Taxation (Budget Measures: Family Incomes Package) Bill

Members, the House is resumed under urgency. We are on the interrupted debate on the second reading of the Taxation (Budget Measures: Family Incomes Package) Bill. Speaking last time was Sarah Dowie, and she has 8 minutes remaining if she wishes. [Interruption] She does not want to take the call, so the next call is a split call. I am calling Marama Davidson—5 minutes for the Green Party.

I rise to speak on the second reading of the Taxation (Budget Measures: Family Incomes Package) Bill. This bill is part of a Budget package that reminds me of a scene from the movie Mad Max: Fury Road. There is a scene in that movie where, at the end, the tyrant who has taken control of all the water and kept it away from the people finally turns the taps on for the people. He turns the giant taps on, and the people are clamouring to get their bit of water. They are cheering and they are yelling, because they have been denied water for so long. There is cheering and yelling, and he turns the tap on, and then he turns it off a few seconds later. The water is on for only a few seconds, and then that is it for the people.

I was thinking about that. I was thinking that this bill turns that tap on, and for families and communities who have desperately needed help for years and have been denied it, it is a small, trickling drop. For our lowest-income families, this bill is a trickle. In the words of the Child Poverty Action Group, what we need instead is a tide to actually make meaningful change.

Increasing the lowest tax thresholds and increasing the child payment rates under the family tax credit will get more money to people on lower incomes, and we support that, yes. This bill increases Working for Families payments because costs are high, especially, at the moment, with housing.

So it is unfortunate that the Government has hooked the tax cuts for the lowest incomes to tax cuts for the higher incomes. The Greens do not support tax cuts for higher incomes. People on higher incomes themselves do not support tax cuts for higher incomes. They have been clear that they would prefer to have well-funded public services and provisions, and a country where people have enough to live well. Like everyone, the Greens are not fooled by this Government’s bill, which is pretending to fix up some of the big mess that the Government designed.

This Government wants to pretend it is finally making the changes our country desperately needs, after having run into the ground social services like social housing, like education support staff, and like mental health and addiction support services. In actual fact, this Government, once again, has made decisions for the past, not for the future, like the fact that the largest share of the tax cuts under this bill will go to families on more than $127,000 a year. There is around $33-odd a week for them, while those on the lowest incomes—less than $24,000 a year—will get maybe only five bucks, if they are lucky. Those tax cuts for higher incomes will come at the cost of even more public services.

The Greens know that that is the opposite of what we need. Five dollars extra is a pittance for people on lower incomes, but, at the moment, sadly, that $5 makes a difference. It makes a meaningful difference, and we should not be proud of that. Some families have become so used to scraping a meal together on so little that $5 extra is actually a thing. It is a deal, and so the Greens will not stand in the way of that. But this bill does not do what is really needed to improve the lives of people on the lowest incomes and to help us all benefit from stronger communities everywhere.

The Greens will keep fighting for those more meaningful changes while not standing in the way of the potential of what this bill has to offer to our lowest-income families. We will keep working for the real changes. We understand the true value of communities of people who have enough to live and survive and live meaningful lives. That is the leadership we need. Thank you.

I call Dr Megan Woods—5 minutes.

It is my pleasure to take a call on this bill. I would just like to acknowledge Pink Shirt Day, when members across the House are united on taking a stand against bullying.

After 9 long years in Government, this is all this Government has got. This is what it dishes up in an election year bribe Budget. Does it do anything to address the big deficits that we have in this country? Does it do anything to address the housing crisis? No, it does not. Does it do anything to address overcrowding and the stretch on our schools? No, it does not. Schools in my electorate in Christchurch, in Wigram, are some of the most at-capacity and over-capacity schools in that city. Does it deliver for those schools? No, it does not. Does it do anything to address the $1.7 billion gaping hole we have in the health budget? No, it does not. Does it do anything to address the number of police that we need in our communities, that the police themselves are saying we need? No, it does not. This does not rebuild the social fabric of New Zealand. Instead, all we see is a package of regressive tax cuts that do nothing to rebuild the kind of society that we want New Zealand to be.

Well, Labour is a progressive party. Labour is a party that stands for values and ideas where we do have a strong social fabric, where we do not think it is acceptable that we have people who are now forced to bring up their children in a car. We do not think it is acceptable that children wait 12 weeks to see a mental health specialist after expressing suicidal thoughts—12-year-olds. Is that the kind of society we want? We do not think it is acceptable that we have overcrowding in our schools and that we can no longer, hand on heart, in this country say that we have a free, open-to-everyone public education system.

What will these tax cuts do? For some people, they will deliver $1 a week. It is the “One Dollar Bill Budget”. That is what it will deliver for some of the lowest-paid people in this country. What the members opposite are trying to dress up—they are trying to throw the kitchen sink at this, but let us actually just look at the tax part of this legislation that we are debating. We in this House are all going to get a good, decent tax cut, but for some of the lowest-paid workers in our country that is not what they are going to get. They will not get anywhere near the amount we will be getting. Those low-income earners will still be having to dip into their pockets—$200 a year for school stationery bills because this Government has underfunded the operational budget of schools and is doing nothing to address that. They will still not have access to a good public health system when they need it. The Government still has done nothing to address the housing crisis; instead, it has thrown the short-term solution of an accommodation supplement at it. But the simple fact is that we do not have enough houses.

What we need is a vision and some fresh thinking in this country, and that is what a Labour Government will deliver. A week and a bit ago, Andrew Little stood up at the Labour Party congress and showed what that is. Let us have a think about what it is when we think about the need for New Zealanders to have warm, safe houses. What is Labour planning to do about that? We are planning to give back the subsidy that this Government has cut from homeowners, to help them insulate and warm their homes. This bill and this Budget do nothing to address those things. Where is that? Instead, what it is doing is it is giving high-income earners money at the expense of those earning less.

We want to give those mid-income earners, those people who have struggled to buy their own house, whom this Government does not think need any assistance—we want to help them be able to insulate and warm their houses. We think that is a priority and that is what Budgets are about. And for Labour it is about rebuilding our health system. It is about rebuilding our education system. It is about making sure that we have a housing system that works for all New Zealanders so that nobody has to bring up their child in a car.

It was a great day yesterday. This bill is the product of Budget 2017, and this bill has demonstrated again—yes, again—that this National Government believes in rewarding hard-working people. Yes, we believe in rewarding hard-working people. It is really amusing listening to the speeches from the Labour Party members. On the one hand, they are saying that this is an election bribe, and, on the other hand, they are saying that this is not doing enough. They are making contradictory arguments, so they need to decide which side they want to be on.

The anger that is coming out from their speeches shows that they cannot bear the fact that we have come up with such a good package. They are playing a position without any logic. I want to say this to them: they are not opposing us; they are opposing more money going into the pockets of low and medium income families. Yes, they are opposing more money going to low and medium income families.

I am taking this call to support the Taxation (Budget Measures: Family Incomes Package) Bill in its second reading. I am very proud to take this call. I am not a member of the Finance and Expenditure Committee so it is a real privilege for me to have this opportunity to speak on this bill in its second reading. Putting this bill through under urgency shows how eager this National Government is to help low and medium income families. We are talking about a package worth $2 billion. Maybe the Labour Party does not realise how many zeros are after “2” in $2 billion. This package is to help families in different phases of their lives, including people who are on superannuation. This package is to put more money in the pockets of 1.3 million families, and it comes to an average of $26 a week, which is great news for low and medium income families.

The economy is doing really well. We have a strong economy, and that is because of our responsible management of finances and also because of investing heavily in diversifying our economy. Now we are all enjoying the benefits of this strong economy. Through this bill we are passing on the benefits of this strong economy to low and medium income families. We know that wages are rising faster than inflation under this National Government. We have increased the minimum wage every year since coming into office in 2008. The annual average wage in the last 7 years has gone up from $49,500 to close to $59,000. As a result of that, some families have been faced with a higher marginal tax rate. We do not want to punish them for earning more. We want to reward them for earning more, for working hard.

It was the previous Labour Government that believed in punishing people for earning more, and Labour’s spending went up by 50 percent even when it knew the global financial crisis was coming our way. But on this side of the House we want to reward these families, and that is why we are shifting the $14,000 income tax threshold to $22,000, and shifting the $48,000 tax threshold to $52,000. This is a bill that employees are going to celebrate. This is a bill that businesses are going to celebrate. Businesses know that happy employees mean more productivity. Yes, happy employees mean more productivity. This bill is going to be celebrated by people on superannuation. We know that, as a flow-on effect of this bill, people on superannuation will get $622 from 1 April next year—this is the married rate. The current amount is $600. So this is an increase of $22. This bill contains many other components. For example—

💬 Brett Hudson: Delivering for New Zealanders.

Exactly—delivering for New Zealand. This bill also increases the accommodation supplement for student allowance recipients, as well as the family tax credit rate for young people. We are simplifying that through this bill, and as a result of that, some families are going to get more for their family tax credit rate that they get for their young children. This bill demonstrates that we are building on all the hard work that we have done in the past. For example, we made GP visits free for children under the age of 13. We increased benefits by $25—this was the first time in 40 years.

The ASSISTANT SPEAKER (Lindsay Tisch): Order! This is a debate on what is currently in the bill. It is not a Budget speech. This debate is about the taxation measures and the family package. So just concentrate on those. This is not a general Budget speech. That comes later on.

Thank you, Mr Assistant Speaker. I was just saying to the Opposition that this bill builds on all the hard work that we have done in the past. So this bill is actually to help low and medium income families, and I want to say again that by opposing this bill the Labour Party is opposing more money going into the pockets of low and medium income families. I am really proud of this bill and I am really looking forward to this bill being passed. I support this bill and commend this bill to the House. Thank you.

It is a pity I have not got a little bit longer, because there is about 10 minutes of rebuttal for every point that the last speaker, Parmjeet Parmar, made. There are a couple of things I would like to point out first and foremost, if I may. The member who has just resumed her seat talked about happy employees being more productive, and you know what? I could not agree more with that. All the evidence shows that when someone is happy in their work and happy in their life they are far more productive.

But I suppose, when I look at this bill and I look at what constitutes a happy employee, I have a different view of this. I have worked in business. I have studied business. I know how this sort of stuff works. I would suggest that 50c an hour—[Interruption] Are you clapping? Feel free to clap. I would suggest that 50c an hour, which is going to be delivered in a bill like this, is a hell of a lot less, in terms of making families happy, employees happy, and workers and businessmen and businesswomen happy, than perhaps, I do not know, delivering safer communities or perhaps delivering houses or maybe healthcare or maybe education. I am not sure. Maybe I am wrong in this, but every sort of indication I have is that happy, productive employees are not those who will get $1 an hour; it is employees who can go home to a house that they call their own. Happy employees have not got a child among the 50,000 who are in hospital with a respiratory disease.

💬 Brett Hudson: You’ve just defined them as rich, Stuart.

I am quite interested in hearing what this member has to say, because I think he is so far out of touch with what is actually going on in this country that it is quite astounding. I wish, actually, that those who are listening to this debate could hear this. There is a whole lot going on in our society at the moment that people are—on 23 September, and a couple of weeks beforehand, actually—going to have to make a choice about, and that choice is about what sort of country we want to live in. What sorts of communities do we want our children to grow up in? You can have the compassionate. You can have Labour, led by Andrew Little and Jacinda Ardern, where it is about building communities and understanding what makes communities work, what drives compassion. It is the sort of community that I grew up in.

What happened is I got home from school every day, we drank a pint of milk, we had a Marmite sandwich, and we scattered. We scattered around the neighbourhood. We did not lock the house, of course, and you could leave your bike outside the dairy without it being a problem. Then what would happen at 6 o’clock—my mother had this huge big bell. She would ring it and it would resonate throughout the community, and what would happen was children would scatter to all corners of the earth. There were the lawyer’s sons, the accountant’s sons, but there were the sons of the mechanic, the machine shop workers. This was a community and a society where everyone was equal. We all owned houses. Sure, someone’s father might have earned a little bit more than someone else’s father, but it did not matter. We all paid our taxes, we all owned homes, and we were happy. The thing is that we all went to school and played rugby and we all dressed the same. There were not these massive gaps. There were not these massive gaps and inequality. When I look at this—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! I pulled up the previous speaker, and I reiterate the point I made. It is all very well having some generic material—that is always interesting—but you must relate it back to the substance of what is in the bill, and it is the Taxation (Budget Measures: Family Incomes Package) Bill. This is not a general debate. It is not a debate on the Budget. I ask you to come back to the substance of this bill.

I raise a point of order, Mr Speaker. It is my understanding, and I have not got the reference in front of me, that if members from the opposite side are interjecting and throwing comments out, then I have the right to answer them.

The ASSISTANT SPEAKER (Lindsay Tisch): No, just because someone interjects does not mean to say that you need to deviate away from the substance of your bill. I have heard in that 3½ minutes probably about 3 minutes about what you used to do when you came home from school and having Marmite sandwiches. It is all very interesting because I used to do the same, but the thing about it is to relate it back to what is in the bill.

I suppose the point I was making is that both you and I grew up in a different type of community where we valued community, where we were all equal, where there was not that level of inequality and social stratification that we see now. I suppose the reason I am making that point is if we are going into urgency, if the only bill we are passing under urgency that comes out of this Budget is a bill that talks about giving a few people a little bit of money, some who do not really need it a little bit more, and others not very much at all—if this is really where the Government thinks that the greatest need in our communities is, then that is a shame.

When I read this bill and I have a good look through it, and I try to digest where the Government’s vision for this country is—because we are sitting in urgency. Normally what most of us would be doing is visiting constituents, talking to organisations, or helping those with issues, but we are in this House debating this bill, so it is important, or it is seen by the Government to be important. But if this is the most important issue facing our country today then I think it shows how out of touch that Government is.

One of the reasons I say this is that on Tuesday one of the bills that we were debating was the tax rates bill for 2016-17. We have not even passed legislation that codifies the tax rates for last year. Yet we are putting a bill through urgency that talks about tax rates for next year. Surely, if it was so important then the Government would have done the other bill through urgency. I do not even think we have passed that bill yet, have we? We are debating next year’s and we have not done last year’s.

I suppose all that I can say is that I would love a tax cut. Like the vast majority of New Zealanders, I would love to have more money in my back pocket, because I do work hard. I acknowledge that every New Zealander who works—well, the vast majority of New Zealanders who work do work hard. I know that the vast majority of New Zealanders who work would love a tax cut. But what I also know is if you give New Zealanders a choice between a tax cut or an increase in education, or more police in their neighbourhood, or mental health services, then they will say: “Give me the social services.”

I know we are not supposed to bring families into this debate, but I have got four children and they range in age from 3½ to 15. The thing that I am a little bit concerned about is the world that they are growing up in, and it is different from the world that I grew up in, and that is the point I was making. The concern I have—

💬 Hon Maurice Williamson: You’re telling me the world’s changed?

The world has changed. You are dead right, Mr Williamson—the world has changed. But unfortunately the government is not recognising that fact. There are some things that have changed for the better. I get that. But there are other things where the Government can actually make things better, and that is the role of the Government.

There is the fact that our schools are underfunded by $100 million. Lloyd Burr got this right on TV3 last night when he said that the health system is so underfunded it remains in crisis. I suppose the thing that makes me a little bit sad, a little bit mad, and a little bit more passionate to work a little bit harder to win the election is if this bill, the Taxation (Budget Measures: Family Incomes Package) Bill, really is—really is—addressing the most salient issues, the most pressing issues in our community according to that Government, then it is out of touch, then it has got it wrong.

This will provide a little bit of extra money to a whole lot of workers, I acknowledge that. But what it does not do is really address the issues that New Zealanders are telling us they care about. No New Zealander said: “I want a tax cut. I do not care about anything else.” What they said is “Give me a house. Give me a warm, dry house. Make sure my kids can get educated. Make sure the health system is there for our children and our communities. Do not spend a billion dollars on a prison; spend a billion dollars on our schools.” That is what New Zealanders want. They want the life that I had and no doubt—I do not want to bring you into it, Mr Speaker—

💬 Mr SPEAKER: Then do not.

—that we all had. Alastair Scott grew up in exactly the same community that I did. We were running round. We were happy. We went to the hospital. Our schools were well funded. We had a great time but that is not the future or the present for a whole lot of kids in our community.

When we are having 50,000 New Zealand kids admitted to hospital with respiratory diseases, we know we are in a little bit of trouble. The thing about this bill is it does not address those issues. It does not address those issues. What is in here for the 50,000 kids who are admitted to hospital every year with a respiratory disease? How are they going to benefit from this? How are they going to benefit from this? The $20 a week, yeah, that is nice, and that will go a way for a lot of families, and it is money for a lot of families, but it does not address the core issues. It shows a lack of understanding of what makes a really good community.

New Zealanders should be rewarded when they work hard, but New Zealanders also deserve to grow up in a community where they are safe and where their kids are going to get education. In fact, my underlying political reason for being and my philosophy is equality of opportunity. I just do not see that this bill delivers on equality of opportunity in any way, shape, or form. That is the sort of bill that we should be debating under urgency—the sort of bill that does allow our kids to get educated, the healthcare that is needed in our communities, and the police that are required to keep our communities safe, that is why I cannot support this bill. Thank you.

That was an interesting but disappointing speech from the previous speaker, Stuart Nash. He could not pinpoint and could not speak against any part of the bill. In fact, he acknowledged a lot of it. He acknowledged that the bill does affect those who are least well off. He does accept that Working for Families and the accommodation supplement does affect those people. But, unfortunately, the disappointing thing is he is going to vote against the bill.

I would like to commend, if I can, the Green Party for having the balls to vote for this bill. I do not want to sound patronising or condescending, because I know that that party does care for those who are least well off. It talks about it all the time in this House, and I commend it for supporting the bill because it knows that this bill affects one-third of the children who are currently in households earning half of the average wage.

💬 Brett Hudson: That’s right. Median wage.

Median wage. In those households that are earning less than half of the median wage we will be pulling 50,000 kids out of that situation, one-third of those who are currently categorised as children in poverty, by that particular measure. That is a good thing—that is a good thing.

Some of the Labour members have also supported the notion of Working for Families, which is also a good thing. They have also talked about the accommodation supplement. Mr Phil Twyford was wrong when he said the accommodation supplement only subsidises the landlord. If we wanted to subsidise the landlord it would be very simple; we would simply adjust depreciation rates, for example, on buildings, back to allowing depreciation rates of some sort, which would flow directly to the landlord. That would be a subsidy for the landlord.

This is not a subsidy for the landlord. The accommodation supplement goes directly to the tenant—goes directly to the tenant. That tenant can choose on what and how to spend that money. I have no doubt that it will be focused and spent on the increasing rentals that we on this side of the House understand have occurred. So people who were in category 1 and people who now will be in category 1—the number of people has doubled. The number of people who will receive the accommodation supplement in category 1 has doubled. But these guys on that side do not support it—they do not support it. They do not support Working for Families, and of course—

💬 Hon Members: Ha, ha!

—will not vote for it; unfortunately, they do not want tax cuts. By definition, or by a consequence of what they have said, the one thing they do want—unspoken, implicit—is tax increases. They want to increase taxes for those in the higher income bracket. They have said that this bill gives money to the rich; those who earn over $52,000. Those people who earn over $52,000 will get more money, and that is true, and they do not like it. They do not want ordinary Kiwis to aspire, to earn more, and to put more in their pockets, and the only way that they are going to manage to balance their increased spending is by taxing—by increasing taxes. Watch—in their policies, in their Supplementary Order Papers (SOPs)—I absolutely expect an SOP that demonstrates that all they want to do is raise taxes to allow for an increased spending that will always be, and always will be, excessive and expensive. That is exactly why people can see straight through the rhetoric from that side of the House. Ordinary New Zealanders—those who are least well off—are more affected, and that is why this is an excellent bill and I commend it, alongside the Greens and this side of the House, to the House.