Clark: Why I should still be PM

Labour leader Helen Clark answers Dominion Post readers' questions

The Dominion Post invited readers to send in questions for National leader John Key and Labour leader Helen Clark. They came into our office to answer your questions. Here is the full transcript of Helen Clark.
View video: Helen Clark talks to The Press

Since the last fiscal update the world economy has taken a turn for the worse and its impact on New Zealand has yet to be experienced. If this resulted in less tax take and a higher budgeted deficit than that indicated to date how would you fund the shortfall? Specifically, in what areas would you reduce government expenditure? Would you abandon future tax cuts or would you seek to borrow additional money to fund the additional deficit?
John O'Malley, Silverstream

The worst thing to do would be to be cutting back on overall public spending. If we want a lesson about how to head to the great slump, do that. What I've been focusing on is growth and investment so that New Zealand's in a good position when world trading conditions and the world economy pick up as it surely will But the IMF's forecast for global growth deteriorated by 25 per cent just in the three months to October. The 0.1 per cent growth they expected for the United States will probably now be recession for next year so it's going to take a while but the worst thing we could do is cut back on our overall public spending.

We are going to plan for a December economics stimulus package to look at how we can ensure that we keep some momentum and forward movement in the New Zealand economy through this tricky time and we're focusing on infrastructure spend but also maintaining and stepping up the investment in education and skills training because there are still skill vacancies in our workforce that we cannot fill. There are still unskilled vacancies we cannot fill so we need our people as work ready and as skilled as possible to take maximum advantage of that.

In a worse case scenario whereupon the majority of $150 billion bank deposit insurance fund is called upon, just where do you propose to draw those funds from?
Paul Mannering, Christchurch

Oh, I don't think for a moment it will be. Just don't believe it for a moment. The reality is that with the charges we are levying on the scheme we may end up in profit. That's the current expectation.

For eight out of the last nine years we have benefitted from the greatest commodity boom in living memory. Now that boom has abruptly ended and commodities are spiralling downwards. Why offer us tax cuts now when it is less affordable and less fiscally responsible?
Roger Thompson, Rangiora

At some point you have to make an adjustment to the tax thresholds. Now, we haven't done it before because there have been a lot of other priorities and I won't spend 30 minutes on this answer talking about the things that we have prioritised, but we did do the tax relief for families through Working For Families and through business with the business tax package and tax relief for savers. However, the time had come when we had to adjust the thresholds. Now it so happens that our threshold adjustment has put some useful amounts of spending power into people's pockets after a long winter. A winter which saw fuel prices go very, very high, saw food prices for key items go very high, and of course had seen mortgage payments stay up. The beauty is that all these things are starting to ease now so there is obviously the tax cuts, Working For Family increases that came out from October 1, fuel prices are down, food prices are clearly starting to trend down on some of the key items, and interest rates are trending down. So it's quite a positive thing for our families.

Win or lose this election will you still be in parliament for the next three years?
Alan Humphries, Wellington

I would certainly think so, and I am only planning on Plan A, of course.

Will you include Winston Peters in your government if you don't need his votes?
Uwe Engbers, North Shore

Last time I took a very inclusive approach to building government majorities, and we invited Peter Dunne to come into a confidence and supply arrangement. We were looking to build durable arrangements and journalists will remember the scepticism with which the arrangements we announced back in October 2005 were received, but another three years, another Labour minority government has served its term and so I think the approach of being as inclusive as possible and working with small parties has proven to be a very wise one.

We have had nine years of economic global growth, good economic times. You had stated in 1999 and again I believe in 2002 that a priority for Labour would be to get New Zealand up the OECD rankings. What happened? I believe New Zealand is now sitting near the bottom.
Eddie Halliday, Wellington

We vary somewhere around 20, 21, 22 - there's not much in it. The truth is as hard as we run we have increased our national income considerably but as hard as we run others are running too. The countries which were right at the bottom of the European ladder like Spain and Portugal and Greece they've had a lot of money poured into them by the bigger, richer economies of Europe so they've come up and we don't have a sugar daddy like the EU we have to do it ourselves which is why we have been so relentless about education, skills, innovation, outward looking, exporting, smart strategies to lift values so we're on a race to the future and you can never relax on that. And then the next generation of poor countries has now come into Europe with the Central Europeans, the Baltics, the Mediterranean countries, now Romania and Bulgaria. Now the EU will pull them up, that's the reality. We have to pull ourselves up and only we can do that with our brains.

Do you think there is something fundamentally wrong that a country like New Zealand charges more for a litre of milk than a litre of petrol or soft drink given we are one of the largest dairying producing countries in the world? If so what are you prepared to do about this?
Clive Kirby, Newlands, Wellington

We pay the world price for milk. The world price has been at unprecedented levels. That has been, overall, good for the New Zealand economy because the dairy receipts have been absolutely phenomenal, to the advantage of New Zealand. Now our objective has to be to make New Zealanders so well off in terms of better paid jobs, because we've got better and smarter products and services that we're making deliver, we're paying higher wages so that the world price for milk doesn't faze us but at this point of our development, the high world price for milk obviously was tough for families.

Are you or are you not in favour of New Zealand becoming a republic? If you are in favour of New Zealand becoming a republic are you prepared to put the issue to the people in the form of a referendum during your upcoming term as Prime Minister? If you are prepared to hold a referendum on republicanism during your upcoming term as Prime Minister and it turns out that most people are in favour of changing our current system will you be prepared to take the first steps towards creating a republic during your next Prime Ministerial term or will you just sit back and wait for Australia to make the first move?
Craig Williams, Wellington

My position is clear. I think that it is inevitable one day that New Zealand will become a republic. I don't see that day coming any time soon because among the Kiwi public is no particular interest in the issue. I think New Zealanders are pragmatic people who are inclined to say 'if it ain't broke, don't fix it'. Right now they don't feel the system's broke. It's not on their priority list, therefore the prospect of a referendum on the subject in the next three years is absolutely zilch and I don't see any reason for any action on it.

Seeing as both parties went against over 80 per cent of the population to repeal Section 59 (the provision that allowed parents to smack their children) what will they do when the referendum says to reinstate it - will they follow the wishes of the public or think they know best?
Dorothy Brown, Rangiora

That's not what the referendum says of course. With referendum questions it's often difficult to work out what they are saying. I think people remember the citizens initiated referendum on the fire service which was incomprehensible. The one that was put up on law and order issues was similar. It was very difficult to read what it was really driving at and there's a high level of ambiguity in the questions which have been circulated for referendum this time. It seems to me that when Parliament votes 113 to 8 for something that's near unanimity. I think Parliament as a whole was exercised about violence in the family and wanted to send a strong signal. Parliament did not want to send a signal to the police that matters of little consequence should be dragged before a court and the reality is that they're not being dragged before a court.

You say this election will be about trust. How can we trust you when you campaign with a billboard that does not reflect your own face?
Barbara Burkhart, Marlborough

It certainly reflects my face. It's me. Everyone wants to look their best for a photo. You might as well say that our wedding photos don't look like us, you know, and no woman would want that said about her.

Many highly skilled New Zealanders living abroad would like to come home but economically the move would be a huge backward step. What steps will you take to encourage them to come home?
Darrell Collins, Melbourne

I don't accept that it would be a huge backward step. In fact I think the families find it to their advantage to come back home to New Zealand. Australia is not offering anything like 20 hours free early childhood education. Working For Families is a pretty attractive package. In a lot of parts of New Zealand the housing costs are highly competitive with Australia and there's the job satisfaction, the great outdoors, the attraction of being able to offer your children what you had yourself from Plunket through kindy to the quality local school and to tertiary education on much more advantageous terms now than in Australia. Overall we offer a good package in New Zealand.

If a bill came before Parliament allowing gay couples to marry and it was a conscience vote would you vote for the bill?
John Fouhy, Northland, Wellington

We made a judgement that civil unions was the appropriate way to go and so at this time I wouldn't be giving a commitment to vote for such legislation. Who knows how attitudes will change in the future but I wouldn't anticipate such a bill and I think if there was it would provoke a lot of thought among our members of parliament having decided that civil union was appropriate at this time.

I am a 35-year-old male with a wife and two kids. I work full-time and my wife works part-time and do not qualify for any income assistance. I feel that the governments always target the high income and low income earners. The middle income earners always seem to miss out. Why should average middle class working people with families vote for you?
Andrew Hill, Tauranga

For it to be true that there's no Working For Families for that couple they would not be on an average income because working for families reaches 70 per cent of families so they would be in the top 30 per cent, but then in the top 30 per cent the small children should be seeing the doctor for nothing. Other doctors' fees have halved across the board with very, very few exceptions because almost every doctor is in a primary health organisation which has a contract with the health board. A lot of the practices are offering exceptionally low fees, much less than half the market rate, more like a fifth of the market rate in many cases. We have got people in this country seeing a doctor for $10, $15. As well, our family outside the Working For Families range is getting a prescription for $3 not $15 so the average cost of going to the doctor and getting two prescription items has gone down from $80+ to around $31. So it's a pretty good deal.

Secondly if our family has a 3 or 4 year old in an early childhood centre a lot of those families are saving $80-90 a week on their early childhood fees and that's equivalent to $4000-$4500 extra in the pay packet so I think people need to look at the overall package here what's being offered for the tax dollar - quality education, good primary health care, the things that really people expect the government to deliver.

And of course if they've joined KiwiSaver there's significant support for their savings through government legislation which required the employer to put in as well and they'd be getting the $20 personal tax break.

I am 55 years old, single, never married, no children, live alone. I am on an income of $38,500. I have 5 years to go and my mortgage will be paid. I run a car but due to physical difficulties I need a hip operation. I cannot get on a bus. I have been in the same job for 25 years as a payroll clerk for the District Health Board. I am struggling to stay on top as I pay mortgage, power, petrol, food, phone, and medical insurance. The only luxury I would have would be the internet at $29.95 per month. My question to both leaders is what will I get out of voting for your party personally?
Gail Deavoll, Christchurch

What she gets out of voting for us is absolute assurance that New Zealand super is there for her and that's critical at that age because obviously on the income that she's had it's not going to have been easy to save. She's got a mortgage, she's still paying that off. Now New Zealand super, the viability of the New Zealand Superannuation Fund is absolutely critical to that lady's long-term prospects and I would say that National taking an axe to the New Zealand Superannuation Fund by being prepared to use it as a private piggy bank to fund their big infrastructure projects is very threatening to the viability of New Zealand super. In addition, if our person was able to contribute to KiwiSaver of course we would be helping her improve her prospects in retirement as well so I do think there's a package there for her. I think also the primary health care is very important to her. Her costs are significantly down in going to the doctor and in terms of her hip op that she would like we are doing twice as many as we were four to five years ago so that's an intervention, well that's a rate of doing them that's the same as the UK with its National Health Service and hard to better that anywhere in the world.

Do you feel it is fair for beneficiary to receive more net gross than a working man struggling to provide for his family. For example a solo mother on DPB with seven children getting a net income of $1,100. How is this equal equivalence to the working man getting $700 after working over 40 hours a week?
Angela Raynor

If the working man on that income had 7 children, Working For Families means he would be immensely better off than the domestic purposes beneficiary with seven children, if there is such a mythical person. What we did with Working For Families ensured that the family in work was always better off. We've taken a lot of criticism for that from groups like Child Poverty Action Group who want it to be exactly the same but we said there has to be a carrot in there for people to work and that's the in work payment. People are always better off in work.

Are you prepared to subsidise private health insurance? As a 68 year old I currently pay $6200 per annum to Southern Cross and when I turn 70 this will be close to $7500. I can't afford it and I can't afford not to have it yet I paid ever increasing premiums for 25 years.
Robert Manson, Howick

No, because every dollar that you spend subsidising private health insurance is a dollar you are not putting into the public health system and most of our people are utterly reliant on the public health system so our view has been that that's got to be the priority. If people want to go private, of course they have the choice to pay and have the choice to pay for private health insurance but we don't think that's something that should be subsidised.

Your policy has been not to fund Herceptin for the international standard of 12 months. Can you outline your policy for funding high cost medicines in New Zealand in the future?
Amanda Rudd, Wellington

There isn't an international standard. There is a lot of interest in what New Zealand is doing with funding Herceptin for the time period that we are. This has been gone over extremely carefully by Pharmac and Pharmac is of the view that at this time they have no evidence on which to base the decision that they should fund 12 months rather than the shorter course. If there was such evidence they would follow it but they don't have it. As a Government we are not prepared to put ourselves in the position of over-ruling Pharmac because if we do that we will allocate money for expensive drugs according to which lobby group is the loudest rather than according to any objective criteria and that wouldn't be right.

In this high tax country with reduced life expectancy compared with Australians do either of you visualise providing modern albeit expensive medications for our citizens? As a medical subspecialist I would like to be able to stop telling a small group of individuals they would receive better therapy across the Tasman.
Rodney Waterworth, Napier

Life expectancy has been climbing here and there are very encouraging results. It's particularly encouraging to see Maori life expectancy going up. New Zealand tries to provide from our small base of 4.2 million people health care that is first class and what people in other first world countries could enjoy and we do a pretty good job of that, including for rare diseases. There are some things where we will have to send people to Australia because there's simply not the scale here to develop a specialty for it but given our size, given that it's 4.2 million people, we don't have the greatest bargaining power with drug companies, we don't do too badly.

What is your policy on the arming of the police force? Will there be a referendum for this so that people can have their say?
Andrea Lockie, Kaiapoi

I don't support routine arming of the police force. I do support the Taser. I think the Taser will both protect the police and do it in a way which doesn't involve lethal force and I'm for that.

Small business administration costs are high. Are there any plans to raise the level for GST registration above the current level of $40,000?
Ann Cook, Warkworth

I would think that's a threshold that has to be adjusted from time to time. I would need to look at when it was last set and then say has it been adjusted in line with any index. That's a fair point to raise.

I am very concerned with the current food labelling legislation requirements in New Zealand considering recent developments in the manufacturing sector in China and India. I now want to know if any ingredients in a food product I am purchasing comes from either country. Current labelling says made from New Zealand and/or imported ingredients. This is unsatisfactory labelling information. I want to know if a product is made from a 100 per cent New Zealand ingredients so I can support these products and not put my health at risk by consuming anything from China and India. What is your party going to do about this situation?
Anton Richter-Visser, Hamilton

Our view is that the products on the shelves should be safe and it's the job of the Food Safety Authority to assure us of that. Where they come from doesn't govern whether or not they are safe. Now it's entirely possible for Kiwi producers of foods to proactively label their food "proudly made in New Zealand from 100 per cent local ingredients" and in the current climate that might be a very good marketing tool but we don't propose to have a requirement for country of origin labelling. What we have to be assured is that Food Safety Authority will act in our best interests to ensure that what we eat is healthy.

So that the public might determine the financial support of your party should it reveal in detail all the donations over $300 that it has received from individuals, lobbies, industry and trusts in the last two years? If not, why not? Shouldn't the public be very uneasy about donors unwilling to reveal their identity?
Paul Beaumont, Stokes Valley

The last round of changes to electoral law endeavoured to get more transparency and openness in the system but to go down to anything like a level of $300, I would have to raise the fact that political parties would be extremely short of money. Already the level to which we have lowered it has had an impact on fundraising for parties. I believe that upfront transparent public funding of political parties for election purposes is desirable as is practised in the United States of America and Australia and a great deal of Europe. The only way we will get money, private donations out of the political process is to go that way.

Please explain why your party will not remove taxes on taxes, in other words rates.
Bruce Melrose, Upper Hutt

Because GST was established to go across every good and service when it was brought in from a tax compliance point of view it is administratively a very simple and effective tax. Once you say "okay not on that" then the next lobby starts not on that and you break down the whole system. If we don't raise money through comprehensive GST we have to raise it from somewhere because GST makes a big contribution paying for our health care and our education and our super and our police and everything else that's worthwhile.

I want to know you will put in place to eradicate the P epidemic that is taking over our country. I would like to see a separate part of the police force created to dedicate their time to getting rid of this devastating drug because this is where our most violent crimes and domestic violence are occurring. I've been a victim of abuse from the effects of P by my ex partner. We need tougher laws and punishment to get rid of this and more help and support for those stuck in the never-ending spiral of P. I have lost many friends because of this drug.
Jessica Watkins, Mt Maunganui

Firstly, P is pedalled by organised crime. We have the new organised crime agency being set up in the police to give the police a real focus on gangs and drug trafficking through organised crime. We have put a lot of extra resources into the police both in terms of many more personnel, about 2500 more funded in our time. We have certainly resourced the police for busts of P labs and tackling this type of crime. I agree that P has been responsible for some horrific crimes. However violent crime is more likely to be driven by violence in the family - that's accounted for over 90 per cent of the increase of reported violent offences - and of course alcohol plays a very, very significant part. Traumatic, disastrous, horrible as P is it wouldn't be the main factor behind a rise in violent crime.

Why do we need 120 parliamentarians to govern 4 million New Zealanders when Britain has 646 in the House of Commons to govern 61 million people? That's 33,000 people per one New Zealand parliamentarian versus 94,000 per one UK parliamentarian. Are we that unruly?
Bill Tait, New Plymouth

When the legislation setting up the MMP parliament was passed I voted for the amendment for 100 members which I thought would be enough but the majority voted for 120 in as we know we can get an overhang we have at the moment with 121. It's not a fair comparison to say that Britain's got 60 million people 646 MPs therefore pro rata we should have 1/20th of their number of MPs. That wouldn't make sense. When the Royal Commission on the electoral system looked at the size of parliament it said you really need a certain number of MPs to perform all the functions, and that is true. From a position of the government party and while I have been Prime Minister we've normally had 49 or 50 seats, and we struggle to cover select committees. We have a Cabinet of 20. Our Ministers outside the cabinet sit on select committees but we've got a lot of committees and we do struggle to staff them. The view was that for the functioning of parliament to cover the hours it sits and select committee loads we need a parliament of 120 I think personally we could have done it at 100 but 120 has got embedded now.

My question is one most politicians try to avoid. What are the parties going to do about people on benefit all under one roof collecting money each week, no intention of looking for a job, just happy to sponge off the taxpayer? The awful instance of the Kahui twins still amazes me, and what has changed? Are the rules for getting a benefit each week going to be looked at, and I don't mean forming a committee to sit and discuss this awful situation? Some constructive answers please.
Janice Neighbour, Whitby

Report them to us. If we know people are abusing benefits we do something about it, and that's always my reply when people say I know so and so and they're cheating - tell us, we'll send someone around. We are constantly on the lookout for people abusing benefits. Actually, the level of abuse and fraud is quite light but where it exists we have to deal with it. No excuses.

How are you going to guarantee with certainty that individuals with illness, treatable by surgery, will receive outpatients appointments within 6 months of being referred to a hospital consultant by their GP and elective surgery within 6 months of the consultant booking such surgery. What recourse will the patient have if these deadlines are not met and is the strategy is different to the current strategy?.
Dynes McConnell, Wellington

We are pretty close to meeting those targets because those other targets people referred properly by GPs see the specialist an outpatient appointment within the 6 months and then if they meet the clinical criteria for surgery, that they be seen within 6 months. The performance has sharpened up a lot. We can always improve on it of course and some specialties come under greater pressure than others. That's why we set out four to five years ago to double the amount of hip and knee joint replacement surgery. We've succeeded in doing that. We set out about three or four years ago to increase the number of cataract ops by 50 per cent. We've achieved that. There are other areas like cardiac surgery we are now setting more targets for. Elective surgery - overall we have put more dedicated funding into it. I am very committed to seeing the public health system meet people's reasonable needs within a reasonable timeframe.

Your party has told the nation that they would receive tax cuts from October 1. When you took power nine years ago you immediately raised the top rate of tax from to 33 per cent to 39 per cent . The effect of inflation over that period also means that the $59,000 threshold should have increased that figure to over $75,000 rather than the $70,000 it now is. You do not appear to have given a tax cut at all but merely adjusted some but not all of the fiscal creep. Do you maintain that you provided a genuine tax cut?
Steven O'Connor, Wellington

Obviously when the thresholds aren't adjusted over a number of years you get what used to be called fiscal drag but my understanding is that the two leaps in the income threshold at which the top rate applies should get us pretty much back to where we were in terms of real income vis a vis that rate, because $70,000 is just the first move. It then goes at a later stage of our tax package to $80,000 but I would have thought that most people would accept an adjustment to the threshold is in effect a tax cut, it's more cash in the pockets.

How can you talk about trust when your policies of spending money on everything has so damaged the economy that we have no substantial money for a rainy day and are now facing ten years of deficit. How much further into debt you're your emissions trading scheme push us?
Neil Walker, Hawera

That's completely untrue because people on the right wing of politics can't have it both ways. They can't say we both been mean and hoarded the surplus, and then suddenly say we've been spendthrift. That just doesn't add up at all. Michael Cullen ran very strong policies for surplus and the time had to come when we had to put the tax package ahead of some other things which we did in the Budget this year. What then happened was the international situation got deeper and more serious, but we are not going to break our word to Kiwis and go back on that. We have locked that in with legislation.

I think what has happened over the nine budgets that we have had the privilege of delivering is that we have put tremendous amount of investment into infrastructure and I'm not just talking road, I'm talking rail, I'm talking public hospital infrastructure - three times as much in nine budgets as the previous government did in the previous nine. Huge investments in our schools, our courts, our police stations, a lot of hard investment in modern infrastructure. We've built up the funding in education and health, more generally we've increased the super so people can live more comfortably. There's so many things we've invested in there comes a point at which you rebuilt a lot of capacity and don't need to be increasing it at that rate across the board. I think those first eight years when the economy grew at an average of over 3 per cent, even 3.2 per cent to the year to the last December - I think we have made very very good use of the money.

When you say that John Key's tax plan will ruin KiwiSaver what do you mean? Wouldn't it be better for low wage earners to put 2 per cent rather than 4 per cent and put some food on the table as well during economic hardships such as these? Also if a wage earner wants to put in 4 per cent what would stop them? Isn't this a fairer method for everyone?
Jack Prucher, Taradale

No, because you don't get meaningful savings out the end of it, you don't get a meaningful enough home deposit from your savings and you don't get a meaningful enough income in retirement.

The sort of feedback we are getting from people is that the 4 per cent they locked themselves in - they liked the fact that they then had to save that they'd made that commitment and they couldn't get out of it and at the end of it they were going to get something worthwhile.

That's the very strong feedback that we've had and people say, these are not my words, "we think it's good for us, they have made us save, we elected to save" so, to in effect trash the scheme to fund tax cuts for disproportionately higher incomes just isn't fair on those people.

Again the feedback we've had is people saying "look I've made my plans and this is not what I was told. I was told the National party was only going to make a minor change but this is a huge change if the benefit to me is going to be cut in half".

The other point we are making is that there has been some strong growth in take-up from young people on modest incomes who haven't had the opportunity to have employer subsidised super before and that personal tax perk going in so it's been a tremendous thing for those people.

I think KiwiSaver is a vote changing issue, I'm absolutely convinced on it when you have over 860,000+ Kiwis signed up to it and they can see the value of it cut in half - that's powerful.

Why should I vote for a party that has over the last 9 years thought it appropriate to come in through my front door and into my house telling me how to discipline my children, telling what sort of light bulbs I should have in my house, and controlling how much water I should have coming out of my shower?
Patrick Coyle, Christchurch

Firstly referring to the section 59 issue the change was voted for 113 to 8. It's not a matter of Labour telling people anything. It's a matter of near unanimity in parliament that MPs wanted to make a stand against family violence. Simple as that and I know of no case where any decent parent who did something inconsequential has been dragged before a court.

That's the first point. Secondly there's no more show of the Labour government reducing the volume of water through people's showers than there is of flying to the moon. This isn't going to happen.

Thirdly, countries around the Western world are phasing out the old light bulbs and bringing in the new because everybody wants their countries to be more energy efficient. This is not just New Zealand, this is worldwide.

Given that our contribution to global greenhouse gases is only 0.02 per cent what modification do you intend to make to the emissions trading scheme that will mitigate the financial stress on families and the economy already burdened with the adverse consequences of the global recession.
Bryan Helm, Porirua

As part of the package round the ETS there is support for households in the transition to ETS with power bills so that's very very specific support.

The second point to make is that if New Zealand does nothing about its greenhouse gases then we stand to have significant problems in our international markets.

In my position I've been on television in the United Kingdom, in the media in the United Kingdom fighting for us to be able to sell our goods to the British because our competitors in high value markets are trading on "buy local" and "don't buy from New Zealand" with all the carbon footprint of bringing food around the world.

We are having to fight for the future of our travel industry as people say you shouldn't fly long haul, think of the carbon footprint, think of the greenhouse gases.

What we are doing is two things. We are positioning New Zealand so that we do play our part in fighting climate change and New Zealand does like to be part of the solution to international problems, even if we are only a small contributor to it. We like to play our part,

Secondly it's a smart thing to do for the economy because if we don't go down this road we stand economically to be the big losers because of losing our brand as being clean and green and 100 per cent pure. Instead we've become the dirty greenhouse gas polluting people which you wouldn't want to buy so if environmental integrity is important to consumers we have to offer that.

I feel that your policy on student allowances is a blatant election bribe. Why do you feel the need to create a universal allowance for students in New Zealand rather than spending the $250 million on cultivating the education of our youngest generation which more and more seems to be leaving schools with illiteracy? You seem to be directing funds towards the age group who is able to vote. There is already an interest free student loan scheme which is great and I myself are taking advantage of however as an ex student I think you will find that a universal student scheme will encourage failing students to stay longer in a vocation which is not for them while squandering free money on alcohol in a student lifestyle.
Kate Anderson, Nelson

Remember people have to keep passing to get the allowance. Seriously, we have put major investments into education at every level. The 20 hours free early childhood education which the overwhelming majority of 3 and 4 year olds and early childhood educators are part of is a very significant investment.

We have just this Budget year got the big investment going into ensuring that our new entrant classes can go to a one teacher to 15 children ratio.

We have put thousands more teachers in front of children in the primary, intermediate and secondary schools. We've announced the big plans for reform in secondary education with youth apprenticeships, a much more personalised education, so that we can aim to have young people staying in high school longer and achieving more.

We then come to tertiary where we have worked over nine budgets to make it more affordable. We have got to the point where we want to take the next step, and the next step at this time I think is particularly important. It relieves the pressure on families. We have found huge interest in this from family people who have got teenage kids coming through or even bright kids below secondary school age where the parents are starting to think well what about their tertiary education.

At the moment the full student allowance starts being abated for a family on the average wage so if the family's income is $45,783 every dollar over that, the student allowance gets abated by 25 cents.

That means by the time the family total income goes to $77,000 which is just above the average family income there's nothing left at all yet $77,000 can be mum and dad and two factory jobs.

These families don't feel rich. They may have other children who are not students who they're trying to support, and they can't support their kids. They're very interested in this.

Secondly I believe that a lot of our students have felt under pressure to do too much part-time work while they're studying and that affects their grades and their health because of too much pressure.

You only get one chance to get good grades and that's the year that you are studying that course. You don't go back and say well I only got a C I'll try for an A. If you only got a C you only got a C and so if you can't give of your best that limits your prospects for going on and doing honours courses, getting top jobs and so on.

If this encourages people to drop some of the part-time work and study genuinely full-time that's good and if it also does that the chances are it may release some of that part-time casual work which we will need if the world economy is going to slow, and ours is going to be slow.

Above all that of course there is the importance of sending the signal that our country needs more highly educated and skilled people that we really value. 

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