Taxation (Budget 2021 and Remedial Measures) Bill

I present a legislative statement on the Taxation (Budget 2021 and Remedial Measures) Bill.

💬 SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Taxation (Budget 2021 and Remedial Measures) Bill be now read a first time.

This bill’s pretty short. It’s a four-page bill. It is necessary as a consequence of the Budget, which is why we’re passing it under urgency today. The Budget outlined by the Minister of Finance today is, of course, focused on securing the recovery of our economy and investing in the wellbeing of New Zealanders. As we heard from the Minister of Finance today, and the Prime Minister, we are rebuilding the economy to be better, stronger, and fairer, and the Budget documents show that there is a lower debt track than was previously forecast, lower unemployment, higher employment growth, and the ability to increase core benefit levels in a way that is necessary. This will speed our recovery from the impact of COVID-19, and the other initiatives in the Budget will also assist the economy to be more productive, more sustainable, and more equitable.

On the more equitable front, this really is important for our country. We know that the people hardest hit by the economic impact of COVID are often those least equipped to deal with it. Although I’ve heard criticisms today from the Opposition as to the increases in benefit levels, I would remind people on the other side of the House that even after these increases, someone who’s on the job seeker benefit earns less than $350 per week to pay for their rent, their clothing, their food. And, as the Prime Minister most eloquently said in her speech, it’s not as if—as we heard from the ACT Party’s David Seymour—people will not have an incentive to work, because the difference between benefit levels and work, for the vast majority of New Zealanders, remains a great difference. That said, we always, in this country, try to make sure that working families will be better off in work than on a benefit, and, at the margin, there always are a few people who are at that intersection. We take care of that in New Zealand in a number of ways, including through the minimum family tax credit. That’s what this bill is about. It changes the threshold for the minimum family tax credit.

The minimum family tax credit tops up the incomes of working families to ensure that they’re financially better off in work than being on a benefit. Therefore, when benefit rates and thresholds are increased, the tax credit must also be increased to maintain that margin. So what this bill does is propose an increase to the minimum family tax credit threshold from $30,576 per year, after tax, to $31,096 per year, after tax. It’s estimated that 4,800 people will be helped by this change, including 200 families who will be newly eligible to receive this tax credit. The increased minimum family tax credit threshold will apply from 1 July 2021.

The other measure in this bill is technical. It’s a minor remedial matter to correct a drafting error in the Child Support Amendment Act 2021. The Child Support Amendment Act 2021 mistakenly stated that the relevant child support late payment penalty changes would apply from 1 April 2021. It should’ve stated that those changes were to apply from the earlier of a date set by Order in Council, or 1 April 2022. Correcting the application date error will bring the law in line with what was originally intended. It’s a small drafting error but it’s important that it’s rectified as otherwise it creates significant practical implications for Inland Revenue’s systems.

In conclusion, as we rebuild our economy and adjust benefit rates in today’s Budget, this bill ensures that families remain better off when working, and, by receiving the minimum family tax credit, this means they’ll be better off than they would be on a benefit. I thank the House for giving this bill its urgent attention and commend it to the House.

💬 DEPUTY SPEAKER: The question is that the motion be agreed to.

There was a rebuke of the previous speaker in the Budget debate for reading his speech. Well, there will be no chance that anybody on this side of the House will be able to read a prepared speech, because we have literally had 3½ minutes to view and consider the bill.

I don’t think I have ever been as disappointed or disillusioned in speaking to a tax bill as I am right now, because it is so deeply disappointing and underwhelming in the context of a Budget that is deeply disappointing and underwhelming. And, boy, does it focus on the wrong things. Yes, it’s important to support low-income New Zealanders, and it’s no wonder we have to because of the complete mess that this Government has led the economy into with massive increases in rent, massive increases in electricity—and we haven’t even seen the start of that—significant increases in other household expenses that low-income New Zealanders cannot afford. So in the context of that, it was the right thing to do.

But I would love to be standing here to talk about changes under urgency after a Budget that at least had its eyes up, that had some aspiration for this country, that supported the innovators, that supported the entrepreneurs, that simply supported working New Zealanders. There wasn’t a thing in it for working New Zealanders; nothing for small businesses, the very backbone of our economy; and the people that actually create the jobs that create the Crown revenue that enables us to pay for our social services and infrastructure—nothing for them.

There could have been plenty to do. We could have been talking about a simple change—tax threshold changes—but no, we’re not doing that. This Government is too petty, too mean, too small-minded that they don’t understand who actually creates the wealth in this country, and it ain’t the Government. The Government creates wealth by doing one thing and one thing only: taking a very long hand into the pockets of hard-working New Zealanders and lifting their cash out of it. The obligation on Government is to keep that action to a minimum, but all this Government knows how to do is spend and borrow and hope.

The saddest thing about this is that the vast bulk of the people who are going to have to repay the eye-watering level of debt that is being incurred by this Government over the next few years have not even been born yet. I will be long gone before we make inroads into the $180-odd billion of debt that we will reach, if we’re lucky. And I say “if we’re lucky”, because this Budget gives no more money for the promises, the profligate promises that they splashed around in election year. Remember the New Zealand Upgrade Programme? Of the $12 billion, $6.8 billion was for transport projects. Most of that was for roading projects, very few of which will be able to be afforded within the funding envelope that they appropriated last year. No more money for upgrades, despite the fact that we know the Ministry of Transport and Treasury have said they’re not going to be able to come within a bull’s roar of doing those sorts of things with a—

💬 Chris Bishop: That’s right. A 1 percent contingency.

—1 percent contingency. That’s right, Mr Bishop. So either of one of two things is going to happen. They either borrow more and leave a greater legacy of debt for our children and grandchildren, or they break that promise, and given that they’re very good at making announcements and not delivering, I think they’ll break that promise.

We could have been talking about relieving the regulatory burden, not just the tax burden, on hard-working New Zealanders, but no. This is bereft of any ideas to take our economy into the 21st century. The innovation, the technology, the automation that is now being actively pursued by some companies here in New Zealand and many more around the world—nothing for them. You know, they’re spending $44 million on small business support, which is less than half of what they’re spending on the Hillside engineering workshops.

💬 DEPUTY SPEAKER: Order! This is not a Budget speech; it’s on taxation, so you need to link those to the bill.

The taxation pays for every single one of the things that I’m talking about—

💬 DEPUTY SPEAKER: Yeah, but that’s not the bill.

—and I’m also talking about what we’re not talking about and what we should be, which is spending better and taxing less. But instead, we are having to lift the minimum family tax credit to maintain the separation between those who work and those who don’t. That’s appropriate, and the Minister said so. And the National Party strongly support—and, in fact, it is a core value that we reward hard-working New Zealanders while maintaining social supports for those who struggle to find work.

But we’re only having to do that because we have significantly increased benefits for those people who are not in work right now. Why are we having to do that? Because inflation on those core living costs for those low-income families is out of control. Rent is the number one. They were going to solve the housing crisis, remember? A hundred thousand homes—871 built. They talk about increasing social housing. The easiest way to do that is to buy existing houses, and that’s what they’ve done. That’s not increasing housing supply; it’s taking houses out of the rental market and increasing rents. Low-income New Zealanders are struggling. They’re struggling with their electricity bills, and given what wholesale electricity rates are doing right now, they can stand by for significantly higher costs for electricity—electricity, I have to say, that is now being generated by a substantial amount of imported Indonesian coal.

If that isn’t a metaphor for the abject failure of this Government to get on top of the issues facing our country this century, I don’t know what is. We’ve failed on COVID. We have failed to vaccinate our population fast enough so that we can open up our borders fast enough, so that the people who we are going to be supporting through this Budget and through this tax change can actually get jobs. They crow about 221,000 jobs in this Budget over five years—that’s the forecast period. That’s less than 40 percent of the jobs that were being created just 3½ short years ago. That, is a scandal.

We will be supporting this bill. It is the right thing to do. We need to maintain a separation between those who work and those who don’t. Work must always be better financially, socially for those people than not working. No one will find a pathway out of poverty on jobseeker support. That is the hopelessness that this Government is leaving them with—the sense of no hope, so we’re just going to beef up your supports and leave you on the scrap heap. That lacks imagination, it lacks ambition, and it’s deeply, deeply disappointing.

Actually, there’ll probably be more job seekers, not fewer. Some of the assumptions in Budget 2021 are, frankly, heroic in terms of Crown revenue projections, in terms of job seeker numbers. There is nothing in here that even supports the 221,000 jobs that they are projecting, however modest that figure might be, and that is also very disappointing. We’ll talk more about that as this bill progresses, and it will have to take in a broader context than just this, on the face of it, small change, because what it does is it speaks to a much, much broader failure. This is palliative, this is the ambulance at the bottom of the cliff, and that’s what this Budget is. It’s an ambulance for those desperately struggling people, struggling under the mountain of extra costs that this Government has inflicted on them. It really is an indictment on a Government that has no imagination except about how to make announcements.

This is a very narrow and very technical bill, but it is brought about because of a substantial change that this Government has made today, a change that sets right the disastrous impact of the “mother of all Budgets” from 30 years ago. Today, we have increased benefit rates. Why? Because it looks after the most vulnerable New Zealanders, because it addresses the key challenges of child poverty in our country.

We have taken the steps to increase benefits because it is necessary, because it is needed, because it is the right thing to do. But once we increase benefits, we do need to adjust the minimum family tax credit. That minimum family tax credit ensures that always people in work earn a tiny bit more than people on benefit. That is what this narrow bill does. It is a technical change that supports the major change we have today to support our poorest and most vulnerable New Zealanders. I commend this bill to the House.

Oh, the question is that the motion be—I call the Hon Gerry Brownlee.

The previous speaker—Dr Deborah Russell—was right to say that this bill comes about because of the changes that the Government has made to benefits. While it is interesting to note the relationship between benefits and family support, what’s more alarming is that you might have expected that the Government would have put a greater focus on people earning more and, therefore, the gap between those who are earning and those who are on a benefit being taken up by the wages that they’re able to earn out of this economy. But, no, there is just this simple, redistributive mentality that does not look at the benefits of a growing economy.

Now, the Minister of Finance, in delivering his Budget today, did mention some projections for growth moving forward. But there was not one thing in this Budget that would support that growth—

💬 Hon David Parker: R & D tax credits.

—not one thing in this Budget that would support that growth. Now, the Minister over there says, “Oh, there’s R & D tax credits.” Well, that requires them to spend money. It requires them to spend money and it requires them to be profitable in order to be able to do that. Don’t—

💬 Hon David Parker: It’s a tax cut.

While he’s over there saying that it’s a tax cut, that’s a tax cut you get if you spend your money—it’s not, at all. That kind of shows the convoluted, mixed-up logic that goes on on that side of the House.

So if we look at other aspects of this Budget—and I know, sir, we’re not debating the Budget. This bill is a direct consequence of a serious improvement in people’s beneficiary income, but it doesn’t deal with the fact that you need to get people back into the workforce, and standing up and just saying that “Oh well, unemployment is going to fall to a particular rate.”—it only does that if people invest in the economy, if people expand the economy, and people choose to employ more people in the economy.

We know that in the next short while, the State can’t be relied on to fill up that gap, because the extraordinary thing in this Budget was the Minister of Finance managed to increase the incomes of those who are on a benefit, while at the same time having previously announced a decrease in the incomes for those who are in work and in the employ of the State, because we’re looking at this over a four-year period. So while this is a Budget move that, on the face of it, might be well accepted by a lot of people, it does put a huge burden on to the economy.

We heard the Prime Minister saying that this can be afforded because we’ve got greater capacity now to borrow. But, in the end, a borrowing programme from a Government is a shifting and a shuffling of obligation from now until some time in the future—some time in the future—and it was interesting that the justification is that it’s undoing something that was done in a Budget 30 years ago. Well, in 30 years’ time, young New Zealanders now will still be paying for this. So where was the focus on closing that gap by increasing the earnings capacity of those who are currently relying on family support? It simply was not there.

When it comes to these sorts of things, the previous speaker described it as a purely technical bill, and that is true. It is a technical bill. It’s a very short bill—it’s just four pages long—but the consequences of it are what this House should be aware of. It’s what should be discussed here today.

I’m sure that people are going to stand up from the other side in a minute and say, “Lives are going to be improved. It’s all going to be fantastic.” Well, I suggest they go and read an article that’s published today by interest.co.nz, talking about the hidden inflation inside our economy. It makes the case that if a certain collection of grocery items were put into a basket similar to a Consumers Price Index basket, then the underlying inflation in New Zealand would be something like 7 percent. It makes the case that if there is a 1 percent move in mortgage rates in the next short while—just 1 percent; it doesn’t sound like much—on the average mortgage at the moment, that would be the equivalent of a 14 percent increase in payments required. That comes out of earnings.

So what you’ve got here is a proposal that simply, with its redistributive approach, increases costs all around. It increases costs all around—no question about that.

While people might say, “Oh look, lives are going to be so much better as a result of this.”—I appreciate how hard it is for people on low incomes like that. I can’t imagine what it’s like on those incomes to wander through a supermarket, wondering whether or not you can take something off the shelf, and, worse than that, looking at that high level of inflation on those basic staple products must be very, very demoralising. So there was a need for a different approach—a much different approach—to simply saying, “We will solve everything by putting in place an additional payment that takes us back to the levels that we were at 30 years ago.”

I would ask the question: why has it taken a Labour Government so long to get to this, given that half of that time, they were sitting on the Treasury benches? It’s only now—only now—because they’ve got the cover of COVID-19 and are able to commit the future generations of this country to enormous debt that they can sell their desire to have a freebie for people in difficult circumstances that it’s actually happening. It’s not based on “The country’s doing really well.” It’s not based on “The income coming into the Government from the productive sector is now so big that we can afford these things.” All it is is another layering on of cost to the productive part of the economy, and that’s sad because the people who suffer most when that happens are those who are on the bottom rung of society: the people who have the lowest of incomes.

Far from being kind, this is a cruel hoax, and while people will be happy for 12 months or so with the increased payments, it’s going to catch up and it’s going to catch up very, very quickly. So this is a bill that I think is totally misnamed, and at a later point in proceedings today, we’ll be able to discuss that aspect quite a bit further.

I just want to conclude my remarks on this bill by stating that there will be a number of questions that we will be putting to the Minister in the committee stage of this bill so that we can get some sense—some sense—of how it’s expected the economy might get to a position where this is a truly affordable thing. I don’t mean “affordable” in so much as the Government being able to afford it, because I’ve already explained that. The Government is just going out to borrow to pay for it—simple—and then they’ll transfer the cost of that borrowing on to everyone who’s working. The real question is: how long can we afford to keep people out of the workforce—keep people out of the economy, effectively—shoving them to one side, and not giving them a great deal of hope?

There are programmes in here that they’ll point to, and I can see one of the speakers that’s about to come from over the other side is getting very excited in preparation about how they’re going to rebut everything I’ve said. Well, answer these questions, when the opportunity arises: what is to be done about that underlying inflation in the food price sector? What is to be done about the $100-a-week increase in rents over the last three years? And what’s to be done about the massive gap now between the average income, the need to save a deposit, and the cost of a house? They are the real things that need to be dealt with. They are the real things that will make a difference in the lives of people who are on the bottom end of society.

I don’t begrudge them getting this—not one bit—but what I will say is they’re getting it because of the Government’s mismanagement. While they can take it, and that’s a good thing that they do, it is unfortunate that the country is being lured into a kind of fool’s paradise about where the economy sits, about what is an affordable thing, and about what is a reasonable way to treat people in this country. So, far from being a wonderful, beneficial, generous, kind thing, it is everything that is opposite to that. Those end my comments at this stage of this bill.

What a misery guts! That member, Gerry Brownlee, was so disinterested in what is actually going on that he almost forgot to stand up. He would have us not give the people who most need it, all of the assistance that we possibly can. He’d go back to Ruth Richardson’s Budget if he had his way. And members might have noticed that he didn’t actually speak about the bill before the House.

This bill is a tweak that is needed to make sure that the very incentives he talked about for people to get into work—that he said didn’t exist—do exist. This bill is simply about making sure the minimum family tax credit is raised so that there’s an appropriate distance between those on a maximum benefit and those who are in work. It makes perfect sense.

And, of course, it will tidy up a drafting error—probably, the IRD drafter wasn’t paying attention. We need to give that a tweak and make sure that it comes into force on 1 April 2022. That’s going to have to be a retrospective change, because it actually says 1 April 2021. But yet again, it is just making sure the system works.

What a fantastic Budget—a bright red Budget for a great day in the House. I commend this bill to the House.

Tēnā koe, Mr Speaker. I rise to, first and foremost, state that the Green Party supports an unconditional income support system that allows people to live with dignity. I’m quite appalled at the fact that members to the right have spoken lengthily about everything but what’s actually in the bill. I’m surprised that the National Party members are opposing a piece of legislation that, ultimately, supports people who are in employment.

But what the minimum family tax credit at its core fails to recognise is that our caregivers who are on the benefit who may not be in paid employment also deserve to have livable incomes, also deserve to live with dignity. I do not believe that we should be pitting our unemployed whānau who are doing massively important labour in our communities, who are doing caregiving, who are doing volunteering—I do not think that we should be saying that they deserve less income than those who are in paid employment.

Therein lies the fault of the minimum family tax credit. It puts this punitive narrative that people who are outside of paid employment deserve less income than those in paid employment, when most of us have been raised by caregivers who devoted their time and their efforts to ensure that we thrive.

So instead the Green Party supports replacing the minimum family tax credit with a family support credit that allows low and medium income families to live with dignity. It supports $190 a week for the first child payment and $120 a week for subsequent children, with a higher abatement threshold and lower abatement rate, which would also mean more money for low-income families.

So while this bill may seem technical, it actually continues to perpetuate a hurtful narrative that keeps many of our people on the benefit in poverty. The minimum family tax credit, at its core, tells our communities who are outside of paid employment, many who did volunteer work that was critical to our response to the pandemic, that they deserve to have less money in their pockets.

The Green Party believes that our welfare system needs to be built so that it provides unconditional support, which is why we’ve been campaigning not just to lift benefit levels—which is what led to this bill—but also remove punitive sanctions and ensure that we have adequate top-ups that mean that people don’t have to queue up at Work and Income for a food grant just to survive.

This is not to say that people in paid employment who are working part-time and are also looking after children don’t deserve to be supported, but we reject any narrative that says that our people on the benefit who are doing critical labour—and those living with disabilities who do not have enough money to live on currently, because, unfortunately, the increases to the supported living payment are not going up at a fast enough rate to ensure that people have enough to survive. What we are saying is simply that instead of the minimum family tax credit, we need to build an income support system that is fit for purpose.

So while this bill will address the number of people that qualify for the minimum family tax credit, we have not yet addressed the fact that we continue telling our people on the benefit that they deserve less income than those who are in paid employment. I hope that one day we move towards a society that recognises caregiving labour as worthy of livable incomes—that we honour our mums, our caregivers, who have done so much for our society. So the Green Party will continue advocating to overhaul our welfare system so that we eliminate hardship, not just alleviate it.

Thank you, Mr Speaker. There’s been a lot of commentary about my good friend the Hon Ruth Richardson and her Budget of 1991, and I have to say, given her venerated status—one of New Zealand’s most decisive and effective finance Ministers; first and still our only female finance Minister, but unable to speak in the House now—that she’s made a few replies, which I thought the House might like to hear. She says that Grant Robertson’s comments were a “predictable cheap shot, further reinforcing my point that the budget expenditure choices are driven more by politics than economics.” She goes on to say, “My Budget was driven by a desire to lift economic growth and to make employment attractive. Grant Robertson’s Budget is overtly driven by politics and the desire to pay off Labour supporters.”—and ain’t that the truth.

The ACT Party opposes this bill, for the fundamental reason that we oppose the underlying changes that make it necessary. We understand perfectly that the rationale is to ensure that more people receive the minimum family tax credit in order to maintain the difference between working and receiving a benefit. This legislation has been made necessary by a Government Budget that has nothing in it for people whose main way of getting money is actually working. It is a Budget of handouts; as Ruth Richardson would say, driven more by politics than economics, and this Government’s desire to pay off its political supporters.

The Government has increased benefits with no grasp of the economic problems that some of the poorest people in New Zealand face. If they were prepared to look at the data, then they would be able to figure out that the reason people are impoverished is not a reduction in incomes but an increase in the proportion of their income that goes to housing. For the same reason, mainly the inelasticity, the weak supply of housing and accommodation, these increases in money to people on benefits will mostly go to people who actually rent houses to them.

If people doubt that, if people would like a recent model—if, you know, basic economic theory is not enough for you—then you only need to look at what occurred recently when this Government increased the accommodation allowance for students. In a tight rental market where students were lining up around the corner to try and get a flat, guess what happened when each of them had an extra 50 bucks put in their pocket! Rents went up. It’s not difficult—you don’t even need to be an economist; you just have to ask yourself: if you’ve still got too many people chasing too few bedrooms, what is going to happen when they get more money? They’re going to bid the price up. There’s not going to be any more people accommodated, because you’ve still got the same amount of accommodation. You’ve just got people using more money in order to get that limited supply of accommodation. The only people that benefit in a supply inelastic market are the suppliers—in this case, the landlord.

That fundamental misunderstanding of what economics drive the lives of poorer people in New Zealand is why this Government is making changes that won’t have any serious beneficial effect for them. But what it will do is affect their children—actually, all children who grow up in this country and pay tax and are going to find that when it seems so easy to borrow cheap money, printed by Adrian in his printing press, actually, all of a sudden, with interest rates rising—and they will rise—that debt becomes costly.

So we are going from a pre-COVID expenditure level of $1.8 billion each year on jobseeker support and emergency benefits—$1.8 billion a year pre-COVID; after COVID; the forecasts are, every year, $3.8 billion. That’s an extra 2 billion bucks a year from a Government that is borrowing every extra dollar to be paid back by the next generation. And it’s worse than that. That extra $2 billion, that’s on assumptions made by Treasury—heroic assumptions, in my view—that unemployment is going to be 4.4 percent in a couple of years’ time, it’s going to be below 5 percent. Really?

So we have a Government that is, as far as I can tell, conducting an enormous experiment to see how much of a beating business can take before it stops. You know, it’s basically doing everything it can. They’re like, “If we just keep bashing private enterprise, maybe they’ll stop employing people. Have they done it yet? No. Let’s put in another dumb policy.” That seems to be their basic approach. You know, we’ve had increases in minimum wages at 6 percent—faster than any business can raise productivity—fair pay agreements. It’s like That ’70s Show in here. We should have Led Zeppelin playing in the House, because that’s the tenor of this Government’s policies.

Actually, it’s worse than that. You know, these fair pay agreements, they call them—it’s like going back to compulsory arbitration—

💬 DEPUTY SPEAKER: And in the last four minutes of the member’s speech, he needs to come to the bill.

If you follow, this is very tightly linked to the bill because it’s about the cost.

💬 DEPUTY SPEAKER: Well, you need to express that.

Well, how much simpler do I need to make it, because it actually is a pretty direct link, Mr Speaker, between—

💬 DEPUTY SPEAKER: Yep, and I’m ruling that the statements you’ve made for the last three minutes have—you have not linked them to the bill, and I want you to. You’re experienced in the House—won’t take much for you to do that.

Well, Mr Speaker, I’d argue it wasn’t taking me very much, but let me spell it out: this bill is put in place to accommodate an increase in benefits. That increase in benefits has a fiscal cost: $1.8 billion before COVID; benefits will now cost $3.8 billion, and that assumes that we’re going to have 4.4 percent unemployment in two years’ time. The connection between the unemployment level and the forecast and the reality is that this Government is putting in place so many policies that, I believe, will make those forecasts unrealistic. That’s where we got to.

Now, I was just talking about Led Zeppelin and fair pay agreements in the 1970s, but that was inappropriate, because, actually, these fair pay agreements are better compared with the compulsory arbitration Act of 1896. I don’t even know what sort of music they had then, but actually—

Ricardo Menéndez March: Point of order. Mr Speaker, to my understanding—and I understand you have mentioned it—the bill has nothing to do with fair pay agreements, and it has to do with minimum family tax credits. I also know that the member is, basically, perpetuating a tax on low-income whānau instead of sticking to the bill.

💬 DEPUTY SPEAKER: Yeah—

💬 Chris Bishop: Speaking to the point of order—speaking to the point of order.

💬 DEPUTY SPEAKER: No, I don’t need any help. That’s a debating point. The member is actually linking it to the bill. I asked him to do so, and he has done that.

Well, thank you, Mr Speaker, and I asked how much simpler would I have to make it—I don’t think I’m capable of making a point simple enough for Ricardo Menéndez March. In fact, I defy anyone to make a concept simple enough for Ricardo Menéndez March, especially when it involves economics, because that guy wouldn’t have a clue—wouldn’t have a clue. Not only does he not understand economics; he doesn’t understand the Standing Orders. How long’s he been in Parliament? Six months? Has he even opened the Standing Orders yet? I doubt it. Nice try, sunshine—try again later.

💬 DEPUTY SPEAKER: And back to the bill.

And we’re here—yeah, yeah, yeah—to talk about a serious issue, and that is that this Government’s economic forecasts are unrealistic because they haven’t allowed for the effects of their policies, like fair pay agreements. They can’t be factored in by Treasury, so it’s forecast. But I predict that unemployment is going to be higher after the damage that this Government is doing to business, and when unemployment’s higher, the fiscal cost of these benefit increases is not going to be an extra $2 billion a year; it’s going to be a lot more than that. It’s actually going to be billions and billions and billions, and it’s going to be paid for by who? By the kids.

So the policy that’s put in place to try and help kids, well, that policy is actually going to harm them. That’s why I use another phrase—just to sew this together—that was first used in this House by Ruth Richardson, and that is that borrowing today and putting the debt on to kids tomorrow is a form of fiscal child abuse. It might be OK if it was going to alleviate child policy, but as we have argued, actually, the money’s going to end up in the pockets of the landlords, because until you fix housing, there’s no point in raising benefits to alleviate policy. That is the basic economics, and you can’t have real compassion unless you actually grasp economics—a point, I might add, that was well understood by our first female and, I would argue, one of our best ever finance Ministers, the Hon Ruth Richardson. Thank you, Mr Speaker.

There’s been a lot of talk about economics in this House, so I’m going to bring it back to some home economics, all right? Some people in the House have talked about how tough it is. They acknowledge how tough it is. Well, I know how tough it is when you only have $10 in the hand at the end of the week. You walk through the supermarkets and you know that you’re going to buy that $1.89 jar of Pams jam instead of the $2.25 Craig’s jam. Why is that? Because every cent counts. And, also, home economics says that when you don’t have enough income coming in, it’s your food budget, it’s the food expenses, that are most fungible, which is the one that you’re going to cut back on.

So the benefit increases that happened today—or the “handouts”, as some people would say—are going to put more food on children’s tables. We have to go back to why we are here, and those children need that extra food. So the bill that we’ve got before us today goes back to the policy purpose of Working for Families. It goes back to one of the policies, which is to ensure income adequacy to make sure work pays by supporting families with dependent children so that they’re awarded for their work effort. So I commend this bill to the House. That minimum family tax credit goes back to that purpose and that’s why we need to commend this bill to the House.

This is a bill that increases the level at which the family tax credit comes in, because today we are increasing benefits. There’s been much discussion on the other side of the House about why we’re doing that. Here, in the National Party, we agree that lower income New Zealanders have been made particularly vulnerable by this Government. We have heard, on the other side, talk about the dignity and moral choices. Well, I want to talk about the moral issue that is the way costs have gone up by this Government. Because you can talk about the difference between different jars of jam, but what’s actually far more significant is the fact that, on average, rents have gone up more than $100 a week under this Government. If you want to look at what is driving poverty, what is driving problems for lower income New Zealanders, housing costs, and the extensive growth in them, is the actual number one reason why this Government is having to increase benefits.

It’s not just rents; it’s the price of mince. It’s the price of potatoes. It’s the price of sausages. It’s the price of bread, of cheese. It is the price of electricity. It is the price of fuel. These are the costs that are going up under a Labour Government. That is why any Government has an obligation to first consider how we are going to grow the real productive economy to ensure there are better jobs, they are better paid, and people can stay on top of costs.

Here, on this side of the House, we believe that work should pay. We believe there is more dignity in independence and more dignity in the ability to work than there will ever be in someone having to say, “I want to work, but there isn’t a job for me.” That is why we believe it is incumbent on any Government before it says, “I will pay you more for not having a job” to first say, “I will ensure we have an economy that can pay you more for the dignity of your work. I will ensure we have an economy that creates jobs. I will ensure we have an economy that creates pathways to independence, that creates pathways that allow people to get off a benefit and get into paid work.” All of that is absent from this Budget.

What this bill does is it makes a small but necessary correction to ensure that there is dignity in work, by making sure that work still pays, by increasing the family tax credit. So we on this side of the House say, well, that is necessary in the context of increasing benefits. But we say to the members opposite, unless you focus on keeping costs down through fundamental things like housing, this is simply running to catch up. It’s important that we remember here the callous disregard that members opposite have shown for the impact their policies have on the lowest income New Zealanders.

The biggest example we’ve had of that is the way they have approached housing policy, where they said, “We want to divide New Zealanders. We want to blame those mums and dads who’ve saved hard for the nest egg of a rental property. We want to call them ‘speculators’. We want to blame them for house price increases, so we will remove their interest deductibility. We will increase their costs. We will ignore the advice from the Treasury. We’ll ignore the advice from our officials saying ‘This is likely to increase rents with the biggest impact being on the lowest-income New Zealanders, who are most likely to be detrimentally impacted by rent increases by landlords facing increased costs.’ ” So they ignored that advice. They are quite happy to rob Peter to pay Paul, to pat themselves on the back and say that they’re the ones delivering dignity, when they’re the ones delivering increased costs to our most vulnerable New Zealanders.

As we consider this bill, and the reality of the need for there to be incentives so that families who are working are better off than families who choose not to work or are unable to get jobs, so that we actually have an economy that encourages people into work, we must consider the need for the Government to ensure that there are more jobs being created and that people are able to get into skilled employment. That is absent from this bill. It is absent from this Budget. And we, on this side of the House, say that work must pay. There must be dignity in work, and the economy should be grown.

Thank you, Madam Speaker. For the benefit of the people at home, the National Party’s actually supporting this bill, and you wouldn’t know it, because they can’t bring themselves to actually say, “Yes, this is a good thing.” They say we should do more for the poor, “but”; they say we should do more for the lowest paid, “but”—that’s the guts of it. They want this to happen, but when this bill is presented to them, they support it, but they want to spend their 10 minutes talking about all the other things that actually aren’t in the bill.

What this bill does is actually rewards and keeps that incentive, the gap between the increase in benefits—the desperately needed increase—and work. They spend their time saying that they are the party for work, but what it is, ladies and gentlemen and those watching at home, is that this is a good bill. They know it. They can’t bring themselves to actually come and say, “Good on the Government for doing something that should have been done a long time ago.”—when perhaps they were in Government.

💬 Hon David Bennett: You’re a communist.

So here we are—point of order.

ASSISTANT SPEAKER (Hon Jacqui Dean): A point of order—Kieran McAnulty.

We are in urgency, Madam Speaker, and it’s going to be a long time. We may as well cut it off at the pass. The Hon David Bennett knows that it is unparliamentary to call another member a communist. I would ask that he be made to withdraw and apologise.

ASSISTANT SPEAKER (Hon Jacqui Dean): The member will withdraw and apologise.

💬 Hon David Bennett: When did that become unparliamentary—

ASSISTANT SPEAKER (Hon Jacqui Dean): Ah, no.

💬 Hon David Bennett: He hasn’t taken offence. He said it was unparliamentary.

ASSISTANT SPEAKER (Hon Jacqui Dean): No. The member will resume his seat. The member will withdraw and apologise.

💬 Hon David Bennett: I withdraw and apologise.

Thank you very much.

💬 Hon Scott Simpson: He’s a socialist.

Yes, I am a socialist and I’m proud of it. Yeah—there you go. [Applause] Thank you very much. Bring it on, and I’m very proud to say to the good people of the Wairarapa that they elected a proud socialist as their MP. I say to the Hon David Bennett they were very happy to elect a socialist in Hamilton East as well—and I know it hurts him. I know it hurts him, and I’d say that he may as well be a socialist, because his face is as red as a socialist, I can say that right now. Madam Speaker, I commend this bill to the House.

Oh, what a pleasure it is to speak after my colleague, my comrade, Kieran McAnulty. This bill is something that’s set up wonderfully for us to support those people in work who are needing to have a little bit extra. We have put in place such a wonderful Budget supporting the additional needs of people on benefits.

I want to just very quickly raise something. We’ve heard about Ruth Richardson today from one of the members across the House. I was directly affected by the Ruth Richardson Budget. I was directly affected, and I would like to say that 30 years ago my life was affected and I would like to tell Ruth Richardson: it isn’t about politics; it’s about fairness. It’s about living with dignity. It’s about ensuring we have enough food in our cupboards to eat, and it’s about our children. I commend this bill to the House.

You know, Rogernomics has, in the Labour Party history, attached itself to Labour as some sort of terrible, appalling time of Labour Party history that they’d rather forget. When they talk about the 1980s and 1990s, they don’t actually remember that it was their party from 1984 to 1990, and they kind of conflate Ruth Richardson and the benefit changes and the “mother of all Budgets” with Rogernomics. They forget that they were the people in charge and that the continuation of things that happened in the early 1990s were the continuation of their own Government’s time in office.

Grant Robertson’s obsessed with this period. When he was back in the dark days of Opposition and he was casting about for things to do, he rewrote the Labour Party constitution, and they tried to just whitewash the 1980s. They said “Governments in the 1980s took New Zealand down dark turns.” They didn’t mention it was them. They just kind of pretended and forgot about that.

So today we hear from the Government, in this debate but also repeatedly through Minister Robertson’s speeches, that this is like the chance to repent. Redemption is here. We’re going to make up for things that happened in the 1990s. Well, the funny thing was, who was in charge between 1999 and 2008? It was Helen Clark. In fact, Labour has been in charge, during the last 30 years, for 14 of those 30 years. But yet apparently it’s taken till today for the country to repent and redeem themselves.

The other interesting thing about all this talk about the 1991 benefit cuts is that they weren’t in the 1991 Budget. Grant Robertson is wrong. Grant Robertson said today in his speech that the 1991 Budget Economic and Fiscal Update cut benefits. It did not. There were benefit cuts, but they were in the December 1990 mini-Budget, after National came to Government back in 1990. I was seven. Grant was, I don’t know, 12 or something. Clearly, this is something he cares deeply about, but he’s wrong about when the benefit cuts actually happened. But, of course, he’ll just ignore all that because it doesn’t allow him to create the symmetry, the symbolism, of what he wants, which is 30 years on from 1991.

So he misremembers history, and, actually, there’s a lot of misremembering of history going on in the Labour Party at the moment, because in the Labour Party’s version of history, pre-1984, before that big bad Roger Douglas came along with his mates Caygill and Prebble, and then they were followed by Ruth Richardson, their other mate from the other party, in their version of history, pre-1984, New Zealand was a glorious country: unemployment was low—

💬 Hon David Bennett: Milk and honey.

—and milk and honey—

💬 Hon Scott Simpson: No strikes.

—there were no strikes. Whereas the reality is, as the smarter Labour Party members know, like David Parker, actually, New Zealand pre-1984 was a sclerotic economy, compared to a Polish shipyard—an economy that was on its knees.

💬 Hon Michael Woodhouse: What did it have, though—it had wage and price freezes?

Well, it did. It did have a wage and price freeze.

💬 Hon Andrew Little: Who put those in place?

Yeah, well, that’s right. I mean, here’s the thing. Andrew Little says, “Who put that in place?” Here’s the thing. I’m prepared to acknowledge that Rob Muldoon’s wage and price freeze was a mistake. Are you, Mr Little, prepared to acknowledge that the changes made from 1984 onwards—which, by the way, the fundamentals of which have never been reversed—have made New Zealand a more productive and prosperous economy?

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! The member will not bring the Speaker into the debate.

I’m sorry. I’m sorry, Madam Speaker. I got very fired up there. So we’ll wait and see if Mr Little is prepared to acknowledge that.

So the Labour Party misremembers the past, because we did have a wage and price freeze from 1982 to 1984. I’ll tell you what else we had back in the 1970s—there’s been repeated references to it during the debate today and in previous days—which is a union system or an industrial relations system not so much focused on the flexibility of the labour market but on raw union power. David Seymour made reference earlier to the fair pay agreements being advanced by the Labour Party as being actually closer to the 1896 Industrial Conciliation and Arbitration Act, and there’s probably some truth in that.

The sad thing is that successive Labour Governments in both Australia and New Zealand, and social democratic Governments around the world, have realised that enterprise-based bargaining based on the productivity of a business is the way forward for higher wages, not productivity based on whatever a union boss and the employer boss decide in a smoke-filled—well, it won’t be smoke-filled any more, but a back room—

💬 Hon Michael Woodhouse: A vape-filled room.

—a vape-filled, closed room in the dead of night when they’re trying to strike an industrial bargain. We’ve long ago realised that. Paul Keating realised that. Bob Hawke realised that. Roger Douglas in New Zealand realised that. Stan Rodger, who was the Minister of labour in the 1980s under that Labour Government, realised that. Successful progressive social democratic parties know that, which is why none of them, including the Australian Labor Party, are trying to go back to the bad old days. I’ll tell you, the only party in the Western World, the only social democratic party in the Western World, trying to reverse 50 years of industrial progress is the New Zealand Labour Party. So they misremember the past.

💬 Kieran McAnulty: Point of order. I’m actually finding that quite interesting, but none of it is in the bill.

Speaking to the point of order, I accept the point that it is relatively wide-ranging, but I just make the point that it is responding largely to points made by members opposite, and it’s a robust debate.

ASSISTANT SPEAKER (Hon Jacqui Dean): OK, thank you. Thank you for those points of order. I’ve been following the bill closely as the debate has flowed, and it is a relatively narrowly focused debate, but there are the changes, consequential changes—increases to social welfare benefits—and I think, given the House is in urgency, I am happy that the member’s speech is within the scope of this bill. However, I would remind the House to be aware that this is still a first reading—second reading, you can spread your wings a little more.

Thank you, Madam Speaker. So we support this, as members on this side of the House have—[Interruption] Well, we support it for the reasons that Nicola Willis, I think, neatly outlined, which is that you’ve got to maintain the gap between welfare and work. We agree and we absolutely believe you have got to maintain that gap between welfare and work to incentivise people to get into the labour market. So the general policy statement—“this bill proposes to increase the Minimum Family Tax Credit … as a consequence of increases to Social Welfare benefits”—is absolutely justified in light of the increases to benefits that the Government is providing.

But I would make the point that we will never do anything about inequality in this country—an admirable goal—until we sort out our housing market. The Minister of Finance in his speech today waxed lyrical about doing more for those on low incomes and creating a more equal New Zealand. Actually, if you want the truth, since the 1980s, since the terrible reforms that they like to demonise, the truth is, if you take out housing costs, inequality in New Zealand is flat. When you include housing costs, that’s when you start to get the pernicious effects of restrictive land laws, restrictive zoning requirements in our major cities, and a restrictive urban and outer urban planning regime that makes it nearly impossible to build a house in this country, and it makes it difficult—nearly impossible—to supply the infrastructure to build a house in this country.

If we’re talking about 30 years on, it was 30 years ago this year that Parliament passed the Resource Management Act (RMA) 1991. By God, if there was one thing this Government could do that would make a difference to reverse something bad that happened 30 years ago, for me, it probably wouldn’t be the benefit cuts. If I’m looking on 30 years and saying I want to do something progressive, I want to do something that will change things for the better in this country, I want to do something that will make it easier to build houses, I want to do something that will make it easier to create a more equal society, I want to do something that will make it easier for low-income people to get on the housing ladder, I want to do something that will make it easier to lower the social housing wait-list, make it easier for renters in this country, the one thing I would do would be wholesale Resource Management Act reform. Thirty years ago, Parliament passed the RMA, and 30 years—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! The member is just getting a little wide of the bill. Could he return to the bill, please.

Oh, well, Madam Speaker, I’m making the point about how the Government’s argument is that lower-income people are doing it tough and therefore we have to increase benefit levels, and I’m making the point that one of the reasons lower-income people are doing it tough is because of the explosion in housing costs, particularly rental costs, driven by a restrictive housing market, driven by the Resource Management Act. This is a point that people often don’t understand: if you make it harder to build houses, you make it harder for people to get into the rental market and you make it easier for landlords. You mean that landlords can charge what they like.

We need a housing market where renters have the power, not landlords. At the moment, the situation is the reverse. You’ve got students near where I used to live lining up on Kelburn Parade and the streets running off it at 8 a.m. in the morning to get a student flat that’s smelly and mouldy, and they’re charged an arm and a leg and through the nose for it—to continue the clichés. It’s just appalling.

We’ve got to reverse all that, and once we reverse all that by actually making some changes that should be reversed from 30 years ago—i.e., the Resource Management Act—that’s when we’ll get a housing market that works for renters. We don’t need to increase benefit levels like that. That would be the single best thing we could do for low-income people in this country.

Tēnā koe e te Māngai o te Whare. He tino Hōnore tēnei mōku ki te tū i tēnei ahiahi ki te kōrero e pā ana ki te Tahua Pūtea 2021. He mea nui ko au te kaikōrero whakamutunga o te pānuitanga tuatahi o tēnei pire i te ahiahi nei. E tino harikoa ana ahau kotahi piriona tāra i roto i tēnei tahua pūtea mō ngā kaupapa Māori, pērā i te whare, te manatū hauora Māori me te mātauranga Māori anō hoki. Ko te mea tuarua ko ngā penihana, ka piki ake te moni ka whiwhi i ngā tāngata e noho ana i runga i te penihana ia wiki, atu i te toru tekau mā rua tāra ki te rima tekau mā rima tāra ia wiki. Ka piki ake i te moni mō ngā whānau, ka heke iho ngā nama o ngā tamariki e noho i raro i te pōharatanga nō reira e mihi ana ki te Minitā.

Engari ko te kaupapa o tēnei pire, ko te tikanga ko te kaupapa mai rā anō kia nui ake te pūtea ka whiwhi i ngā whānau e mahi ana i te pūtea o ngā whānau e noho ana i runga i te penihana nō reira ko te kaupapa o tēnei—ka whiwhi i ngā whānau e mahi ana i tētahi wāhi pūtea atu i tō rātou nama kua whiwhi mō te mahi kia nui ake tō rātou pūtea ia wiki i ngā whānau i runga i ngā penihana. Nō reira, e tautoko ana ahau i tēnei pire. Pau te kaha.

[Greetings, Madam Speaker. It is a real honour to speak this afternoon about Budget 2021. It is also an honour that I am the final speaker on this first reading of the bill this afternoon. I am delighted that $1 billion of the Budget is for Māori, for housing, health, and Māori education. The second aspect is that for those on a weekly benefit, the money that they receive will go from $32 a week to $55 a week. There will be more money going into the pockets of families, which means a reduction in the number of children living in poverty, so I commend the Minister.

However, the main element of this bill, and it has been the primary purpose for a long time, was to ensure that families who worked had more money than those who were on benefits—that is to say that families in employment would receive additional money to what they earned, so that they would end up with more income than those on benefits. Therefore, I support this bill. Thank you.]