Income Insurance Scheme (Enabling Development) Bill

on behalf of the Minister of Finance: I present to the House a legislative statement on the Income Insurance Scheme (Enabling Development) 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 Income Insurance Scheme (Enabling Development) Bill be now read a first time.

The Government, working alongside Business New Zealand and the New Zealand Council of Trade Unions, has consulted on an income insurance scheme to support workers who lose their jobs through no fault of their own. More than 100,000 New Zealanders lose their jobs every year, and more when we go through an economic shock like COVID-19. It’s often difficult for people to find work that matches their skills after a redundancy, and they end up taking lower-paid jobs. This wage-scarring costs our economy more than $15 billion per year. It makes it more difficult for our employers to get the skilled workers that they need, but it also causes hardship for individuals, families, and whānau, and disproportionately impacts low-income, Māori, and Pacific households.

An income insurance scheme like the one we have consulted on has the potential to deliver three key benefits to workers and employers across the labour market. First, we want to minimise the immediate financial impact of a sudden job loss for workers and their families. Second, we want to support workers back to good jobs by ensuring they have income in the period immediately after job loss. Instead of being forced to take the first job offered, we want workers to have time to find the right job for their skills or to retrain for a new, fulfilling career path. Third, we want to support the economy to adjust more rapidly to shocks and downturns.

In February this year, we asked New Zealand to give us feedback on a detailed proposal for a New Zealand income insurance scheme. It is important that we hear the views of New Zealanders about the proposed scheme, how they think a scheme should be designed, how it should be operated, and, of course, how a scheme might impact them. Consultation finished in late April, and we are currently working through the many submissions and pieces of feedback we received.

New Zealand is one of a small number of countries that does not currently provide a social insurance scheme for job loss due to redundancy or health conditions and disability. However, New Zealand has operated a successful accident compensation scheme for 50 years on a social insurance basis. ACC has proven they have expertise in delivering a successful social insurance scheme. They have been identified as an agency that could deliver a scheme if Government decides to establish one. However, ACC is currently prevented from working substantially on the development of a new scheme by the Accident Compensation Act 2001, which prohibits ACC from undertaking work that does not relate to the purposes of the accident compensation scheme.

The Income Insurance Scheme (Enabling Development) Bill will enable ACC to set up a strong implementation process for a New Zealand income insurance scheme using funding provided in Budget 2022, most of which has been set in contingency pending a decision on whether to establish a scheme. The bill does not commit the Government to proceed with or to use ACC as the delivery agency for the scheme but simply provides ACC with a function ring-fenced from its existing functions relating to the development of the scheme.

As Minister for ACC, I see the benefits for New Zealanders from an income insurance scheme delivered by ACC. It has experience unmatched in New Zealand when it comes to delivering social insurance. As the Minister for Social Development and Employment and Minister for Disability Issues, I see the benefit of an income insurance scheme in helping to address some of the discrepancies between the ACC scheme and our health and welfare systems.

The income insurance kaupapa would sit alongside and complement, not replace, the work the Government is doing in my and other Ministers’ portfolios to transform the health, disability, and welfare systems. A wide range of Government agencies and Ministers have been involved in the development of the income insurance proposal. I want to thank all of them for their involvement and assure New Zealanders that we will continue to work across portfolios to make connections between this and other system transformation kaupapa.

I also see benefits to ACC if a scheme such as this is added to their portfolio. Ensuring and supporting workers who lose a job due to a health condition or disability will broaden the current focus on injuries and accidents and allow a wider view of workers’ needs, and the economies of scale from operating two such similar schemes are significant.

I note, though, that no final decisions have yet been made to establish a scheme or about an agency to deliver it. Government expects to decide on whether to establish a social insurance scheme by July, including whether to use ACC as the delivery agency.

The bill will establish new legislation, an Income Insurance Scheme (Enabling Development) Act. The Act will either be replaced when legislation is passed, if legislation is passed, to establish an income insurance scheme, or it contains a sunset clause ensuring that it will be repealed by 31 March 2025 if the scheme does not go ahead. ACC already has the operational expertise to operate an income insurance scheme. A key provision of the bill is clause 9, which establishes a new function for ACC: “to carry out all work reasonably required for it to be in a position to bring an income insurance scheme into operation.”

The bill also includes information-sharing provisions, which are necessary for ACC to establish and test information-sharing systems for the scheme. These provisions are needed so that ACC can develop system requirements that are effective and provide appropriate protections for personal information once the scheme is up and running.

The bill recognises the Crown’s responsibility and commitment to Tiriti o Waitangi / Treaty of Waitangi principles. These must be front and centre in any work ACC does to develop a scheme. The way a social insurance scheme is developed and operationalised will have significant implications for Māori employers and workers, and their whānau, hapū, and iwi. Māori currently experience disadvantage in the Labour market, including being more likely to be made redundant than any other workers. The provisions which primarily require ACC to engage with Māori and be purposeful in developing a scheme that will work for Māori are necessary to ensure that if a scheme is developed, it will help reduce these inequities.

New Zealand workers, employers, and the wider economy have for too long lacked the support that a social insurance scheme can provide. Almost every other developed country has a long history of providing a social insurance scheme to protect workers, help employers find the workers best suited to their requirements, and support the economy during economic shocks. This Government thinks now is the time for New Zealand to join those countries and has consulted on a proposal for a scheme to do so. If a decision is made to progress such a scheme, ACC must be involved in that work from day one. The bill enables this. I commend this bill to the House.

The question is that the motion be agreed to.

Well, we will not be agreeing to this motion, Mr Speaker. We’ll be voting against it because this bill and what it represents is a slap in the face for the squeezed middle who are getting smashed by the cost of living crisis in this country. We’ve just come out of a Budget, and everybody’s looked at this Budget, which has been the biggest-spending Budget in recent history. During the John Key - Bill English era we had new spending in each Budget of somewhere around a billion, sometimes less, and sometimes a little bit more. Grant Robertson allowed himself $6 billion, the largest amount of new spending in a Budget ever, and even that wasn’t enough. He had to reach out for all the other cookie jars available to reach into the next Budget to get an extra few billion, and into the old COVID fund, to get a bit of extra money. He was reaching around and there’s $9 billion of new spending in this Budget.

So the obvious question people ask themselves is, “Well, hang on a moment. Where’s this all going to come from?” Inevitably, if we keep on spending more and more and, unfortunately, not getting good results for it, the inevitable consequence is that we’re going to have to pay more tax down the line. This Government is sneaky when it comes to tax, and that’s why they love the inflationary environment which puts incomes up into higher tax brackets and increases the flow of income tax. And now we discover, the day after the Budget, that they’re introducing a jobs tax—another new tax. They promised that they wouldn’t bring in any new taxes, but I suppose they’ll say. “This isn’t a tax; this is a levy.” But for the New Zealanders who will have to pay it, it doesn’t matter whether it’s a levy or a tax, it’s still money coming out of their pockets and into the Government’s coffers. And so the proposal that is being considered for this jobs tax is 1.39 percent for each earner and for the employer. So if you’re on the average wage, 72,000 bucks, that’s a thousand bucks a year.

We’ve just heard with great fanfare that this Government is going to give everybody 350 bucks—well, not everybody; everybody earning less than the average wage—for three months, and then they’re going to stop it; they’re going to take it away. So they’re giving, on the one hand, and on the other hand, they’re going to sneak another thousand bucks a year out of your pocket for the new jobs tax. What a sort of crooked arrangement that is, and it’s typical of this sneaky Government. They are addicted to spending. They can’t stop spending. They always want to do more—no, they don’t want to do more; they want to announce more and they want to talk about more but they fail to deliver and New Zealanders are picking up the price. It is all making it more difficult for Kiwis who are struggling to get by and dealing with the cost of living crisis.

When we look at this bill, Mr Speaker—you might be interested in the details of this bill—this bill is a bill to prepare for another bill. I suppose that’s how you would describe it. It’s allowing the Accident Compensation Corporation to do some preparatory work for what’s called the income insurance scheme that this Government is considering introducing. You can only conclude by the fact that they’re introducing this bill that the Government is pretty keen to bring in this new jobs tax, and that is to bring in income insurance for people who are made redundant and who are sick.

Now, of course, New Zealanders are all aware that we already pay an enormous amount in tax for the benefit system that we enjoy in this country—it looks after people who are either sick or out of work, and that’s as it’s been for a long time. This proposal is to add another layer on to that—income insurance—paid for by a levy. But the problem fundamentally with this is that this Government right throughout its history in the last five years has failed to recognise that if a Government adds to the cost structure of the economy and to the costs facing businesses, it inevitably flows through to consumers—because you can’t keep adding costs to businesses without there being a result. And we’ve seen that—

💬 Hon Members: Oh!

—and the Green Party groans, I suppose—in the housing space. If you pile a lot of costs on to landlords, surprise, surprise, they pass some of those costs on to the renters, and rents go up, and that makes it more difficult for New Zealanders to get ahead. That’s why New Zealanders are struggling so much with high rental costs—it’s partly because this Government keeps piling costs on that sector.

When we look at the employment side, we’ve got the fair pay agreements working their way through the House, which will add rigidity to the public sector. We’ve had extra sick leave, we’ve had higher minimum wages, all these wonderful things—well, the fair pay agreements are not wonderful in any way, shape, or form. They will add rigidity into our employment system at a time when we need to be flexible and agile in order to compete with the rest of the world. The Government wants to take us back to a clunky 1970s-style industrial relations framework. It’s so bizarre that they would think that’s a sensible idea. I don’t know why, but, anyway, they are.

So that adds costs to the whole system—extra public holidays, you name it; just throw it in. It’s a Father Christmas approach to Government—if you want it, you can have it. Higher minimum wages—that’s fine, but, inevitably, surprise, surprise, when you add to that cost structure that businesses face, the consumers end up paying for it, and that’s one of the reasons for rising inflation. It’s not the only reason but it’s one of the reasons for the driving up of inflation.

There’s a jobs tax on top of all the other issues, so employers will have to pay 1.4 percent in jobs tax. The employees will pay it as well. It all goes into a system which is estimated by the Treasury to cost $3.5 billion a year. Now, I don’t believe for one second that it will cost $3.5 billion a year if it is introduced. Some estimates already are suggesting $4.7 billion, but it will only be the start. At the beginning of the discussion the Minister claimed, incorrectly, I think, that Business New Zealand were all excited about this. They were quite enthusiastic early on. That enthusiasm has dimmed substantially, I understand, because what initially focused on a redundancy issue which was tied to the relaxation of other redundancy requirements so as to overall bring flexibility to the system has already expanded to sickness and other issues. And you can rest assured that once the system is set up, it will balloon and balloon and balloon, and the costs will grow and grow.

The whole welfare system, which we continue to pay for, won’t be reduced in any way, shape, or form, with a whole new system developing on top, and New Zealanders will end up suffering under the burden of it. So this bill is setting up an arrangement in order to set up a bill that we won’t support, either. It’s an announcement about an announcement. It’s a bad announcement about a bad announcement that’s coming down the line. At the end of the day, this is a backwards Budget. New Zealanders are going backwards and this is not going to help. All the talk about helping with the cost of living with a small payment to a small group for a short time will be more than wiped out by this extra jobs tax which is coming down the track.

Thank you, Mr Speaker. Well, once again, the House and the public of New Zealand have just heard that the National Party are going to vote against something that will support our hard-working New Zealanders, should they find themselves in a situation where they become unemployed through no fault of their own. We are hearing that more and more. The rhetoric across the House is, “We’ve got to support middle income, the squeezed middle” everything else—every measure that this Government is putting in place or suggesting is being voted down by those opposite out of pure political spite. Pure political spite.

I note that the previous speaker did talk about Kirk Hope, who actually says income insurance scheme, not a job tax. And I quote; he says: “It was designed to protect workers because economic shocks that lead to income shocks have long-term effects on those directly affected, as well as their families, communities, and local businesses where they buy their goods and services.” But, actually, it does not put this social insurance scheme into place. What this bill actually does is give the ACC the ability to begin the preparatory work should New Zealand decide that this is something that we wish to bring in to support those who lose their jobs through no fault of their own.

We heard that over 100,000 Kiwis lose their job every year. Can you imagine if that was something that was to happen to you or anyone here who may not—you know, if you weren’t an MP, you had some other form of employment, the panic that would set in when you hear that you are losing your job; particularly if you are a lower-income earner and you don’t have that ability to save for that rainy day to prepare for a shock like that. This will allow you some time to just breathe, to have a think, to reassess what you’re going to do, perhaps retrain so that you are not forced into taking the first available job that comes along, one that you may not be suited to, but one that you have to take because you have to support your family. Because people deserve to be able to work in a job that provides them with dignity, and one that they get self-satisfaction from, not something that they have to do because they simply have no choice.

Now, we heard that this idea went out to the public in February to have a think about whether it is something that they think that we should be doing. And we know that submissions have closed as of April in this year. The decision or the thinking around that ACC may well be the best organisation to facilitate this social insurance scheme, it does make sense, although no decision has been made that that would absolutely, definitely be them. But it would make sense if they were the chosen agency, because they are used to dealing with ACC payments to people around New Zealand, so they do have an idea of how that needs to work.

This piece of legislation, as I said before, simply allows ACC to begin that preparatory work, should it be something that New Zealand decides that it wishes to undertake. What it also allows is that if New Zealand decides that it is not something that they wish to do, then there will be no further legislation required in order to follow up with that decision.

We heard the Minister talk about how New Zealand is actually one of the only very few countries that does not have a social insurance scheme like this—

💬 Hon Scott Simpson: We have an unemployment benefit.

We heard Mr Simpson just say that we have an unemployment benefit. Well, Mr Simpson, the unemployment benefit is for those that are, as you mentioned, job seekers, but when someone is working in a job that they lose through no fault of their own, they are used to a certain income. Their family relies on a certain level of income, and when that is taken away very quickly, through no fault of your own, you do need some assurance that you are going to be able to maintain that level of living that you are used to, to be able to pay the bills that your family requires you to pay in order to survive, albeit at a slightly reduced amount than your 100 percent wages that you’d be used to.

This is a really important step towards giving people that certainty and that security, should New Zealand decide that it is something that they wish to do. I commend this bill to the House.

Well, thank you, Mr Speaker. We’ve just heard a socialist trying to dance on the head of a pin to justify taking away more tax money from hard-working New Zealanders to redistribute to other taxpayers in a way that only socialists can actually justify in their own heads. This has been a Budget that finds us in this urgency debate, debating a piece of legislation that is to establish the mechanism for further taxation of hard-working New Zealanders, under the most highly inflationary times that we have seen in 30 years, when the squeezed middle is being squeezed tighter than ever before and when New Zealanders are generally genuinely suffering as a result of the misguided, inappropriate, and addicted-to-spending Government that the socialist party in Government at the moment represents.

New Zealanders will have an opportunity at the next election to put that right, and they will, because this piece of mechanism to create the administrative model that would allow the Accident Compensation Corporation—can you believe it? The hint that this piece of legislation is not needed is in the name of the agency that they want to amend to allow them to do it. It’s called the “Accident Compensation Commission”. It was set up to provide support for people who have accidents, not as a mechanism for taxing people more than they already are. We’ve had this ridiculous situation of a panicked response by the Government who have realised that they have to do something about the squeezed middle. They have to do something about the cost of living crisis confronting so many New Zealanders. So what they’ve done is a sticking-plaster solution, and they’re going to give those people who earn less than $70,000, $350 to help pay for a $20 block of cheese or a one-way ticket to Australia or some other thing. That will be helpful to some people. But if you are on the average income of $70,000 and the mechanism that will trigger the taxation resulting from this piece of legislation comes into effect, you’re going to be a lot worse off to the tune of about $1,000 a year, not just once but every single year in perpetuity.

The question has to be asked: why? Well, it’s all about a socialist mind-set that says, “We know better how you should live your life and how you should have your money spent for you.”—that big Government is good and that Wellington knows best, and particularly that the Labour Party and the trades hall, their close cousins, know best how you should live your life and how you should have your money spent for you.

And make no mistake about this, this is the first step. This piece of legislation being passed under urgency, without the scrutiny of a select committee process, is the first step along the imposition of this new tax that Labour want to introduce. Well, I’ve got news for the member who has just resumed her seat: she’s going to lose that seat at the next election. There is no chance that the good people of Rangitata will re-elect a socialist of her mind-set to represent them in the Parliament of New Zealand. Because the good people of Rangitata know that their hard work and efforts don’t need to be, or should not be, squandered by a Government that is very free with the spending of other people’s money, very free with the reallocation of other people’s income to purposes and causes that they, in their weird academic world, think is somehow justified, right, and appropriate.

Well, a change is coming and it’s coming sooner than this Government thinks, and we on this side of the House oppose this sneaky Government and their jobs tax. We oppose the sneaky means that they are using under urgency to introduce the mechanism to create their sneaky jobs tax. We will oppose the sneaky jobs tax when it comes into Parliament. And, what’s more, as soon as we get an opportunity, a re-elected National-led Government will almost certainly in the first 100 days move to repeal it.

What a sad day for the Opposition, opposing everything that we’re proposing for the sake of opposing. There’s no substance at all and for the five minutes Mr Simpson has been speaking, there is nothing. There isn’t one thing that New Zealanders can benefit from. Instead, an attack on Jo. Jo is actually an awesome MP and when I was in Timaru last year visiting at a local library—because she does a good job. What we have seen in the last 24 hours is just opposition for the sake of opposition. There is nothing at all—no substance in what they say or what they do. But we, on this side of the House, are working for everyone. We are working for New Zealanders.

Matt Doocey, since last night, has been asking what we’re doing for hard-working New Zealanders. This is what we’re doing for hard-working New Zealanders. The Income Insurance Scheme (Enabling Development) Bill is a bill that’s designed to help hard-working New Zealanders. More than 100,000 New Zealanders lose their job every year through no fault of their own. And then, once they lose their job, it’s difficult for them to find work that matches their skills, after redundancy, and they end up taking low-paid jobs. And then that leads to the country losing $15 billion every year. If we can deal with this, the $15 billion can be reallocated somewhere else where it’s needed. It makes it more difficult for our employers to get the skilled workers that they need. It also exposes individuals and families disproportionately to unnecessary hardships, especially in low-income households, Māori, Pasifika, Pacific Islanders, and other minorities.

This is something that the Government has consulted with Business New Zealand and the Council of Trade Unions to come up with the idea. It’s not something that the Government, behind closed doors, designed and came up with; actually, a lot of consultation and work with other entities went into this. This bill supports the Government’s priorities to accelerate our recovery from COVID-19 and it lays a foundation for the future. This is a big deal for the thousands of workers across the motu as well as our businesses.

As New Zealand moves beyond the economic and social impact of COVID-19 from the last two years, there are important lessons to be learnt from the way that we are able to support one another through an unprecedented series of challenges. We must start doing things differently and this is where it starts. This bill provides the ACC with statutory authority to work to prepare to operationalise an income insurance scheme, should we decide to establish the scheme. The bill also recognises the need to listen to workers and employers when designing the scheme, which is required by ACC to engage with representatives of workers and employers. Now it’s time for an enduring solution. This bill is a necessity so that ACC is able to do its job: for it to implement the proposed income insurance scheme and to ensure the work is done in the right way. Mr Paul Goldsmith previously said that this is yet another bill, but this bill does not establish an income insurance scheme yet, as was indicated, but we have made a decision to go ahead with this scheme or with the ACC as the delivery agency. That is what you call looking after hard-working New Zealanders.

This bill is a good bill. It leaves no one behind at all. And since the last 24 hours, the feedback that we’ve been getting from hard-working New Zealanders, from all over the country, from all corners of the country, is that this is a good Budget that leaves no one behind. Businesses are happy and that that’s really making the Opposition jealous and angry. That’s why they are reacting the way that they are reacting. I urge the Opposition to actually be the decent Opposition that New Zealanders expect them to be. New Zealanders deserve better than this. This is a good bill. I commend it to the House.

Thank you, Mr Speaker. It’s a pleasure to rise today out of my traditional black and into the pink, in a way that’s shocking my eyeballs, all for the effort to counter bullying, and I promise to do my best to be kind to everybody in the House today, which may be a challenge with some of the speeches. But I will do my absolute best to be consistent with the message of today.

So we come to the bill, which is the Income Insurance Scheme (Enabling Development) Bill, and, of course, I’m speaking on behalf of the Green Party. The Green Party hasn’t made a decision yet, similar to the Government, interestingly, in terms of whether we’re going to support the income insurance scheme. We’re waiting until we see the details of that scheme before we make a decision. In light of that, we are abstaining on this bill today, unlike the Government, because if the scheme is going to turn into something good we don’t want to oppose the work to be able to get that done. But, on the other hand, actually, our concerns as to what was consulted on are really significant, and I do want to go into a bit of that today. So we don’t actually want to vote in support of something that may be seen to be just kind of saying that we’re rolling out the red carpet for it.

So I want to start by acknowledging our absolute agreement with the Minister in terms of what we want to see in society and the problems that we see in society at the moment of the disproportional impact of sudden job loss and the profound impact that that is having on individuals and whānau and communities, and recognising that we need much better support for people to get into good jobs, as opposed to being forced into taking any job. I’ve had my own personal experience of that, of coming back from overseas and not having any money. The last time I’d worked in New Zealand, I’d been an executive director of a national organisation; I had no money and I took a job of watching a phone because I just needed some money to be able to pay the bills, and I had a job watching a phone. Now, I don’t think I got paid for it like it was an honest day’s work, watching that phone. It rang once in the six weeks that I had the job and I told the person that it rang and they answered it. I don’t think that was the best use of my skills. Some people in this House may disagree, however—

💬 Hon Carmel Sepuloni: A lot of people would struggle to do that job.

No—some people in this House possibly. However, this is the reality when people are facing poverty and struggling to pay the bills—is that they’re being forced into taking anything as opposed to going into our income support system, and particularly when there is a stand down for people coming overseas or from leaving jobs. And that is not serving anyone, I would argue.

We also recognise that in a time where we will have to significantly shift our economy from one that is just addicted to fossil fuels to one that is carbon neutral, there is going to be a change in our job patterns, as there will be with more automation coming into a range of industries. We need to have that structural level of support for the costs of that to be shared across the economy as opposed to being put on to, primarily, the working people of our country. So we’ve got agreement on there being some real problems. However, in the income insurance scheme as it’s been proposed at the moment the things that worry us are around the setting up of a two-tier system and a multiply complex system, in fact.

Noting that New Zealand is out of step with other countries in not having an income insurance scheme, I will note that we have had one historically in the 1930s. I think it was the United Government at the time that set up an income insurance scheme, a punitive scheme, and we do have a concern that in the system, in the proposal as it was, there was the provision for sanctions within it. So we do not want to see that replicated. I do note that that scheme was not successful. It was a dismal failure and was replaced by a Labour Government with a comprehensive social security system. I raise my hands for the vision of that, which we are yet to achieve in this country. That is the Green Party’s goal: recognising we have a responsibility as a country to be able to protect people from this massive churn in our economy that working people are bearing the cost of. But we believe that that is probably best dealt with by a really simple system of a strong social security system with free education and absolute support for people being able to retrain, and support to achieve their dreams. We’re not convinced that adding another separate system, and particularly one that’s being potentially run by ACC, is the best one.

I note the Minister is doing some good work in ACC in terms of shifting some of the culture that has raised concerns right across the country that we’ve been experiencing for a long time, where people talk about the kind of—it feels as if it’s just turned into a corporate insurance company that people are having to battle to be able to get their entitlements, and that the organisational agency’s emphasis is on limiting their liabilities as opposed to supporting people to have the best outcomes and opportunity for rehabilitation and support, as the scheme was intended.

So part of my concern with this bill today is that we are giving ACC another large job, a really significant, large job at a time when I feel like they are just starting on a really difficult and challenging programme to turn around that corporate culture, to get back to an agency that serves our communities and delivers on the Woodhouse principles. I think that is a massive risk for us as a country, to be honest. And there is the chance that when we’re seeing in this—and we have to note too that in the regulatory impact statements there’s the work around noticing that many of ACC’s systems will be the same for this work as they are at the moment, and that ACC, in terms of technology, has introduced this next-generation case management programme, that, to be honest, was supposed to be this amazing thing delivering for clients and providers and improving outcomes but has actually just resulted—in the latest findings or annual report from ACC where provider and businesses were exhibiting low trust in ACC and net trust scores for businesses and providers both declined, as did client net trust scores and Māori client net trust scores.

So we’ve seen ACC developing this new technology. They’ve been trusted to do that, and confidence in delivery and staff has gone down and staff turnover has gone up, and they are telling us that we’re not going to get the potential benefits of that realised for another 10 years. At the same time, we are going to be giving them this whole new job of exploring and potentially implementing an income insurance scheme. That, for the Greens, is quite worrying. I also note that we are expecting the updated report on that process. It was, I understand, due last week—I was contacted for media comment—and then was delayed until next week.

I also understand that next week we’ll be getting the report on the privacy breaches and practice within ACC. It feels a bit uncomfortable to be debating this today when that’s coming out next week, and when we know that this is a lot about information sharing and there have been some very serious concerns around ACC’s ability and culture in terms of protecting client information. So, again, it’s a bit worrying, but if I’ll talk more in the next speech about the specifics of the bill. Thank you.

Thank you, Madam Speaker. I stand on behalf of the ACT Party in opposition to this Income Insurance Scheme (Enabling Development) Bill. To me, this is an “if” bill—if we want an income insurance bill. So why are we rushing this framework through in this Government’s Budget? Oh, that’s right: they need to find a price tag of $2.2 million to be able to have the framework in place for this, if we’re going to have an income insurance scheme. Yes, it’s great that it has a sunset clause so if it isn’t in place by 31 March 2025, it’s not going to go ahead. So I’m looking forward to being in the next year’s Government, and this will definitely not be going ahead. However, I foresee this Government squeezing it through probably in the next—what?—six or 12 months, if not sooner.

This Government, with this bill, has given the lovely middle-class people, the average workers that you so much want to look after, and we want to look after—we created an alternative budget that would give people much more money in their pockets than $350 for just a short period of time. So if this bill comes through, well, there’s still an extra $350, and this had to come out of their wages, so that leaves less money in their pay packet, and every cent costs for the low and average income people.

Also, you say it’s horrible for people that can’t find a job within their skills if they’re made redundant and they have to take a lesser role. Well, I wouldn’t say that to my good friend that had to do that last year because she was made unemployed. She says, “No, I have got a university degree. I cleaned toilets and showers when I was at university. What is the difference now? It is money. I can feed my family.” Her husband was also made redundant because he worked within the tourism industry. Did they sit down and go, “Oh, woe is me, there is no job.”? They took jobs that they can do, and a lot of New Zealanders do it.

Also now, my friend has the ability to go back to school and learn as well. But they took a job. It’s not the greatest job. It doesn’t represent what their skills are. But also—and I know you’ll probably call out at me—airline pilots: yes, some of them may have had money put aside, but not all of them would have had money in their bank accounts because of family, housing; however, how many of them had to change their career last year as well because of being made unemployed?

So, really, this whole scheme is a framework for “if”, but it’s probably more likely that it will be, and all it’s going to do is just create more hassles also for ACC, which is not doing its core job properly. There are people out there that are not getting their cases heard properly, and are fighting ACC.

And then to the Privacy Act. Oh, gee, wow, how many more agencies are going to have to be linked into this bill? I believe there have to be at least four more agencies, or three more, that aren’t even talking to ACC. So when we’re sharing private information, you know, it’s a bit scary when ACC’s already had one leak in sharing information, let alone other leaks.

So as we’re saying, the cost of living is in crisis for many, many people, and if this “if” bill, which this bill is the framework for, comes through, it’s not fair on those people. It is not fair for the New Zealanders who are battling every day just to go and do their grocery shop, to pay their rent, and those who have got mortgages, with their interest rates that keep going up. Yes, it may sound great to help those that are made redundant for a period of time, but small businesses, at this stage, are still screaming out for employers. We cannot find employees. We need more people willing to take jobs as a stepping stone as well. How many of us have not had the perfect job for the first time or a second time, when we had to take what we could get so that we could live? I don’t see that being a problem; I see that as being a good Kiwi that’s working hard to feed themselves, feed their family, and get ahead, even if it’s not the job or the job of their skills.

So if this framework, as we’re saying, is going ahead, it is totally unfair on the employees in New Zealand, especially when the Nats here said it was going to cost an extra thousand dollars a year, and if this comes in while they’re still getting the $350 as an extra, that’s not going to go very far. And then you also want to put it on to the small businesses. Well, small businesses are already stretched, and this is where this comes into reality. So a small business has to pay this as well, and the small business also has to give pay increases. So that means the small business will then be raising their prices, and who do they put those prices on to? The average New Zealander. So it’s a big money roundabout and nobody is going to get ahead. This bill, as I say, is just the framework for an “if” bill, but it’s probably not going to be an “if” bill; it’s probably going to be a bill that we will be sitting here debating in probably less than six months.

It’s just—you know, why now? And also, why are we standing here on a Friday morning rushing all these bills through? I’m pretty certain that this could have been sneaked out a little bit sooner so that we could have at least had a little bit more time to take it to select committee to nut this framework out, and just make sure especially around the data sharing and how private that’s really going to be.

So I stand here in opposition to this—where is the bill name; here it is—Income Insurance Scheme (Enabling Development) Bill. As I said, it is the beginning of the “if” bill—if we have an income insurance scheme, which is going to cost $2.2 million just to get it going. So ACT opposes this bill.

Mōrena. Fabulous pink in the House today. I just want to start by acknowledging all of the teachers and schools who are doing the mahi to support this kaupapa—speak up, stand up to stop bullying; building inclusive schools. So thank you to everyone across the House who is acknowledging that kaupapa today.

It is a great pleasure to stand and take a call on this bill. This is about the next steps in this process. So far, it’s been a really collaborative process. We have had business, we have had workers, and we have had Government at the table, grappling with this wicked problem about securing our future. So it is absolutely appropriate that this bill is part of this Budget debate.

It is about the next steps in building a coherent plan—it isn’t the only part, but a coherent plan as we are working towards building a just transition for our economy. It’s not a knee-jerk reaction; it’s not a sticking plaster. It’s something that some of us have been working on for a long time.

I just need to acknowledge my dear comrade Glen Bennett. We have been involved in the just transition conversation in Taranaki for years. I think it’s really great to see this collaborative approach now coming at a system level. We have got this wonderful process, and, I guess, when we ask why—we’ve been asked why; good question. Kirk Hope, actually, from Business New Zealand, is really clear about why. He talks about when we have job losses, they don’t just harm individuals and their families, but they affect businesses, communities, and the economy.

When we were going about doing the work in Taranaki around just transition, something that was really clear, something that we committed to, was about support and empowerment for workers during economic transition. This is business, this is workers, and this is our local communities who are having to stare down climate change and the impact it is having on our economy right in the face. As our Taranaki economy changes, people who may have worked in one area for their whole life may find their skill set is no longer needed. We need a system where employers, unions, and Government support workers to develop new skills. So we’ve had this wonderful, sophisticated conversation. We’re not just talking about oil and gas, as some people constantly do; we talk about energy. We’re not just talking about our fabulous dairy sector, but we’re talking about food and fibre. So this is a really important part of building towards a just transition for workers, for businesses, and for our economy.

It’s really interesting—you know, we hear the word “socialist” thrown around as if it’s some sort of insult. But I’d like to think that actually, when I reflect on the just transition work that we have done in Taranaki, there’s maybe a bit more of a sophisticated way of looking at it. Our community decided on a shared responsibility, on a collaborative approach to making sure that we carry our entire economy to a place that is secure and prosperous for everybody, all right? So yeah, a little bit of hope and a little bit of joy in our day as we acknowledge the significant work that has gone into this Budget to help make our future a great one.

So, finally, I’d just like to reflect, this bill is enabling. It isn’t about “if”; this is about being really thoughtful and collaborative about building something that is futureproofed. And it is something that the rest of the OECD has pretty much sorted quite a while ago. The fact is that it is enabling and it continues to enable by requiring ACC to engage with representatives, workers, and employers. So don’t panic—don’t panic. The socialist approach, which is actually about collaboration and finding solutions together so we can secure a future for our children that is one that is fabulous is something I am really, really happy to support, and so I recommend this bill to the House.

The next call is a split call. I call on Penny Simmonds for five minutes.

Has there ever been a worse time for a Government to try and cook up another new tax and disguise it as a levy to punish every worker and every business in this country? Has there ever been a worse time when people are struggling under a cost of living crisis, when people are struggling with increased interest rates, hurting their mortgages, putting their rent up? Has there ever been a worse time when inflation is running at a 30-year high and businesses are struggling to recover from COVID? And has there ever been a worse time when a Government is addicted to spending not only today’s money but tomorrow’s to cook up this way in which to punish every worker and every business in this country?

If there was anyone left out in New Zealand that had any doubt about how out of touch this Government is, the Minister would have removed that doubt in her opening speech when she said “Now is the time.”—“Now is the time.”, which were the exact words from her speech. Now is the time to cook up another way to take 1.39 percent off every worker and every business! Now is not the time. The National Party knows that. The National Party opposes this bill.

Tēnā koe, Madam Speaker. Kōrero mai, kōrero atu, mauri tū, mauri ora—stand up and speak out against bullying. Thank you, Madam Speaker. It’s a pleasure to take a call on the Income Insurance Scheme (Enabling Development) Bill. Before I begin, I just want to congratulate finance Minister Grant Robertson on an outstanding Budget, and I’m proud to have worked alongside our health Minister, Andrew Little, to secure funding for Nelson’s new hospital.

I just want to be very clear about what this bill does. This bill is enabling legislation. We are still to go through the process of determining if we introduce an income insurance scheme and what it would look like. The group who worked on this bill recommended that ACC should be the agency to have oversight of that, and what this bill does is it enables ACC to do that work.

Like many members of the Labour Government, I’m proud to have worked as a union organiser prior to coming into Parliament—[Interruption] I knew the other side would scoff at that—fascinating. But, I guess one, of the things that union organisers do—and this is really serious—is that when workers lose their jobs, we’re the ones sitting in the room next to them, and not just those who lose their jobs having been made redundant but people who lose their jobs due to things like cancer. The other side of the House is scoffing at this, but, actually, I’ve sat there, alongside some of my colleagues here, next to those people who have lost their jobs. It’s serious. It’s devastating, and many of them are in jobs where they cannot afford—like all of us, who are privileged—to have a product like an income insurance scheme.

So if we end up with a scheme of this nature, which is very common across the world, by the way—this is not something we’ve just cooked up for New Zealand; it’s very common across OECD countries—it will actually allow working-class people to have access to a scheme that will support them if they lose their jobs.

One of the other points—I just want to acknowledge some of the comments made by the ACT Party member Toni Severin. Absolutely, following COVID-19, people have lost their jobs. One of the things this bill would do, by providing enabling legislation, is allow the Government to take a serious look at an enduring scheme. The previous National Government did some really good work following the Kaikōura earthquake, in particular, to support businesses and people to stay in their work. We did some work, obviously, through the wage subsidy following COVID-19. These economic shocks can come along at any point. We can never predict when they will occur, especially in a country like ours, with so many earthquake zones—again, why we need a new hospital in Nelson. What this bill would do is give us the enabling legislation so we can have an enduring scheme so that when we face those shocks, people have that certainty of some income for a small period of time—as my colleague Jo Luxton pointed out, so they can actually have that space to take a rain check and look at what might be needed.

It’s disappointing to hear that the other side of the House won’t be supporting this bill. It is enabling legislation. I’m incredibly proud that the Labour Government is continuing to do work alongside workers, alongside employers, to take a really serious look at how this type of legislation could help our people. So, on that note, I commend the bill to the House.

Tēnā koe, Madam Speaker. Look, it’s really great to be able to take a call on this bill because it’s important that we note that over 100,000 New Zealanders every year lose their jobs. We need to make sure that they’re in a position to be looked after and that we maintain the continuity in those people and in their development and making sure things like mortgages can keep being paid, that school fees or those regular costs in a family can continue to happen. When you take someone out of the workforce suddenly, that can have a whole lot of knock-on effects that affect the wellbeing of their family, their wider family, and their community.

So we’ve been asked by those members opposite, “This is the worst possible time to introduce this measure.” Well, I argue different. I think it’s exactly the right time to be preparing ourselves. In the current volatile situation we find ourselves in the global economic climate, we have inflation up to 8 and 9 percent in places like the UK and the US and Canada and Australia. New Zealand is behind all of those countries in our inflation rates, but we are not immune to those pressures and we see those happening every day, putting pressure on the cost of living for families. So having a framework in place that protects our families and enables our communities to have a degree of reassurance is a good place for New Zealand to be in.

It’s often difficult for people to find work that matches their skills after redundancy, and they end up taking on lower-paid jobs. This wage scarring has a big impact on our economy, has the potential of more than $15 billion per year, and it makes it far more difficult to employers because they need to get those skilled workers in place. But it also causes hardship for those individuals, families, and whānau, and it also disproportionately affects those people from Pasifika and Māori backgrounds and communities as well. Loss of work is more likely to affect low-income workers and we know this for a fact. Those workers are more likely to lose more than one job in their lifetime. Low-income households are far less likely to have significant savings to back them up when times get tough and they’re much worse positioned to manage difficult economic times compared to higher-income households.

So having this in place is important. What this legislation does is it enables ACC to undertake the work that they need to do to engage with those key partners and to work through the framework that will take place in order to establish an income insurance scheme. The work is ancillary and consistent with its role in delivering accident compensation to New Zealand. This means that at the moment, it is difficult for ACC to take the kind of role and preparation in this process that it needs to do to be a delivery agency. It’s only right and proper that this framework is put in place first.

This bill provides ACC with the statutory authority to do work to prepare to operationalise an income insurance scheme which we decide to establish at some stage in the future. It also recognises the Crown’s responsibility and commitment to the Treaty of Waitangi and its principles, by requiring ACC to engage with Māori and to be purposeful in developing a scheme that will contribute to developing Māori outcomes and labour market outcomes in New Zealand. In addition to this, it also recognises the need to listen to workers and employers when designing the scheme, by requiring ACC to engage with representatives of workers and employers. It also puts in place protections relating to ACC’s collection and use of personal information to ensure the scheme ACC designs properly balances privacy and providing timely and accurate service to clients.

It is important to note that because a decision to proceed with the proposed income insurance scheme or ACC as a delivery agency is yet to be made, the bill contains provisions to repeal itself on 31 March, 2025, and this means that the legislation will not continue in force if it is taken not to go ahead with it.

To point out one last thing—why we support the bill. It is important to say that what it does is it sets ourselves up to be in a strong position in the future to make sure those wage shocks that we heard—whether it be a global financial crisis, whether it be inflation, or whether it be a natural disaster—those shocks to our workforce, employers, and employees have some devastating effects. On this side of the House, we care about what that does to our communities.

It’s only right and proper that we put in place a framework to mitigate those challenges we find. I commend it to the House.

Well, listening to that contribution from that prior member Ginny Andersen talking about future economic shocks, can she not understand and see what’s in front of all Kiwis today? We’re faced with a cost of living crisis today, not in the future, and this Government are asleep at the wheel in terms of putting in place solutions that are going to deal with it. This income insurance scheme, which in effect is a job tax, is absolutely a solution looking for a problem—it is not required.

Madam Speaker, I’ll take you through that quite simply, because Kiwis sitting at home watching this will go, “I haven’t heard too much about this job tax.” But I tell you what, when they work out the detail and what the impact is on their back pocket—because that’s where the money’s coming from—they’re going to send a big, bad “no” to this Government that they oppose it. Because the impact, fiscally, on the back pockets of hard-working Kiwis is a thousand dollars a year for someone on 72 grand—that is the average income. A thousand dollars—$20 a week of taxes coming to every Kiwi, or 2,750,000 workers in this country for an insurance scheme, or a tax, that benefits 50,000 people at best. That is the fact of the matter—2 percent of Kiwis if they are lucky. Because, of course, people have private medical insurance, potentially; their employers actually do the right thing and look after them when they get sick and unwell—they’ve got other medical options around this. This is a scheme that’ll benefit less than 2 percent of Kiwis, but tax nearly 3 million of them.

It is completely outrageous, and they are failing to see the issues right in front of them today: a cost of living crisis. And that shows that this Government do not have any perspective in terms of what are the real-world impacts on Kiwis at home right now. They are creating a model of State reliance. A model of reliance by individuals in this country on the state. They are not talking about aspiration. They are not looking at what is the investment we need to require in order to support this element of the workforce. They’re not looking at working and partnering with the private sector to bring in place solutions that may deal with this problem.

They’re painting a picture which, fiscally, will cost this country—and it was in their reports and in the Budget yesterday—$3.5 billion by 2026 of levies collected off hard-working Kiwis. That’s $3.5 billion, and that could increase up to over $4 billion. That is outrageous, and I hope some of the people watching and those looking will actually go, “Well hold on a second, that doesn’t sound smart. That doesn’t sound sensible. Why are they trying to deal with something that doesn’t even exist today?”

Maybe they should deal with the problems that Kiwis are facing when they’re paying an extra 150 bucks a week today for their living costs. Maybe that might be a good idea. Maybe we could give inflation-adjusted tax relief to all Kiwis. Give them the benefit today because they need the benefit today. They do not need a scheme that will impact a small number of Kiwis that will not bring benefits to the nearly 3 million hard-working Kiwis in this country. That is why National oppose this bill.

Tēnā koe, Madam Speaker. Tēnā koe e te Whare. I want to start first of all by thanking Minister Carmel Sepuloni for introducing this bill into the House. It is one of the many good bills that she’s presented to the House, another feather in the cap. And while I’m mentioning the Minister, I would also like to say what great work she is doing in terms of bringing our Ministry for Disabled People, which is coming through on 1 July. So thank you for all the work in terms of protecting vulnerable people in this country, Minister.

In my previous life as a doctor, two types of patients that I saw often: one was related to ACC cases, where people had an accident and needed time off from work. It caused a lot of stress—mental stress, obviously physical stress as well. But the other type of people were those who had lost their jobs for whatever reason. And what I would say is the stress suffered by people who have lost their jobs isn’t much different from stress suffered by people who have had an accident—a physical injury or a mental injury—because it does add to the stress in your life, and the last thing you need at that point is to be worrying about, as my colleague here said, paying your mortgage and paying your bills.

So what this bill does, really, is give a way for these people to have a bit of time to figure out how they can get another job and to give a bit of security, but also to give a bit of mental relief in not having to worry about what’s happening when they’ve had such a big, significant event at that point. I know ACC has had its fair share of criticism over the years, but it is a beautiful system. Again, you know, there is no sort of, I guess, liability, but people are supported through it. The aim, in ACC’s term, is to support people through a terrible event, whether it’s a rugby injury they might have had or something related to sexual trauma. But people are supported, and that’s what this country’s all about.

In a similar fashion, this specific insurance scheme is about supporting people who’ve lost their job for a reason and will potentially go through stress, will go through trauma. It’s about supporting those people. So it’s a great bill and it helps people—100,000 New Zealanders who are losing their jobs every year for whatever reason; compare that to 1.9 million claims which are made through ACC. It’s a small number of people but not an insignificant number of people, and, as a speaker from the National Party, Simon Watts, said, “Oh, you know, 50,000 or 100,000 people, who cares?” Well, I would just like to remind Simon Watts, there’s about 50,000 people who live in his electorate, and if he told them that 50,000 people don’t really matter, then good luck with the next election.

So it is important that this insurance scheme comes through because there are a lot of people who are in that situation and who can end up losing their job, including some people on the other side, as we’ve seen in the last election. So it probably would help their insurance scheme as well.

It’s just important to remind ourselves that this specific bill is not just about that insurance scheme; this is just about providing a system for ACC to be able to provide that service and that scheme. And, as we move forward, I’m sure the Minister will present the actual logistics of how that scheme would look like in a separate bill.

But I would like to commend this bill to the House, and, once again, would like to thank the Minister for bringing this incredibly supportive bill for New Zealanders. Thank you.