Taxation (Budget Measures) Bill (No 2)

I move, That the Taxation (Budget Measures) Bill (No 2) be now read a third time.

I would like to thank the House, again, for considering this bill as urgent, and for the contributions from members that have brought us to this stage. This Government fully recognises the immense pressure many hard-working Kiwis are under due to the rising cost of living. This is a real, urgent issue confronting households every day. That is why this Government is moving at pace to grow the economy so that we can ease the burden on households, drive down the cost of living, and give every Kiwi a fair shot at getting ahead. By growing the economy, we accelerate the recovery and deliver real support to New Zealand households and businesses.

This bill is designed to support households and businesses by implementing measures to boost investment, increase productivity, raise wages, and encourage savings. These are all the things that will put New Zealand on an accelerated pathway to recover and have a stronger economy.

I want to take a moment now to reflect on what we’ve heard from people and the communities that these changes are designed to support. One voice that particularly stands out is that of Issie Mullen-Winiata. Issie is a bright, passionate 17-year-old who has advocated for ensuring that under-18-year-olds have the same KiwiSaver rights as everyone else. She brought a petition to Parliament last September. I want to share her words directly with you, because we deserve that they are heard: “I am petitioning because, as an under-18-year-old worker, I find it unjust that I miss out on KiwiSaver contributions while doing the same work as those over 18. I believe this change is essential for young workers, as buying a first home in New Zealand is incredibly challenging, and this change would ensure equal access to retirement savings and support first-home buyers. In my opinion, allowing us to start saving earlier is vital to both buying a first home and ensuring retirement savings.”

Mr Speaker and honourable members, Issie is exactly right. I am very proud to be part of a Government that is supporting the bill because it provides equal opportunities to our young people to start saving sooner. It will mean young people like Issie and their KiwiSaver accounts will be able to grow, and it would allow them to buy their first house or to enjoy their retirement income more comfortably.

The positive feedback for measures in this bill, particularly regarding KiwiSaver, has been overwhelming. Brendan Ward, executive head of distribution for NZ Funds says: “Including 16- and 17-year-olds is a fantastic step, a great initiative to get young people into their investment journey.” He also said, “Lifting the default contribution rate to 4 percent is smart. Kiwis aren’t saving enough.” Robyn Walker, tax partner at Deloitte New Zealand, says: “It’s good to see some active thought given to improving retirement savings. When small changes are compounded over a working life, they can make a material change to what is available at retirement.”

The feedback does speak for itself. No one gets to retirement wishing they had saved less. We all need to save more, and these changes will make a significant difference when people retire, allowing them to go off and enjoy their retirement how they want.

I also want to touch on Investment Boost. New Zealand needs to get the wheels of economic growth turning. This Government wants businesses to invest in their businesses, and new assets, to hire more workers, to pay higher wages, and get more money flowing through the system. That is why this Government is making it easier for businesses to invest through Investment Boost. This tax incentive will allow businesses to immediately deduct 20 percent of the cost of new capital assets. This is all about growth. With 600,000 businesses in New Zealand, Investment Boost will allow them to have a better access to tools that they need to increase productivity.

Dylan Bentley, relationship associate at ANZ bank, said, “Investment Boost is a helpful change for Kiwis. For businesses looking to expand and boost productivity, this is a clear signal that now’s the time to invest.” Ifran Nabi, a tax adviser, said, “I think this policy is a winner. The last time New Zealand businesses had such a big win in respect of a tax announcement would have been 15 years ago.”

Investment Boost is a win for Kiwi businesses and it is a win for Kiwi workers. It’s going to have significant benefits, higher wages, more job opportunities, and we are very, very proud of a Government that is bringing in this tangible change for hard-working Kiwis across this country.

I am humbled to be the Minister of Revenue of this Government. I want to acknowledge my Inland Revenue Department officials and our Treasury officials for the significant amount of work that they have put in in preparation and supporting this bill and the broader Budget. I acknowledge my teams and the broader teams of the Minister of Finance for that work and the context in which they have played.

Together, these measures and this Budget sets a clear course for New Zealand’s economic recovery and sustained growth. With economic growth comes higher wages, more job opportunities, higher living standards, and more thriving businesses and thriving Kiwi households. That is why I am proud to commend the bill to the House and I look forward to its positive impact in our beautiful nation.

The question is that the motion be agreed to.

This is, in the final analysis, a disappointing bill. There are some aspects of this bill that, of course, we agree with—there are, you know, some good things in this bill. But overall, it is disappointing and it is worrying.

Let’s start with one of the things that is a real positive in this bill. As the Minister of Revenue said, extending KiwiSaver to 16- and 17-year-olds is a very good move. We do know that getting people in earlier, enabling them to start their savings earlier, has a long, long-term benefit for them, and I think the Minister quoted Robyn Walker, a tax partner at Deloitte, who said that “Small changes are compounded over a working life and they make a big difference in the long run.” So, yes, it is a wonderful idea to get 16- and 17-year-olds enrolled and contributing to KiwiSaver.

But as small changes compound over a working life, what about big changes? What about $250 less every year in the KiwiSaver tax credit? What about the Government cutting the KiwiSaver tax credit in half? That small change, compounded over a working life—well, that’s going to work out to $66,000 less for someone over a lifetime for someone who’s aged 20. That’s the effect of compounding. This is why this is a disappointing bill. It’s a good measure on one hand, putting 16- and 17-year-olds into KiwiSaver, but then it’s taking away even more with the other hand. That is a very disappointing move.

Then there were the changes to Working for Families—so, again, some changes there. Now, here is a good change: lifting the abatement threshold up to $47,000, I think, was the change that went through. That is a good thing. It means that people get to keep more of what they receive in Working for Families before it gets abated away. A good move, but at the same time the abatement rate was lifted so that money gets taken away faster. It was described as being fiscally neutral—it could be. But here’s the other change that went through, and it is quite a significant change in that regard: this Government has stepped away from universality for children.

You know, people still talk about the old family benefit and what a difference it made to families, and one of the reasons that it made a real difference was it was simple, it was straightforward, and it was universal. We had started to work back towards that concept of universality, which we have in place for our senior citizens, and we were starting to get it in place again for our children with the Best Start payment. Every family, no matter what, received Best Start for the first year of a child’s life. It was a universal payment, and it spoke to the importance of children—the importance of ensuring that children get a good start.

A Government that actually cared about children would be looking to increase the length of time for which Best Start could be received—no questions asked. Instead, this Government has chosen to turn it around, and sitting in their own regulatory impact statement, it turns out that with this Government’s changes to Working for Families, 61,000 families are worse off. That’s one of the changes in this tax bill: 61,000 families who are worse off.

Then there’s the Government’s partial expensing of asset purchases. It’s a really interesting move, and of course on this side of the House, we do agree with trying to do something to enhance business productivity. We do agree with trying to do something around capital intensity. What that means is ensuring that firms have a stronger asset base so that then each worker is more productive. These are good things to do, but is this the right way to do it?

We found out through questioning of the Minister during the committee stage of the bill that they had not considered alternative measures. They’d considered maybe decreasing the company tax rate, but they hadn’t considered specific measures around increasing capital intensity, around ensuring that we have a better capital base. The only one they considered was partial expensing. Where was the work on increasing the low-value asset write-off threshold? That would have helped firms, and, in particular, it would have helped smaller firms. Where was the work around accelerated depreciation—not just having this partial write-off in the first year, but an overall increase in depreciation rate? That too would have given a boost to firms.

Now, a responsible Government would have done the analysis comparing these alternative measures—not just between the company tax rate and partial expensing, but between partial expensing, increasing the low-value asset write-off threshold, and accelerated depreciation rate. Those matters should have been considered, as well. But the real problem here is that this Government has not adequately considered the risks of a blowout. We have leading thinkers in this country, leading tax people, saying that there is one hell of a risk here. John Cuthbertson, who heads up the tax division within Chartered Accountants Australia and New Zealand, has said that he is worried that there is no cap on the value of the investments that can get this tax break. That could lead to a blowout.

Sitting in the Budget Economic and Fiscal Update, there is an acknowledgment that this is indeed a substantial risk. Let me read it again—it needs to be in the Hansard. Sitting on page 89 of the Budget Economic and Fiscal Update, under “Revenue”, is a specific fiscal risk, and we don’t even know how big it is because the projections are uncertain. It says, “The fiscal and economic impacts of Investment Boost are significant and have been based on some assumptions and judgments which have a degree of uncertainty. The modelled impacts use aggregate macroeconomic data as an input together with assumptions on coverage within the tax base, and forecasts of growth in investment. Variations in any of these factors can materially affect the fiscal and economic impacts of the policy.”

It’s all very, very uncertain. There is a substantial fiscal risk, and we just don’t know. This is a good move to try to increase productivity, but is this move the best move that could be made? We don’t know, because the alternative analysis wasn’t done, and what about all the risks associated with it? Then we were told that it would have a long-term benefit on wages, as well. But, again, sitting in the Government’s own regulatory impact statement, at paragraph 75: “International evidence provides mixed results on how the specific benefits of investment targeted tax measures are shared between workers and capital owners. This makes it difficult to better assess the distributional impacts.” They say it will flow to wages, but the reality is that the evidence shows that workers never get the benefit of these changes, that the benefit of changes in the last 20 or 30 years has overwhelmingly flowed to capital, and that workers’ wages have remained largely static.

It is heroic to claim that this will flow through to workers. What we do know will flow through to workers is the changes in pay equity that have made this Investment Boost possible. This Investment Boost—this partial expensing—is being paid for on the backs of the women who hold this country together. That is absolutely shameful. It should never have happened. This is a very dubious bill, and we simply cannot support it.

Thank you, Mr Speaker. You know, we consider this Budget to be a bit of a lolly scramble. But let us be clear: this bill is not only a lolly scramble but for the workers and wage earners of Aotearoa there aren’t even any lollies in there, just sadness and despair. That’s what we are seeing with this bill and that’s what I’ve seen throughout the committee stages.

Let’s unpack what exactly happened during the committee stage because, again, we are pushing this bill through under urgency. There is no select committee stage. We didn’t hear from the people of Aotearoa. Indeed, in the regulatory impact statement, only three departments were consulted: the Treasury, the Ministry of Business, Innovation and Employment, and also the Inland Revenue Department (IRD). That is significant later.

Let’s start with the first part of what this bill set out to do in terms of the Investment Boost. The first issue that we have with Investment Boost is the fact that it blatantly allows subsidies for the oil and gas industry, which is fundamentally against our international obligations and also some of our free-trade agreements, particularly with the EU and the UK. This is significant risk to Aotearoa in terms of our trade potential because of the fact that the Ministry of Foreign Affairs and Trade wasn’t even consulted, according to the regulatory impact statement. That is a risk. As the previous speaker, Deborah Russell, has already mentioned, we also simply do not know the magnitude. In the impact statement it states, “There is a significant uncertainty about the magnitude of the effect and how the benefits will be distributed across the economy.”

I think the second part of this—how this will be distributed across the economy—is the crux of the issue that the Green Party has with the Investment Boost, because like we have seen leading up to this Budget, the Government will do anything other than reset the tax and be transformative in the way that we look at tax in Aotearoa, but instead will take money from the lowest-paid workers, from our women workers, and all of those by cancelling 33 pay equity claims. We are seeing the Government is willing to take money from our young people. We’re seeing the Government is willing to take money from our young parents and from our children. This is what is pushing forward this Investment Boost.

When we are looking at the Investment Boost, there was also none of that other clarity around it, which the previous speaker, the Hon Dr Deborah Russell, has mentioned in terms of the potential blowout. All of these are a concern and that’s just one part of the issue with this bill.

Let’s talk about family credit and Best Start. What we are seeing with the family credit—yes, there is an increase in terms of the abatement rate, from $42,000 roughly to $44,900 a year. In terms of when we are looking at the gradual reduction in terms of the 27 cents in the dollar for Working for Families, we’re seeing that being increased to 27 cents, 50 in the dollar, which means for every dollar earned over the threshold of $44,900, payment is reduced by 27.5 cents, which is an increase. That means that working people and young parents who are struggling, who are doing multiple jobs, will see even less money in their back pocket. That is what we are seeing when we look at the family credit because it is adjusted possibly to the level of the Consumers Price Index, but it is not adjusted to the point that our communities and the people of Aotearoa actually need.

Let’s talk about Best Start. We saw in the latest report in the regulatory impact statement 61,000 families will be worse off with this bill. Not individuals—61,000 families will be worse off with this. For a Government that likes to talk the talk about how much they care for the people of Aotearoa, how do they justify this? There is no justification for this.

Lastly, when we are looking at KiwiSaver, this is also incredibly problematic because yes, increasing the contribution from 3 percent to 4 percent on the surface might seem like a good thing; expanding it to 16- and 17-year-olds is a good thing and is a good move. However, as we were also trying to ask the Minister of Revenue and we have got no response, how would this affect the poorest families, and also students, and also people who are just already trying to support their families? How would this work with this Government’s own educational outcome achievement targets? It doesn’t match up and it doesn’t line up.

When we’re looking at KiwiSaver, we can talk about the fact that, yes, employers can increase to 4 percent and employees increase to 4 percent. For those people who are on minimum wage, they’re already struggling as it is. For them to match that, they have to also increase their contribution to 4 percent. Not only that, we are also still seeing employers who take the employer contribution out from the remuneration of their employee, which means that for some employees, particularly those in really vulnerable employment situations such as retail and hospitality, we’re seeing that rather than contributing 6 percent, they’re now looking at contributing the 8 percent without any signal from this Government that their salary will be significantly increased. That itself is an issue.

Second issue with the KiwiSaver that has been introduced under this bill is the fact that the Government paints this beautiful picture about the fact that yes, people will save more, but they themselves have chickened out on contributing more for New Zealanders. They themselves have halved their Government contribution from over $500 to $250. That is cowardice. If you really care about the people of Aotearoa, you would have highlighted that. If you’re going to take money from New Zealanders, you might as well come out and say it proudly. Don’t hide behind all of this other smokescreen that is being created trying to say that what you’re doing is a good thing. In fact, it is not for the people of Aotearoa.

The final issue when it comes to the KiwiSaver readjustment that we see here is the fact that the Government has once again created more blue tape for people to try and get rate reduction if they say, “We simply can’t afford to pay 4 percent.”; “Well, here’s an option for you to remain at 3 percent, but you have to do it every single year and you have to keep on reapplying for it.” As we have seen with the shambles that was FamilyBoost, introduced by this Government last year, $14 million was done through admin. We haven’t even got out of this Minister how much this Kiwi boost and this rate reduction application is going to cost IRD. That wasn’t even something we were able to get out of the Minister during the committee stage. But what we do know is more and more people may potentially opt out of KiwiSaver because it simply is too hard for them to try and apply for a rate reduction on a year-to-year basis.

This is a Government that does not care for New Zealanders. This is a Government that doesn’t care about young people. Again, if you really care about the 16- and 17-year-olds, if you really think that they’re going to be working, they’re going to be contributing to KiwiSaver, let them vote—let them vote. Instead, what we are seeing is once again cosmetic changes and smokescreens have been created.

In our Green Budget that we have announced, we want to see a variation, a transformative change to the way we look at tax. The Investment Boost that the Government and the Minister said is based on the US and Canada—guess what! They have a capital gains tax. Canada has a form of windfall tax. We do not even have that. There is no barrier to investment; there is no risky investment in Aotearoa. Under our Budget, we’ll see a transformative tax system that benefits the people of Aotearoa. We see that benefiting hundreds and thousands more families because we will increase that abatement rate and we will increase what people get. Thank you, Mr Speaker.

Thank you, Mr Speaker. Look, it’s a pleasure to stand on behalf of ACT and talk on the Taxation (Budget Measures) Bill (No 2)—the first bill in what was a very responsible, sensible, and future-looking Budget that was delivered yesterday. ACT is very proud to be standing on this side of the House with our Government partners and actually putting in place a Budget not just for today but for the future, and this bill is a very important part of that.

What we have clearly signalled to New Zealanders in this Budget is this: we understand there are still cost of living pressures, we understand that we need to invest in the public services they expect, but we also need to put in place the foundations for a growing economy to deliver higher-paying jobs and wages and also get our education settings right.

Of course, in this bill we see the Investment Boost, which is an amazing policy to actually get our productive sector, allow them to invest in capital, make sure we’re actually building the jobs and getting the technology to address things like our productivity deficit under control. So that’s great.

There’s obviously some important changes in KiwiSaver, which I think across the House everyone universally accepts that New Zealanders need to be saving for their future and some important changes being made, including some very important Working for Families changes.

What I’ve taken out of the very positive Budget that this side of the House and this Government has delivered is exactly that: it’s a positive Budget by a positive Government which actually is looking to grow New Zealand, ensure we have the right skills, we have actually a productive sector and deliver for businesses and families and farms and actually make sure our children have the skills and education for the future.

It’s very clear to see, when you look in the Budget, where we’re investing the money that things like this bill are delivering and ensuring we get in place. That’s in health, that is in the Investment Boost, that is in defence, and that is in education. This Budget is a Budget for today, but it’s also a Budget for their future and I commend it to the House.

Thank you, Mr Speaker. I rise on behalf of New Zealand First in this third reading of the Taxation (Budget Measures) Bill (No 2). I think it’s oozing from the other side of the House—I think they like this policy; I think they like Investment Boost. I started to hear them warming up to it during the committee of the whole House—and also the KiwiSaver changes. I think, deep down, they wish that they had come up with those ideas that this Government has come up with in this Budget.

I want to say, firstly, congratulations to our finance Minister and our Minister of Revenue, who have put this together, and congratulations to the Associate Ministers that have worked on this. Investment Boost: starting today, investing into capital; 600,000 businesses, 50,000 farm holdings across this country—they get can get out and start investing into capital, into productive assets that will employ people, that will change the dial, that will put out economy back on track.

This is a flagship policy. This is something we will come back into this House—2025: what did this Government deliver? They delivered Investment Boost. It is, as I said yesterday, a game-changer. This side of the House thought of it; that side of the House is going, “Oh no, they’ve come up with something.” A game-changer for business; a game-changer for our economy. And what a game-changer in KiwiSaver for our young people, 16- and 17-year-olds, those contributions from the Government and their employer. They’re going to be able to get their first home sooner. They’re going to save more. We’ve come up with it. Support us. You should be on board with this. I commend it to the House.

Tēnā koe e te Pīka. Tēnā tātou e te Whare. I rise on behalf of Te Pāti Māori to share our—and show our—fierce opposition to this bill, the Taxation (Budget Measures) Bill (No 2). This is a Budget that attacks the poor. It attacks Māori, attacks beneficiaries, attacks parents. It’s the “no BS Budget”, the “no fudge-it Budget”, the “yeah, nah Budget”. The Budget that is built on the suffering and misery of our people. E te iwi: we represent 1 million people of this population.

Hon Member: No, you don’t.

TAKUTAI TARSH KEMP: We are 20 percent of this population. Yes, we are; we are 20 percent. The total Budget, $188 billion, and this Government only sees Māori to be represented at 0.27 percent of its annual Budget. Wow, that’s all we’re worth to this country, yet this country was built on our people.

Let’s talk KiwiSaver. KiwiSaver, the scheme for our kaumātua and kuia. They’ve worked hard. They have been part of a scheme that is there to be available for them to access at age 25. They’ve worked hard so that they can—

Todd Stephenson: Twenty-five?

TAKUTAI TARSH KEMP: Age 65, sorry—65, I correct myself. Oh, we’re good at maths. We’re good at mathing. Age 65—but our people don’t live that long. We don’t even get to access our KiwiSaver. Yet this Government shared yesterday that they’re going to halve their contribution because they’re saving—saving on the backs of our people. We will no longer get the contribution of $500. It’s been halved. We’re now going to get 25 percent of that. It’s now gone down to $260—$260. What is that worth?

KiwiSaver was meant to be there for our retirement. It’s meant to be there so that we can have access to the future—the future of our mokopuna. But we will no longer live to access the KiwiSaver. That’s why it’s a “yeah, nah Budget”.

E te iwi: we’ve got a cost of living crisis. I don’t hear anything from this Government to help us improve the cost of living.

Hon Member: It’s because you’re not here.

TAKUTAI TARSH KEMP: Oh, I’m here. We are not hearing anything that is going to improve the cost of living. Our people are starving. They’re lining up to the food banks. There’s no increase for food banks. There are 2.8 million people living under the minimum wage; that’s 59 percent of this population. There are 3.2 million living under the living wage; that’s 68 percent of this country. The cost of living pressures are hard. They’re stressing our people out. Our whānau are struggling out on the streets. It’s increasing mental health issues, it’s increasing health issues, but we see no increase in pūtea for Māori health in this country, again; another part of this “yeah, nah Budget”.

They say parents are going to get an increase of $14 a fortnight. That’s $7 a week. That doesn’t even buy you a pound of butter. That doesn’t help with the bread and butter issues that our people are facing. It’s $11 for butter. It’s $12, apparently, in Te Kao. We’ve got an increase in homelessness. There’s 113,000 people homeless in this country. There are 246,000 vacant houses. Te Pāti Māori want to introduce a vacant house policy; we’re going to make sure that our whānau are housed. E te iwi: this is a “yeah, nah Budget”. We’re getting nothing from this Budget of 2025.

Thank you, Mr Speaker. I rise to take a call on this bill—

Hon David Seymour: Here we go.

FRANCISCO HERNANDEZ: Yes, here we go, indeed, Mr Seymour. There’s been a lot of rhetoric from this Government about how they are the better economic managers, about how they are going to create productivity, how they are going to create economic growth, and how they are going to attract capital to New Zealand. But what’s actually been the net result of their 18 months of misgovernance? Minus 0.5 percent rate of annual growth.

They keep attacking us, on the Government benches, for degrowth, but they are the ones that have actually practised degrowth. This Government continues to perpetuate that outdated economic thinking, which has led to New Zealand’s worst economic growth in recent memory. What is that outdated economic thinking? It’s that outdated economic thinking which this Taxation (Budget Measures) Bill (No 2) confirms. And what is that? It’s that outdated thinking which views extractive institutions as the primary way to generate economic growth. That was thoroughly debunked by the Nobel Prize winner Daron Acemoglu last year—forgive my pronunciation of his surname. His central thesis was that extractive institutions, like this Government is seeking to perpetuate by their handouts to landlords, by their handouts to fossil fuel companies, by their handouts to the sorts of institutions that have actually led New Zealand to the state it is in now, versus the economic institutions that actually generate real growth.

Let’s go through how this bill actually doesn’t do what they’re saying that it does. It is really telling—really telling—in their example in this legislation that they referred to “Thomas”—“Thomas” who bought a yacht. How relatable to so many New Zealanders, who are out there buying yachts! Now “Thomas” with the yacht, he’s bought a yacht for $100,000—I don’t even know; I think yachts are more expensive than that. That thinking and their example of “Thomas” shows who they’re actually governing for. They are governing in the interest of these extractive institutions, they are governing in the interests of overseas buyers, who they are selling our conservation land to. They are not governing for the needs and interests of everyday New Zealanders. That’s why they’ve gone silent. They’ve stopped heckling because they know I have them dead to rights. They know that they can’t defend what they’re doing. We know that this bill and their policies leave 61,000 families worse off. We know that in the regulatory impact statement, it states that the changes to KiwiSaver and the options that were considered will decrease disposable income, reduce profitability, and may lead to—I can’t actually read my handwriting, but it leads to bad things.

I just want to reflect the echoes of what has already been said before: this Government is, actually, fundamentally serious. The halving of the contribution rate actually shows that they are prioritising—they have this idea that they want to increase savings for people, but in reality, the reducing of the Government contribution rate will disincentivise people from saving; that’s what the regulatory impact states. And it’s more likely to reduce the saving rates of people that actually can’t afford the higher contribution rate. Look, we’ve heard that they can just opt out of that, but as we’ve heard in the contribution from my colleague Dr Lawrence Xu-Nan, they’ve put in a sea of blue, black, and yellow tape to actually stop people from being able to automatically opt into the higher rate. They’ve put in a lot of barriers for people. That fundamentally shows—and we’ve seen this in the Budget, we’ve seen this in the Budget bill—who they’re governing in the interests of.

You’ve heard my colleague Dr Lawrence Xu-Nan, and you heard from my colleague Chlöe Swarbrick yesterday, talk about what the alternative vision is. Instead of having bills like this, and instead of having an economy that prioritises the extractive institutions, instead of having an economy that prioritises overseas investors and landlords and tobacco companies, we could have an economy that invests in people and planet through the Green Budget. Kia ora.

How disappointing it is that this Opposition is voting against these fantastic KiwiSaver measures. They go on about losing the Government contribution, but that Government contribution is being reduced by $5 a week—it is being reduced by $5 a week, and that is being swamped by the fact that we are lifting the default rate from 3 percent to 4 percent. For the average person at the end of their working life at retirement, their nest egg will be more than 20 percent larger. For a working parent on the average income, their nest egg when they get to 65 will go from $397,000 to over $500,000. They will be over $100,000 better off, and you’re arguing about $5 a week. That’s how ridiculous it is.

The KiwiSaver changes, the lift of the—oh geez, I’m losing my place here—our changes to KiwiSaver will lift the value of the nest eggs by over $3.3 million, “$3 million Kiwis”. Labour brought in KiwiSaver, and they are now voting against this. The Green Party voted for the 2006 legislation, and they are now voting against this. They are voting against 16- and 17-year-olds being able to join this scheme. It’s an absolute disgrace. I commend the bill.

Members, the time has come for me to leave the Chair for the lunch break. The House will resume at 2 p.m.

Sitting suspended from 12.56 p.m. to 2 p.m.

Good afternoon, members. When we broke for the lunch break, we were up to the third reading of the Taxation (Budget Measures) Bill (No 2), and we were up to call No. 8, which is the Labour Party call.

Thank you, Madam Speaker. It is a pleasure to come back and spell out exactly why it is that Labour is not supporting this bill.

Just before we broke for the lunch break, we were hearing from one of the Government speakers about what a boon $5 a week would be for people. Now, we cannot underestimate the compounding value of $5 a week, what that means to people, and they were talking about the cost to that. But I want this House and I want all of those watching to put that against the cost that this Budget comes at, and that is nearly $3 billion a year for working women and the way their work is valued in this country. Because that is what is paying for these Budget initiatives. Let’s not make any mistake: it is the money that has been set aside in the Budget that this Budget lays bare is gone, that has been cut by this Budget to make sure that our hospice nurses, our Plunket nurses, our care and support workers—that these people’s work that hold up our country is valued and paid fairly—that is what is paying for this Budget.

This is being touted as the centre piece of National’s so-called growth Budget. It lost favour even before the Budget was released; the finance Minister was having to try and find new names for the Budget, couldn’t carry through with the charade of the “growth Budget” moniker that the Prime Minister had come up with—that was even too much for her to bear. So let’s have a look at what lies at the heart of this so-called growth agenda for the Government. This legislation that we’ve been debating is the first piece and does three things. It puts in place the Investment Boost, it makes changes to the KiwiSaver regime, and it makes changes to Best Start.

Let’s start with the Investment Boost. This is a $6 billion policy that the Government has said sits at the heart of what they want to achieve for New Zealand. Now, on this side of the House we’ve been very clear: we are not opposed to measures that will increase productivity. We just want some certainty about them. We want to know they’ve been fully evaluated. We want to know that if we’re going to spend $6 billion, and maybe counting—we’ll get back to that—if we’re spending that much money on lifting New Zealand’s productivity, then it’s the best use of $6 billion, because $6 billion is no small change. But what we saw in the documentation with this legislation is it was only compared to cuts in the corporate tax rate.

Now, I think anybody knows that there is more than one way to skin a cat and more than one way to lift a country’s productivity. The fact is that we hadn’t looked at all the options before $6 billion was spent. Let’s be very clear: what this policy is offering is 1 percent growth on GDP over 20 years. So let’s be very clear of the extent of the ambition that this Government has for the growth of the New Zealand economy. Furthermore, the documentation that came with this legislation did warn that of the wage growth that could accompany that 1.5 percent over a 20-year period, you couldn’t be sure how much that that would actually accrue to workers. They also couldn’t be sure how much of the growth benefits would actually accrue in New Zealand, given that this was a bill that is targeting foreign investment as well. So it’s not even sure if New Zealanders are going to benefit by the economy and wages and growth growing by these small amounts over a 20-year period.

One of my real concerns about this measure is the lack of thought that this Government has put into it, so much so that one of their own Ministers had to come back to the House last night just to check that this was uncapped and could apply to everything. Now, in what we call the BEFU, the Budget Economic and Fiscal Update, it lists the fiscal risk, and that is this policy, the Investment Boost. Because this Government—I think inadvertently—has made this policy so broad that nobody is sure how much it’s going to cost, and we’re not going to know until the first round of filings are done.

Now, it is listed as a fiscal risk. But we, in the last 24 hours, have had some of the country’s top tax experts coming out and warning about the fiscal risks to the Government’s books from the lack of work that this Government had done around this piece of legislation. When Shane Jones couldn’t believe his luck, he had to come back and check with Ministers before he confirmed to media, because he couldn’t even imagine that his Government would have left the country that exposed with that big a blank cheque that had been out there. But he did seem pleased to think that this was the return to Muldoonism that New Zealand First has always been after.

Let’s have a look at the other measures in this bill and why Labour cannot support it. If we have a look at the changes to the KiwiSaver regime, we freely agree that giving access to KiwiSaver for young people, for 16- and 17-year-olds is a good thing. But what we cannot support and will not support is the cuts to the Government contribution. This is halving the amount that the Government puts in. We’ve heard all kinds of nonsense from Government members that people are going to end up with more. They’re going to end up with more because it’s their own savings, but what they are missing out on is the Government partnering with them on that.

Now, if we add up in compound what someone who is 18 or 20 years old at the moment is going to miss out on by the time they retire, it’s $66,000 that they would have otherwise had in their KiwiSaver account had the Government contribution remained in place. Let’s look at that for a 30-year-old: it’s $30,000 that they’re missing out on had the Government contribution stayed in place. We do have concerns that this is going to mean that young people are missing out and this is needed.

Let’s also have a look at the changes to Best Start. I think some of the things that the Government hasn’t addressed—this is a bill that has gone through under urgency. We’re on to the third reading. It’s 24 hours since the country learnt about it, but what is going to happen to the marginal effective tax rates? We get some clues to this within the documentation with the legislation that, actually, it is going to raise the effect of marginal tax rate of 9,000 people in New Zealand. Who are these people? Who are the people whose tax is going to increase? What are the distributional impacts of that and how is it going to occur? What we do know is that these changes are going to mean that there are thousands of families who are going to be $43 a week worse off.

We’ve had the Government tell us that some families will be $7 a week better off. That’s $7 a week. As it’s been pointed out multiple times, it’s not even enough for a block of butter. But let’s put that $7 gain against what could have occurred if pay equity funding had not been cut and if we had paid fairly our hospice nurses, our Plunket nurses, our care and support workers—the very people’s pay that is being cut in order to pay for this Government’s Budget. If you want to talk about relieving the cost of living, about making lives better for working people and working families in New Zealand, then do not cut $3 billion a year that was destined to increase the wages of people, because that is what is paying for this Budget. That is what lies at the heart of it and why Labour will not and cannot support this piece of legislation.

We’re into the third reading. I would like to see a Government Minister take to their feet and tell us how they’re going to protect New Zealand against what I think could be an inadvertent door that has been left open for a massive blank cheque for the New Zealand taxpayer. How are we going to ensure that even more cuts aren’t going to be required to pick up the tab for this? Because the risks are there, they have been signalled, but the Government will not respond to it. It is their job; it is their responsibility.

This is a Budget that really has been about a Government showing its priorities, showing its choices, and showing where it puts worth. And what it has told the women of New Zealand is they are worthless. That is what this Budget tells them. For the women of New Zealand, this will go down in history as the “worthless Budget”.

Oh, it’s so good; it’s so exciting. I just had to remind some of my colleagues to silence their phones because they are off the hook. We’re hearing from tradies and business owners. It’s just such good news about the 20 percent depreciation. Apparently, it can even work for earthquake strengthening. My colleague here Carl Bates has just had a text message from a manufacturer saying they can now invest an extra half a million dollars this year because of the incentive. It’s so good—it’s so good. And we know now—I just saw Shamubeel from Simplicity KiwiSaver say contributions will increase by $1,014 per annum because increased contributions more than offset subsidy reductions.

Thank you, Madam Speaker. This bill is the centrepiece of a Budget that is being paid for by women and young people. Listening to the committee stage over the last two days, I have real regret that the Taxation Principles Reporting Act, which was repealed last year, wasn’t in play as we could have had a proper analysis of some of the equity impacts of the bill, including things like vertical and horizontal equity. But, no, this Government doesn’t like transparency around taxation and instead they have tabled a bill that purports to lift capital investment, increase productivity, and facilitate economic growth and then has a bunch of cuts paid for by women.

Let’s look at what this bill is saying it purports to do, because the partial deductions, first of all, are made on an assumption of increased productivity. They are deemed to be, we heard—I think the Minister of Revenue said he had a feeling that it was about right at 20 percent, and we have not seen the cost-benefit analysis of that. We have quite rightly interrogated what the blowout would be if there is going to be a huge capital investment, and yet also there is the absolute lack of ambition from this Government to say that it is going to increase productivity by 1 percent over 20 years.

The point was made by the Hon Damien O’Connor about the massive leap of faith that a capital investment was going to lead to increase productivity, and we did not see any value-for-money comparators. For example, what would the similar amount of investment have done if it was put into people, into training, into keeping young people in training and tertiary institutes, or into upskilling? None of that comparative was made, because we did not see the evidence of it.

The was just a very brief analysis, and actually quite a flawed process in my view, with all due respect, where we did not get to ask questions in some of the sections—for example, why commercial buildings qualify for the partial deduction and what would happen for Airbnb units, and so on. We did not even get to pose those questions before amendments were voted on.

Then we turn to the Best Start deductions and means testing, which is effectively going to put 61,000 families back by $43 a week. Now, let’s be clear that for a family with two adults working full time and on the minimum wage, they will no longer be eligible according to the calculations. That is quite a horrendous shift. When we think about the first 2,000 days, the excellent work that’s been done by the University of Otago near my electorate on the value of investing in children, that doesn’t make sense—also the case when we consider that what the bill could have done was increase incomes for a family or recognise front-line social service providers. It could have invested in early prevention and early investment when we consider that New Zealand is No. 32 out of 36 wealthy countries when it comes to the child wellbeing statistics, which is nothing to be proud of, and that a third—27 percent—of our children go hungry. The Ministry of Social Development’s own research shows a strong correlation between this payment and attendance at school, something that this Government says it is committed to and is putting extra money into in another part of the Budget. It simply doesn’t add up.

Finally, when we look at KiwiSaver once again, 66,000 young people will have less for their retirement. The Retirement Commissioner has queried the equity of it, and in fact I would like to quote from something she said this morning, “I would at least have liked to see some of the savings from reducing Government contributions be applied to serving these groups where we see the widest gap.” And she is talking about low-income earners, Māori, Pacific, women, and people who are marginalised. None of the savings from that will go to them. Instead, what we’re hearing is that there will be a kind of lidless ability for big business, mining, farmers, and others to be able to get a partial deduction, once again paid for on the backs of women. We saw some really tricky things around being able to even access an ability to stay at the 3 percent mark for those who would like to. Clearly, the Government doesn’t care about working people. I do not commend it.

Before I take the next call, can I just say to members on my right that if they want to have a full-volume conversation, please, take it out into the lobby.

In summary, what have we learnt from this debate? This is great policy: Investment Boost, KiwiSaver—jointly, this will make a difference to New Zealand’s productivity, economic growth, and savings challenges. It’s such great policy that Labour loves it: Barbara Edmonds loves it, Deborah Russell loves it, and Megan Woods loves it. The public love this policy, but yet Labour is going to vote against it. We are focused on what matters to Kiwis; we are focused on growth. I commend this bill to the House.

Let’s call this Budget for what it is: it’s a slap in the face for working Kiwis. It’s a Budget written by a Minister of Finance and a Government that are out of touch with everyday Kiwis. It isn’t economic leadership; it’s political cowardice, and it’s self-serving and it’s short-sighted. Every line of this Budget shows who this Government is really working for, and it’s not working Kiwis.

This Government campaigned hard on the cost of living crisis, and the number one issue still for New Zealanders is cost of living. And there is absolutely nothing in this Budget to help Kiwis struggling to put food on the table and pay their weekly bills. That’s the most glaring betrayal in this Budget: the complete failure to address the cost of living crisis. That is why this Budget has not been well received by the people of New Zealand. Groceries, rent, electricity, rates, everything is going up, and there is nothing in this Budget to help alleviate that pain being felt every day in New Zealand.

What did this Budget give them? Let’s take a look: $7 a week—$7 a week. That’s to help 142,000 families. That’s the flagship in this Budget to households under pressure. Let’s be honest: it’s not even going to cover butter or cheese—anything substantial. But do you think those members opposite have even thought of that—how far $7 is going to go for the average New Zealander? And while families get seven bucks, businesses are able to claim $6.6 billion in tax write-offs. This Government is showing exactly who it values, and it is not the working families of New Zealand.

Best Start—let’s take a look at that. If you thought the first part was cruel, take a look at what is being done to new parents. The Best Start payment was to support families with newborn babies, and that is now being cut back and income tested in this legislation today. For families earning a combined income of above $97,000, they no longer get that. That’s not wealth. We’re talking about two average incomes: two teachers, two nurses, a tradie and a retail worker. Those people no longer get help with affording nappies, formula, and extra expenses when you have a newborn baby. “Tough luck, you’re on your own.” is what this Government is saying to those people earning that amount. In the same breath, this Budget has delivered $15 million in additional funding for private schools.

KiwiSaver—let’s have a look at that, because what the Government has done is not just short-sighted, it is shameful. The Government’s contribution to KiwiSaver is being slashed in half. As we’ve heard, that has an impact of $66,000 at the end of the line for an 18-year-old today or $30,000 less at retirement for a 30-year-old after they retire. Let’s be clear: that’s not an accounting change; it’s a direct attack on working people’s retirement. It is those people that are doing it even tougher under this Government by doing that to KiwiSaver, and further to means testing KiwiSaver as well.

Working for Families: 61,000 people are no longer entitled to Working for Families under this Budget, which is meant to help with cost of living. What happened to the catchcry of the squeezed middle that were going to be helped out by this Government? They went really hard out by saying, “The squeezed middle needs some extra assistance.” Well, the squeezed middle just got squeezed right out on this Budget.

They’re not getting any assistance with the change of those KiwiSaver levels. Already around the numbers of people withdrawing their KiwiSaver due to hardship, we’ve seen record numbers over the last few months of people drawing down their KiwiSaver because they can’t afford to make the personal contributions. Well, by decreasing the Government contribution and increasing the personal contribution, that just makes it even more likely that New Zealanders will be put under strain and be required to withdraw their KiwiSaver due to hardship, which makes it even harder down the line for New Zealanders to be able to retire comfortably. This is a short-sighted Budget that does not consider the long-term impacts to hard-working Kiwi families who are just trying to get by. It is a raid on the future of every New Zealander who’s doing the right thing: saving a little every payday and hoping they’ll be able to retire with some dignity. It puts that dream even further out of reach.

Investment Boost—let’s take a look at that. We’ve had some good analysis come through on that. Treasury analysts have had a look and said that at a $6 billion cost, GDP, increasing productivity—great, but will it really do it? One percent growth in GDP over 20 years. That’s crazy—1 percent over 20 years. And a 1.5 percent increase in wages. And we don’t even know if that’s going to go to workers or not.

Then, on top of that, as we’ve had the opportunity to take a little bit of a look at the documents, the Budget Economic and Fiscal Update has it listed as a clear fiscal risk, because there is no idea on what the cap is. In fact, we have the Minister of Finance not knowing what the actual cap is. Shane Jones didn’t know what the cap was and he had to come back downstairs and figure out what was going on last night. And so we have, with all New Zealand’s 500,000-plus small businesses, if each of them made, say, a $10,000 claim under this scheme in investment in computers or machinery or hardware, that pretty much blows the scheme—that’s the whole scheme gone; let alone if you’ve got a couple of billion-dollar oil rigs or commercial developments swallowing up most of the money. It’s noted as a fiscal risk because there is no cap on it. The Minister of Revenue, and Inland Revenue on top of this, are yet to decide whether earthquake remediation to existing commercial buildings will be included or not—we don’t even know that. All of those buildings that need earthquake remediation, we still don’t know whether they’re eligible for this investment boost for that work to be done. Looking forward to seeing if that will happen. And if it does, that’s $1.7 billion of that money swallowed up.

Now we’ve taken a look at that, let’s take a look at what’s happening with the overall view of what it means for the future of New Zealand. It really provides no hope, because it provides no vision of where we’re heading as a nation. What we’ve been told is “This is efficiency and this is fiscal discipline.”, when we all know what it is: it’s austerity. It’s a Budget that’s not just out of touch; it’s designed to make people give up. Give up on saving, give up on getting ahead, and give up on the idea that this Government might actually be on their side, when quite clearly it’s not.

And the worst part of this is the spin that we see put on it. Nicola Willis can stand up and claim that families are going to be better off after no meaningful relief, no protection for savers, no support for parents, and taking money off women. That’s what this Budget is going to go down for. You show me one family that got the $250 they were promised in the last Budget—just one—because there is not one family that this Government can show what their last promise delivered. Even the finance Minister can’t show that there’s one, because, behind the spin, behind the slogans, there’s nothing for Kiwis in this Budget, just like the previous one.

This Budget is a disaster for working people, and Labour will oppose it at every stage of the way. We believe that Budgets should be about building up, not tearing down. This Government has chosen to balance the books off the backs of working women, young people, and working families. They’ve taken the future earnings away from hard-working people. They’ve cut the KiwiSaver contribution, they’ve means tested KiwiSaver, they’ve means tested Best Start, they’ve cut 61,000 from receiving Working for Families, but New Zealanders can see through it, and we will make sure that they don’t forget this. We will stand with working people and we will oppose this Budget at every step of the way, because it will be remembered as the “Inequality Budget”, that took money away from working New Zealand women and put it into places that drove no productivity whatsoever.

As the final Government MP to stand in support of this bill, let’s put it on record what New Zealanders really think—Opposition, listen up.

On record today: Dunedin manufacturers call this tax deduction a great step forward. Business New Zealand says that Investment Boost will drive capital upgrades. The Employers and Manufacturers Association says that it boosts productivity and puts more in workers’ pockets. BusinessDesk says that Minister of Finance, Nicola Willis, has just given businesses the green light to invest. And there is more. On KiwiSaver, the Retirement Commission says that the changes could make savings last 30 percent longer. Radio New Zealand reports that 80 percent of the KiwiSaver contributors will benefit. Pie Funds calls it a game-changer for retirement.

Let’s be clear: the Opposition is voting no to business growth. The Opposition is voting no to more retirement savings. But this Government is backing business, backing savers, and building a stronger economy for all New Zealanders. So let’s make it law.