Income Tax (FamilyBoost) Amendment Bill

Members, the House is in committee on the Income Tax (FamilyBoost) Amendment Bill. We now come to clause 1, and this is the debate on the title. The question is that clause 1 stand part, and I just wanted to make a point before we start this. We have received a number of amendments around the title and I’ve had a good look through them, and it’s likely that I will rule some of them as an attempt to criticise the bill. I just wanted to make members aware, before we started clause 1, to just be very logical with the title clause amendments, because some of them are quite a stretch. Having said that, the question is that clause 1 stand part.

Point of order, Madam Chairperson. Just to clarify: we’re going through this clause by clause, are we?

CHAIRPERSON (Barbara Kuriger): I have not been told any different.

Hon Dr DUNCAN WEBB: OK. That’s good. Yes, well, I’m very happy to talk about the title, because I do think that the title doesn’t really capture what this bill does. Madam Speaker, I may take a call.

Really, this is a bill which addresses the problem that there are no people, and it’s unlikely there ever will be any people, getting $250 a week, which is the maximum that people are entitled to. Presumably, I think the Minister said in her speech—well, she alluded to the fact that, in fact, to get that amount of money, you’d have to be paying an enormous amount of childcare because of the fact it’s a subsidy and it doesn’t pay for all the childcare, and childcare doesn’t usually consume that amount of household income.

Really, we should be calling this bill something along the lines of the “Income Tax (Imaginary $250 Per Week Subsidy) Bill”, because that’s what it is: it’s imaginary. In fact, it was misleading to go to the electorate and say that there were going to be those subsidies to a large number of people. The Government hasn’t fronted up and said, “Look, here are the actual figures.”, because they will now know. They will actually now know, with a pretty high degree of accuracy, what the curve of the subsidy will be, who will be getting the most and how much that will be and where it will tail off, and what the entire curve and distribution of those will be. The Government should be upfront about that.

Look, in fact, if we’re going to change the title of the bill, and, in fact, we should—and, in fact, there may be some tabled amendments, either here or arriving shortly, that do that. The “Income Tax (Imaginary $250 Per Week Subsidy) Bill” is a good start, but if you don’t like that one, I’ll address some more in due course.

I, too, want to speak to the appropriateness of this name. In particular, I want to talk about it because, although on the face of it what this bill does is just increase the amount of FamilyBoost available to families—and this is a good thing which we’ve said we support because of the cost of living—in actual fact, it disguises what really has gone on with this bill. That is that right from the start, this policy was flawed; was flawed not because it was attempting to give money to families, but it was flawed because the money could not be delivered. The delivery mechanisms weren’t there. The data wasn’t there to support the Government’s analysis that it would go to 100,000 families. The data certainly wasn’t there to show that people would get $250 a fortnight, as the Prime Minister promised during the election campaign.

We pointed this out as the initial FamilyBoost legislation went through the House, I think, back in Budget legislation. We said there would be problems with delivery. We pointed out that there were issues with the policy. We said a simpler way to do this would just be to give a straightforward subsidy via the early childhood education 20 hours free that already exists. We warned the Minister that her policy would not work. Well, you know, it hasn’t worked.

So we’re coming back now to this House in order to save Nicola Willis’ face. She promised money; she couldn’t deliver it. That’s the real reason we are in this House today. So disguise it, as one might, by claiming it’s all about just putting more money in families’ pockets; good thing to do in a cost of living crisis. What it’s really about is fixing up the giant stuff-up that was made.

I think that this bill should be called the “Income Tax (FamilyBoost) (Saving Face) Amendment Bill”. I think that ought to be the way that this is referred to because all it does is try to save Nicola Willis’ face.

Thank you very much, Madam Chair. For those watching this debate at home, you can tell by the quality of the contributions from members of the party on my left that they are not taking what is a significant benefit for New Zealand families seriously at all. The fact that we are increasing the income threshold for people to be eligible for FamilyBoost from $180,000 to $230,000 is a significant increase in scope, and the fact that we’re increasing the credit from 25c to 40c is significant. I think, in all fairness, let’s take this issue seriously. This is a significant win for New Zealand families, and we should treat it as such.

Can I just make it clear that I will judge the quality of the contributions, thank you.

Thank you very much, Madam Chair. It is with the utmost seriousness that I begin my contribution, because, of course, Labour is supporting this bill. We recognise the Government has owned up to its mistake, today, and has finally—after months of pressure in this House from my colleague Barbara Edmonds and from my colleague Dr Deborah Russell—seen the light.

We want to be recognising the fact that they have changed their policy, their unworkable policy that they took to the election, and—to just make sure that this is appropriately recorded in legislation—to give the bill a title that reflects what it actually does. Because we’ve been so vigorous in the House in our prosecuting of the fact that this policy has been unworkable, we would just like the gratification of having that reflected in the title. So we would like this to be the “Nicola Willis Caves to Labour’s Pressure Bill”, because that is a description of what’s actually happened. The Government has defended this policy in this House for months. We have made the case that no one received the $250 that they were promised at the election and, therefore, we now want to have this turn-around appropriately noted.

The other potential name for this bill—because we know, as the Minister reflected in her contributions, that people are finding it tough out there. There is a cost of living crisis, and the Government has spent an awful long time supporting an Act that wasn’t delivering to expectations for New Zealanders. I would humbly like to suggest this is called the “Out of Touch with Working Parents Bill”, because working parents face everyday realities of making their budget add up. Childcare is a significant cost, and yet, for two years, the Government has been arguing that this unworkable policy that they are now having to correct was all right. Yet today, under urgency, we’re passing a change to all of that. So it would just be appropriate to note that the Government has recognised that it hadn’t met the needs of working parents because it was out of touch.

Then, finally, I think working parents would, quite rightly, ask the Government whether this could be called the “Show Me the Money Bill”, because they haven’t been getting the money. There are multiple instances of Christopher Luxon saying at the last election that working families will get $250, and yet the Government can’t find a single family that has received the $250—yet the Government can’t find a single family that has received the $250. We saw a valiant attempt at defending that from the Minister of Finance in the earlier stages of this debate, when she said—I think she was, essentially, saying that, theoretically, if someone did have high costs, they could get a $250 rebate from this policy, but the fact that no one exists who’s got that rebate shouldn’t be held against that Act. That is absolutely ridiculous, and Kiwis could, quite rightly, ask the Government to show them the money.

Then, when I reflect on this—that this was a policy the National Party designed in Opposition and that has proved to be utterly unworkable in Government—I’m also reminded of their cancer medicines promise, which they had to defer because they couldn’t get that. So we could also call this bill the “Problems in the National Party Policy Shop Bill”, because they’re unable to really seriously put forward proposals that would help working people.

Finally—because I do find Mr Campbell’s contributions give me many reasons to continue to speak—we could also think about the fact that this is, as my colleague has said, face saving and yet has been an overly bureaucratised bill with 25 percent of the costs going on to administration of the bill rather than giving relief to working families. So we could call it the “Making Red Tape Bill”, because I know that is a particular preoccupation on the part of Government members.

So there we go: five excellent contributions to renaming this bill!

Thank you, Madam Chair. I want to support a number of those amendments to the bill title that the Hon Ayesha Verrall has just run through, because it is quite farcical that this particular bill is here fixing the mistakes of a policy that was bound to fail because of the administration costs—the compliance costs. Then, when I look at, actually, the regulatory impact statement about what’s the policy problem: “The policy problem is that FamilyBoost is reaching fewer families and providing less financial assistance than originally intended.” So it’s quite clear that this is an admission of a failure of a bill.

Hence why my suggestion to the Minister, in relation to this bill, is maybe calling it the “Income Tax (Save FamilyBoost from Further Failure) Amendment Bill”. It’s quite clear that, through the contributions in the House this morning, which clearly set out all the different failures—from when the admin cost is around 20 percent of the spend; when it was promised that 21,000 families would get the two full $250 that was promised at the election actually being less than 300 families; or the 130,000 families that were entitled to FamilyBoost that was then revised down to 100,000, which is now less than 70,000, or actually 58 percent, as set out on the regulatory impact statement—I think the “Income Tax (Save FamilyBoost from Further Failure) Amendment Bill” is actually a perfect title for this particular bill.

Then, also, to Dr Verrall’s other contribution around the “Income Tax (Out of Touch for Working Parents) Amendment Bill”, I think that is a fitting title for this particular bill, because as we set out earlier in this debate, the number of steps that parents have to go through to actually get their entitlements for this bill—her suggestion as to rewording this as “Out of Touch for Working Parents” is actually a very fitting name for this bill, because, again, as I questioned in my second reading speech, my question or my thing to the Minister really was: “Is there going to be more bills to fix this policy?”, given that this bill does not even touch on improving administration; it just increases the families who are entitled to it. Again, as I’ve prefaced before in the House, the question that I had around the administration is that it needs 95 fulltime-equivalents. We can probably go through those questions as we work through the rest of the clauses.

I do believe that this should be called the “Income Tax (Save FamilyBoost from Further Failure) Bill”, because it has been a failure of a policy. We’ve had an admission from the Government that they’ve had to bring this bill to the House, rush it under urgency to try and get more families entitled to it, which is why Labour is supporting the bill. But it is a failure from this Government, full stop. When both the Green Party and the Labour Party, in earlier speeches, said, “You should have just extended early childhood education to two-year-olds”—a policy that was minimal administration for families; it was already a policy that they have to undertake when their child turns three and four years old—instead, the Government decided to repeal it and bring in the FamilyBoost policy, which is clearly not boosting anybody sufficiently, which is why they’ve had to come back, fix the legislation, and, also, why they’ve actually got another bill—another tax bill, actually, another tax bill—that has some changes through Orders in Council, which Dr Deborah Russell had talked about. My suggestion to the House is that we should call this the “Income Tax (Save FamilyBoost from Failing Even Further) Bill”.

Tēnā koe, Madam Chair. We’re here in urgency and, obviously, we’re not going through a whole process, and I believe that when this bill was originally brought in, it was also—the primary legislation this is amending was brought in under urgency, during Budget urgency, and so we’ve never had a select committee on this policy or this legislation. Reading from the regulatory impact statement the summary of the options to expand FamilyBoost, this is from the officials at Inland Revenue: “What is the policy problem? The policy problem is that FamilyBoost is reaching fewer families and providing less financial assistance than originally intended.” Well, intentions are all good, but here we are: we have the evidence that FamilyBoost has not been working.

During a cost of living crisis, it has not been providing the financial support to families who need it and that it was intended to, and so what would have been much better was if the coalition Government and Nicola Willis hadn’t cancelled the planned extension to free 20 hours’ early childhood education (ECE) to two-year-olds. That would have easily reached a whole lot of families in the past year and a half. It would have meant thousands of dollars more in the pockets of families of two-year-olds. It would have made a substantial difference, and here we are, rearranging deckchairs on the Titanic of this policy, which is—

CHAIRPERSON (Barbara Kuriger): Can I just remind the member that we’re on the title.

Hon JULIE ANNE GENTER: Yes, we’re on the title, and—

CHAIRPERSON (Barbara Kuriger): Thank you.

Hon JULIE ANNE GENTER: —that’s why—I mean, but the title says it all, right? “(FamilyBoost)”—it’s all just a marketing exercise to make it look like the coalition Government actually wants to help families when they chose to give billions of dollars to landlords and tobacco companies, and for that reason, they didn’t have enough money to do the planned extension of 20 hours’ free ECE, which would have actually helped families who had two-year-olds.

Instead, families with two-year-olds in early childhood education pay thousands and thousands of dollars more, and a very small number—250—and what is that as a percentage of the population? There were 250—no, 249 families—who went through the process to get some sort of rebate. That’s just a pathetically small number, and it doesn’t begin to touch the number of people with two-year-olds. They were saying with their policy, “Oh, well, we thought there’d be a 100 percent uptake.”, but now, even with these changes, they’re saying that a more realistic uptake is 71 percent of eligible families. That means that 29 percent of eligible families—which is nearly a third—are not estimated to take up the benefit of this policy.

So there are many alternative titles, but it’s like “Income Tax (FamilyBoost) Amendment Bill” is not a title that actually captures the impact of the policy. I very much agree with the Hon Barbara Edmonds, the previous speaker, who has said that this should be called the “Income Tax (Trying to Save FamilyBoost from Failing) Amendment Bill”.

Look, a better solution would be not to do this legislation at all, but to go back to what the Green Party have supported, or at least the halfway house of what Labour has suggested, of extending 20 hours’ free early childhood education to two-year-olds. What if we just said that all tamariki are eligible for free, universal public and community early childhood education—why not? What is the reason to not do that? Wouldn’t that be a better policy to achieve the intended outcomes of this bill?

We haven’t been to a select committee, but it’s pretty clear that the policy objective is to improve the uptake of FamilyBoost by increasing the number of eligible recipients and the payment amounts to better align with the Government’s intended level of support. It’s clear that this policy has not worked, and while this legislation—this tweak—is going to try and make sure that more families get the benefit, it’s not as good as what we could have, or anywhere near as good as what we could have.

When we talk to people in the early childhood education sector, they’re very, very clear that this Government doesn’t support quality teachers and it doesn’t support quality early childhood education. It is taking steps through the review to try and water down early childhood education so that it’s easier for the owners of for-profit centres to cut costs, rather than looking at the outcomes we want. The outcomes we want are children who receive the care and who receive the early childhood education that they need to thrive, and we want families that aren’t out of pockets by tens of thousands of dollars every year in order to ensure that they can access that. It’s not a hard ask.

The title of this bill is wholly inadequate. It’s a joke. It should be called the “Income Tax (FamilyBoost is a Joke) Amendment Bill”.

I move, That debate on this question now close.

Dr Lawrence Xu-Nan has been really keen to give a very quick title speech, so I’m going to give him that opportunity.

Hon Dr Duncan Webb: So has the Hon Dr Duncan Webb.

CHAIRPERSON (Barbara Kuriger): Yeah. I just said I’m going to give Dr Lawrence Xu-Nan the chance to talk on the title. I note that the Hon Dr Duncan Webb has had one chance. I do want to remind the team that we are on the title, and we are getting to the point where we’re straying off the title and into other things which are more important to talk about.

Thank you, Madam Chair, I really appreciate it. I do want to address the title because I think, overall, what we’re finding here is an incredibly laughable and out-of-touch bill, mainly because it is providing a technical solution without addressing the core issues that we’re currently seeing with FamilyBoost.

So my recommendation is that this title should be “Income Tax (FamilyBoost, but With a Massive Caveat That We’re Still Going to See Limited Numbers of Households Being Eligible to Get FamilyBoost) Amendment Bill”. I mean, I do acknowledge that it’s a very wordy title.

But, I think, if we’re boiling it down, the title should be more appropriately called “FamilyBoost, yet another blue and yellow and black tape we’re seeing by this Government”. So “(FamilyBoost and Blue Tape) Amendment Bill”, because that’s what we are seeing here.

Although we are wanting to address the fact that this is a genuine concern—there are going to be, supposedly, more allocations of budget for something like this—the core crux of the issue, as we’ll discuss further along, is that not enough families have the time or the energy to claim the reimbursement in the first place, which is something we said when this Act was introduced under urgency in last year’s Budget.

So an alternative title should be “Income tax (the Government is Out of Touch With Young Families) Amendment Bill”, or “Income tax (This Government Think That Parents of Young Children Don’t Already Have Enough to Do) Amendment Bill”. Because, frankly, the Government members are completely out of touch with what young parents. Not everyone has the fancy resources that the Government members on that side of the House have; some of them have to work multiple jobs; there isn’t sufficient time to do the compensation and to look at the commencement, to look at—the ability for families to apply for that retrospective amount. That’s my final one. I think that’s the one to land on: “Income Tax (The Government is Out of Touch With the Parents of Young Children)”.

I move, That debate on this question now close.

Now we come to a number of questions and the first one around the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Zero Families Fully Boosted” is ruled out of order as being merely an attempt to criticise the bill.

There are a number of tabled amendments which are also deemed by myself as merely an attempt to criticise the bill so I don’t think we need to go through those one by one, is my judgment.

Hon Dr Duncan Webb: Yes, we do. Point of order.

CHAIRPERSON (Barbara Kuriger): My advice says no, I don’t, Dr Duncan, but I will hear your point of order.

Well, the Standing Orders and Speakers’ rulings in dealing with amendments allow amendments to be dealt with together where they are all, essentially, achieving the same thing. Each one of those amendments that you are addressing is quite unique, has a quite different title, and makes a quite different point, eo each of them should be dealt with on each of their merits—whatever the decision of the Chair is or this committee, should be dealt with individually.

OK. Yes, I could group them but I’m going to actually read them as the member’s suggested. It won’t change the result but, as the member’s requested, I will read them.

The next one is that the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Broken Promises” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Wealthfare” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Show Me The Money” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Imaginary $250 Per Week” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Desperate Vote-Grabbing Measure” is ruled out of order as being merely an attempt to criticise the bill.

The question that the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “FamilyBoost, But Not Really for Māori or Pasifika” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Bigger Subsidies for Richer People” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Cleaning up after Nicola” is ruled out of order as being merely an attempt to criticise the bill.

The question that the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Leadership Chances Boost” is ruled out of order as being merely an attempt to criticise the bill.

And that Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Pay First, Subsidise Later” is ruled out of order as being merely an attempt to criticise the bill.

Hon Dr Duncan Webb: Point of order. That last one, though, that really is quite an accurate description because—

CHAIRPERSON (Barbara Kuriger): I think—I’d ask the member to be careful about trifling with the committee. I ruled these out of order—

Hon Dr Duncan Webb: But it’s only the one that I’m asking about. Just reflecting that “pay now, subsidise later” is actually an accurate description of what this bill does.

CHAIRPERSON (Barbara Kuriger): My judgment has been made, the Hon Dr Duncan Webb. I’d like to ask you to resume your seat and then—

Rima Nakhle: When’s your 13th birthday? So we can get a cake.

CHAIRPERSON (Barbara Kuriger): Quiet please, we’re voting.