Today on Newshub Nation ` the government says Budget 2018 is the first in a trilogy, so is it a blockbuster or a flop? We talk to Finance Minister Grant Robertson. The Council of Trade Unions says public services are suffering from years of underfunding. We ask Bill Rosenberg if this budget goes far enough to fix things. Plus we find out why the Ministry of Social Development is being accused of bullying state abuse survivors. Captions were made with the support of NZ On Air. Copyright Able 2018 Kia ora. Good morning. I'm Simon Shepherd. Welcome to Newshub Nation. On the eve of the Finance Minister's first budget, he described it as the first part of a transformational trilogy, but reviews have been mixed; it's been praised as solid and sensible, while critics say it was boring and a bit too timid. Finance Minister Grant Robertson joins me now to answer those questions. Good morning, Minister. Thanks for joining us. Morning. OK, so, you have an economy that's growing at 3% a year, surplus going from $3 billion to $7 billion over five years. You've been blaming the Nats for a lot of underfunding, but shouldn't you be thanking them for handing you such a solid economy? Well, I'm certainly thanking the businesses and workers of New Zealand who've contributed to building up the economy over recent years, and, look, yes, New Zealand's economic growth relative to the rest of the world has been solid. The issue that I think we all fought the last election campaign on was the distribution of the benefits of that growth ` have we actually kept up with funding our public services? Are people on low and middle incomes actually seeing a boost in their incomes? That's what we've set about addressing in this budget and in the work that we did before Christmas. So you're going to address that with these expanding surpluses and these great forecasts from Treasury, but some of the economists are saying these Treasury forecasts are overly optimistic. Are they too optimistic, and do you actually trust those kids in the Treasury? I certainly think that Treasury's economic forecasting stacks up over the years. If you look at it over 10, 20 years, you'll see that their forecasts are as accurate as anybody else's. But they are, obviously, forecasts, and one of the reasons to be careful about our expenditure is to make sure that if economic conditions change, we've got a buffer. That's one of the reasons to have a decent-sized surplus. It's one of the reasons to be careful about government expenditure. Are you really concerned that there is going to be an economic shock ` a recession ` on the way soon? Well, we always have to be mindful of that. If you look at the history of the global economy, years ending in 8 haven't been as good as they might have been. I don't see an immediate sign of that in the global economy. In fact, global growth forecasts are around 3.5% to 4%. But we've got to be mindful that we live in an era where there are security risks. There are geopolitical issues that we've got to look out for. So we are going to be cautious about our spending and the surpluses we leave ourselves. Well, part of that caution is your self-imposed 20% debt cap on core crown debt. Why is that necessary? That's what allows us to have surpluses ` or, rather, that's what we pay back with the surpluses ` is to reduce that debt. New Zealand entered the last global financial crisis with very low levels of debt, and that allowed us to weather that storm well. We're a small country; we're exposed to greater risks in the global economy than other countries are. We've also shown ourselves to be prone to natural disasters, and we've got to be able to cope with any of those. And then right at the moment, we've got the immediate issue of Mycoplasma bovis, where we don't know the exact extent of the cost that will fall upon the government and, indeed, on farmers for that. So keeping our debt levels low, lower than other countries do, is actually important for New Zealand to be able to withstand things that are beyond our control. Sure, but are you also pandering to business? I mean, business confidence has been somewhat shaky about your government. Is this just an outright ploy to say, 'Hey, you can trust us'? No. This is about what we believe is the right thing to do. Now, we want to continue to work with the business community ` we want to make sure that our policies line up with what will help businesses grow sustainably ` but this is a prudent and careful approach, and I don't apologise for that. We have a plan here. The plan is a three-year one and hopefully a six-year one and hopefully a nine-year one. This is the first year of that plan. Are you actually being upfront about your level of debt? Are you squirrelling some of your debt away in other areas that we can't see? You know what I'm talking about. I do. What we have done is built on what the previous National government did. And does that make it right? Well, it does in this case because it's Housing New Zealand, who have a big programme of work ahead of them, being able to borrow against their own balance sheet ` also the Crown Infrastructure Partners, who are working for the urban infrastructure developments in New Zealand, being able to borrow as well. That's a sensible approach. Even if they borrowed to their absolute cap, all that would do is shift net debt just above 20%, which is our target anyway. But is it a sensible approach when you say you've got the government, who can borrow at low interest rates, like someone's mortgage, and then you're pushing it out to the credit card, which is going to have a higher interest rate? No, not at all. I mean, Housing New Zealand will be able to borrow in the same market that the government is. They've actually been doing it, as I say, on the basis of the policy the previous government brought in. They will do a good job of that. We've got the Debt Management office at Treasury who manage the overall borrowing programme for New Zealand. But, as I say, in the end, in terms of net debt, it doesn't actually shift the dial that far. So Housing New Zealand will get the same rate as the government? I would certainly hope so. Right. It's not guaranteed, then. Well, Housing New Zealand's borrowing in the same market as the government with a very large balance sheet. OK. You've talked a really big game leading up to the election ` big expectations. You're talking about nine years of underfunding. Why not do things a little bit differently? Why not just throw out the rules and be really transformative? Well, look, this is the first of three budgets this term, and I think I said in my budget speech these are the first steps towards a transformation, but we can't transform the economy if we haven't got the foundations right, and the underfunding of public services in New Zealand over the last nine years has to be arrested, and then we build from there. I really do encourage people to look at this as the first of those three budgets. We cannot make the big changes New Zealand needs to make, both in our society and our economy, if we don't have the foundations in place. You keep talking about this as a trilogy. All trilogies want to come out with a blockbuster, right? And money's never been so cheap, and you're hamstringing yourself by your own fiscal responsibility rules here. No, I don't agree with that at all. We're making big and significant investments at this point. We have a slower debt-repayment track than the previous government. In cash terms, of course, the amount we're borrowing does go up over the next few years, but the economy grows as well so we can meet our debt targets. As long as those Treasury forecasts are accurate. Well, I think, yeah, even if those Treasury forecasts were wrong by a small amount, we would still be seeing the economy grow to the extent that we can keep to our rules. But, look, we are spending $42 billion over the next five years in capital projects, infrastructure projects ` that's $10 billion more than the previous government had ` so we are making a difference here, but we're balancing that against the long-term need to look out for future generations. Let's talk about making a difference and let's get down into what you've budgeted for Maori development. So $37 million ` that's less than half of what National had last time. And also Kelvin Davis promised $20 million more for Whanau Ora, so you haven't really delivered that, have you? Well, let's unpack that. In the first place, the money that got put in Budget 2017, much of it actually didn't come to fruition at all; it had the real feel of some election-year promises. When we went looking to see what that money had been used for, we couldn't actually find it, and it's not responsible, as a minister of finance, for me just to roll over funding that we can't see the purpose for. What we've done is we have put in place some very good and specific projects around housing and education and training for Maori, and it's vitally important to remember that the Families Package, which will deliver increases in income to families ` $1.5 billion to Maori families over the next five years. So I think we've done the right thing there. If I can answer you on Whanau Ora as well... Yup, quickly. (CHUCKLES) Whanau Ora is the subject of a review. Once that review is completed, we'll come back to the table. We support the principles of Whanau Ora, but, again, if you're doing a review, it doesn't make a lot of sense to push the money up at the same time. Look, you've got all seven Maori electorates. You've got 13 Maori MPs. And the Prime Minister said it's better to promise and not achieve than just do business as usual, and she made a big point of equality in her Waitangi speech, didn't she? Absolutely, and that's` So are you letting your voters down? Far from it. When I speak to our Maori MPs and went around the Maori electorates during the election campaign, the issues that were being raised with us by Maori voters were housing, education, health, lifting the incomes of our people. We are addressing those issues ` the Families Package before Christmas, the investments we're making now. We do want to develop programmes that support Maori to thrive, but we're not just going to carry on funding that the previous government threw in without even knowing what it was going to achieve. But you're talking about mainstream polices here. Do Maori thrive when they are mainstream policies? There's a combination of both. We need to do` But not much on the targeted side. It's all mainstream. But as time wears on over these next two budgets, you'll see more in that area. We've got some in here now. We've got a programme in there that's actually aimed at addressing shortages in terms Maori housing, Papakainga Housing programme. We've also got a programme in there for young Maori who are not in employment, education or training. So we've got targeted programmes, but I can tell you from going around in the election campaign, it is those bread-and-butter issues that Maori voters wanted to see action on, and we've done that. You're also asking for patience from Maori voters as well, and yet they're going through the process right now of deciding whether to be on the general roll or the Maori roll. Are you going to lose them? Are they going to go`? I don't think we will at all, and in fact, as I say, I think Maori voters put their faith in the Labour Party because they knew we would address the core issues that are worrying them and their whanau, and we're going to do that. Are you confident that this analogy of a 'rising tide floats all boats' is going to work? Because we've just seen in the prosperity index in Auckland ` that's the tale of two cities ` worst inequality since World War II. Look, we are committed to supporting Maori to thrive economically, socially as well. That will inevitably involve a mix of universal programmes and more targeted programmes. What we're saying is in this budget, in the package in this budget and the 100-day plan, we've made significant investments in lifting the wellbeing of Maori, and there will be a mixture of those programmes going forward. OK. Let's move on to... One quick question ` do you think there has been less for Maori development here because Winston Peters doesn't like race-based policies? No, I don't think that at all. The actual amount that's reduced in the Maori development is relatively small because we have brought in new programmes as well as saying that the ones that were effectively ghost programmes in the last government have been pulled back. So it's not Winston Peters dictating this policy? Far from it. OK, let's talk about Winston Peters, your coalition partner. He got $1 billion for Foreign Affairs combined package, $3 billion for the Provincial Growth Fund over three years. Did you spend a lot of your budget keeping Winston happy? No, this budget represents the combination of the coalition agreement with NZ First, the confidence and supply agreement with the Greens, the speech from the throne. It represents all of the parties in government. But if we just pick out one of those things ` the Provincial Growth Fund ` all of the parties in government want to see our provinces thrive. This is the biggest investment in lifting economic development in our regions in all of our lifetimes. We're going to make sure that, actually, the regions thrive. And I think that is a transformational policy ` saying that we're actually going to be active on the ground, not just standing back, not the hands-off approach to the economy, but being there in the provinces is a major priority for all the parties. But in keeping your political partners happy, the Regional Growth Fund, Provincial Growth Fund, was a key policy for the coalition. But what did the Greens get? They got $100 million for the Green Investment Fund, $15 million for Sustainable Farming Fund ` small fry compared to what New Zealand First got. Well, I've heard James Shaw and Marama Davidson both say since the budget that they're very happy. They're a huge contributor to what we're doing. If you just take a look at the Auckland Transport Programme, where Julie Ann Genter and Phil Twyford have been working together ` they're a $28 billion programme ` huge investment in rail. We've got huge strides being made towards lowering the carbon emissions in our economy. Those sorts of issues are the ones the Greens have come to this coalition with, and I think they're doing well out of it. So Winston seems to be quite specific in what he's asking for, and let me ask you this ` $4.8 million tax break for the racing industry. Why exactly is that necessary in this budget? Is it just a particular hobby horse of Winston Peters'? Well, last time Minster Peters was in charge of Racing, between 2005 and 2008, tax changes were made for the bloodstock industry. It's his view that those haven't been implemented properly. This is some funding to support that. It's a fairly modest change, but it's one that will support an industry which I might say employs, as part of your earlier comment, a lot of Maori as well. So, you know the racing industry is one that's important to him. I absolutely acknowledge that. And so you're happy to give it to him? I am, because this is actually implementing a policy that should have been implemented a decade ago. But let's compare it to the amount of money that you put towards fighting towards cybercrime, which is less ` $3.9 million over four years. And yet cybercrime has the potential cost the economy a lot less. I think you need to be a little bit careful about that comparison, because there's already a lot of money that goes into combating cybercrime. That's the additional funding that's gone into it, so you're not really comparing apples with apples there. Do you think people will look at the bloodstock issue and say, 'Really? Is that one of your priorities?' Well, as you say, it's about $4 million. It's among many others. It's an industry that employs a lot of people, particularly young Maori, and we're committed to supporting it. OK. Transformation ` that was a buzz word in all your speeches and Jacinda Ardern's speeches leading up to the election ` transformation, productivity. So we're talking about Research and Development. You've got $1 billion dollars in your R & D incentives. But a company has to spend $100,000 on R & D in a year to qualify. So that's going to cut out all the small, upcoming tech start-ups, isn't it? Yeah, there are other means by which they will be able to get funding and get support. The R & D tax incentive is targeted at businesses, giving them some certainty about the spending that they will do. We know that, internationally, these schemes exist, and we know that if we want to be competitive in getting innovation going, we need a big, large-scale scheme like this. But this is the point ` in order to start transforming the economy, we need to lay the base properly. R & D tax incentives, the Green Investment Fund, the Provincial Growth Fund, the money we're putting into transport and infrastructure ` they're the basis of an economic transformation. But there's been some criticism of first the Provincial Growth Fund ` there seems to be just a big pot for forestry and rail and not the kind of transformational technology ` clean, green regional technology. We're in the first year of that, and I think as I said on budget day, I expect the balance and mix of the Provincial Growth Fund to change over the years. But that forestry work will be part of transforming that industry. One of the big issues for New Zealand is that we continue to rely on the export of raw commodities. What we want to do through establishing the New Zealand Forestry Service is start to move that industry up the value chain. So part of what the Provincial Growth Fund will do is actually move us in to areas of prefabricated timber, adding value to those products in New Zealand. But you've got to start somewhere. And the issue we've got is that the regions have not been given the attention they should've over the last nine years. We are now putting our stake in the ground on that. Let's talk about prefabricated, because that leads me on to prisons. You've allocated $198 million for 600 rapid-build modular units ` sounds like pop-up cells. Temporary Band-Aid for the solution, and Corrections officers are concerned for their safety in these overcrowded prisons. So what are you going to do to reassure them? Yeah, look, I think that the area of Corrections is one where the dropping of the ball by the last government has not had enough attention. Well, the ball's now in your court. It is very much in our court, and we're dealing with it, so that's why we put in place 600 rapid builds, because otherwise we would have a real issue right now. If you were going to deal with it, you would have approved the Waikeria Prison. Far from it, because my belief and the belief of this government is just building more prisons is not the answer to dealing with criminal justice. So what is the alternative? Well, the alternative is to reduce the prison population, and we will do that over the next few years. That will take 15 years. You've got a bulging prison population right now. Right, exactly why we're doing the 600-bed build. But what we've got to do is actually have an integrated plan that reduces the number of people going to prison, that focuses more on prisoner reintegration and rehabilitation. Building a big mega prison at Waikeria isn't going to do that. Now, we're working through our options about what we can do there, but that has to be part of a plan that addresses the second-worst incarceration rate in the world. Prisons don't work, and so we have to make sure that we actually build a new programme of changing our approach to criminal justice. We will make sure that prison officers are safe, but it has be part of a wider plan. Well, this is urgent, isn't it? Waikeria and that decision needs to be made now. Waikeria decision is in front of Cabinet, and it will be made in the very near future. But what myself and the Prime Minster and others have all been saying is that we need a completely different approach to criminal justice. All right. This is your first budget ` first Labour budget in 10 years. You said yourself, repeatedly, it's the first instalment in a trilogy. So is it a box office hit, or is it at flop? I'm going to ask you to rate it out of five. How many stars are you going to give your own budget? Oh, look, it's not for me to do that, Simon. I'm very happy with the budget that we've put out. It was a privilege to deliver it. It's one that I think does lay out the foundations for parts two, three and beyond from there. Others will give it a star rating, but I'm pleased with it. You know sometimes with a trilogy, the last one is the flop? Oh, no, the last one will be a great one. But it won't be the last anyway. There will be a further instalment after that. Oh, you're confident of that? OK, Grant Robertson, Finance Minister, thank you very much for your time. Thanks, Simon. And if you've got something to say about what you see on our show, please let us know. We're on Twitter, Facebook, and Instagram ` @NewshubNationNZ. Our Twitter panellists today are Tim McCready and Jess Berenston-Shaw. You can email us at nation@mediaworks.co.nz. The address is on your screen right now. But up next ` health got the big money in this year's budget, but is it enough? We talk to Bill Rosenberg from the Council of Trade Unions. Plus ` why were private investigators hired to look into state abuse survivors at the taxpayer's expense? Well, the government's stuck fast to its fiscal responsibility rules in this year's budget in a bid to boost business confidence, but has that come at a cost? It was aiming to be transformational, but critics say this year's budget didn't go far enough. CTU economist Bill Rosenberg joins me now. So the government says it's going to do things differently, but is this budget really that transformative? It's a start, but it's not transformative. It made some gains in some areas. So, for example, in health, we know that it actually, for the first time in seven years, has met the needs of growing population, aging population and costs and so on. But there are a whole lot of very large unmet needs that are not addressed, and that's kind of the story throughout the different areas of the budget as you work your way through. They're starting to move, they're showing a good sense of direction, but it's not transformational. OK, so is it not transformational because of this debt cap ` the 20% debt cap? Are they constrained by that? That is a very significant factor, yes. So they've got this debt target of 20% of GDP at a time when interest rates are very low and it's very cheap to borrow. They couple that. It's not only the debt cap; they've kind of got a pincer between the debt cap, their policy not to raise further taxes in this term of office, and a rough revenue cap at 30% of GDP. In fact, they're only spending 28.5% of GDP on their core services. So there's some wiggle room there, you think ` a little bit of wriggle room to spend more? And so that wriggle room ` they're restrained from doing that by the amount that they're doing in capital expenditure, that $40 billion that the minister talked about. Yep. The answer that we see in the short run is that they should expand their borrowing to cover that capital expenditure, because those returns on that in the future will bring in taxation and so on in the future, but the debt cap is preventing them from doing that. All right. They're being too risk-averse, in your view, but aren't they just trying to please the business community and to prove that they are fiscally responsible? Well, that's the politics of it, but, in fact, if you look at New Zealand's debt situation, it is at the best end of the OECD. We're seventh from the bottom in terms of the lowest net public debt levels in the OECD. If you include the New Zealand Super Fund in our debt calculations, which we should be doing, and international agencies and the Auditor-General all have that view, our debt levels are currently 7% of GDP falling to 2% of GDP. Our debt levels are not our greatest risk. Our greatest risk is in those social, economic, and those other areas of the public services that are just being squeezed, underfunded. And so they're underfunded; there are significant shortfalls, you're saying, but you can't expect the government to address 'nine years of neglect', as they say, in just one budget. And I absolutely agree with that, but they could have made a much bigger start to it if they had relaxed some of those rules. The way they could go about it is that they're talking about next budget being a wellbeing budget, and that's going to be framed in terms of Treasury's living standards framework, which looks not only at the fiscal and financial, but it looks at human capital, education, and those kinds of things ` social capital, inequality, and environmental` natural capital, which is our environment. Now, what you need to do is you need to have a set of fiscal rules, if you like, that take account of all of those things rather than simply, you know, focusing solely on the financial. Does that` if they're going to take these wellbeing measures in to account in the next budget, that means they've got to throw away the current fiscal regulations or fiscal restrictions all together? Not at all, no. I mean, fiscal responsibility in the sense of making sure that you are not building up huge amounts of debt in to the future that can't be repaid are always going to be part of government, and Labour's record, going back, has been, actually, pretty exemplary on those things, despite what people say. But the question is one of balance, and at the moment, government debt is not our biggest concern. All right. So you did mention health at the beginning of this interview ` $4 billion in funding over the next four years. Is that enough? So, if you look at` Just take this year. Those extensions are a bit of a... OK, let's take it from one year. For one year, we've done a calculation over the last seven years of what's necessary in the budget to just keep health standing still year to year. Yep. And, for the first time, this year we've found that there's enough there to cover rising costs, rising population, the aging of the population, which increases health costs ` and the new initiatives that the government announces. In the past years, those have just not been funded, those new initiatives. So it's ticking over? It's ticking over. But you look at things like mental health, where there's been, over the years from 2009 to 2016, there's been a 50% increase in people needing help, but funding only grew by a third of that frame. Well, that's right. During the election, Labour promised a fresh approach to mental health, including $43 million for a primary care program, and there's counselling for under-25s. So is that a broken promise on their behalf? Well, I mean, they are putting in place an inquiry, and one would hope that after that inquiry they will be very serious about putting more money in to it in a well-thought-out way. But that's just one example of the different deficits. I mean, we're seeing in hospitals not only the very obvious failures of our actual physical buildings, but staff under constant pressure and showing every sign of it, staffing shortages, patients turning up with even more serious conditions. All of these things are very significant pressures on the health system. Okay. And one of those issues is the amount that we actually pay staff in the hospitals ` and nurses. Now, the government seems to have squirrelled away $619 million over the four years in something called tagged contingencies. Is that where they're hiding the money to deal with all these pay claims? Are they going to come through nurses, police, and teachers? Well, so, they describe it as tagged contingency, and the narrative says we don't tell people what's in here because this is subject to commercial negotiations and wage negotiations, so only Grant could really tell you what that's going to be used for. But he probably wouldn't anyway. He probably wouldn't anyway, for understandable reasons, but that is hopefully where they have some money to sort out some of these things. For example, for nurses and other health staff, there's this panel set up to look at what is a good outcome from that. Hopefully they will have the money there to fund that when it comes up with a... I think in one of your documents you said costs from collective bargaining pay equity for nurses over three years is going to be $750 million, so there seems to be a disparity between $619 million over four years and $750 million just for nurses. Is there going to be enough there? Will they have to enter their surplus? Yeah, that wasn't my costing, but certainly there are significant costs there, and it's not only nursing, but in teaching, where you have staff shortages ` difficult to recruit teachers. So there's work that needs to be done there, and you could go on in other parts of the public service where there's been, particularly in the core public services ` biosecurity officers, social workers and so on who just haven't had pay rises. There's the pay equity settlements that are coming up. So there are big issues there that have been kind of sat on by the previous government, storing up these pressures for the incoming government. One of those is education. You mentioned the teachers, but also there's the aging classrooms. $1.9 billion for education ` is that going to cut the mustard? I can't judge that, but in health, for example, they put in $750 million extra for buildings and so on. So, there's a $1.25 billion capital budget in health. That's huge, and the question is only whether they can actually spend it in one year, rather than whether it's enough in one year. In education, I can't give you a judgement, but there are other build-ups in education. For example, in early childhood education, it's nice that they've given some operational funding to early childhood; they haven't had it in, I think, nine years or something like that. But then you have teachers looking after five 2-year-olds. I don't know if you've got 2-year-olds. I do. One is a tonne. Five of them... You just don't have education at that rate. So there are these build-ups in every area of the education budget. So a lot for the government to deal with coming up. Thank you very much for your time, Bill Rosenberg. Thank you. All right. Still to come ` we dissect the week's political news with our panel. Plus, Mike Wesley-Smith investigates claims the Ministry of Social Development bullied victims of state abuse. Prominent campaigner Louise Nicholas has accused the Ministry of Social Development of bullying state abuse survivors and sweeping their claims under the carpet. She want the Royal Commission of Inquiry into state abuse to seriously examine MSD's treatment of victims, which she says reflects her own early experiences with police. And one survivor told Newshub Nation she was outraged to learn her sexual abuser was re-employed by MSD to work with vulnerable children many years after she made complaints against him. Here's Mike Wesley-Smith. For this woman, painful memories buried years ago resurfaced with a single phone call. WOMAN: A detective from Invercargill rang me on my cell phone saying he was inquiring about the time that I was in the girls' home in Dunedin. He was referring to sexual abuse by social worker Edward Anand. Edward Anand was a social worker who sexually abused her and many others at Dunedin Girls' Home in the 1980's. The first incident with Anand, I reported to a senior staff member. I was brushed off, telling me it was my fault. This woman, who we'll call 'Rachel,' says she told other staff at the home about the abuse. Ministry of Social Welfare told us her complaint was passed on to police at the time. I know for a fact they didn't. I discussed with the detective that was investigating the case, and he confirmed that there was not police report on it. But then, many years later, other victims came forward, and an investigation was eventually opened. Finally, in March 2016, Anand was found guilty of multiple rapes and indecent assaults relating to eight girls. He was sentenced to 13 years jail ` an outcome Rachel says pales in comparison to the life sentenced his abuse inflicted on his victims. It's affected their lives. I don't know how to explain it. All of those women were destroyed by Edward Anand. He ripped her childhood away from her, and that's what it` she's had to live with this. She's had to carry this. Advocate Louise Nicholas was there with Rachel as she read her victim impact statement in court. I was very, very proud of her and the other women that had stepped forward. But even after Anand's sentencing, part of the story was unresolved. What we got in the courtroom was a man, and he was convicted, and he was put to jail. The next part is, 'Why did this happen? Why was it allowed to happen?' Louise accompanied Rachel to the meetings with MSD officials in 2016. It was disgraceful. They didn't care about me. They wanted to hide it, sweep it under the carpet, and hope I got away. They did come across with empathy, and you could hear that, but they had a job to do, and in the first meeting, I absolutely felt that the survivor... And I'm gonna say it, I felt that she was being bullied. Children in state care residences like Dunedin Girls' Home were sometimes locked in isolation rooms. (KNOCKING ON DOOR) In its 2015 report, the Confidential Listening and Assistance Service, which heard from 1100 state abuse survivors, said... And girls locked in isolation rooms was an opportunity Edward Anand used to carry out his abuse. When he appealed his sentencing conviction, the judges who dismissed his appeal noted, 'Some sexual assaults had taken place in a secure unit in which some of the complainants were confined after they had misbehaved.' They enabled this man to abuse me. They enabled this man to screw my life, and when it was reported to them, they weren't interested. After Edward Anand was jailed in May 2016, MSD put out a media release confirming that complaints about him had first surfaced in 1986, that they had been referred to police, and that he had resigned. But what the release does not mention is that, despite these allegations, MSD re-employed Mr Anand in May 2001 to work with vulnerable children at the Epuni Care and Protection Residence in Wellington. He worked there for a year before resigning in the face of disciplinary charges. My initial reaction was I was very angry. I bawled my eyes out, and then I thought to myself, 'I just hope this idiot hasn't harmed others like he's harmed us.' What part of stupid is that? I`I`I... I'm,... I'm speechless. And Louise Nicholas says MSD's response to survivors reminds her of her own experience with police, when she complained about officers in the early 2000's. You know, when I think back about police and their culture and what they were going through, when everything was getting swept under the carpet, I think MSD has done the same thing. And it's not the only aspect of MSD's approach to survivors in recent years that has drawn strong criticism. I still couldn't figure out why they wanted to spy on us. Earlier this year, we spoke to a survivor called Earl, who filed court action against the Crown for sexual abuse he suffered in state care. It became known as 'The White Case.' In 2007, Earl says Crown Law responded by having private investigators approach his siblings to persuade them to give evidence against him in the court case. All I'd done was what I'm entitled to do, and that was seek justice. Crown Law says their actions were entirely appropriate and in accordance with the Crown litigation strategy signed off by cabinet. Sir Michael Cullen was Attorney-General at the time. Good morning, everybody. We asked him about the use of private investigators in Earl's case, and he said, in an email... While I haven't seen the details of what's happened there, I'd be very interested in that, because, again, spending a huge amount of taxpayer's money when someone is just seeking a just process does seem questionable to me. Male Survivors, Ken speaking. Advocate Ken Clearwater, who works with survivors like Earl, puts it more strongly. I think using investigators, private investigators, in the White case was just absolutely appalling. These are victims of pretty horrendous crimes. He wants the government to disclose the full details of the work the private investigators did in Earl's case. I definitely think that all the investigation should be made public, and I also think what is very important is that they look at the costs that were involved. But despite numerous requests, Crown Law and MSD have refused to provide this information, citing legal privilege. Lawyer Sonja Cooper acted for Earl at his court hearing. Certainly, I do understand them relying on the old safety catch of 'it's legally privileged,' but this far down the track? In terms of what they were asking them to investigate and how they were going about that, I can't see why that's not relevant information and why they can't disclose that now. What Crown Law has agreed to say is that... However, Crown Law acting for MSD, and the Ministry itself? Well, it had this to say ` If we're using private investigators to track down potential witnesses, fine. It's when it goes beyond that. Here, it went so far as to going to their families. I think that's when it goes beyond the bounds. It is the experience of survivors like Earl, Rachel and others that has convinced Louise Nicholas the Royal Commission of Inquiry can't simply focus on the distant past. Hell no! It's got to be up to today. I mean, they're talking about children that had to be in state care back then, but we've still got children coming through the system as well. Our youngest client is 17 years of age. Abuse didn't stop magically from 2000 onwards. It continues to occur. And Rachel's driving motivation is that children in state care now and in the future receive the protection she never had. If MSD want to help people, put your hand up, say we made a mistake. Don't hide. I would put everything on it that Anand's got a lot more victims out there, and they're unaware of what they can do. Crown Law and MSD both declined to be interviewed for that story, but in a statement, MSD said, 'It takes responsibility for the times when it failed in its duty of care to vulnerable children.' It says it will co-operate fully with the Royal Commission to learn from what happened in the past. OK, still to come, National MP Alfred Ngaro puts a physical challenge to Labour's Stuart Nash in this week's Facebook session. But first, we catch up with our panel. Former National Party General Manager Chris Simpson, Bernard Hickey from Newsroom Pro, Sandra Grey from the Tertiary Education Union and Newshub Political Editor Tova O'Brien. Welcome back. I'm joined now by our panel ` Chris Simpson, Bernard Hickey, Sandra Grey and Tova O'Brien. Thanks very much for your time this morning. Tova. First you ` Prime Minster says there's been too much short-term thinking and this budget's about generational change. Will it deliver? Nope. Not with this Budget. This is not a transformative Budget. They didn't go for the big whizz-bang, straight out of the gate. They decided to really push on with that responsibility. They're fighting a bit of a losing battle, being the Labour Party, in terms of the perception around their economic management. So Grant Robertson has gone for the surplus; he's gone for the 'steady as she goes'. He hasn't done anything ground-breaking here. They've gone for responsibility over whiz-bang. They just need to be really careful, because they keep pitching this is the 'trilogy budget' ` really careful that they deliver on all of those promises. He said hand on heart that he would by 2020. Given they've already broken a couple of them, watch that space. More to come. Yes, he keeps talking about the trilogy. Chris, do you think that the sequel needs a bit more oomph? Well, judging on him saying about next year's Budget, which they're already working on today, is the transformational Budget ` the one about well-being, then he may follow through on that. That will be interesting to see if he does. Bernard, I mean, you're big on transformation. But nothing to see here, I think you're saying? Is that right? Well, they've certainly not addressed the major problems, which are the infrastructure deficits they discovered upon getting into government, which are holding back Auckland and the economy. And if they could address them with significant spending over the next decade, then they have to start now. This is not something you can dream up six months before the next election. Start now, then you make a difference. But for now it's a holding pattern ` win the confidence of the business community, reinforce your reputation for fiscal conservatism and then move on. The trouble is, it takes 10 years to build a light rail line or a motorway or 100,000 houses. And they can't afford to muck around. There are some other glaring emissions in there as well. M bovis, the money they've given to Maori development is piddly, the money they've given to cybercrime suggests we're fighting cyber with a popsicle stick, rather than Excalibur. So, you know, there are lot of glaring emissions and things they could have spent money on in this Budget that they didn't. Yeah, but they're saying they're blaming the Nationals for nine years of neglect, Sandra. Can they keep doing that, though? Or do they just have to move on with the rhetoric? Well, I think at the moment we have to acknowledge the big hole left in funding for Health, Education and infrastructure. We have to acknowledge it. It's there. But I agree ` we actually have to deal with it now. We can't actually wait and say, 'OK, we're going to prove ourselves as economic managers,' and the problem for Labour is that everyone holds them up to a different standard to what they hold. National expect better, more stable management. They do need to put more money in to Health, Education. So you want them to be bolder? It has to be much, much bolder. So if we just take one small issue, which was the discussion about Maori youth ` you know, an amount of money is going into look at those who aren't in education and training, and they are really important kids to get hold of, but at the same time, they've put nothing in to the polytechs in the communities where those kids are. So absolutely no extra money's gone into helping them get into education. And that's problematic. To give you an idea of how little there is transformation in here, the number of people who are unemployed reduces by less than 10,000 in five years with this Budget. They don't get under the 4% employment target that the government itself said it wanted to get under. So they're not really addressing these big shortfalls. It's also an opportunity for the government to say to the business community, 'Here, we can help you with the infrastructure 'and the housing affordability problem that you have with your businesses,' and unleash a new surge of productivity, which would pay for itself. OK. Do you think one of the reasons that they aren't being so bold is because they had to give so much money to Winston? Chris? Well, of course they had to give a lot of money to Winston. They weren't expecting to get into government. So at the end of the day, if you don't have the policies in place, you then go into coalition agreements and then you actually turn up, saying, 'Well, mm. How does this work?' So of course you've gotta give it to Winston. That's why they're in government. Can I also say, some of it, though, is money for people like Tracey Martin, who has advocated very strongly around child poverty and child well-being and education, which the public has actually said they want more money spent on. So it's not that New Zealand First is going out there with all of Winston's ideas. You know, the money being spent on early childhood education, the money being spent in education ` the 1.6% increase ` so a little bit more money in so they can keep up with roll increases and help students ` great thing. But Winston does wield a big stick, doesn't he? What about the bloodstock tax? I think this Budget just tells us that what Winston wants, Winston gets. And I think you pointed out ` we'll come back to the bloodstock tax ` but you pointed out in the interview with Grant Robertson as well that the thing that sums up the relationships between the parties in this government is the respective slush funds ` regional Development getting 1 billion a year, the Greens Investment Fund just getting 100 million a year. So a tenth of what New Zealand First is getting. And then just to remind us of the power that he wields in this Budget, the cheeky 5 mill for racehorses. And Winston Peters' press release, Simon, reads like a love letter to race horses ` 'A standout yearling is one that commands attention by virtues of its bloodlines, 'looks and racing potential.' So this is just Winston Peters politicising and reminding us of the power he has in the Budget. Cos a lot of those other big-ticket items were announced in advance. So, Bernard, the Greens to miss out? Actually, they may have missed out in numbers terms, but they've gotten the great prize, which is this Carbon Neutral Act which is coming and the Carbon Neutral Commission. And also the involvement perhaps behind the scenes in the transport policy is huge. The focus on rail and on public transport in cities is huge for the Greens. And I think for them, I don't think they're unhappy with what they've got so far in government. So they're arguing that they're happy, but they have been shafted compared to Winston Peters. But they're arguing on the sidelines that they've been happily shafted. Have they been happily shafted, Chris? Totally. Totally. Totally. And I actually agree with Bernard on this one. They're definitely on the sidelines still, but at the same time, longer-term, they're on the right side of history with regards to where the future is and where the economy's moving anyway, especially from a business perspective. A lot of businesses talking in that sense anyway. And surely if they do move to a well-being framework, which will have the environment as one of the key markers` Yeah, but the well-being environment, the one that the Treasury is working on at the moment, nobody's done that in the world. No. Isn't it good to be a world leader again? Again, Fiscal Responsibility Act, Reserve Bank Act, all the things we've been world leaders in, but again, here is something they're bringing in for the next Budget, which may be transformational or may not be. But they have to change some of those rules as well. We have to sign a summation that we are going to have to pool a bit more money so that we can deliver on the well-being budget. That's why they're saying they're happily shafted this time, cos they're looking forward to the next. But the next Budget could be transformational. The next Budget could be a morass of what's going on here, that this is what's going on. Well, I think if the public keep pushing that they want that Well, Bernard, do you think the well-being's going to be transformation? Well, if they do a proper well-being budget and look at the environmental costs and social costs and do a proper accounting for it, it could be transformational if they act on it. The trouble is, they have this hard debt target at the moment, and that is the thing that is holding them back on so many things. If you look at some big decisions that were actually made in the Budget ` not to go ahead with the Waikeria Prison, to delay yet again the Orion ` these big chunks of capital ` these are decisions made because of a completely arbitrary 20% target which the previous government signed up to, Labour has signed up to it as well for no good reason. No one in the bond market cares about this. We can now borrow at 2.8% ` this is an opportunity` Money is cheap, isn't it? There is a window of time here to go out into the world's investors and say, 'We can turn Auckland and this country into a much more productive place 'with $20 billion worth of your savings into a strongly growing economy.' No problem whatsoever. So I think the real key to transformation is changing this underlying debt target which no voter either knows about or cares about, but is the anchor or the millstone for this government. They can't now, though, can they? No, they've committed to it. One last quick question ` not much targeted money, Tova, for Maori. No. I think it's really disappointing. I think it's pathetic, and I actually call what the minister was saying on The Nation to you, Simon, BS. He's saying it's ghost funding from the National Government. Fine. Take that money and use it well. If you think that money's not being used appropriately by the previous government ` that funding that went into Maori Development, into Maori, then use it well. And he's not doing that. You could argue, though that the big chunks of money going into the Working for Families` Which he does ` mainstreaming. Universal funding, not targeted. And the housing issues will be disproportionately benefiting people at the lower end of the spectrum, which means more likely to affect Maori and Pasifika. As well as that base funding, you do have to have the targeted. Education ` if you don't have targeted funding for support services, for Maori students, that are run by Maori, you are not going to achieve good educational outcomes. So we actually have to do both. We have to improve the baseline, but we also have to do those targeted fundings that will lift Maori achievement in all areas. Especially when you've got five Maori ministers, you've got all the Maori seats, you've eradicated the Maori Party. You need to be showing you're doing good for Maori. OK. All right. We're going to have to leave it there. Thank you very much to our panel ` Chris Simpson, Sandra Grey, Bernard Hickey and Tova O'Brien. Stay with us. We're back after the break. Let's talk about education. $1.9 billion for education ` is that enough, Sandra? It certainly is a start to dealing with some of the real problems, which is that we don't have enough teachers and we need to get more people into classrooms, but there's another problem with that, and that is teacher salaries and particularly support staff salaries. So this money isn't going to really help with the fact that we have pay equity cases now for support staff in there, and that's gonna be a big bill, and it is gonna shift the nature of the sector. So more money's needed on that front. In terms of classrooms, in terms of our infrastructure in the buildings, not enough to deal with what schools have, certainly not enough to deal with what polytechnics have. They got no money, and their buildings are also falling down. So if you go up to NorthTec, they teach in rooms with water running down the walls because there is no money in that budget to spend. So we do need to relax these arbitrary rules we've placed upon ourselves as a nation and actually put some more money in and say it is important for our kids to have good classrooms. Maybe they have set aside some money; there's talk of these tagged contingencies, Bernard. Is that where they're hiding the money to negotiate pay rises? Yeah, they've been careful not to tell the unions how much money they've got to negotiate. I can sort of understand that. But there is plenty of fat in there. I mean, a $3.8 billion surplus in the coming year rising to $7 billion ` they can do some things with that for some of these pay deals. The broader question, though, is around capital. One of the big stories out of this budget is that there was actually no extra capital from the December half-yearly update. There was extra operational spending but not the capital, and that's the issue we have. How can you really spend that money on teachers and supplies when the buildings aren't up to scratch? And that's actually a big problem not just in schools, but in housing. We built a whole generation of state houses through the '60s and the '70s. They are now about to fall down, and they have to be replaced, and that's one of the big unworked-on pieces of infrastructure in this country ` the housing. Can I just also say, on the pay rises, we found the contingencies ` little bitty line on page 30 of the BEFU, and next year it's $284 million in contingencies. Yes, there's operating cash. Yes, there's fat that can be cut from the surplus as well, which is where they'll have to go, because that $284 million next year ` if teachers get the 16% that they want, that's immediately $300 million in one year, and that wipes out that contingency fund just like that. The contingency goes up in future years. There is more operational cash that they can put in the budget next year, but then they'll have to start carving into the surplus if it blows out, and they've raised expectations in terms of those pay negotiations. And the government's made a commitment, actually, to being a good employer, and the public supported that through living wage, pay equity campaigns. They really do support people being paid ` care workers being paid what they deserve. But when you increase care workers' wages in rest homes, you've also got to increase registered nurses' wages, because you get a disparity, then, around who's getting what. So there is a whole lot hidden behind here. Something that people want addressed ` if we want a healthy economy, if we want a growing economy, if we want well-being, then people's wages actually do need to lift. OK, you mentioned a growing economy there, which is dependant on Treasury forecasts. Treasury has just downgraded its forecast about the investment spinoffs from the KiwiBuild, and Phil Twyford took a swing at them, calling them kids. That's a pretty risky move, isn't it, Tova? Just a bunch of kids. Just a bunch of kids. I think it's fairly typical government behaviour, isn't it? If you get the advice that you don't like, blame the officials, and then he points immediately to the advice like, so he's just picking and choosing which ones he liked and taking those guys down a notch. What do you think, Chris? They've done it for years. That's typically what you do ` when you're in a certain situation, you blame the officials. And more often than not, the officials have actually done a really good job and it's actually a reflection of the politician. Especially when these guys, the Treasury officials, have just been slogging their guts out to produce this budget for you. On the day after the budget, you have a whopping great crack. Not very grateful, is he? And he got free sausage rolls and lamingtons too. The Treasury were very good this year. But it is normal, as Chris says, for politicians to have a go at the officials. John Key did it; he called the advice about Super absolute nonsense or whatever it is. And they're learning from the hands of the master in Michael Cullen, who described advice from Treasury as 'ideological burps'. All right. He actually didn't go far enough, perhaps. Should have gone harder. Maybe next time, next budget, he can go harder. OK, well, let's wrap it up. Finally, Grant Robertson refused to rate his own budget with me just a few moments ago. So I want you guys to do it. It's a trilogy. It's going to be out of five stars. And I'm going to come first to you, Chris. I give it a three. A three? Yeah. Everyone else is pretty much saying it's a nothing budget. The reality is that's a good budget from a conservative perspective. If they're looking for engaging with the business community and winning them over, they've actually done not too bad on that. And even if you go back to when Helen Clark and Michael Cullen were running the country, from 2000 to 2008, business confidence was basically down all the time, but the economy went up, and they left us with a surplus and nil debt. All right. Sandra, quickly. If I was gonna rate the rhetoric and the language and what they're aiming to do, I'd give it a five because, of course, it is a shift in direction, but the actual delivery a three. A three. Bernard? I'd give it four asterisks. Because they have won the conservative argument. We are fiscal conservatives, just like the Nats were, and they're winning respect and trust to do things in the coming years, but they still haven't addressed that transformation. OK. Tova? Given it's part one of a trilogy, I'm reserving judgement until this day in 2020. I want to see how it plays out, how many promises they break, if they break more promises, and whether they deliver on the things that they did. OK, interim score? No! It's a holding pattern. Oh, Tova refusing to commit. I'm playing the long game. She's running for parliament soon (!) Thank you very much to the panel. OK. Newshub Nation viewers might remember National MP Alfred Ngaro from his online workout video taking the mickey out of Police Minister Stuart Nash. Mr Ngaro joined us for a Facebook live interview this week and called out the police minister with a brand-new fiscal challenge, this time for a good cause. Hey, look, Stuie Nash, mate, I know you've been doing those videos, and it's all about you looking buff and sort of mean and stuff, but if you really want a challenge, I challenge you to do the Sky Tower challenge with about 40kg of weights on your back and trying to chase up 1103 steps, 52 flights, doing it within 20 minutes. Dude, you're on. I'm doing it this Saturday. You should try it and see how we go. And by the way, I've just about raised $2500 for the charity, so you've also got to match or beat that. There you go, Stuart Nash. That's all from us for now. If you didn't catch all of the show, you can watch it now on Three Plus One. Lisa will be back with you from next weekend. I'm Simon Shepherd. Thanks for watching. Captions by Cameron Grigg, June Yeow, and Madison Batten. www.able.co.nz Captions were made with the support of NZ On Air. Copyright Able 2018 This programme was made with the assistance of the New Zealand On Air Platinum Fund.