Income Tax (FamilyBoost) Amendment Bill

Labour supports this bill, and we support the bill because it puts a bit of extra money into families’ back pockets. We are in the midst of a cost of living crisis. We know families are doing it tough. In the last year—a year under that Government—food prices have gone up 5 percent; fruit and vegetables have gone up 8.9 percent; meat has gone up 9.4 percent; bread has gone up 9.5 percent; cheese has gone up 14.3 percent; milk has gone up 15 percent; all on that Government’s watch.

Families are doing it tough, and right through winter, things have been even worse. In the last year, electricity prices have gone up 11.4 percent, and they’ve gone up because that Government will not invest in renewables. That is why we are struggling and why families are paying higher prices. On top of that, it seems—as admitted by the Minister of Finance today—within the last quarter, when the numbers come out tomorrow, it might show that we’ve been in recession.

The green shoots that they keep on talking about seem to be withering away, and it’s because that Government has failed to support the economy. Families are doing it tough because money is not circulating. Jobs are disappearing; 19,000 jobs in the construction sector. Here’s the thing: propping up the construction sector would have propped up jobs, would have propped up money circulating in the economy, would have propped up small businesses. Instead, we have low wages, an economy that’s stagnating, high prices, and a cost of living crisis.

That is why Labour is supporting this bill: because families are doing it tough. But lest the Minister of Finance say that this is a road to Damascus moment or anything like that, let us be clear that if she says it’s a road to Damascus moment, it’s only because she wants to shine a bright light in one direction and hide the complete failure of her policy in the other direction. The only reason we have been putting this bill through the House in urgency is because the Minister’s policy was a glorious mess—an absolute mess.

That Government came into office saying that they were going to deliver $250 a fortnight to families. Every now and again, they manage to remember the words “up to”. But the headline promise was $250 a fortnight to families, and that money was going to be delivered through tax cuts and through this policy, FamilyBoost. Up to $250 a fortnight, they said—but, when we asked, again and again and again, they could not find a single family that had gotten up to $250. Their headline promise, and they have not delivered it.

In fact, when we pushed and pushed and pushed, what we found was that, in terms of the families who got it, only 244 families had actually gotten the full amount of FamilyBoost. We’ve had a very recent update to that data in the regulatory impact statement for this bill; it’s now up to 385 families who have received the full amount of FamilyBoost, and, of those families, the Government couldn’t identify one that had had the tax cuts as well to get up to $250 a fortnight.

That Government promised that 100,000 families would get FamilyBoost. So far, only 27,000 families have gotten it in every quarter that it has been on offer. That is a failure of a policy, and that is why we’ve been back in the House, putting the Minister of Finance’s tweaks through—to live up to the promises that they made and did not deliver on.

It is really interesting. It was very hard to forecast this policy, as shown in the regulatory impact statement. It turns out, once we got that data, that, of the families who are predicted to take it up, only 51 percent of families had taken it up. Even in the new model—even with the tweaks that are being put through in this bill—even then, only 71 percent of families are projected to be able to take up FamilyBoost.

This policy is still not working properly. Families are missing out, and, if we look at who’s missing out, there’s some really telling data on that—some really telling information. From the Minister’s own officials, and from the regulatory impact statement, it is Māori and Pacific families who are missing out on getting FamilyBoost—who are missing out on that extra money that they so desperately need when we’re dealing with the cost of living crisis being manufactured by this Government.

I can understand why they’re missing out: one of the things that’s going on is that it’s actually hard to claim FamilyBoost. The families who have claimed it say that it’s an easy process—but what about the families who haven’t been able to claim it? We haven’t heard from them, and I know why the barriers might be there. In order to claim FamilyBoost, a family must get receipts from their childcare provider; they must upload them to Inland Revenue, and then they must claim the money back that way. What about the families who don’t have the capacity to copy documents at home? What about the families who can’t get those documents in the first place? What about the families who don’t even have computing at home? What about the families who don’t have easy access to the internet? There are a whole set of barriers there for families in terms of claiming FamilyBoost. I think that bureaucratic process is part of the problem, and we told the Minister that the process would be too bureaucratic.

On the other side of the equation—on the other side of the screen—Inland Revenue has had to employ 95 extra fulltime-equivalent staff members to deliver this policy at a cost of $13 million; 95 people processing receipts and putting the claims through. It’s great that people are employed, but this is a highly manual process, and, again, we told the Minister that the manual nature of this process would create barriers.

“Why?”, we said. “Why on earth?” If we wanted to have this kind of policy of supporting families—of ensuring that we reduced the costs of childcare, of ensuring that children get good early childhood education—there was a perfectly good policy on offer on this side of the House, of taking the existing model, which was working, of 20 hours free early childhood education for three- to five-year-olds and expanding it to two-year-olds. That would have helped families out; that would have made a difference to them, but the Government on that side decided to reject it.

Here’s another one of the stinkers that comes through from the regulatory impact statement and from the information we got with this bill. Sitting in the officials’ commentary on the bill, we have the data and the calculations that show us the income levels that families can earn and still get this rebate. This rebate—only a small amount of money, but money none the less—is available to families earning $220,000 a year. That’s a large income. I don’t begrudge those families getting that rebate—I think we should be helping families out—but $220,000 a year? That’s a very large income for a family. That puts those families well, well into the top 10 percent of families.

Families earning $200,000 get some of this money—that’s still a large income. These are large family incomes, and yet they are getting assistance with childcare. In some ways, I don’t begrudge it, but, in other ways, for goodness’ sake! What we have here is families at the upper end of the income scale getting this assistance, and Māori and Pasifika families not getting it. There is something wrong with this policy; something wrong with the way it’s being set up and the way it’s delivered. Even then, we do not have any guarantees from the Minister that it will work.

The Minister, in the latest tax bill, is putting in a clause to give herself, or himself, the right to make further tweaks to FamilyBoost by using an Order in Council. That, to me, says that they are worried that what they are doing in this bill will not be enough; that they know that they are going to have to otherwise come back to this House again and again and again to tweak their policy because they have not got it right.

Yes, Labour supports this bill—we want families to have more money. But let’s be quite clear: what this bill represents is a giant mess made by that Government, and a big cover-up for Nicola Willis.

Tēnā koe, Mr Speaker. Thank you very much for letting me take the call. The Green Party absolutely supports early childhood education, and, in our view, it is a public good. It should be free, it should be universally available, it should be for public good—not for private profit—it should be the community sector that supports it, we should have qualified teachers. All of this is entirely possible and within reach, as the Green Party demonstrated in our Green Budget in May. It is a completely different approach to the one from this Government. We want to wind down subsidies for commercial centres who are making profits, and we want to ensure that we have a child-centred, fully public system—and why not? What else could be more important than our tamariki?

Early childhood education is an investment in our country. It’s an investment in our future. But, you know, it’s the last thing that this lot want because they’re quite happy with the inequality in this country, as we can see from their actions, which have all gone towards exacerbating and increasing it. The reason is because the people who they represent benefit when there are people living in poverty. It means there’s cheaper labour. It means that they can benefit from tax-free capital gains. That’s why they made the terrible, terrible decision to give billions of dollars to landlords, quite a lot of money to tobacco companies, a couple a hundred million to fossil fuel exploration—all things that don’t genuinely benefit our country in any way whatsoever, but do benefit vested interest.

All of the information about the failure of Nicola Willis’ early childhood education support policy is right here in the regulatory impact statement (RIS), which says, very clearly, “What is the policy problem?” The policy problem is that FamilyBoost is reaching far fewer families and providing less financial assistance than originally intended. A change is required. FamilyBoost was dreamt up on the campaign trail to try and pretend that you can have it both ways: that you can have a National-led Government that is clearly going to prioritise the interests of landlords, private property owners, large corporates, and polluters over the common public good of the country, but they know that that’s not actually popular, so they try to dress it up and pretend they’ll have policies that will take action on the things that New Zealanders actually care about. Families do want more support for quality early childhood education, so the Government dreamt up this policy, FamilyBoost, and cancelled and repealed the extension of the free 20 hours of early childhood education that was set to come in for two-year-olds. Something that would have been delivering real benefit to a much larger number of families over the last year and a bit, year and a half.

Instead, they brought in FamilyBoost. After the time at which the free early childhood 20 hours for two-year-olds would have come in, they brought in FamilyBoost. Now, in 2025, we can see it’s barely getting out there. Only a very small number, 249 families, actually benefited from the full subsidy, so that is obviously a tiny percentage of the families that have young children. It’s not addressing the issues with unaffordability of early childhood education.

Nicola Willis and the Government have come to the House—again—under urgency. By the way—oh, this is here on the RIS, this is good—“Given the lack of available data when the scheme was being designed in late 2023, the eligible population … for the current settings was modelled assuming 100% uptake in order to set the fiscal cost”. They came in with their harebrained policy because we don’t have an independent fiscal institution. In Opposition, it’s all about what’s going to sound good in headlines—“Let’s try to make it look like we’re doing something”—and come up with this crap policy. They come in, the officials, to have limited data, they’re trying to design this programme with no information, and they estimated that there would be much higher uptake. In fact, I think it was only about 50,000 families received any sort of benefit from this, when they originally thought it would be many times more than that.

So, yeah, it was about 59,000 across all of the categories—only $50 million paid out, when they’d budgeted $174 million. What is that? That’s more than two-thirds of the money set aside has not gotten to the families who need it, who are struggling with the cost of living crisis. They come—again—under urgency and try to claim that the Green Party doesn’t support early childhood education or families with young children because we won’t vote for their crap policy brought to us under urgency—again. I mean, it’s just pathetic. Like, it’s just really hard—look, I try to use more erudite language to describe what the Government’s bringing, but I try to be straightforward and to the point and the reality is it’s shallow, it’s irresponsible, it is not good policymaking. It’s disappointing.

I’m sure all the voters who voted for the Government policies, many of them are absolutely regretting their decision because they can see that the economy has crashed, people are struggling, record numbers of people are leaving for other countries like Australia. By the way, they’re going to countries that have a capital gains tax, that have a higher, more progressive tax, that have more public services, because that’s how we as a country deliver quality public services, is having a fair tax system instead of having these complicated, ridiculous policies that say, “Oh, we’re going to try and make low-income, working parents keep their—firstly, they have to pay upfront for the early childhood.” They have to pay up front for it with FamilyBoost and then claim it back with invoices.

Why is this Government creating extra bureaucracy and extra administrative burden on families in order to access some measly support that doesn’t even address the fact that all this money we’re putting into early childhood centres, a lot of it isn’t getting to the kaiako, it isn’t getting to the children; it is getting to the owners in the way of profit. The decisions that the Government’s about to make—because the Minister David Seymour is quite committed to making our early childhood centres less safe, lower cost, with less qualified teachers in order that the owners of those private centres can rake in more profit. As if that is going to help our country. Well, we all know that it’s not. People out there in Aotearoa should know they have a real alternative. We don’t have to vote for your sad, pathetic attempts to address real issues when they don’t address the issue, and we will not—we will not.

I want to read more from this regulatory impact statement because I thought it was quite fascinating and quite telling. So we’ve got the distribution of payments by income and payment amount. I asked the Minister during the committee stages if there had been a distributional analysis of the impacts of the policy, and he claimed that Figure 1 showed that. Well, it really doesn’t, because it only includes the people who have actually accessed the money. It doesn’t include the many people who have not accessed this who are eligible. It doesn’t look at the overall impact. But what it does say is that of the people, the families who are accessing this, the data shows that claims and payments are concentrated among families at the higher end of FamilyBoost income eligibility, particularly those, you know, they’re still not high income, but overall the policy is still not addressing childcare costs for the people who need it most. That’s the problem with the overall design of it.

If you want people who are under stress, who are low income, who are dealing with kids, who are maybe working multiple, insecure jobs, who maybe have insecure housing because the Government has made it easier for landlords to kick out tenants for no reason, who are maybe dealing with insecure work because the Government has made it easier for employers to exploit workers, that they have to somehow figure out how to navigate myIR and figure it out. Also, it may not even be worth it to them to do that, because they’re simply likely to receive smaller payments and see less value in claiming FamilyBoost.

All of this just to say that it is terribly disappointing, I think, for New Zealanders to have this Government who is so short-sighted, who is so much in the pocket of vested interests, of big business, of fossil fuel interests, of private, corporate, of owners of early childhood centres who cannot understand the value of investing in our people; who do not care about reducing inequality and looking after tamariki and ensuring that they have quality education; who do not understand the value of women providing basic, core, essential services to our economy and who rip money away from them. It is a disgrace.

I want to acknowledge that when this Government recognises a problem with laws that have been made, we act very quickly to fix them. We don’t stand here in the House and pretend we don’t know what the problem is. We are here to fix things that matter.

That is why the Income Tax (FamilyBoost) Amendment Bill is so important. It aims to reduce the cost burden of early childhood care on families. The goal is to make childcare more affordable, particularly for lower and middle income families. That is why ACT is here in Parliament: to fix things that matter. We support this bill.

We have established across the House today that early childhood education is not just an investment in our kids; it’s an investment in our long-term human capital, productivity, and prosperity. We congratulate the Minister for her work on this bill. It’s the right policy in the right place at the right time. We commend this bill to the House.

Ricardo Menéndez March: Tell us why.

Dr DAVID WILSON: I just did.

A five-minute call—Ricardo Menéndez March

Thank you, Mr Speaker. I think it’s really telling that so many members of the Government are unable to acknowledge the policy design failures and to adequately own up to them. Kudos, at least, to one of them—Simon Court—for acknowledging that in the previous contribution that he made.

Let’s begin by acknowledging the fact that we’re debating this bill under urgency due to a complete botch-up by the Government, who, I would say, has gone as far as mischaracterising the policy during the election season, promising that this would provide genuine and meaningful cost of living relief for families with young children. As the months have rolled on, what we have found is that most families have not been able access this support at all, let alone receive the maximum support available. At a time of growing inequality and of growing material hardship for children living in poverty and for the families who are currently being locked out of accessing emergency housing and are living on the streets, the Government’s flagship policy seems to be, right now, under urgency, simply expanding the income brackets so that higher-income New Zealanders can access this FamilyBoost payment.

It’s not a meaningful intervention in a cost of living crisis that has been, literally, worsened by decisions that this Government has taken to cut thousands of jobs and to deprive people living in poverty of essential assistance from Work and Income. It simply aims to pander to the early childhood education (ECE) companies that are running our early childhood education centres as a for-profit business, as opposed to a public good. Early childhood education should be a core public good that is adequately supported, where the workers are well looked after and there are enough workers so that they can look after the children that they care so much about. Right now, what we have is a Government that is simply subsidising corporations at the expense of the future of our children. This policy, unfortunately, does not go any way to addressing the core underlying issues that are preventing so many families from accessing early childhood education.

My colleague Julie Anne Genter talked about some of the design issues that this policy has—particularly, the barriers it creates for low-income families who desperately need support. The fact that the policy has been designed in a way that means that you have to pay first before you can access the rebate, means that, for lower-income families, it still remains a barrier. This is why the Greens, rather than pushing through the technocratic and poorly designed policy, would instead champion ECE as a public good, adequately support the workers, and make it free so that no family in Aotearoa—no matter their income bracket—has to make decisions about whether they can afford early childhood education or their bills.

What is also really clear as well, looking at the regulatory impact statement on this bill, is that this Government chose to not engage with the agencies who have public good ahead of profit when it comes to their interests. Looking at the regulatory impact statement, it is incredibly clear that they chose to simply consult with people in the early childhood education sector as opposed to, for example, the families who have not been able to access this very same policy, or, for example, consulting with the Children’s Commissioner who would’ve, in my view, been a critical agency that this Government should’ve consulted with to get really important feedback on the impact that this policy is having on families.

This policy is a joke if this is the Government’s flagship cost of living relief on top of the tax cuts that will disproportionately benefit high-income earners. They need to turn their faces away from the halls of Parliament and on to the streets to realise that inequality is growing in this country, that more people are living in the streets, and that this FamilyBoost bill will do nothing to alleviate the hardships—many of them caused directly by Government decisions—that they have inflicted upon our communities. The Greens are fighting to not just get rid of this Government but to have a Government that treats early childhood education and things like dental care and things like our GP services as core public goods. Yes, we will make the wealthy few pay for it, as much as it scares the members on the other side.

The Green Party won’t be supporting this bill, because it’s a terribly designed policy. It does not meaningfully deliver cost of living relief and does not address, in any way, the fundamental issues within our early childhood education sector. We look forward to working with families affected by the cost of living crisis to put forward alternatives that meaningfully allow families to have what they need to live a thriving life. Kia ora.

Debate interrupted.