Families Package (Income Tax and Benefits) Bill

I move, That the Families Package (Income Tax and Benefits) Bill be now read a first time.

This is a transformational package. It will transform the lives of low and middle income New Zealanders, especially those with children. It will lift 88,000 children out of poverty when it is fully implemented. That will nearly halve child poverty when that happens. In short, this piece of legislation will make New Zealand a better, kinder, and fairer place. This package represents the shared desire of the three parties that make up this Government to not be satisfied with the status quo. We have different priorities from the previous Government. We want all New Zealanders to share in prosperity. We want all Kiwi families to have the means to provide for their children and to live in warm, dry, and safe homes. We see an opportunity to better support families, especially those on low and middle incomes, to ensure that their children get the best start in life, and I want to thank the New Zealand First Party and the Green Party of Aotearoa New Zealand for joining us in transforming New Zealand society in this way.

This coalition Government’s families package will do these things by boosting the incomes of low and middle income families through extending Working for Families; introducing a Best Start payment to help families with supporting a child’s early years; introducing a winter energy payment for our superannuitants and low-income families; introducing 26 weeks of paid parental leave by 2020, which has already been passed into law; reinstating the independent earner tax credit; implementing the accommodation supplement and accommodation benefit increases announced in Budget 2017; and, finally, to pay for it all, repealing the tax cuts announced in Budget 2017.

The Government can confidently fund these important measures by scrapping the previous Government’s tax cuts. Those tax cuts were an untargeted and irresponsible election stunt. In the face of growing inequality, a housing crisis, and a health and education system under stress, the previous Government prioritised delivering $440 million a year to the top 10 percent of earners. Rather than cutting taxes for high-income earners, this Government wants to focus our support on families at the time of life when they need it most. Accordingly, this bill repeals the changes that the previous Government made to increase two tax thresholds, instead keeping the tax thresholds at their current rates. It is important to note that the changes proposed by the previous Government have not yet come into effect. No one will be paying more personal income tax than they do now as a result of this legislation.

In the recently completed election, New Zealanders were clear that they wanted something done to reduce the gaps they saw growing in New Zealand. It is not the New Zealand we know and love, where your future is not determined by your hard work but rather by the circumstances of your birth. We want a New Zealand where every child has the opportunity to achieve their potential and is supported by a kind and empathetic Government. The message from voters was clear: now is not the time for tax cuts when there are pressing social issues to be solved. That message was heard by all three parties on this side of the House.

Scrapping the tax cuts will save the Government almost $8.4 billion over five years. Of this, $5.5 billion will be used to fund the Families Package, leaving $2.8 billion that can be used for other purposes such as health, housing, education, and infrastructure. The bill also repeals various consequential amendments that were enacted following the previous Government’s changes. The bill gives effect to aspects of the Families Package that require primary legislation. For Working for Families, the bill will introduce a range of new measures effective from 1 July 2018. Most significantly, the family tax credit rate for the eldest child will be increased by $575, to $5,878 per year. This, combined with the removal of age bands so that there is only one eldest child rate and one subsequent child rate for the family tax credit, represents a real boost to household incomes. In addition to these increases, increasing the abatement threshold from $36,350 to $42,700 will significantly increase the number of families eligible for a tax credit. In 2018-19, 26,000 more families will be eligible for Working for Families as a result of these changes. Moreover, these changes will restore much of the value lost when the last Government cut Working for Families in 2010.

Some further amendments will ensure that families remain better off in work than on a benefit and are otherwise not left behind. This includes the minimum family tax credit, which will be increased from $23,816 to $26,156. We are also including those in receipt of the orphans benefit, the unsupported child’s benefit, and the foster care allowance, to have their allowances increased by $20.31, to reflect the changes that have been made to the family tax credit, and we are very pleased to be able to include this additional support.

The Families Package also includes the extension of paid parental leave, which was passed into law last week, giving parents 22 weeks of paid leave from 1 July 2018, increasing to 26 weeks by 2020. Providing a weekly payment to families with newborns, through our Best Start package, helps establish a strong foundation for a healthy family. Best Start will provide all families with $60 per child per week in the first year of a child’s life and, for low and middle income families, the support until the child turns three.

The evidence from sources such as the Children’s Commissioner’s Expert Advisory Group on Solutions to Child Poverty and the long-running Dunedin longitudinal study is clear: support for the first three years of life is critical to a child’s development. This is also the time when many families struggle to manage care and work responsibilities together. We want families to have more choice when it comes to the first three years of their child’s life. Best Start will be available to children born or due to be born on or after 1 July 2018 and replaces the parental tax credit. For families who receive paid parental leave, the Best Start payment will begin after the paid parental leave ends. In addition, Best Start will also be available to caregivers receiving the orphans benefit, unsupported child’s benefit, and foster care allowance. Best Start is the recognition that the well-being of children must be at the centre of everything we do as a Government.

The winter energy payment will also be available to those who receive a main benefit, New Zealand Superannuation, or a veterans pension. On an annual basis, it will be worth $450 for a single person and $700 for a couple. This payment is in recognition of the increasing cost of living that often leads to those on fixed and low incomes struggling to heat their homes in winter. Around 1,600 New Zealanders die each year due to living in cold homes, and thousands more end up in hospital. That is not acceptable. Eligibility, Mr Joyce, will be conditional on people being resident largely in New Zealand in the winter months, and it will be possible for people to opt out from receiving the benefit if they do not believe they need the assistance. One million New Zealanders will receive the winter energy payment. One million New Zealanders will be warmer and safer as a result of this package.

This bill will reinstate the independent earner tax credit cruelly taken away by the last Government. Around 500,000 individuals received that in 2016-17. The Government has also opted to retain the increases to the accommodation supplement and accommodation benefit payments announced in Budget 2017. It is estimated that $135,000 New Zealanders will benefit by an average of $35 a week. Taken together, this families package will transform the lives of people all across New Zealand: 384,000 families will be better off by an average of $75 per week when it’s rolled out; 652,000 families without dependent children will gain an average of $14 a week; and 88,000 children will be lifted out of poverty—a reduction of 48 percent, and 39,000 more than the Budget 2017 package.

This is a package that sets out to build a fairer New Zealand, one where we take a significant step towards our aspiration to be the best country in the world to raise children and where we reject the hollow, selfish, individualism of the last nine years. It is with great pleasure that I commend this bill to the House.

As the Government implements, in this package, two-thirds of what was announced in Budget 2017—I didn’t hear then the warm, aspirational rhetoric about the increases, for instance, in the housing assistance that was announced in Budget 2017 under the National Government. It’s directly replicated in this package, but now it’s a revolutionary move to show a kinder, gentler New Zealand! Just a few months ago it was—

💬 Hon Steven Joyce: The end of the world!

The end of the world! No, it was niggardly, unkind, uncaring, fiscally too tight. But now: “transform”. So the transformation that we’re talking about today is not so much the transformation for the families who will receive the dividends of a strong economy and good Government books; it’s simply that the Labour Party now has the chequebook. So that’s the difference that Grant Robertson was showing, which he was talking about today.

Let’s see—well, the Minister did a great job of looking like the cat’s got his cream. But what he has no understanding about is where the cream comes from. That became clear today in the Half Year Economic and Fiscal Update, which showed that this Government is inheriting the strongest economy of any incoming Government, with stronger Government books than any incoming Government. And the test is not: did they do something with that? The test is: did they do what could have been done? Have they done a really good job of it, or, as we see here, an intellectually muddled job—and I’ll go through that.

Here are the components of the Family Incomes Package from 2017. It had three components. A big increase in housing assistance—and I’m pleased the Government’s kept that, because the families with the lowest incomes and the highest housing costs are those most under pressure. Some families in high rental areas like west Auckland will benefit by well over $100 a week from that. That is one of the single biggest impacts on lifting those families above the poverty line of 50 percent of the median household income. Then there are the child payments under Working for Families. They’re targeted. The Government’s increased those by a bit more than was announced in Budget 2017—just a little bit more. They’ve changed the abatement threshold. That does mean that more higher-income families get it—not more lower-income families but more higher-income families. So that’s the Working for Families part—that’s targeted and they’ve kept that.

Then, of course, they’ve abolished the changes in tax thresholds. So someone on the average wage, we heard from the Deputy Prime Minister today, is greedy. They greedily thought that with Government surpluses—$20 a week or $1,000 a year is far too much for their share of all the hard work over the last 10 years! This is where the Labour Party message is grinding with New Zealanders. They’re acting as if they’ve discovered some new country. Well, maybe they have, but everyone else over the last 10 years has worked hard. We’ve all been careful with the Government finances. Businesses and households have reorganised themselves. The people in Christchurch found their way through an earthquake. And now is the opportunity where the whole country could benefit from that. But, instead, what’s actually happened is a very simple thing: the Government has cancelled the tax reductions for New Zealanders across the board, and that money has gone on the tertiary package. That’s what’s happened.

We saw the Deputy Prime Minister struggling today to explain why they are against universalism when everyone gets $1,000 a year but they are for it when you give it to every student, regardless of their income. As I asked the Prime Minister the other day, why is it so much fairer if they’re against MPs benefiting by $1,000 a year but they then give our children $12,000 a year? Because that’s what happens.

Well, I know about that, because I’ve got some. I can tell you, that’s the irony of this: my household is miles better off—miles better off under this intellectually incoherent, stupid policy. My household is, I think, something like $10,000 a year better off. What sense does that make? None. Because I appreciate the people—well, I feel guilty about it, because I know who’s worked for it. I know who has given up: people on the average wage who voted for that Minister are giving up $1,000—[Interruption]

💬 Mr SPEAKER: Order! I am going to ask Andrew Little to settle down, but I’m especially going to ask Brett Hudson to stop making those gestures. Thank you.

Just to summarise in more normal tones, my household’s miles better off because the Government has taken away $1,000 a year from average wage earners and handed that to those people who are getting a free tertiary education for one year. That’s actually, technically, regressive, because almost all of them tend to come from higher-income families than those on the average wage who are paying the bill.

That just brings me to the issue of child poverty. You see, the finance Minister is acting like the cat who’s got his cream, but he’s getting one saucer of it. You see, this is one shot, one plug of cream that he gets to lick his lips on, because all the money is gone for the next five years. And here’s the difference: if they’d stuck with the law as it stands, and the fiscal management that was in place, then within two years we could have had another round of tax reductions and child poverty reductions. So it’s good that under this—well, you know, when it was 50,000, they took no notice and said it was terrible and said New Zealand was an unkind country, but now, today, as they implement this, it’s 70,000 and suddenly it’s a revolution—we’re in a completely different world.

Well, it’s good that there are 70,000 kids coming out of poverty, but, of course, what they’re missing there is the other half of the equation. The households where there’s long-term benefit dependency, where there’s family violence, where there’s serial criminal offending, and where there’s gambling problems—what do you think is going to happen to the extra money if you do nothing to support those families? The other half of the equation was always the social investment approach, and that is to recognise that not only is it about low incomes; it’s also about social dysfunction. If you don’t deal with the social dysfunction honestly and in the gritty and long-term way that’s required, then increases in incomes will certainly have some benefits but will not deal with persistent deprivation.

Those members know that that is true. But here’s where the Minister of Finance has slipped one past them: there’s no money to do it now. Social investment is exactly about investment. It is expensive. It costs money to deal with highly complex families, but there’s no money left to do it because it’s gone to the people who don’t need it—that is, the first-year students at university and polytech. So the Government has not put—it has not put—our most disadvantaged households at the core of its strategy, and that is the incoherence of this package.

It’s an odd mix of copying the last Government’s policy and adding some untargeted, misfired, universal cash going to households who don’t need it. And the long-term issues remain untouched and there’s no threat that that Government will get near them. They’ve got no money and no will to do it.

Order! I’m inviting the member to sit down. I assure him I’ll get him to stand up again relatively soon. I just want to make clear to members on both sides of the House, because I think Grant Robertson transgressed slightly and the Leader of the Opposition transgressed greatly, we are now debating not the economic package, not the student arrangements, not social investment; we are debating the Families Package (Income Tax and Benefits) Bill. And because we have had a previous debate on the general economic package, this bill, which would otherwise have been treated in a more liberal manner, given the lack of the opportunity to debate the package, will now be debated as a bill. It is not going to be a general economic debate.

I seek leave for the discussion on this bill to be slightly wider than the purpose of the bill, in order that it might traverse some of the wider economic issues that clearly are important to the Government.

The question is that the debate be—

💬 Hon Grant Robertson: Leave is sought—you’re seeking leave.

Yes, sorry.

💬 Hon Grant Robertson: Leave is sought.

Leave is sought—I apologise—for the debate to be widened, in order to discuss matters that are outside the scope of the bill. Is there any objection to that? There is objection. [Interruption] Mr Little—second warning in about 10 minutes.

I raise a point of order, Mr Speaker. In terms of this level of wideness or narrowness, can I just ask: is it OK to talk about—in relation to the tax cuts, which obviously is a significant part of this bill, the cancellation thereof—where the money’s being spent in relation to that? Keeping it narrow—

In a passing manner, yes, but as the substance of a member’s contribution, no.

Thank you, Mr Speaker.

💬 Mr SPEAKER: Sorry, I’m just going to—[Interruption] Order! I am on my feet. I do apologise to the member again, and I reiterate my assurance that he will get a chance to stand up this time. I do want to make it clear, though, Mr Joyce—I probably didn’t make it clear—that that will be on the first and second readings and on the third reading. Of course, when we’re doing the committee stage, at that stage it is a very narrow technical debate. The Hon Stuart Nash.

Thank you very much, Mr Speaker—finally. The speech you just heard from the Leader of the Opposition versus the speech you just heard from the Minister of Finance is the reason why we are in Government and they are not. Yet again, you heard a speech putting down the people of New Zealand—putting down the families, putting down the students—whereas over this side—

💬 Hon Gerry Brownlee: I raise a point of order, Madam Speaker. I don’t mean to interrupt the member, either—I do apologise to him—but I do need to correct him. The reason they are in Government is because that’s what Winston wanted.

The ASSISTANT SPEAKER (Poto Williams): Thank you, Mr Brownlee. We don’t need any further points of order of that nature.

Thank you, Madam Assistant Speaker. The reason we are in Government is because that member and his cohort spent far too long in their ivory towers. What we on this side of the House did is we went out, and I’ll tell you what we heard, Mr Brownlee, in the street corner meetings and the town halls and the cottage meetings up and down this country: that, you know what, it’s just not time for a tax cut—it’s just not time for a tax cut. It’s time to once again reinvest in our communities, in our schools, in our health system, in our police force, and in our housing. It’s time to give those who need a little bit of help a hand up. That is what the people of New Zealand want.

This is the reason why I got into politics. This bill is the reason why I got into politics—the long hours, the mountains of readings, the street corner meetings in the pouring rain in the middle of winter and in the hot summer of Hawke’s Bay. To really make a difference—this is what politics is about, to make a difference to Kiwi families, and this is what this bill does.

The sort of families we’re talking about are those that work hard. They pay their taxes. They get out there. They coach their kids’ sports teams. They look after themselves. They play with their mates. They enjoy a beer every now and again. They have dreams. They have aspirations—both for themselves and for their children. They don’t often take a holiday. There are no expensive presents for birthdays or family trips to Fiji, because you know what? Despite everything else and all the work they do, life is tough. Life is tough—not necessarily bad and not without love and support, but tough.

They want to believe that we as politicians, as their elected representatives, are here for them, are standing up for them, and are going hard for what they believe in. And you know what? Then what they hear is that the last Government’s tax cuts give $440 million to the top 10 percent, and they come to a street corner meeting and they go—

The ASSISTANT SPEAKER (Poto Williams): I’d appreciate reference to the bill.

—yes, but this is about families, Madam Assistant Speaker—how can this be fair? How can this be fair?

As New Zealanders, we actually don’t ask for much; we really don’t. All we want is a fair deal—all we want is a fair deal—and this is what this bill is about. Under a Jacinda Ardern Government, they see that, in fact, the New Zealand First - Labour coalition is about making a difference in supporting our families—New Zealand First, Labour, and Green MPs working together really hard to make a difference. This is what this Families Package does. It really makes a difference.

This Families Package is transformational in a way that will make life just that much easier for 384,000 Kiwi families, by an average of about $75 a week. This includes those on a pension as well, but, don’t worry, it’s not those who are going to go over to the Gold Coast and spend it there. That’s been sorted, Mr Brownlee. For some listening, I know that $75 a week might not seem like a lot of money, but for nearly 400,000 families it makes a real difference. It determines what sort of food they eat, if their children can afford to play sport, if there’s something under the Christmas tree. Of course these families are still going to have to work incredibly hard; they’re still going to have to make sacrifices. No one’s retiring on these payments at all, but they know that this Labour - New Zealand First Government has got their back.

For me, this is what this bill and this Government is about—about lifting 88,000 children out of poverty. Seriously, how can you knock that?

💬 Hon Gerry Brownlee: Slowly.

Eighty-eight thousand children out of poverty—and Mr Brownlee’s right; “slowly”. You can knock that slowly, but I think the vast majority of New Zealanders understand that living in a country where poverty is rife is just not right, and this is why this package is going to help 88,000 kids get out of poverty. I don’t know how, Mr Brownlee, you can disagree with that.

The question is, of course: how can we afford this? How can we afford this? Well, what we did is we rolled back the tax cuts to those who didn’t really need them. Again, this is the message I heard right across my electorate. You know what that message was? “Mr Nash, instead of a tax cut, we would rather this money went into our core infrastructure, like our schools, like our hospitals, like our police force, but, most importantly, into the families in our communities who are working really hard, but who are struggling.” We all know them. Those of us who are electorate MPs, we see them in our offices, because often they’re at their wits’ end. They just don’t feel as if they’re getting a fair deal. The thing is that these are Kiwis who are working hard—they’re working hard, they’ve got kids, they just can’t make ends meet, and this is what this is about.

This is the New Zealand way. This is the Labour way. This is what a great coalition Government believes in—families. This is what this Government believes in—standing up for families. And what that actually looks like—Ministers from all parties collaborating in a way that makes a real difference. That’s what coalition politics looks like, and that’s how you make it work really well.

Our Families Package—I just want to reiterate—is going to lift 88,000 children out of poverty. It is going to make 385,000 families better off by an average of $75 a week; 710 Kiwis on the pension will get help to pay their winter power bill—in fact, a million Kiwis are going to get help to pay their power bill. There are 40,000 children every single year who end up in hospital during winter with respiratory diseases and ailments—40,000 Kiwis end up in hospital with respiratory diseases and ailments. That is not the New Zealand that I grew up in, and not the New Zealand I believe we can be.

The orphans benefit, the unsupported child’s benefit, and the foster care allowance are going to increase by $20 a week. It mightn’t sound like a lot of money to some of those members, but to the people who are looking after our orphans, looking after these kids, who are foster parents, it makes a difference—it really does.

The independent earner tax credit will be reinstated. That Opposition over there, when they were in Government, got rid of this. Five hundred thousand Kiwis are going to be better off. Again, it’s not a lot of money but it makes a difference. This is where that Government lost touch. They forgot that—you know what?—for a whole lot of Kiwis, this makes a difference. We’re going to increase the Working for Families non-abatement period to $42,700 because we know this is important.

This is a Labour - New Zealand First Government that’s got the backs of our families and has the back of New Zealand families. This is a Government that cares about our families. We know there’s a lot more to do. We know there’s a lot more to do over the next three, six, nine, and 12 years, and this is just the start of it—this is just the start of it. Imagine—this is what we can do in our first 100 days; imagine the first 100 weeks, and then 100 months—

💬 Hon Grant Robertson: And then 100 years.

And then 100 years. But this is the thing: we’re setting this up for 100 years. I believe that the Ardern Government is going to be the most transformational since the first Labour Government. I also believe, because I’ve sat in a number of meetings with our finance Minister, Grant Robertson, and boy, this man has a feel for the facts. He knows where the money is and he knows how to drive the economy in a way that is going to create meaningful growth and meaningful change.

I have never been more excited about being in politics than I am now. We are making a difference to New Zealand families, and that is what politics is about.

Listening to the earlier speakers on this bill, I was moved at the level of contradiction that was occurring. Mr Nash was busy telling us how important $20 a week can be for a family or for somebody in a difficult situation, and how important it is to increase that. And yet, this is the same Mr Nash who doesn’t think that should happen for the average wage earners in his electorate of Napier—that somebody who’s working hard to get ahead, who might be a tradie or somebody who’s doing a couple of jobs, shouldn’t get $20 a week. Because it’s important for somebody that Labour bestows their favour on, but it’s not important for ordinary, everyday Kiwis.

Then we had Andrew Little going on at this side of the House and being aggressive about Labour’s package. Is this the same Andrew Little that used to represent workers—middle-income workers, who used to be important to him? Is this the same Andrew Little who actually used to stand up for those people, but who’s now sitting in this House, and if you don’t have the good fortune to have young children, then Labour is not going to help you at all with this package—1.2 million New Zealanders are invisible to the New Zealand Labour Party; 1.2 million. And that’s why they got only 37 percent, because they told everybody else to take a running jump. That’s what they did.

The other thing that’s really important—

💬 Hon Grant Robertson: You need friends, Steven.

Well, let’s talk about friends—let’s talk about friends. Mr Robertson accused middle-income earners of having hollow, selfish individualism. So the journalists that I just saw in the press gallery who happen to be single or don’t have a young family are hollow, selfish, and individualistic if they would dare want to have a tax threshold change that would give them a bit more income—that this time of selfish individualism was gone because he was removing the tax threshold changes. There’s no other way to write it than to say that anybody who is single or who has grown-up kids or who is a couple trying to get started is guilty of hollow, selfish individualism, according to Grant Robertson. I’m sorry if that’s appalling; that’s appalling. If that’s the attitude in this bill, there’s no wonder that we’ll be opposing it.

💬 Hon Iain Lees-Galloway: Oh, you are going to oppose it?

We are opposing it—definitely. Don’t you worry about that. We are opposing it. We of course support the accommodation supplement changes, but we’ve already put those in place. We don’t need a bill to change that. We supported the Working for Families changes that we put in place. That side of the House is very excited today that they’ve collapsed the rates. Actually, they didn’t; that’s already happened. That’s already happened because the previous Government had already put this in place. But what we won’t subscribe to is calling New Zealanders who don’t have young children hollow, selfish, and individualistic. We are not going to subscribe to that, as Grant Robertson did, which is an appalling treatment of New Zealanders that just happen to be in different circumstances from the Labour Party’s current favoured group.

Now, we need to talk a little bit about the claimed public endorsement of this package, as raised by members opposite, because there’s a bit of a problem with that. Only one party campaigned for this package, and that party got less than 37 percent of the vote. The New Zealand First Party voted for Budget 2017 and then campaigned to remove it. It’s going to come as a surprise to New Zealand First supporters that they actually lose the $670-odd for the veterans pension, that they’ll lose the $670-odd for superannuation, because none of them heard Tracey Martin running around the country saying, “Hey, elect us and we’ll remove the superannuation increase.” Nobody heard that because it didn’t happen; it didn’t happen. And now she’s sitting in this House and saying that she will change what she voted for and what she didn’t campaign on, and that’s what’s going on in this House. And then we have the Greens, who also voted for it. They also voted for the package of the Government of the day, in Budget 2017.

So there is no mandate for this change, and that’s why we’ll be arguing against it. The only party that argued for it got 36-point-something percent of the vote and are walking around arrogantly saying that anybody who doesn’t support this is guilty of hollow, selfish individualism. I’m sorry, but that’s not a fair way to describe New Zealanders. All they want—

💬 Hon Grant Robertson: I raise a point of order, Mr Speaker. I take offence at the fact that at least half a dozen times during that speech, Mr Joyce has completely misrepresented what I have said—completely misrepresented what I have said.

💬 Hon Gerry Brownlee: That is not a way to raise a point of order about a matter like this. It is a debating point, unless you’re about to rule that it’s not, in which case chaos will reign throughout the House, because those sorts of comments are frequently made, and, of course, the man who makes them most frequently in this House is none other than Grant Robertson.

The ASSISTANT SPEAKER (Adrian Rurawhe): I thank both sides’ members. This is a robust debate, and I did hear the word “misrepresent” coming from both sides. I encourage all members to abide by the Speaker’s ruling made at about 10 minutes to 5 and speak to the bill.

Thank you, Mr Assistant Speaker. Of course, we come to the very timing of this bill, because, actually, this is not a big bill. This could’ve actually been tabled probably some weeks ago. It’s certainly been on the books for a while, but the Labour Party didn’t want to run it until 10 or 11 days before Christmas, because they’re so embarrassed about what it is, and they’re hoping that nobody will notice exactly what’s going on. Well, I have news for them, because New Zealanders do notice, and that’s why they’re still well behind the National Party in the polls, because they are the only ones arguing that people that actually want a tax package are guilty of hollow, selfish individualism.

We come now to the matter of the extra subsidies. We have two extra here. This is a poorly designed package. It’s a poorly designed package, and it actually involves resurrecting one tax credit that had already been sorted by providing people with tax cuts instead, and adding two more, including one that, apparently, you get to auto-enrol for but you have to report to the commissar if you’re going to leave the country and have a winter energy payment and pay it back at that point, which is something that we’re no doubt going to have a look at through the course of this debate.

This is a party opposite who claim that we shouldn’t be having universal payments for things, that tax is unfocused and shouldn’t be given to everybody, but then turns around, in its incoherent way, and says that we should give a baby bonus to everybody—baby bonus to every parent—irrespective of income, and also a winter energy payment to any superannuitant irrespective of income. So superannuitants are not allowed to have an increase in superannuation, but, actually, they’re allowed to have a winter energy payment. This is ridiculous politics. This is just creating an ever larger spaghetti of entitlements that New Zealanders don’t understand, because the Labour Party can’t bring itself to allow middle-income earners to have a tax reduction. They want everybody paying a 30c-in-the-dollar marginal tax rate. It’s the only conclusion you can come to, because 30c in the dollar is where we’re all headed.

Already, more than half of all full-time workers in New Zealand pay a 30c-in-the-dollar tax rate. That’s what’s going on, and if they are paying Working for Families abatement or they’re paying accommodation supplement abatement, they are already above 50 percent of every additional dollar that they earn going back to the Government. And this is a party on the other side who claim to care about the taxation of workers, who say, “Oh, we should be valuing work more. We should be making sure that people get more of the value of their work.” And the very first thing they do—the very first thing they do—is actually reduce the amount of return people see in their hands from their work. That’s their first act. This is the party opposite who claims to be concerned about the wages of workers, and the very first act of this party, in relation to workers, is to come to this House and take $1,060 off people on the median wage from 1 April next year. That is not lifting their incomes. That’s not helping them afford the costs in their lives. That is actually taking money from them. That’s what’s going on, and that’s why we will oppose this bill.

Thank you very much, Mr Assistant Speaker. It’s a delight to stand and take this call on behalf of New Zealand First on the Families Package (Income Tax and Benefits) Bill. This is a true example of what is, in reality, probably the first real MMP Government this country has ever had. This is not an example of a large party with some cling-ons. This is not an example of a large party that said, “Here, have some crumbs from the table. Give us your vote, and then we’ll just go about our business.” This is, finally, for New Zealand, an example of what MMP was supposed to bring in. Finally, we have a coalition Government, between the Labour Party and New Zealand First with support partners from the Green Party, cohesively, cooperatively, and collegially working together to create this piece of legislation.

It is no shock that the National Party has stood—or their speakers to date, anyway—to say that they hate this bill. It’s no shock, because they’re still living in the neo-liberal 90s. They’re still living in a situation where they believe that every one of the New Zealanders—the massive number of New Zealanders—who are going to be lifted out of poverty by this bill should be an individual in their own right, that they should look after themselves and that the State will not care for you.

In Part 1 of this bill, the Best Start tax package is going to support, once again—since the universal family benefit was abolished in this country by a National Government, this will be the first time since, I think it was, the 1990s that we will once again as a Government say to New Zealanders, to the world, “We will put children first. We will support our babies.” This Government has already moved a piece of legislation to make sure that we showed that to New Zealanders and the world, with regard to the extension of paid parental leave to 26 weeks, and once again we do it again.

I want to just show—this is a file that I was working on, on behalf of New Zealand First, before the election, and it’s labelled “universal child allowance”. This is how in tune this coalition Government is, that this work was already being done by New Zealand First at the same time as it was being done by the Labour Party, because the need for this piece of legislation is so great. What we have inside of this piece of legislation with the Families Package is an opportunity, in the next so many hours, to pass a piece of legislation that will lift 88,000 children out of poverty.

But it’s not just those children. There will be—I think I’ve got some numbers here about the number of families. By 2019, this piece of legislation will have assisted 385,000 families. They are middle and lower New Zealand families. These are the families—the women who came up to us to have a meeting with me up in the North, who said, “We’re middle-income earners at home looking after our children, and we get nothing from the National Government. We get no recognition from our Government that looking after children is actually important work. We get no recognition that this is part of what must be done—we must care for our children.” And this is what this Government will do.

There is estimated to be 748,000 children living in those 385,000 families. That is what this piece of legislation will do. This piece of legislation—no, it will not, because it will repeal the tax cuts that the National Government put forward last year. Oh, it was earlier this year, probably—lots of water’s gone under the bridge since then. And I acknowledge that New Zealand First voted in favour of that piece of legislation. We did so because of the accommodation supplement. We knew how desperate—desperate—New Zealanders were to actually get anything more to assist them to get out of cars, to get of motels, and to get out of garages with family members. That is why New Zealand First supported that piece of legislation, because at that time we knew the desperation of the New Zealanders and their living conditions. As per normal with the National Government, they rolled up a sweetie with a drop of poison, and that was the tax package.

So this is an opportunity to take the piece that New Zealanders need and leave behind the bit that nobody asked for. None of the New Zealanders that will be helped by this package, none of the 385,000 families, none of 748,000 children, none of the 608,000 families—the 63 percent with children in this country that will benefit in an enormous way—asked for a tax cut. They asked for a Government that cared. They asked for a Government that had empathy and understanding. They asked for a Government that put them first—not international speculators, not international buyers, not other people, but them. They asked for the divide between the rich and poor to be addressed, and this will go some way for it.

Mr Brownlee made a comment that the only reason this Government is in the manifestation that it is—he suggested it was because of one man. I don’t know what dictatorship the National Party works under, but I can confirm for the New Zealand public there was nothing dictatorial about the intense conversation that the New Zealand First caucus and the New Zealand First board had about the responsibility of selecting a Government for New Zealand during the negotiation process, and I know because I was there every day.

What we chose was the change that needed to take place. We chose a truly MMP environment—finally. We chose a Government that would recognise and acknowledge that these steps needed to be taken to turn back the neo-liberalism that had taken place and that had harmed our country—harmed our country.

We know that there will be fewer families showing up at food banks. We know that there will be fewer families and children and older people showing up at our hospitals.

💬 Hon David Bennett: Enjoy it, Fletch. You ain’t going to see it again. Ha, ha! You’ll have to get a real job now, bro.

Mr Bennett is shouting out, because, Mr Bennett—he always shouts out. He doesn’t seem to take this place very seriously, which is interesting for the length of time he’s been here. There were 9,300 senior citizens hospitalised last year with pneumonia—no, keep smiling Mr Bennett. Keep smiling, Mr Bennett. There were 9,360 superannuitants who ended up in hospital last year because they couldn’t afford their winter energy bill, and now this Government will do something about it.

Now this Government will do something about it, because for nine long years that Government did nothing. They suggested we might give you $20 a week. They suggested that you can look after yourself—“Well, there’s a foodbank down the road.” or “Let’s let another charity start up.” How Dickensian. How Dickensian to decide that in this nation, a nation of plenty, what would be the answer is charities and non-profit organisations to deal with what the Government should have held responsibility for.

This Government takes the responsibility. This Government will deliver for the people of New Zealand, and this Government holds the majority of the votes that were cast in 2017—this Government.

💬 Hon David Bennett: They hold the majority—the Greens. They’re your mates.

This Government holds the majority of votes in 2017, with our supply and confidence partner. The first good rule of Government, Mr Bennett, is to count. Figure out how to count—57-63 doesn’t cut it. It doesn’t cut it. This is the unfortunate thing: that party still lives in a first-past-the-post environment. That party still lives in a neo-liberal—

💬 Hon Amy Adams: I raise a point of order, Mr Speaker. In Speaker Mallard’s ruling, when he gave the urgent debate this afternoon, he made it very clear that, as a consequence, the debates on this bill would be strictly limited to the matters in this bill, and we’ve just had a long diatribe from the member Tracey Martin wanting to relitigate the election results. While that might make her feel better, it certainly cannot be construed as a narrow, tightly focused debate on the principles of this bill.

Speaking to the point of order, Mr Speaker.

The ASSISTANT SPEAKER (Adrian Rurawhe): I don’t need any more assistance, thank you very much. I take the member’s point. There has been some drifting. Most of the member’s speech has been relevant—just not the point at the end, about 30 seconds, and maybe that’s enough.

I finish my time with this. I’m very grateful to my Labour Party Cabinet colleagues and to the Green Party support members there for the inclusion of orphans, unsupported children, and foster children inside this piece of legislation. So often, they had been forgotten. So often they had been neglected, particularly by the previous Government. So it’s wonderful to work with people who actually listen, have collaborative conversations, and make sure that the voice of all New Zealanders are inside of the legislation we pass. Kia ora.

Mr Assistant Speaker, thank you. In rising to take a call in this first reading, in the first of what I’m sure will be many calls over the course of the next few days on the Families Package (Income Tax and Benefits) Bill, the first matter I actually want to bring to the House’s attention is that, while we are debating this bill under urgency and given that with urgency we have a very limited time as the representatives in this House who have the job of holding the Government to account, it matters, of course, even more that we have access to the relevant information. While the bill maintains that the regulatory impact statement is available on the Treasury website, it is, in fact, not. I want to put on record that I think it is most unacceptable to be debating a piece of legislation brought in by this Government where they are spending the largest chunk of their economic plan that we’ve seen released today, and yet they have made it impossible for members debating on this side of the House to have access to the regulatory impact statement, and I think that is, frankly, shoddy.

It is interesting that the first real piece of legislation we’ve seen from this new Government that isn’t just a re-run of an old member’s bill that’s been hanging around in the ballot or isn’t National Party legislation is acting to take away money from hard-working New Zealand taxpayers. That’s the reality, and Labour want to use all sorts of other ways of describing it, but these are tax cuts that are in law. They are in law. They weren’t our policy that would have happened if we were the Government; these are changes to the tax thresholds that are fundamentally necessary to maintain the fiscal relevance of those thresholds and address what’s called fiscal drag. If you don’t keep amending the tax thresholds, you get what’s known as bracket creep, and you get more and more low-income families paying higher rates of tax. If this was a Government that was genuinely concerned about addressing the take-home pay and the incomes of low and middle income families, they would want to do what the National Government did when it was in power, which was address bracket creep and fiscal drag and address the relative reduction in buying power of those various income tax thresholds.

We’ve heard in this debate numbers thrown around of the number of families who are going to benefit from these changes, but here’s what I’ve managed to take out of the information—scarce though it is—on the bill. Two-thirds of those who benefit from this package will be $400 a year worse off. So two-thirds of the people that Labour are claiming benefit are worse off as a consequence of this bill. Let me take you through why that is. Six hundred and twenty-five thousand people, by Labour’s own numbers—so if members on the opposite side read their own documents; they probably haven’t—625,000 families, according to the Government’s own information, benefit from this package by $13 a week. But they are losing $1,060 a year, meaning they are $400 a year worse off under this package. That is two-thirds of the people that the Government claims this package helps. Now, even apart from those two-thirds—that’s 625,000 families who they’re claiming as beneficiaries, who are worse off under this package—there are another 1.2 million who get nothing from this package and lose the $1,060 that they would have had from 1 April next year.

Now, we heard the finance Minister, in the general debate, talk about this being the reward for workers. Well, if the reward for workers is being used as an increasing cash cow, an ATM, for the Government on the opposite benches, then I think it’s a reward that those workers would refuse. Why would you take $1,060 out of the pockets of every hard-working New Zealander earning low and middle income to fund this package, when most of the people it claims to benefit are going to be worse off? It makes absolutely no sense.

In addition, they say, “Well, the superannuitants will be compensated by the winter heating payment.” Well, actually, no, because quite apart from the superannuitants who are off travelling around the world and despite what Jenny Salesa said in the House today, in speaking for the Minister of Health, that they wouldn’t be able to access it if they were on the Gold Coast and Hawaii, patently they will. They can have repeated holidays of up to four weeks at a time each and still fully qualify. So while we’re looking after those superannuitants who patently don’t need it, even though it’s claimed to be a targeted package, we’ve also, in this bill, now found that superannuitants who are in residential care will miss out on this and will miss out on their tax cut. So for those superannuitants—and I hope New Zealand First are listening to this, because they are the party that claims to stand up for them—who are in residential or rest home care, they lose $1,060 a year and get nothing under this package. Now, why a party that claims to stand up for those people would support that is patently beyond me.

It seems to me very clear that this is about that old left-wing Labour Party ideology that says, “We know how to spend your money better than you do. We would rather take the money out of your pocket, filter it through a large bureaucracy, and then, if we deem it appropriate, we might give you a little bit back if there’s any left over.” How arrogant. How arrogant to think that people are better off if Labour take money from them and then pick and choose who gets a little bit of what’s left after they have filtered it.

On this side of the House, in National, we respect people who get up and go to work, and we worked hard in Government to create surpluses so that we could give some of that back, so we could let people keep their own money. Straight away, in the first action of this new Government, what they’re doing is saying, “Forget that. The Government might be collecting more than it needs, but we would rather keep it and spend it on our wasteful programmes, which aren’t well targeted, than let taxpayers keep a bit of their money.”

So we’ve heard a lot today about the fact that this is a better-targeted package—it’s going to go to those who need it. Well, I’ve already highlighted the situation of the idiocy of having those who might be over 65 who are perfectly well able to care for themselves and pay for their own heating and who are travelling around the world taking repeated breaks in warmer climates being eligible for the support, but not lower-income people who are on rest home care subsidy. As well, within this package we have, of course, the baby bonus, which is paid out to everyone who has a baby, whether they need it or not, and yet this is the targeted package for low-income earners that the Government wants to believe we’re buying.

There’s another thing about that baby bonus that I find quite incredible. I’m glad Mr Lees-Galloway is in the House, because while parents are taking his much-vaunted extension of paid parental leave for half the year—six months—they will not get the baby bonus. So, straight away, they’ve taken back half of their gift to new parents: “Have $3,000 a year. Oh, but, actually, you don’t get half of it straight away.” Isn’t that incredible?

While parents are on paid parental leave, as I pointed out when we were debating paid parental leave in this House, they are getting considerably less than the minimum wage. So parents on paid parental leave get almost 20 percent less than the minimum wage, and yet Labour is saying that during that time they don’t need the extra baby bonus. I would say that they need it more than anyone. They need it more than anyone. So, straight away, the Government that is talking about giving new parents—all new parents will get $3,000 a year. Quite apart from the fact that that is not targeted at all—

💬 Hon Iain Lees-Galloway: So where’s your policy to give them more money?

Well, our policy, Mr Lees-Galloway, is to let them keep their own money and fund it for themselves, because they don’t need a Government to tell them how to spend their money. Our policy would be much more sensible. So, quite apart from the fact that they’re not targeting it at all to those who need it—the baby bonus is not targeted and it goes to people at the top—but, straight away, Labour gives with one hand and takes half of it back, because, actually, you don’t get it at all if you’re getting paid parental leave, even though that’s significantly underfunded.

So it is not a well-targeted package, and look at the increases to Working for Families. This change will see more high-income families getting Working for Families. So, again, we see that this is not a targeted package supporting the low and middle income earners. If it was, they would be concerned about fiscal drag and bracket creep. If it was, you wouldn’t see universal free tertiary education eating up almost all of the spending. And if it was, you wouldn’t see the universal baby bonus going to those who don’t need it, and you wouldn’t see a winter heating payment going to those who don’t need it. This is simply Labour wanting to increase the dependency of people on the Government.

Now, the one thing in this package that Labour have kept from National’s Budget—and I commend them for keeping it—is the accommodation supplement changes. But what I find astounding was the sitting and listening to the debates that we had after Budget ’17, when member after member from the Labour caucus got up and railed against the accommodation supplement changes. It was a landlord subsidy, it was giving to our rich mates—which is their standard refrain, regardless of what we’re debating—it was an appalling way to do it, and it was absolutely wrong. And what’s the one thing they keep? National’s accommodation supplement changes. So I think you really have to take this with a grain of salt.

Finally, this package purports to take 88,000 children out of poverty. Well, good on them. They’re only 12,000 short of what National would have done.

Whoo! That was a painful listen, I’ve got to say. That speech from Amy Adams was, to me, the perfect speech of neo-liberalism, which just outlined right there the messages of this side. The accusation that we would rather take people’s money and spend it on wasteful, poorly targeted programmes and take that money and spend it on poorly targeted universal healthcare, poorly targeted universal basic education systems, maybe poorly targeted community-based police services, or—I don’t know—poorly targeted and at least adequately funded community services or poorly targeted decent wages—

The ASSISTANT SPEAKER (Adrian Rurawhe): Order! The member needs to come to the bill.

This is the philosophy of that side. They believe that taxation and Government providing basic services is wasteful. They believe that those basic things, which are the foundations of any decent society, should be paid for by the individual and that it is wasteful for us to be using our tax money on those things.

Well, I will stand up here and say that we have a different philosophy on this side of the House. It is a philosophy that is grounded on experience of what delivers the best results for the most people, and that is a universal approach to the provision of the foundations of our society, which are decent education, decent incomes, and a decent healthcare system.

So, to get on to more specifics of the bill, I do want to recognise the antecedence of this piece of legislation, which I think can be significantly attributed to the campaigns from our communities to address child poverty. This week, I was at the Tick for Kids celebration in this Parliament, which was a meeting of young people and community leaders from all around the country. There were hundreds of people present, celebrating this moment in time. This moment is where we have come to the point where, in the election, I think every single party acknowledged that child poverty was a shame on our country, and we have the election, I assume, of a Government that has already made a commitment to addressing and reducing that poverty. This legislation today, in the first 100 days, is part of demonstrating to the country the commitment of this Government to reduce inequality and progressively eliminate child poverty from this country.

Ensuring everyone—especially families—has enough to sustain themselves has been a driving force for the Green Party for years, and I do want to specifically acknowledge the political commitment, the intellectual leadership, and the moral courage from Metiria Turei, working alongside many advocates in our communities and around the country in this fight. He mihi aroha ki te mareikura a Metiria Turei mō tana tū kaha mō ngā whānau me ngā tamariki katoa.

[A warm greeting to my esteemed friend Metiria Turei for her strong support of families and all children.]

Our children and our friends and families and neighbours who are struggling need us to see them and address their needs. In the words of one of the speakers from the Tick for Kids celebration, it is time we shifted the burden of child poverty away from those who are experiencing it. This House has the ability to lighten that load and to take some of that load, and I am pleased today that there is a will in this House to do that.

This bill, alongside the Prime Minister seeking cross-party support for legislation to ensure that we actively reduce child poverty, was a major reason for the celebrations this week. This bill doesn’t remove the burden of poverty from all of our children, but it is a start. It is a critically important milestone, a signal from this Government that addressing inequality and ensuring that families have enough is a major focus for us in this term. It may not have escaped the notice of the National Party members that the Green Party supported their dodgy Budget legislation. They may seek to suggest that we were divided on that legislation, and I do want to put it on record in the House again that it was a very, very difficult call for us. It came down to the urgency of need amongst the people on lowest incomes experiencing extreme housing stress, and the long-term fundamental harm of eroding our tax base. So, I have got to say, it is a real relief to be able to support this legislation that undoes those egregious tax cuts and ensures that families have got the support that we were initially supporting in terms of changes to the accommodation benefit.

This legislation will ensure that the Government has the money to start rebuilding the foundations of an egalitarian society and, entirely consistent with that, provide more money in the pocket for families who have been doing it too hard for too long. This legislation will lift 88,000 children—and we can only assume their caregivers as well—out of poverty by 2020-21. This is 48 percent more than the status quo, and 39,000 more children out of poverty than under National’s reforms.

I want to take just a moment to remind this House of some of the consequences of poverty: homelessness, which in turn undermines people’s employment opportunities and education, as well as their health and sense of value in our society. Poverty results in overcrowding in homes, which creates a significant health risk as well as exacerbating stress and increasing the risk of violence. It results in sickness and hospitalisation and more than one death a week from low-income related diseases. There are poor educational outcomes for kids having problems concentrating, reduced opportunities for learning outside of school, sickness, and the impact of transience for not having enough money for the family to pay the rent. It results in social isolation, something that is not often talked about but is a really profound impact of poverty, where children are too embarrassed to bring friends home. They don’t have the money or the resources to be able to get to events or to participate in sports or cultural groups or to go on school trips. They become ashamed and embarrassed and worried about their clothes—that they are out of place and they don’t fit. That isolation has profound and lifelong consequences and results in mental health illness resulting from the stigma and stress and anxiety. We can and we need to do better for our children and the people who are out of the paid workforce.

This legislation, and the winter payment in particular, I think of—during the election campaign—a woman in my street, whose door I knocked on, who was on a sickness benefit. It was winter and it was cold and she told me that after paying her rent she had only $20 to $30 left for everything. She could not turn on the heater, and she was a sick woman, unable to be in the paid workforce after years of being in the paid workforce and contributing. She was left unwell and unable to get well, because she did not have the money to turn on the heater and feed herself. This piece of legislation will make a difference for her, and I am so, so pleased that New Zealanders voted to make a difference for that woman, because she matters and we all are a little bit less of ourselves if we don’t acknowledge her value and support her in getting well.

This legislation does a lot of things, and I’m sure in the subsequent speeches over this debate that I will get to drill into some of the details of it. But I do just want to say that if the Green Party had been leading the Government, this isn’t the legislation we would bring in. We would do it differently, but this is a start. It’s a quick fix in the interim before we get into solving the problems of Working for Families and the complexity and problems of the accommodation supplement. But this Government has a commitment to doing that and ensuring that everyone in this country has a right and an ability to participate and be well.

Mr Assistant Speaker, can I start—as this is the first contribution I’ve made with you in the Chair—by extending my congratulations to you. You already show a very dignified aura as you sit in that Chair, and I wish you very well in your role as an Assistant Speaker.

I do want to return this debate to the legislation, the Families Package (Income Tax and Benefits) Bill. It’s not about universality of healthcare or education; it is a piece of legislation that is quite specific. It’s in urgency, because, of course, it comes into effect on 1 April and 1 July, and that justifies coming into urgency according to the Leader of the House—can’t quite understand the logic myself, but, anyway, here we are.

I’m having trouble—I know the National caucus has taken a position of voting against this bill, but I’m reminded of the prayer we start the day with: “Putting aside all personal interests as we debate matters”. I don’t know what I’ve done to deserve so much generosity and favouritism from this Labour - Greens - New Zealand First Government. I didn’t ask for their generosity, but I’m about to get it.

I have a daughter Laura who’s off to university in Auckland next year, so, conservatively, that’s about $10,000 or $12,000 that I’m better off. I have a daughter Isabella who’s doing her last year at school—and congratulations to her; recently nominated deputy head girl. She will definitely go to university the following year so that puts me about another $10,000 or $12,000 better off. Then I’ve got my son, Morgan, who’s determined to be an architect when he finishes school—he’s got a few more years to go. He’s only 13. But that gives me another opportunity through the generosity of this Labour Government to pick up about $10,000 or $12,000 a year.

Then there is, of course, the situation—I don’t look to be over 65, but I do admit that I am. So I’m looking forward to the winter energy payment of $750, and when I eventually get home, perhaps on Saturday afternoon when the urgency finishes, I will have a discussion with my wife about the potential of trying to become eligible for the baby bonus. I’m not confident that will be a discussion that ends well, but I am certainly doing very, very well out of this package. But having considered the $10,000 or $12,000 for three children and the winter energy payment of $750, I am going to put personal interests aside and I will be voting against this legislation.

One of the reasons that I do it is I think you’d best describe this legislation as intellectually bereft. It is simplistic legislation. It delivers universality to people that don’t need it. We heard the speech from the Hon Tracey Martin saying that this was all about targeting. If it was about targeting the people she’s identified in true poverty, then I might be prepared to vote for it. But when they generously give this sort of money to somebody in my situation, why is that good legislation?

💬 Kiritapu Allan: What about the tax cuts?

What about the tax cuts? That’s a very interesting—I did take that into account. I could have got $1,060 a year and now they’re talking about $35,000 a year. How’s that sensible—how’s that sensible? It is taxpayers’ money that you’re wasting by delivering it to somebody like me who doesn’t need it. By all means, target assistance; we all support that. But the stupidity of passing out this sort of package and making it universal to people that don’t need it just leaves me wondering what intellect, what planet were the people who decided this package on.

A winter energy payment that I understand will automatically be enrolled, so it’ll come with superannuation payments, and then the option to opt out. Who’s going to bother to opt out? Stephen Tindall?

💬 Hon Member: Winston might.

The Rt Hon Winston Peters might—well, we’ll watch with interest. He was very, very slow to reveal when he was picking up a whole lot of superannuation that he shouldn’t have been picking up. But maybe he will opt out. I don’t think many people will.

💬 Hon Willie Jackson: No, you won’t.

The Hon Willie Jackson interjects and said that I won’t. Well, he doesn’t actually know that situation, but give me one reason why I should. You’re passing the legislation. You’re the one who’s designed the system to give it to people who clearly don’t really need it. Why should anybody opt out? Why should the responsibility go to somebody to opt out of stupid, ill-considered legislation that the Hon Willie Jackson is about to vote for.

This Government needs to be past slogans. When the Hon Grant Robertson introduced this legislation he used the words, and I quote, “We want all New Zealanders to live in prosperity.” Who doesn’t want that—who doesn’t want that? We all do. Then it’s a matter of intelligently delivering policies that will give the opportunity for all New Zealanders to live in prosperity. But to take a tax cut off me of $1,000-odd and, effectively, give me a gift of perhaps $30,000 is just plain stupidity. There is no other way I can explain it.

Why does the Government hate the idea of tax cuts? I don’t understand, and I know it’s been a philosophical argument we’ve had from the time I got here. People earn their money. They should pay reasonable taxation to a Government to deliver those essential services, which we expect a Government to deliver. But once you are in surplus, the fundamental philosophical discussion that should be had is: can a taxpayer spend their own money better than recycling it back through a central bureaucracy for a Government then to generously decide where they will put that money? I know the philosophy of that Government, because I’ve watched it time and time again. What it does is it identifies a sector of the voting community where it will spend its efforts over the first three years that it’s in Government to try and lock in that particular sector to vote for them.

I’ll tell you where they did it so blatantly. It was interest-free loans for students. Once there, difficult to remove, and I accept that, but there was a sector of the community they targeted specifically to make sure, they hoped, they’d vote for them.

I’ll give you the next one. It’s free tertiary education that’s been announced. That’s where the tax cut money’s gone—$2.8 billion swapped over to $2.5 billion to provide tertiary education for students going into their first year with the promise that they’ll develop that over time. That’s another group the Labour Government’s determined to lock into its catchment of votes for the next election.

💬 Kieran McAnulty: Rubbish!

But New Zealand—who said rubbish?

💬 Kieran McAnulty: I did.

Kieran McAnulty said that’s rubbish. Well, I don’t think it is. He can think it is. When he’s been in that Labour caucus a bit longer than 45 days he’ll then know that, actually, it’s not rubbish at all. It’s the way they operate. But the interesting thing is New Zealand voters are smarter than that. They’re a lot smarter than that and they work out for themselves as to whether churning taxpayers’ money back through a system and giving it out to sectors that receive particular favouritism from the Labour Government is at all appropriate, and I don’t need that favouritism, I don’t expect that favouritism, and I think it’s stupid.

Can I make my final point. This legislation will sign the death warrant for New Zealand First as a political party. They have stood for years to support the superannuitant, and they’re not going to support the superannuitant who has seen superannuation rise by over 35 percent during the period of the National Government, and now that particular trajectory of rise has ceased simply because that Government, supported by “Mr 7 Percent, New Zealand First”, has now removed that tax cut, which was absolutely critical to the calculation of further superannuation payments. They know they’re in trouble, and that’s why they’ve come up with the stupid idea called a winter energy payment, which Tracey Martin says is designed to deliver to those people who live in cold houses, ending up in hospitalisation. That applies to some. Target the assistance to them by all means, Government, but don’t give it universally to the many, many thousands of people who do not need it.

Thank you, Mr Assistant Speaker. It is truly an honour to rise in support of the Families Package (Income Tax and Benefits) Bill. It is, however, incredibly disappointing that the member who has just resumed his seat, the Rt Hon David Carter, thinks that it’s stupidity to lift families—entire families—out of poverty and to invest in education.

I’ve been reflecting on the changes that this bill will have on so many lives: people that I’ve met, young mums who are just managing to support their families, who work multiple jobs and still struggle to put food on the table, who have to make choices like taking their children to the doctors or putting food on the table. I appreciate that it’s free for those under 10, but it still costs to take them there, and, in some cases, if the parents are unable to pay for their doctors fees it gets taken out on the children. So there are multiple issues there: wages not keeping up with inflation, as we’ve seen they haven’t; rising house prices in rentals; families that are just managing until they suddenly have to replace a tyre, or the warrant of fitness is due, or, Heaven forbid, they have to go and see a doctor, and then it’s Struggle Street. There are elderly people whose living rooms I’ve sat in whom I’ve spoken to—people who tell me that they wear layer upon layer in winter because they don’t have the money to pay for heating.

He aha te mea nui o te ao? What’s the most important thing in the world? He tangata, he tangata, he tangata. It’s the people, it’s the people, it’s the people. Throughout this campaign—and for years, in fact—we’ve talked on this side of the House about the kind of Government that we would be if we were given the chance, and now we have been. People have voted for change. We’re a Government that puts people first, that puts people at the heart of policy making; a Government that cares; a Government that brings justice and compassion back. In the first few weeks of this Government, in less than—what was it?—six weeks, we voted and passed the paid parental leave bill to extend paid parental leave to ensure that parents can spend more time with their baby so that families are benefited.

We passed the Healthy Homes Guaranteed Bill—

The ASSISTANT SPEAKER (Adrian Rurawhe): No. The member needs to come to the bill. This is not a general debate.

Absolutely, but all of this impacts families as will this Families Package. So now this, the Families Package, will lift 88,000 children out of poverty as a direct consequence—a bill that will boost the incomes of low and middle income families with children; a bill that will introduce the Best Start payments, which will give every child in this country the best start in life possible. The winter energy payment will directly impact those people I talked to in their living rooms, those people who couldn’t afford to pay for heating. We will implement the accommodation supplements, and I think we’ve already talked about that at length.

We will do this by reversing tax cuts that would have put an additional thousand dollars a year into the pockets of people like me and members in this House, people who don’t need it; $400 million per year to the top 10 percent of income earners—the most benefit to those with the highest incomes, while taking away resources from those who need it, starving vital public services, starving the education sector, the health sector, while we have a mental health crisis and a housing crisis, so that they could ensure that there was a surplus. That they now put it into the pockets of those who don’t need it doesn’t make sense. What we are proposing to do—what we will deliver—will actually deliver prosperity while we grow the economy.

On this side of the House we talk about economic growth not as an end in itself, but as a means to an end—as a means to ensure that we improve the well-being of all New Zealanders. And I am proud to be part of a Government that makes things fairer for the many and not just the few at the top.

We’ve heard speakers or members from across the House say that Labour’s not the party for people without children. I have no children; the tax cuts would have directly benefited me, and I’m proud that we are actually putting our money where it is needed the most.

Thank you, Mr Assistant Speaker. Well, we’re finally debating—

The ASSISTANT SPEAKER (Adrian Rurawhe): Oh, my apologies to the member for those few seconds. The time has come for me to leave the Chair for the dinner break. The House will resume at 7.30 p.m.

Sitting suspended from 6 p.m. to 7.30 p.m.

Well, today we are debating the centrepiece—the so-called centrepiece—of the Labour or coalition Government: its Families Package (Income Tax and Benefits) Bill. First of all, I want to congratulate the coalition Government for actually introducing a bill of its own. We on our side were getting a bit sick of passing all our old legislation from our last, 51st, Parliament.

All New Zealanders want to ensure that everyone having children gets the support they deserve, in providing financial, physical, and emotional support during the life of their children as they grow to adulthood. National, of course, provided a tax package, which is already legislated, that would’ve helped New Zealanders in that situation. Disappointingly, the coalition Government will now scrap those legislative changes and implement its new package, which we’ll be debating over the next few days.

And, of course, it comes with a hefty price tag. The Minister states that it’s going to improve the lot of 384,000 families, but I’ll just draw Madam Deputy Speaker’s attention to the fact that the National package, the legislated National package, actually benefited 1.64 million families. What this new piece of legislation that’s been introduced today does is rip off the $1,060, which everyone would have received through a tax cut, from 1.2 million working New Zealanders and gives nothing in return. That is the bad thing about this.

Worse than that, these hard-working people, who have enjoyed the benefits of working and seeing their wages increase over time, are now suffering the consequences of fiscal drag—mainly because of the fact that their wages have gone up, they’re now into a higher tax bracket. As the Hon Willie Jackson will now know, wages have increased by approximately $10,000 since National took power over the last few years, and this means that these people are now paying 30c in the dollar, rather than what they would originally have been paying—around 22.5 percent. That’s what our tax reform is about: addressing that inequity.

However, we have got a new policy promoted by this coalition Government, and, of course, it makes a lot of claims. The first claim I heard was that the Prime Minister and the Minister of Finance claimed that the new tax package would lift 88,000 households out of poverty—

💬 Dr Duncan Webb: Children.

—or children, I should say—children—by 2021.

💬 Alastair Scott: 2021?

2021, and that, in fact, is below what National had intended.

So the legislated tax package already would have lifted 50,000 children out of poverty, and what we had committed to was a subsequent tax package that would have addressed the poverty of another 50,000 people. In my terms—and I think I’m OK at maths—that’s more than 88,000 children. But the worst thing about this tax package that’s been put forward today is that all the money has been blown, so there is very little capability for the Minister of Finance to be able to put in place any further tax cuts to actually benefit those people in poverty.

I just also want to focus on the issue around the district health boards. I know it’s a topic that hasn’t been canvassed before. I’m keen to understand why the Minister, or some of his colleagues, have gone silent on the issue of the capital expenditure for the health sector.

💬 Madam DEPUTY SPEAKER: Talk to the bill—talk to the bill.

It’s in the bill.

💬 Madam DEPUTY SPEAKER: Talk to the bill.

I’ll tell you why I don’t believe that the members have read the Half Year Economic and Fiscal Update, and I draw the attention—

💬 Madam DEPUTY SPEAKER: No, we’re actually debating the bill.

OK. Madam Deputy Speaker, the reason I want to draw this attention is that because there is money being spent in this family tax package, this is restricting the ability to make substantial capital programmes for the health sector, which goes against the stated wishes of the coalition Government, and I don’t believe they’re in a situation to be able to do it in the future.

I had the opportunity during the urgent debate to really cover off the more substantive parts of what I wanted to speak to about this bill, so I won’t go into too much detail in this speech, but what I do want to do is respond to some of what the previous speaker, Andrew Bayly, mentioned during his speech. He very facetiously congratulated us for introducing our own bill. What I’d like to say is that at least this is a bill with impact. It is a bill that will make a difference, so it was definitely worth waiting for, and there is going to be much, much more to come from this side of the House.

This is a bill that is going to lift 88,000 children out of poverty. I want to just go back to what Andrew Bayly said about how their commitment was to actually lift 50,000 out of poverty, I think, in 2018-19, whereas the 88,000 is 2020-21. Fair point, but, actually, our number for 2018-19 is 71,000, which still tops what they were attempting to achieve. I really wanted to make that point.

We’re really proud of this package, and want to remind that side of the House that there are 385,000 families that are going to benefit from what we put forward today here in the House. It is the changes to Working for Families, it is Best Start, it is the accommodation supplement, and it is the winter energy payment. There are changes to a number of other areas, and all of them are going to have a positive impact on New Zealand families. I’m really proud that we’ve been in Government, what, seven weeks?

💬 Hon Grant Robertson: Yes.

Seven weeks, and we’re going to make a bigger impact for children in poverty and for New Zealand families than what that Opposition managed to do in the nine years that they were in Government.

I’m not going to continue on. All I’m going to say is, again, thank you to the officials and to the team that was involved in this, and acknowledgment to our finance Minister and also to our children’s Minister, who I’ve had a great time bonding with over Working for Families.

Thank you, Madam Deputy Speaker. It’s a pleasure to take a call on this bill. It deeply disappoints me to see the reversal of this piece of legislation. It’s really been interesting over a period of time that the argument has been that people aren’t going to miss what they didn’t already have. But there was a piece of legislation in place designed to give people tax cuts on 1 April 2018.

All the arguments that we’ve had to date say, “Well, it didn’t matter because they didn’t see it—they didn’t have it.” This piece of legislation clearly says that it’s going to repeal the tax threshold changes. If you’ve actually been and had a look at the dictionary definitions of repeal, it talks about “revoke”. We talk about “rescind”, “cancel”, “reverse”. So it’s the revocation, the reversal, and the retraction of a law or an Act of Parliament. So, Grant Robertson, anything that denies in the future that this is a reversal of something that already exists—I’ll give you the definition afterwards. If you haven’t had a chance to look it up for yourself, I’ll give it to you.

It’s also deeply ironic that the first significant act of a Government who has the stated aspiration of lifting workers’ wages is to reduce what hard-working Kiwis have already received in the hand. Now, I’ve got an uncle that says if he buys a Lotto ticket every week, and he takes the $5 out of this pocket and he puts the Lotto in that pocket, over time he’s going to come out about the same. This is actually something working on a very similar theory. So it’s actually—people earn it, they put it in this pocket, and then you come along and take it out of the other pocket, and then they end up exactly the same.

💬 Madam DEPUTY SPEAKER: I don’t take it—I don’t take it.

Sorry, Madam Deputy Speaker. So look, it’s taking hard-earnt money out of people’s pockets, and, you know, Grant Robertson said before that the money could be used for other purposes. Well, I’m sure that those other people could use that money for those other purposes, especially those one million people—over one million people—that are missing out.

Now, they may not have children, and it’s really unfortunate that they’re going to miss out by virtue of that reason, because they still work just as hard for their money. But imagine if every one of those million people took that $1,060 and bought two trees with it, there’s two million trees—so there you go. So people can actually decide with their own tax cuts what they actually do with that money.

The other piece of this legislation that’s really interesting is that there’ll be a lot of explaining for some of the Government coalition partners to do, because $676 a year will be taken from superannuitants and veterans. So, actually, they are going to be worse off, and New Zealand First is actually going to have to go back and explain why they voted for this piece of legislation and then they decided to repeal it.

💬 Hon Chris Hipkins: Just table the research unit notes.

Mr Hipkins, I have the intelligence to be able to find out my own research, OK? I did this all in my own time. Thank you.

The other things around this bill—I really resent the fact that Mr Robertson talked before about the hollow, selfish individualism of those people that work particularly hard. I don’t think they’re going to be very impressed out there hearing us repeat that comment. Now, we’ve talked today also—Grant Robertson and a number of other members across the other side of the House have talked about the 88,000 kids that are going to come out of poverty supposedly by 2021. Now, you’ve got to have a plan around that, because giving people money doesn’t necessarily get them out of poverty, because there’s a whole other part to that poverty story.

So you can legislate for tax changes and money changes, but there’s an element of social dysfunction that we all as politicians have to own up to, because if we don’t own up to it we can’t fix it. There was a great package that we had from our previous Prime Minister and now excellent leader, Bill English, around social investment. So there’s a different view on this side of the House around how you lift those kids out of poverty. It’s actually not taking money out of people’s pockets; it’s actually putting the right things in place in our society and in our communities so that they can actually help deal with this whole issue.

The other interesting thing about this piece of legislation is it introduces a new winter energy payment. So if those people decide—they’re going to get it automatically—they don’t want it, it’s up to the person to go back and say they don’t want it. Well, it’s like “Yeah, right!” That sounds a little bit to me like an advertisement that advertises beer. It’s the whole “Yeah, right!” thing. Of course they’re all going to come and give it back, so it doesn’t actually make any sense to give money and expect people are going to come and offer it back of their own accord.

I was going to say I came down in the last shower, but given that there’s quite a lot of very dry weather going on around in the country at the moment, it’s not a very productive statement to use, because it makes me older than I would like to think I would be.

Also, I really think when it comes to this taxation bill it’s about people feeling that when they go to work in the day they’ve actually earnt their money. I was actually reading the income tax and benefits bill disclosure statement and regulatory impact statement before—doing my own research, Mr Hipkins—with the material that was actually provided on the Table over here.

Under the section where it talks about benefits and costs, it says in number three over the page, “What are the likely risks and unintended impacts …?” and under the number it talks about, “Potential for reduced work incentives as a result of high effective marginal tax rates in some cases. This results in workers paying more tax for every dollar of … income earned.” So it may not be that good for productivity in the long run, because what you have to remember is we are talking about one type of tax here, but this is not the only type of tax that people are paying.

As I go through here and look at page 27 of 45 of the same document, the question in here is about the problem definition and objectives and “What is the policy problem or opportunity?” It says that the “Family Incomes Package would be less likely to meet the current Government’s objectives for the wider Families Package (outlined below).” And if you look at number three—and there seems to be something about number three in this statement—it talks about freeing up “fiscal resources over the next four years to contribute to further investments in housing, health, education, and other priorities.” Well, that’s a very commendable and laudable thing—to free that money up. The problem with that money is it’s already been spent. It’s been spent on what they call the fees-free package, provided for by a lot of—again—hard-earning people who pay their taxes.

So while you think it’s laudable to send people out to work, let them earn money, take the money off them, put it in the other pocket, give it to the students, and then say that you’re going to contribute over the next four years to health, education, housing, and other priorities, it’s not giving a very good fiscal example to the people of this country to say actually, “I’m going to use the money for something one day, but, actually, I’ve already spent it. Oh no, what am I going to do now? The money’s already gone.” So it’s not very good. It’s not very good planning, and it’s not very good prioritising to actually spend the money before you promise to use it on something else.

So all in all, I’m not overly impressed with this repeal, because I think people are going to be a whole lot better off and a whole lot more incentivised to get out and work productively for this country and earn money and pay the taxes they deserve, but no more than they deserve. I’m deeply opposed to this piece of legislation. So thank you, Madam Deputy Speaker.

Madam Deputy Speaker, I am sick to death of hearing that lot talking about hard-working New Zealanders as if it was only the high-income earners. How do they think that a bus driver, a cleaner, a security guard—they are hard-working New Zealanders, and many of them are working three jobs just to make ends meet, and they’re the people that this Families Package will help. So you know what? It’s not about you and your mates.

At last, we’ve got a Minister of Finance who knows about balance. This is not some blunt tool; this is not lolly scramble. At last, what we’ve got here are some financial measures that target. At last, here we have something that says, “Who needs this? Lower-income working families.” We’re not going to ask someone to fill out 30-page forms for their heating payment. No, what we’re going to do is say, “Here it is.” This is not some dirty little social investment scheme. This is a thoughtful package that a Minister of Finance that I am very pleased to be working with has thought out very carefully.

So you, the member for Taranaki - King Country, stop thinking of your dairy farmers, start thinking about the people who milk the cows. So you know what? I can think of nothing better—nothing better—than this package, which helps out families, people with new members—

💬 Barbara Kuriger: I raise a point of order, Madam Speaker. I did not mention the dairy farmers. I was actually thinking about the bus drivers—

💬 Madam DEPUTY SPEAKER: Order! [Interruption] Order! That is not a point of order.

Yeah, well, perhaps you should try catching a bus from time to time. All I’ve got to say—there’s not much more to say but, at last, there’s a Minister of Finance who has a package that has balance, that at last targets help where it’s needed, and that will lift 71,000 children out of poverty next year. Thank you, Madam Deputy Speaker.