Families Package (Income Tax and Benefits) Bill

Thank you very much, Madam Chair Williams. Well, I haven’t had the opportunity to take a call so far in this debate, and—

💬 Hon Member: Lazy, lazy, lazy.

Well, so many of my erstwhile colleagues were so keen to speak on the substantive parts of this bill and what a terrible bill it has been. But I want to make a few suggestions now we come to the title and the commencement clauses about what this bill should actually be called, because the name Families Package (Income Tax and Benefits) Bill is a prosaic and boring title for the bill.

What this bill should really be called is the “Families Package (Free Money for Millionaires) Bill”, because the Best Start package gives free money to everyone who has a baby in that first year. Members opposite have been hilarious about the benefits—or the non-benefits—of universality and targeted assistance during the debate. We heard Dr Webb, the member for Christchurch Central, standing up earlier and lauding the benefits of this highly targeted social assistance—except this is not targeted; this is universal, and it’s completely untargeted.

It should also be called the “Families Package (Untargeted, Generous Spending) Bill” because the winter energy payment is the exact opposite of targeted assistance. We should also call it the “Families Package (Spaghetti of Entitlements) Bill”, because what is concerning about this is just the further complication of an already complicated taxation and benefit system. We’re reintroducing the independent earner tax credit. That credit that the National Government repealed in the 2017 Budget—well, that’s coming back in with all the complications that it creates. You’re going to have to apply for it; most people don’t.

Then we’ve got the baby bonus as well and Steven Joyce’s amendments that were put in the earlier part of the debate on this bill to roll the baby bonus, the Best Start package, into the Working for Families tax credits.

💬 Alastair Scott: Very sensible.

“Very sensible”, my colleague Alastair Scott says. Those were opposed by the Labour Party for no good reason. We never heard a real reason why we needed to create a whole new entitlement, the Best Start scheme, and so we have another spaghetti of entitlements. Look, the system is complicated enough as it is already, and the National Government in the last Budget started the process—the very worthwhile process—of starting to simplify a complicated system, and now we’re getting just more spaghetti of entitlements.

This should also be called the “Families Package (Less Money for 1.2 Million Kiwis) Bill”. That is the really regrettable part about this bill, because it reverses those tax cuts that came into effect—or were going to come into effect on 1 April 2018—and it takes away $1,060 per year from the average Kiwi on the average wage. That is really disgraceful.

We should also call it the “Families Package (Regressive and Inequitable) Bill”, because that is actually what the bill is. I think it is regressive. This Government talks a lot about how it wants to be a progressive, reforming, transformational Government. Well, what is progressive—what is progressive—about taking money from people on the average wage to give it to students going off to university who would otherwise have gone to university, and who over the course of their working life will get an income premium from the degrees that they get that far exceeds the value of the loan that they take out? What is progressive about that? That is regressive. That is inequitable. That is regressive and inequitable because those who go on to tertiary education benefit hugely from that education, and we on this side of the Chamber think it’s fair that they pay for a bit of that.

Isn’t it interesting—what was the first move of this Government? They talk a lot about child poverty reduction. That’s been a theme of the last nine years. The Prime Minister is the Minister for Child Poverty Reduction. What was the first thing they did? What was their first big spending promise once they came into office—the first serious spending effort that they put into place? It was hundreds of millions of dollars—billions of dollars—on a tertiary education package on fees free. More money for 18-year-olds from wealthy areas to go off to university, for kids who would otherwise go to university anyway; not on child poverty reduction but on fees-free tertiary education. This bill is regressive, it’s inequitable, and we should rename it so it reflects the actual accuracy of what this package actually entails.

Thank you, Madam Chair Williams. It’s a pleasure to take a call on the title and commencement, and I, like the last speaker, Chris Bishop, think the title and commencement of this particular bill are completely the wrong way round, because it talks about the Families Package (Income Tax and Benefits) Bill, and what this bill has actually done is it has taken income off those people who have gone out there and hard-earned—every day they go to work, they come home, and it actually gives them their wages in one pocket and it takes it out of the other pocket.

The benefits in this bill—that’s an intriguing one because what it’s done here is it’s actually given the benefits largely to the wrong people. So it’s given $60 a week to those people with young families—and that’s fine if you’re going to target it and you’re going to give it to those families that need it. But, actually, we’ve heard a few times today about “spray and walk away”, and this may well be the “Spray and Walk Away Bill”, because you’re going to spread it around and you’re going to ask people with the energy package to give it back if they don’t want it. So you’re just going to spray it around, walk away, and hope that people are going to come along, go through the red tape that the red party puts in place, and give it back. Actually, it’s not targeted at all; it’s just all over the place.

What disappoints me, if we look at the objectives in here, is it talks about this bill providing targeted social assistance. Now, I’ve heard Grant Robertson say that it’s not all about the dollars and cents; it’s actually about what we can do for families. So, Minister Robertson, what I would like to say to you is that this package alone is not going to do what you think it’s going to do in terms of getting 88,000 children out of poverty, because unless you do the other targeted social things that go with the money, you’re not going to achieve the result. So what it says here is it’s part of the Government’s focus on ensuring children get the best start in life, and complements other legislation.

You’ve made a bill here that is so tight that every time we’ve tried to link it to something else, you’ve broken that chain. Ministers have sat in the chair today and they’ve talked about being able to link the data. So we asked a lot of questions about the energy package—people going overseas. They can go overseas for a period of time; if they do, they have to pay it back.

We’re actually told that the Government departments are linked up. That’s really funny, because every time we talk about linking up Government departments and using data for social investment or for any other sort of social assistance, we get pushed back and we get told by members of this Government, particularly the Green Party over there, that it breaches privacy. So this is not targeted social assistance and neither is it social assistance, it’s actually taking money off those people that earn it—Duncan Webb, I think we had the conversation last night about the fact that it’s hard-working truck drivers, it’s plumbers, it’s electricians, and it’s all those people out in the workforce. You put together housing targets, you put in roading targets, and you put a whole lot of things so then what you’re doing is you’re going and penalising the people that are doing all those projects for you, by taking those tax cuts out of their pockets.

The CHAIRPERSON (Poto Williams): Excuse me, not for me.

Sorry. Sorry, Madam Chair. The other question I’d like to ask is: why are we repealing the tax cuts that were aligned to come in on 1 April, and a lot of these benefits are starting on 1 July? Can I suggest that maybe that’s got something to do with the fact that we’re just trying to squeeze a little bit more money out here. If the Government was really serious and the Minister was really serious about this, then the Minister would actually put these so-called benefits—and we can disagree on what we call the benefits—in place on 1 April 2018 so that that could fill in. He’s just trying to create a gap so he can make his own Budget balance. So he’s leaving 90 days where they don’t have to pay anything, buying themselves a gap.

The other thing that’s become very clear by turning down Louise Upston’s amendment just before is that this Government is very reluctant to measure and manage the things that they’re putting in place. Thank you.

The question was put that the following amendments in the name of the Hon Steven Joyce to clause 2 be agreed to:

replace clause 2(2) with:

Subpart 1 of Part 1 (Best Start tax credit) comes into force on 1 April 2018.

replace clause 2(6) with:

Subpart 1 of Part 2 (winter energy payment) comes into force on 1 April 2018.

replace clause 2(7) with:

Subpart 2 of Part 2 (rates of orphan’s benefit and unsupported child’s benefit) comes into force on 1 April 2018.