Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill

I move, That the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill be now read a second time.

As I said earlier, ensuring the fiscal sustainability of the income support system while still protecting the real incomes of beneficiaries and low-income working families is a priority for this Government. This bill will help to achieve this goal by again indexing main benefits to inflation, a measure which has been used for 31 out of the last 35 years. This will revert the previous Government’s action to index main benefits to net average wage growth. In line with ongoing policy, it also adjusts the minimum family tax credit—which tops up incomes to ensure that people are better in work than on benefit—to ensure it remains in step with benefit rates.

Our Government is relentlessly focused on getting New Zealanders into work, and these amendments will help align incentives to achieve this goal. We want people receiving a main benefit to continue to have enough income to meet their basic needs, but also to ensure that the best way to get ahead is through a job.

It is important that this change be made as soon as possible to allow the rate of main benefits to be indexed to inflation when the yearly adjustment of rates is implemented on 1 April 2024. This will both ensure that the benefit system starts upon a path to greater fiscal sustainability and contributes to changes that emphasise the importance of work in New Zealand. For this reason, I commend this bill to the House.

I have 10 minutes now to speak, which is wonderful. I want to specifically speak to some of what is contained in the supplementary analysis report for this particular bill, because the bill does not outline all of the implications. I think it’s important to note the limitations and constraints on analysis, given that this is going through in urgency. It is stated really clearly in a section in this particular report that “The scope of analysis in the Supplementary Analysis Report has been restricted in the commissioning where Treasury advised to only analyse the impacts, risks, and other elements of the Government’s chosen way forward for this legislative proposal. Options other than those chosen by Cabinet are not analysed in depth.”

This runs counter to that Government’s early narrative and line about wanting to be an evidence-based Government. We have heard from them that they want to make decisions based on evidence, and yet everything that we have seen, including what we see in this report, says that this is not the right thing to do in terms of the impacts that it will have disproportionately on certain groups and the impact that it will have on child poverty.

I was most concerned about a number of sections in this report, and it is important that the general public are aware of the supplementary analysis report because of the fact that this bill is going through in urgency and because not all of the detail is contained in the actual bill.

The report is really clear that “The change in indexation settings is likely to directly affect main benefit recipients, who are low-income New Zealanders.”, and that the change is most likely to impact on “population groups of women, Māori, and Pacific peoples, and disabled people”. In reference to disabled people, the report also goes on to state very clearly that some of those disabled people that are on benefit are actually not able or do not have the ability to enter into the workforce. Indexing to wage growth, which we know is generally higher—not always, and we’ve seen it in recent years—is the fair thing to do for those that are already on the lowest incomes and for those including this particular group, some of whom are not able to work at all or some of whom have many barriers to being able to get into employment in the first place.

The thing that really concerns me that we’ve touched on, and many of the speakers in Opposition have touched on today that the Minister has not spoken directly to, is the actual impact that this bill will have on child poverty targets and the reduction targets moving forward. As a Government, we made reducing child poverty a target. We actually took it so seriously that we enshrined it in legislation. That side of the House, when they were in Opposition, actually supported that legislation, and they now need to be held accountable to actually meeting those targets. So when they introduce a bill like this, where there is evidence that clearly states that it will actually reduce their ability to meet those child poverty reduction targets, then they should be ashamed of themselves.

If we look at the supplementary analysis report and we turn to paragraphs 30 through to 32, the actual forecast impacts on child poverty reduction should be of concern to everyone in this House and should be of concern to the general public. It states really clearly that “Preliminary modelling … shows that indexing main benefits to inflation leads to an estimated increase in the number of children in poverty under the ACH50 and BCH50 poverty measures over the forecast period, in the absence of other changes.” Well, we haven’t seen any other proposed changes from that side of the House that are going to mitigate the risk of child poverty continuing to grow under that Government.

It also states forecasted numbers for what that increase in child poverty is likely to look like. It states that “By tax year 2028, there would be an estimated increase of 7,000 … children under the ACH50 poverty measure, and an estimated increase of 7,000 … children under the BHC50 poverty measure. … Beyond the forecast period we would expect this change may have a particularly significant impact on the primary, before-housing-costs measure of child poverty.”

So when the Minister stands up in the House and says they’ll continue to increase benefits, it will continue to rise with the cost of living, we know that that Minister is being disingenuous, because the change that we made would have seen benefits go up slightly more each year than what we will see now because of that Government’s decision to revert back to the Consumers Price Index (CPI).

As I said earlier, Judge Andrew Becroft, who was the Children’s Commissioner at the time, made it really clear that changing of indexation of benefits to wage growth as opposed to CPI is one of the most significant things that we could do to actually support with reducing child poverty over time. And yet that Minister and that Government continue to ignore the advice that we have been given.

What is saddest is that the only reason that they are doing it is because they went into an election campaign promising tax cuts that they had no actual plan for how they were going to be able to pay for and then were reduced to having to turn to the most vulnerable, poorest New Zealanders to look for the cash to be able to prop up the tax cuts that they had committed to funding. So over the forecast period, yes, the Government is going to get an extra $670 million to support them to pay the tax cuts. But who is that money coming from? It is coming from the poorest New Zealanders who are struggling more than anyone else in this country during a difficult time with the cost of living, and they feel no shame about the fact that they are doing that.

I have to say it’s not just this—however, this is, I think, something that we should be turning our attention to with some urgency. It is the fact that alongside that, the Government has taken away the free prescriptions; the fact that the Government has also taken away the free public transport for children and half-price public transport for young people. All of these things have an impact mostly on those families that are already struggling. And where does it come from? It comes from an absolute no duty of care to the people that are the poorest.

I want to say, you know how hard it is for these families living in poverty? I’m not sure whether that side of the House really does—and how much harder it is to pull yourself out of poverty when you’re actually living in those circumstances. What I’ve observed over the course of my life is that those who have the most continue to get given the most. Those who have the least continue to go down this downward spiral and to get the least. And how is that fair? How is that fair for Aotearoa New Zealand, in a country where actually we have been quite egalitarian over the course of our history and our time, where we actually have had a propensity to care about the most vulnerable, the poorest, those that need us to turn our attention and support to them? Yet what that Government is doing through this very significant change, actually, runs counter to what I believe is the spirit of New Zealand, one that cares for and tries to provide support for and puts a ladder out for those who are struggling to be able to climb out of the situation that they are in.

It isn’t just this that I’m concerned about. I’m actually concerned about what we’re going to see on top of this moving forward, with the proposed cuts across the public sector, including to the Ministry for Social Development. We know that they have no qualms in actually taking the funding away from the most vulnerable. So what else will be cut?

We heard from the Minister that her response to addressing child poverty is to make people get off benefit. In fact, she’s planning on setting a target for the number of beneficiaries. Well, can I just say that that will only create perverse incentives for the system to push people off benefits and will not support with us as a country being able to reduce the number of children that are living in poverty.

That Government, I have to say, should be ashamed. And I’m looking around at some of the members who I think are actually being quite considered with this debate and listening to what is being said. I am not making up the things that I have said. They are clearly outlined in the supplementary analysis report for this bill. I encourage all members of the House to read that and to actually think about whether or not this is the right course forward. We do not believe that it is. We think that they need to do a big turnabout on this. I don’t have hope that that will happen, but we are here to debate this and we will push this to the very end.

Let me add some contributions that, hopefully, shouldn’t come across as controversial in that I think people should be treated with respect and dignity, including people on the benefit. Everybody should have a right to participate in their communities, and everybody should have a right to a warm, safe home and enough kai to put on the table. Yet despite seeing the “nots” from members on the other side, what this bill is intending to do is to undermine all of these things by lowering the increases to benefit levels that have been already set by successive Governments below the poverty line.

Benefit levels, as they stand, do not enable people to do any of these things, and the system does not treat people who are receiving income support with respect or dignity. And it is not good enough for the Minister to say that because things have always been this way, because for 30-plus years we’ve just indexed benefits to inflation, we should keep things as they are. That statement is so, so indicative of the approach of this Government and in fact too many Governments. They believe that the policies introduced by neo-liberal approaches in the 1980s and the current status quo is good enough. They omit the fact that we have seen record inequality as a result of these policies introduced during that neo-liberal period, and they do drive intergenerational poverty.

So to pretend that just because things have always been this way, they work, is to completely ignore the evidence that we’re living in a period of heightened inequality with our front-line services, charities, and community organisations being under the pump. So the Minister once again needs to turn her face to the street to actually engage with the realities that people who are going to be impacted by lower benefit increases are going to be subjected to.

Our communities deserve more than crumbs. Our communities deserve more than us debating for the crumbs that indexation will cause and will deliver for our communities. Our communities deserve benefit levels that enable them to fully participate in the community, enable them to put enough food on the table, and enable them to feel like they’re treated with respect and dignity.

And to that last point, when we have members of the Government making speeches and talking about people on the benefit as if they’re just numbers and people that can fill in a stadium, that contributes to the dehumanisation of a whole group of people. When we don’t engage in relation to the lived experiences, when we don’t engage with the realities that when someone is on a benefit, they’re subjected to conditions that do not enable them to even participate meaningfully in the workforce, when we have a social security system that cannot even quantify the kind of jobs that people go into, or the wages that people go into, then the arguments from the Government around how lower increases to benefits will lead to better employment outcomes is nothing but spin and omits the hardship that this bill will contribute to. The hardship that already exists will be compounded by a Government that, out of sheer cruelty, wants to lower those benefit increases.

There is no balance to be struck in relation to the outcomes of this bill. The savings the Government supposedly will make by lowering benefit increases will be incurred in costs by people needing to get hardship grants and people needing to take on more debt just to survive. They are simply passing down the costs, either to the hardship assistance that is already being delivered and is already at record-high levels, or to the front-line services that are already struggling to make ends meet.

So let’s make it clear: this bill is just shuffling the costs that would have been incurred by increasing baseline benefits to other parts of the system and other parts of our community. Having baseline benefits that allow people to live with dignity actually takes pressures off the system. It takes pressures off staff who are delivering food grants day in and day out and who probably want to more meaningfully engage with people on the benefit in relation to those employment outcomes that the Government talks about.

The reality is that the Government members have not actually accurately described the realities that Work and Income staff members experience or the realities that people on benefit experience. They think that it’s simply a matter of making life harder for people so that they feel more encouraged to find work when the system doesn’t even enable people to participate meaningfully in employment.

Picking up on those first reading comments is really, really important because they’re indicative of the broader debate we’re having in relation to this bill but also to the welfare system more generally and this assumption that we can just push people further into poverty and that doing so will further encourage them into employment. But all it will do is, again, contribute to toxic stress, poverty, debt, homelessness, and criminalised communities that are already struggling to make ends meet.

The paper that other members alluded to helps illustrate this picture as well, particularly in relation to a group that will be most disproportionately impacted. When I did some parliamentary written questions to the Minister, the answer I got painted an even clearer picture in that disabled people, those without those work obligations, are going to be the ones who will lose the most compared to jobseeker beneficiaries. For example, cumulatively over a period of four years, somebody on the jobseeker benefit will be worse off and will not see about $1,800 as a result of these changes, whereas for somebody on the supported living payment that difference will come up to $2,200.

These are people who we identify and recognise as needing support, and we know that full-time work may not be suitable. But, actually, independent of somebody seen to be fit for full-time employment or otherwise, it doesn’t mean they don’t have a right to life with dignity or that they should not be treated with respect. And for those who are on the jobseeker benefit, we don’t account for all the other contributions they do. The system in fact has very little way of accounting for that—for example, the care that they may be providing to family members, particularly those that may not be part of a nuclear family, or the volunteering work they do. In fact, our volunteer workforce is in large part made up of people on benefit, yet the system does not take that properly into account.

The Government members paint a picture as though people on a benefit don’t deserve to live with dignity and as though they’re not making contributions of their own outside of employment. When members talk about the dignity of work, they’re basically implying that there is no dignity when somebody is not in paid employment—that there are no other contributions that bring about dignity. And when members of the Government talk about the poor outcomes that people on a benefit experience—for example, lower incomes—they fail to admit that those members are the ones who set those incomes. Those poor outcomes are decisions by successive Governments. The paper that the Minister keeps referencing in terms of those outcomes are just outcomes out of the decisions that people like her have made for decades. They didn’t just appear out of thin air. We decided to enable those poor outcomes by setting our welfare policies in a way that is punitive and doesn’t contribute meaningfully to employment.

Again, when the Minister talks about how lower increases to benefits will incentivise employment, she may want to reflect on the fact that we don’t actually even keep a record of who goes to these work seminars. We don’t keep a record of the type of wages that those people get when they do enter employment. She has no information about this. She has no evidence of what she’s talking about. She’s going off on these assumptions, and on Q+A when being questioned about the evidence that she was using to base this bill, she talked about, “Well, there’s a different range of views. There’s a different range of research.” Actually, she’s not even able to substantiate the type of research that would back this, once again breaching her coalition agreement and the supposed approach of basing legislation on the best available data.

In fact, we have the opposite. We have available research from here and from overseas jurisdictions with similar income support systems that show that benefit sanctions and low incomes contribute to many things but not to good employment outcomes. We have people on the benefit who have generously for years shared their experiences, whether it’s in the We Are Beneficiaries report or the Welfare Expert Advisory Group report, or constantly in the media talking about what it is like for them.

And we cannot pretend—Ministers or any of us—that our lived experience is indicative of the hundreds and thousands of people who may be on the benefit. We cannot go into this place and assume that our sole experience of people who are now in a privileged position reflects the hundreds of thousands of people who are going to be impacted by lower increases to benefits.

So I look forward to engaging with the Minister on the facts, not just on her vibes on why she wants to drive lower increases to benefits in the long term, effectively pushing people into hardship and into debt.

Thank you, Madam Speaker. That was a very interesting contribution. It seems like the member, Ricardo Menéndez March, thinks—they, because we don’t think like that—that the system doesn’t treat people on benefit respectfully. We do treat people, everybody, with respect, and this is their thinking, not our thinking.

The other thing which I understood from that speech that the member was giving just now is that the member thinks there is a problem if people—those who are on benefit—get into employment. We don’t see that to be a problem. We want people to get into employment because that is how people will have better lives. But we do support the benefit system because we want to see that people are getting enough, sufficient to survive, and also we don’t want to see people slipping into poverty. So these are the two—if I have to simplify—main reasons for our benefit system.

So it is not a system that people can take for their whole life. If they can go out and work, they should be going out and working. And that is what this Government is focused on and ACT is focused on. And the arguments that I’ve heard so far from members on that side is that just because they had this approach of linking main benefit to wage growth, that is the right approach, and any other approach is going to be a wrong approach. We don’t agree with that. I haven’t seen any logical reason from their side. The ACT Party supports this bill. Thank you.

New Zealand has been unmoved by the protestations across the House during the first reading, and we’d just like to reiterate, for those watching on telly or those trainspotters that will read through the Hansard, that we are actually talking about guaranteeing increases indexed to inflation to our main benefits.

One of the things about getting a bit older is I’m old enough to remember a time when the Labour Party stood up for workers. We know that the Greens get all their votes from leafy suburbs and have never stood up for workers. But what hasn’t been said in this debate is: what about the moral hazard here? What message are we sending to those hard-working Kiwis that get up every morning, get in the traffic, or go out, roll their sleeves up on a farm, or whatever they might be doing, in the meat works or down the mines—what are we saying to them? When they have their hard-earned wage increases, that’s something they’ve done off their own backs, through their own productivity, and those hard-working Kiwis have to pay their taxes, and increasing taxes.

If we simply just say that that increase should flow through to people that are not doing that—and we’ve heard from Dan Bidois: nearly 70,000 extra people on the jobseeker benefit. There is a degree of people that are choosing not to go to work, and we heard that from employers up and down the country. I think where there is some merit, we’re talking about people with disabilities and getting them into work, and I agree that there is an untapped pool of resource there. I know, through this full unemployment period, that employers are looking more to tapping into that workforce, and I think that is a trend we’ve very much got to get in behind.

But it’s more getting to the root and branch of it—stuff like what we’re doing around economic development, around the fast-track legislation to absolutely unleash and turbo-charge economic activity, particularly in our regions, and create high-paying jobs. That is the thing that will move the needle for these people that are on the benefits and getting them in the dignity of work. It is this Government’s role to create the opportunities for employers to employ and pay good jobs. So it’s more about getting the regulatory settings—this is how we’re going to approach this problem over here—for business so that the country as a whole can be successful, drive higher incomes, drive more employment, get some of those extra 67,000 New Zealanders that are on a jobseeker benefit into the dignity of work. That will be our approach on this side of the House. That is what New Zealand First will support, so we commend this bill to the House.

This is a split call. I call Takutai Tarsh Kemp.

What we are seeing from this Government is that they are making life harder, and to be honest, I know exactly how hard that is because I’ve seen it every day, all day, at Manurewa Marae. They do not leave, and our whānau are going to continue to line up requiring benefit support, requiring kai on the daily, and it is going to be our people that are struggling the most and hit the most. First they came for workers’ rights, then they came for workers’ pay; now they are creating a beneficiary State. The only people that will benefit from this bill are their rich mates. Māori always bear the brunt of these bills. First in the door, last to leave at the Ministry of Social Development—and, in fact, first in the door at the marae, last to leave the marae with the support that they need, because they need manaakitanga.

Here’s a real solution: Te Pāti Māori are not here to reduce poverty; we are here to eliminate it. Get a wealth tax, put on land tax, remove GST from kai. Whānau can get seven weeks’ free kai. Raise the minimum wage to $25. This will be better for our whānau. Double baseline benefits. I encourage this Government to get out and actually, from behind your chair, go and see the organisations that are front-lining and seeing our whānau get hit the hardest. Go to Manurewa Marae, go to Papakura Marae, go to the Manukau Urban Māori Authority. There are many Māori organisations. Actually, Auckland City Mission is another one—go there and see the whānau that are struggling.

This bill will continue to make it harder and our whānau worse off. You know what? I can still see the struggle on the faces of our whānau. I see the whakamā in their eyes, I see the sadness in their āhua, in their wairua, and this is going to make it even worse for our whānau. Our whānau deserve better, and that’s why we will not be supporting this bill. Kia ora.

Thank you very much. It’s quite hard to sit in here—not surprising, but difficult to sit in this place and hear the cruelty, still not surprising, of the Government members in this very House making the worst dehumanising assumptions: boring, old assumptions, decades old unproven assumptions, clearly with evidence against these assumptions, about people receiving income support. It is difficult because it flies in the face of humanity.

I want to pick up on what my Manurewa whanaunga has said—Tarsh Takutai—in terms of what is actually the reality on the ground. All people—surely we can agree in this House—must be able to live with dignity.

Now, I might just take us back to some incredible work that was done by the Welfare Expert Advisory Group from the former Government. The goal and the vision of that group was that we have a welfare system that ensures people have an adequate income and standard of living, are treated with and can live in dignity, and are able to participate meaningfully in their communities. Now, that group which went around the country and sat in front of the very people at the front line experiencing the realities of decades of political decisions that have kept the lowest incomes below the poverty line. They sat with the front-line organisations who then have to come in and clean up the mess that successive Government decisions have made by entrenching intergenerational hardship and struggle.

And that welfare group included, for example, that well-known lefty, Phil O’Reilly, previous chief executive of Business New Zealand, who was very clear and full-throated in his own analysis, after having worked at the highest levels of business and community, who was clear: they are simply not receiving enough, because he felt the essence of people doing their best.

Now, I have to be very clear about people doing their best with what little they have, because I have just heard the last two Government members of this House attempt and actually use the words to say hard-working New Zealanders, and inferring then that people receiving income support are not, that people receiving income support are not hard working. That absolutely upholds an age-old, stupid, boring stigma that they are lazy.

Now, the Welfare Expert Advisory Group that travelled the country and listened to people affirmed that people are doing their best with what little they have, and that what is needed is, actually, to increase properly all benefits above the poverty line. Actually, those are political decisions that we have the choice to make. We have the choice to end poverty overnight. We have a choice to redistribute wealth.

Now, have a think about this: the Welfare Expert Advisory Group was pre-COVID, it was pre the impacts of climate change that have just happened, it was pre a period of COVID lockdowns that saw those with assets and wealth who, by doing nothing, had their assets and wealth, what, triple—by doing nothing. And those living on the hardest incomes were put into more material hardship. So who on earth are we calling lazy in this House? How dare we—how dare we.

The Greens were clear: we can end poverty overnight, redistribute the wealth—wealth tax, capital gains taxes, land taxes. Redistribute what was not earned in the first place, and how about even just put foodbanks out of business? The people serving food to our communities, they don’t want to be doing it. They want the families to be having enough to maintain their own mana motuhake and dignity and increasing the incomes for those on the lowest is absolutely the way that we can do that and is absolutely the way we stop intergenerational poverty and it’s a decision that we can and must make. Thank you.

I have to take a deep breath. The 31 years of indexing the main benefit to the Consumers Price Index (CPI)—31 years—says that a lot of effort has been put into attacking the challenge of balancing what beneficiaries can be given, what the country can afford to give, and encouraging beneficiaries who have the choice to work, to be out there and working.

Much has been said to disparage the statement “dignity of work”. Dignity of work does not constitute saying to someone else who may be working less, or not working at all, that they have no dignity. There is dignity in poverty as well. You know, I’m a father of four daughters, and the primary reason for not using labelling in the household is that it has real grounded benefits, and I think that while we can speak about labels and use words that attack other people, that has no place in a discussion like this. The bill that we have is really meant to achieve that balance that the 31 years of indexing the main benefit to CPI has been trying to do, across parties, and that is what we are trying to do as well. I commend this bill to the House.

E te Māngai o te Whare, tēnā koe. Thank you, Madam Speaker, for the opportunity to take a further call on this bill. Given that we have 10 minutes in this contribution, I will take a little bit more time and won’t be so rushed with my comments, because I think it is important to get on the record the evidence that we have before us and the information that we have before us, which comes in the form of the supplementary analysis report on the indexing of main benefits to inflation, and also the departmental disclosure statement.

In the earlier contributions in the first reading and some of those today, I think people may assume that we are speculating or making these things up. But, in fact, on our side of the House, we have been referring to the information that has been reported to this House, and I think it’s important that I take the time to point some of those things out. I do, though, want to start by actually pointing out that there are limitations and constraints on the analysis that we have on the bill before us, and that is because this is being done under urgency and it is being done so that it can be in place in time for the 1 April changes.

In the report, it says, “Because of the time sensitive nature of the proposal, it was progressed through the mini budget in December 2023. … Due to these tight time frames, it has not been possible to conduct external consultation on this proposal.” So I refer to the contributions from Takutai Tarsh Kemp, where she said to go and meet with the people at Manurewa Marae and to go and talk to those in the sector. Well, as we can see from the report here, that has not been possible because of the time frames in which those members want to implement these changes. It is noted in this report that there has been no external consultation on these proposed changes.

Further to that, it says, “The scope of the analysis in this Supplementary Analysis Report has been restricted in the commissioning where Treasury [were] advised to only analyse the impacts, risks, and other elements of the Government’s chosen way forward for this legislative proposal. Options other than those chosen by Cabinet are not analysed in-depth.” So, in short, there were no other options explored in terms of this.

I turn to the departmental disclosure statement, and, as I mentioned and spoke about in my first contribution, my concern was that there was little or no Treaty analysis done, and why that is important is because, as is stated in the supplementary analysis report, Māori will be disproportionately impacted by these proposed changes. So in the departmental disclosure statement, which asks, “What steps have been taken to determine whether the policy to be given effect to in this Bill is consistent with the principles of the Treaty of Waitangi?”, it says, “As Māori are disproportionately represented in the population receiving main benefits, the amendments contained within the bill to the indexation rate of those benefits will, in turn, particularly impact Māori. Due to the nature of this proposal as a manifesto commitment and the compressed time frames associated with its implementation, there has been limited opportunity to conduct Treaty analysis of the proposal.” That concerns me.

Turning now to other points identified in the supplementary analysis report, the main conclusion of the report is that this will result in beneficiaries, over the long term, actually receiving less income. We heard from the Minister that this is about addressing the cost of living crisis and that this is about providing beneficiaries with more income. However, what the supplementary analysis report says is that while for one year that may be the case—and it is a very small increase—over the long term, there will be less income, and they conclude that it “may result in slower progress in achieving child poverty targets as set by the … Act in 2018.”

In the supplementary analysis report, it says, “What is the problem or the opportunity?” I would like to focus on what I think is the opportunity for the Government. The opportunity for them is that indexing main benefits to inflation presents an opportunity to create fiscal savings in the longer term, leading to a more sustainable cost to the Government, and what would they need fiscal savings for? Well, they need it to pay for their tax cuts, and they are going to take from the poorest. They are going to take from the poorest and from the most vulnerable—from women, Māori, Pasifika, and people with disabilities—to pay for their tax cuts.

What it says in the supplementary analysis report is that the total net savings over the forecast period comes to $669 million—almost $670 million. We are going to take that from our poorest—from our beneficiaries and from our children who live in these households—to pay for tax cuts, so let’s be very, very clear about that. As I said in my earlier contribution, as the spokesperson for children, this concerns me. This proposal that we are debating today is going to mean that we have more children in poverty.

Now, I have heard in the debate so far that for 31 years, all Governments indexed it to the Consumer Price Index (CPI). When the Labour Government made this change in 2020, what we saw was the largest increase outside of one-off adjustments in nine years. You know, we take a similar approach to adjusting superannuation, so that’s fairer and more consistent and it will help reduce poverty amongst our most vulnerable. Adjusting rates to increases in the average wage ensures that we share the benefits of a strengthening economy, and it means that those on benefits don’t fall further behind.

I now want to turn to the part in the supplementary analysis report which says what the direct impacts of this bill will be on main benefit recipients. It is clear in the report that “The change in indexation settings is likely to directly affect main benefit recipients, who are low-income New Zealanders.”, and that the change in main benefits “will disproportionately affect people who identify with the population groups of women, Māori, and Pacific peoples, and disabled people, who are overrepresented within the main benefit population.” Women, for example, make up 55 percent of those receiving a main benefit whilst only being 50 percent of the population. It says that “Māori are overrepresented in the population who receive main benefits in comparison to the wider population.” For Māori, “Approximately 39 percent of people receiving the main benefit are Māori, [compared to their only being] 17 percent of the general population.”, and for Pacific people, they are also overrepresented, by “making up 12 percent [of the population receiving main benefits] compared to [their being] 8 percent of the general population.”

I want to reflect on the contribution from the New Zealand First member, when he said—I wrote it—about disabled people that “they’re an untapped workforce”. The supplementary analysis report, at paragraph 29, says, “Disabled people and people with health conditions will be affected by a change in indexation settings. … Beneficiaries that are not able to work will also be impacted by this change, but will have no ability to enter work to change their situation.” These are people with disabilities. These are people with health conditions that prevent them from being able to work. Shameful!

In the last minute that I have available to me, I say that I am really proud on this side of the House of the progress that we made under the Labour Government. When we made this change, it was recommended by the Welfare Expert Advisory Group. It was welcomed and commended by the Children’s Commissioner at the time—Judge Andrew Becroft—as the single biggest thing that would impact on child poverty. We had, under Labour, 77,000 fewer children in poverty. I am concerned for our tamariki who live in the households of those receiving main benefits. They are going to be the ones who are going to suffer as a result of this mean-spirited change where we take from the poorest to pay for the tax cuts that the National Government, supported by ACT and New Zealand First, is hell-bent on providing.

I’d like to focus my brief contribution on one number: 67,000. That’s how many extra people on a jobseeker benefit there are under the last six years of Labour—67,000. That is the challenge that we face to turn things around. In fact, the number of young people on a benefit is up 50 percent under the last Labour Government. So I’d like to just reflect on a couple of comments. The first is from Marama Davidson, how we end poverty overnight. We can end poverty overnight by getting these people into a job and things like Mana Motuhake. This is about actually getting them into a job. Tino rangatiratanga is about getting them into a job. Dignity is about getting them into a job. Progress is about getting them into a job. That is the focus that we have on this side of the House: to move those people into jobs so they can make their lives better; they can live independently. That is going to be our focus. I commend this bill to the House.

This is a split call. I call the Hon Jan Tinetti.

Thank you, Madam Speaker. I’m absolutely sad, to be fair, to be speaking here today, because this is a terrible piece of legislation, and as someone who used to be the child poverty reduction Minister, I’m heartbroken that we are even discussing this. Child poverty reduction is an incredibly hard goal, but this Parliament came together to vote for that legislation, and it was a world-breaking piece of legislation that we have had in this country. Then, as our Government moved towards those targets, we looked at ways, with our welfare advisory group, of how we can best meet those really ambitious targets that we had, and all nine of the child poverty reduction targets were trending downwards.

What is really sad is that what this bill is turning around is that indexing of those benefits. We’ve heard here from so many speakers on this side of the House that one of the main aspects of that child poverty reduction happened in 2019, when, through that Budget, benefit abatement thresholds were increased and main benefits were indexed to align with net average growth rather than inflation. This is particularly important and critical for maintaining the progress towards the before-housing-costs 50 target. If people on the other side of the House aren’t really sure what those targets mean, look it up and make sure you absolutely understand what is happening here today and the difference that it will make, because in the supplementary analysis report—and, particularly, I heard my colleague the Hon Carmel Sepuloni talk about this—in paragraphs 30 and 31, it talks about “In isolation, indexing main benefits to inflation may impact progress towards child poverty reduction targets. Preliminary modelling … shows that indexing main benefits to inflation leads to an estimated increase in the number of children in poverty [in] the [after-housing-costs 50] and [before-housing-costs 50] poverty measures over the forecast period”.

What does that actually mean? That means 7,000 children put into poverty under those measures, each of those measures—7,000 under each measure. What does that look like? That looks like an impact on women, who are predominantly situated within those benefit recipients but also sole parents as well; 80 percent of our sole-parent population are women. That is a huge impact on them and therefore a huge impact on those children. That is absolutely shameful that we see so many young people that will be put back into poverty just by the stroke of a pen and by the passing of this piece of legislation.

What does that actually look like in reality? That means food insecurity. That means young people that don’t have enough clothing. If you look at the measures that make up those particular measures, you can see children that don’t have more than one pair of shoes, if any pair of shoes at all. That means children who are living in trauma because of the impacts that poverty has put on them. That is 7,000 more children on each of those measures of reduction that will be put back just because of the passing of this legislation.

But alongside that, we see some other measures as well. The impact of the scrapping of the 20 hours’ free childcare for children aged two years—now, that was something that I was particularly proud of, because it meant that more young people could go to childcare and more people would have the flexibility, more women would have the flexibility, to be able to choose to go back into the workforce. We hear the other side saying, “Oh, we’re interested in people getting back into the workforce.” How do they expect women to get back into the workforce if childcare’s being taken away from them? You know, I haven’t heard that answer here in any of this. What they are impacting on is they’re impacting upon young people going into poverty and their parents not having access to that childcare. This is not a Government that is interested in lifting children out of poverty; they are interested in funding their tax cuts.

E te Māngai, ko tēnei te wā tuatahi i tae mai au i tēnei Whare whakahirahira, mai anō i tāku kōrero matua ki tēnei Whare, nō reira tēnei te mihi ki te Whare.

[Madam Speaker, this is the first time I have arrived in this magnificent House since my maiden speech to this House, and so I acknowledge the House.]

This is my first time speaking in this House since my maiden speech. In my maiden speech I sought to lay out my desire to want to listen carefully, to āta whakarongo. If the people of Maungakiekie were going to send me here to serve them and the wider the people of Aotearoa, then surely I would have much to listen, so I have listened carefully this morning to this debate.

Can I say to the members opposite that I do not believe that we disagree in terms of our motivations. The reason that we have all come to this House is because we want to see all people flourish, and that includes helping those people who genuinely need help, and we know that there are thousands. We know that there are tens of thousands of people in New Zealand who need our help, and that is why we have our benefit system. So what is not on trial today is the motivation for what we are doing.

What is on trial today is our different approach to how we help those people, and one of the fundamental differences here—and the point was acknowledged by the previous speaker, Hon Jan Tinetti—is the focus that this side of the House has on work. We do acknowledge, absolutely, that there are many people, for various reasons, who are not able to work. But it is important that we have a distinction in income between work and benefits because it provides, amongst other things, an incentive.

When I speak, Takutai Tarsh Kemp, to your invitation—and I share your wero ki ngā tāngata i tēnei Whare [challenge to the people in this House]—to go to the front line and to meet the whānau that you serve admirably there at the Manurewa Marae. I would say that that is what I have spent much of my career doing, with an organisation there called Te Whakaora Tangata. And of all the work that we do with those whānau, there is virtually nothing that brings more hope and more dignity to those whānau’s lives than when we help them find a job. I commend this bill to the House.

Thank you very much, Madam Speaker. Now, sitting back and listening to both the debates in the first and now the second reading, to sit back and take it all in, I really have to ask myself, what type of a society is this Government trying to build? What type of a country are we building in our future? The answer to that is a divided one.

The argument for this bill, which will reduce all main benefits—the only argument I have heard over the first and the second reading is that there’s too many people on the benefit and we need to get them off. I have not heard how we will get more jobs; I have not heard how we will support more education and training; I have not heard how we will support parents to get better childcare, to be able to start work when kids have been born; I have not heard about how there is a plan for young people to get them in training and employment and education. I have not heard any of these answers.

Sadly, what I have heard is that there are enough people on the benefit to fill a football stadium, and then snicker and laughter. That is what makes me sick, that this is some kind of a cruel joke to divide our society, to say there’s enough people on the benefit to fill a stadium, and that’s somehow a joke. That is a joke to this Government; that we have people who are struggling to pay for food, who are struggling to feed their children. This is a Government who campaigned on addressing the cost of living crisis in New Zealand, and they laugh at those people who are struggling to feed their own kids on a daily basis.

That is why this Government represents “let them eat cake”, because they don’t care. They do not care about those people who are doing it tough in New Zealand. They are duplicitous and they are two-faced and they front up and they say things like—Louise Upston says, “But beneficiaries will be better off under our Government because we will be dealing with the cost of living crisis. We will be growing the economy to support more job opportunities as well as improving health and education.” But also Louise Upston said on Newstalk ZB when asked “To be clear, will beneficiaries be, under the changes, better off under the changes you’ve made and receive more or less money this time on the current projections than they would under the previous system?” The answer from the Minister was they are likely to get less, marginally, yep.

Hon Louise Upston: Two dollars! Two dollars!

So the reason—$18, actually, over a long-term projection. So, when you’ve got a Government that is fronting up and telling New Zealanders that they are here to fix a cost of living crisis and they are saying that this is going to work but you’ve also got Ministers on the record admitting that under this bill the amount of money going to beneficiaries will decrease, that is two-faced and that is duplicitous.

So when we look back and see what we’ve got to do, there’s a problem in that there is no plan to address how we shift people off the unemployment benefit and how we provide them with dignity and meaningful employment. There is no plan in that space and that is what this Government is lacking. They have come in, guns blazing, and wiped out legislation like three waters, like this, again with no plan in place. There’s no plan to fix the problems that we are still facing as a country, and that is incredibly concerning.

I really wonder, sometimes, whether some of the members opposite have actually dealt with people on the benefit or met them or engaged with them. The mum with three kids who is trying to—they want to cut that benefit. So how do we provide for the next generation of New Zealanders and provide them with the skills, the training, the education, and the support? When we look at the regulatory impact statement from their own officials, who have provided the information for this bill, they say that changing the indexation will have a direct benefit and it will in fact disproportionately affect people who identify with population groups such as women, Māori, Pasifika, and disabled people; people who are already overrepresented in the main benefit population.

So we know for a fact that those people doing it tough are going to do it even tougher. Yet, still, this Government states that they are here to fix a cost of living crisis. I wonder whether their fiscal discipline that they have spouted, their fiscal discipline which will save them $670 million from this legislative change in the House today—$670 million taken out of the pockets of those people struggling to feed their children—will be now carved off and put into tax cuts? Now, if I ever saw reverse Robin Hood, it’s this bill. It’s stealing from the poor and giving to the rich, and it’s disgusting. The fact that they can sit there and laugh about it, draw a ring around those people and say that they can fill up a football stadium and find that amusing shows just how out of touch this Government is.

I look forward to hearing what their solutions are to the problem of having enough people on the unemployment benefit to fill a football stadium, because I think that there needs to be some more information provided by the Minister and by those members as to what the solution is to this problem. Just by, as the New Zealand First member said, you know, firing up the economy and having a bit more excitement going on there, that’s somehow going to trickle down and give those people who can’t feed their kids a bit more money in their pocket. Well, we all know that’s a failed experiment. We all lived through the 1980s and we all know that those people who saw that austerity delivered under Ruth Richardson and previous National Governments just made those at the bottom suffer even more.

That’s exactly what will happen again because there are no new ideas from this Government. They are simply repeating the same failed mistakes of previous National Governments. They simply look back over what was done and they do it all over again. What we’re seeing is those people who do it tough, those people who only get a 2 percent increase on the minimum wage, those people who are on unemployment benefits, those mums who are struggling to pay for childcare, those people who want to get their free prescriptions; all those people do worse under National.

So I look forward to seeing how they’re going to pay for these promised tax cuts. We all look forward to this Budget to see what kind of disaster will be wreaked upon the rest of New Zealand, what times of deep Public Service cuts we will see with a 6.5 to 7.5 percent cut right across all our public services. Again, it will be those people struggling that will do the worst out of this.

I’d like to close with a bit about what was done under Labour’s track record because I think it’s important that we put that on the record. Our families package helped 330,000 Kiwi families in its first year, increasing the accommodation supplement and through the family tax credit, and by also introducing the Best Start payment and also the winter energy payment. As a first step of the review of Working for Families, we implemented changes that meant 346,000 families were better off by an average of $20 a week. That’s better off, not worse off, which is what this Government does.

We made generational increases to the main benefits and indexed them to average wages, ensuring that they increase over time, and it’s so sad to see that taken away and step backwards, because the opposite is going to happen with this legislation: they will decrease over time. So those who are already doing it tough will be worse off in New Zealand in a cost of living crisis under a Government who promised to tackle a cost of living crisis and was elected on that basis. Duplicitous. We increased main benefit abatement thresholds to $160 a week, boosting beneficiary incomes by ensuring they keep more of what they earn from part time work. And mark me, this will probably be the next thing to go; we’ll see abatement thresholds come down as a way of decreasing and getting more money carved off to the side to fund tax cuts that were unaffordable when they first did their numbers.

This will be a scramble of a Budget for National. They will be looking at any way possible to carve off money from those who need it the most. I’m sad and dismayed, not just by this bill but by the general attitude of not caring about what kind of a society we build in New Zealand. The absolute disregard they give to those people in our community who need support and assistance to do better for themselves and their children.

If National hold themselves up as the party of opportunity and for everybody being able to make their way in the world, then they completely go over and back on their word by putting through bills like this that simply cut Kiwis where it hurts the most during a cost of living crisis. I do not commend this bill to the House.

Point of order, Madam Speaker. Apologies, I tried to take this point of order at the end of the member speaking so as not to interrupt them. I just wanted to draw your attention, Madam Speaker, to the Speaker’s rulings around interjections—that they should be rare and reasonable. And specifically, to Speakers’ ruling 65/2, which talks about “The practice of members engaging in a constant barrage of interjections amounts to heckling; it is intolerable in a debating chamber.” Just to draw your attention to that, because I felt that at times during this debate that practice has been occurring.

DEPUTY SPEAKER: Thank you for your feedback. My gauge was that we could all hear what the speaker was saying at that time. If it does get too noisy we will ask the noise to be down. We’re in a tense period where the legislation is actually quite tense in the House, and so I think we just need to be mindful of the noise. The interjections, I think, are going to keep coming and we’ve had them from both sides of the House this morning. So, thank you.

Throughout the course of the debate so far, I’ve heard words thrown around like “cruelty”, “dehumanising”, and “cruel joke”. And I just think back to a few months ago when the Minister in charge of this bill, Minister Louise Upston, made her way to Takanini, visited us over there in South and East Auckland. We were about to get in the car to go visit some other people and a gentleman approached us, knowing who we were, a gentleman that shared his story that he has been suffering with bipolar and schizophrenia for most of his adult life. This gentleman was in his early 50s and he shared that he always has wanted to work. But there are difficulties around his health condition—because I hear that term thrown around as well; do we reflect on the health conditions of some people. He spoke about the health conditions that he has that makes it difficult for him to maintain a regular, sustainable job. He went on to share—and it really touched me—that for that election last year, he really took the time to look at policies. And he said for the first time in his life he’ll be voting National because he saw that National gives people a chance in the sense that we believe in people.

So I’m not going to accept that we are not maintaining dignity. I’m not going to accept that our policies are dehumanising, and I’m not going to accept that we’re shameful. Because what’s shameful is the woeful record in child poverty that happened in the last six years. So, no, Madam Speaker, we have aspiration for our people and I commend this bill to the House.

The question is—[Interruption] Votes will be taken in silence, please. The question is that the motion be agreed to.

This bill is set down for committee stage immediately. I declare the House in committee for consideration of the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill.

In Committee

Part 1 Amendments to Social Security Act 2018