Tuesday, 25 July 2017

TUESDAY, 25 JULY 2017

TUESDAY, 25 JULY 2017

Mr Speaker took the Chair at 2 p.m.

Prayers.

Visitors

Australia—Standing Committee on Agriculture and Water Resources, House of Representatives

Mr SPEAKER: Honourable members, I am sure that members would wish to welcome members of the Standing Committee on Agriculture and Water Resources from the Australian House of Representatives, led by the Chairperson, Rick Wilson, who are present in the gallery.

[Applause]

Points of Order

Parliamentary ICT System—BlackBerry Service and Intranet Changes

RICHARD PROSSER (NZ First): I raise a point of order, Mr Speaker. I wish to bring to your attention two concerns regarding the reliability of parliamentary information technology. I would respectfully ask you to investigate how it was that on 14 July, all Apple iPhone users lost email access through BlackBerry, why now, 11 days on, some MPs are still without email access on mobile devices, and whether there is an issue with Parliamentary Service testing systems before deployment, because we do have reports of compliant non-Apple devices struggling with the BlackBerry service.

The second issue is that I would respectfully ask whether you are able to report back to the House as to why the intranet has been very heavily modified just before the final sitting block of this Parliament in a way that, effectively, treats core parliamentary business such as Hansard, the Order Paper, and oral questions as options to be located manually when, in fact, they are critical functions.

Mr SPEAKER: I will have a look at both of those matters and respond directly to the member.

Written Questions—Interim Answers

CHRIS HIPKINS (Labour—Rimutaka): I raise a point of order, Mr Speaker. I do have a matter that is more directly related to the functioning of the House, and that is to do with interim answers to written parliamentary questions. Under the Standing Orders and Speakers’ rulings, Ministers can give an interim answer only where there is substantial collation required for an answer. We have seen a pattern in the last week or two where Ministers are giving interim answers to a wide range of written parliamentary questions and potentially deferring the obligation to provide an answer until after the period in which the Parliament is dissolved, which means that they then will not be answered.

The Opposition has an obvious concern about that, in that we think that Ministers should supply an answer if it can be given and is consistent with the public interest, and they should be using those interim replies only if they cannot collate the information in the time frame available. If they are giving an interim reply, they should certainly give an indication as to when that information is likely to be available. We have had examples where Ministers have given a reply saying that they will make the information available when they can. The member has then gone back and said “When will that be?”, and they have given another answer that says “When I get around to it.” or “When I can.”, without giving any specificity around when that will be. Clearly, there is an agenda there to defer it. We want to make sure that that information is released before the election.

Mr SPEAKER: That is a very important part of our democratic process. I assure the member I will look at that immediately after question time and, hopefully, will be in a position to make a more substantial ruling to the House tomorrow.

Oral Questions

Questions to Ministers

Todd Barclay—Southland Electorate Office Allegations, Prime Minister’s Involvement

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

Rt Hon BILL ENGLISH (Prime Minister): Yes.

Rt Hon Winston Peters: Why did he feel the need to interfere in an employment dispute between another MP and a staffer?

Rt Hon BILL ENGLISH: I have no responsibility for that matter.

Rt Hon Winston Peters: Why, on the Barclay issue, was he in constant communication with Glenys Dickson over a long period of time?

Mr SPEAKER: Again, in so far as there may be prime ministerial responsibility, the right honourable Prime Minister.

Rt Hon BILL ENGLISH: I have no comment to make on that, but I am surprised that after the member’s tour of the regions 8 weeks out from an election, this is the biggest issue that he has found.

Rt Hon Winston Peters: Supplementary question. [Interruption]

Mr SPEAKER: Order! I apologise to the member. I just need less interjection from both sides of the House.

Rt Hon Winston Peters: Talking about big issues in places like Gore, if he was only peripherally involved, why was he in such frequent communication with Glenys Dickson late at night and early in the morning?

Rt Hon BILL ENGLISH: As I have said, I have no comment to make on that, but I know that when the member went to Gore, he would have found a strong economy looking for skills to do the jobs that need to be done, and not nearly enough complaints for the member to feed off.

Rt Hon Winston Peters: Talking about meetings in the South and Invercargill, where there was no more seating, if he is denying this frequency, will he release his relevant phone records regarding his communications with Glenys Dickson?

Rt Hon BILL ENGLISH: Again, I have no ministerial responsibility for that, and I would expect that at some time before the member decides who the next Government is, as he alleged today, he will probably raise some more important issues.

Rt Hon Winston Peters: Talking about the most important issues—

Mr SPEAKER: Order! Can we have the supplementary question, please.

Rt Hon Winston Peters: Talking of the most important issues, why does he keep changing his story on the Barclay matter?

Rt Hon BILL ENGLISH: I have not.

Richard Prosser: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! I have a point of order.

Richard Prosser: Mr Speaker, I seek your guidance—and I wonder whether you could contemplate this issue and come back to the House at some point—with regard to the Prime Minister’s answers to the Rt Hon Winston Peters’ questioning. I am referring you to Speaker’s ruling 171/2, which says that “Ministers can be questioned only on matters for which they have responsibility. If they have made statements that impinge on those responsibilities, they can be questioned on them, regardless of the capacity in which the statements are made.” I would contend that matters such as this, which do clearly impinge on the perception of the integrity of the Prime Minister, are matters on which he can be questioned.

Mr SPEAKER: I greatly appreciate that point of view raised by the member. We have been over this territory substantially. There has been a range of statements made around this issue by the Prime Minister—perhaps with some ministerial responsibility, perhaps as leader of the party, perhaps as a former member for this particular electorate. I think the only person who could decide whether he has made any particular comment in regard to this matter as a Minister or as Prime Minister is the Prime Minister, and so he has answered.

Housing—Homelessness and Emergency Housing

2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he have confidence that his housing and social Ministers have homelessness under control, given the number of grants for emergency housing has almost hit 30,000 in nine months, when only 1,400 were expected for the whole year?

Rt Hon BILL ENGLISH (Prime Minister): Yes, Ministers are doing a good job. The 30,000 grants apply to around 8,000 actual people, because a number of them get successive grants. Over the past year the Ministers have overseen the first ever direct Government investment in emergency housing, amounting to more than $300 million and supplying up to 8,000 places for transitional housing. The member cannot have it both ways—on the one hand, criticising the Government for not doing enough and, on the other hand, criticising the Government for spending too much money.

Andrew Little: Does he stand by his statement yesterday that “I don’t know why people are complaining” about him spending $140,000 a day putting homeless families in motels. Does he not understand that he caused this crisis by selling and knocking down thousands of State houses and not replacing them?

Rt Hon BILL ENGLISH: The member is simply wrong in his assertion about State housing. There are more State houses than ever, and I am pleased to say that the Government has taken a large number of initiatives, including the Housing Infrastructure Fund designed to ensure that tens of thousands more houses are built.

Andrew Little: When a study from Yale says New Zealand has the worst homelessness problem in the developed world, is he going to admit—without ducking and diving all over the show—that after 9 years his Government has failed in its basic duty to put a roof over people’s heads?

Rt Hon BILL ENGLISH: If there is any failure in basic duty, it is the basic duty of the Opposition to be a good critic of the Government, which it has certainly failed in. Even Yale University itself says that the absence of an internationally agreed definition of homelessness hampers meaningful comparisons. In other words, the comparison is meaningless.

Andrew Little: Does he feel any responsibility for the children doing their homework by torchlight in cars, for the families sleeping in freezing garages, or for the homeless people dying on park benches?

Rt Hon BILL ENGLISH: That is why the Government has gone to all the trouble of investing $300 million in emergency housing for the first time ever and setting out on a number of major initiatives to ensure that tens of thousands of new houses are built both by the Government and by the private market.

Andrew Little: Given that overseas speculators are driving up housing costs, will he ban those speculators from buying our homes; if not, why is he protecting overseas speculators rather than the homeless in New Zealand?

Rt Hon BILL ENGLISH: It is time that the Opposition stopped blaming New Zealanders with Chinese-sounding names for what goes on in the housing market. In case the member has not noticed, house prices in Auckland are flat to falling.

Andrew Little: Can he explain why, when we have the worst homelessness problem in the developed world, his latest move as Prime Minister is a $400 million tax cut to the richest 10 percent? [Interruption]

Mr SPEAKER: Order!

Rt Hon BILL ENGLISH: I think we do have the worst Labour Party in the developed world—I do not think there is any doubt about that. The homelessness comparison is irrelevant, and the Government is very happy with the initiatives it has announced in the last couple of weeks, with the Housing Infrastructure Fund that will enable 60,000 new houses and Crown infrastructure partnerships that will enable tens of thousands more houses to be built.

Andrew Little: After 9 years, how does he feel to know that New Zealanders will remember his Government as the author of the worst housing crisis in our history, and its legacy as being 41,000 homeless New Zealanders?

Rt Hon BILL ENGLISH: In a growing economy and with a growing population, we need more houses. Unlike that member, we are investing to support the infrastructure for more houses. That member says he wants to take a breather before he has even got on the job.

Housing Supply—Crown Infrastructure Partners

3. ANDREW BAYLY (National—Hunua) to the Minister of Finance: How is the Government helping councils increase housing supply?

Hon STEVEN JOYCE (Minister of Finance): On Sunday the Government announced that Crown Fibre Holdings, our successful ultra-fast broadband investment company, will be repurposed as Crown Infrastructure Partners to introduce new ways of funding the roading and water infrastructure needed to build further houses in our fast-growing cities. Right now, some councils are starting to come up against their borrowing limits, limiting how much extra land they can open up for development and constraining their supply of housing. Supported by up to $600 million in capital from the Crown, Crown Infrastructure Partners will use private capital to keep the debt off councils’ books and ensure that growth pays for growth in our fastest-growing cities.

Andrew Bayly: What are the first projects Crown Infrastructure Partners will assess?

Hon STEVEN JOYCE: The Auckland South project is the first that will be assessed as a possible special-purpose vehicle project. It forms part of a large $387 million infrastructure development opportunity to the south of Auckland City, including investments in water networks, new train stations, and major new roading arterial projects. If successful, this will increase the supply of new houses in that area by around 17,800, where the current infrastructure can support only 3,000 houses. Another project is in Wainui, an area to the north of Auckland. Investments in roading and water infrastructure there have the capacity to lift development from 2,000 houses to 5,500 houses.

Andrew Bayly: Will Crown Infrastructure Partners be open to councils around the country?

Hon STEVEN JOYCE: Yes, it will. The goal with Crown Infrastructure Partners is to transform how local council infrastructure is funded in high-growth councils throughout New Zealand, using the commercial expertise and experience that Crown Fibre Holdings has gained through the successful ultra-fast broadband programme. As such, it will be open to all councils that put forward high-quality development proposals that fast track the supply of new housing and supply funding over time to support their finance.

Andrew Bayly: What other moves has the Government made in respect of housing infrastructure?

Hon STEVEN JOYCE: Just over 2 weeks ago, the Government announced the funding for nine key local infrastructure projects as part of the $1 billion Housing Infrastructure Fund. The interest-free loans and advances extended to the fast-growing councils of Auckland, Hamilton, Waikato, Tauranga, and Queenstown Lakes will open up enough land to build 60,000 new houses over the next 10 years. Crown Infrastructure Partners is the logical next step in infrastructure funding, following the Housing Infrastructure Fund.

Roading, East Coast—State Highway 35

4. MARAMA FOX (Co-Leader—Māori Party) to the Minister of Transport: Will he be committing any more resources to State Highway 35 over and above what was announced yesterday that would enable other road upgrades, and not just toilets and rest stops?

Hon SIMON BRIDGES (Minister of Transport): Firstly, can I just acknowledge the member’s advocacy for the region and make quite clear—look, as she said, there has been investment through the Tairāwhiti Economic Action Plan. There is a lot we are doing in the Gisborne region, whether it is passing lanes, whether it is the Mōtū Bridge, or whether it is the rest areas she mentions, the Horoera Bridge, the “Great Rides”, and more. Between 2015 and 2018 the National Land Transport Programme (NLTP) invested approximately $113 million into the East Coast’s land transport network. What I can say to the member is, given the very large capital investment that we have seen and that is coming through the next NLTP from this Government, I expect there will be additional investments made both into the East Coast generally and also into State Highway 35 specifically.

Marama Fox: Can the Minister explain the correlation between the highway number, 35, and the number of years, 35, that the slip south of Ruatōria has reduced the highway to one lane through a particularly windy stretch of road?

Hon SIMON BRIDGES: I suspect probably not. I think what I can say to the member is, look, I totally acknowledge as Minister, but also as a New Zealander, that we have real issues with resilience. We have seen that in Kaikōura, we have seen that in the Manawatū Gorge, we have seen that in Coromandel on State Highway 25, and there are those issues, also, on the East Coast. I think what is good news is with the very strong economy we have we are able to invest back into these issues to make for more permanent resilient solutions. As I say, I appreciate the advocacy that the member makes.

Marama Fox: Given that the slip has existed for 35 years, will he agree to an investigation to find out what it would take to fix the road on State Highway 35 south of Ruatōria; if not, why not?

Hon SIMON BRIDGES: I am uncertain about that specific slip. I think what we can say, though, is through the Tairāwhiti Economic Action Plan we are developing an integrated transport priority plan for the region. We are investigating upgrades on State Highway 2 from Napier through Gisborne to Ōpōtiki. We have got an investigation under way into upgrades to State Highway 35 and its connecting routes, and that may well deal with the issues the member raises. Then also, look, there are the things that she mentioned in the substantive question about rest areas, Horoera Bridge, and the 7 kilometre link between State Highway 2 and the Mōtū “Great Ride”.

Budget 2017—Tax Cuts

5. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Why is it a higher priority for him to cut taxes for members of Parliament than it is to invest more money than is in Budget 2017 into health, housing, or education, or to immediately restart contributions to the New Zealand Super Fund?

Hon STEVEN JOYCE (Minister of Finance): It is not. Budget 2017 invests $7 billion over 4 years into sustaining and expanding public services for a growing country. At the same time, it invests massively in new infrastructure. It also, at the same time, brings debt down as a percentage of GDP and, at the same time, presents a Family Incomes Package that particularly targets low and middle income earners. That is the benefit of having a strong and growing economy as a result of this Government’s strong economic plan.

Grant Robertson: Is it correct that the top 10 percent of earners will gain $400 million a year from the tax cuts he proposed in Budget 2017?

Hon STEVEN JOYCE: The tax threshold adjustments in the Budget come in at $14,000 of income, up to $22,000, and then from $48,000 up to $52,000. I cannot verify the member’s shonky maths, but I can verify his idea of giving a $3,000 baby bonus to someone earning $250,000 a year.

Grant Robertson: Why is it his priority that members of Parliament get a tax cut that is worth 26 times more than what a person on the minimum wage gets?

Hon STEVEN JOYCE: The member is wrong. The Government’s priority is to lift the incomes of low and middle income New Zealanders, which we are doing, and, actually, if you look at the Government’s Family Incomes Package, across the Working for Families, the accommodation supplement, and the tax threshold adjustments, it is the low and middle income earners who do the best. I know that the other parties have subsequently tried to copy the programme, but one thing I do not understand is why the member is so worried about members of Parliament getting a tax threshold adjustment when he does not seem worried about proposals to give them a $3,000 baby bonus if they have a baby.

Grant Robertson: I seek leave of the House to table a document prepared by the Parliamentary Library, dated 25 July 2017, that shows that members of Parliament will receive 26.5 times more in tax cuts than someone on the minimum wage.

Mr SPEAKER: Leave is sought to table that document prepared by the Parliamentary Library. Is there any objection to it being tabled? There is none. It can be tabled.

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

Grant Robertson: Why is it his priority that the top 10 percent of earners get $400 million a year in tax cuts when our health system, housing system, and education system are so overstretched?

Hon STEVEN JOYCE: The member is literally wrong, and he can keep running the same talking points but it is interesting that obviously the public of New Zealand is not believing them, and that is because the Government is putting an extra $3.9 billion in the health sector this year, taking the budget to something like $16.8 billion a year in health. Interestingly, I have seen reports of other parties’ proposals for health expenditure, and the Labour Party is proposing to spend less—less—next year, in its campaign, than the Government is actually spending in additional health expenditure this year.

Grant Robertson: Will he guarantee that if he is in Government next year he will fund health for the full impact of inflation and demographic change, as outlined in the Ministry of Health funding model and as provided for in our alternative budget?

Hon STEVEN JOYCE: I have had a look at the 17-page document that the Labour Party released, which incidentally does not mention the economy at all—the thing that actually pays for this stuff—not once in that 17-page document. And, actually, I had a look at the number that it proposes for health next year, and it is less—less—than the Government actually put into the health budget this year. So if I were a member of the New Zealand public, I would back this Government, because obviously our track record is better than what Labour is proposing.

Grant Robertson: I raise a point of order, Mr Speaker. I asked a specific question. The Minister did not address that at all. I asked him whether he would guarantee something about next year’s Budget; he has not done that.

Mr SPEAKER: No, because the member in the conclusion of his question then referred to a policy document that indeed the member had released, and that gave fairly wide licence for the answer to be given.

Grant Robertson: I seek leave of the House to table that excellent policy document to show the Minister that our funding for health—

Mr SPEAKER: Order! I am not prepared to put the leave, because I take it that a member as experienced as this member will have made sure that it has been freely available via the media already.

Rt Hon Winston Peters: Because it is not published and available in New Zealand, I seek leave to table an article headed NZ rides immigration lunacy into per capita recession from MacroBusiness Australia, 15 June.

Mr SPEAKER: Leave is sought to table that particular document. Is there any objection to it being tabled? [Interruption] Order! I have put the leave. Is there any objection? Leave is declined.

Inequality, Economic and Social—Household Incomes Report

6. JONATHAN YOUNG (National—New Plymouth) to the Minister for Social Development: What recent reports has she received regarding household incomes?

Hon ANNE TOLLEY (Minister for Social Development): This morning, the Ministry of Social Development released its latest household incomes report, which shows that median household incomes rose 3 percent, in real terms, in the year to June 2016. Since 2008 median household incomes have risen by around 11 percent more than inflation, which is a lot stronger than many other OECD countries, where real household incomes remain at or around pre - global financial crisis levels. This Government’s focus on building a strong economy is delivering for New Zealanders and their families.

Jonathan Young: What else does the Ministry of Social Development’s household incomes report show?

Hon ANNE TOLLEY: More positive news. The report shows that there is “no evidence of any sustained rise or fall in the [before housing cost] household income inequality in the last 10-15 years.” The report also shows that the net improvement at the top of each income decile has been reasonably even across the board. This means that not only does the report show that incomes are rising, the pleasing news is that these increases are fairly evenly distributed across all income deciles. Both lower and higher income households are getting the benefit of a strong and growing economy.

Jonathan Young: What does the report show us in regard to material hardship trends?

Hon ANNE TOLLEY: As this House knows, the report takes a multi-level, multi-measure approach, as there are different dimensions that need to be considered. For one of these—income poverty—the report shows that there is no evidence of any rise in recent years in income-poverty trends using anchored-line measures, either before or after housing costs. The trends are either flat or falling. Secondly, in terms of hardship rates for children, using the less-severe measure, there is a clear drop from the peak of 20 percent from when National first came to office, down to 12 percent. This means that child hardship numbers have decreased from 220,000 to 135,000 in 2015-16. But it is important to note that the report does not show the impact of this Government’s $2 billion Family Incomes Package, nor does it show the impact of the child material hardship package and the first increase in benefits in over 40 years.

Transport, Ministry—Joanne Harrison Case

7. SUE MORONEY (Labour) to the Minister of Transport: Does he stand by his decision not to order an inquiry into the treatment of Ministry of Transport whistleblowers who were made redundant in a restructuring influenced by convicted fraudster Joanne Harrison, when I asked him to do so on March 16, 2017?

Hon SIMON BRIDGES (Minister of Transport): I have never made the decision not to order an inquiry into the treatment of Ministry of Transport whistleblowers. I have made clear a number of times, I think, in Parliament and publicly, that the moment I was advised of the fraud of Joanne Harrison, it was a matter that I expected the then chief executive of the Ministry of Transport, and the next one following that, to treat with the utmost seriousness. I have sought and received assurances that both the Serious Fraud Office (SFO) and the State Services Commission were involved and are also treating this with every bit of seriousness it deserves. I have supported from the get-go the internal Ministry of Transport review into the whistleblowers issue and then the State Services Commissioner commissioned one. I note that there have been a number of other independent reviews and, of course, the SFO investigation, which I have also fully supported.

Sue Moroney: I raise a point of order, Mr Speaker. That primary question was on notice, and it was validated by your office, because I supplied—[Interruption]—well, he is saying your office is wrong.

Mr SPEAKER: Order! Can I just have the point of order, please?

Sue Moroney: I supplied to your office—

Mr SPEAKER: Order! I want the point of order.

Sue Moroney: The point of order is that the Minister claimed that the supposition in the question is wrong. It has been validated by your office.

Mr SPEAKER: The Minister is responsible for his answer. I listened very carefully to the question that was read and to the answer that was subsequently given. The question has been addressed. If the member feels in any way that a misrepresentation has occurred, then there is an appropriate course of action, but it is not in raising points of order like that in this House.

Sue Moroney: Why did he tell Parliament on 16 March that “what is now very clear … is that the person in question here was not involved in the decision-making process in the restructure.”, when the independent investigation conducted by the State Services Commission found that Joanne Harrison was involved and the staff were disadvantaged as a result?

Hon SIMON BRIDGES: I think what is really clear is that the member has asked me whether or not I had made a decision in relation to an inquiry of Ministry of Transport whistleblowers. I have never done that. I have always made clear that I want the Ministry of Transport to operationally deal with these matters, and I expect it to take them with the utmost seriousness. In relation to the matter that the member raised, I think she should be careful in terms of what the State Services Commission investigation in fact found. What it found was that it investigated and found that four Ministry of Transport staff did suffer professional disadvantage due to a process that convicted fraudster Joanne Harrison had a hand in. I entirely accept that.

Sue Moroney: Will he apologise to the four heroic staff who were disadvantaged—

Hon Member: Why?

Sue Moroney: Because they were disadvantaged in their employment by Joanne Harrison under his watch. That is why he needs to apologise.

Hon SIMON BRIDGES: I think there is a division of labour between the Minister, the department, and the State Services Commission. What we know quite clearly is that the State Services Commission has delivered an apology and will ensure that those affected get appropriate redress. That is absolutely right. I have supported both the Ministry of Transport and then the State Services Commission inquiry into this issue from the get-go.

Sue Moroney: When he referred the Ministry of Transport fraud to the Serious Fraud Office in April 2016, was he aware that these staff had been raising concerns since 2013 about Joanne Harrison’s dodgy invoicing and contracting practices; if not, why not?

Hon SIMON BRIDGES: I have never referred the matter to the SFO. I have made quite clear that as soon as I became aware of this from the then chief executive of the Ministry of Transport, I made abundantly clear my expectations of him about how this was to be dealt with. I have outlined that in my primary answer. I have outlined that to the member, in relation to her questions, a number of times.

Sue Moroney: I raise a point of order, Mr Speaker. My question was whether he knew in 2016 about—

Mr SPEAKER: Order! No, that was not the question. The question started with a referral to the Serious Fraud Office, and the Minister disputed that.

Sue Moroney: Why did he fail to inform the Prime Minister or the Prime Minister’s office in April 2016 and May 2016 and June 2016 that a serious fraud had been committed in his ministry?

Hon SIMON BRIDGES: Because I place my expectations in relation to this on both the Ministry of Transport and the State Services Commission. I satisfied myself that an SFO inquiry investigation was going on at the time—it does not get more serious than that—and that the State Services Commission was fully involved in the matters.

Science and Research—Regional Research Institutes

8. MAUREEN PUGH (National) to the Minister of Science and Innovation: What recent announcements has he made about the Government’s Regional Research Institutes initiative?

Hon PAUL GOLDSMITH (Minister of Science and Innovation): In the past week I was very pleased to announce two new regional research institutes for New Zealand. The first of these, the New Zealand Institute for Minerals to Materials Research, will be based in Greymouth and will use innovative research and manufacturing techniques to help unlock the potential of New Zealand’s mineral resources. The second regional research institute, and the fourth for New Zealand, is Plantech, which will be based in Tauranga. Plantech will leverage the Bay of Plenty’s strengths in horticulture to accelerate and commercialise research and innovation for the benefit of the region. The regional research institutes’ initiatives were announced in Budget 2015, and total Government investment is now $65 million. This investment will help spur innovation in two more regions.

Maureen Pugh: Can the Minister outline some of the ways the West Coast will benefit from the new regional research institute?

Hon PAUL GOLDSMITH: Yes, I can. An important part of the West Coast economy is mining. The new institute’s strategic vision is to reposition this traditional sector by converting minerals into higher-value products, which could start a new chapter in the history of the West Coast. There were three initial research areas that we explored: purifying rare-earth elements for use in magnets and lasers; extracting tungsten from goldmining waste; and developing a carbon foam pilot plant. On the commercial front, the initiative will be working to develop industry partnerships for syndicated research that increases the value chain for minerals. If successful in its vision, the institute will drive a step change not only in New Zealand’s mineral manufacturing but in the way we think about our mineral resources altogether.

Todd Muller: Can the Minister outline some of the ways the Bay of Plenty region will benefit from the new regional research institute?

Hon PAUL GOLDSMITH: As a matter of fact, I can. By connecting and leveraging the existing skills, knowledge, and resources in the Bay of Plenty horticulture sector, this new initiative will make an exciting test bed for research and technology development that could transform the sector. Planned tech will initially focus on research to enable digital automation of devices for growers, including robotics and digital sensing. Uptake of these kinds of technology will help improve productivity and sustainability in the horticulture sector, and has the potential to drive significant economic benefits for the entire region. Thank you.

Beneficiaries—Treatment by Work and Income and Living Conditions

9. METIRIA TUREI (Co-Leader—Green) to the Minister for Social Development: Does she believe that the Ministry of Social Development has a responsibility to treat unemployed people, sole parents, and people with disabilities with respect and dignity, and ensure every person on a benefit has all the support they are entitled to?

Hon ANNE TOLLEY (Minister for Social Development): I believe that the ministry should treat everyone with respect and dignity, regardless of whether they are on a benefit or not.

Metiria Turei: Does she think that her ministry lives up to this standard, given the hundreds of examples made public this week describing denigrating and obstructive responses by Work and Income deliberately denying people their entitlements?

Hon ANNE TOLLEY: I have travelled all over New Zealand and have been into Work and Income offices and talked with staff. I have never met anyone yet who is not absolutely passionate about helping people get back on their feet, get into work, and live successful lives.

Metiria Turei: Given that a recent study into grandparents seeking financial support has found that “the service standards published by Work and Income are continually breached, not displayed in offices and are not subject to a complaints procedure, …” will she commit to changing the punitive culture in Work and Income so that it focuses on giving people the help when they need it?

Hon ANNE TOLLEY: The benefit that the member is referring to is the unsupported orphans benefit. I think that is the name of it. There are procedures that do take a long time to process—determining whether or not a child is in the full care of a grandparent. I have met with Grandparents Raising Grandchildren on a number of occasions. What I can say to the member is that this issue in particular is being addressed through the Ministry for Vulnerable Children, Oranga Tamariki, which focuses on the needs of the child and, therefore, will enable much better support, I believe, to be wrapped around any people who are taking care of those children and in particular, grandparents.

Sarah Dowie: What recent actions has the Ministry of Social Development (MSD) taken to ensure people do receive the support they are entitled to?

Hon ANNE TOLLEY: We have been working our way through a number of issues to ensure that the practice aligns with the legislation and that people do receive their full entitlements. For example, one issue that was identified was a coding error that meant some clients were being paid the accommodation supplement at the wrong rate. When this was discovered, MSD took the appropriate action to reimburse 22,000 current clients at around $14 million and undertook to identify previous clients who may have been underpaid. MSD is absolutely committed to ensuring that people get the support that they are entitled to.

Metiria Turei: When Work and Income tells 85 percent of grandparents who are caring for their grandchildren that they are not entitled to benefits that they should in fact be receiving, will she instruct Work and Income to review every case to ensure every single person on a benefit is receiving their full entitlement?

Hon ANNE TOLLEY: I am not aware of where that figure comes from. If it comes from a survey that was done recently, then I would question the assertion that that relates to all grandparents. As I have said, there is a process by which Work and Income has to be satisfied that the grandparent now has the full care of and responsibility for the child, and that does cause, from time to time, some lengthy delays. As I say, this has been raised with me on a number of occasions by the organisation representing those grandparents, and we are addressing it as best as we are able to.

Metiria Turei: When so many stories of people being driven into poverty and despair by the broken welfare system have emerged in this last week, will she instruct the MSD to hold an amnesty for every current beneficiary—

Hon Gerry Brownlee: Oh! Now we get to it.

Metiria Turei: —for every current beneficiary, so not me, Minister—so that they can talk to Work and Income about—

Mr SPEAKER: Order! Would the member complete her question. It is a very long question.

Metiria Turei: —so that they can talk to Work and Income about their full entitlement without risking investigation or financial punishment?

Hon ANNE TOLLEY: First of all, I reject the assumption that the social welfare system that this country so proudly has is broken. In fact, on the contrary, I would say the results—that people are working very hard throughout New Zealand—have shown a record number of people coming off reliance on a benefit and into work. Sixty thousand children in New Zealand now no longer live in houses dependent on a benefit, and I think that is a huge success for this country and a huge success for the people who are now living totally independent lives, able to support themselves and their families.

Metiria Turei: Why will the Minister not hold an amnesty for current beneficiaries when she cannot guarantee that every parent on a benefit has enough money to feed their kids and pay their power bills this winter without having to ask for extra assistance?

Hon ANNE TOLLEY: I think the member forgets that this Government was the first Government in over 40 years to raise the amount of money paid to beneficiaries—the first Government in 40 years. There is no doubt that it is difficult to manage on a benefit, but that is why the staff at Work and Income work so hard with families to help them into sustainable employment, because the best way out of poverty is to be self-reliant, to be independent, and to be able to be working in New Zealand supporting their own families.

Metiria Turei: How many beneficiaries are currently homeless?

Hon ANNE TOLLEY: I suggest the member puts that down in a written question.

Metiria Turei: Given the Minister does not know how many current beneficiaries are homeless, how can she agree with the use of financial sanctions to threaten the poorest people in New Zealand with worsened poverty?

Hon ANNE TOLLEY: Sanctions are only ever applied after several warnings, and are applied only when people do not comply with their obligations. Some of those obligations are very simple—turning up for an appointment. If there is a good reason, the sanction is not applied. It is very easy for people to re-comply, but there has to be some accountability when you are abusing spending taxpayers’ money.

Metiria Turei: Why does the Minister believe that it is OK for the Government to use poverty as a weapon against solo mums and their children, disabled people, and homeless people who have already lost everything?

Hon ANNE TOLLEY: I completely refute the assertions of that member.

Metiria Turei: How many people on a benefit have committed suicide in the last 5 years?

Hon ANNE TOLLEY: I do not believe that the MSD has ever collected those sorts of statistics.

Todd Barclay—Southland Electorate Office Allegations, Prime Minister’s Statements

10. CHRIS HIPKINS (Labour—Rimutaka) to the Prime Minister: Does he stand by all of the statements that he has made, or have been made on his behalf, in this House regarding the Todd Barclay case?

Rt Hon BILL ENGLISH (Prime Minister): Yes.

Chris Hipkins: When he stated in his answer to oral question No. 2 in the House on 20 June that “I would expect any Minister who became aware of possible breaches of the law to bring it to the attention of the authorities.”, was he aware of any allegations regarding breaches of the law by Todd Barclay that he had not brought to the attention of the police?

Rt Hon BILL ENGLISH: I have made extensive comment on those matters already.

Chris Hipkins: Does he agree that it is “slippery deceit” and a “disgrace” for a Prime Minister not to tell the police everything they know about a matter under investigation, and that to avoid and refuse to tell the truth is a lie; if so, given those are his words, has he told the police everything he knows about the Todd Barclay matter?

Mr SPEAKER: In so far as there is prime ministerial responsibility—the right honourable Prime Minister.

Rt Hon BILL ENGLISH: I have commented extensively on that.

Chris Hipkins: Did he use a Ministerial Services - funded phone when he discussed Todd Barclay with Glenys Dickson, and was that conversation recorded by Todd Barclay?

Mr SPEAKER: Again, in so far as there is prime ministerial responsibility—the right honourable Prime Minister.

Rt Hon BILL ENGLISH: I have no responsibility for that matter.

Chris Hipkins: I raise a point of order, Mr Speaker. The Minister is responsible for whether he used a Ministerial Services - funded phone for that conversation.

Mr SPEAKER: The Prime Minister has given his answer to the question that was raised; the question has been addressed.

Chris Hipkins: Does he agree with the statement “This behaviour from someone in such high office is unacceptable … No wonder they are denying health cuts, pretending there is no crisis in education, and acting like we have no law and order problem. It is not leadership to cover up and hope it all goes away.”; if so, given he was the one who made that statement, why will he not live up to his own words and fully and honestly answer questions about his role in the Todd Barclay saga?

Mr SPEAKER: There are two supplementary questions there; the Prime Minister can address one or the other.

Rt Hon BILL ENGLISH: The matter has been covered extensively by a 10-month police investigation.

Extreme Weather Events—Otago and Canterbury

11. Hon JO GOODHEW (National—Rangitata) to the Minister of Civil Defence: What reports has he received on the impact of severe weather conditions across parts of Otago and Canterbury?

Hon NATHAN GUY (Minister of Civil Defence): Over the weekend, I travelled to Otago to visit some local areas affected by the recent rain and flooding. The impacts of these floods will be felt for some time in communities in Canterbury and Otago. I spoke with the local mayors in these regions, and the focus now is turning from response to recovery. I want to thank the tireless efforts of civil defence and council staff, and emergency services, volunteers, lifeline utilities, and a host of other agencies like the New Zealand Army, which contributed to a number of local and regional responses.

Hon Jo Goodhew: What advice does he have for those communities in any affected areas?

Hon NATHAN GUY: Although local states of emergency are being withdrawn as the river levels continue to recede and authorities transition to recovery mode, I am mindful that further rain is forecast in the days ahead. The public are urged to be cautious and take care. Farmers are encouraged to make contact for stock feed to Federated Farmers, 0800 FARMING, and the Government stands ready to provide support where it is needed. Financial assistance is available to local authorities that have been affected.

Finance and Economic Development, Ministers—Confidence

12. FLETCHER TABUTEAU (NZ First) to the Prime Minister: Does he have confidence in the Minister of Finance and the Minister for Economic Development; if so, how?

Rt Hon BILL ENGLISH (Prime Minister): Yes, because they have developed policies and initiatives that are supporting one of the stronger-growing economies in the developed world, which have been particularly successful in the regions. I know that for New Zealand First that is frustrating because it did a tour of the regions and could not find nearly as many complaints as it would have liked. I sympathise with its political difficulty.

Fletcher Tabuteau: What confidence can taxpayers have in his Government when Mr Joyce rejected New Zealand First’s warning, which I gave last December, over Fuji Xerox—[Interruption] listen up, listen up—saying that he had “no issues with the claim that the member has raised”, despite it subsequently blowing up into $500 million worth of fraud?

Rt Hon BILL ENGLISH: New Zealand First often warns us of things, and less often than that do they actually happen.

Hon Simon Bridges: Even a broken clock’s right twice a day, Fletcher.

Fletcher Tabuteau: What confidence can anyone have in Mr Bridges, given the Ministry of Business, Innovation and Employment has refused to suspend all-of-Government contracts with Fuji Xerox until the Serious Fraud Office (SFO) completes its work, despite the SFO completely missing the fact that we all know now to be $500 million worth of fraud?

Rt Hon BILL ENGLISH: If the member is interested in those particular matters, then he should put a question down directly to the Minister. I would not expect either the Minister for Economic Development or the Minister of Finance to be conducting fraud investigations. It is important that those investigations are carried out by the appropriate authorities.

Fletcher Tabuteau: Does this mean, Prime Minister, that the National Party is happy to continue dealing with Fuji Xerox New Zealand, a company of questionable commercial integrity, and its current managing director, who designed this disastrous Ponzi scheme in the first place, which forced the Japanese parent company’s chairman and directors to resign?

Mr SPEAKER: Order! There is no prime ministerial responsibility for the National Party. That question is out of order.

Grant Robertson: In light of his primary answer, how can he have confidence in a Minister of Finance who has overseen a fall of 1.3 percent in GDP per hour worked in the last year and GDP per capita falling for the last two quarters in a row, and what is the point of economic growth if it cannot deliver to New Zealanders a decent health, housing, or education system?

Rt Hon BILL ENGLISH: Knowing how difficult it is to find a negative number in any of our economic statistics, I am surprised that member did that much work—that he actually got past page 3 and might have found one.

Hon Damien O’Connor: What effect on regional economic development does he think the discovery of Mycoplasma bovis by his own Government department—as confirmed on Saturday night—will have; if so, what action has he or his Ministers taken to inform dairy farmers around New Zealand since that discovery on Saturday night?

Mr SPEAKER: Again, there are two supplementary questions there. The Prime Minister can address one.

Rt Hon BILL ENGLISH: Unlike the other questions, that is a serious question that deserves to be treated seriously. The Minister for Primary Industries and the Ministry for Primary Industries certainly take the discovery of the disease seriously. It has not been in New Zealand before, and they are taking concerted action to ensure that they can minimise the spread, investigate what other measures can be taken to contain it, and inform farmers of both the need to look out for it and the risks of it spreading further.

Urgent Debates

Transport, Ministry—Joanne Harrison Case, Treatment of Whistleblowers

Mr SPEAKER: I have received a letter from Andrew Little seeking to debate under Standing Order 389 the finding that staff of the Ministry of Transport were disadvantaged after they raised concerns about the conduct of Joanne Harrison. The finding was set out in the report of the investigation into whistleblower treatment within the Ministry of Transport released by the State Services Commissioner. The release of the findings on this matter is a particular case of recent occurrence for which there is ministerial responsibility.

The matter raised by Mr Little is a very serious one. The Public Service has a reputation for professionalism and integrity. The findings in this case risk damage to that reputation. Public servants were disadvantaged for doing the right thing in reporting conduct that was later found to be criminal. Such cases are rare, but they deserve the attention of this House.

ANDREW LITTLE (Leader of the Opposition): I move, That the House take note of a matter of urgent public importance. This has been a most unfortunate episode in the history of the very fine Public Service in New Zealand and the reputation that it has established over many, many years and many decades. This has been a tawdry exercise and a failure by a Government department and a failure of oversight by a Minister who, frankly, knows better.

Going through the factual background, we know that in 2013 concerns and questions were being raised by senior staff of the Ministry of Transport about the processing of invoices for that ministry. They were invoices related to services taken on by the organisational development group, which was an outfit within the ministry under the control of Joanne Harrison. The problems were that there were erroneous invoices, there were invoices that did not have sufficient explanation about what they were for, and there were invoices from a single outfit that, when added up, were outside the threshold of arrangements that could be entered into without a contract. That ensured that a lot of money was being paid to an individual outfit that, given the amount being paid, should have been the subject of a properly tendered contract, and that did not happen. That went on throughout 2013 and 2014.

In late 2014 Joanne Harrison, the head of the organisational development group, took a trip overseas to attend a conference that, it then turned out, was a conference that had been cancelled. It was cancelled before she left New Zealand. So the full costs of that, and appropriate per diems and other costs, were then paid out by the ministry.

In 2015 the ministry investigated changing its accounting and business processes so that it would introduce automated invoice processing. At that point, it was unrelated to the allegations being made by those staff who had raised concerns about the invoice, but this is where it gets interesting. Before the ministry had even taken on software for the automated invoice processing—before the ministry had changed its processes or started any implementation—a redundancy exercise involving staff in the accounting function who might have been displaced by the implementation of the new processes started and got under way. It then turns out that advice on the redundancy process that affected staff in the accounting and financial section was the subject of advice from Joanne Harrison, as, effectively, the HR guru in the Ministry of Transport. It turns out that advice was given—and taken, for some inexplicable reason—to let staff go before their positions were actually redundant.

Here is what Sandi Beatie, the investigating official, said about this—Sandi Beatie was the one who wrote the report that was released a couple of weeks ago. She noted that the timing of the redundancies was interesting and wondered why they were made 2 weeks before Christmas, when the ministry knew at that time that it did not even have a transition plan or any new technology in place for moving to automated invoice processing. It let these people go, and then it turned out that they were the people who had raised the concerns about the invoices that related to an outfit connected to Joanne Harrison, who had applied irregular processes over those invoices.

Sandi Beatie went on to say that the three redundancies in the finance team premised on the introduction of automated invoice processing occurred 7½ months before the system even came into effect. She went on to give her conclusion that at that time there was no legal justification for letting those people go on the grounds of redundancies. Their positions were not surplus to requirements at that time, and Sandi Beatie goes on to say: “this is an area in which I conclude that Ms Harrison’s influence played a part.” There is no question what was going on here: Ms Harrison, having been caught short—having, in fact, been caught out at a very early stage—took steps to remove the people who were calling her out. At that point, an important check and balance was lost within the ministry, which allowed Joanne Harrison to carry on committing fraud that she was subsequently convicted of in 2016 and sentenced for earlier this year.

We rely on good, honest, hard-working public servants to be vigilant in their jobs day after day after day, and when they see wrongdoing, to be able to call that out—to have the comfort to call it out. In fact, it is so important that this House passed legislation to afford those public servants protection for doing so. The Protected Disclosures Act is a vital part of the protection of taxpayers’ and citizens’ interests when it comes to the conduct of our public services.

We had these staff making their disclosures, and in fact one of the staff members formalised their disclosures under the Protected Disclosures Act. That Act has as its objects three principal things. The first is allowing disclosure and investigation of serious wrongdoing—it has to be serious; but there could not be anything more serious than financially ripping off the organisation that you are a senior employee of, which was what these staff thought they were seeing. It turned out that they were right, and at the time they had their suspicions—and they were right to have those suspicions—they took the appropriate action.

The second thing that the Protected Disclosures Act is meant to do is to protect employees making those disclosures. That is what it is set up for, because it is true that in some workplaces, including in public workplaces and Government departments, there are sad characters who, when they are called out or called to account, get vindictive, get intimidatory, bully, and take action against those calling them out.

The third overarching objective of the Protected Disclosures Act is, of course, to promote the public interest. Anything that makes sure that taxpayers’ money is properly spent, spent within its mandates, spent within the rules of the department whose responsibility it is to manage it—that is in the public interest.

These three employees did everything right. It is very sad that when one of them, who went on to get other temporary work and was found by their new manager to be so good—to be so good—that they wanted to increase their pay and went through to get authority to increase their pay, the person who blocked that in a nasty, vindictive, mean, miserable way was Joanne Harrison. She was not going to let go. We should be glad that she is behind bars. She is a vile person. She has caused distress to the innocent lives of a number of public servants who were just trying to do their jobs.

The question is: what was the Minister doing? It cannot be possible that the Minister did not know what was going on. The chief executive knew what was going on. If the chief executive has suspicions of a fraud and requires an investigation to take place—because he commissioned an investigation—he has got to let his Minister know. It turns out that the chief executive’s investigation exonerated Joanne Harrison—it made some tweaks to the processes but left everything to go as it went.

There is another disturbing aspect to this as well that it is timely to reflect upon. That is the culture of the Public Service—not the thousands and thousands of public servants at all levels who, day in and day out, do their best, do their utmost, give good advice, work hard, and do good things. It is at the senior level. It is the legislation that governs the Public Service that has fundamentally changed the culture of our Public Service to one where, increasingly, good people—good public servants—are encouraged or incentivised or urged to work only in the interest of their Minister and, actually, sometimes, against the public interest. The sense of empires and, kind of, dung heaps is emerging in our Public Service, so that the loyalty or the fealty of public servants, increasingly, is not to principles of good governance, incorruptible governance, and good quality advice across the board, but to particular Ministers and sometimes to their political advancement and furtherance. That is not a healthy development.

What I see when I look at the report into this matter—the investigation that was conducted into the responsible and honourable actions of these excellent public servants—is that they saw values that went beyond just their department within the ministry. They saw values that went beyond just their ministry. It was about a good Public Service. It was about them being good public servants. But they were prevented from upholding those principles and those values by the culture of that organisation.

I do not want to cast aspersions on our very fine Public Service, or, indeed, on the State Services Commission and those others who are there, responsible for inculcating that very important set of principles and values that underpin our Public Service. But when you have legislation that drives heads of ministries and agencies and departments to run their organisations as if that is the only thing that matters—as if only the interests of their Minister matter—then we are in a very dangerous situation. It means we have departed from those good—some might say old-fashioned—principles of a coherent Public Service that is there to serve the interests of all New Zealanders, and public servants who are there to uphold the entire Public Service through their actions and their conduct.

That has got to be the aim and objective of every head of ministry, department, Crown agency, and other public sector department. It is about upholding the Public Service and its integrity as a whole. But we have an architecture now that, in my view, dictates or argues for behaviour that is not consistent with that principle, and this is the sort of thing that happens when we have that kind of design and architecture of our Public Service.

I say this in light of the Sandi Beatie report and in light of Peter Hughes’ stewardship of the report and now his commentary on it: the Government, through whatever means, must take responsibility for what happened to those public servants, must own up to what happened, and must put right what has been done wrong to them. That does mean compensation. It will mean an apology. It might mean finding an opportunity for them, if they wish to do so, to return to the Public Service at the level of seniority that they were at at the time that they were let go. Nothing less would be just. That commitment must be given.

The next commitment must be that this Government, this Minister of Transport, and the Prime Minister and Deputy Prime Minister must demonstrate that they are serious about a Public Service that, in all respects and across all its people—from the chief executives of ministries, departments, and Crown agencies and right down the hierarchy—acts at all times in the best interests of every New Zealand citizen and every New Zealand taxpayer. We do not have legislation at the moment that incentivises or encourages that. It might just be time to review that and review our Public Service to make sure that those vital values and principles of good public service are being upheld and maintained.

I do not see that in this report. I saw in this report too much acceptance of a single stream of advice from a senior public servant to the chief executive—a senior public servant who turned out to be corrupt and a fraudster. If we have a culture that allows that in the Ministry of Transport—I do not say it is happening anywhere else, but if it happened there it can happen again. We must be ever alert and ever vigilant to make sure that that never happens again, and, above all, that good public servants are not hung out to dry and do not lose their livelihoods when they step up to the plate, take responsibility, act honourably, and preserve Public Service values.

Debate interrupted.

Amended Answers to Oral Questions

Question No. 2 to Minister

Rt Hon BILL ENGLISH (Prime Minister): I raise a point of order, Mr Speaker. I just want to correct an answer I gave to a supplementary question in question No. 2—I am sorry; I am seeking leave to correct an answer.

Mr DEPUTY SPEAKER: Leave is put for that purpose. Is there any objection? There appears to be none.

Rt Hon BILL ENGLISH: In answer to a supplementary question, I said we have more State houses than we have had before. I should have said we have more emergency houses than we have seen before.

Urgent Debates

Transport, Ministry—Joanne Harrison Case, Treatment of Whistleblowers

Debate resumed.

Hon PAULA BENNETT (Minister of State Services): I have not met the public servants and the staff who have been involved in this, but I have been told that they are salt of the earth, hard-working, very good people, who in no way deserved this kind of treatment. I find myself standing here and agreeing with a lot of what the Leader of the Opposition has said in this debate and finding myself in a position where we certainly take the role of whistleblowers and public servants incredibly seriously. This investigation that has been done at the urging of the State Services Commissioner is something that we will be taking very seriously. I am pleased to see that these whistleblowers will be given compensation and that they have received an apology from the State Services Commissioner, as I would expect they should do, in person. Now, I think, there is a wider problem for us to then look to addressing, and that is about how we look at very old legislation, and I am just going to talk a little bit more about that.

As has been discussed, we had an investigation that has been carried out by former Deputy State Services Commissioner Sandi Beatie. It was in response, of course, to public concern that public servants raised issues about Ms Harrison’s activities. I am kind of tempted to use quite strong language in regard to Joanne Harrison, but let us just make it clear that she was a sophisticated, deceitful, and manipulative person, who took advantage of her senior position at the Ministry of Transport and has been dealt with through the courts, as she should be. At no point, though, should hard-working public servants who are expressing concerns genuinely and are doing the right thing feel in any way that they should be treated in any way except for respectfully, and there should be a process that supports them in that. If the legislation is not up to date enough and is not doing the job it should, which I think this investigation quite clearly shows us—there should have been those protections there—then I am more than willing, as the Minister of State Services, to look at that and ensure it.

I have a huge amount of respect for our public servants. I think they do an incredible job, from those who work at the front counters of Work and Income and the Police through to those who give us policy advice, and the leaders within the Public Service as well. I think that they deserve our protection and they deserve our recognition for the hard work that they do. I must say, it is one of the reasons I am absolutely thrilled to be the Minister of State Services. I get the best of them and how they work, and they deserve our respect for it.

Ms Beatie has found that four staff within the Ministry of Transport raised concerns about Joanne Harrison’s behaviour and then suffered disadvantage—that is the language that Ms Beatie uses throughout her investigation—in the processes that they were involved in. No staff were made redundant because they raised the concerns. It is the belief of the investigation that those redundancies were going to happen anyway, but they were disadvantaged because it was not done in the right way. It was done earlier than it should have been. There can be absolutely no doubt that Ms Harrison had a role to play in that, and, as such, that is the disadvantage. Ms Beatie found that, as I say, they were not made redundant because of raising the concerns about Joanne Harrison, but she did find that the redundancies were due to the ministry moving to an automated accounts payable process. This was a planned move that was legitimate for the ministry, and Joanne Harrison actually had no control over that actual decision. However, the investigation did find that the staff suffered a disadvantage and unnecessary hurt and humiliation due to the process that was followed when they were made redundant, and Ms Harrison was involved in that process.

I think it is as much for the hurt and humiliation that I stand here as the Minister of State Services and say no public servant should be treated that way. None should have to go through that in any way, shape, or form. One should not be playing favourites, but these were very hard-working, long-service public servants, I am led to believe, and so there is no way that their careers should have ended in that kind of way. Ms Beatie has recommended that the staff receive an apology and that the State Services Commissioner works with them to reach an agreement on appropriate compensation. The State Services Commissioner has met with the former staff members and their families. He has thanked them for their public service. He has apologised to them for the treatment they received after raising genuine and well-founded concerns, and he is happy to, and did, repeat that apology publicly, as well. He has also agreed with them that there will be a package of redress and settlement for the disadvantage that they suffered.

The other point of it is then getting to what we can do about the whistleblowing and the actual legislation and what is happening there. Ms Beatie also identified two other cases where individual Ministry of Transport staff may have been treated badly by Ms Harrison. These were not related to whistleblowing, and were outside of the investigation’s terms of reference. However, the State Services Commissioner passed that on to Mr Mersi, the chief executive, and he is looking at it so they can go through that.

There are recommendations for steps that the public sector agencies can take to support their staff who raise these concerns, to make sure that they can do that safely. The State Services Commissioner, Peter Hughes, has actually issued some very strong standards on effective systems for Government agencies, because I think we do need to look at the whole way that the systems go through to ensure that we are actually getting this right. The commissioner has been very upfront that those standards need to be met. He has ensured that they go out to every agency, so that everyone is very clear about what they are. He has published the standards to really make sure, as I said, that we have those effective systems, including under the Protected Disclosures Act.

He is also recommending that the Government look at the Protected Disclosures Act, and that it needs to be reviewed and updated. It is 17 years old. It would be fair to say that it no longer reflects international best practice, and we need to make it more up to date, to make it more user-friendly for people making disclosures, and to introduce proper reporting and monitoring requirements. I am very happy to look at that Act. I am very happy to take his recommendations. I have heard one of the Opposition members talk about what that process should be for how we go through the changes in that Act. I have not really thought through what that process will be as far as consultation goes and how it would be, but I am very happy for it to be as wide-reaching as it kind of needs to be.

A couple of things—I think that we most definitely have a lot to be proud of in this country, actually, when it comes to our Public Service, and that we are one of the most transparent and least corrupt places in the world. We do not get to stay at the top and say that unless we are actually doing something about it and making the kind of difference that needs to be made when we come across incidents like this. We need to remember that our Public Service does an outstanding job; that we are the equal least corrupt country, according to Transparency International; that we are the most prosperous country in the world; that we are the first for ease of doing business; and that we are the third greatest for economic freedom, I must say, as well. But when it comes to transparency and corruption I think that a vital part of it is that our public servants are seen as independent, that they are seen as not being party political, and that they are able to address very real concerns that they have and make sure that they are taken seriously and that they are kept safe. If that means that we need to update the Act to make sure that it is in line with what really needs to be done, then, as I say, I, as the Minister, am really up for doing that.

I am not sure there is a lot more I can add except for that I am very happy, in my role as the State services’ Minister, to recognise the hurt and humiliation of those public servants that, as I say, from what I have seen from the report, certainly should not have happened. I too offer my apologies to them. I would like to see them treated fairly, which is what the State Services Commissioner is doing. He is the right person to be doing that, as the leader of our State services. I am going to look at the Act and go through that with the commissioner, taking his advice, but also making sure that the Public Service, the unions, the Public Service Association, and National Union of Public Employees have a real say in what that looks like and how we keep people safe and protected. Thank you.

JAN LOGIE (Green): I rise to take a call on behalf of the Green Party in this urgent debate that goes to the heart of our country’s ability to have confidence in our Public Service. So far, I am pleased to hear a lot of messages of support in the previous two speeches, from the Labour Party and the Government, in support of the value of our public sector. It is not something that we often hear in this House, actually. I am far more familiar with the messages of needing to constrain the public sector and how it is a drain on our resources, when in actual fact it is the engine room of our country and enables us to address our social and environmental issues.

The core of the discussion today is about the fact that the now convicted fraudster Joanne Harrison was able to defraud our public sector of over $725,000, that good people within the public sector who raised concerns about her practices lost their jobs, and that there was, after her conviction, a review of the processes that was led by Sandi Beatie, who was previously in a senior position in the State services. Her report found that four public servants had been disadvantaged in the process, after speaking out and raising concerns. While three of them may not have been made redundant directly as a result of speaking out, the process relating to their redundancies was improper and they were disadvantaged through that process.

It is very good to hear the Minister of State Services say so clearly that no public servant should be treated that way, because that is correct: no public servant should be treated that way. We need, as a country, to ensure that we are encouraging people to raise concerns when they see impropriety or they hear advice that is not based on evidence. We need that rigour and safety in our public sector, to ensure that our money is being spent well and that our services are the best that they can possibly be. We need to encourage people to speak up and we need to protect them from any negative consequences for doing that.

As has been discussed already, the Protected Disclosures Act has three key purposes: to enable disclosure and investigations where there is serious wrongdoing, to protect employees making disclosures, and to promote public interest. What we have seen in the situation here was that people used that Act but they were not, in effect, protected. So, clearly, we do need to review and update the Act, and it is great to hear that we seem to have, so far at least, unanimity of thought on that point. And I hope that there will be consideration within the State services as well as within Government of the wider issues around culture and how culture can create openings for certain behaviour or protect against certain negative behaviour.

I, certainly, have been hearing from public servants for quite a long time now about some very significant concerns about a shift in culture in our public sector. We have had reports from research that came out in 2012 of 7,000 female public servants that found an extraordinary 43 percent of those surveyed public servants reported experiencing bullying in their public service life, in their workplace. I think we need to consider that, because when people are experiencing bullying, the chances that they are going to be able to speak up and be heard is reduced, so we need to be addressing that aspect of the culture.

I also hear concerns raised with me about increased managerialism within the public sector, whereas previously—at least at one time—a culture of free and frank discussion was encouraged and people’s particular knowledge was respected. But now we seem to have this very clear stronger chain of focus up towards the Minister, and people who are mindful of their career opportunities are mindful of wanting to deliver—this is what I hear—for the Minister, rather than the public.

We are hearing that that is also affecting information that is being shared in the workplace. People who want to have career opportunities will be wanting to limit damage. That creates an environment where things are covered up and stifled, and that is part of what we seem to have seen here. Certain people’s—managers’—voices can be privileged, which we have directly seen, and that was the finding of Sandi Beatie: that this senior manager had undue influence in the system. I think that is what we are hearing concern from public servants about: the much wider implications of the way that our Public Service has been run under this Government, through that increased managerialism.

There have been some people who have also spoken about—which I touched on to begin with—an undermining of the Public Service ethos about the sense of people being there to be servants to the public, which is really at the heart of a vibrant Public Service. It is not about making the Minister look good; that is not Public Service ethos. That is about a politicisation of our Public Service, and we really need to be safeguarding against that. That kind of change in ethos is creating a culture that more readily enables this type of behaviour to happen because it is undermining that sense of everyone being there for a purpose, for the public. It makes it more about career advancement than it does about public service. We really do need to be speaking more about the value and the benefits of the Public Service and respecting the amazing work that is being done across so many areas in our country by some amazing public servants.

I also want to speak to another aspect that I have been hearing in concerns raised by public servants that I think also links to this, which is an increased risk aversion and a sense of preventing scandal. And it is not preventing scandal by making sure that a scandal never happens, but a shutting down of information sharing, and we have seen the Ombudsman’s report around the operation of the Official Information Act as one aspect of that. This seems to be developing into this culture of, rather than exposing things to the open air so that we can look at them and understand them and consider them, much more of a silencing and a hiding and a preventing of things coming out into the public in many areas, and we have far too much evidence of that.

I think that creates an environment that is far more likely to support corruption. While we are doing really well in the Transparency International ratings, we want to make sure that nothing changes, and it will be a while before that shows up so we need a proper review of the state of our public sector to protect all the strengths that have been there that we all benefit from.

CLAYTON MITCHELL (NZ First): I would not say it a great pleasure to stand and have an urgent debate on this particular matter, but I think it is a very urgent matter and one worth raising. As we look around the House and we hear the comments that are made, right around the House by all parties, this is of serious concern and of a serious nature. I guess where the last speaker, Jan Logie, finished off is where I am going to start off.

The reports around the globe and from the OECD have New Zealand as one of the least corrupt countries on the planet—in the world—and the reality is, I think, we have got a sinister background, because this is not an isolated incident. Nobody in their right mind could condone the actions of Joanne Harrison: how she has behaved, what she has done, and how she has even been enabled to get away with what she has been doing for such a long time. Now she is sitting in jail for 3 years and 7 months, and I hope she actually serves those 3 years and 7 months and shows some sort of remorse for the actions that she has taken. It has been self-indulged, and she has been looking after her own interests at her behest and to the disadvantage of staff and the reputation of the public sector.

But it goes further than just the public sector—although this incident does directly relate to the way that staff members and the people from inside the public sector have been treated. When they have seen an injustice taking place, and an advantage given to a person by devious means, and a disadvantage given to others who are standing against this sort of—and I will use the word—tyranny, but maybe that is not quite the right word, it has cost them their livelihood. It has cost them their reputations, and it has been a huge dirty smudge—a stain—on their CV, despite their standing up, proudly, for what they believe is the right thing to be doing, and pointing the bone at somebody who has been defrauding the public purse. They have lost their jobs for it.

Despite what the report has come out and said—that an apology is required and compensation needs to be given to these people—they will always be the ones who have suffered the most, because they had done the right thing, and there was no protection there for them; there was nowhere that they could go. Joanne Harrison, who now is in jail for her actions, and other people who were involved in their inaction, are moving up the ladder, if you like. We have recently seen that Martin Matthews, who has been given the auspicious title of Auditor-General, is now standing down. He was privy to this information from these people who came forward, and he chose to do nothing. In fact, he tried to move her around into other positions where she may have been better suited. Ultimately, over the 3-year period that she was defrauding the system, she actually moved up the chain, despite people saying: “There’s something wrong here. This is not right. Look into it.” It was overlooked.

So where does the buck actually lie? When do we actually finally say that procedures were not followed?

Sue Moroney: The Minister. That’s where the buck stops.

CLAYTON MITCHELL: I am getting to that. Procedures were not followed and processes were not followed either. Ultimately, the Minister has to take responsibility for that; that is the job of the Minister. The buck stops at the top. Martin Matthews certainly does need to take a big proportion of responsibility for that. Ultimately, the responsibility will lie with Joanne, but it needs to go to the top. Why were these processes and the procedures not followed? How did it get to a point where over a more than 3-year period this was going on under their very noses, and we have got to a situation where over $725,000 was taken away from hard-working New Zealanders—and I am talking about the tax that they have paid to go into the Ministry of Transport to get better infrastructure—for someone’s own personal greed?

Ultimately, I would like to hear from the Minister as to why he allowed this to go on. He must surely have been aware of the situation, and, if he was not, then why was he not made aware of it? There has got to be some level of ownership from the Minister, and anything less than that—well, then, that Minister has got to have their head buried in the sand.

The reality is that the Chief Ombudsman, Peter Boshier, has said that there is insufficient protection for whistleblowers. Even the term “whistleblower” has a connotation where I think even the general public could go: “Well that’s not a good term.” At school, if you ever told on somebody for doing something, you were a whistleblower. It is negative. But we have got to turn that negativity into positivity, because it is standing up for justice. It is actually standing up to look out for your peers.

When we have got a society that we want to be the most incorruptible in the world, we actually have to have everybody looking out for everybody else. If we have a breakdown of that—if people get silenced, if they get pushed aside, if they get too afraid to speak about the truth of what is going on—then you are going to see corruption very, very quickly entering into this beautiful country of ours. I am suggesting that this is not an isolated incident. I am suggesting that this sort of thing has been going on, and there is a culture of bullying going on in workplaces to silence this sort of behaviour: this honest integrity that people have to do the right thing and to say the right thing. They have been silenced. We need legislation to empower these people to feel that they can comfortably speak up and not be chastised, castigated, and cast out like these people have been whom we are dealing with here today.

The private sector is obviously another area where this goes on. Coming from the private sector, and running businesses—and my own businesses—for over 20 years, I heroed those staff members who came to me with problems that were happening within my organisation. I held those people in high regard, because it was the information that they gave me quietly and in secret that enabled me to find and charge those staff members who were being dishonest, who were ripping off my business and me.

We need to take that sort of approach, where staff and people can approach their bosses, their NGO leaders, their CEOs—at any time—to say: “I have some serious concerns. This is what I’ve seen. This is what’s going on.” If we have taken that away, which is exactly what we have seen happen here with these people, then we are going to see some serious, serious problems in this country moving forward. So I would like to see some urgent attention, some legislation brought in to tighten this up, to give some security to those people who are doing the right thing. An apology—great—it is a little bit too late. Compensation—absolutely, it is essential, but they should not have ever got to the situation where compensation was required. They should be put on a pedestal and looked after within the organisation that they have loyally been working in.

So New Zealand First does support the urgency of this debate. Thank you to the member for bringing it to the House to be discussed, and we would certainly be very supportive of seeing some changes made by the Government, despite there being only one month to go—maybe we could prioritise something in this area. Thank you.

Hon SIMON BRIDGES (Minister of Transport): It is really good to take a call on this and discuss what I think is a really serious issue. I think one of the interesting things about this is on the Government side of this, which is Paula Bennett as Minister of State Services, who has spoken, or whether it is me as Minister of Transport—I do not think we disagree with anything we have heard so far from Andrew Little, from the other speakers, from the Greens, and from New Zealand First.

Of course, there will always be politics in these things. I do not see it as particularly political, actually. It is a situation that has presented itself through, ultimately—and that is not to say there are not shortcomings—the dishonesty and manipulation of a woman, and we need to learn from it, and, as I say, I think, actually the House agrees with all of that. This is, to be sure—let us make no bones about it—a sorry, sorry saga.

In a sense, you would say there is nothing good that can come out of something like this. As Clayton Mitchell has said, seven-hundred-and-something thousand dollars nicked, stolen, taken deceitfully from—ultimately, he is exactly right—the taxpayers of New Zealand, who do not expect or deserve to see this sort of thing happen. I think, with all of that said, though, we can and we will see some good come from this, inasmuch as there have been within the Ministry of Transport, as a result of reviews—there are, clearly, from the tenor of the Minister’s comments—improvements to the system, with the whistleblowing legislation and so on, that are being seriously considered and that will come from this.

I think we have to be careful, in cases such as this, of glib, sweeping statements. We have seen that. At one level, there is the sort of: “Look, it is all on her—a clever, manipulative fraudster; it is all her fault.” And, at a level, that is the side I am on, by and large. Or a view we have seen very recently: “No, actually, she was stupid.” I saw one of the blogsites say that she was stupid and this should all have been picked up really early on in the piece.

I would, on balance, go with the “clever, manipulative” side of these things, but that does not mean, at any level, that the ministry involved here, the Ministry of Transport, and the overall system, if you like—the State services system that the States Services Commission (SSC) presides over and the commissioner ultimately presides over—cannot learn from this. Of course it can. With the independent reviews, the big chartered accountant firm’s reports into various internal processes, auditing processes, and so on and so forth, within the ministry—the whistleblower situation, where originally the internal review started and then moved, given the seriousness of it, given the allegations coming to light, into the State Services Commissioner’s remit—I think changes have come and will come from that. Because there have been shortcomings; there have been shortcomings in the system.

I think what we should not do, though, on the back of that—as I say, when we take care about these things—is to do either of two things. We should not absolve the State sector; I actually agree with Sue Moroney about that. It is right to go through these things carefully and scrupulously. We need to improve. But we also should not, in any way, shape, or form, absolve Joanne Harrison who ultimately—I think, actually, in any scenario; I disagree with that blog recently—was a dishonest, clever in her way, in her fraud, calculating, and manipulating person who has rightly gone to jail for several years as a result of that. Ultimately, we need to call it as it is: she was and is a fraudster.

Let us also be clear when we discuss this case and we go through it—as Nick Smith and I were discussing just before this debate, or as this debate had started—she is not the first and she will not be the last. Actually, every Government that New Zealand has had, certainly in the recent past, has had someone like a Joanne Harrison. Be very clear. That is not to be complacent about that. Improvements in the system that can be made should be made. I made clear, when we were talking about the reviews of the Ministry of Transport’s processes, that there were some real shortcomings there, and ditto in relation to the whistleblowing and the suggestions by the State Services Commission. They should be made. But she is not the first and she will not be the last.

The context, I think, is important. Paula Bennett made this point and I will just reiterate it. We should not lose sight—in the overall context of our State sector, of Ministers, of members of Parliament, some senior officials, down to the very bottom—as New Zealanders, ultimately, that we are, and we should cherish and be proud of the fact that we are, even with this case, one of the most transparent, least corrupt countries in the world. We are, rightly, the equal least corrupt country, according to Transparency International this year. We are the most prosperous country in the world. We are the first for ease of business. We have high satisfaction in life. We consistently, in these areas, come out very, very highly. Actually, I agree—although I am hearing from some of the members over on the other side—that is why we need to cherish these things. That is why we need to take them seriously, as the Government does, and not fall into complacency in relation to cases such as this.

There are clear shortcomings here, identified now by the independent reviews, the SSC report. Ultimately, I think we can say that while it will never be perfect in how it flows through in the time lines and the various things that go on—particularly when you look back in hindsight—nevertheless, ultimately the system has dealt with it. We as members of Parliament can talk about it all quite openly and freely. Whether it is the Ministry of Transport, whether it is the Serious Fraud Office that prosecuted Joanne Harrison and, you know, through the courts saw her sentenced to several years’ imprisonment, whether it is the SSC, whether it is parliamentary committees, ultimately the system has dealt with this, I think, strongly.

Finally, can I just say, in relation to whistleblowers and the issues there, what we saw was completely unacceptable. Quite clearly, from the State Services Commissioner’s report, these folk, these officials, these hard-working officials within the ministry, were disadvantaged. And I think it is right, and it is the right place, that the State Services Commissioner has apologised and that they, through that process, through the SSC and the Ministry of Transport, will receive redress for the wrong committed to them through all of this sorry, sorry saga.

SUE MORONEY (Labour): That was the sound of a Minister not taking responsibility for his own shortcomings, when it comes to this whole sorry saga. That Minister today would not apologise to those four staff who were identified in this report as having been disadvantaged under his watch. That Minister refused to apologise to them. That Minister also refused to do the very investigation that has found these shortcomings, when I asked him to on 16 March in Parliament.

Hon Simon Bridges: You’re wrong.

SUE MORONEY: Mr Bridges, I stood right here and I asked you to do that inquiry, and you did not. You failed to do the inquiry that you should have done, Mr Bridges, into this sorry state of affairs. But it is not the first time you have been missing in action on this particular issue.

When I broke the story in July 2016, last year, about the fraud that had happened, that Simon Bridges did not tell the public about, that Simon Bridges did not even tell the Prime Minister about until—

Hon Simon Bridges: There was a criminal investigation going on.

SUE MORONEY: He did not even tell the Prime Minister. So he thought the Prime Minister was going to get in the way of an investigation? I do not think so. He failed to tell the Prime Minister until the day I went public with the story in July 2016. So we need to know why that was.

But once I went public with that story, my phone rang off the hook. It is very interesting, in today’s digital age, that when a story gets out and names someone, like Joanne Harrison, for fraud—suddenly that went international. I got phone calls from both within New Zealand and outside New Zealand over a 2-week period that formed a very clear picture of the way this particular fraudster operated.

There were two main things that she did all the time, because this is not her first fraud. She has been convicted of a previous fraud, but there are other stories still to come out. What I learnt was that there are two main things that Joanne Harrison did everywhere she went. The first one was to build a trusting relationship of varying degrees with the middle-aged male running the show. That was the first thing that she did everywhere she went. The second thing she did was she got rid of anyone who stood in her way. She got rid of people who were on to her. So, knowing that this was her mode of operating, those were the two things that I explored. It was not hard to work out, and so the Minister could have worked that out. If he had actually been prepared to be transparent and upfront with the New Zealand public, he could have got that information much earlier and known that these were the areas that needed to be explored.

The first of those I am not going to explore in this debate because I am hoping that that will be the subject of another urgent debate later on, perhaps this week or next week in the House. But the second one is really the subject of this debate, and that is getting rid of anyone who was on to her. That was her mode of operating. I saw it happen overseas; I had reports of it happening within New Zealand in other workplaces as well. But, really, you did not have to get all those phone calls about Joanne Harrison to understand that that was an area to explore.

Both of the chief executive officers (CEOs) involved—both Martin Matthews before he left the Ministry of Transport but after he finally came to the conclusion that it was a serious fraud that had happened under his nose, and also Peter Mersi, the incoming CEO—and Simon Bridges, the Minister who oversaw all of this, should have automatically understood that when you have got a fraudster operating in a workplace there will be people who will have been targeted, because that is the way fraudsters operate.

Yes, Joanne Harrison was not sophisticated, I can tell you that. When you use twink on invoices, that is not a sophisticated way of operating a fraud, so let us put that one to rest. She was not at all sophisticated. She was so unsophisticated that the staff were blowing the whistle on her right, left, and centre, so let us put that one to rest. But she was manipulative, because, guess what, that is what all fraudsters are, by definition. That is what they all are, by definition. Show me the straight-up fraudster and I will introduce you to the tooth fairy, because there is really no such thing as a straight-up, hard-down-the-line fraudster. They are manipulative. That is why these systems are so important. It is why these systems are so important, because, yes, the Minister is right on one hand: frauds have happened before and they will happen in the future. The thing is that we need the systems in place to make sure that those frauds do not continue on for the 3 years that this was allowed to continue in the Ministry of Transport.

So what are those systems? Well, actually, in this case, pretty much all the systems worked. That is the good news. The public servants, whom we trust with our money, with the New Zealand public’s money, did what we needed them to do. They said: “The invoicing practices are wrong.” They said: “The contracting regimes that Joanne Harrison is deploying are shonky and dodgy.” And they were reporting them. They were reporting them all the way up the line. Where it went wrong was that they were not being listened to; their advice was not being taken.

Remember these are hard-working public servants of long standing in the finance department. I have met with some of these whistleblowers. They are some of the most genuine, hard-working people you could ever expect to come across. They were not listened to, in favour of a relative newcomer to the Ministry of Transport who was doing things like getting the chief executive to dress up like Marty McFly from Back to the Future. So she was being trusted, but these hard-working—mainly women, actually, who were working in the finance department and in the legal teams, their word was not being taken for it. So the systems were, in fact, working, but when they were blowing the whistle, the whistle was not being heard, and it was not being heard by the referee in particular, and that is what needed to happen.

So these whistleblowers were doing the right thing. They are heroes. We should be celebrating what they did, but instead what happened—and happened under Simon Bridges’ watch—was that they lost their jobs, and they lost their jobs prematurely. The thing that always stuck with me is that they got made redundant just before Christmas. Who makes workers redundant just before Christmas unless there is an absolute urgent need to do so? Well, the Ministry of Transport did, even though the system that was going to replace them did not come into being until July the next year. So that smelt for a start.

It took far too long for this investigation to take place. I first raised the prospect of an investigation on 9 March when the Ministry of Transport came before the select committee. I asked it not once but twice during that select committee hearing, to hold an investigation into the restructuring of the finance department in light of the fact that the fraud had happened and those staff had been blowing the whistle on Joanne Harrison. I was so gutted that the CEO—Peter Mersi, the incoming one—said no to that request. The first time I said it, well, I thought: “Gosh, poor guy, he’s been in the job 3 days and this has all blown up, maybe he hasn’t thought this through.” So I gave him, you know, 5 or 10 minutes in the select committee room to dwell on it a bit and then I asked him again and he still said no. But then the very next week I came into the House and asked the Minister to hold exactly that investigation and the Minister also failed in his obligation towards those staff and did not order that investigation to happen. He was specifically asked by me to order that investigation, and he did not.

Eventually, running out of patience, I met with the State Services Commissioner, Peter Hughes, on 26 April and I put the information again in front of him. I said to him: “This is important because this is about the integrity of the Public Service. If public servants in Wellington think that there is a situation going on where people might have been made redundant because they told the truth at the workplace, it’s not good enough to leave it there. It is something that the States Services Commission needs to get involved in.” I was really disappointed that the commissioner, Peter Hughes, actually said no. He said he was reluctant to do it and then he wrote to me on 5 May and said that he was satisfied with the actions that the Ministry of Transport had taken and he would not take further action by having this investigation.

Then about 4 weeks later he changed his mind. Why did he change his mind? It was because of the involvement of the media. It was because the media would not let this lie, and I want to say, before I finish this contribution, what a great part of our democracy that is. I want to particularly thank Radio New Zealand for its relentless pursuit of this issue, because it was its advocacy and its pressure that brought about this representation, this investigation, these findings that I hope will make a real difference in our Public Service.

JONATHAN YOUNG (National—New Plymouth): As we look at this situation we can look back on the audit trail—the paper trail, of discussions and hearings at select committee—and we see some comments that I think are relevant. The previous speaker, Sue Moroney, said that the concerns of the employees were not listened to. That is not the case. Let me say that at the select committee, when perhaps that question may have been asked, the response was that the chief executive told us that during that period there were a number of instances when the person, Joanne Harrison, did not fully comply with the ministry policies. However, he said that all of the instances were followed up.

It may not have brought the result at that point in time that the member may have wanted, but the statement was that all of those instances brought to the attention of senior management were followed up. He said that the person, Joanne Harrison, gave responses that seemed sufficiently credible. I guess in that situation where there are instances that people bring up, where they have a concern that policies have not been followed—and it is important for us to understand that policies are there for the protection and the integrity of a Government department—it is important for senior management to listen and to follow up, and that is what the chief executive said. He did also say that when he took over his role on 12 July, on 13 July he spoke to the Serious Fraud Office and said that there was a need to be open and transparent, and the Serious Fraud Office advised him at the time that it and the police needed time to establish a case and to put measures in place to recover the money.

So what we see, through a long period of time, is that matters have been raised, matters have been listened to, and, yes, there was a sufficiently credible answer given, yet, through the process of Government oversight—Office of the Auditor-General, Serious Fraud Office, and Police—this fraud has, obviously, been brought to attention, a conviction has been won, and the perpetrator is serving time in a New Zealand prison. That proves, no matter how long it took, that a system and a process is in place, and that people are listened to.

But what the State Services Commission has reported back to us is that those four people who raised these issues were disadvantaged, because of that, by Joanne Harrison’s involvement. That is a wrong thing—that is a wrong thing. That issue was questioned at our select committee, and credit to those questions. We need to have a transparent and open system where, without fear or favour, people can work for the Government, for the Public Service, for the people of New Zealand, and do a job that is going to benefit this country, and if they see people ripping off the taxpayer, if they see people undermining the integrity of the process of serving the people of this nation, they can raise that question without fear.

So we know that the State Services Commissioner, Peter Hughes, has reported back and suggested that there needs to be changes to make our system more robust, and Minister Bennett is certainly looking into that and giving it very deep consideration.

I think what we see here—in terms of Joanne Harrison—is a very clever person who had incredible intent and purpose and has manipulated a system and a process. We certainly do not want to think that every person who works for a Government agency or entity is like that. So there is a tension and a balance. We must have those processes and systems in place that protect the integrity and the purposes of Government agencies, but at the same time it is like—where do you draw the line in terms of police checks over people? So now, when it comes to some of these senior positions, there are criminal checks. I think that is a response that needs to take place.

Professional disadvantage is a terrible thing.

The ASSISTANT SPEAKER (Hon Trevor Mallard): The member’s time has expired.

Jonathan Young: Thank you, sir. That went very, very quickly.

The ASSISTANT SPEAKER (Hon Trevor Mallard): It was a 5-minute speech, as is the next one.

Hon ANNETTE KING (Labour—Rongotai): As nobody else is taking the call, I think I will. It is good news that the Minister of State Services is now taking the issue seriously. She stood in the House today in a very solemn manner and told us how she was taking this matter seriously, that she “would consider” changes to the whistleblower legislation. I say to the Minister: “Don’t just consider it. Put on record the time frame for making changes to this long-overdue reform of this Act.”

It has taken a long time. I just want to begin by congratulating Sue Moroney, who pursued this issue. I have listened to some of the interjections across the House, and I know it has not been popular with the Government that Sue has pursued this with some vigour over almost 2 years. I know it is not popular, but that is the role of a good Opposition member—a member who is given information—

Jonathan Young: And you guys are dumping her.

Hon ANNETTE KING: —who does not let go of it until there is some action. I am sorry, Mr Young, you could have done the same, but it was left to an Opposition member to raise this issue continually, to be ridiculed for raising it, but eventually to get—

Jonathan Young: Who ridiculed her?

Hon ANNETTE KING: Oh, I heard the ridiculing.

Jonathan Young: Not our committee—not our committee. Come on, Annette.

Hon ANNETTE KING: It might not have been you, Mr Young, but I heard it across the House, because people did not like the issue being raised.

It seems to me there is a common approach we often get in these issues, and that is for the Government to take so long before it will take notice of an issue. Those members bury their heads, they try to bury the issue—and we have had many examples of that over the last few weeks—and they do not do anything until the pressure is so great that they are forced into taking action.

I do not know why we cannot see a more proactive approach. What is there to lose by a Government saying: “Here is an issue. Let us look at it. Let’s see what lies behind it.”? When a Government does not do that, particularly when it comes to the Public Service, I believe it then demeans the very public servants that work for it, by not being open and transparent. I believe that we have an excellent Public Service. Both the member for Hutt South and I have been Ministers of State Services. We understand the Act, we understand the obligations, and we know the quality of our Public Service in New Zealand. I think it is sad when their reputation is besmirched by a bad apple in the barrel, and that bad apple not being identified early and not being held to account. So when I look at my time as Minister of State Services, I put a lot of store in the State Services Commissioner and their role in these matters.

I have got some questions for the Ministers of State Services, from back then in 2013—that was the Hon Jonathan Coleman—and then today’s Minister of State Services, Paula Bennett. What information did those Ministers receive? When did they receive the information that there was a problem with this woman, Joanne Harrison, a woman who has proved to be manipulative and to be ripping off the taxpayers of New Zealand to line her own pockets? When were those Ministers advised? How were they advised? What actions did the Ministers of State Services—back in 2013 and again now—take in relation to this?

When you look at this sad, sorry story, I think the thing that really upsets me is how the workers who were made redundant—moved on—were treated. I mean, imagine being restructured right on Christmas. How mean can you be? They did not need to be stood down then; they were stood down months before they had to be, and then they had to train their temporary replacements. Having been told that they did not have a job and told they had to finish before Christmas, they were then told they had to train their replacements. What sort of treatment was that? I would have thought that the Secretary for Transport would have thought that was a pretty mean way to treat former public servants—people who had given many years of service.

As Peter Hughes, our now State Services Commissioner, said—and I am so pleased Peter Hughes is there; he is a fine man and a very good State Services Commissioner—the staff suffered “humiliating” reprisals due to their raising of concerns about Harrison. It is time for the review of the Protected Disclosures Act—it is neither protecting people nor allowing disclosure.

Hon TIM MACINDOE (Minister of Customs): Joanne Harrison’s criminal behaviour was calculated, it was serious, and it was unforgivable. She is now, rightly, serving a lengthy prison sentence for her dishonesty. Many people have been hurt by her fraudulent actions, and I want to start today by acknowledging the four former Ministry of Transport staff members, in particular, who have suffered professional disadvantage as a consequence of her actions. They have received an apology from the State Services Commissioner, and the State Services Commissioner will ensure that they get the appropriate redress in these circumstances. They should never have been disadvantaged for doing the right thing and speaking up. It is vital that public servants who think they see someone doing the wrong thing or doing something illegal can speak up without fear. In that regard, I echo the comments that we have just had from the Hon Annette King, and from other speakers who have contributed to this debate today.

As Mrs King and others have noted, we have an excellent Public Service in New Zealand. Public servants should never be disadvantaged for doing the right thing. That is why the State Services Commissioner has issued new standards for Government agencies on putting in place effective systems for staff to raise concerns. Successive Government speakers in this debate have echoed the findings of the former Deputy State Services Commissioner Sandi Beatie’s inquiry into this very regrettable matter.

I also want to acknowledge the hurt that Joanne Harrison’s former colleagues have suffered as a result of her fraud and deceit, because they are good people. For the last nearly 3 months I have had the privilege of serving as the Associate Minister of Transport, so I have begun to get to know some of them well, and I hold them in the very highest regard. I thank them for their excellent service to our country and for the important work that they are doing. They too deserved so much better from their dishonest colleague, and they definitely do not deserve to be tarnished by her despicable actions. Again, I agree with the comments that the Hon Annette King made in this regard.

I am particularly proud of the fact that New Zealand is one of the most transparent and least corrupt countries in the world. We should all celebrate that, and that is why it is particularly distressing to hear today of one of those isolated incidents of this type, where the normal state of affairs has not prevailed. Our Public Service does an outstanding job, and that is showing in so many different international rankings about freedom and transparency. Let me mention just one, in the very recent 2017 Transparency International survey, which found that we are the equal least corrupt country. Is that not something that we can be proud of as New Zealanders? So when something of this nature happens—and, fortunately, it is so very, very rare—it is important that we learn from the experience and take appropriate remedial action. That is what has happened in this case.

So let me just conclude this debate, because I think the issues have been well and truly traversed by all who have contributed, and I thank members across the House for some very thoughtful contributions in the last hour and a bit that we have had to discuss this matter. Let me just repeat the three really important things that are the Ministry of Transport’s response to the State Services Commissioner’s whistleblower report. Firstly, the Secretary for Transport has considered the issues that have been raised by the State Services Commissioner and is in the process of resolving them with the individuals concerned. It is important that the public understand that so that they can have confidence that everything that could be done in the circumstances is being done to put things right by those most directly affected.

Secondly, the ministry is committed to working with the State Services Commission to help make sure it has the best-practice systems in place so that staff can raise concerns safely so they can be looked into and addressed, because we have to have a climate in which people who are put in that sort of position can speak out honestly and without fear that they will suffer repercussions.

Thirdly, the ministry’s guidance on protected disclosures is reviewed each year, and the Secretary for Transport has given public assurances that the systems and processes for escalating issues of concern are fully compliant with the State Services Commission’s standards.

So, as I say, this is a very regrettable, totally unsatisfactory incident perpetrated by a criminal person. I do not believe she was stupid; I believe her actions were deeply calculated, and that is why it is right that the actions that have been taken are being taken and that the lessons from the State Services Commission’s report are heeded and implemented.

The debate having concluded, the motion lapsed.

Estimates Debate

In Committee

The CHAIRPERSON (Hon Trevor Mallard): The Standing Orders provide for 11 hours of debate on the Estimates. The Business Committee has determined that the Estimates debate be divided into 10 separate debates covering the sectors set out in the Estimates of Appropriations for 2017-18. Each debate will be led by a call from the chairperson of the select committee nominated by the Government as the major committee reporting on the sector. The Labour Party will have two calls, the Green Party will have one call, New Zealand First will have one call, and the Minister in the chair will have three calls in response—all are 5-minute calls. Members may take unused allocated calls later in the Estimates debate.

In addition, there are 52 5-minute supplementary calls that have been allocated to parties that may be taken as parties see fit during those 10 separate debates. At the end of each debate the question will be put that the votes in each sector stand part of the schedules.

The time taken on each question is in the hands of members, depending on parties’ use of their allocation of supplementary calls. However, this debate expires after 11 hours. The Estimates debate should be relevant to the Government’s current spending plans, as contained in the Estimates of Appropriations. All of the votes are available for debate. A compendium of the reports of select committees on the votes is available on the Table.

Economic Development and Infrastructure Sector

The CHAIRPERSON (Hon Trevor Mallard): Members, we come to the first of the votes in the economic development and infrastructure sector, B.5, volume 1. The question is that Vote Business, Science and Innovation; Vote Labour Market; and Vote Transport stand part of the schedules.

JONATHAN YOUNG (Chairperson of the Transport and Industrial Relations Committee): I am very pleased to stand and speak on this very important area in New Zealand’s life, which is economic development and infrastructure. We are indeed the party that has invested huge amounts of money into infrastructure—proven, I think, so important only a few weeks ago when this country was caught in a cold snap that saw many of the State highways closed off because of snow and bad weather. State Highway 3 on the west coast of the North Island was the only route that people could drive from Auckland to Wellington. So it is such a good thing that this Government is funding development of that piece of infrastructure so that it will be resilient and be able to provide the support and services, particularly to freight transport, which enables this economy and this nation to be able to progress. Particularly in my part of the country, everything in and out obviously travels by freight—most of it by land, some by rail. It is so important that we have a strong infrastructure programme, particularly around transport, for our nation to go ahead. This nation is thriving, is doing well, and we are delivering for New Zealanders. It is great to see that.

This ninth Budget is about that. It is about ensuring that our country can succeed, can proceed, can go ahead, and that we see the infrastructure in place that is going to enable businesses to succeed and communities to prosper, whether that be schools, hospitals; whether that be rail networks; whether that be roading networks—it is a good thing.

Recently I was in Auckland, and as I was driving from the airport through the city I received a message on my phone to say that if I took the western route and went through the Waterview tunnel, that would take 5 to 10 minutes off my journey. I took that route, and I got into the CBD so quickly. It is important, in a city that faces an incredible level of economic activity, that we have routes that enable those businesses and those people who are moving to and fro about the city to get there efficiently and fast. It is great to see that Waterview Connection opened—a great step forward—in that western ring route, to see an alternative to going right down State Highway 1 through the CBD in that way.

It is all about efficiencies. It is all about economic advantage. This Government is investing in those things that are going to help New Zealanders succeed and make our country even more prosperous. All of that means that our companies can be more productive. If people have less time sitting on a motorway and more time in their places of work, we are going to see companies prosper in an exceeding way. That is a good thing, and this is behind the thinking, behind the vision, that this Government has in order to help businesses succeed. They are the ones that create employment.

The CHAIRPERSON (Hon Trevor Mallard): Order! I am going to interrupt the member and ask him to take his seat. We will turn the time off. I want to remind the member of the role of the chair of the select committee. There is an extra allocation for chairs of select committees, and that is so they can report back on the hearings in a way that better reflects a presiding officer of that committee—so to report back on what occurred at the select committee on the reports that have come in. After that, I have no expectation of a less partisan approach from the members who follow.

JONATHAN YOUNG: Thank you, Mr Chair, for—[Interruption]

The CHAIRPERSON (Hon Trevor Mallard): Order!

JONATHAN YOUNG: Thank you, Mr Chair. So the western ring route—that came up in our discussions. All of these things about Auckland Transport and its relationship with the New Zealand Transport Agency and the necessity to create these efficiencies in our largest economic powerhouse of Auckland City were very important areas of discussion. We were very pleased to see that there is this great investment taking place over even these next decades. We are very mindful of the progress that we need to make.

The CHAIRPERSON (Hon Trevor Mallard): No, the member has another 50 seconds.

JONATHAN YOUNG: Fifty seconds? Thank you, Mr Chair. It is expected—the western ring route is a 48-kilometre motorway alternative to State Highway 1. All the time we are looking at these different ways in which, as I said before, businesses can move around the city, and that is incredibly important. It is expected to produce wider economic benefits worth $430 million.

This is the reason why the infrastructure investments are important. They enable such strong economic progress and profitability for New Zealand companies. I am very happy to commend this Appropriation (2017/18) Estimates) Bill to the Committee.

STUART NASH (Labour—Napier): Is it not interesting that the member Jonathan Young talked about infrastructure, and all he talked about was bricks and mortar, as if that will get us there. In the Commerce Committee, we heard about economic development, and what we heard was that the Government is cutting $24 million, or about 4.5 percent, out of economic development at a time when it is absolutely needed, I would argue. But the interesting thing we heard in the select committee—and it is in the report. It talks about the Business Growth Agenda. The Minister talked about the fact that the target that has been set is that 40 percent of gross domestic product will be from exports. That is not a bad target. We would agree with that target—it is aspirational—but this Government has not got anywhere near that target at all.

But the interesting thing is that it is not as if the Minister outlined how it was going to get there. In fact, what happened was the chief executive said “No, in hindsight, we got the target wrong.”, or it had been poorly put together, poorly communicated, or poorly designed, I think, was actually the word he used. But the thing is that it is not poorly designed. I think 40 percent of GDP as exports is the right way to go. We cannot say: “Well, we’re not going to achieve this because it’s a poorly designed target or the target’s wrong.” What has happened here is that, in fact, this Government has not put the building blocks in place that allow our companies to actually go global. We have not got the R & D tax credits, we have not got the incentives, and we have not got the vision, the passion, the programmes in place that allow our companies to go from New Zealand, which is the southern end of the Pacific Ocean, and take on the world and do this. If you look at research and development, for example, as a percent of GDP, we are one of the lowest in the OECD, and it does not have to be this way.

This is the thing that always astounds me about the National Government. It says it is the party of business. It says it is the party of growth. It has got something called the Business Growth Agenda, and, to be fair, on paper it looks pretty good. But what the Government has not been able to do is translate the words and the vision from the paper into reality.

I know that for 9 years spokespeople on economic development from this side of the House have been quizzing Minister Steven Joyce—who is actually now the Minister in the chair, and who was the Minister for Economic Development for a long time—about what is happening, how he was going to get us there, and the answer has always been “Well, don’t ask me about that now. That’s 10 years away.”, or “That’s 15 years away.” Well, it is coming up fast, and I just do not think it is good enough to say: “Don’t worry about that. You know, we’re not concerned. That’s 8 years away. We’ll get there.” Well, we actually need to have a plan that allows us to get there. We need to see some progress because we are going backwards, and to say “Oh no, no. It doesn’t matter because GDP’s been increasing, and therefore the measure has been standing still, so overall, as a percentage, it’s dropping.” is simply not good enough.

If we are to grow jobs and if we are to have sustainable economic development that creates wealth for our regions and our cities, we need companies that are geared up to take on the world and win. Goodness me, we have the intellect here. We have the businessmen and businesswomen. We have the tertiary institutions. We have the building blocks of what should be companies to take on the world, but we just have not got it right.

I would argue that in a country the size of New Zealand, the Government does have a very important role to play in getting those settings just right. When I look at regional economic development, for example, this Government has committed $11 million a year to regional economic development. Labour has committed $200 million over 3 years—$200 million over 3 years—as opposed to $33 million over 3 years. What Labour has said is: “OK, we back the regions. We back our businessmen and businesswomen in the regions. We know they are innovative, but we also know that if the Government gives them a little bit of encouragement and helps them along the way, then they could be so much better.”

I suppose that the main difference between the National Government and a Labour Government led by Andrew Little is that the National Government believes you just leave it to the market and the businesses will take care of themselves, whereas Labour believes that we have a mandate—we have a moral mandate and a responsibility—to actually help these businesses grow. And when they do, they will flourish. We are not saying that we will take control; we are just saying that we will help them on their way.

I have massive faith in our businessmen and businesswomen right around this country. We have some shining examples of how we are taking on the world and winning. But, after 9 years of a National Government, we could be doing so much better, and we will be, under Labour.

The CHAIRPERSON (Hon Trevor Mallard): I am going to call the Minister in the chair, but I am going to, again, remind people of the parameters of this debate. We are voting on the estimates of expenditure, and, therefore, we have to say whether we are supporting them and why, or whether we are opposing them and why; whether they should be adjusted up or down and why, or whether there is an alternative expenditure and why. But they are about expenditure.

Hon STEVEN JOYCE (Minister for Infrastructure): I am pleased to report that I support the Estimates as they stand. I think they are thoroughly excellent Estimates, it has to be said. Can I acknowledge Stuart Nash, the previous speaker, and say to the member that I have good news. Not only is this Government passionate about the growth of our businesses, particularly internationally, but it is delivering that growth as well, including, it has to be said, in research and development, where that has gone up by something like $329 million annually over the last 2 years to, now, 0.65 percent of GDP. It is not there yet, but it is a heck of a lot better than it has ever been before, which is good progress. That is why we should not rerun yet again—I think it will be the fourth election—a debate about R & D tax credits, because they do not actually achieve anything and the Government’s approach with Callaghan Innovation achieves a heck of a lot more. But I invite the member to take it to the country one more time and give it a run around and see who salutes it.

I am here primarily to talk about the infrastructure expenditure, because I think that is hugely important. We now have a rapidly growing country, right around New Zealand. Through the post-Budget period, I have had the opportunity to make around 35-odd speeches right across regional New Zealand. I did not take a bus, but I did go and meet a huge number of people. The good news is that in places like North Otago, South Canterbury, Marlborough, Nelson, Manawatū, Hawke’s Bay, the Bay of Plenty, Waikato, Northland, and right across the country, they are experiencing rapid growth, rapid job growth and, in some cases, some of the best growth they have seen in 20 years.

That means it is all-important to invest in the infrastructure to sustain that growth right around the country. If you have a look at the Estimates, what they will show members is that what we have done is we have got a number of surpluses going out in the next 4 years, which is reasonably unusual across the developed world—in fact, almost unique. The important thing, though, is that all of those surpluses are being reinvested in infrastructure. You could see it as the country, effectively, reinvesting in its growth.

We have set $11 billion of additional capital expenditure by the Crown over the next 4 years to take the total expenditure to $32.5 billion over the next 4-year period through our big infrastructure agencies like the New Zealand Transport Agency, Housing New Zealand Corporation, and so on, and also directly through the Crown. Some of the numbers are quite eye-watering; for example, $4.85 billion in new school buildings and renovations—well, actually, they are all new buildings, replacing existing buildings and in new schools. That is a massive investment over that period, and that has to be all done over the next 4 years.

You also have a massive investment—of course, the initial $436 million in the City Rail Link. We have something like $9.2 billion in new roads. There is a lot of investment—$450 million—in KiwiRail. A big part of the investment, of course, is the reinstatement of State Highway 1 north and south of Kaikōura. I had the opportunity to go down last week and see progress. There is something like 1,600 people working on that project now—1,600 people working on that project—

Denis O’Rourke: Way too slow.

Hon STEVEN JOYCE: —and something like 2,500 inducted into it. I appreciate that that member’s leader, Winston Peters, was down there and he somehow missed it all—he somehow said there was not anything happening—but, certainly, when I went down there were yellow goods for Africa in terms of the volume of activity that was taking place.

So education—health is another one. I visited the acute services building in Christchurch—the $460 million-odd investment that is currently being built there. So a lot in the health area and, of course, a lot in the housing area—something like two and a bit billion dollars in Government house building over the next 4-year period.

Again, this is possible only because we have a strong and growing economy as a result of a strong economic plan that is seeing these regions grow and seeing our tax revenues grow, which gives us the opportunity to reinvest in the infrastructure for growth. That is the virtuous circle that New Zealand finds itself in because of strong economic management over the last 8 years since the global financial crisis and, of course, the Canterbury earthquakes. I would recommend to the Committee to support these Estimates, because they are the Estimates of a confident, growing country, and one only has to look across the OECD to know that New Zealand is in a good space right now and going ahead.

FLETCHER TABUTEAU (NZ First): Thank you for the opportunity to speak to the Appropriation (2017/18 Estimates) Bill on behalf of New Zealand First. I just want to address some of the comments from the chairman of the Transport and Industrial Relations Committee, Jonathan Young, and from the Minister. The chairman stood up in this Chamber today and he spoke about a huge outpouring of money on infrastructure in roading, and he put it this way: he talked about all the discussions that are going on and he talked about all the work that is happening. I just want to put it to the Transport and Industrial Relations Committee chairman that when he pointed out that there was only one arterial route to get down the country from Auckland to Wellington, for example, because of some snow on the roads, he highlighted the very fact that this Government has spent no money on infrastructure in roading in the country over the last 9 years, and now the Government pretends it has got some money and it pretends it is going to spend it on roads and infrastructure, apparently.

New Zealand First cannot support these appropriations, and I am glad Minister Steven Joyce got up and spoke before me, because it very much aligns with the notes I prepared in preparation for this Committee. Technically, it is correct for the Government to say that it is running a 3 percent growth in the economy. It is technically correct to say that with the Budget released earlier this year and these appropriations that the Government is running a surplus. But I just want to point out to the members in the Committee today and the New Zealand public that in both of these cases, any superficial analysis of these numbers in the appropriations will point out the fallacy of those claims.

The first and most important argument to make outlining why this is a fallacy is that this country, despite having 3 percent GDP growth—which is technically correct—has just run two consecutive quarters of negative growth as a proportion of GDP per capita. Kiwi individuals out there in the regions, out there in their households—as individuals—are making less money, and that has happened now in two consecutive quarters in the New Zealand economy. Unfortunately, it took an Australian publication to point this out in the media sphere. I just want to say that it is really disappointing that we seem to have political and economic commentators speaking to the growth of this economy and simply parroting what the Minister gave to the Committee in his contribution before us.

I also want to add to this debate and talk about this Budget and these appropriations—for example, the decrease in regional spending for economic development and the absolutely farcical appropriation for the Tourism Infrastructure Fund. It was just taking money from existing funds, putting them into one account, and calling it the Tourism Infrastructure Fund. The Government claimed it is spending more; that is not what we see in these appropriations, and that is not what is happening out in the real world.

My point, using those two examples from this appropriations debate, is that any idiot can create a technical surplus. Anyone can create it. You write down a number on a piece of paper and then do not spend that amount that you wrote down on the piece of paper and you have got a surplus. [Interruption] Sorry, Mr Chairperson, you are absolutely right; you do not have a surplus. The Minister does not have a surplus. The Government does not have a surplus. We know this because people are suffering. I have just told the Committee that individual income has decreased as a measure of GDP per capita. [Interruption] Household spending ability for discretionary spending has decreased in the last quarter. Everything is going backwards under this National leadership, and this is what I am standing up here today to remind the members and to remind the public of—that we do not have a surplus. We have inadequate spending in health. We have inadequate spending—in fact, the Minister acknowledged it. He said we are spending more—$320 billion, he said—but we are the lowest on R & D spending in the OECD. The reality is—

JULIE ANNE GENTER (Green): I rise to speak against these Estimates in this debate because, as the Minister Steven Joyce laid out very clearly a moment ago, this National Government is not investing in the infrastructure that New Zealand actually needs in the 21st century. I believe that Minister Steven Joyce is stuck back in the 1960s—that is where he has got most of his infrastructure projects from.

He laid out that in the Estimates; $9.2 billion will be spent on new roads. Now, I am a big fan of roads. They can do a lot. We have roads. The problem is that investing in new roads now is not going to help the people who are trying to use the roads we have. The single most effective way to improve our transportation network is to invest in the complements to the roading network—things that have languished for decades, like the rail network. I am sure that some other Minister will get up soon and claim that National is spending more on rail than anyone has ever spent in New Zealand, and, technically, that is true, but it is also spending more on new highways than anyone has ever spent in New Zealand, and therein lies the problem. When you are spending $6 to $7 on new highways for every dollar you are putting into our terribly under-invested rail network, then we are missing the opportunity to actually carry more people and more goods through the rail network.

The Green Party has long been an advocate of public transport and rail in New Zealand and in Auckland, and we have been proven right because everywhere we have invested in public transport and rail it is has been wildly successful. In fact, it was about 4 years ago that I was coming into this House and asking the then Minister of Transport whether his Government would support investing in the City Rail Link, and we heard over and over again: “No, no, no. It’s not needed until 2030. OK, if Auckland reaches 20 million passengers by 2020 we will bring it forward.” Well, guess what: Auckland is going to have 20 million annual rail trips this year, in 2017. It is 3 years before the target that was arbitrarily set by that Government for starting the City Rail Link.

So good on the Government for finally realising that if it did not start it now, it was going to be a complete disaster, but we have doubled rail trips in Auckland in just 3 years. Now is the time to be expanding around that work. Now is the time to be building rail to the airport, so it can be open by 2021, in time for those events that are going to be happening in 2021. There are a number of them—APEC, the next America’s Cup. Now is the time to be investing in the alternatives so New Zealanders have the option to leave the car at home. That is the only way—that is the only way—to reduce congestion, but it is also the best way to reduce the cost of transport and getting around. There are opportunities all throughout the country to be investing in the infrastructure that will actually reduce our climate pollution. Doing anything else at this point is completely absurd.

We have only a short period of time to cut our carbon pollution, and transport is still growing. As long as we put our money into infrastructure projects like the East-West Link or Penlink there is an opportunity cost of not putting that money into accelerating projects that will actually cut carbon pollution, that will cut costs, that will cut congestion, and that will improve public health. I would have thought that this National Government, if it truly cared about economic responsibility and meeting our climate targets, would say that it has looked at the data and at what is effective and that, actually, its recent spending on transport has not been very effective.

It is time to start prioritising the projects that will be effective. The Green Party will do that. We will build rail to the airport by 2021. We will invest in rapid transit in Wellington and Christchurch. We will invest in our national rail network—complete electrification, so we do not have to ditch our electric trains and bring back diesel, because that is the best way to achieve a whole lot of goals that I know most New Zealanders share. I know that across the political spectrum, right now in Auckland everyone basically agrees with me. It does not matter whether they vote for National, New Zealand First, Labour, or the Green Party—probably even ACT voters realise that spending $9 billion on a few highway widening projects in urban areas is not going to solve the fundamental problem of too many cars on our roads.

Here is the opportunity. I am sorry to say that National is not taking it, but we do have the opportunity to change the Government and get a much better spend on transport, which will be better for our climate, our environment, our people, and our towns and cities.

Andrew Bayly: Mr Chair.

Hon Simon Bridges: Mr Chair.

The CHAIRPERSON (Hon Trevor Mallard): Well, this is interesting. I am going to give the call to Andrew Bayly on the precedent that came before, and that is that people who have been regularly seeking the call even if they have missed out on it are likely to get it.

ANDREW BAYLY (National—Hunua): It is a pleasure to be talking tonight, and I think the theme tonight should be that this is a Government for infrastructure. I think there are three things we should be talking about in terms of infrastructure. The first one, as we heard earlier tonight from the Minister of Finance, is about all the good things that are actually in the Budget. The main centrepiece of that Budget was the $11 billion of additional new spending to be put forward, over the next 3 years, towards increasing or improving our roading network. Just over $9 billion will go into roading and related infrastructure, and also a whole lot of other money has been invested into schools, hospitals, defence, and housing.

My electorate has certainly benefited from that. I have just had the pleasure of hearing that we are going to have a brand new school in Flat Bush. We have just opened a school earlier this year in Ormiston. We have 10 new classrooms in Beachlands, and there have been a whole raft of those types of investments.

The amazing thing is the $32 billion that is going to be invested in infrastructure in New Zealand over the next 5 years, which is going to improve the way that everyone operates, how we move around at a personal level, and how businesses also grow and survive and compete using modern infrastructure. I also just heard a little bit about the rail, and, of course, it is worthwhile just reiterating that $558 million will be going into rail initiatives around New Zealand—$450 million of that is going into KiwiRail. There is a large investment in improving the KiwiRail and associated networks, and that does not take into account the $436 million down payment on the central rail loop, which will benefit all Aucklanders. I certainly agree with the previous speaker, Julie Anne Genter, that there has been a dramatic increase in rail patronage, and that is why we are investing so substantially into it.

On top of that, we have had the $1 billion Housing Infrastructure Fund, and a lot of that has already been allocated, certainly to Auckland and Hamilton, and a lot of that is going to help create the opportunity for another $60,000 houses across New Zealand, which is absolutely essential, as we all know.

The third thing that I want to talk about is Crown Infrastructure Partners. This is a new model that was, of course, announced over the weekend. I think it is very, very significant as the third leg of the treble in terms of infrastructure. It is really recognising that in many cases councils are up against their borrowing limit, and of particular pertinence to many of us is the Auckland Council, in terms of its financial situation. Of course, coming up against its borrowing limits is restricting the council’s ability to pay for good new infrastructure that is so desperately needed.

What the model is under the Crown Infrastructure Partners arrangement is that, together with about $600 million of capital provided by the Crown, private equity will be allowed to fund and assist in investing in the infrastructure, to make sure that these very large developments can occur. It is really using the successful Crown Fibre Holdings model that has, of course, been rolling out broadband round New Zealand, where, under these arrangements—and they will be relevant only to very large developments—Crown Infrastructure Partners will own the infrastructure, and they will build it, of course, and they will receive the development levies and other associated revenue.

The council will—in its own right, but there is no requirement to—have the opportunity to buy those assets. Basically, what we are doing under this model is front-loading the investment so that these large developments can occur much more quickly, and without imposing such significant impositions on various councils’ financial balance sheets.

Of course, to me, the most relevant is the $387 million that has been announced for the south of Auckland. It was very timely that the announcement was made at the Stevenson development at Drury South, where it is going to create 5,000 new jobs for many people living in my electorate of Hunua. Of course, that money is going to go towards improving the roading network and the train network—specifically, there are proposed new train stations at Paerata and Drury South—which are all going to improve the situation for many of my constituents. Thank you, very much.

Hon SIMON BRIDGES (Minister for Economic Development): New Zealand is a confident little country with real wind in its sails, and that is because of great business people, great businesses, and, actually, a good Government that is delivering through Budget 2017 and Budgets before that, and I am really proud to be a part of it.

In terms of economic development, Winston Peters, we know, went looking for the problems. Actually, what he would have found, I know, as someone who is out there every day in regional New Zealand, is that 12 of our 15 regions are growing strongly. The three that are not have some of the highest regional GDP anyway, and that is a result of, as I say, confident business people and businesses, and good Government settings. We are seeing employment up—actually, it is the second-highest in the OECD, and behind, I think, only Iceland. We have got unemployment coming down. We have got growth up. New Zealand is on a roll.

We are seeing through the Budget the sorts of policies, the sort of smart funding, that are really delivering on that. Paul Goldsmith today was talking about a regional research institute, funded through the Budget, that was going into horticulture. It is one of our industries, or sectors—whether it is kiwifruit, apples, or viticulture—that is really on a roll in New Zealand, going from a small handful of hundreds of millions of dollars to actually, I think in all of those cases, more than a couple of billion dollars each. It is a really growing and high-value area. Whether it is honey, whether it is ICT and technology—there, again, we have come from nothing to where we are today, a $16.5 billion sector, with some of the highest-paying jobs in New Zealand. As communications Ministers, what we are doing in the Budget in that area is making a real difference.

And in that technology area are rockets, not far from where Stuart Nash lives, although he does not deserve any of the credit for this. We are the 11th country in the world to go into space. So whether it is composite fibre going into the yachting and the America’s Cup yachts or whether it is Rocket Lab, we are creating a clever, diversified, high-value economy that New Zealanders know is on a roll and has real, as I say, wind in its sails.

In terms of infrastructure we have heard a load of old cobblers from some of the other parties in this Committee. Here is what New Zealanders know to be true: with an economy on a roll, with an economy that is strong, with Government books that are strong, we are investing unprecedented funding into the right kind of infrastructure to fuel our economy and provide the platform. That is true whether it is transport—as Minister of Transport I talk about that—or whether it is communications. Broadband—we have some of the best policy settings, and smartest funding through Crown Fibre Holdings, in the entire Western World. In transportation, through the Budget, there is $12 billion—$12 billion over the next 4 years—in land transport. Of that, $9 billion alone is into State highways—over 500 kilometres of new lanes around this country. Whether it is Auckland and the Waterview Connection, it is a stunning success that I get more messages about than you would believe, or the regions of New Zealand, with the roads of national significance, with the arterial roads, with the public transport, with the cycleways, or with the rail investment that is going on—in all of these areas there is unprecedented investment in New Zealand.

We are investing in resilience, whether it is in Kaikōura, where we are investing not only to rebuild but to improve; whether it is the Manawatū Gorge, which we know has got real problems at the moment, but where we will invest, because we have got the economy that can back this sort of investment; or whether it is in the Coromandel, or other areas besides.

In terms of broadband, we should be really proud of what the Government is funding in an incredibly smart way in that area to make New Zealand a high-knowledge, high-value diversified economy. We are getting that ultra-fast broadband, the world’s gold standard in broadband, not just into the big centres, not actually just into the bigger towns, but right through into the townships of New Zealand. With Rural Broadband Initiative 1 and now Rural Broadband Initiative 2, which is in a commercial process right now, we are going to cover this country. We have gone from the back of the queue in the OECD, I think I am right to say, to about 11, at the moment, in the world, and with the policy settings we are on we will get into the very top handful, the top four or five, without too much trouble.

What a great Budget that delivered for New Zealanders.

IAIN LEES-GALLOWAY (Labour—Palmerston North): I rise to speak in opposition to this Appropriation (2017/18 Estimates) Bill because it fails to invest in the infrastructure and the public services that this country needs. Instead, what this National Government is proposing is to give tax cuts to the highest earners, with $400 million going to the top 10 percent of earners in New Zealand—instead of using that money to invest in healthcare, which urgently needs that investment, or in housing, which urgently needs that investment, or in transport, which urgently needs that investment.

I want to speak very briefly to the transport issue that is affecting my region, the Manawatū Gorge. Minister Bridges mentioned it very briefly. He made an oblique reference to some investment at some point in time in the future. It is absolutely clear that we need a replacement for the Manawatū Gorge road. It is unsafe, it is insecure, and it is hurting our regional economy to have it closed on such a regular basis. The shame of it is that back in 2011, when I came to this House and said that very same thing, the National Government laughed at me. The National Government laughed off the idea of building a replacement to the Manawatū Gorge road. In fact, my opponent at the time tried to use it against me in our local campaign. That was actually the campaign that I won by the largest majority, I would like to point out.

The National Government’s failure to invest in that route—the National Government’s failure to invest in that route—shows its lack of foresight and also its lack of interest in regional New Zealand. So I do not want to hear the Minister come and make some oblique reference to at some point in the future doing something about the Manawatū Gorge. The National Government should have actually gotten on with this job 6 years ago, but instead my region, the Manawatū-Whanganui region, and Tararua and Wairarapa and the Rangitīkei and the Hawke’s Bay have been left to languish by a Government that has no foresight and no interest in investing in the infrastructure that our regions actually need.

I actually came here today to talk about this Government’s failure to invest in the infrastructure we need to cope with the level of population growth that we are experiencing at the moment. We desperately need to take a breather in Auckland, because this Government has relied so heavily on population growth through immigration to grow the economy that now what we are seeing is enormous strain on housing in Auckland, enormous strain on public transport in Auckland, enormous strain on our hospitals in Auckland, and enormous strain on our schools in Auckland, all because of this Government’s failure to plan for the level of population growth that it has allowed. So we on this side say, yes, we do need to take a breather, but also we need a sensible and nuanced approach to immigration.

I hear that Bill English is planning to back down on the only immigration policy announcement that National made this year. Michael Woodhouse went to Queenstown and made a big fancy policy announcement about how there were going to be new thresholds for what was deemed to be a skilled occupation and what was not. Migrants who had been working in New Zealand for 3 years were going to have to face a stand-down period, even if there was a skills shortage in the area that they were filling, and partners and children of migrants working in the regions would not be able to get work. Well, that was a silly, knee-jerk response from a Government that had failed to engage in the immigration debate. It suddenly realised that it was on the wrong side of the debate, so it came up with a poorly thought-through, half-baked policy that has now been rejected by its base. It is scrambling to find a solution to its appallingly badly, poorly thought-through immigration policy.

What I have been getting is feedback from exactly the same people who have been giving the National Party grief about its policy that Labour has actually got it right on this one. Yes, we need a breather in Auckland, but we also need to regionalise our skills lists so that we can appropriately respond to the needs of the regions. Whilst we have got pressure on infrastructure in Auckland, we have got employers in the regions who do struggle to find the skills that they need, so we are going to tailor the immigration system so that we can get the skills into the places that we need them. Regional New Zealand urgently needs a supportive Government to actually be able to grow and take advantage of the opportunities that are available to it. What it does not need is a one-size-fits-all, knee-jerk response of the sort that the National Government came up with. If regional New Zealand wants a nuanced, sensible response to the immigration challenges that we are facing, it ought to look to Labour, and not to the silly stuff that we see from National.

Hon MICHAEL WOODHOUSE (Minister of Immigration): Those are the seven words that are going to define the Labour Party in this election. Those seven words are: “We desperately need to take a breather”. Goodness knows those members have been 9 years in Opposition. They have been trying so hard to get back to Government they are already exhausted—already exhausted. They have got to take a breather. Goodness me, things are going so fast for them. The economy is growing just too quickly for them to keep up. Nearly 11,000 jobs are being created every single month, and it is exhausting them. A lazy—

Tracey Martin: Speak to the Estimates.

Hon MICHAEL WOODHOUSE: She says: “Speak to the Estimates.” This is the fundamental purpose of the investment in infrastructure, in transport, in jobs, and in growth. This is a confident country, a confident Government that knows exactly where it is going, that has a plan for growth, and that certainly has a plan for migration.

It started with those words 10 years ago when we said that we would bring them home, and we did, and they stayed home. And do you know what else we did because of very good immigration policies? We reduced by a third the number of labour market - tested work visas that the lazy Labour Government was issuing because it was not prepared to work hard enough to ensure that New Zealanders were at the front of the queue for the growing number of jobs that were there then, before the global financial crisis.

I am extremely proud of this Government’s track record in ensuring that New Zealanders are getting jobs. We have a labour market and I have three portfolios that are very, very connected to that labour market—that is immigration, workplace relations and safety, and ACC—which is designed to be fair, flexible, and safe. The investments that we have made in WorkSafe, the labour inspectorate, and ACC are going to ensure that that very strong, confident growth in the economy, in the creation of jobs, and in our immigration policy will continue.

The bleaters over on the New Zealand First benches have been out to the regions, and do you know what they could come back with to talk about? Nothing—absolutely nothing. And do you know why? Because they got a message. They got a message that when a leader talks out both sides of his mouth and says that he wants to reduce net migration to 10,000—10,000 does not even allow for the number of Pacific friendship agreement visas, the refugee quota, and the partnership visas that we have to issue every year. It means no work visas, no working holiday visas, no post-study visas, no farming visas—that friend of the farmers, apparently, is going to decimate that industry. At least he said which particular ones he wanted to kill off. The Labour Party members, who want to cut the migration by 30,000, are not able to say that. It is an oblique reference from a lazy Opposition that does not know what it is talking about.

And Iain Lees-Galloway has stood up and said that our immigration policies on temporary labour have been rejected; actually, quite the opposite—quite the opposite.

Iain Lees-Galloway: No, they have. That’s why you’re backing away from it?

Hon MICHAEL WOODHOUSE: No, no. I am not backing away from anything, and the member will need to wait and see. I admire the fact that he thinks he knows more about this policy than we do, but I can tell that member that there is a very, very sensible policy that is targeted to where the growth is, and that will continue. And guess where it is. It is in the regions, and it is going to continue to be in the regions because those regions are the backbone of this country—the backbone of this economy. The last thing that this Government will do is throw those regions under a bus the way a Labour-Greens – New Zealand First Government would do.

We understand where jobs come from. They come from hard-working Kiwis who have the confidence to take a risk, to invest, and to invest in our New Zealanders. But there are some industries that now and for the foreseeable future are going to need to rely on overseas labour, and this Government supports those businesses. It supports them in helping New Zealanders into jobs, and that is why we have the Ara initiative at Auckland airport. That is why we have the Sector Workforce Engagement Programme initiatives in Ashburton, the regional seasonal employer schemes in Hawke’s Bay and Central Otago, and that is why we will continue to make sure that Kiwis benefit from this growing economy. This Government understands good migration, good, sensible work employment laws, good health and safety laws, and that is what we have invested in through this Budget.

DENIS O’ROURKE (NZ First): I am going to talk about the Estimates, because that is what the debate is supposed to be about, as distinct from the diatribe of drivel we just heard from Minister Woodhouse. I want to particularly talk about transport and begin with Christchurch, where I live. All we are seeing in Christchurch is some old projects being completed to connect the Northern Motorway with Cranford Street to complete the Western Belfast Bypass, and there will also be some further work required shortly on the Southern Motorway. But that is all we are seeing in Christchurch. Those are very old projects that have been there for decades and are only now actually being completed.

What we are not seeing in Christchurch is any work on passenger rail. The lines are already there. The need is there between Rolleston and Christchurch in the south, and it is already needed between Rangiora—where a certain member whom I see in the Chamber now lives—and Christchurch. There is no action being taken on that at all. There is a desperate need for infrastructure to support passenger rail in Christchurch—provision in the Estimates: zero. Zero. That is the record of the National Government there.

In Auckland it is even worse. Aucklanders are being absolutely shafted. What we see is a $4 billion funding gap between the years 2018 and 2028. The Government has said that the available funds are something that, well, will have to be found by Aucklanders, by Auckland Council, because the Government itself has absolutely no plans in these Estimates or elsewhere to fill that gap. Yet, at the same time, the Government will not allow Auckland Council to impose a regional fuel tax. So it says to Auckland: “Fill the gap. But, no, we’re not going to give you any ability to do so.” In addition to that, there is no action to be taken on implementing a road-pricing regime for Auckland, because that ultimately is going to be needed not only to raise funds but as an essential demand management tool.

Looking at some other things about Auckland, the Government has talked about its $436 million commitment to the Auckland City Rail Link—that is far too little, far too late. There should have been a much greater provision by central government for that rail link in Auckland. It should have been probably 50 percent larger than that to relieve Auckland ratepayers of that burden, because that rail link is needed to relieve congestion on Auckland’s infrastructure as a whole.

In addition to that, the Government will spend at least $1.84 billion on the East-West Link in Auckland, which has a very, very poor benefit-cost ratio—so poor that the Minister of Transport will not even release it and will not see it updated because he is actually ashamed of it. That is a dog, that project. It should not be proceeding at all and, in fact, the whole of the National Government’s roads of national significance project approach to transport is itself a dog. It represents what is, essentially, a 1960s transport strategy. Much better alternatives are available, especially in reinvestment in rail, which New Zealand First has as its No. 1 priority. That would include a heavy-rail link to Auckland International Airport, along Puhinui Road to the railway system at Onehunga. That would also allow a fully developed passenger rail system from the south, from Hamilton, as well as from Auckland City itself.

There are many other ways in which the money could be better spent than this Government is going to do. A tunnel for the Manawatū Gorge would be a much better expenditure of taxpayers’ money than the billions spent, for example, on the Waterview Connection—that tunnel. There are other opportunities for rail that are so many that I would not know where to begin. But to put it this way, the expenditure of only $450 million on rail over the next 2 years, when billions upon billions are being spent relatively uselessly on major roading projects, shows that this Government has got its priorities utterly and completely wrong. These are not Estimates that this party, New Zealand First, can support.

MICHAEL WOOD (Labour—Mt Roskill): I am very happy to stand to speak on the Appropriation (2017/18 Estimates) Bill and to reaffirm the Labour Party’s opposition to this particular vote. I want to, in my comments, focus in on the expenditure proposed in the area of transport.

The first thing that I want to do, actually, is pay tribute to Minister Joyce for his speech before, and also Minister Bridges, in fact. They revealed themselves to possibly be some of the greatest Keynesian economic people in this Parliament, because their speeches from beginning to end were simply boasts about how much money they are spending. Of course, one of the things that we on this side of the House hear time and time again from this Government is that it is not about the amount of money you spend; it is about the results that you get. How many times have we heard that? And, of course, who would disagree with that? But it is all very different when it comes to the infrastructure and, particularly, when it comes to transport. In our opposition to this part of the Estimates, we do not oppose the amount of money that is being spent in the area of transport, but we absolutely oppose the way that it is being wasted, and the way in which this Government is proposing to spend billions of dollars of taxpayers’ money, for no discernible improvement in our transport network and the significant congestion challenges that many of our cities face.

In fact, in the hearings in the Finance and Expenditure Committee, we had an extraordinary discussion with Minister Joyce, who, when we quizzed him about the billions of dollars going into projects like the East-West Link and the other roads of national significance that are included in this vote, we asked him: “Can you tell us”—can you show us—“the evidence or the analysis to demonstrate that these billions of dollars of taxpayers’ money will actually improve traffic in Auckland or our major cities?”. And he could not point to one piece of evidence or answer that question. He, in fact, said “Oh, it’s a good question.”, as if we were arguing about some trifling matter, not billions and billions of dollars and one of the biggest problems in our major city, Auckland.

Now I was at an event a few nights ago with a senior executive from one of New Zealand’s biggest retail companies. He said to me that the biggest problem that his business faces is the fact that it has trucks sitting on Auckland’s motorways for hours and hours and hours, every single day: wasting productivity, wasting profit, and wasting his company’s time. And every year, they have to get out of bed earlier in the day just to get their products from their distribution centres and into their stores, and nothing, nothing in this vote—the additional $11 billion spent over the next 4 years on transport—will do anything to fix that. Call me old-fashioned, but I think that if you are spending $11 billion of taxpayers’ money, you actually want to have some evidence that it will make a difference.

I am very pleased that the previous speaker raised the example of the East-West Link: a $2 billion project, funded without proper analysis, whereby the Minister will not actually release the most recent cost-benefit ratios of the $2 billion project, which, unbelievably, is building a motorway project along the foreshore of one of Auckland’s harbours, 5 years after we spent $30 million on a reclamation project to fix up the fact that we built a motorway along the other part of the foreshore of that harbour. And it is a project that will not actually make a difference.

What we know will make a difference, not just in Auckland but in our other cities, is investment in high-quality public transport. But when you go through the report from the committee, do you see any reference to that whatsoever? Of course we had the Government dragged, kicking and screaming, by Auckland into a grudging share of paying for the City Rail Link—a grudging share, a grudging 50 percent share—when, of course, any motorway project gets funded straight out of the National Land Transport Fund. This Government’s priorities for expenditure are wrong, not because they are not spending enough but because they are spending it in the wrong ways and it will not make a difference.

Can I just give one other small example in my remaining time, and that is in the area of road safety—something that will concern every single New Zealander. Last year 320 people died on our roads. That road toll, after years of decreasing, has been increasing over each of the last 3 years. Yet what did we learn in the Estimates process? We learnt that there had been a $12 million reduction in the funding for road policing, at the same time as more and more New Zealanders are dying on our roads, and at the same time as, in many cases, regional councils are screaming out for money for basic maintenance and road safety measures on neglected regional roads, while Government Ministers satisfy themselves with photo opportunities on uneconomic roads of national significance. We oppose this vote because it is a wrong spend of money and a Labour Government will do so much better. Thank you.

CHRIS BISHOP (National): I am a young man, a young member of Parliament; a youngster in political terms. I have seen a little bit of Parliament and I have worked around politics for a while. I have not seen 2 weeks like we have seen in the last couple. It is just extraordinary, the contortions in the Opposition benches, the infighting and the—

The CHAIRPERSON (Lindsay Tisch): Order! That is not in this debate. I must ask the member to focus on the contents of this appropriation debate. That is a general debate issue that you were talking about, and that is not part of this.

CHRIS BISHOP: Thank you, Mr Chair. I was just making a couple of prefatory remarks. I want to focus my brief remarks on the Government’s investment in ultra-fast broadband (UFB), which, I think, when they come to write the history of this Government—which has been in office for 9 years now and, God willing, another 3 years after 23 September—they will look back and they will say that it was the investment in ultra-fast broadband that was one of the defining achievements of this Government. It is hard to actually explain sometimes how the rest of the world looks with quite a degree of envy and admiration at what is going on in New Zealand with ultra-fast broadband. To give credit where credit is due, some of that is due to the action of the Hon David Cunliffe when he was Minister of telecommunications, with local loop unbundling. And then, of course, that public-private partnership model developed by Steven Joyce when he was “Minister for Broadband”, I guess you would say, in the early days of this Government.

I had the opportunity just a couple of weeks ago to visit a company in Upper Hutt called Strictly Savvy, which is one of those companies that is taking advantage of the opportunities provided by ultra-fast broadband. It is a small unit in a very large development in Railway Avenue in Upper Hutt—a repurposed old factory—and they provide virtual assistant services. You might say: “Well, what’s that?”. Well, basically, they have a team of people sitting there—and they are growing very rapidly; they are up to 20 staff—in Upper Hutt and they provide executive assistant services in graphic design, website design, and online book-keeping for Xero and MYOB, and other things as well. It is all from Upper Hutt, and their clients are in Wellington, Auckland, Southland, and all around New Zealand. Basically, they have a team of people there who are contracted to do the work that people all around the country want. It is possible only because of ultra-fast broadband. It started in the last 3 or 4 years; it is an award-winning business. It is growing very quickly, and it is possible only because of ultra-fast broadband. It is an innovative company, it is an example of Kiwi ingenuity, and it is doing great things.

That is what UFB can do. It can provide new businesses and new opportunities and new innovations, and that is the whole point, actually, when you make investments in infrastructure like ultra-fast broadband; you sometimes do not know what is coming down the line. You do not know what people are going to do with it. In the same way, when you build a road or you build a railway network, it is not actually clear sometimes exactly what opportunities will be presented but you know that they will exist, and that is why you do it. That is why this Government is making such a strong investment in infrastructure like we see in the appropriation bill that we are debating before the House. So I welcome the Government’s investment in ultra-fast broadband—their ongoing investment, including in this Budget.

I also want to touch on the investment in the Rural Broadband Initiative, and people might say: “Well, Lower Hutt, the Hutt South seat, there is not much rural part of Lower Hutt.” But they would be wrong. There are small pockets of rural idyllic lifestyle in the Hutt, particularly in the great place of Wainuiōmata, and they are crying out for a cellphone tower down Coast Road. Because the Rimutaka Forest Park, which hundreds of thousands of people in New Zealand visit every year—and my good colleague who has just taken the chair, Scott Simpson, I am sure, will be out there, along with Maggie Barry, who visited recently, to visit the forest park in his new role as Associate Minister for the Environment—is a wonderful part of the valley. It is a wonderful part of Lower Hutt. It is a wonderful part of the lower North Island, but there is no cellphone coverage. And every summer—well, it seems like every summer, anyway—people go missing in the Rimutaka Forest Park, and it is a real hassle for the Department of Conservation rangers that go in and out and it is a hassle for people who work in and around the park, and it needs and deserves cellphone coverage.

That is the whole point of the Rural Broadband Initiative for major tourist hotspots, for major areas that are missing out. You do a co-investment along with the ultra-fast broadband partners in the TELCOs, in order to make a co-investment by the Crown in those companies, to provide coverage that would not otherwise exist if things were done on a purely economic basis.

So I am very hopeful that the result of the commercial negotiations between the TELCOs and the Crown will be that the Rimutaka Forest Park gets some cellphone coverage. That will be good for Wainuiōmata, and it will be good for the Hutt Valley.

MELISSA LEE (Chairperson of the Commerce Committee): Thank you for the opportunity to take a call on the excellent work that the Rt Hon Bill English and the National-led Government have undertaken over the past year to support more jobs and growth in the economy. We work hard for our Kiwi families.

I chair the Commerce Committee, and we have had our members actually question the Ministers in the appropriations of commerce and consumer affairs as well as in the communications sector. We have always enjoyed the meetings that we have, including on the economic development appropriation. One of the things that really interested me in the sector was when the consumer affairs Minister appeared before the committee, and the consumers affairs appropriation—a total of $186.590 million in the 2017-18 year. It is a 6.2 percent increase, from the 2016-17 Budget.

One of the things that the Minister had to answer, in relation to the portfolio, was about the work of the Commerce Commission, which does tremendous work in this area. The commission regulates the competition, and all that sort of stuff. One of the things that was really worrying was the workload. Members were quite concerned about the workload that the Commerce Commission was doing, and whether it was in fact adequately resourced—in terms of personnel and the competency—in an ever-changing environment.

We asked this, following a very particularly busy time for it. The Minister’s answer was that she had great confidence and that the commission was appropriately funded. I think that is the kind of work that this Government is delivering. We are actually making a difference. We fund the commission. It does a great job.

New Zealand has undertaken amazing growth through the last 8 excellent years of National leading the way for New Zealand families. Under our Government we have worked hard, despite natural disasters, the global economic crisis, and all manner of world political interests, to get our people into jobs, into the economy, and working as part of a team effort for a world-class New Zealand as an international trading nation.

Often in this House I have talked about the achievements of this Government in terms of the free-trade agreement that we have secured for New Zealand with our trading nations—recently I had an opportunity to visit Korea, where I was involved in a political conference where there were Korean heritage members who turned up from all over the world—and how New Zealand stands in the view of the world, when it comes to our economic development, and our coping mechanism when it comes to things like the competitive nature and the work that the Commerce Commission does.

The other aspect that I would like to talk about is the Financial Markets Authority (FMA). There is a proposal of an increase of $9.8 million per annum. We asked the Minister whether the FMA was sufficiently resourced as well. The FMA has expanded as a result of the Financial Markets Conduct Act of 2013, which increases the responsibility and the functions of the FMA. This is the reason why it has received an increase in funding. The implementation of the Act has involved the licensing and authorisation of a significant population of previously unregulated financial service providers.

In terms of the appropriation within Vote Business, Science and Innovation, this includes the communication appropriation, which is an increased fund for ultra-fast broadband, the Rural Broadband Initiative, and the Mobile Black Spot Fund. We have, as a committee, made changes that this Government is putting in place, in terms of better communication. We have to be very proud of the work that the National Government has delivered for New Zealand.

Votes agreed to.

Education Sector

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

Dr JIAN YANG (Chairperson of the Education and Science Committee): I rise to support the Appropriation (2017/18 Estimates) Bill. The National-led Government has been relentlessly focusing on delivering better public services, and enhancing students’ participation and achievement has been one of the key priorities. We are making every effort to make sure that our education system is able to cater to the individual needs of our children. We have continually increased the funding of education and also we have seen a continual increase in our students achieving higher qualifications.

Budget 2017 has delivered the largest injection of new money into our education sector since the Government took office in 2008, with an additional $1.1 billion of new operational funding over the next 4 years. So this brings our total funding for education to $11.6 billion, which is a new record.

More specifically, early childhood providers will receive an additional $386 million over the next 4 years and this investment will enable us to create 31,000 new places for early learning. This means that more children will be able to get better early learning, and also, for the very first time, targeted funding to support children at risk of not achieving is being extended to early learning, with $35.5 million of new money for early childhood education.

Early childhood education is particularly important for us because the early childhood years are vital to children’s future development and for their capability to learn in the future. This Government intends to provide the strongest start for our children in their early life to as many children as possible. This is very important because we believe it is important to give our children the strongest start in life, so that they will be able to succeed in the future. All children are now starting school better prepared to learn, and leaving school better educated and qualified and better prepared for work or for higher education.

Education is always closely related to the economy. This is because education, or a better educated workforce, is crucial to a growing economy. Also, in New Zealand’s case, education is a very important export industry. As a matter of fact, international education is the fourth-largest export industry in New Zealand. It contributes $4.5 billion each year, with 30,000 jobs. This Budget will invest $1.7 million each year into international education—an additional $1.7 million—particularly for Education New Zealand, to make sure that Education New Zealand can support and strengthen the sustainability of international education.

We can also look at international education from a different perspective. It is not just in dollar terms. It is also because all international students, once they return to their home countries, can be ambassadors for New Zealand. That is not calculated just in terms of dollars but also in terms of reputation and New Zealand’s image internationally. So it is very important for us to continue to focus on, and invest in, international education.

But I emphasise this Government also wants to modernise our education system and also the content of our education. For that reason, recently this Government made an announcement that it is to make the biggest change to our school curriculum in 10 years. That change is to make sure all young New Zealanders are digitally fluent. That is important because in today’s world, if you are not digitally fluent, you will not be able to compete. So it is a very competitive global and digital world.

TRACEY MARTIN (NZ First): New Zealand First will not be supporting the Estimates, and I will give you a few reasons why. Inside this 4-year Estimates period, there is $20 million that will be given to integrated school property—that is, private property owned by other people, and $20 million of taxpayers’ money will be going to that. I realise that a deal was done to actually bring integrated schools inside the Education Act 1989. Some parts were removed so that they do not actually have to meet some other criteria that they used to have to meet, but right now $20 million of taxpayers’ money is going to be provided to integrated schools for their private property. Let us not forget that there is no mention inside these Estimates of how the negotiations are going to get back the $5 million of taxpayers’ money that was handed to the Whangaruru trust. There is no mention inside these Estimates about that money.

There is $5.231 million over 4 years to put untrained apprentices in front of our children—$5.231 million of taxpayers’ money to put untrained apprentices in front of our senior students. Yet at the same time what is not inside these Estimates is money for Computers in Homes to actually narrow down the digital divide for some of our families. Mr Bishop should be very aware of that because many of those families are actually in the electorate that he is hoping to win. There is no money for SeniorNet. As this Government drives more and more social services online, there is not a single dollar in here for SeniorNet to help our seniors keep connected to the Government services they require. There is no money for the gifted and talented.

Every single one of those things has been cut inside this Budget. We could have spent that $5 million just on Computers in Homes. We could have spent that $5 million on SeniorNet—that $5 million that is going to put apprentices in front of our people because this Government cannot do workforce planning when it comes to teachers and cannot seem to invest a little bit of money on actually doing some workforce planning so that we do not lurch from one shortage to another. For $5 million we could have kept Computers in Homes, for $5 million we could have kept SeniorNet, and yet what we have got is apprentices inside our classrooms in these Estimates.

There is $8 million over 4 years for English for speakers of other languages (ESOL). That is well and good, but it is not enough. It is not enough because not only is it only $8 million over 4 years—and let us get real; so many of those students need that support because they come from other nations, and they deserve that support because we want them to participate fully in New Zealand life—but there is a 5-year limit on how much support they can get, regardless of whether they have the language skills required to continue their education.

So we have Pasifika students up at our secondary school who can no longer get any sort of ESOL support. There was a wonderful programme—an amazingly wonderful pilot programme—that was trialled at Mahurangi College. The students did well. The student voice said “This is so good. Can we please have it after school to put our parents on it?”, and what happened? This Government pulled the funding. So we had a successful ESOL pilot. This Government pulled the funding. It may have put $8 million in here over 4 years, but it goes nowhere—nowhere—to addressing that.

There is $7.6 million over 4 years for Māori language resources. What about the resource teachers of Māori? It is all very well and good to decide you are going to have another printed resource or another DVD that one is going to post out to schools. What about the resource teachers of Māori—17 years under review. They have been 17 years under review, and this Government decides it will put $7.6 million over 4 years for some more DVDs and a couple of books. New Zealand First cannot support a Budget like this that actually has very little practical outcomes. It looks good on paper; it does not translate to the ground.

There is close to $30 million in this Budget for Novopay cock-ups. For the Holidays Act compliance there is $15 million. There is $13.9 million over 4 years to stabilise the payroll—that is Novopay, people. It is another $30 million—the gift that keeps on taking. That is what this Government has signed us up to with that payroll service. So how could anybody support Estimates like these, based on dodgy information and a totally unrealistic and completely disconnected view of what is happening in our schools and what needs to be supported?

CHRIS HIPKINS (Labour—Rimutaka): This year’s Budget and the developments that have occurred since then have now given New Zealanders a very, very clear choice when it comes to this year’s general election—a choice between tax cuts or health, education, and housing. That is the choice that they will face, and when we look at Budget 2017, what do we see? We see funding for early childhood education on a per child basis frozen yet again. What does that actually mean in real terms? That means cuts—more cuts to early childhood education. This National Government has cut early childhood education funding on a per child basis every single year since it has been in office. When National members talk about the growing funding for early childhood education, they conveniently forget to mention that there are more and more kids participating, and as a result the spending goes up while the per child spending goes down.

Early childhood education quality in this country is now reaching a critical breaking point because the Government is not willing to fund it. The very first decision it took in its first Budget was to cut funding for the early childhood services that offer the highest quality by employing qualified and registered teachers. Fees for parents have gone up 25 percent under this Government, and what do its members throw back? They throw back a comparison with 2007 to say that the cost of early childhood education is going down. Well, in 2007 the Labour Government introduced 20 hours’ free early childhood education. If we take it on just the National Government’s track record, fees and costs for parents have continued to go up under this Government.

That is why I am very pleased to say that the Labour Party will be prioritising early childhood education funding ahead of tax cuts. We will make sure that early childhood services that have 100 percent qualified and registered teachers receive the extra funding they used to get until the National Government cut it. We will make sure that early childhood education funding is adjusted every year so that it at least compensates for inflation on a per child basis, and that is something that this National Government has not done once in the 9 years that it has been in power.

Let us look then at the school sector. Schools in New Zealand are crying out because of the problems they are having with their school properties. There are 214 schools in New Zealand that are already over capacity, and hundreds—hundreds—more are at risk of overcrowding because the Government has been too slow to respond to population growth and population pressures. It gets worse—it gets worse—for those schools in areas where the population is stagnant or, in fact, declining, because they are getting next to no money put into their school property. As a result, we are seeing school properties in some of the poorest communities being left to rot—being left to rot.

There is one bright shining hope, however, and that is this recent flurry of announcements we have seen by the National Party members that they are going to spend more money in schools where they are marginal—where they think they might win the seat. So here is a message to every school community around the country that thinks that its school property needs upgrading. If you have got a National member of Parliament, make them marginal, because then National will come along in an election year and give more money, as it is about to do later this week to Wainuiōmata High School, which needs the money—and I hope that it is enough to completely rebuild the school, because that is what it deserves. Anything less than that and the National Government will have let that community group down as well. The Labour Party will ensure that every school in the country is brought up to an acceptable standard by 2030. The current Government is playing catch up and has no plan to make sure that every child is working in a satisfactory learning environment.

School operations grants were frozen last year, and this year’s operations grant barely compensates for inflation. The result we have seen is the contributions from parents increasing by 50 percent under the current National Government. School support staff are being done over once again because they rely on their school operations grants for their salaries, and the operations grant increase does not even take into account the salary increases that they bargained for in good faith through their collective contracts.

Teacher supply is yet another issue the National Government is turning a blind eye to. For the last 8 years National members have said there was no problem with teacher supply. Now they have acknowledged there is a crisis, they are tinkering around the edges, and we are going to end up short of teachers. There are not enough teachers in classrooms, and they have got no solutions to that problem.

Hon PAUL GOLDSMITH (Minister for Tertiary Education, Skills and Employment): It is a great pleasure to take a call in this Estimates debate and talk about the considerable and ongoing investment that this Government makes in the tertiary education sector particularly. This Budget totals nearly $3 billion a year that we invest in the tertiary sector, plus another billion or so for support for students.

We do that because of the powerful, powerful contribution that higher education makes to the lives of New Zealanders, partly in terms of equipping them with the skills and the knowledge that they need in order to get a good job and contribute to our economy and our country, and to better understand the world in which they live and in which their families live. We also contribute to tertiary education because we can see the thought leadership and innovation that is developed out of our university sector, particularly, but also across the tertiary sector. That can contribute to making our companies more internationally competitive—yes—but also to better delivering evidence upon which we in Government and the broader community can make evidence-based decisions, and also to finding solutions to many of the challenges we face. Many of the university researchers are deeply involved in the National Science Challenges in many of those areas in which we as a Government continue to invest heavily.

When I look at the tertiary sector as a whole, I see it sort of broken down into four parts. Part of it is all around a lot of the investment we make at that foundation level, which is trying to find that spark of inspiration for young people who have not come out of the schooling system connected yet, and really trying to reconnect them with education so that they can get back into learning and into a job.

We have got a number of programmes that we fund, such as Youth Guarantee, the student achievement component level 1 and 2 funding, the Māori and Pasifika Trades Training Initiative—a whole bunch of schemes that are designed to try to reconnect those kids. Our focus over the next little while will be continuing to evaluate them. Some of them work very well, some work brilliantly in one part of the country—in Gisborne—but not so well in the South Island, and others will work well in other areas. The focus is on the effectiveness of those regimes, and we are very determined to make sure that they work effectively to try to reduce that group.

The next is the broader skills category, and we are looking at the Productivity Commission report, which we will be delivering our response to shortly. It is all really about trying to ensure that the system is generating the skills that we need as an economy right here, right now. We are in a situation where more than 11,000 jobs are being created every month. There is a real call out for skills in so many areas, and our tertiary sector is capable of delivering those skills. We want to ensure that it continues to do that over the next years, that it is responsive and innovative, and that students have the information available to them to make wise choices about the courses that they take. There is a lot of work going on in that area, and that is why this Budget that we are talking about has increased the overall funding for tuition rates across the board.

Another two areas are around ensuring that we maintain real world-class, international-level universities so that New Zealanders have access to that, and that is why we continue to put extra resources into the Performance-based Research Fund, which responds to and reflects the higher-quality research side of what universities do. We continue to invest, and have consistently invested, in that area, as we have in the broader science factor, in which a significant amount of our science funding—$1.5 billion a year—is channelled through the tertiary sector as well.

I just want to touch on the international side. The Budget has got extra resources for Education New Zealand. This is a $4.5 billion industry—very important—which employs upwards of 30,000 New Zealanders. We do not take the view that some other parties do—that you should just slash the whole industry in half. We think it is an important industry. It is about diversifying the New Zealand economy, and the focus should be on dealing with the poor performance that there undoubtedly is in areas of that sector. We have got the regulators working very hard in that area to rein in poor performance. Overall, it is a very important sector, and we continue to support it.

CATHERINE DELAHUNTY (Green): Tēnā koe, Mr Chair. Tēnā koutou e Te Whare ko tēnei pō. This Estimates debate is always worth participating in, because there is such a huge gap between the rhetoric in what we say and all the numbers we throw around in this House and then what happens when you go out and talk to people. There is such a big credibility gap. In the education Estimates debate, a number of speeches from the Government members have talked about all this money that it is giving and how fantastic it is.

Since the Budget, I have been to visit a number of schools, networks of principals—all kinds of people who work in the education sector—waiting to see the big, happy smiles on their faces. What I saw was that in freezing early childhood education and in freezing the operations grant in a way that does not account for inflation beyond 1.3 percent, people out in the sector are really not very happy. I think it is important to take that 1.3 percent inflation figure—or apparently-related-to-inflation figure—for the operations grant for schools and track it through to reality. The reality is I went to both a high school and a primary school where we were talking about this, and what people, and principals in particular, described was that the current education Estimates, with the way that the operations grant has been treated, which barely takes account of the increase in rolls because we have a growing population, mean that it is actually—surprise—a cut.

What the schools told me—and this is from people who are deeply concerned to be even saying this out loud—is that school support staff are going to have to go. Saying that school support staff are going to have to go because of the Estimates is not like saying: “I’m going to give up smashed avocado and have one less latte.” It is saying that the children in our schools will not have some support that they need for them to participate in their learning and that the person who is a school support staff worker, at barely above minimum wage, is going to lose their job. So, surprisingly, principals were not very happy about being the bearers of the Government’s failed Estimates commitment! They were not very happy about that at all.

The reason this is so serious is that the school support staff—obviously, their role is invisible to many people, or otherwise, they would be properly funded. They should be centrally funded, which is the Green Party’s position. But the children are the ones who miss out. We are talking about neurodiverse and disabled children, who cannot participate in school without a school support person doing those hours, and many of them cannot get enough hours to go to school for more than a few hours a week, which is a breach of their human rights. So the Estimates giving a little bit more money for autism programmes is not going to deal with the fact that a child needs with them not only a school support staff person but, actually, someone who has had some professional development, who has some status, and who is paid some reasonable wages.

When we go out for the meetings that we are starting to have all over the country—I, Tracey Martin, and Chris Hipkins—we are not hearing: “Yay, the Budget has delivered.” We are hearing that it is a cut and that it is cutting where it hurts the most. The Green Party will not stand by silently about the cuts to school support staff because of the frozen operations grant. We will not stand by and say that a failure to have a goal of 100 percent qualified staff in early childhood education—and a failure to fund that—will lead to quality early childhood education. The Estimates have failed to do the most critical things, and all the window dressing and all the pretty new buildings you have to build because there are more children—ignoring the buildings that have not been fixed, which my colleague Chris Hipkins mentioned—will not make up for the fundamental fact that if the operations grant has to be divided into a million cruel pieces, it will be death by a thousand cuts. That is not OK in the education system.

The Estimates have not been received by the sector and by the parents and children with delight and smiles. It has been disturbing to see the inequalities growing. Again, we are dependent on school donations to make up for shortfalls that this Government has perpetuated in this Budget. The Green Party cannot support that. We are voting against the Estimates because we stand for education, and we will be standing proudly this election for a better-quality public education system.

Hon TIM MACINDOE (Associate Minister of Education): It is unfortunate to be starting literally a minute before the dinner adjournment, but let me just say, particularly for the benefit of the member Catherine Delahunty, that our education sector is in very good shape, and I am incredibly proud of the fact that we have just delivered the biggest investment in our children’s education in history. While my very good friend the Hon Hekia Parata is in the Chamber, may I pay tribute to the great job she did.

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

The CHAIRPERSON (Hon Chester Borrows): Kia ora mai tātou. Tēnā tātou katoa. Members, when we broke for the dinner break, the Committee was debating the votes in the education sector in the Estimates debate. The Hon Tim Macindoe had the floor, and he has 4 minutes and 37 seconds remaining if he wishes so.

Hon TIM MACINDOE (Associate Minister of Education): Mr Chairman—

Hon Ruth Dyson: He doesn’t have to, though.

Hon TIM MACINDOE: He most certainly does wish so, and I am delighted to know that the Opposition members are as thrilled with this opportunity as I am. Just before the dinner adjournment, I was acknowledging the Hon Hekia Parata and the fine state in which she has left New Zealand’s education system, and I also made the point in reply to a former—

Hon Ruth Dyson: Come to Christchurch, Tim.

Hon TIM MACINDOE: I have been to Christchurch several times, I can say to Ms Dyson. I always enjoy my visits there, and I am thrilled to see the way that education is flourishing in that fine city as well. I made the point that one of the reasons why it is flourishing so much is that the recent Budget has delivered the largest ever investment in the education of our children that we have seen in New Zealand’s history. Just in order to put a couple of figures on the record, the 2017 Budget has put an injection of an additional $1.1 billion of new operating funding over the next 4 years into education, and that takes our total funding for the education system in 2017-18 to $11.6 billion. As I say, that is a record investment—$11.6 billion is going into education.

In the 2¾ months that I have had the great privilege of being an Associate Minister of Education, the thing that has focused my mind in particular in the education portfolio has been my responsibility for infrastructure and school property. What a privilege it has been to be going around the country, particularly to areas of high population growth, and be able to respond to the demands that exist in those areas for what we are calling roll growth classrooms. I have been to Northland, to Nelson, to Christchurch—and I know Ms Dyson was particularly thrilled that I came to Christchurch—to Otago, to Auckland—

Hon Ruth Dyson: Didn’t notice, to be honest.

Hon TIM MACINDOE: Ha! The wonderful thing, which I know Ms Dyson will be particularly delighted to hear, is that there is more to come.

In the nearly 9 years that the current Government has been in office, this Government—

Hon Ruth Dyson: 9 long years.

Hon TIM MACINDOE: —9 spectacularly wonderful years, as I know Ms Dyson appreciates—has invested over $5 billion in school infrastructure. That is a very significant investment, but in this year’s Budget it has been foreshadowed that over the next 4 years there will be another $4.85 billion. That, of course, reflects the greater choices that a Government has after sound management of the economy, getting us back into surplus so that we can start to ensure that New Zealanders enjoy the benefits of their very hard work and their restraint through the global financial crisis that they have had over the last few years.

One of the problems that we inherited as a Government was that the average age of school property when we came into office was 40 years. I dare say we all have knowledge of schools and classrooms around the country that are, in many cases, pre-war—[Interruption]—or, in Mr Muller’s case, things that he might remember from the 1980s, or whatever. In many cases, they are no longer fit for purpose. They certainly are not consistent with the very significant shift in education that has taken place over the last 10 or 15 years in particular, as we have gone on to a much more digitally focused and student-centred style of learning. Mr Chair, I am conscious of the fact that there is no timer on at the moment, so I might just need to see whether you can help me with that, because there is no way of ensuring—

Hon Member: 5 more minutes!

Hon TIM MACINDOE: Ha, ha! But what this means is that as a result of Budget 2017, we will have 305 new and replacement classrooms around the country. What is also very exciting, and what I am particularly thrilled about is, that the Ministry of Education now has a much longer-term focus in the way it works out meeting the needs—particularly the infrastructural needs—of schools, so that it is now looking up to 30 years ahead to identify where as a ministry they might need land. It is working with local authorities right around the country, and infrastructure providers, to carry out planning for high-growth areas. As a result of that, the Budget also includes $8 million for the ministry’s strategic planning capabilities because, clearly, there are a number of very talented people working in the ministry to ensure that that work can be done.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe e Te Heamana o Te Komiti o Te Whare, tēnā tātou katoa. Well, I can only say that anyone who has taken over the portfolio of school property has received a hospital pass, because, as the select committee report noted, there are 214 schools that are over capacity right now. So, ka aroha atu ki Te Minita, kia kaha, because I think that in the Estimates, from my view of the world, there is not enough money in there to do all the things, not only for those 214 schools but also for the many schools that are reaching capacity and no doubt will go over.

That is not actually what I want to talk about. I am really disappointed about these Estimates, because I believe that education is about the future. There is a saying in Māori that, basically, says that for the bird that feeds off education, his or hers is the world. That is really about protecting the future, and I look at these Estimates and I feel really concerned about the future—what it holds for the next two generations. For example, how does this Budget and these Estimates address the issue of the high number of young people not in education at all and not in employment or training? There is a real deficit in these Estimates. We need to do something a lot better for the young people, in particular, of the current generation.

It would be far better to have a Budget that actually funds properly the whole of the next generation’s future. For example, I think the pressure on families today to make ends meet—and when you think about those young people who are growing up not only in overcrowded schools but also in overcrowded garages, or in a car, that is 40,000 people in total. What sort of future does this Budget hold for them? I worry about them. I worry about how the next generation is going to take care of the current generation, for example, with the growing number of elderly people—none of us in this House are getting any younger. Actually, we are not representative, really, of the entirety of our country. So I worry about that.

I worry that there is not enough money to address things like dyslexia. I was speaking to a family in Tokoroa only last week—a dad who was trying to do the best for his family. He ended up having to pay more than $2,000 to have his son assessed, and it turned out that this young boy of 9 years old had dyslexia. Then, and only then, did that family receive the kind of support that they really did need. But if that family had not gone out on a limb and actually paid that money to have their child assessed, that boy would be sitting in an overcrowded classroom, not receiving the kind of education he deserves. All of our young people deserve better.

I think that things like removing school donations, or giving schools the option of buying into what we on this side of the House are proposing, which is to eliminate the pressure on families that some schools place on their families that our families can ill afford, are some of the things that one could do to ease the pressure on our families.

TODD MULLER (National—Bay of Plenty): I rise to take a call on the Estimates for education. Firstly, can I acknowledge the contribution before of Tim Macindoe, who I think is doing a sterling job as Associate Minister of Education. You can hear the enthusiasm in his voice as he talks to the privilege of being able to go round the country to communities that are finally, after many years, as he said—you know, when we took over, there were a number of properties that were seriously under-invested in, and through the choices that we have made to get an economy delivering, as it is now, we can put significant investment into education. You could hear in his passionate portrayal the genuine enthusiasm he has and the warmth he receives from the communities when we talk to these various school announcements, and I will shortly talk through some of those as they pertain to my community. I can assure Mr Hipkins that it does not in any way relate to the pressure on the majority; it relates to the strength of the community and the growth of migration, particularly in the Bay of Plenty context.

Look, I thought the Estimates hearing was actually extraordinarily well done. The Education and Science Committee had the privilege of having the Hon Nikki Kaye address us as a committee for the first time. We stepped through a number of issues, and Opposition comments have touched on some of them. I firstly want to talk about this view around school capacity. I think Nikki Kaye, in particular, was very open about the importance of ensuring that the ministry has the right systems and processes to look forward 10, 15, 20 years and ensure that the capacity planning is appropriately competent and resourced accordingly. So whilst the issue was put to her, she very confidently talked to the $8 million that is appropriated in this Budget to be able to lift that forward planning for the ministry, and I think that is very useful. Whilst it is only a small amount, when you look at the overall $11 billion investment, it is an important amount to ensure that that part of the ministry’s work programme is done effectively.

My area in the Bay of Plenty has benefited from the announcement in the Budget around school buildings. I was very delighted to be alongside Nikki Kaye when she announced in Papamoa that we have another new school on the horizon, starting in 2 years’ time. In addition to roll growth for Papamoa College, there are additional buildings for the second year in a row for Golden Sands School in Papamoa, and there is the new school in Pyes Pā that we announced last year. You know, I come from an area that is going particularly well. A lot of people from around the country are moving to Tauranga and the wider districts of Papamoa and Ōmokoroa and Welcome Bay, and it is great that we are in the position as a Government to have an appropriation, as listed here, that identifies that pressure on the community, and that is in front of that expectation of two new schools being built in my electorate over the next 2 years and significant increases in the schools that are already there.

We also touched on early childhood education. As we have already heard from our speakers, and particularly Tim Macindoe, we have got a significant chunk of additional money—$386 million of operating funding over 4 years.

Maureen Pugh: How much?

TODD MULLER: $386 million. Look, these numbers—you know, they tend to run off the tongue a bit, but they talk to a Government that has worked very hard to ensure that we have the economic choice as a country to be able to invest in this sector.

So it does frustrate me when I hear cries from the Opposition that it is never enough. It is never enough, but there is significant investment that is going into this sector. This is the highest amount in education ever in this country—$11.6 billion. It is a record investment, but it is not just investment in property and an increase in the operations grant. It is investing in the digital literacy of our teachers to ensure that the environment in which students are being taught is absolutely appropriate to give them the skills to be successful in an increasingly demanding global economy.

This is a Government that is delivering. This Budget in respect of education is a great example of that, and I am very proud to be able to be part of a Government that can deliver this sort of vision and aspiration for the country. Thank you very much.

CHRIS HIPKINS (Labour—Rimutaka): What a disappointing contribution from Todd Muller, the member who has just resumed his seat. It was boring, it was lifeless, it was full of hollow platitudes, and it made the member look like he wanted to be anywhere else but in the Chamber defending his colleagues and this Government’s Budget, and I am not surprised. He is one of the better ones over there, I have got to say, and if even he cannot summon up the energy to sound enthusiastic about this year’s Budget, I think that says everything about a Government that has run out of puff, has run out of steam, and is going through the motions. He would rather be anywhere but here, having to actually defend the Budget that those members have passed.

And it is not surprising—86,000 young New Zealanders, and counting, are currently sitting at home doing nothing. They are not in education, not in employment, and not in training. Those are the numbers—86,000, and counting—under this National Government. That is a significant increase on when those members became the Government.

Instead of doing something about that, this Government wants to keep throwing barriers into the road of those young New Zealanders. Student fees for tertiary education are up 40 percent under the current Government’s watch. Student debt is at $16 billion. Did you know that since the student loan scheme was introduced, we still have not reached the point where the amount borrowers are paying back exceeds the amount that is being borrowed? The overall student loan balance, more than 20 years after student loans were introduced, continues to balloon every year. It is an unsustainable scheme, and we need to do something about that.

The Labour Party has got some answers. The current National Government has completely run out of puff. Well, we have not. We have got plenty of fresh ideas, including a plan to provide all New Zealanders with access to at least 3 years of free post-school education, because we know that the future of our economy and of our country relies on education. The more educated the population, the more productivity we will have and the more we will earn as a country, and that will be fantastic for New Zealand.

Having 3 years of free post-school education is an investment that will pay dividends for our country. But it is not just institution-based education provision we are interested in; it is on-job training as well. The Labour Party has got a pragmatic, common-sense approach when it comes to boosting the number of apprenticeships that we need in New Zealand. We need more apprenticeships, and there is no doubt about that. We have a critical shortage of tradespeople that is currently being filled through immigration, and yet we have got these 86,000 young New Zealanders whom we could be training up to take on some of those jobs. Our plan to convert the dole to an apprenticeship subsidy for those young New Zealanders simply makes sense, because it is money that we are already spending.

Our plan to introduce more funding for night classes and adult education also makes sense, because we know that as the world in which we work and live changes, adults are going to need to be re-engaging in the education system more than at any time in the past, and yet this Government is cutting funding for those very programmes that are targeted at adult learners. We want to see those programmes revitalised so that all New Zealanders have the opportunity to achieve their potential. For New Zealanders who find that after 10, 15, or even 20 years in the workforce, the job they are doing is no longer required, we want to ensure that they have the opportunity to retrain and to re-educate for the new jobs that are going to be available.

Does it not say everything about the confused priorities of this Government that an adult on a job seeker benefit gets more financial support than somebody who is on a student allowance and is studying or training to improve themselves so that they can get a better-paying job? We have a cycle for some New Zealanders that involves them going from a job seeker benefit to a low-paid job, back to a job seeker benefit, into a low-paid job, back to a job seeker benefit, and into a low-paid job. We have got to break that cycle.

One of the ways we can do that is through education and training, and yet the current Government is focused on putting barriers in the road of those people who want to upskill themselves and re-educate themselves. Well, the Labour Party is going to stand beside them. We are going to make sure that we break down those barriers so that they have the opportunity to undertake training or education right throughout their life, so that that education will genuinely be a lifelong thing for all New Zealanders, because it is going to have to be. It is going to have to be, not just because of the changing nature of work but because of the changing nature of the way that we live.

This is a Government with no real plan. It has run out of steam. It has got no new ideas. We are more than ready to step in. We have got plenty of fresh ideas.

JENNY SALESA (Labour—Manukau East): New Zealanders are entitled to a free, accessible education system. We believe that education gives our young people the opportunities to be the very best that they can be, to contribute, and to make New Zealand a fantastic place to live.

After 9 very long years, this National Government’s approach to education in Budget 2017 is just more of the same. Has it invested to ensure that the teacher supply crisis is addressed? No, this Government has failed to do that. This Government has also failed to address overcrowding in schools. We have heard from many of our colleagues, talking about the fact that we have schools that are overcrowded already and have many hundreds of other schools that are at risk of overcrowding. This Government has also failed to keep tertiary education fees down for students, and thousands of our students are now facing a lifetime of student debt.

The best educational systems make teaching as a profession an attractive career. They also do their very best to try to retain teachers in the profession, but we know from a survey that was announced about 2 days ago, I think, that in Auckland in particular, two-thirds of the young teachers—primary and intermediate school teachers—are either already leaving the largest city that we have or are planning to leave Auckland. Why? Because they can no longer afford to live in our largest city.

Schools are telling us that they are actually finding it really hard to recruit teachers into their schools. Schools are telling us that as they start term 3—which was yesterday—more than half of their schools are short by two or three teachers. This is an issue that we must absolutely address because it affects all of our children from all levels—from early childhood and primary as well as at high school. When we have schools in Auckland that are stepping up and proposing innovative ways of addressing this issue by saying that they are looking at building places of accommodation—residences at their schools to house teachers—you have to actually ask why it is that schools are beginning to do that, and then the other question you have to ask is which schools actually have the resources to be able to do that. I can tell you that it is the schools in rural communities and in South Auckland that are absolutely not in any position to be able to build places to accommodate their teachers because the teachers can no longer afford to live in our largest city.

Getting back to Budget 2017, one of the things proposed under this Government is that it will have a Budget initiative for children in early childhood education services who are disadvantaged kids, but the issue that we have on this side of the House is how these kids are going to be identified. The really blunt tool that this Government is going to use is it is going to look at kids who are in benefit-dependent households—kids from benefit places. But more than half of the families that come to our offices out in South Auckland asking for assistance are working families. They have either a father who is working full-time or both parents who are working full-time, and yet they live in cars, garages, tents, and caravans. We cannot say that these children are not at risk, because when you are a child and you should be attending early childhood education services but you do not have a house to live in, absolutely you are at risk.

I have one other question to ask of this Government. It actually made an announcement that it will be building many more new schools out in Auckland, but the question is that the announcement that this Government made over 3 years ago now that there was going to be an allocation of $350 million promised to build nine new schools in Auckland—where are those schools? To have re-announced $240 million in this Budget way back in June was a rehashing of policies and Government funding that was announced several years ago, but just because it has not actually built those schools does not actually give this Government the licence to give us National trickery—announcing funding that it has already announced but has failed to spend.

It is time for a completely fresh approach. Labour in Government will implement what is really needed—a comprehensive education system. Thank you.

Hon NIKKI KAYE (Minister of Education): I am very pleased to speak around Budget 2017, but I think it is important to give a bit of context in terms of where we have come from. We have heard a lot in this debate about school property. Let me remind the Committee of what we were handed in terms of our school property portfolio: old, cold buildings. We did not have condition assessments of buildings. We have in a 9-year period, compared with the previous Government, spent more than a billion more on school property to fix buildings, to invest ahead for growth. We have done significant work in terms of bringing our school infrastructure—can I acknowledge my Associate Minister Tim Macindoe—and it is no different in this Budget.

We have seen additional investment on a scale of hundreds of millions in areas like Auckland. We are, obviously, investing in areas like Tauranga and Bay of Plenty. We have already invested in areas like Hamilton and Queenstown. This is a Government that has upgraded, fixed, and delivered more modern learning environments than anyone in history by far, and that is what this Budget is about.

The other thing that I would say at a larger level is that we hear a lot from the Opposition and certain stakeholders about this “funding freeze” in education. Well, let us look at the facts: under our Government, Vote Education has gone from $8 billion to $11.6 billion. That is $1.1 billion more over 4 years, the largest ever injection of education spending in a Budget, and that is under this Government, in this Budget. We are focused on, obviously, ensuring that we get the outcomes, whether that is rising levels of participation, which we are doing in terms of early learning, or whether that is more young people with NCEA level 2, which is happening. We have seen increases in improvements, whether that is lifting results in terms of reading, writing, and maths—again, we are getting those results—or whether it is Māori and Pacific achievement, and again, let us talk about those results. We have gone from a situation where 57 percent of young Māori left our schools with NCEA level 2 qualifications, to 74 percent, and for Pasifika students, it has gone from 65 percent to 80 percent. Not only are we investing but we are getting results.

Can I just make this comment. We saw the Labour Opposition release its policy on the weekend. What was one of the core planks of this policy, when the whole thing about national standards is that we know where these kids are so that we can invest in them? Labour has said that it is going to scrap national standards, but it has not said what for. So to every parent out there in New Zealand, you have a very clear choice: a Government that cares to tell parents how their kids are doing in education, or a Government that says: “No, we’re going to deny you of that information and we’re going to replace it with nothing.”

I think that is appalling, and that is why in this Budget we are focused on not only having good achievement information but also investing in our most vulnerable. That is why, as we just heard from a previous speaker, you can see investments in this Budget around oral language and communication—$6 million. You can see investments in this Budget—$34 million to help those children who have severe behavioural difficulties. You can see in this Budget a Budget that is weighted around early childhood to target those kids who may be in vulnerable families. You can see in this Budget increases in operational grants by $60 million. You can see in this Budget another 31,000 places funded in early childhood education.

This is a Government that is investing more in infrastructure, investing more in targeting those kids who are vulnerable, and getting greater outcomes, and you contrast that with a Labour Opposition that will not even believe in enabling parents to have basic information about how their child is doing. I think there is a clear choice. This is a great Budget.

Votes agreed to.

Environment Sector

The CHAIRPERSON (Hon Chester Borrows): Members, we come now to the votes in the environment sector, B5, volume 3.

JOANNE HAYES (National): I stand to take this call for the Estimates on Vote Environment. I am really pleased to do this, as a member of the Local Government and Environment Committee. As we start moving through my contribution, I just want to add that it has been the 2017-18 Vote Environment appropriation that has increased to 82 percent of the funding from the 2016 actual expenditure. We are looking at $871.489 million of appropriations going into the 2017-18 Vote Environment.

A significant appropriation for this vote has been the New Zealand Units, to do with climate change. We are investing—the appropriation is looking at—$681 million, just for the allocation of New Zealand Units. We are looking at $23 million to provide advice for mitigating environmental hazards and waste—that is, the Waste Minimisation Fund. There is $23 million for advice to implement tools to improve environment management, and $20 million to provide advice and implement tools for water management.

Even though it is a 5-minute call, I want to spend a little bit of time talking about the freshwater management section of the Vote Environment appropriations. I think that the Clean Water package of 2017 is a very good package because it looks at areas like $100 million investing into the improvement of fresh water for the Freshwater Improvement Fund. That is to go towards organisations and communities to actually help them with cleaning up their waterways.

I also want to talk a little bit about the fact that some members in the House believe that our rivers and waterways should be 100 percent swimmable. Obviously, that cannot happen because the weather will not allow that to happen. Just look at the floods that happened, which actually did contaminate our waterways. So we are looking at 90 percent of the waterways in New Zealand being swimmable. I doubt that anybody would have wanted to swim in those rivers that flooded over the weekend. When we start to look at the fresh water, I really do support this. I also come from a rural background, and I see it all the time—whenever the rivers flood, you do not want to go swimming in there. So 100 percent swimmable rivers—I do not think that is actually achievable, but 90 percent is actually achievable.

One of the other things that these particular appropriations look at is actually locking stock out of waterways. This is the first Government of New Zealand in the history of this country that has actually put in regulations around locking stock out of waterways. If we start to look at some of the areas in the North Island, and the dairy farmers are actually implementing those rules around locking stock out of waterways, and that is really important. It has been this Government that has put that particular piece of legislation in. So, you know, we get a lot of flak on this side about that, but we are a Government that has done this. This is the first time in the history of this country that a Government has stepped up to manage fresh water and put in regulations that local government has to implement to keep our water clean so we can all drink it.

Hon Amy Adams: That’s right. Thank heavens for National.

JOANNE HAYES: Yes, that is right. It is a National-led Government. So when I stand and I hear all the banter from the other side, it is just blowing hot air in the wind, because you did not do it when you had 9 years, the Greens did not even have any influence in that Labour-led Government, and I doubt that will happen into the future. I am really proud of what this Government is doing around the Vote Environment portfolio and especially around fresh water. I am sure that my colleagues will carry on discussing the rest of the Vote Environment, because they are good pieces of information and appropriations that have gone into Vote Environment, as well as Vote Conservation.

This is a Government that is actually delivering for New Zealanders. No other Government has done that. We will continue to do that into the future for the environmental health of this country, and I am very proud to stand here and take the first call on the Vote Environment Estimates. Thank you.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Chair. Otirā e ngā mema o Te Whare nei, tēnā tātou katoa. I am also pleased to take a call as a member of the Local Government and Environment Committee and to just say how grateful I am to the previous speaker, Joanne Hayes, for clarifying that the reason why our rivers are dirty in this country is the weather.

Fletcher Tabuteau: The weather.

MEKA WHAITIRI: It is the weather. It should be no surprise to members on this side of the Chamber and to all New Zealanders listening that it is the weather’s fault for creating dirty rivers!

I just want to draw the Committee’s attention to the Estimates for Budget 2017—and the member did talk about an increase in the Budget. Of course, most of that is in the New Zealand Units, and she did highlight some of the investments. I want to talk about the five new policy initiatives that are part of this Budget. It is with real concern that I note that the investment by the National Government in what I believe are critical policy issues will be laid out for all to see.

The first one is domestic emissions reduction. This Government believes $1 million in 2017-18, and $3 million over the following years, will address improvements on reducing New Zealand’s domestic emissions—$1 million. Then we have got the Paris Agreement on climate change. Hold on—we cannot even get $1 million out of the National Government. There is $924,000, and that would fund the ratification of the Paris Agreement and a plan for domestic action to mitigate climate change.

Then there is the Marine Protection: Advancing Regional Processes. It gets $250,000—$250,000 is the commitment from the National Government, to provide policy advice. In my calculations, that might be two senior policy advisers, or three juniors at a stretch. But that is the National Government’s commitment to marine protection in this country. Then we have the urban development capacity, where we have got $1.469 million in 2017-18, and a further $2.1 million over the following 3 years.

Then there is Te Mana o te Wai Fund—$1 million. It is $1 million aimed at improving water quality for freshwater bodies that are important to iwi and hapū. Every hapū and iwi, up and down this country, will see that figure and understand the commitment from this National Government to addressing iwi and hapū water-quality issues that the previous speaker spoke about—this Government’s commitment to the environment.

I want to touch on the Freshwater Improvement Fund, which the previous speaker spoke about. This is the $100 million fund over 10 years that this National Government has committed to. If you look at the name “Freshwater Improvement Fund”, you would think it is for improving fresh water, would you not?

Hon Ruth Dyson: What’s it called, again?

MEKA WHAITIRI: It is called the Freshwater Improvement Fund.

Hon Ruth Dyson: Yep, you would think that.

MEKA WHAITIRI: Right. It was announced by the National Government in 2014, and how many applications have we had to that fund to date? None.

Hon Ruth Dyson: What?

MEKA WHAITIRI: None.

Catherine Delahunty: Zilch.

MEKA WHAITIRI: Zilch. It was 2014, and we are now 3 years down and we have not had one single application to that fund. That is the National Government’s commitment to freshwater management in this country. Everybody around the country will know that this National Government is not in the game of protecting our environment, and Budget 2017 confirms that.

I want to talk about shifting goalposts, because we were told by this Government that we could achieve swimmable waters. Remember, those members are the ones who talked about: “You’re only going to get wadeable. That’s it—wadeable.” You see, they cannot even get their own commitment to freshwater management in this country, because now they are talking about achieving swimmable rivers by 2040. So, on one hand, we are on wadeable, and now we are trying to move to swimmable. Of course, the target time under this Government has been extended out to 2040, but, of course, if we have a flood or major weather catastrophe we are going to be set back, because that is the reason why we have dirty rivers in this country. That is, again, the excuse that this National Government gives, time and time again, around its commitment to cleaning up our waterways for this generation but also for the rest who come after it.

This is a half-baked commitment to the environment. It is something that we, on this side, do not support, because it is not a real commitment to ensuring that our environment, our rivers, and our conservation estate are protected.

CATHERINE DELAHUNTY (Green): Tēnā koe, Mr Chair. Tēnā koutou e Te Whare ko tēnei pō. I am thrilled to take a call on this. I learnt a lot tonight. I learnt that swimmable rivers are not possible because of the weather, and I was quite disappointed because the Budget failed to also deal with a big issue that Nick Smith has kept mentioning in the House whenever I have questioned him in the last 2 years. One of those big issues that I thought the Budget might deal with was the volcano problem—volcanic ash was mentioned as a cause of dirty rivers—and then I thought it might deal with the birds. I thought Nick Smith might announce the massive bird cull, because basically the argument has been we cannot have swimmable rivers because of birds and volcanic ash and the weather, and if that is the case, how come Budget 2017 did not address any of those?

Those birds are still out there, people, threatening your water. Those random volcanoes are approaching your rivers as we speak, about to pollute them. It is really, really something else.

Unfortunately, Budget 2017 was a big disappointment to many people. We actually knew what was coming, because when there is a crisis you just keep announcing the stuff that you have announced before, and that is what happened this time, as my previous colleague mentioned.

My colleague who is on the Local Government and Environment Committee, Eugenie Sage, has been rigorous in questioning the Government about water funding. This 2014 fund—it never lets anyone subscribe to it. Then in 2017 it is announcing it again, and we are still waiting. It is very disappointing.

Te Mana o Te Wai Fund was closed, and people around the country were saying to me: “The problem with Te Mana o Te Wai is that we have to raise half the money.” If it is a hapū or a small community or whānau trying to clean up your waterway—and I have met many in my year-long tour of this country—they actually need a fund that they can access where they do not have to find half the money.

Then the fund was closed down, and of course there has been another announcement now of another hundred million dollars. Oh, fantastic—$1 million more in Te Mana o Te Wai Fund, $100 million more into the Freshwater Improvement Fund. But where is the evidence of change? Where is the relationship between what is being put in there and what is actually happening to water? If you have anything to do with the water space—and I have to say some of the National Government’s initial speakers just did not seem to know very much—the Waikato River alone is estimated to cost up to $8 billion to clean up. So $100 million is not going to touch one of our major rivers.

We have a disproportionate response from the Government about the crisis in fresh water. What is more, quite apart from the money, we have this incoherent policy that no one understands. It is quite an achievement to be able to announce a fresh water clean-up package that the officials then are revealed by email to have not understood how to talk about it. That is quite an achievement.

Meanwhile, dirty water is running into the sea every day, and we continue to maintain models of agriculture that are polluting waterways. People in the public understand that 2040 is not an aspirational goal. Swimmable by 2040—so many people are looking at that and going: “Wow, this is the dream—when we have killed all the birds and stopped all the volcanoes, we will be able to swim in the river by 2040.” But the public is not stupid. The public of this country want clean water, and they want it done by changing the land-use processes—not by killing farming or giving up having proper sewerage systems or anything else that impacts on water, but by making a real investment in what has happened.

The consequences of the last 20 years are really, really serious for fresh water, and by talking about fencing, this year’s Estimates have completely failed to address the scale of the problem. Fencing is good, but it is a red herring for nitrates. If you know anything about this area, it is about nitrates and it is about those models that create excessive nitrates and nutrients in our waterways.

Sorry, Government—big fat fail. It is not birds and it is not weather; it is actually how we live. It can be changed, but you are not the people to do it, because you have not got—to quote John Key—the guts.

EUGENIE SAGE (Green): I will stick with the theme of water and take it in the climate change direction. In Vote Environment there is over $713 million for the climate change appropriations, but a large part of that is administration of the emissions trading scheme, and in the rest of the Budget there is a $23 million allocation to provide advice and implement tools for environmental management. If the Green Party was in Government we would be spending a lot just on reducing emissions, and we have a major plan to do that, but we would also be supporting councils and local communities in adapting to climate change, because a changing climate is not some distant threat. It is happening now in the form of extreme weather, and it is costing our communities and our people and our landscapes a lot.

We have seen that in Otago and in Canterbury over the last weekend. Doorknocking beside the Heathcote River on Sunday to see how people were, we saw the tragedy of those homes where floodwaters having gone through people’s homes, wetting furniture and carpet, and inundating them with sewage-contaminated floodwater. People do not always have insurance. The recovery from that is really difficult.

We have seen the Government step in and respond when there is a natural disaster like earthquakes, both in Christchurch and in Kaikōura, but when it comes to adapting to climate change, the Government just looks the other way. It is leaving communities on their own to deal with the issues of climate change. You have got councils like Whakatāne dealing with Edgecumbe and with Matatā, and the whole coastal erosion flood hazard risks there. It is the councils that are having to have the difficult conversations with their communities about whether there is a retreat strategy, how that is paid for, and just how to work policy around it.

We have seen this Government totally fail to provide any updated guidance on how to deal with coastal hazards. The most recent technical guidance was in 2008, yet we have got councils like Kāpiti, like Christchurch, and like Whakatāne and Hawke’s Bay Regional Council dealing with these front-line issues right now. It is the councils that pay the costs of cleaning up after these extreme weather events. Just going into the city on Monday and seeing the large number of potholes on the road as the water has got underneath, and the huge number of slips—and it is the councils that pay for that. Councils need guidance and a partnership with central government to tackle adapting to climate change, yet this Government has its head in the sand on that.

There has been a total failure by the Ministry for the Environment. The Minister mentioned at the select committee that there is a technical working group that has been set up. It is supposed to be releasing an interim report very soon, but perhaps it will be like the updated guidance on coastal hazard issues. That has been promised for several years, and it is still yet to eventuate. We have seen in Auckland massive problems, with the stormwater infrastructure totally inundated by these heavy rain events. We will see more of those, and yet we do not have the partnership that we need between central government and local government to help councils upgrade their infrastructure and cope with these intense weather events.

The Green Party has got a plan to reduce our emissions right across the energy, the housing, and the agriculture sectors, and we also want to work with councils to work out how we can adapt to climate change. Our Green Infrastructure Fund, which we announced recently, is part of our commitment to make that transition to a cleaner economy, to bring the Government and the private sectors together to finance new, clean infrastructure projects in the solar and the wind energy sphere, in recycling, in energy efficiency, and elsewhere. We need to deal with climate change. We need a plan to reduce our emissions. The Green Party has that, and we will be promoting much more help to councils to adapt, as well.

Hon SCOTT SIMPSON (Associate Minister for the Environment): It is a pleasure to take part in this Estimates debate, and it was a privilege also to attend, for the first time, the Estimates hearings held by the Local Government and Environment Committee, along with my colleagues the Deputy Prime Minister and Minister for Climate Change Issues, the Hon Paula Bennett, and, of course, the Minister for the Environment, the Hon Dr Nick Smith. We were able collectively to put to the select committee during the Estimates hearings the case for New Zealand being better off in terms of its environment and natural resources under this National Government than under any previous Government in the history of New Zealand.

I am very proud to be part of a National Government team that is delivering on environmental, conservation, and waste management issues for New Zealand and New Zealanders. We bring to this debate—and it is tangibly proven in terms of the vote Estimates on environment, conservation, and climate change issues—the investment that is being made in terms of improving what has been for many parts of the country some less than desirable outcomes in environmental terms.

It is a bit rich to hear members of the Opposition stand in this Chamber and criticise the water policies announced by the Hon Dr Nick Smith. During the 9 long years of the last Labour - New Zealand First administration, there was absolutely nothing done—zero, zilch, nada done—in terms of improving the water quality of New Zealand waterways, and for them to now have the audacity to criticise a plan that is solid, robust, and practical in the way that they do is entirely inappropriate from their point of view.

We bring to the debate on environmental issues our Bluegreen philosophy, and that is a pretty simple one. It is one that works very well, and it is one that actually represents the largest parliamentary grouping of environmentalists in this House. Often it is the parliamentarians in the Green Party who appear sometimes to claim the moral high ground on environmental issues—that is, when they are not talking about social justice issues or whatever. Increasingly, they do not represent environmental care and responsibility in this Parliament. It is actually the 44 National Party caucus members who make up our Bluegreen caucus, advocating and responsibly bringing policy to the Parliament and to the people of New Zealand in terms of environmental protection, enhancement, and conservation.

I just want to focus on a couple of things in the time that is available to me. One of them is something that has captured the minds and imaginations of, I think, just about every single New Zealander, and that is the big hairy audacious goal of having a predator-free New Zealand by 2050. In my part of the world, on the beautiful Coromandel, groups, volunteer groups, NGOs, and organisations have just embraced this concept because many of those organisations have been for years—for decades—working away with gritty, stubborn determination to control predators in one of the most beautiful parts of New Zealand. But now, with the inspirational, aspirational goal of Predator Free 2050, they have approached the challenges ahead of them with renewed vigour.

I am very confident that in a part of the country like the Coromandel, which is geographically defendable in terms of its location, it is an ideal and perfect spot for a Predator Free 2050 initiative to be given a really good burst. So as part of our Bluegreen approach that we bring to policies and initiatives run by this Government—an approach that is characterised by sensible, pragmatic, and environmental decision-making—we are not the party of placards and protest. We just want to get on with it and do things in a pragmatic way.

I have been given the delegation for waste and waste minimisation. I have got to say that in the few short weeks that I have had this environment role, I have been incredibly impressed with the work that has been done by so many organisations around the country to minimise waste, to reduce rubbish going to landfill, and to recycle and reuse. We have got some terrific initiatives around the country, and I hope that over the next little period of time we will be able to shine a light on some of this terrific work that is being done in the North and the South and the East and the West. Around New Zealand, innovative ideas that are great for our environment and for our country. So it was a pleasure to submit to the committee’s hearings, and I commend the Estimates to the Committee.

DENIS O’ROURKE (NZ First): I want to start with climate change, because it probably is the area where we should be spending most of our debate this evening. I note that the Budget provision of $713 million includes an appropriation of $681 million for the allocation of New Zealand Units under the emissions trading scheme (ETS), and a further $13 million for policy advice and $19 million for administering the ETS. However, over the last few years what we have got is an expenditure that has now exceeded $1.4 billion on these matters. That is a lot of money and you have to ask yourself whether in fact we are getting value for that investment. I do not think we are, because if we do a lot more a lot sooner to avoid the need to buy units, or to allocate units at all, then that would be good for the New Zealand economy and also good for our progress towards our Paris commitments.

So we think that progress has been far too slow and far too little. In fact, the Minister for Climate Change Issues has said that she wants to make a start. Well, for goodness’ sake, it is way too late to be making a start. We should be well along the road to reducing the need for the allocation of those ETS units, because we should have made a lot more progress in real policy measures concerning climate change. But we have not seen any real action by this Government in that respect.

New Zealand First, on the other hand, has a whole raft of policies on climate change that relate to the optimisation of New Zealand’s opportunities for renewable energy so that we do not have to wait until 2025 to reach our 90 percent target. We want to ensure that, in particular, we make very solid progress in reducing the effects of agricultural emissions, which are by far New Zealand’s greatest challenge.

There is a great deal that can be done. One of the first things that need to be done is huge investment in New Zealand forestry, both plantation forestry and the replanting and regeneration of natural forestry. We want to make transport an early target, to reduce dependence on fossil fuels and to optimise the use of electric vehicles. We want to do things like a fringe benefit tax holiday for plug-in vehicles. We want to see a continuation of the exemption for electric vehicles from road-user charges beyond 2020. We want to see attention paid to adjusting depreciation rates to encourage the use of electric vehicles, and so on. We also want to see the Parliamentary Commissioner for the Environment’s report recommendations concerning the actions that need to be taken in New Zealand to deal with sea-level rise. We want to see those implemented as well. So there is a great deal that can be done, and when you look at the Government’s record it is pretty pathetic.

In terms of freshwater management, again, New Zealand First has a whole range of what we think are very important measures we would like to see taken. We think that the $100 million allocation to the Freshwater Improvement Fund is—no pun intended—just drop in the bucket, and there needs to be a much more serious attempt at improving freshwater quality. We want to see, in terms of the export of fresh water, a royalty charged on a regional basis and for 25 percent of that to remain in the region concerned. In terms of waste minimisation, again, we have a very comprehensive policy on that.

The one that I particularly want to mention—because I have only a few seconds left—is the need to regulate commercial and industrial waste, including demolition and construction waste. Far too much of that goes to landfills. That is by far the biggest volume that can be tackled. That needs regulation. It is the one and only way that that can be reduced. There needs to be compulsory sorting of those waste streams before any of it goes to landfill, or indeed even to a clean fill. That would be a very big hit.

Those are the sorts of policies that New Zealand First wants to see. We do not see any of that in this Budget.

NUK KORAKO (National): Tēnā koe e Te Kaiwhakahaere. Huri noa i Te Whare nei e mihi atu ana ki a koutou katoa. It is my pleasure to speak on the Appropriation (2017/18 Estimates) Bill, covering the environment sector. I am a proud “brown blue” and I am also a very proud Bluegreen, so I take great pride in being able to speak on these appropriations.

Just following on from the last speaker, Denis O’Rourke, it is really great to be on this side of the Chamber, because to us the glass is always half full—over half full, actually, particularly when we talk about appropriations. Look, at the end of the day, it is all about the economy. It is all about having a strong economy to actually be able to have the pūtea—the money—to be able to dedicate to these environmental initiatives. So if you have not got the money, well, then you have got very, very sad-looking environmental initiatives. With that then, even look at a lot of our Third World countries. They are the most polluted and they have not got the strategies because they cannot afford them. But when we look at the very, very high end, those with strong economies—look at Scandinavia and all that. They lead the world. That is exactly what we are actually about in New Zealand as well, on this side of the Chamber—driving that through.

When we come to climate change, National takes this climate change very seriously. We are actually committed to New Zealand doing its fair share. We want to protect our country. We actually do, because it is not just about us—it is not for us in a lot of ways—it is for our children and their children after us. That is where our strategy is completely, totally different from what I hear from the other side of the Chamber. Let us look at the Paris Agreement. Under that we have signed up to a fair and ambitious target, and by reducing emissions by 30 percent below the 2005 levels by 2030, that is doing our bit—that is really aspiring to do our bit.

Our challenge now, though—our challenge now—is reaching that target while still growing the economy. Now it is all about that as well. I talked about the economy before. Growing the economy and creating jobs—that is what this is about as well. So our emissions have been steady over the past decade—over the past 10 years—but now we need to start really reducing them. We know that. We understand that. We have got the economy to really start pushing that as well. So when we look at this—when we look at all of this—let us have a look at renewable electricity. We now have 85 percent of electricity through renewable generation. We have got that now—over 85 percent.

We are also off to a good start and we are looking at how we can reduce emissions in other sectors such as agriculture and also transport. So when we look at those things that I have just highlighted, that is really about a Government and that is about an economy that are actually delivering for New Zealanders, and also delivering for the world as well, particularly when we are looking at the environmental strategy.

The other thing that we have to be careful of, though, is that we do not place unnecessary costs on businesses in New Zealand. We will not do that. What we can do is create these initiatives in conjunction with businesses, and that will lead to better environmental outcomes. So one of the main whakaaro here—one of the main parts of the strategy—is to actually partner with businesses so that they can work together, and that means that then we do not lose those businesses. They do not actually pack up and go overseas, and we have to be very, very mindful of that.

I had only an opportunity to talk only about climate change, but from this side of the House, this is an excellent Budget, particularly for the environment. On that note, e mihi atu ki a koutou katoa.

DENISE ROCHE (Green): Tēnā koe, Mr Chair. I rise to speak to this part of the Estimates debate on the environment. I am going to focus my comments on the issue of waste, which was mentioned in the committee report but not really in very much detail. The Budget included an increase—which I was very excited about, initially—in the Waste Minimisation Fund by about 50 percent. The Waste Minimisation Fund comes from the waste levy that was introduced in the Waste Minimisation Act, which was a Green Party member’s bill. The waste levy came into force in 2009. The idea of the fund that comes from that waste levy is that it be used to minimise waste and support businesses to find innovative ways to deal with some of the really difficult items in the waste stream and actually find ways to get them out of landfills so that the resources can be reused.

So when I saw the Budget I was very excited until, of course, I realised that a 50 percent increase in the Waste Minimisation Fund equates to a 50 percent increase in the amount of waste going to landfill. This, basically, suggests that there is no plan to reduce the amount of rubbish that we create in this country. I guess I should not have been surprised, because when this Government came in, one of the first things it did—and the Associate Minister is probably aware of this—was that it took away the targets from the waste minimisation strategy that had been in place since 2002. So it took them away, which therefore means that you cannot really try to find a way to reduce waste because you really do not care. That is obviously what is happening here.

The waste levy has been reviewed recently, and that is part of the deal of the Waste Minimisation Act—it does get reviewed every 3 years. The original idea with the waste levy—which is only $10 a tonne—was that the levy would be extended. It would increase over time, which would act as an incentive to reduce the amount of rubbish going to landfill. It would also be extended to different types of materials and different types of landfills, because with the way that it applies at the moment, there is only a small number of landfills that are actually covered by the legislation.

Despite that, there are millions and millions of dollars created every year from the waste levy, because the amount of rubbish that we are producing is not going down. In fact, at the same time as the review was happening by the Ministry for the Environment about the waste levy, a waste levy action group was set up by councils, researchers, and the industry itself to look at what would be a good way to reduce the amount of stuff going into landfills, and it came up with the idea that increasing the levy is the No. 1 way. What its report showed was that, actually, over the term of this Government and over the term of the waste levy itself, there has been a 16.4 percent increase in the amount of stuff going into landfills. Why is this important? It is important because the landfills create greenhouse gases, and if we are to ever do anything about our greenhouse gas emissions, this is one thing that we could do. It is such an easy thing to do.

The report from the waste levy action group, basically, said that if we increased the levy to about $140 per tonne for some items and extended it to a few more landfills, then we could deliver about $500 million in net benefit to New Zealand every year. We could increase jobs by 9,000—those are jobs that are concerned with resource recovery—and, at the same time, we would divert around about 3 million tonnes of waste from landfill, which is what we want to do.

But I am not seeing any action from this Government at all about wanting to make any minimisation at all in the amount of rubbish we are producing, because if this Government did care about it, it would be doing things like making a tiny little change that the people of New Zealand want, which would be to introduce a charge on single-use plastic bags. Yes, I know plastic bags are not a big amount of the waste stream by tonne—they are not—but we use 1.6 billion of them every year in this country and we are not doing anything about it.

The industry actually—the packaging forum—set up a recycling scheme with the help of the Waste Minimisation Fund that comes from the waste levy, to the tune of about $1.2 million of soft plastic recycling, because it did want to see us reduce the amount of plastic that we are using and producing and throwing away in this country. I have to say that recycling is what you do after you have failed—you have absolutely failed—to do the other stuff to reduce waste, which is avoid, reuse, refashion, and reconfigure. You do all that stuff before you get to the recycling, because recycling itself is resource-intensive.

We could be introducing a charge on single-use plastic bags. People will have known and have seen quite recently that nearly all the mayors in this country want us to be able to do something about plastic bags—put a charge on them—and so if we will not, at least give local government the opportunity for them to make their own decisions about it. We have had Retail New Zealand, which I met with last year, say—and it has now changed its tune and said that it knows that its members want to put a charge on single-use plastic bags.

I have also talked with the supermarkets, which cannot put a charge on plastic bags because it would offer an unfair competitive advantage to their competitors, and they cannot agree to do it together because that would be a breach of the Commerce Act, because they would be acting like a cartel, apparently. So they cannot do it voluntarily, but they could have, and they would be happy to accept a charge on single-use plastic bags if there was regulation to do it.

The magic bullet in the Waste Minimisation Act is Part 2, which is the area where you can declare anything in the waste stream a priority product, and you can use that magic bullet to introduce a product stewardship scheme like putting a charge on single-use plastic bags. This Government is so out of touch with what ordinary New Zealanders want. It is Plastic Free July, and community organisations right across the country have been talking to the media and talking to people in their communities about the scourge that is plastic pollution in our environment.

I probably do not need to go into detail for this Committee about the impact that plastic does have on the environment, because it should be obvious. It damages our brand—our “clean, green” New Zealand brand—to see the littering of plastic all around our country and in our oceans, rivers, and seas. I will not even get on to the damage it does to marine animals, but I probably do not need to talk about that, because it is really obvious and apparent that the fact that this Government will not do anything about it is deeply disturbing, when this is such a no-brainer. Everybody wants it. We can do it. It should be done. It could reduce the amount of rubbish that is going to landfill and create a reduction in our carbon dioxide emissions. In fact, if we got rid of single-use plastic bags altogether, it would be the equivalent of taking about 3,000 cars off the road, which is not much but it is a step. In fact, just focusing on plastic bags, it is not much, but it is a step. It is the gateway drug to the next plastic that we actually get rid of, and that will be refunds on drink containers.

I think there are heaps of things that we could be doing that are cost-neutral, that create jobs, that create opportunities, that are green, and that provide employment. We could be doing lots of things in the waste sector, but what we have got is a Government that is saying: “Hey, we’re going to increase the amount of rubbish going to landfills by 50 percent so we can get 10 bucks off each tonne, so we can fund our mates to go and burn some more tyres for fuel.” I despair. We are really deeply disappointed with this Budget, but we will keep fighting because sooner or later this Government will realise that the people of New Zealand actually want some action, and we will provide it when we are in Government.

CLAYTON MITCHELL (NZ First): I sprang out of my seat like a jackrabbit out of a hole. Righty-o. Conservation is what I will be speaking to this evening. The reality is that our water and our environment are the lifeblood of our country, and, in fact, every New Zealander has a very close connection with those two very things. Our environment, which is a massive driver for our economy now, with tourism—and, let us be honest, people do not come to New Zealand to visit Auckland or go to our large cities. They come and they visit our beautiful country to visit our natural environment—to go out to see our beautiful lakes and rivers and beaches, mountains and hills, and so on and so forth.

With an expectation of tourism exploding by 2025 to over $40 billion of additions to our GDP, as some people expect it to do, we should be seriously investing heavily into our environment, into our conservation, and into our natural flora and fauna, and yet, as we built up to the 2017 Budget, I was getting a little bit excited because the Hon Maggie Barry was starting to talk positively about the sort of funding and the surprise that was going to come out of the Christmas stocking on Budget day for conservation. She talked about the $21 million that was going to be made available for the Battle for Our Birds and for keeping our predators under control, with this massive beech-seeding problem that seems to be scourging our country at the moment. She talked about $76 million in infrastructure support for conservation and $11 million for our kiwis, and I was starting to get excited because she had not even told us what she is going to announce on Budget day.

Of course, Budget day came, and zilch. Doughnuts are what we got—big zeros. Nothing else was announced. Everything that was going to be put forward for conservation was put forward prior to Budget day, and all it turned out to be was a few extra toilets on some of our tracks. There was $21 million to drop more 1080 into our forests, indiscriminately killing all sorts of animals and species native to this country. And, of course, we have seen a huge degradation of financial support with regard to the Department of Conservation (DOC) over the 9 years that National has been in Government, to the point where the Minister—I even thought, well, maybe she just does not understand the difference between real and nominal.

So in one of the speeches I went through and tried to articulate to her the difference between the value of a dollar yesterday, which is different from the same dollar today. Of course, if you do not index it to the Consumer Price Index, you are going to find out very quickly that $100 back in 2008, when the National Government came into power, versus $100 now—it will actually take you $115 to accumulate the same asset. What we have seen over 9 years is over $300 million being taken away from conservation. We have seen hundreds of DOC staff and rangers being removed. Let us be honest, those workers—those boots on the ground—are absolutely vital to making sure that we can control our predators, making sure our tracks stay open, making sure our huts are available, and making the experience for our tourists arriving in this country something to write home about to their friends and family, to say: “You know what? You really do need to get down to New Zealand. It is just 100 percent pure, 100 percent beautiful, 100 percent natural.” And yet, we have got a plan to have swimmable rivers by 2040? I mean, this is just an absolute joke.

I have got the Minister here, and I am sure he is going to jump to his feet and take a call on that. Increasing the levels of E. coli to be acceptable overnight does not necessarily make those rivers more swimmable, more safe, or more environmentally friendly. It is a serious, serious concern that we have.

Our Battle for Our Birds—as we know, we are spending over $120 million a year on napalming our forests with 1080. At the end of the day, this indiscriminate killer is killing our natural birds. Jan Wright, in her recent review Taonga of an island nation: Saving New Zealand’s birds—we have got 168 native species in New Zealand, and 55 of those species are in serious risk of complete eradication. We are talking about moving into extinction, like the moa. It is documented that after every single 1080 drop, populations of native species drop. Some populations of native species drop more than others, and that is directly the result of the fact that we do not even have a plan to be considered for Predator Free 2050. That is an absolute joke in its statement.

Hon Dr NICK SMITH (Minister for the Environment): It is a delight to be able to speak in the Estimates debate across the environment, conservation, and climate change portfolios. Firstly, I want to reinforce our Government’s approach of a science-based approach to these environmental challenges. There is no question that when it comes to the New Zealand First Party, which says “We’re going to save our birds, but oh no, no, no, we’re not going to follow the scientific advice of using key poisons like 1080.”, which is the best hope for survival of the kiwi—the New Zealand First Party wants to ignore science. That is why it is a threat to the survival of the very species that my friend and colleague Maggie Barry is championing with this Budget.

That science-based approach equally applies to this Government’s work around fresh water, and I do want to challenge parties opposite. If you look at the 9 years that we have been in Government, we have committed over $350 million to freshwater clean-up projects across New Zealand. That is why Lake Rotoiti in the central North Island is in a cleaner state than it has been for more than 25 years. The eutrophic levels in that lake are in great shape. If we look at Lake Taupō they are in great shape. If you look at the $100 million that is provided in these appropriations, there will be over 25 individual projects around New Zealand where there will be the real practical yards that will make a difference towards that ambitious target National has set down of 90 percent of our lakes and rivers being of a swimmable standard by 2040.

I also want to point out the climate change measures that are in this Budget. They are the largest portion of the vote, and I do want to bring members’ attention to the fact that the emissions trading scheme (ETS) is being ramped up on 1 January this year, again on 1 January next year, and on 1 January again in the year after that. I just challenge the critics on the Opposition benches of that emissions trading scheme to tell me of a country that has a more comprehensive emissions trading scheme than New Zealand. It is certainly not the United States, and certainly not Australia. Actually, it is more comprehensive than that which is provided for in Europe, and I want to commend the work that Paula Bennett as the Minister for Climate Change Issues is doing in terms of strengthening that ETS, taking it to the next stage, and actually giving confidence to those key players who are planting trees and who are switching to renewable energy.

Again, I just repeat on the renewable energy line something that this Government is incredibly proud of, which is that every year that the previous Government was in office the proportion of power that was renewable dropped. It dropped in Labour’s period of Government from 75 percent to when it left Government in 2008, so that only 65 percent of New Zealand’s electricity was renewable when we became the Government. Through the emissions trading scheme and the price signal we have got that figure up from 65 percent, and we are heading now to over 80 percent. In fact, the latest numbers have us up at 84 percent and we are on target to meet that 90 percent renewable target, which is an important part of the climate change story. Alongside that, I really want to commend the work around New Zealand’s part in the Paris Agreement. It is disappointing that Trump and the United States have walked away from it. New Zealand is absolutely committed, it is one of the first countries to get on and ratify it, and that again shows the serious approach that this Government is taking to those issues.

I also want to mention the tyre initiative. We have known for 20 years that there has been a problem with waste tyres, and in funding for this year’s Budget we called for bids, got a programme up and running and spreading over—

Dr Megan Woods: For 9 years you’ve had the waste minimisation legislation sitting there.

Hon Dr NICK SMITH: Well, what of my question to the member? You had 9 years, and what did you do on tyres? Zip, zero—absolutely nothing. We have over nine programmes up and running, and I just want to run through them. Often I am challenged around where the national policy statements are, and the national environment standards, flowing out of the ministry with this sort of support. Well, there is a national environmental standard on aquaculture out for consultation right now. There is a national environmental standard on tyre waste out there now. There is a national environmental standard out right now on important issues of water quality. In fact, this Government has produced more national policy statements and more national environmental standards—

Dr MEGAN WOODS (Labour—Wigram): It is my pleasure to follow the Minister for the Environment and to respond to some of those things the Minister said. He said he wanted to look to the evidence and to look to the science, and said that is what his Government did. He said it places great store in the experts, so I would like to refer to the recent OECD report that came out on how New Zealand is doing in this area of the environment, in the area of climate change. The Minister talked about the Government’s ambitions around having renewable energy—laudable ambitions and ones that I support—but they are not enough on their own.

I refer to the report that Simon Upton presented not long ago. He said: “Having largely decarbonised its power generation, New Zealand needs to ensure its climate policies are effective in curbing emissions in all sectors, notably transport and agriculture.” It goes on: “With respect to agriculture which accounts for 49% of emissions—the highest share in the OECD—the report suggests … incorporating emissions from agriculture into the Emissions Trading Scheme”. So, yes, we do have a comprehensive emissions trading scheme—thank you, Hon David Parker, the architect of that scheme. But is that scheme as comprehensive as it was meant to be? No, because we have left 49 percent of our emissions out of that scheme, and this is a Government that refuses to even look at bringing it in—to look at the evidence and to listen to the science in ways that it could be done. The science community is giving that very clear message.

What did Budget 2017 deliver in terms of climate policy? Well, there was a $4 million increase for one of the greatest challenges for humankind at the moment. This is a Government that allocated an extra 4 million bucks to continue its work of low ambition and is not even meeting those targets. Were there plans in there to have a climate commission that would put together carbon budgets and finally do something to put New Zealand on a pathway to have the net zero carbon economy that we require under the Paris Agreement? No, there was no such allocation in this Budget. So when the Minister says that we can look at the country and what it is achieving, it is simply not achieving.

He then talked about the fact that this is a Government that does not think that President Trump should have withdrawn from the Paris Agreement. Well, on this issue too, this Government lacks the moral courage to show leadership. When it had the opportunity—when its leader, Bill English, had the opportunity—to sit opposite the US Secretary of State Rex Tillerson and tell him that that is what New Zealanders thought, he gave it away. He did not even bring up the fact that the US had just withdrawn from the Paris Agreement, despite it being only days after that action had been taken. Andrew Little took that opportunity. Andrew Little sat opposite the Secretary of State and told the Secretary New Zealand Labour’s opinion—what that kind of lack of leadership in the world felt like to us as New Zealanders and to us as a party.

So for this National Government to claim any kind of leadership when it comes to climate change is just simply a joke. It is a low-ambition party with no plan of even how to reach those low-ambition targets. There is an extra 4 million bucks in the Budget for the greatest crisis facing our planet, and this is a Government that thinks it is doing enough. It has got a scheme in place that its members say is the most comprehensive. Well, it should be. If it had been implemented in the way it was planned to be by David Parker, then, actually, it would be a tool in the fight against climate change—if we included agriculture—but this Government will not even consider that.

There is strong evidence for how we could do that. What those members say is that they are going to keep pumping money into science on agricultural emissions. This is good, but this simply will not solve 49 percent of our emissions. This is a Budget that has failed in leadership on climate change, and it is a Government that lacks the kind of fortitude that we need in order to face the challenges such as climate change in the 21st century.

Hon MAGGIE BARRY (Minister of Conservation): I would like to talk about the appropriations as they relate to conservation. This is the first anniversary of the release of the very ambitious notion that New Zealand could become predator-free by 2050, and today I revisited the scene where we made the announcement, Zealandia, with the British Foreign Secretary, who was very complimentary indeed about our “campaign of slaughter”.

There are a number of issues that confront our native and threatened species, and when I released the threatened species document a couple of months ago, I was very encouraged to hear of the interest that people had in defining the species that need assistance and having, for the first time in the Department of Conservation’s (DOC’s) 30-year history, a template. There has been some money that has come through for the sea lions on this, and there are a number of other initiatives that we will be announcing in due course.

I think you need to have a plan and you need to be able to measure what you are doing, and the main issue facing our species that are under threat is of course the rats, the stoats, and the possums. We identified those and called them out and put them on notice, really, about a year ago, and we put $28 million in as a starter to get some leverage around businesses, philanthropy, and other organisations that want to help us, including local and regional authorities. Their contribution should not be minimised, because we expect them to step up and help, and to a large extent they have done that.

We formed the Predator Free 2050 Ltd board. It has now done the challenges that it needed to do. It has set up a chief executive. It is about to announce expressions of interest and start to talk about the scale—the landscape-scale—protection that needs to be put around the various environments, with agreements from iwi and all the community groups, so that we can have vast amounts of land. More than a million hectares is our aim in the next few years, so that our taonga species can breed and do what nature intended, as opposed to just being fodder for so many introduced vermin.

There are a number of Budget initiatives that we have put through around this, and we have explained this on many occasions. Interestingly, when you go into an appropriations hearing at a select committee level—it was very ably chaired, of course, by Andrew Bayly at the Local Government and Environment Committee—you generally expect to be asked about the Budget, particularly as the Greens have been spreading ridiculous misinformation and “Green arithmetic” around this for a long period of time. Remarkably, on this occasion they stayed silent. They had the opportunity with the chief financial officer there—just saying. They had every opportunity to ask a lot of questions, but they did not. If I was a machiavellian individual, I might suspect that they did not actually want to know the facts and have them spoken about openly, because then they would have to change the rhythm of their nonsense. Whether they choose to do that or not we do not know. I do not know—they are probably a bit of a lost cause.

Let us go through the facts, for those who are engaged and interested in them. DOC has a $107 million increase in this year’s Budget, and that is an outstanding amount of money. There is $76 million for tourism infrastructure and $21 million for the largest predator control operation—

Clayton Mitchell: You’ve already said that. Is that a real or nominal figure?

Hon MAGGIE BARRY: —ever in New Zealand’s history. That is Battle for our Birds, and that is the use of 1080. It is a shame New Zealand First members cannot come up to speed with the facts around this, because they are completely incapable of seeing the science that many others have seen. I have tried to send Richard Prosser the Parliamentary Commissioner for the Environment’s report on this. Whether he has been able to open it and read the text—not very many pictures in it—I would not be sure, but he certainly does not appear to have taken on board any solid information.

Battle for our Birds is very much a part of what we need to do to keep our taonga species safe. The $76 million will be spent, for example, on a new booking system, and that new booking system will enable us to introduce a very, very good and, I think, long-overdue differential charging system.

New Zealanders, through paying our rates and paying our taxes, already have an investment in public conservation land—in our Great Walks, staying at our huts, and those kinds of things—but for international visitors who come here and use our facilities, they really do need to pay what it is worth. At the moment, we are going through the figures. We will be making an announcement on those in the next few weeks, but to me that is a far more sensible approach than trying to charge everybody who comes to New Zealand. Many of them want to come and look at our landscapes and our wonderful environments, but not all of them do. So user-pays is the approach that we would take on this one. It is too blunt an instrument to charge people a large amount of money coming through the border, and that could well be a disincentive for tourism, which, let us face it, is a particularly lucrative thing for New Zealand now—more so than even our primary industry.

The money that we are putting across with regard to differential charging will, of course, be used to ensure that we do not see an adverse impact on the environment from these large visitor numbers. So the tracks, the infrastructure, and the facilities that we need to ensure a top-rate visitor experience will be part of what that money is invested in, but any profits that are made—and we expect them to be substantial—will be put back into biodiversity and species protection. That is at the heart of what DOC does, and it does it incredibly well.

We have, as well as that, a range of volunteer and community organisations, and let me take a moment to commend them. They do a terrific job and they are motivated by the best-possible intention, and that is to preserve our environment and our species and to help DOC in the wonderful work that it does. They do it in the way of weeding, they do the laying out of traps, and so forth.

In the next few weeks we will be announcing, through our DOC predator control rangers—they will be setting up trap libraries. They will be having traps that are readily and freely available to communities such as Picton. One in every four houses in Picton has a rat trap, and a stoat trap as well if they want it. These trap libraries around New Zealand, with an initial investment of about $300,000, will make traps readily available to those who want to use them.

Also, our DOC Community Fund—it is about $4.5 million a year—is very much focused on the Battle for our Birds, but more on the environment and the ecosystems that our birds need to dwell in. So it is very important that the weeds are cleared away, because if you have weeds they will smother the forest, and if the smothered forest cannot cope then there are no habitats for birds, lizards, and other threatened species. So the DOC Community Fund is very popular. We have made it a little bit easier now with the paperwork so that the volunteers and community groups can actually get out there and do what they want to do, which is save their threatened species rather than fill out forms.

So there are a number of different approaches that DOC is taking. When it comes to wilding pines, which are always the No. 1 weed in New Zealand, they will be there for some long period of time. Last week, with the Hon Mark Mitchell, a wonderful new app was launched from Land Information New Zealand (LINZ) that will really enable communities and all the groups that are fighting wildings to see their progress and to know where the threats and the challenges lie. It will also, I think, help city people and those who do not really necessarily appreciate the terrible devastation that these wilding conifers have, on the whole, wrought to our native landscape environments. They have changed them beyond all measure. They are using up a great deal of groundwater. They need to be kept under control. But perhaps through these apps people who do not have immediate, day-to-day encounters with wildings will be able to assess the progress made in knocking them back and the damage that they are doing.

I announced at the same time additional funding for five priority projects, Mid Dome amongst them. It is doing terrific work in that part of the South Island, and we are helping it with the $16 million bid that we had last year in the Budget. We allocated some more of that last week so that we can enable these wonderful groups to get together and do effective weed control, and so that DOC and LINZ and Defence, and right across the Crown—the Ministry for the Environment and climate control, under the Ministry of Business, Innovation and Employment, as well—can be the ones that really help them get to a substantial gain. We are in a hurry. Our Threatened Species Strategy and the Parliamentary Commissioner for the Environment’s bird report showed people who have perhaps not paid attention before just how incredibly important it is to save our species, and we are running out of time.

I saw today at Zealandia, once again, and was reminded of, New Zealand the way it ought to be, the way it ought to sound, and the way it ought to look. That is what we have firmly fixed in our minds, and that is what this Government is delivering every step of the way in conservation, environment, and climate control as well. We are there. We understand nature. We are funding it to a realistic level, and we are making an appreciable difference. Thank you.

MATT DOOCEY (National—Waimakariri): Just following on from the Hon Maggie Barry, I thank her very much for that schooling in conservation. I feel like today and tonight that is exactly what we have had from all our Ministers who have spoken—a schooling in their specialist areas—and from the Associate Ministers as well. They have been offering their expertise, their knowledge, and their experience. That very much underpins this Estimates debate—the experience, the knowledge, and the expertise of the people at the top making the decisions on where we invest our money.

That is exactly what we are doing with Vote Conservation and Vote Environment—deciding where we can invest our money, get good returns, and, ultimately, protect, sustain, and improve our conservation practices and our environment. It is fair to say when talking about environment and conservation—an old saying my mum used to say is that money does not grow on trees, and I think, actually, as I get older, I realise how right she was. So we should actually reflect that the reason we do have money to spend on Vote Conservation and Vote Environment is that we have strong management of our economy, a growing country, a growing economy, and a Government that is shaping globalisation for the benefit of local people in New Zealand. That is why we can spend this hard-earned taxpayer money on protecting our environment.

When we think about it, it is actually our environment and our conservation that is intrinsic to being a New Zealander. I reflect that I was once backpacking through the Netherlands when I met some people in a backpackers’ hostel. Like you normally do, you talk about where you are from, and someone said: “Where are you from?”. I said “Oh, I am a Kiwi.”, and they said: “Oh, why do you want to be named after a fruit?”. That reminded me that not everyone thinks of a kiwi as being a bird.

Ultimately, the kiwi is the iconic bird of New Zealand, and it is fantastic to see under this Budget that an extra $11.2 million is going into protecting the wild kiwi population. What we know is we have got a 2 percent annual decline, and we are looking to turn that around to a 2 percent increase. We are aiming to have 100,000 wild kiwi by 2030, up from 69,000 currently. I am quite fortunate in Waimakariri that we have a conservation park called Willowbank, which is doing some fantastic work with the kiwi, and I do enjoy taking my young kids down to see the kiwi enclosure. So it is fantastic that we are looking to support the kiwi, the iconic bird—as well as the kiwifruit, I suppose—of New Zealand.

I also want to touch on what I see as a very pragmatic Government—one that is always responsive in looking at how we can respond to the needs of our community. From this Budget I note that we are spending $4.75 million in operating funding as a result of the Christchurch Port Hills fires. Many will remember that several months ago, those fires devastated the region of the Port Hills, so it is fantastic that the Government is supporting the return of biodiversity in the Port Hills and the reforestation. The Port Hills is an important area for not only people in Christchurch but the whole of Canterbury as well, and it is fantastic that that funding will go into supporting the biodiversity of the Port Hills and the reforestation there as well.

Minister Baggy—Minister Maggie Barry. Sorry, Minister—I was doing so well until then. I will take the shoe out of my mouth. The Minister so passionately talked about Predator Free 2050 and the enthusiasm that that has created with the local community. I know that there is funding of $300,000 available for local community groups. I know that one group in my electorate, Kaiapoi MenzShed, is passionate about how it can get involved in that funding. It wants to build its own predator cages and to get out there and make a real difference for the environment and for conservation in the local area. Thank you.

Votes agreed to.

External Sector

The CHAIRPERSON (Lindsay Tisch): Members, we now move to the votes in the external sector, and the question is that Vote Customs, Vote Defence, Vote Defence Force, Vote Foreign Affairs and Trade, and Vote Official Development Assistance stand part of the schedules.

TODD MULLER (Chairperson of the Foreign Affairs, Defence and Trade Committee): I am looking forward to taking a call on this bundle of impressive portfolios that we discussed at the Foreign Affairs, Defence and Trade Committee. I would like to kick off first, if I may, with the Estimates hearing we had last month in respect of foreign affairs and trade specifically. We heard of a significant appropriation of just on half a billion dollars for the upcoming year, an increase of 8 percent, reflecting the priority that the Government puts on trade. Obviously, Trade Agenda 2030 is a key part of our priority to support export growth for New Zealand businesses around the world. That is a $91.3 million commitment over 4 years, and $27 million of that will be to support the trade resources, both here and in-market, of the Ministry of Foreign Affairs and Trade, which will go a long way towards our broader strategy of 90 percent of New Zealand’s current goods export being covered by free-trade agreements by 2030.

In our hearing we heard that the initiative, the spending, is going to focus on the establishment of a high commission in Sri Lanka. As somebody who is a former Fonterra executive, that is a very good thing to hear, because there are significant dairy—and other—interests in Sri Lanka for New Zealand. It is good that we will now have a high commission based in Sri Lanka, an establishment of an embassy in Ireland, and I was also pleased to hear the additional support we are providing for the New Zealand Antarctic Institute.

We had quite a significant conversation around non-tariff barriers, and, again, I was very pleased to hear from the Minister the commitment we are making, through our Trade Agenda 2030, to invest in-market to support New Zealand businesses to deal with these increasing non-tariff barriers. We have 85,000 exporting companies in this country, and the interests of the 85,000 exporters, on which this country relies so heavily in terms of our ongoing standard of living, sometimes—particularly when I am listening to the other side—get lost in the debate. It is great to know that this Government has an agenda to particularly focus on ensuring that they have as easy access to the markets of their opportunity in future as possible, and I am delighted to see that we are investing to enable that to happen.

We had a very good hearing in defence. The Hon Mark Mitchell, who is doing a superb job taking over that portfolio and is well respected by all of the committee—and I am sure I can speak for all of them in that respect—talked to the Vote Defence Force appropriation of $3.38 billion. A significant component of that will be new and upgraded military equipment as part of our commitment, outlined in the defence white paper, of $20 billion worth of capability over the next 15 years.

One of the areas where I was particularly pleased that our committee traversed with the Minister is that not only are we spending an extraordinary amount of capital to support New Zealand’s security interests globally, but also the way that capital is going to be deployed and how we are going to procure that significant investment on behalf New Zealand taxpayers is very impressive. We heard that a number of experts are now working on improving the Defence Force’s capability around procurement—a lift up to 40 people. Certainly, from my commercial perspective, I guess, it is often an area that in the commercial world is under-invested in, and it is great to see that the Ministry of Defence sees the importance of ensuring that we have very good people to underpin what will be a significant $20 billion procurement programme over the next few years.

Finally, in my last few seconds, I do want to acknowledge the contribution of Minister Tim Macindoe when we discussed customs. We heard about the updated and upgraded SmartGate and the Joint Border Management System. A number of these projects were seen at the time as sort of highly technical, but they do facilitate trade and business, and reflect this Government’s priority in ensuring that the businesses that ultimately make the value and money and success of this country are enabled to the greatest extent, in terms of their engagement with the world and the opportunities that are in front of them. Across the three portfolios, we heard in spades the commitment of the Government to deliver on that. Thank you.

IAIN LEES-GALLOWAY (Labour—Palmerston North): This might be the most pleasant contribution all evening, from the Government’s point of view, because on matters of the Defence Force—at the moment, anyway—the Labour Party does not part company very much from what the current Government is doing. It is important that we ensure that our Defence Force is fit to carry out the tasks that a nation like New Zealand needs it to be able to do. Those are primarily ensuring that we can patrol and control our own exclusive economic zone, that we can respond to natural disasters within our own country, that we can provide support in times of natural disaster and in times of unrest in our own region, that we can work closely with our friends and allies such as the Australians and other friends from further afield, and that, when necessary, we can participate in UN-mandated multilateral efforts further afield, sometimes involving the need to use a strike force. New Zealand is well-known on the international stage for contributing and, I suppose, punching above our weight as a small nation.

Looking through the report of the select committee—unfortunately, I was not able to attend the Foreign Affairs, Defence and Trade Committee when the Minister appeared before it—

Hon Member: We missed you.

IAIN LEES-GALLOWAY: —which was a great shame for the select committee members, but they will get over it—I was interested to look at the conversations that were had about procurement, because it is true that procurement of defence assets can be troublesome. This is not a problem that only New Zealand has faced. A number of defence forces around the world have had issues, shall we say, when trying to procure new equipment, especially when trying to project forward 30 years and purchase equipment that is going to last a long period of time. It is noted that in the past there have been issues around New Zealand trying to be an early adopter and trying to customise capabilities, rather than, say, having a more off-the-shelf approach and looking at using equipment that other defence forces that we operate alongside are using.

I would also say that I think the lesson from the past is not to under-invest in Defence Force assets for a long period of time and then try to rapidly bring the Defence Force up to speed with where it should be. I think it is a matter of fact that during the 1990s there was significant under-investment in the Defence Force. We found ourselves short when deployed overseas and were unable to provide the support that we had offered to other nations. We needed to bring our Defence Force into the 21st century at pace, and it was the pace that caused some of the difficulties.

So it is good to see that we have a white paper that projects forward into the future. It is good to see that there is a sustainable approach to procurement outlined in these appropriations.

I just want to very briefly touch on a couple of things that the select committee looked at. One is the proposal for Singaporean F-15 fighter jet pilots to train at Ōhākea. It is quite exciting, as a citizen of Palmerston North—the thought of seeing F-15s flying around in the air.

Ron Mark: Who disbanded it?

IAIN LEES-GALLOWAY: Well, Ron Mark would desperately like the New Zealand Air Force to have a strike force. That would be a very poor use of the resources that we have in New Zealand. We are a small nation that can provide only a small defence force, and it is sensible to focus on what we can do well. I know that a man with the astonishing amount of bravado that Ron Mark has would like New Zealand to have a strike force, but the rest of us in this Committee are pretty sensible about what New Zealand can actually do.

So, anyway, in Palmerston North we are looking forward to the Singaporean F-15s coming. We hope that can go ahead because, frankly, Ōhākea is a very underutilised piece of Defence Force infrastructure. It would be fantastic to see more building, more use of that land, and more use of that asset for something that could bring a lot of economic growth to our region.

BARRY COATES (Green): Kia ora, Mr Chair. I have the great pleasure of talking about a subject that is near to my heart. I want to talk about overseas aid, and it is a subject that we do not talk enough about in this House. In particular, the mission for New Zealand giving aid to foreign countries is around the reduction of poverty in those countries. It is about sustainable development. These are really important goals in our troubled world, where we often forget that much of the world is still struggling with the basics of life.

From my own experience as CEO of Oxfam for a decade, I have seen all too often the way that countries and communities just need a little bit of help in order to recover from disasters or to be able to build their capacity to be able to get ahead. New Zealand can do that. We are a country that can help others. We are, quite rightly, focusing on the Pacific—our nearest neighbours—and I think it is very good that we have an official aid programme that supports the Pacific.

However—and this is where I come to comment on the Budget—all is not well in the New Zealand aid programme. From the apparent statistics in the Budget, it looks like we are giving more aid in this current year. Actually, what has happened is that we have grossly underspent our aid budget over the past 2 financial years, and suddenly we have got money to spend at the end of a 3-year appropriation, which looks like being a case of shovelling money out the door without having planned a programme. The whole idea of having a 3-year appropriation is to even out the spend of money over 3 years. This has not happened with the aid budget.

In addition, even with this blip, what has happened to New Zealand aid is that we are progressively giving less and less and less aid as the years go on. At the end of the last Labour Government, it was giving 0.3 percent. That is way below 0.52 percent, which is the peak of aid that we gave as a percentage of GDP. Now, under this Government’s current spending plans, the figure is going down to 0.21 of a percent—so that is 0.21 percent. That is extraordinarily low. It is less than one-third of the UN target of 0.7 percent, and we are one of the lowest aid givers in the OECD. This is not the right trend for New Zealand in our overseas aid.

There are other problems with our overseas aid. Twenty percent of our overseas aid is about to be spent on Aid for Trade under the terms of the PACER-Plus agreement, which we have initialled with Pacific Island countries. That is 20 percent. It is going for Aid for Trade. That sounds great, but what actually happens is that you end up giving aid that is meant to be for poverty reduction to business and, very often, to the elites who sit in capital cities and commercial enterprises. That is not what we need aid for. We do not believe in trickle-down in the aid programme. We actually want to help people who need the assistance, not help business.

We have also seen New Zealand businesses now benefiting from overseas aid. We have seen the concept of “New Zealand Inc.” not being applied to the marshalling of New Zealand’s resources to help overseas countries, but resources being marshalled to help New Zealand companies in their trade overseas, and this is the wrong direction. We have seen aid subsumed within the all-consuming passion of having a free-trade agreement with anyone who would have one with us—typically happening at some time in about a decade’s time—and, as we have found out from many retrospective analyses, not necessarily with any net benefits for countries like New Zealand. So we have seen the objectives of aid come in behind the objectives of trade, and, as we have seen from a previous speech, we are seeing an enormous amount of money being invested in defence—$10 billion—and we have not seen commensurate money for aid. Thank you.

RON MARK (Deputy Leader—NZ First): It is a pleasure to be able to stand and speak on the Estimates for Vote Defence and Vote Defence Force for New Zealand First. A couple of things in response to the Labour commentary to my—

Hon Jo Goodhew: Right.

RON MARK: —right, yes. That is bizarre, is it not? It will change—it will change soon. I guess what New Zealand First will point out are a couple of things in the report—and I will come back to the Labour comments.

Firstly, we note the appropriations that the Government has made for Defence, and as much as those members want to pat themselves on the back and talk about how it might well be a percentage increase, we say that that is about smoke and mirrors. We point out one thing very, very clearly: we are still talking less than 1 percent of GDP. If I think back to a time when we had a National Government in this country where 16 of its Cabinet Ministers had served operationally overseas, it is a sad and sorry state that we now have a National Government that does not value defence.

I have got to put on the record that it is really interesting to hear—every party in this House stands up and says what a wonderful job our Defence Force personnel do internationally when they are deployed, with very scarce and minimal resources—short in number, but always, everyone says, punching above their weight. Well, we take that for granted, because we still do not resource the Defence Force to the level that it deserves, to be able to perform these functions on our behalf in hostile environments. New Zealand First has always said that we should be spending 2 percent of GDP on defence, and we are not even halfway there. I think an outgoing National Government will need to reflect, when it is sitting in Opposition, on its track record over the last 9 years, because if this is the best you can do, ladies and gentlemen, you are going to fail.

I want to point out a couple of things. It is interesting in the report, where we say: “We heard the ministry is halfway through an extensive change programme to significantly increase the number of experts working on capability delivery, from 11 people in 2015 to 40 people.” What does that say? It means that in terms of the overview of procurement process, under the governance of successive Governments—National and Labour—we have performed badly. That is an admission that we have performed badly in defence procurement, something New Zealand First has been saying for a very, very long time.

It goes on further: “The Secretary of Defence said the ministry has strengthened every aspect of its management, governance, capability, development, delivery. It has also revised its guidance material, processes, templates, and procedures”—da-da-da—which means that prior to that it was substandard for 9 long years. Prior to that it has been substandard, and all the controversy that still swells around the light armoured vehicles (LAVs) that are parked in plastic wrap waiting to be sold—not able to be sold—is evidence of faulty and flawed procurement processes.

But I am going to put one up to defend our Defence Force personnel. Had they been resourced in the first instance with staffing, capability, and expertise, some of those things might not have happened. Had we not had Governments that were selecting for them and tightening the procurement parameters around purchases for them, we might have come up with different decisions, and I will point to one right now. The reason why there is a foreign military sales (FMS) application for the P-8 Poseidon is that the production line is about to close, and it is about getting spots in the production line. That is why the Government has opened other stuff—a procurement that is actually ahead of other procurements that it should be behind. So this is putting the cart before the horse, and this is a case of clear predetermination by the Government that we should buy the P-8s.

We are saying that at $330 million an airframe, we will end up trading in numbers for capability and capacity, and that is a bad move. So why are we doing this? Why do we not look at the Kawasaki P-1, the Embraer Saab-based MPA? Why are we not looking at the marinised C-130 or the C-390? By entering into the FMS application now, this Government has essentially done what Labour did with the LAVs—it has entered into a predetermined decision-making path, that has proven so catastrophic in the past. Why are we doing this? Clearly, because we have not learnt about the mistakes of defence procurement.

Hon DAVID PARKER (Labour): I want to address the issue of Vote Foreign Affairs and Trade, and particularly to focus on trade. In the report back from the select committee it records that the Government is trying to convince this Parliament to vote $20 million extra over the next 4 years towards trade. Why would we do that for a Government that is failing so abysmally on trade?

I am going to recount some of the disastrous performances on trade that we have had from this Government, which, 8½—close to 9—years ago was elected on a platform of increasing exports from 30 to 40 percent of GDP. It has gone backwards—26 percent this year. To the end of its Budget forecast it gets to 28 percent—still less than the 30 percent when it took over. The Government is so far away from its ambition to raise exports to 40 percent of GDP that its members do not even talk about it. They say they have not dropped it, but there is no reference at all in this select committee report.

What is there reference too? Well, it says it is going to have this new target: “Trade Agenda 2030”—never-never land again—“launched earlier in 2017 sets a target of about 90 percent of New Zealand’s merchandised exports to be covered by free-trade agreements by 2030.” Do you know how they will do that in the National Government? It will drop exports. That is what it has done in respect of its last target. That might get it to 90 percent—what a meaningless target. You could drop exports and meet your target of 90 percent of them being covered by a free-trade agreement. It is a nonsense target, and those members have only picked it because they are so embarrassed about their pathetic performance on trade.

What are some of the individual components? What is happening with our trade agreements? Well, Korea, what did the Government do there? Oh, that is right, it gave away the right of a future New Zealand Government to ban South Korean purchases of New Zealand houses, when South Korea retains that same right for itself, and when Australia, the prior year, retained that right for itself in its agreement with South Korea.

Hon Member: That’s not true.

Hon DAVID PARKER: It is true—it is true.

Paul Foster-Bell: What about stamp duties?

Hon DAVID PARKER: You should have read them. You should have read the agreements, because, Mr Foster-Bell, it may be that your last record in Hansard is as incompetent as some of the earlier ones. It is true that you had that one-sided deal with Korea.

What about the Gulf Cooperation Council? You know, this is the one—the Saudi sheep deal where, you know, the National Government wasted $10 million paying off a Saudi sheikh—as described by the Auditor-General. What has happened there? That deal is dead in the water. Qatar, one of the Gulf Cooperation Council countries is, you know, on the outer with the other countries at the moment, and yet that is one of the things the select committee Government members report on as to how Gulf country trade could be going to improve. The Gulf agreement is nowhere to be seen.

What about the Trans-Pacific Partnership (TPP)? TPP—dead in the water.

Todd Muller: Oh, you need to be more optimistic.

Hon DAVID PARKER: I need to be more optimistic! Well, look, you know, “Pollyanna”, there on the other side—actually, Pollyanna has hair. Sorry—ha, ha!

Korea, TPP, Gulf Cooperation Council, exports down as a percentage of GDP compared with a target of going up—and those members have the audacity to come here and tell New Zealand taxpayers they want another $20 million over the next 4 years to do more of the same. I think the performance of this Government on trade is absolutely poor, and part of the problem is that this Government causes investment in the economy to go to the wrong parts of the economy. Per capita, GDP in New Zealand is down. Productivity in New Zealand, per person, is going down—why? Because we spend far too much money bidding up house prices in Auckland, and those extra billions of dollars that are being invested in existing houses—not new houses; existing houses in Auckland—are not being applied to the businesses that grow new jobs and new exports and productivity. That is why this $20 million, if this Government is re-elected, will be wasted, because—

Dr SHANE RETI (National—Whangarei): It is a pleasure to rise and support the Estimates as they are presented. I would like to speak primarily to the customs portfolio, if I can. We heard from the Minister of Customs, and he described to us the ongoing benefits of SmartGate: a 30 percent increase in passenger management from last year—in fact, the 27 millionth passenger will pass through in June—and 95 percent of people are processed within 45 minutes. We were interested in what the criteria are for other countries joining SmartGate, and what we were told was that, fundamentally, this is able to be done because of robust standardised visa sharing and information sharing between Immigration New Zealand and the airline reservation systems. This was useful, because we then asked the question “Well, could this be applicable to cruise ships?”, and we were told, because the information is not as robust as the airline reservation system, probably not now, but at some soon-to-be future date, yes indeed.

We also then talked—and spent a lot of time in the Estimates hearing—about illicit drugs coming across the border. We learnt how efficient our new border technology is, and how we are catching more and more at the border, particularly methamphetamine. We were particularly interested, though, in what might be coming across, and the question was raised as to how we might guess—how we might assess—how much we are maybe not catching. We know there are several ways to look at that. There is the Massey drug survey. We also know that the street price is a measure. If we have more supply, the street price goes down.

I think one of the new Customs tools that is quite interesting is wastewater analysis. This builds on work done earlier last year by the National Research Centre for Environmental Toxicology, Massey University, and Australian and Belgian researchers. They published an article in the Drug and Alcohol Review called An exploratory wastewater analysis study of drug use in Auckland, New Zealand. They looked at two waste-water sites in Auckland and assessed 17 drug residues. They found high levels of methamphetamine. At the end of last year, the Police commissioned the Institute of Environmental Science and Research to use that same sort of methodology and have a look again. This time they just looked in Auckland—did waste-water analysis in Auckland. They looked at five drug types—methamphetamine, cocaine, alpha-Pyrrolidinopentiophenone, methylene dioxy-methyl amphetamine, and heroin—and they also found methamphetamine in high levels. I think as a new tool for Customs to get some sense as to what we are not catching at the border, waste-water analysis is a very good tool, and we are very pleased to hear that.

To move briefly to the defence portfolio, we heard that the Government is further supporting defence and the Defence Force. For Vote Defence, we heard that we are strengthening the procurement process with a 24 percent increase in funding on the previous year. That is important, because Vote Defence Force is also going up 8 percent, and that funding is being used to upgrade military equipment, provide targeted personnel with critical military capabilities, and regenerate the defence estate. The procurement process is very important, because there are $20 billion of purchases over the next 15 years, and so that increase to defence to strengthen up its procurement capabilities, amongst other things, is going to be used to increase the staff from 11 to 40 in this critical and specialist area.

We also heard that procurement practices are bringing forward—and one of the other members mentioned this—organisational knowledge from the past to improve procurement going forward. What does that mean? Well, more specifically, there is a change from early adopter to operationally proven—yes? We maybe do not want to be the first people in the world to be using something; let us get something that is operationally proven first. Secondly, we need to be aware of optimism bias in our acquisitions, and, thirdly, there is the use of a whole-of-life costing model over 25 to 30 years. I think this demonstrates Government support for defence and the Defence Force. With increased strategic funding, the Government is protecting and managing our borders with state-of-the-art technology, and the Estimates confirm that funding is fully supporting these objectives. Thank you.

Hon MARK MITCHELL (Minister of Defence): I am very happy to take a call on this, the External Sector Estimates debate. I am going to speak to trade, foreign affairs, and defence. I am going to come back to the points that were raised on the defence portfolio and also to Mr Coates’ comments, but can I just start first with trade.

Can I acknowledge the Hon Todd McClay—he is away overseas at the moment working on another trade deal—and his commitment and the work that he has done. There is something that he has done that I have found, actually, really interesting. Through the Trans-Pacific Partnership select committee process, when we were hearing submissions from the public, it actually became really clear that the public genuinely wants to engage and to have a public debate and conversation around these free-trade deals—when they are being negotiated and when they are being prepared to be put in front of the country for a decision. I think what Minister McClay has done is he has been very, very good in making sure that both he and officials are getting around the country—with public meetings, with industry, with different sectors, and with NGOs—and actually engaging and talking about these trade deals. Fundamentally, that has been extremely important in terms of getting the support required to continue to advance them.

One trade deal I would just very quickly like to touch on is one that actually came through the Foreign Affairs, Defence and Trade Committee, and that was the Korean free-trade agreement (FTA). I was lucky enough that today I had a meeting with the Korean ambassador, and he made the comment to me that this free-trade deal is already delivering beyond expectations in terms of what we saw and identified as value, not only to New Zealand but to our trading partner in Korea as well. That just continues to reiterate and support the fact that these free-trade deals are very important for us as a country in terms of our overall Business Growth Agenda.

Trade Agenda 2030 is the fundamental road map for us as a country in terms of our trade agenda over the next 10 to 15 years. That involves $91.3 million of new funding, and that will be spent over the next 4 years as part of Budget 2017. That is going to mean a new embassy in Dublin and a new high commission in Sri Lanka, both very important markets for us. There is $35 million to support primary sector exporters to succeed in accessing overseas markets, and $27 million to boost Ministry of Foreign Affairs and Trade (MFAT) trade resources and to accelerate FTA work. There will be the new Clearing House for a single online point of contact for exporters encountering trade barriers and requiring support—that, fundamentally, is very important. Any business can access that, from a small, one- or two-person retailer that is just in a start-up phase to a big manufacturing company that has already got a strong export pipeline. There will be a cross-sector ministerial advisory group (MAG) to increase engagement on trade deals; this MAG will include exporters, industry groups, iwi, NGOs, and, Mr Robertson, unions.

Grant Robertson: Yeah, we had that, actually, in 2008. I just wonder why you got rid of it.

Hon MARK MITCHELL: It is a pretty inclusive policy. I would just like to quickly move on to defence, and just quickly respond to the points that Mr Iain Lees-Galloway made around our economic zone. Defence is doing an outstanding job in terms of policing and protecting our own economic zone, and we should be very proud that there was a story on the front page of the national paper in Fiji this week just thanking and highlighting the work of our inshore patrol vessel that has been based up there supporting the Fiji military and the Fijians because they lost their own capability. The vessel has been doing some outstanding work. The numbers are phenomenal in terms of the area that it has patrolled and the number of vessels that it has stopped, searched, and checked, and it has been recognised by the Fijians for the outstanding work that it has done.

We are also recognised in leading in terms of our responsibilities in our patrolling the Southern Ocean and Antarctica. That is tough work, but our navy has got a strong history. It knows how to operate down there. It is very good at it, and for that reason we are seen as leading other countries that also have a responsibility to patrol the Southern Ocean in terms of how we are providing proper coverage and ability over the area that we are responsible for.

In terms of the UN peacekeeping—you raised the UN peacekeeping, Mr Lees-Galloway—yes, we are very active in the UN peacekeeping sector. We have got a long, proud history of deploying and supporting these UN peacekeeping missions. We have got five staff at the moment in South Sudan. Can I acknowledge one of the past members of the Foreign Affairs, Defence and Trade Committee, David Shearer, who is doing an outstanding job, from what I understand, of leading that UN mission in South Sudan. He has got some big challenges, but he seems to be making some good progress on them. I am very pleased that we are able to support him as a country through the New Zealand Defence Force (NZDF) in what he is trying to achieve up there. That is a very challenging mission, without a doubt.

We have just had 35 engineers come back from Sinai. They have been out there at the south base, target hardening, basically, the base there. I was lucky that I met with the UN commander of the mission up there, who was on his way through New Zealand about 3 weeks ago, and he said that he would really love to have our guys back. They arrived there with the goal of actually rebuilding a perimeter fence around the camp, but, in true Kiwi fashion, they ended up identifying a whole lot of other projects that they could do to help target harden and make the place safer for all the UN staff who are based out there. So they got on and they did that. I met with them down in Burnham. They were saying that they did not have a Mitre 10 up the road where they could go and get the equipment. There were lots of challenges in terms of sourcing equipment in the local market, but, again, it just reiterates and supports the fact that our people are doing great work on these UN missions.

Iain Lees-Galloway also mentioned procurement, and, actually, Ron Mark from New Zealand First also mentioned procurement. Procurement is a big challenge, without a doubt, and if you look at the history of our New Zealand defence forces, we have not always got procurement right. There were some big challenges in bringing the NH90s into operational use. But in actual fact—I just visited them last week, and was having a look at some of the innovation that our people have done at Ōhākea in the workshops that we have there; world-leading technology—they have actually improved the NH90s and they are in full service now. Actually, globally, in terms of operational capability and use, we are leading the world on about 70 percent operational usage or availability—I think the closest country to us is on about 45 or 46 percent—so that is actually outstanding. We are getting better. We are getting a lot better.

That did require actually putting some more people into the Ministry of Defence. We did actually have to strengthen our ability in terms of the big programme that we have got coming in terms of procurement, and the defence white paper has given us our own very clear road map in terms of that. There is going to be some significant investment into our people—to make sure that they get the right training, support, and career pathways to be able to keep them and give them a good viable career—and into our equipment. We have got a very big procurement programme over the next 5 to 10 years in terms of replacing a lot of our capability and a lot of our equipment, which, actually, has now been in service for anything up to 50 or 60 years. And, of course, we are investing very heavily in our defence property, to make sure that there is a complete upgrade and that our people have got the best facilities, the best equipment, to be able to use and have access to.

Just on that, if I could give you some figures in terms of the amount of investment that we are looking at, the Defence Force will receive a $406 million boost in operating funding over 4 years and $576 million in capital as part of Budget 2017. The major increases in funding in the armed services will support a range of NZDF capabilities, as I have just outlined, through both procurement of equipment and also heavy investment in our defence estate. There will be $100 million to improve defence camps and bases throughout the country, including upgrades at Auckland, Manawatū, and Canterbury. There will be $301.7 million for the littoral operation support ship and the frigate communications upgrade.

I was very lucky in that when I was up in Singapore for the Five Power Defence Agreement meeting, my Canadian counterpart invited me on to the Canadian frigate Winnipeg, which has actually gone through a very similar systems upgrade to what we are proposing for our own frigates. It was hugely impressive. It means that it will give our navy a far advanced capability and also continue to make us a good partner and interoperable.

RINO TIRIKATENE (Labour—Te Tai Tonga): Tēnā koe, Mr Chair. In my contribution to this debate, I will be concentrating on Vote Customs. Vote Customs is the oldest Government department in New Zealand—177 years old. It is, generally, a very high-performing organisation. It has just won a recent award. The vote appropriation for Customs is not insubstantial; it is around $216 million that is being sought. On the face of it, Customs is a very experienced, very focused organisation, or so we would have thought. Just in terms of a few short questions that I posed to the Comptroller of Customs and to the Minister during the committee, in relation to an estimation—

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to report progress.

Debate interrupted.

House resumed.

The Chairperson reported progress on the Appropriation (2017/18 Estimates) Bill, and no progress on the Commerce (Cartels and Other Matters) Amendment Bill.

Report adopted.

The House adjourned at 9.56 p.m.