Full transcript of the Urgent Debate on the Ministry of Health’s Financial Management of Building Project, which took place on Tuesday 8 March.
Mr SPEAKER: I have received a letter from Andrew Little seeking to debate under Standing Order 389 the news of a serious failure of financial management at the Ministry of Health in relation to a building project. The news of the ministry’s inability to fund the building project from within the cash reserves as projected is a particular case of recent occurrence. The upcoming annual review debate offers an opportunity to debate the performance of Government departments. This issue could be debated at that time. I do note, however, that the Health Committee has already presented its report on the annual review of the Ministry of Health. The issue was not raised in the report and, presumably, the committee was not aware of it.
The matter raised is a very serious one, and the sum of money involved is significant. Treasury has expressed concern at the governance and financial management of the ministry and has stated that it does not have “confidence that the failures that occurred around the [project] will not reoccur.” Having carefully considered this application, I believe it requires the urgent attention of the House. I therefore call on Andrew Little to move that the House take note of an urgent matter of public importance.
ANDREW LITTLE (Leader of the Opposition): I move, That the House take note of a matter of urgent public importance. The Ministry of Health is one of the biggest-spending ministries and departments in the Government, so what happens with the Ministry of Health matters. That is why good oversight matters. That is why you need a Minister of Health who is focused on the job and a Minister of Finance who is not asleep at the wheel. Unfortunately, we cannot say of the present Minister of Health nor of the present Minister of Finance that they are not across their portfolios and that the Minister of Finance is not asleep at the wheel. This has been an absolute and utter failure of oversight by those charged with the responsibility of that oversight.
A $24 million project—a $24 million refit project. That is a big project in Government, yet the Ministry of Health—its officials—no doubt aided and abetted by the Minister, because the Minister would know that this was going on, is somehow able to persuade Cabinet that it had the funds to do this project, when the funds did not exist. How does that happen—how does that happen? Now we see the real consequence of this: $18 million of the cost of this project has to be financed out of a now much-hyped rental that the ministry has to pay for its premises. It is $18 million more over 15 years. That means that its rental for its head office is now going to cost more than $1 million a year extra over the next 15 years.
We know who will pay the price of that—we know who will pay the price of that. It will not be just every taxpayer; it will be the patients who, yet again and for the next 15 years, will go without the hospital surgery that they need and the pharmaceutical treatment that they need. That is what happens when Ministers, and this Government, are so arrogant and so contemptuous of their responsibilities as Ministers that they just do not care. They just let it go. They let officials from the ministry tell them: “Don’t worry, we’ve got $24 million.”
Did the Minister of Finance tell his officials, the Secretary to the Treasury: “Could you please just go and check the balance sheet? Just check that the reserves are there, please? Can you just check that they’ve got $24 million?”. No one did it. The Secretary to the Treasury, aided and abetted by the Minister, of course kicks for touch. He said: “No one came to us. No one told us. We’re only the Treasury. How would we know about the money that the Ministry of Health says that it’s got or that it needs?”. He does not know, the Minister of Finance does not know, the Minister of Health does not care, and no one knows what is going on. But it does not end there. Having got the entire Cabinet to approve the whole project without the money being there, they then delegated the responsibility of tying up the loose ends and making sure that it was all kosher to the Minister of Finance and the Minister of Health.
This is what the Secretary to the Treasury said, and how he recorded it: “In approving the business case, Cabinet delegated responsibility to the Minister of Finance and the responsible agency Minister to approve final investment decisions.” It is very clear. In spite of the Prime Minister saying “There is no issue here. There’s nothing on the record. There is no evidence. There is nothing wrong.”, here is the documented evidence. Here is the documented evidence of ministerial incompetence and failure. They cannot do their jobs. The one person whom we need to know is doing their job is the Minister of Finance—overseeing the spending of billions of dollars, the raising of billions of dollars of taxes—and he does not care that a department, one of the biggest in the country, waltzes on up and says “Leave the project to us. We’ve got $24 million.”, and he does not even care whether they have got it or not. That is our Minister of Finance. That is the New Zealand Minister of Finance today. He does not pay attention, does not give attention to detail, and lets this fiasco carry on.
It gets worse—it gets worse. The Secretary to the Treasury goes on to say—and I make no judgment of it at all about whether this is a self-serving document; it may or it may not be; I make no judgment—“The approval by Cabinet was on the basis that no additional Crown funding was required and that the $24 million capital investment would be funded from cash reserves.” He goes on to say: “The Treasury was not consulted.” How does it happen—how does it happen—that a $24 million project can be given sign-off by Cabinet, and Treasury does not know about it? Treasury does not know about it. Is that even possible? Is that even credible? Is it even believable?
Hon Members: No.
ANDREW LITTLE: No, it is not—no, it is not, and the Government is desperately playing a dance to try to bury this and make it go away. That has been the role of the Minister of Health, at least, anyway.
So when the fiasco became apparent, what did the Government do? Anybody else—any self-respecting Minister concerned about his responsibilities and accountabilities to the taxpayer—would have thought: “Gee, I’d better have a look at this. Better call in a specialist; better call in the Office of the Auditor-General, because that is the specialist agency that deals with mismanagement in the public sector and with failures of management responsibility. Better go to the Auditor-General.”
But what does he do? “Better not have anybody who can call us to account. We’ll call in the private sector.”, because according to the National Party, the private sector can do no wrong. That is why you sell Landcorp—or talk about it—at the behest of your junior party partner. So the Government calls in PricewaterhouseCoopers, which does this skimpy little document that confirms what we all know just by looking at the details. It said there was serious financial mismanagement. Oh yeah? Cabinet approves $24 million that Treasury does not know about and the Ministers do not care about—we know that that is serious financial mismanagement.
The question is: how on earth did that happen—how on earth did that happen? It is a disgrace. It is an absolute disgrace, because what the Secretary to the Treasury then goes on to say, in his most instructive memo—his aide-mémoire, as he describes it—is: “The whole issue has come to light in the 2015 Budget process, because the ministry does not have sufficient cash reserves.” But he goes on to say this: “Nor did the ministry have sufficient forecast cash reserves when the property consolidation”—which is the project they are talking about—“was approved by ministers in 2014.”
So at the very time that the highly skilled National Cabinet—the masters of the universe, the great managers of the economy, the people who know everything about managing assets and capital and money—was approving this, the Ministry of Health did not even have the money. It did not even have the money.
Grant Robertson: What kind of incompetence is that?
ANDREW LITTLE: What sheer and utter incompetence is this—what sheer and utter incompetence? It is nothing less than a total disgrace.
Hon Annette King: He laughs.
ANDREW LITTLE: And those members laugh about it, because that is the National Party of the 21st century.
Hon Annette King: Arrogant.
ANDREW LITTLE: Arrogant, contemptuous, do not care about their responsibilities to the electorate, do not care about their accountabilities to the taxpayer; those members just do not care—they just do not care. The Secretary to the Treasury, very helpfully, went on to say that the ministry’s next bid demanded the equivalent of 90 percent of the department’s projected depreciation funding over the next 2 years, which, of course, was completely impossible, because as it turns out, you know, the ministry has got other assets that it has to depreciate, including an ICT system, which depreciates more rapidly.
So it could not do it, and do you know what the Ministry of Health then tried to do? It then tried to sort of inveigle its way in to the district health boards and say: “Forget about the district health boards for a moment. We might have an extra $200 million for their capital funding, but give it to us in Wellington, because we’ve made such a huge mistake that we should be rewarded for it at the expense of the district health boards around the rest of the country.”
You know who the people are whom I most pity in all of this? It is the people of Dunedin—the people of Dunedin, who have been waiting for an upgrade to their hospital for years. I visited that hospital last year. It is literally falling down around your ears—or my ears, and they are pretty big, admittedly. The hospital is falling down around their ears. It leaks. People are jammed into it. People have to have surgery in cramped and barely spacious surgical theatres. They are waiting for their hospital upgrade, but they will not get it now. It will be pushed out because of the Minister of Health’s incompetence and the Minister of Finance’s failure. Will they ever front up to Dunedin, do you think? Will they ever go to Dunedin and explain to the people of Dunedin: “Sorry. We’d like to give you a new hospital. We can’t, because we failed to do our basic job of overseeing the officials who we are responsible for. We are too busy scoring political points, playing political games, to care about what’s actually happening in health, to care about what’s happening with our hospitals. We’d rather just ignore the officials, ignore our job to check, when officials tell us money is there, that it is. We would rather forget all that stuff, because we are too busy playing political games and scoring political points.”
That is what this Government has come down to, and now we have reached the apotheosis—now we have reached the apotheosis—of a Government that for so long, for 8 years, has never taken responsibility for its own failures. It has never taken responsibility for its own incompetence. It blames everybody else. It is everybody else’s fault. I notice that when the story broke, it was not the Minister who fronted up, in the Westminster tradition of ministerial responsibility. The Ministers shoved out the Director-General of Health—the new-ish director-general and former acting director-general. They pushed him out there, because he is the sacrificial lamb.
Well, it is not just his fault. He may have some responsibility—he may have some responsibility—but it is the Ministers, ultimately, who are to blame. I want to turn Bob Semple’s dictum on its head: they are not just responsible, they are to blame. It was their job to make sure that their officials did their job. It was their job to ask the simple questions. “So when you say you’ve got $24 million of reserves”—because I say it does raise an obvious question when a Government department says it has got $24 million in reserves. If I were a Minister, I would be asking: “Really? How much underspending have you had to do in the health sector—which is so desperately needy of cash—and for how long, that leaves you with $24 million reserves?” That is an obvious question, and had the question been asked, had the Ministers been doing their jobs, had they asked the question—it is pretty obvious—then they would have had to have been told: “Oh, whoops. We do not have that money.” Then the project would not have been approved and we would not be in this situation.
None of us in the Opposition likes to be in the position of pointing out to Ministers how incompetent they are. That is not good government. It is not good government when we are in that position. But it behoves us on this side of the House—it is our moral responsibility when we see such a fiasco, such a farrago in Public Service management—to call this to account. We have to tell every New Zealander: “If you are wondering what has happened to your health dollar, if you are wondering why you cannot get your melanoma drug treatment, if you are wondering why you cannot get your surgical treatment, your elective surgery, look no further than the Minister of Health and the Minister of Finance, who now have squandered $24 million—or at least $18 million over the next 15 years—that has to be tacked on to the Ministry of Health budget at the expense of New Zealand’s long-suffering patients.”
And do you know who is going to suffer most? It is not just the people in Dunedin; it will be the elderly, because we know that when it comes to health decisions and health rationing, that it is always the elderly who suffer. They are the ones who miss out on the hip surgery and the knee surgery and those things that make life just a little more comfortable after a lifetime of paying their taxes. They are the people who will pay the cost of this when Ministers fail to do their job.
It cannot go unnoticed, and it will not go unnoticed, and this House must notice that on this occasion two of the most senior Ministers, presided over by a Prime Minister who has been in the job for 8 years, and the New Zealand Government represented by Cabinet—the National Cabinet—have totally failed New Zealanders. They have totally failed taxpayers in New Zealand. This is not the quality of Government we should expect. After 8 years, you know the training wheels are long gone. The training wheels are off this lot. They know how to run a Government—or they should do. They know how to ask the questions—or they should have done. But they have got to the point now where, 8 years on, they have such contempt, such arrogance, that they no longer care anymore. They no longer care about doing a good job. They no longer care about doing their job as highly paid Ministers responsible for the public purse, responsible to the people of New Zealand. It is absolutely appalling.
It is absolutely appalling, and now a project has been entered into, it is beyond the point of no return, and taxpayers will pick up the cost. Taxpayers will pick up the cost. The Secretary to the Treasury goes on to say that his recommendation was that no extra money be made available to the Ministry of Health to punish it for its failure. Well, it is not just the ministry and its management that should be punished; it is the Ministers as well. They too have failed. They have failed New Zealand. They have failed every taxpayer in this country.
Hon Dr JONATHAN COLEMAN (Minister of Health): Every time I hear Mr Little speak, I am thoroughly reminded of why he could not win the New Plymouth electorate two elections in a row. I tell you, there is one thing that unites the Labour caucus: it is the over-riding feeling of boredom they get whenever they see their leader get up to speak. He was talking about arrogant and contemptuous—[Interruption] He was talking about arrogant and contemptuous—[Interruption]
Mr DEPUTY SPEAKER: Order! Calm down.
Hon Dr JONATHAN COLEMAN: He was talking about arrogant and contemptuous. What none of the Labour caucus could see was that right throughout that speech Phil Goff and David Cunliffe were talking between themselves in the back row, because they have given up so much hope in Andrew Little they could not even be bothered listening to their leader speak.
Hon Annette King: Behind you.
Hon Dr JONATHAN COLEMAN: I have got a number of messages for Annette King, actually, but I tell you that if she is going to let that doofus take over her seat at the general election, she is going to end up—
Hon Annette King: I raise a point of order, Mr Speaker. You heard what the member just said—a disgraceful comment about the Leader of the Opposition. If he cannot argue the issues, he should not get to his feet at all.
Mr DEPUTY SPEAKER: The point is taken. The Minister will restrict himself to parliamentary language and terms of address.
Hon Dr JONATHAN COLEMAN: Well, that was a very easy wind-up. You can see that Mrs King gets very het up very quickly. Look, there are quite a few things that we just need to clarify about this whole situation, and I can tell you that you can tell when Labour members are on the ropes, because they will not listen.
The first thing I would like to say is that if this is the biggest issue that Labour members have got to campaign on today, I tell you they are in real trouble. It is very interesting that they do not want to be in here and talk about the funding of melanoma drugs, because, actually, they have put themselves in a terrible position over that. They are compromised with their contacts with drug companies over that. It is very interesting that they do not want to talk about the economy, because, as they know, they are losing on the economy, so they try health. That is the strategy over there. But, look, you will really like this bit. You will really like this bit, so just listen up. The Ministry of Health—[Interruption] Listen, you will like this—[Interruption]
Mr DEPUTY SPEAKER: Order! Just to quote former Speaker Hunt, interjections are to be rare and reasonable and, hopefully, witty. Just repeating the same line over and over and over again is not within the Standing Orders—[Interruption] No, do not crank up the volume, as my cousin would encourage you to do. Just see whether you can limit yourself to what is rare, reasonable, and, hopefully, witty.
Hon Dr JONATHAN COLEMAN: Come on, Mr Deputy Speaker. It is not all about you, you know.
Mr DEPUTY SPEAKER: You cannot make comments like that. You will withdraw and apologise.
Hon Dr JONATHAN COLEMAN: Now, Labour—
Mr DEPUTY SPEAKER: You will withdraw and apologise.
Hon Dr JONATHAN COLEMAN: I withdraw and apologise. Listen up—you will like this bit, OK? Just listen to this: the Ministry of Health made a mistake. I will say it again: the Ministry of Health made a mistake, right? So its financial governance in this matter—and it has admitted it—was not up to standard, OK? It said that it could fund this move out of cash reserves, and when it came down to it, actually it was $18 million short. That was completely unacceptable, and Chai Chuah has taken responsibility for that on behalf of the ministry. I have made it very clear to him that that cannot happen again.
But you want to look at the wider context here. What this move is about is five large Government departments—the Ministry of Health, the Ministry of Education, the Ministry of Social Development, Crown Law, and the Ministry of Business, Innovation and Employment—moving into new premises. That is going to constrict the footprint by 30 percent over the next 20 years. It is going to cut costs by 20 percent, and it is going to save $338 million, so it was a very good decision to make—absolutely a great example of Better Public Services. There was a mistake in the financing of it, but I can tell you that the wider story is very, very good news.
I can tell you that there are a few things that Mr Little said there that were completely incorrect, and I am not surprised about that, because the fact is that this is being funded out of departmental expenditure—[Interruption] So it is the back-office expenditure of the Ministry of Health, and the very good news—[Interruption] Once again, you can tell these guys do not want to hear, because they know they are being delivered knock-out punches on this stuff. When they were in Government, they were spending $230 million just on running the ministry, not on delivering clinical services. Today that ministry costs $190 million to run. There used to be 1,500 people there; there are now 1,100 people. And guess what? They are producing better results all the time. So we are not in a situation like when Mrs King was the Minister of Health, when she put in an extra $2 billion and produced—
Hon Annette King: Oh dear, oh dear, oh dear.
Hon Dr JONATHAN COLEMAN: —and I have got a folder for you here; the “King file”—2,000 fewer operations. It was absolutely incredible. We were talking about first specialist assessments today. You know, when Annette King was the Minister—when she started—they were doing 38,000 specialist appointments in the Auckland District Health Board each year. When she had finished, they were doing 7,000 fewer. So how can you spend 6 years as the Minister of Health and deliver 7,000 fewer appointments? But it was worse than that in other places—well, actually, not quite as bad; that was the worst. In Canterbury she ended up delivering 1,800 fewer appointments over 6 years. And here in Wellington, where she is an MP, by the end of 6 years she was delivering almost 5,000 fewer appointments.
Hon Annette King: It’s only 11 years since I was the Minister—11 long years.
Hon Dr JONATHAN COLEMAN: Yes, and I think what it shows is the dearth of talent on the Labour benches. What are those members going to do when Mrs King leaves? They are absolutely stuffed. They could not have the MP for Wigram there; she is not up to it. Kelvin Davis—a pretty good footballer but not much good for anything else. Iain Lees-Galloway—they are never going to have a King’s College old boy on the front bench; universally despised outside Parliament and inside Parliament, outside the caucus and inside the caucus. So the cupboard is pretty bare over there. There might be a bit of hope for that guy from Dunedin North, but, remember, he is the guy who wants to ban Google.
Mr DEPUTY SPEAKER: Order! I am sorry to interrupt the Minister, but he needs to remember—sit down while I am on my feet. Thank you, Minister. He needs to remember that this is not a general debate. It is a specific debate—an urgent debate—and he needs to address it. If he has not got anything more to say about it, he does not need to fill his whole 15 minutes.
Hon Dr JONATHAN COLEMAN: Oh, yes, I have. I have got plenty to say, because, actually, I am responding to the character assassination of the Minister of Finance and the scurrilous attacks on me, by just pointing out a few things about those members’ pedigree. Andrew Little—[Interruption] Listen to this. Andrew Little was talking about Dunedin. He was talking about Dunedin and he was saying that the sick and the elderly would suffer there. He was saying that people would not get their operations there. Well, that is absolutely untrue because, actually, the point is that this $24 million is money well spent. It is going to save money in the long term. It does not come out of the operational budget, right? So it does not take one dollar away from patient services.
Hon Trevor Mallard: Rubbish. The member doesn’t know how to run a budget.
Hon Dr JONATHAN COLEMAN: So, actually, anyone who is saying that—like Trevor Mallard, the time-expired member for Lower Hutt—is wrong. They are wrong. And I can tell you that if Labour members did a bit more work—if they got around the sector, if they did some reading, if they produced some discussion documents—they might know some facts about the health sector, because, in actual fact, we are delivering more and better services all the time. I know that Labour members read a few press releases. They would have been bitterly disappointed to see that over our time in Government, we have produced an extra 110,000 appointments per year. So it has gone from 430,000 appointments per year to 540,000 appointments a year.
This was going to be Labour’s big knockout punch, because those members were sure that when it came to GP referrals to specialists, they were going to be able to say that it was absolutely terrible and that no one was getting their referrals. But do you know what the data shows? It shows that 90 percent of patients referred from a GP to a hospital specialist—in the 3 month period; of the first data released last year—got an appointment with a specialist. I know that that is very, very disappointing to Government critics, to haters and wreckers of the health system, and to Mrs King and the Labour Party, but that is the fact. What is happening under this Government is that we are making more and more front-line services available to the public all the time.
The other thing that I need to absolutely raise here is that Labour members keep on stating—and, for the record, it is completely untrue; it is incorrect—that $1.7 billion has been cut from the health budget. That is untrue and it is a lie. I do not know why they keep on saying it. It is completely untrue. In actual fact, the health budget goes up every year. It went up by $400 million last year. It has gone up by $4 billion over our time in Government.
So what was happening with Labour? It was increasing the spend like crazy. It was going up by 7 to 8 percent per year, and, I can tell you, if we had continued on that spending track, the Government would now be running the books at a massive deficit. So the question that Labour needs to actually answer is how it can promise to put more and more money into health and keep the books in balance. I can tell you, Grant Robertson cannot do it. He absolutely cannot, because it is impossible.
The fact is that when Labour was in charge of the health system, it put more and more money in and it delivered less and less. That is all those of you at home need to remember. When Labour is managing health, it spends more and it produces less, and I can remember that at North Shore Hospital. I would go there, and there would be people waiting under the harsh fluorescent lights. There would be queues of ambulances in the car park, and people were saying “We’ve got to get National in because, quite frankly, we’ve had Annette King, we’ve had Pete Hodgson, we’ve had the disaster of David Cunliffe, and we cannot bear to have the health system run by these people any longer.”
The other thing I would like to say is that the health targets have been a massive success, and I know Labour would concede that they have, because when Labour was running the health system, about 65 percent of our kids got immunised at the age of 8 months. Now it is 95 percent. It is absolutely incredible. Over Labour’s time in Government there were fewer elective surgeries delivered. We promised an uplift of 4,000 per year, and we have delivered an extra 50,000 surgeries per annum since we came into Government, an extra 110,000 specialist appointments, and 5,500 more doctors and nurses in the system.
Hon Annette King: One of his big porkies.
Hon Dr JONATHAN COLEMAN: You know, when Annette King was the Minister of Health she was sending 800 people per year to Australia for basic cancer care—800 people. Do you know how many go now? Zero. So there is no question that people are getting better health-care under this Government. Annette King speaks about cover-ups. Well, I will tell you what a cover-up is. It is sitting in the room when the decision is made to spend $800,000 of taxpayer money on your election pledge card, it is kicking 30,000 people off wait-lists, and it is sending people off to Australia for cancer care. So I think Mrs King has thoroughly proved the case for her incompetence. It is sad, actually, that she is blocking up the Rongotai electorate. I think she would be far better going off to local government, but, actually, on reflection, there is no one competent in the Labour Party—
Mr DEPUTY SPEAKER: Come back to the question.
Hon Dr JONATHAN COLEMAN: —to take over the portfolio, so they are probably better to leave her there for the moment. But when you come back to it, we have put more front-line services there for New Zealanders. If these guys ever get into Government, they will spend more and more, they will produce less and less, and do you know what? They will continue to go around the country misleading the public.
Hon Annette King: You should be ashamed of this—
Hon Dr JONATHAN COLEMAN: You know what Annette King said on the Trans-Pacific Partnership (TPP)? She said that people would die. She said that the TPP would kill people. She said that it would cost hundreds of millions of dollars, and she has been proven wrong, and now she is—
Hon Annette King: I raise a point of order, Mr Speaker. I require him to withdraw that. I have never said that TPP would kill people. That is a total lie.
Mr DEPUTY SPEAKER: It is a matter for debate.
Hon Annette King: Well, it’s a lie.
Mr DEPUTY SPEAKER: It is matter for debate.
Hon Dr JONATHAN COLEMAN: Anyway, while Annette King was saying that the TPP would kill people, secretly she wants to vote for it, and that is the big problem they have got. Apart from the hard-line left-wing, Marxist Grant Robertson, there are a whole of people who want to vote for it—just like David Shearer wants to vote for the flag. You know, there is so much to debate in this Parliament that I am amazed that Labour is wasting Parliament’s time with an urgent debate—
Mr DEPUTY SPEAKER: I will remind the Minister—
Hon Dr JONATHAN COLEMAN: —on a minor financial blip.
Mr DEPUTY SPEAKER: Order! I remind the Minister again that this is not a general debate; it is an urgent debate around the question that was raised. The member should confine himself to that.
Hon Dr JONATHAN COLEMAN: Yes. Well, going back to that question, I can tell you that this move by the Ministry of Health into new premises is an excellent move. It will reduce costs by 20 percent, it will reduce the footprint by 30 percent, and it will save $338 million over 20 years. But I can tell you that Labour would not have a clue about how to do anything more efficiently and how to produce better services. And I can tell you that the constant commitment of this Government is to more front-line health services for New Zealanders. So that is more operations, it is more cancer care, it is more doctors and nurses, and it is more immunisations. The bottom line is that only National can manage the books and produce better health services for New Zealanders, and the public knows that.
METIRIA TUREI (Co-Leader—Green): So the Ministry of Health makes a major financial mistake—losing $18 million—and the Minister knows about it and he hides it from the New Zealand public. He has just spent 15 minutes shouting about the Trans-Pacific Partnership (TPP) agreement and about Annette King and about anything else he can make up in his own mind, and he has not explained to New Zealanders why he hid from the New Zealand public the fact that the ministry lost $18 million. He knew about it. The Minister knew that the ministry had made such a major financial mistake. He knew about it. He did nothing about it.
Hon Annette King: He covered it up.
METIRIA TUREI: I agree with Annette King. The Minister covered it up. He had an opportunity last year, as I understand, to tell the New Zealand public that the ministry had made this mistake. Perhaps he could have called for an inquiry or initiated an inquiry into that mistake—
Grant Robertson: Or the Auditor-General.
METIRIA TUREI: —or, yes, asked the Auditor-General to look at the financial mistake that was made. It is $18 million that was lost, after all. He could have told the New Zealand public that a mistake had been made and he was handling it and making sure it would be managed properly. None of that happened. Not a single part of good governance, of effective ministerial management, happened when the Ministry of Health lost $18 million. And the Minister today had a 15-minute opportunity to tell the New Zealand public what had happened, how he found out, what he then did about it to try to fix it, and what he expects to happen from this point on. Did the Minister talk about any of those things?
Hon Annette King: No.
METIRIA TUREI: No, he did not. Did he provide the New Zealand public with any confidence that this is a Minister who has a handle, a grip, on his ministry? No, he did not because he does not know what is happening in his own ministry. That causes very serious concerns for the Green Party and for Labour, which raised this urgent debate, and it should do for the New Zealand public as well. It certainly did for Treasury when Treasury discovered that this mistake had been made. The Ministry of Health got a letter from the head of Treasury saying that the fact that the ministry had lost this money brought into question the governance and financial management practices of the Ministry of Health.
I will just note that the Ministry of Health is one of the core services that New Zealanders need to be confident is operating well, and is operating effectively and efficiently with the budget that it has. We know that the budget is being squeezed in health. We know that more and more New Zealanders, particularly older New Zealanders, are needing more and better quality health care. We know that there are thousands of New Zealand children who suffer from avoidable illnesses and also need high-quality health care from the Ministry of Health. So for the Ministry of Health to be told by Treasury that Treasury has serious concerns about its financial management should cause uproar amongst New Zealand families, because we cannot afford to have a ministry that is not managing its scarce resources properly. We must have a Ministry of Health that does have a handle on its accounts and does know whether it has $24 million or just $6 million in its reserves. How could we have any confidence in a ministry and a director-general that do not know what their financial picture is? And, of course, the Minister did not bother to ask the right questions, and when he did find out that there was a problem he did not tell the New Zealand public. It had to be exposed rather than them taking control of the situation.
We know that Pharmac needs more money to provide medicines—important critical medicines that will save the lives of thousands of New Zealanders. Our hospitals, doctors, nurses, and district health boards are all crying out for more money so that they can take care of their communities. I live in Dunedin. We need a new hospital—desperately, urgently. We know that the services there are being squeezed. The people in Dunedin feel this every day that they turn up to accident and emergency to have a health issue dealt with. All of those people in Dunedin, and communities just like them around the country, deserve better from the Ministry of Health and from the Minister. We know that mental health care is being cut in Canterbury—in Canterbury, the area where there is the greatest need at the moment for genuine mental health care and services, to help people ride through what is continuing to be a traumatic experience post-quakes. The money is not there, for that.
We have seen money disappear out of the Ministry of Health, and money being cut from essential services in Christchurch and Canterbury. We have thousands of people every year who are living with serious pain because the surgery that they desperately need is being put off. Why? It is not that we do not have the expertise. We have the skills. We have the doctors and the nurses who can do that work, who can provide that surgery. We do not have the financial resources to make sure that surgery is available to all of those people who need it. There are many, many New Zealanders who are suffering simply because there is not enough money in the system to go around. On top of all of that, the real and desperate needs of New Zealanders, every day in this country—we have a Minister who seems to think that a hands-off approach to his ministry is good enough; a Minister who will sign off on an $18 million handout to his ministry to cover the mistake that it has made and to cover the mismanagement of the finances, and not tell the New Zealand public about it.
This is a debacle that happens when you have a Minister who is asleep at the wheel: financial mismanagement, operational ineptness, and a complete mishandling of taxpayers’ money for such a critical and essential service. The health Minister is responsible for this stuff-up, and everyone in the House and taxpayers and New Zealanders around the country will not have to look much further than the monument that is in Molesworth Street now to see the consequences of that muck-up. New Zealanders deserved better from their Minister. I accept that when you are a Minister of a major agency like the Ministry of Health, there will be mistakes made. Yeah, of course there will be mistakes made, but we look to our Ministers to show that they are capable of dealing with those mistakes when they are made—Ministers who are honest with the New Zealand public, who will tell us what is going on, and who will demonstrate to us that he or she is taking the situation in hand and has some control over it. It is a great disappointment that Minister Coleman, the Minister of Health, failed so miserably to do that today. Thank you.
FLETCHER TABUTEAU (NZ First): This debate is a question that is about honesty and integrity. I sat there listening with earnest interest to what the Minister had to contribute to this debate. I wanted to understand how he was going to explain the situation to the House. I was busy listening, but the Minister literally had no reply to the issue that we are talking about under urgency as of this moment. There was literally nothing. It was an abuse of a member who has not had control of those ministerial reins for over 11 years, and yet he felt it was topical to talk about that now, to drag it up and somehow cast aspersions on someone who had nothing to do with this farce. The reply did attempt to finally get around to spinning numbers, but that is what it came down to in the end: it was an attempt to spin statistics.
We saw that a lot in the House this afternoon during question time, actually. Whenever we asked a Minister an earnest question about what they were doing—with education, the police, the prisons—we were spun numbers. To ask this Government to now talk to this House, to talk to the people of New Zealand, with honesty and integrity seems to be too much ask. It is truly upsetting to see. There have been calls for the Minister to resign, and I am sure the caucus will agree with me when I say we fully endorse those calls.
But, actually, it should not be a question about whether that Minister is going to resign. The question now should be whether the Prime Minister will get some guts, stand up, and actually hold that Minister to account for the failings that he has allowed to be perpetrated under his watch and, actually, more than his watch—under his discretion and his direction. It has been a travesty, and there has been no attempt to reply and to show accountability for their actions. At least, I will concede, the Minister got it right when in previous statements he described the situation as a severe bungle, but that is all he seems to be willing to admit. This is a $24 million refit. It is a debacle, coupled with the payroll issue from another Minister whom we have often heard about in this House.
What we were concerned to hear about today, and what has come to light, is how Cabinet decided that Treasury did not need to be a part of this process. For some reason, it was good enough for the Ministry of Health and the Ministry of Finance to sidestep procedure and undertake this process themselves. What we have discovered is that we have got this $18 million commitment over 15 years—so we are talking about more than $1 million a year in financial commitments—to offset this mistake, this failing of this Minister. What was upsetting tonight was that the Minister denied that this will affect New Zealanders and their health care.
I put it to the Minister that it does not matter how we label the title of the budget, and it does not matter what budget he says the money is coming from: New Zealanders and their health care will be undermined by the lack of funds now available to the health care budget. That is the bottom line when it comes to money and what the reality is in this situation right now. I mention that they delegated responsibility to the Minister of Finance and the Minister of Health. Treasury clearly highlighted—it said that it was Cabinet that had sidestepped correct procedure.
But I am sure Steven Joyce is not surprised at all by this stuff and the stuff-ups that have been occurring. He has seen it happen under his “super” leadership. His rule has almost continuously seen these kinds of mistakes and stuff-ups. I personally am not surprised to see that transfer into Cabinet procedure; and now we see this come to fruit, which is completely unacceptable. These Ministers have made mistakes. I note here that the Treasury secretary, Mr Makhlouf, said: “the new bid for funding brings into question the governance and financial management practices of the ministry”. He went on to say that Treasury had no confidence that the failures would not happen again—absolutely no confidence that this would not happen again. We say to Treasury that there is probably a reason why it has no confidence that this will not happen again; I simply look to those people sitting on the other side of this House. Sir—no, I will not say that. Neither should it be a surprise to the New Zealand public that these mistakes—more than mistakes; I describe it politely as a mistake. There seems to have been deliberate action here on the part of Cabinet and on behalf of the Ministers to, essentially—I put it to the House—cover up this issue.
What then upsets the New Zealand First caucus—we ask the Government what it was thinking—was that they did not go to the Auditor-General to look at the accounts. They did not call up the one body that could publicly hold them to account for this financial stuff-up. No, they called up a private consulting firm to audit the books—a private consulting firm. This is unacceptable and an insult to this Parliament and an insult to the people of New Zealand. But let us take note of some of the feedback that PricewaterhouseCoopers actually gave in its report. I will just briefly say that the report can be summed up by saying that there were failures of governance, failures of capital planning, of documentation, and reporting. The findings by the private consultants were damning even of themselves, but the fact that the Auditor-General was not called on is completely unacceptable.
The people of Dunedin have been literally crying out for years for this upgrade to their physical asset—to this health facility. This Minister of Finance and this Minister of Health have failed them. They now must suffer the indignity of those conditions for years to come because of this mistake, and with no one owning up to it. It is unacceptable. The arrogance, the temerity—just today we were told of the police not doing their job by the Minister herself, and yet she refused to admit that the Police, for example, are being underfunded. It just seems to be a practice of passing the buck, and it seems to be everyone else’s fault.
We in the Opposition are not surprised to discover that the Ministers have failed to do this very simple job. Not only have they failed to do the job, but they have deliberately gone out of their way to ensure that they were not held accountable for it. For that, the accountability needs to be much more severe and greater than it ever would have been in the first instance. I finish by saying that people looking for health care and people who need the support of this Government have been let down. People will miss out on their health care services. It is unacceptable and this Government and those Ministers need to own up to their mistakes. Thank you.
Hon Peseta SAM LOTU-IIGA (Associate Minister of Health): I rise to stand in this urgent debate and to just outline some of the facts around what has happened in the last 2 years around these new premises. The Minister stated quite clearly, and I support the Minister in this, that there were savings around some of these projects in the Ministry of Health, in the Ministry of Education, and the Ministry of Social Development, for the premises, of over $338 million—$338 million worth of savings. These are savings that go back into front-line services. So we get those savings by having those projects.
However, we also understand—and members opposite should understand—that a mistake was made. At an operational level, a mistake was made around the financial management of this project. But we know that an independent review was ordered. PricewaterhouseCoopers came in, did a review, found some of these mistakes, and changes were then made within the system—within the Ministry of Health—in order to alleviate this problem. So what changes were made? Changes were made to the financial processes that were undertaken to manage this project. What other changes were made? Changes were made to personnel to manage this particular project. What other changes were made? Changes were made in order that financial transparency around these types of projects would be completed in future. So we have got that undertaking. The Minister was quite clear in his representations to the officials that this was unacceptable—it was unacceptable.
But what we also know is that there is no additional capital funding going to this project. We also know—
Hon Annette King: It’s not capital any more—that’s right.
Hon Peseta SAM LOTU-IIGA: And Mrs King should know—I do not know whether she does—but we also know that it does not impact on front-line services, because these are departmental expenses. They are departmental expenses made by the Ministry. A mistake was made and, therefore, there was some level of accountability in the Ministry—unacceptable, unacceptable.
However, we have heard members opposite wax lyrical about how, according to Metiria Turei, there is no mental health funding in Canterbury. Well, that is not true—that is simply untrue. In fact, there is more mental health spending in Canterbury today than there ever has been, so that is untrue. We have heard Mr Tabuteau say that this is a travesty; that there is a lack of funding. What he did not say was that there has been $4 billion extra spending in the health portfolio since this Government took power—$4 billion worth of extra spending in health services, in front-line services since National took power.
What does that mean? I know that Mrs King is smiling because she knows the good news that National has brought to the health portfolio. She knows that there are 1,700 more doctors. She knows that there are over 3,500 more front-line nurses dealing with the issues and the problems—the health services dealing with the issues and the problems—that New Zealanders deal with every day. She also knows that there are 1,000 fewer bureaucrats in the health portfolio than there were under the King-Clark-Cullen Government—1,100 fewer backroom operators than there were under that Labour Government. So these are the facts—these are the facts. We also know that the number of employees decreased from 1,500 to 1,100.
What we will stand on in the health portfolio is, we will stand on our record. Yes, mistakes are made, but then they are alleviated. Problems are sorted out within ministries, within departments. What we will say, with the extra spending—and we heard recently that the rheumatic fever rates across this country have been halved. I know Mrs King is also proud of that fact—we know that Mrs King is proud of the fact. We also know there are no more people flying to Australia for their cancer treatment, because they are being treated right here because this Government has made a commitment to those patients to fund their cancer treatment right here in Aotearoa New Zealand.
We also heard from Mr Little, and he said that things are out of control—that the finances are out of control. Well, I say to Mr Little that we inherited a budget that would have blown out the debt in this country to over $100 billion. Treasury forecasts were quite clear that it would have been $100 billion worth of debt by 2021—by 2021 it would have been well over $100 billion—and the debt to GDP ratio would have been well over 60 percent. Mrs King also knows that we have got that ratio down to 30 percent—we have got that down to 30 percent, and she knows that. We also know that this Government has run the first surplus for—
Grant Robertson: His surplus!
Hon Peseta SAM LOTU-IIGA: Yes, it has run its first surplus due to the damage that Mrs King—11 years ago she was the Minister of Health—and the damage that she and her mates did. And Grant was up on the 9th floor—Grant Robertson was up on the 9th floor. He was up there scheming and running debts—[Interruption]. Yes, running up programmes that were profligate and well outside the ambit that New Zealanders expect.
Mr DEPUTY SPEAKER: Back to the debate.
Hon Peseta SAM LOTU-IIGA: I just want to summarise by saying that this is an issue and it was unacceptable. It was a problem, and the Minister has got on top of it. There are changes that have been made, but New Zealanders will continue to get the high-quality health services that they have been getting under this Government. I am confident about that, and I know that members opposite are too.
Hon ANNETTE KING (Deputy Leader—Labour): What a disappointment. We have an urgent debate on a serious issue in this Parliament, and we have a Minister of Health who would not front up to the issue, who did not apologise for what has been called a serious financial mismanagement by his Ministry. He used abuse, he accused people, he smeared people, and he insulted them. I have to say that it was one of the most pathetic performances that I have seen from a Minister in a long time. Maybe the chair of the Health Committee might like to teach the Minister something about contrition, because that is what was needed today—it was contrition.
Grant Robertson: Absolute idiot.
Hon ANNETTE KING: Well, maybe even absolution, but he is not going to get it until he faces up to the problems that were of his making, at the end of the day. All the Minister could say was: “They made a mistake.” Well, that is not how this story unfolds. I just say to the Associate Minister of Health, who has just sat down, that he made a better speech than his Minister. He would probably make a better Minister, but he was not informed on this issue, because it was not PricewaterhouseCoopers that found out about the mistakes; it was Treasury that found the mistakes, and it was Treasury that said that there must be an independent inquiry into what went wrong in the ministry. I have to say that when I heard the Director-General of Health on the radio this morning, saying that he had asked for an inquiry, he was not telling the truth. I have the documents here to show that it was Treasury; it was the Secretary to the Treasury who went to the Ministry of Health and the director-general and said: “There must be an independent inquiry.”
I want to ask this: why did they not go to the Auditor-General? The Auditor-General is the person who carries out the investigations into our Government agencies. Each year they provide the Health Committee with a report into the financial management. Why did they not go to the Auditor-General? I know the answer. Because, from the very beginning, this has been a terrible cover-up—a cover-up of what they called a mistake.
Let us look at the facts. The sum of $24 million is what it was going to cost to do a fit-out within the Ministry of Health. In 2014 the then acting director-general, who is now the director-general, came to the Ministers and said: “The $24 million”—this is 2014—“for the fit-out, we can do from our own reserves, from the cash reserves we have, and our forecast cash reserves. We don’t need any money.” So the Ministers said: “Go ahead.” And then we come to 2015. In February 2015 the director-general told the new Minister of Health: “Oops. We made a mistake. We actually haven’t got the reserves. We’re going to need to put in a bid for $18 million of money to cover it.”
The Minister said today that he has known since February. Treasury, in its papers released, said it was not told until March. What sort of Government management is this? The Government agency that has oversight over money was not told until March that there was no money in the cash reserves to pay for this fit-out. So I do not know what was going on in their minds.
But what happened next is interesting. Treasury then sent a very strongly worded memo to the Minister of Finance, the Minister of Health, and the Associate Minister of Finance and said that it was very worried. Treasury said that it would never have supported this bid, had it known that the ministry did not have the cash reserves to pay for it. What Treasury said is that it would not have been supported by Treasury, and have exposed—this is the words they used—a “serious failure of financial management within the ministry that is being investigated and needs to be addressed.”—exposed a serious financial mismanagement. Mr Speaker, would you call that a mistake?
Mr DEPUTY SPEAKER: Don’t bring me into it.
Hon ANNETTE KING: Well, I am sure if you could, you would know that it was not a little mistake; it was a serious failure by a ministry. So what happened then? We have the Minister of Health who is now aware of the problem. There is then a report that is commissioned, because Treasury said there must be an investigation. We have the ministry get PricewaterhouseCoopers to do it, and then you hear from Treasury a little later on, saying it is very worried about it. Treasury does not think the report, when it sees it, is going to actually fix the problem. It has grave doubts that it is going to fix the problem. Treasury says the report outlines that there were failures in governance, capital planning, documentation, reporting, and engagement, particularly with key stakeholders like Treasury. So the Secretary to the Treasury said: “We’re very concerned about this PwC report, in its final form, because we don’t think it addresses the issue.”
Well, that report was put out in June last year. Was the select committee, when we did our financial review, told there had been a problem within the Ministry of Health, with financial management? No, we were not. We were not told, and I believe that is a cover-up. We ought to have been told there had been an issue, this is how the ministry had addressed it, these were the recommendations, and this is what it was doing. No, we were not told. The Minister had that report from June, from the beginning of June.
Do you know how we know about it today, and why we are having a debate? One line in a Treasury report, seen by a Labour researcher, said: “A report from Treasury on financial management in the Ministry of Health.” We put in an Official Information Act request. What came out was all this stuff. I have to say Treasury released it with alacrity—with alacrity. In fact, people are really surprised that the information provided was even provided—budget-sensitive, budget secrets, advice to Ministers. It was provided because Treasury was so angry about what happened.
So that report—the Minister knew about it, Treasury knew about it, the Ministry of Health knew about it, and the Minister of Finance knew about it. The Minister of Health, if he was a good Minister, would have fronted up and said: “There’s been a problem. I have made sure they address this problem. I have had a report. I’m making sure all the recommendations are addressed. Here it is.” So, through an Official Information Act request, it was released a couple of days ago—actually, at the end of last week. Why did not the Minister front up? I believe this is a cover-up. They did not believe we would ever find out about this mismanagement. PricewaterhouseCoopers—we did not know they had even had an inquiry. We did not even know there was a report. This House has been treated appallingly. The select committee has been treated appallingly.
Ron Mark: It should have been in the annual report.
Hon ANNETTE KING: It should have been in the annual report—you are quite right; it should have been the financial investigation into the financial statements, from the ministry. They sat there and said nothing to us, and treated us like fools. That was with the backing of the Minister of Health. A Minister who was really on top of his game—and I will not say the word—would have come forward and fronted up to the issue, and he would have had our respect. He did not. I have said that the director-general ought to offer his resignation.
I do believe the Auditor-General should now look at this whole issue. In fact, I am going to send it to the Auditor-General. Treasury does not believe that what was said in the PricewaterhouseCoopers report will be implemented—that it is going to work. So let us have the Auditor-General have a look at this whole issue and report back to this Parliament, because it will be transparent, it will be open, and the public will know. This is a black day for this Government and for this Minister of Health, who spent most of his time talking about when I was Minister of Health, 11 long years ago. I have to say that it was most disappointing. They have not fronted up to this debate in any serious way at all.
MARAMA FOX (Co-Leader—Māori Party): I want to recognise the Speaker of the House, who, after receiving the letter from the Leader of the Opposition, thought it important enough that we follow that letter and have an urgent debate. There is an issue here. The issue of overspending ensures, we could say, that we do not get to spend in the areas of most need. The rates for Māori in health, in all of the outcomes, are poorly represented. We could go on to ask: should the ministry have put money into bricks and mortar or put the money into the asthma rates for children, for Māori? The chronic obstructive pulmonary disease rates for Māori women are the worst in the world. We can carry on having that debate for ever. There are a lot of things that the Ministry of Health could have spent that money on, notwithstanding the ministry needs a building to go into. So that is beside the point. The point of this is that the ministry did not have the money that it said it had.
We have heard from Annette King, who explained the details of that. I thought it was serious enough, and the Speaker of the House thought it was serious enough that we should address the issue. I waited to hear the explanation, but I did not hear it. It was not forthcoming. And so I do go back to those statistics because, for me, they are quite concerning. We are overrepresented in too many areas as Māori in this country, as Pasifika in this country, and that needs to be addressed. Just this year I was approached by an asthma group—the Train the Trainer workers for Māori asthma providers in this country—that had had its contract ended for no apparent reason. No reason was given to it; it had met all of the outcomes that had been asked of it by the Ministry of Health.
Māori have some of the highest rates of asthma in this country and in the world, and yet the only Māori health provider that provided training for trainers for asthma prevention had its contract discontinued. Hauora groups across the country have expressed concern that funding for Māori health is continuing to dwindle. I have put those questions to the Minister of Health and to the Ministry of Health, and have not yet been satisfied with the answers that have been provided. Māori adults are three times as likely as non-Māori adults to smoke.
The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am slightly reluctant to interrupt the member, but I did listen carefully to the rulings that the Speaker previously in the chair, Chester Borrows, gave as to the narrowness of this debate and the importance of relating matters to it. It is not a general health debate and it is not a health estimates debate; it is on a relatively narrow issue. The flow-on from that may be something that the member could discuss, but she has got to, at least occasionally, get back to the issue.
MARAMA FOX: Thank you, Mr Assistant Speaker. I listened intently to a number of the issues that were raised in the House, and I felt that they were quite wide and, therefore, gave me some leniency here, but I take your direction. And the point comes back to the fact that $24 million has been overspent, misspent, and not calculated for correctly, and has been presented, some might say fraudulently, to the Health Committee. And yet we continue to have these disparities. It is a borderline issue, but I am waiting to hear the response.
I am waiting to hear how that mistake happened and then did not get reported back. I am waiting to hear from our Minister how we can continue to address these issues of disparities and not have those mistakes happen again. I have not been satisfied that I have heard those things. I have heard from the Associate Minister of Health Peter Dunne that the spending on health has gone up, that we cannot make those comparisons, that this may not have made much difference, and that we have fewer workers overall in the bureaucracy of the health sector. Yet we continue to have this mistake raised in front of us, and we continue to have the disparity of health statistics for our people.
I do push the boundary of this discussion to mention that, because the reasons that have been given by the Minister and the Associate Minister for expanding health spending to address those issues are clearly not evident when you look at the statistics for Māori health and for Pasifika health in this country. And so I appreciate the leniency that the Assistant Speaker has given me today. I would be interested to hear that these issues are being addressed. I would be interested to see, next year—again, when it gets that far—that they come to the select committee and present their findings to show that processes have been put in place to eliminate this happening again. Thank you.
GRANT ROBERTSON (Labour—Wellington Central): Let us be absolutely clear about what has happened here, because Ministers who have stood up have tried to say: “Oh, well, this was a very good deal. We need to have people in these facilities. It’ll bring staff together. It’ll have efficiencies.” That is not the debate. The debate is that the Ministry of Health, with the Minister of Health, along with a Minister of Finance looking the other way, has come forward only when it was forced to, to acknowledge that it did not have the $24 million that was required for this. And then when it was found out about that, it tried to cover it up. That is what we are talking about here today—a ministry that, somehow or other, got past Treasury $24 million of spending of money that it did not have. And Treasury has been very clear in the papers that have come out, that had it been consulted when this idea first went up, it would not have approved it.
On this side of the House, we find it extremely hard to believe that Treasury was not consulted about an expenditure project of this scale, and we will be digging in further to that. But if we accept that, then this is not just a little financial mistake, as the Minister of Health would have you believe; this is serious financial mismanagement, and it is a cover-up. And New Zealanders deserve far, far better than that. My colleagues Andrew Little and Annette King have outlined the details of this case.
What I want to say to this House and to the people of New Zealand is that it is quite clear, in the third term of this Government, that it has got arrogant; it has got out of touch. It, somehow, does not think that $24 million matters. It somehow wants to brush off $24 million wasted—$18 million now that has to be found—but $24 million does not seem like a big sum of money. Spending $26 million on a flag referendum does not seem like a big sum of money to this Government. The $10 million owed to KiwiSaver policyholders, because they have not had their contributions passed on, is brushed off by this Government.
This case here is typical of an out-of-touch Government, in its third term. It does not care any more if it wastes $24 million. Well, on this side of the House, we know what $24 million could do in the health system. We know that it could deal with the operations for people who come into our office every day in pain because they are not getting operations under this Government. We know that that money could go into helping ensure that young people are not growing up in cold, damp homes, which are giving them respiratory illnesses and skin diseases, which are seeing children show up at hospitals in greater numbers than ever before. That is what $24 million could give the health system. But, instead, this Government wants to cover up the fact that it has wasted that $24 million—now $18 million—which will have to be found, year in, year out, in budgets.
This case is one where the Government needs to own up and take responsibility. Where was the apology from Jonathan Coleman today? Where was the apology from Jonathan Coleman about how he and his ministry tried to hide the fact they did not have the money for this project—$24 million? They tried to hide it. They came back to Treasury, asking for $18 million, and then someone in Treasury asked the right questions, and then it came to light. But it only came to light this week because of the good work of Annette King and the research unit of the Labour Party. No one on that side of the House was putting their hand up to say: “We had serious financial mismanagement.” Those are the words of the Secretary to the Treasury—serious financial mismanagement.
It was a year ago that this was discovered—a year ago. Not one peep from the Government in the last year. It hid it, it covered it up, it did not want New Zealanders to know, and it has only emerged because the Labour Party has brought it to the attention of New Zealanders. Well, I will tell you this: we will keep doing that in the health sector, because this Government is mismanaging the finances of New Zealand. It has got its eye off the ball when it comes to Bill English and Treasury, and we have got a Ministry of Health that wants to cover things up. New Zealanders deserve far, far better than that.
SIMON O’CONNOR (National—Tāmaki): I am always pleased to speak on issues like this, particularly after the likes of Grant Robertson, because I hope I inject a bit of rationality and calm into things. You can often note around topics like this—and it is something I have talked about in the House before—that it is about proportionality. When we respond to issues, you can choose to yell, scream, be quite shrill about things—
Tim Macindoe: Calm.
SIMON O’CONNOR: Yes, you can try to be much more calm about these things, but if you measure a topic against a level of shrillness, I think you begin to understand very quickly—sorry, Mr Assistant Speaker; the House can begin to understand—the level of truth. And the long and the short is that we have heard a lot of shrill comments, we have heard a lot of conspiracy, we have heard a lot of personal attacks, and, I think, again, that masks, basically, a lack of substance.
But I do echo, at the start, what the Minister of Health himself said at the beginning—I am not sure if he was heard because there were so many interjections from the other side, but what he said was that a mistake has happened, OK? I am more than happy to say that, other members on this side of the House are happy to say that, the Director-General of Health, Mr Chai Chuah, has said that—a mistake has happened. Whether you then take a particular mistake to be a sign of a collapsing health system—I think that is out of proportion. I think if you start to use shrill language, saying that this is a Government that is arrogant and out of touch—again, shrill. Interestingly, of course, it has been the thematic approach of the Opposition for a while now.
I think it is important to put this into some context. The first, for me, if there is a theme, is that the exception proves the rule—the exception proves the rule. This is exceptional, it is a mistake, it is one that should not have happened, one we did not want to happen and do not want to happen again, but it actually shows and proves just how well the health sector, overall, is performing. Look, mistakes do happen. The Opposition knows this—it elected Phil Goff and then got rid of him, and then made the mistake of putting in Shearer and got rid of him, and then followed through into Cunliffe, and now, I think, they are probably still regretting mistakes there. The thing here is that, ultimately, mistakes do happen. You learn from those and you move on, and that is exactly what has occurred here. Eighteen million dollars has not been apportioned correctly. It is a financial governance situation as much, really, as accounting and where things are placed and put.
And, really importantly—and I think it has been drawn to the attention of the House by other speakers—this is within the departmental spend, not the operating spend, so I think most Kiwis out there will understand that we have to have moneys to run the department, and there are other New Zealanders out there who understand that we have moneys to run the actual health system, the district health board itself. What we are talking here is a Ministry of Health that thought: “Hey, we will be able to fund the costs of refitting the building through savings in our departmental fund.” It thought it could save $24 million; it turned out it was not able to save as much as that. It forecasted incorrectly and, instead, it needed a further $18 million. A mistake has happened, the Minister was, rightly, informed in time and was, importantly, informed, as a Minister ought to be.
But, importantly, as an operational matter, the Director-General of Health, as I understand things, moved very quickly, particularly to bring in the likes of PricewaterhouseCoopers, PwC, to look through not only how this particular situation happened but also to see what financial considerations can be put in place to make sure it does not happen again. I think that is fundamentally important.
Context, as well, is fairly important. The whole idea of a refit for Government buildings is something that we have been looking at as a Government for quite some time. We are very aware that the likes of the Ministry of Education, the Ministry of Business, Innovation and Employment, the Ministry of Health—obviously, in this particular circumstance—and the Ministry of Social Development are re-looking at where they operate from, how much floor space they need, and so on. As context to the fact that the Ministry of Health was trying to refit, which has brought about this $18 million shortfall, is that, ultimately, the Government was seeking to save around, I think, $338 million in expenses related to buildings to actually reduce the cost by about 30 percent. I think it is really important to put, therefore, the $18 million that we are debating here today in the context of that wider $338 million savings.
Again, it is all around proportionality, and some of the shrill nature of the debate is that we do not want to, in a sense, lose the forest for the trees. This has been a project by the Ministry of Health and others to save a substantial amount of money, and, yes, elements of financial governance have led us to this situation—not ideal—but the systems have been put in place, I have been assured, as have others, to make sure this does not happen again.
It has been raised that it is a cover-up and that the Health Committee should have been told. Well, look, select committees are actually the masters, in many ways, of their own destiny. There are nine members of the committee, independently minded and, I would say, capable, who are able to read and to seek information and to ask questions. It was not something that was raised—it was not raised and has not been discussed. Personally, I see no great conspiracy in that. When I think about the hour that we had with the Ministry of Health—sure, I know in my own self there was a whole pile of questions that I would have liked to have asked. The great thing about our parliamentary system, particularly around financial reviews and estimates later in the year, is that select committees get their opportunity to raise questions and to interrogate, for want of a better word, the Minister—
Hon Member: Scrutinise.
SIMON O’CONNOR: Scrutinise—there is a much, much better word; interrogate is a bit too strong—not only the work of departments but also their officials. I have every confidence after the debate today of what some of the first questions will be in upcoming financial reviews. Again, I do not think there is any conspiracy here—in fact, you could ask why it took the Opposition so long to find these bits of information. The select committee—
Sue Moroney: Because it was a cover-up.
SIMON O’CONNOR: Here we go, once again, a yell about a cover-up that, actually, was down on paper. In fact, if it was covered up, we would not be having this discussion—[Interruption]. Exactly. It seems a very strange statement.
We are sitting within a health system, as I said at the start, that is incredibly positive. I think the joy, or the attempted joy, of the Opposition to jump on to this is, as I said at the start, a case of the exception proving the rule. The Opposition is not able, by and large, to find negative elements in our health system, so a financial reporting error has become a moment of delight. I think what we have heard from Minister Coleman, certainly what we have heard, too, from Peseta Sam Lotu-Iiga, one of the Associate Ministers, is that this is well-structured and under control. I think that the public needs to have confidence that this has been discovered, it has been appropriately reported—and I think the independent approach by bringing the likes of PricewaterhouseCoopers in is incredibly helpful itself.
As I say, too, I know it is belabouring the point but I think it is fundamentally important in the context of others who keep saying “Hey, we could have been funding more support for rheumatic fever”, which, in fact, we have done remarkably well in already. Some people say we need more funding for cold houses. Yes, there are always calls for more, and, of course, this Government has done—I think it is hundreds of thousands; 300,000 or more, I think, mainly State houses—an amazing job there. So there are two points: one, the Government has been doing a tremendous amount of work in all the areas of health that have been put forward—great stories to tell there.
But, fundamentally, there are always calls for more in the health system. Those of us who have worked in it understand that; those of us on the select committee understand that, but, importantly, what we are talking about today is a departmental spend, not the operational spend. Fundamentally, not one dollar—not one cent—has been taken away from, or is missing from, the health budget, which leads to the tens of thousands more surgeries under this Government, to the really strong initiatives to reduce rheumatic fever, to the moneys that have been put in to actually insulate homes around the country. Not one cent has been missing from that. We are talking in this context about a departmental budget, a mistake that has been acknowledged, and, importantly, a mistake that has been corrected—acknowledged, corrected, and processes put in place. There is not much more to be said in this proportionate speech.
- The debate having concluded, the motion lapsed.