Budget Measures (Miscellaneous Fiscal Matters) Bill

on behalf of the Minister of Finance: I move, That the Budget Measures (Miscellaneous Fiscal Matters) Bill be now read a first time. The bill is an omnibus bill covering fiscal measures. Part 1 of this bill will repeal cheque duty from 1 July 2014. Cheque duty applies at the rate of 5c per cheque. It is an outmoded tax and is New Zealand’s last remaining transaction duty. Since no equivalent duty applies to alternative methods of payment such as cash, eftpos, internet banking, and credit card transactions, cheque duty is a distortionary and easily avoided tax. Although the popularity of cheques has declined, they are still common enough for cheque duty to be a cost for a significant number of people and businesses. Removing this cost by repealing cheque duty will benefit those who use cheques. Abolishing cheque duty will also reduce compliance costs, particularly for banks and printers of cheques. Reducing compliance costs wherever possible is an ongoing focus of this Government.

Part 2 of this bill corrects an unintended consequence in the operation of the New Zealand emissions trading scheme. It stops reregistration arbitrage, which arises from the price difference between international Kyoto units and New Zealand Units. Urgent intervention is required to prevent the significant reputational and integrity risks and fiscal cost to the Crown that this may create. Post-1989 foresters are voluntary participants in New Zealand’s emissions trading scheme, which means they are able to register and deregister the same area of land multiple times. These participants receive New Zealand Units for forest carbon growth while registered and then are able to surrender cheaper international units to meet their emissions liability. This bill limits participants to surrendering only New Zealand Units when they are deregistering an area of forest from the emissions trading scheme.

Part 3 of the bill suspends for 3 years the application of anti-dumping duties to residential construction materials. This includes the anti-dumping duties currently in place on standard plasterboard from Thailand, reinforcing steel bar and coil from Thailand, and wire nails from China. Removing these duties will increase competition for building materials and reduce the cost of constructing new houses. The suspension of anti-dumping duties follows a market study that found they are having a chilling effect on competition in the building materials market. Anti-dumping duties are a legitimate form of protection for a domestic industry and are provided for under World Trade Organization rules.

However, contrary to some misconceptions, dumping does not mean flooding the market with large quantities of low-quality goods at low prices. Dumping simply refers to a situation where goods are imported at a lower price than if they were sold in their country of origin. This is not necessarily unfair trade. It is normal to charge different prices in different markets.

Bearing this in mind, the Government has decided that in the case of residential construction materials there should be a temporary suspension of these duties to provide an immediate benefit to the Christchurch rebuild and also to the increased residential construction in other areas of the country, particularly Auckland. The decision to suspend these anti-dumping duties was not made lightly and comes from the work of the Productivity Commission into housing affordability and from the Ministry of Business, Innovation and Employment’s Residential Construction Market Study. It has been made in conjunction with the Government’s decision to suspend tariffs on a broad range of residential building materials. Reducing the cost of building materials is an important, although only one, part of the Government’s ongoing programme to increase and improve housing affordability.

The removal of import barriers is expected to reduce the cost of building a standard New Zealand house by around $3,500. The cost savings from the suspension of anti-dumping duties are expected to make up the bulk of this amount at around $2,600 per house. The total savings from suspending these anti-dumping duties could be over $55 million per year. Taken together with the savings from introducing the tariff concession scheme, direct savings are in the order of $75 million per annum nationwide. I expect that these measures will result in a more competitive market for residential building materials, resulting in further reductions in the costs of constructing homes.

As part of this package of measures to improve import barriers, the Government has also directed officials to develop a bounded public interest test to be applied to all decisions to impose or extend the duration of anti-dumping and countervailing duties. At the moment there is no ability to consider the wider public interest in decisions to impose or extend the duration of anti-dumping and countervailing duties, or to consider significant events that affect an industry or the public such as an earthquake or other natural disasters. The details of a bounded public interest test will be developed through a public consultation process, with a view to considering amending the Dumping and Countervailing Duties Act at a later date. It is the Government’s intention that any public interest test is to be put in place before the end of the 3-year suspension period so that building materials will be subject to a public interest assessment when the suspension ends. It will allow the wider public interest test to be considered not only in relation to duties on building materials but also in relation to other types of goods.

The Government appreciates that the suspension of current duties on plasterboard, reinforcing bar, and nails will have some impact on those New Zealand manufacturers that these duties are designed to protect. However, I do not consider it likely that the suspension of these duties will threaten the viability of those businesses, given the strong domestic residential construction market, which is likely to remain strong over the 3 years that the duties will be suspended. I am confident that our building product manufacturers can adapt and innovate to match up to the international competition.

The suspension of anti-dumping duties on residential building materials is implemented by this bill as part of the Government’s wider programme to improve housing affordability. This includes work being done on standards and regulations to increase competition, to reduce the price of New Zealand building materials, and to free up new land for development, improving sector productivity and reducing compliance costs. In conclusion, the combined effect of these measures will make a lasting difference to housing affordability and will see more New Zealanders realise the dream of owning their own home. I commend the bill to the House and move that it now be read a first time.

Well, here we are, under urgency, debating the Government’s Budget, the critical measures to turbocharge the economy, to take the step up to lift wages, and to get better jobs, and the Government comes to the House to remove cheque duty. That is right. Stop the marches in the street. Call off the hunger strikes. Cheque duty is gone. Around the country New Zealanders celebrate the fact that they will save on average 35c a year—35c a year—from the removal of cheque duty. I have got advice for New Zealanders around the country: do not spend it all in one shop. That is my advice—35c a year. This is the Government’s big idea that holds us here in urgency on a Friday: the removal of cheque duty. We are looking in the Budget for the comparable measures: the rebate on cassette players, fondue sets, and lava lamps, because they are about as relevant as cheque duty is to the economy today.

💬 Hon Trevor Mallard: What! What are you saying?

Trevor Mallard may also have a rebate placed on him by the end of the day. This is as good as it gets from the Government. This is the thing that the Government has lifted out from the Budget to say “Here’s our economic plan: the removal of cheque duty.” Well, that is not enough. It is hard to believe that the Government thought that that was important enough. In the middle of all the many initiatives Bill English could have talked about in his Budget speech, he chose to talk about the removal of cheque duty. So on this side of the House we welcome the scourge of cheque duty being taken away from the lives of New Zealanders, but we ask ourselves whether or not a timid, scattered, backward-looking, fragmented Budget like this deserves to have cheque duty—that 35c a year—lifted out as the biggie.

By the way, those figures do come from the Bankers’ Association—that an average of seven cheques a year are written out by bank consumers around New Zealand. Goodness only knows, some people must be writing a lot of cheques to get that average up. But seven cheques a year at 5c a cheque is delivering 35c a year to New Zealanders. This is the social dividend from the National Government—35c a year. Amazing stuff! Do they still have 35c mixtures? They probably did in the 1980s, when people were paying by cheque, but they do not any more. It is 35c a year from the Government to turbocharge the economy. I was seeking advice from Mr Mallard on the future of 35c mixtures—

💬 Hon Trevor Mallard: You eat more lollies than I do.

Ah, yes—not any more. That is the first part of this bill, so there is the turbocharging of the economy.

Then we come to the measures to relieve the housing crisis. The Government has decided that it recognises the depth of the housing crisis, and the fact that in Auckland particularly housing is becoming unaffordable. Last month $6,000 was added to the cost of an average house in Auckland, so the Government has come along today with a package of measures to sort out the devil of the cost of plasterboard, varnish, and nails in the construction of houses. It guessed that it will save $3,500. The Minister basically just said that—that it is just a guess of approximately $3,500. Well, that might touch the conveyancing fee for somebody trying to buy a house. While we are at it, first-home buyers and building houses do not always go together. Just a hint for the Government that if it wants to actually do something that will improve the lot for first-home buyers, it needs to have a programme like KiwiBuild, where we are actually going to build 100,000 affordable homes across New Zealand. My colleague Phil Twyford will certainly be speaking at some length in this debate around Part 3 of the Budget Measures (Miscellaneous Fiscal Matters) Bill and its woefully inadequate response to the housing crisis.

I do note that within the Budget and within housing a number of interesting facts have come to light. At the moment many people are struggling to buy a house and struggling to service a mortgage. At the moment in New Zealand you need to spend 49 percent of the average gross full-time wage to service a standard mortgage. That is tough work for people—49 percent. Well, what the Budget shows us is that by 2018-19, people will need to spend 63 percent of the average gross full-time wage to service a standard mortgage—63 percent. But it gets worse. If you are in Auckland, it is 49 percent now, but when it is 63 percent across New Zealand, if you are in Auckland then 83 percent of the average gross full-time wage will be needed to service a standard mortgage. That is why housing is unaffordable for New Zealanders. That is the Kiwi dream being taken away from the next generation of New Zealanders.

We have a housing crisis in New Zealand. We all have a responsibility to do something about it, and in this legislation, the National Government is taking the tariff off nails and varnish and plasterboard. It is not enough, it is insufficient, it is hopeless, and it will not do anything to greatly improve the chances of people getting into their first homes, and that is it for housing in this Budget—that is it.

The third part of the bill is around the Climate Change Response Act, and my colleague Moana Mackey will have more to say about that. What we can say there, though, is that although it has been described by the Minister as an “unintended consequence”, that is not how it is viewed out in the sector. The question we on this side of the House have is: why does the Government hate the forestry sector so much? Why has the Government got it in for the forestry sector and want to take it on? I can tell the Government this, having looked at the regulatory impact statement. The section where it says “There has been no consultation with stakeholders on this.”—that was a mistake. Can I just say that that was a mistake. Right around the country, iwi forest owners are not going to be happy with this. They are not going to be happy with this response. Quite clearly, this is not the climate change legislation that the Government should be putting before the House.

So that is it. That is what the Government has come to us today as its big Budget bill to bring in front of the House under urgency. It is woefully inadequate. We look to this Budget for some ambition for the New Zealand economy, and it is not there. It is politics as usual. It is an election-year Budget, where National has come in and stolen a few policies from Labour, but it leaves ambition for the economy at the door. If we want to have good jobs and higher wages, it does not come from tweaks to the cheque duty; it comes from actually adopting an approach where we bring New Zealanders together. It is a partnership between the Government and business and communities that is about creating jobs and making sure that there is industry and regional development and that there is an economic upgrade that will actually add value. We are not going to get higher wages in New Zealand through politics as usual—by investing in the same things we have always have done, at the same rate.

We need to upgrade the economy in manufacturing, in forestry, and in information and communications technology. We need to make sure that the skills are being gained by people to take on those jobs. We need to get the settings of the economy right by changing monetary policy so that people are back at the centre of the economy—not the speculators, not the bankers, but the people who actually drive productivity in our economy. And that is the other thing that is missing from this Budget. Where is the dividend to reduce inequality? If we really want to do something in our economy and our society, then we have to harness the talents of all New Zealanders, and this Budget leaves behind those who live in poverty. There is very little in this Budget that reaches those people, and the last bill that we debated missed them out entirely.

This is not a Budget for future generations; this is a Budget for this election year. If this was a Budget for future generations, we would not be allowing superannuation spending to outstrip education spending this year, and that is what is happening. There is no policy in here for future generations to know that they will have universal superannuation. There is nothing here that looks ahead to that. There is nothing here that looks ahead to safeguarding the Kiwi dream of homeownership, or of giving people a fair chance to get on the property ladder. There is nothing in here to address the inequality that means that if you are lucky enough to live in Mission Bay in Auckland, your median income will have gone up by $6,000 over the last few years, but if you are in Māngere or Ōtāhuhu, you will have ended up with only a $200 increase. That kind of inequality cannot be sustained in our economy. This is a woefully inadequate piece of legislation that the Government thinks, somehow, trumpets its Budget. It actually shows that its Budget is a failure.

Granted that Mr Robertson could not purchase enough wine gums for his calorific out-take of that speech from the cost of a sole cheque in cheque duty, nevertheless this bill is a useful, discrete measure. As the Associate Minister for Climate Change Issues, I would like to build on what my colleague Mr Foss has said. In relation to Part 2 of the Budget Measures (Miscellaneous Fiscal Matters) Bill, entitled “Climate change response: unit restriction amendment”, I would like to emphasise the following points to the House. This bill will act to maintain the integrity of the emissions trading scheme, which is the Government’s primary policy tool to address climate change.

An unintended consequence has occurred in the operation of the emissions trading scheme. It allows particular participants the opportunity to arbitrage New Zealand’s units against cheaper international units. This is referred to as re-reregistration arbitrage. Post-1989 foresters are voluntary participants in the emissions trading scheme. They are able to participate in the scheme at their discretion. Reregistration arbitrage occurs when these foresters register and then deregister from the emissions trading scheme multiple times. At registration a post-1989 forestry participant receives New Zealand Units and they may surrender any emission unit when they deregister. This allows foresters to use the registration process to profit from the price difference between domestic units and cheaper international units. It was never Parliament’s intention for this to occur. If this unintended consequence is left unchecked, it could create significant reputational and integrity risks for the emissions trading scheme. This arbitrage activity also creates fiscal costs for the Crown.

The bill ensures that these risks are prevented. The bill improves the integrity of the scheme by removing the opportunity to gain from the interplay of the price difference between domestic and international units and certain design features of forestry participation. To do this, the bill will ensure that post-1989 foresters surrender New Zealand Units when deregistering from the emissions trading scheme. This will stop this arbitrage activity, as there is no longer an opportunity to use the deregistration process to gain from the unit price difference. It will bring forestry into line with other emissions trading scheme participants.

This bill, of course, will also permanently remove cheque duty, which has become an inefficient and distortionary mode of tax, and will temporarily remove anti-dumping duties on imported residential building materials in order to increase competition, lift sector productivity, and reduce the cost of residential construction. I commend the bill to the House.

Why does the National Government hate the forestry sector? Why does it hate forestry so much? The one sector that got it out of a hole in the first commitment period of the Kyoto Protocol was forestry. This was the sector that put us in the black. Why does the National Government continue this sustained attack on the forestry sector? When I picked up the Budget Measures (Miscellaneous Fiscal Matters) Bill and saw the brief description of it, I thought: “OK, well, that looks fairly reasonable.”, until I read the bill, and until I read the regulatory impact statement and realised that this is not about what the Associate Minister for Climate Change Issues was talking about, at all. This is not an “unintended consequence” of the emissions trading scheme; this is the very deliberate result of a Government that has failed to restrict the cheap international units that have flooded into this country and collapsed the carbon price. This arbitrage issue is a problem only because there is such a differential between the New Zealand Unit price and the cheap Kyoto Protocol unit prices, which the National Government has done nothing about and continues to do nothing about. That is the problem. Fix that, and this all goes away. I will put forward an amendment in the Committee stage in my name to do just that—fix the actual problem, instead of just taking another whack at the forestry industry.

I really do not understand why National hates forestry as much as it does, given the benefits of forestry to this country. The good news is that a Labour Government is coming. It has a plan for the forestry sector that includes restricting these cheap international units and assisting this export industry, which has huge job potential. What the Minister would have us believe is that this is purely about reregistration. So in the mandatory emissions reporting period of 5 years a forester can go in, collect New Zealand Units, and then deregister from the scheme, and pay that liability with these cheap Kyoto units. They can then, the next day, reregister to enter the scheme, get New Zealand Units, and deregister. We do not want that to happen, but that is a symptom of the current failure of this Government to have an adequate price on carbon and to reduce the gap in price differential between New Zealand Units and foreign units. That is the actual problem.

What the Government is saying now, though, is that it is actually not just going to stop the reregistration, because you could just do that by saying that a forester can register only once in any reporting period. That fixes the problem and the problem goes away. What the Government has chosen to do is to say that if you are in forestry, you do not have any access to these Kyoto units at all. So even if you are deregistering with no intention to reregister, and even if you are deregistering because the economics are not working, or for whatever genuine reason, you do not get access to those units, whereas everyone else in the scheme does. So this is not about reregistration at all, because if it was, we could simply fix that problem by saying that you cannot reregister. This is about whacking forestry once again. When you look at the regulatory impact statement on this bill, it makes it quite clear that this is not actually about reregistration at all. One of the points that the regulatory impact statement makes is that it will be seen as unfair to post-1989 forest land participants because it imposes a restriction on their use of Kyoto units, whereas other sectors continue to have unrestricted use.

Let us talk about those other sectors. There is one other sector that is full of National Party mates who got free allocation of New Zealand Units, and that is the heavy industrial emitters—so, Rio Tinto. Remember the $80 million the Government gave Rio Tinto? Well, Rio Tinto also got a free allocation of New Zealand Units, and Labour absolutely supports that. Rio Tinto can engage in arbitrage by taking those New Zealand Units and paying its pollution liability with these cheap international units. Is the Government stopping that? No. And why? Because the Government likes those guys because they are its mates, but it does not like forestry. So it is going to allow arbitrage to continue amongst the heavy industrial emitters, who got free New Zealand Units allocations. They can continue to engage in arbitrage but forestry cannot—forestry cannot.

One of the reasons for that that the Government talks about is fiscal risk. So it says that it needs to do this because the fiscal risk to the Crown is so great. Well, if we take the Climate Change Response Act 2002 report from the Environmental Protection Agency and if we use the methodology that it uses for its calculations, what we find is that in the year to June 2013 there were 36 million New Zealand Units allocated to industry—to the Government’s mates—which at today’s prices represent $111 million in value. Of that 36 million only 24,000 were surrendered by that group to meet its obligations. So it was practically nothing at all. The balance was met through these cheap Kyoto units that we are now telling forestry they cannot have access to. So if we use the same logic as used in the Environmental Protection Agency’s own report, what we find is that the fiscal risk to the Crown from the heavy industrial emitters’ arbitrage is $107 million. There is $107 million in fiscal risk.

So what is the fiscal risk that we are dealing with here in this bill, caused by post-1989 foresters? It is $11 million to $66 million. It is $11 million to $66 million in fiscal risk from forestry. There is $107 million in fiscal risk from heavy industrial emitters. And which is the group that we are targeting in this legislation? Forestry. Why? Because the Government hates forestry. Why are we not targeting heavy industrial emitters? Because they are the Government’s mates—they are the Government’s mates. So if this was about fiscal risk, then we would actually be applying this across the board, and we would have no issue with that—with it applying this across the board with the same rules applying to everyone, and not one rule for National’s mates and another rule for the forestry sector, which was the only sector doing the heavy lifting in the first commitment period of Kyoto in terms of emissions reductions.

The Government has allowed the carbon price to collapse. There are practically no complementary measures going on at all. An analysis of the Government’s own figures shows that by 2030, if we compare doing absolutely nothing at all in terms of climate change policy, with the Government’s current plan on climate change policy, the difference in emissions reductions is 0.4 percent—0.4 percent. We effectively have business as usual when it comes to climate change policy under this Government. So when I hear Minister Simon Bridges talking about needing to uphold the reputation of our emissions trading scheme—are you kidding me? Are you seriously kidding me? That thing lost its reputation the minute that this Government was elected and completely gutted it and allowed the carbon price to collapse overnight. Our emissions trading scheme has not had a good reputation since this Government was elected. It is nothing more than a fig leaf.

I am sorry, but the biggest risk to our reputation in terms of climate change is this National Government—Simon Bridges, Tim Groser, John Key—and Gerry Brownlee, who is a climate change denier who just wants to build more of his carbon-sequestering motorways. When I hear the Government talk about the reputation and risk of our emissions trading scheme, I am sorry—I am sorry—but that is just galling.

The other angle on this, of course, is that there are people who are currently going through the process of deregistering and reregistering, and who are going to be caught out by this. An email went out today to Ministers—because, of course, there was no consultation on this bill; no one knew this was coming—which said: “We have no problem with what we understand the legislation is trying to achieve, but currently we have 25 clients who have sold some or all of their New Zealand Units to purchase emission reduction units. They have purchased these emission reduction units to surrender, as the legislation allows, once we had completed and submitted the deregistration applications to the Ministry for Primary Industries. We can complete these submissions by the end of next week but do not want to progress at the moment if we do, as I understand our clients will be required to surrender New Zealand Units that they no longer hold. These are mum and dad - type forest owners, and although the amounts involved may seem small to you, they are substantial to them.” So do not fool yourselves, National Government members, that that is not going to have a very real impact on people today.

What makes it even worse is that I have here the Sustainable Forestry Bulletin from the Ministry for Primary Industries. What this does—and this is from August 2013, January 2014, and February 2014—is tell people how to deregister and reregister their forests. So the Ministry for Primary Industries has been providing guidelines and advice to post-1989 foresters on how to do this. They may be forgiven for thinking that the Government was OK with it. I think they could be forgiven for being extremely surprised that the Government has now pulled the rug out from under them, when the Sustainable Forestry Bulletin from August 2013 says: “Things to consider when removing and reregistering post-1989 forests in the ETS.”

The Government has been promoting this bulletin as a legitimate tool for foresters to use. It has given absolutely no warning that this was going to happen. It has allowed price-gauging to continue under the emissions trading scheme by fuel and energy companies, which are buying these cheap international units at 35c, then charging, through power bills and at the petrol pump, around $20 a tonne. The Government has no problem with that; that is OK. It has no problem with the heavy emitters being able to engage in arbitrage. That is OK because they are their mates. But when it comes to forestry, the one sector that has been doing the heavy lifting for it in terms of our net emissions—the one sector that has done this—the Government is whacking them once again. It did it the first time by allowing the carbon price to collapse. It has continued to oppose Labour’s attempts to restrict these cheap international units, and now that it is doing some restrictions—

I am sorry to interrupt the honourable member. Her time has expired.

This bill before us, the Budget Measures (Miscellaneous Fiscal Matters) Bill, is a composite bill, so the various policy considerations that attend to it in its entirely separate pieces make for a contaminated democratic process. But that is the nature of this Government.

In the first reading I want to address only Part 2 on climate policy. Part 2 is described as removing an unintended consequence in the emissions trading scheme that has the potential to expose the Crown to significant fiscal risk. This bill is a testament to past folly. It is an acknowledgment by this Government that its emissions trading scheme has failed. This bill seeks to prevent, after the fact, the practice of arbitrage. Arbitrage is a rort. It is defined as the purchase of currencies, securities, or commodities in one market, for immediate resale in order to profit from unequal prices.

How did New Zealand get to this state in its climate policy? The primary purpose of the basic Climate Change Response Act is to enable New Zealand to meet its obligations under the United Nations Framework Convention on Climate Change. The Act aims to reduce New Zealand’s emissions. That is a binding obligation. To achieve this, the Act sets up the emissions trading scheme. The scheme is described as a scheme that reduces net emissions to below business-as-usual levels. To achieve that, the local carbon currency, the New Zealand Unit, has been introduced as the mainstay of the scheme, but foreign units, the Kyoto units, are allowed into New Zealand as extra currencies. Since the scheme has come into force, New Zealand’s gross and net emissions have continued to soar. The purpose of the Act has not been met. In fact, New Zealand is in breach of its international obligations.

There are two ways by which New Zealand Units are initially acquired: an emissions trading scheme participant can earn them through forestry sequestration, or they can be gifted by the Government to cover any liability as a polluter. But the scheme also allows people to purchase foreign units at a cheaper rate than the New Zealand Units and surrender those to the Government instead. They then hold on to their New Zealand Units, to sell them later at a higher price. They have, therefore, made a financial profit off a scheme that is designed to bring down emissions. In the case of forestry, they may be harvesting their forests, thereby increasing emissions, or they may not. They may simply be deregistering from the emissions trading scheme and reregistering the next day. Either way, they make a financial profit off a scheme that is designed to change society’s economic behaviour towards the goal, the imperative, of emissions reduction.

There are some 2,400 post-1989 foresters in the emissions trading scheme, covering 330,000 hectares of forest. In the second half of 2013, 550—almost a quarter—applied to deregister. About 40 percent have applied to reregister. In making carbon a commodity for trade, as opposed to a pollutant to be reduced, the designers of this scheme have thwarted the purpose. In allowing windfall profit from a scheme that is intended to protect the planet from dangerous climate change, the champions of the free market have excelled themselves in the art of political cynicism. In doing so, they condemn their own children to a dangerous future.

Eliminating this form of arbitrage will result in the price of the domestic New Zealand Unit rising. How much it will rise by is hard to estimate, but it will rise. This will have the effect of reducing emissions or curbing growing emissions. The Green Party therefore intends to support Part 2 of this legislation, for that fundamental reason.

But the question has to be asked why this Government is confining the halt to arbitrage to the post-1989 forestry sector. The forestry sector has been asking for a unit restriction on international units for years, so this is in line with that. But why make this change, yet allow other kinds of emitters—industry, pre-1990 forestry, energy—to continue to use international units for surrender?

The same principle is exploited by industry—aluminium and steel, by way of example—under industrial allocation plans. They get given volumes of New Zealand Units each year for nothing. They too bank them and surrender cheap international units instead. Why single out one sector, forestry, which is reducing emissions, which has a break-even carbon price of $15 but is getting $3 under National’s failed emissions trading scheme?

Does National believe in the free market, or not? This move shows it believes in the free market for some emitters but not others. How many New Zealand Units were allocated to the three other sectors in the last year on record, ended June 2013? How many were issued to industry, fishing, and pre-1990 forestry? The answer is 36.5 million. This involves aluminium smelters being allocated 90 percent of their annual emissions as New Zealand Units, yet they too can hand back 100 percent as international units. Is that arbitrage, or is it not?

What about the steel mills, the wood processors, the methanol producers, the pulp and paper mills? They are all allocated between 60 and 90 percent of emissions as New Zealand Units, yet they can hand in any kind of unit. Those 36 million New Zealand Units allocated last year have a current market value of $110 million, yet any of these sectors can replace the same level of emissions with emission reduction units worth $7 million.

Why did it take 6 years for the modestly self-proclaimed brilliant economic stewards currently on the Treasury benches to trip over the blatant rorting of their emissions trading scheme? Was it, by chance, a blind ideological devotion to the free market—the free market of global carbon credit distortion? If so, the invisible hand was inside the pocket of every New Zealand taxpayer. Where was ACT when we needed it? Where was the compassionate conservatism of Bill English? The Minister of Finance, Minister of profit by arbitrage, was asleep at the wheel. Where was the insightful judgment of John Key, the Prime Minister of everything, including degradation of the planet? He was awake, but unable to recognise a problem whose characteristics have defined his life experience. It is no wonder they do not act.

Or was it, by chance, a determination to ensure that greenhouse gas polluters of this country are not constrained in their freedom to respond to the mercantilist policies of the John Key - Government—the mercantilism of a 21st century milk and log colony? If so, the invisible hand is passing the taxpayers’ money across to selected corporations. Bravo—a better, brighter New Zealand.

The underlying basis of New Zealand in terms of Treasury climate policy is global least-cost abatement. But global least cost is not the dubious emissions reduction units of track 2 type. There is no global carbon price as yet, and there will not be for a decade. The international price ranges from NZ50c to NZ$30. Do we really believe that NZ50c is a true global least cost to save the planet? Allowing the cheapest of these units to come in, undermining the integrity of our emissions trading scheme, is cynicism of the highest level. Emissions reduction units remain valid in New Zealand until 31 May 2015, so their purchase and trading and surrender can continue until then, even though most people who have a commercial interest will have already done the purchasing, but any further arbitrage will undermine the emissions trading scheme.

My own member’s bill, the Budget Measures (Miscellaneous Fiscal Matters) Bill, has been in the ballot for 2 years now. It would have prevented the import of all these cheap foreign units so that the New Zealand price could float up. That would have applied across all sectors of our economy, which is how the policy should be. We shall be looking forward to the Minister’s explanation as to why this bill does not allow restrictions on emission reduction units across all sectors.

It is my pleasure to speak on this Budget Measures (Miscellaneous Fiscal Matters) Bill. The tenor of Mr Robertson’s speech seemed to be that rather than the steady, sensible, predictable Budget carrying on in the right direction that this Government has delivered, we should somehow be turning things on their head and having big changes in the economy—putting in a capital gains tax, nationalising the electricity sector, overturning monetary policy with an experiment that no other country in the world has tried. He said it was time for an absolute upheaval in our economic policy, which makes no sense whatsoever when we look at the results that have been delivered in this Budget, the sixth Budget from Bill English.

After 6 years of hard work by this Government and by businesses and New Zealanders generally, from one end of the country to the other, we have the economy growing at nearly 4 percent, wages rising faster than inflation, more money in the Budget for families and the most vulnerable, and business confidence at the highest level in years. That seems to me and, I think, to most New Zealanders to indicate that this Government is taking the economy in the right direction.

I was appalled to hear a whopper from Mr Cunliffe in his Budget debate speech, saying that Labour had previously delivered nine surpluses. Well, Mr Cullen said he had a surplus in his last Budget but the reality was that the final Budget in the final year that Labour was responsible delivered a $3.9 billion deficit. The 2008 year saw Government spending increase by an astonishing 12 percent in 1 year, leaving a Budget deficit of $3.9 billion and forecasts of never-ending deficits. This Government has had to pick up the cudgels and get this economy back into shape. It was a great day yesterday, being able to celebrate a restoration of fiscal responsibility and prudence, and I am very pleased to be part of a Government that has done such a thing.

I do want to mention, in relation to this bill, the housing affordability aspects of it in the temporary suspension of dumping duties provisions. Probably the single biggest issue that I hear about in Epsom is a concern about the steadily rising house prices in Auckland. This Government has been very, very active in this sector because we realise that the biggest issue we have is the constraint of land and a small supply of new houses, and so Nick Smith has been indefatigable in his efforts around the city to increase the supply of land and of new housing.

The other area is the cost of building. I do not like to be unkind about any members on the other side of the House, but for Mr Robertson to suggest that the cost of building has no impact on the price that first-home buyers pay is economically illiterate, because the cost of building a new house does flow through to the overall cost of houses in the city. So this bill will, in a small way, make a difference to house costs across Auckland by making it cheaper to build new houses. On that basis, I commend this bill to the House. Thank you.

I take a call on behalf of New Zealand First on the omnibus Budget Measures (Miscellaneous Fiscal Matters) Bill, covering cheque duty, climate change, and building supplies. Firstly, cheque duty—it is too late to really comment on this. This should have been done years ago. Again, it is a little, trifling matter that the Government has pulled out in this particular Budget. It is just another way of it padding the Budget out to make it look better than it actually is. Cheque duty should have been done away with years ago, not 6 years into this Government, given the number of cheques that are issued. I was told this morning that the largest issuer of cheques in this country is the Inland Revenue Department, and it is exempt from paying cheque duty. So is it not ironic that the Government, the single biggest writer of cheques, does not have to pay duty on them? That was a bit of nonsense. The fact that New Zealanders have not been paying duty on electronic transactions and other forms of transactions has made it quite an anomaly, and it is time that that went.

However, moving on to climate change, New Zealand First wants the New Zealand Government to have a serious response to climate change, and this provision is not it. What is now apparent is that a great majority of countries see climate change as a result of increasing greenhouse gases and as a major global challenge. New Zealand First does not argue with that. Climate change is a reality. New Zealand First is opposed to New Zealand’s emissions trading scheme, the ETS. We consider it far too complex and far too impractical. It was concocted by financial theorists for the benefit, it would seem, of the financial sector—a Merrill Lynch solution, or, really, a non-solution from the likes of Merrill Lynch.

As a serious response to climate change, the emissions trading scheme has been, as we foresaw, a dismal failure—window dressing. It has failed to deliver significant emissions reductions. In addition, there is little evidence that it is actually helping industry to change to a lower-carbon world. The emissions trading scheme has been systematically rorted. We have seen the unit values go from something like $23 or $24 down to a couple of dollars internationally. What an absolute embarrassment in terms of that scheme. A vast industry has grown around the emissions trading scheme, but it has delivered few real results, and this bill is part of the mess that has ensued from the emissions trading scheme. The bill is a consequence of the mess, confusion, and financial game-playing that has come from the emissions trading scheme. The emissions trading scheme was a half-baked scheme, and the need for this bill demonstrates that.

It is time that New Zealand had a serious policy and plan to address climate change. Climate change is possibly the greatest challenge to our future. Yesterday’s Budget pretended it was not happening at all. That exposes the total lack of vision of the National Government. This Budget fails to deliver any meaningful policy on climate change, and for that and other reasons it is a manifest failure.

On to the building supplies part of this bill—we have great difficulties with this. New Zealand First really does question this as well. New Zealand First anticipates that there will be all sorts of unintended consequences from this building supplies part of the bill. Removing anti-dumping duties could adversely impact the New Zealand economy. There is a reason for anti-dumping duties being in place. It was to protect local manufacturers. We have seen no evidence that the negative impacts on New Zealand jobs and businesses have been fully considered or taken into account in devising this bill. It smacks of being another of National’s knee-jerk responses to the housing crisis, a crisis of its own making. But instead of taking meaningful measures—specifically, curbing immigration and foreign buying of New Zealand housing stock—it decided to throw to the wolves the local manufacturers of construction products.

In this bill there is no actual mechanism for ensuring that the claimed cost reductions will, in fact, be translated into lower house prices. It is a hope and a dream that, by getting cheaper imported goods into this country for construction, the price of houses will go down. It will simply mean that the margins will go up for many of those constructing the houses and putting them up.

There may be cost reductions, but that remains to be seen, and, quite frankly, we are very sceptical. It is also questionable. Today Elephant Plasterboard, a New Zealand manufacturer of plasterboard, said that we also need to be very mindful of the products coming in—whether they will have full warranties, guarantees, and longevity. There will be increased supplies from the likes of China, Thailand, Korea, and Indonesia, and questionable quality standards.

Many of us have witnessed the leaky homes of the 1990s, which came about from the National Government changing the building code and allowing building products and kiln-dried timber to be used during the 1990s. Now in the 2000s, we have ended up spending at least an additional $11 billion, heading towards $20 billion, on leaky homes because of inferior products being used in the construction of our residential houses. We have the potential here, by knocking local, good-quality manufacturing on the head and allowing increased imports from questionable sources to go through another period where—what will the plasterboard standards be? What will the standard of the nails be? I can assure you that I have built a number of properties and I have used nails. Nails are deteriorating in quality year on year. So what will be the quality of the nails?

Recently I was told of trailers being sold in New Zealand that are coming in complete from Asia, and they are now being given only 2 years’ warranty when New Zealand manufacturers of similar trailers give you virtually a lifetime guarantee. They will go on and on and on. A good, decent trailer will last for ever, but the ones that are being brought in now out of China, and being sold considerably cheaper, are given only 2 years’ warranty.

The Government has plucked a figure out of thin air as the cost reduction on a standard house—a nice, round figure of $3,500, which sounds good but is totally unquantifiable. Where did this figure come from? Answer: the back of some envelope in Treasury. We predict there will be business closures in the building supplies sector. There will be job losses. The cost of building supplies is an important issue, but ill-considered legislation is not the answer. Reducing GST on building supplies was another and better option. There is no evidence that that option was considered.

It is critically important that we protect the manufacturing base—not just expose it at short notice to unfair competition. But once again the fate of the New Zealand manufacturing base appears not to matter to this Government. This Government has spent much of this year pooh-poohing the Opposition, which raised concerns about the state of our manufacturing. Sure, our agricultural manufacturing is doing very well, and some sectors of manufacturing are surviving in terms of IT and smart manufacture, but there are areas of what you would call manufacturing for home products, consumer products, and building products—products used in everyday life in New Zealand that are produced in this country—that are under real pressure. Those manufacturers, which in many cases are also exporters under a very high New Zealand dollar, heading towards 90c, are in dire straits in many cases.

This is yet another nail in the coffin for local manufacturers. Taking away the last of those anti-dumping duties will allow greater imports from many, many Asian countries, in particular, where their cost of production is so much less, where their cost of labour is so much less, and where their quality of materials is perhaps more questionable. Therefore, New Zealand First has great reservations about aspects of this total bill.

I am pleased to rise to speak to the Budget Measures (Miscellaneous Fiscal Matters) Bill, the second of the Government’s Budget legislation. I am going to take a short call because this week is really all about checks. Think about it. National has balanced the Budget. Check. We have returned the country to surplus. Check. We have cleaned up years of Labour’s reckless overspending. Check. We have got a great plan to extend paid parental leave. Check. We are extending free doctors visits to under-13-year-olds. Check. We have invested almost $200 million more into the education system. Check. And we are getting rid of cheque duty. You had better believe that that is a check. I commend this bill to the House.

On Budget morning an opinion poll in one of the daily newspapers said that 76 percent of New Zealanders wanted to see the Budget prioritising tackling the housing crisis and doing something for first-home buyers. Oh, how New Zealanders have been let down and disappointed by this Budget. How badly the National Government has got it wrong after talking up the housing crisis for months and leaking suggestions that it was going to do something about the supply of housing in Auckland. Well, it has left New Zealanders feeling badly let down.

How bad is this housing crisis? Well, bear this in mind: the median house price in Auckland has now gone over $700,000. We have seen a 40 percent increase in house prices in Auckland since National took office in 2008. Foreign speculators are driving up the price of houses in Auckland, outbidding Kiwi first-home buyers from the end of the telephone. We have got people living in garages and sleepouts around the country. And because this Government has utterly failed to get a grip on the housing crisis the Reserve Bank has imposed lending restrictions and loan-to-value ratios requiring 20 percent minimum deposits, which have shut first-home buyers and low-income Kiwi families out of the housing market, handing the advantage to speculators, both foreign and domestic.

The best this Government could do was to announce the temporary suspension of anti-dumping duties and tariffs on some building materials. That is the best it could do, and that is a very inadequate response to the housing crisis. There is nothing in the Budget—nothing—for first-home buyers. There is nothing to put a stop to foreign speculators bidding up the price of houses in Auckland. There is nothing to guarantee that the 285,000 children growing up in this country below the poverty line who live in rental properties will have a warm, dry home. The best that National is willing to offer the country is to lift the anti-dumping duties and tariffs on some building materials. It has estimated on the back of a cigarette packet that this might save $3,500 off the cost of a new home, but we have heard nothing from the Ministers or from members in the House today about why they think that saving would be passed on to first-home buyers. What is to say that in an overheated housing market the builders and the developers will not just pocket that $3,500? That is even if we give any credibility to the estimate that it would save $3,500.

What else, alongside this measure, did the Government announce in the Budget? It announced $30 million for social housing organisations. That is $30 million over 3 years—$10 million a year—for social housing organisations. The supposed centrepiece of Nick Smith’s housing policy is to resource the community housing sector to provide more affordable housing. Alongside lifting the anti-dumping duties and the tariffs on varnish and nails and wall board, the Government has put $10 million a year into social housing organisations. I calculate that on the basis of a house costing $350,000, it will take Nick Smith 455 years to meet his target of transferring 13,000 houses to the community housing sector—455 years. The NGOs, having heard Nick Smith announcing with great fanfare in last year’s Budget the expansion of the community housing sector—just like this year’s great announcement of lifting the anti-dumping duties on Gib board—have been left waiting for the last 12 months to hear what kind of resource the Government would put into this initiative. But all they got was a measly $10 million a year—utterly pathetic.

The other initiative alongside the lifting of tariffs and anti-dumping duties is $80 million to the Ministry of Social Development for the purposes of implementing the eligibility assessment for people to get into State housing. So the Government’s single biggest announcement alongside the lifting of anti-dumping duties and tariffs is $80 million to pay the bureaucrats in the Ministry of Social Development to do the job that Housing New Zealand has been doing within its baseline funding. This is unbelievable stuff.

But, look, there is more—there is more. There is $7 million in the Budget to pay the Ministry of Social Development to kick pensioners and disabled people out of State housing. Alongside lifting anti-dumping duties and tariffs, which has been talked up as this Government’s huge contribution to solving the crisis in affordable housing, this is all it has got. After Nick Smith has been the Minister of Housing for a year and a half, this is all the Government has got—to pay the Ministry of Social Development $7 million to kick people out of State housing. Paula Bennett announced it in a press release entitled “Helping more families into rental housing”. Actually, it is $7 million to kick people out of their State houses—unbelievable.

I want to say that the public have been left open mouthed and astonished that the Government would talk up the housing crisis for the last few months, dropping generous hints that it was going to do something for first-home buyers. This temporary suspension of tariffs and anti-dumping duties is estimated by someone in Treasury to save $3,500 off the cost of a new house. Even if that is true, it is still a tiny, pathetic amount. It is less than 1 percent of the median cost of a house—less than 1 percent. Get this—it is 2 to 3 weeks of house price inflation in Auckland. It is 2 to 3 weeks of house price inflation. That is all it is going to save.

The Productivity Commission, which Nick Smith loves to quote in this House as his bible, the font of all wisdom, heard a lot of submissions on the question of building costs. Its report indicated that building supply costs in Australia are 76 percent of those for a standard home in New Zealand. So New Zealand is paying a lot more. In fact, based on that data and adjusted for inflation and for the exchange rate, New Zealand is paying more than $20,000 more for the building materials for a standard home than consumers in Australia are paying. And the best this Government can do, after an extensive working group exercise to look at building costs—Ministry of Business, Innovation and Employment officials did a market study on residential constructions, we had extensive public consultation, and a whole range of options were foreshadowed—is come up with the temporary suspension of anti-dumping duties and tariffs on varnish, nails, and Gib board. It is unbelievable.

I just want to say, in the context of this being the Government’s showpiece announcement on affordable housing, that it is worth noting that the Budget’s own figures tell us that under the current policy settings of this National Government the housing crisis is going to get much, much worse. The Budget figures themselves, the interest rate track, and the projections on wage growth tell us that in 5 years’ time, by 2018-19, it will take 63 percent of the average full-time wage to service an 80 percent mortgage on a standard home—63 percent of the average full-time wage. It is currently bad enough. It is currently 49 percent, and everybody but the National caucus and Nick Smith would agree that that constitutes a housing crisis. In 5 years, under this Government’s policies, it is going to go from 49 percent to 63 percent. And if you live in Auckland, that figure is 86 percent. So under this Government’s policies, hard-working Kiwi families paying off a mortgage in Auckland in 2018-19 will have to spend 86 percent of an average full-time wage just to service a mortgage. That is, if they can afford to get into their own home.

What is the upshot of this? The Government with this Budget has basically run up the white flag. It has admitted defeat. It is telling New Zealanders that the dream of Kiwi homeownership is over. It is finished. The Government has given up and it has surrendered.

It is a privilege and a pleasure to speak at the first reading of the Budget Measures (Miscellaneous Fiscal Measures) Bill this morning. What a great Budget we had, and this is a good bill. This is but one component of the Budget, and the Budget, actually, is one component of our fantastic management of the economy. The speaker who just resumed his seat, Phil Twyford, I think demonstrated fairly well, actually, the politics of envy. Labour members are envious of our Budget. They are envious of our economic management. A wee bit of hyperbole, he said—

💬 Phil Twyford: Nothing could be further from the truth.

—nothing. He said we have done nothing to give families warm dry homes. Well, we have. There are now over 280,000 homes that are warmer and healthier through our successful insulation schemes. If he thinks that is nothing, I would hate to think what he thinks is something. I have great pleasure in supporting this bill to the House.

I understand that the next call is a split call—5 minutes. Dr David Clark.

I think the short call by the member opposite is indicative of the vision of this Government. Not only was it limited but it was also late. The member, Kate Wilkinson, stood and said that it was a real pleasure to take a call on this bill, the Budget Measures (Miscellaneous Fiscal Matters) Bill, this morning. I hate to inform the member that it is, indeed, nearly 1 o’clock. The member is, of course, behind the times. She is from that party opposite that is always following, always playing catch-up, and always trying to catch up with where Labour is at, in terms of policies that have vision for New Zealanders—for those New Zealanders who want to get ahead. We are working with New Zealanders. We are determined to work with New Zealanders to deliver policies that have vision, that have purpose, rather than the scattergun, backward-looking approaches that we see this Government pushing.

This bill removes cheque duty. That is one of the things that it does. I have to say that all those years of waiting for a surplus just to splash out on removing cheque duty is rather a delicious irony. It really does speak to the backward-looking view of this Government. It is still obsessed with the old cheques. I know that I do not own a cheque book. I look around this House, and there will be members who do and members who do not, but, really, it is a small and diminishing part of the Budget.

💬 Iain Lees-Galloway: John Banks gets them.

John Banks takes a lot of cheques, says a member in front of me, and he is probably right, but I do not know whether he will be doing that much longer, though, for reasons that we cannot discuss in this House. Cheque duty is being canned, but, unfortunately, New Zealanders are left with a credit card bill of about $58 billion from this Government’s borrowing—$58 billion—and we know that credit cards attract greater interest than cheques. So here we are with a Government opposite that has borrowed more money than Robert Muldoon did, presenting its vision to the world: cancelling the fee on cheques. That sums it up, aside from the belated catch-up of the member discovering that the afternoon has arrived and the yardarm has moved on.

💬 Dr Cam Calder: Don’t mention it.

We will not mention the yardarm too much in respect of those members opposite. They were busy last night. This Budget is, unfortunately, as I have said, backward-looking and scattergun, but we think that it is a lost opportunity more than anything else, because it lacks aspiration and because the Government is facing higher unemployment numbers than when it took office at the height of the global financial crisis—and unemployment is still higher in New Zealand. It is a lost opportunity because real median wages are lower than when it took office, because this Government has overseen the highest gap between rich and poor in recorded history in New Zealand, and because middle New Zealand struggles and continues to struggle under this Government. It is a Government that has failed to raise those real median wages. It is a Government that has overseen interest rates rising but has no plan—no plan—to help New Zealanders into their first homes. There is nothing in this Budget for them. The $3,500 estimated to be saved from the housing tariff is insignificant in the context of the $200,000 increase in house prices in Auckland over the last few years. It is a fraction of 1 percent, as my colleague Phil Twyford pointed out earlier.

This is a visionless Budget. We know that the Government has got to surplus, of course, through a series of fudging attempts: first, through keeping artificially high ACC levies—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

Another is through transport spending—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

—being couched as a loan, and so on, but that has been all to produce cheque duty reductions. This is the big vision from the Government that we are being told right now. It is not interested in housing, it is not interested in jobs, and it is not interested in wages; instead, we are here under urgency passing legislation to remove cheque duty. So, ladies and gentlemen at home, I am informed that this might save you up to a dollar a year.

💬 Iain Lees-Galloway: No, 35c.

Oh, 35c a year. My apologies—35c per year this may save you at home.

💬 Moana Mackey: Don’t oversell it.

I should not oversell this policy. And there will be some people for whom that 35c does make a difference, but it is not the same kind of difference that would be made from having the kinds of policies that Labour is proposing to bring in when in Government, such as universal KiwiSaver, and the ability to use monetary policy to make sure that interest rates are kept low whilst having the money that is used to do that going into savings rather than into offshore banks.

I am pleased to have an opportunity to speak to the Budget Measures (Miscellaneous Fiscal Matters) Bill. There are a number of concerns, but I will be focusing primarily on the building and wood products part of the bill. I will note what Kennedy Graham said, when speaking before on the emissions trading scheme aspects, that it is about time there was some catch-up on the rorts that have been done by predominantly overseas interests in the forestry area, but that it is absolutely unfair that forestry cops it when other major industry are not being dealt with in the same way. So I support his statements on that.

I want to move through to the removal of duties and tariffs on building products. I spent a lot of the morning trying to work out how broad that goes and what things will be affected. I think we all need to reflect on the processes; the tradesmen in our towns and in our cities who are working on everything from kitchen cabinets and bathroom cabinets to trusses, doors, window frames, and things like that, the people with skills; and the businesses that are feeding into the local economy. These are going to be knocked heavily by this allowance of dumping of materials into the New Zealand market.

💬 Hon Craig Foss: No, they’re not.

You say that. I look at the tariffs and I see 5 percent on some countries. If that is not going to impact when we have industries that actually need boosting—you are talking of savings here going on to $30 million. Not savings; costs to the Government of $30 million. Why do you not put that into boosting those local industries instead of hitting them with the costs here?

Sitting suspended from 1 p.m. to 2 p.m.

I was able to use the lunch break to look a little bit further at the bill and I had a good discussion with the Minister. I certainly appreciate, and the Green Party appreciates, some of the intention of the part of the bill that I was debating, which was to deal with some of the monopolistic behaviour of some of the suppliers in terms of plasterboard in particular. However, my concern in the earlier part of my speech, and also now, is with what I would call the collateral damage of that. I think that the bill needs some fine-tuning to look out for the New Zealand businesses that are involved in the construction of joinery, for example, and some of the timber products.

We would like to see a Christchurch rebuild in wood. We would like to see it done with New Zealand producers, New Zealand manufacturers, and New Zealand tradespeople for New Zealand people. I checked with some suppliers, manufacturers, and joiners, and I talked with a kitchen manufacturer from another town nearby. I was checking as to how much they were using that was imported, and it was very little. But I also talked to a Christchurch door manufacturer business down there. They are New Zealanders doing New Zealand stuff and they have tooled up in anticipation of the growth that is expected with the rebuild. I am concerned that this bill will impact very negatively on them, on timber products, and on New Zealand businesses and that. So it is collateral damage. I realise that my time is nearly up, so we will talk more on this later. Thank you.

I have been listening to the debate from across this House today and yesterday afternoon—I think we have had something like 9 hours of debate—and you can come to two conclusions. The first is that our country is really lucky to be so well governed by John Key, Bill English, and their team. Secondly, the Opposition members, judging by the quality of their debate over the last 9 hours, are clearly not up to running this country. We have just seen it with the last speaker, Steffan Browning. He was concerned that by removing protection, you are going to cause damage for some New Zealand companies. But he loses sight of the goal that we have to secure, which is to build the cheapest possible houses to get as many people into homeownership as possible. If he thinks he can do that by maintaining artificial duties and not reducing the cost of a house by $3,000, then he is in a space that he should not be.

I would also like to draw attention to some of the debate that came up this morning from the Labour deputy finance spokesperson, David Clark, the wizard from Treasury. He spent all of his debate—

💬 Phil Twyford: The Reverend.

The Reverend. Yes, the “Red Reverend” from Dunedin.

💬 Grant Robertson: The Rev. Dr David Clark to you.

Dr David Clark, the “Red Reverend” from Dunedin. He focused on removing cheque duty. He overlooked telling the people of this country that, one, it is an outmoded tax, and, two, the cheque duty does not raise substantial money at all—$4 million a year. It is distortionary, it is easily avoided, and it does not apply to eftpos, internet, or credit card transactions. That is why we want to get rid of that duty. It costs more to administer than the revenue it collects. The Budget Measures (Miscellaneous Fiscal Matters) Bill is a very good bill and I support it entirely.