Taxation (Budget 2021 and Remedial Measures) Bill

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

Thank you, Madam Speaker. I rise to take a call on the second reading of the Taxation (Budget 2021 and Remedial Measures) Bill. I won’t restate what has just been stated in the first reading, but I will respond to the comments that the Chair ruled in order in respect of David Seymour and various members of the National Party about the effect on rents. The suggestion is being made by the Opposition that changes to benefit levels and changes to the in-work tax credit that this bill is about will all be absorbed in rents, and I want to explain why I don’t think that’s correct.

I do agree with Chris Bishop that we have got some problems with rigidities in land markets.

💬 Nicola Willis: Hurry up and fix it.

Well, the member shouts out, “Hurry up and fix it.”, I would point out that nine years in Opposition, they made things worse. And, actually, I’m about to tell the member how we are fixing it and how the fixes are working.

Now, we know there’s been this rapid escalation in house prices and, related to that, rents in New Zealand. The good news is that—I think the members of the Opposition misheard it when the Minister of Finance and the Prime Minister both referred to the fact that Treasury’s projection is that house prices will go up in the year ended June 2021 by 17 percent. That’s actually the year that ends next month, and their projection, which is set out on pages 12 and 13 of the Budget Economic and Fiscal Update 2021, is that for the following year—i.e., for the year that commences on 1 July—the predicted increase in house prices is 0.9 percent for the year. Now, the reason for that is that housing policy is now working.

💬 Nicola Willis: Ha, ha!

Well, it’s a fact-free zone on the other side of the—Opposition. This is the Opposition that denied we had a housing crisis for nine years, made it worse in everything they did to overly complicate the Resource Management Act and all of the other distortionary policies that they pursued.

Madam Speaker, I am referring in no more length to the issues that you gave other parties the latitude to—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! The Minister will resume his seat. We are in danger, here, of this bill becoming more about housing policy than the matter at hand. So I—[Interruption] There will be silence while I’m on my feet. I will invite the House, very warmly, to stick to the matters that are contained in this bill. There is latitude from the Chair to recognise that we are in urgency, but we are getting to the trading-blows stage of debate and I would prefer that members stick to the substance of this bill.

The reason why this bill will not result in higher rents is that this last year we had more than 40,000 consented houses, which is building houses ahead of population growth in typologies that are smaller houses, mainly two- and three-story semi-detached units in Auckland, and that’s why the projection in this Budget is that house price inflation, essentially, disappears from next year on. I commend this bill to the House.

Hon Michael Woodhouse.

💬 Hon Michael Woodhouse: Oh, I thought you were going to ask if the question was going to be put.

Oh sure. The question is that the motion be agreed to.

In my nearly 13 years in this place, I thought I’d heard it all, and then the Greens abstained. I am still picking myself up off the floor—that here we are, with a consequential amendment to minimum family tax credits as a consequence of a very significant material increase in the incomes of our most vulnerable New Zealanders, and the Greens can’t support it. They can’t even say aye to that. Surely this is Green Party whakapapa? Surely this is their raison d’être, apart from saving the planet? It’s about saving the people from the quagmire of poverty, and they can’t bring themselves to support it. I am staggered. I had thought I’d heard it all, and then the Greens come along and surprise me once again.

If the Tui beermakers want a number of billboards, I think we heard a couple of doozy candidates from the Hon David Parker about how they have suddenly fixed the housing problem that the previous National Government had created! Suddenly, because he said it’s all over, it’s going to be fine! And, actually, that’s consistent with the narrative, because falling on the floor just a couple of minutes ago wasn’t the first time today; the first time actually was when Grant Robertson, in his Budget speech, said something about house prices—because they’re up 17 percent, but these guys are going to magic them back down to 0.9 percent! There’s a Tui billboard right there. And why is that relevant to this bill? It’s because the reason we are here is that the costs for those vulnerable New Zealanders, including dramatic increases in rent, have necessitated quite large increases in their income support, and this bill is a consequence of that.

I think we’re going to be on a treadmill because the benefit increases that the Government has announced in Budget 2021 were what was recommended to them to do two years ago, before those dramatic increases in rentals, before those significant increases in electricity prices and the other household expenses that struggling families are needing to find the money for. So we haven’t got ahead of the curve; we’re still well behind the curve, and the policies of this Government are going to continue to make life difficult for these non-working New Zealanders. And the most difficult thing they’re going to have to do is to try and find a job in an economy that, thanks to this Budget, there won’t be enough of. This is a seriously unimaginative, bland, spend-and-hope Budget, and we’ll be back here probably, having to palliative care the most vulnerable New Zealanders and increasing minimum family tax credits once again.

And that’s assuming the Budget projections for Crown revenue, job growth, economic growth, and unemployment are actually met. I have little confidence. Because they made a really good announcement, it probably dooms it to not being successful, because if there’s one thing this Government does, it’s announce and then fail—announce and fail. And I think they will fail to support our most vulnerable New Zealanders, because they’re putting the ambulance at the bottom of the cliff and not implementing measures that will prevent them from falling off that cliff in the first place. Those measures would have been support for business, for employing people, for increasing the incomes of middle-income New Zealanders, for reducing the tax burden—goodness knows we should be speaking today on a Taxation (Budget 2021 and Remedial Measures) Bill that actually remedied stuff around taxation, because it’s a bit of a misnomer; what’s on the tin isn’t actually what we’re debating.

But, in the spirit of that, National members will be moving amendments to this bill to take serious remedial measures. In the committee of the whole House, we’ll be suggesting what a really good taxation remedial measure should be, and we’ll be talking about them, I’m sure, after the dinner break.

💬 Dr James McDowall: Will you be supporting that?

We are supporting that. Well, we’ll certainly be supporting our own amendments. That’s an interesting question. But what we won’t be doing is abstaining. And I hope the Greens can change their mind. They have time. There are two or three more votes to go. Perhaps they’ll have a road to Damascus experience and realise that the very people that they claim to support are, at least in part, people who would benefit from this bill when it’s passed. I’m gobsmacked. We will support it. I feel like a Green Party member at the moment!

Thank you, Madam Chair. It’s good to see that we’re almost all on board here. Look, the fact of the matter is—

💬 Hon David Bennett: Almost all on board here!

Well, there’s so many of us great socialists on this side of the House. You know, it just beggars belief that here we have a programme to lift children out of poverty by putting money where it is needed and at the same time doing, as the Prime Minister says, the double duty of stimulating the economy, and we’ve got naysayers in the House. It just really, quite frankly, flummoxes me.

This bill is just one piece of the puzzle to make sure that over the next days, months, and year, we can put this into place, keep New Zealand moving, and keep the economy recovering in the fantastic way it has. This is just to make sure that people who are getting family tax credits move commensurately with those who, of course, need it most—those who are unable to work—so that they can be looked after, but we still have that great incentive to get into work so that the unemployment rate under this Government continues to fall. I commend the bill to the House.

Thank you, Madam Speaker. This bill is the result of a Budget that has its centrepiece in an increase in benefits. This is a good Budget for the National Party because it shows New Zealand the true intent of that Labour Party. It shows New Zealanders—if they didn’t already have a wake-up call—as to what that party intends for the New Zealand economy, and it is an economy that is bound to fail now. This economy cannot survive the three years of this Labour Government and the economic policies they will put in front of us. I actually think, good on the Labour Party for actually doing what they think, because the more they do that the more New Zealanders will lose jobs in the end, the more New Zealanders will have increased housing prices, and the more New Zealanders will realise what a failure that Government and their economic policies will be.

This is not something new that is just being traversed in this Parliament today. We’re not looking at a glorious Labour Party that has worked out the economic solutions for the world. That is not what we’re seeing here, to the public of New Zealand. What we’re seeing is a Labour Party that honestly believes in socialism. The Prime Minister’s speech at the end—she said it was a matter of dignity. It wasn’t a matter of economic support. It wasn’t a matter of helping people to get a future for themselves. It was a matter of dignity, because “I am a socialist at heart and I believe this, and they need to follow me. You need to follow me and understand that I am right, because socialism works and the Labour Party understands what people need. They understand how to solve the issues of the world.”

Those people there have never earned anything in their life, are lucky to be in this place, and most of them won’t be in this place at the end of the three years, because what will happen, as a result of this, is there will be a major tidal event in New Zealand politics, where the Labour Party will be destroyed and it will be destroyed for decades because they haven’t learnt the lessons of the past. And the lessons of the past are that big Government, socialism, and a Government that thinks it knows best always fail. That is the history of the world. It is a history that we are doomed to repeat, a history that every other country in our region is not doomed to repeat because they are smarter, more successful, and are saying no to those ideals.

The Australians have said no to those ideals. The Americans have said no to those ideals. The Canadians are saying no to those ideals. And what is more important, everybody that we want to trade with in our region never even thinks of believing in those ideals. The Asian communities that we want to trade with believe in capitalism and the right of individuals to get out there and make some money and to go for it. This is a Labour Government that is using the cloud of COVID to create an environment where they can bring about social and economic change that they see is their great job to do. They have never gotten over the fact that New Zealand changed its economic position 30 years ago. It actually adopted an economic philosophy that every country in the world now follows. Even the most autocratic Governments in the world do not have socialism anymore.

💬 Hon Member: North Korea.

There is no autocratic Government in the world that believes in the socialist—oh, maybe North Korea. But apart from that, there is none. Even the most savage leader of the world that could take over his or her own country does not—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! Order! The member will resume his seat. Second reading is slightly wider in scope than a first reading, but I would suggest that members stick to matters to do with the broad intention of the bill and the broad principles of the bill. Then, the member’s speech and all other members’ speeches will be within scope.

Thank you, Madam Speaker. I was just going to get on to that, because when I looked at the first page of the Budget speech, what do I see as the second line? Today’s Budget is to deal with what happened 30 years ago. Then I go to the next paragraph: today’s Budget is to deal with what happened 30 years ago. I go to the fifth paragraph: today’s Budget is to deal with the inequitable changes 30 years ago. The first page of their Budget is all about how they want to throw out the reforms of 30 years ago. It’s not just the reforms of 30 years ago; it’s the reforms since then. It’s the reforms every other country has done around the world. Is the genius of Jacinda Ardern, the genius of David Parker, the genius of Damien O’Connor, the genius of Willie Jackson, and the genius of Greg O’Connor going to mean that we have a better economic system than any other country in the world? No way! They are leading New Zealand to failure. They are leading New Zealand to a position that will hurt the very—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! Order! I’ve warned the member that the purpose of a second reading is to explore the broad themes of the bill and broad principles contained in the bill. I’m accepting a bit of latitude, but unless the member sticks more broadly to the bill, I will have to warn him further.

Madam Speaker, the broad theme—

ASSISTANT SPEAKER (Hon Jacqui Dean): No, the member will resume his seat. I have ruled.

The bill talks about the tax system in relation to a benefit change that we have seen today in the Budget. We heard the Green Party talk about the need to look after beneficiaries. That’s their whole purpose of being in this House, if I get it right, you know? We heard David Parker talk about his great plan of how he’s going to change housing prices, but, in essence, the very people that this bill is about—you know, the beneficiaries that will be the ones that they are saying they’re looking after—are actually the people that will be most hurt from the economic policies that this bill represents. This bill represents economic policies that will destroy the New Zealand economy. They will destroy the private sector, and the private sector pays the bills for the social spending of this House. The day we forget that, and the day we think that there is some socialist utopia where we can just sit there and move money around and we can actually solve the problems of the world, is the day we do a disservice to the beneficiaries of New Zealand. That is what is happening in this bill today.

It’s great for the National Party because it is showing the failure of the Labour Party and how the Labour Party will take this country down. We see it with all their policies that they’ve done this year. They’re taking a very arrogant approach to their economic credentials and that will destroy the New Zealand economy. What we are doing is we are standing up for ordinary New Zealanders that want to see a prudent Government. If you look at the Australian Budget, guess what they did! They put down iron ore at $50 instead of $250. Even though they’re getting $250 in the market at the moment, they had a prudent Budget. There is no prudent Budget here today. What we see is a Budget that is based on ideological principles—ideological principles that have shown to fail time and time again.

The great socialist experiment that New Zealand is entering into will be a failure. It will be the end of the Labour Party. It will be the end of those Labour MPs that came in last time. They better enjoy it; they’ve only got three years. It’s going to be the last of the Labour Party. Then we can see the end of socialism. We can see the end of a Labour Party that has no right to govern in this country because it is out of touch with New Zealand. It is out of touch with the world and it’s out of touch with where we want to go.

Look at how out of touch they are. David Parker, in his speech, talked about consenting—because there’s 40,000 consented houses, there will be no increase in rent. Well, how does that work? How does that work? Should we consent 100,000 houses and then rent will halve? Is that what’s going to work? You know, it’s great economic theory, isn’t it? You know, maybe you should write a book about it? Maybe he should explain his economic theory, because the 40,000 consented houses are going to make jack difference to rent, David Parker. What will make a difference to rent is if the productive part of this economy is belted time and time again, and we have an economy that’s based on a party that thinks it can just redistribute income and it knows everything. And it does it with dignity and with heart because it is right, and the rest of the world is wrong. The history of New Zealand is wrong and all economic history is wrong under them.

I stand here as a very proud member of the great socialist democratic Labour Party—a Labour Party where the true intent is to look after New Zealanders, all New Zealanders; a Labour Party where the true intent is to ensure that children have enough food to eat—all children. It is a Labour Party where the true intent is create jobs—because we are “a labour party”; a Labour Party which has had the guts to reverse the horrendous cuts in the “mother of all Budgets”, and to increase benefits today. Why? Because we care about all New Zealanders.

This narrow, technical bill adjusts the minimum family tax credit because we have increased benefits today. It’s an increase that was recommended by the Welfare Expert Advisory Group, an increase that has been shown to be supported broadly by New Zealanders in the most recent opinion polls. This is an excellent bill. It is a bill that represents the true values of New Zealanders, and I commend it to the House.

Tēnā koe, Madam Speaker. The Green Party proudly supported this year’s Budget, because we support an increase in people having more income to live on and to move towards a livable world that protects against the effects of climate change. The reason why we are critical of this bill, and I think it’s really telling where the ideology of the National Party is coming from, is because what we have heard in previous speeches is that, ultimately, the purpose of the minimum family tax credit is about keeping a difference in incomes between those that are unemployed and in paid work. It’s telling that the National Party is railing against increasing benefits but somehow really proud to support a policy that continues keeping a gap between some of our most vulnerable members of society who have struggled so much for decades.

We are stoked that there’s been an increase to core benefits levels that will mean less people will need to get food grants to survive, and we’re clear that this doesn’t go far enough but it’s a step in the right direction. What we don’t support is a system that continues pitting our people in paid employment against those that are doing volunteering and caregiving and that accepts that they do not deserve to live with dignity. We should be having an income system that unconditionally supports people, and we, as proud socialists as well, will continue advocating for quality public services, for an income support system that works.

So going straight to the bill, ultimately what we are talking about is a policy that has perpetuated the narrative that caregiving isn’t labour that deserves to be supported equally to those in paid employment, that people who are receiving income support are somehow not as independent as those in paid employment. We do not believe that we should be working towards a system that perpetuates these divisive and stigmatising narratives. Instead, this is why we continue working to replace the minimum family tax credit to change it to a family support credit for all low-income and medium-income families that will create a $190 a week first child payment and $120 a week subsequent child payment, to lift people out of poverty.

That is the future we want for our income support system, and so while we are stoked to see core benefits being increased in this year’s Budget, we will continue campaigning for an income support system that provides unconditional support.

Thank you, Madam Speaker. I’ll just use this opportunity to take an extremely short, unexpected call. These sorts of policies are an ambulance at the bottom of the cliff. You can’t have a failed Government policy after so long increasing costs to New Zealanders, increasing living costs, and increasing housing, and failing at the housing market, and then saying we need to make these changes to make it all fairer and more affordable. That is why we’re opposing this bill. Thank you.

It’s been really interesting listening to these people on the other side of the House who, obviously, failed level 1 economics. They fail to understand the concept of circular flow. The increased money—[Interruption]—pay attention, because you obviously failed—through this bill that flows into our most vulnerable households doesn’t just disappear. What happens is it flows. It is spent in the local economy, at the supermarket—like we heard earlier—on jam, at the petrol station, at the chemist, and buying stationary for kids and school shoes. That in itself—

💬 Hon David Bennett: Point of order. The member’s introducing a new concept into the debate of circular flow, and I’d be really interested if she would define that, because—

ASSISTANT SPEAKER (Hon Jacqui Dean): Thank you. [Interruption] Thank you. Thank you, the member will resume his seat. Angela Roberts.

Thank you. That, in itself, stimulates the local economy. It creates more jobs and more spending. Then, if you managed to make it all the way to level 3 economics, you would also understand the concept of fiscal multipliers: the positive impact on our economy and helping us to accelerate our recovery.

Hope and dignity and economic arguments can flow together. I commend this bill to the House.

I call Nicola Willis for a five-minute call.

The purpose of this bill is to ensure that people are still better off in work earning a tax credit than they would be on a benefit, and that is why a lot of this debate has focused on housing policy, because you’re not better off in work if your rent keeps going up again and again, week after week, year after year under a Labour Government. And that’s what’s been happening. Rents have, on average, gone up $100 a week under Labour, and that is a lot more than wages have increased. But don’t worry, because David Parker has entered the debate to share some news with New Zealanders. His news is this: housing policy is now working! So good on David Parker! That’s the news he has for every first-home buyer in this country who is being asked to pay more for a house than in any other country in the Western World.

ASSISTANT SPEAKER (Hon Jacqui Dean): Come back to the bill—the member will come back to the bill.

And this applies to the families earning the tax credit who we’re speaking about in this bill, who will be having to face increased housing costs into the future.

But I do want to just reply to a couple of the comments that Mr Parker made in relation to this bill in his contribution in the second reading, because what he said was that actually the reason it’s all going to be fine is that the Treasury have predicted that house prices, while they’ve increased 17 percent in the past year under his Government, will only increase 0.9 percent in the next year. Now, suddenly, David Parker has come to the mountain of the Treasury and said, “I worship at you, O Treasury. If you say it, it must be true.” And this is, of course, in quite stark contrast to where his colleague the Hon Phil Twyford has been on this, because when Treasury warned Phil Twyford, “Mate, you’re not going to be able to build 100,000 KiwiBuild homes. It’s not happening.”, at that point what he said was, “Well, those are just silly kids at Treasury. They don’t know what they’re talking about.” And, of course, we have 871 KiwiBuild homes.

But the next part of Mr Parker’s analysis that I just think we need to look at, apart from his undying, completely yielding adherence to everything that the Treasury says, is this idea that the housing policy is working because, actually, we’re building more houses now. Well, I would remind Mr Parker that in 1973 we were building 13 houses per 1,000 people of our population, and today we’ve managed to get it to about eight. So we are not building houses as fast as we have in the past, as a country, and it is completely false to claim that.

But the point of this bill is actually about making sure that work pays. And this is a very small step towards that. It deals with the threshold at which a family is eligible for a tax credit. And what we’ve been arguing on this side of the House is, yep, you’ve got to do those things, because otherwise you create a truly socialist economy where people are better off on benefits than they are in work—and I think from the tone of some of the contributions coming from the other side that that is actually the utopian vision that some Labour members have, as they ascribe their socialism and pin it to the wall. But we on this side of the House think that this should be a country of aspiration, of reward for achievement; a place where kids grow up knowing that if you get up in the morning and you go to work and you work hard, then there is a path to prosperity for you. The only way that we create that path to prosperity for every single child growing up in this country is if we create a productive economy with jobs, industries, businesses competing against the best in the world, because only when this country is earning its way in the world, and has businesses that can actually afford to hire more people and pay them more, will we truly give children a pathway of aspiration. And that is why, on this side of the House, we beg of the members opposite: you have to do more than think of clever ways to divide the pie.

This Budget lacks any focus on a path to prosperity, a growth vision for the New Zealand economy. It is not enough for a finance Minister to look in the rear-view mirror and say, “I remember something that upset people 30 years ago.” Well, we all remember that, but what we want to know is your vision for 30 years in the future. Where will this country be when my five-year-old is 35? Because I want her to see a country where if she works hard, she’ll get ahead. I want that for every single child. Every beneficiary’s child, every working parent’s child needs to be growing up in a country where if they work hard, there’s a high-paying job for them. It needs to be much more than just putting a little bit more in the benefit.

Thank you, Madam Speaker. I think that is just the ideal example as to why those members on the opposite side of the House are simply out of touch, out of touch with what this Budget will mean for hard-working New Zealanders up and down the country—out of touch. The message I would give to the Opposition is that, if that’s the song sheet they wish to continue, they’d better get comfortable on the Opposition benches, because that’s where they will be for some long, long time.

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! The member is speaking on the Taxation (Budget 2021 and Remedial Measures) Bill, and I would invite him to mention the bill pretty soon.

Yes, thank you, Madam Speaker. On that basis, I am delighted to commend the bill to the House.

Sitting suspended from 5.59 p.m. to 7 p.m.

The House is resumed. When we adjourned for the dinner break, we were discussing the second reading of the Taxation (Budget 2021 and Remedial Measures) Bill.

This is the second reading of this bill. There’s been an enormously wide-ranging second reading debate so far, a debate that, quite clearly, I think has confused itself between this bill and the Budget itself.

💬 SPEAKER: Absolutely.

But then—but then—you wouldn’t want to break, sir, with the—

💬 Hon David Parker: Point of order, Mr Speaker. I was sat down for straying outside of the bill by the Speaker before dinner.

💬 SPEAKER: Yes, yes. That is not a point of order. I think the member knows it’s not a point of order. I was watching the debate and that happened far too late.

There is, of course, a loose connection to the debate at hand and then, of course, straying so widely as to be ridiculous. And I think that’s what the previous person in your seat identified with the Hon David—

💬 SPEAKER: Right. Now we’ll get back to the bill and not reflect on the Chair’s ruling, all right?

Oh, no, no, I wasn’t. I was being quite complimentary of the ruling.

💬 SPEAKER: No. It doesn’t matter whether you’re complimentary or not, you’re still reflecting.

So here’s the problem, everyone will be trying to make the case on the other side of the House that this is a good thing for New Zealanders who have jobs, who earn, but are still in receipt of family support. No one is going to deny that they need it. No one’s going to say, “Look, we’re not going to have that.” And no one wants to see the gap between someone who is living on a benefit and someone who is living in work so closed up that there is no incentive to go into work. So that’s a pretty easy principle to support.

The problem, though, is the fundamental reason why those people are on family support in the first place. The current Budget and the current initiatives from this Government do not see that number of people being recognised for the work—the contribution they make in the community.

We’ve just seen, a few minutes ago—we’re to see, I should say—the Prime Minister go on to TV and say that the benefit of this particular increase in family support won’t get swallowed up by rent increases. Well, why would anybody accept that, when, in the last three years, rents have gone up by $100, average rents? And what’s the reason for that? It’s a bit hard to explain because we’ve had low interest rates. We’ve had relatively low inflation recorded and published. But, in all reality, the costs of providing that rental accommodation have risen and are going to rise even further. So when it comes to trying to claim that there is a material benefit for people in this particular policy that’s coming out of this legislation, it’s wrong—quite wrong. When the next roll of rent roll comes round, this will get swallowed up very quickly because the deductibility of interest is going to go, and we’ve got rates that are going up across the country, and we have the precarious nature of low interest at the moment.

It’s very interesting also to look at some of the daily costs that people face. And I heard speakers earlier saying that they know what it’s like to be down at their last $2 going throughout the supermarket and having to make a choice about what to buy with that last $2. Well, I don’t have anything but sympathy for people who find themselves in that position. But just have a look at a simple basket of grocery products as demonstrated by interest.co.nz in their article today. Treat them as if they were a Consumers Price Index basket and you were assessing what the increase in those costs have been. It’ll show that in the last 12 months inflation’s running at about 7 percent. So it doesn’t take much to soak all this up.

The fundamental problem here is that whenever there is an effort to redistribute wealth, there is a looking away from the idea that it should be expanded, and that’s what a bill like this—it’s where a bill like this fails. If we are to raise the incomes of New Zealanders, it has to be based on production. It’s interesting going back and looking at great socialists of the past, and perhaps the greatest of all—Michael Joseph Savage—who said that whatever is able to be afforded by way of the welfare State has to be paid for by production. That’s the bit that’s missing here. Just a bill to say we’re going to lift the threshold of earnings by $520-something a year so that they can qualify for the family support and maintain it with a gap between those who are not in work. Well, the first thing is there’s a real problem with that. Perhaps there are too many people not having the opportunity to work because they are shut out of the economy for one reason or another. No one begrudges anyone the support of the welfare State when they need it. But some of the comments that have come from over the other side of the House today have suggested that there’s some big nirvana out there where everybody can just quietly go about their life with any amount of increase coming on a regular basis and not being in a productive position. I don’t think people who are genuinely in need of this support—and we saw some of them on TV tonight—will in any way not want to be part of that productive economy.

So this bill is a band-aid on the fundamental problem that we’ve got in New Zealand, which is an economy that does not accommodate enough people in the workforce. We are supporting this bill because it would be quite wrong to say that those people who are in work should not have a natural advantage over people who are not at work. And that’s not to be pernicious against people who aren’t in work; it’s just recognising that in the workforce there is a productive base—it ultimately provides the basis for our economy.

But I’d say, again, this is a redistributive bill looking at the collective wealth of the nation and deciding how it should be spread out. Well, most of that spread, in countries like ours, is in the services that people expect to make their life better on a daily basis. This bill doesn’t look at that; it simply looks at the idea of providing extra cash to those families who do need it. And I heard someone earlier saying, “Well, look, there are two economic theories that are in place here that make it absolutely acceptable.” The problem with all that is no one on the other side of the House has looked at where the funds come from. Yes, they do go into the economy. Yes, they do go round and round, and, yes, there is a multiplier effect, etc., etc. But where did the funds come from? It comes from a very, very heavily indebted New Zealand.

So there is a kind of a fool’s paradise being promoted with a bill like this that I think does not, should not, be considered a problem for those who are in receipt of the benefit of this particular expansion of the family support thresholds, but is the fault of politicians who are not looking at the root cause of our problems, and the reason that we have so many people in this country in receipt of Government assistance, whether it be for income supplement, for accommodation supplement, or for whatever it might be. The reality is that this bill comes because of a Budget that’s looked away from expanding the productive sector.

Voting Correction—First Reading