Families Package (Income Tax and Benefits) Bill

Thank you, Madam Chairperson Tolley. It is interesting. This is the first time in my time in Parliament that I’ve had the opportunity to move an amendment twice in a day. The world must be changing, or has changed, I guess.

This amendment requires the Retirement Commissioner to report on the impact of the Families Package (Income Tax and Benefits) Bill 2017 on the well-being of retired persons. If you think about when we add a payment like this or like the winter energy package to superannuation, it is, effectively, there for ever, because it would be very difficult for future Ministers or Governments to take that away, in my view. So as a consequence of that, I guess, it really becomes part of the superannuation package in New Zealand, and the concern about these sorts of payments being added to a superannuation package is whether that superannuation remains sustainable in the future.

The reason for inserting this part in the bill is that to get the Retirement Commissioner to provide that reporting will ensure that in the future superannuation in New Zealand is sustainable. Of course, we’ve seen a number of reports from the Retirement Commissioner over the past few years stating quite clearly that she feels that superannuation in its current form is not sustainable in the long term. That’s what drove the previous Government to look at changes to the entitlement age of superannuation, some 20 years in the future from now. By adding a payment like this to the superannuation entitlement, that puts a whole lot more pressure on this sector of the Government’s accounts. So I think that it’s very wise that we get the Retirement Commissioner to look at this, to review it, and to report on the significant policy changes that have taken place as a result of this quite significant payment being added to superannuation on an annual basis.

So the aim of this is to ensure the sustainability of superannuation in the future, and I think that’s pretty important. We’ve got, of course, the Superannuation Fund, which will kick in in some 20 or 25 years’ time. So that gives the opportunity to add more money to the superannuation system in New Zealand. But in the short term, this is going to put more pressure on the system. I think that to provide an annual report on the impact of the Families Package, which are the benefits that come from the family package announced in this bill, is a very sensible move for us in New Zealand.

I, obviously, have a very strong interest in the future sustainability of superannuation in New Zealand, as we all do. I think it’s important that we are able to ensure for all of our community, whether they are young, old, or wherever, that the Government is, in the future, going to be able to maintain this entitlement that all New Zealanders feel they are entitled to and, certainly, that they have. It is most important that we ensure that this is sustainable. In adding Part 3 to this bill—it is a pretty simple part—it requires the Retirement Commissioner, at least, to report on the sustainability of superannuation in the future.

I think it’s a very good move. I think I’ve probably said all I need to say on it. I think it would be an effective tool for the Government to use in the future, and it will certainly add something to the strength and the comfort of superannuitants in the future. So thank you, Madam Chair.

I raise a point of order, Madam Chairperson. The amendment in question changes the New Zealand Superannuation and Retirement Income Act, or the principal Act, which was not part of the original bill. The bill, as the purpose clause points out, makes changes to income tax and benefits, and it is clear that the principal Acts being amended are, in fact, the Income Tax Act, another tax Act, and the—

💬 Hon Grant Robertson: Social Security Act.

—and the Social Security Act. So this does seem to stray well beyond what is a fairly clear general policy statement at the beginning of the bill.

I am somewhat puzzled by the point of order raised by the Leader of the House. There is no purpose clause to the bill, and the general policy statement makes it very clear that the objectives of the bill are to raise incomes, to alleviate child poverty, and to provide targeted assistance. Clearly, this is an amendment that has been accepted by the Clerk. There have been numerous that haven’t been. I would argue that it’s been quite a narrow interpretation, but I think that this absolutely sits within those, and I would question that there is a purpose clause, as the leader has suggested.

💬 Hon Chris Hipkins: Point of order.

I don’t need any further help. I have heard both members. Actually, this amendment is requiring the commissioner to report on the impact of the Families Package itself on the well-being of retired persons. That is a major target for the package and, therefore, it is reasonable to have that reporting. So it is in order. It is still quite a tightly focused debate.

Thank you, Madam Chair. Thank you for allowing me to take this call on Ian McKelvie’s excellent amendment suggesting this new Part 3. As we’ve just canvassed on that point of order, this is a very important aspect of ensuring that the families income package, as the Government has introduced it in this legislation, is reported on and tracked, and the committee and therefore the public—and more importantly the public—are able to themselves see the impact on savings and the wealth of our people as they move towards retirement, and whether the objectives of the bill as set out in the general policy statement have in fact been delivered. I would just quote for the committee again that the general policy statement tells us very clearly that the objective of this package is to provide targeted social assistance, to improve incomes for low- and middle-income families with children, and to reduce poverty.

Now, those are all laudable goals, and I don’t think there’s a member in the committee who would disagree with the goals. We will all disagree—vehemently, often—about how you best achieve them, but if that is the stated purpose of this legislation and this package, which it is, then it is quite right that you would have an independent and well-respected body like the Retirement Commissioner issuing an annual report that tells the public in a very unbiased, measurable, objective way whether this package has reached those goals.

We commented in the earlier stage of this debate—I certainly did—that one of the concerns that this side of the Chamber has had about this process is that Treasury, in their regulatory impact and disclosure statements, have made it clear that they haven’t been able to assess whether this package will meet its intended outcomes. So without any sort of assurance at the front end of the process that this package will in fact raise incomes of those who need it most and alleviate child poverty, it is vitally important that there is some measure of assurance for the public, who pay for the funds to fund this package—and have lost income from their own pockets to pay for this package—that they can have some assurance and some way of checking and holding the Government to account as to whether in fact this package has done what the Government has been very proud to crow that it will do.

They are laudable aims; no one is doubting that. What we have doubted and questioned from the moment this debate began is (a) is this the best use of the money involved, and (b) is it the best way of meeting those purposes? Now, the Government has shown no willingness to create their own targets and their own reporting mechanisms for this committee, but we have a very, very useful and appropriate mechanism in the retirement and savings commissioner, who can assess absolutely whether the sorts of expenditure that this package involves—and we’re talking billions and billions of dollars, so it is a significant amount of public money. There is a genuine right and need to know whether that has improved the financial outcomes, the incomes, and therefore reduced poverty of those concerned. If the Government doesn’t want to have their own measurable targets that they report on—and we know they don’t, because they voted against my colleague the Hon Louise Upston’s excellent amendment that would have set that in the legislation—it makes entire sense to have a body that already exists, like the Retirement Commissioner, tasked with preparing that annual report.

So I’m happy to give my full support to this review mechanism. I think it’s important that the committee reflects on the fact that this won’t be a lengthy or expensive process in and of itself. It’s not a new agency, it’s not a new bureaucracy, but this is the very raison d’être of the retirement and savings commissioner. Are New Zealanders in a position where they are better able to save for their retirement? Have the changes that have been made in this package—not generally, that is the commissioner’s general piece of work. This will ask the Retirement Commissioner to look specifically at the changes in this bill: the changes to the tax threshold, so the fact that people have lost those tax benefits that they would have had putting more money in their pockets; the baby bonus that is in this legislation; the winter heating payment; the accommodation supplement changes; the Working for Families changes; the family tax credit changes through thresholds and rates.

There are a wide number of different moving parts in this package, but it only matters if those working parts are for the benefit of the low- and middle-income families that this bill, in the face of it, in the objectives, tells us is its purpose. The whole reason for having this package is to lift the incomes of those families. Now, if that is the case, surely we would want to know as a country whether that has been effective. I think that a Retirement Commissioner annual report is an excellent way of achieving that.

I move, That the question be now put.

I raise a point of order, Madam Chairperson. I just want to draw your attention to Speaker’s ruling 113/3, which says, “An amendment must be drafted with some precision, in a form of words that may be embodied in law.” I note that the amendment by Mr McKelvie, as tabled, has a heading, “Part 3—Changes to the age of eligibility for New Zealand Superannuation”, and then his new provisions, clauses 79, 80, 81, and 83, in fact bear no correlation to the heading that he has inserted. So, clearly, it should be ruled out of order, on the basis that the words could not be embodied into law in the form in which they have been presented to the committee.

One of the challenges, obviously, is the time frames in which we’re trying to put these issues forward. The copy I have in front of me clearly has the comment in the purpose “to require the Retirement Commissioner to report on the impact”. So while I accept there may be a typo on this particular copy, it is very much about the purpose, requiring the Retirement Commissioner to report on the impact of the package.

If I might speak further to the point of order, the clarity of the Speaker’s ruling—while I acknowledge the Leader of the House, it does continue on to say, which is rather important, “An amendment that is merely an attempt to criticise the provision will not be accepted.” I think that actually puts that entire Speaker’s ruling into context, that an amendment that is designed to merely criticise a provision shouldn’t be accepted. I think this is a contributory, not “criticisory”, dynamic.

Yes. Look, I thank the members for their well-made and eloquent points. However, this has been accepted as a valid amendment and we have commenced debate on it.

Thank you, Madam Chair Tolley. I’m pleased to speak on this new part, put forward by Ian McKelvie. Mr McKelvie has put a lot of thought and effort into how to actually ensure that the legislation is delivering on the Labour-led Government’s intention. One of the things that I think is important is that this part of the committee stage gives the opportunity for the committee to contribute to the improvement of the legislation. The Retirement Commissioner is independent, has a really important role in terms of ensuring the well-being of retired persons in New Zealand, and as those—[Interruption]

The CHAIRPERSON (Hon Anne Tolley): Order! Sorry. Could the member have respect for the speaker.

Madam Chair, thank you. So, for those that have been watching parts or all of this debate, they would have followed the significant impact intended by the Labour - New Zealand First - Green coalition around this package that is being introduced today. While many of us in the House will disagree with parts of it, none of us would disagree with the need to improve the lives of low-income New Zealanders, and part of that is being able to—

The CHAIRPERSON (Hon Anne Tolley): Order! Sorry. Can I just ask the Hon Jacqui Dean to resume her seat. It must be awfully difficult for the speaker.

Thank you, Madam Chair.

💬 Hon Ruth Dyson: Quite difficult listening to it.

So it is really important, and I know that the Hon Ruth Dyson doesn’t think that this stage of the committee is important for the public, but when a bill is put through in urgency that is not being enforced and put into place until 1 July, it is the opportunity for the committee of the whole House of Parliament to bring these issues to the fore, because the New Zealand public don’t have a chance to. So I do think it’s important.

I do think that Ian McKelvie has raised a really important point in the opportunity for the independence of the Retirement Commissioner to assess the impact on an annual basis, to report on the impact of the Families Package (Income Tax and Benefits) Act of 2017 on the well-being of retired persons.

My colleague the Hon Amy Adams did bring to the committee’s attention some of the limitations, I guess it’s fair to say, pointed out by the regulatory impact assessment. So this provides another opportunity that’s been lacking in the short time frame in which the Government has attempted to throw this bill together, and, actually, to throw something together that would be better for New Zealanders than what we had proposed in our time.

But this is then being able to say, right, with things like the winter energy payment, which is a bit curly in terms of eligibility and people capturing it or not—

💬 Hon Steven Joyce: It’s not for winter and it’s not for energy.

Yeah, it’s not for winter, it’s not really around for energy. So this gives the ability for the Retirement Commissioner to assess the impact, for New Zealanders to be clear about what the impact of this intended piece of legislation has, and, as I said, Ian McKelvie has considered this at great length. And, really, we’d come back to the objectives that the Government has put in the bill itself around targeted social assistance—targeted social assistance to improve incomes for low and middle income families. And it will be interesting to see the first report of the Retirement Commissioner, because I’m assuming that the Government wants to measure the impact of their changes.

So I’m assuming that the Government will be accepting this amendment in Ian McKelvie’s name. They’ve talked about openness and transparency, they’ve talked about the impact on real people, so I am taking the step of assuming that the Government will be supporting this amendment in Ian McKelvie’s name and that we will then be able to see in a year’s time a report from the Retirement Commissioner on the well-being of retired persons, who, of course, make up a large percentage of the New Zealand population, and it’s growing. So we do want to ensure that policies that speak like this actually deliver the intended outcome.

So I am pleased to support my colleague’s amendment to insert new Part 3, which involves the Retirement Commissioner’s ability to measure the impact.

Thank you for the opportunity to speak on the new Part 3 in Mr McKelvie’s name. I’ve listened very carefully to the contributions from Ian McKelvie, Amy Adams, and Louise Upston. They’re all very similar, so I think I can make a judgment from that on what is being attempted here with the new Part 3.

We’re certainly very interested to judge the outcomes of the work that we’re doing with the Families Package that’s coming through. The Retirement Commissioner already makes a number of reports each year on the well-being of elderly New Zealanders. This Government isn’t interested in waste. The Opposition might be interested in waste and producing more unnecessary reports, but we’re not. We know that the Retirement Commissioner, when they go through their normal reporting process on the well-being of older New Zealanders, will undoubtedly reflect upon the package that’s going through the House today. So this is an unnecessary report, and the Government will not be supporting Mr McKelvie’s new part as a result.

The question was put that the following amendment in the name of Ian McKelvie to insert new Part 3 be agreed to:

After clause 78, insert:

Part 3 Changes to the age of eligibility for New Zealand Superannuation

79 Principal Act

This Part amends the New Zealand Superannuation and Retirement Income Act 2001 (the principal Act).

80 Purpose

The purpose of this part is to require the Retirement Commissioner to report on the impact of the Families Package (Income Tax and Benefits) Act 2017 on the wellbeing of retired persons.

81 Section 83 amended (Functions)

After section 83(h), insert:

to provide an annual report on the impact of the Families Package (Income Tax and Benefits) Act 2017 on the wellbeing of retired persons.