Thursday, 11 August 2016

THURSDAY, 11 AUGUST 2016

THURSDAY, 11 AUGUST 2016

Mr Speaker took the Chair at 2 p.m.

Prayers.

Business Statement

Business Statement

Hon GERRY BROWNLEE (Leader of the House): When the House resumes on Tuesday, 16 August the Government will look to complete the third reading of the Appropriation (2016/17 Estimates) Bill and the Imprest Supply (Second for 2016/17) Bill, and progress the Committee stage of a number of other bills on the Order Paper.

Oral Questions

Questions to Ministers

Banking Sector—Official Cash Rate

1. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he stand by all his statements?

Hon BILL ENGLISH (Minister of Finance): Yes. And, in particular, when I was asked a few months ago about what I thought of the Labour Party proposal that the Government legislate interest rates, I said: “That’s a pretty dumb idea.” I stand by that statement.

Grant Robertson: Does he stand by his statement that he is not concerned that trading banks are not passing on the full official cash rate (OCR) cut?

Hon BILL ENGLISH: Yes, in the context in which it was made. The banks operate in a competitive environment. I see some of them have decided today, for instance, to favour their depositors by putting deposit rates up. For all those New Zealanders who save and put money in the bank, they probably prefer that. Other banks, over time, may decide to pass all those reductions on to borrowers.

Grant Robertson: In light of that answer, then, has he sought to correct the Prime Minister, who said he thought that banks should “pass … on in full” the rate cut to their customers?

Hon BILL ENGLISH: That, of course, as you would expect from the Opposition, was not quite what the Prime Minister said. In fact, he made a comment to the effect that he expected that is what the banks would do in the context of a competitive market. And, fundamentally, it is our view that the competition among banks will determine how much is passed on. It is not the Government’s job to tell them how to run their business.

Grant Robertson: If it is not the Government’s job to tell banks how to run their business, why did John Key say: “If banks behave like good corporate citizens, they should pass on Reserve Bank cuts in full to their customers.”?

Hon BILL ENGLISH: Because good corporate citizens do what their customers demand that they do, and that is what will happen. In the end, they will decide how to respond to demand in the market and New Zealanders who are worried about it can ring up their bank, demand a lower interest rate, and I am told that they will get it.

Grant Robertson: What responsibility does he take for New Zealanders not receiving the full benefit of the OCR cut today, given the ANZ bank statement that lowering lending rates would “throw fuel on the fire in an over-heated housing market.”?

Hon BILL ENGLISH: This week the primary responsibility for the housing market in New Zealand lies with the Auckland Council. It has in front of it a plan and we, like the council, hope that it will sign off a plan that is convincing about bringing more supply to the market, because that is the critical variable in the housing market and the Auckland Council has control over that variable.

Grant Robertson: When 75 percent of New Zealanders are telling his Government that it is not doing enough to address the housing crisis and that this is the reason banks are giving for not cutting rates, why will he not front up to New Zealanders and admit that his Government’s failure to even admit there is a housing crisis is a major reason why mortgage rates will not be cut?

Hon BILL ENGLISH: In the first place, the member is making an assumption about mortgage rates, and I think we have yet to see how the competitive pressures in the market will work out. As it happens, banks have reduced mortgage rates over the last 6 months or so by more than the reductions in the OCR, and that could easily happen over the next few months. But the key decisions now for the housing market lie with the entity that regulates the Auckland housing market, and that is the Auckland Council.

Grant Robertson: Does he recognise that he is now completely out of touch in ruling out a review of immigration policy settings when the Reserve Bank has now joined every Opposition party and most economic commentators in saying that unsustainable levels of immigration are putting downward pressure on wages and upward pressure on housing prices?

Hon BILL ENGLISH: Immigration policy settings are always under review, but I will tell you one part of it we will not be reviewing. The biggest single change is New Zealanders staying home. Unlike New Zealand First, our policy is not to kick New Zealanders out in order to reduce the migration numbers. [Interruption]

Mr SPEAKER: Order! [Interruption] Order!

Grant Robertson: Why is he refusing to undertake a review of monetary policy and the Reserve Bank’s policy targets agreement (PTA) when, on the basis of today’s Monetary Policy Statement, inflation will not reach the mid-point target until 2018, meaning it will have failed to meet the PTA for 7 years by that point?

Hon BILL ENGLISH: Along with other commentators, I would invite the member to specify what he thinks the alternative should be, because, in fact, across the world there is so much concern about deflation that central banks are taking extraordinary means to try to reach the inflation targets. And it turns out inflation targeting is probably more important now than it has ever been. In any case, the PTA is reviewed every 5 years as it expires, and that will happen in the next 12 months or so.

Economy—Monetary Policy Statement, August 2016

2. ALASTAIR SCOTT (National—Wairarapa) to the Minister of Finance: What reports has he received on the outlook for the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): Earlier today the Reserve Bank released its Monetary Policy Statement and cut the official cash rate by 25 basis points to 2 percent. The official cash rate is now the lowest it has been in its history. The Reserve Bank forecast growth to accelerate from 2.5 percent this year to 3.4 percent in each of the next 2 years. The outlook is broadly similar to its June statement but stronger growth is now being forecast. The drivers of this growth include stimulatory monetary conditions, higher terms of trade, strong construction activity, and strong tourist spending. This confirms that New Zealand remains one of the better-performing developed economies.

Alastair Scott: In light of the lift in forecast economic growth over the next 3 years, what is the Reserve Bank’s outlook for the labour market?

Hon BILL ENGLISH: The Reserve Bank is forecasting an increase of about 1 percent more growth in the economy over the next 3 years, compared with what it thought 3 months ago. It is forecasting that unemployment is going to continue falling from 5.2 percent this year to 4.5 percent by 2019 and that job numbers will increase by more than 2 percent on average over the next 2 years. A significant component of that, of course, will be the construction boom, where thousands of houses will be built over the next 2 or 3 years. These forecasts are in line with Treasury’s forecast for the labour market and show an economy that is delivering more jobs, lower unemployment, and real increases in incomes when in many developed countries that is not happening.

Alastair Scott: What risks does the Reserve Bank see in the economic outlook?

Hon BILL ENGLISH: It points out that global growth is below trend growth—that is, below the normal average—even though there are unprecedented levels of monetary stimulus from central banks. It points out that significant surplus capacity remains across many economies, supressing global inflation. Weak global conditions and low interest rates internationally are placing upward pressure on the New Zealand dollar, and the Reserve Bank has signalled continuing concern about the exchange rate being too high. Faced with these risks, the Government is continuing to focus on building New Zealand’s competitiveness, giving businesses the confidence to invest and create jobs, and lift incomes.

Alastair Scott: What steps is the Government taking to support growth in jobs, wages, and investment?

Hon BILL ENGLISH: Although the Reserve Bank has presented a fairly positive outlook for the New Zealand economy, this cannot be taken for granted, because forecasts are just forecasts. That is why we have a wide-ranging programme to ensure that the economy remains resilient and continues to grow. For instance, billions of dollars are being invested in public infrastructure, including a roll-out of ultra-fast broadband, and there has been significant new investment in science and innovation, as well as the Government focusing on getting higher productivity and better results in the public sector, which represents about a quarter of the economy.

Pest Control—Predator Free New Zealand 2050

3. KEVIN HAGUE (Green) to the Minister of Conservation: What advice has she received on the total funding that will be required to achieve a predator-free New Zealand by 2050?

Hon MAGGIE BARRY (Minister of Conservation): I have received advice from the Department of Conservation (DOC) that costs out our ability to make parts of New Zealand, including various islands, predator-free, and for us to take a staged approach. DOC, of course, is internationally recognised for its ability to eradicate pests from islands. We have eradicated pests from more than 150 islands so far, including Kāpiti Island, Whenua Hou, Little Barrier Island, etc. Generally, there is scientific consensus that this goal is achievable. Predator Free New Zealand has also been supported by philanthropists and others. So I have received very good advice that this excellent initiative, which I am commending the Greens for supporting today, will actually be achieved.

Kevin Hague: I raise a point of order, Mr Speaker. That was a primary question on notice and it asked about the advice that she received. The Minister in her response has not answered the question about what that advice was.

Mr SPEAKER: I absolutely agree with the member. The question has been on notice. The essence of the question is a dollar figure as to the total cost of the project. If the Minister cannot answer that, I have no alternative but to give additional supplementary questions to Mr Hague, but if the Minister wants to attempt to answer the question first, I will reconsider after hearing the answer.

Hon MAGGIE BARRY: There have been a number of estimates that have been put forward, some of which are accurate, some of which are building on suppositions. For example—

Hon Member: Accurate according to whom?

Hon MAGGIE BARRY: Well, we think that they are accurate. At this stage, when we look at how much it costs us to, for example, rid the Million Dollar Mouse from the Antipodes, that is a million dollars and upwards. There are various studies—a $9.04 billion figure came through from Auckland University, for example. That figure is based on the estimated highest-per-hectare cost of current eradication technology. It does not, though, take into account potential technological advances, and it is really simply a scale-up of current methods that are used on islands.

Kevin Hague: How much of the total funding required to achieve a predator-free New Zealand will the Government commit to providing?

Hon MAGGIE BARRY: We have already committed $28 million of new money over 4 years. That is an initial start-up, which comes in addition to the approximately $100 million that is paid out every year by various Crown entities to ensure that we can keep on top of the main three predators—the rats, the stoats, and the possums. What we have been looking for and have been very open about is that the investment that we are putting into science and technology and research is where the groundbreaking gains will be made. As I said, 5 years ago this was not considered possible; now it is very much within reach, and there has been universal approval from international agencies and others, and, just very recently, today, even from the Greens themselves.

Kevin Hague: How can the Government guarantee that the predator-free target will be funded adequately when fully two-thirds of the funding will apparently come from the private sector and regional councils, and the Government’s own contribution will be entirely contingent on their decisions?

Hon MAGGIE BARRY: I refute what the member has just said. Our initial contribution of $28 million is something we have put in to start the ball rolling, and I think it is a significant investment from the Crown. We are committed to achieving this goal and this level of investment, for example, from other philanthropists. The member may not be aware, but the NEXT Foundation has contributed $100 million over 10 years. Both of the Morgan foundations and the Tindall Foundation are all significant philanthropic groups that have contributed large sums of money because they believe in the vision. They believe in the notion that we can get rid of these eco-invaders that are eating our natural creatures—our birds, lizards, etc.—to the point of extinction. This is an achievable goal, but I have always said from the start, as did the Prime Minister, that we will do it in collaboration—we will all do it together. We are also putting money into a community fund. For example, Sir Owen Glenn has just contributed a good sum of money to our money. So it is going very well.

Kevin Hague: Why should the public have any confidence that the Government is genuinely committed to the predator-free goal, when another of its 2050 aspirational goals—halving greenhouse gas emissions by 2050—has actually seen emissions rise under her Government?

Hon MAGGIE BARRY: I think that—comparing apples with pears in this space, and moving quite a long way from the primary question aside—we are a Government that backs itself to succeed. The climate change initiatives are excellent—New Zealand is doing its fair share, and there will be other announcements that our extremely capable Minister, the Hon Paula Bennett, will be making in due course around that—but for my part, for Predator Free New Zealand, which comes under the Department of Conservation, the funding, the resources, and the level of energy, commitment, and expertise that is going in mean that it is achievable. If that member is so cynical, why is it that the Greens have tried to insert themselves into Government policies? We are pleased that you are supporting it, of course.

Hon Gerry Brownlee: Does the Minister believe that the eradication of exhaust fumes from a very large number—tens of millions—of possums would make a difference to carbon dioxide emissions?

Hon MAGGIE BARRY: The Minister makes an interesting point. His knowledge of possum dietary habits is perhaps greater than my own, but, obviously, eradicating probably up to 10 million possums in this country could only help, not only with our biodiversity but also with our gas emissions, so I thank the member for the suggestion and that valuable point.

Kevin Hague: Will she take up the Green Party’s initiative of charging a taonga levy on overseas visitors to ensure a dedicated and substantial revenue stream for eliminating predators; if not, why not?

Hon MAGGIE BARRY: This really falls within the domain of the Prime Minister and Minister Bennett, because tourism is their purview. I would really be very hesitant to say that you have to go into these things quickly. Clearly, the Greens have just made it up on the back of an envelope—it is a very poorly thought through initiative. We, on the other hand, are doing some substantial gains. I would suggest that by doubling the tourism levy you run the risk of killing the goose that lays the golden egg. Tourism is now our biggest revenue earner over dairy. Why would you try to penalise people coming to this country, who perhaps do not understand our environment—

Mr SPEAKER: Order! The answer is significantly long enough.

Kevin Hague: When will she take some action to advance the agreement her Government has already signed by the Prime Minister with the Green Party to develop pest control strategy together?

Hon MAGGIE BARRY: Way before my time there was a memorandum of understanding between the Government and the Greens. There is no longer. Any so-called—

Iain Lees-Galloway: What! A memorandum of understanding—were you married?

Mr SPEAKER: Order! Mr Lees-Galloway—please, a little less interjection so that I can hear the answer.

Hon MAGGIE BARRY: So the Greens have no role to play in Government policy and Government initiatives—anything that we come with. Your support of Predator Free New Zealand after the event is welcome. It is good that you see sense at last as a party—not “you” as in the Speaker, but the Green Party, which has such poor conservation and environmental records of its own. This is a desperate measure to insert yourselves into something that is not of your making.

Ron Mark: I raise a point of order, Mr Speaker. In the spirit of the House, we are enjoying these questions and answers at the moment. Could I move that you allocate another supplementary question to the Greens so that we can hear more from the Minister?

Mr SPEAKER: Can I just suggest that the member make a point of studying the Standing Orders and Speakers’ rulings a bit more frequently.

State and Social Housing—Housing Developments

4. SIMON O’CONNOR (National—Tāmaki) to the Minister for Building and Housing: What recent announcements has the Government made regarding its programme of large-scale housing developments in Auckland?

Hon Dr NICK SMITH (Minister for Building and Housing): Yesterday the Tāmaki Redevelopment Company issued an expression of interest process for the redevelopment of the large block of State housing at Tāmaki. It is seeking proposals to transform the first phase of 1,000 homes into 2,500 new mixed-tenure homes. By the time the programme is completed, at least 7,500 homes will be delivered at Tāmaki to the Auckland market. This is the largest urban redevelopment project ever undertaken in New Zealand, and, while taking time, it is part of the change in Auckland to a modern, vibrant, international city.

Simon O’Connor: How many new houses has the Government completed on public land in the last year, and how does that compare with historic levels?

Hon Dr NICK SMITH: The House will be interested to know that Housing New Zealand in the last year has completed 871 new homes. This is the highest number in 25 years. On top of that, other Government programmes have completed 155 new homes in Weymouth, 24 have been completed in Awatea, another 432 at Hobsonville, and 32 in that first stage of the Tāmaki project. A total of 1,514 new homes were completed last year under Government initiatives. This is the highest number in 25 years, and more than double the rate that was ever completed under the previous Government.

Simon O’Connor: How many houses on public land does the Government have in the pipeline for construction between now and 2020, and how does that compare historically?

Hon Dr NICK SMITH: The Government has under way an extensive programme of directly building houses on public land that in Auckland, by 2020, will deliver 10,000 homes. This includes projects like Tāmaki, Hobsonville, McLennan, Moire Road, Manukau, Great North Road, and New North Road, and I will be announcing further sites to add to this programme in the near future. There is no time in history when there has been this scale of new home building in Government programmes in Auckland.

No. 5 to Minister

Question

Mr SPEAKER: Question No. 5, Dr David Clark. [Interruption]

Dr David Clark: Point of order. [Interruption]

Mr SPEAKER: Order! Both interjections—but particularly it started from the Deputy Prime Minister—are certainly unhelpful to be referring to any members who are not here.

Dr DAVID CLARK (Labour—Dunedin North): I seek leave to hold the question over until the Minister of Trade himself is available to answer the question.

Mr SPEAKER: I will put the leave. Leave is sought to do that. Is there any objection? There is objection.

Trade, China—Retaliatory Export Restrictions

5. Dr DAVID CLARK (Labour—Dunedin North) to the Minister of Trade: How and by whom was he or his office informed “on or around 25 May” of “possible trade retaliation”; and what was the content of that communication?

Hon STEVEN JOYCE (Minister for Economic Development) on behalf of the Minister of Trade: The Minister was informed via an email from his office staff on 25 May. In terms of the content of that communication, as the Minister said yesterday, there are limitations to what detail can be provided publicly, given legislative and World Trade Organization (WTO) constraints around the reporting of what may be competition issues that are not yet under investigation.

Dr David Clark: Where did his office get that information from, and from whom?

Hon STEVEN JOYCE: As I said in answer to the primary question, in terms of the content of that communication, there are limitations as to what detail can be provided publicly, given the legislative constraints and WTO rules around the reporting of what may be competition issues that are not yet under investigation.

Dr David Clark: I raise a point of order, Mr Speaker. My question was very clear as to where that information came from. He did not even address that part of the question.

Mr SPEAKER: Well, I accept he did not, but he gave a very good reason for why—if the member just wants to resume his seat for a minute. The Minister gave a very good reason why he is not prepared to address the question, and I refer the member to Speaker’s ruling 193/3. He is, effectively, saying that for privacy reasons, commercial sensitivity, or national security it is not in the public interest to give further detail. That is an acceptable position for a Minister to take.

Dr David Clark: Given his statement in the House yesterday that there are “legislative constraints” around the reporting of competition complaints that are not yet under investigation and his reiteration of that today, what specifically are those legislative constraints?

Hon STEVEN JOYCE: There are constraints under New Zealand competition law and also under WTO rules that any complaint about competition issues between countries cannot be reported publicly until such, and if, an investigation is conducted.

Dr David Clark: Given his statement yesterday and again today, what specifically are those legislative constraints?

Hon STEVEN JOYCE: I do not have the exact clause and chapter of the law to hand, but—

Grant Robertson: It’s just an excuse, then.

Hon STEVEN JOYCE: No, it is not an excuse, Mr Robertson. It is actually the WTO rules and competition law, and the Minister is not in a position, in the public interest, to disclose further.

Chris Hipkins: I raise a point of order, Mr Speaker. If a Minister is going to refuse to answer a question in the House on the basis that it is not in the public interest, which I think is what the primary Speaker’s ruling that you referred to relates to, surely there must be some responsibility on that Minister to cite with some specificity the legal basis on which they are making that claim.

Mr SPEAKER: No, listen again to what the Minister said. The second question was, effectively, the same in terms of specific legislation, and the Minister said he could not give you the specifics. That is an answer that is given by the Minister and that addresses the question.

Dr David Clark: Can he confirm that he is in fact relying on section 10 of the Dumping and Countervailing Duties Act 1988 to protect the identity of either Pacific Steel Group or the country of China; if not, what legislation is he relying on?

Hon STEVEN JOYCE: I am not prepared to confirm the contents of the member’s question.

Dr David Clark: Why did he not think it was sufficiently important to inform the Prime Minister, in the face of threats of possible trade retaliation to some of our biggest exporters in our biggest export market, for 2 whole months?

Hon STEVEN JOYCE: The Minister has already acknowledged publicly that he should have provided the Prime Minister with a fuller account of the issue and done so sooner. He has apologised to the Prime Minister for that.

Work and Income—Job Seekers’ Opportunities and Culture

6. MARAMA FOX (Co-Leader—Māori Party) to the Minister for Social Development: Does she agree with the study of Alicia Sudden that Work and Income is pushing too many beneficiaries into jobs that don’t last; if so, what is she doing about it?

Hon ANNE TOLLEY (Minister for Social Development): No. I find it very hard to put faith in any research that, by its own admission “is not considered as accurate or likely to represent the entire population”. I also note that the Ministry of Social Development has some concerns around the methodology and approach taken. As I have already told this House, I have commissioned the social policy evaluation and research unit to do some research in this area, based on data matching and rigorous methods, not anecdotal evidence from a university assignment that involved handing out flyers, offering grocery vouchers for taking part, and interviews with only six hand-picked respondents. People leave benefits for a range of reasons, including moving into retirement or overseas. Two categories of people, I note, were not considered by the university study mentioned by the member.

Marama Fox: Does she consider it appropriate that Work and Income New Zealand (WINZ) sent a 38-weeks-pregnant woman to a potentially dangerous and physically taxing job, doing bee-keeping; if not, what is she doing to ensure WINZ does not treat people like this again?

Hon ANNE TOLLEY: No, it is not appropriate. Although I am not able to talk about specific cases, I want to make it very clear that no 8½-months-pregnant woman should be directed by Work and Income to find a job. Work and Income policy is explicit: that a client receiving job seeker support can be deferred from work obligations from 27 weeks of pregnancy, or earlier if there are any complications associated with the pregnancy.

Marama Fox: Is she concerned by the dismissive comments of the Ministry of Social Development Deputy Chief Executive (DCE), Ruth Bound, who said the thesis “does not fairly reflect the work our people do each day to help improve the lives of New Zealanders we support”; if so, is she going to change the demeaning and judgmental endemic culture of WINZ?

Hon ANNE TOLLEY: No. As I mentioned in my primary answer, the thesis itself says that it “is not considered as accurate or likely to represent the entire population.” As the DCE said in her full statement: “The ministry welcomes any research that provides insight into the lives of the people we work with; however, our initial view of this thesis gives us some concerns around the approach taken.” The DCE went on to acknowledge that “It can be hard to get a foot on the ladder, and difficult to begin the climb, but it’s a start to better things. That is what ministry staff come to work every day to do: to help people make a better life for themselves.” I want to take this opportunity to acknowledge the hard work that the staff at Work and Income do every day, supporting people to get into education, into training, or into work so that they can fulfil their dreams.

Marama Fox: Supplementary question.

Mr SPEAKER: The member has got two supplementary questions and has used them.

Marama Fox: It is my understanding, Mr Speaker, that we have been given an extra supplementary question for today.

Mr SPEAKER: Well, no one has advised me. I will accept the member’s word and accept the supplementary question, but unless we have these sorts of arrangements more formally arranged, it is very difficult for me to manage question time. On this occasion, I will accept the word of the member.

Marama Fox: Does she agree, then—given that the DCE agrees that feedback from any source is valued—with Sudden’s thesis, where it says “WINZ should be more flexible and supportive”; if so, given the success of the Whānau Ora approach in doing just that, will she work with the Māori Party to improve whānau well-being in the context of returning to a system of personalised care management?

Mr SPEAKER: Two additional supplementaries, by the sound of that.

Hon ANNE TOLLEY: No. In fact, I do believe that the Work and Income system is incredibly supportive and flexible, and we have seen the success of that with the latest figures showing the lowest June quarter since 2008. I would also like to point out to the member that 120,000 beneficiaries have access to intensive work-focused case management, which is helping more of them into independence. I would say to that member that the Ministry of Social Development has been incredibly supportive of the Whānau Ora approach, and, in fact, just recently transferred $11.38 million in contracts and funding to Whānau Ora commissioning agents, and tranche three sees more to come.

Transport Infrastructure—Visitor Information Technology

7. SARAH DOWIE (National—Invercargill) to the Associate Minister of Transport: What announcement has the Government recently made around the use of Bluetooth technology in the South Island to deliver information for visiting drivers?

Hon CRAIG FOSS (Associate Minister of Transport): Last month the Minister of Transport, Simon Bridges, and I announced a trial of Bluetooth technology to deliver audio information messages to rental car drivers on the popular Christchurch to Queenstown route. The trial is being run by the New Zealand Transport Agency in partnership with two New Zealand companies: HMI Technologies and Go Rentals. Audible safety messages will be sent by roadside transmitters via Bluetooth to devices fitted in rental vehicles. I invite members to view the information about the trial on the Go Rentals website. The site also includes a map showing where the transmitters are and general information about the trial. I understand that the trial is going very well and that the numbers of those participating has already exceeded expectations.

Sarah Dowie: How will this trial complement other initiatives to assist visiting drivers, especially those travelling in Southland?

Hon CRAIG FOSS: This technology has the potential to improve safety outcomes in remote locations that are the drawcards for many of our visiting drivers. This trial will complement the many other initiatives that are already in place to provide visitors with road safety information at each stage of their journey and holiday in New Zealand: planning, booking, arriving in New Zealand, inflight information, and when they are, of course, actually on our roads. This includes providing information to those who are obtaining visas to come to New Zealand and an additional $25 million investment in the southern regions of New Zealand for funding road improvements and making improvements to roadsides at popular tourist spots, including, of course, those in the Southland area.

Police, Minister—Statements

8. RON MARK (Deputy Leader—NZ First) to the Minister of Police: Does she stand by all her statements; if so, how?

Hon JUDITH COLLINS (Minister of Police): Yes; and as to how, I have been told “quite brilliantly, and yet with modesty”.

Ron Mark: Which of these does she stand by: TV3’s The Nation programme on 12 June, when she said she was “confident of reducing overall crime and violent crime (including domestic violence) by 20 percent”; or yesterday, when she said “there aren’t enough police” and that “family violence rates have increased and put pressure on police resources”?

Hon JUDITH COLLINS: Both. One is about what has happened, and the other is about the increased reporting of family violence that we expect to go up because people have so much confidence in New Zealand Police.

Ron Mark: Who in the Far North did she speak to recently, who led her to conclude that crime and police resourcing are not a big issue?

Hon JUDITH COLLINS: I am not sure that I said that at all, but I have spoken to several people in the Far North and many say it has never been quite the same since the Hon John Carter was the member.

Ron Mark: On what date was she last in the Far North District, given she spent much of the adjournment in the Far North of the United States and Canada?

Hon JUDITH COLLINS: Well, the member is clearly a bit jealous about my excellent fishing photos and my zip lining. As to the Far North, I was there in July. I cannot tell the member the exact dates, but I am happy to provide them should he put that on notice. It is obviously such a big issue for him.

Ron Mark: Which towns, specifically, did she visit in the Far North District when she was last there?

Hon JUDITH COLLINS: The member really does need to put this down as a written question or as a primary question, because I do not normally give a travelogue when I come here. I am going to talk about the Far North. I certainly know I have been to Kaikohe recently, I have been to Ngāwhā prison, I have been to Kerikeri, I have been to Whangarei—I have been to various places in Northland and, actually, all that distance in between them.

Immigration Policy—Numbers and Impact

9. IAIN LEES-GALLOWAY (Labour—Palmerston North) to the Minister of Immigration: Has he seen any reports that 60 percent of New Zealanders think the Government should let in fewer immigrants; if so, why does he think New Zealanders are becoming concerned about immigration?

Hon MICHAEL WOODHOUSE (Minister of Immigration): Yes, I have seen those reports. There could be many reasons why, ranging from genuine concern for New Zealanders’ access to the job market, confusion between migration and immigration and the fact that current positive migration is being driven predominantly by New Zealanders’ movements, to sensationalised reporting that neglects the fact that the overwhelming majority of migrants are on temporary visas and will return home, as well as some who are being influenced by scaremongering from political parties over things like Chinese-sounding surnames.

Hon Steven Joyce: Oh, Chinese-sounding surnames!

Iain Lees-Galloway: Calm yourself. Why did the Minister dismiss the concerns raised by the Ministry of Business, Innovation and Employment, and Treasury, that “We have seen increasing numbers of migrants working in lower-skilled occupations with lower pay.”?

Hon MICHAEL WOODHOUSE: On the contrary, those concerns were not dismissed and are constantly being addressed by the continuous nipping and tucking of immigration policy to ensure that it is fit for purpose. The best examples of that, I would suggest, are the 56 occupations that have been removed from skills shortages lists since 2013, whereas only five have been added on. I think that reflects a very important issue.

Iain Lees-Galloway: Why did the Government approve work visas for 2,700 sales workers last year, when there are already 23,000 unemployed sales workers right here in New Zealand?

Hon MICHAEL WOODHOUSE: It is difficult for me to give the exact reasons, but I would suggest that there were two main reasons. One was that those work visas were not subject to a labour market test if, for example, they were the partners of people who were already here. They may have also been in areas where there is chronic short supply of labour, notwithstanding the job seekers that Mr Lees-Galloway suggests—I do not know whether the number is 23,000, given that overall job seeker numbers at the moment are hovering around 50,000. I would hazard a guess that there were not half of them who were looking for sales rep jobs. But the point is that it is important to look through the numbers and make sure that the reasons for those work visas being granted are understood.

Iain Lees-Galloway: Why did the Government approve work visas for 6,500 labourers last year, when there are 23,000 unemployed labourers right here in New Zealand, ready to work?

Hon MICHAEL WOODHOUSE: So we are down 23,000 unemployed labourers and 23,000 unemployed sales workers. That represents just about 100 percent of job seeker support numbers right now. I would suggest those numbers be viewed with a great deal of caution. The simple answer to the question is that there was not a New Zealander available to do the job in the place where the work was. And I note further that we have now moved a long way away from the “Where are the jobs?” call, because the jobs are definitely being made by a growing economy in this country.

Iain Lees-Galloway: Why is the Government issuing work visas to fill the jobs that tens of thousands of unemployed Kiwis want—a policy that leaves new migrants vulnerable and that leads to fewer jobs, with lower wages for Kiwis?

Hon MICHAEL WOODHOUSE: I am very glad to note that the Labour Party is now acknowledging that there are jobs for every single New Zealander who wants them in this growing economy, but it would be naive to think that there were not barriers to employment for some of those New Zealanders. The Minister of Tertiary Education, Skills and Employment, the Minister for Social Development, and I are working extremely hard to remove those barriers, whether they be geography, training, skills, or recreational drug and alcohol use, which needs to be addressed before they are ready for work. We are working hard to make sure that every young New Zealander is fit for work.

Ron Mark: Is the Minister surprised that he has so many anti-immigration questions from Labour these days, given that previous Labour leaders have so viciously attacked New Zealand First and Winston Peters on the very same topic?

Chris Hipkins: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! I will hear from Mr Chris Hipkins.

Chris Hipkins: The Minister is not responsible for questions that the Opposition asks.

Mr SPEAKER: No, I cannot see that there is any ministerial responsibility, anyway. We are moving on.

Ron Mark: Is the Minister confused by reports from political parties that have formed a coalition recently, when we have questions such as this and he is being asked to answer questions such as this, and then the leader of the Green Party, James Shaw, goes on radio and says—

Mr SPEAKER: Order! There is no ministerial responsibility whatsoever. [Interruption] Order!

Ron Mark: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! It is a point of order, but I hope it is not in any way contesting a decision that I have just made.

Ron Mark: No, I just need your assurance, Mr Speaker, that when Ministers are asked whether they have read reports on issues that affect their portfolio, that, going forward, such questions will stand as legitimate.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. There is absolutely no way that a scrap between Labour, the Greens, and New Zealand First affects the Minister’s portfolio.

Mr SPEAKER: I was hoping that I might get something useful from Mr Brownlee, and I guess that in some ways I have. It is not only the words “have you seen any reports” that matter, it is the total context of the question, and there is simply no ministerial responsibility.

Ron Mark: What difference is there between his immigration policy and his Government’s beliefs on immigration and those being extolled by his Opposition party right up until that poll came out?

Mr SPEAKER: Again, there is no ministerial responsibility.

Tourism—Visitor Spending

10. NUK KORAKO (National) to the Minister of Tourism: What reports has he received about increased spending by tourists visiting this winter?

Hon PAULA BENNETT (Associate Minister of Tourism) on behalf of the Minister of Tourism: The latest monthly regional tourism estimates show that there has been a strong start to the winter season, with tourists spending more in every region than they did at the same time last year. Otago led the way with $3.2 billion in spending by domestic and international visitors in the year to June, an 11 percent increase on the year before. In total, six regions saw tourists spend more than $1 billion in their region just in the last year. It is fantastic for the industry that these tourists are getting right round the country.

Nuk Korako: What reports has he seen about more tourists staying in regional New Zealand?

Hon PAULA BENNETT: June 2016 saw the highest ever number of guest nights for the month of June. Every region in New Zealand saw an increase, with the Bay of Plenty, Waikato, Southland, and Northland seeing the biggest increases. This means that all our regional hotels, motels, holiday parks, and backpackers are seeing more people visiting and staying in their towns. Budget 2016 included an extra $12 million in support of regional tourism by helping the regions to pay for their much-needed tourism infrastructure.

Nuk Korako: Has he received any reports on upcoming legislation that creates improved processes around recovering lost airline luggage?

Hon PAULA BENNETT: Ironically, I saw a report just this afternoon of a member’s bill that has been drawn that will actually make sure that people are able to recover their lost luggage easily, modernising the system yet again into one that is electronic—great for our tourists, both international and domestic. I welcome it from the member.

Police Resourcing—Numbers

11. STUART NASH (Labour—Napier) to the Minister of Police: How soon after signing off on the Police Four Year Strategic Plan in May of this year did she change her mind about there being no increase in police numbers out to 2020?

Hon JUDITH COLLINS (Minister of Police): The 4-year plans reflect the known resources at the time of writing. The next month I met with police to discuss any ongoing concerns regarding demands that they will have in the future, particularly around family violence.

Stuart Nash: How many extra police officers did she request in the 2016 Budget round?

Hon JUDITH COLLINS: What I had requested was funding for police, which we got.

Stuart Nash: Point of order, Mr Speaker.

Mr SPEAKER: I will allow the member to re-ask the question. Ask the question again. If the Minister chooses to answer whichever way, that is the Minister’s business.

Stuart Nash: How many extra police officers did she request in the 2016 Budget round?

Hon JUDITH COLLINS: I did not ask for extra police; I asked for extra money, which is what we got. We got around about close to $300 million to pay for police and also some of the other work that police are doing. I think that is a pretty good outcome for $300 million.

Stuart Nash: How much of the $300 million was specifically earmarked for new police officers on the ground?

Hon JUDITH COLLINS: I think I have answered that. The member is just refusing to accept that police getting paid properly is part of what Government does.

Stuart Nash: When can Kiwis expect to see more police officers on the beat as a result of her admission that she made a mistake and her realisation that more police are needed?

Hon JUDITH COLLINS: I certainly have not admitted any mistakes, and the member should know that that is not something I would do lightly. He should not try to put words into my mouth.

Hon Dr Nick Smith: He’s been making a few mistakes of his own.

Hon JUDITH COLLINS: He does, actually. Just because he is a right-winger and we share certain views, there is no need to think he knows me. [Interruption] You think he is a leftie?

Mr SPEAKER: Order! I think on this occasion the answer has been given. [Interruption] Order! Dr Smith.

Stuart Nash: Let me use some of the Minister’s words. When she said twice yesterday that she was “looking to the future”, does she believe that she has a future as the Minister of Police if she continues to make such fundamental mistakes as agreeing to no increase in police numbers less than 3 months ago, and then changing her mind when presented with the facts?

Hon JUDITH COLLINS: As I have made very clear, I have made no mistakes on this matter at all. In fact, I would say to that member that the only one here who should not be talking about mistakes is him.

Public Transport, Auckland—Rail Options for Waitematā Harbour Crossing

12. JULIE ANNE GENTER (Green) to the Minister of Transport: Will he commit to prioritising rail to Auckland’s North Shore as part of the additional Waitematā Harbour crossing; if not, why not?

Hon SIMON BRIDGES (Minister of Transport): The proposed additional crossing will include a rapid public transit link, and, as I have said a number of times now, as part of planning for the additional crossing the New Zealand Transport Agency (NZTA) and Auckland Transport are investigating what type of rapid public transport will be best. Until those investigations have been completed it is premature for me to favour one option over another.

Julie Anne Genter: Is a rail-only option being considered and evaluated by the New Zealand Transport Agency and Auckland Transport right now?

Hon SIMON BRIDGES: Not rail only, but it is incredibly early days in terms of the kind of rapid public transit link that there might be, and we are keeping options open in that regard.

Julie Anne Genter: So can I confirm that the rail-only option is not being considered as one of the many possible options that could exist for the future Waitematā Harbour crossing?

Hon SIMON BRIDGES: It is clearly not going to be rail only, but in terms of the rapid public transit link that would be part of this, we are keeping our options open.

Julie Anne Genter: How can he evaluate what is going to be best value for money if all options are not being considered?

Hon SIMON BRIDGES: I think, as I have said, it is incredibly early days. We are at the route protection stage at the moment. We are talking about a project, at the moment at least, scheduled to be built in the mid-2020s to the late-2020s. The decisions will be made on the basis of investigation, not ideology. The options are open, and that is certainly the case in relation to the form of rapid public transit link that there will be.

Julie Anne Genter: Given that a rail link is extremely popular with Aucklanders and it would give them better choices to get around, as well as taking pressure off the existing road network and being the logical next step after the City Rail Link, why is he not making a rail option at least one of the options that is being evaluated under the New Zealand Transport Agency’s investigations?

Hon SIMON BRIDGES: I think a rail option will be investigated as part of the options they go through, but not a rail-only option at the exclusion of everything else. That is the point I have been trying to make. I would also make the point, of course, when we talk about public transport on the North Shore, that there is the Northern Busway. There are very significant extensions going on to the Northern Motorway at the moment, including extensions to the Northern Busway that are being planned, and, of course, there are other public transport and alternative transport options, which I know the member will be in favour of, that have gone through consultation and are being worked on, such as SeaPath on the North Shore as well. There is a strong number of planning processes under way in relation to public transport right now and in relation to this crossing. It is early days and we will work our way through it.

Julie Anne Genter: I seek leave to table the NZTA’s route protection designation, which is for a road-only crossing.

Mr SPEAKER: And is that available easily for members to get on the website?

Julie Anne Genter: I think it is not available on the website.

Mr SPEAKER: I will put the leave and then the House can decide. Leave is sought to table that particular NZTA information. Is there any objection? There is objection.

Bills

Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill

First Reading

Hon MICHAEL WOODHOUSE (Minister of Revenue): I move, That the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. It is my great pleasure to bring this bill before the House, which is the second bill containing the Government’s proposed measures to simplify tax administration in New Zealand. The centrepiece of the bill proposes a major shift in the way small businesses currently pay their tax, making these processes simpler and easier. These changes were announced in April by the Government as part of Budget 2016.

Small businesses are the backbone of our economy, and we want the tax system to fit around how businesses operate, not the other way round. The packages of changes included in this—

Fletcher Tabuteau: I raise a point of order, Mr Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): Order! Sorry to the Minister—before I deal with the point of order, I would like to hear what is being said, and to those who are leaving the Chamber, please do so expeditiously so as to give courtesy to the speaker. Now, there is a point of order from Fletcher Tabuteau.

Fletcher Tabuteau: Mr Assistant Speaker, you have addressed my point of order. Thank you very much.

Hon MICHAEL WOODHOUSE: The package of changes included in this bill will make paying tax easier and more certain, reduce the burden of interest and penalties, and help small businesses tailor payments to their circumstances. Most businesses aim to do the right thing and pay their tax as best they can. For most businesses, that means paying income tax in three instalments of provisional tax throughout the year. Provisional tax was by far the single most commented on aspect by taxpayers in the public consultation on the Government’s green paper on tax administration released in March 2015. Many found it onerous and unfair. In particular, the application of use-of-money interest was a key concern of taxpayers.

The Government agrees that processes can be improved, and feedback from business since that Budget announcement has been overwhelmingly positive. I have had feedback just recently from a caucus colleague who was speaking to a hairdresser, an owner of a hairdressing salon for about 15 years. One would think that a hairdressing salon had a reasonably steady taxable income flow, but this particular owner had a variation in the number of chairs that operated and the number of staff that worked for her of between 10 and 16 at any one time. That created a huge challenge for her in estimating her taxable income and therefore her provisional tax obligations. She fed back to my caucus colleague what an absolutely fantastic initiative this was. Even in hairdressing, we are hearing that. It is not a seasonal occupation or business so much, but many of New Zealand’s tens of thousands of small businesses are seasonal, and they will all benefit from the changes we plan to make.

The bill seeks to remove the application of use-of-money interest to a large number of them. It introduces a new calculation method to better match tax payments with income earning. The proposed new calculation approach, the accounting income method, takes advantage of technological advances to smooth the process. It more closely matches income earning with tax payments and reduces compliance costs for small business. The objective is to simplify tax processes so that, rather than imposing a stand-alone tax process, tax would become a part of the normal, everyday accounting work that businesses already do in managing their finances. Because tax will be paid as income is earned, businesses using the accounting income method will have more certainty that they are paying the right amount of tax.

But this is not a case of throwing the baby out with the bathwater. Although the current calculation methods do not meet everyone’s needs, there are certainly businesses for which the current provisional tax methods work adequately well. There is, therefore, no intention to do away with other methods for calculating provisional tax. The proposal is for the accounting income method to be a fourth option for calculating provisional tax.

The Government appreciates that the current system can be unfair. Even if a business ends up paying the right amount of provisional tax during the year, it can still incur use-of-money interest. So for those taxpayers who use the standard uplift method, the Government is proposing two changes to minimise the impact of use-of-money interest: firstly, to increase the safe harbour as to when use-of-money interest will apply, from $50,000 of residual income tax to $60,000. The bill also proposes extending the safe harbour to non-individuals. Combining these proposals will remove some 67,000 additional taxpayers from the impacts of use-of-money interest.

Secondly, for the standard uplift taxpayers who are outside the new safe harbour rules and who make the required instalments, use-of-money interest will apply only from the last instalment date. This means a taxpayer can pay their entire tax for the year with no use-of-money interest being applied. For those using the new accounting income method and who pay the required instalments, use-of-money interest will also not apply.

The effect of the proposals will be that use-of-money interest will be eliminated or reduced for the vast majority of taxpayers. I believe that the proposed measures will provide greater certainty as well as peace of mind, particularly for smaller businesses. The bill also proposes flexibility for businesses that could trade their way out of debt. It proposes to reform the late payment penalty by no longer imposing the monthly incremental penalty from new GST income tax and overpaid Working for Families tax credits. These and other proposed business tax simplification changes were driven in part by a desire to make it easier for taxpayers to comply.

In fact, the vast majority of people do comply with their tax obligations, but there is a small group of people who seek to evade their tax obligations and hide their taxable assets offshore. This is not a problem confined to New Zealand alone, and it has become the subject of an international effort spearheaded by the OECD. New Zealand works closely with the OECD on a number of matters, and we take our global responsibilities very seriously. That is why the second major component of this bill proposes enabling legislation requiring New Zealand financial institutions—unless exempted—to review their accounts and collect and report information to the Inland Revenue Department (IRD) on accounts held, or, in certain circumstances, controlled, by non-residents. Where necessary, the IRD will then share that information with other tax jurisdictions in specific countries. The objective is to help eradicate tax evasion.

Generally, the legislation aims to allow the reporting financial institutions to take advantage of options outlined by the OECD and to not require reporting financial institutions to collect further information than is required by the OECD standard. This approach should help to minimise the compliance costs for financial institutions. The overriding principle in this proposal is the desire to bring more transparency into international tax matters.

This is true for one other item in this bill: the proposed amendments to our foreign trust rules. Although our tax settings are very sound by international standards, the Government has always been open to making improvements to New Zealand’s already strong tax settings if that was warranted. That is why the Government agreed to act on all of the recommendations from the Shewan inquiry, to ensure our disclosure rules are fit for purpose. The proposed amendments to the foreign trust disclosure rules included in this bill will strengthen our rules and help make sure that we maintain our reputation in the context of best practice of international exchange of information. This includes the proposal to require a register that is searchable by the Department of Internal Affairs and the New Zealand Police, and for annual disclosure requirements.

The remaining changes in the bill are of a practical nature and ensure that the tax rules are applied consistently, that they are clear, and that they achieve their correct policy purpose. Finally, the bill includes a range of other remedial amendments to give greater certainty to taxpayers. Together these measures will help strengthen our tax systems and make it easier for taxpayers to comply with their obligations, and be fairer for taxpayers more generally. These are good proposals for New Zealand and good for the tax system. I commend this bill to the House.

STUART NASH (Labour—Napier): As with every tax bill, Labour will support this bill through to select committee. But, yet again, we have another bill in the House where we are amending the Income Tax Act, the Tax Administration Act, and the Student Loan Scheme Act. This is about the fourth, fifth, or sixth bill this year that we have had on this, and I just would like to request of the Minister of Revenue that perhaps he just get it all right in one bill. Put it together so that we can actually do it at the same time.

We in the Labour Party are all for making tax easier. There is absolutely no doubt about that, but there is a great saying that imitation is the highest form of flattery. This Government has been in power for 7 or 8 long years. It had not even addressed this issue at all, until one pivotal moment. What happened—what that moment was—was Labour introduced a tax policy to make provisional tax easier, or certainly to make it easier for small to medium sized businesses to not have to pay provisional tax. What the Government did was it said: “What a fantastic idea. Let’s adopt that.” I am pleased that it has, from a small to medium sized enterprise’s perspective, because doing business in this country has to be easier. But I just wish that the Minister would give a little bit of credit where credit is due. You are welcome, Minister.

I am sure that what we will do, however, is make this bill just a little bit better through the select committee process. What I do urge is that those who are listening, those who are involved in the tax business—whether you are lawyers, accountants, financial advisers—submit on this bill so that we can actually adopt the best practices out of the Labour policy and put it in this legislation.

There is something called the accounting income method, which is the pay-as-you-go method. The thing about this—and I am not too sure of the extent of this—is that to be able to access this, a business must use accounting software to derive the level of provisional tax required to be paid. I will signal here my slight concern about this, because it appears to me that those good, hard-working Kiwis who sit down at the kitchen table at the end of the day and undertake their tax return in the way it has been done for a long, long time may well be disadvantaged. I am unsure of what the extent of that problem might be. I do not know how many of the small to medium sized businesses that operate in New Zealand are actually on accounting software and how many do it the old-fashioned way, but what we do need to do is understand the extent of that problem, and if there is a solution, then let us see whether we can find it.

The other question for the Minister is why wait until April 2018 to implement this. Why not do this next year? Certainly, it does not take that long to put these provisions in place. I would have thought the vast majority of small to medium sized businesses, and certainly those operating in an environment of uncertainty—we all understand that they find provisional tax a little bit of an imposition, so let us get this sorted sooner rather than later.

The other point that the Minister talked about—and that I would like to set the record a little bit straight on—is the foreign trust disclosure rules. There are a number of information disclosure requirements that this bill puts in place—these are for foreign trusts with New Zealand resident trustees. The trust must register with the Inland Revenue Department (IRD). The trust must file annual returns, pay regulation and filing fees, and share information with certain Government agencies. You would have thought that any trust in New Zealand would have to do this anyway. But no, we are changing the law to make sure this happens.

The interesting thing about this is that the Minister and the Prime Minister said that there was no problem. There was no problem, and then what happened was that Grant Robertson and Andrew Little went on the offensive and explained the injustice about this. And what happened? The media understood it. They understood the issue. The IRD certainly understood the issue, because it had written a paper about 2 years ago outlining the risk of this. But there is one group that understood this issue more than anyone—that is, the small, powerful industry sector, which lobbied, first of all, the Prime Minister, and then the Minister, and, magically, this whole issue disappeared. Maybe it is just a coincidence that when the Prime Minister’s tax accountant lobbies the Minister with an issue that the IRD had highlighted, it disappears. Let us go with the fact that it is a coincidence.

But when the Prime Minister and the Minister both say “There is no issue. Move on.”, and then the Opposition highlights the fact, what do we have next? The Prime Minister says “Well, maybe there is an issue here.”, and he appoints John Shewan. John Shewan comes out and highlights the extent of the issue—and we know it is an issue. The interesting thing is that the Minister said in his speech: “We are doing this to preserve New Zealand’s reputation.” Well, I would argue that by not doing anything we have tarnished New Zealand’s reputation. One of the few things that we have—one of our few global competitive advantages—is our reputation for honesty and integrity. When this incident, this loophole, was reported in the global media, people talked about New Zealand as a tax haven. It did not matter if, by whatever definition, we actually were not a tax haven, the perception globally was that we were, and the perception is all that matters.

So when the Minister says “We are doing this to preserve New Zealand’s reputation.”, I would argue that the damage to New Zealand’s reputation is reasonably significant and we need to act really quickly to address this. But the interesting thing is, if this had been done 2 years ago, if the Minister had followed IRD officials’ advice when they came to him and said: “Minister, we have an issue, but, Minister, we have a solution.”—he did nothing about that. I think that is negligent, I think that is irresponsible, and I think that is playing hard and fast with New Zealand’s global reputation. It is wrong. It is just wrong. I ask the Minister: was it worth it? Was it worth it?

What we have now is a piece of legislation in front of the House that was pushed to the very top of the Order Paper—not under urgency, but as urgent as you can get without operating under urgency—where, originally, the Minister was not even interested. The Prime Minister was not even interested, and he himself said: “There is no issue here.” What has changed? If I was a cynic, I would say that the Prime Minister polled on this. New Zealanders understood the issue better than the Prime Minister because, I think, the Prime Minister, after 8 long years, has actually lost touch with what good, hard-working Kiwis want. He used to have his finger on the pulse. He used to be very, very good at this. For 3 years, you could argue, he was one of the most in-touch Prime Ministers we have had. After 6 years he was beginning to—he was still there, but now he has got “third-term-itis”, where he has lost touch with what New Zealanders want.

The interesting thing about this, I think, is that the Prime Minister and the Minister both thought: “This is about tax and foreign trusts, and New Zealanders don’t care about this—it’s too complicated for New Zealanders.” But the thing is, New Zealanders got it—New Zealanders got it. The thing is that New Zealanders understand when they are being ridden roughshod over by a group of high-powered lobbyists who go to the Minister and say: “Can you make this disappear?”. The reason New Zealanders got it is that we will put up with a lot, but one thing we really do not like in this country is that sort of behaviour, because what it does is it has a slight tinge of—I was going to say “corruption”, but that is the wrong word—let me say, favouritism. That is not how we do politics in this country.

To sum up, Labour is supporting this bill to the select committee. Of course, Labour wants to see the tax system made simpler for small to medium sized businesses. It is about time this bill is here, but we will support it and we will ensure this legislation is better when it comes back to this House than it is going into select committee. The second thing I would say, in summing up, is that after consultation we will support, with reservations, the changes around foreign trust disclosure, but this is too little, too late. This is an issue that could have been headed off at the pass, and I think the Minister has not only dropped the ball but really, really missed the boat here. He played hard and fast with our global reputation, and it is simply not good enough. Thank you very much.

DAVID BENNETT (National—Hamilton East): This bill does continue that process of the reform of the tax system that the National Government has been working on. It is important to look at the tax system as something that is an ongoing process. As people become more aware of issues, then they become part of the changes you see to the tax system.

That last speaker, Stuart Nash, spoke about some issues that were quite relevant, actually, in the sense that there had been a lot of public perception. The perception was what he said mattered, but that perception actually led to the Shewan report, which led to this tax bill. So it is a Government that is engaging, listening, and working through and then delivering the right policy for New Zealand going forward that takes into account the issues that are out there.

This bill also has a number of other components to it in regard to some very important legislation that will be of assistance to small businesses, particularly, around provisional tax. I know many small businesses are looking forward to those changes, and they see them as very important.

There are also some changes around GST, Working for Families, and tax credits from 1 April 2017. It is trying to get that balance between penalties and encouraging taxpayers to make timely payments without it becoming too overwhelming on the taxpayer.

This bill also has a number of other requirements in regard to the G20 OECD standards, and so that is something else that is part of the bill as well, as well as a number of other subsidiary issues. But it is a bill that is part of that tax reform. It gives a continual process of tax reform, and this is part of that process of getting the best tax system for New Zealand and to achieve our purposes.

GRANT ROBERTSON (Labour—Wellington Central): Well, off the back of that incisive contribution from the chair of the Finance and Expenditure Committee, can I reiterate my colleague Stuart Nash’s comments that Labour will support this bill on its first reading, as we do with all taxation legislation that comer before the House.

There is no doubt what this bill is really about. There is the usual attempt to correct the mistakes of the last tax bill that went through, and to tidy up the loose ends in the tax system, but this bill is the swallowing of a very large, dead, Panamanian rat for the Government—because that is what this bill is about. This bill is the Government coming to the House and saying to New Zealanders: “Three years ago when Inland Revenue Department officials told us that we should be doing something to close the loopholes in our foreign trust regime and when we the National Government ignored them, we were wrong and we let New Zealanders down.” It would have been nice to have heard from the Minister of Revenue that he acknowledges his Government got it wrong and that the hard-working officials in the Inland Revenue Department (IRD) were the ones who got it right, and they were ignored by the Government. And they were ignored by the Government with the influence of the foreign trust industry and, in particular, the Prime Minister’s close adviser, Ken Whitney.

Let us take ourselves back to when the Panama Papers first exposed issues around New Zealand’s foreign trust regime. John Key’s first thing to say was that New Zealand has full disclosure of information when it comes to foreign trusts. Well, today this legislation actually tries to get us to full disclosure—or some way down that path—so the Prime Minister was just plain wrong about that. He actually knew, I am sure, that there were things that could be done, and today we have legislation that proves that the Prime Minister was wrong. We do not have today full disclosure of information when it comes to foreign trusts. We should be able to get that in New Zealand. This will take some steps, but there is more that needs to be done, which I will come to shortly.

What was really instructive about the Prime Minister’s first reaction to concerns about loopholes being exploited in our foreign trust regime was that he decided to stand up for the tax evaders and the tax avoiders. He chose his side. He could have chosen New Zealand taxpayers and the reputation of the New Zealand tax system, but he chose the other side. He chose to side with the foreign trust industry and the people around the world, the mega-wealthy, who decide that they should not pay their fair share of tax. Well, on this side of the House we side with New Zealand taxpayers—a fair go and a fair deal for New Zealand taxpayers.

Most New Zealanders are prepared to pay their fair share of tax because they want to fulfil a responsibility to a good society—and good on them for doing that. But those who seek to avoid their obligations and who seek to cheat other taxpayers—we should have no time for them whatsoever, but the first thing the Prime Minister did was to back those people. And I do not care what country they come from—Bill English stood up in the House and said: “We don’t need to care about the Mexican taxpayers.” We do, actually. We actually need to care about the fact that right around the world we have tax systems that support people paying their fair share, because when we go to the OECD and say “We want multinationals to pay their tax.”—which we do—how can we stand up there with any credibility and make that claim and ask for the assistance of the rest of the world when we are the ones with a system that is being exploited? We are the ones with a system where somebody from Mexico named the “Duke of Influence” could park his money, where discredited Brazilian politicians with $150 million worth of money that seems, potentially, to have been corruptly found finds it way to New Zealand, and where corrupt Maltese politicians file their money in New Zealand. That damages our reputation.

So today we have got a piece of legislation that starts to try to deal with that, but—make no mistake—this Government did not come here willingly with this legislation. It was dragged here because it was exposed as being on the side of tax evaders and tax avoiders.

And it was all so unnecessary, because in August 2013 the Inland Revenue Department came to the Government and said: “We need to do something. To protect our international reputation, it may be necessary to strengthen our regulatory framework for disclosure and record-keeping.” In August 2013—on 15 August, which is almost exactly 3 years ago—the Inland Revenue Department said to this Government “You need to close the loopholes.”, and the Government did nothing about it. So the Inland Revenue Department came back to it in August 2014, in November 2014, and in December 2014. By November 2014 the Inland Revenue Department had already put tightening-up disclosure requirements for foreign trusts on its work programme, and that was the signal for those in the foreign trusts industry. Once it made it on to the work programme, they used their insider influence. Ken Whitney, the Prime Minister’s closest adviser, writes to the Minister of Revenue, Todd McClay, and says “I’ve spoken to the Prime Minister. He’s told me to talk to you.”, and then, lo and behold, within a month it is all over. It is off the IRD work programme, and the foreign trusts industry gets to carry on without even having to take a breath.

That is because this Government chose to side with the industry over New Zealand taxpayers and ordinary working people all over the world, and that is a shameful record from this Government. It had the chance to stand up for a fair tax system and it decided against it. It went with the insider influence, which is so typical of this Government, and the Prime Minister said: “Don’t worry about it. Ordinary people approach me all the time with ideas and I refer them to the Ministers.”

Hon Annette King: At the Koru Club.

GRANT ROBERTSON: He said “Ordinary people come up to me every day in the Koru Lounge.”—that is right. Ordinary people roaming freely about the buffet in the Koru Lounge, talking to John Key, who is passing details of Ministers hither and yon—what a load of nonsense. This was the Prime Minister’s personal lawyer and adviser using his influence, and Todd McClay just said: “How much? How high, Prime Minister?”. This is a shameful episode, and this Government needs, today, to acknowledge to New Zealanders that it got it wrong.

The proposals that it is bringing to the House today are inadequate in one specific way, and that is the absence of a publicly available register of foreign trusts. This is because, in the end, if another jurisdiction is looking around the world to see where money might be parked and cannot get easy access to that register, it is not going to be able to find out. It is not so much looking for a needle in a haystack; it is whether there is a needle in a series of haystacks, and it does not have the information to support that.

We have registers of companies in New Zealand. We have publicly available registers of companies; we have publicly available registers of charities. Why are foreign trusts not seen in the same light? So the legislation in front of us today says that it will be the Inland Revenue Department and the police that get to see this. That does not properly advance the interests of transparency, and as a country we need to hold on to that reputation around transparency that has been built up over many decades.

One of the saddest parts of this whole episode was the fact that during it, New Zealand slipped down the Transparency International rankings. I was present when a Government backbencher said: “Well, you know, our aim is to be in the top five for the Transparency International rankings.” Just imagine if Steve Hansen held a press conference and said: “The All Blacks’ aim is to be in the top five of rugby-playing nations.” He would be sacked—he would be sacked straight away—because when we are the best in the world at something, we must stay as the best in the world. We are slipping in Transparency International ratings under this Government, and those members do not care because they are too interested in protecting the mega-rich and those who have close influence on them.

This piece of legislation will get scrutiny at the select committee. It will get many, many submissions, I am sure. I want to assure the public of New Zealand that the Labour Party will look closely at this legislation to ensure that we use it to restore the reputation of New Zealand for transparency, to restore their faith in the tax system of New Zealand, and to give ourselves credibility on the world stage when we ask others to support us when it comes to cracking down on multinational tax avoidance.

CHRIS BISHOP (National): That was a speech of fiction. It was just a fantasy from Mr Robertson. But the point he made about the hard work of the Finance and Expenditure Committee (FEC) was accurate and true, because we on FEC are a very hard-working committee. We have had a number of tax bills put before the committee, from the House, in the last 18 months. We will go through this bill with the same care and prudence and diligence that we give to all the tax bills that come before us and all the sensible bills that the Government puts before us. So I am looking forward to examining it. In particular, I am looking forward to looking at the changes for small business because, as the Minister said in his introductory remarks to the House, they are going to be of enormous benefit to a lot of small businesses around New Zealand.

There are a few things in politics, a few policies and big announcements, that get cut-through. People in politics talk about the cut-through—the stuff that really gets out to the public, which they talk about around the dinner table or the water cooler, down at the pub, at the rugby, or wherever. I think we have had another example of a cut-through policy just the other day—that is, the predator-free New Zealand policy. That has been enormously popular. I have had lots of people come up to me and talk about it and say that it is really great to see the National Government backing a blue-green vision for New Zealand, really outselling the Greens and Labour, and putting up that vision of New Zealand being predator-free by 2050. They are surprised the Greens did not have it as a policy themselves. They have been saying to me that it is very surprising that the Greens did not do it, and that they just want to champion it and applaud our vision.

But the other cut-through policy, to return to the theme of the actual bill, is the small business tax changes. I go to a lot of fora with small business, and it has gone down extremely well and people are actually rating it with me proactively. I think that is probably the biggest thing in this bill, along with the changes that have come out of the Shewan trust review.

Grant Robertson left out one very important part of his fantasy time line of what happened around this, and that was the defamation by Andrew Little of John Shewan. It was not mentioned—

Iain Lees-Galloway: That is a fantasy. Now you’re into fantasy.

CHRIS BISHOP: Iain Lees-Galloway says that it is a fantasy. Why did he accept that he was wrong, then? Come on! He knows that that is wrong. Left out of the time line was the defamation of John Shewan. If Andrew Little wants to come down to the House and say that, we would welcome that.

But, anyway, this is a good bill. We are looking forward to examining it at the FEC.

JULIE ANNE GENTER (Green): Tēnā koe. The Green Party is supporting this bill. I think it is useful that aspects of the bill are actually quite aligned with what the Green Party has proposed in the past—notably, the changes to business taxation for small businesses, to make it simpler. That is something the Green Party campaigned on before the 2014 general election. I am surprised it has taken this National Government 8 years to come up with the idea and implement it. It has certainly had plenty of time. But I am glad that it is going to make progress on that, and I look forward to examining the changes in more detail in the select committee process.

The other big change, of course, in this bill is the changes to the disclosure requirements for New Zealand foreign trusts. Although it is very complicated I will try to make it simple for those who are watching at home. I know it seems very, very arcane and boring, but, yeah, well. Back when the Panama Papers came out, the Prime Minister and the National Government said: “We have full disclosure with regard to New Zealand foreign trusts. We already have full disclosure. Nothing to see here. New Zealand is not being used as a tax haven. We don’t need to change anything.” Of course, our co-leader James Shaw, colleagues from the other Opposition parties, and I all pointed out that there were a huge number of professionals in the tax world—tax law academics—who were saying that actually this is not the case. New Zealand does not have anything like near full disclosure.

In fact, there is a huge amount of secrecy around New Zealand foreign trusts, and this needs to be fixed in order to protect our international reputation. Of course, although the Prime Minister and the Minister claimed in the House that that was not the case, they had been told this by their own officials several years previously. I think what New Zealand voters should be very concerned about is the fact that they cannot trust the National Government to do the right thing—to listen to the advice of officials and do the right thing in the world and ensure that our laws are fair and are supporting fairness and transparency in respect of taxation and international tax avoidance. It took the Panama Papers and sustained scrutiny and questioning from journalists and Opposition parties for the National Government to do the right thing and make these changes.

I congratulate those members on doing it, but we have to point out that they denied there was a problem. They chose not to pursue it when nobody knew about it. The Prime Minister’s personal lawyer and other representatives of the foreign trusts industry who are making huge amounts of money off very wealthy foreigners, exploiting the lack of transparency in our foreign trust regime, wanted to keep being able to facilitate that secrecy in order to make money for themselves. The National Government responded to that lobbying and buried the changes. This is why it is so important to have an Opposition and why it is so important to have investigative journalism, because they shine the light on this cosy relationship between the Government of the day and vested interests.

The Green Party wants to stand up for greater transparency, and we are constantly proposing positive, practical solutions. I note that the member’s bill that the Green Party proposed several years ago in 2012, which we reworked and proposed again just a few months ago, is very similar to the changes that are being made in this bill, following the Shewan inquiry. So if we look at clause 10, the changes to sections 59B, 59C, 59D, and 59E are all very, very similar to what the Green Party was proposing to increase transparency around New Zealand foreign trusts. Of course the National members, ever the masters of spin, characterised those proposed changes, when I asked about them in the House, as “barking mad”.

There is one important difference in what is being proposed in this bill from what the Green Party proposed, and that is that what is in this bill does not include a publicly searchable register, which may be necessary for foreign Governments to be able to ascertain whether their taxpayers do have a foreign trust in New Zealand. It is probably quite a critically important aspect of making the regime more transparent and ensuring that we do have compliance. Aside from that, virtually all the recommendations from the Shewan inquiry were in line with the bill that was proposed by the New Zealand Green Party, and which I, on multiple occasions, tried to raise and propose as parts of debates on other taxation bills but, of course, was quickly shut down.

So, yes, the Green Party is happy to support this bill. We want a fairer, simpler tax system for small businesses. We want a fairer and more transparent tax system that does not facilitate tax avoidance by wealthy foreigners, because most New Zealanders, I think, agree—perhaps some of the National members are not in agreement with this, but I think that most New Zealanders agree—that tax avoidance and evasion is not right, it should not be happening here in New Zealand, and we should have maximum disclosure.

But it is simply not possible for the Prime Minister to have been honest and correct when he said that New Zealand had full disclosure, and for us to be debating this bill, which obviously changes, right here—it implements the changes to the disclosure requirements for a foreign trust that were recommended by the Government inquiry into foreign trust disclosure rules. Obviously, we did not have full disclosure. We needed full disclosure, and it took sustained media scrutiny and Opposition scrutiny for this Government to do it. I say to the voters of New Zealand that you do not need to have to rely so much on Opposition parties. Elect us into Government and we will ensure that there is a fairer, simpler tax system for New Zealand.

FLETCHER TABUTEAU (NZ First): There are three main policy aims in this bill, and I would like to focus on the last one—that is, the elements related to the foreign trusts and tax jurisdiction.

But first—and it is unusual with the new Minister of Revenue, but I would like to concur with some of the statements he made in his address to the House, and I am well pleased to see he is pleased about it—I would like to support what the Government is saying with regard to the provisional tax system. I have only just realised that Labour called for it, the Greens called for it—well, New Zealand First called for it years ago as well. So there is a lot of common sense—

Hon Clayton Cosgrove: We wrote a policy on it.

FLETCHER TABUTEAU: —yeah—running through the House, and the Government picked up on it. It is a great thing, and we do support that. The support is somewhat tempered by the obscene sums of money that the Government is having to spend in terms of the Inland Revenue Department upgrades, the ICT capabilities. We are talking sums in the billions of dollars. As to how often the case is that these omnibus bills come up, especially with regard to tax, it is a great frustration—of mine, in particular, but for New Zealand First, of course—that these omnibus bills cover such distinct and varied pieces of policy.

So although I would love to stand up and support the Government with this bill with regard to streamlining business operations in terms of their tax obligations—helping them with provisional tax obligations, because I think that is sensible—the third part of this bill is an abomination. It is an abomination to this House and it is an insult to the people of New Zealand.

So, of course, this is where I would like to spend my time. I apologise for this long quote from a business magazine from overseas, but if you would give me some leeway, Mr Assistant Speaker: “When New Zealand Prime Minister John Key flew into Malta for the Commonwealth Heads of Government Meeting in November 2015, he already knew he shared some important views with his host, Malta’s Prime Minister Joseph Muscat, about the importance of keeping the tax secrets of foreign investors. Both countries are quiet achievers in the ranks of global tax havens, and both are determined to keep it that way. While Malta has been fiercely resisting pressure to close tax avoidance loopholes used by foreign companies, including Australian firms, to move profits out of the European Union, New Zealand has fought just as hard to protect its laws that make foreign profits tax-free and invisible for beneficiaries of its offshore trusts.” This is not a perception around the world; this is the reality as the world sees it. We are a haven and we are being abused. It is described by many as an opportunity for corrupt politicians, organised criminals, fraudsters, bribe payers, arms dealers, and terrorists to use New Zealand’s loose regulatory framework.

New Zealand’s 12,000-plus offshore trusts pay no New Zealand tax on foreign earnings. Their beneficiaries are not registered and their accounts are not filed with any public body. New Zealand regulators may demand this information if so requested, but it is not disclosed to foreign Governments. Yet, Mr Woodhouse, the Prime Minister rejects claims that New Zealand is a tax haven. To quote the Prime Minister: “our tax settings are relatively robust by international standards, but we’re always open to considering changes if they’re warranted.” The release of tax haven records underline the ease with which corporates and individuals can use New Zealand to hide their wealth. Even Mr Shewan in his report said: “it is reasonable to conclude that illicit funds are being hidden in New Zealand foreign trusts.” That is a direct quote. Mr Shewan would not state it outright, but given that his terms of reference did not include actually looking at the Panama Papers, he could only make that assumption. He may have described the terms of reference in his preface to the report as broad and comprehensive, but New Zealand First said at the time that they were not broad enough. What we are seeing here today bears that out, although, actually, to be fair, Mr Shewan did come down quite hard on the Government’s lack of action in terms of transparency.

So there were a few statements there made by Mr Shewan that were embarrassing to the Government. This is a quote from Mr English: “Mr Shewan’s inquiry noted that foreign trusts are legitimate vehicles and that New Zealand’s tax treatment of foreign trusts is appropriate.” That is what Mr English got from the inquiry—that was it—and yet the inquiry concludes that the existing foreign trust disclosure rules are inadequate. Then he goes on to say that the rules are not enough to protect New Zealand’s international reputation.

Let us be clear for the members of the House: New Zealand First is dead tired, so tired, of this National Government’s half measures when it comes to legislation—half measures on the housing crisis, half measures on regional development, half measures on transport infrastructure, half measures on our social infrastructure, and half measures on just looking after small New Zealand businesses in terms of the uneven playing field they have to play on with regard to their GST and tax obligations when compared with their overseas competitors. It is all about half measures and spin, and it is beyond frustrating.

This bill, with regard to foreign trusts, is yet another half measure. It does not even go halfway, I put it to you. Let us be absolutely clear: the response in this legislation is completely inadequate, and I use the European Union to measure how inadequate this response is. New Zealand’s tax regime will come under investigation as Europe prepares a “black list” of global tax havens, and guess what? New Zealand and that National Government will be on that list. It is looking all over the world and it has confirmed that New Zealand will be investigated.

Hon Michael Woodhouse: He’s retracted that. He’s corrected that. He said that was misreported.

FLETCHER TABUTEAU: They will investigate us, Mr Woodhouse. Let us be realistic. The Prime Minister’s pet industry has been put under the spotlight. Mr Woodhouse has said the formal investigation may not take place, but we know that the EU is now looking at us very, very closely, and it has put us under a microscope. Right now, without a free-trade agreement—right now, without those magic free-trade agreements that this Government likes to make up—the EU is our third-largest trading partner, so it is pretty critical that our relationship with the EU is on the up and up.

Here is the kicker: New Zealand does not comply, even with the recommendations made by Shewan, even if those are implemented—and not even all of those are implemented in this bill. For example, “no tax exemption of foreign income”—New Zealand will not meet this standard. It wants an automatic exchange of information with foreign tax authorities, and the jurisdictions where the settlors and beneficiaries are resident to be reported—New Zealand will not meet this standard. It wants a public register of trust ownership and details—New Zealand will not meet this standard, even after this legislation is enacted. We are facing scrutiny, at the very least, from those that we would like to sign a free-trade deal with.

New Zealand First would like to be able to support parts of this bill, as I said. There are good aspects to it that we think the select committee should investigate and expand on further. But because this is less than a half measure in protecting our reputation and ensuring that this country does not support thieves and robbers from around the world, New Zealand First cannot endorse this piece of legislation, even at this stage. It is not an honest attempt, and I suggest to the Minister that he come back with a full, comprehensive, and honest go at solving our problem with tax havens.

STUART SMITH (National—Kaikōura): This is a great tax bill, but before I speak about that I would like to actually respond to some of the pious drivel that we have heard on the Panama Papers. As a conspiracy theory coming from New Zealand First—well, there are no surprises there, I expect, to anyone. But, from the Greens? Their mother party, or their mother organisation, Greenpeace, was actually implicated in the Panama Papers. It is a bit rich for those members to come into this House and then act piously—

Eugenie Sage: I raise a point of order, Mr Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): There is a point of order—[Interruption] Hang on—we will not have that, either.

Eugenie Sage: The member has made a totally inaccurate statement. Greenpeace is not the mother organisation for the Green Party.

The ASSISTANT SPEAKER (Lindsay Tisch): I take that point, and ask the member to focus just on facts.

Hon Michael Woodhouse: I raise a point of order, Mr Speaker. You are well aware of the Standing Orders and Speakers’ rulings around debating points. I would suggest that in the context of the comments that the member has made, that is indeed a debating point.

The ASSISTANT SPEAKER (Lindsay Tisch): No. [Interruption] Order! We will not have any interjections when I am on my feet. [Interruption] The member will withdraw that comment and apologise for it.

Hon Clayton Cosgrove: I apologise and withdraw.

The ASSISTANT SPEAKER (Lindsay Tisch): My ruling was not to do with the point that Stuart Smith made regarding the points in relation to Greenpeace; it was to do with the point about it being the mother, or the sister, or the overriding—I do not know what the word was—of the Green Party. I did say to the member to stick to the facts. I did not rule it out of order. I did not ask him to withdraw and apologise. I am asking him to continue.

STUART SMITH: Thank you, Mr Assistant Speaker. I think I will move on to the bill itself. One of the key things about the National Government’s management of the economy is how it has made businesses’ lives a lot easier with the way Government regulations, and the interface between Government and business, occur.

This is a fantastic bill—particularly, I think, with the accounting income method coming in, which will make things much easier for small businesses. Also, the use-of-money interest not being required on the first two instalments of provisional tax will be a great boon for businesses and enable them to manage their accounts much better. We all know that small business is the backbone of New Zealand’s economy, and anything we can do to enable that is fantastic. I must say, I did quite enjoy the first minute of my speech, but thank you.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Assistant Speaker. E ngā mema o Te Whare nei, tēnā tātou katoa. I am happy to take a call on this, the first reading of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill. Just by observation, I say that when this bill is introduced, it will, no doubt, have amendments or impacts on the Income Tax Act 2007, the Tax Administration Act 1994, and the Student Loan Scheme Act 2011. As previous speakers have made mention of in this House, there are three main policy proposals in this bill: firstly, changes to business taxation to make tax simpler; secondly, it implements the G20 OECD standard for automatic exchange of financial account information tax matters; and thirdly, it makes changes to implement the disclosure requirements for foreign trusts recommended by the Government inquiry into foreign trust disclosure rules.

The aim of the bill is to amend several tax statutes for various purposes, including to simplify processes, to reduce compliance costs for smaller businesses, and to tighten foreign trust disclosure rules. Labour stands for a simpler, fair, and transparent tax system in our country, and therefore we are supporting this bill. The Minister mentioned that included in this bill are what he has termed business-friendly measures, which are about simplifying the provisional tax rules by providing a new pay-as-you-go option for small businesses to pay their provisional taxes by 1 April 2018, and that needs to be commended.

But in terms of simplifying tax, the particular part of this policy that I want to particularly make mention of in my contribution is the removal of the 1 percent monthly incremental late-payment penalty on new GST, income tax, and the Working for Families tax credit debts from 1 April 2017. As we know, many families out there are struggling. The wages do not meet up with the costs of living, and so any removal of penalties, particularly in the family tax credit, must be commended.

For the time that I have left in this contribution I want to talk about the third policy proposal in this bill, which has come about as a result of the government inquiry into foreign trust disclosure rules. The previous speaker, Stuart Smith, made mention of so-called scaremongering. I just want to draw the House’s attention to the Panama Papers. It was the largest data leak in history, released by journalists back in April. The largest cross-border journalism collaboration ever uncovered a giant leak of documents from Mossack Fonseca, the global law firm based in Panama. It consisted of more than 11.5 million files. You cannot call that scaremongering—11.5 million files, showing the practices of the wealthy and powerful around the world and their use of tax havens.

It was reported that New Zealand’s involvement in the scandal—we were mentioned in 60,000 of those documents. I would challenge the member who said that the whole Panama Papers scandal and what it caused this Government to do was scaremongering, because clearly that type of leak and the implication of us being one of the many countries that are supposedly tax havens for those wealthy people definitely challenged our reputation internationally.

When this bill is put to the Finance and Expenditure Committee, of course we would get people delving into and probably examining aspects of the bill to ensure that we are going to end up with a simpler and transparent and just tax system, particularly for the small businesses, but also, as others have mentioned, for the international reputation of our nation—our great nation—that we are not the haven for people to park in. I want to also hope that the select committee that is examining this bill, and those submitters out there who may be submitting, do ask the select committee to look at making the registration more publicly available and not just available to the Inland Revenue Department and the New Zealand Police, so that the scrutiny to ensure that we have a fair and transparent tax system is actually scrutinised by all the public.

Like I said, this bill is something that Labour will be supporting and we will, no doubt with vigour, look forward to those who submit, so that we can make sure it is robust and it meets the intention that both the Minister and the Government have said it has, and so that we do have a simple tax system in this country that is fair and we clearly refute the slight on our reputation that we are a tax haven. Therefore, I commend this bill to the House.

ANDREW BAYLY (National—Hunua): It is a pleasure to talk just briefly on this new bill that has been introduced to the House today. This is in a long line of taxation bills before the Finance and Expenditure Committee. We are a hard-working committee and we are looking forward to looking at all aspects of this bill.

I just want to highlight that it has got four very important points. First of all, it does deal with the issues that John Shewan referred to in his report. We are addressing them, and I cannot wait to have a proper debate about that; not some of the rubbish I have been hearing this afternoon. Secondly, it deals with the Inland Revenue Department’s Business Transformation programme, and introduces three aspects related to that. Thirdly, it implements the G20 OECD automatic exchange of information—again, a very important part of continuing the transparency that New Zealand is well regarded for. And, lastly, it introduces 16 measures relating to allowing businesses to pay their tax in a much more easy way, doing away with many of the use-of-money provisions, and also introducing this pay-as-you-go scheme.

This is a great bill and I am looking forward it.

Debate interrupted.

Amended Answers to Oral Questions

Question No. 8 to Minister

Hon JUDITH COLLINS (Minister of Police): I seek leave of the House to correct an answer to question No. 8 that I gave today.

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

Hon JUDITH COLLINS: Today during question No. 8, I was asked when was I last in the Far North and I gave the answer as July. It was, in fact, 17 June, and I could have also said 15 and 16 April this year.

Bills

Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill

First Reading

Debate resumed.

Hon CLAYTON COSGROVE (Labour): Just to deal with that last aside, I am sure the people in the Far North were very gratified to have the Minister of Police in their sphere, in their presence, radiating warmth and radiating esprit de corps and humanity to one’s fellow man and woman, as she is known for.

Could I deal with some of the points that Parliament’s version of Bear Grylls—the previous speaker, Andrew Bayly—made in his contribution. I think he may well have been on ice in the North Pole for a tad longer than was necessary, and that may have had some effect on his anatomical processes from time to time, but putting that aside, he touched on the bill—which, of course, Labour will support in the first reading—in respect of its provisions around provisional tax and making payment of provisional tax easier for small businesses. I do commend the Government for that, although, as usual, it is a day late, a dollar short, and late to the battle when the war is almost won.

It was very interesting to see the timing of that proposal. At the time, well before this Government turned its mind to provisional tax—I was revenue spokesman, actually—Labour actually wrote and released a policy on provisional tax.

Hon Annette King: I think you should table it.

Hon CLAYTON COSGROVE: It is a policy that I am happy to table for the members’ interest. It is a policy that was released publicly; a policy that also had the benefit of being highly detailed and highly costed. Not only that, but we engaged professionally the former Inland Revenue Department (IRD) deputy commissioner Robin Oliver to go through that policy and vet it for us. Those who know Robin Oliver will know that there is probably no one in our recent history—in respect of knowledge of the IRD processes and policies—better matched than Robin Oliver and his history with the IRD. So we went to the best, Mr Oliver and his associates, and asked them to vet it.

Our policy, of course, was about flexible tax for business. It was about giving businesses more control over their lives, making the tax system work for them. Essentially, businesses could pick their own tax rates—still having to pay, ultimately, the same or appropriate level of tax—but marry the tax system and the provisional tax to their cyclical business, whether it be seasonal or whatever. Not only that, but we said we would scrap harsh late-payment penalties in respect of provisional tax and raise the level at which provisional tax kicks in from $2,500 to $5,000.

The day we announced it, and I have this on very, very good authority, the “Mr Fix-it” of the Government, Steven Joyce, I am told, because there was somebody in the room who told me, called the IRD officials in over the head of the Minister of Revenue and basically said—and I will not use colourful language—“How the hell are we going to deal with this? Go and do something.”

Chris Bishop: Oh, that’s not true.

Hon CLAYTON COSGROVE: Oh, yes, that is absolutely true. It was not Chris Bishop who told me, I have to say. To be fair to him, it was not Chris Bishop who told me. The Government ran around like headless chooks, desperately trying to put a policy together, and, to be fair, it came out with one. But it was several months late. It is not as robust as our own policy. It does not give business the full flexibility of the policy that I and colleagues and Andrew Little put forward, but it is something to deal with. So, again, ours was a policy that had been vetted by the former Deputy Commissioner of the IRD. It was very detailed and would give a lot of control back to small businesses.

So the Government’s policy is not a bad effort, but it was—as usual, the Government had a look at the polls, did a few focus groups, and said: “Hang on, we’ve been beaten to the punch here. We’d better come out with some sort of half measure that maybe makes us look, as if we’re in control and we can empathise with small business, and small business will say this is great.” It was a day late and a dollar short, as per usual.

Then we look at the provisions around the foreign trusts issue, which a number of members have talked through. I know other members have dealt with this point, but it is interesting that again the modus operandi that I just described in respect of its provisional tax announcements was almost exactly the same modus operandi that it exhibited around the foreign trusts issue. The National Government procedure is: “If the proverbial hits the fan, we basically deny, deny, deny, deny.” The Panama Papers came out, with a lot of commentary around New Zealand’s international reputation being tarnished, if not put in jeopardy, in respect of being a world-class taxpaying nation that does the right thing and meets its obligations and is transparent. So the Government sort of reels the issue out on a pole, like a bit of raw meat, to wait and see whether the vultures peck, and peck, and peck. Then, you know, if it is going too far the Government reels it in, and then the Government decides it had better actually do something because the polls tell it, of course, that the public is taking an interest in this, that other embassies and jurisdictions around the world are taking an interest in this, and that Government members’ feet are starting to be put to the fire.

So after the denying and the Government saying there was no issue, there was no damage to our reputation, and our legislation was world class and robust, we then moved to a flip-flop, which was: “Hang on, we had better have an inquiry. Take Mr Shewan—ask him to do a report.” That is a big change—a big U-turn. It was poll-driven—who was the politician who talked about “poll-driven fruitcakes”?

Hon Annette King: Lange.

Hon CLAYTON COSGROVE: Lange—that is right. Yes, well, it is very apt today: “Feet put to the fire, big issue—poll it, focus group it, and then when the pressure is on we had better be seen to do something.” Then we had the Shewan report, and then we had the measures described in this bill.

Well, the select committee will have to go through and test quite robustly the level of quality of these legislative instruments to try to meet the mark, because, of course, it was the Prime Minister, the Minister of Finance, and others who said that this was not necessary—it was absolutely not necessary. Day after day, week after week, press conference after press conference, and doorstop after doorstop, the New Zealand people were told that none of this was necessary—no need for a report, no need for any action, no need for any legislation. And now what have we got? Well, we have had a report, we have had an inquiry, and we now have legislation, and a finding by Mr Shewan that our disclosure rules in respect of existing foreign trusts are “inadequate”—inadequate. So that is where it sits.

We will support the legislation through the first reading, but it will be interesting to tease out from officials and from the Minister of Revenue and others as to the level of quality of these legislative tools and whether they will actually meet the mark in terms of ensuring that New Zealand’s reputation is preserved and enhanced, so that we are not seen—we are not perceived and there is no suggestion—to be somehow doffing our hats as a foreign tax haven.

I look forward to the debate, I look forward to the scrutiny of the legislation, but I do say to the National Government that the sort of modus operandi of doing nothing; deny, deny; then have a poll; then turn around and do a U-turn; and then maybe be seen to be doing something probably did work in its first 3 years, possibly did work in its second 3 years, but it certainly ain’t working in these 3 years.

ALASTAIR SCOTT (National—Wairarapa): It is not often in the electorate that constituents come up to an electorate MP and say: “Fantastic policy. Fantastic policy.” Often, it is the MP explaining policies and communicating, but in this case, with the provisional tax changes suggested, it was one of those policies that, as my colleague Mr Bishop said, really cut through—really hit the nail on the head.

Those who are in small business, those who have operated small businesses—and there are a lot of them on this side of the House; I am not sure there are so many on that side—understand the problems, the issues, that the current provisional tax rules present to small-business owners. This policy, this bill, goes a long way towards solving that issue, and I commend it to the House.

A party vote was called for on the question, That the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill be now read a first time.

Ayes 108

New Zealand National 59; New Zealand Labour 31; Green Party 14; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 12

New Zealand First 12.

Bill read a first time.

The ASSISTANT SPEAKER (Lindsay Tisch): Just a point: when a party votes against the question, it does not automatically mean that there is going to be a party vote. If a party wants a party vote after I have declared the result, which is a challenge to the presiding officer, a party must call for it.

Darroch Ball: Well, I did, didn’t I?

The ASSISTANT SPEAKER (Lindsay Tisch): Well, you did eventually, but it took some time, because I was ready to move on.

Bill referred to the Finance and Expenditure Committee.

Bills

Imprest Supply (Second for 2016/17) Bill

First Reading

Hon BILL ENGLISH (Minister of Finance): I move, That the Imprest Supply (Second for 2016/17) Bill be now read a first time.

Bill read a first time.

Bills

Appropriation (2016/17 Estimates) Bill

Third Reading

Imprest Supply Debate

Imprest Supply Debate

Hon BILL ENGLISH (Minister of Finance): I move, That the Appropriation (2016/17 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2016/17) Bill be now read a second time. This debate is around the Estimates, which, for those in the House who have not paid too much attention, set out all the spending of the Government for 2016-17. I want to start by acknowledging the efforts of so many public servants and organisations that the Government funds outside the Public Service for the care and attention that they give to the sensible spending of public resource—that is, the taxation we gather off so many New Zealanders.

What lies behind the John Key - led Government’s approach is a simple reality: those people who got up at 4 o’clock this morning and went out to start work, those who worked all day in the cold and the wet and paid their PAYE at the end of last week deserve that we make as good a use of it as they would have if they had been allowed to keep it. There are households right across New Zealand where another couple of hundred dollars would make a big difference. So that is why the Government pays attention to how money is spent. We only have billions because people pay 15 percent when they go and buy their milk and their bread at the supermarket. That is how we end up with billions of dollars.

These Estimates are part of an ongoing process where this Government is trying to change the way public money is managed. Here is one of the challenges. It is related directly to our parliamentary process, which I know, Mr Assistant Speaker, you know better than most of us. Parliament has to work on an annual cycle, because the constitutional permission to raise tax and spend other people’s money has to be renewed regularly. It should be. At least every year—in fact, more often than that on confidence votes. But a whole lot of the issues that the Government deals with are not about annual cycles. When we are looking at the impact of Government spending on the environment, that could be intergenerational—or should be, in fact. When we are looking at educating our young, that is not about 1 year’s result or 10 years’ results: for too many of those children, it is the only chance in their lifetimes to change their prospects.

So a big part of what is going on in the refocusing of the public sector is to get the right balance of complying with the requirements of Parliament—as expressed through these Estimates where we have to be able to track every dollar—on the one hand, and making sure it is effective in a time frame that is relevant to the issues that the Government has a responsibility for, on the other hand. Because, frankly, the Estimates do not tell us a lot about whether we changed that young child’s life or whether we helped the prisoner not to reoffend, or whether we wrote the right quality of environmental regulation that will have an impact for a generation—because that is how long it takes fresh water to get from the farm to the river, carrying nitrates if that is what has happened.

That is quite a challenge, I have to say, because our Government agencies are hard-wired for compliance. If there is one thing they have to do, it is comply with the appropriations that this Parliament gives it—and Parliament’s watchdog, the Auditor-General—they have to do that. But at the same time, increasingly, they have to think in a framework that is relevant to the problem and, particularly, that demonstrates impact. This is because too often the spending that we are approving here disappears out into the wider community, and people, even with the best of intentions, are not quite sure whether it worked. Because the spending here is not for the teachers, it is not for the doctors, and it is not for the police or the NGOs. They are all very influential, sometimes too influential, on how the money is spent. The money, the spending, the support, is for the citizens, or—the word I like to use because it irritates people, including the Labour Party, is “our customers”—our customers. Not people who are passive recipients—and it annoys the Greens, because they, like Labour, want the New Zealand public to be grateful recipients of their good intentions expressed with other people’s money. That is what they like—people who just put up with what the Government gives them and say: “Well, it must be the right thing because nice people from the Government said so.” That model of Government is over, and if Governments do not change it, the evidence around the world is that voters will if they feel that the State can no longer be responsive and can no longer change when it should change.

So that is what lies behind a lot of the direction and changes in the Estimates. And, of course, it covers a whole range of issues, including spending on issues that have been discussed quite a bit lately, one of which, I will mention, is housing. I thought it was notable today that the Labour Party had nothing to say about housing. And do we know why? It is because yesterday the Government initiated the process for the biggest housing development the country has ever seen—like, ever seen—and it is only the first of a number.

Chris Hipkins: How many houses? How many?

Hon BILL ENGLISH: Well, in Tāmaki it will go from 2,500 to 8,000 houses. Here is a challenge for the member: if the Labour Party housing policy was so popular, Phil Goff would be using red billboards in Auckland, and Justin Lester would be using red billboards in Wellington. But the Labour Party policies are so popular that Phil Goff is making every effort to look like the National candidate for the Mayor of Auckland. And Justin Lester is so desperate not to be labelled as Labour that he is using the ACT colours for his billboards. Of course, the biggest issue for Labour is whether Stuart Nash or Nick Leggett is the most left-wing. That is the biggest issue. That is the one that really got them fired up.

So we are very pleased with the way that the Public Service is responding to the challenges that have been given to it. We are pleased with the progress on housing, because in this 3-year term of Government this country will rebuild Dunedin—this country will add to the number of houses that are in the city of Dunedin. And then, in the next 3 years, it will have to do that plus more. That is a combination of what we hope and believe will be sensible decisions from the Auckland Council, which has to produce a plan that shows credible, large increases in supply, and the Government’s building programme, which is getting up and going and—as the Labour Party will find out—on getting into the middle of next year will be running at scale. I can assure it of that.

So I commend these Estimates to the House. I want to thank all of the committees that have spent time scrutinising them. Sometimes in select committees very good questions are asked, particularly by the National Government members. Sometimes not so good questions are asked by everybody else. But it is part of, I think, in the select committee, a growing understanding of the way that public spending is being managed in New Zealand. And it is all about doing a better job for those New Zealanders who most need it—not doing crazy things like the Labour Party is suggesting, like “Get your student loan wiped if you join the Public Service.” I mean, what happens if you join the Labour Party? Is it going to—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! [Interruption] Order! The member’s time has expired.

GRANT ROBERTSON (Labour—Wellington Central): Never has a truer word been said—that member’s time surely has expired. He devoted a large chunk of his speech to the promotion of various mayoral candidates around the country. Just to fill in one little gap there: Justin Lester, the most excellent Labour-endorsed mayoral candidate in Wellington, has billboards that are yellow and black. They would be the colours of Wellington, the city in which he is running. I would expect the Minister of Finance to know that, given that he has resided in Wellington for a very long period of time.

But he did not mention one mayoral candidate in Wellington who I think will be extremely disappointed that she was not mentioned by the Minister of Finance given that, I believe, he has endorsed her. [Interruption] That is right—Jo Coughlan. We did not hear about the colour of her billboards. I think you will find they—Jo Coughlan’s billboards—are actually green and red, but, look, it is fine. The Minister of Finance’s endorsement in Wellington will be hugely helpful for Jo Coughlan to scratch herself up from seventh or sixth place in the order.

As for Phil Goff in Auckland, a man whom I think most people would be laying bets on to be the next Mayor of Auckland—but feel free, National Party, to put up a third candidate. It has already got two on the go—Mark Thomas, a refugee from Wellington, is up there as well. Actually, do we count John Palino? Does he count as a National Party candidate? Well, he is Cameron Slater’s candidate, so that is three. They have already got three National Party candidates there. So Phil Goff is well and truly in charge of that—but enough about local government.

The Budget of 2016 got off to a bad start. It actually got off to a bad start the day before, when Paula Bennett, desperate because she knew that the Budget did next to nothing for housing, decided to make her own Budget announcement. Bill English did not know about it. He was remarkably relaxed when he heard about the fact that Paula Bennett was promising to pay $5,000 to people to leave Auckland. It was a little bit of a confusing policy because she also had another policy to pay people $3,500 to go to Auckland. So people were potentially getting themselves on the merry-go-round of that money, but, in the end, the success of that pre-Budget announcement that Bill English did not know about was for 12 people—12 whole people—to take the opportunity to take the $5,000 and move out of Auckland.

When New Zealanders take a look at a Budget, what they are looking for is whether the Budget helps them and their families and their communities to grow and to prosper. The Budget is the Government’s chance to say: “Here are the things that are important for New Zealand to go ahead in the next few years.” We look at the core areas that you do in any Budget—what kinds of jobs are going to be created, what kinds of housing are there going to be for people, what will the education system look like, and how will the house system be supported? They are the building blocks of opportunity, the things where New Zealanders look to the Government and say: “We’re trying to build a good life for us and our families—will the Government be there alongside us?”. They take a look at the 2016 Budget and they see nothing. It does not fix the housing crisis. It cuts health and education in real terms. It does not do anything to support New Zealanders in the transition to a changing, working environment in the future of work.

What is more, when we look ahead, the grand ambition of the Government, once naming itself as ambitious for New Zealand, is that wages—average wages—will not actually keep up with inflation for the next 2 years. The share of the economy that working people get is—

Andrew Bayly: That is rubbish.

GRANT ROBERTSON: Andrew Bayly needs to catch up with the Budget Economic and Fiscal Update. Have a read of it and you will see wages not keeping up with inflation for the next 2 years. That is how little the National Government members know about what is going on. Just how out of touch they are is that they do not even realise what their own Budget says.

When New Zealanders look at that, they will be saying—Bill English says he is concerned about the people who get up at 4 o’clock in the morning. Well, he should be concerned about those people, because they are working harder and harder and not feeling like they are getting ahead. The reason for that is that the share of the economy that working people get is declining under this Government. We know that. Wages are not keeping up with the cost increases we are seeing in housing. Then we find out, in the days after the Budget, that the level of income and asset inequality in this country is getting worse. Statistics New Zealand has come out and told us that the top 10 percent of New Zealanders have 60 percent of the wealth, up from 55 percent just a few years ago. That is the New Zealand that this Government is creating: one where those at the very top do better and those hard-working New Zealanders who, as Bill English says, are getting up at 4 in the morning, are struggling to see their way forward. This Budget did next to nothing for them.

When New Zealanders are looking at a Budget like this, what they should have seen was a plan to fix the housing crisis. It is the biggest political issue facing New Zealand today, and the Budget was largely silent on it. A little bit after the Budget, it turns out the Government had a panic and decided it had better create a billion-dollar infrastructure fund—

Hon Annette King: How long did that take to work out?

GRANT ROBERTSON: It took the Government 3 weeks to work it out. There was one sensible thing about that process: Government members did not tell Nick Smith until the very end. That was the sensible bit of the process. They told him a couple of days before the end. They did not even bother to tell the councils that they wanted to work with, and most of the councils looked at it and said: “This will get us next to nothing.” What that package should have been was a simple and plain thing: to have a Government that would be a partner in building affordable homes.

Bill English, in his pre-Budget speech, has acknowledged that only 5 percent of the homes built in New Zealand in the last 10 years have been affordable homes. That translates to about 500 homes in Auckland being affordable, when we need thousands and thousands. So the comprehensive housing plan that Labour has put forward is what should have been in the Budget: 100,000 affordable homes built over the next 10 years, making sure that we actually have an affordable housing authority that has got the mandate to get in there to work with councils, iwi, and developers to create good-quality, affordable housing right across New Zealand.

Somehow, in the middle of his speech, Bill English starting talking about rebuilding Dunedin. If only that was what he was going to do, because, actually, out of our Affordable Housing Authority project, we want to do the kind of urban regeneration that communities like South Dunedin, where I grew up, actually need—and that is what we will do. Making housing central to building strong communities—that is what Labour’s KiwiBuild and Affordable Housing Authority policies are about.

Then we need to make sure that we are providing adequate State housing. We heard Steven Joyce come out with his tweet to say: “We are not taking a dividend from Housing New Zealand.” That happened in the wake of the Budget as well. Next year, I understand that Steven Joyce’s Twitter account will be included as an unspecified fiscal risk in the Budget, because if he is going to make $90 million tweets, he is going to get right in there alongside the Earthquake Commission and a few other things that are already in that category. But the Government needed to have a commitment to State housing, it needed to have a real commitment to emergency housing, and that was not there.

Then we come to health where we have a continuation of the underfunding of health that has been a feature of the Budgets of the National Government. We have now reached $1.72 billion of underfunding right across New Zealand, which is having an impact.

Then we look at the education system where, remarkably, the Government chooses in this Budget to say “We will freeze the operational grants of our schools.”, at the very time when our schools need more support to be helping to prepare young people for the future. The good news is that in education the Labour Party has a plan too: 3 years of free post-secondary school training and education for every New Zealander—recognising that now and into the future the kinds of skills that people need to be developed and retrained and constantly upgrading. We are going to upgrade careers advice in school because every New Zealander deserves the right to have a career plan, to be supported to make the decisions for what they will do next. No New Zealander should be leaving school without that plan, and that is what you get from this Government: 87,200 people aged between 15 and 24 not in employment, not in education, and not in training.

Hon Annette King: How many?

GRANT ROBERTSON: More people, Mrs King, than the population of Palmerston North—87,200. There is nothing is this Budget to deal with that.

So if the Budget was building the opportunity for New Zealand, it would have KiwiBuild in it, it would have health funding that keeps up with population change and backfills what has been let go in the last few years. It would have support for a strong education system, both in our compulsory sector and giving opportunity for training and education past then, and it would have support for our regions to start developing the jobs—the decent work of the future. They are the building blocks of opportunity, they are the things that would be in a Labour Government Budget, but we look at what is in front of us today and it is a tired Budget from a tired Government.

Mr DEPUTY SPEAKER: I am sorry to interrupt the member but his time has long expired—at least 30 seconds.

DAVID BENNETT (National—Hamilton East): The Budget Estimates debate is a great time to look at the policy difference between the two political parties that have just spoken. I think we can tell that that last speaker, Grant Robertson, has a very negative approach to New Zealand. It is an approach of, basically, Grant Robertson knows better than any other New Zealander—that a failed academic who has made his life out of politics knows better than anybody else in New Zealand. He is somebody who can decide where to build houses. Grant Robertson believes he is greater than God. He can work out where houses go, he can build them at a certain price, and he can make everything happen at a certain price for a certain policy.

That is the Labour Party dream. It is a dream of socialism gone wrong. The Labour Party is continually harking back to its socialist roots: free housing, free university education, free Government jobs if you work for a Government department, no loans. It is all that socialist rhetoric that has gone and has been taken away from the rest of the world that has grown up and worked out that it does not work, and has actually moved on. That is what this Budget shows. It shows an open, progressive economy that delivers for New Zealanders.

I want to take a little moment to talk about immigration because I know that this is something that the other parties are going to come to in their speeches, because whenever they talk about housing, they link it to migrants. The National Government is proud to welcome people to New Zealand. We are a country that is proud to have people come to this country and become part of New Zealand and build their lives and their dreams here. We are not a party like New Zealand First, which is against migrants, we are not a party like the Green Party, which does not want any people in New Zealand, and we not a party like the Labour Party, which has sold out for the theory of housing—the once-proud Labour Party. When I first came into politics, at every event I went to the Labour Party said: “We are pro-migration. We are pro-immigrants.” Now it does not say that. Those members hardly go to those events because they know they cannot stand up in front of those groups and actually be honest with them and say “We’re cutting immigration.”, because that is what the Labour Party stands for. That is its policy: it wants to cut immigration. That is the true Labour Party that you are seeing come out now, and the Labour members are very quiet now—not one defensive comment. Not one—

Iain Lees-Galloway: It’s because we’ve all gone to sleep.

DAVID BENNETT: Then they come back now, because they have just been called to talk.

New Zealand has a choice of how we run this country. We can be an open, free country that takes our opportunities or we can be closed and restrictive on our people and our future. The world is going through quite interesting times. You are seeing what is happening in Britain and what is happening in North America. There is a mood and there is a political class that is talking about restrictions, about stopping people—

Hon Annette King: A class?

DAVID BENNETT: Yes, it is a class, Mrs King—a class based around those people like Bernie Sanders, who are true Labour Party members. That mood is a negative mood that is against progress and success. New Zealand has taken a different approach. New Zealand is in the heart of that Asian growth bubble that is, basically, the world for the next 150 years. As part of that, the last thing we should do is have a restrictive approach. If New Zealand takes the Labour, Greens, and New Zealand First approach we will deny ourselves the opportunity that our geographical position has enabled us to take in the next 50 to 100 years. We cannot let that opportunity slip.

I often talk to the public in Hamilton and ask them: “What is the biggest thing in Hamilton? What is our biggest strategic advantage?”. We always look at it and we know that it is our proximity to Auckland. Just like Hamilton is to Auckland, New Zealand is to Asia, and just like Hamilton has taken advantage of that link with Auckland through the expressway, New Zealand needs to link with the Asian development and growth and actually take advantage of our opportunities in front of us. We do not need to stop people coming to this country. We do not need to say that we need to have population stilled across our major cities. We do not need to restrict our people and our future. What we need to do is embrace that opportunity and take that opportunity. Every time the people of Hamilton look north, they look at it with success and pride because they know it is helping them grow, and every time they look east they look at it the same way. We look at that as being the next stage of Hamilton growth. It is to look east, just like New Zealand’s next stage will be to look east towards South America and America, as we grow. So you can relate Hamilton to New Zealand’s position, and it is very much the same.

New Zealanders must take that opportunity, and we must not go into that politics of fear and dissolution that you are seeing around the world, which pits people against each other just because of our race or our religion or where we were born. We must accept all New Zealanders and, more importantly, must welcome new New Zealanders and let people have a future in this country and not go through the petty politics of fear that the Opposition peddles through every election campaign, which we know those members are going to do again this time.

This Budget is so important in providing that impetus, and I think New Zealand has got a perfect opportunity in the next few years to take advantage of that. The one thing I fear is that we do not take advantage of that and our near neighbours do, and if New Zealand gets out of kilter with Australia in that regard. Then have a look at the housing market. Instead of worrying about 30,000 people leaving New Zealand to go to Australia, as was the case 10 years ago under the Labour Government, there will be 50,000 leaving to go to Australia. Cities like Melbourne and Sydney are projected to have populations of 9 million people each in the next 30 years—9 million people. Auckland goes to 2.4 million people in that time. Auckland needs to grow and be stronger than that to be successful. We need a strong Auckland for a strong New Zealand. A strong Auckland will come through population growth, and that population growth is imperative to our country taking its place in the future.

The Green Party may laugh, but the Green Party just wants New Zealand to be an Island State and thinks that everything will be fine and that everything—

Grant Robertson: Well, we are an island.

DAVID BENNETT: Well, an Island State in the sense of not having that strong economic basis. Oh, we are all an Island State, if you want to look at it that way, Mr Robertson. Mr Robertson can be cute around the facts, but he cannot actually understand any of the details when it comes to things.

So it is important that we follow the course that New Zealand has set itself on, and this is a course that gives us an amazing opportunity to be a very successful country. If we do not follow that choice and we do not follow that course, then we consign ourselves to what New Zealand First, the Labour Party, and the Green Party want, and that is not something New Zealanders want to see. We do not want to see—oh, Mr Ron Mark is laughing as well, yes. Mr Ron Mark, who has never won a seat, who never can win a seat, and who has back-pedalled into this Parliament for his whole career on the coat-tails of one leader of his party, and who has never been able to convince the people of one electorate to vote for him—so it is big of you to come in here and tell us what to do, Mr Mark.

Going back to that population change, which is so important for Auckland as well, if we do not have that population growth, Auckland will not have the world-class university of the future. Auckland will not have the base for that economic growth that we need so that our young people stay in this country and want to be part of New Zealand. Auckland’s strength will mean that Hamilton and Tauranga are strong and as those regions grow, then the rest of New Zealand will prosper and succeed as well, and you are seeing that through the rest of New Zealand at this moment with a strong economic base in the north of the North Island.

New Zealand has a clear choice next year as to whether we take an open approach—which this Budget represents—that is aspirational for our people and that gives us opportunities and takes the opportunity we have in that new world order, or whether we take the restrictive, negative approach of the Bernie Sanders of the world, the Don Trumps of the world, and the Lenins of the world, who would actually want us not to take our chances but to consign ourselves to being a State that does not believe it needs to compete and does not need to actually offer the opportunities to all New Zealanders. I see New Zealanders as deserving and needing those opportunities, and they should not have them taken away by a negative, restrictive Labour - Greens - New Zealand First Opposition. Thank you.

JULIE ANNE GENTER (Green): Tēnā koe, Mr Deputy Speaker. What that previous speaker, David Bennett, really exemplified was the extent to which this National Government is all about spin and not about substance, and is not willing to debate substantial issues on how we can actually create a fairer, greener New Zealand. I know that most New Zealanders want to live in a society where everyone has a fair go, where we do not have people sleeping on the streets or sleeping in cars, or kids going to school hungry, which limits their opportunities in the future. I know that most New Zealanders, even the ones who voted for this National Government, do not want that, and I know that most New Zealanders—probably all New Zealanders—love our precious natural environment, as I do. This is the reason I emigrated to New Zealand and made it my home. It is because I absolutely love the native forests, the beaches, the mountains—it is a fantastic place to live. And I know that—

Andrew Bayly: And the people.

JULIE ANNE GENTER: All the people who live here want to protect it for the long term, for their children and grandchildren. They do not want to see it be lost just to get some short-term economic growth. They want a long-term strategy that protects our people and protects our environment.

The reason I got involved in politics is that I was just trying to be a problem solver. You know, I focused on urban planning and transport because I could see there were a lot of opportunities to get those win-wins in that area, where we could get a better environment, save money, and get a better outcome for people in cities. Healthier, happier cities—what a fantastic opportunity. I had to get involved in politics because politicians in New Zealand were making the calls and deciding to put lots of money into really outdated, uneconomic motorway projects. It was such a missed opportunity. In fact, this National Government is continuing to do that. So I joined the Green Party because I could see the Green Party was the party with these smart, forward-looking policies that will actually deliver a much more successful society and will deliver more jobs for New Zealanders that will protect our environment and enhance the well-being of our citizens.

I know it is very easy for the members in the National Party to get up and claim that the Green Party members are a bunch of loonies who do not understand the economy. If there are 59 of them going around saying that, I do not doubt that people have the impression that the Green Party does not have a serious economic policy. But when you look at the reality, the substance, the Green Party is the most economically realistic party in this Parliament, and I have to say that some of the Opposition parties are not too bad, and we want to work with them.

Hon Member: I’m glad we got that one in.

JULIE ANNE GENTER: We want to work with them.

Although the National Party spin is that it is the best party for jobs in the economy, the reality is becoming glaringly obvious. Just look at the Reserve Bank statement today. That was a damning indictment of 8 years of National’s short-term approach that has mismanaged the economy. That is its short-term approach to governing. National is unwilling to take the courageous hard calls. National went against popular public opinion and went off and partially privatised the energy companies with asset sales. That was not popular, and it was also a fiscal and economic failure. It barely raised any money. We flooded the market with energy shares at one time, which drove down the price. It meant we got less revenue. And now, the cost of those forgone dividends has almost exceeded the amount that we received from those sales. So it was an economic and fiscal failure.

But what could National have done instead? It could have listened to Treasury and implemented a comprehensive capital gains tax back in 2010, when Treasury was begging it to. That would have raised a lot of revenue, which we could be using to invest in infrastructure, to deal with our population growth. It would have been a fair way to raise that revenue. It would have helped reduce the growing gap between the haves and have-nots. It would not have solved the Auckland housing bubble—there is no question about that—but it would have dampened it a bit. At the very least it was a fair way to raise revenue. It is not fair that New Zealanders—middle New Zealand—go to work, collect their pay cheque, and pay tax on that, but that rich, elite class who are able to own lots of properties can earn hundreds of thousands of dollars every year in Auckland, not lifting a finger, in tax-free capital gains. That is not fair. It is not right. It is not good for the economy. That is why we are pretty much the only country in the OECD that does not have a capital gains tax. It is not economically sensible.

So if this Government was really serious about governing for the long term and creating a sustainable economy that looked after everyone, it would have dealt with the housing crisis in the last 8 years. But it has not. Government members’ statements in this House are pretty much fact free. They do not even really believe in objective reality. If we take the Prime Minister seriously, he thinks that he can find a scientist who will give him whatever opinion he wants to hear. I do not doubt that he thinks that. But it is not true. Unfortunately, this fact-free approach to politics really undermines the public’s confidence in politicians and in our political system. As a result they are less likely to participate. That is bad for democracy, and it is bad for our society.

This is how we know that things are not going well, despite National’s protestations to the contrary. They say that GDP growth is great and the economy is going gangbusters. We know it is not working for everyone, because homelessness is at an all-time high. For the first time we are getting enormous reports of people having to live in cars and live on the streets. We know it is not working, because 62 percent of our monitored rivers are not safe for swimming. That is not right. That is not the New Zealand that we want to live in, where the majority of our monitored rivers are unsafe for swimming in. We can do better than this. We do not have to trade away our rivers in order to have jobs. That is rubbish. The GDP growth is not a solution for the increasing number of children who are growing up in poverty and going to school hungry.

Although there have been a few tinkering solutions, the reality is that this Government has not done everything it could do to eliminate child poverty. There is no reason any child in New Zealand should grow up in poverty, without a warm, safe, dry, and secure home to live in. There is no reason they should go to school and be hungry. It is not in our short-term or long-term interests to allow this to continue. The Budget is all about priorities. Budget 2016 did nothing to address child poverty. It did nothing to address climate change. It did nothing—actually, it probably made the situation worse, when it comes to our rivers, by subsidising irrigation, which does not make economic sense and will lead to increased pollution in our rivers. Government members shake their heads, but the truth is they are in denial. They are unwilling to confront the facts.

I am here, as all my colleagues are, to bring these facts to the public of New Zealand, who can see that things are not working for all New Zealanders. We can do better. Even in Opposition the Greens have delivered smart, practical policies that are already benefiting New Zealand. There is the home insulation scheme—over $300 million on making homes warmer and healthier. That was only one-third of what the Greens proposed, but it was our idea and at least National went ahead with it. Urban cycleways—over $300 million over 3 years to make it safer for people to walk and cycle in towns and cities, which reduces congestion, is great for health, and it is great for our cities. That was a Green Party idea. The electrification of Auckland’s rail network has been enormously successful. Now there is the City Rail Link, and even though the Government has not committed funding to it, it has realised it has to happen, after dragging its feet for years.

Predator-free New Zealand? What a good idea, National, but you actually have to fund it if you want to make it a reality. The Green Party has proposed a perfectly logical, eminently doable way to fund this predator-free New Zealand goal. We launched it today—the “taonga levy”, which would be a small amount of money from all the millions of tourists who are coming to our country. It would help to fund protection of our conservation estate and ridding New Zealand of predators. Would it not be great if the Government actually followed its promises through with actual policy that would deliver on affordable housing, smart green transport, carbon-friendly jobs, and protecting our rivers and our conservation estate? We can do this. It is absolutely possible. That is why I am here, because I know that it is a possibility. But it is only a possibility if we change the Government.

CHRIS BISHOP (National): At the start of Julie Anne Genter’s speech, she started off in quite a generous and kind-spirited way, talking about how parliamentarians across the House actually agree on a few things that would make New Zealand a better place: that children should not grow up in poverty, that we need secure housing, that we all agree we need jobs and economic growth, and that we need to think about how we protect New Zealand’s natural environment. That is actually true. I think all parliamentarians here actually agree, when you boil it down, on the type of New Zealand we want to live in.

Where we disagree is on the methods. Where we disagree is on how we get to that point, and too often, I think, in this House—and, actually, we hear it a lot from other Green members—members on this side of the House, on the Government benches, get accused of hating the poor.

Julie Anne Genter: I didn’t say that.

CHRIS BISHOP: You did not say that. That is—

Julie Anne Genter: I just said you’re not helping them.

CHRIS BISHOP: That is my exact point. You did not say that, but too often your colleagues say that. Members on this side of the House get accused of hating the poor and of enjoying the fact that people live in poverty and need a helping hand in life. Nothing could be further from the truth. The disagreements are around the methods. So I want to commend Ms Genter for the start of her speech.

Around the world, the values of openness and multiculturalism, and the idea that countries should engage and be interconnected with each other in the world—those values are under attack. Whether or not it is the rise of “Trumpism” in the United States, with metaphorical and literal walls being built to shut America off from the rest of the world; whether or not it is “Brexit” in the United Kingdom, where one of the subtexts of that debate was a rebellion, in some ways, against migration into the United Kingdom and globalisation; whether or not it is the rise of Pauline Hanson in Australia, with, quite frankly, very alarming and distasteful rhetoric about people of the Muslim faith and other ethnicities; or whether it is the rise of the right in Europe and people like Marine Le Pen in France—the values of multiculturalism and tolerance, of engagement with the rest of the world, and of being welcoming of foreign capital and labour are, in some ways, under attack.

We are in an interesting time in global history, because globalisation, I put on record for the House, has been manifestly and overwhelmingly a force for good in the world. In the last 15 years, extreme poverty has been halved, largely due to globalisation. Countries engaging in trade, companies and individuals engaging in trade, and interconnectedness in the global economy have lifted hundreds of millions of people out of poverty in Africa, in China, in South-east Asia, and in poor parts of the world that have, for far too long, been trapped in a poverty cycle. We need to make the case for globalisation as a force for good, but, at the same time, we also have to be cognisant of the fact that there is angst and disquiet in many communities around the world—in the United Kingdom, Australia, the States, and including New Zealand—from people who, perhaps, have missed out on the gains of globalisation.

That is a challenge for all Governments, but it is a challenge that is accepted by this Government. It is a challenge that Bill English, Steven Joyce, Paula Bennett, and the finance team absolutely accept: to take all New Zealanders with us, so that we all share in the gains of growth, but also realise and be cognisant of the fact that, as many speakers on this side of the House point out repeatedly, New Zealand’s future cannot lie in returning to the 1970s-style Fortress New Zealand economy of that era. It does not lie in putting up the shutters and trying to wall ourselves off and insulate ourselves from the rest of the world. It absolutely must lie in things like trade agreements like the Trans-Pacific Partnership (TPP) agreement, in free-trade agreements like the one with Korea and like the economic partnership with Taipei. It must lie with interconnectedness with the rest of the world so that our exporters can sell more on the world stage and so that our fast-growing IT companies can get access to markets offshore and sell their products and employ Kiwis, who then provide for their families.

It has to lie in that, because we discovered in the 1970s that trying to subsidise our way to prosperity and trying to put up tariff barriers so that we could protect and defend our domestic industries just led to inefficiency and, in the end, led to job losses. The transition to being part of the global economy was all the more painful because we denied for far too long that we could do that. We pretended that we could just live behind tariff barriers and live in a world in which we did not need to engage with the rest of the world.

The Labour Party led the charge for New Zealand entering the world economy from 1984 onwards. That is its proudest legacy. If Labour stands for nothing else or if Labour is proud of nothing else, it should be proud of those changes. The unfortunate reality and the great big divide across the House these days is between who stands for an open, confident, trading New Zealand and who stands for a return to the politics of the past. I call it the politics of nostalgia, because there are a lot of people in New Zealand who have tried to present a revisionist version of history and tried to imply that New Zealand in the 1970s was a nirvana, when in reality it was anything but.

The Economist magazine says that the big divide in politics these days is between open and closed. It is not about left and right, not about rural and urban, not about the other traditional dividing lines—conservativism or socialism on the liberal side of the spectrum. The big dividing line is about open and closed, and this Government stands on the open side of the ledger. It absolutely stands on the open side of the ledger. Our future lies as an open trading nation that welcomes foreign capital and welcomes foreign migrants to New Zealand and knows that our future lies, as David Bennett said earlier, in that Asia-Pacific growth hub that we are so connected to. We are an Asian nation and that is where our future lies.

It is regrettable that the Labour Party, which has such a proud history of opening New Zealand to the world, is now opposed to the TPP agreement, is increasingly opposed to foreign migration, and actually, very sadly, is resorting to childish and, frankly, deeply unpleasant stunts like the Chinese names debacle from last year, which I think even Phil Twyford regrets. Unfortunately, he cannot undo the damage he has done and the hurt he has caused to Chinese communities—the hurt he has caused to people of Chinese backgrounds who have lived in New Zealand for over 150 years. It was Helen Clark who apologised in 2002 to the Chinese for the poll tax, and that has all been undone, unfortunately—

Hon Annette King: Rubbish.

CHRIS BISHOP: —by Mr Twyford. Oh, Annette King says “Rubbish.” Clearly Annette is not going around to events in her electorate. She is clearly clearing the way free for Andrew Little to run in Rongotai, because if she had bothered to talk to people in her community she would know that that was deeply offensive to Chinese people—deeply offensive.

This is a Budget that continues New Zealand’s path to being an open and confident market economy, the pathway of the last 30 years. It increases funding for taking advantage of those trade agreements that the New Zealand Government has signed. It funds things like the New Zealand Story, which helps our exporters. It increases funding for Education New Zealand so that we can attract international students into New Zealand—a very large export industry for New Zealand. It increases funding for tourism, a sector that is going extremely well and welcomes people into New Zealand to take advantage of our natural environment and take advantage of our outdoors. It increases funding for innovation in our economy, which is increasingly the motor of our economy—our fast-growing ICT sector and our technology sector, like we have out in the Hutt Valley, or, as I call it, Technology Valley. It increases funding for the pre-seed commercialisation fund. It increases funding for science and innovation, that increasingly important part of the economy.

This is a confident Budget delivered by a confident Government. It is just a shame that parties opposite that have been so strong in the past on an open New Zealand are actually standing up for a closed New Zealand.

RON MARK (Deputy Leader—NZ First): Once again, it is very interesting listening to some of the speeches from the Government benches. You really would think, off the back of that speech, that everything that the National Governments did prior to 1984 was bad and wrong. They must have been such a useless bunch of governors, administrators, Ministers, and Prime Ministers! That is what Mr Bishop thinks of the legacy of his old National Party. Up in Pahīatua, in the Wairarapa and Mangamutu, we do not think that way, because the Rt Hon Sir Keith Holyoake came from Mangamutu. He is dearly loved, and people did not think he was an idiot, Mr Bishop. They thought he was actually a very kind, generous man who stood by the old principles of the old National Party—something that has been replaced by the “Liberal Party of New Zealand”, which is very evident in this Budget and very evident in the speeches that we hear today.

This Budget and these Estimates do not reflect the National Party; they reflect a neo-liberal party that has managed to take over what was once a grand old party—a party that was strong on social conscience, that was firm in its head about personal responsibility, and that managed with fiscal prudence the economy of the nation and the development of all of its people. This is a Government that thinks it is better to divest itself of such onerous responsibilities as providing housing for low-income New Zealanders—for New Zealanders who struggle because of the very low wages they earn and because of the very competitive, trickle-down, free-market economy that we have created.

This is the new National Party—the new “Liberal Party of New Zealand”—that believes in the fiscalisation of our economy, as opposed to managing the nation’s economy to the benefit of all people and not just the wealthy, elite few who happen to own, personally, millions of dollars. These are the very same people who benefited the most from the magic tax cuts that so undermined this Government’s ability to deliver competent, capable, efficient, and effective public services to the people of New Zealand, like being able to run a prison where prisoners are safe and being able to run a justice system that keeps the citizens of New Zealand safe. But, no, that does not matter to this neo-liberal party, because such things do not matter to it. It is all about the bottom line, the fiscalisation of the economy, return on investment, and to hell with ordinary New Zealanders.

It is probably reflected when one goes and looks at the pecuniary interests and sees just where these people come from. The neo-liberal National Party of New Zealand parachutes people into rural New Zealand who are not from that area. What does it say to every rural National Party member—

Hon Member: What are you talking about?

RON MARK: What does it say, Alastair Scott? What does it say to the people of the Wairarapa that the National Party would prefer to have a banker representing—

Hon Simon Bridges: He lives there. He runs a vineyard there.

RON MARK: He does not live there. Mr Bridges, the man responsible for WorkSafe, who does not know that when you climb a big ladder on a digger and you get to a certain height above the ground—Mr Bridges, you should have a harness on. But that is—

Hon Simon Bridges: Oh, this is cruel.

RON MARK: Ha, ha! But that is Mr Bridges, who brings a law to the House and then demonstrates “Well, you know, do what I say and not what I do.” It was a good morning, Mr Bridges, but you do understand the impact that your legislation—the occupational safety and health legislation—is having in terms of compliance for those businesses that you trumpet that you so support.

We were standing there at that particular event wearing hundreds of dollars of safety equipment. I kid you not—Mr Scott was there, I was there, Mr Bridges was there—we got out of that bus at the Waingawa Log Hub and we must have walked 10 metres from the bus to the area where we congregated so the Minister could have the photo opportunity, but we wore the most expensive, flashest high-visibility jackets, padded and insulated as they were, all at the cost of Centreport, all at the cost of the logging industry, all at the cost of the truckers—the people who put on the event that day. We had brand-spanking-new hard hats. We had steel-capped boots. Thousands and thousands of dollars on us dignitaries—apparently we were—who turned up to watch Mr Bridges cut the ribbon with a pair of scissors.

Hon Simon Bridges: They were sharp!

RON MARK: You know what, I did say to Mr Bridges—as he took the scissors and he walked across that uneven ground towards that big loader, I said: “Mr Bridges, have you had a safety briefing on how to use those scissors? I don’t want you cutting yourself.” He had not—he had not. The irony is not lost on us that this Government would pass onerous legislation that the Labour Party might be proud of passing. This is not lost on New Zealand First. But I did attend the civil contractors’ conference, where, again, Mr Bridges and I—he made a comment to me that we were probably seeing too much of each other that week. But he did open the event, and opened it well. But it was interesting listening to the—

Hon Simon Bridges: Now you have told everyone our secret.

RON MARK: No, no, we have not talked about it. We did attend that conference, and one of the things that came out from that conference, sitting there, listening to the debate and the discussion and the workshops, was how onerous the occupational safety and health legislation is now proving to be, and how it has got people thinking, not about productivity, not about getting efficiency—it is about every second of every day sweating over whether the procedures are exactly right and identifying each and every risk, no matter how stupid and nonsensical that risk might actually be. Such as 15 or 20 dignitaries getting out of a bus, stepping down that step on to a piece of prepared ground where they could observe someone cutting the ribbon, and having to wear hard hats, big, expensive high-vis jackets, steel-capped boots, and not being allowed to actually go and have a look at the loaders operating and the train carriages being loaded, because that would have exposed them to risk. What a load of absolute nonsense and drivel. So let us talk about some other things.

Andrew Bayly: Let’s talk about the Budget.

RON MARK: I could talk about these things for hours. Last year Mr English said of the 2015 Budget: “We are also starting to see the impact of Government social investment in approach.” With burglaries in mid-Canterbury and South Canterbury up 40 percent, and where burglars in Northland have a 97 percent chance of getting away with it, he is right—he is right. We are seeing changes in social investment.

In 2008 Mr Key promised that there would be one police officer for every 500 Kiwis. Well, when New Zealand First was in the coalition Government, we had the ratio down to one police officer for every 488. Now it is one police officer for 526. So, the Government, after 8 long years, has failed to hit its own very modest and pathetic target. It has failed to even keep pace with what it inherited from 2008. As the Rt Hon Winston Peters said, we need up to about another 1,900 police just to get to a point where we are comparable in police per capita ratios with the United Kingdom.

As for the party that professes to be rural, it is full of MPs who could not tell a cow from a bull, or the bull from the bull. And they are just about as out of touch as a tsunami of rural crime goes unreported because there are no police. Look at Carterton. We might well have a police station—Martinborough—but there is no sense in having police stations if there are no police officers rostered on. In Carterton, there has not been a police officer rostered on at the Carterton Police Station for over 6 months, which worries me as a former mayor, because Carterton District Council is contributing half the wage for someone to sit at the desk, to allow that place to be manned. Clearly, it is not being manned by police officers.

It does not matter where we look in this Budget. If I was to address some of the questions—some of the comments made thus far by the Government members. I just want to draw to their attention that when they want to address immigration—we know what the Government’s view is on immigration: open the door, allow people to be poured into this country, to help their business mates to increase their profit margins. It is about driving the minimum wage down, and we said back in March 2016 that New Zealanders were having to compete with people who were coming in and accepting below the minimum wage, paid under the table. People who were competing for jobs—jobs that Kiwis should have been taking.

When this Government says we have a shortage of low-skilled workers, well, whose fault is that? The free market, apparently, was meant to provide all of those skilled workers and those apprenticeships. Well, quite clearly, the free market model has failed, and that is why we believe the Government should have picked up its responsibility and funded trade training, just as it used to do in the days when, actually, Mr Holyoake and Mr Muldoon—National Party Prime Ministers—were doing so.

Hon ANNETTE KING (Deputy Leader—Labour): I am so pleased to be able to speak in the third reading of this debate, at a very important time of night, when so many people are listening to this debate. But I am so disappointed with the contribution from the National Party. It has been half-hearted, lacklustre, and fact-free. I think that Paddy Gower has finally got it right—they are on the way out. They are on the way out.

I want to take a serious look at this Budget, because it deserves a serious contribution in the House today. I want to look at the health budget of 2016. All those members opposite who are filling the seats over there, I want them to take notice of some of the facts I am going to give them, because they are not mine; they are independent facts about the health of our nation.

This Budget, in my view, was a missed opportunity. It was full of half-baked ideas. There was wilful neglect, and there was a lot of political grandstanding. It was a budget that had plenty of doctored figures, with a combination of smoke and mirrors. Vote Health needed $635 million to keep up with demographics and cost pressure. What it got was $579 million and a whole heap of political grandstanding. Of that $579 million, district health boards (DHBs), where the services are provided, got $400 million. Minus the $11 million taken off their baseline to pump up the Pharmac budget, it comes to $389 million, minus $89 million that they have to find in efficiencies.

The ministry provided the Health Committee with an answer to the actual cost pressures just a few weeks ago. They started at $489 million, just in the DHBs. What we have got from this Government is a lot of hype about how much money it has put into health, but it has not met the cost pressures and demographic growth of this country.

In a desperate attempt to cover up 8 years of failure in the health budget, Jonathan Coleman got his hapless leadership of the Ministry of Health to produce the biggest con in figures that I have seen for a long time. Jonathan Coleman claimed that funding for health over National’s time in Government was ahead of all cost pressures. Well, I have to tell you that the health sector fell about laughing, before weeping. Treasury fell about in despair at such incompetence with the health figures, and the patients—well, they just fell over, waiting for their hip, their knee, and their eye operations. You see, Jonathan Coleman’s figures did not include ageing or the wage costs that come from multi-employer agreements that make up the health sector: the doctors, the nurses, the allied health services, etc.

So here we had a Minister of Health trying to con the public that there was more money in health over 8 years, under this Government. That is demonstrably untrue. I have to say that I was pleased that Treasury itself recognised that the way this Government was adding up the figures was not the way they are counted, by it or by anybody else.

Then we got to wilful neglect by Dr Coleman. For months GPs have called on the Government for additional funding for primary healthcare. They wanted to see improved access. They spoke of the growing inequities and the rising costs of doctors visits that have happened in the 8 years of this Government. When Labour left power the average cost of a doctor’s visit was $29. It had been brought down under a Labour Government, by investing into primary healthcare over half a billion dollars to make it fair and equitable and easy to access. Today it is $40, and up to $70, per visit for people to go to their GP. The Government was warned that these increases in costs that patients were facing and the lack of additional funding were going to mean that GPs were going to be putting up their prices.

I found it interesting to watch Dr Tim Molloy, somebody whom the Minister himself respects and whom I have great respect for—he is the president of the Royal New Zealand College of General Practitioners—who said: “Having to decide whether you eat or go to the doctor is actually a reality.” It is actually a reality today.

Why I am raising this is that the Minister had the ability to seek additional funding for primary healthcare. In fact, Treasury urged him to seek additional funding for primary healthcare. I happen to have Treasury’s Budget-sensitive document here. This was in February, when it started urging the Minister of Health to apply for more money in the Budget for primary healthcare. It says: “This briefing provides our … views on work underway to improve access to primary health care for high needs populations. … The 2014/15 New Zealand Health Survey results released in December … indicate that access is still a significant issue. There is still a prevalence of 27% for rates of adults experiencing unmet need for primary health care. There continue to be higher rates of unmet need for Maori and those … most socioeconomically deprived areas.”

It went on to say: “We are supportive of changes to improve outcomes for those with high need” and “We understand that issues with access and funding arrangements have been known in the sector for some time and we think the sector needs to show … urgency to resolve them. We [have] pushed [the ministry] to prepare something on [very low cost access] in time for the Budget … the Ministry has not signalled anything [yet].”

It never signalled anything, and the Minister never signalled anything. He never sought additional funding for primary healthcare. That is going to mean, if you listen to ProCare Health, the biggest primary health organisation (PHO) in New Zealand, that it is going to do what it calls “cap busting”. That means it intends to bust the cap that is on the price you pay, because it cannot afford to continue to provide primary healthcare.

What I found pretty disappointing was to have the Associate Minister of Health, the Hon Peseta Sam Lotu-Iiga, in the House this week, when answering a question about funding for primary healthcare, stand up and say that $25 million extra had gone into primary healthcare, in answer to my question of what went into reducing doctors’ fees and reducing inequalities. Not one of those dollars goes into doing that, and he knew that, and in this House he was making it sound like that money had gone in to reduce the cost of primary healthcare. Dr Andrew Miller is the chair of the Manaia PHO. He said this is “an appalling inequity, entirely unethical and illogical.” That is what he has said about the Government’s approach to primary healthcare, and I think it pretty well sums up the Minister, as well.

Then we get to wilful neglect. There has been wilful neglect of mental health in this Budget. There is a lack of funding that has gone into mental health in this country. You see the reports of failures. You see the cuts in services. You see the staff lay-offs. You see the police frustration at having to pick mental health patients off the street and take them to the emergency departments of hospitals, and you see emergency departments right around New Zealand saying they are being inundated with acute mental health patients. It is wilful neglect of a very important part, as well.

Finally, we come to the half-baked ideas. We hear that this Government is going to continue with its social bond experiment. It has wasted millions of dollars, with no results—no providers willing to get into bed with it, and no bank willing to put up a dollar to run a crazy scheme where it is going to have the banks fund mental health patients getting a job, and if the providers, who are not the banks, manage to get them into a job, then the bank gets a dividend.

What did the banks want? They wanted to make sure that all risk was taken away from them. It was a social experiment that has wasted millions that could have gone straight into the provision of mental health services and primary health services. I have not even got to those poor people out there who are living with sore knees and hips and one eye needing a cataract because the Government will not do two of them. These are the people who want a health system that provides health services when they need them—when they need them—not, in sum, on the never-never, with the Minister saying: “We are doing more because we have to do more.” I will come back to that issue very shortly to show what you can do with bodgie figures.

ANDREW BAYLY (National—Hunua): Mr Deputy Speaker, at times like this I feel sorry for you. Some of these speeches we have heard today are just—

Mr DEPUTY SPEAKER: Do not bring me into it.

ANDREW BAYLY: I do not even know whether Mr Ron Mark has actually read the Budget. He did not even quote anything from the Budget; it was totally dislocated from anything we have talked about this afternoon. I was also very disappointed with the Opposition member talking about finance, because we are missing a context and the context is how New Zealand is progressing economically. I just have not heard that from anyone over on the other side of this House.

May I just take the opportunity to talk about a few of the facts. GDP growth—well, we are very lucky, are we not, because we have got very positive GDP growth. As the Opposition spokesman on finance would have heard this morning from the Governor of the Reserve Bank, and if he had read the new monetary statement, we have, in fact, got higher projected levels of economic growth over the next 3 years—3.4 percent of GDP growth, a great average that most countries around the world are absolutely envious of. Secondly, we are returning to surpluses. We have gone from $18.4 billion of debt 4 years ago to a surplus last year, to an even greater surplus. I note that in the 11th-month result of this year, the operating balance before gains and losses account was at $2.3 billion in surplus, and that means that we are going to have an even greater surplus this year if we can take that forward through to the June month. That is a great achievement by our Minister of Finance.

We have also reduced debt. No one seems to talk about it, but I love talking about it because we have reduced our Government debt from 25 percent to under 20 percent. That is a good thing. Most people who own a house or whatever know the importance of reducing debt, and we have done it very diligently during a period of great economic upheaval around the world.

We have also reduced the Government sector. I noted that the Minister of Finance complimented our Government sector and the hard-working people in it, but we have reduced the cost of it from a bloated 34 percent, as it was under the last Labour Government, to now just under 30 percent. That is a great achievement, and at the same time we are delivering better outcomes.

Also, we are turning this economy towards an export focus. Against the backdrop of a declining dairy industry, we still reported a $2 billion increase in exports coming from a whole range of export industries: tourism, construction, the beef industry, wine, ICT—shall I go on? Maybe not. We have got a growing, diversified economy.

I can say to you that this morning I have just been down to visit this fantastic little business here in Wellington. It is an animation business. It has world-leading technology. It has been developed here by creative New Zealanders. That is the type of people whom we want to see. That is the type of business we want to see being developed in New Zealand. And here it is, only just down the road here on Cambridge Terrace—an outstanding example of creative New Zealanders diversifying, creating real value for New Zealanders, and, in the process, actually creating high-value jobs.

Just talking about jobs, there have been 200,000 new jobs over the last 3 years. Even by Treasury’s forecasts, there are an extra 170,000 jobs forecast to be achieved over the next 3 years. Against that there are growing wages. Contrary to what Mr Grant Robertson said—I do not know where he got his knowledge from. It was just unbelievable misinformation. But since this Government came to office in 2008, the average wage has increased by $16,000 and is now at $63,000.

Grant Robertson: Do you want me to table the Budget? Do I need to table the Budget?

ANDREW BAYLY: Turning to the monetary thing, which I think you talked about this morning, Mr Grant Robertson, look—we are all aware that inflation is remarkably low at 0.4 percent, and it is forecast to go to 0.2 percent in the September quarter. In real terms it is virtually zero, Mr Grant Robertson. Even against that, wage-price inflation over the last 3 years is—let us quote—1.7 percent in 2014, 1.8. percent, and 1.8 percent. In my terms, that means a net increase of really just under 2 percent, and, going forward, all these figures, Mr Grant Robertson, are showing positive, until perhaps 2019 when they forecast inflation finally getting to 2.1 percent. Even you were sceptical about that this morning, Mr Grant Robertson. So we have got growing wages, and that is great for New Zealanders.

What does all this mean? It means options. It means options for all of us to be able to spend on the things that we really want to spend on to improve New Zealanders’ outcomes, and it is also about sharing the benefits with all New Zealanders.

I just want to go back to the Budget—

Mr DEPUTY SPEAKER: Good move.

ANDREW BAYLY: There has been $761 million put towards growing an innovative economy. We are making a remarkable investment in science and innovation. We put in another $411 million in this Budget, and we are hoping to get it to $1.6 billion by 2020. We are absolutely committed to the science and innovation sector.

There is $257 million into our tertiary institutes. Also, we have got regional development—$100 million thrown into that.

But I just want to turn to the issue of skilled workers. We know that a skilled workforce is the powerhouse for a thriving economy. Budget 2016 allocated $14.4 million over 4 years, which means that we are going to get another 5,500 new people into apprenticeships. I want to remind you that there are already 42,000 people in apprenticeships; this will take us close to 50,000 people. But what is more, we have put in more money to help Māori and Pacific Islanders, and we are hoping to get another 2,500 into apprenticeship schemes. This is about creating the opportunity for people to get great jobs, get paid well, and be able to afford the houses that they need to look after their families. I am fully in support of all those initiatives around that.

Education—huge investment. There is nearly $900 million into building new schools. I was just going back through some of the press releases. The Hon Nikki Kaye is just perpetually going to new schools, telling them how much we are going to invest in them to improve their lot. We are absolutely committed to creating the right environment for our children to learn and benefit from a great education outcome. This is a huge investment in the Budget, nearly $400 million into early education centres, and already we have got significantly high participation rates in it. I fully endorse the approach and the investment in that area, because we want to see our young toddlers going into early education centres, getting the right groundwork for schooling, and then carrying on through our great schooling system.

Health—it was great listening to Annette King talking before. She has got a good point that health is really a growing investment for New Zealand. We are investing. We are putting $16.1 billion into it. A staggering $2.2 billion was invested or allocated in this Budget. The whole argument around health that I hear is that because we have got 69,000 new immigrants, on a per capita basis we must be going backwards. On my reckoning, $2.2 billion is a significant increase over the existing population and current budget. Most of that is going into district health boards—$1.6 billion. There is $170 million million into disability support. There is $100 million into elective surgery, making it 148,000 new surgeries that we do every year, mainly for our older people, which is great. Bowel cancer, tobacco prices, and the increase in Pharmac Ms King acknowledged.

The other area I want to talk about is the environment. I think it is great that we are starting to turn our minds to a significant investment, carrying on with the $100 million that we already invest. I greatly appreciated the announcement by the Hon Paula Bennett on the emissions trading scheme changes. The additional $100 million that was set aside in this Budget for cleaning up our waterways, the targeted pest control, the investment in reducing or eliminating wilding pines, and the more recent announcement about being predator-free by 2050 are, I think, phenomenal and courageous and wonderful initiatives that we should be pursuing.

Also, I should acknowledge the Minister of Transport, who is sitting in front here, for the wonderful initiatives around electric vehicles—trying to increase them and get them up to about 60,000-odd by 2020.

I think those are great initiatives, and when you think about all of the other good stuff in this thing—the policing, the $300 million that the Hon Judith Collins got—I could just go on, but, unfortunately, I have got to sit down. Thank you.

CHRIS HIPKINS (Labour—Rimutaka): I think perhaps the greatest revelation in this debate so far today has been that the biggest issue occupying the mind of the Minister of Finance is the colour that local government candidates are using on their billboards up and down the country. He has taken the time to go and do a detailed study of the colours that mayoral candidates are using on their election hoardings. That seems to be Bill English’s greatest obsession. I was interested to learn that he did not seem to realise that yellow and black are actually the colours of Wellington, seeing as he has lived here for most of his political career.

But I digress, because at least that is more substantive than the issues occupying the time of the National Government backbench, whose biggest issue for the week thus far appears to have been the way airports advertise lost luggage—lost luggage. The advertising of lost luggage is the biggest issue on the minds of the National Government backbench. Forget about the children living in poverty or the people living in cars—“No luggage left behind” is going to be the campaign slogan for the National Government at the next election. It is going to free the airports of all that pesky red tape about the way they advertise lost luggage, and the economy is simply going to take off. It is going to take off as a result of this revelation coming from the National Government backbench about the advertising of lost luggage. We are confronting the reality that many aspects of the economic system that we currently have are broken, and the National Government’s best attempt to fix it is to change the way the airports advertise lost luggage.

But it is actually a very serious issue—the economy, that is, not the luggage—and it is not being addressed by this National Government. We have to accept the reality: there is a large proportion of the New Zealand population that is feeling left behind and forgotten under this National Government. And we have to accept the reality that, in the current economic environment, effort and contribution have been decoupled from reward.

There are a lot of people out there working really hard who are not getting ahead and who are not being rewarded for that hard work, while they see other people doing exceptionally well who are not making as much of an effort. Those at the top continue to get richer, while those who go to work every day to help create the nation’s wealth, who toil away, feel that they are being left behind and that the Government is simply ignoring them. They have had enough of John Key and Bill English telling them that things will be better tomorrow—things will be better tomorrow—and that there is a brighter future on the way; that brighter future that never seems to arrive. Eight years into the tenure of the National Government, the voters are still waiting for it to deliver on the promises it made in 2008.

But, of course, we know that the National Government is governing in the interests of those at the top and not the interests of the hard-working New Zealanders who generate this country’s wealth. While families up and down the country see the fees that they are being asked to pay for their kids’ education going up and up, in early childhood education and in schooling, they see that this Government’s priority is to increase the funding for the kids who attend private schooling. And they see that while they are shut out of the housing market, while they cannot get a foot on the property ladder, this Government is quite happy to see those houses that are available hoovered up by property speculators. This Government has no real plan to deal with this.

These families see that while there are people desperately in need of specialist appointments so that they can get the healthcare they need, those who can afford health insurance can go straight in and get the healthcare they need while those who cannot get left behind, languishing—not even on waiting lists, because they cannot get on to health waiting lists under this Government. While hard-working New Zealanders have been clobbered by increases in GST under this National Government, they see the vast bulk of the tax cuts that the Government has dished out going to those on the highest incomes who least needed it.

And, of course, then we see that the biggest priority coming out of the Government this week is the recovery of lost luggage—in fact, not even the recovery of lost luggage. If it was recovery of lost luggage, I would have some sympathy for it, but it is not even that. It is just the advertising of lost luggage.

We have to confront the reality that prosperity and the benefits of economic growth have not been shared in the current economy, and, as a result, trickle-down economics has been exposed as a massive lie. Let us put some numbers into this—70 percent of New Zealanders are earning less than $48,000 per year.

So when the National Party comes along next year and promises a big bribe in the form of tax cuts, bear in mind that the vast bulk of New Zealanders probably will not benefit at all from that. Any benefit that they might have had from that has more than been taken away by the other charges that they are encountering when it comes to their kids’ education, when it comes to their healthcare, when it comes to their transport options, because under the user-pays environment the people at the bottom pay more while the people on the highest incomes do significantly better.

Here is another revealing statistic about the economic track record of this National Government. Working families’ share of GDP growth, under this National Government, has fallen by $50 per week. There are 50,000 more unemployed New Zealanders than there were when this National Government took office. It inherited the lowest unemployment rate in the OECD and it has added 50,000 more people to the unemployment queue.

Let us compare the track records. National Government members think that they are brilliant economic managers. Well, they might be brilliant economic managers if you are on the highest income and at the top of the economic heap, but not for the vast bulk of Kiwis. Fifty-one percent—more than half of GDP growth—went to workers during the tenure of the last Labour Government. Only 37 percent of the growth has gone to the workers, the people who generate the wealth of this country, under this National Government. Forty-four percent of Kiwis—that is just under half—did not get a pay rise in the past year, and there are now 82,000 young New Zealanders under the age of 25 who are not in education, employment, or training; they are doing nothing. Their future has been written off by Bill English, who calls them “pretty damned hopeless”. Rather than actually backing them and providing support so that they can get ahead, Bill English would rather simply say that these guys are “pretty damned hopeless” and are not worth any support.

This is a Government that promises to make progress rather than actually delivering progress, because progress requires a plan. It requires leadership, it requires vision, and it requires a bit of humility. None of those things are present within the current National Government. It has no plan to fix the housing crisis. The biggest issue, the biggest challenge, facing the Government is the housing crisis, and it has no plan to fix it, because Nick Smith thinks that the crisis is simply a figment of people’s imagination. John Key thinks that the use of the word “crisis” is simply emotive. Anne Tolley says that people living in cars is nothing new. Steven Joyce thinks the housing crisis is a good thing. That is what he has actually come out and said—that he thinks the housing crisis is a good thing.

So what are the solutions that National has proposed to this most pressing issue? Well, it has got the $1 billion fund, which actually turns out to be only a $30 million investment of Government funding because the rest of it just simply recirculates. It had the flying squad stunt. Whatever happened to that? It was these flying squads that were going to identify any people—which turned out not to be flying squads at all. Perhaps they were out looking for their luggage as well.

Then, of course, it has got the emergency housing grants that cover 7 days of accommodation, when it takes 155 days, on average, for somebody to find a home if they are homeless. But that is OK, because they will get a week of hotel accommodation. It is only the other half of the year that they are going to have to find somewhere to live, maybe a bridge or a shopping trolley. It is paying the homeless $5,000 to get out of Auckland. Well, how many people have taken that up? Very, very few.

Then, of course, we have got the special housing areas that have resulted in fewer than a thousand houses being built. It is cutting the building tariffs, which resulted in the price of building materials going up. We have got the surplus Crown land promised by Nick Smith. That was going to deliver 500 hectares of land, and it delivered 13, once you took out the substations and the cemeteries and Government House up in Auckland. Then, of course, we have got the selling off of State houses to the merchant bankers and the offshore investors and pretty much anyone who will buy them, because the Government is desperate to get rid of them, no matter the cost. But I think the pièce de résistance of National’s housing plan is its selling of P houses to unsuspecting first-home buyers. I think that that really deserves a special mention because not only does it show it has not got a plan; it shows that it is spectacularly incompetent.

I did not get the chance to go into the National Government’s failures in the education area, but I will simply point out that every parent in the country is going to pay more for their kids’ early childhood education and more for their kids’ schooling, because this Government, again, has frozen the budget, which means that that funding is going backwards.

ALASTAIR SCOTT (National—Wairarapa): While Nuk Korako might be looking for his lost luggage, the Labour Party continues to carry around its old baggage. It has not adapted. It continues to live in the past. It has no new ideas, and any new ideas are shot from the hip. In fact, some of the rhetoric, the speeches that we hear, from the Opposition members across all three Opposition parties—one wonders what country they are living in, because they continue to talk the place down. They continue to say that New Zealand is doing so badly, that there are so many bad things happening here. Things are miserable, woeful. But the opposite is true—the opposite is true.

We are in a construction boom—a construction boom. More apprentices are involved in the building industry and across the trades than ever before. That is what is happening. More people want to live in New Zealand, and Opposition members call that a problem. People are voting with their feet. They are choosing to stay in New Zealand. Why is that? Well, that is because there is opportunity here. Kiwis are coming home from the UK and from Australia, and, most importantly, they are not leaving, because they realise the opportunity is here.

The Opposition members blame the immigrants for the apparent “problem” of this construction and apprenticeship boom that we are in. They blame the immigrants. But, in fact, the number of immigrants that we have brought in as a country over a very long time has been relatively stable—around 40,000 to 50,000 a year. We bring those people in to fill the gaps, to fill the skills gaps that we are not able to fill here today. We do that because we are building a nation. We want to enable those skills to be used and utilised effectively and efficiently, and particularly in today’s climate and around the IT sector. If you look on www.seek.co.nz there are a lot of jobs available for people and highly skilled sectors of the economy.

So that is what is happening. The economy is growing—the economy is growing at around 3.5 percent. That is an increase in the projected growth rate. That was announced just today by the Governor of the Reserve Bank. That is good news—that is good news. It is incredibly good compared with other countries of the world, and that is why we have an official cash rate of 2 percent. Other countries in the world have negative interest rates. That is how poorly run their economies are. It demonstrates the strife that the European economies are in—when one puts money into the bank to keep it safe, the depositor pays the bank to look after their money. You do not get any interest at all, such is the deflation and the pessimism that is out there.

Here we have a positive growth rate, projected to be 3.5 percent. We have projected unemployment to continue to fall. These are all signs of a positively growing economy. Just today in the select committee we heard from immigration people that there was increased inquiry. More people want to join this economy; more people want to come into New Zealand. They are coming from countries like the UK and Australia because of things like the Brexit situation. The instability of some of the other countries around the world is driving people to economies that are stable, that are reliable, and that have opportunity for their families.

These people do not have Chinese-sounding names. These people have American-sounding names: names like Chad, Brad, Angelina, and Chuck. Now is that a problem? Is that problem for the Opposition, and will that be a problem for Phil Twyford? Perhaps it might be.

Grant Robertson: I don’t like the name Chuck.

ALASTAIR SCOTT: Well, you might develop a policy around that, Mr Robertson. American-sounding names may not be accepted here based on a shoot-from-the-hip policy derived from the Labour Party.

The alternative is not an option. In the Green Party, Miss Julie Anne Genter suggested that there was credibility on that side of the House, in her party, around its economic views and economic policies. But then her co-leader wants to halve the value of houses in Auckland—halve the value of houses in Auckland. How she is going to do that was not explained, but that is the endgame. That is the sister; the brother in the partnership—or what can we call the relationship nowadays? The green-red—what is the relationship now described as? Is it a relationship still? But the Labour Party does not support that policy—and rightly so. It is ludicrous. So when Julie Anne Genter suggests that they have credible economic policies on that side of the House, unfortunately, the proof is in the pudding, and they do not.

Then we had Ron Mark. Well, that was an interesting contribution. I could only describe his contribution as quaquaversal. Just to help you, that means he is going off from the centre in all directions—meaning nothing, saying little, but aiming with his shotgun approach and hoping to stick something somewhere. Of course, the closed-door policies, the anti-immigration policies, the anti-growth, the anti–Chinese, the anti - free trade—the “No. No. No. Party”—is what makes that party lack credibility, lack aspiration, and is another example of a party living in the past. No aspirations and no aspirational goals for Kiwis to aspire to.

So, as the Minister said earlier, this Government is careful about how it spends taxpayers’ money, because the Opposition parties do not consider whose money they are responsible for. So, for example, Grant Robertson’s 100,000 house programme—let us say 10,000 houses a year. That is $5 billion of taxpayers’ money. Even if he was to able to recycle that at half a million dollars a house, let us say, that is a lot of money. That is a big amount of money, and he forgets that the taxpayer is going to have to pay for it. Where are those houses going to be built? Well, there are going to be thousands of rugby fields compulsorily acquired by Andrew Little, because that is what he said would happen. He would compulsorily acquire private property to fulfil his dream of being the largest house-building company in the country.

Realistically, what is going to happen when Mr Little turns up to the auction sites, bidding for land to build his houses, under his design and in his colour schemes, and whom is he going to compete with? Whom is he going to compete with? He is going to be competing with first-home buyers. He is going to be competing with people who are in the queue, waiting and bidding for a property. He is simply going to increase the demand for housing, and we understand that increased demand can do only one thing, and that is to put prices up.

The housing ripple effect is affecting the Wairarapa. It is affecting provincial New Zealand. It is enabling people to be in jobs. It is creating confidence in the regions. People are building, with more sparkies and plumbers and construction. Capital Precut Solutions is an example of a business in the Wairarapa that is doing very well by exporting pre-cut framing from the Wairarapa to Auckland. This is an example of how provincial New Zealand is doing well under the confidence and the stability of this Government. Software companies in the Wairarapa are exporting throughout the world. That is because we are connected through the Rural Broadband Initiative, and Fab Lab is another example—connecting to the world using high-speed ultra-fast broadband, enabling schoolchildren in Pongaroa to be connected to their colleagues across the world, anywhere in the world, anywhere on this planet.

This is a very good Budget. It is coming from a stable and reliable and aspirational Government, and that is why I commend it to the House.

GARETH HUGHES (Green): Kia ora. Ngā mihi nui ki a koutou. Kia ora. In this debate we have actually touched on some pretty interesting ideas, concepts, philosophies, and history, and I would like to touch on that in this last contribution of the session this week.

The contribution I want to talk about is what Chris Bishop talked about, because it is rare that we actually talk about things like history and ideology in this House. He was talking about neo-liberalism and he was talking about issues like globalisation. These are really important because they are live issues in terms of the debate of what has happened in our history, but they are also critically important around how we go forward as a nation and what are the values we take in terms of our governance, our institutions, and our economies, so I think it is important that we spend a little bit of time debating it in this House.

Mr Bishop was trying to frame it as a choice between the current ideology, which is neo-liberalism—which you can characterise around the primacy of markets, powers for corporates, rent-seeking behaviours, ignoring some of the externalities, and a lesser role for the State. We see this classically in the housing market at the moment, where, at a time of a housing crisis and when people are sleeping in cars and on the streets, the Government is literally still selling its traditional role, which is providing housing for those who needed it with State houses. So those are some of the factors, and he tried to portray it as a simple choice between the status quo, which is this economic and governmental philosophy, or Fortress New Zealand of the 1970s. It is not that cut and dried, and it is actually a false dichotomy to try to present it like that, because it is not a choice like that. In fact, we live in a complex world where we can make choices—and do make choices every day—about the values we bring.

The same dichotomy was brought in when it came to globalisation. It was a choice between either globalisation or a head in the sand isolationism, which, of course, is not a true choice. We can have a more globalised world without some of the more negative impacts—what “big G” globalisation means. Basically, in the last 30 years, it has been about growing powers for corporates to dictate rules and laws and take judicial cases to international tribunals, which we see once again in the Trans-Pacific Partnership agreement. We see laws that are favouring capital mobility, but not the mobility of individuals. There was a theory that everyone would be brought to the same standard, but, in fact, what we have seen is a global 1 percent now that owns as much wealth as the other 99 percent—1 percent owns as much wealth as the other 99 percent.

Mr Bishop tried to argue that there were only the choices between neo-liberalism or Fortress New Zealand and between globalisation or isolationism, and then he tried to argue that, in fact, it was a good choice that had been made because we had brought everyone with us. I do not know whether Government members are seeing what is happening outside, as they speed by in their Crown limos or hang around in the Koru lounge or at glitzy events with the mates who donate, but when you look at New Zealand, we have not brought everyone with us. In fact, what we see is that the richest 10 percent now own 60 percent. We were one of the most equal and egalitarian countries in the world, but we have seen the fastest growth in inequality. We are literally seeing people begging on our streets. We clearly are not bringing everyone with us. We are not bringing everyone with us when we have got 15 kids dying every year and 42,000 kids hospitalised every year as a result of cold, damp, unhealthy housing. What we have seen is wage growth stagnating, in real terms, over that period that Mr Bishop was trying to defend, yet productivity is growing magnitudes more. What we have seen are the gains of that globalised, market-driven, corporate rule - driven world going to a minority. We have not brought everyone with us. In fact, we have left a huge number of people behind.

Mr Bishop also said that you cannot subsidise yourself to prosperity. We do not have to look to the past for inspiration. I think we can look to some of those values and set a bit of an exemplar. But no one is talking about going back to the 1970s and republishing all the old laws and regulations and having price freezes that the National Government brought in in the early 1980s. It is ironic, because this Government is one that is the most political that we have seen in a long time, and the most short-term - focused we have seen in a long time. It is a Government that makes these vacuous, empty, long-distance promises that we see—of being pest free, or having a 50 percent reduction in emissions while our emissions go up. It is ironic because, in fact, this Government has been the most interventionist—interventionist, of course, with its friends, be they Skycity, or the oil industry, or Saudi sheiks.

What we have seen as a result is that we have left people behind. We have seen fragmented communities and a reduction in democratic trust and engagement. We have seen a country that has given up on the idea that everyone in this country deserves a fair go, on egalitarianism, and on the old concept that jack was as good as his master. We are seeing a more stratified New Zealand—a different New Zealand where some kids never get to see the sea, where kids do not learn how to swim, where kids do not learn how to read, and where they are sleeping in cars or in garages. We are also seeing a concept where we are putting the environment in conflict with economic growth—as if that was a true choice, because we know we cannot mine or pollute ourselves to prosperity. The result has been a whole generation locked out of homeownership.

I talk about these issues because my generation has grown up with these concepts and has not known anything else. We cannot remember those old reforms. New Zealand has had a number of these periods of change, and this is why I am interested in talking about them. In the 1890s we saw the first revolution, with the Seddon Government, with the old-age pension and universal suffrage. In the 1930s, of course, was the first Labour Government, and then in the 1980s we had the fourth Labour Government dismantling it. New Zealand operates from these 40-year periods of transformational change. My generation has grown up entirely within it. When you look at this generation, it could be the first generation in a couple of hundred years that is poorer than their parents were at this stage. This is a generation indebted with $15 billion of student debt, and a generation that cannot get into housing.

The difference is that for my parents, an affordable education, a job for life, and State support to get into a house were just considered the norms under that values set. Today they are considered luxuries for my generation—a job, a house, and an affordable education. We are seeing a population that is sicker, poorer, less equal, more isolated, more marginalised, less participatory in our democracy, less happy, more medicated, and living in crowded, dirtier cities, and there are people begging on the streets.

It is something I think we need to debate more, instead of the point-scoring to and fro. Let us talk about history, because there were benefits from the reforms. But let us also honestly look at the costs and wonder what could be the next change for this country. Could it be one where we incorporate those old values of looking after people, of not leaving people behind, of actually working together and designing more modern, open, democratic institutions—perhaps using digital technology? There is a host of exciting changes—

Mr DEPUTY SPEAKER: I am sorry to interrupt the member, but the time has come for me to leave the Chair.

Debate interrupted.

The House adjourned at 6 p.m.