having to fund specialist reports themselves. We know from submissions on the Education and Science Committee inquiry that the education system is failing many children with dyslexia, dyspraxia, and autism in particular.

I am someone who has personally benefited from many years of specialised support in the education system, whether that has been speech therapy or small class sizes. It breaks my heart when a parent tells me that their child is unable to get the support that they need. I had that support through most of my education, and I know what a difference that support made to me. I would not be here in Parliament today without that. I have experienced inclusion done well. I have experienced inclusion done very badly. I have also had 3 years of intensive educational support at a specialised residential school for Deaf in England.

What I can tell the Minister is this: inclusion works only if it is properly resourced and if the school environment is genuinely supportive of the child. Inclusion done poorly is traumatising for those with disabilities, which brings me to Salisbury School. I cannot understand why the Minister seems so determined to be closing that school down, because it is a school that is providing some fantastic support and service to some of the most vulnerable children in this country. It is my belief that there is clearly a role for Salisbury School to stay open and become a centre for best practice, which can then spread throughout the education system.

Salisbury School is no more expensive than other residential schools, and would be viable if it had at least 20 students, which would be easy to allow to happen. I urge the Minister to listen to the families and to former students who have attended that school and keep Salisbury School open. Stop using the Intensive Wraparound Service committee as a sort of gatekeeper acting as a sinking lid on enrolments in that school. There is no need to do so. We can learn from what is being developed at Salisbury School in the way of being a centre of excellence in education for children with highly complex needs. That is something that we need to retain and keep open.

Hon HEKIA PARATA (Minister of Education): I am delighted to stand up and participate in the education Estimates appropriation debate today. I am very proud to be a part of a Government that has seen an increase in Vote Education every year that we have been in Government. In Budget 2016 we saw a further increase of 2.5 percent, which has meant that education spending, for the first time, has exceeded $11 billion. We are most definitely putting taxpayers’ money where our mouths are.

We are ensuring that we are investing in all the pillars of a good quality education. We are investing in the quality of teachers and principals. We are investing in data and evidence to understand how well our children and young people are doing. We are investing in those who need additional learning and support, through increasing the provision for special education. We are investing in infrastructure.

The single biggest capital allocation in Budget 2016 was over $880 million into schools, classrooms, rebuilding, and redevelopments across the country. This provision provides for 480 new classrooms to meet or get ahead of growth in some of our expanding centres. It means new schools in areas across the country, responding to the needs there. It is the first time any Government has ever done a condition assessment of every school property across the country. That means that we are able to prioritise the dollars that we are able to have in Vote Education to those schools that need it most and to work our way through the portfolio.

In this regard, I would like to acknowledge my colleague the Associate Minister of Education, Nikki Kaye, for the tremendous amount of work she has done in cleaning up that portfolio and working with me and with our Government to ensure that we are building modern, light, airy, energy-efficient, warm, and safe classrooms and learning environments for our young people.

We also put into this Budget a further $436 million to meet the growing demand in early childhood education. This brings the total investment by our Government into early learning to almost double what it was when we came into Government at the end of 2008. We are very serious about giving our earliest learners the strongest start on their education journey as is possible.

There has also been quite a bit of discussion about special education during this debate. I just want to intrude a bit of fact on to the Opposition members’ penchant for providing us with numbers that do not mean very much. So let me provide the actual numbers: for special education we have provided a further $42.1 million in order that we could increase the amount for those young people in the ongoing resourcing scheme. These are the young people who have the most complex and the highest needs, and we have extended the numbers of those getting that support to 8,600.

I think it is important to have these numbers in front of us because the members have focused on only one element of our special education investment, the Intensive Wraparound Service (IWS). That has been a very effective success for parents; it involves parents. The specialists—the clinical behavioural and education specialists, not the Minister of Education—make assessments, which has been characterised as gatekeeping. But actually these are the experts who give the advice on what is needed for each of these young people who are in the IWS, and we have extended that by $8.5 million.

A member earlier today confused the provision and thought that that included the $1.5 million operating funding for specialised equipment and technology. It does not; that is in addition. And in addition to that we have also provided $15.3 million for 550,000 extra teacher-aide hours to support, we estimate, a further 1,250 young people who are participating in our inclusive approach within our classrooms.

So in special education we have seen the overall budget rise by 29 percent since we have been in Government. I know there is more need to be met, but this Government is serious about it and has been making contributions to ensure that that is reflected in the actual funding.

We are also targeting operations grants this year to the 155,000 young people who come from long-term benefit-dependent households. We are keen to see that funding—instead of a 1 percent universal grant that would have amounted to about $16 on average, whether a child needed it or not—go to targeted funds. Thank you.

CHRIS HIPKINS (Labour—Rimutaka): It would be very unparliamentary of me to use the phrase “lies, damned lies, and statistics” when it comes to the contribution of the Minister of Education, so I will not do that, but what I will do is inject some—

Hon Hekia Parata: I raise a point of order, Mr Chairperson. I do take offence at that, because in fact the numbers I was reading out are published in the Budget Estimates of New Zealand. They are not damned lies or statistics.

The CHAIRPERSON (Hon Chester Borrows): If the member were making a point about unparliamentary language, that would have been one thing. The member really raises a matter, though, that just underlines that it is a matter for debate.

CHRIS HIPKINS: I will be very happy to inject some further statistics into this debate so that we can talk a little bit about them. They also come from the Government’s Budget, which I think is very useful, because we have seen huge cuts on a per-child, per-student basis in funding for education since this Government took office.

Let us just look at early childhood education. We will look at just 1 year. Let us look at just 1 year in early childhood education. From the year 2015-16 to the year 2016-17—that is, the current year’s Budget—the funding has fallen from $8,623 on a per-child basis to $8,555. That is just actual funding. That is actual funding. If you adjust it for inflation it is even worse, and if you go back over the time of the last National Government you will find that funding for early childhood education has gone back significantly. The current National Government seems to have forgotten that the reason we are spending more money on education is that there are more kids in the system. That is actually a good thing. It is great that there are more kids participating in early childhood education, but the funding is not keeping up with that significant increase in growth.

In primary school education—let us look at that—since 2008 the cost to parents has gone up 40 percent. In the last couple of years it has gone up at 10 times the rate of inflation. Parents are having to put more and more money into their kids’ education because the Government funding simply is not keeping up.

Let us look at the tertiary system, and Louise Upston touched on that earlier. There is $15 billion of student loan debt, up by 50 percent under this National Government. Fees have increased for those studying post-school by 41 percent during the time of this National Government. What has Government funding done? It has gone up by 3 percent, barely even covering the rate of inflation. In fact, it probably does not cover the rate of inflation during that time. And we wonder why homeownership is falling amongst an entire generation of New Zealanders—the lay-by generation of New Zealanders, who end their educational journey for a time, when they leave post-school study and go into the workforce, saddled with a huge mountain of debt.

There is a cartoon that I quite like. It has a graduate returning home to his parents with this huge sack on his back that represents the student loan debt he has got. His parents are tut-tutting in the doorway, saying: “When we started out, we started out with nothing.” This poor graduate is saying: “Trust me, I’d be quite happy to be starting out with nothing.” The reality is that graduates—and it is not just at university; it is people leaving polytechs and other forms of post-school education—are starting out their working lives with a massive financial burden as a result of the student loan scheme, and this Government is making it worse. This Government is not doing anything to address that. It cut eligibility for student loans. It has continued to increase fees. It has cut eligibility for student allowances to support people in their post-school study. It is simply not good enough.

All of the rhetoric Government members say about wanting to give people a good start in life is just that—it is rhetoric, because they are not actually willing to follow that up with actions. Louise Upston says the Government is unwilling to leave young people behind. There are 64,000 of them being left behind right now. They are under the age of 25, sitting at home doing nothing. They are being left behind, and the Minister of Finance, Bill English, simply calls them “pretty damned hopeless” rather than actually doing anything about it.

And then Louise Upston had the audacity to say that the Government does not want to leave older New Zealanders behind when it comes to education, either. Tell that to Steven Joyce, who cut all of the sorts of financial support for older New Zealanders who want to undertake some form of tertiary study. Once you get to a certain age, according to Steven Joyce, that is it. You are cut off. You do not get any form of financial support for post-school study because of Steven Joyce. I do not think that is the sort of future we should be aiming for in New Zealand. I think we should recognise that older New Zealanders who want to continue to retrain so that they can get better jobs should be able to do so. They should be financially supported to do so, and they should not be written off, as is happening under this current National Government.

Let us continue on through the education system. There are so many examples of funding cuts. Night-class funding has been cut. Funding for special education, although there have been some increases in funding—and I do want to acknowledge that, and I want to welcome the increase in funding for the ongoing resourcing scheme. But it is still not enough, because it is still not keeping up with the number of kids who are arriving at school with special needs.

SARAH DOWIE (National—Invercargill): It is a pleasure to rise and take this call in the education debate for Vote Education for the appropriations for 2016-17. What a worthwhile topic to be talking about as a mother: investing more than $11 billion in education to give our children a platform to build on, to gain skills, to grow, to gain confidence, to achieve the successes that they want and their hopes and dreams. I think that that is just such a worthwhile portfolio, and I am very, very proud that this Government has invested more than $11 billion in education.

I want to address some of the rhetoric that Mr Hipkins was talking about with regard to early childhood education (ECE). I have two small children, and I must say that I am very, very pleased with the early childhood education that they have received. I now have one child in the primary school sector and one child who is still going through the early childhood education system. I am very, very pleased that this Government has continued with providing the 20 free hours for early childhood education and that we have in New Zealand a 96 percent participation rate in early childhood education. In Southland that is up at 98 percent because we have a labour participation rate—[Interruption]—Ms Curran, that is higher than the national average.

So ECE provides a very, very good platform for our young children before they move on to their more full education journey. You can choose, as a parent, what registered provider you want to go to and still obtain those 20 free hours of education. You can go to a playcentre, which celebrates more free-play concepts. The children are still learning to explore. They are still learning confidence. They are still building relationships. They are building resilience, and they continue to grow. Or you can choose a more formal-type system, which I have also encouraged my children in, like day care. That is a more structured format. They have mat time. It is more like school. In both situations, they have achieved. Their results have been very pleasing, and my older child, who has gone on to primary school, has benefited from the ECE system in New Zealand. We have one of the best education systems in the world. The dream of no matter where you are from, as a New Zealander—if you can get into education and you have got the tenacity to learn and do well in your education, you can achieve whatever you set your mind to. That dream is alive and well in New Zealand, and I am very, very pleased with that.

I want to talk about the expansion of our social investment model and targeting our at-risk people. The Minister has already talked about this, and we know that there is a cohort of people—young students—and that if they are in benefit-dependent families, then they are more at risk of not achieving in their schooling career. I want to talk about an example in Invercargill. Invercargill Middle School is a finalist in the Prime Minister’s Education Excellence Awards. It has basically shoved deficit learning out the door. Katie Pennicott and the principal there, Stan Tiatia, got together and they challenged the staff to throw deficit learning out the door. What they have done is they have tailored learning programmes to their students. They decided that if they spent that time tailoring programmes for each individual, they knew that that individual would achieve, no matter what. They have turned that school around. Children have achieved, and they have been recognised for that. I want to congratulate them on those efforts.

I also want to talk about the school property investment. We often talk about the bigger centres and say that the bigger centres are growing and that they need more schools and more classrooms and more investment in infrastructure. But in Invercargill, Donovan Primary School’s roll increased by 64 percent in 11 months due to the fantastic leadership of its principal, Mr Peter Hopwood. It has received an extra classroom, which will be state of the art. It will be a warm classroom. It will be connected to fibre, and it will be very interactive in the children’s learning.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe, e Te Heamana. If there was a national standard for Budgets, I am afraid this Budget would fail. Actually, it would be “pretty damned hopeless”. That statement was made in my electorate—in Feilding, actually. There is a group of parents in Feilding who have had the courage to start their own school. The reason why they wanted to start their own school is that none of the schools there are providing total immersion Te Reo Māori. So that is what they wanted to do, and good on them.

It has been an absolute struggle for them, though. In this Budget there is nothing there for them. They are on to their third venue. That is just not good enough. The Minister of Education talks about providing good, safe school buildings for students. There is a group in Feilding that has nothing like that. They deserve better.

Children living in poverty—what is in this Budget for them for education? How does a child go home to a car and try to do their homework? There is nothing in this Budget for them. How do children do their homework without Wi-Fi? They do not have the ability to connect to the internet. There is more pressure on their parents. As we heard from my colleague Chris Hipkins, it is much more expensive for parents now to provide an education when living in cars. My colleague Jenny Salesa knows all about that, because a lot of them are in her electorate.

The Minister talked about the increased budget. Well, actually, it has not increased enough. This idea that you can have targeting for certain areas of education does not really work. The overall effect for most children living in poverty is that they do not get to benefit from it. That is a sad occasion.

I had the privilege of visiting a group of rangatahi in Palmerston North. The system has failed for them. They have dropped out of secondary school. They have even dropped out of alternative education. And if it was not for Te Aroha Noa Community Services, a group in Palmerston North that has given them the opportunity to have a safe place for them to learn, then they would not be in any education, like 64,000 others. They would not be in training, they would not be in employment, and they would not be in education. There is nothing in this Budget for them.

I cannot help but comment on Māori boarding schools. Māori boarding schools deserve a better deal. The contribution that Māori boarding schools have made to this country is significant. The closures that have happened, I think, are symptomatic of how the Ministry of Education has not supported these very important schools. I think about the amount of money that the Government has poured into private schools and into charter schools, and then I look at the opportunities for the likes of Turakina Māori Girls College, which was closed last year, and it is very disappointing. There is nothing in this Budget for Māori boarding schools.

I think the Māori Party members should be ashamed of themselves. They talk about sitting at the table that makes decisions that provide opportunities. Well, there has been a high cost for those opportunities, which go to only a very small number of people. If you have a look at the numbers of Māori children attending charter schools, they are very low compared with the numbers who are going to mainstream schools.

My question is: where is the benefit for those Māori kids and, actually, all kids living in poverty? All the kids who deserve better opportunities—where are the opportunities for them in this Budget? I cannot see them. Thank you.

Hon HEKIA PARATA (Minister of Education): I really do have to get up and do the Committee a service by correcting the previous two speakers.

The most recent speaker, Adrian Rurawhe, was wrong in almost every regard. In this Budget, in Vote Education, just over $11 billion has been put into schools, kura, early childhood providers, and kōhanga reo across the country. Now, let me just deal with partnership schools and kura hourua. The member asserted that very few Māori went there. In fact, all of the kura hourua are contracted to ensure that a minimum of 75 percent of their rolls are Māori and/or Pasifika, and many of them are much higher than that—much higher than that.

The member commented in his assertion that this Government had not supported Māori boarding schools. Again, the member is completely wrong. Of the six Māori boarding schools—Turakina Māori Girls College, Hato Pētera College, Hato Pāora College, St Joseph’s Māori Girls’ College, Te Aute College, and Hukarere Girls’ College—there are about 650 students in total at those boarding schools. All of the boarding schools have greater capacity than that. Turakina, in fact, had capacity for 150 students; it had 49 students. The Government invested $9 million, paying for all of the staffing and learning costs at the school and over half of the boarding allowances and scholarships. However, the Government cannot make parents or grandparents send their daughters or granddaughters to Turakina. The Government cannot magic up students. That is a choice that parents make.

I will tell the member why there is a challenge—and it is a challenge for all boarding schools, not just Māori ones. It is because there are more choices available to whānau, closer to them. There are now 282 kura, reo rūmaki, and bilingual classrooms and schools across the country that parents are choosing to send their young people to because they are closer to home and they have more options. Māori boarding schools, and boarding schools in general, have played a very fine part in New Zealand’s education his- and her-story. But they are very difficult now, and many parents are choosing—not just in Māori boarding schools but in boarding schools in general—closer to home options. So the member is quite wrong.

In terms of disengagement, since records were kept in 2000—this is the 16th year that we have had records around engagement by kids—this is the lowest rate we have ever had of suspensions, stand downs, exclusions, and the fourth one, which I cannot remember. It is now down at just 4.1 percent—at 4.1 percent. I am sorry that the Opposition is not happy that we are seeing greater engagement by our young people and more of Māori.

Yes, we do still have challenges. What are we doing about that? We have introduced Year 9 Plus, which has identified about a hundred young year 8 students going into year 9 and asked, using the Whānau Ora model, how we wrap round them to help them and their brothers and sisters be successful. We have also introduced Count Me In. I invite the members of the Opposition to use 0800 Count Me In for any 16- to 18-year-old who is on the street and not involved in education, employment, or training, and who does not have a qualification. Call 0800 Count Me In and we will get an education provider to that young person and re-engage them with education.

We are providing new infrastructure for kura across the country. So, again, the member is quite wrong. We do that using the condition assessments to prioritise. It is apparent to me that the members are not interested in facts, but I am very happy to host a meeting in my office and run through those. Today I released our available Public Achievement Information. What that shows to the Opposition is that in all facets of education, Māori education has gone up. At early learning we have higher participation. In national standards we have seen incremental growth. The previous Opposition member criticised that and said there was not enough. I agree with him, but we now know where they are and we are getting incremental growth, and we will continue to build on that.

Ngā whanaketanga—we are seeing growth there. Clearly, the member is not interested in hearing those facts, but I am happy to provide this chart with the facts of actual kids in actual schools doing better under this Government. The member says there is nothing in this Budget for them. We have targeted $43 million to those kids who come from long-term benefit-dependent households. That is on top of this Government increasing—for the first time in 43 years—the benefit to those living in hardship. We are serious about lifting educational achievement for all kids.

JENNY SALESA (Labour—Manukau East): There are a number of issues that I would like to talk about in this Estimates debate on the Education Sector, but let me begin with charter schools. I have particular concerns about the approach to funding that this Government has around charter schools. We have an estimate at the moment that this Government has spent around about $44 million on charter schools to date, and in this year’s Budget at least $11.8 million will be invested or spent on new charter schools. This is despite the fact that this model is a failed model. This is a model where, as we have seen with Te Kura Hourua ki Whangaruru—it is a model that has failed there, so much so that it actually closed the school. The taxpayers of this country, New Zealand, have invested $5.5 million in Te Kura Hourua ki Whangaruru and it has closed down, and yet this Government is going to expand it even more in this Budget.

Charter schools, as we know, are targeted at Māori and Pacific students. So can I just address Māori and Pacific students, but in particular Pacific students in my electorate in Manukau East in South Auckland. I just heard the honourable Minister of Education talking about how this is a Government that actually assists and is really, really successful with Pacific and Māori children, and talking about real families and real students. But if I can just give a couple of examples from the families that I see in my office.

Just last week we had a family referred to us from a social worker in a school. They have six kids. They lived in a garage. This garage was leaking. The day that I visited this family—because they had no car—to authorise me to assist them so that they would get into a house, it was raining. It was a day when it was also very windy; a very cold day. Three out of six of the children were at home sick. This mother said that her kids are healthy kids apart from the fact that since they had been living in this garage in South Auckland her kids have been sick.

Honourable Minister, we deal with so many children who live in garages and so many children who live in cars, the issue of transience is an issue that we deal with in South Auckland on a daily basis. In one of the schools—the largest primary school, I am told, in South Auckland, with over 1,000 children—57 percent of its children are not there at the end of year in December because they are transient. The official definition of “transience” is: “Students that move school twice or more over the period from the 1st of March to the 1st of November.” We have other schools that have even higher transience levels than that.

What I know from the children whom I see who are transient—here is another example: a mother with two teenage boys. She has been living in her car for over 6 months, but during that time she has not enrolled her sons in a school. Why? Because she has moved so often. She has moved from Hamilton to Tauranga to the Bay of Plenty and back to Auckland. She has moved so many times. She is not able to find a private rental or, indeed, a State house. Her two sons, who are teenagers, have not been in a school that whole time. So when we hear the Government talking about how this is a wonderful Government that is doing so much for Māori and Pacific children—it is not doing enough for the thousands of Māori and Pacific children who are homeless.

We know from Otago University that there are at least—this is 2013 statistics—41,000 people who are homeless. In Counties Manukau, in my area, the Counties Manukau District Health Board tells me that there are at least 110,000 people who are living in overcrowded conditions. We know that when people live in overcrowded conditions, they do not have the space to be able to do their homework, and they are admitted in and out of hospitals a lot, and these families are transient. So, honourable Minister, there are a lot of consequences when our children are homeless.

On one of the weeks that our Labour MPs went to visit Te Puea Marae—a marae that has served over 160 families who are homeless—they were told that at least about half of the children who were there in that week were actually children who were not even enrolled in school—half of those children. So there are various—

STUART SMITH (National—Kaikōura): I am really pleased to have the opportunity to speak on education in this Estimates debate. I would like to congratulate Ministers Parata and Joyce on increasing the appropriation by 2.5 percent to $11 billion. They are not just throwing money at the appropriation; they are actually targeting it. They have been bold enough to invest in data, for example, and use that data to enable them to target it at students who need it to get all of the services and the right education for each level right through to the tertiary sector.

What we have seen in the past is Governments throwing money at education and thinking they are going to get a better result. Although you may get some minor improvement, it is not an investment in the future, and we really need to do that. I would like to talk about the communities of learning (COL). We have got a fantastic one in Blenheim. I think every person will fondly remember a teacher who made a big difference for them. The whole idea of COL is to seek out those particular teachers and let their skills and their techniques be shared by others. It is not about just knowing the subject; it is about getting that idea across.

As I go around my electorate and visit the schools, it is quite obvious it is not the knowledge that the teacher has; it is how they get that across. It is an intangible thing, almost, but COL is going a long way to actually bridging that divide and getting all the teachers up to that same level. I think it is really brave. It is not the easy path to take, by any means, and you will not get immediate results, necessarily, but it is an investment in the future. I congratulate the Ministers on doing that, and I think it is fantastic.

I would also like to talk about some data—the Minister touched on it before—that has just been released. It was a bold target to have 85 percent of 18-year-olds achieve National Certificate of Educational Achievement (NCEA) level 2 by 2017. In my electorate, 86.1 percent have done that, so we are ahead of the target. That is a fantastic result, and we have got that data now—we can all share in that. This is what education is all about. In every other sector we would measure the performances against one another—that is how you get improvement. If you do not compare and learn, how are you ever going to improve? I really congratulate you on going down this path.

I think that what we really want, instead of the old league tables about how schools are achieving by how many people achieve excellence in NCEA level 3, is to get to a point where we can see that the schools that top the league table are the ones that have students achieve at or above their potential—not some headline number about who passes NCEA level 3 with excellence. I am really looking forward to that day, and I hope that day comes soon.

I would also like to touch on the tertiary sector, and, once again, I think the Minister has made a bold step by increasing the subsidy in the STEM subjects. What we know, when we look at ourselves compared with other OECD countries, is that we do not have as many graduates in science, technology, engineering and mathematics. If we want to keep up with our trading partners, if we want to be successful in a modern world, we need graduates in those areas. It is really important that we get the investment in the right place to ensure that that occurs. In the past, universities in particular have churned out students who have degrees that have much lower course costs because they do not have laboratories, etc., which cost a lot more money. Putting that subsidy in, or increasing it for those subjects, will make it much more attractive for those universities to encourage more students through in those subjects. We will all be the richer for that.

We also cannot forget, of course, apprenticeships. There is an extra $14.4 million to try to achieve 5,500 more apprentices by 2020. Last year, in fact, we had over 42,000 apprentices enrol to go through various trades. I think that is a really important area, particularly when we have got something like our situation at the moment, where we have got a huge construction boom going on in New Zealand. We need tradespeople—they are just as important as university graduates, if not more so—in numbers.

It is a great pleasure to speak in this debate. Thank you.

Votes agreed to.

Māori, Other Populations and Cultural Sector

The CHAIRPERSON (Hon Chester Borrows): Members, we come now to votes in the Māori, Other Populations and Cultural Sector, volume B.5, volume 8. The question is that Vote Arts, Culture and Heritage, Vote Internal Affairs, Vote Māori Development, Vote Pacific Peoples, Vote Sport and Recreation, Vote Statistics, Vote Treaty Negotiations, and Vote Women stand part of the schedules. But before I take a call I will just advise the Committee that all parties, apart from the National Party, have used up their supplementary calls, and the Māori Party and the ACT Party have one each. So the standard calls that exist as allocated proportionately under this topic are those calls that are left.

NUK KORAKO (Chairperson of the Māori Affairs Committee): Ā, tēnā koe e Te Tiamana. It is a privilege to take the chair’s call in this debate of the Māori, Other Populations and Cultural Sector in my role as the chair of the Māori Affairs Committee. It is also a privilege to be a Māori MP in a Government that is working hard to improve the lives of Māori, Pasifika, and also all New Zealanders.

Although I do not agree with the Māori Party’s stance on Helen Clark’s UN bid, Marama Fox did remind us just how bad the Labour Party was for Māori the last time it formed the Government. When we look at that, Labour, supported by New Zealand First, extinguished Māori customary title over the foreshore and seabed. That is the first one. The next one was that after National completed the first Treaty settlements in the 1990s, it was Labour that, effectively, stalled them, and then it took a National Government, particularly under the Hon Christopher Finlayson as the Treaty Minister, to get things moving again. The third thing is that it took a National Government to actually commit New Zealand to the UN Declaration on the Rights of Indigenous Peoples. And the fourth thing, which I think is really worth highlighting, is that it took a National Government to apologise to Tūhoe for the Urewera raids.

With this sector, I want to talk about the great things that National is doing for Māori now, particularly through this year’s Budget. Treaty settlements are continuing, and more and more iwi around the country are actually receiving the apologies from the Crown. What they are also doing is actually banking the commercial redress that gives them the opportunity, in a way, to invest in their futures.

We have also further increased our investment in Māori and Pasifika trade training schemes, and this is a fantastic programme. It is about giving so many young people the chance to take up a trade, to actually provide for themselves and their families, and to play an important part in filling the skill shortages we are facing in the construction and the infrastructure industries. What better way is there to support our young people than to give them a chance to make a contribution to their country’s well-being while at the same time securing their family’s financial future and ensuring that they can depend on a wage and not actually a welfare payment? Under the trade training schemes, 1,200 young people benefited from this programme last year, but demand is continuing to grow. This new funding of $9.6 million will provide places for 2,500 young learners in this year alone, and 3,400 in the next year.

What about housing? We have heard Opposition members talking a lot about housing shortages, but here is a Government that is doing something about it. It is called comprehensive planning. Young Māori who want to own their first home can already access a number of things in a number of ways so that they can actually have a great opportunity to move into their own home. The first one is the HomeStart scheme, the second one is the KiwiSaver savings that they can utilise, and the other one—particularly amongst a number of iwi—is that they have their own saving schemes, just like the Ngāi Tahu Whai Rawa. So there are three ways that young Māori can actually access these particular funds, where they are savings funds, so that they can actually have a better chance of getting their first home.

We are also giving the Māori housing network a boost—$12.6 million over the next 4 years. We know that Māori find it more difficult to get into their first home than non-Māori do, so this targeted assistance will actually help more of our whānau realise their housing dreams and make them come true. This funding will go towards new homes and housing repairs and to ensure whānau have access to safe, secure, and also healthy homes.

This Budget also benefits our Pacific brothers and sisters, with a further $4.6 million in new operating funding going to the Pacific Employment Support Services. This helps get Pacific young people back into work and back into training. I have focused on Māori and Pasifika, but there is a lot more involved in that as well. Kia ora.

KELVIN DAVIS (Labour—Te Tai Tokerau): Tēnā koe, Mr Chair. It gives me pleasure to speak on the Māori side of the Estimates. I have to take issue with Nuk Korako, who just sat down, who said that the National Government has a comprehensive set of housing policies. The only thing comprehensive about it is that it is a comprehensive failure, because the housing crisis in New Zealand is the worst that it has ever been. It is an absolute shambles and Māori are, indeed, suffering from it.

He raised the issue of the Māori Housing Network—$12.6 million over the next 4 years. That is $3 million a year. When the Budget was announced, I rang up Ricky Houghton in Kaitāia and I said to him: “Ricky, at this very moment, how many people are on your waiting list to get a house?”, and he said: “Ninety-nine. There’s 49 families and 50 individuals who right now could do with a house.” So even if that $3 million was spent in Kaitāia on building houses for the families and the individuals who need accommodation up there, it would not meet the need, and that is just in Kaitāia alone, let alone every other town and hamlet across New Zealand. So the Māori Housing Network fund is just a drop in the bucket.

Let me say that I lay the blame not just at the feet of the Government but also at the feet of its partners the Māori Party members, who, to be quite frank, are the Māori caucus of the National Government. Those members say it is good to be sitting at the table. Well, let me tell you, there are two tables. There is the big Cabinet table, which all the Cabinet Ministers get to sit at, and then outside in the foyer there is the little coffee table, which Minister Flavell sits at, and it is the coffee table because that is where the crumbs fall—underneath the coffee table.

Māori homeownership in 2001 was at about 31.7 percent. It has now dropped into the 20s. That is unacceptable. At that time there were about 105,000 Māori homeowners. That has dropped. The biggest decline has been up in the far north, in Whangarei. The Māori Housing Network says it has built over 200 homes in the last year, and look, those 200 homes, I am sure, for the people who are living in them, are fantastic—they will be warm, they will be dry, they will be comfortable—but those 200 homes make up less than a quarter of a percent of the total Māori housing stock, and that is unacceptable for Māoridom.

Then let us look at Māori unemployment. Well, it is over 12 percent. It is more than double the rate for the rest of the country. That is unacceptable, and I lay the blame there at the feet of the Minister for Māori Development. There are Māori in prison. There are close to 10,000 people in prison at the present moment and over half of those are Māori. What is this Government doing to help prevent our Māori people from going into prison in the first place? And it cannot say “Oh, we’re doing all these things and they’re really working.”, because the number is going up exponentially. It is not just going up year upon year; it is going up month upon month.

Māori have been let down severely when it comes to homeownership, unemployment, and Māori going into prison, but Whānau Ora—and I do not want to steal Nanaia Mahuta’s thunder here—is a concept that we really hope is going to be successful for Māori. We like the concept. There are six goals: self-managing, so that whānau will be self-managing; they will be living healthy lifestyles; they will be participating fully in society; they will be confidently participating in Te Ao Māori; they will be economically secure and involved in wealth creation; and they will be cohesive, resilient, and nurturing. And yet when we look at the figures on how well Whānau Ora has been achieving over the 6 years it has been going—I looked at the two commissioning agencies and, admittedly, they have been going for 19 months or so, but I could only see in the annual report just the results from one of those commissioning agencies.

In terms of self-managing, 78 percent, or close to four out of five, of those whānau were not self-managing. Seven out of 10 of those whānau that it has been working with were not living healthy lifestyles. And confidently participating in Te Ao Māori? Ninety-six percent were not yet confident in participating in Te Ao Māori, and the other figures are just as bad. OK, it will take time. It will take time, but it could be done better.

Hon TE URUROA FLAVELL (Minister for Māori Development): Tēnā koe, Mr Chairman, kia ora tātou katoa. Ka mihi rā ki a tātou katoa, ā, koutou i tae moata mai ki Te Whare, ka pai, ka mihi ki a koutou katoa. Nōku te whiwhi, kia tū ake hei waha kōrero mō mātou o Te Pāti Māori, otirā, ko taku tū hei Minita Whakawhanaketanga Māori, ka mutu, ko te kawe haere anō hoki te āhuatanga o Te Whānau Ora. E rongo ake ngā kōrero kua puta ai i tēnei ahiahi ēngari, ka whakairia ērā kōrero mō te wā nei, ka hoki mai ki aua kōrero ā taihoa ake nei.

[Thank you, Mr Chairman, and acknowledgments to you all. I commend you all, and those of you who arrived early in the House, well done and good on all of you. I get this opportunity to speak on behalf of the Māori Party, to stand as Minister for Māori Development, and, furthermore, to advance aspects relating to Whānau Ora. I heard the contributions that emerged this afternoon, but I will hang them there for now, and come back to them presently.]

Budget 2016, for us, builds on the gains that we have certainly tried to make over the past 8 years as a partner to the National Government, knowing full well that there is only one vote that counts in this House and that is the Budget. If you vote for the Budget and you get the Budget over the line, you get the goodies and you remain being the Government of the day. So the Māori Party has been able to support the Government on the Budget, which is an important vote for the stability of Government if for nothing else, but also we have been able to vote against the Government sometimes and vote with the Government sometimes, just as Labour does, just as New Zealand First does—actually, just as everybody does in this House at one point or another.

So the key thing has been around an emphasis on really making a difference for whānau Māori, and the increases in funding that we secured in Budget 2016 have been about investing, I suppose, in the solid foundations that we have been able to set up in past years and through until now. It is not about trying to solve every issue that Māoridom has in front of it, because there are many; that is true. It is about the resource that Te Puni Kōkiri and I have as levers at my fingertips to be able to press the right buttons. In that regard we have tried to focus on whānau; whenua, as in land; whare, as in housing; whakapapa, as in cultural revitalisation and whakawhanaungatanga; and that is about economic aspirations and economic opportunities and to take us forward in a complete package.

The language of revitalisation in all sorts of ways is so important to us—in particular, the language. You will know, Mr Chair, that part of the development that we have taken forward is not just about money, but in fact the legislative programme, and in particular the Māori Language Bill and the Te Ture Whenua Māori Bill. Of course, the Māori Purposes Bill deals with some of those issues.

I have been really pleased with the developments that have happened, and in particular about the increases in spending across the board. The transfers, for example, from housing to social development have resulted in an extra quarter of a billion dollars being allocated for generating outcomes for Māori. So if anybody criticises the Māori Party, I can say, and indeed our ministry can say, that upwards of $120 million was secured in the last Budget. I can also say that that has been pretty much the level throughout the last 8 years that the Māori Party has been in association with the Government of the day. If I ask the question “Well, what does everybody else deliver?”, the unfortunate answer is “not a lot”. But be that as it may, we have tried to—[Interruption] That, I suppose, is why people want to be on the Government benches. When you get there you are able to make changes not only to legislation but also to secure some funding and that, I suppose, is the fundamental difference.

There were some issues raised by the member for Te Tai Tokerau, Mr Davis. Ka nui te mihi ki a koe, tēnā koe.

[I appreciate you greatly, and thank you.]

He did talk about the whole notion of the Māori Housing Network. So it is important to note and to put on the record that we were able to secure an additional amount of funding for the housing network, to make some longer-term difference to the housing situations facing many whānau. Does it cover every Māori whānau? No, it does not. But that is being real. We are trying to focus as best we can on those ones at the very hard edge. An amount of $17.6 million per annum is now allocated to the Māori Housing Network to increase the supply of affordable housing, making homes in high-needs communities, having them safe, having them warm, and building capability amongst our people in the Māori communities, such that they are able to move through the housing pipeline.

I had the unfortunate situation of having to visit ngā tūpakeke in the Waimana Valley in my rohe. It gave me no pleasure whatsoever to go into their house, with both of them suffering, coughing, because of the damp conditions.

Pita Paraone: No different from the north.

Hon TE URUROA FLAVELL: I accept that even in the north—in fact, throughout the country—there are times when our people are suffering. But to be able to go in and give them a hand, with some support mechanisms, is hugely important to me and I am committed to following that through into the future.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): I do want to acknowledge that since 2008 the Māori Party has successively supported the National Government over a period of time—over a period of time. If we measure whether or not the advantages have gone to Māori, we need to look at some of the challenges.

Homelessness is increasing in many of our communities. A hui tonight at Te Puea was telling us just that. Not enough is being done to provide housing for those who need it most. This is not about people in abject poverty. This is about people working and still not being able to secure a home. Employment—people rolling over from a 30-day to a 60-day job, and then being dropped; it is not good enough. This is about people waiting in GP services for about 20 minutes and paying a lot of money. Even though the Government has said that it will make GP visits free for under-13-year-olds, Māori families and elderly people are suffering under this Government.

In education, the Minister may well say that National Certificate of Educational Achievement levels have increased, but let us look at the facts. Māori students in particular are not being tracked into core subjects that would give them higher earning, professional degrees, like those gained through the sciences, like in medical professions, and that is the truth. Schools are pushing kids into lower subject areas, not into higher subject areas where they will gain greater skills.

But I want to come back to the issue of Treaty settlements because I did hear the contribution of the chair of our select committee regarding their stellar track record. Well, do you know what? When National signed up to the Declaration on the Rights of Indigenous Peoples, it did it knowing that there would be several caveats that it would not be able to deliver on and make the necessary changes within domestic legislation here in New Zealand. Labour was not prepared to do that, because we thought that was actually a dishonest way of going forward.

But here is the track record. On the Trans-Pacific Partnership, did the Government consult with Māori when it professed to say that their rights were protected insofar as the Treaty clause? No, it did not. On the Kermadecs, did the Government consult with Māori when there was the potential to override the 1992 fisheries settlement? No, it did not. On Te Ture Whenua Māori, a fundamental piece of legislation that absolutely establishes Māori interests in land, did the Government have a good consultation on that process? No, it did not. So, on the one hand, here is the Declaration on the Rights of Indigenous Peoples being held up by the Government as being a stellar track record for the Government, but on the ground, where it matters most, the Government has failed—on process alone. That is the thing. Where the rubber hits the road there are some significant challenges.

Let us come back to Treaty settlements and look at some of the key challenges before the Government. For example, on the foreshore and seabed alone, when the Government introduced its bill to override Labour’s solution, not one, not two, not even three titles have been awarded under the Government’s Marine and Coastal Area (Takutai Moana) Act—not one, not two, not even three titles have been awarded. Even more, it is going to have a cut-off date next year, in April. Where is the advantage in terms of those types of issues?

Yes, Treaty settlements have proceeded apace. We support that. In fact, that is the one area where, across the House, we acknowledge the contribution of Treaty settlements. However, the proof is in the pudding. Several of those Treaty settlements require accords to ensure effective implementation—around about 2,000-odd, we were told at the select committee. However, we do know that Government departments are slipping in their obligations to uphold the several accords across a number of Government agencies to ensure the effective implementation of these Treaty settlements.

We are concerned. We are concerned because the proof of the pudding is in the eating, and if Treaty settlements are not implemented effectively it will impact on the integrity of Treaty settlements. We are watching vigilantly because we want the Treaty settlement process to be an effective, durable process that delivers advantages. The creation of the Post Settlement Commitments Unit is one way in which the Government, to the Minister’s credit, can improve this situation.

JAN LOGIE (Green): E Te Tiamana, tēnā koe, ki a koutou huri noa i Te Whare, tēnā koutou katoa.

[Greetings to you, Mr Chairman, and to you all throughout the Chamber.]

We still have much work to do before women in this country are safe, free, and able to access all of their rights. I would like to speak tonight about Vote Women and the ability of the Ministry for Women to support the much-needed changes for women in this country.

Last week has been described, fairly I think, as a shitter of a week for women in New Zealand. It was a week where a high-profile business leader, Kevin Roberts, said that it was not a problem that there are not more women in leadership and that the reason for our absence from senior positions in business is our lack of vertical ambition. It was a week where a judge and a lawyer in a sexual assault case considered it OK to ask the complainant whether her “no” really meant no, and would not any red-blooded male do the same. It was a week when a report of an alleged sexual assault by professional rugby players was followed by a range of leaders all around this country very publicly questioning the morality and decision making of the woman complainant. It was a week where everyday sexism was on glaring display all over our media.

But the real problem is not that last week was a bad week but that this was an expression of the everyday realities for many, many women in this country. The gender pay gap is widening. The private sector continues to lock women out of seats on their boards, and a disturbing number of businesses continue to exclude women from senior management in their workplaces. And our conviction rate for sexual and domestic violence remains painfully and life-threateningly low.

So what does the budget for the Ministry for Women tell us about how seriously this Government takes the freedom, security, and rights of women in this country? By budget, the Ministry for Women is the smallest ministry in the country. Next is the Ministry for Pacific Peoples, which has almost twice the budget of the Ministry for Women, and a budget that I would argue is also woefully inadequate. So the ministry representing more than half the population—half the population, who are still under-represented in this Parliament, on boards, in business, in the media, pretty much everywhere except in tertiary education outcomes and low-paid jobs; half the population is underpaid and undervalued and under attack in our homes and in our workplaces—this ministry has the smallest budget of all. Vote Prime Minister and Cabinet has a budget 15 times that of Vote Women. The only vote smaller than Vote Women is for the Parliamentary Commissioner for the Environment. I guess we cannot expect anything else when the Minister for Women does not even sit in Cabinet—a decision made by this National Government.

The Ministry for Women is the Government’s principal adviser on achieving better outcomes for women. It should be conducting the research and holding the expertise to inform us of the impact of policy on women, and also what initiatives beyond what the Government is doing it could do to improve the status of women. But the truth is that the ministry is so horribly under-resourced at the moment that it is excluded from even key initiatives. The Government has been having a working group working on equal pay principles, and the Ministry for Women was not even included.

PITA PARAONE (NZ First): Tēnā koe, Mr Chairman, tēnā tātou o Te Whare nei.

[Greetings to you, Mr Chairman, and to us of this House.]

It is my pleasure to take a call in this debate on behalf of New Zealand First. The Minister in the chair, the Hon Te Ururoa Flavell, has extolled the virtues of sitting with the Government over the past 8 years, and has been saying that he has been able to get an average of $120 million per Budget over that period. In the 1950s, the 1960s, and even the 1970s, when Māori migrated to the towns, it was said that their plight was very serious indeed—well, nothing has changed in 2016.

It seems to me that in spite of the relationship between the Māori Party and the National Party, the plight of Māori is no better today, in 2016, than it was back in the 1950s. In fact, I would suggest to this House that those of our kith and kin who lived in the 1950s and 1960s were better off than their descendants are today. Why? Because they had jobs—they certainly do not have jobs in 2016. Their health was not as good as it could have been, but they certainly had better access to health services back in those days than they do in 2016.

Education—children were being sent to school, and they actually stayed at school, and those who did were able to make their way through the halls of academia, and some of them today are still contributing to the success of this country. But I cannot say the same for Māori children in 2016. That is in spite of the various funding initiatives and programmes that the Government has extolled in the area of education.

But I want to say that a comment was made about Te Matatini, and $700,000 has been made available over the next 4 years, which will bring their total budget to just under $2 million. Can I suggest that they would have liked to have more. Although they may have said that $700,000 was all they needed, I would say that in their heart of hearts they would have loved a lot more than what they actually got, given the contribution that that programme has not only for the national scene but for the international scene as well. If you consider the annual Edinburgh Tattoo, when they came here, Māori participated. When they held it back in Scotland, Māori groups have gone over, and the world has been taken aback by those performances. I think that Te Matatini could well have done with more funding if the Māori Party had pushed for more, but obviously it did not.

Māori Party members have talked about the amount of money that they have got for Māori initiatives, but none of it is new. All the Government has done is just moved it from one shelf to another. I just want to say to the Minister and to the Māori Party that I do not believe that what they are saying about their achievement is that it is not as great as it could have been.

I want to talk about Treaty settlements. They say that Treaty settlements are binding. We are getting ready to have a bill brought before this House in regard to the Kermadecs. Was that not a binding referendum? What has the Māori Party done to stop the property rights that were allocated to Māori in good faith under a binding agreement? Why does the Māori Party not do something about that? Again, although we might have seen a good amount of funds allocated to Treaty settlements in the last Budget, it—

Kelvin Davis: Mr Chair?

The CHAIRPERSON (Lindsay Tisch): The Labour Party has used all its calls, but I am going to call Kelvin Davis. The Labour Party has used all its calls.

KELVIN DAVIS (Labour—Te Tai Tokerau): My colleague Nanaia Mahuta, and Pita Paraone also, made some very relevant points. The point I want to pick up on first is the point about the consultation around the Kermadec Ocean Sanctuary. Nanaia was slightly wrong. There was consultation before the announcement was made—it was a good 10 minutes’ worth, I think. I think Ngāti Kuri and Te Aupōuri had 10 minutes to ponder whether or not they actually agreed with the Kermadec proposal. That is this National Government’s idea of consultation. Of course, it makes me wonder, when we have a Minister saying that it is great to be at the coffee table, where the consultation with the Minister was when that decision around the Kermadec sanctuary was made. What is the point of being the Minister for Māori Development, sitting around the coffee table, when you find out basically at the same time as the rest of the world that something as substantial as the Kermadec concept was going to be announced? To me, that shows the disregard that National has for its Māori caucus—i.e., the Māori Party.

I also take issue with Marama Fox’s comments about Helen Clark last week. She raised three points: one was the foreshore and seabed issue, one was the United Nations Declaration on the Rights of Indigenous Peoples issue, and the other was the Tūhoe issue. I have to admit, the foreshore and seabed issue was not Labour’s finest hour—we have got to take that one on the chin—but with the United Nations Declaration on the Rights of Indigenous Peoples, Labour took a principled stance. Labour said: “We cannot endorse that declaration if we cannot honour all of the clauses in it.” So Labour did not sign it.

Contrast that with the National Government and the Māori Party, who went over to New York, made a big issue about signing that declaration, and yet cannot honour all the clauses. That, in my opinion, is not a very principled stance to take whatsoever. I admire Helen Clark for taking the criticism on the chin for not signing it. She did it from a very principled stance. Contrast that with the National Government and the Māori Party, who signed it but cannot, and will not, honour it.

One of those clauses basically says that indigenous people are entitled to all of their lands that they traditionally had. That means that Māori would get back every single acre in New Zealand, but we know that is not going to happen. Helen Clark wanted to be able to negotiate so that there was something that we could honour and could sign, but, of course, Labour lost the election. The National Government came in, and I am waiting—on behalf of all Māori in New Zealand—for every single acre of land to be returned to us. I am waiting, but I think I will be waiting in vain.

Then there were the Tūhoe raids. We did not like what we saw in the Tūhoe raids, but there is a rumour floating around—and I was interviewed on a Māori radio station that said it had a source—that that anti-terrorism unit was run out of Helen Clark’s office. I said: “No, that’s not right.” A Prime Minister, a member of Parliament, cannot direct police in their operations. “Oh, no, no, we’ve got our source.” Well, I wonder whether that source was Marama Fox and Te Ururoa Flavell.

Carmel Sepuloni: Oh, reliable!

KELVIN DAVIS: A reliable source, all right. It is an absolute lie, an invention, a creation that the police raid on Tūhoe was organised out of the then Prime Minister’s office. It is absolutely ridiculous. Members of Parliament cannot do anything to direct the police in their operations. In fact, Annette King told me—because I asked her about it; I asked what happened at that time—that it is ridiculous. The police told them that they had intel information. They did not say where from, who the people involved were, or what part of the country they were in. The Government had no idea, other than that the police had some intel. Helen Clark asked whether the Terrorism Suppression Act was the most appropriate Act to conduct the operation under, and the Solicitor-General at the time sat there and said yes, it was the most appropriate Act. That night they saw what was going down in Tūhoe. The Labour Government at the time was absolutely dumbfounded by it, and 3 weeks later the Solicitor-General reneged on that advice.

Hon TE URUROA FLAVELL (Minister for Māori Development): Tēnā koe. We are supposed to be talking about the Appropriation (2016/17 Estimates) Bill—I am struggling to find out what Helen Clark has got to do with any spending around the time. Be that as it may, there is plenty of food around tonight, so that is good.

Firstly, I want to congratulate the Minister for Treaty of Waitangi Negotiations, the Hon Christopher Finlayson, on ushering so many Treaty bills through this House—far and away more than the Labour Government in its time. The work is not over yet, we know that, so I just want to put on record a real congratulations to him.

The second thing is the issue that was around consultation to do with Te Ture Whenua—I digress a little bit, but there is money in Te Ture Whenua so I can talk about it and the accusation of a lack of consultation with Māori. Well, give me a break—the consultation started within 5 years of the original bill being put on the table, with at least half a dozen wānanga throughout this country. Indeed, during the time that I have been Minister there have been three consultation rounds in one year, and it would be really helpful if members of the House read the bill so they stopped spreading lies around the country—

The CHAIRPERSON (Lindsay Tisch): No. The word “lie” has been used a couple of times, and we will not have that any further in the debate.

Hon TE URUROA FLAVELL: In that space, we know that the law is currently being considered by the Māori Affairs Committee, which is good. We need to have all those ideas come to the table, and I am looking forward to the discussions coming back. Can I say that in respect of Te Matatini and the note about spending that there was an increase and we might expect that—yeah, not enough, but I take the point and we are trying to give assistance there. In respect of the Kermadecs, that is interesting, because two of the tribes—and I am a bit disappointed that some members believe that those two tribes agreed to a kaupapa about their mana whenua in 10 minutes. It does not reflect well on those members nor those tribes, because they signed an agreement to say yes, they agreed with the Kermadec Ocean Sanctuary Bill. Be that as it may, I note that the New Zealand First Party, as I understand it, supported the Kermadec bill in the first reading—

Darroch Ball: Select committee—just the select committee.

Hon TE URUROA FLAVELL: No, the first reading—therefore supporting that motion. So it is a bit rich to tell us that we should have voted this way or that way. Those members have got to get their own act together.

Can I just say that in terms of spending I am happy about where we have got to. I think we can always do better, but going back to the discussion around housing, in terms of the repair projects we have been able to reach 223 whānau, 42 new affordable homes—mostly, affordable rentals—infrastructure for 113 new homes, and four emergency houses. So we have been able to put some money into the housing area, as spoken about by Mr Paraone. We also have, in the Whenua Māori funding space, a Māori Land Service—I can say that that one is going to move into the future—there is a budget of $14.2 million to support the establishment of a Māori Land Service.

Pita Paraone: New Zealand First is doing more for Māori than the Māori Party is.

Hon TE URUROA FLAVELL: A kaupapa that is important to Mr Paraone is Te Mātāwai, and he should know that Budget 2016 provides $12 million over 4 years for the establishment of Te Mātāwai. I am pleased to say that pretty much all of the positions on Te Mātāwai have been filled with not too much rocking of the boat. There are two more positions to go, and we should have the first meeting of Te Mātāwai before the end of the year, so that is really awesome—that is 13 members.

Can I also add another note that is probably close to the Labour Party, and that is that the Māori Television Service has been able to get $10.6 million added to its budget. I acknowledge the efforts of the Hon Parekura Horomia in his time in being able to push the Māori Television Service along. It has been really great. I am looking forward to going to Tūrangawaewae in a week or so. We will be able to make some announcements in respect of our iwi call to have a day of commemoration for the Māori Land Wars, or Nation Land Wars, New Zealand Land Wars—call them what you like. That has been very much a call from iwi throughout the country and we will be able to, as Budget 2016 said, give $4 million over the next 4 years towards that kaupapa. The date is still to be determined, and also how that money will be distributed, but it is really exciting to go to Tūrangawaewae. Ki Te Koroneihana o Te Kīngi Māori, ka tū ā taihoa ake nei, ki te whakatakoto i tērā kōrero ki mua i te aroaro o Te Ao Māori.

[In regard to the Māori King’s coronation, I will rise to put that before Māoridom in good time.]

Budget 2016 has been good in terms of Te Puni Kōkiri, where we are going into the future and under my leadership at this point in time. We can always do better, of course, and we will attempt to do that into the near future. Kia ora tātou.

The question was put that Vote Arts, Culture and Heritage, Vote Internal Affairs, Vote Māori Development, Vote Pacific Peoples, Vote Sport and Recreation, Vote Statistics, Vote Treaty Negotiations, and Vote Women be agreed to.

A party vote was called for on the question, That the votes be agreed to.

Ayes 63

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

Noes 58

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

Votes agreed to.

Clauses 1 to 10 and schedules 1 to 5 agreed to.

House resumed.

Bill reported without amendment.

Bills

Food Safety Law Reform Bill

First Reading

Hon JO GOODHEW (Minister for Food Safety): I move, That the Food Safety Law Reform Bill be now read a first time. I nominate the Primary Production Committee to consider the bill. Today I present the Food Safety Law Reform Bill to the House. The bill marks an important milestone in putting the whey protein contamination (WPC)—or WPC incident, as it is commonly called—behind us. The House is well aware of the impact that this false botulism scare had on our dairy exports. The bill addresses the recommendations made by the independent inquiry into the incident that require statute change to implement.

This bill illustrates the Government’s commitment to ensuring the safety and suitability of food, which is vitally important for the health of consumers both in New Zealand and overseas, and our international trade reputation. It demonstrates a commitment to continuous improvement in the regulatory system that underpins the food and beverage industry. Food and beverage products make a significant contribution to our economy, accounting for 60 percent of our merchandise exports and generating $27 billion of export income in 2015. The industry is a large employer—domestically employing approximately 79,000 people. The bill aims to protect human health and maintain New Zealand’s reputation as a supplier of safe and suitable food both domestically and internationally by ensuring all steps have been taken to address the recommendations of the independent inquiry.

The bill will strengthen the legislative framework by applying changes across the three main Acts governing food safety: the Food Act, the Animal Products Act, and the Wine Act. The omnibus nature of the bill will help business by applying similar requirements under each of the three Acts where possible. For example, the bill puts some existing enforcement tools from the recently passed Food Act into the Animal Products Act and the Wine Act so that the regulators have similar tools available to encourage behaviour change and deal swiftly with operators who do not comply, irrespective of the food type. The inquiry recommended this approach.

One of the areas being strengthened is risk-based plans. These plans are the foundation of our food safety system, setting out how operators will take responsibility for their own risk-management processes. The bill will enable regulations to be made to set out which parts of these risk-based plans must be supplied to the regulator for registration. These provisions help address the inquiry’s concern that the regulator does not always hold full information on risk-management plans.

The bill strengthens the framework for food product traceability. Traceability and recall systems are crucial for businesses to be able to respond quickly during a food safety incident using methods that they and the regulators know will work. In addition, the bill clarifies some of the roles and powers of the Ministry for Primary Industries during a food safety response, including giving the ministry a statutory role in contingency planning.

The Director-General of the Ministry for Primary Industries will have a new power to require disclosure of information held by a party that provides services to a food business. The power is needed to make sure the specific situation that led to the botulism scare does not reoccur. The power will be able to be used only when identifying and responding to a food safety incident that may have serious health impact. The supplier of information disclosed under this provision will have immunity from criminal prosecution unless the information they provide is false. The bill makes clear that verifiers who check whether a business is complying with the obligations are primarily accountable to the regulator when carrying out their duties. This will address any criticism that verifiers can become too close to the businesses they are checking.

The amendments I have mentioned so far link to the inquiry’s commentary on what went wrong during the whey protein contamination incident and will improve the system as a whole. The bill also takes the opportunity to make some other enhancements to support modern business practice and help to futureproof our legislation. To that end, a provision in the Food Act that permits the Ministry for Primary Industries to use automated electronic systems is being replicated under the Animal Products Act and the Wine Act. The director-general will also be able to set the form and manner in which information must be provided to allow more electronic transactions.

In line with the Government’s aspiration for continuous improvement, the bill improves the clarity of some existing delegated legislative provisions to assist future decisions on the making of regulations and notices. This is an opportunity for good regulatory stewardship. The bill also provides for some technical amendments to harmonise similar requirements across the system, clarify the intent of some existing provisions, and correct minor errors of interpretation.

I consider the bill will enhance the delivery of safe and suitable food to consumers as well as protecting New Zealand’s wider trade interests and reputation. Although the botulism scare was a false alarm, we want to ensure that our legislative framework continues to prevent as many food safety incidents as possible and has the mechanisms and tools to deal quickly and effectively with any situations that arise. The bill is a further step in this Government’s ongoing programme to improve food safety legislation. We need a food system that supports innovation, drives value-add, and encourages more food businesses to export.

There were 38 recommendations to the Government from the inquiry into the WPC incident. The Government accepted them all. The bill and the proposed legislation complete the structural realignment necessary to learn from, make change in respect of, and move on from an incident that damaged New Zealand’s reputation but gave us the opportunity to be even better. I commend this bill to the House.

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): Labour will support this bill. We understand the need to make progress in our food safety regime, and generally the Minister for Food Safety outlined very accurately the details of the bill. It is, for the most part, a technical piece of legislation, but I have to say that I was concerned when the Minister said that this would, effectively, put the issue behind us—or words to that effect—that is, the whey protein concentrate 80 dilemma. It is costing us hundreds of millions of dollars at present. It was a major disaster not in terms of actual harm to people but in terms of harm to New Zealand’s reputation, and we will be paying a price for many, many years ahead.

What we had, particularly in the China market, was a first entrant advantage—the first country to sign a free-trade agreement with China. We were moving into that market with some momentum, particular in the area of dairy, but what this did was set us back big time. What we have seen in that market is countries like Ireland, the EU, and those who have caught up to us, and our advantage has now slipped.

The Minister referred to the independent report, and it is indeed sober reading. It was necessary and it has provided 38 recommendations. I acknowledge to the Minister that the Government is attempting to work through and implement each and every one of those. But if we can go back and learn—because, as I said, I do not think we can put it behind us, and I do not think we can say that just by the passage of this legislation we have made vast improvements. There is still, in my view, an issue of resourcing and an issue of independence in the food safety regime, and in the area of policing and implementation of the regulations there is still some, I think, conflict of interest when the Ministry for Primary Industries (MPI) is the one organisation responsible for so much across the primary sector: policy development, implementation of that policy, and then in the policing of that. You cannot stand up and hand on heart say “We have the best regime in the world.”, when there is so much conflict of interest in the way of the structure.

We have said that we will pull food safety and biosecurity out of that big monstrosity of the Ministry for Primary Industries and have them set up as independent agencies where they have the autonomy, the independence, and the resources to do their job, because New Zealand’s reputation—and, in fact, our future as an economy—depends upon the absolute implementation of the best and highest standards in the world in terms of food safety, food quality, and biosecurity. So we must learn from the mistakes of the past. I acknowledge that the Government has brought this legislation to the House. It is not an insignificant piece of legislation—in fact, you know in terms of size there is a lot of detail, and I am sure that the select committee is going to take quite some time to work through it all, and we will do our best to make improvements where necessary.

If I can go back to the report, it is important that we read the report, understand that the legislation was driven by the report, and ensure that what we pass through the select committee and back through the House gives effect to what has been recommended here. If we go back to, I guess, the summary of what happened here—in terms of MPI’s response, I do not want to read all of the summary here, but I quote: “The ministry had no single, coherent (or reviewed or rehearsed) crisis plan for a food incident that it could implement straight away after receiving notification of C. botulinum.” It is quite concerning really. It goes on to say that “The ministry deserves credit for many aspects of its response, but it should have had better-documented decision-making processes, used more rigorous science-based risk assessment”. We are told by Ministers, in particular the Minister for Primary Industries, time and time again that we have world’s best-practice biosecurity systems—

Todd Barclay: That’s right.

Hon DAMIEN O’CONNOR: —and that we have the world’s best food safety systems. That is right. The members over on that side have heard it time and time and time again. It is not the truth—it is not the truth—and what this report exposed was the faults in the assumptions that lay within MPI because of a Government that gave it a whole lot of responsibility by bringing a lot of agencies together and said: “Get on with it; you can merge your policy areas. You can bring your policing and monitoring regime into animal welfare, biosecurity, and food safety. We just need a kind of a standing army that has general skills, but no specialist skills.” What I know in biosecurity and what this report identifies in food safety is that we have not got enough of those specialist experienced people remaining in MPI to stand up and say, hand on heart: “We have some of the best systems in the world.”

The recommendations from the inquiry are fairly clear. It says it should revise the rules for non-routine reworking of dairy products, continue to strengthen its monitoring and auditing activities, finalising its food incident protocol, undertaking regular exercises—it goes on and on to identify things that we would have assumed were part of a world’s best-practice regime; it was not. One of the recommendations here says: “The law should be amended to give the ministry a specific statutory power to compel disclosure of relevant information (including test results) needed to respond effectively to a food safety incident.” The Minister points to the new powers that this bill will bring in and they relate to, of course, the area of IT and new technology, and the report identifies where the transfer of that information was not timely, not always accurate, and not always robust and science-based.

We need to ensure that the regulatory authority has the ability to find out any fact that it needs when it comes to incidents like this. We need to assure the world that we will continue to provide the safest, finest quality food to consumers, regardless of where they are—in Central China, into Europe, into the UK, or into South America. We need to assure each and every one of those markets. That will require more resourcing and more expertise to ensure that our standards meet and exceed those of all of those markets. The Chinese at the moment are getting particularly sensitive to some of these issues—I have no doubt in part because we have talked about initiating an inquiry into low-quality steel coming into the market. The Prime Minister is a bit sensitive about this. In fact, I think he has misled the country when he said that he was not informed about possible retaliatory action when we were talking about an inquiry into the quality of steel. I think there is a lot to be exposed in that area.

But the issue for food safety—as Zespri is finding out at the moment—is that we need to ensure that anything that we export from this country is top quality and safe. The issue with Zespri is not about safe food. In fact, in my view, it is just a non-tariff trade barrier—it is something that has popped up, and I would not in any way like to imply that Zespri is in the same boat or connected to what we are trying to do here. Being able to test appropriately, having the right science in place—and we did not have that when it came to this. The testing regime was deficient, the transfer of information was deficient, and the final decisions were, in fact, disastrous—not for human health but for our reputation.

So what we are doing in the House here today is introducing a bill that we hope will make progress in terms of reassuring our customers around the world and actually making our system more robust. But if the Government thinks that the passage of the legislation alone is going to make a huge difference, then it is ignoring the reality that within MPI there are too many conflicting objectives, in our view. And until food safety and biosecurity are brought out of MPI into separate independent agencies, we do not think the passage of this bill will entirely address the issues that were raised in this report. Labour will support the legislation but will be scrutinising it very, very carefully in the select committee.

IAN McKELVIE (National—Rangitīkei): That was a gem. It gives me a great deal of pleasure to rise to speak to the first reading of the Food Safety Law Reform Bill. I think that the previous speaker, although he was not entirely complimentary, actually did raise a number of issues that are absolutely relevant to this bill.

Of course, this bill comes out of the Food Act 2014, which was some 10 years in the making. It took a lot of work by the Ministry for Primary Industries (MPI), by a series of Ministers, and by our broader food-related community to get that Act in place. As often happens when we get a piece of legislation finally through the House, something comes along and changes the course of that legislation or gives us the opportunity to review some of the things that were put in place in the course of the original legislation. The whey protein contamination incident of 13 September 2013 led to a subsequent inquiry that has given Minister Goodhew the opportunity to review the Act and come up with the Food Safety Law Reform Bill that we have in front of us now. So although it was a huge issue for New Zealand internationally, we received great credit for the way in which MPI did deal with this, in what were quite difficult circumstances.

So I think that, contrary to comment that we have just heard, we were done no damage internationally in the course of that process. In fact, we came out of it with some significant credit, and it has certainly given us a very sound base on which to go forward as we continue to put this new legislation in place. The whey protein contamination incident was significant enough to warrant an independent inquiry being held, and although the inquiry focused on the dairy sector the changes made in this bill will benefit all sectors of the food production industry.

The recommendations used to form the bill will lead to amendments to three Acts: the Animal Products Act, the Food Act, and the Wine Act. All of those are Acts that make a significant contribution to the New Zealand food industry. Food, of course, is certainly the biggest industry in New Zealand. It accounts for over 60 percent of our merchandise and some $27 billion of income, employs some 80,000 people, and is absolutely critical to the well-being of this country. So this bill, as it passes through the parliamentary process and comes out the other end, will be absolutely one of the key platforms on which we build our future as a food-producing nation and on which we secure the right of our food producers to export and participate in the international market. It is absolutely key to us that we have a sound piece of legislation that backs us, and, obviously, experience gives us a lot more credibility in this area.

I just want to perhaps also comment on the capacity of MPI, which in the last 2 or 3 years has grown significantly. As food, biosecurity, animal welfare, and the key issues that relate to agriculture become more and more complex, as the world pays more and more attention to where food comes from, how it is produced, and how it evolves, its job is hugely complex. I think it has played a great role in getting us to the point we have got to in the last 3 or 4 years with all those three major Acts, and it will continue to do so as we move forward.

I think we are in a pretty good space with this bill, and it will be very interesting to follow it as it moves through the Primary Production Committee and comes back to the House. New powers for the director-general enable them to decline plans and to compel disclosure, and certainly have given, I think, confidence to the whole industry and will create a very confident platform for us to move forward. This bill is a good, sound response to the inquiry. It puts the WPC80 incident behind us. I look forward to further debate taking place during the select committee process. Thank you.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Deputy Speaker. E ngā mema o Te Whare nei, tēnā tātou katoa. I am happy to take a short call on the first reading of the Food Safety Law Reform Bill. Like my learned colleague the Hon Damien O’Connor said, Labour will be supporting this and looks forward to closer examination at the select committee.

This is an omnibus bill that seeks to make improvements and enhancements to three Acts governing the food safety system and strengthen New Zealand’s reputation as a supplier of safe and suitable food in the domestic and international markets. The bill was created largely to implement the recommendations from the Government Inquiry into the Whey Protein Concentrate Contamination Incident. From reading, quickly, the actual inquiry I notice that the recommendations—nine, in fact, were actually made. I thought it was important to bring the recommendations made by the independent review to the House to help enhance the purpose of this bill.

So the first recommendation talks about “the ministry, in consultation with the dairy industry and verifiers” in terms of revising “the rules for non-routine reworking that requires a product disposal request”. The first recommendation also talks about ensuring “the industry’s strict compliance with reporting times for product disposal”. It also talks about continuing to “strengthen its monitoring and auditing activities”.

The second recommendation says: “The ministry should continue its work to ensure readiness for a food safety response, including: Finalising its food incident protocol …; Undertaking regular exercises/simulations …; [and] Ensuring staff are fully trained …”. The third recommendation touches on food incidents: “In any food incident, the ministry should: Start, and document, a risk assessment …”. It should also “Document the use of statutory powers” and “Co-ordinate with all relevant parties to ensure a single integrated response.”

The fourth recommendation is that “The ministry should re-establish a group of scientific experts along the lines of the previous [New Zealand Food Safety Authority] Academy.” The fifth recommendation is that “The law should be amended to give the ministry a specific statutory power to compel disclosure of relevant information (including test results) needed to respond effectively to a food safety incident.” The sixth recommendation is that “The ministry should receive targeted funding to ensure it: Has the resources …; [and] Completes the much-needed reform of dairy regulations.”

The seventh recommendation is that “The law should be amended to make clear what tests must be conducted in accredited laboratories.” The eighth recommendation is that “Industry participants should be required to seek approval from the ministry when no accredited laboratory or validated method is available for diagnostic testing,”. Finally, the ninth recommendation is that “The ministry, the New Zealand Food Safety Science and Research Centre (in the process of being established) and laboratories should collaborate to establish, test and maintain: Mechanisms for sourcing controls …; A global register of accredited laboratories …; [and] Arrangements (including customs and biosecurity clearances) …”. These are highly technical recommendations, but they clearly come from people very committed to ensuring that in New Zealand we have the best world-class food safety system.

The bill makes multiple amendments in relation to food control plans, which are generally required for high-risk businesses that deal with food, such as restaurants. The botulism scare, which was touched on by previous speakers, absolutely damaged New Zealand’s reputation as a safe food producer on the international stage. It also exposed major failings in ministerial oversight, competency, and the Ministry for Primary Industries’ processes. As touched on by our spokesperson on food safety, Labour called for an independent food safety authority at the time.

When we look at these nine recommendations—they do talk about adequately resourcing the sector to ensure that we have the most robust systems, but in terms of the independency to ensure that not only do we have the Ministry for Primary Industries (MPI) laying down the policies, and also having some independent authority to ensure that we are implementing, policing, and monitoring correctly, none of the recommendations actually touch on that. I would be interested to hear from those submitters who may have a view on that particular point.

Labour would separate out the responsibilities, as I have touched on, to ensure that we do have an independent body to ensure a robust independence and that autonomy of decision making is upheld. Labour does not support the current situation, where MPI is both the regulator and the enforcement agency for food safety standards. We want to ensure that responsibility for food safety is clearly not compromised, and we want to ensure that reviews that are meant to be done are done.

The bill addresses the recommendations of the independent Government inquiry, like I have mentioned, of the whey protein concentrate contamination incident, and it needs statute change to implement. The bill makes improvements and enhancements to the three Acts. The bill itself is made up of four parts. The parts make amendments to the Food Act 2014, amendments to the Animal Products Act 1999, Part 3 talks about amendments to the Wine Act 2003, and, lastly, Part 4 talks about the consequential amendments to other enactments.

The key features of the bill are the new requirements for risk-based plans and programmes, where businesses are likely to see new requirements in relation to the form and manner in which risk-based plans and programmes must be supplied to the regulator. In addition, businesses will be required to provide copies of their plans and programmes to the relevant verification agency and retain copies. Another purpose of the bill is traceability and what is called recall regulations. New regulations under the bill would set new traceability and recall requirements that will apply when a food safety incident takes place.

Another part of the bill is stronger verification, where the bill clarifies that the primary accountability of recognised persons and agencies when carrying out their functions is to the regulator, and it enables information that is relevant to the competency of the accredited agencies to be passed to the regulator. The bill also provides for verification regulations to, where necessary, apply to businesses other than operators using risk-management plans and programmes.

Lastly, the bill talks about stronger enforcement. The bill updates the enforcement tools in the Animal Products Act 1999 and the Wine Act 2003 to bring them into line with the more recent Food Act 2014. This change standardises compliance methods across the food safety system. When a food safety incident does occur, the bill will give the director-general increased statutory powers to respond, require information, and inform the public.

The bill also modernises the food regulatory system by allowing for the use of automated electronic systems for service delivery and transactions, such as issuing export certifications and providing office assurances. Like I said, Labour looks forward to this bill being properly scrutinised at the select committee process. I commend this bill to the House.

STUART SMITH (National—Kaikōura): It is a pleasure to have an opportunity to speak on the Food Safety Law Reform Bill, and I want to respond to a couple of the points made from the opposite side of the House a little later on. This bill is really a great step forward in our food safety management. It is an important area. As any person who has ever been involved in marketing would know, perception is really important to the value of a product, and we are very much an exporting nation and we really live and die on our market perception.

The bill makes changes to the Animal Products Act 1999, the Food Act 2014, and the Wine Act 2003 in order to improve their effectiveness. As has been mentioned, it addresses recommendations from the whey protein concentrate (WPC) contamination inquiry. But I do not agree with the assertion made by the Opposition that it has incredibly damaged our reputation. In fact, I take the opposite view. I think that the inquiry, our openness in these situations, and our really quick handling of this issue by coming forward with this particular bill enhances our reputation because it shows that we will actually deal with these things as they come along.

I actually had the opportunity to speak at two conferences in China on food safety, and spoke to regulators and companies in the market that are importing New Zealand milk products into the Chinese market. I know they were concerned about the WPC incident, but they were also very, very pleased that we were stepping up, we were honest about it, we were not trying to sweep it under the carpet, and that we got ahead of the whole issue and recalled the products and did not allow them to get into the market, even though it turned out to be a false alarm. I think that those sorts of things are really important. And if we look at the key features in the bill, traceability and recall regulations are a big part of that. So having something where you have got an issue—whether it turns out to be an issue in the long run or not—is not as important as being able to identify those products, and that is very clearly laid out in this bill, and then being able to bring them back from the market gives all those players in the market a great deal of comfort.

I also want to touch on the other assertion made, that the Opposition is not happy and it wants a duplication, in effect, of powers. It wants to have a regulated body that sits out on its own to put out the regulations and then another body to sit in judgment on them, because the Opposition is not comfortable with it. But that is an unnecessary and expensive duplication that really will not achieve anything other than bloating bureaucracy. Really, that is not what this is all about. We are wanting to get a good result here for New Zealand and for our food safety reputation. I am very comfortable with the way that is being handled at the moment.

The risk-based plans and programmes are really important, and I know with my experience in the wine industry with our wine standards management plan that all wineries had to complete—it is a really important document. Those plans will be very robust and lay out very clearly how things are handled, and I think that is vital as well. Stronger verification is a part of the bill as well, so I am looking forward to seeing it in front of the select committee and hearing from those submitters who have their take on how this will work. We will, I am sure, iron out any issues, which I am sure will be very few in number. It is with great pleasure that I commend the bill to the House.

STEFFAN BROWNING (Green): I rise to speak on the Food Safety Law Reform Bill. The bill has some useful parts to it, but in some respects it is a bit of a public relations (PR) exercise as well. It is useful that the bill does propose some changes to the Animal Products Act, the Food Act, and the Wine Act, and reduces some duplication there.

It is important that the Government and the select committee that will be looking at this do look at the issues that came up through the botulism issue, and what those processes were. Mostly they were reasonably effective and require little change. But I notice in the regulatory impact statement that it pointed out that there was not a need for much change, but that the change was happening to show that the Government was doing something in response to the botulism thing. But what has happened is that we are going to have even more bureaucracy over small producers, and we have already got a problem with the Food Act as it stands.

In the last term we worked very, very hard on the Food Act, and with part of that stuff—and there are a number of members in the House here today who worked on that—the point was to remove the cost of compliance for small operators, to make sure they were not driven out of business. There is nothing that I can see in this bill that is in front of us that is going to actually help achieve that. In fact, with the harmonisation that is suggested in here, it is probably going to make those costs even worse and reduce the chances of small producers staying in business. We will have to look at that as it goes through the select committee process. Because of that and some other features, the Greens will be supporting it only to select committee. We will be looking to see what happens at that point as to whether we support it further.

The bill establishes requirements on the form, manner, and time frames in which food enterprises must provide risk-based plans and programmes to regulators—no real problem there. It establishes regulations to enable traceability and recall requirements to be met. That is critical; we must be able to recall food when it goes wrong. But this Government has gone over the top around some of that, particularly. I will use raw milk as an example. It is making it almost impossible for some small herd owners to stay in business in that niche opportunity, and niche demand, from some people who can only actually tolerate raw milk. The Ministry for Primary Industries has gone over the top—the Minister has gone over the top—with the regulations on that, which make it actually very difficult for people to access it or for farmers to supply it. There is no need for that to be the case. As long as there is appropriate traceability and recall provisions—that is all that was needed. But they have gone too, too far.

One area that we are concerned about is the possible removal of country-of-origin labelling provisions. We have those provisions—rather, Australia has those provisions. That is one of the only exemptions from the Food Standards Australia New Zealand arrangement we have, that great trans-Tasman arrangement. It would be great if we could also have country-of-origin labelling here. The Government is proposing in this bill to remove the word “source”. It says the claim of source is covered by other requirements in the Act. We actually do need to know what the source of food is. Consumers deserve to know. They must be able to make those decisions for themselves about what food they are eating and where it comes from. They are being left out, but big food business is being courted by the Government—or the Government is being subjected to big food business. They are the ones who say it is going to cost too much. But it is actually not going to cost too much. You would be lucky if it cost part of a cent per item at the supermarket to have country-of-origin labelling. We need country-of-origin labelling all the more as food is moved around the globe to the degree that it is.

I mentioned the new regulations of small business before, and we will be expecting to have submissions from small businesses that will once again be constrained by the regulations that will come out of this bill. It is important that we look after those small businesses and not just be worried about the commodities that are coming out through our dairy industry in low-value commodities. We are worried about the reputation around that, and yet we are not worried about enhancing our good local producers that New Zealanders want—that we all acknowledge we want.

While we are going down this course, you have to ask: where is the total diet survey that looks at the contaminants in New Zealand food, in the food that is on our supermarket shelves and at our farmers’ markets and other places? Where is the total diet survey that is meant to come out at least every 5 years? It is more than a year late. What is happening with this Government? It does not worry about pesticide residues in food but worries about its reputation for its low-value commodities. Why is glyphosate not being tested comprehensively? Why is that? The World Health Organization has pointed out that it is a carcinogen, we know that it is an endocrine disrupter at parts per billion, it is a neurotoxin, and yet this Government is not even looking for it properly in food and a number of other pesticides. When the total diet survey does come out this year, we can expect the findings in that to be spun. They will be spun, because normally they would suggest that there is next to none found with pesticides out of the tests that are done, but, in fact, nearly all conventional food—fruit and vegetables at the supermarket—has pesticide residues in it.

I am hoping that this Food Safety Law Reform Bill can address some of those issues too, that we can actually give consumers genuine confidence—not spin, not just PR—in what is in their food. So we will support the bill to the select committee. We will be looking at those aspects of country-of-origin labelling, small businesses—the impact on them—and also these other issues such as pesticides and whether our food is safe. We will be hoping to see those things addressed by submitters and by the select committee generally. Thank you.

RICHARD PROSSER (NZ First): I am pleased to rise on behalf of New Zealand First to take a reasonably short call in the first reading of the Food Safety Law Reform Bill. New Zealand First will support this bill’s referral to the select committee, and I stress that we support the bill only that far at this stage. We supported the Food Act, which this bill, obviously, will amend, along with, of course, the Wine Act 2003 and the Animal Products Act 1999.

I agree wholeheartedly with the comments from the chair of the Primary Production Committee, Mr McKelvie, on the importance of this sector to the economy overall in terms of the percentage of GDP that it creates and in terms of the number of people who are employed there. We are fully cognisant of the importance of that sector. We support the stated aim of the bill, giving life, as it does, to the recommendations of the independent Government Inquiry into the Whey Protein Concentrate Contamination Incident. This inquiry, of course, did not report in time for its recommendations to be digested as such and included in the Food Bill as it was then. We accept that some of those recommendations will require statutory changes—changes to legislation—in order to be implemented. But we are mindful of the possibility of fish-hooks being included in the fine print of changes that are made to laws that in other regards are honest enough in intent and construction.

Hon Damien O’Connor: More like gaffes, with the National Party.

RICHARD PROSSER: Quite possibly, Mr O’Connor. The explanatory note of the bill states that “The fundamental model of the current system is not being changed.” Well, we hope not, and it is the select committee process that will show us whether, in fact, that remains the case.

Reading from the debate pack that has been put together by the Parliamentary Library—and, I have to say, it is a very valuable and much-appreciated resource—we see that one of the key features of the bill is new requirements for risk-based plans and programmes. Well, as I recall, it was these requirements that were at the heart of many of the submissions on the Food Bill, and there was a good deal of debate around the detail at that time. We certainly hope that there will not be any great deviation from the consensus that was arrived at with regard to that position.

Another key feature of the bill is that it provides for traceability and recall regulations. This, rather vaguely, suggests that new regulations will set new traceability and recall requirements. Well, that could cover a very wide range of parameters, and again we will want to be certain that, in fact, the spirit of the Act as it exists will remain intact. There is to be stronger verification. This seems unlikely to present any gnarly issues, but, again, our continued support will be dependent on that being the case.

There will be stronger enforcement—that is the fourth point. Stronger enforcement is generally something that New Zealand First is wholeheartedly in support of—as you will know from our stand on law and order—provided, of course, that the stronger enforcement is not of laws and regulations that should not exist in the first place. So, once again, we will be examining the detail behind this with quite some close scrutiny at the select committee. It is not that we do not trust the Government; rather, we are somewhat gun-shy when we read comforting phrases such as—again, from the bill’s explanatory note—“The Bill also improves the statutory powers available for responses to food safety incidents by enhancing the Director-General’s ability to, when there is a serious risk to public health, require relevant information from persons who hold it.” It improves statutory powers and enhances the director-general’s ability—that could cover, again, a fairly wide range of activities.

Also, from the regulatory impact statement is this: “Provide a regulation-making power in the three food safety Acts to set requirements for operators to undertake mock traceability and recall exercises.” When we hear those comforting noises couched in the terms that they are in, again we are not cynical, but we naturally wonder whether such provisions may contain the potential for a Draconian approach to be taken by regulators in the absence or the failure of any suitably resourced and committed regulatory watchdog. So we will once again be very interested in examining in detail these provisions in the proper environment of the select committee and, of course, in reading and listening to, with great interest, the submissions of stakeholders from within the industry and, of course, the wider general public.

Then, of course, as my colleague from the Greens touched on, there is the matter of country-of-origin labelling, which does not fall under the purview of this reform bill but, it could be argued, could and should be very much within its scope. We will argue that point, as I am sure other parties from this side of the House will be doing, because country-of-origin labelling is certainly very much a food safety issue.

In spite of the protestations to the contrary and howls of outrage from the Government benches, this view is not about xenophobia or prejudice, or any other supposed crimes against political correctness. It is about caution, it is about due diligence, and it is about the simple common-sense acceptance that there are some countries in this world where standards are not what we would demand or expect and where practices are less stringent and less safety-oriented and where life is perhaps cheaper than the value that we ascribe to it here.

Food from some parts of the world is not as safe as we would prefer, and labelling food that comes from those places as being identifiably from those places is something that a great many people in this country regard as being very important. Indeed, many people from within the primary sector and the food production sector do share those concerns. There is a—

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

Debate interrupted.

The House adjourned at 10 p.m.