Income Tax (FamilyBoost) Amendment Bill

I move, That the Income Tax (FamilyBoost) Amendment Bill be now read a second time.

As I set out in my first reading speech, this bill expands the successful FamilyBoost scheme to help more families pay for their early childhood education costs, and it means that households will get larger rebates on the early childhood fees they pay.

This bill has become quite symbolic of the journey that the Labour Party in particular has been on in which the arc of sensible policy has bent towards pragmatism because, of course, the Labour Party’s position, to date, has been to oppose this form of cost of living relief for families with young children and early childhood education. They voted against the FamilyBoost scheme, but, of course, that scheme has gone on to ensure that more than 60,000 families—colleagues, more than 60,000 families—have benefited from cold hard cash going into their family bank account that they would not have otherwise received, as a result of this scheme because it has successfully provided rebates to families who face high fees and have children in early childhood education.

Now, Labour opposed that, and that was curious to me because it did seem somewhat contradictory to be calling for cost of living relief but voting against one of the more concrete things that our Government has done to deliver it. But today, we have had a moment of sense in this Parliament, and I want to commend colleagues opposite for supporting the FamilyBoost scheme. It’s OK to have a flip-flop when you end up on the right side of the flop, and so good on you. You’ve come around, you’ve seen wisdom. FamilyBoost is an excellent scheme delivering real income relief and it’s great that the Parliament as a whole can get behind it, and I look forward to colleagues across the House promoting this scheme to the constituents in their electorates, encouraging families to apply for this rebate and get the relief that they deserve.

I note we do still have a hold-out and that’s the Greens, and I look forward to some gymnastics to explain why it is that families with young children should not get this income relief. I’m sure the Greens will somehow link it to climate change and, possibly, Palestine.

Now, what does this scheme mean? It means that the abatement rate for families earning more than $140,000 per year will reduce and the changes will put more money in the bank accounts of those households currently receiving FamilyBoost. So, in effect, where they once got 25 percent rebates on their fees, they’ll now get 40 percent. So for those 60,000 families that have already made claims and said, “Actually, this is pretty easy. All I did was I went to my very cooperative early childhood education centre who put together a three-month invoice for me.”—as many of them have—“I uploaded it on to the IRD website and, a couple of days later, the cash went into my account. Now, next time the cash goes into my account, instead of it being 25 percent of the fees, it’ll be 40 percent of the fees. I’ll be getting more money in the future.” Great news for those households.

But here’s the next thing: because we are changing the abatement rate, we are extending the group of households who are now eligible for this scheme. Where once there was a cap on the family income, we’re now expanding that out so that families with incomes of up to $229,000 will now be eligible. What that means is that thousands more families can now apply for rebates on their early childhood education fees.

I know this is really meaningful, and I suspect that’s what’s happened with the Labour Party’s voting decision today, because I have met with families who have said to me, “Look, we really like this scheme, but we’re just on the outside of it because between my income and my husband’s income, we’re just over the limit. Would you look at expanding the limit so that families like ours can be eligible for it?” That is what we have done. We have responded to that, we have listened to that, and we have expanded the scheme so that more families can be eligible.

I just want to point out something that has always been the case, which is that the amount that households receive through FamilyBoost depends on one thing in particular, which is how much they actually pay in fees for early childhood education. I want to acknowledge that not all families face high early childhood education fees, and that’s for a range of reasons. Sometimes, it’s because they don’t have their children enrolled for many hours because of their care and work arrangements. Often, it’s because their early childhood education service doesn’t charge very high fees and by the time they get their 20 hours subsidy, their Ministry of Social Development subsidy, there’s not much fees left to pay. However, regardless, families who are within the income threshold, no matter what fees they pay, once those things are accounted for, are eligible for rebates.

The maximum rebate is only available to those paying $300 a week in fees. However, if you’re paying less in fees than that, you’re still eligible for a rebate. Let me step you through this, colleagues. Let’s say your household pays $100 a week in early childhood education fees—not an uncommon amount for a family to spend—well, under this FamilyBoost scheme at the moment, you’d be eligible for $25 a week in rebates. Well, today, what we are voting for is to make it so that you are eligible for $40 a week in rebates, which, over the course of a quarter, really adds up into the bank account.

Let me extend that because it’s been very clear to me that members opposite don’t understand the scheme—so I think they should listen—which is that if a household is paying $200 per week for early childhood education, then currently they’re eligible for $50 a week in rebates. But under this bill that Labour are graciously voting for today, that expands to $80 per week. The point that I am making is, quite simply, that the amount of your rebate depends on how much you pay in fees. Now, it seems to be the position of the Labour Party that everyone should get the same rebate, but, obviously, by voting for this today, they’ve seen that this is the better way to do things.

Inland Revenue estimates that around 16,000 additional families, perhaps more, will access the FamilyBoost scheme because of the changes we are legislating today, and so that is meaningful. It means more families getting assistance with the cost of living at a time in family life when households face so many additional expenses. Many members in the House today will have experienced this period of life and some are still experiencing it when you have children, your costs go up suddenly. Often you need to move into a bigger rental or get a bigger house because there’s a baby and there’s a toddler and they can’t all fit into the two-beddie that you once had, so your housing costs go up. You’re paying for nappies, you’re paying for formula, you’re paying for car seats, you’re paying for prams. It’s right at the time when, actually, your working hours are reduced because of your caregiving responsibilities, so your income is under strain. Then you make that decision that both of you are going to return to work, that you’re going to take on those extra hours of work, and by the time you take on those extra hours and you pay your early childhood education fee, you pay for the car parking to go to work, you start to ask yourself, “How do I make this all add up?”

What FamilyBoost says is that we recognise your effort. We recognise your aspiration that you are working, that you’re paying those early childhood fees in order to support that aspiration, and, we, as the Government, are on your side. We recognise those costs. We’re not going to judge you for which early childhood service you choose, how many hours you send your children for, how old your kids are; we’re going to have a simple scheme that says if you’re in that stage of life, we will refund up to 40 percent of your early childhood education fees in recognition of your effort and family circumstances. So this is a very positive way of standing alongside families at what can be a financially difficult and stressful time in life.

It is the case, that in order to benefit from this scheme, families do need to register and they do need to make claims. Now, 67,000 families have already done so, and I commend the Labour Party for hearing those families and moving from their position, which was previously to deny them the support, because those 60,000 families have voted by applying for the scheme and made it clear that the scheme matters to them. As a result of the changes we’re making today, more families should apply because more families will be eligible.

If anyone in this House wants to know what they can do to support families, then they should make sure they talk to them about this scheme, encourage them to apply, and make clear that more families are now eligible than was previously the case. I strongly recommend that households do that.

Families have been telling Inland Revenue that it actually took them around five minutes to make a claim. I once again want to commend those early childhood education services who have made that process simple by, in many cases, changing their invoicing approach to have collective three-monthly invoices so that the family get the print-out, they upload it to IRD, and they’re right as rain. In fact, more than half of the families who have submitted written feedback on the scheme indicated that they found the process top-notch and easy.

Families who have not already registered and claimed for last year’s rebates can still do so. This is important: families have said, “Oh, well, actually, I never got around to it so I missed out.” Actually, you haven’t. You can still make a claim for fees from last year, so take the time and do it.

Look, to recap, this is about making more families eligible for cost of living support. The changes can be met within existing funding. I want to once again thank Labour for their huge turn-around and their support for the FamilyBoost scheme, and I urge the Green Party to stand on the right side of history and follow Labour’s lead. A divided left is an ugly thing to look at.

The question is that the motion be agreed to.

What an ugly speech—what an ugly speech. Here’s why it’s ugly: it is ugly because it is a cover-up. It is a cover-up for the non-delivery of their flagship policies at the election. That’s the only reason we are back in this House today. It was because they proposed an unrealistic policy, they couldn’t deliver on it, and we are back in the House today fixing it up to cover face for Nicola Willis.

We are, of course, supporting a policy that does put more money in people’s back pockets in a cost of living crisis—a cost of living crisis caused by their failure to support the economy. Now, caused by their failure to support the economy, we are back in here covering up Nicola Willis’ failure—a complete failure.

It’s a failure in terms of non-delivery. They promised that 100,000 families would receive up to $250 a fortnight—said it was a fortnight rather than a week. That’s what they promised, but they simply did not deliver it. That was not possible for them. So that’s one of the things that they simply could not deliver. People voted for them on the grounds of getting $250 a fortnight. They did not deliver.

Let’s talk about some of the particularly worrying concerns about non-delivery. Unfortunately for the Minister of Finance, her own officials have pointed to a particular area of non-delivery, and it’s one that we ought to be deeply, deeply concerned about. Sitting in the regulatory impact statement—I’m going to direct people to look at paragraphs 27 and 28—it talks about the population impacts of the Minister’s policy. Generally, it says early childhood education (ECE) participation rates for Māori and Pacific children remain lower than those of other groups. Since FamilyBoost operates as a rebate model, requiring fees to be paid upfront, it is uncertain whether changes to the policy settings—that is the changes that the Minister has proposed—will increase ECE participation among those communities.

This is a policy that puts money in families’ back pockets, but not Māori and Pasifika families. We want to have a long, hard think about the actual delivery of this policy if it is not getting to some of our families who are most in need. Then it says the specific impacts of lower-than-expected reach and average payment amounts suggest that lower-income households, including those overrepresented in this group such as Māori, Pacific, and some disabled people, may benefit less from FamilyBoost. Check the regulatory impact statement. This is because they often use low-cost, donation-based, or poorly subsidised ECE services. As a result, these households are not the ones who are getting some extra money in their back pocket. In a cost of living crisis, those families are not going to get extra money. This policy is there to provide extra money; it is not going to happen for these families who are most in need.

Let’s carry on. It’s reflected in the scheme’s notably low uptake among families using kindergartens, playcentres, and kōhanga reo. In contrast, higher-income families have greater unsubsidised fees, so they are more likely to apply for and get FamilyBoost. This is a non-progressive policy. It’s a policy that benefits the well off more than it does the less well off. Again, that means median families: we know median families are struggling. We know that people need some extra money in their back pockets—of course we will support that, but behind this policy is a record of failure; it is not a progressive policy.

In terms of actually claiming it, we had the Minister saying that—sorry, I want to go to the bureaucracy that surrounds this policy. Now, the way that FamilyBoost works is families pay their fees upfront, they get receipts from their childcare provider, then they go to Inland Revenue’s website and claim the rebate. It’s an extraordinarily labour-intensive policy, and we can tell this. It takes 95 full-time employees at Inland Revenue to administer this policy—95 fulltime-equivalent employees at Inland Revenue to make sure that this policy succeeds. That’s because it’s an incredibly manual policy. Instead of having an automatic policy, such as the one proposed by the Labour Party at the previous election, we have this incredibly labour-intensive policy, which requires 95 fulltime-equivalent employees to deliver it at Inland Revenue.

That’s an extraordinary amount of people who are working on this scheme. In fact, the administrative cost of that in the 2024-25 year was $13 million. That’s how much it’s costing to deliver this policy; a huge administrative cost.

Normally, that side of the House worries about the quality of spending in Government departments. Well, here’s a whole lot of time and effort and money being spent to deliver a policy, because it was a policy which would not work right from the start, and the Minister was told that.

Hon Dr Ayesha Verrall: Face saving for Nicola Willis.

Hon Dr DEBORAH RUSSELL: Yeah, face saving for Nicola Willis. There’s that kind of failure sitting in there.

Then the Minister had the temerity to say that families who have claimed the rebate have found it easy. Well, yes, the families who have been able to claim it would find it easy, but where is the research for the families who have not been able to claim it? How do we know what barriers are sitting there, which means that people are not accessing the payment? It’s all very well to say that people who’ve managed to do it found it easy. What about the people who have not managed to do it? So that is a failure as well.

Then there’s the ad hoc nature of this change; a whole bill going through under urgency in order to change the primary legislation in order to fix up the Minister’s mistake. I see members over there have their faces in their hands worrying about it.

There’s a link to the current tax bill that is going through the House that has just been introduced to this House this week. I want to direct members’ attention to a clause in the current tax bill, because it’s an important one. I take it that members won’t have the current tax bill right in front of them, but clause 80 in that bill inserts a new section, “MH 6 Orders in Council for FamilyBoost”. What it does is it enables the Minister, by Order in Council, to change the settings for FamilyBoost—to change them on a dime, to change them pretty much at will, to change them because perhaps the policy isn’t delivering.

I mean, what that clause in the new tax bill suggests to me is that the Minister anticipates that, even with her changes, there still will not be sufficient families taking up this policy—people still won’t be claiming it, and so she’s given herself a fail-safe. She’s not going to need to come back to the House to tweak the settings yet again; she can just do it from the comfort of her office and hide her policy failures by sneaking it through quietly with an Order in Council.

This bill is, I think, a testament to the failure of vision on that side of the House. It’s a testament to the failure of Nicola Willis’ policy around FamilyBoost. Despite all she was told about how it would not deliver, despite all she was told about how the data was unsure, despite a clear policy alternative about an absolutely sure way to ensure that families got support for their early childhood costs, she decided to go down this path—a path which simply could not be achieved.

I think it’s time for the Minister, instead of just touting the numbers, instead of saying it’s an increase to FamilyBoost—of course it’s an increase to FamilyBoost. But the reason for it is because the Minister’s policy, right from the start, did not deliver. It’s a bit like those wretched boats: simply not delivered. This is Nicola Willis’ record of failure, and it is beyond amazing that she would turn up to the House and say that this is a success.

Early childhood education (ECE) is crucial support for tamariki. It’s one of the best investments we can make as a society in reducing inequality and improving productivity and ensuring that all tamariki are able to live up to their potential. The future flourishing of Aotearoa, and if you want to think of that in economic terms, is very much about the investment in our people. The research shows that the first few years of a child’s life is the most important for their ongoing long-term outcomes.

There’s no question that the Green Party wants to support early childhood education. When I was Minister for Women, I had the privilege and opportunity to speak to officials and Ministers from other countries and those from the Scandinavian countries like Iceland, Sweden, Denmark. What I found in Norway was that there was a clear agreement that if you want to get better outcomes for women, the policies you have to invest in are paid parental leave and quality early childhood education. The benefits are much greater than just for the children; it’s the ongoing productivity because it means parents can go out and work or volunteer or go to education, whatever it is they’re going to do, and not be under that financial pressure.

Now, currently in Aotearoa New Zealand, we had a policy of 20 hours free early childhood education. I personally have benefited from that. I have one child in early childhood education now and one who’s in primary school who did go to early childhood education. I’m so grateful for the support that they had from the kaiako, the teachers—the loving, supportive, nurturing environment, which meant that I could still be a representative in Parliament and have young children and my partner can continue with his paid work because he’s very passionate about that as well.

However, despite the 20 hours free ECE for three-year-olds and four-year-olds, we still have some of the highest early childhood education costs in the entire world. For families with children in early childhood education, it’s the biggest cost after housing. The Government’s spending a lot of money on ECE, but a lot of it isn’t getting to the families because we have a number of for-profit centres that are returning a healthy return. Now, we have a Government that’s looking to lower the standards, make it possible to have more non-qualified teachers so that it’s easier for owners of those centres to reduce their costs, cut their costs at the expense of the care of the child.

It is such short-sighted policy and today we have the Minister of Finance, Nicola Willis, come in here and proudly claim that this FamilyBoost policy and the legislation going through the House right now is somehow a big win for families and that those who are not supporting the bill, like the Greens, are somehow opposed to investment in early childhood education. What a joke. It’s ridiculous. The Green Party showed in our Green Budget in May that we could provide free universal early childhood education to all New Zealanders, and that would make sense, it would be with qualified teachers, and that would be a genuine investment in the long-term future and productivity of our country.

Why would we support this failed policy of FamilyBoost, which, over the first year, only 249 families claimed the full tax credit when the Government was expecting thousands. Well, I could have told Nicola Willis—I’m pretty sure I did tell Nicola Willis in 2023 on the campaign trail—that this policy was not going to be accessible; it was not going to reach the families that needed it most. It shows how out of touch she and the Government of the day are that they think low-income, working parents have the ability to easily pay upfront early childhood fees and then claim them back four times a year. It’s actually ridiculous.

It’s not easy for the centres. I’ve been out there talking to kindergartens, for example, and they’re very worried about the moves that the Government is making, mainly under the direction of David Seymour, to deregulate the sector, to undermine the quality and training of kindergarten teachers and early childhood educators—just to make it like kiddie farms, basically. I mean, that’s really one of their main donors—the kiddie corp legacy. The people who make their money out of early childhood centres, not because they care—I mean, maybe some of them care about the care of their children, but it’s pretty clear that they’re less interested in healthy, safe, quality teaching and more interested in cutting costs and being able to make lots of money.

That’s just not what early childhood education should be about. It’s a public good. It benefits all of us. The last Labour Government did have a policy that would have been really administratively simple, that would have benefited a lot of families, that would have reduced the cost of living a heck of a lot more than FamilyBoost, and that was extending the free 20 hours to two-year-olds—two-, three-, and four-year-olds. That was about to come in in March 2024. Did it come in? That would have saved families thousands and thousands of dollars if they had two-year-olds in early childhood education. It would have been administratively simple. It would have reached far more families. Let’s not pretend that FamilyBoost is some great policy that is going to benefit lots of families struggling with the cost of living, when they could have had 20 hours free at early childhood education centres for two-year-olds in 2024.

The FamilyBoost scheme entirely fails to address the fundamental issue of the profit-driven ECE sector passing on huge cost to parents and the Government with little transparency about how the funding is used. It’s complex for families, administratively expensive; it doesn’t address gouging by private ECE owners. It doesn’t address the fact that early childhood educators are often not earning enough money to live where we need the centres. So there’s a massive shortage of early childhood education places in Te Whanga-nui-a-Tara—in Wellington. That’s because early childhood teachers, if they didn’t buy a house in Wellington 20 years ago, were really struggling to be able to do their job and live near their work.

So there are issues around housing and transport affordability, which of course the Green Party is aware of as well, but there’s a simple, positive alternative: free early childhood education provided by community organisations rather than for-profit businesses with quality kaiako—quality teachers. The Government could afford to do this—absolutely—if the coalition Government genuinely believed in economic development and things that would boost productivity and address inequality and provide equality of opportunity to every tamariki in this country, they would be looking at a policy like what the Greens have proposed, which is free, universal, quality early childhood education.

I hear that the members opposite are sceptical. They just think we can’t afford it. Well, Iceland can. Iceland’s a country with—what? —350,000 people. They’re not making money out of minerals or oil; they actually have renewable electricity. They have demonstrated that when you invest in people, it is sustainable, and you get a thriving society. So there’s no reason why New Zealand could not have a more visionary policy and something that’s actually going to be effective.

I mean, one thing I can definitely tell you is that investing in early childhood education would get a better return to the economy than spending $2 billion to $3 billion on 1 kilometre of one lane of motorway in Wellington—the centre of Wellington. Like, that’s how outrageous and how utterly backwards this Government is that they think that throwing some money at tarmac is somehow going to benefit the economy. It shows the poverty of thought—absolute poverty of thought—that they don’t understand.

Cameron Brewer: You’re pro-tunnel in Seatoun—you’re pro-tunnel.

Hon JULIE ANNE GENTER: As—Mr Brewer—I failed to mention the other day, I don’t think the National Party actually has the support of the people of Rongotai, because the Green Party got 50 percent more party votes than the National Party did. The Green Party alone got more party votes than every Government party combined in Rongotai, so they absolutely have—oh, and then the Labour Party was very close. OK, the Labour Party was a very close second. The Green Party and the Labour Party together got 66 percent of the vote in Rongotai.

So the Government doesn’t have a mandate. They’re out of touch. They don’t understand what’s genuinely going to benefit the economy or the long-term health of our society. That’s why they plug away with these failed policies that are administratively burdensome, and that don’t reach the families that need it most. It’s all about branding. They think if they go out there and brand themselves as good managers of the economy, “Oh and we care about early childhood”, but only for certain families, not for all families. They don’t recognise it’s not just the families with children in early childhood that benefit from policies like investment in early childhood; it’s the entire country—it’s the entire country, and New Zealanders deserve better.

We’ve just had two contributions this morning in the first and second reading for this bill—one from the member Tuiono and one from Julie Anne Genter—from the Green Party. They have both been a mishmash of confusing anecdotes and getting off track, it has to be said. I heard a couple of quotes in there that might be considered relevant. We heard “not accessible to families” and “certainly not all families will benefit”. Well, I can only assume, based on that, that the Green Party is not supporting because, to surmise, that’s because their average voter base earn above the cap, but, other than that, I couldn’t see why the House wouldn’t support this unanimously. The ACT Party does. Thank you.

I find, with some irony, that members across the aisle are casting aspersions on the management of the economy when one particular party was fully in charge of the economy and it was like looking at a train wreck in slow motion. The Marxist manifesto that’s come from the Green members about how we run our economy says that we’ll all be equal and, I suspect, we’ll all be equally poor. This is not just an investment in our kids. It’s an investment in our human capital, our productivity, and our prosperity into the future, which I think all members across the aisle can agree with, and we look forward to their support of the passing of this bill.

Thank you, Mr Speaker. I’m just going to take a call on the second reading of the Income Tax (FamilyBoost) Amendment Bill. I actually quite like following Dr David Wilson’s contribution. Again, congratulations to the new member who’s joined us in the House. I do find some of his contributions actually very considerate and measured. I didn’t agree with some of his comments around the economy, but, actually, what I did agree with is the acknowledgment of having to come together to help families with the cost of living. That’s exactly why Labour is supporting this bill. We know, and we have affirmed through the first reading, that this bill is actually fixing a failure of a Government policy.

What I found quite disappointing in the first reading of the bill was an interjection that came from the Minister of Finance where she laughed. She laughed about the Labour Party supporting them to fix their bill to support families with the cost of living. I found it quite revealing of the Minister of Finance’s view. This is a bill that’s had to be introduced to fix a problem in her own policy because of the failure for families to actually take up this policy. She’s had to increase and change thresholds and rates so that, hopefully, more families can actually access the FamilyBoost payment. I found it quite revealing that she wanted to laugh about that, given that this is a bill to fix her failure. Perhaps she was actually laughing at herself and not at the Opposition, who was trying to support this bill.

One of the reasons why I believe that this policy has been a failure—and it’s been traversed by members in the House previously—is that, when this Government came in and they decided to repeal the ECE, or the early childhood education, 20 hours free policy that was extended to two-year-olds, that was actually one of the very first policies that this Government decided to repeal. That was a terrible, terrible move because, actually, that ECE 20 hours free meant that families didn’t actually have to do anything. They could just take their two-year-old to their early childhood provider and get, basically, the 20 hours free. There was no paperwork that they had to do other than the normal enrolment of their child into an ECE.

This Government decided to add a bureaucracy and add more red tape, which I thought was quite ironic given their war against red tape. They decided to make it harder for parents to access entitlements for them to be able to subsidise their early childhood education for their children. As Dr Deborah Russell has set out earlier today, what that bureaucracy has practically meant is that there are 95 more full-time employees at the Inland Revenue Department administering this policy at a cost of $13.9 million. Just to help the House understand that, that’s 20 percent of the money that the Government has set aside for this policy spent on administering this policy. I know the Inland Revenue Department; they are very good people who work very hard and would try and make it as efficient as possible—95 fulltime-equivalents (FTEs) needed just to administer this new policy.

It is ironic that, for a Government that wants to make it easier for people to send their children to early childhood education, one of their first acts was to repeal a policy that actually did make it easy, that was hands off and no work, and then they put in a policy where now parents have to make sure they’ve got their invoices and receipts and file a return. That’s come at a cost of $13.9 million for a new bureaucracy that’s had to be set up to actually administer this.

Another interesting statistic for the other side of the House is that IRD have had to field over 28,000 phone calls for this policy. They’ve also had to deal with over 20,000 web messages. This is the red tape and bureaucracy that has been set up by a Government who ironically wants to fight red tape and bureaucracy. Instead of a very simple policy that was in place and that was hands off for parents, they put in a new policy that required parents to do more compliance and also built a new bureaucracy surrounding it.

The other interesting element that has come out through written parliamentary questions around the failure of this policy is that over 41,000 families have actually been declined FamilyBoost. The main reason why they’ve been declined is because their quarterly income is over the income threshold. It’d be interesting to see how those numbers change with the changes of the threshold within this particular bill. The element for me that is most surprising about that is that there’s still only 244 people who’ve actually got the full entitlement. Again, the Government promised it was going to be 21,000 families who would receive the full entitlement, but, actually, only 244 people received the full entitlement. That is an absolute failure. I go back to that initial remark I made around the Minister laughing about it. She should be laughing at herself. This is a failure of a policy, which is, again, why Labour is supporting this. At the moment, families need money to be able to support them.

The other interesting element that has come out through the regulatory impact statement, in relation to administration costs and the ability to make this policy as easy as possible, is that rather than the Government actually putting through urgency some more measures to make the administration easier for families; they actually went and consulted—and I give credit to the Inland Revenue officials who did this—with kindergartens, ECEs, and some experts around what sort of changes they could make to make FamilyBoost easier. The interesting point, which is at paragraph 33 of the regulatory impact statement, is—and I quote—“Most suggestions had a focus on encouraging uptake through making the process easier or more accommodating for families, however, these suggestions could not be achieved within the short-term.” There, in the regulatory impact statement, you’ve got very good officials who are consulting with the sector and saying, “We want to make FamilyBoost easier for families.”, and then you’ve people that they’ve consulted with coming to say, “Well, actually, here’s our suggestions to make it easier.” Unfortunately, because of this rushed process of urgency and the inability for officials to be able to provide a proposed bill for the Minister, they’re not actually able to make the policy easier for families. Yet there’s some very good consultation that was done with some suggestions to make it easier for families.

We support this bill because we know families need every dollar at the moment. What we don’t support is a Minister of Finance laughing at the efforts of the Opposition members in trying to support families to get that money. Again, this bill is an admission of the failure of the Government policy and the Minister of Finance. Her policy has been a flop. That is the flop that’s happened here. It has been a flop from the beginning. As much as people in the sector and as much as people in the Opposition have been saying “Just keep the ECE extent for two-year-olds and up”, because that’s the policy that’s actually in for three-year-olds and four-year-olds. No, for one year, families have additional administration costs. We have a new bureaucracy, which has 95 FTEs. We have 20 percent of the cost of this policy being spent on administration by the Inland Revenue Department. Again, it doesn’t matter what’s in this bill to try and lift rates and thresholds to try and get more families into it; there is still the major issue that this should have been easier for families.

I look forward to seeing whether the Government actually improves the administration of this policy. Hopefully they bring it in a bill next year so that more families can actually access this. At the moment, this is just a band-aid trying to fix a failure for a failed uptake of a policy that’s meant to help families in a time of need. When the Government promised 130,000 families that they were going to get $250, there are still zeros. There’s still crickets from the other side of the House because they can’t find one family at all.

The Greens will not be supporting what I would call a fig leaf on this coalition’s regressive tax policy and it’s continuing to put taxpayers’ money into the profiteering from the most vulnerable youngest members of our society.

We continue to hear a bit of a myth that this country is the best country in the world to bring up children. But if you look at early childhood provision, if you look at family violence management, if you look at a whole lot of health statistics, this is not what it should be—the best country to bring up our tamariki. You cannot say that other parties care more about our tamariki than the Green Party. We would in this House—and I acknowledge the words from Dr Wilson—probably all agree unanimously that early childhood is the most important investment that we could make. But it’s not babysitting. It’s not an investment just so that workers can go to work and make tax for the Government to spend. It’s an investment in human capital, it’s an investment in the public good.

I was very disappointed when I visited Ko Te Aroha community childcare centre in Masterton earlier this month. They’d actually sought the presence of the National Party MP there, who, for one reason or another, had not yet been able to visit. But what they told me is that this coalition Government does not really care about early childhood care for the following reasons.

First of all, there is no Ministry of Education funding for the buildings. But if it’s a school—so when the children get to five—they get a bit of funding for the buildings. If they’re under five, there is no funding for the buildings. Secondly, they are only funded for when children turn up. So if they have 30 allowable placements but only 27 children come because three are sick—or the parents are sick or there is some other difficulty—then they are only funded for 27. Thirdly, if one of those qualified teachers is sick—and my goodness, the bugs that go around in early childhood; we can all understand how that might happen—it is very, very difficult to get relief teachers, and I don’t see any help from this Government in solving that.

Also, it was a pretty good education going to Ko Te Aroha. They do have some children with high needs. There’s an extraordinarily high number of children who have experienced trauma and maybe those are ones that the private early childhood centres choose not to take on their books, but you get 1½ hours of special-needs support for a child at that childcare centre. It’s low pay already, and if you’re going to try and add up 1½ hours at this centre and 1½ hours at that centre and 1½ hours at another centre, it’s very, very difficult to make a career choice to be a teacher-aide for early childhood education.

So the Green Party’s clear Green Budget supports a much simpler, much more effective way of working with the tax system. This bill is fiddling with the fig leaf on the tax system, not taking a simple approach: first $10,000 tax-free. I would like to see the money that this Government spends on public good not going to fund oil exploration subsidies, not funding tax on tobacco, and if you want to ask me about other issues in the tax system, I would need a lot longer than 35 seconds.

Labour’s spokespeople who talked earlier on pointed out that 20 percent of the fees will go to admin. What percentage will go to corporate profit from centres that are soon going to have far more unqualified teachers looking after our most precious tamariki?

Before I call Cameron Brewer, I just to clarify that the House has got itself a little bit out of order in terms of speaking. So we’re going to have Cameron Brewer, and then we’re going to come back into order and have Ryan Hamilton straight after Cameron Brewer.

Thank you, Madam Speaker. Just looking at the regulatory impact statement as to how successful this policy already has been: $50 million has been paid out to 60,000 families. This is about improving FamilyBoost, making it more rewarding and more accessible to more Kiwi families. I commend it.

Oh, $6,240 a year eligible refund—so good. I commend this bill to the House.

This is a split call.

Thank you, Madam Speaker. How embarrassing—how embarrassing—for the Government to get their policy settings so wrong and to get their systems so wrong that they have to return to the House. They have to return the House to reset the policy. Now, they are embarrassed, but this is also a Government who is not backing itself. We can see how they’re not backing themselves in something that my colleague Dr Deborah Russell pointed out before, which is that the Government has also introduced an amendment in the annual taxation bill that will allow future changes to FamilyBoost to be made by Order in Council. If you’re very embarrassed now, the last thing this Government will want to do is to have to return back to Parliament to change the settings again if they’re wrong. But they are not backing themselves; they are using an Order in Council to go around the side door if, yet again, they find that their policy settings are simply wrong.

While we do support the changes that are being made in this bill, in truth, we don’t know whether they will be successful because there are unanswered questions about whether parents, for example, have been consulted on what the easiest way to access these supports is. There are issues, also, about the Government failing to see this sector as a whole. My colleague Teanau Tuiono spoke earlier about moving the deckchairs. Having a policy that families can use to support them to make it easier, in terms of the cost of living, to access these services and not looking at the pay of early childhood education (ECE) teachers and not looking at the mechanisms through which they would access those supports is an absolute failure. This Government really needs to think about what those access mechanisms, are as well as supporting our ECE teachers.

The NZEI put out a press statement that talked about the massive impact that Labour Budgets have had in the past, including our policy—our simple policy—of introducing 20 hours of ECE for two-year-olds, the simple policy that would have worked. They talked about the investment into the ECE sector, and they queried whether the FamilyBoost changes would, in fact, help people because of the placement of those administrative burdens on some of the families who least have the time available to navigate the process.

Interestingly, the Government’s own document, the departmental disclosure statement, also echoes this issue. It says that this policy won’t be effective if the uptake is low. The uptake is really the cornerstone in terms of understanding whether these supports will be taken up at all. Now, what we’ve seen in the past is that a number of families simply haven’t been able to access the support. The big questions is: what consultation and what work has the Government done identifying what system improvements can be made? Again, the departmental disclosure statement gives us some insight into this, but there is an important point. It says that there was consultation, however—and I quote—“there was a constrained consultation period with a limited group of public government and private sector stakeholders when developing the proposal to be given effect by this Bill.” There is no mention of parents, the people who will need to use the system. My question would be: what consultation was done with the users of this system? It appears that there has been none. It’s OK, because, again, the Government have put in place a back door where, if and when they get this wrong again, rather than coming back to the House and being up front and open with the people of New Zealand, they can—through the back door—through Order in Council make a significant change to Government policy. I’d put it to the Government that that is not the purpose of an Order in Council. You must not avoid being embarrassed. You must face up to your mistakes.

This is a great policy, I commend it to the House.

Thank you, Madam Speaker. Oh, I haven’t got my sparring buddy here for this contribution.

I’ll start from the beginning—from the very beginning. When this Government came into Government, there was a policy in place—and that was the Labour Party’s policy—to provide funding to extend the 20 hours early childhood education (ECE) subsidy to two-year-olds, because it was currently only available to three-year-olds. What this Government did was they cancelled that policy because they believed they had a better one—they had a better idea and a better plan.

But what we know is that they have not been able to deliver on what it is that they promised to families, and that’s why we are here today, debating this bill, which Labour is supporting because we can see that the Government is admitting their failure, coming here to fix up their mistakes, and to finally get the support that was promised to families.

There has been a bit of discussion in the last few contributions—one of the members on the other side of the House was boasting about the almost $70 million that has been paid out so far, but what that member failed to acknowledge is that, actually, they were expecting to pay out up to $174 million. The difference between $69 million and $174 million is quite a big number. It points to the fact that they have failed to deliver on their promise and to deliver this policy.

I did mention in my previous contribution that I have heard from parents—and I do note that the Government has not consulted parents on this proposed change, but I was talking to parents yesterday who were saying that this Government’s scheme is difficult for parents. It gives them more life admin on top of their busy lives and looking after young children. This Government says, “We have some relief for you, but you have to do all of these things to be able to access that relief.”

Now, compare that to what Labour had in place, which was to extend 20 hours free ECE that was automatic based on your enrolment. This Government says, “We have some relief for you, but you have to collect the receipts, you have to get the invoices, you then have to submit it, you have to do it every so often”—and that is causing a lot of people not to access the support that they have.

In the regulatory impact statement, at paragraph 33, the IRD did do some consultation on this proposed change, and one of the things they got from that feedback was suggestions about how to make it more accessible—how they could encourage the uptake by making the process easier and more accommodating for families.

We were just having this debate across the House in the earlier speeches—the Minister of Finance absolutely ignoring or refusing to listen to the points that I was trying to make on behalf of parents. Her own regulatory impact statement points out that this is feedback that the IRD have been receiving. One of the things that needs to be noted is that, in a rush to address their failed policy, it says here that “however, … [the] suggestions could not be achieved within the [short time frame]”. Once again, this Government refuses to listen to feedback on their policies and make the changes accordingly.

We have some figures that we have been talking about in the House this morning about FamilyBoost and about what was promised but what has actually resulted. We know that only 244 families have received the full amount, and we don’t know—nobody has been able to provide us with one single family who has received the $250 that was promised. Nicola Willis promised 100,000 families would get FamilyBoost, but only 27,000 have consistently received it. Only 27,000 households have consistently received a payment for the year—a payment every quarter—and 67,590 unique households have received at least one payment. We support this bill because we want all of those families who are entitled to receive this support in a cost of living crisis. This bill fixes up the policy’s abject failure.

The other thing I think is really important to note for this House is that this is administratively expensive: $13.9 million has been spent on the administration of this policy. That is an additional 95 fulltime-equivalents. The scheme is complicated, and IRD has answered over 28,000 phone calls about FamilyBoost and also responded to over 20,000 web messages relating to FamilyBoost. It also concerns me, when we look at the data that we have, that, up until 3 September, 41,482 claims have actually been declined. What we know is that around 69 percent of those were declined due to their income being over the quarterly threshold, but the remainder were declined for a range of reasons, including relating to the invoice or due to a return not being filed.

This information that we have received, through written questions and other sources, shows the Government that there is a whole lot more that they could be doing if they genuinely wanted people to be able to receive the support that this policy is promising them. But they don’t want to do that, and I just can’t understand why they don’t want to make this a simpler process for families to receive much-needed financial relief in a cost of living crisis. Why do they continue to ignore that information?

The final thing that I want to talk about in my contribution is the lack of time that has been taken to engage directly with parents. This Minister seems to assume that she has all the answers for that without taking any time to engage with them. At paragraph 34 in the regulatory impact statement, it says: “The short consultation time frame means officials were unable to engage directly with families.”

I know, because I met yesterday with those advocating and supporting families in this early childhood education space, who said they desperately want to be working with the Government and be heard by the Government in terms of the concerns that they have. But because of rushed time frames, because of a dismissal of those concerns that they’re raising, the Government is not prioritising ensuring that they are consulting with that parent voice—and I would suggest that this Minister and this Government do more of that.

Labour is supporting this bill because we recognise that these families who have been promised this support from the Government—who have not been able to deliver on their promise—deserve to receive this. We are supporting it because it is an acknowledgment that this Government’s policy has failed, that it needs to be corrected.

We see—sorry, one other point that I’ll make—that they actually are anticipating that they’ll need to come back again, so they’ve changed the law—they’re making a change in there—so that they can just do this through orders and won’t have to come back and be embarrassed once again. We commend this bill to the House.

I support more tax credits for the 22,000 additional families who can be supported by the FamilyBoost. Therefore, I support the bill to the House.

Thank you, Mr Speaker. Here we are, cleaning up Nicola Willis’ mess because she couldn’t get it right: she couldn’t design an effective, simple, and straightforward system. She went out on the hoardings and she said there’s going to be thousands of families that are going to get $250 a week—

Hon Barbara Edmonds: 130,000 families.

Hon Dr DUNCAN WEBB: —130,000 families—thank you, Barbara Edmonds—and how many are there? Nada, zilch, none, zero—zero.

The spiteful speech of the Minister of Finance—we’re coming here saying, “If you want to fix it up, we’ll give you a hand.”, and here she comes and attacks the Labour Party because she’s got nothing good to say about the National Party.

But we’re here—and you know what? This is a flawed policy, but it’s not as bad as giving nothing. I honestly don’t understand why you didn’t just give free early childhood education (ECE) to two-year-olds. Look, there are people out there, there are families out there putting baby formula on Afterpay, and you’re asking them to pay for their childcare first, then go and get the invoices, then go online, fill out the form, upload the invoices. We know it’s well-documented that the reason there’s been such poor uptake is if you put enough administrative hurdles in front of people, you will get attrition. Where will that attrition be? It’ll be amongst those people who are less literate or less able or more busy, more distracted, not amongst your wealthy, leafy, middle-class families who’ve got a bit of time for admin for an evening; no, it’ll be those people who’ve got three kids and three different jobs and who are struggling to make ends meet.

So this doesn’t help those that need it most—the most. It actually provides a very generous subsidy right up into quite high income brackets. It abates, I think, at a family household income of over $200,000. Whereas, we think the help should be going to those that need it most. This will help some truly needy families, and that’s why we’re supporting it.

But let us be clear: this is a patch on a policy that failed. We need to address the real issues in our country, and whilst this will give some relief against the horrific cost of living crisis that that Government is overseeing, it doesn’t go far enough. We need genuine measures to address things like the cost of food. If people are putting baby formula on Afterpay, going to the gas station and having to borrow money to put petrol in their car to go to work—these are the problems that families are facing, and that Government is not interested in addressing them. They’re fiddling at the edges. There are no measures. In fact, it’s the opposite. They are putting costs up; things like the Natural Hazards Commission, car registration, the soon to be petrol tax. They are actually creating inflation in Government charges. Here we have a derisory patch on a policy that, in fact, favours the well-off, rather than those that really need it the most.

We are supporting the bill. In the tone of the speech, you might wonder why we are supporting it—because one of the things it does is help families who are really struggling with their childcare and ECE costs, and that is a good thing. It’s the least bad piece of legislation that the Government has presented so far, so we will support it, but for Nicola Willis to come in here and pretend that in some way this isn’t just a fix of an absolute policy flop is ridiculous. She should come in here humiliated and be humble, to apologise for the mess she made and that she’s having to ask us to help her out. Here we are, happy to help out—

Carl Bates: Humble like Duncan Webb!

Hon Dr DUNCAN WEBB: There’s Carl Bates—keep up the good work!

Look, this is a policy which hasn’t worked. It’s a bit of a fix; it doesn’t go far enough. The sooner that Government is removed and we can make some real change that helps those that need it the most, the better.

Motion agreed to.

Bill read a second time.

This bill is set down for committee stage immediately.

In Committee

Clause 1 Title