Taxation (COVID-19 Support Payments and Working for Families Tax Credits) Bill

Thank you, Madam Speaker. I present a legislative statement on the Taxation (COVID-19 Support Payments and Working for Families Tax Credits) Bill.

ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Taxation (COVID-19 Support Payments and Working for Families Tax Credits) Bill be now read a first time.

This bill will support New Zealanders through difficult times. COVID-19 has been tough for many people, some more than others, and if you put yourself in the shoes of low to middle income families who have to provide for children, many sole parent families, you can imagine how tight budgets are and the pressures that brings. Reducing child poverty is critical to the Government’s priority of improving child wellbeing and laying the foundations for the future. Child poverty is a long-term issue affecting New Zealand children, and increasing support for low and middle income families is necessary. It’s a fair thing to do, it helps those families to live better lives, and it creates opportunities for them and for the betterment of society more broadly.

The changes we are proposing through this bill contribute to the welfare overhaul work programme, which itself lays foundations for the Government’s vision of a welfare system which ensures that people are treated with dignity and can live in dignity, with an adequate income and standard of living, so that they are able to participate meaningfully in their, and our, communities. The bill therefore proposes to increase the family tax credit rate by almost $15 per week for the eldest child in the family, and $13 per week for subsequent children, from 1 April 2022. This family tax credit increase combines a $5 per week per child increase on top of the Consumers Price Index (CPI) increase for the family tax credit which was scheduled for 1 April 2022. The bill also makes two additional Working for Families increases for 1 April 2022, providing for a scheduled CPI-indexed increase for Best Start from $60 to $65 a week, from $3,210 to $3,388 per annum, and an increase to the minimum family tax credit threshold from $31,096 to $32,864.64. People currently receiving a family tax credit or Best Start payment will be better off from this change. The changes are targeted towards the lowest-income families—[Receives glass of water] Thanks very much. Excuse me, Madam Speaker. Sorry, I had a tickle in my tonsils there. The changes are targeted towards the lowest-income families so that those with a family income of less than $40,000 benefit the most, with an average increase of $26 per week.

This package is estimated to lift another 6,000 children out of poverty. As we do that through supporting those most in need, we’re also increasing the abatement rate for the family tax credit and the in-work tax credit from 25 percent to 27 percent, and this kicks in for a family whose income is over $42,700. In addition to the Working for Families tax credit increases, the bill also makes a minor remedial amendment updating the CPI measure used for the indexation of the family tax credit and the Best Start tax credit. As a result of the Working for Families changes in the bill, it’s estimated that a further 6,000 children will be lifted out of poverty, and that’s in addition to the up to 33,000 children who will be lifted out of poverty by the increase in benefit levels earlier this year. Under this Labour Government, these are solid gains for people in lower-income brackets, and we placed a real Budget emphasis on this because we really do believe on this side of the House that ending child poverty is justifiably one of the highest, if not the highest, priorities for Government.

If I could turn to COVID-19 support payments and the framework for them, this bill also makes some changes to the resurgence support scheme, which continues to provide financial support to businesses struck by the effects of COVID-19 and, through that, helps to save jobs. It’s a good scheme, it’s worked well, and it has been a valuable aid not just to the businesses in receipt of it but to the confidence in the wider economy. We want to ensure that we can continue to provide this support, and to enable us to do that we need to adjust how the resurgence support scheme, or the resurgence support payment—or the RSP—is activated. Legislation relating to the RSP contains specific references to support eligible businesses if there is a “resurgence in New Zealand of COVID-19 or an escalation in COVID-19 alert levels”. Because we’ve now got a shift from the alert level framework to the COVID-19 Protection Framework, as well as a shift of focus from elimination to an approach based on minimisation and protection, this means that the current legislative framework requires amendment.

The proposals in this bill are aimed at adapting the resurgence support payment legislation into a more flexible COVID-19 support payments framework. The new framework will retain the overall objective of supporting eligible businesses affected by COVID-19 restrictions, but it will no longer be specifically linked to the alert level framework nor be limited to an escalation in COVID-19 alert levels. Instead, the amendments will allow the Government to be responsive and provide support to businesses in a variety of scenarios. The amendments will allow Inland Revenue to make payments to eligible persons financially affected by a public health measure, business circumstance, or other matter related to COVID-19.

💬 Hon Member: How many? How much? To whom? How will we know?

Well, the detail of that, in response to the member’s interjection, will be set out in Orders in Council that the Governor-General will be able to authorise, by payments—

💬 Hon Member: That’s not good enough. Last time we did this, we knew what we were doing.

Well, this time you do too. This Government stands on its record of properly supporting businesses, and it’s evidenced in the fact that we’ve got amongst the lowest unemployment rate in the world, we’ve had very high growth rates, notwithstanding COVID, and we think we’ve got the balance about right. But, as with the existing RSP provisions, the new COVID-19 support framework will provide the activation criteria. Eligible persons, circumstances of payment, and calculation of payments may be set by Order in Council, as they currently are for the current scheme.

The bill is about alleviating financial stress. It helps keep business afloat. It does this by ensuring that vital COVID support payments can continue to be made, and it ensures also that families are better off. It’s a bill that recognises the reality of economic conditions today and the role of the Government in helping to relieve some of the financial stress. I thank the House for giving this bill its urgent consideration and commend it to the House.

The question is that the motion be agreed to.

Well, it is my pleasure to be leading off on the Taxation (COVID-19 Support Payments and Working for Families Tax Credits) Bill. Now, I have a lot of respect for the Hon David Parker, but, gee, all I can ask today is that we’ve got a long time here and you’ve got to show—and I’m saying this to David Parker; I ask him to show some passion for this issue, because that was one of the most boring speeches I’ve listened to for a while. And I’m just surrounded by high-functioning ex-Ministers of tax or revenue. I’ve got the Hon Michael Woodhouse and the Hon Todd McClay here, and I don’t know which one was more exciting and dynamic, whether it was honourable Todd or honourable Michael, but, gee, at least they showed something; they had passion. They wanted to make a change, do the right thing—but that was just boring. We’re going to be here a long time tonight, so let’s settle in, let’s have a ride, because there is a lot in this bill that we need to discuss.

Now, I noted that the Minister talked extensively about the tax changes and the Working for Families and, look, in the main, we agree with most of those things; they are mainly driven by inflation. Of course, we have just seen a Government oversee a massive amount of inflation, 4.9 percent up to September, and it is sky-rocketing. A lot of it has to do with not only policies they put in, like changing minimum pay rates, and all the encumbrances they put on small businesses, but we’ve also seen so much wasteful spending going into the economy and just exploiting it. And that’s meant that we have an economy that’s overheating; of course, the outcome of that is inflation. And that is why they are having to put up all these benefits. As the Minister said, family tax credit going up, the family credit abatement going up, from 25 to 27 percent. We will be asking the Minister about that because the effect of that is that it increases the marginal tax rate for working families and therefore actually provides a disincentive to work. And I think that’s a question that the Minister will have to answer in the chair.

Best Start tax credits—another one that’s going to go up, the minimum family tax credit. All that, in the main, is OK. But this bill is not so much about that; this bill is about the second stage of the COVID delivery element that we’ve been debating all last night and all this morning. And what a shambles—what an absolute shambles we have seen today, and the earlier COVID debate. It’s all being done on the hoof, and this is another example of that. This bill is one where it sets out no details—and we’ve taken the opportunity to ask the Hon Grant Robertson, over the last couple of days: what are the details about these revised payments that are set out in this tax bill? All this tax bill does is it enables something to take place, but it never says what is going to take place. And he’s been noting that the Government announced the change on 22 October, over a month ago. We’ve only got eight days before these changes come into play—eight days. That’s why this Government is trying to ram through these two pieces of legislation today and tomorrow, to make sure that we can actually have the mechanism in place for the end of next week. And, of course, Parliament doesn’t sit next week.

It’s an absolute shambles. Everyone knows that we’ve been having this issue for 18 months, and they talked about it a month ago, and yet Labour has only fronted up with a bill today that has no more detail than actually enabling something to happen at some point in time. What certainty does that give the small businesses? I heard Simon Watts talking about his businesses in the North Shore. I’ve got thousands of them, every electorate MP, and I bet you some of the Labour members have got them as well, crying out for help. “Give us certainty. No, tell us what’s going to happen.” And not a skerrick of detail at the moment—not a skerrick. This is what’s wrong with this bill.

So what’s going to happen in this bill? All it’s going to do is say that the Inland Revenue commissioner is going to be able to set the criteria. So that’s going to be one of the points of dispute in this debate. Why would you empower the IRD? That should be a legislative function. But, actually, the legislation gives the commissioner the right to set the eligibility criteria, and that is wrong. We will be testing the Minister on that. Then we’ll be asking, “What about the whole mechanism?” We know that there’s going to be a change of the payment system, we’ve heard that, but we don’t know whether it’s still based on revenue drop. And, of course, many of those businesses that we’ve been talking about will have suffered, and will continue to suffer, from revenue drop. I know Grant Robertson says it’s all going to be nirvana by the end of next week; it’s not, actually. A lot of those businesses will have run out of cash and, actually, it won’t be that quick to take up. Of course, we’re going into January, holidays, and a lot of businesses are simply not going to be able to see the upturn in business they are hoping for. And, of course, they’ve got to pay provisional tax in January, they’ve got to pay terminal tax in February, and then, of course, they’ve got more tax payments to make in April. That is a bleak outlook for many of our companies, and that is why we need to have much more clarity. So we don’t know whether it’s going to be based on a revenue drop, and I think that’s a really important principle.

The second thing: the Minister wasn’t able to say which six sectors were going to be targeted, because he has made it clear that specific sectors will be targeted. But, when asked today, he was unable to answer that.

💬 Hon Member: He doesn’t know.

He doesn’t even know what areas—we don’t even know what areas are going to be in red, orange, or green. It is just chaotic—it’s absolutely chaotic. This is the issue with this bill, and that is why we are very worried about it.

Then, there’s an element of this bill which is the Shane Jones mark 2, or version 2.0. What I’m referring to is that the bill empowers the Government to provide any person or organisation to receive payments under the framework, without a clear and consistent approach as to who should receive the Government financial support. Now, up to now, the payments have been directed to businesses. Suddenly, in this bill, we see a reference to “any person or organisation”. What’s that about? We’re talking about financial support to people, or are we talking about financial support to businesses? And, actually, all the support, to date, has been to hard-pressed businesses. It is unusual and unclear why there’s this big change in this part of the bill, and, of course, that will be an issue of what we want to test the Minister on today.

We also think there should be a greater focus on those on the job seeker benefit. Coming back to the issue of the changes, there’s been a lot of emphasis on changes to the benefits, but we’ve got 190,000 people on job seeker benefits. We need to make sure that they are looked after, but also we want to make sure that they’re back in business, back getting a job, because that is the thing that will help people get out of poverty. When the Minister says that this package will lift up 6,000 children out of poverty, the best thing this Government could do is to create the framework for more jobs and to get those 190,000 people back into work. And just to remind the Labour members, there are currently 32,000 people who went on the job seeker benefit 18 months ago, after the first lockdown—

💬 Hon Member: How many?

—32,000 who are still on the job seeker benefit. And they are the people that we need to have back in work. It is appalling that they’re sitting on the job seeker benefit 18 months later.

So this approach, what the Government keeps wanting to do, every time inflation goes up—mainly as part of the Government’s own making—is to do the only thing, which is to push up benefits—push them up. What this Government should be doing, and what we should be debating today, is a system where we’re allowing businesses to get under way, to trade their way out of the current plight that they find themselves in. That means removing the traffic light system as soon as possible. We don’t accept it. We don’t think it has validity, now that we’re getting very close to 90 percent. Once we get to that point, open up New Zealand, allow businesses to flourish, allow them to hire more people. Let’s get this economy much more rocking. This is a poor piece of legislation. It’s going to be a long night tonight.

Oh, thank you, Madam Speaker. Just really sad to hear the same old tune from the National Party that the benefits are a bad thing and that supporting our most vulnerable is something that we shouldn’t be doing. Well, this Government will continue to do it. And because we have picked up, four years ago, the nine years of neglect of that sector, off the National Party, we’ve had a lot of making up to do. This is just one further step in alleviating the abject poverty that the National Party left a lot of people in. And I’m very proud that this small step will lift 3,000 more children out of poverty, will help 30,000 more families, and our child poverty reduction targets are all on track—on every measure, we’re improving it. This is part of it. We’ll continue doing it, and we will make no apologies for helping those in our society who need help the most. I commend it to the House.

One minute and one second is all that the chair of the Finance and Expenditure Committee can offer on a very, very poorly prepared process. An important piece of legislation that hasn’t had any consultation. It hasn’t had any exposure draft. Parties only saw it—what, last night, the night before? It hasn’t gone through his select committee and all he can do is offer one minute and one second and talk about nine years of neglect. That’s the quality of the debate that we’ve been hearing over the last 24 hours.

But as Yogi Berra famously said, “It’s déjà vu all over again.” We’re back here again in a first reading again of a bill that we’re expected as a House to give due diligence to and have passed into law without any of those processes. I want to quote my favourite lefty Professor Andrew Geddis from the University of Otago, a fantastic jurist—

💬 Hon Member: At least he’s principled.

A very principled fellow. And he said in an article that quoted, of course, the Victoria University professor Dean Knight describing the previous bill as a constitutional disgrace—he concluded in his blog piece today—this is Professor Geddis—“But here’s the thing. When you’re the government, you’ve got to do better than ‘just enough’. Putting rules in place to allow society to function in the new COVID normal matters. But how you put those rules in place also matters. And in that respect, the government has failed us with this latest bill.” I suggest that the Government is going to fail us—us, being the people of New Zealand—with this bill and its process.

Now, on the face of it—I’m going to talk about Part 1—it looks very similar to the bill that we passed under urgency in February this year with National’s support; in fact, I think, with the ACT Party’s support, albeit that we were critical of the process even then. We were a little bit more forgiving of what we were actually doing, because we knew what on earth we were doing—we knew what we were doing, because the Minister of Finance, who moved the bill at first reading, told us exactly what we were doing. And referencing Hansard from that first reading, we knew that business resurgence payments will be triggered at higher alert levels, at alert level 2 or above, that the payments for business resurgence would be $1,500 per applicant per firm plus $400 per fulltime-equivalent (FTE), up to a cap of 50 FTEs. We knew that the payment would be made by Government to business that have a revenue drop of 30 percent or more, calculated by comparing a seven-day period at alert level 2, etc., etc.

Now, I would like to know what on earth we are supporting in terms of business resurgence payments. I was expecting the Minister of Revenue to come into the House, knowing that we’re having to pass this under urgency for a new business support framework that starts in eight short days’ time, and give the House, and indeed the public, the businesses that are going to the wall right now waiting for the answers to the questions of when they can open up again, what alert level they are going to be at, when we’re going to see overseas tourists, when international students will come back—and we had nothing.

We are being asked to pass a piece of legislation that gives the Government extraordinary powers by Order in Council to pass secondary legislation that will cost the taxpayer billions of dollars—money that I don’t begrudge when it’s well targeted. And of all of the $60-odd billion that this Government has spent, mostly under the COVID-19 Response and Recovery Fund, my party supports those payments that are a direct response to COVID. So that is beefing up the health system’s ability to respond, getting the personal protective equipment, the vaccinations, the intensive care unit beds—not that we’ve been that successful at that—providing the wage subsidy and the business resurgence payments. But it behoves this House and the people who are in it to scrutinise the amount of spending, and we’ve had no transparency whatsoever on what the Government did announce.

We got that information in February, and nine months later we’re still none the wiser about what the total cost of that is, because the Minister clings steadfastly like a comfort blanket to the Public Finance Act and says, “Well, we’ll find out all that information on Budget day next year when the Supplementary Estimates of Appropriations are released.” That’s not good enough. But I’ll give him credit for this: Mr Robertson did come to this House in February and give a detailed description of what those business resurgence payments would be and when they would be qualified for by business.

So I turn to the departmental disclosure statement and the regulatory impact statement. Now, one would think when they pick it up that at 54 pages long there’s a reasonable amount of detail in it about what we’re doing, how much it’s going to cost, and when it’s going to be triggered. Actually, 38 pages of that are actually about the family tax credit and Working for Families changes, which my colleague Louise Upston will talk about through this debate. Nearly nothing is being said about what the support framework for business is going to be. Indeed, testing of the legislative content on page 10 of the regulatory impact statement says, “No formal steps have been taken to determine whether the policy to be given effect by this bill is consistent with New Zealand’s obligations.” Is it consistent with the Government’s Treaty of Waitangi obligations? Well, “No formal steps have been taken to determine whether the policy is consistent with the principles of the Treaty of Waitangi.” And I bet the Hon Willie Jackson, the Minister for Māori Development, should have been roaring in Cabinet when he heard that—absolutely no scrutiny of the degree to which this bill is compliant with the Treaty of Waitangi.

What about external consultation? Because the thing that really annoys me as a chartered accountant and as a former Minister of Revenue is the insidious watering down of good consultation process. It’s a process called generic tax policy process, actually. It’s a different TLA—three-, four-letter acronym. That’s the good tax policy process, where the IRD actually was required by the previous Government—I don’t think this Government even knows it exists—to go out and engage with the sector, the tax sector, through the Chartered Accountants Australia and New Zealand Corporate Tax Group, through the Tax Advisory Committee, and the Small Business Advisory Committee, and say, “This is what we’re thinking. Tell us about what you think back.” Because the best tax experts, actually, great though they are, don’t work for the IRD; they work for KPMG, Deloitte, Findex—all of those—and they used to advise IRD on what they thought.

Now, they didn’t always agree. But at least IRD was able to take those views into the Cabinet room when we see papers proposing changes to the Income Tax Act and the Tax Administration Act. Nothing has happened in that, and the Government said, “Oh, well, it’s only a technical change. In fact, it’s crazily simple in its application. We’re taking sections 7AAB and 7AAC of the Tax Administration Act and replacing it with new sections 7AAB and 7AAC.” One could argue that the words in that are very, very minor changes, but what’s not said is the big problem with this bill. What’s not said is what the Government’s going to do with that power. When are they going to do it? For whom are they going to do it? In what circumstances are they going to do it? And how much is it going to cost the New Zealand taxpayer? None of that detail is available, and we’re eight days out from—what is it called? The COVID support framework or the COVID something framework—the traffic light system, and the consequential benefit, or otherwise, particularly down my way, on business and what that means.

Because, despite any perceived relaxation of the lockdown rules, the Government is still standing in the place of commerce. What business really wants to know is when the Government’s going to get out of the way and allow them to trade safely and normally, because there’s two ways that businesses can earn income. It’s by corporate welfare, which I thought this Government would have been strongly opposed to, or it’s free trade—the transactions between a willing buyer and a willing seller that creates the economy that enables the Government to pay for the social services we so badly need. And instead, it’s intervened in a socialist roundabout in the name of safety with no apparent end. Apparently an announcement, now, that Kiwis can come home. Well, whoop-de-doo! They should have always been able to. But no Australians, no Brits, no Europeans, no Americans, no international students, no tourists. The commerce that we need to make this support redundant is still an uncertain future. This is terrible process. I’d love to be able to support support for business. This isn’t it.

Thank you, Madam Speaker. Look, I just want to speak really briefly on why these changes are needed, and it comes down to people. As said in the regulatory impact statement, Māori, Pacific people, people with disabilities, and women are overrepresented in low-income earners, and evidence indicates their groups are likely to be among the hardest hit by COVID-19 economic impacts. Māori and Pacific women in particular are overrepresented in low-wage employment as well as casual, temporary, and other forms of insecure employment. COVID-19 has only exacerbated the situation for these groups, who are also more likely to be in the industries impacted by COVID-19 restrictions.

Women with caring responsibilities, especially sole parents, are also exposed to the adverse effects of economic recessions that can lock in long-term unemployment and poverty, including in-work poverty, and lead to increased rates of poverty. Changes to the family tax credit considered in this bill provide increases to families with the lowest incomes. They are therefore likely to disproportionately benefit—benefit—Māori, Pacific people, and women. That is why I support this bill and I commend it to the House.

Thank you, Madam Speaker. I’ll rise to take a call on the Taxation (COVID-19 Support Payments and Working for Families Tax Credits) Bill at this, the first reading. I suspect there’s nobody that would say this debate and the conditions around it are ideal. I suspect everybody would have wanted more time for this process and for the consideration of this bill. I’ve heard the Government say, in terms of that, that this is necessary for getting it done. We would have liked to have seen the work start earlier so that we could have had the normal process and still get it done. We recognise the tension and the urgency that the Government is under, albeit self-imposed.

Specifically to talk to this bill, there are a few points, and I do want to address some of the points raised by National in relation to the resurgence payments and the points that they read out from the regulatory impact statement—or departmental disclosure statement, I think—saying that the work hadn’t been done around this and the impact on rights. I would also point to the part of that same document that said, in relation to the COVID-19 support payments framework amendments, the Treasury considered that the regulatory impact statement was not required, on the grounds that they have no, or only minor, impacts on businesses, individuals, and not-for-profit entities. So I understood the point that was being made, but, really, this is about not setting up a new scheme; it’s about recognising that when we are shifting to having an endemic presence of COVID in our communities, resurgence is not the framework that we need to work within, and that our alert levels will no longer be in place, so we need legislation that will enable Government to respond.

I do also want to point to the sense of discomfort of listening to the point of saying that while this is corporate welfare—and the Greens share a kind of perspective around that—but that the alternative is free trade and opening things up. Like, where would we have got to if that had been our response to COVID? When there’s 8 million—I heard recently—people that have died around the world, and we—every single life meaning something—have lost around 40 people. That’s significant in our communities, and even one more death than that, through that opening up and relying on businesses to make that decision for themselves, when we have heard, sporadically, even at the toughest times, businesses calling for that. So I’m all for protective measures that actually support our communities to make the right decisions for the safety and wellbeing of people in this country. While we have criticisms in terms of, maybe, how some of the money has ended up and where it’s gone, that, actually, we do recognise that businesses needed that support to be able to make the right decision.

Now, we are also—I’d like to speak to the changes around Working for Families, and I’ll spend most of my time on that in this debate. Just registering a really deep disappointment with this, that it is just as I think the Child Poverty Action Group noted in their response to the Government’s announcement that the Government’s family income tweaks are “out of touch” and “deeply disappointing”, they do not go anywhere near to address the need within our communities. I just want to step through, in terms of that context that we’re in, in relation to COVID, that COVID came along at a time when we had an established, entrenched housing crisis—that the Government at least, now, is starting to address, rather than denying—and of inadequate incomes across many of our communities, deeply entrenched poverty, that is evident in the rates of rheumatic fever, as one example. Then we had to go into lockdowns, and people lost their jobs. They lost hours of work, particularly people in casual employment that may have supplemented their benefit, in terms of their ability to support their families. The most vulnerable, we know, and particularly in terms of disabled people, what we’ve heard from the community is that many of them lost their jobs first. While their need for electricity went up, their need for food went up, and the need for internet went up, particularly for people with children. We’ve seen, as a consequence: debt increase, unprecedented queues for food parcels, and people having to reach out for additional support because our social safety net was not and is not adequate.

That is where we are at now, where people are deeply struggling. Our services, as a result, are also—they’ve done an incredible job, right? Our marae, our Whānau Ora providers, our community organisations are trying to knit together that safety net to stop people just crashing and burning. But there is only so much those organisations can do. The best-placed people to actually look after people and strengthen that safety net: that’s this House, and that’s about getting really strong income support measures in place that also support people to transition into employment where that is an option and available.

Now, these changes for Working for Families of $5 per child, that may happen—the regulatory impact statement says there are significant statistical uncertainty over the child poverty reduction estimates, which show between 4,000 and 6,000 children may be taken out of poverty—just doesn’t even enter the ballpark of what we need and what we should expect for our families. The worst bit is that it’s coming at the expense of our middle-income families who are actually still struggling to be able to put down some roots and get some stability for their families, because the Government is increasing the abatement of Working for Families for those families who have managed to increase their income a bit.

So they wanted this policy to be fiscally neutral in a pandemic, in a housing crisis, where the cost of living is going up, they wanted to address child poverty in a fiscally neutral way by taking that money from middle-income earners, which is what this piece of legislation does. That goes exactly counter to what the Welfare Expert Advisory Group—that we hear the Government is one day going to implement their recommendations. This is 100 percent counter to their recommendation, which was to have work towards a more universal scheme. They’d recommended that the Working for Families payment was increased for the first child by $57 immediately, this was 2019, and that for subsequent children it be increased by $29 immediately—2019. Here we are, getting a $5 increase, and they recommended, further, most critically, a lowering of that abatement rate to 10 percent for those earning between $48,000 and $65,000, and then up to 15 percent for those earning between $65,000 and $160,000. To reduce that effective marginal tax rate, that is being exacerbated by this decision to increase the abatement rate.

This is creating a cliff-edge for families who are wanting to increase work. This is incentivising families to choose to only have one parent in work and the other one not to go into work, because this will punish them for getting both into work. We know historically who suffers from that, and it’s women, because traditionally—we still haven’t closed that gender pay gap yet—that it’s men who are more likely to be on higher incomes. Most two-parent families will be a male and a female—not all. So this policy goes counter to that intent of supporting people into work, and it is also counter to the process of recognising that we all have a role in supporting children in this country. Who was it, was it Whitney that said, “Children are our future.”? Could have been said better, but it’s an important point.

Thank you, Madam Speaker. I rise on behalf of the ACT Party in opposition to this COVID-19—oh, sorry; wrong one—the Taxation (COVID-19 Support Payments and Working for Families Tax Credits) Bill. This is the second bill in 24 hours that the Government is attempting to pass under urgency, without the usual consultation. And the interesting thing about it is it doesn’t come into force until midway next year. So you’d have to wonder whether this is being put through under urgency because of some dire need to avert an emergency, or because it’s politically expedient to make a law more rapidly and with less scrutiny and hand out money to people that the Labour Party thinks will vote for it, under cover of urgency. In a way, it’s kind of worse to rush a bill through under urgency for that reason than it was to do the COVID19 Response (Vaccinations) Legislation Bill under urgency. I mean, at least there are some practical problems with the COVID-19 response in terms of vaccinations that they arguably do need to rush because they’re so far behind in the response. Whereas doing extra taxpayer handouts under cover of urgency—that is the height of cynicism.

I have to say, I often find myself, for some reason, giving a speech on a bill after Jan Logie. And that often gives me a lot to unpack—and let me just try to get through some of the things that we’ve just heard. Jan Logie said that it’s absolutely critical that we keep the borders closed, that we don’t open up, and that we prevent one more person from dying—she said that even one more person dying from COVID would be a tragedy. I agree with that: every death is a tragedy. It’s also important to have a bit of perspective: 30,000 people die in New Zealand every year, 100 people a day, many of them from things that are preventable—if, for example, we could afford more cancer medicines or make the roads safer or have better nutrition for people or a higher quality of housing. This is where, I think, the Greens often lack a sense of perspective. Actually, in a way, they kind of acknowledge that, because shortly later in Jan Logie’s speech she said, “Well, people have lost their jobs because of the lockdowns and restrictions.” Well, she’s absolutely right. I mean, doesn’t that tell us that there actually need to be trade-offs and that when you make policy, you’ve got to consider that there are different impacts on different people from decisions made by Parliament. But it seems she didn’t recognise that, because she then said, “The people who are most able to help vulnerable New Zealanders are the 120 people in this Parliament.” Well, that is not only completely unrealistic, but it’s also, frankly, insulting to the many New Zealanders who wake up each day and try to make a difference in their own lives and the lives of those around them and actually help people.

Some people would say that real kindness and generosity is not putting your hand in someone else’s pocket and through this Parliament and its power to tax, but putting your hand in your own pocket and giving up your own time and money to help your fellow New Zealander. What an extraordinary world view, where we don’t want one more COVID death, we’re prepared to lose our jobs and lose more people to other things as a result of the endless restrictions and the borrowing and the spending, and the way to help people is to go into Parliament and take money off one person and give it to another—an affront to all of the people who are actually practically helping each other.

I say all that because, in a way, the Green Party is a caricature, or an extreme rendition, of the Labour Party’s position on this issue. This Labour Government went into COVID with more natural advantages than any other country. One of the biggest advantages it had was access to cheap credit. And it borrowed money—$60 billion—second-biggest fiscal stimulus in the OECD to get through COVID, second-biggest before the latest lockdown, all of which seemed viable because of record low interest rates. When the interest rates couldn’t go any lower, because it is difficult to go lower than zero—some countries have managed it, but it’s difficult—they started the large-scale asset programme, and then they started the funding for lending programme to try and pump even more money into the New Zealand economy.

And now, at exactly the time when we need to start reconnecting and give people the opportunity to earn a dollar, all this Labour Party can do is rush through, under urgency, a legislative initiative to push more money out of the Treasury and into some people’s—not all, but some people’s—pockets, because that’s all they know how to do. They don’t know how to unite New Zealanders behind good ideas to create more wealth, but they do know how to divide people, they know how to commodify people into identities, they know how to divide wealth, they know how to take off one and give to another—robbing Peter to pay Paul, hoping to pick up some votes on the way through. That’s the Labour Party style of Government, and they’re doing it right now under urgency, under cover of COVID, to advance their longer-term political goals.

I just wonder how many of the Labour backbenchers are going to earn their salary today and stand up for more than two minutes and actually defend their Government; or better still, critique it. And as that great New Zealand artist Scribe said, I’ll take a bet, “Not many, if any.” That’ll be the answer to how many of them will get up. The difficulty is that while they’re failing to do that, the New Zealand Government is putting on New Zealanders tremendous pressure in terms of the cost of life and the cost of living—that’s what we’re hearing from people. What we’re hearing from people is prices are going up, and that in a way explains why they’re rushing through this law to try and give more money to some people, but the difficulty with the Government’s strategy of printing money, using low interest rates—not so low anymore; just went up 25 points, quarter of a percent on the mortgage today from the Reserve Bank—

💬 Hon Michael Woodhouse: There’ll be more where that came from.

—and that’s going to keep going and it’s going to keep going. As Michael Woodhouse says, “There’s more where that came from.”

Their strategy of borrowing cheap money and pushing it out the door to try and fund people that they think might politically favour them. It might help with the cost of life in the short term, but it doesn’t work in the long term. What the Government needs to do, if it wants to make it easier for people to afford things at the petrol pump and at the supermarket checkout, and afford homes and afford rent, is not print, borrow, and redistribute for politically expedient purposes at every opportunity, including under urgency, under cover of COVID. They actually need to start uniting New Zealanders behind better ideas to produce more wealth. They need to make it easier to build homes. They need to work out how to plan and finance infrastructure so there’s more land you can build on. They need to make it easier to get competition into the supermarket industry. They need to make it easier to get foreign investment into New Zealand. They need to make it easier to build stuff, period. They need to make it easier to employ people. They need to make it easier for people to come to New Zealand and fill skill shortages. They need to fix the broken Immigration New Zealand system. They need to find a way to safely reconnect with the world, not next month, not next April, but when it is safe to do so, and it’s safer to do it right now.

That’s what they need to be doing—that’s what this Government should be doing. If they were going to use urgency to find a way to get some actual tourists back for the tourism industry, that would be very welcome, but instead they are using urgency, flipping and swiping away the usual democratic processes and procedures that people in a free and democratic society like New Zealand were taking for granted—I suspect they’ll be taking it for granted less—in order to rush through legislation so they can try and demonstrate their kindness by putting their hand in someone else’s pocket to pay off people that they think are more likely to vote for them. The cynicism is extraordinary. They’re buying into the rhetoric of Jan Logie, who spoke before me, who seems to believe that the best way to help people is not to create the conditions for people to work and do smarter, more innovative things; it’s actually the people that are most able to help people are the 120 people in this House with the power to tax.

Well, let me give you a few predictions. Over the next year, all of these inflationary, big spending, and big printing policies, they are going to come to an end; they’ll be unsustainable. And mortgage rates and interest rates are going to have to go up to arrest the inflation. People are going to see their pocketbooks squeezed. People are going to realise more and more that this is the cost of COVID under Labour. And the Labour Party are going to stand there, and their only strategy they’re going to have to fix it will be “We will borrow more money, we will print more money, we’ll take it off someone else and give it to you. We will have a wealth tax. We will do this; we will do that.”, but the people will see right through it, because New Zealanders know that, ultimately, you can’t spend what you don’t earn for very long. And this legislation and the way that this Government’s going about it will be their political death nail, because bad policy is always bad politics in the end. Thank you, Madam Speaker.

I had hoped to speak about the most exciting part of this bill, which is raising 3,000 more children out of poverty, and that’s on top of the 33,000 that were raised out of poverty earlier this year with the changes we made. However, it would be remiss of me not to respond to the comments from Mr Bayly and Mr Seymour regarding inflation—inflation that they know is temporary because, in fact, we have one of the strongest economies in the world. The Reserve Bank in its snapshot this afternoon, in fact, talked about the strength of the economy and the fact that our relatively high inflation is expected to drop incrementally as our borders reopen. Today, we heard the reopening announcement. We heard the reaction from Export New Zealand, who said today’s announcement will allow exporters to start reconnecting to their customers, get back out into the world, and win more work. And may I remind the House that fully vaccinated Kiwis will be able to travel to and from Australia from 16 January, to other countries from 13 February, and all other countries to and from New Zealand from 30 April, with a reopening staged over time.

So the inflation, we know, is temporary. It is a direct result of COVID. COVID is why we are introducing family credits to support our lowest-income families, and the only divisiveness that is being created in New Zealand is coming from opposite benches in the House. We have a very high approval rate thanks to the team of 5 million. A recent survey showed that 70 percent of New Zealanders agree with the direction of travel—that’s 70 percent advantage points. So I will look forward to speaking about lifting children out of poverty the next time we speak on this in the House.

This is a split call. I call the Hon Todd McClay.

Well, there you have it. You heard from the Labour Government: we’re going to go early, we’re going to go hard on inflation, and it’s only temporary. In fact, they’re going early and hard on inflation by having policies that borrow money and spend it without direction in the economy, which drives up interest rates. I would say to the members opposite: the 0.25 percent increase in the interest rates from the Reserve Bank today, for the average house price in Auckland, is $2,500 a year extra, and that’s before there are more increases this year. And they’ll shrug their shoulders and say, “Nothing to do with us, the Government.”, except they have borrowed $97.5 billion for COVID and spent it on most things except for COVID.

This is a Government that only shows urgency on COVID when they’re forced to and it’s too late. This isn’t a bill that says, “At the beginning of this year, we’re going to roll out vaccinations as quickly as we can.” The reason there wasn’t one of those is they forgot to order the vaccinations. You can’t vaccinate Kiwis if you haven’t got the vaccination—and, by the way, here’s a headline: you can’t give them their boosters until you order and get the boosters, either. So it doesn’t matter what the app says, that it runs out in six months’ time: if the Government haven’t ordered them, you can’t give them to people.

That’s the reason we’re standing here today, seeing this rushed through Parliament, this piece of legislation that will borrow and spend more under the guise that it’s good for business and good for the taxpayer and will raise some children out of poverty—forgetting that they didn’t say that since Jacinda Ardern became Prime Minister and made this one of her biggest priorities, “We’re not leaving a single child behind.”, there are more children in poverty today than when she took that on. In fact, some of those families wish she hadn’t had said anything and she actually just got on and did the job.

Well, here’s the challenge that we have with the reason we’re here rushing this through in urgency, it’s because, on every step of the way since the Government put New Zealanders into lockdown last year, asked them to sacrifice and to do everything that they should—Kiwis lost their homes, they lost their businesses, their debt levels went up—the Government has kept talking and hasn’t done the hard work. When we look at the support that was available to businesses, it only came afterwards, when they were forced to because the public pushed them and the media pushed them and the Opposition pushed them.

So today before us in this House, we’ve got a piece of legislation that says we’re going into a traffic light system; for anybody that’s paid attention, it is going to be red. The difference is, actually, what this Government will do is get the police to police it more stringently than everything else, and any poor business person that’s unsure of the rules, doesn’t know what they mean—can open today but actually has extra restriction on them in a week’s time—if they want to run Jacinda Ardern’s red light, they will get caught. The problem we have with that is this bit of legislation says, “Actually, we’ll look after you. We’ll get the Inland Revenue to come up with some rules to give you some support, some money.” Do you know what New Zealanders want? They want the Government out of their businesses. The vaccination levels are up; they’ve done it, despite the Government not ordering those vaccines early enough. They want to trade their way out of this problem. The member opposite said ExportNZ thinks it’s wonderful, they can re-engage with their customers—in six months’ time.

Do you know what Jacinda Ardern announced today for the tourism sector? She said, “Wonderful: on 1 May next year, a family of four from Australia can come to New Zealand for a holiday and spend seven days in self - managed isolation and quarantine on their holiday and then go home again.” They won’t be spending any money anywhere. When you say to people around the world, “In six months’ time, you’re welcome to come to New Zealand and hide away in a hotel.”, they will not come. The tourism sector didn’t get any help today. The tourism sector doesn’t get help in this piece of legislation. It doesn’t do enough for them. They needed it a long time ago. What they want now is Kiwis and Aussies to be able to come here.

Here is a simple question for the next speaker from the Government that will stand up and take all of 30 seconds to tell New Zealanders how lucky they are: why is it that a New Zealander has to wait until 15 January and can’t come home on 24 December? Why is it more risky on 24 December for a double vaccinated New Zealand Australian to come home and see his family than 15 January? When you ask the Prime Minister, she says, “I don’t know.”, and that’s why they’ve been fighting in Cabinet.

This is not a good piece of legislation. It doesn’t do the things the Government says. The help was needed months ago. Now they want to trade their way out, and all the Government wants to do is borrow and spend.

Oh, point of order—point of order. I’ve just noted that the member Helen White—she had her fingers in her ears that entire speech, and I find that rude. I mean, I thought we came to this House to listen to the debate. [Multiple members interjecting]

Order! No, sit down. That’s not a point of order.

Point of order, Mr Speaker. I’ve taken offence to that, but I move that the member be allowed to keep her fingers in her ears for the rest of the debate.

Oh, order! Sit down—sit down. We’ll have the next caller, Shanan Halbert—five minutes.

Thank you, Mr Speaker Amongst all the yelling and shouting this afternoon, we have a very important bill that does change the lives of many New Zealanders and, unlike the former speaker, I’m very, very keen to talk very briefly on the taxation bill that’s before the House this afternoon.

We know that COVID has been difficult for many and we’ve heard lots of discussion and we’ve talked about the needs of businesses, and I absolutely agree; I’ve seen it firsthand myself. But at the other end, while over the three months of lockdown and our challenging times in Auckland, while delivering food packages and getting out and supporting our vaccination effort, we’ve seen the bottom end of town and the needs, the desperate needs, that are in front of us. That is what this bill is about.

Mr Seymour referenced a song about not many, if any. Mr Seymour, I will stand by the Government’s record on supporting our most vulnerable and doing what is needed. One year into the game, and we have done an incredible job under the most difficult circumstances, and when we look at such bills like this, 346,000 families will be better off. I stand by that, Mr Seymour, and am incredibly proud of the work that this Government does, and I commend this bill to the House.

I presume that members opposite, like members here, are out and about in their electorates and that they’re speaking with tradies, in particular, and business owners. One of the biggest problems they all have is that they’re not complaining about no money, no work, no orders; what they’re complaining about is an inability to get workers. That’s the one common denominator, which would certainly make a lie of much of what we’ve heard from the opposite side today.

So the country is actually doing particularly well when we get to that stage, with this being evidenced by the unemployment rate. However, there are always going to be those that are left behind, and “left behind” means we will never fill those vacancies, because of a lack of education or a lack of opportunity. The fact I would like everyone here to reflect on is that this is actually only going to add $20 a week to the budgets of many of these families. Well, that you can be in a position where $20 a week will make so much of a difference just shows that there are those that do need all the help that they can get so that they can be part of this country’s move to ensuring that we do get the workers we need. This is a bill that’s needed, and I commend it to the House.

Thank you, Mr Speaker. Well, in this first reading, in yet another piece of legislation that the majority Government is ramming through this House in urgency, with no public consultation, I’m going to talk about some things that, clearly, this bill isn’t, rather than what it is.

Because if you talk to people in our communities, what do they want? So, for the first half of the bill, you talk to businesses. What do they want? They want certainty. They want clarity. Do they get this in the bill? No. They want to know, with this confusing change to the traffic light system, which National doesn’t even think is necessary: what support would be available due to the restrictions still in place? There’ll be some over the other side that are saying, “Well, actually, businesses are free to operate in the traffic light system.” Well, I’m sorry, but for many businesses in my electorate where hospitality and tourism are the key element of the town’s success, we heard from my colleague the Hon Todd McClay, who is our tourism spokesperson, that they won’t be coming any time soon.

So where in this bill do we hear about specific, targeted assistance to the sectors who will need it most? Oh, no, we don’t. We don’t see that at all in the bill, in this taxation—supposedly—COVID-19 support payments bill. It is not there. What do businesses desperately need? They want certainty. They want clarity. They want to be able to get on and plan.

The other thing—because this bill also purports to support workers. There are thousands and thousands of Kiwi workers who are locked out of their jobs today because of restrictions, who also want certainty, who also want clarity. What we’ve seen in this House earlier today is potentially thousands of New Zealanders who will be locked out of employment and their ability to earn an income, because of a divisive, toxic piece of legislation around vaccinations. But oh, no, they’re very quiet on that side of the House now—they’re very, very quiet. New Zealanders want to get back to normal.

So the other side have also said this bill is about low-income New Zealanders, because COVID has been really tough. Well, my question is this: if COVID has been so tough on those households—because of COVID—why hasn’t the Government, instead, provided temporary support to ease the burden now? Oh, no, no. They haven’t done that. They haven’t put the thought in. Haven’t put the effort in. Haven’t looked at how to target support to those who need it most.

Let me give you an example: so of the thousands of families who have struggled because they’ve been in lockdown, and their children have been at home rather than at school, at school they would have been supported either with breakfast in schools or the Fonterra programme for milk in schools, fruit in schools, lunch in schools. So those families, what would have been far more helpful to them would have been to have given a direct credit to each one of those households that was struggling at the time during lockdown. And Auckland will be 100 days tomorrow. That’s the support that families needed, but instead, what do they do? They put out a headline that says, “Incomes lifted for 346,000 families”. Well, guess what! Most of it was the Consumers Price Index (CPI) adjustment that happens every year on 1 April. I’ll say that again: CPI adjustments happen every year, which are reflected in increases to Working for Families tax credits, Best Start payments, and guess what! They’re going up anyway, other than $5 a week. So yet another flashy headline that is actually pretty meaningless—doesn’t come until April. Yet here we are debating under urgency with no ability for the public to have their say yet another piece of legislation. Oh, but they put the COVID banner on it, and they just slip this particular bill in so that it looks like it’s COVID support. Well, it’s not. So at least be honest about what this bill does and what it doesn’t do.

The other thing that is really not upfront about this legislation is this—and different members have talked about different numbers, so they haven’t even got their facts straight: 3,000 children out of poverty, 6,000 children out of poverty, 10,000 children out of poverty. Well, guess what! You’re starting from behind—you’re starting from behind. Here’s why: Ardern promised in 2017 that 100,000 fewer children would live in households earning less than 50 percent of the median income—2017, remember that? Remember that? That was a key debate. Guess what! Fifteen hundred more children in poverty on that measure. So whether it’s 3,000, 6,000, or 10,000, you’re not even getting back to where it was in 2017. So the reality is, if that side was seriously interested in the wellbeing of those children and lifting children out of poverty, instead they would be focused on those who are without work. They would be focused on the 190,000 New Zealanders who are currently on the job seeker benefit. Just about any business you go into, they’re looking for workers. They are looking for people to fill roles in their organisations, and there are a wide range of what those jobs are.

But what’s worse than that, what we are seeing under this Labour Government is the crisis of benefit dependency, because what we are seeing is people going on to benefit and staying there longer. So if we want to have an honest conversation in this House about children in poverty, where are they? They are in the households where there isn’t a parent in work. So the single focus, if this Government is serious about lifting children out of poverty, should be on those households—it should be on those households. Yet they’re all quiet now—they’re all quiet, because it hurts. The truth hurts.

Actually, what we do want to do, you know, if we’re serious about supporting children, is support their families. Actually, this side of the House, our clear solution is actually allow them to keep more of what they earn. It’s their own money in the first place. So rather than take it off them in tax and then churn it and give it back and spit it out in different labels, actually why not just let them keep it in the first place? That was what we put in our Back in Business plan, because we do believe, fundamentally, if you’ve worked for your income—and this bill is about Working for Families tax credits, so we are talking about people in work—then, actually, why can’t they? Why can’t they just keep more of what they’ve earned in the first place, rather than churning taxpayers’ dollars, spitting out less by the time it’s been swallowed in the tax administration system, and giving it back to people and making them feel incredibly grateful and desperate that they’ve got another $5 a week from the Government.

But no, what is clear—what is clear—in calling this support for COVID—it’s not—what it is doing is growing the amount of money and the amount of people and households that are reliant on getting some form of income from the Government or other taxpayers to pay their bills every single week.

💬 Hon Member: Cruel.

It is cruel—it is absolutely cruel and unnecessary. Instead, the focus should be: supporting businesses to get back up and running, actually opening up, rather than pretending to; allow our businesses to function and function well, and actually give them some credit for the tough times they’ve already got through. They’re chomping at the bit to open up, serve their customers, and allow their workers to get back to work and for everybody to get on and earn an honest living. So, instead, if that side was going to jam some legislation through under urgency, perhaps something along that vein would have been more satisfactory. But no, we’re here debating, under urgency, all stages.

Actually, I think, since this Minister has been the Minister for Social Development, we’ve had more pieces of legislation slammed through under urgency or with shortened, curtailed report-backs than I’ve ever seen before. So they clearly don’t care; they only pretend to. Let’s be very clear about what this bill does and what it doesn’t do: $5 a week is what it really is, and it won’t lift any children out of poverty.

I rise in support of this bill and I’m just going to take a short call because it’s all it requires. This is a bill that supports at both ends. This is a Government that has recognised the need for resurgence payments, and it has made sure that when it has changed its system, it has made that system even more flexible. So this is a system that will allow the Governor-General, by Order in Council, to authorise grants that will be able to make the system that we now have respond to the needs of our small businesses. As an Aucklander, I know how much of a crisis they are in and I know that this Government will recognise and support those areas where there needs to be the most support at this stage. That might be called, by some, a handout. I do not believe it is. I think we’re all the team and what we’re doing here is we’ve got one side of the equation with those businesses but we’ve got the other with beneficiaries, and I’m absolutely proud at the real work we are doing in the area. I commend this bill to the House.