Future Directions (Working for Families) Bill

I move, That the Future Directions (Working for Families) Bill be now read a first time. This bill contains the Working for Families package, the biggest change to New Zealand’s social assistance system in over a decade. It is the culmination of research and planning. By 2007 it will invest $1.1 billion a year in around 290,000 New Zealand families. This bill is further evidence of this Government’s commitment to improving the lives of low and middle income families with children. It provides more support to working families, will make people better off in work, and ensures that families have enough income for an adequate standard of living.

The bill increases the rates of family support substantially. Next year family support rates for the first child increase by $25 a week, and by $15 a week for other children. Two years later these rates will increase by a further $10. The orphans benefit, the unsupported child’s benefit, and the foster care allowance rates also increase next year by $15 a week—and as a quick aside can I say that I hope it is at least something for those grandparents who are raising children, and who have been raising this issue with us.

Family income assistance will have a simpler, more generous abatement system, letting working families keep more assistance for longer. Family tax credit will increase to ensure that families do not have less income when moving off benefits into full-time work. It will provide a higher guaranteed minimum level of income than currently—up to $17 from the current $15, and those figures are net.

A key factor contributing to inadequate family income has been a declining real value of family income assistance. This bill ensures that family support is regularly adjusted to maintain its worth for families. A new in-work payment for parents not on benefit will replace the child tax credit. The in-work payment is more generous than the child tax credit. It will be worth up to $60 a week for many families, and be worth even more for large families. Sole parents must work at least 20 hours a week, and couples at least 30 hours a week jointly, to qualify.

The in-work payment will have wider eligibility than the current child tax credit, including people receiving New Zealand superannuation with dependent children, working the required hours, like many grandparents raising grandchildren. Families currently getting the child tax credit who are ineligible for the in-work payment will still get the child tax credit; but as family entitlements change, the child tax credit will gradually be phased out. The in-work payment will have the clarity and the work incentive effect that the child tax credit lacks.

Housing costs can be, and are, a major burden. To make housing more affordable this bill increases the accommodation supplement. It lets people keep more assistance, and updates accommodation supplement areas from three to four. Auckland will be divided into two areas, with a higher maximum rate for central and North Auckland. Other areas are grouped into areas with a higher maximum rate. For example, Nelson and Queenstown are now recognised as needing a higher accommodation supplement.

These changes will improve housing affordability for people on low and middle incomes living in locations where housing costs have risen sharply. Beneficiaries in work will keep their entire supplement, no longer losing up to $20 a week. The amount of housing costs low-income workers must pay before they get help will be reduced, and for low-income earners the level where their supplement begins to abate will be raised. These changes will help families and assist couples and single people.

Working for Families makes quality childcare for low and middle income families more affordable. For many families the cost of childcare is a significant barrier to employment, yet eligibility rules have not changed since 1992, and the cost of childcare has outstripped annual adjustments in rates. Working for Families raises childcare rates and increases the income limits so that more families qualify. It aligns out-of-school care rates with those for preschool care, increasing them by a further 10 percent this October and a further 10 percent again in October 2005. This bill puts childcare assistance in legislation, recognising its importance to many families. Childcare coordinators will help families access childcare assistance and other assistance. Higher family support and accommodation supplement rates will help families who have difficulty meeting their essential costs. Changes to special benefit next year will reflect this, but no family will lose more special benefit than they gain in family support. In fact, absolutely no one will be financially disadvantaged as a result of Working for Families.

Complex rules in delivery systems work against parents moving off benefit into work. We need a simpler system that supports people into work. The changes in this bill form part of ongoing reform of the social assistance system. The child component of main benefits and student allowances will become part of the family support system. All support for children will be paid primarily through one payment—family support. This makes the assistance readily transferable between benefit and work. The removal of the child component will coincide with family support increases early next year, providing a significant boost for families with children.

A temporary additional support benefit that is easier to administer and understand replaces the special benefit for people who are unable to meet essential costs from their regular income and resources. The invalids benefit rules also change. People receiving the invalids benefit will, with their case manager’s agreement, be able to work 15 hours or more a week for up to 6 months to see whether they can sustain employment. They will not lose their benefit entitlement—though, of course, their benefit might reduce depending on their earnings, and if they leave the benefit, but need to reapply later, they will not face a stand-down unless they have higher earnings, meaning that they can switch on and off work and back to the benefit without any penalty.

The evidence speaks for itself. A couple with three children, living in Auckland on the North Shore earning $52,000 a year and paying a mortgage of $385 a week, will be about $170 better off in April 2007 than they are now.

A domestic purposes benefit recipient with two children, living in Christchurch, will be better off by about $36 a week. An equivalent sole parent working, earning $30,000 per year, will be $128 better off in April 2007 than now. The message is very clear: this Government wants to ensure that adequate income goes into households so that children have the kind of environment they need in which to grow up and flourish, and we want to ensure that work pays. At the heart of everything we are doing here is to advantage people as they move into the workplace, retain earnings, and get on with their lives. I cannot imagine anyone in this House wanting to oppose this bill, but I am looking forward to hearing the debate and alternatives put forward as people move smoothly towards what, I think, will be overwhelming support for what we are trying to achieve. I commend this bill to the House.

One of the things I do agree with the Minister for Social Development and Employment about is that the evidence speaks for itself. So far the evidence is that the Government has got it wrong. [Interruption] Government members may laugh.

💬 Government Members: Say it again!

If Government members quieten down they might hear something. They might hear that the Minister has scuttled back up to his office and found that, in fact, he has got some of his figures wrong. In one of the “Working for Families” sheets—and this has kindly been confirmed by Mandy at the 0800 number that the Minister has kindly set up—there is a scenario that is wrong and misleads New Zealanders into thinking they will get more from this Budget than they actually will. I suggest that the Minister should go back to his office and check his figures to see what other errors are there.

This legislation provides no vision for New Zealand. The only future direction signposted by this legislation is further welfare dependence and overtaxation of hard-working New Zealanders. Since when has making hard-working New Zealanders dependent on welfare constituted a grand vision for this country? Michael Cullen is happy to extend the tentacles of the welfare State into once-independent homes, but one of his predecessors, Michael Joseph Savage, will be shaking his head up there as we speak. He would be shocked at the idea that people who earn $80,000 a year are in a line for welfare support.

Another former Labour Prime Minister, Peter Fraser, would also be appalled. He was concerned that some people thought the welfare system would provide them an armchair ride to prosperity. If one believes that, then Michael Cullen has not only reupholstered the chair, he has added a couple of cushions. The benefits of this Budget go to one in five households, the majority of which are supported by welfare. The remaining households—1.2 million of them—will get nothing.

Extending the welfare roles is no vision for this country. Making middle-income Kiwis more dependent on Government handouts is no vision, either.

New Zealanders will see this Budget for what it is—a cynical attempt to buy votes. It is a lolly scramble, but people will get their lollies in a few years’ time. It is: “Vote for us next year and we will deliver the lollies.” If this is not a lolly scramble about buying votes, then why did it take the Government 5 years to get as far as this? Thanks to the best economic conditions in a generation, this Government has enjoyed healthy surpluses for 4 years but it has not bothered to recognise the needs of people and to use those surpluses to meet them. Now we have the cynical multibillion-dollar handout, most of which will come into play next year, the year after, or the year after that.

Yesterday Labour congratulated itself on increasing funds for hip and knee operations. That self-congratulation offered no consolation whatsoever for those New Zealanders who have been waiting in pain for such surgery over the last 5 years. [Interruption]

💬 Madam DEPUTY SPEAKER: There is too much noise. There is just too much interjection.

This Budget is a cruel hoax for hard-working New Zealand families. The money being handed back to them is the money they earned in the first place but lost due to overtaxation. I think that this Budget will backfire on the Government. New Zealanders can see through this cynical lolly scramble and see this Budget as a desperate attempt to claw back support and retain power. If it is not about buying a third term, then why have the spend-up now? Why did this not happen years ago? Government members have no answer to that.

This Government patronises New Zealanders and expects them to be grateful. Why should middle-income New Zealanders be grateful for being made more dependent on the State and joining the ranks of many of those who are already trapped by the benefit system, which rather than empowering people, actually entraps them? Why should they be grateful for receiving their own money in the first place? People seldom feel good about receiving State handouts. They feel good about providing for themselves and their own families through their own work.

It is adding insult to injury to overtax people, then place them in a position of dependency in order to get their own money back. It is obscene. People feel good about being independent and providing for themselves and their families. New Zealanders do not want handouts. They want to keep their own money that they have earned. Marilynn from Waihi said that this morning on Breakfast. People want a fair deal. They recognise and accept that there will always be those in the community who need support and help, and they are happy to pay for that through their taxes. But they are not happy to have their hard-earned cash churned by a Government bent on creating larger numbers of dependent New Zealanders in order to meet some failed ideology—some dream of controlling everybody’s life.

It is a sad comment on this country that educated professional people with good jobs cannot get by. They cannot because they are overtaxed and they are continually required by the Government to carry a growing number of State-dependent New Zealanders. The burden continues to fall on hard-working Kiwis paying that top tax rate. Labour promised that 5 percent of New Zealanders would pay that top rate. It is now 12 percent of New Zealanders, and we are not talking about the wealthy or the elite. We are not talking about property moguls or millionaires. Many of those guys now pay their tax in other countries because they have left New Zealand. We are talking about teachers, policemen, and the other middle-income Kiwis who keep this country going.

This Budget is not about making New Zealand a place where our children can see a future. This Budget is not about growing New Zealand’s economy or creating opportunities, it is about redistributing income.

💬 Hon Dr Michael Cullen: Oh no!

I say to Dr Cullen that I do not think a teacher on $55,000 is wealthy. I do not think a policeman earning $60,000 is wealthy, but Labour does. Labour thinks that that person is part of the elite and should be taxed accordingly. This Budget overtaxes the increasingly poor to give to the poorer. I say shame on the Labour Government for robbing growing numbers of hard-working New Zealanders of their independence—of their ability to take care of themselves and their own families by their own efforts. Even that family in Waihi wants to retain a greater amount of the money they earn. They do not want to be dependent on the Government for just another welfare handout.

Since his time in Opposition, Steve Maharey has talked about the universal benefit. Where is it? Michael Cullen talked about it in 1990. Where is it? Where are the changes? There is very little to crow about. There has been no talk today in any of the speeches about the rising number of people on sickness benefits and invalids benefits, which by Treasury figures will grow at an alarming rate by 2007-08.

Labour, in its term in office, will be adding nearly 32,000 New Zealanders to the invalids benefit, and up to 19,000 people on to the sickness benefit. That sort of increase cannot be explained away by looking at expected rates of disability and illness in our community.

There is nothing to crow about in the Budget. The Minister wants to overlook the fact that he got some of his figures wrong in the first place. If he got those figures wrong, how can we rely on the other figures that are in the pack? It is an absolute sham. It is a lolly scramble, but people will get their lollies in a couple of years’ time. Gee, that is really generous! But the thing about this Budget, and one of the key themes that I think it is important to remember, is that it makes some people who earn up to $80,000 dependent on the State. Michael Joseph Savage will be turning in his grave. This Government has made families whom he would have thought of as hard-working, independent people, now dependent on the State.

This is going to backfire on the Government, because the main beneficiaries of this Budget are beneficiaries already. There is no vision in making welfare a more attractive part of this country. It is a sham, it is a cruel hoax, and nobody will get any benefit for some years to come.

That truly was the voice of the “rich”, broadcast live to New Zealand. That member is the last member in this House who should be getting up to talk about welfare dependency. She is the only person in the country I know who earns over $100,000 a year, and who got paid parental leave at the full 100 percent rate of her previous earnings. She then opposed the paid parental leave legislation.

💬 Katherine Rich: I raise a point of order, Madam Speaker. Dr Cullen is misleading the House. I did not get paid parental leave through the Government scheme. I think everybody knows that is a fib, and he should withdraw and apologise.

Speaking to the point of order, the point I was making was that the member continued to draw her full parliamentary salary, and then opposed paid parental leave for others.

💬 Madam DEPUTY SPEAKER: Unless the member is raising that as a matter of privilege, the issue of misleading the House is a debating point.

We have some questions for the Opposition. Will Opposition members vote against this bill? Yes, they said. Oh, make my day, they have done it! Oh good. Firstly, Opposition members will vote against an extra $100-odd a week in the hand for struggling working families on $25,000, $30,000, $35,000, and $40,000 a year. Why? Because they will not get any of it. It is as simple as that. If we had made sure that they got the money, they would have voted for it, because that is the Tory view.

Secondly, since the bill will pass, will National repeal it if it becomes the Government? Dr Lockwood Smith is a man with no vested interest in families with dependent children. Will he repeal this legislation if National becomes the Government? He looks baffled by that suggestion. He has only been here for 20 years and he does not know what “repeal” means. Will National repeal it before lunchtime? No, National members will be true Tories. They will have their lunch first and repeal it after lunchtime. We know that is what a National Government would do, given half the chance.

What were the alternatives? The alternatives were tax cuts. How do we deliver a benefit of over $100 a week, in the hand, to a person on $30,000 a year with two children? She is only paying $100 a week in tax at the present time—or just over. So the first $30,000 of income would have to be completely tax-free. How much do members opposite think that would cost? It would cost billions, and billions, and billions of dollars.

Who would get the biggest gain? Well, I would do extraordinarily very well out of it. I would get $300 a week out of doing that, unless of course we raised the marginal tax rates on higher incomes and put up the 39c rate. What would we get by lifting the threshold on the top tax rate from $60,000 to $70,000? Nothing for those earning under $60,000, and the princely sum of under $12 a week for all those earning $70,000 a year and above. The fact is that we cannot deliver gains of $100 a week, $120 a week, and $140 a week to people who are struggling in this life, because they do not pay enough tax to make it possible to deliver it that way.

What has come through in this debate already is the terrible prejudice that National Party people have. It came through from the ACT party in question time yesterday. We have the hard-working family on $50,000 a year, and the family, employed, on $25,000 a year. The National Party seriously believes that one’s income is an absolute reflection of how hard one works. Look at those members opposite! How hard does Pansy Wong work? I have never seen her working in the entire time she has been in the House. On the rare occasions she was working, no one understood what she was doing at the time. There is no such relationship.

Some of the hardest-working people in this country, who do jobs that nobody in this House would want to do, earn $25,000, $28,000, and $30,000 a year. These people are below Dr Lockwood Smith’s horizon. His lofty gaze never comes down to their level. He assumes that somehow they are lazy, incompetent people. They happen to be a large proportion of our population. They happen to be the strata of society I am proud to have come from. Just because I now earn over $200,000 a year as Minister of Finance, I am not turning my back on them—unlike members opposite, a few of whom came from similar backgrounds, and who argue for tax cuts just for them and nothing for struggling families.

Those members wonder why there are social problems. They wonder why kids are going astray. They wonder why people are struggling when too many of our families do not have enough money, when too many children are being raised in poverty. National would say that they should get off their butts and just earn more. They should have chosen their parents better, as so many Tories do, so that they could have inherited wealth, instead of having to struggle up through the ranks of society, as so many others have to do.

We make no apology for putting more money in the hands of families who need it. That is what we were elected to do. We make no apology for the fact that families on $50,000 and $60,000 a year, with two or three children, will get some extra money in the hand, as well, because it can still be a struggle bringing up families on those sorts of incomes when modern rents, modern mortgages, and modern costs have to be paid.

What National has never explained is why cutting the rate for those at the very upper end of society takes a higher priority than low to middle-income working families. Dr Smith has this strange belief that somehow or other the whole engine of the economy will move into a new gear if he plays a lower top tax rate. I have not noticed, in the increase from 33c to 39c, that the entire upper levels of New Zealand society—especially those who earn $200,000-plus a year—have downed tools and stopped working. All the ones who promised to go to Australia have not gone. I still see them at every meeting I go to. They are still earning vast sums of money. I do not want to hear from them in the next few days that they regard it as improper that people on modest incomes should receive some assistance.

But what we have done is increased the gains through employment, compared with being on the benefit. We have not done it by swiping $25 a week from beneficiaries, as the National Party did—pushing more people into poverty and into despair. We have done it by giving a helping hand, so people can earn more by going out to work. By actually being employed they earn more, as a consequence of this package.

National members will vote against that, because with that $1 billion they would prefer to buy a tax cut. What could they do? For $700-odd million of that they could cut the top rate of tax to 33c. That does nothing for the majority of New Zealand families with dependent children. They like to use an average based on the mean, which is biased hugely upwards by the wealthiest families in the country. The median income for a family with dependent children in New Zealand is not $60,000-odd a year; it is $49,000 a year, at the last measure. Therefore, cutting the top tax rate would benefit well under half of all families with dependent children, and most of those would get next to nothing out of it, either. So where is the justice in that? Where is the reward for effort in that? Where is the commitment to the future of New Zealand in that particular approach?

National has managed to summon up the courage to say it will vote against the bill—big deal—but it has not managed to get to the next step and say that if it became the Government, it would repeal this legislation, take the money away from the families that would get more and redistribute that money upwards to those at the top end of society. Because that is the logic of what Kathryn eponymous Rich said here this afternoon. It is what she believes ought to be done: this money should not go to low and middle-income families; this money should go to her and her ilk—on a combined family income of God knows what. I suspect it would be well in excess of $200,000 a year.

Well, I am sorry. The evidence is that people at those sorts of levels in New Zealand have done pretty well in the last 5 or 10 years, all by themselves, through the workings of the markets. The people who have not done so well are those low to middle-income families. They face costs like childcare for going to work, and this Budget and this bill will benefit them.

If National wants to go to the hustings saying “We’ll be better for pensioners”, when it cut the pension, and “We’ll be better for everybody else”, when it cut benefits and wages and reduced conditions of employment, and if it wants to redistribute this package upwards to those who are least in need, then I urge that party to really “bring it on”, because I am looking forward to that fight so very, very much indeed.

In case there is anybody out there listening, I just say that Parliament is debating the Future Directions (Working for Families) Bill. There might be someone listening. One never knows. It is Budget day, so people could well be sitting there listening. This is a bill—

💬 Hon Annette King: The last one just turned off.

Now, now; the Minister could be a little bit kinder than that. It is Budget day. I inform listeners that this bill has just been presented to the House, and nobody on the Opposition side of the House has had a chance to read it in any in-depth manner. We have just quickly gone through it. I inform people out there that the general policy statement in the explanatory note states: “The Bill’s main objectives are to—make work pay for parents who move off benefits into work:”. That is a commendable aim, an absolutely commendable aim. It goes on to state in the next bullet point: “increase family income to significantly address issues of income adequacy:”. That is, beyond question, a commendable aim. The next bullet point states: “address accommodation affordability by responding to the increased cost of housing:”. That is another commendable aim. Those are three commendable aims. Then it states: “make childcare assistance an integral part of the social security system in recognition of its importance to many families:”. That is four commendable aims. And the fifth aim is to “take steps to simplify the social security system.” There are five commendable aims.

How can New Zealand First vote against five commendable aims? Well, we cannot; we will support this bill. [Interruption] But I will tell members over there on the Government benches, before they get too overjoyed, that this is a lousy way to do politics or to play politics. We sat in this House on Monday, and we all said nice things about the House and how important Parliament is to ourselves and to the country, but to present a bill that the Opposition has to read and learn about in 10 seconds flat is to treat Parliament with contempt. That is not a fair go. This bill does not need to go through in such haste or in urgency. It is a “Treat Parliament with Contempt Bill”.

It is a guilty bill, because the Treasurer over there—or does he call himself the Minister of Finance, or Treasurer, or both, or everything; he is “Minister of Everything”—has so much money that he does not know what to do with it. He has to give some away. Actually, I think, on reading this bill, that he is giving it to the right people, which is why New Zealand First will support it. We do not believe that the Minister of Finance should sit on piles and piles of dollars—billions and billions of dollars—through applying some sort of ideology. We support some of that money going into the pockets of New Zealanders, and this bill does that.

But have we got it right? Has the Government got it right? So many bills go through in a fast-track sort of way, with little or no consultation or scrutiny by Parliament, that I almost guarantee there is a major muck-up in this bill. But in the few moments I have had to read it and digest it, I cannot find it.

So we will support the first reading of the bill, and will go through it clause by clause, I hope, when we come to the Committee stage. But I say to New Zealanders out there, particularly to family New Zealanders—and New Zealand First does know what a family is, unlike some people on the other side of the House—

💬 Hon Richard Prebble: They have an academic knowledge.

Oh, they have an academic knowledge, yes. But we actually know what a family is and how important families are to New Zealand—

💬 Hon Annette King: They studied for it.

They have a degree in it, have they? This is getting me worried. I hope this money is going to the right people. New Zealand First would have appreciated more time to be able to digest this bill and what it is all about, but we recognise that the five aims are all worthwhile.

💬 Hon Annette King: Read them out again.

I will read them out again for the Minister: to “make work pay for the parents who move off benefits into work:”—a good aim—and to “increase family income to significantly address issues of income adequacy:”. That is an excellent aim. To “address accommodation affordability by responding to the increased cost of housing:” sounds like a good aim. [Interruption] No, let them enjoy the moment, because I have the feeling—[Interruption] Three fingers, eh?

💬 Hon Steve Maharey: Yes, three!

The member has five “fingers” here. To “make childcare assistance an integral part of the social security system in recognition of its importance to many families:” is a good aim, as is to “take steps to simplify the social security system.” That is a good aim. But it is the Government’s process that we object to. We think that pushing this bill through in the dark of night under urgency is unnecessary. I think there are plenty of people in this House who would support those aims, and we would have liked to have some input into them. We do not want to see a mucked up bill come in that adversely affects New Zealanders; we want the truth to emerge and what has been promised here to be delivered on.

💬 Hon Annette King: Can you read the five again?

The Minister wants me to read the five again? I am getting a little bit exhausted. Does she think there might be someone else on the end of the radio now?

💬 Hon Annette King: I am just enjoying it.

Ha, ha! There is a better way of looking after this country than introducing this knee-jerk sort of Budget, which flashes out the money and the lollies. There is a better way of doing it—a planned economy. To be without a plan is to plan to fail. But we would sooner have this money in the pockets of New Zealand family people than have it sitting in the little chest that Dr Cullen goes and sits all night playing Scrooge with. We would sooner it were in the pockets of families. Therefore, New Zealand First will—I was going to say support this bill going to the select committee, but the Government has abolished the select committee process on this bill. To hell with democracy! The Government is just imposing itself here. Right or wrong, we are being imposed on. Well, the Government has the aims right, but it has the process wrong.

💬 Hon Annette King: One out of two isn’t bad.

That is about the measure of it: one out of two—half of it. New Zealand First will support this bill as it is. We will try to examine it in detail as we go through the debate in the House, but that is a pretty tall order because I suspect there will be some major errors in it. However, I do not want New Zealanders to suffer. Here is an opportunity to give some of Dr Cullen’s money back to them, and we will not stop that occurring for anything.

In the unlikely event that this bill is right, when we lead the next Government we will not be repealing it. But I have my doubts that it is right—[Interruption] Do members want me to say that again? When we lead the next Government, if this bill is correct we will not be repealing it. We will support the progress of this bill, but if we find something wrong we will highlight it hard and long. We hope, for the good of New Zealanders, that the Government has got it right, because it would be the first time that this Government has done something once and done it properly. We say it is better that the money is in the pockets of the average New Zealander, of family people, than in the pockets of the wealthy—so let us hope that the Government has got it right. We will be monitoring it carefully.

We will support this bill.

The Future Directions package announced today in Dr Cullen’s Budget, represented by this very sudden bill, is a mixed blessing. There is no question that the Green Party welcomes the steps that the Labour Government is taking to seriously address issues of endemic child poverty. It is a relief that after 4½ years in power it is finally taking action and beginning a major redistribution of resources towards families and children that was so badly needed after the structural adjustments and widening gap between rich and poor over the last two decades. The Green Party will be supporting this bill.

We do not want to be ungracious about it, but at the same time I will take this brief opportunity to point out a few of our concerns with the legislation. We are quite disturbed by the underlying attitudes represented here, which basically say that it is much better for any parent, even a sole parent with young children, to be out there in the paid workforce rather than staying at home and carrying out the even more important job of being a good mother, or father in some cases. I have a strong sense today that Labour is actually strengthening that dangerous moral imperative that first emerged in the 1990s with the Shipley, Bazley, and Rankin reforms. The imperative says that really all parents, including single parents, should be contributing to the formal economy as a priority, rather than nurturing their babies and children. This bill has as its focus “making work pay”—a slogan used again and again to bolster an acceptance by society that anyone on a benefit should get off it as quickly as possible, even if it is to the detriment of parent and child and even if there are still hundreds and thousands of other people still out of work; and that somehow the children of beneficiary families deserve and need less money to live on than the children of parents in paid work.

I believe the State should be neutral on whether single parents should have to work, and should also accept that it is not a bad thing if one partner in a two-parent beneficiary family works as a full-time caregiver for their children, rather than being work tested, forced out to work, or, as with this legislation, financially penalised for not going out to work. This is not to say that we do not support any measures to help beneficiaries with the transition between benefits and work. There are huge and accumulated problems with wage rates that are too low to support many families, a variety of punishing abatement regimes, and the indubitable burden of extra costs incurred when people first start work after being on a benefit. However, we believe that the way to deal with the transition is not by continuing to entrench the disparities between beneficiaries and working families on the same or similar incomes, thereby penalising the children, but rather through direct support of the working adult, and their needs.

I will turn now briefly to look more specifically at a few aspects of the bill. First of all, there is a lot of detail that will be done by regulation. The Green Party is concerned by the increasing tendency of this Government to put the detail of so much new policy into regulation, rather than doing it through the means of Parliament and the select committee process, which this bill will not have the privilege of going through. There is a lot of detail that will be done by the regulation review process and we will be watching that closely.

This bill does begin the simplification of the benefit system, which the Minister has been promising for the last 4 years, but I would like to reiterate that the Green Party would rather have seen at this time a whole rewrite and review of the Social Security Act—we would like to see the Government start again. The Social Security Act has been with us since 1964 and it has been amended over and over again, as this bill does, yet again. After 4½ years of work by the Ministry of Social Development on benefit reform, we would have thought that this would be a prize opportunity to undertake the whole process, rather than continuing to do it bit by bit.

We are pleased, however, that this package takes us in the direction of simplification. We are very pleased that the inflation indexing, which this bill promises with the family assistance, will happen. It is high time. But we note that although this bill brings family assistance up to date, families in the end will be only as comparatively well off as is equivalent to the position in 1992. It does not really keep pace in the way that we would like to see it do.

We are also concerned about what is happening around the special benefit, which has been a problem area for a number of years for the Government and for beneficiaries. Detailed provisions on this are to be done by regulation, and again we will be keeping a close eye on where this goes. The accommodation supplement is also improved in this bill, which is a good thing for everyone who is in the position of needing an accommodation supplement right now, but in the end we would like to see the accommodation supplement abolished. The only way that will happen is if we have enough housing in this country, and if we do not have a situation where so many people are forced in the end to depend on the State to provide a subsidy that in effect goes both to the landlord of the accommodation and to the employer at the other end.

Although the Budget is increasing the number of State housing units that will be available, it is only by a very small amount. It will actually mean that State houses, as a proportion of the total housing rental stock, will continue to decline. In the long run the accommodation supplement is not the answer.

In conclusion, I would like to reiterate that, despite our concerns and reservations about some aspects of this legislation, this is a commendable Budget initiative that families have been waiting for since 1991 when National’s benefit cuts and the Employment Contracts Act deepened a whole generation’s plunge into poverty. No one will be worse off as a result of this package, and I am grateful for that. Many, many families will be a lot better off over the next 4 years and into the future. I have a concern that, in the summary of the Government’s new spending on the Working for Families package, it appears that the rate of spending goes up only very slowly. In 2004-05 it is $170 million, and spending does not go up to over $600 million until 2005-06, so the wait for substantial gains will be quite long for some people. But good on the Labour Party! The Green Party will be voting for this bill and we are pleased to see that such a big step has been taken.

I rise to speak on behalf of the ACT party. ACT will be voting against this measure. We say to the House that it has no redeeming features.

💬 Hon Maurice Williamson: None.

None, whatsoever. What it does show is that the package that has been put in front of the House is a welfare, Work and Income package, and not one for working families.

💬 Hon Steve Maharey: Rubbish!

The member calls out “Rubbish!”—

💬 Hon David Cunliffe: He said “Rubbish!” It is.

That shows that Mr Cunliffe did not bother to get briefed on the Budget, or alternatively did, but did not care about this interesting detail in the Budget. I ask the House why we are having to sit in urgency. There is only one reason we have to sit in urgency, and that is in order to bring measures in. What are we bringing the measures in for? Are they being brought in for working families? When we actually look at the Budget we find that the position of working families does not change, as the member says. The reason for the urgency is that on 1 April 2005, family support, which will go to welfare beneficiary households, will increase. It is regarded as so important to suddenly do something for Labour’s welfare base that the House will have to sit in urgency!

If members think that is not correct, they can look at page 5 to see that the current benefit rate structure will change. Who will get the increase, but domestic purposes, widows, unemployment, and sickness beneficiaries. Invalids benefits, domestic purposes benefits, and caring for the sick and infirm; that is why we are rushing this measure through. But members have heard leaks from statements Dr Cullen has made to this House. He said that the purpose of this Budget—and, I guess, he claims, the purpose of this bill—is to help working families, and members are starting to say how urgent and necessary that is. I heard the Green Party and, I think, the New Zealand First Party, say they all thought that that was well worthwhile. So let us see when the new in-work benefit starts.

💬 Hon Maurice Williamson: Midnight tonight?

The member asks whether it is midnight tonight. Under urgency, that would be a reasonable assumption.

💬 Hon Maurice Williamson: Is it?

No. Is it 1 April 2005, when the Government’s welfare beneficiaries get a massive—one cannot call it a pay increase, because they do not work—increase in their benefits? No, it is not that. I would like to hear from the next Labour member why the date is 1 April 2006. Why do working people have to wait 2 years? Every single member who votes for this bill is saying to every working person in New Zealand who gets the increase: “I thought it was so important, you should wait 2 years.” Of course, what those members will probably say is: “Look, don’t complain, because most working people got nothing.”

💬 Gerrard Eckhoff: That’s right.

That is right. Statistics New Zealand says there are 550,000 working families in New Zealand with dependants, and the Minister tells us that eventually, in 2 years’ time, 150,000 working people with dependants will receive some money. The 150,000 beneficiary-led families will have it paid early, and that leaves—and I know that everyone on the other side of the House has done the calculations, so I want them to forgive me for pointing it out, just in case they have not—250,000 working families in New Zealand with dependants who, if members support this bill, will get nothing.

Dr Cullen told the House that he had gone through the Budget carefully to make sure there were no losers. Where was Mr Cunliffe when those calculations were being done? He occasionally visits the New Lynn constituency—not often, as he does not want to stay there—but he occasionally comes to visit us in New Lynn. How is it that he did not point out to Dr Cullen that the majority of working people in the New Lynn constituency will be losers in this Budget? Their only role, Mr Cunliffe, is to be bystanders and to pay for this largesse that the Labour-Progressive—and, I suppose, United Future doormat—Government will be supporting. I thought the United Future Party supported families. But no, United Future will apparently vote for this package, so those members support this increase in welfarism. They support making New Zealanders more dependent.

Let me give this example. [Interruption] No, the member should listen to this. If one takes the example of a family with two children on a moderate income of $50,000 a year, and work out where it will be after this Budget, in 2 years’ time it is true that it will get a slight increase in its position. But the family’s net position is that as taxpayers, they will pay more to the Government than they receive back. But if that family on $50,000 a year decides to halve its income to $25,000 and have 20 hours off, then it qualifies under this Budget. What happens to its real net income? It is only $4,500 worse off than if it was earning $50,000 a year.

💬 Hon Maurice Williamson: No!

Absolutely! In fact, it might be worse than that. I have not been able to quite work it out, but there will be a new special accommodation allowance for parts of Auckland—which may or may not include the New Lynn electorate; I suspect it does. I think that under the accommodation allowance, the difference between earning $25,000 and $50,000 a year, after all payments, would probably work out at around $80 a week. That is a huge incentive not to take overtime or work extra, but to go to the boss and say: “Look, I would rather work 30 hours a week than 40, because 10 hours a week is worth more to me than being paid $4,000 a year.” Of course it is, because one could probably go off and do a bit of—

💬 Hon Maurice Williamson: Moonlighting.

—moonlighting. But I would not suggest that any New Zealander would do that—even though theInland Revenue Department says that moonlighting in New Zealand is worth somewhere between $6 billion and $10 billion a year in the black economy. This bill will see the biggest boost to the black economy ever. If one has children, the only way to get ahead is to, first, breed, because the more children one has, the more money one gets—it is much easier than working hard. The second thing one should do—under this bill—is to reduce the number of hours one does and then take up a cash job like mowing lawns or something similar.

I say to members opposite that that is what they are doing. This is a bill to take us on a low-wage, Third World economy path. There are no redeeming features in this bill. This is nothing compared with the huge impact that we would have on the prosperity of New Zealand and the prospects of every New Zealand child, if there were a 20c flat rate of tax—which we could have had. Instead, what we have is the sight of members of Parliament, after having taken $6 billion of the taxpayers’ money from them, asking to be praised for having given some of it back. State radio asked me today: “Isn’t it fair enough for the Labour Party to be helping and looking after its people?”, and I think that shows exactly the level of morality of this Government. It should not be looking after its people; it should be looking after all the people. It should be looking after the nation, instead of being a narrow, partisan Government, which is way behind in the polls.

💬 Hon David Cunliffe: They are all our people.

I say to Mr Cunliffe, the Liberal Party in Australia put forward a benefit breeding programme, where the Treasurer said: “This is a policy that is going to encourage people to have kids.”, and what happened to that party’s popularity? It went into free fall. The only thing stopping this Government from going into free fall is one cannot really go into free fall when one is already under 38 percent—but one can still fall; that can still happen. I say to Mr Cunliffe that he can look for—

💬 Hon David Cunliffe: What’s your support—1 percent?

No, since I have quit the leadership it has gone up by 50 percent—so I am looking for great things.

United Future will be supporting this bill. We could do nothing else, given the fact that Dr Cullen and the Government have seen fit to introduce measures almost identical to those United Future has sought in working towards the implementation of the Future Directions (Working for Families) Bill. Just to back that up, I want to read almost verbatim from the letter and notes I wrote in October last year, when we were in dialogue with the Government about what should be included in this year’s Budget.

Our party decided to put to the Government that it should be a priority in this year’s Budget to address the issue of family support. The first thing we said we were looking for was a complete overhaul of the family assistance system. This bill does that. We wanted to do that by making a significant overall increase in the assistance given to beneficiaries and low-income working families, with specific recognition of the number of children who would be dependent on the family income. This bill delivers that.

We wanted to see a simplification of the system by the amalgamation or elimination of the present segmented family support, child tax credit, and parental tax system. We predicted that this would be likely to require a downgrade in the level of the benefit for those who were not in the workforce, but a downgrade that would be more than offset by the increase in child benefit payments. That is exactly what this bill does. We sought a widening of the after-tax income level between families on benefits and working families, in order to incentivise and encourage participation in the workforce. This bill delivers on that.

I should add that the 1991 benefit cuts that were rushed through in great haste by the National administration of the day did not adequately address the way the accommodation supplement and other things were rebated, giving very perverse outcomes and very high effective marginal tax rates to many families that were endeavouring to do what we all want them to do—to move from benefits into the workforce.

We wanted to ensure that all families entitled to support actually received it, and we are delighted that the Government has signalled that it will be undertaking a major marketing campaign to ensure that all families that should benefit from these measures will do so.

We also asked the Government to make sure that we retained some relativity and comparability with Australia, for the very important and inevitable reason—and, in many ways, unfortunate reason—that some New Zealand families are relocating to Australia because that Government is giving better assistance to families than they can receive here.

One of the things I am delighted to see in this bill is that benefit levels will now be indexed. Every time the consumer price index moves by 5 percent or more, the relative level of benefits and other assistance to families will move in tandem with it, thus retaining in real terms the benefit we seek to deliver to those needy low and middle-income families.

I remember very well having a conversation with Dr Cullen before the Budget in 2002 on the whole question of indexation. As a result of that conversation, members may recall that in last year’s Budget we began at long last to index those families at the upper end of the scale in terms of income. Last year’s Budget delivered $59 million in family assistance to those families, which would not have happened had United Future not been in Parliament to advocate for their situation and to bring that reality to the attention of the Government.

I remember saying to Dr Cullen that if a family had, for example, four children, then even at an income of over $50,000 a year, it would still be struggling to make ends meet. I had no idea at that stage that just a couple of weeks ago we would see in the Sunday Star-Times the big write-up and all the publicity given to the McLachlan-Gilbert family, which is in exactly that situation. It proves the point, once and for all, that even at that level, families continue to need direct support from the Government. The reality is that it is expensive to raise children. We need to take that fully into account, and I am delighted that in this Budget the cut-off point for a lot of families is as high as $70,000. For those with quite large families, it goes up even further than that, to maybe $80,000. We welcome that very much indeed.

I also want to say that the fiscal stimulus that will be delivered to the New Zealand economy through the Future Directions (Working for Families) Bill is timely. No less an authority than the Reserve Bank has said that this is the right way and the right time to give some fiscal stimulus to our economy, because it is going slightly off the boil at the moment and, therefore, can take that stimulus without any adverse effect on monetary policy. That is very, very important indeed. What could be more important right now for this country than to put additional funds, via fiscal stimulus, into the pockets of those people who most need it?

The unfortunate reality for New Zealand at this point in time is that children and poverty go together. If we think for a moment about how the money that will be delivered through this bill will be spent, it becomes obvious that this is exactly the right thing to do at this point in our history. The money will be spent on food, on clothing, on school uniforms and transportation to and from school, on mortgage repayments, on rent, and, I could add, the odd treat by way of family outings and family holidays. I wonder how many families in this country have not had a decent holiday together as a family for some years. It is very important that we give such encouragement now to those intangible but very important aspects of family life. Who knows? Maybe a family will even be able to get a newer car—probably a second-hand import, but still a step up.

The basic and fundamental thing is that through this Budget, our kids and their mums and dads will benefit. They will be able to spend more money on their families. In truth, this is not just expenditure on our families; it is also an investment in the future of our nation. Indeed, I suggest to the House that the measure of a nation and of a society’s greatness is how it caters for, and looks after, its children. It should be the No. 1 priority.

United Future is delighted that this bill will significantly and substantially reduce the level of child poverty in this country. For too long we have allowed children and poverty to go together in our nation. In many analyses, people have said that if we look for the cause of poverty in our nation at the moment, we will see that it is related to children. Those with children are the poorest members of our society, and the more children they have, the poorer they become. Why? Simply stated, it is because a single income—paid, very often, to a working family—just does not give them enough to look after their children and give them the benefits we want them to have. I, for one, do not want to live in a country that is prepared to allow its children to live in poverty. We need to give every child the best possible opportunity for a great start in life.

I was very offended by Richard Prebble’s nasty reference to “breeding”. I find that deeply, deeply offensive.

💬 Hon Richard Prebble: Why?

Because children are our greatest blessing and our greatest wealth. They are not just our present reality, but also our future.

💬 Hon Richard Prebble: Why do only the poor have them?

That is nonsense. I can tell the member that many people who probably earn a lot more than he does actually rejoice in large families, and I know lots and lots of couples who place a high priority on that. Has he so quickly forgotten the McLachlan-Gilbert family that was written up in the Sunday Star-Times just a couple of weeks ago? Did he not see in those photographs the kind of situation that all of us would like to see for our families?

In summary, this is a great bill. I know I will be disappointed, but I came here tonight—not having heard the National and ACT speakers—in the hope that this bill might have the support of all parties in the House. If any party does not vote for the bill, let members of that party—here and now during the first reading—stand up and tell the people of New Zealand that they intend to repeal it if they ever become the Government. Let us get really honest and down to basics. They should have the courage of their convictions. If they are not going to vote for this bill, they should undertake to repeal it. I say to members of the National Party—some of whom are saying right now on the radio that they cannot make their minds up about the bill—that they should get off the fence and vote for the future of New Zealand by delivering some much-needed assistance to struggling families.

Sitting suspended from 5.59 p.m. to 7.30 p.m.

I seek leave for the 11th call in this debate to be a split speech between New Zealand First and National, with New Zealand First having the first call.

The ASSISTANT SPEAKER (H V Ross Robertson): Is there any objection to that course of action being taken? There appears to be none.

I rise to support the Future Directions (Working for Families) Bill. The name says it all. It is about the future—the future today, the future tomorrow, year in, and year out. This legislation is about what this Government will do for working families in New Zealand, and I give it my wholehearted support.

Peter Brown read out the five objectives of the bill and said New Zealand First could not vote against it. I do not need to repeat those five objectives. They were clearly put by an Opposition party member who could see through the National Party rhetoric and the ACT rhetoric, and would support a good bill in this Parliament. That is Parliament working at its best. Members will find that the overwhelming majority of members of this Parliament will support this bill. I predict that somewhere around 82 votes will support this bill. Does that mean most parliamentarians are right, or wrong? In terms of a parliamentary majority, it means most members in this House recognise legislation that will help families not only this year and next year but into the future.

But that will happen only if there is a Government that supports the measures in the bill. The truth is out. The dried arrangement who is the Leader of the Opposition was on Holmes tonight. I have never seen a more wooden performance in my life. He said that if people voted for Labour they would have these measures, but if they did not vote for Labour, they would not have them. Well, there it is; it is out there. These measures will be gone “by lunchtime”, should the National Party, in coalition with the remnants of ACT—should ACT members get voted back in after Richard Prebble leaves—get back in Government. The truth is out: if people vote for National, all the benefits in this bill will be gone.

I know that New Zealanders are not silly. They will be listening to this debate. They will be weighing up the options. They will be looking at what the bill does for them and their families, and they will be saying that the National Party has no commitment to families unless they earn heaps of money. If families earn heaps of money, then National will give them more, because it thinks those are the people who vote for it. National thinks that a family that earns $20,000, $30,000, $40,000, $50,000, or $60,000 a year is not a hard-working family, because if it was really hard-working it would earn more—it would have the ability to earn more. Who would be mowing those members’ lawns and looking after their gardens? Who would be taking away the rubbish they throw out every week? Who would be looking after their kids? Who would be teaching their kids? Who would be the nurses in the hospitals? Those people earn under $60,000. They are the sorts of people who look for some payback in a Budget.

I find it very interesting that it was OK for National, when it was in power, to give money back to families through family tax credits and family support. That is how it gives money to families—through tax credits and family support. Those people were not called beneficiaries when National gave them money, but they are called beneficiaries when Labour gives them money. What hypocrisy! How can those people not be called beneficiaries, when National puts money into tax credits and family support, but the minute Labour puts some real money into those areas, those people become beneficiaries? Well, that two-faced approach can be seen through. National members cannot say that when National does it it is OK—it is good—but when Labour does it, it is bad. If those people are called beneficiaries now, they should have been called beneficiaries under National, and that is the truth.

So National should either face up to the fact that it would do something for families through a mechanism that gives them money, or just admit that it would give money to the rich through tax cuts. Michael Cullen made it clear that if a Government wants to put that sort of money into families’ pockets, it would have to exempt tax on families’ incomes up to $30,000—no tax at all. That would mean I got a big tax break. That would mean that Maurice Williamson got a big tax break, and John Key, etc., etc. I listen to Maurice Williamson; he has always been an honest man. He has said that is excellent; he has said that it would be very good if he got a tax cut, but not good if people who need more money got a tax cut, or got more money in their pockets.

I ask National this: is it all right to tax people and give them hip operations? Those members say it is not all right to tax people and give the money back to them in family support or family tax credits, but is it all right to tax them and give them hip operations? Don Brash said in his speech that for months National had been advocating for families, that for months it had been advocating for more operations. So we are allowed to tax and put that money into operations, but we are not allowed to tax and put that money into families. That is a double standard. If we say the money belongs to the people—that taxes come from the people—we should then decide how to get the best benefit for the people. Well, we say there is a lot of benefit in taxing people and giving them hip operations, knee replacements, and so on. We believe that is good expenditure of money.

In fact, one of the things I like about what this Government has done is that we say there are things we can do for families in terms of income, and there are also things we can do for, particularly, our older people through operations like hip and knee replacements. We have said let us improve that; based on evidence, based on research, and working with the sector, let us improve access to those operations, so that our older folk have a better quality of life. The payback is that our older folk have a better quality of life; they are able to be mobile, to go out and enjoy their grandkids. That is the sort of payback that should go back to our older New Zealanders. Their children have grown up, but in terms of taxing people and putting that money where it is needed, that is good use of money, and that is what this Government has done. [Interruption] Maurice Williamson does not want a hip replacement at the moment, but I do not think he would want to pay $20,000 or $30,000 for a hip operation or a heart operation. Mind you, he probably has private medical insurance, but when he reaches 65 and his premiums are doubled or trebled, he might not be able to afford that operation. Then, of course, he will not be a hard-working New Zealander, so he will not deserve it.

I found Richard Prebble’s speech one of the most interesting and one of the most disgusting. One of the things he said is that this Budget encourages breeding. Well, it is absolutely certain that man has never had a baby. I do not know whether he has ever fathered a child. If he had, he would know that one would need more than a few dollars to want to have a baby. I can see my colleague from New Zealand First nodding her head; she knows what I am saying. Any member who says that this Budget encourages people to breed is very, very strange indeed. I do not know what sort of other inducement those members need to do other activities, but I can assure members—

💬 Gerrard Eckhoff: I raise a point of order, Mr Speaker. Reference to the childless status of members of this House is not exactly encouraged. I recall not so very long ago the childless status of our Prime Minister being talked about in this House. The comments of the Minister are quite inappropriate. She should withdraw and apologise.

The ASSISTANT SPEAKER (H V Ross Robertson): I say to members that disparaging remarks about members are made all the time in this House. It is the personal reflections that we have to be concerned about.

I do not know who has fathered children in this House and who has not. There was no reflection on Mr Prebble. I do not know whether he has fathered children. He may well have fathered many of them. After all, another thing he said was to ask why the poor had children. I presume there was a time when he was poor. I presume that for most people—those who were not born with a silver spoon in their mouth—there was a time when they were poor. I believe that most people who have families do not have a lot of money when they are 20, 25, or 30. They are buying a house and setting up their home. They have mortgages, kids to pay for, and clothes to pay for. They are not usually wealthy. Most people are not rich when they have families. Richard Prebble made the very strange comment: “Why do the poor have babies?”. Maybe that is something he can ponder into the future, because he certainly will not be around very much longer to be able to make such stupid comments.

I believe that this is an exceptionally good bill. It will give support to families that need it. But all that I have heard from the Opposition is knocking and nagging. We believe that Opposition members are the knockers and the naggers of this Parliament. There are plenty of knockers and naggers over there. Could they please give us just one policy?

What an incoherent rant from the Minister of Health. How out of touch she is, telling the Hon Richard Prebble that people will not have a few more babies for a few extra bucks. Did she not notice the Australian Budget, where it had a baby bonus payment of $1,000? Has she not noticed the Italian Budget, which pays people $1,000? Mark my words, it will be a Labour Government one day that will come in here and tell the people of New Zealand that they have to have more kids, and that they have to have one for the country. A Labour Government will be paying people $1,000, and the Minister of Health will be blushing even more than she is now.

Did anyone see Michael Cullen on the Holmes show tonight? What a disgrace! All that nasty envy was oozing from the Minister of Finance. He tried to convince the people of New Zealand that this was not just an envious, sort of hopeless, Budget. The House does not have to take my word for it that this is not a good Budget. Members do not have to listen to me, even though I know it is a terrible Budget. We will talk about that and the Future Directions package in a moment.

Let us listen to the people of New Zealand who were asked: “Does the Budget do it for you?”

💬 Hon Maurice Williamson: What did they say?

If the Budget does it for them in the same way as they will vote when the polls are out, there will be a difference in this Parliament in 2005. The Labour Party will look like United Future. That is how many seats the Labour Party will get. A total of 1,802 people said that it did it for them.

💬 Lindsay Tisch: How many?

Eighteen hundred and two—that is, about 20 percent of all people who bothered to ring up said that the Budget did it for them. A total of 8,349 people said that it did not do a thing. Excuse me for being a bit of a mathematician, but one in five is exactly the same number of people who will get something out of this Budget. Michael Cullen has degrees from every university across the country. One would think he would be able to add the figures up and work out that when one in five New Zealanders are given something—when he takes $1.5 billion worth of extra taxation from people every year because of all the tax he puts on them and then gives them $220 million back—no one is surprised that one in five think this is a good Budget.

It is a disgrace. It had so much hype it was embarrassing. Yesterday the New Zealand Herald was ashamed of itself. It wrote a story saying that people earning $80,000 a year would get something in the Budget. The New Zealand Herald was not lying. Those people will get something—but in 2008. If they have four kids they will get $25. Thanks very much! In the interim they will have paid thousands of dollars more. If that is the secret to success in our country I will be glad when the Labour Party looks like United Future, because there will be nine members too many. That is the answer.

💬 Hon Maurice Williamson: Gives us those numbers again.

The result of the Holmes show poll was that 80 percent of the country said that they had had enough of this Government.

If the Future Directions and Working for Families packages make such a good Budget and will fix welfare in this country, can somebody in this House just answer me one question? I only have one question for Mr Maharey. If this Budget is doing so much for families who are on benefits, is moving them on from being beneficiaries, and is the saviour of our country, can he just tell me why Treasury is telling us that beneficiary numbers will rise in New Zealand after this package, and that it will cost $4 billion more. That is what Treasury has told us after looking at it. Not only has Treasury slammed the growth rate, but it has said that 3.6 percent for the last decade—

💬 Hon Steve Maharey: I raise a point of order, Mr Speaker. The member invited us to answer a question so I thought we should answer that question.

The ASSISTANT SPEAKER (H V Ross Robertson): That is not a point of order and the member is not yielding.

I see the embarrassment of members on that side of the House. Government members are very quiet over there. The Minister of Health—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): I say to members that behaviour in this House is beginning to slide downwards. It is time for us to look at the standards of conduct we expect in this House. I suggest members look up Speaker’s ruling 56/1, which states that interjections are to be rare, reasonable, and relevant. Chaos may be the parent of creation, but not in here.

This is a bizarre Budget if I do say so, myself. It is a bizarre package. Over the last 5 years the Hon Dr Michael Cullen has taken money out of the pockets of working New Zealanders so fast one would think he were an octopus. He has had eight hands in there taking money from everywhere. Now, under the hype, the octopus has said he will give a little bit back to people, and that they should be grateful and thank him for it. Quite frankly, those one in five people who will get something probably are grateful, but it is the other four out of five people who will get nothing.

Let us just look at the Working for Families package for a moment. The Government is going to encourage New Zealanders to get off benefits by giving them an in-work payment.

💬 Jill Pettis: Has the member sold those ornaments on the mantelpiece yet?

No, and I do not intend to. Let us look at the in-work payment for just a moment, because it is a very interesting point. If it is such a great strategy for getting people into work—and we support in-work payments to encourage people to be active in the workforce—why is it to be applied only to people who have children? What happens to beneficiaries who are on their own—beneficiaries who do not have kids? Why is it not good enough for them? Why do people have to have 3, 4, or 5 children? Why is it not good enough for hard-working people?

Tonight so many New Zealanders have had their hopes dashed by this Government. The hype machine has been working. The Government has been trying to learn from Don Brash, and Government members have their backs to the wall. They have 12 months before “situations vacant” becomes a very relevant part of the newspaper. They have 12 months to go. They are on the slippery slide if I do say so, myself.

They are looking at themselves, but they cannot work out why it is all not working. It is because four out of five New Zealanders will get nothing out of this Budget, and they are genuine New Zealanders. They are young people who have come out of university, saying: “I’m going to wait before I have a family because I want to pay off my student loan.” Other New Zealanders are saying: “I want to wait before I have a family so that I can put a deposit on my first house.” They are older New Zealanders who know that New Zealand superannuation is not enough, and they are trying to save a little money to pay for their houses. But there is nothing for them in this Budget. There is nothing in this Budget at all.

The ASSISTANT SPEAKER (H V Ross Robertson): I remind members on my right that running commentaries are out of order. There will be a few yellow cards going out very shortly.

The Government has had months to work on this package, but what do we find? One of the five examples from the taskforce is wrong. We looked at it in the lock-up, and we said that the numbers were wrong. And if they are wrong in one of the five examples, they could be wrong in all of them. [Interruption] Perhaps I could tell the member how they were wrong. There was an example of a 16-year-old who, for 3 years, would stay 16. It is absolutely hilarious. The Government has had months and months to get it right. It has hyped it up, and now it has dashed the hopes of New Zealanders. It really is a very, very sad day for the Government.

We on the Opposition side see a Government that has been snatching taxes off people. We see a Government that we thought was going to have the biggest lolly scramble in history, and sure enough it did, but it could not even get the numbers right. It could not even work out that all New Zealanders deserve a return for their hard work—all those New Zealanders out there who contribute and work hard.

They listened to Jim Anderton, and he has sold them the biggest pup in history. He said: “Give them corporate welfare. We’re giving them welfare in other places so give them corporate welfare.” That is what he told Helen Clark. “They will absolutely love it.” Lo and behold, Federated Farmers were the first people off the block, and they came out and said they did not want corporate welfare. Exporters up and down the country do not want corporate welfare. They have said they do not want those handouts; they want tax cuts. They want to have a grade equivalent to Australia, and genuine legislation that will help them do their business. They do not want Jim Anderton, his scissors and his camera, and all the rest of it. They do not want that. This Budget is a complete failure.

I think we have just seen why Don Brash is not prepared to hand over the finance spokespersonship. We have heard from the man whom Maurice Williamson’s good friend Michelle Boag got into Parliament on a promise that he could be the spokesperson on finance. Then they got Don Brash in as well, on a late run.

What we have heard from the member who just resumed his seat—the member who popped into Parliament from his second or third country house in Helensville—was embarrassing. That member thought about doing some work earlier in the afternoon, decided against it, and then decided to pop down to Parliament for a bit of fun and make the sort of speech that really is embarrassing. Frankly, I am embarrassed. I was here to rebut the attack on this legislation from John Key, but I sat here for the entire speech and tried to work out whether he was for it or against it.

💬 Hon Maurice Williamson: He’s against it.

He is against it. That is good—progress from Maurice Williamson. They are against it. I could not tell from listening to John Key. I am told by the member for Wanganui that ornaments on Mr Key’s mantelpiece could buy a house in Wanganui. That is why he does not understand this piece of legislation. He is spouting on about a poll on a television channel that is overwhelmingly watched by Tories.

💬 John Key: What? Television One?

Television One—the channel that is overwhelmingly watched by people in the upper-income groups, the people who can afford to spend 99c each time, 100 times in half an hour, to respond to a poll. They are the sorts of people who respond to that. Maurice Williamson, I can see, has repetitive strain injury in his finger from using his cellphone to ring up.

💬 Hon Maurice Williamson: Not from my cellphone.

He used his office phone to ring up Paul Holmes, time and time again. Even Richard Prebble, who every now and then is a lot of fun—he gets excited—knows not to rely on polls that people have to pay to enter. Except for the ACT polls, of course, for the leadership. Rodney Hide is buying it pretty well at the moment, but let us leave that to one side—

💬 Darren Hughes: He got 99 percent of the vote.

In the ACT party, I think they are desperate to find anyone to vote. I have never seen people who are less willing to talk about legislation and the issues, and want to speak more about their leadership.

Let us get to some of the issues in this bill. At this point, I want to congratulate my friend Steve Maharey on the work he has done in this legislation. It is fair to say that there are often tensions between education and the labour market in deciding to work in the early childhood education area. Sometimes they can work against each other. Moving quality up in early childhood education costs, but this Minister has made sure that people with three children—maybe with only one of them in early childhood education—and with incomes of over $60,000 are getting support.

National is opposed to families earning over $60,000 and with one child in early childhood education getting support for that. Shame on them! Why do they care so little for the children of middle-income New Zealand? Why do they hate them so much that they say that they should not get support for their children to get quality early childhood education while their mothers and fathers go out to work? I do not understand why Tories attack middle-income New Zealanders so much. They do not care about them. They do not understand. Maybe my friend the member for Wanganui is right—

💬 Hon Maurice Williamson: She’s not your friend.

She is a very good friend of mine.

💬 Hon Maurice Williamson: She’s not your friend.

She is a very good friend and colleague. But the point I am making is that maybe she is right when she looks over there at David Carter, Lockwood Smith, and John Key, and says they just do not understand where middle-income New Zealand is at. They do not understand the people who have to think about whether they can afford 99c to ring up Paul Holmes, or whether they can afford to have their kid in an extra hour of childcare this week while they go to the dentist or the doctor. Those are the sorts of people who win out of the legislation we are debating, and the Tories opposite just do not care about them.

I think it is sad, exceptionally sad, that they are not commending this Government for the quality and the fairness of the package. For all their talk about the importance of work and getting people into work, they are opposing the legislation that is most likely to do it. If we were outside the House they would be called hypocrites. We cannot use that term in here, and I will not, but I want to make it clear that these people are saying one thing yesterday and another thing today. They say they want New Zealanders to work. They say they care about early childhood education, but when it comes to their votes, it becomes clear to us that the people sitting on the opposite side of the House cannot make a sensible decision.

Do members know what is the best thing they could do? My old friend, Maurice Williamson, I am sure, would have given them this advice. I have a lot of time for Mr Williamson on occasions. He knows a bit about parliamentary tactics, and he would have told them: “When you are on a loser, cut it short. Just say ‘yes’ quickly, get it over with, shut your eyes, and get on to the new business.” When that is happening, and one is being stuffed in a political sense, at that point it is better to say: “I accept it. We are losing on this particular case. I want to move forward, get it over with, and get on to somewhere where it might be more enjoyable.” Because what is clear to me is that members opposite have not been thinking carefully about the political tactics here. They want to stretch it out. When one is being done over, it is better not to extend it.

Members opposite need to think very carefully. They need the votes of people in the $25,000 to $60,000 income group—not the $80,000, not the $1-million-a-year people whom Mr Key is worrying about. It is the people in the $26,000 to $60,000 group—the families of New Zealand—and what they have given them tonight is two fingers.

As my colleague Peter Brown pointed out, New Zealand First will be supporting this legislation—the Future Directions (Working for Families) Bill. We need families to survive, as strong families are the basis of society, and we have all debated that many times in this House over the last year.

We are tired of reading negative reports on the state of New Zealand families. All the recent reports on New Zealand families, the UN report, and the Child Poverty Action Group report, state that New Zealand needs to take urgent action to enhance the lives of its children and those of its families. Many children live happy and fulfilling lives in their families, but the less fortunate live in poverty and face violence and discrimination. All of these issues can be addressed by the Government, and this legislation should do that.

When there are figures that are internationally comparable, New Zealand always stacks up really poorly. We have a large gap between rich and the poor, and we have many children living in poverty. We have high rates of death from causes such as infant deaths and sudden infant death syndrome. We have a large gap, too, between children who do well in school and children who do poorly. We have a high rate of youth suicide, a high rate of teenage mothers, and so forth. By international comparisons, we could, and should, be doing a lot better, and this legislation will hopefully do that.

The Agenda for Children came out 2 years ago, but last year’s Budget contained nothing to implement that agenda. It promised to end child poverty, but there was nothing in that Budget to improve the situation of poor families. These families have had to wait until this year’s Budget, and we hope they will benefit.

I was really pleased to see on page 23 of the explanatory note of this bill two internationally recognised income poverty measures with thresholds set at 50 percent and 60 percent of median household income, and that the Government estimates, after full implementation, that there will be a 70 percent reduction in child poverty at the lower threshold and a 30 percent—

The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry to interrupt the honourable member, but it is a convention in this House that members should not conduct conversations in the House unless it is necessary to do so, and then only so as not to disturb the proceedings. I urge restraint on members to respect the contributions of another member. It is good conduct, common courtesy, and good form.

In looking at page 23 of the explanatory note, I see that the Government estimates that, after full implementation, there will be a 70 percent reduction in child poverty at the lower threshold and a 30 percent reduction in child poverty at the higher threshold. We hope this reduction in poverty actually occurs, and no one can argue that it should not. We in New Zealand First will be monitoring that very carefully.

New Zealand First is really pleased to see that some of Dr Cullen’s pot of gold will go to families. We want to see families prosper, and we want the worthy objectives at the start of the commentary, which my colleague Peter Brown pointed out, actually achieved. We hope this bill is right, and that there are no errors in it, as we have not really had a chance to thoroughly read its 50 pages.

We always say that the wealth of our nation can be seen in our children. Our children at the moment do not reflect a prosperous nation. Hopefully, this legislation should reverse that trend. We want to see changes to the state of our families. We want to see work pay for parents who move off benefits into work. We want to see family income increased to significantly address the issues of income inadequacy, and we want to see childcare assistance an integral part of the social security system in recognition of its importance to families. We want to see accommodation made affordable by some way of responding to the increased cost of housing. This bill outlines these things in its objectives, and we want to see them implemented.

This carry-on in here tonight reminds me of that song that goes: “Oh what a circus, what a show!”. What is so ridiculous is that the House is in urgency tonight passing legislation that does nothing until October. Most of it does not happen until April next year, and some of it does not happen until April 2007—but they have to pass it in urgency tonight! Why? Because they want to give publicity to this outrageous package.

Do members know what is outrageous about it? This is the greatest con-job that has ever been imposed on the honest working people of New Zealand. What Steve Maharey, Michael Cullen, and Helen Clark are doing is taxing hell out of honest working families; taxing them blind. They do that with the right hand, and then with their left hand—the left hand being a Labour Government, of course—they come back and say: “We’re going to give you this money. What a great Government we are, we’re going to give you hard-working families this money.” The con-job is this. The money belongs to those families in the first place. This disgusting Labour Government of Clark, Cullen, and Maharey—

The ASSISTANT SPEAKER (H V Ross Robertson): The member will use the members’ full names.

Dr the Hon LOCKWOOD SMITH: Oh, sorry—Steve Maharey. They think they can con New Zealanders by taxing them blind on one hand, and giving their own money back to them with the other—

💬 Hon David Carter: There’s a time delay.

Dr the Hon LOCKWOOD SMITH: My colleague points out that there is a time delay. They take the tax today and they give some of it back to them in 2007. This is the greatest con-job ever perpetrated on New Zealanders. It is no wonder the Holmes poll showed that fewer than one in five New Zealanders support this Budget.

What some of those Labour members opposite do not seem to understand is the problem they have created. They are turning hundreds of thousands of working New Zealanders into beneficiaries. Before this package started we already had 194,000 working families whose employers deducted $695 million in PAYE from their pay, of which this Government pays $685 million back to the same families. That already happens right now. The Government takes $695 million in PAYE off 194,000 working families and gives it all back to the same families. That will now be far worse. At the moment 194,000 families are involved in that absolutely crazy churning. Now that the Government is going to impose this Future Directions (Working for Families) Bill, at least another 100,000 families will be taxed by the Government on the one hand, then on the other hand the Government will say: “Aren’t we wonderful to give some of it back to you later on.”

I have to say tonight that I was blown away by the arrogance of Dr Michael Cullen. He said that if the Opposition thought it could deliver this through the tax system, the only way was to give a $40,000 tax-free zone, and that was stupid, as it would mean a huge fiscal cost. Dr Cullen is an intelligent guy, but his arrogance is such that it is blinding him. He might be a Commonwealth scholar but he is not the only one in this Parliament. The low-income working families of New Zealand deserve help and they deserve support. National would deliver that to them without turning them into beneficiaries. If Labour members had half a brain they would see that tinkering with the system is not the way to fix it up. There are far better ways to deliver to low-income people than this con job.

I can understand the member becoming slightly hysterical during his 5-minute presentation this evening, because it must be quite distressing if one is required as an Opposition member to explain to the House and, indeed, the country, what the Opposition has against hard-working families in New Zealand getting the financial support they deserve. I cannot understand the Opposition. I cannot understand what Dr the Hon Lockwood Smith has against hard-working families in New Zealand, and I sympathise with him for being required to stand in this House and oppose the legislation. That is why I understand that he had to become hysterical in order to get up enough passion to oppose something that nobody in his or her right mind could possibly oppose.

First of all I want to thank the Minister responsible for this bill, Steve Maharey, for his vision of social development in our country, for his commitment to working that vision into the reality of this legislation, and for his sheer hard work in ensuring the legislation is introduced tonight. I also give credit to the Minister of Finance and the Prime Minister for leading this major investment in social development and in our families. They deserve it. They have probably been waiting for too long, but we have delivered in a way that is affordable and sustainable, and they deserve this legislation to be passed and progressed.

I also thank and acknowledge the officials who have worked tirelessly to ensure that the detail of this legislation has the attention paid to it that it deserves so that we can progress it now and give our families the respect they deserve.

I have known for a long time that both Richard Prebble and Maurice Williamson are, frankly, poll-driven fruitcakes. I understand that. Everyone accepts it as a fact. Richard Prebble and Maurice Williamson have always been warmly regarded as poll-driven fruitcakes. They do not have any principles, they do not have any values, they do not have any vision, they do not have any commitment, and now they are totally relying on the Holmes show to elevate their blood pressure to a level at which they have both been able to participate in the House tonight. It was extraordinary to hear both of them speak.

💬 Hon David Carter: What happened on the Holmes show?

I do not rely on any poll for my principles and my values. I never have and I never will. I know that working families in New Zealand deserve our support, and I know that, underneath it all, so does Mr Williamson know that, but it is his job as an Opposition MP to come along here and scrape whatever barrel he can find the bottom of in order to oppose it.

The National Party’s policy is to oppose this bill. It opposes making work pay for parents who move off benefits into work. National members oppose that. They think that parents who move off benefits into work should not receive any financial recognition for that. They oppose increasing family income to address issues of income inadequacy. Why would they oppose that? Exactly. There is silence. There is no good reason at all. They oppose addressing accommodation affordability by responding to the increased cost of housing. Why would they oppose that? Exactly. There is no good reason at all. They oppose making childcare assistance an integral part of our social security system, in recognition of its importance to families. Why would they oppose ensuring that childcare assistance was more accessible and affordable to families in New Zealand? There is no reason at all.

They oppose simplifying the social security system. There is no logic in their opposition. There are no principles or values in their opposition. There is certainly no vision or commitment at all to any alternative.

This bill recognises that low and middle income earning families in New Zealand work hard and that we should give them more support, not less. The National Party and ACT policies state that we should not support those families with better childcare assistance, we should not support them with better accommodation support, and we should not look at family incomes to address inadequacies. That is what those parties say. They do not care about hard-working low to middle income families. I imagine that when one is earning well over $120,000—or $1 million, as the previous speaker acknowledged he was earning—it is a bit hard to imagine how a two-income family can survive on $30,000 a year. It is hard for them to imagine how that family has to choose between the dentist and buying a new pair of shoes. That is what a number of low and middle income working families in New Zealand have to decide, week after week, and some have to go to a food bank or to Work and Income New Zealand to get special assistance.

That is the real world of working families in New Zealand. That is the issue that this bill is addressing, and it is the issue about which the National Party is saying: “We don’t care about them. We don’t think they deserve to get more support. We would have this bill gone by lunchtime.” So the National Party would reverse the changes. If National were ever the Government, and if it were a particularly busy morning in the House, it would have this legislation reversed by lunchtime. Then it would give tax cuts to people in this House—to people earning well over three times what people who are supported by this legislation are earning.

💬 Hon Matt Robson: John Key needs a tax cut.

I think John Key earns a tax cut every day of the week—not. He does not deserve a tax cut. He does not deserve any financial support in comparison with the people who are getting support through this bill. Of course we would love to give everyone in New Zealand a tax cut, but if it comes to priorities and what is more important in terms of driving our economy and assisting people who have income inadequacy, that is the area of support that should take priority. Tax cuts to people who do not need them, versus direct financial support to low and middle income working families, just do not stand up at all. People who earn less in a year than those members opposite spend over a weekend are being denied that financial support by their opposition.

There is no logic to it. It is not even ideological. John Key can keep enjoying himself, laughing at his own opposition to this, but we do still have families in New Zealand that have to make the sorts of choices I mentioned. They have to think about whether they can afford to take their middle child or their youngest child to the dentist, whether they can afford to buy a pair of new shoes, or whether they can afford to buy gumboots to go out on the farm on the weekend and visit the farms of some of the members opposite. They do not own the farms, but they might be able to visit them, collect the eggs, and work part-time for them.

I want to draw the attention of the House to one particular aspect of the bill that relates to invalid beneficiaries. It is on page 11 of the explanatory note. People on invalids benefits in New Zealand—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry to interrupt the honourable member. Can I just say, regarding interjections, that the rules permitting interjections are predicated on the assumption that the person being interjected on has the call. Interjections are not permitted at all when they are directed at a member who does not have the call. It is happening too often and too frequently. Please show some courtesy to the member speaking.

We have a number of people on invalids benefits in New Zealand. They are on invalids benefits because they are not able to work for 15 hours a week or more. Our social security system has lost touch with advanced technology, with growing expectations, and with growing demand from people with disabilities in New Zealand, who now know they have a right to support and a right to employment. Our benefit system in the past has denied them that, and in fact has offered financial disincentives for people on invalids benefits to work. This bill fixes that problem. This is a major and positive step forward for people on invalids benefits, who previously have said: “How can I work? I will be financially worse off if I do.”

I want particularly to congratulate the Minister on this initiative for thousands of people around New Zealand who are on invalids benefits. This says to them: “Our future contribution in the paid workforce will not only be literally valued but it will be financially recognised, as well.” I know that many people will be wanting to take advantage of this change. This bill is designed for people on invalids benefits, for people on sickness benefits, for people on other benefits, and for our low to middle income working families.

The National Party and the ACT party can oppose it as much as they like. They do not represent working families in New Zealand. They do not speak in this House for working families in New Zealand. They deny them the financial recognition and support they deserve. It is those people who deserve a voice in this Parliament, and who deserve the financial support that our situation can afford to offer them.