Taxation (Budget Measures) Bill, Student Loan Scheme (Budget Measures) Amendment Bill

on behalf of the Minister of Finance: I move, That the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill be now read a third time. I will not delay the House unduly, but can I just recap that the main points of these two bills are as follows. Firstly, there is the repeal of tax credits for income under $9,880, which was introduced as a transitional measure in 1986 and has long since ceased to serve its purpose, and, secondly, the tax credit for childcare and housekeeper expenditure, which dates back to Depression times—1933—and has even longer since ceased to be relevant to current circumstances.

There is the introduction of transitional arrangements to manage the repeal of these credits by allowing employers time to update their payroll systems, the replacement of the tax credit for the active income of children with a limited tax exemption—again, this change is a transitional move put in place by Sir Robert Muldoon way back in 1978—legislation to enact the change announced in March this year to the livestock valuation rules, and, finally, the repeal of the student loans voluntary repayment bonus. I should also point out that the detail of the livestock tax changes will be enacted separately later this year.

I need not report unduly from the Committee stage of the Taxation (Budget Measures) Bill, except to say that it was a robust exchange around predictable issues, and I am not sure that any of the previously entrenched positions shifted at all during the course of the debate.

As I close, I do want to acknowledge the work of the officials from the Inland Revenue Department, StudyLink, and the Ministry of Education who have worked on this legislation over a period of time. I want to thank them for their diligence, for their advice, and also for the pretty rigorous way in which they examined all of the issues before us. I am pleased that the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill are now going to proceed to their third readings. Once again, I commend them to the House.

I rise to speak to the third readings of the Taxation (Budget Measures) Bill and Student Loan Scheme (Budget Measures) Amendment Bill, which Labour will oppose. We have had this legislation characterised correctly as picking the pockets of the paper boys and paper girls around the country. I think that has resonated with the wider public. They are realising that this Budget offers very little for ordinary New Zealanders who are feeling the squeeze. And now we have this kind of legislation going through, which, really, is plugging the odd gap here and there—and that is at best. We certainly have seen that in the case of the changes to the student loan repayment scheme, where the Government is swallowing a rat. Far from being a flip-flop, the change is so fast that it has been described simply as a flop.

The Taxation (Budget Measures) Bill, as Mr Dunne has said, takes the money from low-earning children. It also makes some changes to the herd valuation election scheme, and that is a good change. That is a positive change that the Labour Party first mooted, and it is good to see National following through on that. I am afraid, though, there is little else to say about this legislation that is not a criticism, because it really is tinkering. It is tinkering at the edges. After a very short time into its second term, this National Government is reduced to that.

There is no bright vision in these particular tax bills. The Minister of Finance said this morning that he believes that spending is under control on the Government side, but that the revenue side is uncertain. This is an attempt to get that under control. We know that revenue has dropped from 35 percent of GDP down to 31 percent in the last couple of years as a result of changes that the Government has made. A good deal of that can be pinned back to the changes in the 2010 Budget, which saw the wealthiest 10 percent of New Zealanders get 44 percent of the value of those tax changes and the bottom 20 percent get just 2 percent of the value of those tax changes. That was designed, we are told, to stimulate the economy. Well, we know now that it was not revenue-neutral, because the economy has not been stimulated by that. When the wealthiest people get their tax rebate, their tax back, they tend to go on holidays or put it into savings. It does not stimulate the economy in the way that tax cuts for lower-income earners do. What we see here is a broadening of that. The Government is taking the money off low-income children who are perhaps working after school as cleaners, paper boys, paper girls, or pamphlet deliverers. These are not the people we should be pursuing. This is the not the Budget of pro-growth, free enterprise; this is the Budget of tinkering, and this bill backs up that particular agenda.

I have spoken about the regulatory impact statement in previous debates on this legislation. We learn in the regulatory impact statement that in terms of the 68,000 children affected by the changes that will see money taken out of the pockets of paper boys, paper girls, couriers, and cleaners, businesses are likely to have an extra overhead. I think that is a point that just underscores the hopelessness of this measure. This particular legislation not only goes around chasing those who are earning below $2,340 a year but it then puts an extra overhead on the businesses having to collect that. This is ridiculous. This increase in compliance costs just shows where the National Government has got to. It is now making businesses pick the pockets of boys and girls around the country. It is a tragedy.

The other thing that I noted in the regulatory impact statement, which I just have not had an opportunity to mention until now, is that it also has not been consulted on yet. Because this is such an urgent measure for the Government to get through, we have put it under urgency. It cannot even estimate the additional compliance on business, and I just do not think this can be best practice. The businesses carry this extra overhead and they do not even have an opportunity to express their discontent or suggest a more sensible way of doing it.

There is another point that falls out of this, which is that it effectively encourages the grey economy. Those employers who collect pay-as-you-earn tax will be encouraged to do so—they will be encouraged to tax those low-income kids around the country. Those ones who do not do pay-as-you-earn tax—the people mowing lawns next door or babysitting, and so on, who receive cash—are not taxed. For a Government that talks about going after those areas of the grey economy, this is actually just completely the opposite. It is just unbelievable. So we have in front of us legislation that is not only ludicrous in its intent but it also imposes an extra cost on business. This is so far from a pro-growth policy and we could not get much further.

I will touch briefly on the effect on students. We heard Ms Upston crying out in protest—

💬 Louise Upston: It is Mrs, actually—Mrs Upston.

Mrs Upston—my apologies, Mrs Upston. I must get her name right because we have got a quote coming up from her. Three years ago she described the changes being made in this legislation, and she said: “This bill is a significant step to encourage student loan repayment and, more important, to reduce the overall repayment times. The message, very clearly, is that our young people will be debt-free sooner,”.

💬 Andrew Little: Who said that?

Who said that? It was Mrs Upston. Mrs Upston said that just 3 years ago. And now this legislation is repealing exactly that action that she was saying, 3 years ago, was a good idea.

This is the other thing we are doing with this legislation. We are repairing the mistakes of this Government. It is kind of crazy. So here we have not only extra costs to employers, and picking the pockets of our children, but we also have flip-flops—we have flip-flops. The only thing we can say, apart from this, is that this is wider tinkering and it fits with the wider Government tax programme. We have a tax programme that was announced at the beginning of the year, which shows a tightening up of loopholes and trying to make sure that there are no exemptions here or there. This in fact encourages employers in some ways, as I have noted.

The goals of that tax programme are worthy. There is no doubt that we need a robust tax system. Every country needs one, and every Western country has one. But we need pro-growth tax policies. We actually need big changes if we are going to change the way our economy is structured. If we are going to support our exporters, if we are going to grow the economy, if we are going to afford to give our people the skills and training that will take New Zealand ahead, we need proper pro-growth tax policies. This Government, instead of doing that, is tinkering. It is urgently putting through measures to pick the pockets of the boys and girls of this country. That is not proper base-broadening. That is not vision. That is a backward step.

If we are wishing to see the brighter future that has been promised us, we are going to need to change the Government. That is becoming more and more apparent, because there is no plan—there is no plan—there is only tinkering. At the moment we know that 50,000 people a year are leaving for Australia. This bill is not going to help that. If the paper boys and paper girls can save up enough of their money, after tax, they might be able to buy a ticket to get out of here. But maybe this measure will slow them down, because they are the only ones the Government can slow down from leaving the country. If these policies are light at the end of the tunnel, as perhaps they have been described by some—I heard some saying this—I think it is not really light at the end of the tunnel; it is in fact a train coming in the opposite direction.

I want to take only a brief call in this debate. But can I start by saying to the last speaker, David Clark, that his speech was factually, morally, and intellectually wrong on all counts. One day when we look back he will be judged on that.

This was a Budget that was extremely important for New Zealanders at an extremely important time. It was full of hope and it was full of direction. It was delivered to help us get back on to an even footing so that we would not end up like the countries overseas that the members opposite seem to want us to be like so much. The Budget will do a number of things. It will reform some outdated tax credits. It will abolish some issues around herd valuations on farms. It will make some important—and I say important—changes to the student loan scheme. What this will do over 4 years is save $349 million for New Zealanders, so that this Government can reinvest that in more productive areas of our economy. I say to the members opposite, if they believe that we should not be passing this legislation and we should be borrowing that extra $349 million, give up your seats, get off the list, get on the plane, and go to Greece.

Here we are in the dead of morning, on the morning after Budget day, urgently taxing toddlers—urgently taxing toddlers. It is so important that we have suspended the Budget debate, suspended the normal business of the House, suspended all select committee process, and imposed retrospective tax legislation to turn the country round, on whom? Paper boys and paper girls are going to be pickpocketed by this Government. It is so laughable, so risible, so pathetic that it would be funny if it was not so sad. So sad because, as the nation’s press has woken up, imagine the feeling in the Government’s procedures room this morning when confronted by the headlines in the country’s largest newspaper, the New Zealand Herald, “[A] big fat zero Budget”, zero ideas, and zero hope. In the nation’s capital there is this charming cartoon in the Dominion Post of the most important feature of the Budget, which is what the Government is doing to the nation’s children.

Is it those members’ best idea really—is it really—to take the nation’s paper boys and shake their pockets, shake their pockets? Look at them squirming, look at them squirming. I almost—almost—feel sorry for them, but I say “almost”, because I am looking at such charming Ministers as the Minister of Health and the Minister of Police and the feeling has strangely left me. The feeling has strangely left me.

Before the Budget came out there was speculation in the media that there were going to be some major, what they call, base-broadening measures, and this was an important little narrative for the Government to get out because of course Labour’s pro-growth tax reform had been courageous and was well-received by both the business community and the general press. Labour campaigned in the last election on a pro-growth capital gains tax that would get money going where business investment needed it, and on a research and development tax credit, so this Budget was National’s answer. It let the media know there were going to be pro-growth base-broadening measures, and here they are—taxing toddlers by going for the pockets of paper boys and paper girls. Well, is that not just amazing.

The centrepiece of this Budget is the raiding of the piggy banks of 68,000 kids. It is hardly strategic, hardly fair, on some of the lowest-earning people in the country. But, as I said yesterday, the test of a Budget is not only what is in it. I think we have got common ground now, by the time we have got to the third reading of this legislation, for saying that that part of this legislation is just a joke, but we have not spent as much time talking about what else is in the legislation. I think, in fairness to the Government, it is appropriate to mention the two other significant—well, that might be overstating it—the two other measures in the legislation. The first one we might call the “David Bennett special”. There is a new member from the Waikato, a relatively new member, who has come here to earn a decent living, sustained only by the three dairy farms that he has had to disclose in the pecuniary interests register, and one wonders how such a young man has come into such largesse.

I now understand it. I mean, I am not taking his personal finances as an example, as of course that would be inappropriate, but taking that kind of thing as an example, I dare say it was not because he was a paper boy when he was at school. Rather, I suspect, as a savvy Waikato accountant, he has made an art form of precisely the provision that it has taken this Government—out of shame now—4 years to fix.

How do you like this, mum and dad workers in our cities? If you are a dairy farmer and the market is rising, you can classify your cows as capital so that you do not pay any tax on them when the price goes up. But—but—if the price starts going down, you can reclassify them as revenue and claim a tax loss on them. Then when the market goes up, what do you do? You classify them as capital so you do not pay tax. Why not? It is because we have no tax on capital or capital gains. Maybe that explains why a new member from the Waikato comes here with a mere three dairy farms in his back pocket. How come it took 4 years for the modicum of justice on that outrageous rural rort to be closed down? On that part of the Taxation (Budget Measures) Bill I actually agree with the Government, but I ask why we are doing this in year 4 when it should have been done in year 1. That is appalling.

Here is the next bit: what National did do when it came in was its little Christmas present for the trust fund babies. The trust fund kids we were hearing about at breakfast are so outraged that they are going to march on Parliament. There is going to be a new group set up, called the trust fund babies action group—TFAB. The trust fund babies action group is going to be marching against this last part of the legislation, the Student Loan Scheme (Budget Measures) Amendment Bill. I do not want to put too much weight on it, but here is the thing: the repayment bonus on a student loan. If you paid it off quickly because you had millions in the bank—say you came from a dairy-farming community and you could afford to pay off your student loan—that would have been great and you would have got a bonus from the Government for doing it. If you happened to be on the bones of your bum doing a paper round, which the Government is now taxing, to get by, or, as when I was student, pulling drinks or working in a shearing gang, you did not get the bonus. Thank God that has been closed down. That was a National initiative that was driven by greed, it did not work, and now it has had to admit it. Those are three things in the Taxation (Budget Measures) Bill and Student Loan Scheme (Budget Measures) Amendment Bill. The first one is a joke, the second one is 4 years too late, and the third one only corrects a mistake that they cravenly made themselves in the first year.

So what is not in the bill? That is just as important, is it not—what is not in this bill? This is the Budget tax legislation.

💬 Dr David Clark: Pro-growth tax policy.

My colleague rightly said: “Pro-growth tax policy”. Where is it? It is the elephant in the room. How can New Zealand have a zero Budget and ask for real cuts in the health system? There are massive health cuts coming—Tony Ryall knows it. Why are we getting increased class sizes? Why are we going to be 1,000 teachers short? As Annette King knows, why are we cutting back on the provision of housing when we have a housing crisis around the country, and Government members are sitting on their fat bank balances and doing nothing about capital gains—nothing about capital gains?

Why is it that of the 100 wealthiest New Zealanders, only 50 are on the top tax rate at all? It is because they have capital gains, tax free, and because they use all those fancy accountants’ tricks like trusts and fancy company structures, and they do that to avoid paying tax. Pro-growth tax reform would tax capital gains, and it would sort out the trust rorts. Is there any of that in this Budget? No. Why? Why are we taxing paper boys, but not the big end of town? It is because they are too busy having private dinners with the Prime Minister, like Skycity Casino, wherein—

💬 Peseta Sam Lotu-Iiga: What about Vector? What about Fonterra?

The “member for Vodafone” puts up his hand. That is Sam Lotu-Iiga, who as deputy chair of the Commerce Committee took an all-expenses-paid tour to Australia to see the footy, courtesy of Vodafone. Was that not good judgment? It is going to take a wee while to live that one down. But there is a much more important issue here, and it is this. We had a proper, transparent tender around that conference centre. Labour does not think it is the be-all and end-all, but at least there was a transparent process, until one party had a private dinner with the Prime Minister and he then intervened to stop it. That is no way to run a country—that is no way to run a country. You end up looking like a banana republic.

I will go back to the bills. There are three measures in the legislation: the first of them is a joke, the second one is late, and the third one corrects a mistake of National’s making. What is not in these bills? It is proper, thorough-going, capital gains taxation, pro-growth tax reform around research and development tax credits, and other measures to correct what are the big holes in the tax system. This is at best a wasted opportunity. For once I agree with the New Zealand Herald—it is our big, fat, zero hope Budget.

I have listened to the debate both in the first reading and the second reading to date, and in Committee. I have to say that nothing has been said yet to alter our substantive view of the Budget in general or these particular bills, the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill. Nothing, indeed, has been said, I think, that would inspire us or the public to want to embrace Government policy on this. The Budget is touted as the most important event of the parliamentary year—erroneously, it would seem, for the Taxation (Budget Measures) Bill, agonisingly dragged out last night, hit a new low. After the leaders’ speeches, we descended, not for the first time, into the theatre of the absurd—a robust exchange between entrenched positions, to quote the Minister Peter Dunne. If we can drag out the debate on this bill, when virtually its only aspect of interest is the pecuniary interests of paper boys, for 5 hours, as we are doing, when the importance of the general issue of the global ecology and the global economy and New Zealand’s destiny within that is ignored, then pity the poor citizens of this realm. They are worth more than this.

In this exchange last night, what did we learn? We heard Labour call National members of Parliament clowns. We heard—

💬 Hon Clayton Cosgrove: True.

Whatever the accuracy might be, it is out of order. We heard National describe one Labour MP as a bloody bigot, and none of this occasioned—

The ASSISTANT SPEAKER (H V Ross Robertson): Order! Look, whatever members said, you cannot get around Speakers’ rulings or the Standing Orders on using unparliamentary language by quoting someone.

Thank you, and I apologise for dragging down the House to such a low level. We heard National taunt Labour to tell the truth, which in itself was offensive and disorderly, and at least that one—or its aftermath since National repeated the offence—occasioned an apology, the sincerity of which was left hanging in the stagnant evening air of the wilting House of Representatives.

The House last night was populated by a back row of bored minds and vacuous stares, with a continuous muffled uproar between the two trenches, punctuated by occasional outbursts of derision—and that was just National. The evening was characterised by self-demeaning pack behaviour, characterised by an after-dinner cocktail of complacence, ignorance, and arrogance—and that was just National. And we wonder why politicians are ranked so low in public esteem. The theatre of the absurd was marked by a series of ineluctable, predictable voting—64 to 57. That is not exactly a ringing endorsement of Government policy.

There is a distinction in this House between the main parties and the other parties, between first past the post and MMP. It is as if there are two Houses in one—first past the post and mixed-member proportional representation. It is not only the Green Party that seeks to constructively critique Government policy and offer an alternative budget. All parties on the cross benches aspire to be constructive—Green, New Zealand First, and Mana—yet those speeches were dismissed as excessively earnest or naive. Earnestness in the House of Representatives would be superior to the self-demeaning. Members of this legislature are enjoined and paid a decent salary to respect the dignity of the institution. The people who vote us in expect us to live up to that. Last night we mostly let them down. Suffice to consider that for the reasons that were substantively advanced in the first reading and the second reading, the Green Party will vote against this bill in the final third reading.

It was like wading through a pool of porridge, listening to that previous speech. Aside from the grave and solemn speech of Dr Graham—and I thank him for it—we have had a lot of low-grade huffing and puffing from the other side of the House about this bill, that there has not been enough excitement in this Budget. What do they want? Do they want dancing bears and whirling dervishes? The burden of the Opposition, it seems to me, is boiled down to “more”. They want more. Labour wants to have more State taxing and spending, and Father Christmas distributing all his gifts. It is exactly that sort of pap that has got this country into the trouble we are in at the moment, and it has taken 4 years for this Government to try to get us back to a more stable, sensible, and well-grounded Budget.

The centrepiece of this Budget, it seems to me, is staying the course. We outlined a clear and sensible direction in the 2010 Budget. We got the tax settings of this country right in the 2010 Budget, and now this Budget is about adjusting some of the areas to maintain the tax system and collect an extra $350 million over the next 4 years by tightening up a couple of loose loopholes. The three aspects we are dealing with here are livestock valuation rules, tax credits that made sense a few decades ago but are no longer fit for purpose, and cancelling the student loan repayment incentive, which did not prove to be successful.

Labour might be disappointed that there is not enough excitement, and some of the media might be, too, but most New Zealanders are busy getting on with their lives, getting on with it, reducing their debts, and being careful about spending. They know that that is what this Government is about and that is why they like it. That is why they are supporting this Government, and I commend this bill for its third reading. Thank you.

I rise to take a call on behalf of New Zealand First in relation to the Fagin “pick a pocket or two Budget” of 2012. We only have to look at the headlines in our major dailies today to see what the response is from New Zealand, from the media, and from the general public as to this failed Budget from this failed National Government. One headline: “Bill English is looking down the back of the sofa for loose change—raiding the kids’ pocket money …”. Another quote: “[it] is not fair, it is not sensible.” Another headline: “Kids: Meet the taxman.” And another one said that a “wafer-thin surplus” is tipped for 2014-15. And the worst of all from the New Zealand Herald: “Our big fat zero Budget”.

This Government must be highly embarrassed that it is being absolutely flannelled by all quarters in relation to this Budget. This goes back to the Budget of 1991, which was very similar to this: the “mother of all Budgets” under Ruth Richardson, who taught the current Minister of Finance, Bill English, his financial skills—or lack of financial skills. That Budget in 1991 failed. It had many of the same essences that this Budget has of selling off assets, of hitting the weak and the defenceless, and propping up the wealthy and their rich mates. This Budget does the same. It attacks the poor, the people who can least afford it, the young children of this country, the students of this country, the families of this country, the working people of this country, and it leaves those who can afford to do more totally exempt.

This Budget also looks to having a surplus in 2014-15 of a miserable $197 million, which is so close to the margin of error that basically it is another example of this Government’s use of a dartboard: throw a dart, pick a figure, let us go for $197 million, it could be plus or minus $500 million on that—it would not know, because it really does not know.

Further, today it is shown in the media that the current account deficit blows out to $15 billion and our net international investment position, which is the debt that New Zealand owes the world, goes to 80 percent of GDP. How can this country be proud of a record like that? How can this Government be proud of a record like that? When also the New Zealand Manufacturers and Exporters Association comes out and says that this is a poor Budget, that it is not providing step change to turn round the economy, and that it is not supporting exports. We require exports if this country is going to lift its act, and the fundamental problems such as a lack of export growth have once again gone ignored.

This is a “nickel and dime Budget”, this is attacking the children of this country and the families of this country, but it is not giving vision as to how we are going to lift our exports. The trade stats for this latest month, April, show that we are 17 percent down on our exports compared with April last year. That is an appalling figure—17 percent down on 12 months ago. Therefore this Government is sitting on its hands, it is playing around on the edges, it is playing around on the fridges—fringes, and probably in the fridges—and it is just basically navel-gazing. This Government is navel-gazing. It is playing with the pennies, and, as the Dominion Post says today, it is looking down the back of the sofa to try to find a few dollars here and a few dollars there. But it is not addressing the fundamentals of getting growth in this economy, providing jobs, providing employment, helping our exports, and getting incentives into our companies to grow the economy, grow the pie, and grow the taxation base that we have.

This is an inward-looking, reverse-moving Budget that basically is taking New Zealand back to the future, back to the 1991 “mother of all Budgets” of Ruth Richardson, and back to the days of the 1990s when National sold off its assets, sold off the silverware of New Zealanders, and sold off what we have built up as a nation. This is a very negative, penny-pinching, miserable Budget. The Minister of Finance should be ashamed of it. The Prime Minister, John Key, should be ashamed of it. The Ministers over there and the members of the National Government should be ashamed of it. I am sure they will be pleased to get away from the House this weekend and go back to their electorates to lick their wounds, because they will have to go back to face the music in their electorates. I am sure people over this weekend will be telling them what a miserable, miserable National Government this is.

Sat sri akaal, Mr Speaker. I stand to debate the third reading of the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill. This is omnibus legislation. It deals with the livestock evaluation rules and removes three tax credits. It ensures that everyone pays their fair share of taxes. It ensures that loopholes will be closed and tax credits updated, which will create extra revenue over the next 4 years. The childcare and housekeepers’ tax credits have been replaced by Working for Families and 20 hours’ free early childhood education. They have been a major boost for families to elevate their incomes. Times have changed. Society has changed. The Government believes that its spending on the tax credits could be better directed to areas of higher need, and that is what this bill is doing. I commend these bills to the House.

Taloha ni, Mr Assistant Speaker, and thank you very much for the call in this the third reading of the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill. But I do not think I can leave the comments from the Green list member Kennedy Graham go unchecked. This is a House of Representatives, it should be a place of robust debate, it should be a place with colour, and I think that the fact we all just received a lecture from Mr Graham—someone whom I have a lot of personal respect for—may be just a little bit over the top. I think this place should be robust. I am sure the Assistant Speaker in the Chair at the moment may think that from time to time it may get a bit out of hand, but this should be a place where we should feel free to express ourselves in any way that we choose, as long as it is within the Standing Orders. But I will go back to the bill, now that I have dealt with Mr Graham’s sermon.

I think that this bill is a sorry sign that the Government lacks any real leadership in terms of an economic plan to make sure that we deal with some pretty serious issues that New Zealand faces. Instead of getting real leadership, I think, as Mr Winston Peters said yesterday, we have got reruns. We have got reruns of failed economic policies that are not going to do anything to address some of the serious issues that New Zealand faces. We have had the worst economic growth in 50 years. In fact, every week of the last 12 months 1,000 Kiwis have thought it better to get on a plane and head to Australia to make their living, usually with their families, than to stay in New Zealand, their country of origin, their country of birth. I think that is very sad. It is also very sad that there is no real leadership on the fact unemployment has risen by 52 percent in the 4 years that this National Government has been in power. So we have gone back to reruns of the last 20 years. It is almost like Star Trek—this Government has gone where no Government has gone before. It has gone into the pay packets of our paper boys and our paper girls. It is very, very sad to see that we are passing legislation that targets those little critters who are out there—

💬 Iain Lees-Galloway: Bludgers!

—those bludgers—who are delivering our papers and our pamphlets in our communities!

I just want to talk about a couple of people who are doing this job. There is a person in my electorate whose name is Mark James. His two young daughters go out every week and deliver this Porirua paper I have here. It is the Citylife Porirua News.

💬 Andrew Little: A good newspaper.

It is a very good newspaper. Every fortnight it runs a very excellent comment by its local member of Parliament! Mr James was to encourage his two young daughters to know the value of work, so they can earn some money and know the value of money.

💬 Andrew Little: Good parents.

They are very, very good parents. Mr James is such a good parent, but in October last year his worst nightmare came true. The company that contracts his children to deliver these newspapers sent something to them that they did not want to deliver. It was this National Party leaflet. But because he is a professional, and he wants his kids to be professional, he said: “Come on kids. Despite the fact that we don’t want to deliver these, we’re going to go out and deliver them.” So they know about good work ethics. They are good, professional young kids, but this Government want to penny-pinch off them to the tune of $240 a year. How miserly can you get? Instead of real leadership on the big economic issues that matter to New Zealand we get penny-pinching on our paper girls and our paper boys around the country.

We wanted real leadership. When people read their newspapers this morning—the Dominion Post¸ or the New Zealand Herald, or the Press, or the Otago Daily Times—they wanted to see real leadership. But what are we debating here? We are debating a bill that removes three tax credits: the income under $9,880 tax credit, the housekeeper and childcare tax credit, the children’s active income tax credit. It also deals with the abolition of elections to leave the herd valuation scheme. Mr Cunliffe has already mentioned that change in detail, so I will not go into it.

💬 Iain Lees-Galloway: Bold stuff!

The Student Loan Scheme (Budget Measures) Amendment Bill also abolishes the student loan repayment bonus scheme. Bold stuff!

💬 Andrew Little: They didn’t tell us about that.

Where was that mentioned in this National Party leaflet that was delivered by these young professionals in my electorate?

I just turn to the changes that are made to the student loan scheme. It has been debated quite well in the Committee stage. We supported that move because we thought the repayment bonus was a daft thing to do initially, anyway. But I did want to point out some of the quotes from National when it passed this legislation. Anne Tolley said: “We estimate that this measure will reduce repayment times of those who take up the bonus by 1.5 years, and we believe that it will decrease the upfront cost of new lending to 39.4c.” How could anyone vote against that?

Next we have Mrs Louise Upston, who said: “This bill is a significant step to encourage student loan repayment and, more important, to reduce the overall repayment times. The message, very clearly,”—and I will stress this—“is that our young people will be debt-free sooner”. Peter Dunne—the Minister in the chair in the Committee stage—said: “I say to the House that this is a significant incentive for students to pay their loans earlier. I cannot fathom why anyone would oppose the introduction of such an incentive.” But then the truth comes out—in the regulatory impact statement for this bill. Under “Conclusion and recommendations” it essentially says that they got it wrong: “The voluntary repayment bonus does not appear to be improving the value of the Student Loan Scheme. The bonus aims to encourage borrowers who were slow to repay to pay off their loan more quickly. However, many borrowers who were already paying back their loans quickly are also claiming the bonus.”

It basically has not worked. It is what we said. So, finally, the penny drops for the Government. One of its big announcements in this Budget for real economic leadership is to do away with something that it should never have done in the first place. So where is the leadership? Where is the leadership from this Government in Budget 2012? We do not think there is any. We were asking serious questions of this Government in the Budget, but what we get is penny-pinching from our paper boys and paper girls.

The next bill also shows how it is not just the young that it is targeting but also the old in our rest homes. We look forward to debating that issue in the House, because that was not really highlighted in the Budget speech. I trawled through with my highlighter hoping to get it out and say: “Well, there it is. They are being quite upfront about this.” But, no, there is not one mention in Bill English’s speech about changing the threshold for residential homecare. There was not one mention at all. Where is the leadership on growth? Where is the leadership on growth? There is none.

We commend the fact that the Government has finally, again, recognised that research and development might be a good thing to do, but doing that 4 years after it scrapped the research and development tax credits just does not cut the mustard. It is 4 years too late—sorry, National. It is 4 years too late. That is another good point.

As well as the changes to the student loan scheme, which we agree with in this legislation, this Government is going to make it harder for low and middle-income families to support their children who might be clever and want to do some postgraduate study. No—the Government will not do that, because after the fourth year the student will have to go back to mum and dad and say: “Mum, dad, I’m not getting the student allowance any more. Can I grab some food from the fridge? Can I bum 20 bucks so I can make sure that I can go and get to university tomorrow?”.

Is that good enough? Is that going to encourage our students who want to better their lives by going into postgraduate study? I do not think so. Essentially, there is no leadership in this legislation—there is no leadership, at all. It is absolute tinkering. It is picking on our paper boys and paper girls. Where is the strategy for growth? Where is the plan to make sure we get people into jobs? It certainly is not in this legislation and it certainly was not in this Budget.

Well, what an unedifying spectacle that speech from Kris Faafoi was. We heard a Star Trek metaphor that actually was entirely appropriate, coming as it did from an inhabitant of “Planet Labour”. We, unlike Labour, are able to plan and to boldly go where no one else has gone before, where Labour could not possibly envisage going. Our Budget looks to try to invest in the future. It builds on the economy, and it invests money in infrastructure that is going to deliver jobs—an alien concept to the people who inhabit “Planet Labour”. This, of course, is something we boldly address. We boldly go where Labour has never gone before. We are building a competitive economy. We are addressing the hard issues. We are not moving away into the shallow pool of nonsense headlines, of an obsessive focus on paper boys and pickpocketing, and all this other nonsense. I doubt very much whether, from the combined intellectual rigour of our opponents, they have even actually read the Budget, or have actually listened to it. They are leaderless, rudderless, and they have no plan. They are, indeed, aliens, and the Star Trek metaphor I think is well chosen by them.

Looking at what we are doing with Budget 2012, it invests heavily in infrastructure, innovation, and skills, because we know that it is important to create a more productive and competitive economy that will give more jobs to people in this country. This is what we are doing. We have increased science and innovation funding right across government, to more than $1.3 billion in this next 2-year period. We have put in $166 million extra to develop the new Advanced Technology Institute. These are the places where the growth in the economy will come from. We have put in $60 million extra for National Science Challenges. These are matters of substance. These are matters of substance that the people who dwell in the shallow troughs, those on the opposing benches, cannot possibly acknowledge. They do not want to go beyond the headline grabbing and the superficial. They are to be pitied, and they are to be ignored.

This legislation, the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill, as I said last night in the two opportunities I had to address it, does tidy up some mad old legislation that needs to be worked through. It makes the Inland Revenue Department a more streamlined and efficient organisation. It has been meticulously worked through. Some of the old, obsolete taxes have gone. That needs to happen. This Government is focused on growth and on tidying up legislation, and I commend these bills to the House. I think they are entirely worthwhile, and the arguments put forward from the Opposition are superficial, alien, and facile. Thank you.

Just before I call the next member, I advise members of the House that this is a split call, and the speakers will get a bell at 1 minute.

Frankly, I did not think that I would see the day when I would agree with Maggie Barry, but I do now. She said that this legislation repeals “mad old legislation”. It repeals mad old legislation brought into place 2 or 3 years ago by that National Government over there to try to encourage students to pay off their loans faster. What an absolute failure of legislation it has been. It was a bad idea at the time, everybody knew that it was a bad idea at the time, and finally—it has taken only 3 years—the Government has figured out that its legislation was mad old legislation, in the words of Maggie Barry. The National Government has finally figured out that it needs to repeal those changes that it made just 3 years ago.

The Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measure) Amendment Bill are an absolute admission of failure by this Government. They are an absolute admission of failure. The Government has failed to grow the economy. It has introduced a zero Budget with zero hope, zero ideas, zero ambition, and zero growth for this country. These bills are an admission that that zero Budget is an absolute failure for this country. The Government has been so poor at growing the economy that it now has to go hunting down the back of the couch. It has to tip the poor paper boys and paper girls on their heads and squeeze every last cent out of their pockets. It has to go and chase down the students.

And not only is it repealing its mad old legislation for the students but also, of course, what we are seeing is that it is going to take away the student allowance for postgraduate students. Not 2 weeks after the Government announced that all teachers were going to have to have postgraduate qualifications, it is now announcing that if you want to do a postgraduate qualification, you have to do it without a student allowance. My goodness, National hates teachers. This Government hates teachers. It has told them that they are not high quality, and now it is telling them that if they want to get their qualification they are on their own. They are on their own. The Government is not going to support them. In fact, the Government is actively discouraging people from going into the teaching profession, with that cut to the student allowance.

What are we talking about with this bill? Well, we are going to see the paper boys and paper girls taxed. Actually, Andrew Williams called this Budget the “Fagin Budget”. You can just see the poor paper boy going to Mr Bill English and saying: “Please, sir, may I have some more?”. It is poor old paper boy Oliver Twist. In fact, there are a few other Dickens novels that I think are appropriate for this Government and this Budget, such as Hard Times. That is a Dickens novel that I think sums up the situation in New Zealand, as well. Another is Great Expectations. How about Great Expectations? Every year the Prime Minister told us that the economy was going to grow, that there were going to be 170,000 more jobs; now it is 154,000 more jobs. It is shrinking—it is shrinking. But the Government still has these great expectations that somehow by magic—by magic—everything is going to turn round.

💬 Dr Megan Woods: A Tale of Two Cities?

A Tale of Two Cities—well, indeed. From where I come from, Palmerston North, we think it is pretty much a tale of one city in this country: it is all about Auckland and roads of national significance. I am sorry, but it is all about roads of national significance. You are completely overlooked in the provinces—no roads, no rail. The Government is not interested in what is happening in provinces like the Manawatū, and it has run out of ideas.

The best it can come up with is this penny-pinching legislation, which hammers the poor old paper boys and paper girls. They are copping it for the Government’s failure. The Government is taking away a few housekeeping rebates. It is taking away childcare rebates as well. Gosh, has not the Government chosen some delightful people to pick on? Has it not gone after—

💬 Hon David Cunliffe: Middle New Zealand.

Yes, middle New Zealand is getting absolutely hammered by this Government, because it has just failed, year after year after year, to meet any of the promises that the Prime Minister made, absolutely empty promises, not based on any facts. We told it so at the time. We told it so. It refused to believe us, but this legislation, the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill, is an absolute admission of failure from this zero National Government.

Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. I am pleased to take a call on these bills, the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill, because I would like to continue the debate on the issue around poverty. I have just come from the Child Poverty Action Group breakfast. If you want to talk about urgency, let us talk about what is actually urgent, and it is not this legislation. We are in urgency while people are making really urgent decisions, like: “Which medicine shall I be able to purchase this week, out of the 12 life-supporting medicines that I need, because I can’t pay the prescription charges?”. Or: “Shall I have breakfast, or shall my children have breakfast?”. Yesterday, as she walked to the House, I heard the Minister for Social Development say: “Oh, it’s just so boring.” Well, I will tell you what is boring. It is boring to have to make a choice between whether you eat or your children eat, and then to turn on the television and see Parliament acting as if this was urgency and ignoring the really urgent issues—and it does actually make me feel quite ashamed.

However, as they say in Star Trek: “Beam me up, Scotty.” I have just come from the real world, where people treat each other with respect. I do understand what the member Kris Faafoi was saying about behaviour in the House. The Green Party does not always keep its cool either. But we do not celebrate personal abuse, and what Dr Graham was trying to say was that the community has higher standards than we do, and that is a fact. The community has higher standards of behaviour than we do. At the Child Poverty Action Group breakfast this morning, when we talked about the Taxation (Budget Measures) Bill, people were astonished that the bill that we were debating was about attacking some of the most vulnerable minors—as in younger people—through this bill. They were astonished that that was the kind of urgency we had gone into. I heard people speak about the real issues that are urgent in this country this morning, about the attack on welfare beneficiaries, and the rhetoric, which acts as if there are thousands of jobs out there when we know that there is no job creation plan, so we are going to punish and scapegoat people who cannot get the work that they are supposed to be looking for.

I heard students talking about what is going on, and they were amused by this legislation, because students opposed this measure when it came before the Education and Science Committee to change this measure. They knew it was not going to work, except to try to reward wealthy students. I am not going to attack the Government for making a mistake. I am glad that it humbly acknowledges that it was a mistake, and I am glad that it is changing that mistake. It is OK to get it wrong, as the Government does, but it is not OK to get it wrong on the big issues. What it has done in the Budget, as well as in one aspect of this legislation, is to get it very, very wrong. It has got it very, very wrong to say that selling assets will benefit the families and whānau of Aotearoa. This morning I listened to people from the social sciences, from the university, from the student community, and from the front-line community services dealing with poverty, and they are very distressed because they are unpicking the Budget inch by inch, going through the rhetoric, and finding the cuts. So if you look at education and health, wherever there has been a gain, there has been a loss. They were calling this Budget the “smoke and mirrors Budget”.

But in terms of this bill, I would call it the “Fiddling while Rome Burns Bill”, or the “Emperors with No Clothes, and Being Deliberately Urgent about Non-urgent Matters Bill”, because that is what we are doing. We are talking under urgency about issues that are minor, while the rest of the country is out there trying to unpick the rhetoric about what is actually going to happen to our access to food, access to rent, and access to medicine. The fact that people think this is a minor matter and that we can focus on a minor matter is an example of how privileged we are in this House. People with white gloves open doors for us. We earn good money and we have forgotten—at least the Government has; some of the rest of us have not—that the Budget and the very first bill we debate after the Budget should be about what really matters, which is whether our kids get to eat or not. That is the measure of a civilised community, and it is not supported in this bill, and it is not supported in the Budget.

The Green Party supports the changes to the rural rorting system for cows. Good on you. Great. We are pleased to see that you admit that you have made a mistake, but I am afraid that this legislation is fiddling while Rome burns, and people out there are burning. Kia ora.

It is with great pleasure that I rise in support of the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill. I have to say that this was a great Budget, and the reason why I know that it was a great Budget is that the only thing that Labour members have spoken about for the last day and a half is paper boys. If that is all that they can discuss, if that is the only thing they can find to criticise in this Budget, I know that it is a good Budget.

But what interests me even more is that yesterday I saw the Rt Hon Winston Peters get up, and he wailed on about this Budget, and he went right back to 1991. So, as a new member of Parliament, I went away and I decided to pull out Hansard, and I—

💬 Hon Maurice Williamson: What happened?

I will tell you what happened. I could not believe it. Mr Peters voted for every one of the measures in the 1991 Budget—every single one of those measures.

💬 Hon Members: Oh!

I know, but, no, it is true.

💬 Hon Maurice Williamson: Not Winston!

Yes, he did.

💬 Hon Maurice Williamson: He voted for every one?

He did. He voted for every single measure in the 1991 Budget. So when Mr Peters gets up and starts criticising, when he stands up with indignation, he needs—he has got a very short memory—to go back and check the facts.

What I am proud about with this Budget is that it is going to continue on with our proud track record of delivering better health services. Our country is safer today than it was 4 years ago, and our economy is growing. When we came into Government we were facing never-ending deficits—that was what we inherited from the Labour Party. Now we are heading towards a surplus in 2014 and 2015. You have only to look around the world to see what is going on, and to see that we—this Government—are doing everything right to keep New Zealand moving in the right direction. We will emerge as a stronger, better, and well-educated country. Thank you very much.