Income Tax (FamilyBoost) Amendment Bill

Good morning. When we finished last night, we were on the first reading of the Income Tax (FamilyBoost) Amendment Bill.

Labour will be supporting this bill. It puts money in the back pockets of New Zealanders at a time when it is desperately needed. We are facing some real difficulties with the cost of living, particularly here in New Zealand. The rest of the world is moving on. The rest of the world seems to be out of a post-COVID low and getting towards a more level state—perhaps even a bit of a growth state—but New Zealand is stuck. The reason we’re stuck is thanks to this Government and its lack of vision, and in particular, its narrow view of what to do to support an economy—nowhere seen any more so than in the 19,000 jobs that have been lost in the construction sector, the 19,000 jobs that put money in people’s pockets that was then circulated through the economy and supported other families. We are in a cost of living crisis precisely because of this Government.

Let’s think about the nature of that cost of living crisis. Food prices in the last year, when that party was in Government, are up 5 percent; fruit and vege are up 8.9 percent; meat is up 9.4 percent; bread is up 9.5 percent; cheese is up 14.3 percent; milk is up 15 percent; electricity—when that party is in Government—is up 11.4 percent. All they do is bleat about the oil and gas changes, changes that wouldn’t have had an effect for 15 years. Yes, there is a cost of living crisis caused by that Government.

Because people need money in their back pockets, we will support this bill, which puts money in people’s pockets, but—and here’s the big “but”—the real story is not the changes that are going to put money in people’s pockets; it’s the absolute great and glorious clustermuck that led to this point, the great and glorious mess that was created by that party, with what they promised and simply could not deliver. That party promised that families in New Zealand would get up to $250 a fortnight in tax relief. That was what they promised. Of that, $150 a fortnight was to come from FamilyBoost. It turns out that that party cannot find a single family that has received the full $250 a fortnight. They promised that 100,000 families would get FamilyBoost. They promised that, and what people heard was that 100,000 families would get $250 a fortnight back—carefully phrased in terms of “up to”. We’ve gone looking for that family that might’ve received $250 a fortnight, and not a single family can be found. In fact, only 244 families have received the full amount of FamilyBoost.

That’s why we are in this House today. It’s not because that party is being generous, it’s not because they have a good policy here; it’s because they mucked it up the first time around and, now, they are coming back to try and fix it. It is a catch-up. Frankly, the fact that it is a catch-up and the fact that families have not been able to get the money from FamilyBoost, and the fact that no one, as far as we know, has received the $250 a fortnight that that party promised and the fact that we are here today speaks to the bureaucracy and the difficulty of this particular payment that is supposed to put money in families’ back pockets. We are here today, fixing up the mistakes that that Government has made.

In terms of the number of families who have received FamilyBoost, what we know is that, so far, only 27,000 families have received money each quarter. Now, there are more families that have received some money, but only 27,000 families have received money each quarter that this policy has been in place. In order to claim the money, those people have to keep their childcare receipts, feed them into Inland Revenue, and claim the money back. The bureaucracy is amazing, and that is partly why only 27,000 families have gotten a bit of money from it.

If that Government had been serious about supporting families, they would have adopted a much simpler policy. The policy that we had on offer, the policy of extending 20 hours’ free early childhood education to more children, and to ensuring that children aged two and up could be in subsidised childcare, would have helped all families without the bureaucracy. We are supporting this bill because it gives money to families, but all it is is a huge mess.

Mōrena e te Pika. Kia ora and mōrena e te Whare. I want to start with a whakataukī, because it is Te Wiki o te Reo Māori—a relevant one, I think.

Ko te manu e kai ana i te miro, nōna te ngahere; ko te manu e kai ana i te mātauranga, nōna te ao—the bird that partakes of the berry, their domain is the forest; but the bird that partakes of knowledge, their domain is the world—which I think sits off the foundation of what we actually all should be thinking about when it comes to doing the best that we can for our tamariki and for our mokopuna.

Unfortunately, when I look at this bill—acknowledging it is a bill that has come through here with urgency—we were expecting it to address some of the fundamental flaws that we saw when this scheme was first introduced into the House, but we see that those have not been addressed. For example, we still see that what has been outlined will still be administratively burdensome to claim the tax credit, particularly for busy low-income families. It’s a retrospective refund, so many families will struggle to be able to get that. What that means is you’ve got to be able to have cash on hand, first of all. You’re going to get a refund, but it assumes that parents are actually going to have the money in their hands as well.

We are in the middle of a cost of living crisis. We only have to look around the streets where we see so many different sectors striking. I was watching the news this morning. Teachers are going on strike. They’ve had nurses on strike. There are issues right across as well. All of these people in all of these sectors all have parents in them, and some of them will have young children as well, so folks have to reach into their pockets to be able to pay for their tamariki and their mokopuna to go to early childhood education (ECE).

Also, I am just noting that over the first year—and I’m assuming that’s why this bill came here—only 249 families claimed the full tax credit, despite the Government expecting that thousands of people were. So the idea that this is going to all of a sudden open up the floodgates is also of concern, when actually what we should be doing is making ECE free. We should be making ECE free. We should be addressing the core problem with the ECE sector, which is that it has been gobbled up and controlled by private companies. Just to note that the Government spends around $2.7 billion on early child education each year, so it doesn’t make sense that the cost for whānau is still so incredibly high.

It’s the system that we have as well. We only also have to look at the disproportionate pay that people get. If you’re a kindergarten teacher, you are going to get paid substantially more than if you are in a privately run early childhood centre, despite doing the same job with the same hours. It points to the fact that, actually, this bill doesn’t address all the problems. It is, unfortunately—and I hate to use the analogy—rearranging the deck chairs on the Titanic. The issue is: if you’re rearranging the deck chairs on the Titanic, what’s the point if all you’re going to do is get a better view of the iceberg?

It is important, I think, for the Greens to put on record that what we would do in terms of our reforms would be to put early childhood centres at the centre of it; not tax cuts for landlords, not tax cuts for tobacco companies, not prioritising millions and millions of dollars on defence for what I can only see is pandering to the Trump administration.

Hon Members: Oh!

TEANAU TUIONO: We should actually be putting at the heart early childhood education. I can tell from responses from the other side over there as well, and the fact that this bill has come to the House under urgency—they’ve kind of just tacked it on because the plan as designed isn’t working. It isn’t addressing the fundamental flaws within the system itself. That is why it’s so incredibly important that we bring more equity into that system, that we actually move the system to be more run by community-led early childhood centres and we make it easier for families to be able to take their kids. The Greens had been advocating for free ECE.

As I started, I will end as well with another whakataukī—I’ll end with the same whakataukī, because maybe there’s some understanding there for all of us: ko te manu e kai ana i te miro, nōna te ngahere; ko te manu e kai ana i te mātauranga, nōna te ao. Let’s do better, whānau, kia ora.

Thank you, Mr Speaker. Well, I am proud to be part of a Government where ACT is actually fixing what matters. You know what? This bill—and I’m pretty astonished, actually, that the Opposition is actually supporting it, given all the hype that they’ve been rousing around this isn’t enough, there’s not enough families getting enough money out there. But what I am proud of is for the first time in a long time, we have a Government that has recognised that the middle is getting completely squeezed.

Maybe I should give a little bit of a history lesson to the Opposition around what has been happening in New Zealand. We have seen lower incomes rising time after time, we’ve had really big increases in the minimum wage—and, yes, we’ve seen some upper wages increasing too—but the bulk of New Zealanders, the middle class, the mums and dads haven’t seen wage increases in 10 or so years. This is where it’s really hurting everybody. We’ve seen high inflation, we’ve seen the cost of living going through the roof, and this bill aims to put some measures back to those that are getting up every day, getting out there, earning money. They’ve got their kids, they need to put them in some childcare because in today’s day and age, both mum and dad do need to work to get ahead.

This is a step in the right direction. By lifting the threshold and lowering the abatement, the Government is finally recognising that middle-income families are actually feeling the squeeze too. I’m really proud of that because this Government is focused on fixing what matters to New Zealanders. I commend this bill to the House.

New Zealand First supports this bill as it delivers the relief that households deserve and helps parents stay in the workforce and invest in the early education of our youngest New Zealanders. It’s a shame that the member did a little hit and run from across the aisle with the attack on the economy, but I would just like to show that, sometimes, good ideas can come from wherever you think they least come from.

When I was running the Institute of Public Policy, I had Dr Ian Hassall, an ex - Children’s Commissioner; and Dr Emma Davies, who was specialising in research around children, and we had a debate about productivity. So I asked, “Where is the best place to invest if you want to increase productivity in the long run?” It is in children and early childhood education. That is where you’ll get the greatest benefit because that’s where they’re learning the most. We commend this bill to the House for many reasons, this being one of the primary ones. Thank you.

The National Party’s very, very happy with this bill. It increases the percentage of early childhood education expenses claimable from 25 percent to 40 percent, raising the maximum quarterly tax credit from $975 to $1,560. That means up to $6,240 per year for families—a great cost of living initiative.

Thank you, Mr Speaker. It’s a pleasure to be able to speak on the Income Tax (FamilyBoost) Amendment Bill. Just to pick up a point that Dr David Wilson raised in his speech, it is true that the first five years of a child’s life is incredibly important, particularly the first two years. In the first two years, a child is more likely to be able to learn languages, to be able to retain information, and the brain synapses and the connections that they have in those first two years is incredibly important. So I want to acknowledge the points raised by Dr David Wilson.

As many people in this House know, I am a mother of a lot of children. We have been very fortunate—for a number of our children, we didn’t have to send them to early childhood education (ECE). We didn’t have to send them to an early childhood education centre because we had to; we could send them to an ECE because we wanted to. We also had the privilege of being able to have one parent stay home, and that’s because we made the choice that it was going to cost more in ECE—it was going to cost more than our mortgage payments to be able to send our children there. We made a conscious decision as a family, and a financial decision, that one of our parents would stay home because those connections in those first five years are so important for the growth and development of children going forward.

This particular bill, as much as the Government members will be very happy to bring this bill to the House, is actually an admission of the failure of this Government’s policy. This policy has been a failure. There have been a number of statistics, which Dr Deborah Russell referred to, that have shown this policy to be a failure. Initially, the Government, when they were campaigning, said 130,000 families would be applicable for FamilyBoost. When they got into Government, those numbers were revised down to 100,000. What we have actually seen, as Dr Deborah Russell has talked about, is that only 27,000 families have consistently received FamilyBoost since its inception last year on 1 July 2024. That’s only 27,000 families who have actually received it consistently.

Why I wanted to point out that particular statistic is because—going back to my earlier point—some families have no choice but to send their children to an early childhood education centre because they need to work. But yet the Government promised 100,000 families would be able to get FamilyBoost, but, to me, it is a failure if only 27,000 families have been able to actually consistently get this for the last four quarters.

The other element and the other statistic which Dr Deborah Russell spoke about was the fact that there were meant to be 21,000 families who were able to receive the full amount of the FamilyBoost. For members of the House, just to remind them, that was around up to $975—that was the maximum amount, but, actually, the statistics have shown over the last four quarters only 244 families have actually received the full amount.

The reason why I want to lay out these statistics is for the reason why this side of the House, why the Labour Party, is supporting this bill. It’s because we acknowledge this is a Government failure—of their policy. We acknowledge that times are really tough for families right now in Aotearoa. We know that food prices, energy prices, insurance premiums, rates, those administered costs have gone up, so we support this bill because we want families to get the little that they can in order to support them. That does not mean that we accept that this policy is a success, because, quite clearly, the statistics show it has not been a success.

What it also shows is that that Government has broken a number of promises to Kiwi families. Again, the other statistic that Dr Deborah Russell talked about was the zero. That side of the House, the Government, cannot find one family—one family—that has received the full $250 that was promised during the election campaign. That is a travesty because, ultimately, there would have been families across the country who would have depended on that, who would have depended on the $250 to help plan for the year. Instead, we only have $975 going to 27,000 households. That is a really poor policy, a super poor policy, which is why Labour will support this bill, because it’s fixing up the mess—fixing up the mess that Nicola Willis—

Hon Nicola Willis: Ha, ha!

Hon BARBARA EDMONDS: —because of her failure to be able to put in a policy that actually worked—and she may laugh about flip-flop, but that’s the problem: she’s not taking it seriously.

It’s funny when they talk about poor policy but then say, “Oh, but we’ll support it.” Sixteen-thousand families will be better off with up to $1,560 a quarter. I commend the bill to the House.

Hon Willow-Jean Prime: Mr Chair—oh, Mr Speaker.

ASSISTANT SPEAKER (Greg O’Connor): The Hon Willow-Jean Prime.

Sorry, Mr Speaker. I’m still collecting my thoughts after listening to the Minister of Finance laughing over there at the contribution of my colleague the Hon Barbara Edmonds; the Minister gleefully laughing and welcoming Labour’s support for this legislation this morning, not listening to the reason why Labour is supporting this. Labour are supporting this to fix up your mistake—sorry, Mr Speaker; not you, sorry, Mr Speaker—the Minister of Finance’s, the Government’s mistake.

This Government promised—promised—New Zealanders at the election that this policy would bring much-needed relief in a cost of living crisis, and here we are—

Hon Nicola Willis: 60,000 families, Willow-Jean.

Hon WILLOW-JEAN PRIME: Oh, now? Now, because you didn’t do it at the beginning? What about the ones you promised at the election? Then, almost two years later, here is the Minister fixing up her mistake. This is an admission that they had not done the work on their policy to be able to deliver it. I do wonder if this was because they never wanted to spend the money in the first place.

Mr Speaker, you have heard the House ask time and time again: where is a single family who has received what this Government promised? They have not been able to show this House one single family who has received what they were promised prior to the election.

This legislation that we are discussing this morning is an admission by the Minister of Finance that her original policy got it wrong. To fix up that mistake, here is a piece of legislation that is now promising that it will reach further numbers of people. We will hold this Government to that. We will hold this Government to showing us the full 60,000 people who are going to benefit from this policy.

One of the things that parents have raised with me is the poor thought that was put into this policy development—the hurdles that they have to jump through, as busy parents, to access much-needed support in a cost of living crisis. This Minister is putting more life admin on busy parents. There are much simpler ways that this Government could get some money to our busy families who require it, but, no, this Government and this Minister want to make that as difficult as possible.

This policy is coming so late in the piece. Why did it take the Minister of Finance so long to admit the errors that were made, the broken promises to the voters, to finally come into the House now and fix this mistake? Yes, Labour are supporting this because we recognise that families are doing it really tough, that they need real action on the cost of living, that this Government should not have taken almost two years to admit its errors and to fix up its mistake and finally make this available to those families. We are supporting this legislation this morning because they should have been getting this all along, instead of being given promises from this Government which were then broken.

In the final 40 seconds, what I want to point out is that the policy from the Child Poverty Action Group—it says: “The failures in the policy design are ones [that they were] warned about … the high administration costs, the retrospective nature of it, and not knowing if you will receive it from one quarter to the next. These failures are reflected in the poor [uptake].” I implore the Minister to look at how she can make this more administratively straightforward for our families who are struggling. What is she going to do about that?

In summary, I commend this bill to the House.