Taxation (Cost of Living Payments) Bill

Members, the House is in committee on the Taxation (Cost of Living Payments) Bill. I remind members that they are able to participate remotely. If you’re on Zoom and want to take a call, please type “call” into the chat. You should also use the chat if you’d like to raise a point of order. If we receive new tabled amendments, I’ll advise members so that they can refresh the House papers page to see the new amendment. Finally, it’d be helpful for members to ask multiple questions, if they have them, or if the member’s in charge during the call.

Members, we come now to Part 1. This is the debate on clauses 3 to 6 Amendments to Tax Administration Act 1994. The question is that Part 1 stand part.

Well, thank you, Madam Chair. I appreciate the opportunity to take a call on the Taxation (Cost of Living Payments) Bill, which is now at the committee of the whole House stage. It’s quite ironic that this particular Part 1, which is about interpretation and setting up the cost of living payments scheme, is even called the “cost of living payment scheme”. It says “to provide financial support to certain low and middle income persons affected by an increase in the cost of living”. Well, quite ironically, it’s a $1 a day payment, actually less than a dollar a day payment. It says here “affected by an increase in the cost of living”. I’m not sure whether this Government actually understands what is happening in New Zealand right now with the cost of living. In fact, all the one-termers over the other side who’ve been taking calls in the previous debates, trying to explain how much they care—how much they care. This was only dreamt up two weeks ago. This Government doesn’t care. They’re just reacting and responding because the reality is that New Zealanders are facing a cost of living crisis.

I note the clause doesn’t even say “crisis”—doesn’t even say “crisis”. They can’t even bring themselves to say “New Zealanders are facing a cost of living crisis”. It just says address the increase in the cost of living, and it stops there—address the increase in the cost of living, stops there. New Zealanders are facing a cost of living crisis, and today’s Budget, which this bill is part of, does nothing to address the real issues facing many, many New Zealanders. The fact is 7 percent inflation in New Zealand, brought about by a Government which printed billions and billions of dollars of cash and which has been, frankly, irresponsible, wasting money—wasting money left, right, and centre—and now is coming to this House with a $350 payment; quite irresponsible, and, quite frankly, out of touch with the needs of New Zealanders. So I ask the Minister in the chair, why doesn’t he actually just say the word? New Zealanders are facing a cost of living crisis.

Why does the piece of legislation not actually address the real issues that New Zealanders are actually facing? That real issue is actually the fact that we need proper tax relief, and the fact that this Government is constantly taking more and more taxes because they are not adjusting the tax thresholds. National has put forward a plan, a very comprehensive plan, which addresses the real issue in our tax system, which is about actually saying inflation is meaning that while New Zealanders’ incomes are going up, inflation is going up faster, and that their tax system means they’re paying more tax despite them going backwards. So, National is saying: actually, it’s time to have a comprehensive look at those tax brackets and make sure that they reflect the increase in inflation, and to ensure that New Zealanders actually keep more of what they earn.

This Government has come to New Zealanders today and said, “We know best. We know how much money you need. You need $350. Oh, only these people over here, we’ll give you $350, and then that’s it. And we’ll give it to you over a three-month period, in three different instalments. And by the way, we’re going to hire 750 people—750 people—to manage, at IRD, that process.” What about this old-fashioned principle of actually saying “New Zealanders, we trust you, and we’re going to let you keep a little bit more of what you earn because you know best where the cost pressures are in your life, you know best what is needed, and you know best how to get through this cost of living crisis.”

On this side of the House, we actually back New Zealanders, we believe in them, and we actually want to see good policy which actually provides a sensible solution, not the simple, simplistic, socialistic approach put forward by this cost of living payments scheme—

CHAIRPERSON (Hon Jenny Salesa): Does the member have a question of the Minister?

The question is around: why is the Minister not actually addressing the cost of living crisis and not even referring to it in clause 4(2), which says “a cost of living payment scheme”. He doesn’t even say “crisis”—doesn’t even say “crisis”. That’s the reality of New Zealanders out there in the main streets and in the towns up and down New Zealand and the suburbs of our cities. This bill doesn’t even address it. I ask the Minister: why is this Government not even mentioning the word “crisis”?

Thank you very much, Madam Speaker. Look, this is the first of what I’m sure will be many calls on this very tricky piece of legislation. I do have a couple of points I want to make.

The first is that I just want to say to the Minister, quite seriously, it is disgraceful that the bill contains a statement about the regulatory impact statement (RIS) that says that the supplementary analysis report, which members can find on the floor of the House—the bill says that the copies are on two particular websites, the tax policy IRD website and the Treasury regulatory impact statement website. Neither of those websites have the RIS on it, as of about half an hour ago. In particular, they didn’t have them on it at 2 o’clock, when the bill was tabled for the first time. The Opposition saw this bill—sorry, at 4.30, once the urgency motion was moved.

Look, it’s Budget. It’s fair enough. Governments, including past National Governments, have tabled legislation urgently and we ran them through the House, and it’s probably a very poor lawmaking practice, but I wouldn’t be churlish and complain about it because National used to do it as well. But I don’t think it’s unreasonable that members have opportunity to scrutinise the supplementary analysis report.

So we got access to it because it was finally placed on the floor of the House later on, or later in the bill’s first reading. I, for one, while the Minister was giving his speech, tried to look up the regulatory impact assessment report, desperately trying to see some stuff in it, and it wasn’t online. I went to the tax policy website and it’s not there, and I went to the Treasury website and it’s not there, and it wasn’t on the floor of the House. So we had the first reading debate without it.

That’s a shame, because as the Minister knows, and as Matt Doocey pointed out, there’s a lot of stuff in the supplementary analysis report, most notably the fact that the IRD said, “Don’t give this job to us.” and the Treasury said, “Don’t do it at all.” So I would have thought that was, like, some pretty interesting information that Parliament would want to know about. The Treasury said, “The IRD should do this.”, and the IRD said, “No, no, no, we don’t want anything to do with this.” You know what else they said? They said this will have a significant impact on our services, including for the very people the payment scheme aims to help, because they’re the very people who contact the IRD and say, “Oh, look, I need a bit of help with this and I’ve got some issues here.”

What the supplementary analysis report shows is that those people are going to be affected, because there’s going to be a significant number of front-line staff to deliver the payment, and it’s going to be extremely tricky. It’s going to “compromise Inland Revenue’s already stretched workforce and affect the taxpayer population,”—I’m quoting from the supplementary analysis report—“including the families and individuals that this payment would be intended to support.”

So it says, “While Inland Revenue can administer the payment”—which is fair enough, I suppose, because they’re a Government department, they do a great job, and they move heaven and earth to help the Government—“doing so will significantly impact their services to its customers.” So that is pretty material information that the Parliament has a right to know about. So that’s my first point, and I’m pretty unhappy about it, and I would welcome the Minister’s comments.

The second point is a genuine point, and it goes to the departmental disclosure statement, which was available on the floor of the House. Now, we’ll get into the time issues later, and I’m sure members are going to want to explore when exactly this bill started to be developed, because poor old Glen Bennett said, “Oh, no, look, this has been planned for ages.” It’s in the Government documents that it was come up with in the last two weeks. Let’s just put aside the facade that this this was some well-organised and executed plan to assist New Zealanders with the cost of living. Let’s just not joke with the House. We all know exactly how this worked.

But my question for the Minister is: why is this legislation required? I know that sounds funny, but if you read 3.6 of the departmental disclosure statement, there’s actually quite a serious policy discussion around, basically, cutting a long story short, whether or not the bill’s required. I draw the Minister’s attention to the Legislation Design and Advisory Committee, who were asked by the IRD officials for their view on whether the eligibility criteria should be set out in secondary legislation or in an administrative notice. The LDAC, as they’re called, says, basically, “On balance, we think the balance is slightly tilted in favour of treating this as an administrative scheme, principally due to its nature as a short-term response to its immediate problem”. Well, as I understand it, that’s not what’s happened. The question for the Minister is why the Government’s done what they’ve done.

In respect of Chris Bishop’s question about the time of tabling of the disclosure statement, I’m advised that the documents were provided to the Bills Office—Bills Office or the Clerk—yesterday, and that there’s been no attempt to delay the tabling of that document on the floor. So it wasn’t because it wasn’t provided late by the department.

Madam Chair, thank you very much for the opportunity to take a call in regards to this bill. I know my colleague Chris Bishop is, no doubt, going to come back and ask a few more questions in regard to the point that was just raised. I want to ask some questions, and I actually have a series of 10 or so questions, so I’ll take your advice the way in which we do that. I’m referring to new section 7AAA, “Administration of the cost of living payment scheme”, inserted by clause 5. My question relates to subsection (3), which specifies that “The commissioner must publish, on an internet site … the eligibility requirements”. My question to the Minister is: when can taxpayers expect to see that information published? So that’s the first question, and I’ll go on for a couple more and then we’ll go from there.

The second element is in regards to the explanatory note of the bill. The explanatory note contains the term “main eligibility criteria.” So my question to the Minister is: what else is missing? “Main eligibility criteria” implies that there are elements outside of that. So my question, quite simply, is: what else is missing from that?

For this series, I’ll finish off on this last question: can the Minister confirm that the income amount is $70,000 or less? In the Budget speech that the Minister of Finance gave today, he said that this payment will be available to people aged 18 and over who earn below $70,000 per annum, based on last year’s tax data, and who are not eligible for the winter energy payment.

I want to note—and members may think this is quite a small detail, but it goes along with the theme that it is our belief, based on the information we’ve got in front of us, that this bill has been pulled together at late notice and on the hoof. So I ask again: who is qualified to get this payment? Is it those on an income amount of $70,000 or less, or is it, as the finance Minister quoted today, below $70,000? I’ll leave it at that series of questions.

I’m advised that the criteria will be published shortly after enactment—so very close to enactment. On the question as to what’s left, what’s left is minor administrative detail, and the example that officials have given me is that what might be the date that’s chosen for assessing whether someone is a resident or not for tax purposes to qualify or what might be the way administratively they choose to define when someone’s going on or off benefit. It is that level of administrative detail, rather than the level of the payments.

Well, thank you very much, Madam Chair. I’ve got another question, but I want to return to the point I made before which is—it’s sort of neither here nor there whether the material was supplied to the Bills Office. The point is, the bill—which, as I say, we got a copy of at 4.30 p.m. If you watch the video, you can see the Minister move the urgency motion, and the Clerk came in and put the bills down, and we all went and raced to see it because, you know, we had literally six minutes to read it. I’m not making a point about that, because successive Governments have done that since time immemorial, and it would be churlish to complain about it. But I just make the simple point that the bill explanatory note—[Interruption] What’s that?

💬 Hon David Parker: You are whinging about it.

No I’m not. I’m whinging about the fact that I don’t think it’s unreasonable as a Parliament—

💬 Hon Members: He’s whinging.

Well, OK. Well this is a serious point—members might want to laugh but this is a serious point. It is not unreasonable, as a parliamentarian, to expect that when you read an explanatory note of a bill which you have seven minutes to read, that if you go to the websites that the bill directs you to, the things that are meant to be on the website that the bill says are on the website are there. That is a simple proposition; it’s not unreasonable, and I just make that point. I won’t belabour the point any more, but I hope the Minister takes it on board because it’s poor decision-making and poor policy-making.

The question I wanted to ask was—this, basically, defers the decisions as to eligibility to the Commissioner of IRD. And it’s a simple question, which is: what if the commissioner decides that the eligibility threshold’s not 70,000 or below? It’s Government policy that it be that, but what if it’s not what the commissioner decides? So how does that work? Because this is a highly unusual way of implementing a Government policy-making decision. There may be a simple answer to that, and it may be that I’ve just overlooked it, but I’d just welcome the Minister’s guidance on that.

In respect of the timing of that document that the member wanted to see on the web not being available on the web—I hear his complaint. It has been tabled on the floor of the House the whole time, so it was available to members in the House. And I suspect that the reason why the exact timing doesn’t line up on the web compared with in the House is that the department would not have wanted to put it up early accidentally and break the Budget—

💬 Chris Bishop: It’s still not online now—it’s still not online now.

Well, that is of no moment to the member because he’s got the physical copy that he’s read—

💬 Chris Bishop: What about people watching? What about the public?

Well, actually, they’re not debating the bill. [Slamming sound] Oh, literally throwing his toys there! In respect of the idea that the commissioner might somehow change the criteria, the commissioner has no such discretion. These things are set by the Government.

Thank you, Madam Chair. So my questions to the Minister arise from the intent of the bill, as laid out in the general policy statement, as well as some of the speeches we’ve heard from Labour Party MPs. It has to do around the intent of providing relief for people facing cost of living pressures, and specifically the mention of eligible low-income individuals. It’s clear that the bill doesn’t set clear criteria about who this bill is supposed to get the $350, and that’s going to, sort of, be decided outside of the bill. But it is clear to me, reading the explanatory note in the bill, that the Government intends to exclude people on the benefit, as they already receive the winter energy payment.

What I want to understand is: does the Minister believe that people on the benefit are not facing cost of living pressures? Despite the increases to benefit, they continue facing those cost of living pressures. I’m also thinking about under-18s who may be in paid employment. The way that the explanatory note is set out in the intent of the bill seems to be to exclude under-18s who may be doing paid work.

So I want to understand what the Minister’s intent is regarding (a) the exclusion of people on main benefits, the exclusion of under-18-year-olds who may be doing paid work, and what the reasoning was to aim to exclude those groups. Does he not think that they’re facing cost of living pressures, and whether broadening, perhaps, the intent of the bill to include them would support more New Zealanders, as spoken about by many of his colleagues? So this is why we’ve put a tabled amendment around making it really clear that this bill should actually be including people on main benefits, and also people who may be superannuitants who may be struggling. I want to note, as well, that many of our over-65s who may be in rentals are facing massive cost of living pressures, and those pressures exist despite the winter energy payment. So is it his intent to exclude those people, and why?

Yes, that is the design of the scheme. The view of the Government is that this was properly targeted to those that aren’t on benefits. The member will be aware that, in addition to inflationary increases of adjustments to benefits, there have been increases to benefits a number of times under this Government. At this time of year, also, those people are entitled to the winter energy payment. This is struck on the basis of half the rate of the winter energy payment for a couple and is directed to those people who don’t get it. As a consequence, we won’t be voting for the member’s tabled amendment in respect of a bill in which they’re abstaining.

Thank you, Madam Chair, for the opportunity to take another call on Part 1 of this bill. The question I have is in regards to clause 5, new section 7AAA, which, effectively, ensures that the Commissioner of the IRD has the role to administer the cost of living payments on behalf of the Crown. And I just want to note in the supplementary analysis report, which we have here, the advice which says that the Treasury has advised that strong aggregate demand, combined with constrained supply and a tight labour market, will result in inflation staying above target in the near term.

And then I wanted to turn back a couple of pages where it mentions that this particular policy is going to require around 750 staff to operate—750 staff to operate. So my question to the Minister is: we have a tight labour market, and you’re going to find 750 people in a very tight labour market and make the tight labour market tighter? Have you considered whether this actual policy is inflationary and whether it’s actually going to put more pressure on the tight labour market, and, if so, what is the impact that this is actually going to have? Because the reality is this seems to be a policy looking for some sort of solution, dreamt up on the back of an envelope at about 11 o’clock at night two weeks ago, without actually thinking through the consequences. And the reality is: has the Minister had some advice from the IRD as to whether they’re confident they’ll be able to find 750 people to be able to actually administer the particular policy?

I already note that in the supplementary analysis, it says that up to a quarter of the people receiving payments may not be able to receive them within the time frames, due to the fact that the IRD might not have sufficient information about their particular tax details. So we may have a situation where a quarter of the people aren’t going to be able to actually get their payments in the time frame because the IRD doesn’t necessary have all the information to be able to process it.

And then you’ve got the problem of 750 staff being required to come on board in a very short period of time before August to assess millions of applications to actually see whether they’re—

💬 Simon Watts: 2 million.

How many times did you say?

💬 Simon Watts: 2 million.

Two million—2 million applications, and then make a number of assessments for every application to make sure that they are eligible for every one of those three payments. This is a bureaucratic nightmare—it’s an absolute bureaucratic nightmare.

I just wonder: did the Minister potentially ask for some advice as to whether maybe adjusting the tax thresholds might have been slightly more efficient? And, actually, not only efficient for the IRD—maybe they might not have had to hire as many people—but also maybe, actually, that would have given taxpayers the ability to decide how they spent their own money, rather than taxes being taken off people, and then people having to apply for a complicated process to get three payments of $117 over three months, to then come back, once they’d filled out the appropriate tax documents and proved that they were residents and that they’d been earning under a certain threshold, and that they weren’t in prison or dead and all of the other things which are required by the rules in this process, and then get some money back. That is the definition of socialism, and the definition of a Government which believes that they have control, they want control, “It’s our money”—it’s the Government’s money. They are the ones who have the money. They are the ones who own the money.

Well, actually, it’s taxpayer’s money. They worked hard for this money. They worked hard to earn it. They worked hard so that they could try and get ahead, and they give money to the Government through the tax system because they believe it will be for the benefit of all New Zealanders so that they can get the services that they need, not for this Government to use it like a play thing and just build bureaucracies. I ask the Minister to answer some of those questions around the implementation of that policy.

To the extent that I could ascertain questions in that contribution, there was an assertion there that people eligible for the payment have to make an application—that’s not the case. The payment is made administratively by the department for those who are entitled to it; they don’t have to apply. In respect of the administrative functions that we need people to carry out, one of the main functions is to gather bank account numbers. We’re anticipating that people who want this payment will want to give us their bank account number because they will want the payment. So we don’t think that’s going to be onerous, except that the number is about—there’s a large number of people for whom we need bank accounts.

In respect of the question as to whether this is inflationary and did we give consideration to that, of course we did. And on our analysis, we realised that this would not be nearly as inflationary as policies that would give CEOs earning large amounts tax cuts every year of $270,000 per annum. Not an income tax policy that we would favour, but we know that the National Party would. So we find their concerns about the inflationary effects of what we’re doing for low and middle income earners to be crocodile tears.

Thank you, Madam Chair. Always a welcome chance to take one’s mask off. Let’s see what happens from here, shall we?

A couple of questions for the Minister. I’m interested, actually, to pick up on a question of Chris Bishop’s from earlier on. I’m wondering whether the Minister in the chair has spoken to the Minister for the Environment to understand how many more trees have had to be culled tonight in order to provide paper-only copies, when we could have—people like myself; I’d love to have gone online—I’d love to know if he’s had a conversation with that Minister, and, in particular, what the Minister for the Environment said to the Minister in the chair.

Secondly, I’d be really interested—and it’s always to do with Part 1 but it’s in the policy background. He notes, to get this payment, you are not to be “incarcerated”. Always really useful. The only problem, what does “not incarcerated” mean? I’m not actually trying to be stupid. There’s multiple elements to this. Does that include people in remand? Is that people who are sentenced? Does that include or exclude people who are on electronic bail or people who have been bailed?

Finally, I’d like to know: it’s not quite a constituent but a Donna Summer has written and she says she works hard for her money—she says, once again, she works hard for her money. And does he believe that he’s treating her right?

I’m not going to respond to that last flippant remark. In respect of the question is, did I ask the Minister information about the number of trees? No, that would have been a stupid question because it’s obvious the answer is zero. I didn’t need to ask the Minister for the Environment.

In respect of the question, which is a proper question, about what does “incarcerated” mean, it means people who are in custody. That could be someone who is on remand in custody. If they’re not in custody on remand, then they wouldn’t be included in the incarcerated. If they’re in prison, yes; if they’re on home detention, no.

💬 Chris Bishop: That’s going to be easy to work out.

Well, that information is already shared by Corrections with Inland Revenue.

Thank you, Madam Chair. I just had a couple of questions for the Minister around the targeting that you’ve been talking about—saying this is a targeted payment. The scenario in my household would be an extra $1,400 coming into my household, with four children living at home over the age of 18 who will all be eligible for this payment. Is the Minister confident that that is targeting the payments to people in need?

And my other concern is that this will be done automatically, and will there be an option for people to opt out if they feel that they don’t need this money?

Simon Watts.

Madam Chair—sorry.

CHAIRPERSON (Hon Jacqui Dean): Sorry, I’ve called Simon Watts.

Yes, thank you, Madam Chair. I just saw the Minister stand up at the same time, and we’re going to play a bit of up and down yo-yo, but that’s OK.

The question I have in regards to clause 5, inserting new section 7AAA, and I said I’ve got a series of questions, so I’m continuing on with that. Inland Revenue will administer the payments based on information that they hold, and so my series of questions relates to that point. Can the Minister confirm that Inland Revenue holds date of birth information for all individuals in the country that are over the age of 18—quite a simple question, right? But the criteria of this bill is that anyone over the age of 18 is eligible. So my question is: does the Inland Revenue hold that information? If they don’t, well, we’ve got a little bit of a problem.

My second question is around the Inland Revenue and the Ministry of Social Development, and I’m interested to know whether there’s existing information-sharing arrangements, between those two entities, which cover specifically the winter energy payment, because, of course, looking at the criteria, that is one of the exclusion factors for getting this payment. So if that information sharing isn’t in play, Inland Revenue will not have the ability to assess criteria, and we know that that’s not often a reason why this Government don’t make payments out to people, but that is another important aspect.

The last question in this series here is: will the Inland Revenue be proactively contacting individuals before 1 August, which is the date on which this is, in order to ensure that, proactively, they hold all the necessary information to be able to make a payment—for example, asking taxpayers to update their myIR to check that the Inland Revenue holds the correct bank account details, so they can actually get their payment of $27 a week, which, as I said, is 9 litres of fuel in a Toyota Corolla per week; 20 percent of a tank of gas.

💬 Simeon Brown: 9 litres?

That’s it, Simeon Brown. So those are my three questions, and I’d appreciate the Minister’s response.

Referring first to the ACT member’s question in respect of the question as to whether people can opt out, yes they can; there’s provision for that.

In respect of the targeting, we are aware that on occasions, there will be a number of people in a household earning less than $70,000, who are over 18 years of age, who will get the payment, and that is our intention. We would note that, overall, this will be better targeted, than, we would suggest, alternative tax cut policies from the member’s own party.

In respect of the issue as to the collection of bank accounts, there will be social media campaigns—well, not campaigns; that’s the wrong word: information presented to people in order to encourage people to provide their bank account details through myIR, or, if they can’t do it that way, by way of contacting Inland Revenue through other channels.

Matt Doocey.

Thank you very much, Madam Chair. I think that was a very good choice, personally.

Look, I’m sure you’ll agree that without having the select committee stage, there would have been a number of questions we would have liked to have asked the advisors, so I’m hoping I can take an exploratory route into some of the key areas especially that are coming up, in this first stage, with the supplementary analysis. I think I want to take the opportunity, with the Minister for Youth in the Chamber, as well, to understand what discussions went on about why under-18s who are living independently and working were excluded from this payment. I’m sure the Minister for Youth would have advocated for them to be included, so it would be interesting to work out why that was not agreed with, because, of course, there will be a number of young people under 18 who will be in the position where, quite rightly, they should be entitled, but they’re 16 or 17 and maybe not 18.

Looking at some of the advice in this document, it does say inflation has risen over the past year and is expected to be widespread and to persist in the future. This makes a one-off payment a poor mechanism for supporting households with a longer-term problem. So I’d be interested to hear from the Minister why they are pursuing against the advice.

There’s an interesting comment under the executive summary where it talks about other Government priorities that could be pursued using the funding for this payment—for example, initiatives that more directly impact on the interim child poverty targets. So, again, that would be interesting just to hear a bit more about the conversations behind that of why they didn’t pursue something that maybe was more targeted and linked in to child poverty targets, as well.

As has been referenced in previous discussion, but just to hear from this Minister, why it was continued with the Inland Revenue as the delivery agency, considering they weren’t that interested in doing that.

And, if I may, the final comment is under “Limitations and constraints of analysis”. It says, “There is a risk that significant issues with the resulting proposal have not been identified.” And this is to do with the compressed time lines. It would be interesting to hear from the Minister about how he’s going to mitigate those significant issues so we don’t have any problems with implementation.

It is a deliberate design of the scheme to have it for people who are 18 or over and not younger, and we’re not proposing to change that. I don’t know if the member has a tabled amendment to that effect, but if he did have it, we would oppose it.

In respect of the issues as to whether there are outstanding issues that are unforeseen, that’s always possible as was outlined in the document that the member quoted from, but we’re confident that there are no major issues that we’ve overlooked.

Thank you, Madam Chair. Minister, I have four questions, but I just want to offer a perspective first. You’ve chosen—the Government has chosen, through the Chair, to offer a $350 tax rebate to people earning $70,000 or less, who fulfil the criteria you’ve set out. While it’s laudable that the Government does recognise that there is a cost of living crisis, and that it’s a struggle for the economy, it’s a struggle for communities, given the increasing costs—whether it’s fuel, whether it’s energy, building materials, the fact that even the Infrastructure Commission says it’s taking so long to get resource consents—it’s added billions and billions of dollars on to the cost of delivering infrastructure and homes over the past four to five years, which is primarily the term that this current Labour-led Government and the previous Labour coalition Government have been in power. So it seems like the cost of living crisis—while there may be other things the Government can point to—can largely be sheeted home to a series of policy failings or failing to address issues in a timely manner, Minister.

But, thinking about what caused the cost of living crisis—and, of course, we have a significant increase in the cost of energy, we have a significant increase in the cost of transportation fuels which are contributing to the pressure on household budgets—I’m wondering: did you consider ACT’s alternative budget, which would have changed the tax rates so that those earning up to $70,000 would have actually received a tax cut that would have given them over $2,000 in the hand, using the ACT tax formula which limits the two tax rates to 17.5 percent and 28 percent? So, Minister, you’ve offered—through this bill, through this amendment to the Tax Administration Act—a $350 one-off payment, and so I’d like you to consider how that contrasts with ACT’s proposal to limit Government spending and allow a $2,000 tax rebate for people like nurses or teachers in the middle of their career, which is, typically, what they would earn—those middle-income earners who supported us through the COVID epidemic—pandemic, if you like—and who continue to do it tough out there on the front lines.

So I have four specific questions for you, Minister: will people who are self-employed be eligible for this payment, who earn $70,000 or less on an annualised basis, as set out in this proposed amendment to the Tax Administration Act; if so, on what criteria will that eligibility be based? Will it be during the time period 2021-22 when they’ve issued invoices, or will it be when they’ve received payments? Because what we know right now is that many, many businesses are suffering from cash-flow issues because their customers are unable to pay on time. So it’s absolutely vital that we understand, Minister: will the eligibility for small business—if they’re eligible—and for self-employed people allow them to base that on cash flow, cash received, rather than invoices?

My second question is: did the Minister consider any other ways to help Kiwis facing a cost of living crisis, particularly with their energy and transport fuel bills? For example, the ACT Party have proposed that the emissions trading scheme revenues—the billions that this Government, supported by the Green Party, had proposed to allocate to business, to buy them out of their coal-fired boilers, or to Auckland Council to buy them electric ferries to compete with Fullers Ferries, who’ve just bought their own hybrid electric ferry, a fantastic thing that can go right round the Hauraki Gulf, it’ll be able to reach places that the Government-sponsored ferries couldn’t ever possibly hope to reach. They can only go between downtown Auckland and Devonport—now, that’s all you’d expect from a Government service, wouldn’t you? It would be half-baked. It’d be mediocre. It’d be 10 times the price.

Minister, did you consider offering Kiwis a carbon tax rebate of $250 per person or $1,000 for a family, on top of ACT’s $2,000 tax cut for middle-income earners up to $70,000? And was this policy modelled? Was there any modelling as to whether this would have a benefit to individuals or to the wider economy based on this money coming out of the COVID Response Fund, and what is the Minister’s response to Treasury who have asked, forgive me—[Time expired]

Thank you, Madam Chair. As to the member’s question as to whether we considered a tax cut of $2,000 per person instead of this amount, no, we didn’t because we knew that would, if there was responsible fiscal management at the same time, require very substantial cuts in public services. We would also note that we don’t think most New Zealanders agree with that as a policy prescription, because they know full well that the Government has had to draw down on taxes and some increased debt in order to fund the support needed to get people through COVID and to have the out turns that we have had, which is a return to growth to pre-COVID levels, and very, very low unemployment. So New Zealanders back what we have done and they know that that came at a cost and that the finances of the Government need to be restored and couldn’t be restored without substantial cuts in services, if that sort of policy was pursued.

In respect of that, as a percentage of GDP, I would note that our spending this year is 31.6 percent of GDP projected, compared with under the National-ACT Government in 2010-11, 34 percent of GDP.

Thank you very much, Madam Chair. I’ll just unmask and enjoy the fresh air. This bill has, obviously, caught a lot of people by surprise today, and with the limited amount of preparation and notice that we’ve had, of course it’s been a bit of a challenge working our way through some of the detail.

But there are a few things that have become obvious quite early on in the piece, and I’m going to turn my attention to clause 5, new section 7AAA. It says in the bill that this scheme is going to be a grant, and I just wonder if the Minister can provide other examples where IRD administers and delivers grants to taxpayers or to recipients, as it is.

The other thing I would like to know follows on from the contribution Simon Court has just made. Now, we heard earlier on from Matt Doocey that the IRD is going to need to increase their staffing levels by about 750 people.

💬 Simeon Brown: How many?

Seven hundred and fifty, Simeon Brown. And so we do know that that’s going to be a challenge to do that recruitment, and we are now at the busiest time for Inland Revenue, as annual accounts are being finalised for a lot of businesses. So for these businesses, we are talking about a lot of them being small businesses, and these are the businesses that have been struggling over the last couple of years to even stay afloat. And what we want to be sure of is that their annual accounts are going to be able to be processed in a timely manner and that these people and these businesses will be eligible for this grant. So, in terms of the time frames, with the delays that we can potentially expect in the processing through Inland Revenue, can the Minister please give us some confidence that the recruitment will happen in a timely manner and that it’s not going to delay the business as usual for IRD to process those annual accounts?

We are talking about the small-business owners—the dairies, the cafes that have struggled so hard, the tourism operations that have struggled immensely over the last couple of years, and we’re even talking about farmers. Even farmers may qualify for this grant, being under $70,000 in profit, so we want to be really careful that this is going to be administered efficiently, effectively, and in a very timely way.

Now, if that doesn’t happen, Minister, can we also get some acknowledgment from you, or confidence from you, that these grants can be made retrospectively? If in six months’ time, annual accounts are still being finalised, can they go back and be retrospectively applied for, and, if they can, that’s great; if they cannot, how can the Minister explain the fairness of that?

I have one other point that I’d like to raise while I’ve got the talking stick, and that is about the bank account details that people may not have. The Minister has said that we are going to do some advertising and that there will be media around this and people will apply, but if they don’t happen to see that—and I do know a lot of very young people that don’t necessarily read the news channels on social media or the hard copy papers—and if they don’t know about it and find out much later, are they still going to be able to apply retrospectively for this grant? Thank you.

I’ll endeavour to answer a number of questions from prior questioners. In respect of the self-employed, they are included. The assessment is based on their net income, which is their gross income less allowable expenses before losses that have been brought forward.

In respect of other examples of grants administered by the department, of course they were responsible for COVID support payments.

In respect of staffing, not all of the 750 staff required are new. There will be redeployment of existing staff within the department.

As to my confidence as to whether the department can deliver this, I think the exceptional work that was done by the department in respect of COVID support payments should give everyone in this House confidence that they will do it well.

Thank you, Madam Chair. To the Minister, was any modelling conducted to assess the dollar per day per person rate for this cost of living payment subject to taking into consideration inflation? Does the Minister agree with Treasury? It warns that after this Budget, the tax increases or spending cuts pressures are inevitable. And will the management of this system by the IRD blow out the key performance indicators that I understand the IRD have, from my observation of them on the Finance and Expenditure Committee?

Dealing with a question first from a prior questioner in respect of—a farmer, I think, was the example given by the member from the West Coast. The last date for applications from people who were—not applications. The last date when eligibility will be determined will be in March 2023. For people to be eligible by then, they will have had to have filed their tax return for the year ended 31 March 2022. If they haven’t and they are late by that amount of time, then they will be too late to get the payment.

In respect of the ACT member’s question as to whether this will affect delivery of other services by Inland Revenue, they will be juggling between their different priorities, as they have often had to do during COVID periods, and they will use their judgment as to the prioritisation they give to their different functions. I’m expecting that their core functions will, by and large, remain unaltered, but there will be some reprioritisation. I am aware, for example, that they have put aside some of the compliance work they were planning early on in respect of the brightline test that was introduced by the previous Government and extended by us, and that has already been delayed because of priorities for other work, like administering COVID support payments. Those sorts of trade-offs have to be made within departments and will continue to be made over the coming years.

Thank you, Madam Chair. Minister, I just would like you to elucidate a little bit on why you set—or why the Minister established a cost of living payment totalling $350, being half the couple rate for the winter energy payment, as the amount to pay under this scheme? Noting that New Zealand is facing a significant cost of living crisis with the inflationary impact in our economy.

Noting that this is not something that’s not unique to New Zealand, but is something that we are uniquely experiencing in New Zealand. But if we look overseas, for example, the United Kingdom is facing its biggest drop in living standards since 1956 as wages fail to keep pace with rising prices. Living standards, the disposable household incomes, when adjusted for inflation, are expected to drop by 2.2 percent this year, the biggest fall in a financial year since records began in 1956. So this is a serious, serious issue that New Zealand is facing.

But my question is: why has Labour decided to give a one-off $350 payment, and why is it set on that amount rather than looking at something like National’s tax plan, which is a permanent plan, something that everyone would benefit for years to come? So it’s a structural change to the system that would benefit people on an ongoing basis, in an inflationary environment that looks like it’s going to run for some time—for example, under National’s plan, anyone on $50,000 a year or more would get more from National’s tax plan; if you’re on $50,000, you would get $362 instead of $350 from Labour; if you’re on the median wage, $57,000, you get $800 a year, rather than $350 from Labour; and if you’re on the average wage, $72,000, you would get $875, nothing from Labour. I note that this would be an ongoing benefit that people would get under National’s tax plan. This is going to be an ongoing issue with this inflation environment. It looks like it’s going to continue for some time.

So there’s two questions there: why has the Minister not considered an ongoing adjustment to account for the ongoing issue with inflation? And why has the Minister set on a $350 cost of living payment on a one-off basis?

Just for the benefit of the committee of the whole House and, in particular, Mr Bishop, I’m advised that that supplementary analysis report is now online as well as on the floor of the Chamber. I thank him for raising it to my attention.

In respect of the reason that we chose that amount, we thought that that was a worthy contribution to household living costs facing the cost of living pressures to which the member referred. It, of course, is in addition to the assistance that we’ve given through slashing excise duty, road-user charges, and halving public transport costs as well as various other supports that’ve been made to other subsets of the population who aren’t getting this payment but have had other supports from the Government.

I would note that the gap between wages and inflation this year in the forecast economic indicators on page 158 of the Budget Economic and Fiscal Update that has been tabled today shows that inflation is forecast to be 6.7 percent during the forecast 2022 year, against wage growth of 4.6 percent. So we’re trying to bridge part of that gap, but we think that we’ve got the balance right.

I move, That the question be now put.

Thank you, Madam Chair. Look, there are a number of questions that we have still to raise on this side of the House. I do note that this bill has not been to a select committee, so whilst some members on the opposite side may wish to just want to let this piece of legislation pass into the night, it’s important that the questions are asked, because that is our job—to hold the Government to account and to ensure that there is openness and transparency.

I do note that I don’t believe the Minister answered my colleague Maureen Pugh’s question in relation to the retrospectivity, because there will potentially be a number of issues in relation to some people who may not see the social media campaign—which I’m sure the comms department at Inland Revenue can’t wait to get stuck into. They might need to grow the comms department to do that one too. But, regardless, some people might not get their details up to date so may not get their payments. So the question was: can they later on, maybe a couple of months after the payment system has finished, come back to IRD and actually get a retrospective payment? I think that’s a very important question, because this is the Government of equality and equity and making sure that no one’s left behind, but are they prepared to leave some people left behind through the incompetence of their systems?

The second question is in relation to the fact that this is a $350 payment. It’s not a big payment. I think we can all agree $350 is not a lot of money. Even Glen Bennett, the one-termer from New Plymouth—he said it’s only going to be able to replace two of the tyres on his car; not even the full set—just two. He’s looking forward to doing it. Maybe less wheelies on the weekend; more MP work—that way he might get re-elected, but I doubt it.

But the point I’d like to make is it’s 350 bucks. It’s not a big payment. IRD is going through this huge bureaucratic process to work out whether people are eligible, etc., etc. They have to do that for every single payment. They have to check the eligibility of the particular person each month for three months to make sure that they are eligible for the payment. So, I guess, if they go into jail or they die, unfortunately, or whatever the situation is, or they suddenly get a pay rise, they go across—and, obviously, that’s good news.

But why is this just not one payment? Why did the Government come to the position where they wanted to have three payments? Is it just because they want nice comms for three months in a row? They’re going to put out a press release on 1 August and say, “117 bucks is coming your way”, and then on 1 September, “Another 117 bucks”, and then on 1 October, “Another 117 bucks”. Because, actually, I think there’s a real question why this is not just being done once to give people the $350 that this Government is saying is the great cure for costs of living, the cure that they will be fixing this problem with. Why is it not just one payment to eligible people to ensure that not only they’re able to get 350 bucks but they can then do what they want to do with the 350 bucks—if it’s Glen Bennett, get his two tyres on his car fixed, and good luck to him; I don’t think he’s eligible, though, by the way—and then be able to actually make those decisions?

But instead they get 117, then another 117, another 117, and, of course—

💬 Simon O’Connor: How many red zeros can you buy?

Well, you can’t even get a big red zero for 117 bucks—not even the whole $350. You need five grand—5,000 bucks. I’ll tell you what, the average taxpayer in New Zealand, Mr Wood—their tax is around $10,000. That’s two red zeros. So I just think for those taxpayers—

💬 Chris Bishop: It’s the red zero metric.

It is the red zero metric. Two red zeros—10 grand. That is a shame. He spent one New Zealander’s entire tax they pay—entire tax they pay across an entire year—on two red zeros. Just disgusting. That’s the wastage we see under this Government.

But back to the point. Why are we not just having one payment? Not only does that give the people who are eligible—which is not including Glen Bennett, as noted before—the ability to make those decisions but also it removes, I’m sure, a significant amount of bureaucracy, and I’m sure that will save the taxpayer some money as well.

I do ask the Minister, on that particular point, did the Government ask for advice around whether it should be one payment or three? Did the Inland Revenue provide advice as to whether it should be one or three and what might be more efficient for them? I do note that they have been scathing of the fact that they have, effectively, dropped this job on their department to do. Look, I mean, they’re all good public servants. They will do the job. They will be stretched, and they’ll have to hire another 750 people. But the point I make here is: was there any advice requested as to whether, actually, one payment or three and what the impact and the cost benefit or the cost addition to doing three payments instead of one might be; if not, why not, and, if so, what would be the saving to the taxpayer if it was actually just one payment to actually make sure that there was some efficiency and to improve the whole system?

Look, I mean, the Minister might get up and say, you know, “Well, we don’t want people getting that much money too quickly.” I mean, 350 bucks; it’s not even two tyres on Glen Bennett’s car. We’re not talking about big money.

So in the cost of living crisis, I really just want the Minister to answer those questions, because, actually, he should be advocating for efficiency in the State service, efficiency in the Public Service, but what we see is wastage, emblematic mostly from Michael Wood and his two big red zeros.

The member again made the assertion that these are 750 extra staff. Some of them will be reallocated within Inland Revenue. In respect of the year and the retrospectivity point, as the member described it, if eligibility is established by 31 March 2023, which, as I explained, is the date by which eligibility has to be established by the filing of a tax return for the year ended 31 March 2022—if they establish eligibility by 31 March 2023 but they don’t provide a bank account, we do allow them another year to do that, and pay out later. But if they don’t do it by 2024, we no longer carry forward the obligation to pay.

In respect of the issue as to whether we considered one payment compared with three, yes, we did. One of the reasons why we chose three was that it better reflects people’s actual circumstances if, for example, they move off a benefit.

Thank you, Madam Chair. Just backtracking to the answer from the Minister regarding the exclusion of people on the benefit.

The Minister was drawing on, I guess, the fact that people on the benefit already receive the winter energy payment, and I’ve heard arguments around the fact that there’s other lifts to incomes for people on a benefit. But I was wondering if, as part of the analysis of creating and designing this bill and the intent of this bill, the Minister sought any information around shortfalls that people on a main benefit have when it comes to meeting the cost of living. I know that there was no external consultation, but we do have research that does show that people on the benefit have pretty significant shortfalls when it comes to making ends meet.

I’m interested to know whether he believes that the winter energy payment allows low-income people to genuinely meet the cost of living and if he believes that’s why they were excluded—because the evidence tells us otherwise—and, if so, I simply do not understand how the fact that people on very low incomes who may get a top up but yet somehow are still struggling to survive are excluded from this payment that, while modest, will make a difference. For people on a main benefit, it is the difference between often surviving, like being able to keep a rental. For people on closer to $70k a year, it’s a much different impact having an extra $350.

So if we’re genuinely concerned about the wellbeing of low income people, I just want to know what analysis was done around the ability for low-income people on a main benefit or people under 18 to actually be able to meet the cost of living.

The analysis by Cabinet included the other measures in the Budget for beneficiaries, people on main benefits, including the pass through of child support payments and the extension of longer-term public transport subsidies for those on the community services card.

Matt Doocey.

Thank you very much, Madam Chair. Excellent choice.

I just wanted to spend just a brief time, if I can, to ask the Minister a bit more about the cost of this scheme. So it is said in the paperwork, if I’m correct, $16 million, but then there is the reference to needing the full-time equivalents (FTEs) for 750, and there is a reference or a statement in there that Inland Revenue (IR) has sought funding. So I’m just getting some clarity: is the $16 million excluding the 750 FTEs or is it inclusive of that $16 million? And when it says that IR has sought funding, how much funding has it sought, and, then, I suppose, what would be the outcome if the funding was denied? Does that mean there wouldn’t be anyone to administer the programme? So it would be helpful to understand the true cost of what the $16 million is and how much on top of that may be paying for the 750 FTE, which does seem a lot considering we do know the bureaucracy has grown by 10,000 under this Government—so you would argue there’s probably someone with a bit of time around the beltway. So it would be helpful for us to understand the overall figure a bit more.

Just coming back to an original question where I asked the Minister about the exclusion of under-18s, I respect his comment that that is the floor, I suppose, or the minimum age, but I would just ask if he could tell the committee the reason why they’ve decided to keep it at 18 and not take it down to 17 or 16.

In respect of the question as to administrative costs, the member is correct that the total is $16 million. Of that, $2 million is being funded by the department out of baselines. Therefore, there is $14 million additional. That $14 million funds the additional costs that the ministry will face through the taking on, for example, of the temporary staff. And it also includes a component for the ministry to catch up on some of the work that may be delayed as a consequence of this programme.

I move, That the question be now put.

I still have a number of members who are seeking the call in this Part 1 of this committee stage. I’m very mindful that this debate is in the context of a committee stage under urgency. The matters in this bill are substantial and the contributions thus far are relevant, and I don’t believe I’m quite ready to take that call. Thank you very much.

Madam Chair, thank you. I’ve listened to this debate from the start with particular interest, and it occurred to me that there’s a sector of our community that has been left out of all the Government initiatives that have taken place since COVID began. Those are the people I can easily relate to—although I don’t claim to need the payment—and they are our superannuitants. If we look at what’s happened to our superannuitants since COVID began, they’ve, effectively, been protected, but in a lot of ways that protection hasn’t helped their cause from a mental perspective or a financial perspective. And the interesting thing about the financial perspective is that that one sector of our community, other than their normal increase or annual adjustment—I suppose you’d call it an inflation adjustment—have had no particular attention paid to them at all by this Government in the form of increased payments of any sort.

The winter energy payment came in some four years ago, and was welcomed by those who didn’t opt out of it. Some opted out it—and it’s an odd way to do something isn’t it, when people opt out rather than opt in. I’ll get to my question in a minute, but if you look at the average income of a couple on superannuation, Government superannuation, it’s not going to amount to anywhere near $40,000, including the winter energy payment. Yet here we are making a payment to people on an income of less than $70,000, but we haven’t included our superannuitants in this payment. My question to the Minister is: why have we not considered them? I understand the issue with respect to means testing—we don’t do means testing in New Zealand but I understand the issue that you could raise with respect to this. But there are a lot of superannuitants, the vast majority of superannuitants, in fact, who live on that $35,000 to $40,000 a year. Why weren’t they considered for a payment as part of this bill?

Because the annual adjustment of superannuation is the higher of inflation or wage increases. So if we look back in recent years—and, again, the table on page 158, the economic indicators, records that in recent years—and I’ll just go back to, say, 2018. In that year, average wages increased 2.8 percent, inflation increased at 1.5 percent, so the increase of super was well ahead of inflation that year. The following year, inflation was 1.7 and average wages increased 4 percent. Again, superannuitants would have had an increase based on wages, which would have been ahead of inflation.

Similarly in 2020, their increase would have been based on the wage increase of 3 percent relative to inflation of 1.5 percent. Last year, it was closer: 4 percent wage increase, still ahead of 4.3. This year, inflation is forecast to be higher than wage growth and therefore superannuitants will get the higher of those two figures: the inflation figure of 6.7. So they’re not in the same position as low to medium income wage earners in respect of the cost of living pressures. That is not to say that they do not face cost of living pressures—they do, but the situation is slightly different.

Thank you, Madam Chair. To the Minister: for context, there’s an analysis published by Thomas Coughlan from New Zealand Media and Entertainment, who has reported that Treasury thinks that the Government would have to deliver one of the biggest ever Budget spends next year just to stand still with inflation pressures, which are likely to add to the cost of the Government’s programmes by $3.5 billion next year. Now, that’s Treasury advice, which I’m sure the Minister has seen. So that raises a real dilemma for this Government and for a future Government in having committed to such extraordinary growth in spending, $6 billion this year on top of spending in previous years.

Question for the Minister: is it likely that a payment such as this one-off payment would need to be paid next year to account for the cost of living increase that New Zealanders will face? At the moment, inflation’s running around 6.9 percent. That would add, by my brief calculations, for somebody on $70,000 a year, which this payment is targeted at, if their cost of living was increasing by the rate of inflation, that would be an over $4,000 a year increase in their cost of living.

So, look, is it possible that this payment would have to be replicated next year? Will the Government be able to afford it? Is this payment inflationary on top of all the other Government spending with clearly no ability to manage any reduction in spending in any single department?

The assumption is, from the Minister, that there would have to be cuts in order to deliver ACT’s tax cuts, and he’s pointed to various aspects of baseline services, which ACT rejects—in fact, if you read our alternative budget, it’s quite clear, we propose to maintain baseline spending and deliver front-line services in education and health. The cuts that ACT propose to save money to fund our $2,000 tax cut for somebody on $70,000 a year actually come from deleting ministries which deliver no value to the taxpayer, which are completely unnecessary. But you can read all of that in ACT’s alternative budget.

So the question for the Minister: does he agree with Treasury that warns that tax increases or spending cuts will be needed next year, and is this measure inflationary or is it simply signalling that the Government will have to give New Zealanders a much-larger tax rebate next year, and is this being funded from debt or is this being funded from earnings? Because, Minister, if it’s being funded by borrowing from future taxpayers, from future generations, is this even ethical if the Government’s not prepared to look at its operational spending, which it’s also funding from debt, and make necessary cuts to wasteful Government spending?

Of course, this year’s spending includes a one-off substantial payment to clear the historic deficits of district health boards that have accrued over a long period of time. That won’t repeat.

In respect of the total spending as a percentage of the economy, as I have said in earlier contributions—I think I’ve been over this a number of times—this year, it’s projected to be 31.6 percent of GDP; next year, even taking into account inflation on both the revenue and the expense side, it’s projected to be 31.1 percent of GDP; the following year, 30.4 percent of GDP. I think, as the member would’ve heard earlier, the date when we return to surplus is one year earlier than was achieved by the National-ACT administration following the global financial crisis. I would also note that those spending figures, as a percentage of GDP for this year, are 31.6 percent, compared with 34.1 percent of GDP spent by the ACT-National coalition in the 2010-11 year.

Thank you very much, Madam Chair. Look, I want to come back to a question that I asked the Minister before and have not been provided an answer; it’s pretty important, it’s in regards to clause 5, new section 7AAA, in regards to the eligibility payments. So these payments are going to be automatically made to people’s bank accounts. The question I ask, quite simply, is: can the Minister confirm that Inland Revenue holds date of birth information for taxpayers and all the taxpayers that are going to be eligible for this payment? Everyone over the age of 18 who meets the other criteria are going to get the payment, but does Inland Revenue have that date of birth information? If they don’t, I want to understand—well, obviously, there’s going to be a significant issue in terms of the ability to actually make the payment. So that’s my first question.

The second question in regards to the eligibility criteria under clause 5 relates to the statement around the fact that—and it’s the fourth bullet point—and it’s around “and present in New Zealand”. And so my question here is: when must you be present in New Zealand? Is it from 1 August to 31 October? Can you leave New Zealand after the third payment on 1 October? For example, can you go on holiday? Can you go on holiday during that period? Maybe to anywhere outside of the country for a short period of time, particularly if you’re 18 and maybe say your parents are saying, “Look, we’re going to take you on a holiday.” That would be reasonable, and they would earn under the income threshold.

And the aspect around this, again—and I asked a question around information sharing before between the Inland Revenue and Ministry of Social Development, of which the Minister did not answer that question either, which gives me more concern that, again, I ask the question: does IRD and the Ministry of Social Development have an existing information-sharing arrangement which covers the winter energy payment? A key criteria for this payment. He hasn’t been able to answer that question, and, again, that is concerning.

But my point around being present in New Zealand is: does Inland Revenue have an information-sharing arrangement with New Zealand Customs? In order to substantiate the criteria for this payment, Customs is going to need to provide information to IRD to stop people at the border or identify someone who’s leaving New Zealand who may be not eligible. And what’s interesting, and I quote from the Ministry of Social Development website in regards to the winter energy payment, is: “If you’re heading away from New Zealand over the winter months, we can keep paying your winter energy payment for up to 28 days. Tell us if you plan to leave New Zealand for more than 28 days, otherwise we might pay you too much and have to ask for some money back.” So I want to understand in regards to that those series of questions.

And, lastly, in regards to will the Inland Revenue be assessing or analysing prior year earnings for individuals and taxpayers to ensure that they haven’t artificially had or earned net income of $70,000 or less? And why I ask that is because we’ve seen graphs from Inland Revenue that indicate that Inland Revenue actually thinks that taxpayers are artificially paying themselves $70,000 or less in regards to personal income tax. So those questions I’d appreciate a response from the Minister.

In respect of tax residency, it’ll be based on annual tax residency, not whether someone’s gone on holiday for a couple of weeks to Australia.

In respect of the issue that was asked as to the date of birth, generally IRD does have date of birth information. Sometimes there are gaps. Where there are gaps and people think that they’re eligible for the payment, they’ll be able—through the means that we talked about earlier—fill in the data gap in respect of the date of birth and things will flow from there.

In respect of the winter energy payment, the criteria, yes, we do have data-sharing agreements with Ministry of Social Development, but we don’t actually rely upon them for this, because the eligibility for this payment is based on not being eligible for the winter energy payment, and that’s clear from pay returns that come through the revenue, so can be automatically matched.

Thank you, Madam Speaker. I listened with interest to the Minister’s response in terms of how this figure was ascertained, and it was explained that it was the difference between wage increases and inflation, and we just settled on a figure. When I asked Treasury today how they defined lower and middle income wage earners, they did not have an answer for me. It’s not in the appendix of any of the documents I’ve read today. So I ask the question again: was any modelling done to say this would be 250, 350, 450? And is there any sensitivity analysis about how you’ve linked this to the cost of living scenario that people are facing out there?

Secondly, the question again is: was it appropriate to appropriate the $1 billion from the COVID fund when COVID hasn’t been totally wound down, to this programme, as it’s a cost of living crisis programme not a COVID fund programme?

💬 Hon David Parker: Madam Speaker.

CHAIRPERSON (Hon Jacqui Dean): The Hon David Parker.

“Madam Chair”, I should have said; sorry about that. As to the appropriateness of deciding that it was timely to bring back some of the COVID recovery fund payment into the core and use some of it, we thought it appropriate.

In respect of the issue as to the wage threshold, or the $70,000 threshold, that was based on the average wage being around $65,000, and we thought that that was slightly above that. It was an appropriate cut-off point.

I move, That the question be now put.

The question is that Ricardo Menéndez March’s tabled amendment to clause 4 replacing subclause (2) to amend the definition of a cost of living payments scheme be agreed to.

I withdraw and apologise.