Taxation (Cost of Living Payments) Bill

I move, That the Taxation (Cost of Living Payments) Bill be now read a third time.

What a great day to be in Government. I’ve been in this place for 20 years. My anniversary is in a couple of months’ time and I’ve never ever, in the 20 Budgets that I’ve been here for, seen such a depressed Opposition on the first morning of the continuance of the urgency motion. The contributions from that side—I know they’re awake, they’ve arrived here, come through the rain on a Wellington grey day, but the depression on the other side is palpable. I can see why. Completely taken by surprise by the Budget—completely. The terrible design of their tax policy in comparison, laid bare, and they’re left with accusations in the debates on this bill about fiscal profligacy—prophets of doom on the other side. We have to remind them that this bill gives $350 to 2.1 million people—2.1 million people assisted with the cost of living—on top of the extensions to the slashing of excise duty, to the cutting of road-user charges, and the halving of public transport costs.

This country recognises that we have had one of, if not, the best responses to COVID in the world, both health-wise and economically. And, as a consequence, New Zealand’s economy has already bounced back to being pre-COVID size, and growth rates are higher than they were pre-COVID. Unemployment is at an incredibly good low level of 3.2 percent and the Government’s books go back into surplus—notwithstanding the astounding shock of COVID—a year earlier than National got the books back into surplus after the global financial crisis (GFC). Against all of that background, the National Party still say, “Oh, profligate Government stoking inflation.”, when our expenditure in this coming year, according to the Budget documents, is 31.6 percent of GDP, compared with 34 percent of GDP under National after the GFC.

It’s no wonder that the commentators are picking that this is a great Budget, but so are the punters.

💬 Hon Gerry Brownlee: Name one! He can’t find one.

Well, I’m actually looking for a list of some of the quotes—I’m looking for some of the statements by punters throughout the country who are saying that this $27 per week helps. But I’m going to give up on that because I can’t find the piece of paper. The pundits up and down the country are saying that the National Party tax cuts would have given less to low and middle income earners than this $27 a week; $2 a week for a low income earner under the National Party’s tax cuts, a $270,000 tax saving for the chief executive officers (CEOs) who are at the top end of the spectrum—270,000 per annum. People know that, one, the country can’t afford that after the COVID costs—

💬 Hon Paul Goldsmith: This is muckraking.

—and, two, that it would be—“muckraking”, says the Hon Paul Goldsmith.

💬 Hon Gerry Brownlee: Put some numbers on it.

$270,000 is the number that the CEO of Air New Zealand would have got from the tax cuts that National Party proposed and $2 a week was what a low-income earner would have got—about 110 bucks a year compared with the $350 that low and middle income earners get under this package.

This is a very, very good bill and I thought Audrey Young summed it up very well. She said that Grant Robertson delivered a measured response to the current crisis, and she said that he had written a “Goldilocks Budget”, neither too much nor too little, that it had targeted the tax cuts better than the National Party’s alternative, and that the Budget was, essentially, a masterstroke by the Minister of Finance. We’re incredibly well led in this country by the Prime Minister, Jacinda Ardern, by the Deputy Prime Minister and Minister of Finance, the Hon Grant Robertson, who I think has delivered a Budget in difficult circumstances.

Now, the final thing I would point out is that the Hon Gerry Brownlee just gave a contribution on the title debate where he said that people were 6 or 7 percent behind, and he quoted the number. He ignores wage increases—typical of the economic illiteracy on the National Party side of the equation. He just talks about inflation but not wage increases. Even this year that we’re in, the only year in the past five years where wage growth is lower than inflation and the only year that it will be, under this Government—because forward projections out to the end-year forecasts have wage growth higher than inflation—with inflation predicted to be 6.7 percent, wage growth has been 4.6 percent. The gap is not 6.7 percent, as the National Party illiterately repeat in this House; the difference is 2 percent—the difference is 2 percent. And we as a Government are doing what we can to assist people with that reality.

We all know that inflation is here, that it’s not caused by the Government. There was a bit of a spat on TV last night with a leading New Zealand economist, Shamubeel Eaqub, calling out the illiteracy of the ACT Party on this issue. The main causes of inflation are the disrupted supply chains as a consequence of COVID, including disrupted production in China, and transport constraints that have been disrupted through COVID. And then, of course, virtually the whole of the world is bouncing out of COVID at the same time. So demand pressures around the world have spiked, which is in itself inflationary. And then on top of that, we’ve got the war in Ukraine, which has doubled fuel prices, which feeds through to food prices, in part, because the cost of fertiliser has gone up by 38 percent.

So we all know those are the causes of inflation, but we also know that it’s real for New Zealand consumers and that’s why we’re doing our bit to assist them through this measure, which is fiscally responsible, will help 2.1 million New Zealanders, and is widely seen by the media as being a good Budget.

The question is that the motion be agreed to.

Thank you, Mr Speaker. We started off with a hiss and a roar from the speaker Mr Parker about the Budget, and then it started to lose its way. Then he was flambling around, trying to find commentators that had supported it, and he started reading Audrey Young. But, of course, Audrey Young, yesterday, just after the Budget, said it was a “Goldilocks Budget”, but on reflection, she’s written another article a little bit later where her conclusion at the front is “Grant Robertson’s latest Budget may end up pleasing very few.” No longer is it Goldilocks; she’s actually had to pull back and recognise that it’s been a flop, and everybody else in the country recognises that it’s been a flop. It’s a backwards Budget, because the country is going backwards.

Just think, back in 2017, when National left this Government thanks to Winston Peters, this country was positive and was going places. People were flooding into the country. We were aspirational. New Zealand was reaching ahead. Everybody felt good about this country. Five years later, we’re losing a net-outflow of people. Australia is getting the best and brightest from New Zealand—not all of them, of course; some of them here on this side of the Chamber. So we’re losing a net-outflow of people, the country is going slowly, and the growth forecasts in this Budget from the Treasury are being pulled back. Instead of growing 12 percent by 2024, we’re only going to grow 9 percent if we’re lucky. For some of the years ahead, we’re going to be growing less than 1 percent.

So the country, as a whole, under this Government is going backwards. But it’s worse than that; it’s New Zealand households that are going backwards under this Government. Costs are going up faster, the cost of everything—whether it’s cheese, whether it’s petrol, whether it’s food for the table; that’s going up faster than wages are going up. And everybody knows it, everybody understands it, everybody sees it, everybody feels it, and they are frustrated by it. The Government will stand up and say, “Oh, it isn’t us.”, and they’ll point to Shamubeel Eaqub and all that sort of stuff. Shamubeel Eaqub, by the way, when we were in Government, had nothing to say other than the New Zealand Government had their head in the sand over superannuation and we needed to put the age of superannuation up. That was the only thing he used to say, and then, suddenly, this Government comes in, and Jacinda Ardern refuses to put the age of superannuation up, and he stops talking about it—has never talked about it since. So now he’s talking about inflation and about that. So, anyway, good on you, Shamubeel, you do that.

But the point about inflation is that, yes, of course, there’s an international component, but you can’t control that, but what you can control as a Government is what the Government does to contribute to it. And there are two things that have contributed to it significantly: (1) they took the focus of the Reserve Bank off inflation and added a dual mandate, and we’ve run incredibly low interest rates, and that has helped fuel the inflation—like it has in many other parts of the world—and that’s why inflation was ripping before Ukraine and it’s why New Zealand households were going backwards last year; and (2) they have massively increased Government spending—what’s called the fiscal impulse—and this Budget was the biggest splurge of new spending ever, and New Zealanders look at it, and they see it for what it is.

They look at the $11 billion in health, and they ask the obvious question, “Will this lead to any better outcomes?” And when they consider what happened to the $1.9 billion extra money in mental health two years ago for no better outcomes in so many areas, they are rightly concerned about it, and they can see it just disappearing like water into the sand—billions and billions of dollars going out and no better result. Overall, Government spending’s increased by 68 percent by this Government, and nobody can point to a 68 percent increase in actual outcomes. We’re all waiting longer for courts, we’re waiting for surgeries, and everybody’s waiting for everything. All the money goes out and where it all seems to go is into extra public servants and lots of consultants. It’s been great for the consultants, a really wonderful time for the consultants but not good for the average New Zealander—and particularly not good for the squeezed middle.

Then we look here at what is being proposed in this bill: this temporary assistance to deal with the cost of living, and the $27 a week that people will get for a few weeks. And we’ve seen, overnight, people working out how that fits. We’ve seen people say, “Well, if you look at an average couple, in the Budget they’ll get $54 between them for a few weeks, but the cost of rent has been about $50 as well.” Well, OK, that might just cover the rent increase for a few weeks, but it doesn’t cover all the food and everything else that they’re having to deal with, and all the other issues. Then what happens after three months? Oops, we’re back where we were; we’ve gone backwards. And what about the homeowner? Average costs have gone up a $134 a week, so they’re going backwards at a rate of knots, and they’ll be going back faster, because interest rates will be going up even higher to deal with inflation. And, then, of course, well, they might get a cheap bus ride for a few weeks, but that’s going to stop as well.

So the big question that everybody has is: what on earth is going to happen in three months when these little temporary fixes are going to disappear? They won’t, probably, disappear, and that’s going to be a real problem for this Government. They’ve got themselves entirely trapped, and there’s no way out for them, because they’ve raised this kind of hope that they’ll throw some money at people in order to deal with this situation. But they’re going to have to keep on doing it, because the inflation’s not going to go away any time soon. And that’s why we’re not voting for this bill, and it’s why the National Party’s plan is so much better. And it’s an obvious one which is to say, “Let’s stop taking more tax out of the hands of New Zealanders every day, using the sneaky approach of inflation—as incomes rise, hold the tax thresholds down, and more people pay higher rates of tax.”

And that’s been the dirty secret of this Government’s tax policy for the last five years. It’s why Grant Robertson has had so much money to throw around—ineffectively, sadly—and it’s why New Zealanders are feeling the pinch. We’ve just suggested the obvious and simple and right thing to do, which is to say, “OK, let’s adjust those thresholds for inflation and put $1,600 back into the hands of the average New Zealand worker. That will make a real difference to them. It’s a contribution, it’s a start, and it doesn’t go away after three months like this short-term, band-aid fix from the Government will do.”

And, of course, the other element of this is the hurried and ill-considered nature of it. When we look at this Government’s approach to this Budget, they were quite confident about the whole situation. They said that the focus of the Budget was going to be climate change and it was going to be health restructuring. That was going to be the big thing about the Budget until about five weeks ago when they thought, “Hang on a moment. Hang on a moment. Maybe we have miscued somewhat. There seems to be another issue out there—something called the cost of living. Maybe we should be doing something about that.” Just like they thought about law and order, suddenly, very late in the piece, they claimed everything was fine, and then, the only thing going forward that New Zealanders have seen is those stolen cars being rammed into dairies. So they came up with a quick fix there, which won’t really work, and then they came up with this cost-of-living package right at the very end.

We see all the notes from Treasury laid out on the table, saying, “Oh, yes, well, we haven’t really had time to consider this at all. It’s just been flung at us just beforehand. And, by the way, we think it’s pretty bad.” I mean, look. This is what the Treasury has to say on it: “Inflation has risen over the past year and is expected to be widespread and to persist into the future. This makes a one-off payment a poor mechanism for supporting households with a longer-term problem.” This is from the Government’s own advisers. Let me just repeat this: “Inflation has risen over the past year and is expected to be widespread and to persist into the future. This makes a one-off payment a poor mechanism for supporting households with a longer-term problem.” So the Government’s own advisers say it was a bad idea. They say a one-off payment of this magnitude, also, would add inflationary pressures in the short term.

Then there are other priorities that could be pursued with this money. Then, they also point out that they have to go and hire another 750 people down at IRD to figure out how to pay this money. I mean, what a shambles. I’m pretty confident notwithstanding if this bill passes—which it will, because this Government has the numbers—that they’ll turn around and find out there’ll be all sorts of problems. I wouldn’t be at all surprised if we’re not back in this House with another piece of urgent legislation to fix up some kink that they’ve forgotten and that has meant the money’s gone to people in Australia or something like that. I don’t know; there’ll be something that they won’t have figured out in their mad rush to deal with it.

That is the tragedy of this Government. They’re always, always reacting on the back foot to issues, because they’re not thinking ahead and they’re not providing a clear plan for New Zealand. So the backward Budget continues. New Zealanders are going backwards, but our message for you today is: help is on the way, and that’s in the form of Chris Luxon, Nicola Willis, and the National Party that stand ready to lead this country back to success.

What a miserable lot they are on the Opposition benches—a miserable, pessimistic, negative lot. Oh no, oh no, unemployment is down to 3.2 percent, and they think that’s terrible! Mr Goldsmith says that growth is predicted to be only 9 percent, and that’s a terrible thing! They are a miserable, mean lot, seeing only the dark underbelly of everything because that suits them.

Now, we know there is an inflation problem, and it is worldwide. I’d like to point out that just yesterday economist Shamubeel Eaqub said it was “economically illiterate” to sheet it home to the Government here. Well, the economic illiterates on the other side of the House might like to pretend that inflation is caused here in New Zealand alone, but we know it is a worldwide problem, and we know it is caused by worldwide issues.

Whether or not it is caused by worldwide issues, it is our job on this side of the House to help New Zealanders get through, and that is exactly what we are doing. Benefits went up on 1 April. We have the winter energy payment to help superannuitants and people who are on benefit. The minimum wage has gone up. That’s all stuff to help people get through. In this Budget, we are making a contribution to the cost of living for ordinary New Zealanders, for 2.1 million New Zealanders, who will get a contribution to help them through these winter months—$350 going to 2.1 million New Zealanders. It’s going to students. It’s going to people on the minimum wage. It’s going to those who work two or three jobs just trying to get by. It’s going to ordinary people and it will help them.

So let me tell you what people have said about this. Let’s start with some of the big-picture stuff. Now, in terms of whether or not it’s an effective and good measure, let’s talk to, I don’t know, ANZ chief economist Sharon Zollner. That would be the ANZ that is chaired by the former Leader of the Opposition, by the former Prime Minister, Sir John Key. What does this wonderful person say? She says, well, actually, good fiscal policy “should be targeted and temporary and these cost of living pressures are, we’re all hoping, going to ease, whereas a tax cut is, of course, for the long run”. In other words, she supports it. She says, “This is a one-off payment that can be repeated if necessary and it’s actually more flexible, in that regard, than a tax cut would be.” That’s from the ANZ chief economist.

Morgan Godfery, who lectures at the University of Otago Business School, says that the cost of living payment is “a necessary recognition that a large number of New Zealanders are doing it tough … Targeting that payment to the 2 million New Zealanders who are likely struggling with all kinds of rising costs—whether it’s fuel, whether it’s housing costs—I think is both necessary and sensible.” That’s what people are saying about the overall fiscal nature of this particular payment.

In terms of whether or not it would add to inflation, well, University of Otago senior lecturer in economics Dr Murat Üngör doesn’t think that it’ll add to extra pressure on inflation. It is a great, measured announcement. That’s what some of the people commenting on the economics of it are saying.

But what are ordinary people saying—what are ordinary people saying? Here it is: “Arrowtown woman Jo Scott was shopping at Countdown Andersons Bay in Dunedin yesterday and said it was ‘outrageous’ how much the cost of food had gone up.”—we all know that. “She said the payment would be a ‘big help’. Another shopper, Ann Cottrell, of Dunedin, said the payment would be ‘marvellous’.” Ordinary people are welcoming this assistance with their costs of living. It is welcomed on the streets, and that’s where that side of the House is simply out of touch.

Over on this side of the House, we know we need to help. We are doing what we can to help people get through. This is a measured and sensible response to the temporary cost of living pressures. I am so glad to be able to commend this bill to the House.

I must take a minute or two to reply to some of the positions put by the speaker who just resumed her seat. Firstly, I think it’s extraordinary that the Government should come in here and quote the words of a bank chief executive—a bank that’s just been one of the first to jack up their interest rates in this new environment; interest rates that are contributing to that $134 a week extra costs for mortgage holders in this country. Yet the Government comes in here and says, “Well, the banks are happy about it.” Of course they are. Of course they are. It’s typical, isn’t it? The vested interests are always apparently the ones that this bank wants to talk about. Unreal.

Then, of course, we talk about the fact that it’s a measured approach. Well, the overall approach to the Budget is that there is $100 billion worth of income and $127 billion worth of expenditure. The question is: who fills the gap? When we look at this Budget from this week, we see $6 billion spent as planned—as well announced by the Government—a massive expenditure: biggest ever in New Zealand’s history. Then we see an extra $2.3 billion stolen out of next year, brought forward into this year to pay for various aspects of the Budget. And on top of that, the last-minute inclusion, the very last-minute inclusion, not actually in the Budget, only there as potentially a supplementary estimate some time down the track—the billion dollars for this particular move—$9 billion. Now, if anyone looks at how baselines work, that means over the next four years, the Government is going to spend north of an extra—an extra—$50 billion. Where does it come from?

The people who always pay are the people who are at the bottom. This is an absolute sham when it comes to any suggestion that this about solving the cost of living. It’s not. I don’t begrudge people that money. I hope they turn up in their droves and they take it. They need it.

But let’s be clear: someone on $70,000 a year, at the top end of the qualifying range, is paying $14,000 in tax right now. They’re left with a $56,000 income. There’s a bit taken off that for ACC and various other things. But that $56,000 has been eroded in its purchasing power over the last 12 months by about $4,000. David Parker says here, “Oh no, the member got his figures wrong” when I quoted this in the House earlier, because there’s been pay rises. Even if we’re generous about the pay rises, it is still a gap—and, in fact, if someone was on $70,000, they got a pay rise, they no longer qualify. But if someone had got a pay rise that took them up to that level, their purchasing power after that pay rise is still down by $4,000. So it’s an irrelevance that you get all the time being thrown into these arguments by a Government that just seems to think that if they say it and they do it—well, they don’t do it very often, do they? They’re not good on delivery—then everything will be all right.

There’s the fact too that you can have multiple speakers from the Government standing up and saying, “This is wonderful. It’s a payment to 2.1 million people.”, but we’re a population of 5 million, we’re a population of about 1.5 million children who don’t work; we’re a population of over 500,000 who don’t work because they’re retired. So these are working-age New Zealanders—a massive chunk of our population—and the Government is celebrating that their incomes are low enough to qualify for this miserable $350 over a three-month period, $27 a week.

Well, if they think they’re going to go out on the hustings and tell New Zealanders how wonderful they are, I think they’ve got another thing coming. The only people they’ve been able to talk about in the House today who expressed any degree of support for this are a political editor who’s changed his story this morning, and a bank chief executive who’s happy to rub his hands as the interest rates go flying up. Completely ridiculous.

I’ve watched people on television, I’ve heard them on the radio—people who are affected by this. They’re grateful, but they are also very annoyed about the fact that it won’t go anywhere near trying to sort out the erosion of purchasing power that their limited incomes have so far experienced—$134 a week down if someone has an average mortgage in this country.

It just seems to me hard to believe that a Government can be so excited about this. We all know how it happened. Week after week, Labour caucus members were filing into the weekly caucus meeting, saying, “It’s not good out there. We’ve got to do something. We’ve got to come up with something.” And then Grant Robertson’s come along and he’s got a bit of a bone he’s thrown at them and said, “Here, look. We’re going to give everybody $350, dripping it out over three months, and that should take care of everything.” And one by one they’ve stood up in the House since yesterday afternoon, applauding this initiative by Mr Robertson and the Prime Minister as if it is an answer to everything. It’s temporary, so is the reduction in fuel excise. Temporary.

The question still arises: how is that $27 billion worth of extra spending through this Budget going to be paid for? No answer. The only way, ultimately, is taxation. It’s alarming that this bill apparently predicates some 700 new staff being taken on by the IRD. Are they being taken on in a temporary position? I doubt it. Somebody has to be there to run the mechanisms that bring that $50 billion in over the next four years.

The great thing is, you know, I’ll bet there was never any systematic going-through of the Budget prior to it being announced yesterday by the Labour backbench. No idea. They’ll just take it as read, take it as being absolutely 100 percent, no worries, don’t ask questions. It’s been evident from the speeches that we’ve had today. The question arises: what will happen at the end of the three-month period? I’ll tell you what’ll happen: there’ll be a Christmas bonus. Grant Robertson will put on his red hat with the fluffy white pom-pom and he’ll give out a Christmas bonus. Because all of the remedies that failed the economy in the past—the 1950s, 1960s, 1970s—are being trotted out by this Government. You can’t get past the fact that when there is a massive amount of money being spent—like the 68 percent increase in Government spending in four years. Imagine what that’d be like in your household; it’d be phenomenal. And the question is: why is the Government not looking at the drivers of inflation in this country? We keep on getting told, “Oh, it’s the Ukraine war, it’s COVID, it’s all the sort of slowdown in the world.” It’s a big chunk of debt that this country has got. It was the right thing to do to go to the balance sheet to try and get the economy held together. But it is not the right thing to cripple the economy by putting the sort of pernicious tax regimes in place that this Government seems so hell-bent on. Where is the incentive for producers in this country? Go back to that question I raised before: why is the Government so happy to say that a $350 one-off payment is going to sort things out for 2.1 million New Zealanders? That is alarming that that’s the sort of thinking that’s going on. Day by day, the costs of life for those people who are in those income brackets—and remember, that’s the upper end. If you’re on $71,000, nothing. That’s the upper end. So the squeezed middle is a real group of people. It’s not some term just grabbed out of anywhere. It is a massive group in this population. There’s no way that they’re going to be able to come off this temporary assistance and say, “Well, phew. Thank goodness we got through that. It’s all over now. Cost of living has suddenly settled. Look at that. There’s some new land for some supermarkets; that’ll make a big difference to my life.” That sort of thing is not going to happen, and nor is the pressure on fuel price going to go away. So the real question also is—another real question; so many questions come out of this Budget: who is going to pay in the end? Remember, history will tell you it’s always those who are on the bottom end of the earning scale.

Yeah, history is important. We must remember history, and let’s remember that when 2020 came around and the National Party put out their alternative budget, they had a $4 billion fiscal hole in it—a $4 billion fiscal hole—and when it was pointed out to them, they didn’t do anything about it. So everything that they have stood up and said today, you should regard with a grain of salt because National are out of touch, they don’t get the numbers right, and over on this side of the House, we do. That is why we need to be celebrating this cost of living payment. But it’s not just a payment, it’s a package. It’s an absolute package.

I want to give props where they are absolutely due. That is to the Minister of Finance, Grant Robertson, for doing that; that is to our Prime Minister, the Rt Hon Jacinda Ardern, for actually putting this package together and listening to the voices of New Zealanders, because it was the voices of New Zealanders and we know it. That’s right—we’ve got 65 MPs on this side of the House that go back home into our communities after we’ve left this building, and they tell us about the cost of living crisis. We see it in our families, we see it in the people that we represent, and for that reason, we’ve brought this package to the House.

The cost of living payment is going to cost us $814 million, but that’s a drop in the bucket compared to the kind of funding that we put out there into the community, but this is absolutely going to help those in our communities: a $350 payment and let us not undervalue that. A $350 payment is a lot of money, especially when it’s going not to households but to actual individuals. That’s the difference here, and that’s going to make the difference for 2.1 million people who are not getting the winter energy payment already. And let’s not overlook that as well: the winter energy payment is already going to over a million New Zealanders out there, supporting them. But let’s not see that in isolation, because on 1 April, we actually brought in a raft of changes which made things better for our superannuitants, for our students, for those people that get Working for Families tax credits. We are absolutely making a difference to the cost of living for everyday New Zealanders.

That side of the room, they are out of touch. Check out their social media. Last night they put out social media talking about our package, talking about what they would do, and talking about the average Kiwi income being $72,000.

💬 Hon Member: It is.

TĀMATI COFFEY: I’ve got news for that member: back home in Rotorua, we aren’t as lucky to get $72,000 every single year like the rich mates of the people on that side of the room. Back home, our average median income is a mere $28,500. The average personal income back home in Rotorua for the average Kiwi is $28,500. They will not be served well by the National Party and their proposed tax package on that side of the House. They will under this bill and I’m pleased to support it to this House.

I rise to speak on the third reading of the Taxation (Cost of Living Payments) Bill. I’ve been listening through yesterday evening and this morning to the exchanges between members on this temporary $350 payment that is going to be given out to people earning under $70,000, and unfortunately excluding people on the benefit and superannuitants already getting the winter energy payment. What was really clear is that across the House, everyone agrees that there are families doing it tough, but somehow the people on the right, while berating this payment, are not offering tangible solutions to put permanent fixes to our income support system. It’s all talk about austerity and cutting services. Meanwhile, on the left, while I welcome their approach to trying to address the cost of living payments, they’ve introduced a bill which seeks to exclude some of the people that are doing it the toughest. I don’t understand why we can in good conscience try to introduce a bill that seeks to address the cost of living pressures on low-income and middle-income New Zealanders and say to people on the benefits that they already received the winter energy payment and that they’re all good.

During the committee of the whole House, it was really clear to me that the Minister thought that because people on the benefit already receive some top-ups, they are not struggling to make ends meet. That is not true. The Government had not consulted with people on the benefit or those on the ground since it was it clear on the departmental reports—but they didn’t even need to, there’s already so much information out there telling us that people on the benefit are several hundred dollars behind being able to participate in their communities. So we tried to put an amendment to the bill to guarantee that people on the benefit, people under 18 who are on youth payment or who may be in work, would be included in this bill. The Government has an opportunity, still, to do this, because the bill doesn’t prescribe who the recipients are, even though the Minister has made it clear that so far the intention is to exclude beneficiaries. So we’re urging Labour to please, when you’re looking at the recipients who are going to get this payment, review your position to include people on the benefit. Because we can’t just keep talking about how low-income people are struggling and yet exclude so many of them in one of the most significant things that are being done in this Budget.

I mihi the other efforts around subsidies for free fares, the child support pass-on—those things will make a difference. But let’s not lie to ourselves. People on the benefit will continue being behind in order to make ends meet. And what that will create is a system where we’re pushing people to Work and Income to get hardship grants just to survive. So the Green Party will continue pushing for permanent fixes to our income support system beyond these temporary measures, because in three months the inequality crisis and the cost of living pressures would have not fully gone away. In fact, some of these cost of living pressures on some whanau on lowest incomes, they’ve been there since before this Government even came into power. We have had so many years of reports, and Labour has a mandate, a majority to basically transform our income support system so that it supports people.

So I think the whole process has been deeply frustrating from the point of view that the exchanges that we have had, I think, ignored the realities of low-income families. It’s been deeply frustrating to hear members of ACT and National berate this payment yet offer no alternatives to this. And so we look forward to campaigning to transform it.

💬 Toni Severin: Check out our alternative budget.

RICARDO MENÉNDEZ MARCH: I don’t even understand the kind of exchanges that they’re having here, because, again, they’re not really offering any solutions—the members to my right. So, again, I think all low-income people deserve a life with dignity. They deserve to be able to fully participate in their communities. They deserve to not have to be put into debt by our agencies that are meant to support them. The $350 may not be enough for some families to fully participate in their communities, but it will create some relief for people who are having to face the choice each week of whether to afford food or pay their rent. This would have made a tangible difference. So again I urge Labour to include people who have missed out on this payment and look to transformative solutions so that our families can thrive, not survive.

I just wanted to quote an article from Thomas Coughlan at the New Zealand Herald, which said that “Treasury recommended against the Government’s $350 cost of living payment for middle-income households saying it was a ‘poor mechanism for supporting households with a longer-term problem’ ”—that is absolutely correct—“and that it will make inflation worse in the short-term.” And that’s absolutely correct as well. “Instead, Treasury believed the Government should investigate a ‘more targeted form of support to lower-income households’, according to advice released on the scheme. Treasury even thinks the payments would ‘add to inflationary pressures in the short term’ although ‘the risk to longer-term inflationary pressures is relatively small’ because the payments are temporary. On Thursday the Government announced [this, and] people earning less than $70,000 and who do not receive the winter energy payment [is estimated at] 2 million people. … Treasury said the Government should use the money set aside for the scheme … to pursue ‘initiatives that more directly impact on interim child poverty targets’ ”, which this Government and this Prime Minister came into Parliament to actually achieve.

Let that sink in. The advice said that the Ministers wanted to forge ahead regardless of Treasury’s recommendation that Inland Revenue be the agency to administer that scheme, but the IRD said that it should not have to be put in charge of that because it would be a critical operation for the IRD, which is currently managing COVID-19 payments, and it would blow out their key performance indicators for actually doing it.

So you can see where the problems are. Under the ACT Party’s alternative budget, which the Green Party obviously haven’t read, the average worker benefit would be $2,802. A single person earning $60,000 would get an extra $800. An average income of $73,000 would get $2,800. A middle-income worker swimming against the tide of inflation in this “Brain Drain Budget” would leave because this country is working to the lowest possible common denominator in terms of aspiration.

So we’re going to tax the productive to fund Labour’s ideological advantages. But I would argue that at a dollar a day, this goes nowhere—absolutely nowhere—to helping with the cost of living crisis.

💬 Angie Warren-Clark: Rubbish!

How is that rubbish?

💬 Angie Warren-Clark: It’s not a dollar a day.

How would you actually ascertain whether this is a good spend of money, when last night the Minister Mr Parker, who’s usually respected in this House, could not even tell us how this was modelled, whether it should be $500, $400, $350, or $200? Come October, we’ll be asking this question again when the cost of living crisis still will be there, inflation will still be high, and interest rates on your mortgages will still be high, and food prices will still be high.

So I’d like to ask the Government to actually think about: why $350? Where did that come from? When was it decided? Was it because of the Newshub poll which said that three-quarters of this country don’t agree with this Government on the cost of living crisis, that they had failed to anticipate even after all the COVID stimulus? The COVID problem is a different problem to the housing and cost of living crisis. It’s absolutely a separate problem and it needs a separate set of solutions, and it’s going to be here this time next year, come the election. So let’s be honest about this, and let’s be pragmatic. That’s why I like Mr Faafoi, because sometimes he is really pragmatic, but the rest of the economic backbench of the Labour Party are throwing this out as a political spin—and now we know what it’s worth to get a vote from the Labour Party: it’s $350.

So I would ask you to look at Thomas’ article and actually say to the people of New Zealand: this is a short-term fix—it’s not a long-term fix—and you’re on your own. And that’s what they know out there. And we’re all tightening our belts, and you guys haven’t, and that’s what your opportunity was in the last Budget: tighten your belt, reduce spending, reduce the size of this Government, and give people back some taxes to have them pay for the cost of living crisis. Thank you, Mr Speaker.

ACT and National members in this House are right that yesterday’s Budget was a difficult one to prepare, in volatile and uncertain times around the world, and with inflation this week in the UK spiking to 9 percent. It was a difficult thing to do and I commend the finance Minister for his balanced approach that responds to the pressures that people are feeling.

This bill establishes the payments that will go directly to middle income earners to help with the cost of living pressures that are hitting people hard right now. That’s the difference—that’s the difference when you have a Labour Government that sees the need of working people and responds immediately. That’s the difference when the Government sees a crisis of COVID coming from a global pandemic and responds to keep people secure. That is what you have when you have a Labour Government that keeps people secure in their health and secure economically and financially. I thank the finance Minister for his work on this Budget.

There is one thing that hasn’t been well canvassed in this House and I want to speak to it. That is the fact that the payments that this bill enables will be paid to almost all students. Labour has always been the party of students. We have ensured fair access to tertiary education. We are the party that introduced interest-free student loans. We are the party that stands with students to access tertiary education that is fair and available through the country.

Students are a group that has been hit hard by rising living costs while studying, as rent, transport, and food payments are a very large proportion of their costs. Students also are often precariously employed and don’t have stable incomes. There is no application needed for these payments to go to students. They will go directly to their bank accounts, because they have IRD numbers.

There are also other things in the Budget for students, which makes students a huge winner in this Budget. They are things like easier access to first-home grants, which is something we haven’t had before for this age group. There’s the small-business loan scheme, which means that students starting out as business owners and entrepreneurs will have a huge boost to the way they can begin businesses when they don’t have homes to borrow against, which has been the way that small-business owners have had access to capital in the past. This Government has also introduced the Community Connect scheme, which will provide half-price transport for everyone who holds a community services card, which will be most students.

So these payments in this bill will be a big boost for students, and I am proud of that. I’m proud to stand with a Labour Government that responds to need where we see it and sticks true to our values. I commend this bill.

Thank you very much, Mr Speaker. Well, what a fascinating debate, and what we have learnt over the last 24 hours—that last member who’s resumed her seat, Arena Williams, talked about students. How about students who are under 18? They will not be entitled to this. We questioned the Minister yesterday in the committee of the whole House: what about independent students living away from home, providing for themselves? He couldn’t give an answer. And you know why? Because this policy’s been made on the hoof and they have not thought through all this.

We saw it in the paperwork from the advisers: “There is a risk that significant issues with the resulting proposal have not been identified.” Because this was rushed through, thought up on 4 May, and what we saw in the paperwork was that the IRD and the Treasury had an argument because none of them wanted to be the lead delivery agency. They said, “No, IRD will do it.”, and IRD said, “No, Treasury will do it.” None of them wanted to do it, and it’s outrageous.

There’s a quote here: “This makes a one-off payment a poor mechanism for supporting households with a longer-term problem.” And that’s the issue here. This Government’s been caught on the hoof. They would not accept a cost of living crisis. So they put a band-aid in place—$350. And you’d think for all the bureaucrats they have—and there was an argument about people in the top income bracket. Well, how many bureaucrats are now earning over $100,000 a year thanks to this Government? And you’d think with all their advisers, not one of them would have said, “Stop. Hold on. The average income for a Kiwi is $72,000 and they won’t be entitled to this under Labour’s plan.”—$72,000 is the average wage for a Kiwi, and you’re not entitled. Who would have thought! You’ve got to scratch your head. But this is the reality when you make policy on the hoof. It’s a bit like Dad’s Army.

Then it even gets worse, because the Minister had to get up in his first reading speech and accept they don’t have bank details for over 200,000 people yet who are entitled to this, over 10 percent. And then he had to say, “The IRD is still applying for funding to resource the 750 fulltime-equivalents that are needed to roll out this programme. And we know one thing: under a Labour Government, 750 actually probably means about 1,000—1,000 fulltime-equivalent, on top of the 10,000 extra bureaucrats they’ve employed in Wellington already. You’ve really got to scratch your head with this—a band-aid solution to something that is very important for many Kiwis who are under a lot of financial pressure today because of domestic inflation.

These guys have blown $6 billion in the Budget. They’ve raided next year’s Budget by $2 billion, half a billion in the Budget after that, and then because they got caught out with this, this policy’s going to cost $800 million on top of that. They’re out of control, this Government. It’s addicted to spending.

One thing I will leave the House with is, what is the purpose of a Labour Government if it doesn’t stand up for hard-working Kiwis? And what we have today is that for the average Kiwi on the average wage, they will get a big New Zealand Transport Agency red zero. You know those ones that cost $10,000? That is what the average Kiwi will get today—zero. If you’re on $72K, the average wage in New Zealand, you will get zero dollars. And we were challenged by one of the Government MPs down the back there: there’s been no alternate plan put out. Well, I go and say, check. ACT has put an alternate plan out. National has put their permanent tax plan out, that would give an average Kiwi on $72,000 tax relief of $800 a year. Compare that to zero—zero from this Government. They talk a big game but they do not care about hard-working Kiwis.

Thank you, Mr Speaker. It’s a real pleasure to rise and I am delighted to speak in this third reading. For 81 percent of New Zealanders, 2.1 million people, the average wage is 68K—$68,000 roughly. I don’t know where they got their figures from; probably the same place that $4 billion fiscal hole was from.

Basically, I looked at what this means for everyday New Zealanders. Basically, what I did was I calculated my income when I was pre here in Parliament. I was on roughly around $70,000. So I looked at that $70,000, and I still kind of spend like I’m still on that salary. So I looked at the cost of what I would be getting for the $116 per month for the three months. And for those of you who are concerned that IRD does not have your bank account number, we urge you to be in touch. Just go online and give them your bank account number. Some people don’t like to give the IRD their bank account number, but that’s OK. If you want this, you’ll do so.

So there were 14 items that I could purchase for $104: white rice, cheese, 8 litres of milk, bread, 10 kilos of potatoes, 4 kilos of frozen drum sticks, royal gala apples, mixed vegetables, spread, tea bags, coffee, sugar, pasta, silver beet, fruit jam, and crunchy peanut butter. I still had $10 left over, was going to whip down to The Warehouse and buy their $10 can of Milo for the kids. So I also looked and I have 65 litres in my vehicle and I could get 40 litres of fuel. I actually put $60 a week into my vehicle for fuel, so that’s going to help tremendously. The other thing: I pay $60 a week on power. So this is two weeks out of four weeks of power paid for me.

So when we hear all of these wonderful things about how terrible it is, actually real Kiwis are going to have more in their pocket. It’s going to help us to manage this short-term issue and I’m really pleased and delighted to commend it to the House.

Kia ora e te Mana Whakawā. It is always an honour and a privilege to speak in this House, especially today. And can I acknowledge the Minister of Finance. Yesterday, he gave us a balanced, balanced Budget. He said, “The investments we are making in this Budget build on the progress [we’ve] made in Budget 2021.” And may I remind this House what the goal of the Budget is: securing our future. One, we are continuing to keep New Zealand safe from COVID-19. Two, we’re accelerating the recovery from the rebuild and impacts of COVID-19. Three, we are laying the foundations for the future, including addressing key issues such climate change, change housing affordability, and child poverty.

Yesterday, I heard the leader of the National Party say, “The bureaucrats—they’re getting thousands of bureaucrats.” The wage subsidy last year—we had the historic payment to businesses by those public servants. If it weren’t for those public servants, the payments would not reach the businesses so they can pay their workers. The wage, the subsidy, the winter energy payment—the average wage in the Papakura electorate is $56,000; $27 at Countdown Papakura today would get you the following: one loaf of bread, one butter, 2 litre milk, 1 kilogram of rice, a dozen eggs, a block of cheese, a can of tuna. What can you get for $2, if the National Party had their tax cuts? A $2 toilet paper—the cheapest toilet paper is $2. People, when we’re talking about real people, we’re talking about averages. Unfortunately, Pacific people always end up at the bottom, and I want to acknowledge the leadership of the Prime Minister in that as well.

I’ve ran out of time because it’s a quick call, but I want to acknowledge this side of the House—when we’re talking about people, we know what those people are eating every day because we speak with them, we talk with them. And when we’re talking about average people, we are talking about mums and dads next door to us. I end this by saying I commend this bill to the House. Malo.

This will be a lot better, I assure you. This bill is short-term measures for a long-term problem, a cost of living band-aid on what is becoming a rapidly growing wound for Kiwi households. Hard-working Kiwis are going backwards under this Labour Government. A reactive response, a tactical response, is what we’ve seen in this bill. As Kiwis go into Christmas this year, they go into Christmas with a lack of certainty and a lack of trust and confidence in a Government who doesn’t have their backs.

The ANZ quoted yesterday, “Inflation isn’t just a global problem that New Zealand is importing; it’s a domestic issue too.”—completely in contrast to what we’ve heard from the other side. I tell you what, let’s take a look at the front page of the Dominion Post today, which I’m holding up now. I think this personifies the reality and the attitude of Kiwis to this Budget. We have a finance Minister who is absolutely addicted to spending, and that page summarises how much of a flop this Budget is.

Labour’s spending addiction means this country’s books are going backwards—a bill that is part of an unprecedented $6.5 billion of new spending, of which this bill makes up $814 million. The squeezed middle in this country are paying the price for a Labour Government’s lack of fiscal discipline and mismanagement. If you’re the average wage earner in this country on $72,000, under this, what we heard yesterday, you get nothing under Labour.

Total Government borrowings are now over $200 billion. Debt is increasing at 41 percent of GDP, and the average Kiwi family is paying $150 extra a week on living costs, so $27 a week for three months is a short-term sugar hit. It is not going to be anything of substance. New Zealanders need a sustainable long-term plan. Under National, National would fight inflation. Under National’s tax plan, someone on the average income of $72,000 per annum would be better off by $860 a year. Under Labour, they get nothing. A National Government, which I am proudly part of, led by Christopher Luxon and Nicola Willis, will deliver to New Zealanders and provide meaningful long-term relief for a crippling impact of a cost of living crisis, and, more importantly, deliver an aspirational future for this country.

Thank you very much, Mr Speaker. There’s been a lot of emotion this morning. I think it’s because the National Party realise they have been backed into a corner here, and they have a choice. They have a choice today to actually support 2.1 million workers. That’s actually what this is today. They can heckle all they like but the reality is that in about two minutes’ time we’re going to vote on this bill, and they’re going to vote no. This bill supports 2.1 million workers and they’re going to vote no.

They’ve been talking about the average worker, and they know that the average wage in this country is less than $70,000 but they keep saying it’s higher. People can draw their own conclusions as to why they do that knowing that it’s not true. The facts are that a worker on the average wage will benefit from this package. But I wonder why they keep using average over median. Because when you’re looking at average wages, they could increase the wages of every single CEO in the country, the people they want to give tax cuts to, and the average wage will go up. But the rest of New Zealanders don’t benefit. That’s why the average wage is a poor measure.

The median wage, when you have the same number of workers above that line as you have below, is significantly lower—2.1 million workers. Between this payment and the winter energy payment, four out of five workers will be receiving assistance from this Government over winter.

Here’s something for people to reflect on: the National Party voted against the winter energy payment, and they refused to answer a question as to whether they will scrap it if they were to win the election. The National Party is about to vote no for this out of spite. They are, in their minds, letting the good be the enemy of the perfect because they are so puritan to think that only tax cuts are the answer. But tax cuts won’t help those that need it. Even Chris Luxon admits that. When he was asked what the highest earners will do if they got a tax cut, he would say “They would probably save it.” How is that targeted for those that are hurting under a cost of living issue? It’s not. It’s looking after the big end of town. That’s what they care about. They have a chance to prove me wrong, but I guarantee you right now, they won’t.