Thursday, 15 May 2014

Thursday, 15 May 2014

Thursday, 15 May 2014

Mr Speaker took the Chair at 2 p.m.

Prayers.

Bills

Appropriation (2013/14 Supplementary Estimates) Bill

Procedure

Hon BILL ENGLISH (Minister of Finance): I hereby present the Supplementary Estimates of Appropriations for the Government of New Zealand and supporting information for the year ending 30 June 2014 (B.7).

Mr SPEAKER: That paper is published under the authority of the House.

Bills

Appropriation (2014/15 Estimates) Bill

Procedure

Hon BILL ENGLISH (Minister of Finance): I hereby present the 2014 Budget Minister’s Executive Summary, the speech, the Fiscal Strategy Report (B.2), the Economic and Fiscal Update (B.3), and the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2015 (B.5 Volumes 1-10).

Mr SPEAKER: Those papers are published under the authority of the House.

First Reading

Hon BILL ENGLISH (Minister of Finance): I move, That the Appropriation (2014/15 Estimates) Bill be now read a first time.

Bill read a first time.

Budget Statement

Budget Debate

Budget Debate

Hon BILL ENGLISH (Minister of Finance): I move, That the Appropriation (2014/15 Estimates) Bill be now read a second time.

It’s a privilege to deliver the National-led Government’s sixth Budget.

It’s a particular privilege because this is the first Budget in six years to focus on managing a growing economy rather than recovering from a domestic recession and then the global financial crisis.

A growing economy supports employment and higher wages. It provides opportunities for families. And it pays for public services that New Zealanders rely on.

Budget 2014 looks ahead to build on the hard work done by every New Zealand household and business over the past five years.

New Zealand is in a good position.

We’ve made significant progress in recent years to deliver more jobs and higher incomes.

New Zealand is one of the first developed countries to return to normal economic conditions, with a recovery led by the private sector.

Businesses are investing, wages are rising faster than inflation and our export sector is posting record results despite the headwinds of disruption in international markets and a high exchange rate.

Public agencies are working better for New Zealanders and getting better results.

On most indicators that matter, we’re moving forward as a country.

If we lock in the hard-won gains we’ve made, there’ll be many opportunities over the next decade to improve our economic fortunes and secure a brighter future for New Zealand families.

Each year, millions more consumers in the Asia-Pacific region are becoming affluent enough to want, and afford, the goods and services New Zealand produces.

Mr Speaker,

Our challenge is to muster the capital, the people and the skills to take advantage of this historic change in our prospects and lift the aspirations and prospects of every New Zealander.

That requires sticking to our course, with careful stewardship of public money, with sound, proven economic policies and with a determined focus on results from public services.

Budget 2014 shows a return to fiscal surpluses.

There will be a small surplus next year, and increasing surpluses are forecast over time. The Budget also shows the economy continuing to build momentum, with employment continuing to grow and wages continuing to rise.

But these are just forecasts and there is a lot of work to do to make them a reality.

What matters to people and families across New Zealand are the opportunities created by a sustainable economic recovery.

So an important part of this Budget is lifting New Zealand’s capacity to sustain higher levels of economic growth for longer, grow incomes and support jobs.

And what also matters to people and families is that the Government will support them when they need assistance.

Budget 2014 continues this Government’s increased investment in health and education - including tertiary education. Next year, for the first time, we will invest more than $28 billion in these two areas and we are achieving better results from spending every year.

This year’s Budget also contains a $500 million package of extra support for children and families.

We’re able to do this because of the hard work in previous Budgets to get spending under control and get back to surplus.

This package will help young families and those vulnerable children who most need our care and protection. I’ll describe it in detail when I talk about better public services.

Mr Speaker,

The Government’s four priorities this term are:

responsibly managing its finances;

building a more productive and competitive economy;

delivering better public services; and

supporting the rebuilding of Christchurch.

Across our programme we continue to work constructively with the ACT, United Future and Māori parties. I want to acknowledge their support and assistance.

I also want to acknowledge the Prime Minister, the Rt Hon John Key. His leadership has been instrumental in the success of the Government’s programme and in maintaining the trust of New Zealanders through what has been a challenging period.

I now intend to talk about each of the Government’s four priorities in turn. But first I want to summarise the economic outlook for the next few years.

The New Zealand economy has recovered much of the ground lost in the recession and the global financial crisis.

The economy grew 3.1 per cent in 2013, the fifth-highest rate in the OECD.

Growth that was initially driven by low interest rates, elevated terms of trade, a catch-up in housing supply and the Christchurch rebuild has turned into a broader-based recovery supported by strong consumer and business confidence, new investment and higher productivity.

Growth is already delivering more jobs, and wages that are rising faster than inflation.

The Budget forecasts show real GDP growth of between 2 and 4 per cent in each of the next four years, with growth forecast to peak at 4 per cent in the year to March 2015.

Compared to the December quarter of 2013, Budget forecasts show an additional 170,000 people in work by mid-2018, and the unemployment rate is expected to fall to 4.4 per cent.

The average full-time wage is forecast to rise to almost $62,300 by mid-2018, which would be $7,600 more than it was in December 2013.

The Government is taking a long-term view of economic growth, because some of the factors driving the economy today will peak over the next few years.

Export prices are likely to return closer to normal levels, housing supply will eventually catch up and the Christchurch rebuild will peak and eventually slow.

And the New Zealand economy faces ongoing global risks, including uncertainty about the performance of our two largest and linked trading partners, China and Australia.

But against the background of a growing economy, we have the opportunity to do more work on longer-term economic fundamentals like investment, skills and productivity.

Our aim is a long period of steady growth delivering pay rises and more jobs every year, rather than a shorter period of unsustainable growth.

Mr Speaker,

I turn now to the first of the Government’s four priorities, which is responsibly managing the Government’s finances.

Budget 2014 shows the Crown’s books continuing to improve as the economy grows and the Government maintains its careful and responsible management of public spending.

The Government is on track to meet its two key fiscal targets.

First, the operating balance before gains and losses is forecast to be in surplus in 2014/15, by $372 million. Surpluses increase moderately in future years.

We are achieving our surplus target while still spending $5.7 billion on new initiatives in the current year and over the next four years, financed in part by $1.6 billion of savings and revenue initiatives.

Future surpluses give the Government choices, including paying for new capital investments, reducing debt, increasing spending and reducing tax.

Those choices have to be sustainable - recognising that surpluses rise and fall with the economic cycle - and they must also avoid putting material pressure on interest rates during the upswing.

As surpluses grow, the Government will be able to conduct a KiwiSaver auto-enrolment exercise for non-members.

Currently, the number of KiwiSaver members aged 18 to 64 is equivalent to 85 per cent of the labour force, and auto-enrolment is expected to increase this proportion even more.

The Government’s second fiscal target concerns debt. On an annual basis, net core Crown debt is forecast to peak at 26.4 per cent of GDP in 2014/15 and decline thereafter.

Longer-term projections show net debt dropping to 20 per cent in 2019/20, in line with the Government’s target. This includes the impact of resuming full contributions to the New Zealand Superannuation Fund in 2019/20.

These projections are a far cry from the projections made for Budget 2009, that showed net debt rising to over 60 per cent of GDP by the early 2020s.

It was appropriate to run deficits and take on debt to support the economy and New Zealand families over the past few years. But as households know, carrying substantial debt is neither comfortable nor financially prudent.

Making these projections a reality requires sticking to the Government’s plan of careful spending and responsible public management.

After net debt has gone below 20 per cent of GDP we intend to maintain it within a range of 10 to 20 per cent of GDP over the economic cycle, while also making contributions to the New Zealand Superannuation Fund.

Mr Speaker,

The fiscal position has improved markedly over the past five years.

Tax revenue has increased as the economy has recovered. But the biggest contribution to the fiscal turnaround has been considered expenditure restraint that rigorously tests spending for value and results.

Core Crown expenses have fallen from 34.4 per cent of GDP in 2008/09 to a forecast 30.3 per cent in 2014/15 and are soon expected to fall below 30 per cent of GDP.

In the next four years, the Government will continue to focus on achieving better results as the main way of restraining future government expenditure.

The Government has set 10 challenging results for the public sector to achieve over the next few years, in areas such as reducing long-term welfare dependency, supporting vulnerable children, boosting skills and employment, and reducing crime.

We are willing and able to spend more now to reduce the long-term social and economic costs of dysfunction. What is good for families and communities is also good for the Government’s books.

To implement this investment approach, government agencies must prepare comprehensive four-year plans incorporating data analysis and long-term payoffs.

These new ways of thinking have allowed the Government to maintain a track to surplus while delivering better public services.

Mr Speaker,

An improving fiscal outlook means there is some room to increase future operating allowances.

The Government is aware, however, that changes in fiscal policy settings can increase aggregate demand in the economy, raise inflation pressures and push interest rates higher than they otherwise would be.

This relationship was seen clearly in the mid-2000s, when big increases in spending by the previous government were accompanied by home mortgage rates of over 10 per cent.

Advice from the Treasury is that lifting Budget spending allowances to around $1.5 billion a year is about the upper limit for increased spending, or revenue initiatives, before they begin to materially affect interest rates.

The Government is therefore lifting the operating allowance for Budget 2015 from $1 billion to $1.5 billion, growing after that at 2 per cent each Budget.

This moderate increase will provide the Government with future options around investment in public services and modest tax reductions.

There is room to move some of the allowance between Budgets, providing they average around $1.5 billion and economic conditions permit.

Allowances averaging around $1.5 billion per Budget remain well below those adopted in the mid-2000s, and core Crown expenses will continue to fall each year as a proportion of GDP.

The new allowances are built into all the forecasts and projections presented in the Budget.

If tax revenue comes in well ahead of forecast, the Government’s main priority will be additional debt repayment until the 20 per cent debt target is met.

Mr Speaker,

The Government’s second priority is to build a more productive and competitive economy that supports higher incomes and more jobs.

A broad-based economic recovery is now well established. Through difficult times, New Zealand firms have become resilient and innovative.

This has enabled them to secure good prices on world markets despite the headwinds of an historically high exchange rate and lower growth among our trading partners.

Looking ahead, there are huge opportunities for New Zealand as countries in the Asia-Pacific region develop rapidly and demand more of what we produce.

New Zealand can take this opportunity if we are prepared to support people and businesses to invest and grow, create new products and services, and sell more of them to the world.

Our plan for building a more productive and competitive economy is set out in the Business Growth Agenda, and the Budget adds a number of new initiatives to this important programme.

One focus of the Business Growth Agenda is export markets, where the Government is negotiating trade agreements, working to expand market access and helping New Zealand exporters compete overseas.

Mr Speaker,

As previously announced, the Budget includes funding of $69 million over four years, including $14 million of reprioritised funding, to expand New Zealand Trade and Enterprise’s presence in China, South America and the Middle East, and to help 200 more New Zealand firms break into overseas markets.

Budget 2014 also increases the Government’s investment in tertiary education, research and innovation, which are crucial for sustained economic growth.

This investment includes $83 million of operating funding over four years to raise tuition subsidies in science, agriculture and health sciences.

As announced last week, the Government is providing $20 million over two years to fund 6,000 extra places for apprentices.

The Budget provides an additional $53 million over four years to establish another three Centres of Research Excellence, bringing the total number to 10. This includes a Centre focusing on Māori research.

The Budget also provides an additional $57 million over four years for contestable research in science and innovation.

As a result of this investment, and the investments made in previous Budgets, the Government’s total funding of science and innovation is expected to reach $1.5 billion by 2015/16.

The Government is also supporting innovation through two new tax measures.

First, loss-making start-up companies will be able to cash out all or part of their tax losses from R&D expenditure. And second, all businesses will be allowed tax deductibility for R&D “black hole” expenditure that is currently neither deductible nor able to be depreciated.

These two measures will return an estimated $58 million in tax to innovative companies over four years.

Mr Speaker,

Cheque duty will be abolished from 1 July this year.

While fewer people now use cheques, they are still common enough for the duty to be a cost for many people and businesses. But the duty doesn’t apply to other methods of payment and is simply a compliance cost.

Removing cheque duty will cost $15.5 million over four years.

Budget 2014 will allocate $132 million over the next five years to bolster tax compliance, chase up unfiled returns and write down the additional tax identified that is unlikely to be collected. Of this, $48.6 million is cash for Inland Revenue to undertake these activities.

This funding is expected to generate a gross increase in Crown revenue of almost $300 million over five years.

Mr Speaker,

The Accident Compensation Corporation’s consistent performance is delivering benefits to New Zealand households and businesses.

Annual levies for households and businesses have fallen by close to $1 billion since 2011/12.

Budget 2014 indicates ACC is on track to provide further levy reductions of around $480 million in 2015/16. Final decisions on the levies will be made after public consultation by ACC.

Depending on the outcome of this consultation, the average levy for a private motor vehicle could fall by around $130 a year from 1 July 2015.

Mr Speaker,

The Government is continuing its multi-billion dollar programme of investment in modern infrastructure.

Last year, the Prime Minister announced the Government’s commitment to accelerate key Auckland transport projects.

Budget 2014 pushes ahead this commitment by providing $375 million of new capital funding for the New Zealand Transport Agency, by way of an interest-free loan, to accelerate $815 million worth of projects.

These projects will assist in reducing congestion in Auckland, improve access to the airport and capitalise on the benefits of major roading projects already underway in the region.

Mr Speaker,

The Government remains focused on opportunities to use New Zealand’s natural resources productively, while maintaining environmental standards that preserve and enhance the quality of our environment.

Budget 2014 provides an additional $20 million over four years for environmental initiatives and to help the management of our natural environment. This includes $12 million to help local councils and communities improve the way they plan and make decisions about managing fresh water.

The Budget also provides $15.8 million operating funding over four years and $10.7 million capital funding to protect New Zealand’s kauri forests from dieback disease.

Mr Speaker,

The Government’s share offer programme was completed successfully last month, with the sale of shares in Genesis Energy.

This programme met every objective the Government set for it and raised almost $4.7 billion for taxpayers. This has been put into the Future Investment Fund so it can be invested in new public assets.

Budget 2014 sets out another $1 billion of new capital investments from the Future Investment Fund.

$200 million will be invested in health sector projects, including the new Grey Base Hospital on the West Coast.

$172 million will be invested in building and upgrading schools, including completion of a new school at Pegasus near Christchurch.

$198 million will be invested in KiwiRail’s Turnaround Plan and a further $40 million in the design and construction of irrigation schemes to boost agricultural production.

Other investments bring the total allocated so far from the Future Investment Fund to almost $3 billion over three Budgets. That leaves $1.7 billion in the Fund for new capital spending in Budgets 2015 and 2016.

Mr Speaker,

New Zealand cannot afford another doubling of house prices, as occurred between 1999 and 2008.

The Government has taken a number of steps to free up housing supply, which is essential to improving affordability. These steps include signing housing accords with Auckland and Christchurch councils, with the latter subject to consultation.

We have reformed legislation to limit development contributions for funding infrastructure.

We have increased support for those on low and moderate incomes to get into their first home through increased eligibility for KiwiSaver first home deposit subsidies, and by trebling funding for Welcome Home Loans.

A Productivity Commission inquiry into housing affordability found building materials for a typical modest family home in New Zealand are 30 per cent higher than in Australia. Duties and tariffs currently apply to most of the materials used to build a standard house.

Budget 2014 temporarily removes these duties and tariffs to increase competition and improve housing affordability. This is expected to save around $3,500 on the construction of a standard New Zealand home.

Mr Speaker,

The Government’s third priority for this term is delivering better public services within tight fiscal constraints.

I want to compliment the thousands of New Zealanders who deliver public services for their dedication and innovation in achieving better results for our families, communities and businesses.

We have learned how much more can be achieved, particularly for the most vulnerable and the most dependent, by spending taxpayers’ money more carefully and deliberately.

For example, there is a group of around 2,000 six- to nine-year-olds in New Zealand who have had the worst start in life.

These young children will cost taxpayers an estimated $750 million in prison costs alone over the course of their lives if we don’t do more to prevent them getting into trouble.

The future cost to taxpayers of people who received welfare in 2012/13 will be $76 billion by the time they exit welfare or retire. About three-quarters of that cost is due to people who first received a benefit under the age of 20.

These sorts of insights are starting to drive decisions made by public agencies, because the cost estimates help to tell the Government in more detail who needs help and what support they need.

Mr Speaker,

One of the Government’s key priorities is to support children and families.

Even when finances were at their tightest, the Government maintained programmes like Working for Families.

We increased funding for health and education.

And we developed new initiatives like our home insulation programme, breakfast in schools, rheumatic fever prevention, and free GP visits for under-sixes.

The fiscal outlook has now improved. That means we can free up money to provide more practical assistance for families and children, while still running surpluses.

This Budget contains a $500 million package of support for children and families.

The package is clearly focused on young families and those vulnerable children who most need our care and protection.

It has five elements and I’ll go through each of these in turn.

First, the Government will extend paid parental leave from 14 weeks to 18 weeks. This will happen in two steps - to 16 weeks on 1 April 2015 and to 18 weeks on 1 April 2016.

We have previously said we would support extending paid parental leave, in an affordable way, when conditions permit. The Budget delivers on that commitment.

In addition, eligibility for paid parental leave will be significantly extended.

For the first time, “Home for Life” caregivers and people with similar permanent care arrangements will become eligible for paid parental leave.

Parental leave payments will also be extended to people in less-regular jobs, including seasonal and casual workers, those who have recently changed jobs, and workers with more than one employer.

These changes recognise New Zealanders’ wide range of family and work arrangements.

Expanding paid parental leave will cost $172 million over four years.

Second, the Government will significantly boost the parental tax credit.

This payment was introduced by the National Government in 1999. It is available to working families with a newborn child who are not on a benefit and who are not receiving paid parental leave.

From 1 April 2015, the Government will increase the parental tax credit from $150 a week to $220 a week, and the payment period will be extended from eight weeks to 10 weeks. This increases the total credit from $1,200 to $2,200.

In addition, the abatement rules will be changed to better target the parental tax credit towards low-to middle-income families. A couple having their second child, for example, will not receive any payments if they together earn more than $99,847.

Boosting the parental tax credit will cost $42 million over four years.

Third, the Government will invest $90 million over four years to make doctors’ visits and prescriptions free for children aged under 13.

This means that cost will not be an obstacle for families wanting to take their young children to the doctor.

Already, doctors’ visits and prescriptions are free for children under the age of six. We will extend this to children under 13, so primary school-aged children will be able to go to the doctor for free, any time of the day or night, and get their prescriptions free as well.

The Government will offer this scheme to GPs from 1 July 2015.

The fourth part of this package is an increase in funding for early childhood education.

The Government has a target of increasing participation in early childhood education so 98 per cent of children starting school will have participated in quality ECE.

The Budget contains funding of $156 million over four years to help early childhood centres remain accessible and affordable, meet demand pressures and increase participation towards the 98 per cent target.

Finally, the Budget contains funding to help the most vulnerable young New Zealanders and protect them from abuse and neglect.

This includes funding to roll out eight more children’s teams around the country to identify and work with at-risk children and their families.

The Budget also provides funding to screen people who work with children, as set out in the Vulnerable Children Bill, to help support children in Child, Youth and Family care, and to provide greater support for caregivers.

This new funding comes to $33 million in 2014/15.

In total, the Government’s comprehensive package of practical support for children and families - including paid parental leave, the parental tax credit, free GP visits, early childhood education and support for vulnerable children - involves new funding of $493 million over four years.

Mr Speaker,

Through difficult economic times, and through “zero Budgets”, the Government has protected funding for frontline health services and education.

As a result, spending on health next year will reach $15.6 billion and total spending on early childhood, primary and secondary education will reach $10.1 billion. In addition, the Government will spend just over $3 billion on tertiary education.

We have also been focused on doing more for people and their families within existing budgets.

A lot more elective surgery procedures are now being performed, for example, and waiting times for diagnostic tests, cancer treatment and emergency treatment have dropped.

Budget 2014 continues this commitment to funding and to results.

It includes $1.8 billion over four years, including $413 million of savings, for new health initiatives and to meet cost pressures and population growth within the health system.

Apart from free doctors’ visits and prescriptions for under-13s, which I’ve already mentioned, the Budget contains an additional $110 million to fund more elective surgery and reduce waiting times, $33 million for cancer screening and treatment, and $20 million to prevent rheumatic fever.

The Government is also providing $96 million for home-based support services, $112 million for disability support services, and $40 million for additional support for elderly people, including those with dementia.

As previously announced, the duty-free tobacco allowance will fall from 200 cigarettes to 50 cigarettes, in line with the allowance that applies in Australia.

This is a further step towards reducing the harm from smoking, which still causes up to 5,000 premature deaths in New Zealand each year and I want to acknowledge the contribution of the Hon Tariana Turia to this initiative.

Mr Speaker,

Educational achievement at school has started to improve after years of spending that failed to deliver better results.

In Budget 2014, education receives an additional $858 million over the next four years and the remainder of this year, to lift the achievement of New Zealand students, strengthen the teaching profession and meet funding pressures.

Of this, $359 million is to recognise excellent teachers and principals, keep good teachers in the classroom, and share expertise across schools, as the Prime Minister announced earlier this year.

Schools’ operational grants will increase by $85 million and, as I mentioned, early childhood education services get a $156 million increase.

The Budget also provides $111 million of operating funding for school property development and maintenance.

Mr Speaker,

The Government’s welfare reforms have already made a significant difference, with nearly 15,000 fewer people on benefits now than there were 12 months ago.

The Budget invests an additional $100 million over the next four years to support people to come off benefits and into work, including around 8,000 additional places in employment and work-readiness programmes.

As previously announced, the Government is also putting aside $3.5 million in 2014/15 to help up to 1,000 beneficiaries take up job offers and move to Canterbury, where demand for labour is strong.

The Budget allocates $22 million over four years for non-government organisations delivering community budgeting services, as recently announced by the Minister for Social Development.

And it provides $15 million over three years for Whānau Ora navigators to work with and support whānau and families.

Mr Speaker,

Police and Corrections will continue to target their resources to prevent crime and make our communities safer.

Police’s core operating spending is being maintained at almost $1.5 billion in 2014/15. A focus on frontline policing and crime prevention has reduced crime by over 20 per cent in the past four years.

Budget 2014 also supports the Government’s targets to reduce the reoffending rate by 25 per cent. Reoffending has already been reduced by 12.6 per cent, which has meant around 9,300 fewer victims of crime each year.

The Budget provides $10 million over four years to support sexual violence services, including support for frontline crisis response and community-based treatment services.

Mr Speaker,

The Government is continuing its reform of social housing. Social housing should be a step to independence for those capable of it, not a dependency trap.

Budget 2014 provides a $30 million boost to the Social Housing Fund to help the community housing sector provide homes for high-needs families.

The Budget also allocates $64 million of operating and $16 million of capital funding to enable the Ministry of Social Development to assess clients’ needs and allocate tenants to both Housing New Zealand and community housing providers.

From July this year, reviewable tenancies will begin to be rolled out for social housing tenants. Budget 2014 provides $13 million of operating and $2 million of capital funding to find the best housing option for tenants and to support those who are ready to return to the wider housing market.

Mr Speaker,

The Government is committed to strengthening the New Zealand Defence Force so it can meet its domestic and international humanitarian, aid and military commitments.

As previously announced, Budget 2014 provides $535 million in operating funding for the Defence Force over the next four years.

The Government’s fourth priority is rebuilding Christchurch.

I want to pay tribute to my colleague, Canterbury Earthquake Recovery Minister the Hon Gerry Brownlee, and the many public servants, community organisations and families who continue to work so hard to address the many challenges that remain in their community.

Since the first earthquake in September 2010, the Government has backed Cantabrians in the initial response, and now the recovery and the rebuild.

The total cost of the rebuild has been estimated at $40 billion and the Government’s share will be significant.

On current estimates, the Government’s contribution to the rebuild is expected to be $15.4 billion, of which $7.3 billion will be incurred by the Earthquake Commission, net of reinsurance proceeds.

At the moment, the Government is paying an estimated $9 million every working day in rebuild invoices.

Demolitions in the central city are nearing completion and buildings are going up.

There are now more than 200 private-sector buildings - both commercial and residential - either under way or consented within Christchurch’s four avenues.

And construction will begin on a number of anchor projects this year, including the $300 million Justice and Emergency Services precinct, for which the first sod was turned in January.

The Government is also on track to move 1,700 staff in about 20 government departments and agencies back into the central city in 2016.

Housing New Zealand expects to build 700 new houses and complete repairs on 5,000 existing state houses by the end of next year.

And the Government is progressing a housing accord with the Christchurch City Council to accelerate development on central and local government land, and deliver more social housing in the city.

Budget 2014 provides $50 million of additional funding over the next two years for the Canterbury Earthquake Recovery Authority, in addition to $19 million funded from existing contingencies established in Budget 2013.

As previously announced, funding of $13.5 million will be provided over the next four years to continue the Earthquake Coordination Service, including counselling services and the Canterbury 0800 support phone line.

These initiatives bring the Government’s spending and commitments to rebuilding greater Christchurch to $15.4 billion by 2018.

Mr Speaker,

New Zealand is among the first developed countries to achieve a return to normal economic settings.

We are on the right track. We are making good progress. And we are looking ahead with confidence.

The Government’s books are on track to surplus next year and are the envy of most developed countries.

The economy is growing, wages are increasing faster than inflation and more jobs are being created every year.

The country is seeing the benefit of improved public services that are focused on delivering better results.

Our challenge now is to secure these hard-won gains through to 2020.

This is a Budget that looks to the future and to the substantial opportunities New Zealand has earned.

If we stick to the plan the Government has outlined, we can grasp those opportunities and deliver sustainable growth that all New Zealanders can share in.

Mr Speaker,

I commend this Budget to the House.

Hon DAVID CUNLIFFE (Leader of the Opposition): I move, That all the words after “That” be omitted and replaced with: “this House has no confidence in a Government that has failed to put people first; that has widened gaps, where too many of our children grow up in poverty; that has failed to provide enough good jobs and has lowered incomes; a Government that has no vision for our nation’s long-term well-being but is increasingly mired in politics as usual.” At the end of the day, this Budget should not be about politics as usual. It should not be about National versus Labour, left versus right, us versus them. This Budget should be about those whom we are here to serve, about New Zealanders in their work, in their homes, in their families. It should be about all of us in this country and the opportunities that we all need to live a good life. The Government says the economy is in recovery. Some even say it is booming—a so-called rock star economy. We ask New Zealanders whether that is really true for you. Where is your recovery? Is your household budget booming? Where is your fair share? Or are you being squeezed by higher costs and lower wages, power, food, interest rates?

Today I want to show three simple things to Kiwis. The first is that the much-hyped fiscal surplus is not worth the wafers it is written on—it is smoke and mirrors. This is a “fudge-it Budget”. The second is that this Government continues to favour the few, at the expense of the many. This is not a Budget; it is a Cabinet club annual report. It will take more than a few election-year cosmetics to change that. The third is that we want, for all New Zealanders, for New Zealand to be the fairest, most decent country in the world, and that will take serious, long-term policy change that will create genuine opportunity, reduce poverty, and lift all our people up in their work, in their homes, in their families.

This is obviously a “fudge-it Budget”. It is a wafer-thin, smoke-and-mirrors fiscal surplus, possible only because National has asset-stripped Housing New Zealand, taking another $90 million out and stripping 40 to 70 percent of State houses out of our regions, and is now underfunding Canterbury as well. It has cut $567 million out of the Canterbury rebuild, relative to last year’s infrastructure budget. It is holding on to $480 million of ACC levies for another year, which is more than the entire wafer-thin surplus is worth. And there is an unprecedented $375 million interest-free loan for Auckland Transport, which would normally be capital spending. That just happens to be $3 million more than the total surplus. Oh yes, and there is a rosy 4 percent growth forecast for the current year.

National says the “fudge-it Budget” is “steady as she goes”. Steady as she goes, all right—just do not ask where she is going. If you asked John Key what kind of New Zealand he wants to see in 10 years’ time, what would the answer be? Just what we have got now, but with more inequality, more golf courses, and a new flag. Six Budgets and still no vision. As Michael Cullen would say, the one-trick pony is doing its one trick: the dance of the six veils. And what do they tell you? The teaser is that the tax cut is under the seventh.

The numbers actually speak, sadly, for themselves. Numbers like $56 billion—that is how much new debt has piled up under National. Numbers like $1.2 billion a year—that is the ongoing cost of National’s tax cuts for the top 10 percent. Numbers like $10 million a day—that is the interest we are paying on National’s debt: $10 million every single day. Think about how many kids could be lifted out of poverty for that. Under this Government there is not one New Zealand; there are two New Zealands. One is for a few self-interested rock stars, increasingly drunk on power and plenty and privilege and increasingly out of touch with the rest, and the other is for New Zealanders struggling to pay the bills and get ahead, running harder to keep up and unable to catch the fading Kiwi dream. I ask New Zealanders where your recovery is. Have you got your fair share? Is this Budget about you or about the Government? The Government says that it has balanced its books. Have you been able to balance yours?

For too many New Zealanders the answer to those questions is clearly no. Real wage growth is actually forecast to go down—to go backwards—in the Budget the Government has just handed out. That is why the other set of numbers, the ones the Government will not be boasting about, are so heartbreaking. Numbers like 285,000—that is how many Kiwi kids are living in poverty, facing small cruelties like having no raincoat, not being able to see a doctor, or lying cold in their bed. Numbers like 50,000—that is how many more New Zealanders do not have jobs since this Government opened its doors to businesses. People are seeing their employers downsize, close their doors, or just get left to the cold winds of the market. Numbers like 46 percent—that is how many Kiwi workers did not get a pay rise in the last year, despite the so-called rock star recovery, like the care worker I met last year who told me she had not had a pay rise since Helen Clark was the Prime Minister. And numbers like $3.60—that is the price of a 2-litre bottle of milk, which a young mum in my electorate could not afford to buy for a child who had weak bones.

And do you know what? It is numbers like that that make the real difference. I would not begrudge John Key $56 billion in debt if he had actually lifted those children out of poverty, if he had got New Zealanders back to work, if he had given a break to New Zealanders who have been struggling to pay the bills, given them a shot at a better job and better pay. But do you know what? None of that has happened, because that is never what this National Government has ever been about. Since becoming the Government, National has reinforced the privilege of the well-off. Its major tax changes cut taxes for the rich and raised GST on everybody else. It flogged off the family silver to the 2 percent of New Zealanders who could afford to buy it and the foreign speculators who clipped the ticket.

This is not a Budget for New Zealanders; it is favours owed to big corporates, big noters, and the big end of town. There is even a $1 million stage show for Oravida. There is another $40 million of subsidies for irrigation for the dairy industry, which has already had $400 million, and is literally swimming in cash. It is forgetting about the need for decent taxation of property speculators. It is still open season on them buying and selling homes all across Auckland. There is no help whatsoever for first-home buyers, but there is assistance for the building-product companies to get cheaper supplies.

Now, just a few months before the 2014 election, National has brought down what John Armstrong has just said is a Budget that rifles through Labour’s chocolate box and finds a few sweeties to call its own. He has called it the “Great Brain Robbery”, and I tell you that it is David Parker’s brain that has been robbed. New Zealanders know that after half a decade governing for the few, a few cosmetic changes are just a cynical election-year stunt, not a new direction. Paid parental leave is 16 or 18 weeks under National, but would be 26 weeks under Labour. The parental tax credit is less than under Labour’s Best Start plan. It is what Paddy Gower called a baby-sized bribe. On bowel cancer screening, National is finally getting around to rolling something out 5 years too late and about 3 months after Annette King just announced our plan. The announcement of a plan for kauri dieback disease is just in time, as Phil Twyford and I have already announced ours.

These small concessions are nothing more than a pale imitation of the new direction that a Labour-led Government would bring—a direction where people matter most. It has a very different vision for New Zealand, one where we believe that the measure of economic success is whether New Zealanders’ lives are better and whether it is easier for them to get a job, pay the bills, and raise their kids. I believe we can do better as a country. I believe New Zealanders deserve better than the low expectations and easy cynicism of this Government. That is not what we want for New Zealand. We want New Zealand to be the fairest, most decent society in the world.

Labour stands for full employment so that every New Zealander who wants to get a job can get one. That is why we are committed to bringing unemployment down to 4 percent by the end of our first term. We have done it before, with an average of 3.9 percent over 5 years when we were last in Government. Our monetary policy upgrade will help our exporters create jobs. Our forestry and manufacturing upgrades will reward innovation investment in those job-rich export industries. KiwiBuild, our plan to build 100,000 affordable homes in 10 years, will turbocharge the construction sector. KiwiSaver will help build bigger savings so we are not at the mercy of foreign investment flows. A capital gains tax will swing money away from speculation and towards production and innovation. How about decent employment laws that do not see progress taken off the back of workers, and an increase in the minimum wage in our first 100 days?

Housing is the largest cost for most New Zealanders, and it has never been less affordable. When so few people have the chance of securely owning their own homes, when renting has become so expensive and so insecure, something is deeply, deeply wrong. It is time to take speculators out of the property market and to get fairness back in. It is time to build 100,000 new homes, principally for first-home buyers. It is time to tackle the high cost and low quality of rentals. It is time to lift the quality of houses with a healthy homes guarantee. It is time for measures that will cut foreign speculation on Kiwi homes and make speculators actually pay tax like wage and salary earners do.

For our families, under Labour you will see decent paid parental leave, thanks to Sue Moroney. You will see a better tax policy that ensures that everyone pays their fair share of tax. Under National, half of the top 100 richest New Zealanders are on the bottom tax rate—shame. Under Labour it will be the best possible start for our kids. That means more money for health, more money for education, more money for the most vulnerable—hey, we are even going to bring back adult and community education.

This programme to drive economic growth and improve the lives of New Zealanders will be built on solid fiscal foundations. You know, the next Labour Government will run fiscal surpluses every year unless there is a big economic downturn or a domestic disaster. Our policies will be fully costed by this man, Mr Parker, and we will bring down National’s record debt. Labour has nothing to prove here—

Hon Members: Ha, ha!

Hon DAVID CUNLIFFE: You may laugh, but Labour’s 9 years in Government was nine straight surplus Budgets—nine straight surplus Budgets. It has taken the dance of six veils for National to find the first one. It has taken six veils and there is not much under the kimono.

In conclusion, the next Labour Government, a Government that I will lead, will be a Government that puts people first. This is a “fudge-it Budget”, a Budget of low expectations, easy cynicism, and cosmetic change. Gone are Mr Key’s days of apparently being ambitious for New Zealand, because the rock star economy is apparently for somebody else, not for you. Gone are the days of a brighter future. Now Mr Key spends his time talking New Zealand down. He says reducing unemployment to 4 percent is a dream. He says that there is nothing that can be done. Ambition and belief in New Zealanders have given way to snide remarks and political cynicism. That is politics as usual.

Labour will build a nation in which every New Zealander has a secure job, in which owning a home is not a fading dream, and in which we can raise our children in our own country and realistically hope that our grandchildren will live here too so that we can grow old with them, not Skype them. We will build a nation in which every New Zealander, including the 285,000 children growing up in poverty, can share in that dream too. Labour trusts Kiwis to build this nation together, and we know that a Government that backs them can do it together. Today, John Key and his Government have showed once again that they do not have what it takes to make New Zealand the place that all New Zealanders deserve. This Budget proves—and you can tell by the way they are hanging their heads, team—that it is time for them to go.

Rt Hon JOHN KEY (Prime Minister): That was a bit of a woeful speech from David Cunliffe, was it not? The only half-decent line was one written by John Armstrong—it is a shame he did not write the rest of the speech, because it might have been vaguely interesting. As for the label that David Cunliffe put on the Budget, I hate to tell him the bad news, but that was actually the label that Rodney Hide put on the 2002 Budget, so if he had stolen a few of the decent ideas from the ACT Party, he might have been able to give a half-decent speech, but he could not. But let us be honest—it is David Cunliffe. He is doing about as well for the Labour Party as Benji Marshall did for the Blues.

David Cunliffe is the man who has about as many supporters in his caucus as Brendan Horan has in his—one. That is it. And here is the winner—he is shaking his head over there—Grant Robertson. Good news, Grant, good news, son. You are 127 days, 3 hours, and 55 minutes away from being the leader of the Labour Party. Fantastic—fantastic! There is no doubt that Grant assisted David in the writing of that speech. You see, this is what is vaguely interesting at the moment. The Labour Party—and I kid you not; this is an absolutely true story—is out there polling. It is not polling on its policies; it does not have any, and you could see that from the speech. It is—truthfully—out there asking this question: is Shane Jones going to be missed from the Labour Party? Well, here is a tip: yes, actually! He is the only guy who believes in economic development, and, to quote Shane, why would he want to hang around and be economic development Minister in a Government that does not believe in economic development?

This was a very, very good Budget by Bill English—a very good Budget. It reflects 6 years of hard work by not only the Government but by businesses and New Zealanders from one end of the country to the other. It is a confident Budget for a confident nation. Overwhelmingly, across the nation, the majority of New Zealanders believe that this country is heading in the right direction. It is a Budget that sees the books back in surplus, growth at 4 percent, wages rising faster than inflation, and there is more money in this Budget for families, for businesses, and for the most vulnerable. This is a Budget that is focused on growth, jobs, and prosperity. It is a Budget that looks to restore the core finances of New Zealand. It is a Budget that, like this Government, is focused on the issues that matter. It is a Budget that means New Zealanders will recognise that this is a great country, a great place to raise a family, and with a Government that is committed to doing everything it can to make that situation even better.

This was Bill English’s sixth Budget. As he pointed out yesterday, he has had as many Budgets as he has had children, which is living proof, I think—and I am sure you will agree with me, Mr Speaker—of why you should have a Catholic Minister of Finance. What should we contrast this Budget with? I know: let us contrast it with Labour’s alternative, because David Cunliffe read out Labour’s alternative on Monday. In fairness, it was not really a Budget; it was a wish list. It was mercifully brief, but it went a little bit like this—

Hon Annette King: Cameron Slater’s line, eh?

Rt Hon JOHN KEY: Nope. “Dear Santa, please, please, Santa, could you bring me 4 percent unemployment and whopping big future surpluses. I have been a good boy, Santa, even if I won’t tell Mummy and Daddy who the two secret donors to my trust were. Santa, I’ve tried really hard. Even if I did muck up the baby bonus and Shane Jones’ departure and a few other things, I’ve been a really, really good boy. Love, David. P.S. Don’t worry, I will let the reindeer sleighs go in the fast lane even though I’ve banned the trucks.” That was a summary of Labour’s alternative Budget. Actually—let us be honest—that was actually slightly longer than Labour’s alternative Budget.

Hon Member: And more thoughtful.

Rt Hon JOHN KEY: And more thoughtful. And I wrote it myself, unlike the Leader of the Opposition—always a positive.

You see, the difference between a wish list and a Budget is here, in some interesting questions we might all like to answer. Did Labour support any of the savings that this Government has made to ensure that this country came back to surplus in any of the previous five Budgets? The answer to that is no, it did not. Did Labour support welfare reform that will see, and has seen, so many New Zealanders get back to work? No, it did not. Did Labour support tax changes to reduce tax rates paid by every single New Zealander across the country? No, it did not. Did Labour support a 90-day probationary period so that small businesses could have the confidence to take on a worker? No, it did not. Did Labour support Resource Management Act reform so that people can build houses faster and support the growth of businesses? No, it did not. Did Labour support housing accords so that we could have special housing areas? No, it did not.

And, of course, and my favourite: did Labour support the making of The Hobbit movies in New Zealand so that 5,000 jobs could be created here? No, it did not. Did Labour support saving 3,000 jobs in Southland when it came to Tīwai Point? No, it did not. Did Labour support, and does it support, irrigation for our farms so that we can see a significant increase in GDP? Does it support oil and gas exploration? Does it support foreign investment or skilled migrants? Will it even support a free-trade agreement with the largest economy in the world, the United States? No, it will not.

Just before Labour members get a bit starry-eyed about how it all was under Labour, let us just run through a bit of a checklist—here are the facts about the situation when Labour left office and what we inherited. In 2008 this country was in recession; this year it is going to grow, at 4 percent. In the last 5 years of the Labour Government there was a 50 percent increase in Government expenditure; we have got it under control. Mortgage rates for those homeowners whom David Cunliffe was talking about were 10.9 percent under Labour; under National, about 6 percent. Food prices—the thing that New Zealanders worry about—were up 10.9 percent in the last year under Labour; 1.5 percent under this Government. House prices went up 96 percent over the 9 years of Labour; 28 percent under this Government. Electricity prices went up 72 percent under Labour; 20 percent under this Government. The current account deficit was 7.9 percent; it is 3.4 percent under this Government. And maybe—maybe—the most telling sign of all is that under the Labour Government 3,000 New Zealanders a month got up and packed their bags for Australia. Under this Government that figure is 350—the lowest since records began in 1986.

On Tuesday Australia delivered a Budget. If you ever want to see what an experiment of a Labour-Greens Government looks like, it is called Australia. It is called Australia, and Tony Abbott is having to pick up the pieces. Here is what the pieces look like. It means less support for families. It means billions and billions less for education and health. It means a pension age of 70. It means higher tuition fees, higher fuel costs, increased doctors’ charges, and thousands fewer employed in the State sector. Despite all of that, Australia over the next forecast period will rack up $100 billion of debt at the same time that this National Government will bank for New Zealanders $7.5 billion of surpluses.

If members want to talk about the facts, I look forward to the debate about the facts, because this is a very, very good Budget. Its first focus is families. There is $500 million for families, with free doctors visits for under-13s and free prescriptions for under-13s. We are talking about 400,000 New Zealand families having complete confidence to take their young ones to the doctor any time, for free. National delivered that for New Zealand families.

There is $171 million dollars for paid parental leave—an affordable scheme extended from 14 weeks to 18 weeks, and far more flexible than the stuff Sue Moroney was talking about. For the many—and there are many—who miss out, there is an extension of the parental tax credit from $150 a week to $220 a week, lasting 10 weeks, not 8 weeks. It is an affordable package, recognising that mothers want to stay home in those formative times with their youngsters, and they will be supported by this Government. There is $155 million extra for early childhood education, $33 million for vulnerable children, and eight new children’s teams around the country.

The No. 1 issue that New Zealanders worry about is health. Well, in this Budget, on the back of the very fine work that Tony Ryall has done as Minister of Health—and will he not be missed as one of the great Ministers of Health of this country—there is $15.6 billion. There is $112 million for disability support services, and $110 million for elective surgery. The difference between National and Labour—and we heard it from David Cunliffe—is that Labour knows how to borrow, and it knows how to spend, but it does not know how to run things very well. Under this Government, there will be 40,000 extra elective surgical operations, $20 million for rheumatic fever, and $6.3 million for cochlear implants. Twenty thousand New Zealanders a year are diagnosed with cancer. Under Labour, they go to Australia—where the other 3,000 a month are leaving from. Under National, they get the gold standard of 4 weeks or less. There is more money in this Budget for cancer care.

What is more important than education? There is $10 billion in this Budget and $359 million to improve the professional standards of our principals and teachers. This is a Government that is not afraid to measure, monitor, and report on the progress of a child. This is a Government that is not afraid to put $359 million into making sure that every teacher that stands in front of every student in a class is of excellence. That is something to be celebrated and proud of.

In welfare reform, what a tremendous job Paula Bennett has done. What a tremendous job she has done. There were 1,500 people a week leaving welfare and going into work in the last 12 months. There are 30,000 fewer children living in benefit-dependent homes. It was pretty predictable that David Cunliffe would get up and talk about income inequality. It suits his argument, but unlike the truth, it is not real. You see—

Hon David Parker: It is—it is.

Rt Hon JOHN KEY: Well, you do not like it. When you were in Government you liked Bryan Perry from the Ministry of Social Development, who runs the most comprehensive study, but when you are in Opposition you do not like it. What Bryan Perry’s study shows is that income has not become more unequal in the last decade. In fact, what it also shows is that when we compare ourselves to our peers—Australia, the United Kingdom, Canada, the United Sates—all of those countries are more unequal.

Let us also have a look at this situation. This Budget also continues to support the most vulnerable in New Zealand, with Working for Families, accommodation supplements, and income-related rents. But this is also what it shows—and this is an interesting point for New Zealanders. It shows that the top 2 percent of taxpayers in New Zealand pay 22 percent of all personal tax in this country. The top 12 percent of households in this country pay 76 percent of all net income tax before you even account for New Zealand superannuation. Well, here is a question for Labour: if 12 percent of households paying 76 percent of tax is not enough, how much is enough? How much is enough?

The Budget does more for Christchurch, more for science and innovation, more for apprenticeships, more for transport, and more for housing. It does a lot more in those very important areas. Let me make this final point. This is a Government—

Hon Trevor Mallard: Tell us about Judith Collins. Tell us about Judith.

Rt Hon JOHN KEY: That is right—that is exactly what you would say. You are an Opposition that is worried about muckraking and trivia, and you have not got a decent thing to say about the economy. Well, guess what? I am proud to lead a Government that is focused on the issues that matter to New Zealanders—the economy, law and order, health, and education. That is what we do on this side of the House. We get the job done.

On that side of the House, they are worried about all sorts of things, but they are not the things that New Zealanders at home are worried about. How do we know that? Because the poll that was taken over the last 10 weeks saw Labour fall under 30 percent. Why? Because people are sick of hearing about trivia and muckraking, and you know what? David Cunliffe might have promoted Trevor Mallard back in the shop, and that will lead them all the way to where it took Phil Goff—to 27 percent or less, and he knows it. David Shearer knows it too. He knows that it is the wrong way to go.

This Government is going to keep talking about the issues that matter. This Government is going to say to New Zealanders that there is a way forward that is progressive and positive. It is about a future where we back New Zealanders to succeed. We back this country to go well. We back this country to be able to sell more to the world than we buy from the world. We are not threatened by being a multicultural society. We welcome foreign investment. There was a time when Labour members used to welcome migrants. Now they stand on a farm with a New Zealand flag.

This is a Government that is focused on a New Zealand that is winning on the world stage. That is why we are becoming wealthier. That is why so many people want to come and live here. If David Cunliffe wants to keep talking, as the Opposition does, about trivia and muckraking, we will keep talking about the economy, law and order, health, and education. We are a very lucky Government to have Bill English delivering six magnificent Budgets. And does it not say it all today—we are in surplus; Australia is $50 billion in debt. More people want to live here than ever want to go and live in Australia. This is a Government that is getting it right on behalf of New Zealanders.

Dr RUSSEL NORMAN (Co-Leader—Green): This is the “Cabinet club Budget”. The Minister of Finance has delivered the “Cabinet club Budget” on behalf of the National Government. This is the Budget of the 1 percent by the 1 percent for the 1 percent. The wealthiest 1 percent in our country owns 16 percent of the wealth. This “Cabinet club Budget” will make sure that the 1 percent get given even more. But 50 percent of everyday New Zealanders own only a tiny 5 percent of all the wealth in our country. This “Cabinet club Budget” will make sure that they get even less. That is how the Cabinet club works. The “Cabinet club Budget” says to the overwhelming majority of New Zealanders: “You are excluded from the Cabinet club. This is not a Budget for you.” But the “Cabinet club Budget” is a Budget for the polluters. If a corporation pollutes a river, then the “Cabinet club Budget” will subsidise that pollution. If a corporation pollutes the atmosphere with greenhouse gas emissions, then the “Cabinet club Budget” will subsidise that pollution. If a corporation wants to mine a park or it wants to mine in the spawning ground of blue whales, then the “Cabinet club Budget” will subsidise that mining.

This is a Budget for those who have the ear of the Prime Minister. The vast majority of New Zealanders, who hoped that the Government might stand up for them—well, those people are not welcome to be members of the Cabinet club. Just because ordinary New Zealanders are excluded from the Cabinet club, that does not mean that they do not have a role. You see, ordinary New Zealanders are welcome to pay the bills at the Cabinet club; in fact, they are required to. When the members of the Cabinet club gave themselves a $5 billion tax cut, they added $5 billion to the Government’s debt, and it is ordinary New Zealanders—yes, Mr Prime Minister, ordinary New Zealanders; everyday New Zealanders who did not get the tax cut and who are not in the Cabinet club—who are the ones who have to pay back the $5 billion debt, plus interest. Think of it as their way to be part of National’s Cabinet club.

The Green Party believes it is time to take our country out of the hands of the National Party’s exclusive Cabinet club. It is time to steer our country away from debt and borrowing, and to build a healthier, more sustainable economy that puts our people and our environment at the heart of our economic management. We can have a smarter, fairer, more inclusive, and more sustainable economy, but, sadly, this exclusive “Cabinet club Budget” does not deliver one.

I will tell you what the legacy of this National Government will be. The legacy of this Government will be 30 percent of children living in poverty, its legacy will be a 50 percent increase in net greenhouse gas emissions, and its legacy will be debt, mountains and mountains and mountains of debt—fiscal debt, economic debt, social debt, environmental debt. When John Key became Prime Minister in 2008, Government debt was $14 billion. Today that figure has soared to $61 billion, and the Budget projects that it will increase to $63.6 billion by mid-2015. That is money that our children and our grandchildren will have to repay, plus interest.

Let us take a minute to put John Key’s debt into perspective. Government debt now equates to about $13,500 for every man, woman, and child in the country, and this Budget pushes that to over $14,000 for every person in New Zealand. That is nearly $11,000 per person more than when John Key became Prime Minister. The man should get some kind of debt performance bonus. A ball and chain should be awarded to him that he can pass to future generations. John Key has been borrowing money at about $17,000 per minute for every minute that he has been Prime Minister, including the hours he spends at the Cabinet club—where, apparently, he is not the Prime Minister but he is none the less building up debt at $17,000 a minute while he attends the Cabinet club—and the annual cost of servicing the National Government’s debt has risen by over $1 billion since 2008. That is $1 billion every year that we could be investing in our kids’ health and education, or using to clean up and protect our environment.

The Government will say that the global financial crisis and the Christchurch earthquakes are to blame for this situation, but it is the decisions that National made in response to these crises that have made the debt monster even worse. In the middle of a global financial slow-down, National gave tax cuts to the wealthiest New Zealanders. This starved the Government of over $5 billion in revenue, and now the Government has to borrow to cover that cost. That is the simple truth. Let me be clear: the Government borrows money that we all have to repay in order to pay for big tax cuts for the wealthiest people in the country. That is wrong. Those tax cuts for the wealthiest have also made New Zealand a more unequal country. The richest 1 percent now owns 16 percent of all the wealth in the country, while 50 percent of everyday New Zealanders have just 5 percent of the wealth. If you think about that as a building, it is like the top 1 percent having one and a half floors at the top of the building all to themselves, while half of the country—1.5 million adults—are crammed into only half of the basement. When I asked the Prime Minister about this yesterday, he suggested that the Green Party did not have ambition for a more prosperous country. Well, Mr Prime Minister, we have huge ambition for New Zealand, but unlike the Government our ambition is for all New Zealanders, not just the 1 percent. John Key’s ambition is to enrich the 1 percent and he is achieving his targets. The NBR Rich List of the 100 or so richest New Zealanders—they have increased their wealth by about 50 percent under National. Great job, Prime Minister, for the 1 percent. We can see who you work for.

Today Bill English announced that he hopes to achieve a surplus by June 2015, a surplus as thin as the ice that Judith Collins has been skating on. But the question is this: who is paying for the surplus? Well, Rio Tinto is not paying for the surplus. It received a $30 million Government handout despite making a $3.7 billion profit. Of course, Skycity is not paying for the surplus either. Following a dinner with the Prime Minister, next thing it got new gambling laws that will see it further profiting off the human misery of Auckland’s problem gamblers. Warner Bros is not paying for the surplus either. It got its publicly funded tax breaks and employment law changes from the star-struck groupies of the front bench of National. And Anadarko and the mining companies are not paying for the surpluses either. They continue to get big Government subsidies while paying some of the smallest mining royalty rates in the world.

So if the wealthiest corporations are not paying for the surplus, who is? I will tell you. It is the people of Christchurch—still waiting for their homes to be repaired, their roads to be fixed, and their flooded neighbourhoods to be safe and dry. They are paying for the surplus, and it is our children who turn up to school with empty bellies, sick, and not ready to learn who are paying for the surplus. There is nothing in this Budget for poor kids. Paid parental leave, although welcome, will make no difference to the three out of five children living in poverty, whose parents do not have a job. It is the young first-home buyers, struggling to repay their student debt while being locked out of the housing market, who are paying for the surplus. And it is our environment that is also funding this faux surplus, as 50 percent of our rivers and lakes are too polluted now to swim in. Our kāka and our rock wren are paying for the costs of this mythical surplus too, along with the other threatened native birds that live in Victoria Forest Park, which National has opened up for mining.

The Department of Conservation is having its budget decreased once again with a $16 billion cut in real terms, while the funds set aside for protecting our iconic wildlife and our most treasured natural heritage have been cut by $7 million. Our health system will pay for the surplus with significant real cuts in the health funding budget in the 3 years ahead. Likewise, education has significant real cuts over the next 3 years. National is paying for the surplus out of health and education funding. It is cutting funding in health and education in order to pay for this faux surplus. Our people and our environment are paying for this surplus, not National’s Cabinet club mates.

The Green Party believes that all our children should have equal rights to the opportunities that this country offers them—opportunities built on the hard graft of generations that came before us. Previous generations built up our power assets, but when John Key got into office, he sold our power assets, making sure that 99 percent of our kids would lose the dividends from those assets while 1 percent would gain from them immeasurably. Almost all New Zealand children paid for the surplus, and that is not right. John Key and Bill English appear to have a pathological commitment to saddling our younger generation of New Zealanders with a lifetime of debt and of deficit of opportunity, and I say to young New Zealanders: “Don’t accept it.” At this year’s election let us build an inclusive green economy with opportunities for all, not just for members of the exclusive Cabinet club.

If the news is bad for the Government books, then the outlook for household budgets is even worse. The average power bill has risen by $361 a year under National, and if that is not bad enough, incomes in Ōtara, and some of the poorest places in New Zealand, have dropped in real terms by 20 percent, under the Government. Families are really, really struggling. The truth is that the so-called competitive power market has failed in the same way that the housing market failed our families, and National’s response is more of the same.

If this had been our Budget, we would have introduced our electricity reforms to decrease power prices, green our power generation, and improve the overall efficiency of the energy sector. If this had been our Budget, the Green Party would have introduced NZ Power as part of a smart solution to transition our energy sector into the modern world. If this had been our Budget, we would have rolled out clean energy like our solar homes initiative, so that families can create their own electricity and reduce their dependence on the power companies. I am talking about giving families real energy freedom. Under our initiative families and households will get low-cost loans to pay for solar power installation, which they can repay through their rates—enjoying free sustainable power for decades.

The Government has done nothing to ease skyrocketing house prices, and that is a tragedy for young Kiwis trying to get into the housing market. If this had been our Budget, the Green Party would have introduced a capital gains tax on property other than the family home to relieve the pressure on the housing market. If this had been our Budget, we would have introduced our Home for Life package, which would have put homeownership within the reach of tens of thousands of Kiwi families. We think that renters also need a right to good quality housing and the protection of stable tenancies. These smart green ideas address the very real day-to-day household cost pressures on everyday New Zealanders, not just those of John Key’s Cabinet club.

There is nothing in this Budget that will propel the New Zealand economy into the 21st century by creating good green jobs and protecting our environment. Creating economic prosperity without trashing our environment and our climate is the single biggest economic and environmental challenge of our time, and the potential gains from a low-carbon high-tech economy are too significant to be ignored. There is a glaring gap in today’s Budget where the plan for a cleaner, smarter economy should be. In Government the Green Party will create a smarter, fairer economy that will deliver prosperity for everyone—one that creates jobs, reduces inequality, and protects our environment. It is triple bottom-line accounting, which is missing from the National Party’s old-school, Cabinet club thinking.

The estimated potential market share of the global green economy available to New Zealand is up to $22 billion annually. To put this economic opportunity into perspective, that figure of $22 billion is double our current export earnings from dairy. Imagine having a truly diversified economy that makes us twice as much money as dairy does, employs more people in diverse occupations, and does not pollute our waterways. It is a win-win model that, through its actions in its previous Budgets, National has repeatedly rejected.

Instead, National has overseen a dangerous simplification of the New Zealand economy. Our economic simplification in dairying is at the exclusion of job opportunities in cleantech and other industries. As the Budget documents state, manufactured exports are falling and the current account deficit is widening. The singular focus on low - value-added commodity exports, specifically milk powder and raw logs, has exposed the whole economy to the risk associated with a single product, single market approach. Of course, we have been here before. Exporting agricultural products to the UK worked well for a while, but once it joined the EU, we were without a buyer. At that time our strategy was to diversify, yet here we are again with an economy overly, almost singularly, focused on dairy into one market—this time, China. I agree with the concerns raised by experts that we have too many eggs in the China basket and we need a more diversified export base. Any downturn in the Chinese economy will disproportionately damage ours. This is not a smart way to run a modern economy.

All the evidence shows that New Zealand is uniquely placed to seize the opportunities arising from the global shift towards clean energy. In 2011 the world invested US$280 billion in renewable energy, and the global market for clean technologies is valued at more than US$5 trillion. We already have expertise in wind and geothermal energy technology, and our “clean, green” brand holds real economic value. The opportunities are there, and the Green Party will seize them 100 percent, with open arms. But building a green economy requires new institutions to help drive us there. That is why the Green Party announced the Green Investment Bank this week—to accelerate New Zealand’s transition to a smarter, greener economy. The bank will help innovative, low-carbon projects and proposals to get finance so they can get off the ground. PricewaterhouseCoopers estimates that the clean technology sector could be worth between $7.7 billion and $22 billion to New Zealand by 2015 with the right focus and the right investment. Despite this and the fact that the cleantech sector is taking off overseas, National keeps funnelling money into carbon-intensive industries like coalmining, oil drilling, and industrial dairying. The Green Investment Bank will direct investment into the clean, profitable investments of tomorrow. It is just one of a suite of announcements the Green Party has announced to make sure we have our economy heading in the right direction for a high-tech, low-carbon economy.

The Greens are committed to changing the old way of doing things in order to build a smarter, fairer, cleaner world for all of us. This election is our opportunity to embark on that journey, to take the destiny of our country out of the hands of the exclusive Cabinet club and put it into the hands of all New Zealanders. It is the journey we must take to ensure that our kids can stay here and work rather than move overseas to get the good jobs that they want. It is our journey towards an inclusive green economy where women and men are paid fairly and earn enough to lead good lives and offer the opportunity of great futures to their children. It is the journey that will see our rivers and lakes sparkling once more. It is the journey that will ensure that our forest parks echo with the haunting calls of the kōkako rather than the deafening din of mining rigs. It is the journey towards a stable climate and a prosperous planet for us and our children. Together we can build an inclusive, green economy for all of us. At this year’s election let us end the exclusive Cabinet club, let us put an end to the exclusive Cabinet club economy and the exclusive “Cabinet club Budget”, and let us build a smarter, greener economy for the benefit of all New Zealanders.

Rt Hon WINSTON PETERS (Leader—NZ First): Speaking on behalf of the fastest-rising political force in this country, New Zealand First, I say that in this National Budget cronies get cake; Kiwis get crumbs. This is an exclusive, members-only Budget of the “National club”. There is little for the ordinary people. Mr Key got up like a choirboy, then went to falsetto, then started acting like a comedian, which he is not, and then he walked off. Unfortunately, this Budget will not take the heat off Judith Collins—quite the reverse. It is so boring that it will bring that back on, and so fast you could say that it will be over by lunchtime.

Here we go. Where is the economic strategy to address the weaknesses of the economy and the growing inequality in New Zealand, the shameful inequality, which is clear and deeply troubling? The Budget will, of course, benefit National’s cronies. Everyone from Balclutha to Beijing now knows that the best blue-chip investment to make in New Zealand is a donation to the National Party—absolutely gilt-edged blue-chip.

The weakness of the economy is there to see for anyone who lifts up the engine’s bonnet to look at what is happening within the engine itself. Despite the best terms of trade in decades, we still have a chronic balance of payments deficit that the Budget pretends is not even there. National members call themselves economic managers. Where is the action on the fact that we have not had a balance of payments surplus for years? You see, under National, cronies get the cake; Kiwis get the crumbs.

Over the period between the end of 2008 and 2013, Australia’s economy grew 13 percent. Singapore’s grew 28 percent. What was National’s record and New Zealand’s record?

Hon Gerry Brownlee: I don’t know.

Rt Hon WINSTON PETERS: Oh, Mr Brownlee says: “I don’t know.” He is No. 3 in Cabinet but he does not know, which is no surprise to anyone over here. Well, from 2008 to 2013 New Zealand’s economy grew by 8 percent. Do you call that a rock star performance? Do you call that a rock star economy?

Le’aufa’amulia Asenati Lole-Taylor: Rock bottom.

Rt Hon WINSTON PETERS: My colleague is right. Asenati Lole-Taylor says it means we are heading for the rock bottom. So there is a small, highly contrived Budget surplus, like some back-door bee-keeper’s—bookkeeper’s—balance. Have a look at the facts. Have a look at the facts.

Hon John Banks: A bean-keeper’s balance.

Rt Hon WINSTON PETERS: It is, because they deal in small business. We are talking about a country, Mr Banks, where the Government’s income is over $65 billion. There are 100 ways to manipulate a surplus. I know because I was the Treasurer when we had real surpluses, not these contrived ones. [Interruption] Oh, they hate to be shown by comparison to be incompetent.

Look at the facts. When National came into office, guess what the Crown debt was? That is the debt the Government owes to the rest of the world. Well, it was $10 billion. What is it now? It is $60 billion—up six times. That is all the work of the brilliant money trader from Merrill Lynch and the economic genius from Dipton, who is so incompetent that a 24-year-old child can replace him. The debt went up six times because of a money trader and a brilliant economic expert who for 6 tawdry years have presented Budgets that take us nowhere. This is a “steady as you go when you are going nowhere Budget”. It begs the question of how the surplus was generated. If this was a private company, the auditors would be in jail. If this was a private company with a balance of payments crisis and massive debt up six times—the national debt, which includes everybody, the public included, is $150 billion. That sounds like Spain. It sounds like Portugal. If this was a private company, the auditor would be in jail.

Lots of smoke and mirrors and all sorts of cuts and devices have been used. We have a massive problem with hundreds of rotting school classrooms. Did the National members mention the rotting schools they must fix up first before they make this investment in education? Not a word, but we all know they are there, and the number is rising. There have been scores of cuts in crucial public services such as conservation and biosecurity. We are in grave danger on the biosecurity issue because, as anybody inside customs and border control will tell you, they are up against it—undermanned, underwomaned, and underfunded. But the National members sit there and say they are the ones who can be trusted to run New Zealand and our security.

And what of forgotten Christchurch? What sort of Government holds back money deliberately, nakedly, and secretly from the Christchurch rebuild so that it can manipulate a surplus in Wellington? What sort of country—

Hon Gerry Brownlee: That is a lie.

Rt Hon WINSTON PETERS: It is not a lie, Mr Brownlee, and if you will close your big mouth, I will explain how I got there.

Hon Gerry Brownlee: The man is a liar.

Rt Hon WINSTON PETERS: Oh, I see I struck a nerve. See, when you arrest somebody in the street for burglary, they get upset. When you catch a thief in the night, they do not go calmly. Ask the police. When you tell Mr Brownlee “You’ve been stealing the money from the Christchurch people and staggering the rebuild so you can get an artificial surplus.”, he goes berserk and starts shouting out.

Hon Gerry Brownlee: Because you’re a liar.

Rt Hon WINSTON PETERS: He cannot say that, of course, but I do not mind. It would take one to know one, would it not? I will leave it to you, Mr Speaker. Is that fair? Thank you very much. And Mr Brownlee smiles in confession—he smiles in confession.

What about Christchurch? The Government holds back money to manipulate a surplus from the people in Christchurch. They have been suffering year on year on year, with a man called Brownlee in charge of it. Is that any surprise? You do not have to tell the people of Christchurch, who are facing another terrible winter. They know that they have been sacrificed so the Government can boast about its books, and the member from Christchurch in charge of the Canterbury Earthquake Recovery Authority is the No. 1 culprit here. Tell the Christchurch people—

Hon Gerry Brownlee: Come and stand against me, you wimp.

Rt Hon WINSTON PETERS: How can you stand against Gerry when there is no room? Alongside him, about a metre away, maybe, but I cannot stand against him. Tell the Christchurch people whose homes are flooded every time it rains that the federal books are more important than their lives. Go and tell the Christchurch people why the Government is staggering the rebuild. This is now a growing contempt for the Minister himself and for the system itself. [Interruption] Here we go—that is how they got there. [Interruption] Oh! I see I have struck a nerve. The truth always has that effect, whether it be in a court of law or in Parliament. It strikes a nerve.

Holding back on the vitally needed money to rebuild Christchurch to generate the so-called surplus amounts to a crime. It amounts to a crime against our own people. The facts are clear. The Government has jacked up the numbers from an insurance deal when AMI was taken over. AMI was turned into Southern Response Earthquake Services, and there the fiddling started. The proceeds from that sale amounted to—listen to the figure—$252 million, which was placed in Government bonds rather than being used to settle insurance claims. Do you smell a rat here? I do. The Government deal with Southern Response Earthquake Services requires it to put surplus cash on its books into Government bonds as well. This has been boosted by money coming in from reinsurance companies also going into Government bonds. How much? It now holds over half a billion in Government bonds. Does that sound a bit close to the surface to you? The surplus is $375 million, and here is half a billion dollars in Government bonds. Bill English boasted of a surplus today. Mr Brownlee, go back to Christchurch and apologise to those people, because you know who is guilty of having fiddled the books.

Hon Gerry Brownlee: Come and stand against me.

Rt Hon WINSTON PETERS: Stand against Mr Brownlee? Mr Brownlee, I do not like taking candy off a baby. Let these economic gurus from National’s cronies club go and tell the Christchurch people in broken homes begging for relief what is happening to their relief. Under National, cronies get cake; Kiwis get crumbs.

What about jobs? Where is National’s real, measurable action plan for jobs? There are still almost 150,000 unemployed people in this country. If you add to that those who want to work but who are underemployed, or who have just given up trying, you get to 250,000 or a quarter of a million people, but the National members had the audacity to clap for the Minister of Finance. Unemployment is our single biggest problem. Kiwis cannot get jobs, but tens of thousands of foreign students and immigrants are getting work visas in front of them. How does that work? Well, under National, cronies get cake; Kiwis get crumbs.

Where is the action plan in the Budget for the cost of living? Over half of those employed in New Zealand had no pay increase last year —no pay increase. Wages are stagnating. Costs are going up. Electricity prices are soaring, gouging the public without restraint. It will be another cold winter for pensioners and low-income families under National, of course. Why would National care? Their cronies get the cake and Kiwis get the crumbs.

There is a fire sale on assets that we used to own. The Budget does not take into account the loss of our productive asset base. Much of our primary agricultural land has gone to foreign ownership. Many New Zealand workers have ended up on the cheap scrap heap of labour for overseas investors to exploit. Why is there no action?

Tim Macindoe: He can’t even read.

Rt Hon WINSTON PETERS: Why is there no action? The man from Hamilton tells you it all. He used to teach about ethics and principles in a school, once upon a time. Of course, he had to read it from a book because he did not know about it himself. He could not understand anything about it.

Where is the admission that the housing crisis is due to National’s incompetence? Where is the admission that the housing crisis is all National’s fault? For almost 6 years it has blatantly ignored all the underlying causes. Anyone with half a brain—which rules out Gerry Brownlee—knows that tens of thousands of Auckland houses have been gobbled up by overseas buyers. It is a bonanza for foreigners. Foreigners come here and there are no restrictions on buying, no requirements, no taxes—come one, come all.

Treasury predicted just the other day that migration to New Zealand would go up by 41,000 per year from here on in. The Government has got no plan to address the crisis—no plan at all. That is utter madness. It allows people to scoop up homes—50, 60, or even 77, in one man’s case—and Mr English got up in the House yesterday and said “I know how many landlords there are.”, but he has not got the wit to say how many properties each landowner owns. Even a moron could work that out. We have got 22,000 landowners from abroad, but how many properties do they have? Is it 22,000? No siree. No siree. Treasury and now the Reserve Bank say we need a survey of overseas ownership. That is the last thing National wants, because now it is exposed by its duplicity. It does not want facts; it prefers dogma. Under National, cronies get the cake; Kiwis get the crumbs.

Where is the real infrastructure plan that goes beyond building more motorways? There is nothing significant. Auckland is deep in infrastructure deficit. What happened to the rail loop? Nothing. What has happened to provincial New Zealand? Nothing. Where is the vision? National has not got one. No, as usual, National has taken the easy way out and kicked this vital project of the city rail loop straight into the long grass. Where is the plan to promote regional growth? Why is this Government busting the heart of heartland New Zealand? Again, there is nothing substantial or meaningful from the Budget for the regions. They produce export wealth, and in return they get exploited. Under National, cronies get the cake; the Kiwis get the crumbs.

This Budget has been weighed and has been found to be failing. It is shallow and it is empty. New Zealand deserves better, and after 20 September—here is the good news, everybody out there in TV land—

Tim Macindoe: 3.7 percent—you won’t be here.

Rt Hon WINSTON PETERS: After 20 September, that man over there will not be here, no, because he is hopeless. You know what? I could ask the whole of Hamilton whether they know who he is, and they would say no. I could ask “Do you know a guy called Tim?”, and they would say “Well, he can’t be our MP.”

After 20 September New Zealand First will ensure that we get a real economic strategy for the challenges our country faces. We are going to go back to the glory days of New Zealand in the past to give you a better New Zealand for the future. We know that we were once the greatest country on earth. We know we still have the same people. In some ways we have still got the same political parties, but they are barely alive now. Mr Banks is smiling. He knows what I am talking about. If Holyoake was around today, he would not believe what he was watching. If Fraser or Savage were around today, they would not believe what they were watching, because they wanted back then what we want today.

We want our resources to be used by New Zealand people to build New Zealand’s wealth and to expand the happiness of every New Zealander, not this Cabinet club, which is elitist, where the wealthy get wealthier and the poor get poorer—dog eat dog, law of the jungle. That is what National members stand for, and they should be damned ashamed of themselves. They think they are going to win this campaign. Well, stand back and watch, because there is lots of motivation now for a lot of people who in 2011 had given up hope to turn out for this election.

This party believes in some things that used to be ordinary beliefs but that are special today. We do not believe in selling our land to foreign interests. We believe that State-owned assets belong, in trust, to the people. We believe that the Government’s role is to protect and defend New Zealanders, to be the guardian of the country’s resources. We must help people reach their full potential through enlightened policies—health, education, housing, employment, and, above all, sound economic policies. They all say it of course, but New Zealand First believes in it and acts on it.

We also believe in special obligations to the old and the young, to society’s most vulnerable. We believe in one law for all, irrespective of ethnic background. Others give a dog whistle when the election comes close, but this is the party that stands by it. We were founded by these principles, not by the crumbs of tokenism from the cronies from the “National Club”. We believe that Māori needs are the same as all New Zealanders’ needs: good education, good housing, good health facilities, and, most of all, First World - paying jobs in our own country. New Zealand First believes we must train, skill, educate, and employ our own people first. There is no excuse for the hiring of cheap labour from overseas when so many of our unemployed are on the scrap heap back here. On the issue of foreigners speculating on housing for New Zealanders, we have got the courage to say it and to stop it. New Zealand suffers economically from not having a practical plan for its people, and blind ideology is not a substitute.

In the quiet of the National members having been sublimated by sound argument, I want to close by saying that the current economic vision is simply the Auckland housing bubble, increased immigration creating consumer demand, the staggered and retarded Christchurch rebuild, and milk powder to China. We cannot survive without a much more diversified economy. Very soon there will be an election, and I want to tell everyone watching this debate today that no matter how difficult and tiring and troubling things have been, no matter what sacrifices you have had to make, just hang on a bit longer. Just hang on for another 2 months, because help is soon on its way in the form of New Zealand First.

TE URUROA FLAVELL (Co-Leader—Māori Party): Tēnā koe, Mr Speaker. Kia ora tātau katoa. Me tīmata ake i taku kōrero mā tētahi mihi ki te uri o Ngāti Dipton. Tēnā koe e whakatakoto nei i tēnei kōrero ki mua i te aroaro o te Whare Pāremata, otirā, mō tāu mahi i te taha o te Pāti Māori.

[Thank you, Mr Speaker. Greetings to us all. Allow me to begin my speech with an acknowledgment of the relative from the clan of Dipton. Congratulations to you in respect of this speech that you presented before the House of Parliament, and particularly your work with the Māori Party.]

Can I start by congratulating the Hon Bill English on working positively with the Māori Party to support initiatives that matter. I also want to acknowledge the leadership, the courage, and the hard work of my colleagues Tariana Turia and the Hon Dr Pita Sharples, who have been focused in their pursuit of real, tangible improvements in the lives of all of our whānau. Budget 2014 is a testament to their absolute belief in whānau. I mihi to them both for their lifelong journey and standing up for what is right; for believing and acting in ways that inspire us all to know that we can make change happen.

Yesterday a young girl, Crystal Te Moananui, asked me a question that got me thinking. Crystal and her classmates from Thames South School were in Parliament on what she described as a politically inspired hīkoi. She asked me what some of the difficulties were that made me who I am today. My instant response was to reflect back to the time when I was 10 years old and I lost my dad. As I think about that time I recall the intense sadness that I had, the sense of loss, and yet with that there was a powerful challenge to become someone who would have made him proud. The point I am making is that every single one of us in this House—and, indeed, in this nation—goes through periods of crises in which it is hard to see tomorrow. The Māori Party hears stories every day of everyday whānau who are suffering loss, experiencing conflict, and are looking for a way forward.

Our focus for this Budget, then, has been on keeping it real. We have listened to the stories of the heroes amongst our communities, who tell us in plain language what will make a difference. Our Budget package is built around three strategic themes: building resilience within our whānau, hapū, iwi, and communities; maintaining the momentum that we have created while being in a position to do so; and advancing into new spaces for innovation and development. If there is one thing that every New Zealander knows about the Māori Party, it is Whānau Ora. Whānau Ora, at its essence, is about providing every opportunity for our families to thrive, to live the life they dream about, and to make their aspirations real.

This Budget extends upon the commitment to Whānau Ora by a new investment in Whānau Ora navigators. This is the logical next phase of the Whānau Ora approach. The first phase was building the capacity of health and social service providers to actively respond to whānau goals. We have succeeded in enabling over 47,000 New Zealanders to benefit from creating their own whānau plans and to move to greater self-reliance by doing it themselves. The navigator role is now providing support directly to whānau to determine how best to achieve their life goals in areas as wide as income generation, healthy lifestyles, jobs, information technology—whatever our families seek for themselves. While they are determining what it is they need, the Government also has a role in removing any barriers that get in their way.

In this year’s Budget we are extremely proud of the focus on families and children. This is an emphasis that we have championed over the last 6 years in Government, and what we are particularly proud of this year is to see that emphasis carried across into key ministerial portfolios. I want to highlight three specific initiatives we have promoted. Firstly, there is a need for paid parental leave to be brought in so that more permanent guardians and parents can also benefit from flexible work arrangements. What we know from labour market researchers is that many Māori and Pasifika women tend to be overrepresented in areas that exclude them from being able to receive parental leave payments. This Budget and the subsequent legislation will address that gap.

This Budget, secondly, increases the parental tax credit, which has not been raised since 1999. This is a practical means of supporting low and middle income working families who do not currently receive paid parental leave when they have a new child. Thirdly, we highlighted the investment of $90 million to offer free doctors visits and prescriptions for children under the age of 13. Opening up health care has been a huge priority for us. Building resilient whānau is also about healthy homes, and $16 million has been injected into Māori housing, with a particular focus on Māori social housing and rebuilds and repairs in rural communities. [Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): Could I just ask members to show some courtesy to the member who is trying to address the House.

TE URUROA FLAVELL: The additional $20 million invested in rheumatic fever prevention brings the Government’s total investment to more than $65 million over 6 years. I say it is an outstanding approach, which the World Congress of Cardiology also noted last week. Our relationship accord with the National Party is also committed to helping those most in need to live in warmer, drier, healthier homes. At last count 112,000 low-income homes had been insulated, which is making a huge difference across all of our communities.

Keeping it real is also about making it possible for mokopuna to participate in early childhood education. An additional $155 million has been invested in this area. It is about reading, writing, and arithmetic. I can also say that one of the greatest projects that Pita has inspired in his role as Associate Minister of Education is Reading Together, which has now expanded into more than 140 decile 4 and 5 schools, helping parents support their children to read. What can be better than enabling all of our tamariki to have a great start on their education pathway?

The second key theme for the Māori Party in Budget 2014 is building on those hallmark initiatives that tangata whenua have created. A key announcement for us in this Budget is the establishment of a Māori-focused centre of research excellence. There was huge outrage across the country when funding was cut for Ngā Pae o te Māramatanga. The Māori Party picked up the challenge and has worked to create the means by which our own mātauranga, our knowledge, and our tikanga, our ways of being, can be preserved, protected, and advanced. We are really excited about this new initiative rewarding and growing the amazing talent of our Māori research community to help shape our future.

Another major win for us was in securing $12 million of new funding to support iwi radio to continue the vital work in connecting Māori communities. We have also negotiated funds to achieve precious Māori language content, with the support of Te Māngai Pāho.

Finally, the last tranche of initiatives we highlight in Budget 2014 are those we describe as advancing into new spaces for Māori development. This Budget builds on the Māori economic strategy He Kai Kei Aku Ringa by investing new funding of $8 million to support Māori businesses to encourage innovation, strengthen our economic independence, and achieve positive social and economic impact. The Māori Innovation Fund will help establish the support and institutions we need to lift productivity and our collective performance. The Budget sets in place $6 million for New Zealand Māori Tourism to support industry capability and branding and leveraging Māori tourism and trade.

I am not one to leave the best for last, but I am really excited about the project called Moving the Māori Nation. We have announced $10 million over 4 years to establish a contestable fund to focus on Māori sporting and cultural activities, with the goal of contributing to having whānau ora, healthy families. It is now accepted wisdom that the Māori world view of well-being is inclusive of physical, spiritual, and psychological well-being. This project will support a huge range of traditional Māori games and physical activities such as ki-o-rahi, and more contemporary sports and physical activities such as Iron Māori and Tri Māori and so on.

In keeping with the theme of being real, there are still huge areas to focus on. The Māori Party has long advocated for a living wage to lift the minimum income of families. We are proud we were able to negotiate $5 million for te mana o te wai, but there are still many other areas of care for our environment that we want to invest in. We have placed enormous priority on cadetships and trade training, and are pleased that this Budget adds another $20 million to establish 6,000 apprenticeships, but we still need ongoing investment to address the longstanding employment disparities between Māori, Pasifika, and other New Zealanders. And, of course, there are a huge raft of issues that we in the Māori Party call social hazards, and we would like to see more focus on alcohol reform, addiction treatment, and gambling prevention. In the end, these are positive initiatives that the Māori Party is seeing in Budget 2014. We look forward to building on this into the future.

HONE HARAWIRA (Leader—Mana): Kia ora, Mr Assistant Speaker. On behalf of the Mana movement I rise to speak to what I call a “more or less Budget” presented by the National - Māori Party - ACT - United Future Government. When I say “more” I mean things like more unemployment than we had when this Government took office in 2008, with official figures showing that the unemployment rate is now higher across all ages for nearly all New Zealanders—Māori, Pacific Island, and Pākehā included. The Māori unemployment rate alone is up by 8,500 to more than 40,000. More young people are out of work and not in school, training, or higher education, with Māori youth unemployment unacceptably high at 22 percent, nearly four times higher than the latest population-wide unemployment rate, despite all the pūru tūtae about opportunities and all the rūkahu about trade training and cadetships.

There are more people earning unsustainable wages, with statistics confirming that nearly three-quarters of our entire workforce are now earning less than the average wage. There is more of a wage gap between here and Australia. In fact, the wage gap between the two countries has increased by a full 36 percent over that time. There is more income inequality between the rich and the poor, with National’s policies creating an environment where the richest 1 percent of New Zealanders own 16 percent of the country’s wealth, while 50 percent of New Zealanders own less than 5 percent, and where the income of the top 1 percent has risen nearly 10 times faster than that of the bottom 10 percent. There are more children living in poverty—up from 270,000 to 285,000 in 2014. There are more kids going to school without breakfast, and although KidsCan and KickStart Breakfast are helping, more than 100,000 New Zealand children are still going to school hungry every day.

There are more evictions of State housing tenants to help private developers buy up Crown land to build high-end housing for wealthy families and foreign investors, driving prices up and driving low-income families out. There are more families being made homeless through the Government imposing unrealistic criteria on poor people needing a home and using reviewable tenancies to push State tenants out of their homes and into the private rental market and increasingly, because they cannot afford to pay those rents, into homelessness. There are more children hospitalised with rheumatic fever and other diseases that The New Zealand Children’s Social Health Monitor report says are caused through poverty, living in cold, damp houses, not going to the doctor, because they cannot afford to, and, when they do, not picking up their prescriptions, because they cannot afford to pay for them. There is more of a gap between the achievement levels of kids in low and high-decile schools, with Ministry of Education figures showing that the gap has risen now to where fully 52 percent of kids in decile 1 schools leave without any qualification compared with only 10 percent of kids in decile 10 schools. And there are more people in prison and on home detention, especially Māori, with prison rates up for both Māori men and Māori women, and Māori now making up 50 percent of those in prison and 40 percent of those on home detention.

That is where the “less” comes into it, because all of these problems arise as a direct result of less spending and less funding being spent where it is needed most—on creating jobs with decent wages, building good-quality homes for low-income whānau, and making the health and education of our young people an absolute priority. The Government makes a big deal about having to cut spending to get the books back in the black, but all we have seen are massive cuts to core public services like housing, health, and education, and increasing inequities between rich and poor as a direct result of those cuts. What we are seeing is financial racism imposed upon the poor to feed the wealthy—more to the rich and less to the poor. There is less funding for housing, with Housing New Zealand shutting up shop, offering people an 0800 number that nobody answers and offloading tenancies to Work and Income, and the Government stripping $400 million out of the purchase and upgrade of State houses and providing limited funds for social housing providers, which are expected to develop their own capacity, provide new homes, repair old homes, maintain homes on an ongoing basis, and then cop the flak when the money runs out.

There is less funding for education, leading to cuts in quality, poor results in international tests, the dropping of tertiary courses, the axing of Māori research funding, and an increase in course costs and student loan debt. There is less funding for health, leading to higher doctors fees and prescription charges; worse health outcomes for those in low-income families, especially Māori and Pacific Island kids; and greater costs for society down the track. And there is less funding for those health providers that work in the poorest communities addressing the most acute health needs every year for the past 5 years.

So what do we get from this Budget? Well, what we get are massive cuts to primary and preventative health care and the ridiculous sight of National and Māori Party MPs crowing about spending money on rheumatic fever. Although that is great, because rheumatic fever is a killer in poor Māori and Pacific families all over Aotearoa, it is also important to note that rheumatic fever is a Third World disease and we are supposed to be living in a First World country. Spending money on rheumatic fever is not something to crow about; it is an embarrassment that we should be cringing about. What we get is a social development allocation whose signature policy initiative for 2014 is—wait for this—a $1 million kutu chair. How is that for innovative, targeted spending? A kutu chair, for God’s sake. Oh yeah, and some money for budgeting services to cope with the growing queue of beneficiaries struggling to get by.

All we are getting is the same old National - Māori Party - ACT - United Future Budget that we got in 2009, 2010, 2011, 2012, and 2013—Budgets with neither strategy nor funding for the eradication of child poverty, no plan for low-cost housing, no community jobs programme, and no plan to raise the minimum wage or to introduce a living wage. Even though the Māori Party talks about being at the table, the cold, hard reality is that in all the key social areas of health, education, housing, justice, welfare, and employment, on Budget day 2014 Māori are worse off than they were when the Māori Party first signed up with National in 2008. On Budget day 2014, the only places where Māori continue to soar are in unemployment, low wages, homelessness, hospitalisations, educational underachievement, inequality, child poverty, and prison numbers.

If a Budget is about how we set our priorities and outline the financial strategy to achieve those priorities, then we must be strong enough to identify the important ones, courageous enough to allocate the money needed to achieve them, and then unwavering in our determination to realise them. Those priorities define what kind of a society it is that we want, and the resources we dedicate to them in a Budget are an expression of our commitment to achieving them. For Mana, those priorities are simple because they speak of a society we would want to leave for the next generation: a commitment to feeding the kids, building homes for every family—

The ASSISTANT SPEAKER (H V Ross Robertson): Order! Courtesy is contagious.

HONE HARAWIRA: —providing jobs for everyone, and paying for it all by taxing those who can afford to pay for it. We have the means and we have the capability; all we need is the political will. That political will can only come when enough people in this country—Māori, Pākehā, Pasifika, tauiwi, all those in genuine need in Aotearoa—are determined enough to want to change the Government, strong enough to demand that we change the priorities, and committed enough to the view that we must always put people before profits. Tēnā koe, Mr Assistant Speaker. Kia ora tātou katoa.

Hon JOHN BANKS (Leader—ACT): The ACT Party will be supporting this Budget and the two associated pieces of legislation. I congratulate the Minister of Finance on bringing to this House his sixth Budget and on arriving today at a surplus, albeit a fragile forecast at just over $370 million. I was in this Parliament when our Minister of Finance gave his maiden speech. That man from the south has really come a long, long way, and his contribution to this country as Minister of Finance has been great. It has been great.

Achieving a surplus is one of the economic objectives that most New Zealanders clearly understand. It is the proper measure and test of whether a Government is fiscally prudent. On behalf of the ACT Party and the people of Epsom, I am particularly pleased that this Budget marks the end of deficits and of borrowing the savings of others for current operating expenses. Debt is forecast to decline from 24.4 percent of GDP to 20 percent of GDP by 2020. If New Zealand cannot maintain the welfare State within our means, we cannot expect workers in other countries to prop up our welfare State.

Never forget that any Government big enough to give you everything you want is a Government big enough to take from you everything you have. It is essential that future Budgets remain in surplus while cutting taxes to promote sustainable growth. Cutting taxes equals sustainable growth. It is essential that debt racked up to lessen the effect of the global financial crisis by maintaining the welfare State is repaid—that the $60 billion is repaid. That means continuing the pattern of spending restraint. My friend who lives with me in the electorate of Epsom and who works on the Finance and Expenditure Committee, Paul Goldsmith, knows that well and understands the economics of this country and the importance of reducing debt and running prudent financial management. I take this opportunity today to wish him well in the next Government.

No able-bodied New Zealander should be put on the scrap heap at age 16. The clear expectation is that everyone should contribute, whatever their talents and however humble their origins. The taxpayer should not enable lives of hopelessness, idleness, and despair. The taxpayer should not fund lives of idleness, hopelessness, and despair. The self-esteem, self-respect, and independence that come from work are the birthright of every New Zealander. Every New Zealander deserves the opportunity for work and the gratitude that goes with making a contribution. If we were to couple these changes with the abolition of the minimum wage, even more young low-skilled New Zealanders would be able to get their first jobs. The challenge is to display similar courage and boldness in other parts of the welfare State—in education, health, and superannuation. The ACT Party believes in responsibility and choice. The ACT Party believes in responsibility, freedom, and choice.

The medium-term challenge is the affordability of the welfare State, which has not gone away. Rolling back the welfare State is inescapable due to the demographics of an ageing population. It is a matter that we have to come to grips with. We will make the adjustments or go bust. This week the Australian federal Treasurer signalled a lift in the Australian retirement age to 70 by 2035. On current announcements, that will put the Australian retirement age amongst the highest in the OECD. If Australia—a country a third richer than New Zealand, with a means-tested pension and a huge superannuation industry—cannot afford a retirement age of less than 70, a New Zealand retirement age of 65 has no prospect of surviving. The only question here is when this Parliament will do the right thing and give New Zealanders enough warning of the inevitable change so that they can arrange their lives.

The ACT Party believes in smaller Governments, more opportunity, less regulation, lower taxes, less borrowing, and less taxation. A welfare State where around 25 percent of GDP is removed from taxpayers and delivered in services back to those same taxpayers and others is unsustainable and wasteful. To have 25 percent of our GDP redistributed is unsustainable and wasteful. Although this Budget rolls back some of these services, the principle is a good one. We should also look at expanding co-payments. The taxpayer delivery of free goods and services costs more because those consuming them have no clue of their value. If someone consumes something that has cost them nothing, it is probably valueless. That is why so-called free services cost more and more and result in much more waste and less accountability.

In the long term, ACT’s alternative Budget released this week squarely addresses the challenge of lifting long-term growth well above the forecast range of under 2.5 percent. The only way we can achieve a higher than forecast growth rate is if the Government gets out of the business of middle-class welfare and corporate welfare. Less middle-class welfare and less corporate welfare mean that we can let New Zealanders keep more of what they earn by lowering their taxes. I believe that people can spend their money much more wisely than Governments can. By having highly competitive personal and corporate tax rates, we can attract overseas investment, which results in more employment and more growth. This country desperately needs more employment and more growth. There is no problem that New Zealand faces that would not be easier to deal with if our nation was much richer. The only way we can be richer is if Governments take less and meddle less—Governments take less and meddle less—and leave the money of the hard-working taxpayers in their pockets to spend and invest as they choose.

These big issues are not adequately addressed in this Budget—they are issues for the next Government and future Governments—but they must be addressed. We cannot continue to live beyond our means, and the fiscal surplus in this Budget is an indication that Bill English and this Government are committed to living within our means.

I want to give full marks to the Prime Minister and the speech he delivered in this House today. In 10 Parliaments I have never heard a better speech in the House from a Prime Minister than I did today from the leader of the coalition on this side of the House. We are truly fortunate to have John Key as our Prime Minister of New Zealand at this time, and we are indeed grateful in this House to have Bill English as a prudent manager of the funds—the desperately short funds—this country has, to make sure that we get through the global recession and move on to more prosperity.

I was asked a question by a young girl from Diocesan School for Girls, in the centre and heart of my electorate of Epsom, when she visited Parliament recently. “Mr Banks,” she said, “what would you have been if you had not been a politician?”. It is a good question that I put to all members. I said to her that if I had not been a politician, I would have been an astronaut. This is a land of opportunity. This has always been a land of opportunity. I first came here 45 years ago, as a 13-year-old. I came and visited this Parliament as a 13-year-old, and the Hon Allan McCready sat me in a seat up the back here and told me: “One day, John, if you’re good to your mum and you work hard, you too could be a member of Parliament. You too could be a member of Parliament.” The day I was elected to this Parliament, I sat in that same seat. That was 33 years ago. Anyone can achieve anything they like in this country, and that is the mantra that we want to respect for New Zealand.

The young people of this country give me hope. The farmers, the nurses, the police officers, and the entrepreneurs are as motivated and committed today as they were when I came here in 1981. This is a country of goodness, a country of hope, and a country of opportunity, where even the son of a burglar can become the Minister of Police. This is a country of much opportunity. Despite all our challenges, we still live in the golden times of opportunity. Unconditional love from the home and a world-class education are what we need. Unconditional love in the home and a world-class education in the classroom are the key to success. The ACT Party believes in that. This is a Budget of opportunity. The Budget continues to give us much hope and this country much opportunity.

Hon PETER DUNNE (Leader—United Future): One of the principles on which United Future was founded was to promote a better deal for New Zealand families, and that is exactly what we see in this Budget, coming after many years of challenge as the country confronted, and then overcame, the obstacles posed by the global financial crisis. We do not realise the extent to which that crisis impacted around the world on the standard of living of various populations. And it is true to now observe, and even contrast with our near neighbour Australia, the impact on this country, which has been far less because of the good stewardship over the last 6 years of the current Minister of Finance. Today, in a Budget that brings in a small but significant surplus and forecasts more to come, the pathway is laid for a long-awaited dividend to be paid to New Zealand families.

I am particularly pleased about a number of aspects of the Budget, especially the increase from 6 to 13-years-old for free doctors’ visits and free prescriptions. We know, according to all of the evidence available, that our most vulnerable people are our young people, our very young people. Anything that we can do to enhance their access to health services when they need them and to make it easier for their parents to take them there day or night to get that care has to be important, and I applaud the decision to extend free medical care up to the age of 13 for those children. I hope that we see a significant uptake of that policy, and I look forward down the track to improved health status occurring as a result.

Similarly, the $156 million more invested in early childhood education is a significant step forward and recognises the reality that many children today—indeed, most children—will be in some form of early childhood education. That is consistent with the Government’s long-term commitment of moving to around 98 percent of children in early childhood education by about the year 2020. So they are good moves. So too is the extension to paid parental leave. We know the arguments. We have had them back and forward across this Chamber for a long time. The opportunity for parents to bond with their new children in those early months is critical to their future development. In just the same way as access to good health care through the medical system is important, so too the time that a parent is able to spend at home with a new child is important as well, and the extension announced in the Budget is a positive step forward in that regard. As an ideal, United Future would like to see us move over time to 52 weeks’ paid parental leave, because that is the ultimate opportunity to provide a good start for our children and a good positive future for them to embark upon.

If you look at a number of other moves in the Budget, you see that they are all progressive and they are all about building a pathway down which the country can advance for the future. I welcome, for instance, the additional transport investments. Transport infrastructure is a huge issue not just for our major cities but for many of our families, in getting about and doing the jobs that mums and dads do with kids, day in, day out, and out of school on weekends. So having good networks and having good ways of getting around our major cities is an important part of strengthening the role and importance of families in the New Zealand framework. I applaud the Minister for what he has been able to achieve in that regard. In the Wellington area, we have our own range of projects we look forward to proceeding with very soon, and I am sure the Minister knows exactly to what I am referring.

There are some issues, though, for the future that do need to be addressed. There has been the veiled hint around this week’s Budget announcements that tax cuts for the future are now a possibility, and I applaud that. I think there is huge scope for a number of significant changes to the tax arrangements for New Zealand families. I would like to see a top tax rate for top income earners of 30c in the dollar. I would like to see a middle income tax rate of 20c in the dollar, and a low income tax rate of 10c in the dollar—a progressive 10c, 20c, and 30c rate. The threshold points can be developed as we look at income rates over time, but setting that goal, I think, is a very important part of not just giving a dividend to New Zealand families but also pitching us very competitively with other nations, particularly our neighbour across the Tasman. It would give us a huge advantage in that respect.

I also think that in the context of family income and family support—and this argument has been had a little earlier in the year—there is merit in picking up again the United Future bill regarding income sharing, which still sits on the Order Paper of this House. When the Labour Party, earlier this year with its Best Start policy, proposed assisting families with a household income of up to $150,000 a year, and then introduced a raft of exclusions that meant most families would not qualify, it reminded me that income sharing, which has its benefit of assisting families earning up to $140,000 per year as a household, is a much simpler and more straightforward way to go. It is a fairer way of recognising the equal contribution that both parents make to raising their children, and I think that is an idea whose time has now come and ought to be pursued more fully. I look forward to that being part of the tax debate that we will have inevitably as a result of the good economic conditions being foreshadowed by this Budget.

At the other end of the scale, my colleague from Epsom referred earlier to the issue of retirement. I take a different view. It is important, though, that we do have an ongoing discussion and debate about the way in which we support people who are in their retirement picking up their pension income. United Future will continue to promote its Flexi Super policy, where the basic age of entitlement for New Zealand superannuation will remain at 65, but people will have a choice of a lesser rate from the age of 60 or a higher rate if they defer to the age of 70. We would supplement that by making KiwiSaver a compulsory savings scheme. So what you would have in the future, moving forward, is most people—and the figure in the Budget today was 80-odd percent—in a KiwiSaver scheme, guaranteed a payment from KiwiSaver at the age of 65; the possibility, if they choose to do so, of picking up their New Zealand superannuation at 65; but also having the capacity to bridge that, if you like, by going earlier at a lesser rate, and therefore having a dignified retirement income platform.

That is a popular policy. What it does is recognise that the choice of retirement income rests not with the State to determine the age of eligibility but with the individual to make that choice for themselves. What the Labour Party and those who argue for a higher rate are effectively doing is telling working people that they have to work longer to get their pension. What they are doing is telling people that they have to work longer to get the pension to which they say they are entitled. Flexi Super actually puts the choice into the individual’s hands about how they make their retirement plans, and that is a good thing that most New Zealanders support and that we want to see progressed.

I spoke yesterday in the general debate about some changes that could be made in the longer term in the tertiary education area, particularly in terms of encouraging entrants from families where previously there has not been a history of tertiary education, but also looking to whether we can deal with the issue that we now have about significant tertiary education costs through fees. I think there are some other things that we should look at in the future, as well, in terms of our conservation management. I am particularly keen to see us establish a national planting programme along the riparian strips of flowing waterways in order to prevent erosion, to help clean up those waterways, and to get us back to a swimming standard for most of our rivers. I also think that there is scope for establishing a national pilot programme for hunting and trapping for possums for fur purposes, as part of our national pest control strategy.

The key point about all of these things is that we have to earn the income to pay for our dreams. What today’s Budget returning to surplus is all about is demonstrating in an ongoing way this country’s capacity now to earn its income and to pay its way. That then in turn creates the leeway to give opportunity for some of our dreams to be implemented. The contest of ideas in the future will not be around this degree of pessimism versus that degree of pessimism. It will be about optimism and hope for the future. The pathway and the platform that the Minister has laid in this Budget means we can constructively and positively look to the best options for our families in terms of New Zealand moving forward.

United Future will campaign this election on the points that I have outlined in this address this afternoon. We look forward to engaging with the public of New Zealand and with other political parties around those ideas, and we look forward to being in a position to advance them when this Parliament reconvenes, given the platform laid in this very laudable Budget this afternoon.

Hon STEVEN JOYCE (Minister for Economic Development): I move, That this debate be now adjourned.

Motion agreed to.

Urgency

Urgency

Hon GERRY BROWNLEE (Leader of the House): I move, That urgency be accorded the introduction and passing of the Budget Measures (Financial Support for Newborn Children) Bill and any bills into which it may be divide, and the introduction and passing of the Budget Measures (Miscellaneous Fiscal Matters) Bill and any bills into which it may be divided. These two pieces of legislation implement some of the Budget measures announced this afternoon. The Budget Measures (Financial Support for Newborn Children) Bill implements the Government’s plan to increase paid parental leave by 2 weeks in 2015 to 16 weeks, and by a further 2 weeks in 2016 to 18 weeks. It also increases the parental tax credit. The Budget Measures (Miscellaneous Fiscal Matters) Bill enables a number of technical amendments, including the repeal of cheque duty, fixing an arbitrage issue with the emissions trading scheme, and removing import barriers on residential construction materials. Some of these measures become effective on 16 May. For that reason the Government feels it would be appropriate for the House to accord urgency.

A party vote was called for on the question, That urgency be accorded.

Ayes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Noes 57

New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.

Motion agreed to.

Bills

Budget Measures (Financial Support for Newborn Children) Bill

First Reading

Hon SIMON BRIDGES (Minister of Labour): I move, That the Budget Measures (Financial Support for Newborn Children) Bill be now read a first time. The Government is committed to doing its part to give children the best possible start in life, and this bill represents part of a considered and responsible package of measures that will help to reduce some of the stress placed on families when a new child arrives. The measures are intended to provide increased, targeted support, within current economic conditions, for working parents with newborns. In the first year of a child’s life—particularly the first 6 months—it is important for newborn development to get full-time personal care. It is also important for parents and caregivers to get support to manage budgetary and other pressures. Monetary support can greatly assist with allowing the time and space for mothers or caregivers and children to develop close bonds and to reduce parental and family stress. All of these things combined support children’s health and development and improve short- and long-term outcomes for the child and society.

Encouraging mothers’ and caregivers’ ongoing attachment to the labour market has broad economic and social benefits and can support a stable family environment for children to grow up in. There are issues, however, with the way financial support is currently provided to families with newborns. These issues can contribute to poor outcomes for children and make it difficult for some working parents to stay connected to the workforce after taking time out to care for their children. The Government is introducing this bill as part of a suite and a range of measures to enhance the paid parental leave provisions and the parental tax credit to ensure families with a newborn are supported to give that child the best possible start in life.

Before discussing the proposals in the bill, I would like to take the opportunity to talk about the other measures this Government will be consulting on in the near future that are related. These measures are aimed at broadening the number of people who will be eligible for paid parental leave and making the system more flexible for families. It is important to ensure New Zealand’s parental leave framework better reflects modern working arrangements and today’s diverse family structures. The measures proposed will be consulted on with stakeholders later this year, with the intention of being implemented on 1 April 2016. For example, people with permanent guardianship arrangements that are not formal adoptions under the Adoption Act are ineligible for parental leave. Similarly, seasonal or casual workers, who also tend to be amongst the lowest-paid in our society, are currently ineligible for paid parental leave, despite often having had a long work history. We will be looking to amend the law so that it better reflects the arrangements in the modern workplace and the home. However, I want to make sure we have all of the details of this right. We will be talking to people far and wide over the coming months to make sure that we have a fit-for-purpose piece of legislation to introduce to this House.

The bill before the House today makes changes that we can put in place now to help parents with newborns. The bill increases the number of weeks of paid parental leave from the current 14 weeks to 16 weeks from 1 April 2015 and to 18 weeks from 1 April 2016. The new time frames will apply when the actual or expected date of delivery of the baby—or, in the case of adoption, the date on which care for the child is assumed—is on or after the date of the change. The bill also increases the maximum amount of parental tax credit payable on the birth of a newborn to $220 a week, up from $150 a week currently, for the first 10 weeks following birth—again, up from 8 weeks. So from 1 April next year parents of newborns will be able to claim a total maximum payment of $2,200 per newborn.

The bill also changes the abatement formula for the parental tax credit so that it is abated against each dollar of family income earned over an entire year rather than for the period the parental tax credit is paid. This change means the parental tax credit amount will reduce faster as income increases. It brings the effective abatement rate for the parental tax credit in line with the abatement of the family tax credit and the in-work tax credit. This will better target parental tax credit payments to lower and middle income families, ensuring that they receive a greater slice of funding over time. The total fiscal cost of both the extension of paid parental leave and the changes to the parental tax credit is more than $183 million over 4 years. Additionally, we will be spending a further $30 million to increase eligibility. These changes, alongside other measures in Budget 2014, will help to improve the lives of families and children, while also being fiscally responsible and recognising current economic conditions. I commend this bill to the House.

Hon DAVID PARKER (Deputy Leader—Labour): The New Zealand Herald said in respect of this National policy that it was the “Great Brain Robbery”—stealing ideas off the Labour Party, but in reality, a pale shadow of them. The credit for this policy, in respect of children and paid parental leave, should go to Jacinda Ardern and Sue Moroney. They are the ones who got this up on the political agenda, so much so that the National Government was scared and decided that it would implement a shadow of it. This bill, the Budget Measures (Financial Support for Newborn Children) Bill, which has just been presented under urgency—and I have not had time to read it in detail yet because it really has only just been tabled minutes ago in the House—is the first piece of legislation considered under the Budget, the Budget in which the Government has had to fudge it in order to get back to Budget surplus and fund this. The National Government does not like that truth, but it is the truth.

What are the clearest fudges that we have found so far? Well, we know that compared with last year’s Budget the Government has got $560 million less as the Crown’s share of Canterbury’s share of local infrastructure costs. It has gone down in terms of the Government’s Budget by $560 million. That is a week after the Christchurch City Council produced a report—

Hon Clayton Cosgrove: KordaMentha.

Hon DAVID PARKER: —an independent report from KordaMentha to say that its share of those same costs were going up, so it is just not credible for the Government to say that those costs are going down. Further than that, we have also uncovered a document that shows that the Minister for Canterbury Earthquake Recovery, Gerry Brownlee, had a deal with the prior chief executive of the Christchurch City Council and the Mayor of Christchurch that they would not review the numbers until after this Budget and until after the election. That is really cynical—really cynical.

The second thing that we have uncovered is that we now know from the dodgy announcement by Judith Collins in this Budget, reflecting her personal conduct as a Minister, that the Government has overcharged ACC levies by $120 million this year, which overstates the surplus this year by $120 million. So it says that it is going to reverse that out next year, but it has kept it for this year. It did a similar thing last year.

The other area that is a bit dodgy is that the Government is putting $375 million into transport spending in Auckland in addition, as a loan, robbing the future National Land Transport Fund and funding it out of a notional interest-free loan. If the Government really wanted to do that this year, it should have booked that as an additional capital expenditure this year, rather than having this pretence at an interest-free loan.

Health spending has gone down in real terms. I have crunched the numbers, with the help of some of our staff, since this announcement was read out. We know, using Treasury’s own model, that health spending is going backwards by 2.3 percent in real terms. It is going up in nominal terms from $14.4 billion to $14.7 billion, and that is total Crown spending on health, or core spending. Using Treasury’s own model, and taking into account inflation and demographic changes, in real terms, according to Treasury’s own model, that is a 2.3 percent cut—a 2.3 percent cut. So this Budget surplus—yes, it is real, and it is good. Governments have to be prudent and get back to surplus. But it is a fiddle. The Government has fudged it. It has fudged it.

In respect of this particular measure, it is half of a best start. Half of a best start is what I would call it. The Best Start package from the Labour Party is better than this. In fact, there is no one person, I am told by our spokesperson—and I am sure this is correct—who would be better off under this package compared with Labour’s Best Start package. In other words, the Best Start package is better for everyone who is better off under this package.

There are a couple of things that stand out as being wrong with this package, and I should not be surprised by this. The most vulnerable in New Zealand do not get anything out of the measure that we are passing today. That is despite the fact that those New Zealanders who are most vulnerable have faced increasing power prices, increasing rents—in some parts of Auckland rents have gone up by 40 percent—and despite those very real increases in their costs, which for those people, have actually gone up more than the cost of living. The cost of living is an average across the country, but the costs for these vulnerable New Zealanders have gone up by more than the cost of living, and yet this package does nothing for them. Despite the fact that we have got 285,000 children living below the poverty line, the only really significant policy in respect of child poverty in New Zealand in this Budget, this year, after all those rising housing costs, rising rents, rising electricity bills, and increasing numbers of children living in poverty, is that the most vulnerable children in New Zealand do not get anything—anything—not 1c. They do not get one dollar—not in this year, not in the year after, and not in the year after that. They get nothing.

In a country where we have got rising inequality, the Government denies it. We heard the Prime Minister misrepresenting those statistics again today in the House in his Budget debate speech. He stood up and said that the Bryan Perry measure of income inequality, which is the ratio of low incomes to high incomes, has not got worse, according to him. Well, actually it has got a bit worse under the Government. It has not got as bad as it did in earlier times, but it has still got worse. He says that because of that, we have not got rising inequality. That is just such a facile argument. It shames me that we have in New Zealand, this country that used to have low levels of child poverty, a Prime Minister who stands up and pretends that we have not got rising inequality in New Zealand.

New Zealand used to be in the best quarter of the OECD advanced nations in the world when it came to income inequality. We are now in the worst 40 percent. So we have moved from being in the best quarter in the world to the worst 40 percent at a time when the OECD as a whole has been getting worse. There was a bad trend internationally and New Zealand beat that bad trend by being even worse than the bad trend. The only push against that trend of income inequality rising in New Zealand in recent decades, in a material sense, was the last Labour Government, through Working for Families, which, of course, at the time the Prime Minister called communism by stealth.

Even the Bryan Perry measure, which shows a disgraceful increase in income inequality, under-measures income inequality because it excludes capital gains and other irregular income, which are concentrated amongst the wealthy. That is absolutely clear from the data series. We have proven that in the House. We have actually even forced Bill English to admit it, but the Prime Minister pretends it is not the case. That is income inequality as measured by the Bryan Perry figures, which are credible, but they are only a subset of income and therefore they under-measure income inequality, and yet we know it is still getting worse.

The next thing to say in respect of that is that when you have income inequality that is at the level it is in New Zealand, even if it does not get worse from year to year, overall inequality does get worse because every year the consequences of that inequality stack up. You see that so clearly in New Zealand. Seventy-five percent of New Zealanders think that those gaps are widening in New Zealand under this Government. They are absolutely right and the statistics prove it. The number of children living in poverty, whatever measure you use, is going up. The number of people who own their own house is going down. It is the lowest it has been in 50 years. We should not be surprised, because this Government runs New Zealand in the interests of the wealthy, who do well out of those settings of rising inequality because they get to own an ever-higher proportion of the assets in New Zealand, including a higher proportion of our houses.

As for this bill, we will be supporting it. It makes things a little better than they were. It is only half of a best start. It is a pale imitation of it. It does not improve the lot of the most vulnerable and it does not deal with the terrible imbalance that we have in our economy. That is all I have got time for at this first reading.

DAVID BENNETT (National—Hamilton East): It is not the matter that that was all the previous speaker, David Parker, had time for; that is all that that speaker knew. Where is Sue Moroney at this point in time? The leader of the Labour Party’s push on paid parental leave does not even get to speak for the Labour Party. The Labour Party does not care about paid parental leave. It comes into this House and says that it is doing it, but that is not the case. Paid parental leave is something that this Parliament and parliaments across the world have been looking at for a number of years. It is something that the Australian Parliament looked at and passed last year, and it is something that has taken on a very big emphasis in this Budget and what has been done in that $500 million for families, which is the heart of the Budget. That is what New Zealand families have been wanting to see.

We have delivered a strong economic message and we have built a surplus for New Zealand going forward of $372 million in the most of difficult of times. That is a great achievement. At the same time, investing in the young people, the families, and the communities of our country going forward is incredible from a Government in the most difficult of times. I would like to thank Minister Simon Bridges for leading that off. He has done a fantastic job in bringing this legislation forward today. It is something that we will look forward to in the future as something that will deliver for our young people going forward. When that is coupled with free doctors visits for under-13s, it is something that many families in New Zealand will see as a complete package. It is a package and a plan that delivers real and constructive benefits for New Zealand families. It is a package that looks at what is important to those young families who are building the future of our country and building those young people who will be the future to build this country even stronger.

It is not a “Great Brain Robbery”, as there is nothing to nick from the Labour Party. This is a Government that is delivering for families at a time when it is needed. We look forward to seeing this legislation pass through this House. New Zealand families will welcome this Budget. They will welcome the prudence of the Budget and, at the same time, the huge investment in our families going forward. The Budget Measures (Financial Support for Newborn Children) Bill is a good bill and is for the benefit of all New Zealanders. Thank you.

JACINDA ARDERN (Labour): That speech from David Bennett was an absolutely pathetic contribution to this debate, and it proves that National started working on this policy based on some of the analysis provided by the Inland Revenue Department in April. April, at best, is when National decided that perhaps public pressure had finally come to bear on it and that it was time that it started having a little look over at this side for the policies that would benefit families.

Budgets should be about people. That is absolutely what Budgets should be about. They should be focused—if we are, indeed, moving into surplus—on how we can ensure that hard-working New Zealanders are enjoying the spoils of any of the prosperity that we are supposedly moving into. Our disappointment on this side of the House is that New Zealanders, by and large, are not benefiting from any recovery. They are not. Even this Budget is a “fudge-it Budget”. It is an attempt to make it feel like some families are going to get some small scraps from this Budget. The Government could have done so much more. It could have done so much more.

I am happy to point out where there are elements of this Budget that would have been a vast improvement, particularly for families and particularly for newborn children. In particular, when it comes to a little bit of the papering over that has happened, it has especially happened for our most vulnerable children—the 285,000 children living in poverty in New Zealand. Out of this Budget they have got a bit of a clear Duraseal cover over the top of that issue, but what we needed was step change. What we needed—and what has been called for, for some time—was an action plan that was focused on the well-being of all children. Paid parental leave and changes to tax credits should have been one part around income of a plan that should be focused on lifting the well-being of all of those children. As Plunket said: “Poverty continues to hamper progress for all children. Plunket would like to see a coordinated plan to genuinely tackle child poverty using measurable child poverty targets.” That is what it said in respect of the Budget. From Unicef: “UNICEF NZ encourages the Government and all political parties to commit to a comprehensive plan to address child poverty, with targets, measurement and clear accountability …”.

That is exactly what this Labour Party will do in Government. We already have a bill that sets out exactly how we would do it, and we would do it with more than just our Best Start policy because we recognise that our Best Start policy is just one part of a much wider plan that is required. But let us do a little bit of policy comparison. If, indeed, it has been talked as “Best Start - lite”, let us see where, in particular—unfortunately—the Government’s plans have not addressed some really key areas. It has done a little, but it is still no cigar. So let us look at paid parental leave. Currently, we have got 14 weeks of paid parental leave. The Government has proposed extending that to 18 weeks. It is good to see an extension. Labour’s policy has always, however, been 26 weeks since we have been in this. We have been pushing hard for 26 weeks. Sue Moroney has done an enormous amount of work—

Grant Robertson: That’s right—26 for Babies.

JACINDA ARDERN: —in conjunction with 26 for Babies to try to get that Government to move an inch on paid parental leave. It is disappointing that we have not seen it go all the way to 26 weeks, because 26 weeks is what evidence and research says we should be doing. In fact, Labour has said that ideally we would like it to be a year, but we recognise that that would take time, and so 26 weeks is our policy, and, unfortunately, 18 weeks just does not cut it when it comes to what the research clearly tells us benefits children. In fact, Growing Up in New Zealand, a fantastic piece of research currently under way—the biggest update on longitudinal studies since the Dunedin study—has shown us that parents currently try to bring together every bit of leave they are entitled to, scrimping to try to get that little extra bit of time. Having 26 weeks would make a massive difference, and we want to pay tribute to the work Sue Moroney has done to eke 4 weeks out of that Government. So that is part of our Best Start payment.

What about the parental tax credit? We should first acknowledge the origins of the parental tax credit. Jenny Shipley came up with it in the 1990s, when she recognised that there was a large chunk of parents—60 percent—who were not eligible for paid parental leave. Actually, the small tweaks the Government has made, although laudable, actually will not make a big dent in that eligibility. We had 60 percent of parents who were not getting anything, so she stepped in and said that she would create this little tax credit, which still went to a narrow group. Not every parent who does not get paid parental leave gets a parental tax credit, and it does abate—let us be very clear on that. So she introduced that, at a rate of $150 a week for 8 weeks. The change this Government has made in these proposals is to increase the rate to $220 and to increase the length to 10 weeks for the group of parents who are eligible. It has changed the eligibility—it has reduced it. It has reduced it now so that it is more in line with families who might be eligible for the family tax credit or in-work tax credit. So, basically, if a family out there does not get that, it will not get the parental tax credit. That is the message now.

Let us compare that with the Best Start payment. Best Start said: “Look, the parental tax credit is kind of fudging things. It is not covering everyone who is not getting paid parental leave. It is not near-universal. Why don’t we just scrap it and start again?”, and that is what Best Start did. Best Start says: “Actually, for parents who don’t get paid parental leave and who earn under $150,000, we want all of you to receive some support when your baby first arrives.” Ninety-five percent of parents receive the Best Start payment, and they receive it at a rate of $60 a week. The families who do not get paid parental leave get it for 12 months. For families who do get paid parental leave, it kicks in after their paid parental leave ends. On every count, the Best Start payment helps more families, it helps them for longer, and it is more generous.

And here is the kicker. Here is the thing that makes the biggest difference between Best Start and what the Government has proposed. The Government’s proposals exclude our most vulnerable, low-income families. They get absolutely nothing from the package that the Government has introduced. Roughly 14,000 parents who we know are living below the poverty line are still excluded from this Government’s plans. Best Start left none of those children behind. In fact, it said to those children that we will support those kids until they are 3—not just for their first year, but for 3 years. So the 50,000 children living in poverty would benefit from the Best Start package for 3 years.

That is a big difference between what Labour proposed and what this Government is proposing, and that is what distinguishes what Labour is about and what National is about. We wanted to lift the well-being of all children, but with a special focus on the most vulnerable. The National Government has said: “We want to do a little bit of a lift for some.”—for some. For us, it was about extending on both ends. Where this Government has narrowed the parental tax credit and actually left out some of those income earners who very rarely get anything, those are the ones who have also been cut out today as well as those at the end.

Yes, John Armstrong, I think, said it best when he said that this is the “Great Brain Robbery”—the Labour Party brain, that is. He said: “If ever an explanation was needed as to why Opposition parties like to stay mum on their policies for as long as possible then look no further than the contents of this Budget.” Absolutely! But you know what? We stand by announcing our policy in January, because we know that what we announced set out a clear difference that this Government still has not been able to keep pace with. It still reverted to type on the people whom it has decided to lift. It still could have done so much better. We will continue to promote helping the most vulnerable families with no shame on this side of the House. We will make sure that we promote policies that are for the many, not for the few, and are ultimately focused on children, not blame, not reverting to type, and not focused on stereotypes on who should get assistance and who should not. Instead, we are just saying that if we lift children, we lift everyone. That is what Labour policy is about. That is what a Labour Budget would have been about, and that is how we will hold this Government to account.

JAN LOGIE (Green): It is with pleasure that I rise to take a call in this urgent debate on this bill, the name of which is beyond me right at the moment. Basically, the Government is bringing in under urgency—oh, it is the Budget Measures (Financial Support for Newborn Children) Bill—tax credits for parents and an extension to paid parental leave. Excuse me for not being over the title of the bill when it has just been put on the Table a few minutes ago and when there has been no real prior warning for this House to debate an issue that is deeply important for this country.

When we have 285,000 children living in poverty in this country, we need to be talking about this, and we need to be taking time and considering the best options for getting our children out of poverty. The Green Party believes in good lives and a fair future for every New Zealander. We believe in the vision of having every single child in this country thriving, not just surviving—as all too many of them are at the moment, when we put aside those who, sadly, are still dying of diseases of poverty in this country, to our great collective shame.

We know that in this country with so much wealth—so much wealth—around us, we can do better for our children. This debate is part of the opportunity to consider our options to deliver that wealth. I would like to now address, in what I think is quite a divided bill from what I can tell—not having read the detail in the 10 minutes we have had—one bad thing and one good thing. I will speak to the bad thing first so that I can end on a positive note. I do recognise that people I have been following on social media do not want to hear us in the Opposition just attacking the Government. They do want us to recognise what is good in here and we are up for that. We will recognise and acknowledge the things we agree with that are good for our children and we will strongly critique those things that we believe are causing harm or are not up to what our children deserve.

So on that point, I will first address the extension of the parental tax credit. It is a little bit hard to get our heads around what exactly this is. We have been told that it is an extension to the parental tax credit from $150 a week to $220 a week for those who are entitled, but there has been a tightening up of the eligibility. That is where my quite deep concern lies at this stage, because it seems to me that what the Government is doing here is actually extending the discrimination that applies to the in-work tax credit, which is something that the Child Poverty Action Group has been challenging so strongly through our courts. My concern is that that same point of discrimination is possibly being extended into this parental tax credit. So although the Government is saying that this is a measure to alleviate poverty, children from beneficiary families, those who are in the most poverty, are being excluded from that benefit on the basis that their parents are not in work.

I spoke briefly after we had had notice of this provision with the academic Susan St John, to ask her opinion of whether my reading of this was correct, and she was saying that it is actually a little bit difficult to tell from looking on the website, but it does look as if that is true. It does look, from the way that the website is reading, as if the bill requires people to be not receiving a benefit and to be meeting hours of work criteria that apply to the in-work tax credit. That is of deep concern for anybody who opposes discrimination, for anybody who—

Hon Members: Oh, ha, ha!

JAN LOGIE: The members on the Government side of the House are laughing uproariously at the idea of opposing discrimination. I really fail to understand what is so funny about the idea of opposing discrimination. I guess their idea is that people who are not in work need to be discriminated against so that they will get into work. I am not really sure that that bears out, in fact. In the Green Party we believe that parenting is a job worth valuing, and that we should be doing everything we can as a country to support our families—those who have two parents, those who are in work, and those who have only one parent who is actively parenting and might not be in work. That is why there should not be discrimination between those who are in work and those who are not in work, but this bill does seem to be building discrimination in and extending it.

I notice that the court ruling from the Child Poverty Action Group case—which was not successful—established that a ground for discrimination for the court to consider is: “First, is there differential treatment or effects of persons in comparable or analogous circumstances on a prohibited ground of discrimination?”. That is the basis of being in employment. So on the surface of it, it looks as if this provision meets that criteria for consideration by the courts. And if so—and this is the next ground for the court to consider—whether that “differential treatment results in material disadvantage” in that context. It looks to me like $70 a week or more, actually. No, it is probably not that, but there is a significant difference here for those who are not in work, so we are not happy with this as it reads to us at the moment, and we will be looking at introducing a Supplementary Order Paper, which I hope we can get support for in this House, to extend this provision to those who are out of work.

Government members will be pleased that I am now moving on to a more positive note, to congratulate them on following the lead of the 26 for Babies campaign and the almost 4,000 New Zealanders who submitted in support of Labour member Sue Moroney’s bill to extend paid parental leave to 26 weeks. I would like to congratulate the members on that committee from National, who listened to those submissions and were convinced by them. I do not see how anybody could have gone through that process and not been convinced. The arguments were deeply compelling that extending paid parental leave facilitates a bonding and attachment between parents and babies. It supports families and ensures stability of incomes. It closes the shortfall between New Zealand’s paid parental leave provisions and those in other OECD countries. It improves health outcomes for mothers, babies, and children, and 26 weeks would have met the World Health Organization’s recommendation for exclusive breastfeeding. It allows choice for women and it creates job opportunities. There are positive implications in this bill in terms of society, our economy, and women’s workforce participation. How could you not embrace that? So thank you, National, for listening to New Zealand.

I would also like to thank National for the extension of the criteria and accessibility in the bill, because that was my one concern with the member’s bill. I understand that when you have got a member’s bill, you have to go for a narrow scope, and that is why that was not in there. But it is incredibly important. The Human Rights Commission was very clear that for it, extending paid parental leave to those who are in casual employment or are changing jobs is the priority for reducing discrimination. So it is fantastic to see that provision, and our children and women all around the country will be thanking you for this significant step on the journey towards the Green Party policy of 13 months’ paid parental leave—13 months.

Hon Members: Ha, ha!

JAN LOGIE: Again, you might laugh, because in the context of your world and the discourse promoted by the National Party, that seems extreme. But, in fact, that was the Families Commission’s recommendation back in 2007. It actually puts it at only a mid-point in comparison with other countries in the world. It is not actually an extreme concept at all, because it benefits our children and benefits our society. It is about recognising that if we start in the early years and provide a really strong foundation for our children and our families, then we are all going to be better off. [Interruption]

The ASSISTANT SPEAKER (Lindsay Tisch): Order! I am sorry to interrupt the member.

JAN LOGIE: Thank you, Mr Assistant Speaker; I appreciate that after the unruliness on that side of the House. Those members do not understand the importance of children to our society and the importance of the first year of life. That is why the Green Party is happy to support this bill as a significant step towards our policy of 13 months’ paid parental leave.

MIKE SABIN (National—Northland): I just want to commend Jan Logie in particular and the Green Party for another outstanding contribution. Does it not do fantastic things to votes for the National Party when people like Jan Logie and her friends in the Green Party stand up in this House and say that supporting working families is discriminating? That says a lot about what those people are about—that says a lot about what those people are about. If we support hard work and enterprise, we are discriminating. What an absolute load of tripe.

Sue Moroney: They’re just babies. They can’t do hard work—they’re only babies.

MIKE SABIN: Sorry? I wonder whether Sue Moroney will be getting a call in this debate. Was she not doing some work on this? I seem to recall—let me channel that. Let me channel that. I cannot channel it over there because all the brains have been stolen, apparently. There has been a bit of brain stealing. I would suggest they would have had to scramble—

Hon Trevor Mallard: By the zombies.

MIKE SABIN: Speaking of brain drain, there is someone who had a brain drain about 30-something years ago, before he came to this place.

Hon Member: He tried to have a lobotomy.

MIKE SABIN: That is right. Yes, he could not find one—could not find one. However, let us return to this very, very sensible piece of legislation.

The ASSISTANT SPEAKER (Lindsay Tisch): Good idea.

MIKE SABIN: I am entitled to rebut interjections. The New Zealand workplace is a modern and diverse place, and this Government accepts and acknowledges that. This Budget actually reflects the hard work—[Interruption] Sorry, what is Sue Moroney saying? I cannot quite pick that up.

Sue Moroney: You only support hard-working babies. The chimney sweep babies.

MIKE SABIN: Well, that is interesting. That is interesting, Sue Moroney, because what the Budget Measures (Miscellaneous Fiscal Matters) Bill is about is supporting those who need the support. So if we talk about what Sue Moroney was proposing, any household earning under $150,000—like Trevor Mallard, if he were to spring forth and have a child—would get this baby bonus. I know it is a horrifying thought. They would get this baby thing going on. Is that fair? Is that fair? Is that what Kiwis really expect? Actually, I think that New Zealanders have woken up to the idea that this sort of non-targeted approach from the Labour Party of throwing money at a problem and believing that makes it go away is actually dead and gone, which is probably why the Labour Party polling is now suggesting it is doing even worse than what the polling across many different forums has shown. I think the polling has got the Labour Party at well below 30 percent.

This bill is about rewarding the hard work of New Zealand families and about supporting young New Zealand families and the children that they are bringing up, in a targeted, prudent, responsible, and sensible manner. What we know—and this is what this Government has done for a number of years now, through some very, very difficult times—is that if we carefully manage the Government’s finances, if we take care, on behalf of taxpayers, of the challenges of fiscal responsibility in tough times, and if we do that well, and if we invest for outcomes, we get good results. That is why this Budget shows us in surplus. And if we support families that need support to do the same thing, we can expect good outcomes from them. It is a targeted bill. It is a good piece of legislation. I commend the Minister of Labour for it.

TRACEY MARTIN (NZ First): Kia ora, Mr Assistant Speaker. Thank you very much. Can I thank Mike Sabin for resuming his seat. Can I thank him for his contribution, because every time Mike Sabin makes a speech in this House, the women of New Zealand—52 percent of voters in New Zealand—recommit to not voting for that party. They recommit every time they see that man rise to his feet in his bombastic way, and the way that he minimises those things that women do inside this workforce, and the way that he minimises the value of women at home and the importance of what women put into this society. We thank you, Mr Sabin. New Zealand First is rising well past 10 percent based on the speeches of Mr Sabin alone, so thank you so much for your contribution. We look forward to more—we look forward to more. I will go back to the Budget Measures (Financial Support for Newborn Children) Bill. Mr Sabin, unfortunately, does not normally read bills, and he has had very little time to concentrate on this one.

Just quickly, though, with regard to the criticism of Ms Logie’s contribution, the title of the bill is the Budget Measures (Financial Support for Newborn Children) Bill, which means that it actually is supposed to support newborn children, no matter where they are. That is what the title would suggest to you. I cannot say what New Zealand First is going to do with regard to any Supplementary Order Papers at this stage because I need to consult with my colleagues, but the bill may have been misnamed by the National Government if it is very, very against supporting every newborn child. It possibly needs to make that clear in the title before we go forward.

I do want to say that it has been a very lucky year for parents in New Zealand. It has been a very lucky year, and that luck has been because Sue Moroney’s bill was pulled out of the ballot. That is what forced this bill forward. There was no way on this planet or on John Key’s planet that this was going to happen without that pressure. You can see it in the regulatory impact statement. You can see inside that that the officials have said they have not actually been able to do any research on this bill but that thankfully—thankfully—there was already a bill there. Thankfully, most of the work had been done. So I want to acknowledge on behalf of New Zealand First that this bill is here in the Budget not because the National Government has suddenly seen the value of mothers being at home—oh no. The National Government has been forced into it. So there are two reasons why it is a lucky year: one, the bill was pulled out; and, two, it is an election year.

I want to say thank you very much, Sue Moroney, for the work that you did on this, for bringing this to the attention of the country, and for making it incredibly difficult for this Government to back away from this issue. It was so difficult. The Government tried. By crikey, it tried, but the bill for 26 weeks of paid parental leave, the campaign you ran, and the women who stood up around this country and said they believe it is important that parents—not just women but parents—are able to bond with their children and that we as a country are better for it, forced the hand of this Government.

I am interested to see whether the ACT Party will be supporting this bill. Only recently on television we had the new leader of the ACT Party—his name escapes me; he is not well-known—stand up and say: “Don’t have children if you can’t afford it.” Do not have children if you cannot afford it. Only the rich people should breed is, basically, another way of putting that—only the rich should breed. So is this party—

Mike Sabin: Very sensible.

TRACEY MARTIN: Mr Mike Sabin is shouting out: “How sensible!”. Ladies of New Zealand, Mike Sabin just shouted out: “How sensible!”. Please mark that down. Put it in the Hansard in italics. Thank you. That is another 2 percent on the New Zealand First poll. Woo! Go for it, Mr Sabin. Keep it coming, Mr Sabin. Keep it coming. It is excellent work you are doing on behalf of New Zealand First.

Can we just return to the regulatory impact statement for a moment. Let us point out the fact that the regulatory impact statement actually says that for financial reasons, the return to work often occurs before a baby is 6 months old. That is why 26 weeks was important. That is why 26 weeks was the goal. But it has never been the goal. It is not the goal in this bill. It is not the goal anywhere else. Eighteen weeks is all that whoever over there actually truly believes that having a parent at home is good for a baby could eke out of this tight-fisted Government. That is all it could eke out for newborn babies, because that is what the bill’s title is. It is not about parents. It is not about people working or not working; it is about newborn babies. The Government does not want to make it about that. Even when Simon Bridges stood up, he made sure that he emphasised the amounts of the dollars. This was a conversation about money, not about babies.

If you extrapolate the figures out from this investment at the front end of life to the other end of life, we will see that in those numbers an upfront investment in this part gives downstream return in multiple ways. For example, it has been proven again and again and again that when women are actually given an opportunity to stay at home and look after their children, and I say “women” because—actually, we would have liked to have seen some sort of parity here, perhaps like the Danish model, where there is a requirement for men to take part in this parental leave. We are not going to push the point now. That is a conversation that the country should have, and maybe that would go some way to actually minimising the pay gap. Maybe if we actually saw all these roles as equitable, then we would not have this conversation that we have in business all the time, because we would truly be equal when it came to the way we cared in our homes. I know that fathers are absolutely equal in the way they love and care for their children, and I am sure they would like to have the opportunity to bond on some occasions with their children—to have the burden of that, in most cases. So there you go. That would have been a nice conversation to have.

But what we do know is that when women are well-supported when they are at home with their babies, and when they feel that they have truly had an opportunity to make sure their baby is well and settled and that all is right with the world, and their relationship is strong, then they are better employees. Employers tell us that. Employers tell us that when women know that their children are well looked after and everything is going well and they have been given an environment of support, then they are better employees. They are more loyal. They work longer hours. They stay through greater trauma. They are just more loyal. That is what businesses tell us is important, especially when times get tough and you need to have conversations with your employees around needing to do some give and take.

So it is a shame that the Government could not see its way clear to doing the 26 weeks’ paid parental leave, to actually meet the World Health Organization’s targets, to meet what has actually been designated by the World Health Organisation, which says that this is the best start for newborn babies. What is this about if it is not about that? Is it about giving parents a little bit so they are grateful and letting National ride into the election? There is an awful lot of that.

Simon O’Connor: That’s cynical.

David Bennett: Very cynical.

TRACEY MARTIN: Yes, I may have a cynical view, and it is because I have seen it. I saw it in the 1990s and I have seen it from this Government for the last 6 years. Drop $10 million over here into a pot and tell those people they are fine. We have seen it with the provisions on grandparents raising grandchildren and we are seeing it again here.

We are obviously going to speak on all parts of the bill as we go through this evening, so I would like to just highlight—

Hon Trevor Mallard: Through to Saturday.

TRACEY MARTIN: —through to Saturday—for the families out there who think that this is a win-win for them—all those families out there who have actually been getting Working for Families—that I think you need to tune in as this conversation goes on because there are amendments to Working for Families. The families who came to see me in 2008 and said: “We’re going to vote against the Labour Government.”, which they did in 2008, also said: “Crikey, we really, really, really hope that the National Government doesn’t touch Working for Families.” Well, here we go, New Zealand. Listen up, because this bill starts to cut into your Working for Families. It starts to lower that support that you have had. Nothing is ever, ever, ever without hooks with the National Government. Nothing is ever without hooks with the National Government, and as we go on to talk about this bill, I believe that you will see more and more hooks come out.

CHRIS AUCHINVOLE (National): It is with pleasure that I stand to speak in support of the Budget Measures (Financial Support for Newborn Children) Bill. Nothing, I guess, is more important to the nation than the well-being of families, especially young families. I know from my own experience and from conversations with others that the time when you are raising a young family is probably the greatest period of happiness and the greatest period of stress that one can go through. I can remember doing the same thing with colossal mortgage rates to consider and a lot of pressures, and suddenly the children needed to go to the doctor, which was an added cost. National has addressed that in this Budget for children up to—what age?

Hon Chester Borrows: 13.

CHRIS AUCHINVOLE: Up to 13 years old, and that is going to be a wonderful thing for parents. But it is not only that. We could look at the various component parts of this bill, and we come to the inevitable conclusion—

Tracey Martin: You can’t come up with your own policies. What a shame.

CHRIS AUCHINVOLE: It is no wonder Opposition members are squeaking about it—it is a hard thing to argue against. National is taking a very wide and committed approach to doing its part to give children the best possible start in life. This is really going right back to the New Zealand I remember when I was very young. It is going right back to the key values—

Simon O’Connor: That was last year.

CHRIS AUCHINVOLE: Thanks, Simon. No, it was a little bit longer ago than that. This measure is going right back to the key values that Andrew Little will remember. They used to be part of his movement’s ambitions. This bill does allow for an ambitious New Zealand for people with aspirations, and they will be able to meet them because the Government is providing an economic platform from which they can grow. I fully support this bill.

SUE MORONEY (Labour): If imitation is the sincerest form of flattery, can I say that I am only a little flattered—only a little flattered—by the Budget Measures (Financial Support for Newborn Children) Bill. What should have been 26 weeks of paid parental leave is a miserable 18 weeks. But that is not now—not any time soon. It is not until a 2-week extension next year, 2015, and a further 2 weeks in 2016. But there is good news. There is good news for New Zealanders because before then New Zealanders get to vote in an election where they can actually vote for a Government that actually gets this, that actually believes it, and that fights in a principled way for extending paid parental leave, supporting families, prioritising them, and actually putting them at the front of the queue, not like the National Government’s johnny-come-latelys trying to pick up Labour’s ideas and water them down, thinking that that is going to do it. Well, I do not think that will do it.

However, I do want to say at the outset that Labour will be supporting this bill because it is a little progress. It is a little progress, but I will at this stage remind the members opposite that there is a superior bill in front of this Parliament, which still remains in this Parliament, and that they still get to do the right thing despite this poor measure that the Government is bringing in. They can actually vote for 26 weeks of paid parental leave because that bill is still coming before this Parliament, and I look forward to that. I am surprised to be speaking on this bill in urgency because, after all, nothing in this bill comes in until 2015. So I am quite surprised. I am not sure what the urgency is over passing this bill through all stages tonight. I can only think that the Government is embarrassed by my bill, which is still on the Order Paper, and it wants to try to get in front of it.

Well, here is another issue that I want to raise. I have got to say that although I will get on and talk about children’s things because I think that is important—because that is what this is all about; this is all about the children—what I have learnt through this exercise is to never trust a Tory. I have learnt to never trust a Tory. It is a disgrace that Chris Auchinvole was on his feet and even speaking on a bill about this issue, I have got to say, because Chris Auchinvole was the MP who made the agreement with me, on behalf of his caucus, that if there was to be any extension to paid parental leave, it would be done in my bill in my name.

Chris Auchinvole: Oh!

SUE MORONEY: Yes, you did, Mr Auchinvole—yes, you did. That is why I will never trust a Tory. It is why I will never trust a Tory. There he is, pretending that he never made that agreement on behalf of his caucus, but he did. National came to me and asked for an extension because it was going to reconsider its position. National said it was going to make amendments to my bill and discuss that with me.

Chris Auchinvole: I raise a point of order, Mr Speaker. Although it is a reasonable debate and it is an important one, I really do object to being called a Tory.

The ASSISTANT SPEAKER (Lindsay Tisch): That is not a point of order.

SUE MORONEY: I am not going to continue to talk about that particular issue any more, except just to note that Mr Auchinvole did not object to being called untrustworthy. To continue, speaking about what Tories have had to say about this issue, I do want to talk about one more Tory before I talk about children, and that is Judith Collins, who in 2004 said about paid parental leave: “It is another example of the Government using taxpayers’ money to try to win some votes.” That is what Judith Collins said in 2004. If she were here now, if she was not on leave, as she is—

Hon Trevor Mallard: No, no. She’s here. She’s hiding in the Beehive.

SUE MORONEY: Oh, she is here. Well, look, come down, Judith. Come and take a call on the debate—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! Do not refer to the absence of a member.

SUE MORONEY: Judith Collins? OK. Actually, I am also quite interested that the National Party has put male after male after male up to speak on this bill, but, in fact, when it comes to my bill on paid parental leave, National will not let the men anywhere near it, strangely enough. National will only let the women in the party talk.

What I really want to say is that this bill is a really good bill because it puts the issue right in front of the public. They can now see which Government it is that would actually prioritise families. They can see it, absolutely, because they know that a Labour-led Government will have 26 weeks of paid parental leave and will have it in place a long way before the Government even gets to its 18 weeks—even before it gets to its 18 weeks. The public also know that it is the Labour Party that will ensure that all children reap the benefit of policy making under a Labour-led Government.

One of the big gaps in this bill—surprise, surprise—from National is that it is the most vulnerable children who will miss out on any form of support from this bill. The parental tax credit that National has chosen to put more money into and to extend for a short period of time longer does not get to the people who most need it. It does not get to the families who most need it. Students, people on ACC, and people who are beneficiaries do not get to use the parental tax credit. Is it any wonder that child poverty is growing under that Government? Is it any wonder, with those sorts of attitudes? What the Government is using this bill to do is to bring in all of its judgments—

David Bennett: Prove it.

SUE MORONEY: I will prove it, Mr Bennett, if you would just actually listen to my speech. I did hear Mr Bennett before doing a tiny 2-minute speech. He could not even talk about children and families for longer than 2 minutes. I heard him speaking and asking: “Where is Sue Moroney?”. Well, Sue Moroney was doing lots and lots of media interviews because the media understands where this bill comes from. It understands what the driving force has been, even if David Bennett does not want to admit it.

It is a great shame that the National Government again has taken its Cabinet club approach to this bill, has made all the sorts of judgments that it does, and has said that there are only some families that are worthy of this support—only some. Mike Sabin called them hard-working families. He said that this bill is just there to support the hard-working ones. The hard-working babies—really? These are babies. How do they get to be hard-working babies, when they are not even 18 weeks old? They are not even 18 weeks old. But Mike Sabin says that this bill is for only the hard-working babies. That is not the view of the Labour Party. We believe that all children deserve the support of New Zealanders. All children do—particularly the children who are in vulnerable situations. That is why Labour’s Best Start package is considerably better than what this Government is prepared to do.

Why is that? I think it is clear. Everyone in New Zealand knows that this Government has been dragged, kicking and screaming—kicking and screaming—towards supporting extended paid parental leave. It has tried every trick in the book. From 2002 the Government has consistently voted against any form of paid parental leave. It threatened a financial veto—the extreme tool of a financial veto—against extending paid parental leave. The Government has filibustered my bill to try to stop paid parental leave from being extended to 26 weeks. It has used every trick in the book to try to stop this from happening.

In the end, the Government knew that it was on the wrong side of the New Zealand public. National knew that it was losing votes through these popular policies, but still could not bring itself to do it properly. The Government still could not bring itself to do it properly because it fundamentally does not believe in paid parental leave. The Government will never put children at the heart of its policy making because it fundamentally does not get it. Only the hard-working ones—the hard-working babies—are going to get this, according to Mike Sabin. Well, that says just about all you need to know about the National Government. It has been dragged, kicking and screaming, towards this. I am proud of my part in bringing this about, and I applaud the Government for doing the smallest amount it thinks it can get away with in an election year.

LOUISE UPSTON (National—Taupō): I am very proud today to be a member of the National Government, and I am proud of a Budget that has delivered for Kiwi families. This side of the House believes in the support that we are providing today in Budget 2014 for families. One of the things that is really important to me, as a mother of three, is that mothers and families get to choose what happens to and what works for their family and their children. I have to say that one of the things I am really pleased about, with what we are introducing in this legislation today, the Budget Measures (Financial Support for Newborn Children) Bill, is not only extending paid parental leave in terms of length but making it available to more families. We are making it available to more families.

Sue Moroney: You wouldn’t have got it.

LOUISE UPSTON: I did not get paid parental leave for any of my children. What we have now is a system where paid parental leave is available for more parents. We also have, unlike the other side, made extensions to the parental tax credit. We have increased it and made sure that more of the very vulnerable families will get support that they have never got before. So it is absolute rot for that side of the House to say that the National Government is not committed to families. We are committed to families. In this Budget, $500 million supports the most vulnerable children—the most vulnerable children—in New Zealand. I am proud as a mother, and I am proud as a member of the National Government, that this is a Government that is backing families, providing more flexibility for parents, and supporting those most vulnerable children.

The ASSISTANT SPEAKER (Lindsay Tisch): I understand the next call is a split call—5 minutes, Carol Beaumont.

CAROL BEAUMONT (Labour): We are rising on the Labour side to speak in favour of this bill, the Budget Measures (Financial Support for Newborn Children) Bill. We are acknowledging that there is a small improvement being made here for paid parental leave—something that Labour has long championed and something that, as we have already heard tonight, we see needs to be significantly lifted, to 26 weeks. My colleague Sue Moroney has worked tirelessly on this matter, as has 26 for Babies. This is a small step, a very small step, but it is a deeply, deeply cynical one, I have to say.

This is coming from the party that voted against paid parental leave every single time. It voted against it every single time. Its members have been filibustering for weeks now to stop Sue Moroney’s bill, the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill, from actually getting in front of this House because they know that it has the support of the majority of MPs in this House. And it has threatened to veto that bill once it is passed. That is that party over there. So this bill is deeply cynical. It is because it is an election year and it is because National knows that it is on the wrong side of this in terms of the public, because the public support paid parental leave.

Of the submitters on Sue Moroney’s bill, 99.6 percent were submitting in favour of it. The public support it because we all know that paid parental leave is vital for our families. It is vital for ensuring that children get the best start, and it is also good for those children’s mothers, who are the primary caregivers, because it enables women to better balance paid work and family and it gives women choices. These are reasons why paid parental leave is so important. It is also important for babies to bond with their mothers, particularly. All of the evidence shows that bonding is about ensuring that a child gets the best possible start—health-wise, emotionally, and developmentally—so that bonding is important. Those are the reasons why paid parental leave is vitally important, except that we are talking here about 2 more weeks next year and 2 more weeks the year after, when what we need is an immediate boost to 26 weeks, which enables women to do 6 months’ exclusive breastfeeding and really facilitates that. Again, all of the evidence shows that breastfeeding is really important. The World Health Organization has long promoted 6 months’ exclusive breastfeeding when that is possible. This bill will not help that. It will be a small step—a very small step.

It is important that we support our children and families, and the Budget supposedly talks about doing that. This is where this part has come from. Supporting children and families is a vital investment in our future, but our Best Start package is a much more significant step to doing that. It is a much more significant start for our families, because under what the Government is proposing, the most vulnerable will not actually benefit. The most vulnerable will not be getting that extra tax credit—14,000 are excluded, we understand. I noticed that widened eligibility was referred to in the speech, which I have to say I think is really important, but casual workers—some of the most low-paid workers, potentially—do not even get on the horizon until 2016. I have just heard Minister Simon Bridges say this in his speech. Again, the things that potentially would have helped the most vulnerable are being excluded from the bill we are debating here tonight.

While we are talking about supporting children and families, nothing in today’s Budget does anything to help the 285,000 children living in poverty, because there are no plans. There are no plans to increase jobs so that people can get ahead. There are no plans to lift wages. There is nothing in the Budget that deals with those things, which are really about supporting families and children, because children live in families. As an alternative, Labour has very clear plans in these areas—a target around increasing jobs and a target of unemployment dropping to 4 percent by 2017 and lifting wages immediately. We have economic development plans around lifting value and productivity in our economy to ensure that we can provide quality jobs. We will be moving amendments in the Committee stage to try to improve this bill, which is a small improvement.

DENISE ROCHE (Green): It is my pleasure to take the second Green Party call on the Budget Measures (Financial Support for Newborn Children) Bill, which I note, having now had 10 minutes to read some of it, is an omnibus bill that amends both the Parental Leave and Employment Protection Act and the Income Tax Act.

I note that in the general policy statement that is with the preamble to the bill, one of the things it says is that it is targeted to lower and middle income working families, particularly the extension, or the increase, in the tax credit. With this legislation, the tax credit will rise from $150 per week for 8 weeks to $220 per week for the first 10 weeks following the birth of a child, but the eligibility has been tightened, and that does give us some concern.

The other concern we have with this is that although it says that it is for lower and middle income working families, it does nothing for the lowest-income families. Our policy has always been to extend that tax credit to those who need it most. We will be putting forward an amendment to amend this bill, to ensure that we can have that happen for those most vulnerable families, the ones that are most in need.

What families need is enough to live on, and although we support the principle of extending the tax credit, essentially what would lift them out of poverty is increased wages. This Budget, I have to note, has done very little to ensure that working families and those who are living below the poverty line and are in paid employment are able to get ahead. These tax credit measures are basically the ambulance at the bottom of the cliff, and we really do need to be starting to think in preventative terms about raising the standard of living so that we can address those poverty issues, because the costs are socialised—we all pay for them in the end.

When looking at this legislation you can tell that this is election year. I know that there are people on this side of the House who have said it, but, for the record, I will state it again. This is an attempt by the Government to take the benefit of Sue Moroney’s member’s bill, which would have put in place 26 weeks’ paid parental leave, take the credit away from her, and basically introduce some small measures in the interim because it is election year. I do believe and I do agree with this side of the House that it is cynical.

We do support the bill—we would be mad not to—because it takes some small steps towards improving conditions and provisions for, particularly, women who are bearing children while they are in the workforce. But our policy is for 13 months’ paid parental leave. Though this bill is a step in the right direction, to some extent it does feel like lip-service. Others have outlined the benefits of paid parental leave, but I will go through why 13 months is actually what we should be aiming for. We are at the lowest scale in ranked OECD countries for paid parental leave. Thirteen months would mean that there is a longer-term approach to child and maternal health.

It is interesting, actually, to hear the arguments that are being presented by the National Government around the parental leave provisions that it is putting forward, because they are quite oppositional to what it said some weeks ago when Sue Moroney’s bill was first introduced. But I take heart from the fact that the Government has started to recognise the benefits of paid parental leave. The Greens would seek to extend it well beyond 16 weeks, to 18 weeks, and then to 13 months.

SIMON O’CONNOR (National—Tāmaki): I am very pleased to rise in support of the Budget Measures (Financial Support for Newborn Children) Bill. As my colleague Louise Upston noted not only politically but from her experience, as did members on this side of the House, National recognises the real importance of children. We have heard Opposition members talk about paid parental leave in this first reading debate. We have heard some who want 26 weeks, some who want a full year, and some who want even more than a year. I wait for the call that we make it 3 years because that is the most important cycle. What is really important here is that National is responding in a prudent fashion to a need that we have seen for many years.

Hon Members: Ha, ha!

SIMON O’CONNOR: Again, all we hear from the other side is laughing. We have not heard any interest in children from members on the other side of the House. They would rather talk about themselves. National is proud to support children, and I commend this bill to the House.

Bill read a first time.

Second Reading

Hon SIMON BRIDGES (Minister of Labour): I move, That the Budget Measures (Financial Support for Newborn Children) Bill be now read a second time. As I set out in the first reading of the bill, it is fundamentally about providing increased—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable Minister. [Interruption] Order! Sorry to interrupt the honourable Minister. The time has come for me to leave the Chair.

Sitting suspended from 6 p.m. to 7.30 p.m.

Hon SIMON BRIDGES: As I set out in my the first reading speech on this bill, this is fundamentally about providing increased and targeted support within current economic conditions for working parents with newborns. This bill provides more targeted assistance for working mothers and caregivers of newborn children to ensure families with a newborn are supported to give that child the best possible start in life.

I would like to take this opportunity to outline in more detail some of the broader work we will be doing around the paid parental leave system. It is the combined impact of the changes made by this bill and the broader changes that will start to see significant benefits for modern working families. As I mentioned earlier, I am developing further changes to ensure New Zealand’s parental leave framework better reflects modern working arrangements in today’s diverse family structures.

The proposals will be consulted on with employees and employers and other New Zealanders later this year. Specifically, I intend to consult on proposals that would see parental leave payments extended to people in less regular jobs, such as seasonal and casual workers, those with more than one employer, and people who have recently changed jobs.

The proposals would see primary carers providing permanent foster care akin to adoption, such as Home for Life parents, people who have permanent guardianship, biological fathers, and grandparents caring for grandchildren, eligible for the leave providing they meet the work test criterion. The proposals would allow employees to work limited hours or days and keep up skills development during their paid and unpaid leave period. Also, they would allow workers who have been with their employer for more than 6 months but less than a year to be entitled to some form of unpaid leave.

I am aiming to have these changes in place by 1 April 2016. By that time this legislation will be fully implemented and better supporting families. The paid parental leave entitlement will be at 18 weeks, and the changes to the parental tax credit will also have been in operation for a year by that point. The Government believes that these amendments will benefit New Zealand through providing working families with newborn children the financial certainty and confidence needed to take the time off work to care for, and bond with, their children. Further, these changes will produce positive social and economic benefits in a fiscally responsible way. I commend this bill to the House.

JACINDA ARDERN (Labour): I note that the Minister of Labour in his address said that the Budget Measures (Financial Support for Newborn Children) Bill was aimed at giving families the financial certainty that would be beneficial to them and their newborn babies at that really crucial stage of development. But let us be honest. It does not do that for everyone. In fact, as Labour members have pointed out through the early stages of this debate, the most vulnerable families and children remain untouched by this Government’s proposal tonight and that, amongst other things, will be the most significant defining feature, apart from the fact that our package runs for longer, reaches more people, and is more generous.

Aside from all of those fundamental features, one of the most significant is the fact that the National Government’s policy leaves vulnerable families absolutely untouched. If, as National members have purported in their general statements to this House, their Budget is targeted—targeted—at vulnerable families and children, how is it that the poorest families in New Zealand are excluded from this bill? How can that be? That demonstrates to me that this Budget has been more about rhetoric than it has been about practice.

I also want to point out that in comparison to Labour’s Best Start package, which fundamentally aimed to treat as many children as possible equally in terms of the assistance it gave families, the only children in families excluded from the Best Start package were those families who earned over $150,000—and even then, those ones might have been eligible for paid parental leave and could have received paid parental leave. The only ones outside paid parental leave who were excluded were families who earned a combined income of $150,000 in the year that they were taking leave—so not a large number of families; roughly about 5 percent. Under National, the families who are excluded are basically the ones who are earning roughly less than $20,000 per annum. What a telling story that is, so I will let that speak for itself.

I wanted to see then, in that context, what kinds of issues were raised in the New Zealand Bill of Rights Act analysis of the bill that we are debating tonight. It said under the departmental disclosure statement, which we received late this afternoon, that advice had been provided to the Attorney-General on whether any provisions of the bill appeared to limit any of the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990. It said, yes, that information had been provided and we could find that advice on the website.

I would like to just raise with the Minister and the officials that, despite my searches, I have been unable to find that analysis on the Ministry of Justice website and I would implore the Government that if it is indeed available it would be very beneficial to members on this side of the House if that were tabled in the House. All of the regulatory impact statements have been tabled at the same time as the bill, but the last time I checked I had not seen the New Zealand Bill of Rights Act assessment. I will check again for that New Zealand Bill of Rights Act assessment, but it would be very useful if members on this side of the House had that available to us.

But, as I said, I have had the opportunity to look at the regulatory impact statements, and, particularly, I found very useful the statement that was provided by, I believe, the Department of Labour. These statements are very useful. If I were to assess what they were doing, they basically give the kind of analysis that is often provided in a Cabinet paper. They tend to look at the problem definition and will often then provide some analysis of the pros and cons of different options that may or may not have been presented to a Minister. The giveaway often that it is not exactly the same as probably those early briefing papers is that often the analysis in the regulatory impact statement will home in on one option and it will be the one the Government has gone for. That is a little clue that sometimes they have been written after the fact.

But I find it interesting that the Department of Labour has included the following statements under what it calls “problem definition” when looking at the issue of extra support for new families. It states: “Currently, some families experience poor outcomes due to financial pressure on working mothers to return to the workforce earlier than is desirable for health and social reasons.” It then goes on to say that some of the examples of this are, for instance, “suboptimal bonding between parents and their children, leading to poorer outcomes for children and therefore society. Secure attachment is an important predictor of resilience in later life and a large body of evidence suggests that many adolescent difficulties, including crime, substance abuse, and mental health, have their beginnings in early childhood.” I want to point out that the footnote for this piece of research and evidence comes directly from Sir Peter Gluckman, his piece in May 2011, Improving the Transition: Reducing Social and Psychological Morbidity During Adolescence. All of the statements made in the problem definition by the department of labour this side of the House would absolutely agree with. They were the founding principles for the Best Start payment.

I want to, though, just ask this question: does suboptimal bonding between parents and their children, leading to poorer outcomes, and secure attachment as an important predicator of resilience in later life stop becoming an issue at 18 weeks? That is surely the fundamental question we should be asking, because the Government has said: “Yes, we accept maybe 14 weeks might be contributing to the problem. An extra 4 weeks should do it.” Is it enough?

If we look at the rest of the evidence that the department of labour has pulled out, it goes on to say that there are reduced health and development benefits of not achieving the World Health Organization’s recommendation of exclusive breastfeeding for the first 6 months—for example, improved outcomes to mother and specific benefits to babies, such as “improved cognitive development and visual acuity, reduced risks of types 1 and 2 diabetes, reduced childhood obesity and coeliac disease, reduced mortality during the first year of life, and long-term benefits for cardiovascular health.” That comes from the American Academy of Paediatrics. That is a reference to 6 months of paid parental leave, not 18 weeks. And wait, there is more, from the Australian Productivity Commission, on paid parental leave. I want to point out to members who have just arrived that I am actually reading from advice provided to the Government by a Government department.

Mike Sabin: Thank you.

JACINDA ARDERN: No problem, Mr Sabin. It then goes on to say: “not achieving child and maternal health and welfare benefits from the primary caregiver having a minimum of 6 months’ leave”—again, 6 months’ leave. “The benefits include better health outcomes for mothers and infants, and better developmental outcomes for children, including cognitive benefits and reduced rates of infant mortality.” The Australian Productivity Commission reports that there is compelling evidence of these benefits from a period of absence from work for the primary caregiver of around 6 months—of around 6 months—and a reasonable prospect that longer periods, of 9 to 12 months, are beneficial.

The advice that was provided to the Government pointed strongly to 26 weeks, which is the very amount of paid parental leave that Labour has strongly advocated for. Yet what options were put to the Government? Not 6 months—no, not 26 weeks. Instead, it was always the extension of just 4 weeks. And why? What was the rationale in the paper? It said that the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill currently before Parliament, which seeks to extend paid parental leave from 14 to 26 weeks in three stages, basically was not something they would be putting forward as an option, because of the prioritisation of Budget allocations.

Let me say this: Peter Gluckman has pointed out in this report that poor attachment, poor health outcomes through lack of breastfeeding, all of the resilience issues and psychological issues that come about from poor early development—those things cost more than 6 months of paid parental leave will ever cost. It was about investing to save, and that is where this bill has failed.

DAVID BENNETT (National—Hamilton East): Contrary to what that last speaker, Jacinda Ardern, said, I say that the Budget Measures (Financial Support for Newborn Children) Bill is about investing in the future of New Zealand. It is investing in our young people, it is investing in our families, and it is making sure that in the most difficult of times, when we have now reached a Budget surplus, we use that money for the benefit of our younger citizens and our families. It is a prudent Budget that brings a surplus of $372 million. Compare that with our Australian brothers and sisters, and you will see that they are cutting things, whereas in New Zealand we are enhancing things. We are sending out programmes for families. These are important programmes that will benefit the future of our country going forward. They will raise stronger families, with young children who will have their opportunities to be successful members of the New Zealand and world communities.

This bill is important because we are increasing the length of paid parental leave up to 18 weeks from the current 14 weeks. That will be staggered, increasing to 16 weeks on 1 April 2015 and to 18 weeks on 1 April 2016. There is a member opposite from somewhere down in Dunedin—

Dr David Clark: Sue Moroney would take it further.

DAVID BENNETT: “Sue Moroney would take it further.”—that is the comment from the Labour Party. Let us have a look. We have delivered for parents. Did the Labour Party deliver for parents? No, it did not. It talked, talked, and talked. It has not delivered. We have delivered. We have brought home what parents wanted. This is the difference: Labour talks; we deliver. We have delivered at the right time.

When we look at it, there is also the extension of paid parental leave to people who are in similar permanent care arrangements, such as those with parenting orders. So it is broader than just increasing the weeks. We are actually looking at a broader-based policy that actually takes into account the different circumstances that many family relationships have these days. The Minister of Labour needs to be applauded for that—for taking a very positive and open approach and looking beyond the normal family arrangement that was considered the norm. We have also extended parental leave payments to more workers—in particular, those who may recently have changed jobs, seasonal or casual workers, and workers with more than one employer. Again, that is showing the flexibility of this legislation. We are looking at carrying it through into the variations that may be portrayed in the working environment that our younger families face in this modern world.

Things are not as simple as people once expected. There are different arrangements, there are different measures, and there are different ways that people earn their income, and paid parental leave needs to take into account those differences. This legislation gives us the mechanism to do exactly that, and that is something that many parents would have been looking for.

Hon Simon Bridges: Did Sue Moroney’s bill make any difference?

DAVID BENNETT: Sue Moroney’s bill, the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill, did not do that. Sue Moroney’s bill was just all talk. This is delivery—delivery—of the things that are needed for people. We are making paid parental leave more flexible. There will be some more work to be done on this with public consultation around how that can be done, but, basically, we are making it more flexible to take into account those variations and to make sure that the parents who are entitled to it get that chance to get that paid parental leave. Paid parental leave will be good for our families. It is part of a $500 million package for our families. Labour Party members will say that this is their idea. I never once saw the Labour Party go out there and talk about under-13s getting free medical treatment. I did not see Labour Party members go out there and say that that is what they wanted to do.

Tracey Martin: New Zealand First policy.

DAVID BENNETT: We have got some squealing from New Zealand First. Maybe that party’s members said it, but you cannot really rely on what they actually say. The reality is that this is a good, strong Budget. It delivers for families. It delivers for working families—the people whom the Labour Party should have been delivering for, and the people whom National is delivering for. We are delivering in many ways. One of them is through paid parental leave. Another way is through the free doctors visits and prescriptions for under-13s. That is good governance. It is prudent, successful governance, and it is something that many parents and families will congratulate this Government on doing. Thank you.

SUE MORONEY (Labour): It is a pleasure to rise and speak to the second reading of the Budget Measures (Financial Support for Newborn Children) Bill. But is the National Party ever scraping the barrel when it puts David Bennett up to speak on this bill? He does not even seem to know that it was the Labour Party that brought in paid parental leave in 2002. He is standing up there and saying that the Labour Party has never delivered to parents. At the time, Judith Collins said that having paid parental leave was vote buying. Well, David Bennett ought to go back and look at history, and then he may be a bit better informed. I think he is probably feeling quite sad that he has had to rely on an Opposition member of Parliament from Hamilton to have some influence over his Government, given that he cannot have any influence over it himself. But never mind, he got to speak.

David Bennett: I raise a point of order, Mr Speaker. Since when has Sue Moroney been a member from Hamilton?

Mr DEPUTY SPEAKER: I did not hear the context.

SUE MORONEY: Well, I rest my case, I have to say, with that point of order. There is another thing I would have to say about the speakers National has put up to speak on its own bill, and I think it is quite sad. If I was a woman of the National Government, I would feel quite affronted that the one time they get to vote for extending paid parental leave, they have their men speaking. When National was voting against my bill to extend it to 26 weeks, National put all of its women up to take the heat over voting against it, opposing it. I think that is a very cynical use of the women in National, and I feel very sad for them on that.

The people whom I do want to congratulate are the 26 for Babies coalition; organisations like Plunket, the New Zealand Educational Institute, and Barnados, a whole range of unions that are standing up for working people, and a whole lot of organisations that have relentlessly campaigned on this issue. They are the victors today. They are the people who have won this victory for families, and there is no doubt about that. I also want to congratulate the 3,800 people who made submissions supporting my bill on paid parental leave, because I think they have made a big difference here. I think they have put the pressure on the Government to take this measure.

I also want to thank the thousands of people who sent this e-postcard to the Prime Minister, because I think they have made a real difference for families on Budget day. John Key has probably just about had his email inbox crash with the number of these e-postcards that have been sent to him. I am sure every single person who went on and pushed this e-postcard through to John Key has made a big difference. They have made a big difference to families, and they have certainly had a lot more impact than anyone on those benches opposite has made on this issue, so I congratulate them. I congratulate them on that.

This is a bill that the Labour Party will support because it is better than doing nothing. It is better than doing nothing, but, look, there is not much more than nothing that the Government could have done without doing nothing, to be quite honest.

Mike Sabin: That makes good sense!

SUE MORONEY: Well, it does, because the Government had pressure on it, and it still has pressure on it, because my bill is still coming up before this Parliament.

Chris Auchinvole: It’s all about Sue Moroney.

SUE MORONEY: It is still coming up before this Parliament. Mr Auchinvole, I look forward to you speaking on that bill, because you did promise, after all, that any extensions to paid parental leave would come through that bill. So I look forward to that. But what we have got to do is actually get a consensus about getting to 26 weeks, because this mucking around the edges with 18 weeks—and not even 18 weeks now but 18 weeks over the course of the next 2 years, for goodness’ sake! I have a bill before this House that actually gets us to 18 weeks on 1 July this year—1 July this year—which is, in fact, what the Government should be supporting.

If the Government had really listened to the 3,800 people, 99.6 percent of whom supported my bill, for 26 weeks, then it would, in fact, not be in urgency. Let us face it: the measures in the Government’s bill do not come into force until 2015. They do not even start until 2015, so what is the need for urgency? What is the urgent matter that we are here under urgency debating? It is about getting a bill in front of my member’s bill. That is what it is about; that is why we are in urgency.

Let us focus. Let us stop talking about the politics, because I know it is all about the politics for the National Party, but for the Labour Party it is about people. What—

Hon Member: Yeah, right! Tell us another one.

SUE MORONEY: I raise a point of order, Mr Speaker. I am finding it harder and harder to actually—it is always the case when we are debating children, somehow.

Mr DEPUTY SPEAKER: I actually think that is a fair call. There has been a spirited period of members interjecting, and I just think we need a little bit more decorum now, please.

SUE MORONEY: Thank you, Mr Deputy Speaker. I am not sure what it is about paid parental leave that gets the National Party members yelling and screaming, but it always does.

Mike Sabin: No, just when you talk about yourself.

SUE MORONEY: Well, I will talk about Mr Sabin, who thought that the only people who deserved to get extended paid parental leave were babies who were hard-working! I cannot really understand that, because at 6 months I am not sure how you can work out which is a hard-working baby and which is not. But I digress.

When submitters came before the Government Administration Committee, they said that 26 weeks was important. Plunket referred to that today. It has put out a press statement saying “Yeah, well, 18 weeks is OK, but really what New Zealand families and babies need is 26 weeks.” Plunket has said that because all the research and evidence tells us that if we can get exclusive breastfeeding to 26 weeks, to 6 months, that will make a huge difference to the outcomes for those children. It will mean not only that they have a great opportunity to get some really good secure bonding and attachment with their parent but also that they are set up for a very healthy future.

That is great news not only for that baby and that family but also for the rest of New Zealand, because we all get to save precious taxpayer money on not funding more and more health services. That child gets a healthier life, and we get to save money. That is a win-win. That is the win-win that comes from properly developed policy—26 weeks paid parental leave—not policy on the hoof, not the politics of just trying to get away with as little as possible, like this Government has done.

Everyone in New Zealand knows that this Government has been dragged kicking and screaming towards extending paid parental leave. It has done everything in its power to try to stop this from taking place. It has consistently voted against paid parental leave. It has threatened to use its financial veto. It has filibustered my bill. It even asked me—and I in good faith responded—to extend the report back date of the bill. It has used every trick in the book.

As recently as the end of March this year National members were voting at the select committee against extending paid parental leave. So no one is fooled about this; no one is fooled. The real shame about this is the fact that New Zealand families need a Government that will absolutely commit to this and fully understand the importance of investing properly in families. They need a Government that actually knows that investing in those early years reaps us benefits not just for those families, as I said, but for whole country benefits—if we do it properly.

This half-hearted attempt will not deliver those benefits, and that is what we need. It is becoming more and more obvious that what we need is a Labour-led Government that will take the support of families seriously and will not take half measures, a Government that absolutely fully understands how important it is to invest early, get it right from the beginning, and save ourselves a lot of heartache, a lot of problems, and, yes, a lot of taxpayer money in the future.

JAN LOGIE (Green): I rise to speak again in this process of urgency on the Budget Measures (Financial Support for Newborn Children) Bill. I would like to just pick up on a couple of points made by the Minister of Labour—or one, primarily, about the fiscal responsibility that has enabled the Government to support this initiative at this time. I really do want to remind New Zealand that this bill, we are being told, is going to cost about $172 million a year. That is while the tax cuts that this Government introduced have cost this country $5 billion over the last term of Parliament. The $61 billion of debt that this Government has got the country into—up from $14 billion—has now meant that we are paying $1 billion a year in interest off that debt. That is so much lost opportunity for the children and the families of this country that it really puts this $172 million bill in perspective for me—although I celebrate it because it is a step on the journey and at least it is going in the right direction, unlike those tax cuts and unlike the profligate spending on American-style motorways.

But to get to some of the specific points of the bill again, the Green Party, as I have said, believes passionately in an economy that serves the people and the environment, because, basically, that is what the economy is there for. It is a tool to serve people and the environment. This is a chance to use our shared resources to look after our children. The Green Party wants to see every single child in this country thriving. We want to use our economy in the best way that we can to deliver that for our children. Paid parental leave is a key part of that mix, and we are very pleased to support it.

We are also pleased to be supporting, with a caveat—and I am hoping that others in the House will support my amendments—the extension or increase in payment of the parental tax credit. This tax credit recognises the need for extra financial support for lower-income parents, so that they can spend time with their newborn babies, and helps with the cost of things like nappies, clothes, and other essentials in those first few weeks of life. That is a worthy thing to do. That is going to help take some of the pressure off some of the families who are struggling so much at the moment. It will increase the payment from $150 to $220. Seventy dollars a week for lower and middle-income families is a huge amount and it will make a really big difference. The tragedy of this provision, though, is that it is not being extended to the families who are in the most need and who could really, really make the most out of that $70 a week, and for whom it would make a substantial difference to their quality of life and their ability to care for their newborn baby.

The regulatory impact statement tells us that the intent of this policy provision is to increase the amount of financial support available, and that is the primary objective. Secondly, the intent is to target this additional support to the period around the birth of a new child. Thirdly, the intent is to target this additional support to lower and middle-income families. Fourthly, and sadly, part of the policy intent of this measure for the Government is to minimise any impacts on work incentives, as if parenting is not a job that we should be valuing above all other jobs, and as if parents who are out of the paid workforce should be thinking about being in the paid workforce while their baby is a newborn. Surely—surely—that is not something that we want to be encouraging.

I really would remind the House of some of the submissions—for those on the Government Administration Committee who sat through the submissions—on Sue Moroney’s Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill on paid parental leave, and some of the stories that we heard about the importance of it, the difference that it made, not having it, and the heartbreak that was wrought. We heard from a nurse working in the intensive care unit who was shocked to discover that so many parents had to leave their babies during the day to go to work because they could not take leave. That has been the reality for families in this country. The extension of paid parental leave to casual and seasonal workers will mean that that is not the reality for some women now, and that is incredibly important. The same concept of need applies in this situation for the parental tax credit.

We heard of one woman who could not afford to take leave as her partner was unable to be in paid work at the time, so she had to return to work 24 hours after giving birth. She told us how she now has to look at photos of her babies to remember those early years, and of the deep sadness of missing all of those key milestones of her baby. It is heartbreaking to think that that is how our society has been operating for so long and that we are now, in 2014, where families can be torn apart in that way when we make policy choices that could prevent that. This paid parental leave provision is a step towards that. It should be 6 months, because that is the breastfeeding milestone and it is the point at which, the research tells us, so much can be done. We actually support 13 months because that is about the establishment of the full family at that time. The parental tax credit is also a way of indicating how we want to support our families and those in the most need. When 285,000 children in this country are living in poverty, and when the families in most need of this financial support at the time of a newborn baby in the family are excluded, it is hard not to see cruelty in that, as well as a level of discrimination, which the courts have recognised, as others have.

Mike Sabin: That’s right—discriminating against people who work.

JAN LOGIE: Yes—Mike Sabin says cynically: “Discriminating against people who work.” Some people are not in a position to work, and I would like to let the member know that in America there has been research done to look at women on the DPB and the reasons they are on the DPB. Over 50 percent of those women overseas were there because they were leaving violent relationships. I would like to ask the member whether he wants those women to get to a place of safety, to be able to support their children, and to stay out of that relationship. If the answer is yes, then you should not be discriminating against those families. We should be nurturing and supporting those families. If you support ending family violence, then you should support universal provision for families.

Mr DEPUTY SPEAKER: Order!

JAN LOGIE: He should. I am sorry, Mr Speaker—he should be supporting those. Of course Mr Speaker would support that. I am sorry for bringing you into the debate. I would like to finish, finally, by telling another story that came through in the select committee when it considered Sue Moroney’s bill around the importance of this issue, about a woman with twins who had to go back to work when her twins were 5 months old. She had to leave work every 2½ hours to breastfeed, all while her babies were both still waking at different times of the night to be breastfed. Not surprisingly, this was not sustainable for her, so she resigned after 5 weeks back at work. Three years on, she is still working part-time, outside the industry that she is trained in. She has estimated that that has cost her family about $70,000 because we did not have the policies in place to be able to support her to stay in work at that time. Sadly, the 18 weeks is not quite getting us there either. We can do better as a country. Imagine, if we had not had those tax cuts, how much more we could be offering to our children and our families right now.

LOUISE UPSTON (National—Taupō): It is a great day for New Zealanders today, and New Zealand families in particular, with Budget 2014. One of the speakers before me actually asked what New Zealand families need. Well, it is quite simple. If you ask most New Zealand families what they need and what they want, they want certainty, they want job security, they want to know that they will have the opportunity for their wages to increase over time, and they want to have a Government they know is looking after them. That is exactly what this side of the House is doing.

This is not actually a philosophical argument about paid parental leave—although if people have been listening to this debate, they may have thought that—because this side of the House has supported paid parental leave—[Interruption] No, no—we have supported paid parental leave, and we have supported increases when they are affordable. The key word is “affordable”. So we now have our books balanced. We have surpluses after 5 years of struggles because of what we inherited from that side of the House.

This Government’s economic management has finally got us back to a position where we have surpluses. So what is the first thing we do? The first thing we do is to put half a billion dollars into supporting families, which is absolutely fantastic. More important, we support families and support giving them options and choices. I do want to just remind the House that it was a National Government that introduced the parental tax credit, and it is a National Government that is now looking at extending it and increasing the value of it. As the Minister of Labour said before, we are consulting to find out what are the other opportunities and best ways to reach the most vulnerable parents—the most vulnerable—who are currently not supported. But that side of the House forget about that, because they actually want to scrap it. They want to scrap the parental tax credit, but they are very quiet about that.

So this side of the House is supporting families. We are supporting them in the things that matter most and making sure that we have an economy that is growing, that they have job security, that they are going to get higher wages. At the end of the day, New Zealand families also know that it is really important to balance the books. First and foremost, that is what we have achieved, despite unbelievable challenges. The Minister of Finance was today able to say that we are heading into surplus. We are projecting surpluses for many years to come, unlike the decades of deficit that the other side would have taken us into. So who do we look after first? New Zealand families, with this half a billion dollars. Thank you.

TRACEY MARTIN (NZ First): Kia ora, Mr Deputy Speaker. Just to quote for a moment from the New Zealand Herald from way back in March 2014: “A study just published by the Journal of the American Medical Association … found obesity rates among 2- to 5-year-olds in America had dropped an impressive 43 per cent over the last decade.”, partly attributable to mothers breastfeeding for longer. We are talking about front-ending the investment. We are talking about front-ending the investment, and certainly every party in the House is supporting the Budget Measures (Financial Support for Newborn Children) Bill, because we all believe in parents. Like Mrs Upston, I am also a mother of three children. Unlike Mrs Upston, I was able to make a choice to stay at home for 15 years as a parent, and—

Louise Upston: I made a choice.

TRACEY MARTIN: Exactly. We both made—

Louise Upston: Mothers should have a choice.

TRACEY MARTIN: Mrs Upston is now actually choosing to create an argument about who was better than what, and there is no argument here. I merely was saying to Mrs Upston that I was drawing a parallel in the fact that we are both mothers of three and we both had an opportunity to make a choice. Mrs Upston seems to have got upset about that fact, but that is the reality. We both had an opportunity to make a choice, and where I am going to is—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It used to be a tradition in this place that people did not speak, or screech, as they walked around the Chamber, taking advantage of their role as whips. Mrs Upston just did that, continuously screeching as she went from her seat and out the door. I think that you should have pulled her up.

Mr DEPUTY SPEAKER: Well, it has been a reasonably spirited debate. The member is quite right. Members should not be walking around the Chamber and—I have probably neglected that, but in the course of the debate I have probably neglected a few things. I apologise. Let us have a bit more decorum.

TRACEY MARTIN: Thank you, Mr Deputy Speaker. So the point I was trying to make is that both Mrs Upston and I had choice. Part of that choice, in my case, was about the fact that my husband earned over $65,000 a year, as a winemaker, so we were able to actually have one parent at home—one of us at home. There was no paid parental leave for me looking after my children at that time, in the same way that Mrs Upston talked about the fact that there was no paid parental opportunity for her, and those were the times that we were in.

But times have changed quite substantially for families where we are today, and where I am coming to is to the regulatory impact statement, at point 7 on page 3: “The [family tax credit] and the [in-work tax credit] are currently abated at 21.25 cents in the dollar when annual family income exceeds $36,350.”—$36,350. “The [parental tax credit] is also abated at 21.25 cents in the dollar; however the amount of the abatement is calculated against 56 days of annualised income, rather than a full year’s worth of income; this creates an effective [parental tax credit] abatement rate of 3.26 cents [in the dollar].”, and this means that this will happen “dollar for dollar until a family’s income reaches $21,216 after tax.”

Why do I raise those figures? Why are they in the regulatory impact statement? Because there are changes in the family tax credit and the in-work tax credit ratios and abatement rates that are going to kick in at the same time as this bill goes through. The reason I raise those figures is that that is actually what the National Government believes are low to middle income earner rates. But let us give the Government a little bit more benefit of the doubt, shall we? Let us give it the benefit of the doubt that it actually believes that $50,000 gross annual middle income—and what it has done, quite carefully and quite interestingly, is made a large announcement about the fact that the payment rate rises from $110 a week to $200 and something - odd a week. I am sure that one of the National Party members will be so completely au fait with the numbers in here that they will be able to stand up when they take a call and make sure that what I am saying is correct.

For lower and middle income working families, the parental tax credit increase is $220 per week for the first 10 weeks following birth, and currently it is $150 a week for 8 weeks. But this change starts to pay it back faster, on a dollar for dollar basis, from the moment that that income starts to get towards $21,216 after tax. I think that we have not had enough time to study these numbers. We have not had enough time to study these numbers because this bill has been dropped on us. But that is a really interesting change, and I would suggest that somebody out there needs to really crunch some numbers while we are down here in the House until midnight, talking about the bills that this Government is going to push through under urgency.

So although an extension to 18 weeks is good news, it is crumbs. It is crumbs, once again, about which this Government is saying: “Be grateful to us, New Zealand. Be grateful to us.” Let us not forget, as, quite rightly, it has been pointed out before, that this Government is the Government that in its first year increased, by millions of dollars, the funding to private schools. And in one of its first Budgets, it did a tax swap, by cutting the tax rate for the highest income earners and shifting that—yes, it was fiscally neutral, according to the Minister of Finance—tax loss on to those low and middle income earners, who are the same low and middle income earners who will be affected by this clause.

So that is why it is important for everybody to realise what is middle income according to the National Government, because that is not being altered—that is not being altered. As times have got harder, that threshold has not been moved upward. So middle-income New Zealand needs to have a very good look at this overnight and tomorrow, and then come back and make sure that it understands what is going on in this bill.

Can I also say that one of the other reasons why—and we are trying to get across to the National Government that, actually, everything is about money in this House at the end of the day. It is not our money, and we all understand that—it belongs to the taxpayers of New Zealand. But it is about making sure that what you spend in one place is a good investment, so that you end up actually saving money in the long term. Just like a $359 million, top-down - driven Budget item for education, instead of front-ending the spend so that children of 5 and 6 are actually supported in their schools, once again the Government has been tight-fisted at the front end of life, at the beginning of life. We already see—and the reason why I started with the quote—that the savings at the other end are so great. So it is disappointing that there is, again, this short-sighted vision.

If you have a look at some of the Budget documents—and there are people trying to do that right now, trying to catch up on what has gone on, because we have only just received it—you can look at some of the very interesting spend there. It comes out of two different pools agreeably, but there are millions of dollars being set aside for a PaCT tool in the education budget that could very easily have been shifted over to actually support the parental tax credit going to 26 weeks. There are some very interesting spend decisions in this Budget that have not been in the Minister of Finance’s speech that New Zealanders need to have a strong, hard look at to see whether what is being offered to them, this small piece that the National Government actually wants you to be grateful for, is truly the ability that it has to give to you, of your own money—of your own money.

The National Government likes to talk about its largesse. It likes to talk about its spend of $10 million here and its spend of $10 million there. The Government has no money but that which belongs to the taxpayer, and the taxpayer has made it perfectly clear—

Mike Sabin: Or, in some cases, the ratepayer.

TRACEY MARTIN: —perfectly clear—through the very hard lobbying, the incredible lobbying, that was done by families and mothers and people without children who said: “We actually want to stand up for newborn babies in this country. We believe that truly to provide an option, we need to support increasing this to 26 weeks.”

Mr Sabin, of course, has given us his wisdom over there, from the other side of the House, ranting on, saying: “Goodness me! We would not possibly want to support babies and children for a year.” Of course Mr Sabin is completely uninformed with regard to the Nordic nations and the amazing job that they do of supporting their children, and the support that they put into their education systems and the high success that they have. But Mr Sabin is not interested in that. Mr Sabin will follow the party line. Like he did for Kaipara, he will follow the party line. He will not fight for the people of New Zealand; he will follow the line that the National Party tells him to follow.

MIKE SABIN (National—Northland): I am not sure where the member Tracey Martin was going with my Nordic knowledge. I am quite happy to stand here in this House and say that I have a really limited knowledge of the Nordic approach to supporting children, but I have a very good knowledge of what the National Party does to support children, to support families in this country, and this bill, the Budget Measures (Financial Support for Newborn Children) Bill, is actually a very good example of it. I am actually feeling very privileged to be able to speak on this bill, because according to Sue Moroney this is not a bill that men can speak on, apparently. No—no; heaven forbid that the National Party might have a few fathers who stand up to speak on a bill that deals with parent—

Sue Moroney: That’s not what I said and you know it.

MIKE SABIN: Well, it is, Ms Moroney. It is, actually. You were chastising the National Party because of the men who were speaking on this bill. Heaven forbid that men might have something to do with procreation of children. There you go. Call me old-fashioned, but I think we do. I have got three lovely children, none of whom—

Hon Trevor Mallard: One of them is a hell of a lot brighter than his father.

MIKE SABIN: What is that, sorry?

Hon Trevor Mallard: One of them is a hell of a lot brighter than his father.

MIKE SABIN: Well, that is probably true. What happens is an evolutionary process where the offspring become more intelligent.

Hon Trevor Mallard: He’s obviously got a brighter mother.

MIKE SABIN: I am happy to accept that—I am happy to accept that. He has certainly tripped that member up a few times, so there you go. You must be right on song.

If we look at this package, there has been some discussion about the fact that this is a narrow focus on a small set of people, but, actually, this is part of a $500 million package, much of which actually goes far broader than people are acknowledging here. It has some $90 million - odd that will go towards supporting children up to the age of 13 getting free doctors visits. That will be something. That will be very good in Northland. There is $155 million to help our early childhood education centres, and has this Government not done a very good job in that space? There is $33 million to enhance the work that we are doing with vulnerable children around the vulnerable children’s teams.

Tracey Martin mentioned the $359 million, which she pooh-poohs, but, actually, ensuring that we have good leadership and excellent teachers in our classrooms to enhance young people’s opportunities to be good contributors to New Zealand is a very positive thing. That is front-loading. People can cherry-pick one piece or another, but the reality is that this Government is doing a lot across a lot of areas, but it is doing it in a prudent, responsible, and careful manner. That is why we are back in surplus. That is why we will grow at 4 percent next year, and that is why we will continue to be the Government beyond the election—plain and simple.

Hon RUTH DYSON (Labour—Port Hills): It is pretty unusual for a member of the Opposition to contribute in the Budget debate in support of legislation, but I have to say that I am very pleased that I am able to do that. The Budget Measures (Financial Support for Newborn Children) Bill is a good bill. It has not got the snappiest title. It could have been called the “Paid Parental Leave Extension and Parental Tax Credit Extension Bill”, which probably would have been less snappy, but the content of it is something that should be supported.

The bill does not go nearly as far as we would like. It does not go nearly as far as the bill that Sue Moroney has had before this Parliament for a long time, which has been to a select committee, been through an extensive consultation process, and, in fact, had 3,809 submissions. There were 3,809 submissions on Sue Moroney’s extension to paid parental leave bill, which was drawn out of the members’ bill ballot. Of those 3,809 submissions, 99.6 percent agreed in total with Sue Moroney’s bill. That is not a bad record, and that is why I cannot work out why we are getting this half-hearted, “Labour-lite”, “we’d better do something because we’re clearly in bother”, “fudge-it Budget” bill. Why did National not just support a decent bill, when 99.6 percent of 3,809 submitters supported it?

I was very interested in the contribution, not actually from Mr Sabin particularly—although it was a robust contribution and I am sure that he believes everything that he said—but from his colleague Louise Upston, who stood in this House and said: “This is not an ideological debate. There’s nothing ideological about paid parental leave. We’ve always supported paid parental leave.” I am a bit concerned about the member’s memory. It is quite early on a Thursday night and she has totally forgotten the voting history of her party since 2002, when we were in Budget surplus.

When Labour introduced the first-ever paid parental leave provisions into legislation in New Zealand, National voted against it—100 percent of National members voted against it; 100 percent of Labour members voted for it—and National members said some very unusual things during that debate. So for the senior whip of the National Party to come into this House and go, shock, horror: “This is not an ideological debate. We’ve always supported paid parental leave.”, beggars belief, because it is just not true. It is not credible.

In fact, I think the most credible thing that could be added to the debate is to revisit some of the quotes that were made during that original 2002 debate and consider them and the fact that here on 15 May we are only a few months away from the 2014 election. One of the interesting contributors to that debate was Judith Collins, who said during the paid parental leave debate: “It is another example of the Government using taxpayers’ money to try to win some votes. Who would have thought that a Government, that Government, would try to use taxpayers’ money to win some votes?”.

I have not heard Minister Collins—I think she is still a Minister. I have not heard the Hon Judith Collins take a call yet in this debate, but I would like to hear her and see whether we can measure her contribution during the earlier paid parental leave debate, which was introduced by a Labour-led Government with a surplus in our Budget, when it was opposed by the National Party for all sorts of strange reasons.

I would much prefer the rigorous process that the Government Administration Committee went through, with, actually, some excellent contributions from the National members—I must admit, on the public record now, that I think they have contributed very well—and the rigorous attention to the money, asking how much is it going to cost, what can we afford, when should it come in, and who might be impacted best and worst out of the people who are currently entitled to receive paid parental leave.

And then we looked at the broader social impacts of extending paid parental leave. We looked at the impacts on the education system, on early childhood, and on the health system. There was nowhere that we looked where Sue Moroney’s bill did not stack up to be a smart idea. That bill should have been reported back to this House some time ago, and I think it would have got a majority of the support of this House. In fact, it still might. It is a darned sight better than this bill.

Why was it that the Government did not support us reporting that bill back on time, having gone through a proper process, with 3,809 submissions, a large number of which we heard, and 99.6 percent of which supported Sue Moroney’s extension to paid parental leave? Why did the Government not support us getting the bill back at the right time, yet weeks and weeks and weeks later here we are, under urgency, passing a bill that does half of it? This is like a “Labour-lite” excuse. Not only does it not do the proper job, it does not do it nearly as well as the comprehensive package that Sue Moroney proposed. It introduces—what is it; just 2 weeks—a 2-week extension, on April Fool’s Day next year. Why is this bill being rammed through under urgency? Why is it necessary to do it under urgency when it does not come into effect until April next year and we have already done all the work at the select committee? We would be happy to pick it up and do a decent job of it.

I get really frustrated when there is no need for urgency and the public, who are actually the people who are the beneficiaries of this additional support, are being denied their right to have a say. What is the Government scared of that it will not put this bill through even a truncated select committee process? Some people, Minister Bridges, might come along and say they support it. I think the Minister of Labour should welcome the chance to have one thing that he has initiated during his entire term as a Minister being supported by members of the public. If I were that Minister I would jump at that chance.

Hon Trevor Mallard: Other than Christine Rankin.

Hon Simon Bridges: She might be in Parliament later this year.

Hon RUTH DYSON: She might be. Simon’s eyes light up at the prospect that he has just outlined. I do not actually think it is likely.

I do not understand why members of the public are not being given an opportunity to have a say on this bill. There is nothing urgent about it. It is not like the old-fashioned Budget urgency provisions that would come into effect at midnight. Remember, Mr Sabin? You might be too young, but your grandparents may have told you about the olden days when people used to wait for Budget day, and then they would go down to the petrol station and fill their car up with petrol in case the Government put the price of petrol up that night. That was real urgency, not like this measure, which has no need for urgency at all. It is straight cutting the public out, and I think that is a shame.

I just want to quickly quote another couple of National members, because I think it is worthwhile putting on the record what they really think about paid parental leave. Anne Tolley said, when it was first introduced: “Paid parental leave shows how the Labour-Alliance Government is stuck in the radical feminist era of the 1960s and 1970s … and is completely out of touch with women of the 21st century and their diverse involvement in today’s labour force.” Then she said: “This is about paid parental leave that we are extending under the National Government under urgency.” She said: “This is bad legislation. It is a travesty.” Well, Mr Bridges, welcome to the radical feminist era of the 1960s and 1970s, which you are supporting. I do not think Mr Bridges was born then. I do not think he was even born then.

Nick Smith said in 2002, and I would not be surprised if Minister Smith repeated this during this debate: “I say that if a member went out of their way to draft a dumb bill, this would have to be it.” I am sure the Hon Nick Smith would be happy to repeat that allegation in the House today.

I think this bill is a good step forward. It is half-hearted and it is not as good as the bill we proposed, but I am glad the Government has finally come to its senses on at least one issue.

CHRIS AUCHINVOLE (National): With regard to the last speaker, Ruth Dyson, who has just resumed her seat, I am delighted to think that National has produced a bill, the Budget Measures (Financial Support for Newborn Children) Bill, that Labour agrees should be supported.

I am very pleased and I am conscious of the work that was done on the oft-repeated title of Sue Moroney’s “My Bill”. I thought that once it hit the Government Administration Committee it might have been ours, but it seems not; it seems to have been just hers. But if Labour agrees that this Budget Measures (Financial Support for Newborn Children) Bill is a bill worthy of support, I am very, very pleased, because I think it is worthy of support.

Let us listen to the objections to it and why we did not take Sue’s bill. Let us look at it. This bill that we are speaking about now is part of a considered level of support designed to support families on a wide basis, which is something I would have thought Labour would wish to be associated with. There are five parts to the package, and I really do hope Labour will be true to its roots and will support the other parts of the package. Let us just briefly look at what they are.

There is $172 million to boost the paid parental leave scheme—not too bad. We have heard about that; we will no doubt hear a little bit more. There is $42 million to increase the parental tax credit from $150 a week to $220 a week, and an increase in the entitlement from 8 to 10 weeks from April 2015. There is $90 million—wait for it—to provide free general practitioner visits and free prescriptions for children aged under 13, starting 1 July 2015. It was amazing to me that there were, I think, three Budget speeches from that side of the House during which the leader of each party said “What are you going to tell the parents of children who can’t afford to send their children to the doctor?”. Well, that has been answered.

There is an additional $156 million to help early childhood education centres to remain accessible and affordable, and to meet the demand pressures and increased participation towards the Government’s 98 percent target—98 percent. Surely Labour would support that. There is $33 million to help vulnerable children, including eight new children’s teams around the country to identify and work with at-risk children and their families, to screen people who work with children, and to support children in care.

Which of those elements would the Labour Party like to see cut out to support Sue Moroney’s “My Bill”? I think all those elements are important. I think all those elements are a feature of true Labour Party thinking. I think they should be supported by Labour, and I will congratulate it when it does support them. Thank you.

Mr DEPUTY SPEAKER: Dr David Clark—this is a split call.

Dr DAVID CLARK (Labour—Dunedin North): I rise to my feet to speak in a split call, as you rightly point out, to support the Budget Measures (Financial Support for Newborn Children) Bill, which is an important but tepid step in the right direction from an out-of-touch Government. I think that it is important to recognise that it is following Labour’s lead and it is trying to take some small steps in the right direction. It should at least be congratulated on that effort. The bill sits within a Budget that is a lost opportunity. It is a lost opportunity to present a coherent vision for the future of New Zealand and for New Zealanders. It is scattered, backward-looking, and incoherent overall. It lacks aspiration.

The paid parental leave aspect of the Budget that we are debating right now is a 2-week extension in a year’s time, followed by another 2-week extension a year after that. We know that these small steps forward take place on April Fool’s Day, and I would like to personally shake the hand of the official who put forward 1 April as the day for the paid parental leave extension. They had their own private laugh. They know that this step forward is a tiny one. They know that this Government is making a fool of itself by not adopting the bill forwarded by Sue Moroney, which would actually make sure that New Zealanders got a decent chunk of paid parental leave so that good parental bonding could happen and so that we could begin to look after our young people, our early childhood sector. We know that they receive less funding and that they are less well supported than most in the OECD, and the Labour measures in our Best Start package, which this dimly imitates, really take a step in that direction. These are tepid steps—these are tepid steps.

I guess the bill lacks aspiration in line with a Government that has more unemployed people than it had when it took office at the height of the global financial crisis. This is a Government that has lowered real median wages. It is a Government that has overseen the highest gap between rich and poor that we have ever had since records were first kept in New Zealand. This is a Government that has produced a wafer-thin surplus. We know it has got there through artificially high ACC levies. We know it has got there through dressing up transport spending as a loan in order to fudge that surplus. Well, the public can see through that. They can see right through it.

Mike Sabin: He’s obviously forgotten about the multiple billions’ worth of deficit—

Dr DAVID CLARK: I can assure Mr Sabin and others that there will be more fudges that come to light in coming days. I have spoken about some of them with tax accountants this evening, and I could hear on the other end of the line that these fudges in the accounts were enough to make tax accountants blush. The ones that this Government is putting through in order to maintain that façade of surplus make tax accountants, even the most hardened tax accountants, blush. This is one of those wafer-thin surpluses. No one wants one of those Mr Creosote moments from Monty Python. No one wants that wafer-thin surplus to be blown out of the water, but it will be in coming days as we see more and more of these fudges coming to light.

This wafer-thin surplus and these tepid steps forward contrast with the future Labour Government, which has a vision for a more inclusive, prosperous New Zealand, one that will produce better jobs—

Mike Sabin: Tell us what it looks like.

Dr DAVID CLARK: —higher wages, and affordable housing, Mr Sabin; good question. That is what it looks like. This is the future Labour Government, which produced the Best Start policies that are being dimly mimicked here in this legislation. I use the word “dimly” advisedly. National’s moves here exclude from support 14,000 of the most vulnerable children, whom the Best Start package put forward by Labour would look after. We want a New Zealand where no one is left out and where no one is left behind. Labour has the policies to do it. We will bring out a universal KiwiSaver, pro-growth tax reform, and monetary policy to lower interest rates and to send savings to New Zealanders and not to overseas banks. We have a Best Start package that includes a child allowance, more paid parental leave, more early childhood education, and better antenatal care. This contrasts with the dim copy that we have from the Government opposite, with its shallow rhetoric and with the words of Judith Collins describing earlier the extension of paid parental leave as another example of this Government using taxpayers’ money to try to win some votes. That is the cynicism from opposite. On this side of the House we want to build together with New Zealanders a better New Zealand.

DENISE ROCHE (Green): I rise to take the second short call for the Greens on the Budget Measures (Financial Support for Newborn Children) Bill. We support this bill. We believe that it does not go far enough; I will get into a bit more detail on that in a minute. We do not believe it goes far enough. In terms of the tax credit changes, we do support increasing the length of time that the tax credit is extended to—from 8 weeks to 10 weeks after the birth of a child—and increasing the amount from $150 to $220 per week. We do acknowledge and we do note that the application is much tighter than it had been.

Our policy has been to extend that tax credit to all so that it targets not just those in work but those who have the lowest incomes. Those are the people who are existing on the meagre benefits provided by the State. All families face financial burden when a new baby enters the family. Those with less money struggle more. They have less resilience to the financial shock that the entry of a newborn into a family makes, and the costs that they bring with them. This Government, with this Budget, is picking the winners and the losers, and this Budget is firmly directed at the winners—the 1 percent. By restricting the tax credit to just working families, the Government introduces the Dickensian model of the worthy and the unworthy poor. And it fits with the other measures this Government has introduced that demonise those who are not in paid work and that reinforce the punitive approach this Government takes to those who need State support. If we are to address the income levels and the financial strain that families face when they have a newborn baby, then all people need to be able to live on the income they receive.

We need to get past these stopgap measures. In the regulatory impact statement it says that “poverty is one of the greatest risks to children’s health and development”. It says “reducing parental stress especially in the early years is good for children in the short- and longer-term”. These measures are short-term measures.

Why are they being put in place now? Well, I have to say I am a bit cynical about that. These measures have been pushed through under urgency, yet, in terms of the paid parental leave, they will not be introduced until 2015, when the Government will up paid parental leave to 16 weeks. Then in 2016 it will up paid parental leave to 18 weeks. We suspect that this urgency is deliberate to get through this wee scrap of support for families just before the election. Of course, as we saw with the filibustering that occurred from the National members of Parliament during the first reading of Sue Moroney’s Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill, the National Government is keen to avoid displeasing the 52 percent of voters who are women by directly opposing the measure to extend parental leave. And judging by the flood of submissions that Sue Moroney’s bill received, that bill was incredibly popular.

There was, of course, the small matter that the Hon Peter Dunne had signalled that he would be supporting the member’s bill. So some concessions have to be made now in order to avoid him forcing the Government to threaten a veto once the bill was passed, because, as we have got a surplus with this Budget, there would be no reason for that veto after all. I have more to say and I will be rising during the Committee of the whole House to do that. Thank you.

JAMI-LEE ROSS (National—Botany): New Zealanders are very smart. New Zealanders are very understanding. New Zealanders know exactly what is happening here. What is happening here is that the Government is exercising restraint and fiscal responsibility. It is doing the right thing for New Zealand families, but doing it in a measured fashion. When we listen to the speeches from members in other parties in this House, they just want to spend up large. They do not care how much of an impact that would have on the New Zealand Budget. They just want to spend up large, as much as possible, to win an election. This party is all about doing things in a measured fashion, and that has been the approach of John Key and Bill English in the time that this Government has been presenting Budgets for New Zealanders.

I have been rather appalled by some of the speeches we have been listening to in the House. We have had the double-dipper from Rodney, who has been lecturing other mothers in this House on how to raise children. We have had the Green Party, which is suggesting that 13 months’ paid parental leave is appropriate. I do not know why it does not just suggest 5 years, because that is probably where it will get to eventually. And we have had Sue Moroney, who has made this debate all about Sue. It has been all about Sue, and everything that Sue has done for New Zealand families.

Actually, this Government is delivering for New Zealand families. This Government is delivering extra paid parental leave for New Zealanders in a measured fashion. This Government is extending the parental tax credit. This Government is investing half a billion dollars over the next 4 years into the families of this country. We are proud of that. New Zealanders know that that is a good thing for New Zealand families, and the Budget Measures (Financial Support for Newborn Children) will pass very soon.

Bill read a second time.

In Committee

Part 1 Amendments to Parental Leave and Employment Protection Act 1987

JACINDA ARDERN (Labour): It is my pleasure to speak in the Committee stage of this Budget Measures (Financial Support for Newborn Children) Bill, which, as my colleagues have pointed out in their previous addresses, yes, Labour is supporting. How could we not support the bill? It slowly inches ever so slightly towards the ultimate goal that we have always put forward before this House, which is that paid parental leave should be extended to 26 weeks. How could we not support—

Hon Trevor Mallard: That’s not the ultimate goal; that’s a decent interim position.

JACINDA ARDERN: My colleague is absolutely right. Twenty-six weeks is what we were putting forward before the House—

Hon Trevor Mallard: It’s fiscally responsible.

JACINDA ARDERN: —as a fiscally responsible point that we could reach within budget whilst returning to surplus. We had mapped out how that could be done. Our ultimate goal, based on research, evidence, and feedback from parents, was 1 year. But we said that at this point of the game we cannot see how we are able to manage that yet. It remains a goal for us, but 26 weeks is where we believe we can get to. So having the Government stand before us today and say that it wants to go to 18 weeks’ parental leave—of course we were going to support that. But we certainly have some pointers for the Government on how it could have improved the bill.

We are speaking today, during the first part of the Committee stage, on Part 1 of the bill. Before I go into some of the detail, which essentially is around stepping through the time line for the extension, I want to clarify some questions around the overall cost of the elements of the package—the phasing in from 14 to 18 weeks.

The Government has set out the implication in the first and second reading that we simply cannot afford to do any more than that. That is absolutely false. As even the evidence and advice provided by the Ministry of Business, Innovation and Employment has set out, and as Peter Gluckman, the Prime Minister’s Chief Science Advisor, has pointed out, we cannot afford not to move to 26 weeks. Not only is it about the outcomes for mother and baby around breastfeeding; it is around issues like resilience for the child and attachment issues. We know that if a child experiences attachment disorder, the consequences of that down the track can cost a significant amount to the taxpayer.

Infometrics in fact carried out some research into the issue of poor outcomes for children, particularly looking at the effects of child poverty. It found that it costs the New Zealand taxpayer up to $6 billion per annum as a consequence of poor investment in a child’s early years. I do not use the words “poor investment” lightly. We under-invest in New Zealand in our children’s earliest years. That is based on OECD comparisons of the amount that OECD nations—developed nations—invest in children aged 0 to 5 years. New Zealand, on average, spends roughly half that, and I do not mean parents; this is as a State. We spend roughly half what other OECD nations spend—roughly $20,000 versus $40,000—half. That picks up a bit once you get beyond the early years and once you get into the period where a child enters State education.

One of the biggest defining features as to why New Zealand spends less than other countries is our poor paid parental leave. Most nations have recognised the benefit of investing in paid parental leave and have rightly invested in those early months of a child’s life.

There is perhaps no better evidence than what you see coming out of groups like the Brainwave Trust. The Brainwave Trust is not a political organisation. It does not purport to represent any particular ideology. It is simply based on science. It emerged in the 1990s, around the period when we started being able to base more of our policies around the fact that in health we could see now what was going on, and learn what was happening with the brain, not just from doing scans and work once has someone had passed on. We were able to do analysis whilst someone was alive. CAT scans, etc., and the ability to analyse neurological function, provide a wealth of evidence about what the most important stages of development are.

The most telling thing of all is that we learnt that the first 3 years of a child’s life is the most critical period of development, and in particular that first year. Not only from a physiological development perspective do you see the brain grow the most in that period but you start moving beyond just the functionary stuff around the cortex to actually what goes on in your frontal lobe development—judgment, trust; all of those important things that we need for a child to be able to respond to the world around it.

If you are a child who is deprived of decent attachment and the ability to build trust with a parent or a caregiver, that then flows on to your ability to even concentrate when you are in school, the ability to trust that your next meal is going to come your way, and whether or not you revert to fight or flight. The Brainwave Trust tells us that frontal lobe development is optimal—it is optimal.

I hear members on the other side of the Chamber laughing at what the evidence tells us. I find that particularly interesting from a member who belongs to a trust that is involved in a child’s early years—the Home Interaction Programme for Parents and Youngsters, in particular. I am sure Dame Lesley Max would be very interested to hear that Sam Lotu-Iiga is laughing about the evidence around a child’s early years of development. All of that evidence points to us making sure that no child is deprived in their earliest years, and yet we know from the Child Poverty Monitor that the time when a child spends the most continuous period in poverty is when they are under 4 years old. That is why Best Start extends to the most deprived families for 3 years, because we know that that is where we can make the biggest difference.

Part 1 sets out the phasing for paid parental leave moving from 14 weeks to 18 weeks. I want to compare that with the phasing that we would have had under Labour’s Best Start policy—

Sue Moroney: Will have, when we’re elected.

JACINDA ARDERN: —absolutely; as my colleague points out, which we will have, come September—instead of having this 14 to 18 weeks phased in from 2016. If the Government had not vetoed Sue Moroney’s bill, as it clearly intends to do, by what it is doing today, we would move from 14 to 18 weeks from July 2014.

From July 2014 we propose that we would have exactly what the Government is proposing to do in a couple of years from now. We would then move to 22 weeks from July 2015, and to 26 weeks from July 2017. The Government says we cannot afford that. The Government, I must point out, has spent $40 million on private schools. Private schools have got $40 million out of this Government, and yet it is telling us that we cannot afford to invest a little bit more in children and babies, and invest to save. I heard Tracey Martin saying this as well. This is about investing to save, further down the track.

I have already talked about the Infometrics report, which is predominantly based on the amount we save from, for instance, preventable hospitalisations, remedial education, etc. But what about the simple fact that we spend $19,000 on imprisoning someone in any given year? An amount of $19,000 per year is what we spend on imprisoning someone. Some may say to me: “Well, what’s the link between that and a child’s start in life?”. Well, there is the fact that 90 percent of our prison population has literacy issues, and an estimated 60 percent has contact with Child, Youth and Family. Of all of the things that we are spending a ridiculous amount of wasted taxpayers’ dollars on, you could spend a tiny, tiny proportion on a child’s early years, on supporting families, and on early childhood education, where if you invest $1 you save $11. All of these areas are about investing to save.

The Government’s argument that we cannot afford to do it is absolutely untrue. We cannot afford not to do it. These are the areas where we can really make a critical difference—not only to a child’s potential and a family’s well-being but so that we ultimately save every single taxpayer money down the track.

I want to speak in my next address—I have every intention of speaking at least in total for an hour on this bill. I look forward to Simon Bridges making at least that kind of contribution. In fact I challenge him to match me, call for call.

Hon SIMON BRIDGES (Minister of Labour): We will see whether I take up Jacinda Ardern on that wee bet. What a great day for the Government and, more important, what a great day for New Zealanders. After projections of a decade of deficit in the public accounts, we as a country are back in surplus. We are now managing the growth of this economy. What that means is that with the good management of the economy that Bill English and John Key have given us through disciplined decisions, day after day, year after year, we can now invest more in families. This is not luck. It has not happened by having some magic tree down at the bottom of the garden that we pluck money off, according to the Greens. This has happened through good management of the economy, which is allowing us to invest more money in Kiwi families. We are prioritising those families, first and foremost. Those families are getting the first dividends of good management of the economy today.

Paid parental leave is, of course, part of a much bigger package—$500 million for families is at the heart of this Budget, and paid parental leave is, if you like, the heart of that heart. It is a $172 million package—this Budget Measures (Financial Support for Newborn Children) Bill, which I think is $141 million, and then the rest is in a wider reform package. What a great day for Kiwi families.

But let me tell you this. Unlike what we have seen in other proposals, this is a considered and responsible package.

Hon Anne Tolley: And a good one.

Hon SIMON BRIDGES: And a good package. It is more and more—more entitlement than the status quo, going to 18 weeks in two affordable steps, and more eligibility. You know, actually, I have to say that that is perhaps the key of the wider package here. Fundamentally, it is more choice for Kiwi families to decide what is best for them. What a privilege it is for this Government to be delivering this for New Zealanders—extending paid parental leave in two affordable steps, widening eligibility to caregivers other than parents and, of course, to people in less regular work, and then increasing flexibility. Twenty-six thousand people get paid parental leave now; we are increasing that by 1,400 families with what we are doing.

That is 1,400 families who under Sue Moroney’s proposals would get nothing. They would get nothing from Sue Moroney’s package. Unlike the Sue Moroney package and unlike what we have heard from Labour and the Greens, this is a considered, responsible package—

Dr Rajen Prasad: And minimalist.

Hon SIMON BRIDGES: —which reaches more people who deserve the help, Mr Prasad. Sue Moroney—she did the easy bit, but she had not done the hard policy work that was required to reach more people, and she had not done the thinking on the things that matter. Just extending the length of paid parental leave is not the right approach for this country. That is not what this is all about.

Dr Rajen Prasad: Yes, it is. Why not?

Hon SIMON BRIDGES: Mr Prasad says that it is. Well, actually, go back and listen to or read what was said by people who actually normally support Mr Prasad. Academics Susan St John and Jonathan Boston made very clear pre-Budget that more important than the length of the entitlement was targeting it to the people in need. That is what Labour and the Green Party have forgotten with their glib thinking and with their lack of hard work in this area and, actually, across the board in policy. This Government—and I thank the officials for their help, as well—has done that hard policy work. We are doing the work to ensure that the law is going to reflect the modern and increasingly diverse families and workplaces of New Zealand so that more New Zealanders who deserve paid parental leave and the tax credits get what they deserve.

Let me give you a couple of examples here to flesh this out. Caregivers other than parents—at the moment we know that it is mum, her partner, and an adoptive parent who are the only people who get paid parental leave. We are modernising the law to reflect the reality of families today so that permanent guardians are there and, of course, those like Home for Life guardians who perhaps are in a permanent foster relationship. They are currently not able to get paid parental leave. They wanted to be at home nurturing their child, but they were not included, and nor were working grandparents, who will now be able to get the assistance they need.

Dr Rajen Prasad: How many babies in Home for Life?

Hon SIMON BRIDGES: Mr Prasad asks how many. Well, 600—600 more people will be receiving this entitlement by widening the caregivers category to a primary carer - type concept like we see in tax credits that are already in the law. That is something we will be consulting on so that every child who needs it and whose parents are meeting the other eligibility criteria, like working, are getting it under this bill. That is an area where Sue Moroney, Jacinda Ardern, and others on the left there had not done the policy work. We want to see people who are in less regular work also getting this entitlement.

This is another area where Labour has not done the work, because at the moment you have got to have consistent, regularised, and, effectively, if not full time work, then certainly permanent work with one employer. Effectively, middle-class work is where you get paid parental leave, but we are intending to make this much more fair so that if you have been in full-time work for a good chunk of the year and part-time work for most of the year—and we will consult on this—you will be eligible. That will see seasonal and casual workers, perhaps, being eligible. We have seen examples of this. Someone who is a fish processor—a woman fish processor—for half the year who then moves on to fruit picking for the other half of the year is not currently eligible. She may have been doing that for 20 years, but she is not eligible under the current scheme. But we are changing that and making a difference in that regard.

Those who have recently changed jobs—a real example is when the Canterbury earthquakes meant that a woman lost her supermarket job. That same week she went to work for the very same supermarket in a different suburb in Christchurch, but because it was a different franchisor, she was not eligible for paid parental leave, despite being several months’ pregnant. We will consult on that and change it. Again, we will be widening the eligibility for workers with more than one employer because we have done the policy work and we are making sure that this is a fairer package.

Finally, we are increasing flexibility in the wider reforms in this area, in addition to this bill, which increases the length of the leave. The work that Labour and the Greens have not done—

Sue Moroney: I raise a point of order, Mr Chairperson. That is very interesting but it is not in Part 1 of the bill, nor is it, in fact, in the bill at all—at all—what the Minister is talking about.

The CHAIRPERSON (Lindsay Tisch): I am—

Dr David Clark: It’s wide-ranging.

The CHAIRPERSON (Lindsay Tisch): No, it is not wide-ranging. I am listening very carefully to what is being said. It is in context and is building a picture for the overall bill that is before us. So I am allowing him to continue.

Hon SIMON BRIDGES: Currently, the law on paid parental leave is an inflexible, all-or-nothing position. You start your paid parental leave. You have the 14 weeks, increasing to 18 weeks. You then have the option of going unpaid for up to 12 months. If a woman goes back to work for half a day—there are examples of women going back in for IT training—they lose all eligibility for the paid parental scheme. That is wrong and we want to change that and ensure that there is increased flexibility for the benefit of women in this scheme. We want to see days at work for training and those sorts of purposes, and also after that 18 weeks the ability to perhaps look at part-time options—always at the woman’s discretion.

It is great to be speaking on this important set of reforms that this Government is leading for the benefit of New Zealanders.

TRACEY MARTIN (NZ First): Kia ora, Mr Chair. I welcome the opportunity to make comment on the Minister in the chair’s statements. I hope that it will please the Chair that I make comments on the Minister’s statements, unlike a situation that happened with a colleague of mine earlier in the week.

I think the Minister has made some very, very good points. It is a good thing to widen the criteria by which parents can gain parental leave, because it is parents whom we are talking about. I think, Minister, that as long as we continue to genderise it, we have a danger of making this only about women staying at home. Although, certainly—

Hon Trevor Mallard: I raise a point of order, Mr Chairperson. I am very reluctant to do it to one of the people on my side of the Chamber, but I have now looked very carefully at the provisions of Part 1 in this bill, and the matters to which the member is referring are not part of Part 1. Part 1 is a relatively narrow debate. It might be OK to respond to a Minister who made some comments, but normally it is a narrow debate around what it is in the part, not about what is in a subsequent bill. I think what everyone has been talking about in the last two speeches is a subsequent bill.

The CHAIRPERSON (Lindsay Tisch): I hear what you are saying. If we look at Part 1 it is about the duration of paid parental leave. There has been some flexibility. I have allowed the Minister some licence there, and I would just ask the member and future speakers to be mindful about what is actually in Part 1.

TRACEY MARTIN: Speaking to the point of order—

The CHAIRPERSON (Lindsay Tisch): No, no. If you want to speak, it is your call.

TRACEY MARTIN: I am sorry, I am now going to have to seek your guidance. I raise a point of order, Mr Chairperson. I am seeking your guidance. I am not trying to argue with you; I am actually trying to understand what has just happened here. For the second time this week a Minister has stood up and brought a series of things into a debate. I am responding to those things, and I am not quite sure now where I am at with regard to how I respond.

The CHAIRPERSON (Lindsay Tisch): That is fair comment. You are responding on a rebuttal basis to comments that were made. On a previous point of order that came from Sue Moroney, I said that the Minister was putting in context about where the bill was and how it related to this, so there was some licence there. I accept that the member can make rebuttal points about what the Minister has said, but then I would ask the member to come back and focus on the length of time—the duration—of paid parental leave, which Part 1 is about.

TRACEY MARTIN: Thank you, Mr Chairperson. Again, just to clarify with regard to the Minister’s comments, there are some very good things with regard to what the Minister made comment about. We are pleased to see the widening of the criteria because we recognise, just as the Minister mentioned, that the workforce has changed. It is probably the first time, actually, that we have had acknowledgment from a Minister in this Government that there is a casualisation and an underemployment of New Zealanders in this country. The need for them to move from one period of temporary work to another period of work is quite marked, and so this needed to happen. I will, hopefully, address that at some stage in the future.

With regard to the extension of the period of time in Part 1 of the bill, New Zealand First can only reiterate its great disappointment at the fact that the Government has chosen to do the least that it could do—the very least that it could do—for the newborn babies. I did not come up with the word “newborn”. I am not here trying to get anybody’s sympathy or create a weeping workforce out there. The title of the bill is the Budget Measures (Financial Support for Newborn Children) Bill. So it is very disappointing from New Zealand First’s perspective. We say, again and again and again, that this is the very least that the Government felt it could do.

Other members of the Government have mentioned that this is a time frame, and they have joked about different time frames that have been put forward by the Green Party, and so on and so forth. This is almost the least that any Government is doing—any Government that prides itself on governing a country that strives to be its best. If we look at some of the Nordic nations, which I was referring to previously, a year has been acknowledged as the time line in which true bonding takes place. I think Sir Peter Gluckman himself has actually pointed out on many occasions that the benefit to New Zealand as a nation from truly supporting young babies and young children in their bonding with a parent—and it does not matter which parent—is vitally important for the nation and its long-term savings in health spending and other spending.

So with regard to Part 1, although we appreciate the Minister’s comments—and they certainly have addressed other anomalies that need to be addressed, particularly because of the casualisation of the workforce under a National Government—we are disappointed that the Government has gone to the minimum it could do, to attempt to keep a voting public behind it at the next election.

The CHAIRPERSON (Lindsay Tisch): I am going to call Grant Robertson.

GRANT ROBERTSON (Labour—Wellington Central): Thank you, Mr Chair—very enthusiastic I am to take a call, too. My colleague Carol Beaumont and others will no doubt be taking a number of calls on Part 1 of the Budget Measures (Financial Support for Newborn Children) Bill.

Firstly, I want to address a couple of questions to the Minister of Labour and, in particular, I want to just help him, in many ways, understand what is in Part 1 of the bill. People listening around New Zealand to the debate tonight could have gained the impression, if they were, as he described, the woman who worked part-time, processing in a fish factory and picking fruit, that the legislation in front of us tonight, here in Part 1, was going to bring them into paid parental leave—it was going to bring them into that. It does not. I do not understand why the Minister who apparently is responsible for this bill actually does not know what is in Part 1. Perhaps he has been kept out of the process—that is possible up to now—but I think that the Minister should probably get up, take a call, and say to all of those people whom he has just said are going to be brought into the paid parental leave regime by this legislation that they are not. They are actually not. So the Minister could get up and—

David Shearer: Why did he say that, Grant?

GRANT ROBERTSON: Well, that is a good point, Mr Shearer. Why did Simon Bridges tell New Zealanders that this bill does something that it does not? [Interruption] Yes, and do the costings that we have heard about today about paid parental leave actually include those? So there is a second question for Simon Bridges.

I have got another question for him—and I know that three questions will be about as many as the Minister can handle at once, so I will ask only three on this occasion—and it is this. We are here under urgency on a Thursday evening passing this legislation. The Labour Party agrees that paid parental leave is something that is important—

David Bennett: Get on with it.

GRANT ROBERTSON: —and is something that we want to see increase. Members on the other side of the Chamber say: “Get on with it.” All right, then. Who was that? It was Mr Mitchell. All right, then, Mr Mitchell, get on with it. How about bringing this in some time soon? How about bringing it in this year? How about bringing in 18 weeks next year? No, 2016—

Mark Mitchell: I raise a point of order, Mr Chairperson. I am not sure why Mr Robertson has chosen to bring me into the debate. I was busy doing my work. He has chosen to do that.

Hon Trevor Mallard: Speaking to the point of order—

The CHAIRPERSON (Lindsay Tisch): No, no—[Interruption] Order! When I am standing, there will be silence. [Interruption] I am standing. That was not a point of order, all right?

GRANT ROBERTSON: I apologise to Mr Mitchell, particularly because it was Mr Bennett, so I really do owe him an apology for that. If members on that side of the Chamber are telling us to get on with it, how about National gets on with paid parental leave? How about it gets on with bringing in 16 weeks now and 18 weeks next year? How about it actually commits to 26 weeks? One thing we can say is that the Labour Party has been consistent about this. Sue Moroney’s bill came in—what year did it come in; 2012, was it?

Sue Moroney: Oh no, I think it was drawn in about 2013, actually.

GRANT ROBERTSON: Since early 2013 that bill giving 26 weeks’ paid parental leave has been before the House. The Labour Party has said that. We have a policy of going to 1 year. From the beginning of last year we have said 26 weeks, and National finally wakes up. It finally wakes up and, under pressure from groups like 26 for Babies, from Sue Moroney, and from all the submitters on her bill, says yes, it is going to do paid parental leave—and then it says maybe not until 2016. So we are here tonight under urgency for something that is not going to happen until 2016.

I would like the Minister to get on his feet, apologise to all of those people he has misled about the fact that this legislation actually does nothing to bring them into the paid parental leave regime, and then explain to New Zealanders why we are here under urgency for a bill whose Part 1 does not actually come into force properly until 2016. The thing here for the Government is that Simon Bridges and National are doing this under urgency tonight only to try to spike Sue Moroney’s member’s bill. That is it. It is pure politics. It is politics as usual from National—putting us under urgency to try to claim that there is something urgent about its commitment to paid parental leave. Well, National’s commitment to paid parental leave is timid. National is late in coming to the party. That is National on paid parental leave. I believe that Part 1 of this bill should be supported because it is as good as it is going to get under National.

Sue Moroney has an amendment on the Table to do the right thing today, and that is to go to 26 weeks now, in this bill, by 2016—26 weeks. That is the right thing to do. We know it is affordable. Simon Bridges, when he got on his feet to take his call earlier on, said that National has done the work to do this. Well, actually, the reality is that it is Labour and the interest groups like 26 for Babies that have done the work, that have been able to come up with the costings that are real—not the imagined costings that Bill English had in 2013, but the real costings, which are affordable.

We have heard from other speakers on the Opposition side during the first and second readings of this bill about why 26 weeks matters. It is because that is the minimum bonding time in terms of breastfeeding and the minimum time for creating the bond between mother and baby. It puts New Zealand just up into the bottom third of the OECD. Earlier on, the National backbenchers were saying what an outrageous thing it would be to go to 26 weeks, and how utterly unaffordable, odd, and unusual it would be. Well, right now we are second to last in the OECD on paid parental leave. We are second to last. The only country behind us is the United States, which has none. It has no paid parental leave. We are second to last. So this timid response from National crawls New Zealand up the OECD rankings in terms of paid parental leave, but National members could be here tonight with a bill that would give 26 weeks by 2016.

I want to challenge, towards the end of this call, other parties in the Chamber to support the amendment in Sue Moroney’s name, because parties like United Future and the Māori Party have said they will support 26 weeks. I understand they have agreements with the Government, but here on the Table is something that is not actually in the Budget legislation right now. We are on a separate piece of legislation. It is not the Budget debate. Here is the opportunity for Peter Dunne and the Māori Party to support Sue Moroney’s amendment on Part 1 of this bill to take it to 26 weeks, and to do the right thing.

What we have seen through this year is the politics as usual of the National Party. Every second Wednesday night, National members are filibustering, spinning out the debate, making sure that we do not get to paid parental leave. They have made sure that Sue Moroney’s bill does not come up. Today National thinks paid parental leave is urgent. Two Wednesdays ago it wanted to stop a bill on it. That is not good enough. New Zealand families, the parents and the children who will benefit from this, need some decisive action. They need a Government that is actually prepared to stand on principle. That is what the Labour Party has done on paid parental leave, going back to 2002. National opposed it in 2002. National has filibustered throughout this year to stop it, and suddenly it is urgent to timidly step forward to 16 weeks and then to 18 weeks. Do the right thing, I say to National members. Vote for the amendment. Peter Dunne and the Māori Party should vote to take this to 26 weeks.

Today is a good day for parents around New Zealand because they will get an extension to paid parental leave, and we should celebrate that extension, timid as it is. But today could also be the day that members across the Chamber say that New Zealand parents deserve and need 26 weeks’ paid parental leave, and those members should support Sue Moroney’s amendment.

DAVID BENNETT (National—Hamilton East): I move, That the question be now put.

JAN LOGIE (Green): I would like to follow on from the previous speech and also offer my support for Sue Moroney’s amendment to extend paid parental leave to 26 weeks. Obviously, as I have been saying, the Greens’ policy is 13 months, but 26 weeks would be an honourable step towards a society where we are looking after our new families and our babies, and giving the best start. Sue Moroney’s bill so far has been through the Government Administration Committee, which received almost 4,000 submissions and heard from so many people. The select committee heard such personal and compelling stories that convinced the majority in this House that 26 weeks was a fundamental. We as a society were saying that if we are choosing between costs for things, actually, New Zealanders choose 26 weeks. We have heard that message so strongly. I absolutely support extending the entitlements. Sadly, this bill does nothing to do that; it is just about the length of time. Tonight, we have the opportunity to deliver those health outcomes, those economic outcomes, and those well-being outcomes to our mothers and babies and fathers by virtue of 26 weeks.

I would like to remind this Committee again of some of the stories that came to us at the select committee that I mentioned in the second reading only a few minutes ago. Another story I would like to offer is that we heard from a woman who was in a well-paid job and was able to take 10 months’ leave because that was in her contract. She talked about what a wonderful time in her life that was, and how privileged she felt to have had that time. She had not really wanted to be a mother, and she had felt quite ambivalent about becoming a mother, but that time had enabled her to learn to love and connect with her child in a way that she might not have been able to do otherwise.

Actually, what we are talking about is giving some families, some mothers, and some babies that ability and that gift of time to connect. Once they have connected, that is something that you cannot undo, and the good that flows from that is something that you cannot undo. That is something that this society has said it values and it wants. It would prefer us to spend our money on caring for our children and looking after our families. People would rather have that than a larger surplus. They would rather have that than motorways. They would rather have that than most other things because it really, really makes a difference.

Another story that we heard was from a woman who had extended leave, again through her contract, and she talked about some of the difficulties that she had had with breastfeeding and post-natal depression. She said that if she had not had that time, that 6 months of extended leave, she did not know how she would have coped. It is a really difficult time in the lives of so many women and babies, and it is a time when we should be investing in and really providing those fundamental supports so that we show that we care and get the best outcomes as a society.

I am well behind the amendment from Sue Moroney that would enable that to happen, and I am quite excited at the possibility that this Parliament may be able to deliver that for New Zealand tonight. The Green Party is right in there with that vision for a better society.

CAROL BEAUMONT (Labour): Part 1 of the Budget Measures (Financial Support for Newborn Children) Bill obviously is exciting a lot of attention—and it should, because this is an important matter. In Part 1, we are talking about a staged process of making a very small but incremental improvement to paid parental leave. For that, I have to say that it is a very good thing. It is good that we are making that improvement. Over a 2-year period, 2 weeks of paid parental leave will be added from 1 April 2015, and another 2 weeks will be added from 1 April 2016. Finally, it would seem that National members have got their heads around paid parental leave, so that has to be a good thing, and maybe that provides a basis to do a whole lot more.

Maybe National should think, now that it has got its head around it, about whether perhaps it could do the right thing tonight and support Sue Moroney’s amendment on this part, which actually does what is really needed—that is, a good solid movement to 26 weeks’ paid parental leave. This is something that has been well considered in the Government Administration Committee deliberations on the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill. I found it somewhat disturbing that the Minister of Labour could say that there had been no work done on this and no policy considerations and all of those things. Actually, the select committee heard many submissions. The select committee looked at matters like the cost. One of the reasons the Government is saying that it is doing only 2 weeks in one year and 2 weeks in the next is that that is the financially responsible thing to do. Well, actually, a lot of work was done on the costings—a lot of pretty robust measures—and the costs were not that significant when you offset them against some of the savings.

If you add on top of that an understanding about the investment that is being made here—the investment in the people of this country and the future of this country—then this has to be a priority, surely to goodness. Paid parental leave has to be a priority. It is good for the babies. It is good that they get that best start in life. Labour has very strong policy on giving children the best start, including 26 weeks’ paid parental leave, because that bonding, as others have said, is so important in the very early development stages of that child. It is time to establish breastfeeding and to try, for people who are able to, to have a child breastfeed exclusively for the first 6 months, which has long been the World Health Organization standard. That is for good reason—it gives children immunity. It is proven to be useful in things like ensuring that there is less chance of things like asthma, and in a whole bunch of other positive health outcomes.

I have to say, though, that I do think the motivation of the Government in making the moves that are signalled in Part 1—these very small improvements to paid parental leave—is quite cynical. It is cynical because it has tested the waters, it has heard what the public is saying, and it can see there is a very strong desire for change. Families need this. As well as babies needing this, families need this and women need this so that they can make ends meet and manage their household budgets, so that women can manage their paid work and their time as a primary carer for a young baby, and so that they can have a choice about spending time with their baby. The Government has heard that and cynically has put up something, but it is very, very small.

I think it is interesting when one looks at the Minister’s media release on this. It goes to the conversation we had right at the start of this part where there was some discussion about what the Minister was covering off in the debate. I just want for the record to be very clear that Part 1 is essentially saying an extra 2 weeks’ leave from April next year and 2 weeks thereafter. It is not talking about extending eligibility to anybody who is not currently eligible. Maybe the Minister was just getting a bit excited and putting the context there and all of that; perhaps that is what it was about.

But, actually, I think it was more cynical than that, because when one looks at the media release around this, it is the same—what would you call it—fudging, really. It is fudging, because it talks about extending parental leave payments to more workers—in particular, to people who have recently changed jobs, seasonal and casual workers, and workers with more than one employer. I have to put on record that I absolutely think that that is the way we need to go, because there are people who are currently excluded.

Labour brought paid parental leave in back in 2002 and then extended it in 2004. Labour then extended it again to the self-employed in 2007—in fact, I think the Hon Ruth Dyson might have been the Minister at the time; indeed, the Hon Ruth Dyson has long had a commitment to this issue, as has the Labour Party. But, of course, there are further extensions that are required. The Minister’s media release covers some of those people—but very cynically. If a person was to pick up this media release, they would think this was all happening right now. Well, let us get it really clear for the record. What is happening here with this bill, the Budget Measures (Financial Support for Newborn Children) Bill, is 2 more weeks’ paid parental leave from April next year, and 2 more weeks the following April—no extension to new people. So it would be good if the Minister was able to get up and just clarify that himself to make sure that he has not misled anybody or caused any confusion on this important matter.

Like my colleagues, we do see that it is important to support any improvement in this area. To vote against something like this would be not only churlish; it would be tantamount to throwing the baby out with the bathwater, literally. This is an improvement, but it could be so much more. We could actually be really meeting the needs of New Zealand families. We could be investing in our future.

Another person whom I think it would be very good if she got up and spoke, given that she is in the Chamber, is the Hon Anne Tolley. I have got a lovely quote from her. She may not have heard it earlier, but on paid parental leave Anne Tolley said: “This legislation … shows how the Labour-Alliance Government is stuck in the radical feminist era of the 1960s and 1970s … and is completely out of touch with the women of the 21st century and their diverse involvement in today’s labour force.” She said: “This is bad legislation. It is a travesty.” Well, Minister, I would love it if you could get up now and explain to this Committee why in 2002 paid parental leave was a travesty, but now this small move by National is somehow the best thing that the Government has done for some time. Of course, the Hon Judith Collins also had a similar sort of attitude. Hers is probably a little bit more timely in its kind of implication, because the Hon Judith Collins in 2004, when Labour extended paid parental leave at that stage, said: “It is another example of this Government using taxpayers’ money to try to win some votes.”

I wonder whether people listening to this debate might ask themselves whether this is a cynical move—a very small improvement because there is a really strong demand that has developed, particularly around the bill that Sue Moroney has been championing and that 26 for Babies has campaigned around, and because there is such a groundswell of support. We are so close to an election that it has to be questioned whether this is just a cynical election manoeuvre, particularly when you get a Minister who indicates that this legislation is going to do a great deal more than the bill before this Committee tonight is actually going to do.

But there is an opportunity. There is an opportunity for all of us here to make this right. Let us actually do what the people of New Zealand would love to see us do. Let us support 26 weeks’ paid parental leave. It is affordable; the work was done. The proposal in Sue Moroney’s bill was also to phase it in, but with a much stronger benefit to families. So from July 2014 there would be 18 weeks’ leave, 22 weeks’ leave from July 2015, and 26 weeks’ leave from July 2017. Let us actually do something really significant that the families of this country will really benefit from. Let us support the amendment on Part 1. Let us make a real difference.

Hon TONY RYALL (Minister of Health): I move, That the question be now put.

SUE MORONEY (Labour): It is a pleasure to get a call on the Committee stage of Part 1, which is the part that does deal with the extension to paid parental leave—finally—by the National Government. So I am rising to support this step, albeit it is meagre, but from National’s point of view, it is a giant step. It is a meagre step for some of the rest of us but still a giant step for National to have this part, which extends paid parental leave by a further 2 weeks next year, and then by another 2 weeks in the following year.

I have got to say that that is giant steps for National, but I am rising to ask parties to support the amendment to this part that I am proposing, so that we can actually get to 26 weeks’ paid parental leave by 2016. That is what my amendment will do. That, as my colleague Carol Beaumont just said, is what the New Zealand public wants. We know that is what the New Zealand public wants, because when it did actually have an opportunity to have a say on paid parental leave, and when there was not a bill being rushed through under urgency, but there was a bill going through a considered process, as my bill—no, I am not allowed to say “my bill”; the Labour Party bill, I will call it—was doing. I know the National Party will like it being called a Labour Party bill, just to remind people where this idea came from.

I think what Part 1 reminds us about is that the National Government has no ideas of its own. This is its big Budget urgency item, and it comes from the Labour Party. What does that tell us about how lacklustre this Government is? The fact is that it has completely run out of ideas, it is tired, and it is now casting around. The only place that it can find ideas from is when it looks over this side of the Chamber. That is what Part 1 tells us.

My amendment will do what 99.6 percent of the 3,806 submitters on the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill from the Labour Party, which would bring in 26 weeks’ paid parental leave, asked for. So I am urging all of the parties that have voted for 26 weeks’ paid parental leave to support that amendment, because in doing that they can bring about 26 weeks’ paid parental leave, as the New Zealand public has asked for. I am pleased to say that—

The CHAIRPERSON (Lindsay Tisch): Order! Order on the backbenches. I am trying to listen.

SUE MORONEY: I am pleased to say that the amendment has been drafted in a way that will not compromise the National Government itself, nor will it compromise any of its support parties, because it has been drafted in a way that means there is no commitment to improve paid parental leave beyond what the Government is already proposing until 2016. That is long past when the confidence and supply agreement is in place for United Future and for the Māori Party. So this should cause them no concern in terms of honouring their confidence and supply agreement with the Government or with honouring the commitment that they have already made in this House to support 26 weeks’ paid parental leave.

I know that the Hon Peter Dunne, particularly, will want to support this. I am sure he will, because he is on the public record as saying that, yes, he is prepared to support 26 weeks’ paid parental leave but that he does not think it goes far enough. He does not think it goes far enough. So I am certain that he will be voting for the amendment that is on the Table to be voted on this evening. If he does not, I think there are some real questions to be asked about whether he supports his own party’s policy or not. So I look forward to seeing what happens when we come to the vote on this part, which I think will be some time away, because I am sure that the Minister in the chair, the Minister of Labour, has had lots of questions asked of him that he will be wanting to answer.

This part really does just two things, and it does them 2 weeks at a time in the next 2 years. Sadly, although I think the intentions are reasonably good, it will not actually address the submissions that were raised at the Government Administration Committee in submissions on that other bill. I want to talk about a particular submission that really resonated with me. It is the one that sticks in my mind out of all the 3,800 submissions. It was from a woman who gave us her submission in Auckland. She talked about the struggle that she had. She gave birth to twins, and this submission stays with me because when I looked around the room when she was describing what her day looked like when she returned to work, I swear that there was not a dry eye in the room. I think that included the officials as well, and they are pretty hard to get going.

What she described was that she had to go back to work after having these babies when these twins were 3 months old. At that time she had 12 weeks’ paid parental leave. Financially, she had no option but to go back to work. But what was happening for her was that the twins were feeding at different times during the night, so on four occasions during the night she was up feeding one or other of these twins—they were not feeding at the same time—and then she was getting up and going to work the next morning. She was taking the train and dropping the babies off at day care, which she found extremely difficult to do. She found it really hard to leave them at day care. She would then get on the train and travel to work. Two times, or I think it might have been three times, during the course of the day she was then travelling by train back to their day care to feed these babies, and so—

Hon Member: What’s this got to do with Part 1?

Jacqui Dean: Yeah, hello? Lots of people do that.

SUE MORONEY: What has this got to do with it? I am not sure. Jacqui Dean does not know what this has got to do with it. What this has got to do with Part 1 is that this woman said to the select committee that the upshot was that she—

Jacqui Dean: Women are more resilient than you know.

SUE MORONEY: Oh well, look, I am sorry that Jacqui Dean does not empathise with this woman’s story, but after 6 weeks she handed in her notice. She resigned because she could not do it. What she told the select committee was that if there had been 26 weeks’ paid parental leave in place, she believed that she would have been able to actually go back to work and cope at that stage, and that would have meant that she would still have had her job. She would still have her job. When this woman came before the select committee, her twins were 3 years old. She said: “If I knew then what I know now, I would have got through that, but I didn’t.” Today she still does not have a job. She lost her attachment and her connection to that workplace because the duration of paid parental leave was inadequate.

It is still going to be inadequate for women in her position after this Government has passed this bill, because another 4 weeks in 2 years’ time is actually not going to help that woman in that situation. That is what it is all about. It is all about helping parents so that they can cope, so that they can actually focus on giving that attention to their child and to their baby, to get the bonding and attachment going really well. Another 4 weeks is not going to achieve that, and that is what all the submitters on the Labour Party bill told us. They told us that 26 weeks was what was going to actually start getting towards that.

So what we have here in Part 1 is a Government that recognises that it is in trouble over this issue and it recognises that it needs to try to respond and react, but it does demonstrate that it is a Government that really, truly still does not get it. It still does not get it, and it is a big step for National to vote in favour for any form of paid parental leave at all. I get that. I do get that, and I think that is a giant step forward. But please do not think that this bill addresses the issues that the Labour Party bill has been put forward to address. Those issues are the ones that have actually been supported by Plunket, by Barnardos, by Unicef, and by a whole range of other organisations.

Plunket put out a press release today, and it said that it was good to see paid parental leave being extended, but it begged the Government to do the right thing and go to 26 weeks. My amendment will give the Government the opportunity to do the right thing: vote for the amendment so that it does extend paid parental leave to 26 weeks. That can be done tonight. It can be done tonight, and we can get it under way. But, even better than that—

Hon ANNE TOLLEY (Deputy Leader of the House): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 55

New Zealand Labour 34; Green Party 14; New Zealand First 7.

Motion agreed to.

The question was put that the following amendments in the name of Sue Moroney to Part 1 be agreed to:

in each of clauses 19 to 30 inclusive, replace all instances of “18 weeks” with “26 weeks”.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 58

New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1.

Noes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

Part 1 agreed to.

Part 2 Amendments to Income Tax Act 2007

The CHAIRPERSON (Lindsay Tisch): I call Ross Robertson.

Grant Robertson: No, you don’t.

The CHAIRPERSON (Lindsay Tisch): Sorry.

Grant Robertson: That is normally followed by a withdrawal and an apology, Mr Chair!

The CHAIRPERSON (Lindsay Tisch): I withdraw and apologise! Grant Robertson.

GRANT ROBERTSON (Labour—Wellington Central): Thank you very much, Mr Chair. I rise to speak in my very own identity on Part 2 of the Budget Measures (Financial Support for Newborn Children) Bill. Part 2 of this bill brings us to, I guess, the part of the bill that is somewhat disturbing for members of the Opposition. With Part 1 we are able to at least agree in principle on the question of paid parental leave, but when it comes to the changes to the parental tax credit, we come to a more difficult and deeper issue.

The good news here is the recognition that parents need more support—that parents who are undertaking the job of raising children, pretty much whoever they are, need support. We all know that the costs that are in front of all parents are great. Having children is something that when it is undertaken, parents realise the additional costs. All parents should get that support, and that is the problem we have with Part 2 of the bill. It is because a group of parents is being excluded. What Labour decided when we brought out our Best Start policy at the beginning of the year was that we would create a system that would provide support for children up to 1 year of age for everybody who earned up to $150,000 a year, and we would extend that support for children up to 3 years of age depending upon the circumstances of those parents. That is to support low-income families. That is to support vulnerable children.

That is what is missing from Part 2 of this bill: support for the most vulnerable children. What is missing is support for the 14,000 parents who are living below the poverty line and the 50,000 children who are living below the poverty line. Part 2 of this bill says that those children are excluded and those parents are excluded. The changes to the parental income tax credit do not support those parents.

Jacqui Dean: What is the poverty line?

GRANT ROBERTSON: Jacqui Dean seems to have a problem with that. Jacqui Dean seems to have a problem with the fact that the Government could have come to the House today and said: “We get it. We get that all parents—all parents—need support.”—all parents need support. But, no, only those parents whom the National Government deem valuable get support tonight, not the parents who are living below the poverty line, not the people who are really struggling to bring up children. They are not deserving parents for the National Government. Once again, the National Government is deciding who are the deserving and who are the undeserving.

This was an opportunity tonight for the National Government to bring forward to the House some kind of support for all parents, or at least most parents, but, no, it chose to exclude—

Jacqui Dean: More than Labour did.

GRANT ROBERTSON: “More than Labour did.”, said Jacqui Dean—more than Labour did. This from the Government that told us that Working for Families was communism by stealth, and then adopted it wholesale and takes credit in the House for the benefits of Working for Families. No, Jacqui Dean has got it wrong. The National Government has got it wrong tonight. A great opportunity has been missed to lift children out of poverty.

One of the disturbing things while listening to the Budget debate today was hearing that 285,000 New Zealand children are living in poverty. The National Government skirted round that today. Yesterday in the House John Key denied that that number even existed. Here is a very specific piece of legislation that could have dealt with that very issue, and the Government did not do so. I think that is a great shame.

I think there could have been amendments to this bill. I know that my colleague Jacinda Ardern, who is going to speak in the very near future, is interested in putting forward amendments that actually bring this bill into line with Labour’s Best Start policy. What we have got here is half a best start for children—a false start for children.

Mike Sabin: Oh!

GRANT ROBERTSON: Well, no, it is. Mike Sabin disagrees. Why exclude 50,000 children, Mr Sabin? I want Mr Sabin and other National Party members to stand up and tell New Zealanders why it is that 50,000 children miss out.

JACINDA ARDERN (Labour): Well, Mr Sabin finished there with an interjection, saying that the Government’s policy is targeted. That was in response to Mr Robertson asking why 50,000 children in poverty are not being reached by this policy in Part 2 of the Budget Measures (Financial Support for Newborn Children) Bill. That was a reference to the fact that Best Start covers the most vulnerable children with its Best Start payment when those children are not covered by the extension to the parental tax credit. Let us be absolutely clear. The parental tax credit does not go to beneficiaries. They are our lowest-income recipients and they are excluded. It is a cold, hard truth that members on that side of the Chamber do not want to accept. We have an amendment to expand eligibility on the Table. Alfred Ngaro is shaking his head. The parental tax credit has never gone to beneficiaries. They are excluded from the parental tax credit.

Hon Member: That’s right, absolutely. That’s logical.

JACINDA ARDERN: Yes, they are excluded. So they do not get the parental tax credit. They do not get paid parental leave.

Jacqui Dean: They get a benefit, though, don’t they?

JACINDA ARDERN: They get a benefit—yes, that is right, Jacqui Dean. How much is it? How much is it? How much is it? And that is why we have this issue. No one on that side of the Chamber knows how much someone on a benefit receives when they have got a newborn child. If members on that side of the Chamber want to tell me that when you have a baby, you can survive on $290—because that is approximately what you receive when you are a sole parent—then that is absolutely fine; all power to you. But that is why those parents are captured by the Child Poverty Monitor as the ones who are in poverty for the longest. They are in there from the time their baby is aged 0 to when their baby is around 3 or 4 because that is when it is hard to work and raise a child at the same time, especially when the baby is a newborn. Sure, they might want to supplement their income. They might want to raise more money by working, but if you are a sole parent and you have got a baby who is 1 week old, that is a big ask. So you are limited in the amount that you are able to receive, no matter whether you have got the best will in the world—the best will in the world. That is why this extension misses out those who need it most.

Debate interrupted.

Sitting suspended from 10 p.m. to 9 a.m. (Friday)

Thursday, 15 May 2014

(continued on Friday, 16 May 2014)

Bills

Budget Measures (Financial Support for Newborn Children) Bill

In Committee

Debate resumed.

Part 2 Amendments to Income Tax Act 2007 (continued)

The CHAIRPERSON (Eric Roy): When the Committee was suspended last night, Jacinda Ardern had the call. She has about 2¾ minutes.

JACINDA ARDERN (Labour): Is that all—2¾ minutes remaining? Oh, right, so technically I have up to an extra 5 minutes if I am lucky. I thought it might—

Hon Trevor Mallard: It’s another 15 minutes, actually.

JACINDA ARDERN: Well, I think I managed to clock up 40 minutes last night, so I am still waiting for the Minister in the chair, the Minister of Labour, to match me call for call in this debate.

I thought it might be helpful to recap on where we were in this debate last. We are in the Committee stage, obviously, and last night we debated Part 1 of the Budget Measures (Financial Support for Newborn Children) Bill, which talked about the extension of paid parental leave. The extension from 14 weeks to 18 weeks was basically all that Part 1 did, despite the Minister talking about the extension to eligibility. That is not what this bill is doing.

Hon Simon Bridges: It’s coming.

JACINDA ARDERN: He says it is coming. That is interesting. Last night the Minister went to great lengths to make a claim about Labour’s comprehensive paid parental leave policy and Best Start policy, which is quite a significant package, fully costed, fully stepped out, and based on consultation with the sector. He claimed that the policy work had not been done, yet here we are debating a little bit of a change to paid parental leave—just one simple change from 14 to 18 weeks; it is just a little bit of what the Government announced—because I suspect the policy work has not been done. That is my very big suspicion. Why would I expect that that might be the case? From what I was reading of the regulatory impact statements last night, some of the briefing papers were not actually being churned out by the Government until last month. So my strong, strong suspicion in responding to what the Minister has said is that perhaps some of it was done in a bit of a rush.

That brings me to Part 2, which we have only just begun debating, and I am sure it will be a comprehensive discussion this morning. Part 2 contains the changes to the parental tax credit. Very simple changes are made in that part. They are changes that the Minister—again, I am astounded by the statement—said are extending support to people who got nothing from Labour. That is an absolutely unbelievable statement made by the Minister in the chair, because there have always been losers in the system that we currently have. Labour’s policy was clearly focused on trying to plug those gaps. So let us look at who those losers are and how that has changed, because the parental tax credit was always about supposedly plugging that gap.

We have roughly, give or take, 60,000 births in New Zealand per annum. Of those births, we know that roughly 40 percent tend to be eligible for paid parental leave. Why is that? Under the existing criteria, which have not changed yet, you have to be in a job for a particular length of time, you have to be working for a certain number of hours—there are a number of criteria that often preclude people’s eligibility. The Minister has changed those criteria a bit and I applaud him for that; it is good to see. But out of that change, what did the Minister say? Was it roughly 1,200 or 1,400 people affected by that change, give or take? Again, that is not a massive extension of the eligibility, then, for paid parental leave. It is good but not too significant.

Jenny Shipley in the 1990s recognised that that gap existed, and she brought in the parental tax credit. It is not for everyone. Not everyone who does not get paid parental leave automatically then receives the short-term parental tax credit. Let us be really clear about what the parental tax credit is. It is not the family tax credit; that is part of Working for Families, which Labour brought in, cuts across the life of a child, and is income tested. It is not the in-work tax credit, which is meant to be a payment to cover the extra costs of being in work when you have a family. It is the parental tax credit. At the moment, after these changes, it will be for 10 weeks. It used to be at a rate of $150. Under these changes in Part 2, it will be $220 for that 10-week period. So it is roughly $2,000 for a family.

It sounds like everyone who does not get paid parental leave is going to get that—not so. In fact, the eligibility criteria are going to narrow—not yet in this bill; I believe that is yet to come, is it, Minister? I imagine that might be a revenue bill, perhaps. The criteria are going to narrow. So who misses out? Students miss out. The reality is some people might say “Well, if you are studying, why are you having kids?”. There are people in many varying circumstances who might be in study at any age at the time that they may fall pregnant. Life happens. The fact is that in New Zealand 50 percent of our pregnancies are unplanned—life happens. It is about making sure that when it does, parents are well supported to give their child that best start in life. When people are unemployed, it might be the most temporary of unemployment. They might be transitioning between jobs and be temporarily on jobseeker support. They are not eligible for this extra support. They might be in a situation where their relationship has split up. As dire as it sounds, there are relationships that fall apart when people find out they are pregnant. It is a major stressor in relationships, and it happens. If they happen to then have to seek sole parent support, they are not eligible either. You could say that these are individuals who actually are probably in the most precarious of situations—potentially our most vulnerable families—and they are excluded from the parental tax credit.

I think this is a really important point to make, because the extension that the Government has made is in the length of time of the parental tax credit and to the amount but not to who receives it. That has always been one of the biggest downsides of the parental tax credit. It was a little bitsy thing that Jenny Shipley came up with that predominantly tends to go to families where, for instance, parents are staying at home to raise existing children but are under a certain income rate. Those tend to be the families who are receiving the parental tax credit and families who already have children when another one is on the way, if members would like the longer-form explanation of that. Those tend to be the ones who are falling into those eligibility criteria.

The Minister has also said, though, that the criteria are going to change. At the moment, yes, the parental tax credit is not universal outside of people on benefits. It is abated. It is income-tested. The income testing is going to narrow now; that is what we have been told. It is not what we are debating yet, but it is going to narrow. That basically means that if you are currently eligible for the family tax credit—you are roughly on that kind of income range—then you are going to qualify for the parental tax credit. That is the rough guide that we have been given by the Government. That means that there are some families who often miss out on any kind of support from the Government. They do not feel particularly wealthy, but they are not going to get anything now.

SUE MORONEY (Labour): It is great to have an opportunity to speak on Part 2 of the Budget Measures (Financial Support for Newborn Children) Bill. It is a bit of a mouthful and it does not necessarily indicate how little support there is for newborn children, but, still, it is a step in the right direction—a small step, but a step in the right direction none the less. This part is the part that deals with the parental tax credit. I note that this morning the Prime Minister was having breakfast with the Child Poverty Action Group up in Auckland. Well, I hope that he is honest and I hope that he is upfront with the group, because it will not be fooled, by the way; it is a very smart organisation. I hope that he is clear with the group that he has failed to give financial support for newborn children and the most vulnerable and the poorest of families, because that is, in fact, what has happened.

In fact, the Child Poverty Action Group issued a press statement this morning pointing exactly that out. It says: “Unfortunately the 2014 budget offers little else to assist the 205,000 poorest and most vulnerable children in NZ, who fall below the very low 50% poverty line.” That was a press statement issued this morning from the Child Poverty Action Group. It is absolutely right that Part 2 bears this out. It is interesting that the vehicle that National has chosen is the parental tax credit, because that parental tax credit is very targeted but, interestingly, does not target the lowest income people. It excludes the children of beneficiaries from having any support in this way. It excludes the children of students from having support in any way. It excludes the children of people who are on ACC payments from having any financial support at all. So I think it is quite misleading that the bill title says “Financial Support for Newborn Children”, as if it is for all children.

It, of course, is not, and National, with its Cabinet club mates, has moved to specifically exclude the people who are the poorest. [Interruption] It is kind of interesting, because every time we talk about financial support for children and parents, National gets really rowdy. It gets very rowdy and angry, actually. It is really surprising that this continues to happen.

Mike Sabin: I’m always angry.

SUE MORONEY: I could understand it—well, Mike Sabin says he is always angry, but, in fact, he is at his most angry when we talk about financial support for children. National members find it very difficult to understand this concept.

I do want to support the amendment to this part in the name of Jacinda Ardern, because it shows a huge gulf and a huge difference between the approaches of Labour and National when it comes to financial support for newborn children. Under Labour’s Best Start policy every child will benefit.

Simon O’Connor: No, no, no.

SUE MORONEY: Every single child will benefit. Well, Simon O’Connor says: “No, no, no.” He is a little bit right. The people who earn more than $150,000 will not benefit from the $60-a-week Best Start payment under Labour, but they do get the early childhood education component and they will get paid parental leave. They will get extended paid parental leave—a much more extended parental leave—under a Labour Government, by the way. But every single child will benefit from Labour’s Best Start package.

Simon O’Connor: Oh!

SUE MORONEY: It is true, Simon. I know that National does not like that. It does not like the idea that all children will benefit, but that is a fact of Labour’s Best Start package. Jacinda Ardern’s amendment would mean that all the children who miss out under what National is doing in Part 2—

Hon Anne Tolley: All means all.

SUE MORONEY: Well, if Mrs Tolley would, you know, stop yelling and screaming—

Hon Anne Tolley: Tell the truth.

SUE MORONEY: She is saying “Tell the truth.”, and I am—all of the children who miss out under National’s package will get $60 a week under Labour’s. It is not only $60 a week for the first year for those children who are missing out under what National is proposing—and they are from the poorest families, by the way—but that goes on until the child’s third birthday under Labour’s Best Start policy. That is for the poorest families in New Zealand. Is that not the issue that really needs addressing? Well, finally, there is silence from National’s benches. Finally, while I am on my feet, there is a little bit of silence, because National members do not want to answer that question.

Labour’s Best Start policy—and I challenge Simon O’Connor to say this is not true—gives at least $60 a week for the first year to all families earning $150,000, because those families who are entitled to paid parental leave get even more than $60 a year for that period. So it is at least $60 a year. And then the very poorest families—for those low-income families earning less than $50,000 per year—will get $60 a week until that child’s third birthday. Those families earning up to $70,000 a year will get a proportion of that $60. I really do want the Minister to take a call and explain—

Mike Sabin: What does it all cost, Sue?

SUE MORONEY: Look, all they can see is the cost. They cannot see that it is an investment in children. Is that not National through and through? They just see children as being a cost. This Government cannot see that that is the real way to a brighter future in this country. It is always in deficit mode—it is always in deficit mode. From the time that National got into Government, it has increased the country’s debt. It has delivered deficits. It has got the slimmest of surpluses this year, and you would think it had never happened before. Well, there were 9 years of surplus under a Labour Government, and that is what there will be from next year on when Labour returns to Government, as well, because it is Labour that knows how to deal with the issues that the Government is trying to deal with here—the parental tax credit.

Clearly, under a Labour Government there are many more opportunities for jobs. Unemployment was at the lowest levels in the OECD under the previous Labour Government. Under this Government, we have slumped to about 15th or 16th place in the OECD rankings for unemployment. So these are the real issues that need addressing.

In Part 2 the Government is, instead, just trying to pick and choose some winners amongst children. By using the parental tax credit, it is casting the sorts of judgments that we see time and time again from National. Those members are very, very good at judging other people’s families. They are casting the judgment that the children of those less fortunate than themselves are not worthy—they are not worthy of this financial support for newborn children. That is what they have called this bill, yet they are using Part 2 to deliberately exclude the neediest of those newborn children—the most needy.

I am looking forward to hearing the vote on the amendment put forward by Jacinda Ardern. It does reflect the very comprehensive policy, and I do want to take issue with what Minister Bridges said, albeit last night, because I did not get an opportunity to respond at the time. He said that his Government has done all the policy work in this area. Well, I can see that what it has done is look at the very comprehensive work done at the Social Services Committee through the very good Labour Party bill that extends paid parental leave to 26 weeks, and it has cherry-picked a bit of it. And then, with regard to the part that it does need to do some more policy development on, it clearly has been lazy and has not done the work, because if it had, its proposed—proposed—extension to eligibility for paid parental leave would be in this urgency motion today, and it is not. It is not being debated. So, clearly, the Minister has not done the policy work that he claims to have done—he has not done it—and it will be interesting to see whether that bill gets introduced before the House rises in July. I am not sure that we will see it this side of the election, and then I think the New Zealand public would have cause to ask themselves why that is not happening before the election.

Part 2 will be supported by Labour because it is a little bit of improvement, but it is not a lot of improvement, and it does make some really worrying judgment calls about National judging which children are worthy of the support and which children are not. Under a Labour-led Government, that will change. There will be $60 a week made available as financial support for newborn children—all newborn children—and that will be coming in next year. So the New Zealand public would be wise to look in detail at this. I know that the New Zealand public understands which side of the House it is that really understands the needs of children.

JAN LOGIE (Green): I rise to speak to the Budget Measure (Financial Support for Newborn Children) Bill again, and follow on from some of our discussion last night. First, I do need to note how disappointed I was last night to see the proposal to extend paid parental leave to 26 weeks voted down. It was, I think, a real shame for all the families in New Zealand who have access to paid parental leave. So, to talk specifically to Part 2 of this bill, the Green Party really supports the vision of having every single child thriving in this country, and we believe in making an investment in our children and our families. We believe that that investment would pay off manyfold for many years for this country. We, along with many in this country, are deeply concerned about the levels of inequality that we are now living with in New Zealand. Those 285,000 children could be living in poverty—

Hon Anne Tolley: I raise a point of order, Mr Chairperson. I know that we have had a wide-ranging debate, but I do think that we are on Part 2 and this speaker should really attempt to talk to the bill.

Hon Trevor Mallard: I actually listened to the last sentence that the member spoke before she was so rudely interrupted, and it was directly on this part of the bill. If the Deputy Leader of the House listened to the debate—

The CHAIRPERSON (Eric Roy): Order! The member should not use a point of order to attack another member. I think the point is well made. I have been listening very carefully, and we are on the amendments to the Income Tax Act—that is, Part 2. Some discretion is given to draw an analogy and example. I have listened very carefully. I am kind of reluctant to interrupt members, but if members do not want to debate Part 2, then that is inviting the Committee to determine whether or not it wants a closure. That is the kind of discipline around how this stuff works, all right?

JAN LOGIE: Actually, to carry on exactly from what I was saying about our concern around the levels of inequality in this country, the parental tax credit, which we are debating in Part 2 of this bill, will directly feed into that inequality in this country, which for us is just a shame. It is symbolic of the ideology of this Government, whereby it will offer token lollies to people. That will make a difference to some families, and I am not underestimating that. Seventy dollars a week for middle-income families in this country will make a difference, and that is why we are supporting this provision. However, by purposefully denying this parental tax credit to beneficiaries, to people receiving ACC, and to those receiving student allowances or pensions, it will actually also increase inequality. The group that is in the most need is getting nothing from this provision in the bill, which is why we are putting forward an amendment to this bill, which I hope others in this Parliament will support, to ensure that this extension to the parental tax credit will be available to every single family in New Zealand, because we care deeply about inequality.

I would also like to note that in some of the discussions around this provision in Part 2 of the bill, the Child Poverty Action Group’s analysis of this issue has noted that the Government appears to have a blind spot when it comes to the needs of children and beneficiary families, and we agree with that. We have heard that quite clearly from some of the interjections from the Government side of the Chamber last night and again today. I do want to remind this Committee of some of the drivers in the need for people to require income support. The primary driver for it is either a loss of employment, which is something people have no control over, or it may be disability, and we have not brought down the barriers to employment for people with disabilities, or it can be domestic violence, which is something that we are supposedly all together on in this Parliament in fighting. So to discriminate against those families, and to deny them this extra money to be able to help cope in those early days after the birth of a child, does not seem consistent to us with the values of an inclusive society.

I would also note that the Child Poverty Action Group has looked at this analysis and it has also said that although it looks as though families are going to be getting extra money, and it will increase on annual terms for those families who are able to get it, so that they will now get basically about $2,200 from this provision, up from $1,200—so it is an extra $1,000 in total for those families to cope with those extra financial costs of a new baby—it is urging the Government, as are we, to extend those payments to families who are currently excluded. In the words of Susan St John, it is unfair that the new mothers and their newborns who are most in need will get no help from these measures, which are funded by the taxpayer.

For me, that is one of the things to remember. Our tax money is our collective expression of our values as a country. Together we have so much more resource and we can make a huge difference in the lives of these families at virtually no individual cost to us, actually. When it all comes together, it is a tiny amount from me and a tiny amount from you that will make such a huge difference. I really believe that New Zealanders do want children and babies in beneficiary families—those who are leaving violent relationships, those with disabilities, those who have lost their jobs—to have as good a start as anyone else. That is what is in front of this Committee today: the opportunity either to give kids the best chance in every family or to entrench inequality. I am really hoping that this Committee will reflect on its values, reflect on the foundations of this country, and come up with a solution that says “Yes, we believe every child deserves to thrive, and, no, we do not support entrenching and building inequality in this country.”

I would also like to just note that this provision of the bill has been specifically noted by the Government as part of its families package of $500 million, which sounds like quite a lot and is a significant investment. But it is worth noting for the country that this is over 4 years, so that is actually only $125 million a year, and this provision is actually an increase of only $15 million a year, I have been told. So when we are thinking about the relative value—

Hon Trevor Mallard: 13.

JAN LOGIE: —$13 million; thank you, Mr Mallard—and how much this Government is really valuing families and children and wanting to support them, I also remind them that $1 billion is now being spent on servicing the interest on the debt that this Government got us into because it chose to cut taxes for the wealthiest in this country. To me, that needs to be said. I want to support and give affirmation to the Government for good initiatives, and we will do that at every opportunity, but this does need to be put in context. The question needs to be asked as to whether this fundamentally reflects our values. Will this deliver on a country where every single child has the ability to thrive? We are giving all our weight to that vision.

Sadly, although we will be supporting this, because it is something, unless this Committee extends it to every single family, and particularly to beneficiary families, I do not believe that this initiative will deliver what our children deserve.

TRACEY MARTIN (NZ First): I will take just a short call on Part 2 of the Budget Measures (Financial Support for Newborn Children) Bill. I actually just need to ask the Minister of Labour directly whether he could explain part of the regulatory impact statement. If we were not under urgency for this bill—and I am not quite sure why we are under urgency for the bill, because nothing happens from tomorrow, when we pass it, for quite some time—it would go to a select committee, and I would be able to ask the officials for clarification. I am absolutely happy for any member of National to jump up and explain this if they can, please. I am absolutely happy for anybody over there on that side to explain this for myself and, therefore, for the parents who are receiving Working for Families. I would be grateful.

Point 5 of the regulatory impact statement says that to receive the Working for Families payments “a person must be at least 16 years of age and also meet residency requirements. The amount of payments depends on the number of dependent children aged 18 or younger that are being cared for; the age of the child being cared for; the total family income; where the family income comes from; and any shared care arrangements.” I would pick up the note that this is a parental tax credit. If it is a parental tax credit, it does seem strange as to why the circumstances of the parent matter. If there is a philosophical statement there that we support parents through a parental tax credit, why does it matter what the financial circumstances of that parent are? So it would be great if you could just explain that first part.

Point 7, however, says—and I read it last night, and I really would like somebody from National to explain it—“The FTC and IWTC are currently abated at 21.25 cents in the dollar when annual family income exceeds $36,350. The PTC is also abated at 21.25 cents in the dollar; however the amount of the abatement is calculated against 56 days of annualised income, rather than a full year’s worth of incomes; this creates an effective PTC abatement rate of 3.26 cents. The MFTC is abated dollar for dollar until a family’s income reaches $21,216 after tax.” If the Minister would like to jump up and just clarify that paragraph, that would be great. Mike Sabin, have a go at it—no problem. But then we shift to the departmental disclosure statement, and this part on page 3 under the statement “Parental Tax Credit”, which reads—

David Bennett: Tell us about your man, Denny.

TRACEY MARTIN: You will not be able to answer it if you do not listen, Mr Bennett. The statement reads: “The Bill increases the maximum amount of Parental Tax Credit (PTC) payable”—[Interruption] Can you hear me, Minister? I am sure it is a little bit loud. You might not be able to hear the question.

Sue Moroney: I raise a point of order, Mr Chairperson. I am not that far from the speaker. I am really struggling to hear her over the rabble of the National Party benches, and I would like you to call them to order. They have been doing this throughout this whole debate, and I think it is time that they actually let the speakers be heard.

The CHAIRPERSON (Eric Roy): Yes, well, having been present for a few debates across this urgency, I would have to say that it has been a fairly energetic debate from both sides, and I am not sure it is any more appropriate now than it has been at any stage. If you want the Chair to intervene every time on either side, well, we are happy to do that—

Hon Trevor Mallard: No.

The CHAIRPERSON (Eric Roy): Order! I am on my feet. Look, this is the highest court in the land. There is a standard of decorum that I would like to see us embrace, and members just ought to be conscious of that.

TRACEY MARTIN: Thank you, Mr Chair. So just for the Minister, I will start that paragraph again. It is on page 3. The Minister has officials behind him who might be able to provide him with an answer. It is in the departmental disclosure statement on page 3 under “Parental Tax Credit”: “The Bill increases the maximum amount of Parental Tax Credit (PTC) payable on the birth of a newborn to $220 per week”—so it is for newborn children—“for the first 10 weeks following birth. This takes the total maximum payment to $2,200 per newborn. The higher payments apply to babies born on or after 1 April 2015.” Let us be clear: it is 2015. But it is the following paragraph that I have concerns about. It is this paragraph that I know I would like clarification on: “The Bill also changes the abatement formula for the PTC, so that is”—the English is a little bit off—“abated against each dollar of family income over the abatement threshold earned over the year, rather than over the parental entitlement period.”

Hon TREVOR MALLARD (Labour—Hutt South): The first thing I would like to do is to refer the Minister in the chair, the Minister of Labour, to paragraph 44 on page 9 of the regulatory impact statement, where it says that there is no ability to consult after the Budget Measures (Financial Support for Newborn Children) Bill has been put through because the legislation needs to be in place before November 2014 in order to have sufficient time for the Inland Revenue Department’s “systems, processes and guidance to be finalised.” I am not saying we should keep this urgency going until November, but what I would like to ask the Minister is why we are considering this under such shortened time frames. Why has this particular part of the bill—not the whole bill, but this particular part of the bill—not been sent to a select committee for a proper examination?

The paper that he has supplied to us tells us that this particular part of the bill is not urgent. It is not urgent; it could wait until November. Being realistic about elections and things, it could wait until July to go through Parliament. What I want to know, from any National speaker who is prepared to get on their hind legs, is why the Government is pushing this through when its own officials have told it—when its own officials have told it—that this is not urgent legislation.

The next point I would like to make is to jump way further into the regulatory impact statement and ask the Minister about the relative options that are set out in paragraph 45, under “Conclusions and recommendations”. I do not know whether the Minister knows, but what we know is that Cabinet and the officials worked their way through a set of options in this particular area, and the reason this option was chosen—I just want to check my logic with the Minister, because it appears to be written down here—was that it would keep people in work and off paid parental leave. Is that the objective? That is why, on the weighted choices that are set out in paragraph 45, this option won by one point—by one point—and that point came from the fact that it would keep people at work and discourage people from taking paid parental leave.

I just want to ask the Government whether that is really its objective. Is that the objective of the Key Government? Is it to say, especially to women: “We don’t want you to take up your paid parental leave, and this is a way to stop you from doing it. This is a way to save us money on paid parental leave. We will encourage you to stay at work. We will give you a pittance for a short period of time in order to not do what’s right for your baby.”? I just want to ask what sort of ethical basis we are working on. Whom do we care about? First of all we will make a tiny—not that I am going back to it, Mr Chairperson—change in one area, but then we will work really hard to ensure that you do not take it up. We will work really hard to make sure that parents do not take it up. What the document tabled in the House says is that the defining difference—the thing that made this option the weighted average winner—is the fact that it would stop people from leaving their jobs to take up paid parental leave.

I just ask members opposite whether they read this stuff. Do they read it? Do they care? Do the backbenchers ever hold their Ministers to account for the ethics of the Government? The Government is prepared to go out and pretend that it cares about paid parental leave, but then they choose the option in this particular part of the legislation that is designed to minimise people taking up paid parental leave. That option won out of those presented to Cabinet only because it was the option that most kept people away from paid parental leave. So it is designed to save the Government some money in the longer term. It is designed to reduce the options for some people to take paid parental leave, and that is the reason it was chosen. I just want to say that that is something that is absolutely disgraceful.

Moving back to the paragraph that I referred to before, we now know why the Government did not want to send this part to a select committee. Under paragraph 44, it says that it does not need to go through Parliament until November. We now know why the Government is putting it through now. It is because it was trying to sneak it through under the radar. It was trying to put it through this Parliament without us realising what it was actually doing. I just say that in New Zealand, which has a long-term tradition of being transparent in its legislation and being clear and open and obvious about the reasons why we are doing things, to take this sort of sneaky approach in the hope that all members of Parliament are like National Party backbenchers and do not read the documentation that is tabled in the House—it was hoping that we would not read it as well. And what we do know is that we do look at it.

I do not often disagree with officials in their regulatory impact statements, but the next thing that I would like to refer to, in paragraph 45, is the targeting criteria that targets “lower and middle income families”. This option comes up top in that particular area. Well, it does not—it is not the best option for targeting lower and middle income families. The reason it comes top here is that the option of targeting those who are really low-income families was excluded earlier in the paper. It was excluded earlier in the paper. I just want to say to the officials—not those in the Chamber, of course; I would not address them—who were responsible for this regulatory impact statement that giving this option a rating of four, which is at the top of the targeting of lower and middle income families, is just bollocks. It is wrong. It is not the case.

When you take out those families who are the most in poverty and do not allow them to be part of the ranking system in the regulatory impact statement on this part of the bill, then what you are doing is denying the facts of poverty in this country. It might be fashionable and it might be—I do not think it is acceptable for John Key to mess around with the facts when he is answering questions in this House, but it is absolutely unacceptable for the Public Service of New Zealand to become so politicised that the regulatory impact statements do not tell the truth. It must not pick up the standards of the Prime Minister in the denial of poverty in the way that it has here. It is the role of the Public Service to be full and frank in their advice to Ministers and this House. Although I welcome officials’ frankness as to their timing and I welcome their frankness as to the fact that this is designed to stop people taking paid parental leave, I regret the fact that they were not prepared within this statement to point out that the people who are most affected by poverty in New Zealand will miss out entirely on this measure. It is their job—it is the job of the policy advisers of that ministry—to do it.

JAMI-LEE ROSS (Junior Whip—National): I move, That the question be now put.

Dr RAJEN PRASAD (Labour): I am pleased to take a call on Part 2 of the Budget Measures (Financial Support for Newborn Children) Bill. I really start from the position where the Hon Trevor Mallard was, because these provisions actually take out the most vulnerable. What Jacinda Ardern’s amendment does is put them back in, because those receiving a benefit are the most vulnerable, the most in poverty, and it really says that that group should be included. By the process that Trevor Mallard has just identified, they have been excluded.

This is a good amendment and I think if the Government was sincere about addressing the most vulnerable, it would agree to this particular amendment because those on benefits at this time require this assistance. I have not heard an argument from the Minister of Labour. Maybe he would like to take a call to explain to us why those receiving a benefit are excluded. If that provision was put in, I think that would satisfy this side of the Chamber.

Then I want to speak also to the other amendment that Jacinda Ardern has proposed, and this is to increase the parental tax credit to $3,120 from $2,200, because that actually does begin to put it within striking distance of the Best Start programme. This actually does relate to the Best Start programme that Labour proposed. It is quite interesting. When Labour proposed Best Start and tried to address this, there were howls from the Government benches that this was the baby bonus, this was a bribe, and they pilloried it. They did not have anything positive to say about it. I believe that this was when the Government started to think: “Oops, we have made a mistake.”

When Sue Moroney’s bill was before the Government Administration Committee, a very large number of submitters came forward to say that these are the kinds of things we need to think about. When the Government saw support for these kinds of provisions—which Sue Moroney’s bill was talking about—that is when it started to think about paid parental leave and the changes it is making here.

Prior to that, the Government had no idea. The Minister of Labour earlier, when he took the only call he has taken so far, said that this was a very carefully thought out series of policies. That is unbelievable—absolutely unbelievable. This Government has been absolutely driven to consider paid parental leave and the tax credits that we are talking about in Part 2 of this particular bill. The Government did not think about it before and it had no idea.

The Government realises that there is a demand from the public, and it is Sue Moroney’s bill that has forced the Government to look at this. What the Government is doing now is not doing the job well enough. The first part increases paid parental leave by only 2 weeks next year and by 2 weeks the year after. It is a pittance—60,000 children this year and 60,000 children next year will miss out.

So where is the sincerity of this Minister and this Government in trying to address this problem properly? They are not sincere about this. This is simply something the Government has been forced to do, something it has put in the Budget, and it is now trying, under urgency, to pass this bill. The bill has got lots of faults.

This side of the Chamber supports families. This side of the Chamber supports mothers, particularly at the time when children arrive. This is why the 26 weeks’ paid parental leave was so important. It gets us towards a minimum standard. The reports are legendary. The Families Commission report, recommending about 13 months, was a very well-thought-out piece of work. It brought every piece of knowledge that was available around the world, in this particular area, and all the assistance available, thought it through, and put in place a 7-year programme. New Zealand could have transitioned very, very systematically and programmatically to have a decent paid parental leave system, to give our children the best start possible.

But what this particular bill has done, and what Part 2 is doing here, is just only playing at the edges of it. This questions the sincerity of this Government. This questions the extent to which it really is interested in paid parental leave. I think of all of the quotes that were read out by earlier speakers around what National Cabinet Ministers and National members said about paid parental leave. I think an honourable member said that it was a travesty. I think this is where their real heart is. For them this is a—

MAGGIE BARRY (National—North Shore): I move, That the question be now put.

DENISE ROCHE (Green): I rise to take a short call in the Committee stage on Part 2 of the Budget Measures (Financial Support for Newborn Children) Bill. We have put forward an amendment to attempt to extend the parental tax credit to not just the extensions that are included in the bill but to all families, particularly those who are on low incomes—the lowest incomes—those who are on benefits, those who are students, and those who are currently excluded from this scheme.

Every family suffers the financial burden of a newborn child. There are costs associated with it. They include things like the equipment—cots, prams, and nappies. Each of these stresses is felt by every family that has a newborn. So those tax credits for the first 8 weeks, or, in this case now, 10 weeks, makes a significant difference. But it makes more of a difference for those families who are the poorest, because they are less resilient.

In respect of this part of the bill and these provisions around the tax credit, this Government, by excluding the poorest of our families, those who are on benefits, is punishing the babies of the poor. It is basically saying: “We will start your life out by discriminating against you.” This is unacceptable.

This morning I attended with several of my colleagues in this House the post-Budget breakfast that was put on for us by the Public Health Association and the Child Poverty Action Group. They had done an assessment of the Budget. One of the things they said was that this Budget does nothing to raise those 285,000 children out of poverty. What they said was that “The real value of Working for Families continues to decline because of failure to properly index payments, rising abatement rates, and a reducing threshold, so fewer people are being able to access it. It is worth less because the cost of living is rising.” I was alarmed to find out from one of the speakers this morning that New Zealand has the second lowest wages in the OECD countries, just above Iceland’s. That is shocking. How can people rise out of poverty when this is the situation and this Budget does nothing to alleviate that?

This Government is picking the winners and the losers. This Government is spending in this Budget around about 50 percent of its income—50.1 percent, I think—on superannuation, and it is a clear indication of where this Government is directing its policies. Is it, if I am going to be cynical, because people who are receiving superannuation are voters, whereas the babies of the poorest families may not vote for the National Government? I would suggest that this Government has directed these policies towards those who will vote for it, and that is why this tax credit, the parental tax credit, applies to low and middle income families, not to those who are the worst off in Aotearoa New Zealand.

I believe that we should be supporting our children out of poverty, because if we do not we all pay the costs. Those costs are things like poor education outcomes and poor health outcomes. We know that the health budget is one of the biggest that we have to deal with. It is a bottomless pit, as my colleague Kevin Hague, who is the spokesperson on health for the Greens, would say. Unless we do something to alleviate the costs associated with poverty by raising people out of those dire circumstances, then we are going to continue to keep paying for them.

It is the short-term thinking that gets me the most, I think—the fact that we are not thinking in terms of how our families will grow and how our communities will benefit if we invest now. It is a cynical Budget. It focuses mainly on those who do not need it the most.

SIMON O’CONNOR (National—Tāmaki): I move, That the question be now put.

POTO WILLIAMS (Labour—Christchurch East): I want to pick up on a point that the Hon Trevor Mallard made around the policy development regarding the Budget Measures (Financial Support for Newborn Children) Bill. He talked about the kind of baseline information that the officials had in order to develop the policy. Well, Trevor Mallard, what I have to say about that is that when you are coming from the point of view that actually there are not 285,000 children living in poverty, when you are coming from the point of view of denying the real situation that exists in this country, and when your Government is telling you to write a report that actually misses out all of that information, of course you are going to come up with the option that the officials did as being the most useful option. Like you, I do not want to blame the officials. They are coming from a position where the Government is saying really clearly that there are not 285,000 children living in poverty and that there is nothing to see here—move along. That is the fundamental flaw in this piece of legislation.

We are looking at the parental tax credit, which is supposed to be extending the eligibility to people who were not previously eligible, but really, when you boil it down, when you look at the actual components of that parental tax credit, we start to exclude those people who are most in need. Why is that? Because people on the other side of the Chamber have got blinkers on when it comes to recognising the reality that many of our families live in.

I do want to just comment on Tracey Martin’s point. Reading through the abatement discussion is totally confusing. I have no idea what that is about. I, like you, Tracey, would welcome the Minister to stand and explain those particular parts of it.

Hon Trevor Mallard: That wouldn’t help.

POTO WILLIAMS: No, possibly it would not. We probably have a better idea of what is going on with our families than he does. I have to say that where this really misses the point is that we are not looking at children as a whole and what will benefit them, unlike our Best Start package, which looks at 26 weeks’ paid parental leave. All the good science says that staying home with baby for 26 weeks is the way to go. It is the bare minimum that we should be supporting our families through. When we are looking at free antenatal care, when we are looking at increasing early childhood education hours, and when we are looking at providing money to every single family who has a newborn child up to the earning level of $150,000, we are starting to address the real areas of need. We are saying that most of our families need that, not just a select few. Most of our families need that.

The Child Poverty Action Group breakfast this morning was called “The Loaves and the Fishes”. We all know the parable of the loaves and fishes, where a certain man spoke to a crowd and he had nothing to feed them. There was a basket of—was it five loaves and two fish? And he had to feed the crowd on five loaves and two fish. Every time he went to the basket, the basket would miraculously replenish itself. Unfortunately, the reality for our families is that they go to their basket and look to replenish that basket, but they find it empty.

Dr Rajen Prasad: And this Minister doesn’t walk on water.

POTO WILLIAMS: No, he probably does not walk on water, Dr Prasad. These families are required to produce miracles for their children every single day. They are required to produce miracles out of the barest of supplies.

I also want to talk about the name of this bill. What is it? Let us see. It is the Budget Measures (Financial Support for Newborn Children) Bill. I would like to call it the “Baby Steps When Actually Bold Steps Are Required Bill”. It is definitely not enough in terms of supporting our most vulnerable families, or even those families who just find it really tough when newborns come along. Let us face it. When you have a new baby, there are lots of stresses and pressures on you as a new mum. So maybe we could call it the “We Could Have Done What Was Asked For, But We Did Not Bill”, or maybe we could have called it the “We Gave Lollipops to Some”—

CHRIS AUCHINVOLE (National): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 56

New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.

Motion agreed to.

The question was put that the following amendment in the name of Jan Logie to clause 35 be agreed to:

in subclause (1), replace MD 11(1) with:

(1) This section applies when a person qualifies under section MC 2 (Who qualifies for entitlements under family scheme?) in relation to a dependent child, but excluding the disqualifying situations described in MC 6.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.

Noes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The CHAIRPERSON (Eric Roy): Jacinda Ardern’s amendment to clause 35 is out of order as it is substantially the same as Jan Logie’s amendment, which has just been defeated.

The question was put that the following amendment in the name of Jacinda Ardern to clause 36 be agreed to:

in subclause (2)(a)(ii), replace “$2,200” with “$3,120”.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.

Noes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

Part 2 agreed to.

Schedule 1 agreed to.

Schedule 2 agreed to.

Schedule 3 agreed to.

Clauses 1 and 2

JACINDA ARDERN (Labour): It is my pleasure to speak on the title and commencement clauses of this Budget Measures (Financial Support for Newborn Children) Bill in the Committee stage. For the large number of viewers at home, that is when we have the opportunity to say, if we agree with this bill, whether it is coming in at the right time and, secondly, whether we agree with the title that the bill is given. It always seems like a rather bizarre thing to be debating, but it does allow us to get to some of the core objectives of a bill and whether or not we agree with them.

Before I begin, though, at the beginning of my earlier contribution in the Committee stage I did raise an issue about the availability of the New Zealand Bill of Rights Act vet for this bill. I will admit I have not had a chance in the last moments to look at whether or not that has yet been tabled. It was not available online when I looked last night. I just wondered whether or not the Minister in the chair, the Minister of Labour, could make a contribution during this title and commencement part of the debate to just advise the Committee whether the vet has indeed been made available to the public for this debate—acknowledging, of course, that the Opposition always does have a challenge during speeches on Budget-related legislation because we are given the bill literally at the moment that we begin debating it. That is basically when we get the information.

For viewers at home who are unable to see them, there are a large number of papers available on the Table. Trevor Mallard has been speaking about some of them recently. Regulatory impact assessments from different departments are provided. It gives us an insight into the process that has gone into this bill’s development, or it gives a bit of a clue as to where the Government tried to guide the options very early on. But the New Zealand Bill of Rights Act vet, which is provided by the Ministry of Justice, gives us an indication as to whether or not from its perspective people are unfairly discriminated against in the policy that the Government has put forward. It is a very important check and balance that enables us to see whether or not discrimination was justifiable. In some cases, a case will be made in a New Zealand Bill of Rights Act vet to say “Look, on balance, this discrimination has been made for x, y, and z reasons, and we think it is justifiable.”, versus those that are deemed to be not justifiable.

It does not mean that a bill will not go ahead, but it does provide an Opposition with legal advice based on the Bill of Rights Act. It is the way that we enforce the Bill of Rights Act in this Parliament, so it is very important. The vet was not available last night—that I could find. We were, of course, given just a typewritten link to look up, not specifically for that New Zealand Bill of Rights Act vet but for where they vaguely might be on the Ministry of Justice website. The reason I am interested in that is I am interested to see whether or not the fact that not all children are covered by some of the changes raised any issues from the perspective of the Ministry of Justice.

I move now to the commencement clause, because I think it is interesting. We are in urgency, and that usually suggests that there is a matter—obviously, as the word implies—of urgency in passing a piece of legislation. For instance, if it is during Budget time, it might be that there is going to be an extra tax or levy. The best example I can think of is when we raise it for alcohol and for cigarettes. The reason we do that is so people do not go out and rush to purchase before we have had a chance to make these changes. As for these commencement clauses, obviously no one is going to rush out and procreate in order to get these minimal changes that the Government has put in. So from their perspective they might perceive that there is no particular urgency. But here we are in urgency for elements of the bill that actually do not commence for quite some time.

For instance, for clauses 6 to 18 of the bill—and clauses 6 to 18 basically set out the transition from 14 to 16 weeks; that is where we get up to with clause 18—that comes into force on 1 April 2015, which is quite some time away. The transition is something that probably could have been included in a non-urgency motion. The difference that would have made is that it would enable people to make submissions. Why is it that the Government may perceive that it is not necessary for people to submit on this element of the bill? Well, it is because not that long ago the public already gave their views. They did it through Sue Moroney’s member’s bill on paid parental leave. It came back, rather conclusively, that, actually, submitters were overwhelmingly in support of an extension to paid parental leave—not from 14 to 16 weeks, as the first phase in this bill does, but from 14 to 26 weeks. So that is a major disappointment, and it is probably why the Government thought it could put it through an urgency motion, because it already had a Committee stage for another bill that it had got the public view on but just, unfortunately, chose to ignore.

The commencement date for clauses 19 to 31 of the bill, which is the extension primarily from 16 weeks to 18 weeks, then comes in on 1 April 2016. That is interesting. Obviously the Government is making a decision here that the paid parental leave extension is not something that it sees any particular urgency around phasing in. It clearly does not think that people are going to go out and have babies to get paid parental leave, or the parental tax credit, in fact, because, let us be honest, the extension of the parental tax credit—if I have read this correctly—comes in at the point of Royal assent. Am I correct, Minister? So the extension of the parental tax credit from $150 to $220 for a period of 10 weeks rather than 8 weeks comes in at the point of Royal assent because, if I am reading correctly from the commencement clause, it basically says, as we have already said, that “Sections 6 to 18 … come into force on … 2015”, “Sections 19 to 31 … come into force on … 2016”, and the “rest of this Act comes into force on the day after the date on which it receives the Royal assent.”

So Government members are not concerned that raising the parental tax credit by $70 a week and then locking an extra 2 weeks on the end of that mean that people are going to go out and have babies. Yet, somehow, miraculously they had that concern about Labour’s policy. I do not quite understand the difference there. Oh, there is one difference. Our tax credit went to the most vulnerable New Zealanders. Ours went to individuals who are currently left out of the parental tax credit.

So that is, again, the same old tired rhetoric from the Government around the deserving and the undeserving poor. That is exactly what we see from this. Actually, the commencement dates starkly highlight that that is exactly what this Government thinks. It also highlights that the Government is happy for there to be an extension of a parental tax credit straightaway but not of paid parental leave. I do not think the Government’s argument around phasing it in because of cost savings really stands, because it has said that it is fine to phase in one element of the bill, which, from memory, I think comes in at around $16 million, but the other bit can just simply wait.

The problem I have generally around the argument that Government members have been making about fiscal costs—and every argument they make around why they are not doing something or why they are taking longer to do it—is that they say it is because they are fiscally prudent. No, actually, it is just about priorities, because there is not any light any more between when Labour says it will be in surplus—we have demonstrated this—and when National says it will be in surplus. There is no difference. We have budgeted in the same way that National has. The difference is that we have prioritised things differently on this side of the Chamber. We have said “Yes, we need more revenue. We’ll bring in a capital gains tax. We won’t sell assets. This is the way that we’re going to do it.”

Also, the Budget surplus that that Government has actually marked up in this Budget, where has that come from? Let us be really honest about it. Where has it come from? It has come from a significant cut out of proposed spending on the Canterbury rebuild, first of all. It has come from holding on to ACC levies for longer than it needs to, because that is what we need in order to nudge ourselves into surplus. And it has come from no-interest loans through the New Zealand Transport Agency. That is basically how we have got to this surplus—this overwhelming surplus.

So let us be really honest about it. Yes—yes—the Government has governed during a global financial crisis, which we are well beyond now. Yes, it has done that. Yes, there have been earthquakes during National’s time in Government. And, yes, in comparison, Labour, when it had its nine surpluses across 9 years, did have some relatively good economic times. So why not do a little bit of comparison across Governments across the decades? If you compare National Governments with Labour Governments through history, Labour has always had stronger periods of economic growth than National has.

Mike Sabin: Ha, ha!

JACINDA ARDERN: Mike Sabin laughs because it is an uncomfortable truth.

Mike Sabin: You can’t be serious.

JACINDA ARDERN: I am absolutely serious. I challenge Mr Sabin to go away and do the calculation, because I am not using the rubbish rhetoric that he is throwing across the Chamber. I have actually based it on some numbers and analysis, which is uncomfortable for that member.

Finally, because I do not want my time to run out before I make this point—

The CHAIRPERSON (H V Ross Robertson): Order! There is too much barracking and this is not a football field. It is the people’s House, and members will conduct themselves with respect for the traditions of the House as enshrined in the Standing Orders. That is why I am standing. I represent those Standing Orders and I crave your respect for them, and your understanding. I am sorry, Ms Ardern. Your time has finished.

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Chairperson. During the time that you were making your ruling—which I think was a good ruling and could well make it into the Speakers’ Rulings, given time—Mike Sabin was calling out. We cannot have the Chairperson asking for the Standing Orders and Speakers’ rulings to be followed while, through the time that you were making your very good and well-reasoned ruling, a junior Government member was speaking loudly.

The CHAIRPERSON (H V Ross Robertson): Thank you. [Interruption] No, I do not need any help, Mr Sabin. Can I just say that when I am giving a ruling it is unparliamentary and it is discourteous to continue to interject or carry on a conversation during that period. That is totally out of order, and I ask the member to desist.

CATHERINE DELAHUNTY (Green): Tēnā koe, Mr Chair. He mihi nui ki te whānau whānui o te Pāremata. I want to talk about the title and commencement clauses of this Budget Measures (Financial Support for Newborn Children) Bill. Although the Greens are supporting it, we have to go on the record with our deep concerns about the underlying discrimination that is being perpetrated by this bill. The title is the Budget Measures (Financial Support for Newborn Children) Bill, but really it is for newborn children of good parents. You can forget about getting any help for bad babies, because this is all about the good babies, not the bad babies. It is about the babies who are allowed to have financial support from the collective taxpayer contribution and the babies who can go without because they are not OK.

What is interesting when you are thinking about this title is that poverty is referred to very clearly in the regulatory impact statement. It says that “poverty is one of the greatest risks to children’s health and development”, so it would be logical, given the title of the bill, to make sure that all of the smallest children—and particularly the poorest children, who are at the greatest risk—get some relief. So it is very confusing to those of us who thought that the parental tax credit, for example, meant that all parents and all babies would get it, that some babies get it and some babies do not. I do not think that the public of this country actually want us to discriminate against babies.

If one wants to listen to talkback and hear the hate speech against beneficiaries, although that is an occupation that will not do us any good psychologically, it is a way in which people vent their own frustration about low wages in this country by scapegoating beneficiary families. But that is not what Parliament should be doing. In the title of this bill we should be saying that this is support for all newborn children. That is what is missing from the title of this bill. It should be the “Budget Measures (Financial Support for All Newborn Children Without Discrimination) Bill”, but we do not say that in the title. What we are doing is saying “Hey, welcome to Victorian England. We will provide charity for the good people who are grateful or who are lucky enough to have a job, but we will forget about everyone else who has got newborns. They can lie in the gutter.”, which is what happened to many of the babies in Victorian England, actually.

But we would presume that in the 21st century there would be more courage, and there is actually a failure of courage in the title. It should be clear that we support all our children and all our babies. It is completely perverse to create inequality and poverty while claiming, as it does in the title, to be a bill for the financial support of newborn children. It is discrimination, and it is actually disturbing and perverse to see this happening, because we believe that this was a wasted opportunity to actually support the people who are most in need and their babies.

This week I have been touring decile 1 schools and talking to principals about families and their newborns. During the families and newborns discussion they have said that the most important thing is for those newborn children to get what they need when they are at their most vulnerable, because if they do not get what is needed, then by the time they reach school they are already at a disadvantage. So why would a Budget bill called the Budget Measures (Financial Support for Newborn Children) Bill create disadvantage, which is going to be manifest very soon in those small people’s lives? It is simply not acceptable, it is not a fairer society, and it is not what most people expect us to do in this House. It is disturbing.

Further to the commencement date, well, this is being put through under urgency. I will tell you what is urgent: child poverty is urgent. Newborn babies of beneficiary families urgently need support. There is no margin of error for those people. For some of those mothers, it is the most urgent experience that they have ever had, and they urgently need our support. For those who are less in need but who will benefit from this bill—and that is good—they are not going to get it until 2015, so this is not urgency, is it? This is not. This is an election year, but it ain’t urgency. Why do we not sent this bill to a select committee and have the conversation about why the bad babies of the poor are not going to get anything? That is what I would like to have a discussion about. I think there are many, many people and organisations that would like to hold the Government to account through the select committee process on this very issue.

I am proud to be a member of the Green Party, because we have never discriminated. We have always supported, through our support for the court case that the Child Poverty Action Group took, extending in-work tax credits to beneficiary families and their babies.

Hon TREVOR MALLARD (Labour—Hutt South): There are two issues that we are currently debating. The first is whether the Budget Measures (Financial Support for Newborn Children) Bill is appropriately titled. I think we are beginning to develop a consensus—in fact, I think it has been unanimous amongst all the speakers in the Chamber on this particular phase of the bill—that this bill is not appropriately titled. I think it could have been titled “An Election Attempt to Steal a Wee Bit of Labour, Green, and New Zealand First Policy, Water it Down and Pretend it is Appropriate, and to Mis-phase It - Type Bill”, or there are a number of other points. I think that, certainly, the implication that the newborn children who most need support are getting anything at all from this bill is wrong.

I want to refer to the question of timing and commencement. This bill is coming in across quite a wide range of time. There are parts of it that come in from April next year—not very much; about $3 million worth, I think—there are parts of it that come in from July next year, and there are parts of it that come in from July the year after. I think that there are bits that come in from April next year, and April the year after, depending on which particular part it is. The question I have got—and it is a technical question on which the Minister in the chair, the Minister of Labour, might need to get advice—is why it cannot all be brought into force tomorrow. Even if we are sticking with the dates that were previously agreed as to when the payments are to be made, why is the bill being brought into force with some parts coming in as it is approved by Royal assent, and others not coming in until dates that are much later? I just do not see the need for it.

Within the bill there is very clear phasing, and very clear, very well-set-out transitional provisions. They are wrong because, of course, things should have been brought in much, much more quickly and they should have been much better, but even if one accepts, as the Committee appears to be accepting, the timing of the actual provisions, the question I have got for the Minister is this. Why has an unusual format been used in the drafting in order to bring some of these provisions into force on the legislation getting its Royal assent, and some do not come into force until a long time later?

I just want to be a little bit cynical. Is there some ulterior motive here? Is there a motive in the provisions that bring these measures into force, to reverse this out at some stage after 20 September? I am just feeling a certain lack of love and a certain lack of trust with the Minister. If the Minister had been upfront and defended Part 2, and even if he had defended Part 1, then I might have been slightly more inclined to go along with these provisions. Normally, of course, you do not argue with them, but it is a genuine question. I have been around this place for a little while, and normally when there is a delay in the bringing into force of provisions, there is a reason for it. The fact that a bill does not come into effect until later—and that is clearly set out in the clauses of the bill—is not a reason for the bill to be broken into different parts for the commencement clause. There does not appear to be a good reason for it.

We know that, for example, with the parental tax credit measures that are sitting in the bill, the Inland Revenue Department has to be prepared to do some things in April next year and in April the year after. There is no reason why, given what is in the bill, it cannot actually do that. You do not need to phase in the bringing into force of provisions, which on the face of them cannot be brought into force anyway—

CAROL BEAUMONT (Labour): I actually feel slightly sad, having come to the Committee stage, that we have seen attempts to make this a better piece of legislation, but they have just been rejected out of hand. Here we are dealing with something that really should be a cause for celebration. This bill, the Budget Measures (Financial Support for Newborn Children) Bill, should be a cause for celebration because finally National has got it. Finally it accepts that paid parental leave is something worth supporting. It has taken a while.

This bill is quite a small measure, but National voted against paid parental leave when it was introduced in 2002. It voted against extending it in 2004, and I think National members might have abstained in 2007. Then, you know, National has been playing all sorts of silly, silly games with Sue Moroney’s very excellent piece of legislation—well supported by many members in this House—which tries to really make a difference and extends paid parental leave. We have had all sorts of requests by Mr Auchinvole to extend the time for reporting back with a view to reach some decision, and then reneging on that, and we have had filibustering, basically, for weeks and weeks and weeks to try to stop a vote from happening on that bill. Then, of course, finally, we have had the Government putting something forward in the Budget.

I assume that the Government’s intention is still to veto Ms Moroney’s bill if it ever lets it get back into the House to be voted on, but what we have got here, something that should be a cause for celebration, is somewhat tempered by the fact that the changes are minor. Next year there will be 2 extra weeks of paid parental leave, and 2 more weeks the year after. Of course, in the parental tax credit provision we have seen that, despite its being described as supporting “lower and middle income families”, and I think that somewhere else it talks about low and middle income families, it quite clearly excludes 14,000 of the most struggling families. Those who are really struggling to make ends meet and those whose children are living in poverty are being excluded. So the changes are minor and they exclude the people who really need it.

Of course, we saw last night and this morning the Government vote against opportunities to fix those things and to stand up in this Chamber and say: “We all support families and we all understand that newborn children need the best start in life. Let us give them, and primarily their mothers,”—not always their mothers, but primarily their mothers—“the best possible start in life.” We need to give them the opportunity to have bonding, to have good breastfeeding established, and to make sure that children have a very healthy and exceptional start to their life. We want all of our children to do well, not just some of our children—

Mike Sabin: Title and commencement.

CAROL BEAUMONT: —and not just the wealthy, or, as Mr Sabin keeps referring to them, the hard-working ones. We want that for every person and every child in the country. Children are not workers. Last night we had Mr Sabin talking about hard-working babies, it seemed. But, anyway, this is something that we wanted to make real progress on.

I have to say that this bill is deeply cynical—deeply cynical. This Government has done this only because there is an election in 4 months. It has done it only because it knows that it is so strongly supported. The campaign around Ms Moroney’s bill—the 26 for Babies people—has struck a real chord. There is a genuine need out there in the community. The Government’s measure is deeply cynical, very small, excludes many, and is effectively an election bribe, but at least it is some progress. As I said, it should be a cause for celebration that National has finally understood that paid parental leave is worthwhile.

What is also deeply cynical is that the Minister in the chair, Simon Bridges, stood there last night and started talking about how this measure is extending paid parental leave to lots of other people who are not currently covered by it. Well, what the Minister was talking about was announcements about measures that were made in the Budget but are not being enacted in this bill, and, I understand, will not be coming into effect until 2016. There were very good announcements about casual workers and seasonal workers, and so on.

I want to say that this bill should perhaps be called “Support for Some Newborn Children Bill”—

JAMI-LEE ROSS (Junior Whip—National): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 53

New Zealand Labour 34; Green Party 11; New Zealand First 7; Mana 1.

Motion agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Hon SIMON BRIDGES (Minister of Labour): I move, That the Committee divide the bill into the Parental Leave and Employment Protection Amendment Bill (No 2) and the Taxation (Parental Tax Credit) Bill, pursuant to Supplementary Order Paper 448.

Hon TREVOR MALLARD (Labour—Hutt South): I just rise to support the Minister of Labour in this particular decision to divide the Budget Measures (Financial Support for Newborn Children) Bill. It is absolutely clear that this bill is one that it is very, very necessary to divide. If it was not divided, then we would have a separate Act that contained changes to the Income Tax Act and changes to the Parental Leave and Employment Protection Act that were together. Although, of course, they would stand as the law of the country, it would make it almost impossible to reference those particular sections because they would not sit within the relevant legislation; they would be sitting outside it. It would be quite a problem—quite a problem—for people who were attempting to refer to particular sections. It would be a problem for people who were looking for these changes. They would go to the Act and they would find, for example, in their particular law libraries the 2004 or 2006 changes sitting within the Act, but they would not be able to find these relevant changes, because the cross-referencing would not be done at all.

I find it slightly extraordinary that we are having a debate in this area. I think it might be described as unprecedented. I am not absolutely certain, within the Standing Orders, whether it is allowed. But I think it is an interesting test. I wonder whether, in fact, I should raise a point of order against myself, because certainly if I was on the other side, I would have raised a point of order to say that a speech on the division of a bill is not consistent with the Standing Orders and Speakers’ rulings. But it appears, Mr Chairperson Robertson, that in the dying days of your role in the Chair, you are setting precedents, and this is an interesting precedent. I think it is fair to say that it is a precedent that a future Chairperson will no doubt overrule—will no doubt overrule.

But it is not often that I can be 100 percent supportive of a Minister. In most of the stuff we have spoken on previously, I have said he should have gone further or he did not go far enough, even though we were voting for the particular clause. But the motion that he has moved that the bill be divided is something that we are totally supportive of. It is a wonderful thing to do. It is necessary for the law of the land to be properly interpreted and for this particular bill, which refers to a number of Acts, to be properly placed within that legislation. If we did not do this, then, of course, that would not occur. But the idea that it gets debated is certainly novel.

Motion agreed to.

Bill reported without amendment.

Report adopted.

Bills

Parental Leave and Employment Protection Amendment Bill (No 2)

Taxation (Parental Tax Credit) Bill

Third Readings

Hon SIMON BRIDGES (Minister of Labour): I move, That the Parental Leave and Employment Protection Amendment Bill (No 2) and the Taxation (Parental Tax Credit) Bill be now read a third time.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I am just checking whether these are separate bills.

Mr SPEAKER: Yes, the bills are separate bills.

Hon Trevor Mallard: And are we having separate debates on them?

Mr SPEAKER: No, we are not having separate debates.

Hon Trevor Mallard: Are we going to vote separately on them?

Mr SPEAKER: If the member seeks leave to do so, I guess we can.

Hon Trevor Mallard: Do we need leave, or will you put them separately?

Mr SPEAKER: I was proposing not to put them separately. I was proposing to put them together.

Hon Trevor Mallard: Well, they are quite separate issues.

Mr SPEAKER: I accept that they are quite separate issues, but I understand they can still be put together.

Hon SIMON BRIDGES: It gives me great satisfaction to support these bills at their third readings. I would like to thank the whole House for supporting the passage of these bills. These bills help provide financial and employment certainty to working families with newborn children in New Zealand. In the first year of a child’s life, particularly the first 6 months, it is important for the development of newborn children that they receive full-time personal care. Parents and caregivers need support to manage budgetary and other pressures over this time, support that the current paid parental leave and parental tax credit entitlements do not provide as well as they could. Encouraging working mothers and caregivers to remain attached to the labour market has broad economic and social benefits and can support a stable family environment for children to grow up in.

These bills support the aims of allowing working families with newborns the time to bond while maintaining workforce attachment and employment security. They recognise that improved financial support is needed for some of these families. The bills also recognise that we have to manage our purse strings carefully. By supporting working families with newborn children, these bills are in the best interests of New Zealand families and businesses, enhancing economic and social outcomes in a fiscally responsible manner. I commend these bills to the House.

JACINDA ARDERN (Labour): It seems, surprisingly, that the previous speaker, the Minister of Labour, has run out of things to say in the third reading of his Budget legislation arising from the Budget Measures (Financial Support for Newborn Children) Bill. We have still got plenty on this side of the House to add to the discussion on these bills, the Parental Leave and Employment Protection Amendment Bill (No 2) and the Taxation (Parental Tax Credit) Bill. The Labour Party does support the legislation that we are debating now. Of course, it would be crazy if we did not. It in part goes some way to acknowledging what Best Start was trying to do, but, as we have debated at great length, it certainly does not go all the way in some critical areas. Even though there is a stark contrast between the two packages in terms of scale and in terms of length, probably our biggest disappointment is still the exclusions that exist for families. We traversed in quite a lot of detail the fact that those who are our most vulnerable are excluded, but, actually, there is a group of middle New Zealanders, for want of a better word, who are also excluded.

In this Budget the Government used quite a bit of rhetoric around vulnerable children in the speech that Mr English gave yesterday. In particular, the Government announced some extra funding to, basically, implement the Vulnerable Children Bill. That did actually need to happen. We have an agenda by Paula Bennett that was going fairly underfunded in the way that it was being rolled out. Two Children’s Teams are already in existence. Just to give some context, Children’s Teams are collaborative, cross-sectoral teams that are meant to work with our most vulnerable children in areas where there is that extra need. We have two pilot sites, in Rotorua and in Whangarei, and, as of November last year, the teams were working with a total of 32 children—32 children were being assisted by the Government’s Children’s Teams. We always agreed that they are a good idea. What we disagreed with was the fact that they were having to operate out of a department’s baselines. That was just untenable, and so it is good to see that there is some extra funding going in there. It needed to happen if we are going to make some inroads.

But also, the Government did make a bit of a statement around the fact that it was supporting vulnerable children not just through this package we are discussing today but through $349 million going into child protection. That is up from 2008-09. Child protection services then were getting roughly $317 million, but if you inflation-adjust it, actually, what Child, Youth and Family needs to be awarded just to keep pace with inflation is more like $360 million. It is still falling shy, and that is taking into account that over that period of time we have gone from 49,000 notifications where further actions were required by Child, Youth and Family up to 61,800—a big jump in the number of cases that need Child, Youth and Family’s attention and a big jump in the number that are substantiated. So, yes, the Government has put social workers in specific places—in hospitals and in our schools—but on the frontline they still really are an ambulance. It was always intended, actually, that Child, Youth and Family would have a preventative role, but that is long gone—that is long gone.

I want to compare that, then, with what Labour has proposed with Best Start. What was clear in the debate, where there was comparison between the package of what the Government has put forward here in this legislation in income measures and what Labour has put forward, was that Best Start was never just about income. Yes, that was a big part of it. We had, as part of it, 26 weeks’ paid parental leave. We had a Best Start payment that reached 95 percent of families. The only families excluded from our Best Start payment were those earning over $150,000. That was where we were happier to put our exclusion zone. The Government put its on people earning less than roughly $20,000—a stark contrast in the way we address those packages. We have roughly 95 percent of families being covered by our package, so there was a big difference there. But the Government, when it was talking about its payment package, which is in this legislation, did talk about wanting to balance the issue of giving options to families with also maintaining a parent’s attachment to the workplace. We can sit and try to play around with what that might look like using tables, spreadsheets, and options, or we can actually use the evidence.

Some of the best evidence we have is now coming through from the Growing Up in New Zealand study, which uses a diverse cohort of approximately 7,000 families in New Zealand and is covering their experiences in raising their children. The last time we did this was with the Dunedin longitudinal study. Yes, they are expensive studies to do, but they provide us with such rich data and they provide policy makers with a bit of a sense of the choices parents are making, sometimes even when they are up against strong financial pressure. What we do know from the Growing Up in New Zealand study of children who were born in 2009—so we are some way down the track now with those families—is that 11 percent of the children in the study live in households with an income of less than $30,000 per annum—11 percent are in extreme poverty, then—

John Hayes: Rubbish!

JACINDA ARDERN: —in that regard, or could be considered to be in quite significant deprivation. John Hayes just said “Rubbish!”. I cannot quite tell which element of what I just said was rubbish. Does he maybe think that you are not struggling if you are raising a family on $30,000? Is that the point he is trying to make, or does he not acknowledge that 11 percent are growing up in those circumstances?

Hon Clayton Cosgrove: Oh, he’s silent now.

JACINDA ARDERN: He has nothing further to add. So that is what we know about those families. There are a significant number who really are in quite significant deprivation. Then, if we continue to look over the study, it also found that 40 percent of families had received paid parental leave over the last year, and a smaller percentage had received family tax credit. That is interesting. That sits with what we talked about today—that a large number of people are not eligible for paid parental leave, which is being extended in this legislation by 4 weeks. People do tend to miss out on things like the parental tax credit, which we have also been debating. Eighteen percent of the families had, at some point during that period, been reliant on a Government benefit—18 percent. Those families get nothing from this legislation. Those 18 percent of families get absolutely nothing from this legislation today, and that is a point we have tried to make very, very strongly.

But here is another interesting fact. All of the families were reliant on a great number of income sources during the first 9 months of their children’s lives. Only—and this is incredible—14 percent received income from only one source. So this traditional idea that one parent goes out and keeps working and the other stays home and cares for the child is not so. That is just a luxury for families now. Only 14 percent received income from only one source. Thirty-eight percent received income from two sources, 31 percent from three sources, 13 percent from four sources or more, and 5 percent were having to try to cobble together an income from five sources. They are families working multiple jobs, trying to bring in enough income to be able to survive with their new children. That is over the first 9 months of a child’s life. Keep that in mind. What kind of situation does that create for those families? The Government said that what it wanted to do with paid parental leave was maintain attachment to the workforce. I am afraid that it simplifies the situation down to say that, actually, a mother’s only choice is whether she holds on to a slightly lesser income for a longer period. Actually, some of these parents are having to make the choice to go back to work in order to keep the income high enough to keep going. We see that from that data.

There is one final point from this study. The type of leave taken during the first 9 months was made up of paid parental leave, unpaid leave, and annual leave. Families are cobbling together what they can to stay home longer, and I think that that is really telling. But, as I said at the beginning, Best Start—and there have been a lot of comparisons between Labour’s package and National’s—was never just about income. It was also about doing things like putting a boost into early childhood education. We want to move from 20 free hours for families to 25 free hours. We want to fund early childhood education centres so that all of their staff can be 100 percent qualified and so that they are funded to do that. We want to put a boost into Plunket so that Plunket nurses can be not only a universal service but a targeted one, where we are putting them into the homes of our most vulnerable families earlier and keeping them there longer. That is what we want to do to create that extra support, which is not just financial support but support in raising a child, for families who sometimes have very little outside support themselves.

In health, we listened to the excellent work that was led by Paul Hutchison and the Health Committee. We want there to be 10-week gestational checks. We want free scans for mums and we want free antenatal classes. All of that is how you give a child the best start in life, and that is what Labour would do.

SUE MORONEY (Labour): It is a pleasure to rise to speak to the third readings of these two bills—the Parental Leave and Employment Protection Amendment Bill and the Taxation (Parental Tax Credit) Bill—which were originally the Budget Measures (Financial Support for Newborn Children) Bill but have now been split. It is of deep concern that if National members were truly proud of this package, they would be taking their calls on this legislation, but they appear to have stopped. They appear to have given up doing even that. Maybe they are ashamed. Maybe they are ashamed of how little this package actually does deliver. I am not sure why they have stopped giving their speeches on this legislation. None the less, the Labour Party has got plenty to say about financial support for newborn children. As I said at the outset when we stood not that long ago, actually, and spoke on the first reading of the original bill, which we had put in front of us maybe 5 minutes earlier, if imitation is the most sincere form of flattery, then I feel only a little flattered by the measures that are being debated here today in these third readings.

The Government has missed a huge opportunity. It has missed an opportunity to ensure a good level of financial support for all newborn children—for all newborn children. And it has particularly missed an opportunity to have read and understood all of the brilliant research and evidence that have been put before the Government Administration Committee in its debating and consideration of my bill to extend paid parental leave to 26 weeks, the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill. Because if the Government had taken the time to read that information, it would have recognised that, actually, getting to 6 months’ paid parental leave is incredibly important for a number of reasons, such as child development.

Child development experts tell us that because of the way in which a newborn baby’s brain develops, getting that attachment and bonding going well in, particularly, the first 6 months but also the first 12 months of a baby’s life really sets the pattern for how well they will cope with the rest of their lives. It sets the pattern for how well they will be able to adapt to change and how they will be able to work with the challenges in their lives, and for matters like whether they will end up in the youth justice system at all, issues like whether they are going to need remedial education, and problems like whether they are going to need a lot of taxpayer support in our health system. All the evidence said that if we get that first 6 months right—well, 12 months but importantly the first 6 months—we can make a big dent in child development and health issues but also ease the financial stress on families at a time when their income goes down and their expenses go up.

I just remind people about that again because I think that people sometimes just gloss over that. They think that people have babies and live happily ever after. Well, actually, what happens for people who are in need of paid parental leave is that their income goes down at the very time when their expenses go up. All the expenses associated with having a newborn child cannot be glossed over. They are very real. And having access to paid parental leave, and decent access to paid parental leave, is important in taking the financial stress off families so that they can actually focus on the thing we would all want them to focus on, which is nurturing this new, young life—nurturing this new, young life—so that all of us can have the best, well-rounded fellow citizen to live alongside.

I think the thing that really warmed my heart when there was an overwhelmingly positive response to my bill to extend paid parental leave to 26 weeks was that I felt proud of my country, actually. There are moments when I sometimes do not, but on this occasion I really did because people got it.

John Hayes: What about the grandmothers?

SUE MORONEY: People really got it—even the grandmothers, Mr Hayes. Even the grandmothers got it. I know that you think that maybe they might not have a vested interest in this, but most people—not everyone but most people—said “OK. I’m past my childbearing years or I don’t plan to have children”, or whatever it is, “but I can understand the merit in ensuring that all of our children are raised in a stable and decent environment, because we all get to live in a society alongside them.” And would we not all want the best, well-rounded citizens who have had that nurturing and support from those early months to live alongside? Even employers came along to the select committee and said: “Yeah, we get it. We get it as well because we want our employees, when they return after paid parental leave, to have their family well settled so that they can focus and be the most productive at work. We like our employees. We want them to be happy and we want their families to be supported.”

People also understood that extending paid parental leave was a big boost to employers because it meant that they got to retain their valuable staff, whom they had invested in, whom they had spent time training, and whom they want to come back into the workforce so that they can continue reaping the benefits of that skills development. So even employers understood it. Some of them must have been really disheartened to see National continually vote against that measure to extend paid parental leave. They must have been absolutely devastated when they heard National say not only that the Government would use its democratic right to vote against it but that it would stop democracy in its tracks by threatening a financial veto against the bill should it have majority support in Parliament, which it does.

In reflecting on the debate in the last however many hours—12 hours or 24 hours or so—some aspects of it have not been terribly pleasant, but the thing that, again, warms my heart is that I think, looking at the way that party has voted on various amendments that were put forward, there will still likely be majority support for my bill for 26 weeks’ paid parental leave when it gets debated some time in the next few weeks in this House. I welcome that because I think there is still a really important debate to be had on behalf of the New Zealand public, on behalf of the 3,809 people who submitted on the bill—overwhelmingly in favour of it—and that we owe them the right to have the bill they support thoroughly debated in this House. I think it will pass. I think it will pass, and I encourage all of those parties that have supported it to date to continue to do so, because I think what that places on record is the parties that are prepared to prioritise families, that are prepared to prioritise children, and that do understand that this is not a cost to our society but an investment. It is an investment in the future of our society.

That is what I think ignited the public imagination. When the Labour Party came out, even in fiscally challenged times, to say that, actually, families need support—families need support—and the rest of us will benefit from it, the public responded and went: “There’s a party who’s talking about the real interests of the future of this country. There’s a party who really understands and is listening to and knows the pressures that are placed on families.” And the country responded, and that makes me feel so proud of the sort of country that I really do love being a citizen of, the sort of country where people do not necessarily think of their own self-interest but they understand the importance of society and community.

This legislation is a step in the right direction, and I want to acknowledge how much of a big step it is for National because it has never ever before supported extending paid parental leave, despite some of the rewriting of history that has gone on in the debate. I want to acknowledge that, but I also want to say to the National Party: “Don’t sell our families short. Don’t sell our families short.” The National Party and all the parties in this Parliament have another opportunity to actually do the right thing by families. Do the right thing, which the research and evidence tell us will make the big difference in children’s lives, and support my bill when it comes up for debate to extend paid parental leave to 26 weeks—extend it to the families whom the Government says it will make newly eligible for paid parental leave, which Labour also supports.

I do want to say in closing that it is Labour’s view that we want to see that piece of legislation tabled in this House and debated before Parliament rises for the election, because we want to see the detail of it. We think that is the right way to proceed. I commend this legislation to the House.

MIKE SABIN (National—Northland): Perhaps in the debate on the title and commencement clauses of this legislation arising from the Budget Measures (Financial Support for Newborn Children) Bill we should have actually been trying to thread in the words “Sue Moroney”, because that is pretty much all the previous speaker, Sue Moroney, talked about in her contribution. I picked up on the point—and I think it is an insight into Sue Moroney’s mind-set—that she is not always proud of her country.

Grant Robertson: At least she put a bill up.

MIKE SABIN: But when she puts a bill up that she thinks a few people think is OK, suddenly she is proud of her country again. Interesting.

It is not all about Sue Moroney, though. We have heard much about her take on what National should be doing in Government. We have heard that any sort of variation other than her non-targeted bill—which, essentially, goes far too far and actually provides support for people who, I would argue, do not need it. I would not need it. On my income there is no way that that support should be available to me.

That is what this Government has done. It has ensured that the bill that we have been debating is actually targeted at those who need it, is responsible, and actually meets the need. It is not just a blanket mechanism. If we look at the situation out there and the support that members of the New Zealand community are provided with, someone on an income of $50,000 or so with two children is actually tax-neutral. They are actually tax-neutral under this Government. There are actually many people who do not need the sort of support that Sue Moroney’s bill, the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill, would have proffered.

When we look at these particular bills, the Parental Leave and Employment Protection Amendment Bill (No 2) and the Taxation (Parental Tax Credit) Bill, they are encompassed in a Budget that actually distributes $500 million across the community to New Zealand families. It is actually a very generous package when looked at in totality. The reality is that although we are debating this legislation, it cannot be looked at in isolation. This is a Government that has continued to support those who are struggling and those who have been vulnerable for a significant period of time. Much has been said about the people who are left out as a consequence of this legislation, the most vulnerable. Well, those most vulnerable will be getting $33 million more in terms of our support. The Children’s Team initiative and the free doctors visits for under 13-year-olds are two very good examples of what this Budget has been about and where this legislation fits in a total package.

I have no problem in supporting this legislation because I think it helps meet the need in a way that is sensible and prudent, and I actually think that the New Zealand public get that. They get that this is not about lolly scrambles. They get that it is about targeted support. That is what it is about.

JAN LOGIE (Green): I rise to take a call in this third reading of the Parental Leave and Employment Protection Amendment Bill (No 2) and the Taxation (Parental Tax Credit) Bill, which the Greens will be supporting.

The Green Party believes passionately in supporting our children. We believe in the value of good lives for everyone and a fair future for everyone. We believe that every single child in this country deserves to thrive, not just survive or have their lives cut short or harmed by illness from diseases of poverty, as is all too often the case in this country at the moment.

This Government has presented us with a Budget where it has told us that it is giving $500 million to families to support families in need. New Zealand needs to know that that $500 million, which sounds so significant, is actually only $125 million a year over the next 4 years and that this Government, the same Government, is spending $1 billion a year in servicing the interest on the debt that it has got this country into by spending on things like American-style expressways. Do those values express an honest desire to support the families of this country? I do not believe they do. This Government has told us that this is a fiscally responsible response to the challenges, yet it does nothing to address child poverty—the 285,000 children in this country who are living in poverty.

I do want to draw members’ attention to the sound of a baby that we heard earlier in the gallery and how that sound cannot but touch our hearts. I would like to ask members to reflect for a minute on one of the provisions in this bill that relates to the parental tax credit and the thought that the family of that baby may be a working family, not receiving ACC, not on a student allowance, not on a benefit, and that family would be getting extra support from this Government. If there was another baby making that same sound, sitting on its parents’ knees right next to it, who was from a beneficiary family struggling on just over $200 a week—and I would like to remind the members in this House that that is not so different from what we get as a nightly accommodation rate when we travel, and that amount is expected to support that family for an entire week—they are getting nothing in this Budget from this Government.

I ask whether that is delivering on what we want for our children in this country. Is that degree of discrimination delivering the best that we have to offer? I cannot believe that it is. When we have a surplus, when we are choosing to spend money on other things, when we are paying off debt that we do not need to be paying off because we could have had a temporary earthquake levy that would not have required us to borrow for that, when we could have not had those tax cuts for the richest New Zealanders, and if we had lived within our means, we could have provided for our most vulnerable children.

I think this House needs to reflect on the values that are being delivered by this Government. We absolutely support the extension to paid parental leave but I note, though—and I think it is part of an important debate—that the Child Poverty Action Group has criticised this as a priority because it is not reaching the most vulnerable families. I think that is an important debate and it is a shame that we have not been able to go through a select committee process to enable that political public discussion.

When we first got paid parental leave, I was the executive director for the national Young Women’s Christian Association of Aotearoa - New Zealand. We were really involved in that campaign to first get the 12 weeks. I have got to say that it was a tough campaign. We had to do a lot of work to convince the then Labour-Alliance Government, the Labour Party in particular, to support introducing paid parental leave. It was a tough campaign and I think it is heartening for the community to see that now the Labour Party is in a position where it is bringing forward 26 weeks and it is right on board with this issue and the recognition that paid parental leave makes a huge difference to every measure in our society. It is also now encouraging to see the National Party coming on board and getting that.

So to all of you thousands of submitters, all of the many people who sent in postcards, know that you are making a difference, that this House is starting to get it—that paid parental leave will deliver. The National Party, admittedly, has gone only part way, and I was so disappointed last night to see the amendment for 26 weeks get voted down, when we had heard from 3,795 submitters, who desperately and so eloquently supported the need for 26 weeks because of the health benefits in terms of breastfeeding and attachment, and the long-term benefits to us as a society from supporting that early time in life.

It is undeniable, the benefit of that time frame. There was such good debate about it. Employers were very clear that 6 months was actually easier for them, because at the moment, with the 14 weeks, they are typically just covering rather than getting somebody in to replace the person for those 6 months. It is too short a time period. It is actually increasing the costs for them and the burden on their staff.

I do ask the National Party members, who supposedly support business and those interests, whether 16 weeks and, then later, 18 weeks, will address the need that has been identified by those businesses. I am not sure that it does. They were quite clear, from my hearing of the submissions, that 6 months was a good starting period for being able to manage that transition, from their perspective, as well as for delivering the social good.

Finally, I do want to just go back to the fundamentals and what we are valuing as a society. This legislation is bringing in 16 weeks’ paid parental leave next year and then 18 weeks the year after. It is an acknowledgment, and I thank the National Party for that acknowledgment. It is an important thing for all the people in New Zealand to understand that you will listen, even if you will not go as far as they would like.

I would like also to just finish on the core point for us. The major disappointment for us, with this legislation, is around the parental tax credit. Although it offers some money to middle-income families, really it is just an adjustment to recognise the decreased value of Working for Families, because the Government has not been adjusting it to the level that it should have been, so it has decreased in value. That $13 million that is going in there is pretty much a token effort, but I am not underestimating the power of $70 in the hand for 10 weeks for those families. It is just gutting that it is not going to the families that absolutely need it, and that it will in effect entrench the inequality and the gap between those who, for reasons of disability or violence or just not being able to be in a job at that time, are locked out of the workforce at this time. The children of those families deserve our best effort.

This legislation offers breadcrumbs, and we are happy to take them for now, but, boy, do we look forward to the time when we are in a position to be able to offer everyone a fair share of the cake.

Dr PAUL HUTCHISON (National—Hunua): It is, indeed, a privilege and a pleasure to speak on the Parental Leave and Employment Protection Amendment Bill (No 2) and the Taxation (Parental Tax Credit) Bill. Indeed, it signals a great day of celebration in New Zealand. It is part of a $500 million package directed towards families and children by this excellent National Government. What a shame it was to hear those pious words from Jan Logie. How can she reconcile such pious and sanctimonious words with the awful tweet that she has just sent regarding the finance Minister and his family? It is quite shocking, and I hope the media will, indeed, dissect it further, because it is undermining to this very, very important legislation.

In fact, $171 million towards extending paid parental leave in such a reasonably short time, after a major financial crisis, is absolutely appropriate. National has targeted its spending very carefully and absolutely differently from how the Greens and Labour would have done when they were prepared to splurge $500 million—half a billion dollars—absolutely undirected, on every baby born in New Zealand. That was not going to help. We have got no idea how that money was going to be spent, whereas in this legislation, which has arisen from the Budget Measures (Financial Support for Newborn Children) Bill and has been split into the Parental Leave and Employment Protection Amendment Bill (No 2) and then the Taxation (Parental Tax Credit) Bill, we have a realistic approach, firstly to paid parental leave, and then to helping families who are not receiving paid parental leave but are on lower and medium incomes. So this is very targeted. It is very appropriate. It is, indeed, realistic in terms of the money available that New Zealand has to spend. It is very generous towards families and children.

The legislation extends in two tranches paid parental leave from 14 weeks to 16 weeks, and then from 16 weeks to 18 weeks, which is a total of $172 million, with a further $42 million in the parental tax credit bill. This is a very, very impressive change. The tax credit is going from its current maximum of $150 a week to $220 a week, and is also extended from 8 weeks to 10 weeks. The tax credit is currently being paid to low and middle income working families who are not on a benefit or receiving paid parental leave.

That is exactly as I was saying, Dr Prasad. This is appropriately targeted, and that is the difference between Labour, the Greens, and the National Government. As we heard Jan Logie say, she thought this offered crumbs. That is the sentiment. Labour and the Greens would spend more, they would tax more, and, indeed, they would borrow more, absolutely irrespective of prudential financial management. Here we have a National Government, highly responsible, putting the country back into the black, and at the same time investing a very significant $500 million towards families and children.

TRACEY MARTIN (NZ First): Kia ora, Mr Speaker. I rise to speak on behalf of New Zealand First on the Parental Leave and Employment Protection Amendment Bill (No 2) and the Taxation (Parental Tax Credit) Bill. A very wise man whom I highly respect—and in this case it was not the Rt Hon Winston Peters—once said to me that if you truly want to have influence, you need to become a Minister. As I do not usually do with people whom I highly respect, I disagreed at that time and said I believe that as Opposition members we can have influence every single day by taking the argument to the Government.

I think this legislation has shown that that can be true. This Budget has shown that that can be true. Sue Moroney, through the pressure of her member’s bill, the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill, has put enough pressure on through the campaigns she has run to show this Government that it must take some steps, particularly in an election year, to move towards supporting newborn children, just as Barbara Stewart’s proposed member’s bill, the Teen Health Check Bill—which would give free medical care to all children under the age of 13—has been picked up by this Government. That has been New Zealand First policy for a long time. Although I appreciate the advice that learned gentleman has given me and I am grateful for it, in this instance I think I have proven my point. We have had influence, and we are grateful that the pressure from the Opposition, and the pressure from the public behind it, has made the National Party move on this issue.

I want to compliment Dr Paul Hutchison on the work that his Health Committee did around this issue of supporting our unborn and our newborn children. I can only imagine that inside caucus he was one of those who lobbied hard for this to take place, because he understands how important it is. I believe that when he leaves this Parliament he will be sorely missed. I believe that Dr Hutchison probably fought hard for this to go to 26 weeks’ paid parental leave. I believe that he would have done that. But because of whatever it is that is inside the National Party psyche, its members could not bring themselves to push that far, and they will justify that on the grounds of finance. They will justify it. We have just heard, unfortunately, Dr Hutchison falling back on that argument. We all know there is not much else on which they can argue against it, unfortunately.

There is so much evidence that has been produced about the savings from 26 weeks’ leave. Dr Hutchison mentioned $172 million. Unfortunately, due to the urgency of this legislation we have not had a select committee process where we could actually have gone through those numbers to make sure that we know what it costs. But we do know what 26 weeks would have saved. We know what 26 weeks would have saved because we have the report from the Government Administration Committee about 26 weeks’ leave. So we know that with 26 weeks’ leave there is a reduction of $13 million in childcare subsidy. There would be an additional $8 million in tax from recipients of paid parental leave and an additional $5 million in tax from temporary employees filling those paid jobs. Benefit payments would reduce by $2.4 million and, as I mentioned in an earlier reading of this legislation, we have not even factored yet what the downstream health savings will be. A study published by the Journal of the American Medical Association found that obesity rates among 2 to 5-year olds in America had dropped by an impressive 43 percent over the last decade, and that was partly contributed to by mothers breastfeeding for longer. We have not factored all those savings in.

Mike Sabin mentioned that if you had an income around $50,000—

Hon Clayton Cosgrove: Who?

TRACEY MARTIN: I know, he is not well known, but Mike Sabin made the comment that if you had an income of around $50,000 or below—this is the spin that they spin—you do not actually pay tax. I am not sure those people feel like that every day of the week, but National members say those people do not actually pay tax. They use another word for it. They like to spin it. They say it is tax-neutral. In a way, they are saying that those people should not complain because they do not pay tax. But what we know is that there is $50 million worth of savings—$50 million worth of savings with 26 weeks’ paid parental leave, and that is even without the health benefits downstream.

Again, New Zealand First will support this legislation, but it is a bit of Hansel and Gretel legislation. It is spreading crumbs along the way towards 20 September, so it is very much Hansel and Gretel legislation—a trail of crumbs up until 20 September. But there is not even a guarantee at this stage. There is a date for 2015—1 April—and there is a date in 2016. New Zealand First would like to make sure that the New Zealand public understands that although the National Government may steal our policies, it will not steal our commitment to making sure that as soon as we have influence we will put in place these supports for newborn babies and other supports for families and children and for businesses in New Zealand to truly bring us back to the standard of living that we deserve, and that we expect. Although the National Party might have lost its aspiration for this country, New Zealand First has not. Kia ora.

DAVID BENNETT (National—Hamilton East): Just in response to the last speaker, Tracey Martin, I say that this legislation arising from the Budget Measures (Financial Support for Newborn Children) Bill is good legislation that the Government has used to boost parental leave provisions. It is all part of the programme of that $500 million that is going to families in this Budget. It is action taken by a political party when there is the opportunity to do so, unlike the Opposition, which is all talk and no action. When we got the chance we have done it and we have delivered the things that the Opposition were not even talking about, like free doctors visits to under-13s. This is good legislation.

CAROL BEAUMONT (Labour): Well, it is great to see the depth of David Bennett’s passion for the issue of families. That speech was all of 1 minute. I intend to take my full call on this matter. It is an important question—the question of how we support our newborn children.

I want to start by acknowledging that we have this legislation arising from the Budget Measures (Financial Support for Newborn Children) Bill before the House and that there is a small improvement being made in the areas of both paid parental leave—2 weeks next year; 2 weeks the year after—and parental tax credits for some by lifting the amount and length of time. We should always acknowledge where there is some progress being made. There is the progress, of course, in those two areas and, as I said in the Committee stage, the progress, in fact, in the National Party’s thinking because it has obviously finally got it that paid parental leave is actually important and that we need to do more in this space. But we need to do a great deal better, I would say.

As for the last member who has just resumed his seat—to say that Labour has not taken this question seriously is just absolutely incorrect, and the member well knows it. Labour introduced paid parental leave in 2002. Labour extended paid parental leave in 2004. Labour further extended paid parental leave in 2007. And my colleague Sue Moroney, fully supported by this caucus and others members in this House—the Greens, New Zealand First, the Māori Party, and others—has been seeking to extend paid parental leave to a much more meaningful level, 26 weeks.

I am going to come back to why 26 weeks is a really important next step, but let us get the facts on the record here. Labour is very strongly supportive of measures like paid parental leave that support our families and give our children the best start in life. It is obviously a truism to say that supporting families and children is vital for our future. Sadly, at the moment, too many of our children are not getting supported adequately, too many of our children are living in poverty, and that is wrong on so many levels. There are 285,000 children in poverty, living in poor housing, suffering from Third World diseases, not getting the best start, struggling at school as a consequence, going hungry, and going without basic needs.

This is not what we should have in a rich country, a comparatively rich country like New Zealand. It is shameful. It is shameful that that is still the case, and this Budget does not do enough to support families. Labour’s Best Start package is far more comprehensive and, along with our economic development policies, provides real hope for a better standard of living for all New Zealanders.

I want to talk more about this issue of supporting families when they have babies, because paid parental leave is a very significant part of that support. Again, just to remind people what this legislation does, it extends paid parental leave by 2 weeks next year and by 2 weeks the year after. Unlike what a number of members opposite are saying, whom it goes to is not changing. Dr Hutchison and others have got up and said this is more targeted legislation. Well, actually, the paid parental leave provisions do not change in this legislation. What the Government has flagged up is an extension to who receives them in the future—not in this legislation. But I have to congratulate the Government on that. If we can extend paid parental leave to seasonal workers and casual workers—these are groups often of very low-paid workers—that would be a very positive step forward. But, as I understand it, that will not be until 2016. The Minister of Labour last night tried to imply that it was part of this legislation. For the sake of the record let us be clear: it is not. But it is a good announcement and we welcome it.

The legislation does—in National Party terms, possibly—target the parental tax credit. What that means is that it is effectively excluding the poorest New Zealanders, the poorest New Zealand families. Beneficiary families and families of students will not receive the parental tax credit. I think it is something like 14,000 families who are excluded from that, so when people are listening and they hear about this being targeted, that is what this means—that the people who need it the most do not get it.

Let us talk about why we need to do more and how we actually, thankfully, as a Parliament have an opportunity still to do more. We need to move to get to something like 26 weeks’ paid parental leave. Why is that? Well, it is because that will mean that babies do get the opportunity to have, hopefully, the mother—or it could be the father, but generally at that young age it will be the mother—at home with the baby for a longer period of time, giving the family support to make that decision. We all know that the bonding that happens with a newborn baby in those first months is vitally important to that child’s future. It is vitally important. What could be more important to all of us than making sure we get that right? So we want babies to be looked after by their families and we want to build that bonding in relationships. When the mother is at home with the baby, it enables breastfeeding to be well established before she may well go back into the workforce.

But paid parental leave also has benefits for women. Now, more than ever, women are juggling paid working responsibilities and family responsibilities. For many families, that is a vital contribution to family income. That is what they need to do. It means that women can retain their connection to their work, have that leave, and go back into the job they had. As my colleague Sue Moroney noted, paid parental leave of 6 months, or 26 weeks, is something that employers can see is better, because it is easier to be able to work out alternative arrangements for that longer period of time. This provides the opportunity for women to have that balance to maintain contact with their paid work and move more effectively in and out of the paid workforce.

As I have already said, paid parental leave is important for families for both of those reasons, because it is good for babies and because it is good for their mothers. Also, it helps the family income, when, for many families, things are very tight. It is fair to say that the only reason that the Government has got this as part of the Budget is that there has been a campaign that has really struck a chord. Families are saying that, yes, they need this. They need this support when they have a baby.

It was very cynically announced in this Budget, and it was a relatively small announcement, close to an election. Judith Collins would not be commenting, I guess, as she did when Labour announced it, that this is an election bribe, as she indicated she thought it was when Labour announced it.

Hon Clayton Cosgrove: She’s having a wee lie down.

CAROL BEAUMONT: Oh! It is a very cynical move, but it is in response to what is needed out there, and it is well understood. It is well understood in other countries, and I want to make sure that we understand that we are outliers in this regard. We are outliers among the developed countries in the world. We have the second-lowest level of paid parental leave in the OECD. This legislation is not going to substantially change that. I do not even imagine it will change our position. I think we probably will stay there. We need to move to something larger; 26 weeks is the next step.

As I said, the good news is, for all those listening, do not stop campaigning, because there is still a chance on this. Sue Moroney’s bill, if the National Government would stop filibustering, will get back into this Parliament and it does have the numbers to be supported. That is for 26 weeks’ paid parental leave. The work on that bill has been done very well in the Government Administration Committee—the policy work and the financial work. And it is affordable.

There has been significant work done by the select committee to look at the costs, to look at the savings that offset those costs, and to work out that actually it is not a huge cost for the benefit that is given by moving to 26 weeks. So keep the pressure on. Make sure that the Hon Peter Dunne does the right thing, as he has committed to doing. Last night, of course, he voted against a Supplementary Order Paper that would have moved to 26 weeks. Well, he will still have a chance to do what he said he would do and vote for the bill, if we can get it back on to the floor of this Parliament.

So it is important and it is not too expensive. It is about what you prioritise. Investing in our children and families is the most important thing we can do as politicians.

Dr CAM CALDER (National): It is a great pleasure to rise and speak on the third readings of the Parental Leave and Employment Protection Amendment Bill (No 2) and the Taxation (Parental Tax Credit) Bill. This Government is a compassionate Government. We have put strengthening families at the core of our policy ever since we have been on the Treasury benches. We are strengthening families and providing them with the means to be cushioned from the worst effects of the recession—the worst recession, in fact, in the last 70 years.

I am very happy on behalf of the hard-working men and women of Manurewa, the vibrant and diverse community where I have the pleasure of having my office, to know they will be able to take their children to a general practitioner for free visits until they turn 13. There will be even more money, and this Government has spent $1.5 billion—even more money—to engage with our Pasifika and Māori communities, and low socio-economic groups, to help them access early childhood education, which, as we know, is transformational. I commend these bills to the House.

Dr RAJEN PRASAD (Labour): This is a split call. You get the feeling that members of the Government do not really want to debate deeply the Parental Leave and Employment Protection Amendment Bill and the Taxation (Parental Tax Credit) Bill. I really get the impression that they just want to get out of here and not talk about this particular legislation. Of course, there is very good reason why they do not want to, and that is that it is not their idea and they have been forced into this. They know very well that they have been forced into adopting Labour’s policies—not just in this area but in others as well. They know that Labour’s Best Start policy was very popular and is very popular. So, first, they try to ridicule it. Then they had to accept that, no, New Zealanders were interested in this and they wanted change.

Then, of course, the issue came into sharp focus with Sue Moroney’s bill, the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill, to move to 26 weeks’ paid parental leave now. It was very popular. When submitters began to say that not just the 26 weeks but the other aspects were part of a well-developed paid parental leave policy, those members opposite began to get the shivers.

Hon Clayton Cosgrove: What?

Dr RAJEN PRASAD: The shivers. Whatever else they get with the shivers, I do not know, but they certainly got the shivers. They knew there was something wrong. They knew they had to fix this up. So they delayed that particular bill, and they started very quickly to do some thinking around this, but the thinking has been done only to a very small extent.

Hon Clayton Cosgrove: The top half of the brain or the bottom half?

Dr RAJEN PRASAD: Well, I do not know—the very, very top half, maybe. Look at what they have done. It is not very generous at all. They are extending it by 2 weeks in 2015 and 2 weeks in 2016. I would expect Paul Hutchison, as an obstetrician, to have greater awareness of this particular area, but I do not think he does. He has forgotten that part of his professional life. He has come in here and he is really interested only in Labour Party and National Party ideology. That is all it is. I still have a lot of respect for you, though, Mr Hutchison, as a gentleman in the House, but on this point, I think the member has got it wrong.

Some of the National members’ positioning is unbelievable—absolutely unbelievable. Listen to what the Minister of Labour said. He took only one call in the chair. He did accept Jacinda Ardern’s challenge to match us call for call, but then he went to sleep. He realised that it was unsustainable. The process that National has got with this bill is unsustainable. So here we have it. We know that National members have got it wrong for such a long time. The proof is in the eating. Anne Tolley called this a travesty. Nick Smith said it was a bad model. One Paul Hutchison said this was cementing State dependency. I expect the member to withdraw that. He said that when we introduced paid parental leave, it was State dependency. It is not. Those members have been caught. They have had to come to this party. It is still pretty mean. I hope that before long they will begin to really right the wrongs and go to a fully developed paid parental leave policy. This does not go far enough.

They have engineered a surplus. They are trying to be political about this. They really do not have a well-developed policy around this. They have tried under the brand of vulnerable children to bring a few things in, but there is no developmental approach to this at all. So there is a lot of politics in this, Mr Hutchison, which is what his party is playing at. There is very little policy in this—very little policy in this. If there was a lot of policy, it would have been well-thought-out and well signalled. It would have gone to a select committee and we would not be doing this under urgency. They have been caught—

Hon Clayton Cosgrove: Slapped together.

Dr RAJEN PRASAD: Well, they have at least thought about it together, I say to my colleague. It is not well-thought-out. It is very mean. It is only a minimalist approach. It is some time into the future. I know they will crow about this in the election campaign, but this does not cut it. I am glad they have agreed to go a little bit further, but they have been forced into this, and they should apologise for some of the statements that they have made in the past about paid parental leave. Thank you.

DENISE ROCHE (Green): I rise to take the final call for the Greens on the Budget Measures (Financial Support for Newborn Children) Bill, which, I note, has been divided up into two bills: the Parental Leave and Employment Protection Amendment Bill (No 2) and the Taxation (Parental Tax Credit) Bill. The Greens will be supporting these bills. We have stated very vocally through the course of yesterday and last night and also this morning that we have some concerns about that, and we do. However, these steps forward are steps forward, not back, and we do need to congratulate the Government on actually taking these steps.

However, we do have some concerns as well around the use of urgency, which I would like noted for the record. There is nothing in either of these bills that deems that we should be doing this process under urgency. In terms of the paid parental leave extensions, the extension to 16 weeks does not kick in until 2015, and the extension to 18 weeks, up from the current 14 weeks, does not kick in until 2016. Extending the parental tax credit for some babies—not for all babies but for some babies—applies only for babies who are born after 1 April 2015. So we could have had a process where we had submissions on these items. We could have heard from the Child Poverty Action Group, because some of us went to the post-Budget breakfast this morning and we did hear from the group there. What it is saying is that this Budget is not delivering much at all for vulnerable families and our poorest children. I remind the House that there are 285,000 children living in poverty in Aotearoa New Zealand. This bill does not address anything to do with them.

So although we do support the bills going through—we will be voting in favour—we do have some beef with them. The parental tax credit, for example, discriminates against children of people who are on benefits, and it says that those children can stay in poverty. This Government has directed that tax credit only to those who are working. With paid parental leave, yes, we will support the extension to 16 weeks from next year and 18 weeks the year after. However, we recognise that the National Government is surfing a wave of the popularity that was generated by Sue Moroney’s member’s bill for 26 weeks paid parental leave. The Government has made some tiny steps towards that in order to undermine her bill. We support 26 paid weeks off work in order to spend time with your baby. However, our policy goes further than that. We suggest that it should be 13 months, but we will support the National Government’s bill because it is a miniscule step in the right direction.

I am just going to quote from the Human Rights Commission’s submission on Sue Moroney’s bill, the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill, which advocates 26 weeks’ paid parental leave. It said that there were some issues around accessibility to paid parental leave. It is good that this Government has picked up the idea that we should be extending it to seasonal and part-time workers, but, again, I note that is not going to happen with this bill. It is potentially not going to happen until 2016. So these carrots are there, but we have not got there yet. The Human Rights Commission said that “The issue was also picked up by the Committee on the Elimination of Discrimination Against Women … [where it said we have to] ‘introduce appropriate legal measures to ensure parental leave … as well as paid leave for seasonal or fixed-term workers with multiple employment relationships...’ ”. We will support this bill because it is better than nothing, but you can be sure that nothing is what the poor get from it.

TIM MACINDOE (National—Hamilton West): I am delighted to take the final call in the third reading on these very important measures, the Parental Leave and Employment Protection Amendment Bill (No 2) and the Taxation (Parental Tax Credit) Bill, which are such a significant part of a very good Budget. Yesterday it was a real thrill to be able to be in the House hearing that the Government has delivered on its promise of returning the books to surplus and is also focusing on things that matter. The fact that families are absolutely at the heart of this Budget is as it should be. Times have been difficult, and now we are starting to be able to put in place some of the things that members on this side of the House have always wanted to be able to do. But, unlike those on the other side of the House, we have known that you cannot spend money that you do not have. I commend the Minister of Labour for the excellent work that he has done. I am delighted that this support for newborn children is such an integral part of the Budget. I commend all members of the Government for the hard work that has gone on. I am sure that these are measures that will be warmly welcomed around the country.

Bills read a third time.

Bills

Budget Measures (Miscellaneous Fiscal Matters) Bill

First Reading

Hon CRAIG FOSS (Minister of Commerce) on behalf of the Minister of Finance: I move, That the Budget Measures (Miscellaneous Fiscal Matters) Bill be now read a first time. The bill is an omnibus bill covering fiscal measures. Part 1 of this bill will repeal cheque duty from 1 July 2014. Cheque duty applies at the rate of 5c per cheque. It is an outmoded tax and is New Zealand’s last remaining transaction duty. Since no equivalent duty applies to alternative methods of payment such as cash, eftpos, internet banking, and credit card transactions, cheque duty is a distortionary and easily avoided tax. Although the popularity of cheques has declined, they are still common enough for cheque duty to be a cost for a significant number of people and businesses. Removing this cost by repealing cheque duty will benefit those who use cheques. Abolishing cheque duty will also reduce compliance costs, particularly for banks and printers of cheques. Reducing compliance costs wherever possible is an ongoing focus of this Government.

Part 2 of this bill corrects an unintended consequence in the operation of the New Zealand emissions trading scheme. It stops reregistration arbitrage, which arises from the price difference between international Kyoto units and New Zealand Units. Urgent intervention is required to prevent the significant reputational and integrity risks and fiscal cost to the Crown that this may create. Post-1989 foresters are voluntary participants in New Zealand’s emissions trading scheme, which means they are able to register and deregister the same area of land multiple times. These participants receive New Zealand Units for forest carbon growth while registered and then are able to surrender cheaper international units to meet their emissions liability. This bill limits participants to surrendering only New Zealand Units when they are deregistering an area of forest from the emissions trading scheme.

Part 3 of the bill suspends for 3 years the application of anti-dumping duties to residential construction materials. This includes the anti-dumping duties currently in place on standard plasterboard from Thailand, reinforcing steel bar and coil from Thailand, and wire nails from China. Removing these duties will increase competition for building materials and reduce the cost of constructing new houses. The suspension of anti-dumping duties follows a market study that found they are having a chilling effect on competition in the building materials market. Anti-dumping duties are a legitimate form of protection for a domestic industry and are provided for under World Trade Organization rules.

However, contrary to some misconceptions, dumping does not mean flooding the market with large quantities of low-quality goods at low prices. Dumping simply refers to a situation where goods are imported at a lower price than if they were sold in their country of origin. This is not necessarily unfair trade. It is normal to charge different prices in different markets.

Bearing this in mind, the Government has decided that in the case of residential construction materials there should be a temporary suspension of these duties to provide an immediate benefit to the Christchurch rebuild and also to the increased residential construction in other areas of the country, particularly Auckland. The decision to suspend these anti-dumping duties was not made lightly and comes from the work of the Productivity Commission into housing affordability and from the Ministry of Business, Innovation and Employment’s Residential Construction Market Study. It has been made in conjunction with the Government’s decision to suspend tariffs on a broad range of residential building materials. Reducing the cost of building materials is an important, although only one, part of the Government’s ongoing programme to increase and improve housing affordability.

The removal of import barriers is expected to reduce the cost of building a standard New Zealand house by around $3,500. The cost savings from the suspension of anti-dumping duties are expected to make up the bulk of this amount at around $2,600 per house. The total savings from suspending these anti-dumping duties could be over $55 million per year. Taken together with the savings from introducing the tariff concession scheme, direct savings are in the order of $75 million per annum nationwide. I expect that these measures will result in a more competitive market for residential building materials, resulting in further reductions in the costs of constructing homes.

As part of this package of measures to improve import barriers, the Government has also directed officials to develop a bounded public interest test to be applied to all decisions to impose or extend the duration of anti-dumping and countervailing duties. At the moment there is no ability to consider the wider public interest in decisions to impose or extend the duration of anti-dumping and countervailing duties, or to consider significant events that affect an industry or the public such as an earthquake or other natural disasters. The details of a bounded public interest test will be developed through a public consultation process, with a view to considering amending the Dumping and Countervailing Duties Act at a later date. It is the Government’s intention that any public interest test is to be put in place before the end of the 3-year suspension period so that building materials will be subject to a public interest assessment when the suspension ends. It will allow the wider public interest test to be considered not only in relation to duties on building materials but also in relation to other types of goods.

The Government appreciates that the suspension of current duties on plasterboard, reinforcing bar, and nails will have some impact on those New Zealand manufacturers that these duties are designed to protect. However, I do not consider it likely that the suspension of these duties will threaten the viability of those businesses, given the strong domestic residential construction market, which is likely to remain strong over the 3 years that the duties will be suspended. I am confident that our building product manufacturers can adapt and innovate to match up to the international competition.

The suspension of anti-dumping duties on residential building materials is implemented by this bill as part of the Government’s wider programme to improve housing affordability. This includes work being done on standards and regulations to increase competition, to reduce the price of New Zealand building materials, and to free up new land for development, improving sector productivity and reducing compliance costs. In conclusion, the combined effect of these measures will make a lasting difference to housing affordability and will see more New Zealanders realise the dream of owning their own home. I commend the bill to the House and move that it now be read a first time.

GRANT ROBERTSON (Labour—Wellington Central): Well, here we are, under urgency, debating the Government’s Budget, the critical measures to turbocharge the economy, to take the step up to lift wages, and to get better jobs, and the Government comes to the House to remove cheque duty. That is right. Stop the marches in the street. Call off the hunger strikes. Cheque duty is gone. Around the country New Zealanders celebrate the fact that they will save on average 35c a year—35c a year—from the removal of cheque duty. I have got advice for New Zealanders around the country: do not spend it all in one shop. That is my advice—35c a year. This is the Government’s big idea that holds us here in urgency on a Friday: the removal of cheque duty. We are looking in the Budget for the comparable measures: the rebate on cassette players, fondue sets, and lava lamps, because they are about as relevant as cheque duty is to the economy today.

Hon Trevor Mallard: What! What are you saying?

GRANT ROBERTSON: Trevor Mallard may also have a rebate placed on him by the end of the day. This is as good as it gets from the Government. This is the thing that the Government has lifted out from the Budget to say “Here’s our economic plan: the removal of cheque duty.” Well, that is not enough. It is hard to believe that the Government thought that that was important enough. In the middle of all the many initiatives Bill English could have talked about in his Budget speech, he chose to talk about the removal of cheque duty. So on this side of the House we welcome the scourge of cheque duty being taken away from the lives of New Zealanders, but we ask ourselves whether or not a timid, scattered, backward-looking, fragmented Budget like this deserves to have cheque duty—that 35c a year—lifted out as the biggie.

By the way, those figures do come from the Bankers’ Association—that an average of seven cheques a year are written out by bank consumers around New Zealand. Goodness only knows, some people must be writing a lot of cheques to get that average up. But seven cheques a year at 5c a cheque is delivering 35c a year to New Zealanders. This is the social dividend from the National Government—35c a year. Amazing stuff! Do they still have 35c mixtures? They probably did in the 1980s, when people were paying by cheque, but they do not any more. It is 35c a year from the Government to turbocharge the economy. I was seeking advice from Mr Mallard on the future of 35c mixtures—

Hon Trevor Mallard: You eat more lollies than I do.

GRANT ROBERTSON: Ah, yes—not any more. That is the first part of this bill, so there is the turbocharging of the economy.

Then we come to the measures to relieve the housing crisis. The Government has decided that it recognises the depth of the housing crisis, and the fact that in Auckland particularly housing is becoming unaffordable. Last month $6,000 was added to the cost of an average house in Auckland, so the Government has come along today with a package of measures to sort out the devil of the cost of plasterboard, varnish, and nails in the construction of houses. It guessed that it will save $3,500. The Minister basically just said that—that it is just a guess of approximately $3,500. Well, that might touch the conveyancing fee for somebody trying to buy a house. While we are at it, first-home buyers and building houses do not always go together. Just a hint for the Government that if it wants to actually do something that will improve the lot for first-home buyers, it needs to have a programme like KiwiBuild, where we are actually going to build 100,000 affordable homes across New Zealand. My colleague Phil Twyford will certainly be speaking at some length in this debate around Part 3 of the Budget Measures (Miscellaneous Fiscal Matters) Bill and its woefully inadequate response to the housing crisis.

I do note that within the Budget and within housing a number of interesting facts have come to light. At the moment many people are struggling to buy a house and struggling to service a mortgage. At the moment in New Zealand you need to spend 49 percent of the average gross full-time wage to service a standard mortgage. That is tough work for people—49 percent. Well, what the Budget shows us is that by 2018-19, people will need to spend 63 percent of the average gross full-time wage to service a standard mortgage—63 percent. But it gets worse. If you are in Auckland, it is 49 percent now, but when it is 63 percent across New Zealand, if you are in Auckland then 83 percent of the average gross full-time wage will be needed to service a standard mortgage. That is why housing is unaffordable for New Zealanders. That is the Kiwi dream being taken away from the next generation of New Zealanders.

We have a housing crisis in New Zealand. We all have a responsibility to do something about it, and in this legislation, the National Government is taking the tariff off nails and varnish and plasterboard. It is not enough, it is insufficient, it is hopeless, and it will not do anything to greatly improve the chances of people getting into their first homes, and that is it for housing in this Budget—that is it.

The third part of the bill is around the Climate Change Response Act, and my colleague Moana Mackey will have more to say about that. What we can say there, though, is that although it has been described by the Minister as an “unintended consequence”, that is not how it is viewed out in the sector. The question we on this side of the House have is: why does the Government hate the forestry sector so much? Why has the Government got it in for the forestry sector and want to take it on? I can tell the Government this, having looked at the regulatory impact statement. The section where it says “There has been no consultation with stakeholders on this.”—that was a mistake. Can I just say that that was a mistake. Right around the country, iwi forest owners are not going to be happy with this. They are not going to be happy with this response. Quite clearly, this is not the climate change legislation that the Government should be putting before the House.

So that is it. That is what the Government has come to us today as its big Budget bill to bring in front of the House under urgency. It is woefully inadequate. We look to this Budget for some ambition for the New Zealand economy, and it is not there. It is politics as usual. It is an election-year Budget, where National has come in and stolen a few policies from Labour, but it leaves ambition for the economy at the door. If we want to have good jobs and higher wages, it does not come from tweaks to the cheque duty; it comes from actually adopting an approach where we bring New Zealanders together. It is a partnership between the Government and business and communities that is about creating jobs and making sure that there is industry and regional development and that there is an economic upgrade that will actually add value. We are not going to get higher wages in New Zealand through politics as usual—by investing in the same things we have always have done, at the same rate.

We need to upgrade the economy in manufacturing, in forestry, and in information and communications technology. We need to make sure that the skills are being gained by people to take on those jobs. We need to get the settings of the economy right by changing monetary policy so that people are back at the centre of the economy—not the speculators, not the bankers, but the people who actually drive productivity in our economy. And that is the other thing that is missing from this Budget. Where is the dividend to reduce inequality? If we really want to do something in our economy and our society, then we have to harness the talents of all New Zealanders, and this Budget leaves behind those who live in poverty. There is very little in this Budget that reaches those people, and the last bill that we debated missed them out entirely.

This is not a Budget for future generations; this is a Budget for this election year. If this was a Budget for future generations, we would not be allowing superannuation spending to outstrip education spending this year, and that is what is happening. There is no policy in here for future generations to know that they will have universal superannuation. There is nothing here that looks ahead to that. There is nothing here that looks ahead to safeguarding the Kiwi dream of homeownership, or of giving people a fair chance to get on the property ladder. There is nothing in here to address the inequality that means that if you are lucky enough to live in Mission Bay in Auckland, your median income will have gone up by $6,000 over the last few years, but if you are in Māngere or Ōtāhuhu, you will have ended up with only a $200 increase. That kind of inequality cannot be sustained in our economy. This is a woefully inadequate piece of legislation that the Government thinks, somehow, trumpets its Budget. It actually shows that its Budget is a failure.

Hon SIMON BRIDGES (Minister of Energy and Resources): Granted that Mr Robertson could not purchase enough wine gums for his calorific out-take of that speech from the cost of a sole cheque in cheque duty, nevertheless this bill is a useful, discrete measure. As the Associate Minister for Climate Change Issues, I would like to build on what my colleague Mr Foss has said. In relation to Part 2 of the Budget Measures (Miscellaneous Fiscal Matters) Bill, entitled “Climate change response: unit restriction amendment”, I would like to emphasise the following points to the House. This bill will act to maintain the integrity of the emissions trading scheme, which is the Government’s primary policy tool to address climate change.

An unintended consequence has occurred in the operation of the emissions trading scheme. It allows particular participants the opportunity to arbitrage New Zealand’s units against cheaper international units. This is referred to as re-reregistration arbitrage. Post-1989 foresters are voluntary participants in the emissions trading scheme. They are able to participate in the scheme at their discretion. Reregistration arbitrage occurs when these foresters register and then deregister from the emissions trading scheme multiple times. At registration a post-1989 forestry participant receives New Zealand Units and they may surrender any emission unit when they deregister. This allows foresters to use the registration process to profit from the price difference between domestic units and cheaper international units. It was never Parliament’s intention for this to occur. If this unintended consequence is left unchecked, it could create significant reputational and integrity risks for the emissions trading scheme. This arbitrage activity also creates fiscal costs for the Crown.

The bill ensures that these risks are prevented. The bill improves the integrity of the scheme by removing the opportunity to gain from the interplay of the price difference between domestic and international units and certain design features of forestry participation. To do this, the bill will ensure that post-1989 foresters surrender New Zealand Units when deregistering from the emissions trading scheme. This will stop this arbitrage activity, as there is no longer an opportunity to use the deregistration process to gain from the unit price difference. It will bring forestry into line with other emissions trading scheme participants.

This bill, of course, will also permanently remove cheque duty, which has become an inefficient and distortionary mode of tax, and will temporarily remove anti-dumping duties on imported residential building materials in order to increase competition, lift sector productivity, and reduce the cost of residential construction. I commend the bill to the House.

MOANA MACKEY (Labour): Why does the National Government hate the forestry sector? Why does it hate forestry so much? The one sector that got it out of a hole in the first commitment period of the Kyoto Protocol was forestry. This was the sector that put us in the black. Why does the National Government continue this sustained attack on the forestry sector? When I picked up the Budget Measures (Miscellaneous Fiscal Matters) Bill and saw the brief description of it, I thought: “OK, well, that looks fairly reasonable.”, until I read the bill, and until I read the regulatory impact statement and realised that this is not about what the Associate Minister for Climate Change Issues was talking about, at all. This is not an “unintended consequence” of the emissions trading scheme; this is the very deliberate result of a Government that has failed to restrict the cheap international units that have flooded into this country and collapsed the carbon price. This arbitrage issue is a problem only because there is such a differential between the New Zealand Unit price and the cheap Kyoto Protocol unit prices, which the National Government has done nothing about and continues to do nothing about. That is the problem. Fix that, and this all goes away. I will put forward an amendment in the Committee stage in my name to do just that—fix the actual problem, instead of just taking another whack at the forestry industry.

I really do not understand why National hates forestry as much as it does, given the benefits of forestry to this country. The good news is that a Labour Government is coming. It has a plan for the forestry sector that includes restricting these cheap international units and assisting this export industry, which has huge job potential. What the Minister would have us believe is that this is purely about reregistration. So in the mandatory emissions reporting period of 5 years a forester can go in, collect New Zealand Units, and then deregister from the scheme, and pay that liability with these cheap Kyoto units. They can then, the next day, reregister to enter the scheme, get New Zealand Units, and deregister. We do not want that to happen, but that is a symptom of the current failure of this Government to have an adequate price on carbon and to reduce the gap in price differential between New Zealand Units and foreign units. That is the actual problem.

What the Government is saying now, though, is that it is actually not just going to stop the reregistration, because you could just do that by saying that a forester can register only once in any reporting period. That fixes the problem and the problem goes away. What the Government has chosen to do is to say that if you are in forestry, you do not have any access to these Kyoto units at all. So even if you are deregistering with no intention to reregister, and even if you are deregistering because the economics are not working, or for whatever genuine reason, you do not get access to those units, whereas everyone else in the scheme does. So this is not about reregistration at all, because if it was, we could simply fix that problem by saying that you cannot reregister. This is about whacking forestry once again. When you look at the regulatory impact statement on this bill, it makes it quite clear that this is not actually about reregistration at all. One of the points that the regulatory impact statement makes is that it will be seen as unfair to post-1989 forest land participants because it imposes a restriction on their use of Kyoto units, whereas other sectors continue to have unrestricted use.

Let us talk about those other sectors. There is one other sector that is full of National Party mates who got free allocation of New Zealand Units, and that is the heavy industrial emitters—so, Rio Tinto. Remember the $80 million the Government gave Rio Tinto? Well, Rio Tinto also got a free allocation of New Zealand Units, and Labour absolutely supports that. Rio Tinto can engage in arbitrage by taking those New Zealand Units and paying its pollution liability with these cheap international units. Is the Government stopping that? No. And why? Because the Government likes those guys because they are its mates, but it does not like forestry. So it is going to allow arbitrage to continue amongst the heavy industrial emitters, who got free New Zealand Units allocations. They can continue to engage in arbitrage but forestry cannot—forestry cannot.

One of the reasons for that that the Government talks about is fiscal risk. So it says that it needs to do this because the fiscal risk to the Crown is so great. Well, if we take the Climate Change Response Act 2002 report from the Environmental Protection Agency and if we use the methodology that it uses for its calculations, what we find is that in the year to June 2013 there were 36 million New Zealand Units allocated to industry—to the Government’s mates—which at today’s prices represent $111 million in value. Of that 36 million only 24,000 were surrendered by that group to meet its obligations. So it was practically nothing at all. The balance was met through these cheap Kyoto units that we are now telling forestry they cannot have access to. So if we use the same logic as used in the Environmental Protection Agency’s own report, what we find is that the fiscal risk to the Crown from the heavy industrial emitters’ arbitrage is $107 million. There is $107 million in fiscal risk.

So what is the fiscal risk that we are dealing with here in this bill, caused by post-1989 foresters? It is $11 million to $66 million. It is $11 million to $66 million in fiscal risk from forestry. There is $107 million in fiscal risk from heavy industrial emitters. And which is the group that we are targeting in this legislation? Forestry. Why? Because the Government hates forestry. Why are we not targeting heavy industrial emitters? Because they are the Government’s mates—they are the Government’s mates. So if this was about fiscal risk, then we would actually be applying this across the board, and we would have no issue with that—with it applying this across the board with the same rules applying to everyone, and not one rule for National’s mates and another rule for the forestry sector, which was the only sector doing the heavy lifting in the first commitment period of Kyoto in terms of emissions reductions.

The Government has allowed the carbon price to collapse. There are practically no complementary measures going on at all. An analysis of the Government’s own figures shows that by 2030, if we compare doing absolutely nothing at all in terms of climate change policy, with the Government’s current plan on climate change policy, the difference in emissions reductions is 0.4 percent—0.4 percent. We effectively have business as usual when it comes to climate change policy under this Government. So when I hear Minister Simon Bridges talking about needing to uphold the reputation of our emissions trading scheme—are you kidding me? Are you seriously kidding me? That thing lost its reputation the minute that this Government was elected and completely gutted it and allowed the carbon price to collapse overnight. Our emissions trading scheme has not had a good reputation since this Government was elected. It is nothing more than a fig leaf.

I am sorry, but the biggest risk to our reputation in terms of climate change is this National Government—Simon Bridges, Tim Groser, John Key—and Gerry Brownlee, who is a climate change denier who just wants to build more of his carbon-sequestering motorways. When I hear the Government talk about the reputation and risk of our emissions trading scheme, I am sorry—I am sorry—but that is just galling.

The other angle on this, of course, is that there are people who are currently going through the process of deregistering and reregistering, and who are going to be caught out by this. An email went out today to Ministers—because, of course, there was no consultation on this bill; no one knew this was coming—which said: “We have no problem with what we understand the legislation is trying to achieve, but currently we have 25 clients who have sold some or all of their New Zealand Units to purchase emission reduction units. They have purchased these emission reduction units to surrender, as the legislation allows, once we had completed and submitted the deregistration applications to the Ministry for Primary Industries. We can complete these submissions by the end of next week but do not want to progress at the moment if we do, as I understand our clients will be required to surrender New Zealand Units that they no longer hold. These are mum and dad - type forest owners, and although the amounts involved may seem small to you, they are substantial to them.” So do not fool yourselves, National Government members, that that is not going to have a very real impact on people today.

What makes it even worse is that I have here the Sustainable Forestry Bulletin from the Ministry for Primary Industries. What this does—and this is from August 2013, January 2014, and February 2014—is tell people how to deregister and reregister their forests. So the Ministry for Primary Industries has been providing guidelines and advice to post-1989 foresters on how to do this. They may be forgiven for thinking that the Government was OK with it. I think they could be forgiven for being extremely surprised that the Government has now pulled the rug out from under them, when the Sustainable Forestry Bulletin from August 2013 says: “Things to consider when removing and reregistering post-1989 forests in the ETS.”

The Government has been promoting this bulletin as a legitimate tool for foresters to use. It has given absolutely no warning that this was going to happen. It has allowed price-gauging to continue under the emissions trading scheme by fuel and energy companies, which are buying these cheap international units at 35c, then charging, through power bills and at the petrol pump, around $20 a tonne. The Government has no problem with that; that is OK. It has no problem with the heavy emitters being able to engage in arbitrage. That is OK because they are their mates. But when it comes to forestry, the one sector that has been doing the heavy lifting for it in terms of our net emissions—the one sector that has done this—the Government is whacking them once again. It did it the first time by allowing the carbon price to collapse. It has continued to oppose Labour’s attempts to restrict these cheap international units, and now that it is doing some restrictions—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. Her time has expired.

Dr KENNEDY GRAHAM (Green): This bill before us, the Budget Measures (Miscellaneous Fiscal Matters) Bill, is a composite bill, so the various policy considerations that attend to it in its entirely separate pieces make for a contaminated democratic process. But that is the nature of this Government.

In the first reading I want to address only Part 2 on climate policy. Part 2 is described as removing an unintended consequence in the emissions trading scheme that has the potential to expose the Crown to significant fiscal risk. This bill is a testament to past folly. It is an acknowledgment by this Government that its emissions trading scheme has failed. This bill seeks to prevent, after the fact, the practice of arbitrage. Arbitrage is a rort. It is defined as the purchase of currencies, securities, or commodities in one market, for immediate resale in order to profit from unequal prices.

How did New Zealand get to this state in its climate policy? The primary purpose of the basic Climate Change Response Act is to enable New Zealand to meet its obligations under the United Nations Framework Convention on Climate Change. The Act aims to reduce New Zealand’s emissions. That is a binding obligation. To achieve this, the Act sets up the emissions trading scheme. The scheme is described as a scheme that reduces net emissions to below business-as-usual levels. To achieve that, the local carbon currency, the New Zealand Unit, has been introduced as the mainstay of the scheme, but foreign units, the Kyoto units, are allowed into New Zealand as extra currencies. Since the scheme has come into force, New Zealand’s gross and net emissions have continued to soar. The purpose of the Act has not been met. In fact, New Zealand is in breach of its international obligations.

There are two ways by which New Zealand Units are initially acquired: an emissions trading scheme participant can earn them through forestry sequestration, or they can be gifted by the Government to cover any liability as a polluter. But the scheme also allows people to purchase foreign units at a cheaper rate than the New Zealand Units and surrender those to the Government instead. They then hold on to their New Zealand Units, to sell them later at a higher price. They have, therefore, made a financial profit off a scheme that is designed to bring down emissions. In the case of forestry, they may be harvesting their forests, thereby increasing emissions, or they may not. They may simply be deregistering from the emissions trading scheme and reregistering the next day. Either way, they make a financial profit off a scheme that is designed to change society’s economic behaviour towards the goal, the imperative, of emissions reduction.

There are some 2,400 post-1989 foresters in the emissions trading scheme, covering 330,000 hectares of forest. In the second half of 2013, 550—almost a quarter—applied to deregister. About 40 percent have applied to reregister. In making carbon a commodity for trade, as opposed to a pollutant to be reduced, the designers of this scheme have thwarted the purpose. In allowing windfall profit from a scheme that is intended to protect the planet from dangerous climate change, the champions of the free market have excelled themselves in the art of political cynicism. In doing so, they condemn their own children to a dangerous future.

Eliminating this form of arbitrage will result in the price of the domestic New Zealand Unit rising. How much it will rise by is hard to estimate, but it will rise. This will have the effect of reducing emissions or curbing growing emissions. The Green Party therefore intends to support Part 2 of this legislation, for that fundamental reason.

But the question has to be asked why this Government is confining the halt to arbitrage to the post-1989 forestry sector. The forestry sector has been asking for a unit restriction on international units for years, so this is in line with that. But why make this change, yet allow other kinds of emitters—industry, pre-1990 forestry, energy—to continue to use international units for surrender?

The same principle is exploited by industry—aluminium and steel, by way of example—under industrial allocation plans. They get given volumes of New Zealand Units each year for nothing. They too bank them and surrender cheap international units instead. Why single out one sector, forestry, which is reducing emissions, which has a break-even carbon price of $15 but is getting $3 under National’s failed emissions trading scheme?

Does National believe in the free market, or not? This move shows it believes in the free market for some emitters but not others. How many New Zealand Units were allocated to the three other sectors in the last year on record, ended June 2013? How many were issued to industry, fishing, and pre-1990 forestry? The answer is 36.5 million. This involves aluminium smelters being allocated 90 percent of their annual emissions as New Zealand Units, yet they too can hand back 100 percent as international units. Is that arbitrage, or is it not?

What about the steel mills, the wood processors, the methanol producers, the pulp and paper mills? They are all allocated between 60 and 90 percent of emissions as New Zealand Units, yet they can hand in any kind of unit. Those 36 million New Zealand Units allocated last year have a current market value of $110 million, yet any of these sectors can replace the same level of emissions with emission reduction units worth $7 million.

Why did it take 6 years for the modestly self-proclaimed brilliant economic stewards currently on the Treasury benches to trip over the blatant rorting of their emissions trading scheme? Was it, by chance, a blind ideological devotion to the free market—the free market of global carbon credit distortion? If so, the invisible hand was inside the pocket of every New Zealand taxpayer. Where was ACT when we needed it? Where was the compassionate conservatism of Bill English? The Minister of Finance, Minister of profit by arbitrage, was asleep at the wheel. Where was the insightful judgment of John Key, the Prime Minister of everything, including degradation of the planet? He was awake, but unable to recognise a problem whose characteristics have defined his life experience. It is no wonder they do not act.

Or was it, by chance, a determination to ensure that greenhouse gas polluters of this country are not constrained in their freedom to respond to the mercantilist policies of the John Key - Government—the mercantilism of a 21st century milk and log colony? If so, the invisible hand is passing the taxpayers’ money across to selected corporations. Bravo—a better, brighter New Zealand.

The underlying basis of New Zealand in terms of Treasury climate policy is global least-cost abatement. But global least cost is not the dubious emissions reduction units of track 2 type. There is no global carbon price as yet, and there will not be for a decade. The international price ranges from NZ50c to NZ$30. Do we really believe that NZ50c is a true global least cost to save the planet? Allowing the cheapest of these units to come in, undermining the integrity of our emissions trading scheme, is cynicism of the highest level. Emissions reduction units remain valid in New Zealand until 31 May 2015, so their purchase and trading and surrender can continue until then, even though most people who have a commercial interest will have already done the purchasing, but any further arbitrage will undermine the emissions trading scheme.

My own member’s bill, the Budget Measures (Miscellaneous Fiscal Matters) Bill, has been in the ballot for 2 years now. It would have prevented the import of all these cheap foreign units so that the New Zealand price could float up. That would have applied across all sectors of our economy, which is how the policy should be. We shall be looking forward to the Minister’s explanation as to why this bill does not allow restrictions on emission reduction units across all sectors.

PAUL GOLDSMITH (National): It is my pleasure to speak on this Budget Measures (Miscellaneous Fiscal Matters) Bill. The tenor of Mr Robertson’s speech seemed to be that rather than the steady, sensible, predictable Budget carrying on in the right direction that this Government has delivered, we should somehow be turning things on their head and having big changes in the economy—putting in a capital gains tax, nationalising the electricity sector, overturning monetary policy with an experiment that no other country in the world has tried. He said it was time for an absolute upheaval in our economic policy, which makes no sense whatsoever when we look at the results that have been delivered in this Budget, the sixth Budget from Bill English.

After 6 years of hard work by this Government and by businesses and New Zealanders generally, from one end of the country to the other, we have the economy growing at nearly 4 percent, wages rising faster than inflation, more money in the Budget for families and the most vulnerable, and business confidence at the highest level in years. That seems to me and, I think, to most New Zealanders to indicate that this Government is taking the economy in the right direction.

I was appalled to hear a whopper from Mr Cunliffe in his Budget debate speech, saying that Labour had previously delivered nine surpluses. Well, Mr Cullen said he had a surplus in his last Budget but the reality was that the final Budget in the final year that Labour was responsible delivered a $3.9 billion deficit. The 2008 year saw Government spending increase by an astonishing 12 percent in 1 year, leaving a Budget deficit of $3.9 billion and forecasts of never-ending deficits. This Government has had to pick up the cudgels and get this economy back into shape. It was a great day yesterday, being able to celebrate a restoration of fiscal responsibility and prudence, and I am very pleased to be part of a Government that has done such a thing.

I do want to mention, in relation to this bill, the housing affordability aspects of it in the temporary suspension of dumping duties provisions. Probably the single biggest issue that I hear about in Epsom is a concern about the steadily rising house prices in Auckland. This Government has been very, very active in this sector because we realise that the biggest issue we have is the constraint of land and a small supply of new houses, and so Nick Smith has been indefatigable in his efforts around the city to increase the supply of land and of new housing.

The other area is the cost of building. I do not like to be unkind about any members on the other side of the House, but for Mr Robertson to suggest that the cost of building has no impact on the price that first-home buyers pay is economically illiterate, because the cost of building a new house does flow through to the overall cost of houses in the city. So this bill will, in a small way, make a difference to house costs across Auckland by making it cheaper to build new houses. On that basis, I commend this bill to the House. Thank you.

ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First on the omnibus Budget Measures (Miscellaneous Fiscal Matters) Bill, covering cheque duty, climate change, and building supplies. Firstly, cheque duty—it is too late to really comment on this. This should have been done years ago. Again, it is a little, trifling matter that the Government has pulled out in this particular Budget. It is just another way of it padding the Budget out to make it look better than it actually is. Cheque duty should have been done away with years ago, not 6 years into this Government, given the number of cheques that are issued. I was told this morning that the largest issuer of cheques in this country is the Inland Revenue Department, and it is exempt from paying cheque duty. So is it not ironic that the Government, the single biggest writer of cheques, does not have to pay duty on them? That was a bit of nonsense. The fact that New Zealanders have not been paying duty on electronic transactions and other forms of transactions has made it quite an anomaly, and it is time that that went.

However, moving on to climate change, New Zealand First wants the New Zealand Government to have a serious response to climate change, and this provision is not it. What is now apparent is that a great majority of countries see climate change as a result of increasing greenhouse gases and as a major global challenge. New Zealand First does not argue with that. Climate change is a reality. New Zealand First is opposed to New Zealand’s emissions trading scheme, the ETS. We consider it far too complex and far too impractical. It was concocted by financial theorists for the benefit, it would seem, of the financial sector—a Merrill Lynch solution, or, really, a non-solution from the likes of Merrill Lynch.

As a serious response to climate change, the emissions trading scheme has been, as we foresaw, a dismal failure—window dressing. It has failed to deliver significant emissions reductions. In addition, there is little evidence that it is actually helping industry to change to a lower-carbon world. The emissions trading scheme has been systematically rorted. We have seen the unit values go from something like $23 or $24 down to a couple of dollars internationally. What an absolute embarrassment in terms of that scheme. A vast industry has grown around the emissions trading scheme, but it has delivered few real results, and this bill is part of the mess that has ensued from the emissions trading scheme. The bill is a consequence of the mess, confusion, and financial game-playing that has come from the emissions trading scheme. The emissions trading scheme was a half-baked scheme, and the need for this bill demonstrates that.

It is time that New Zealand had a serious policy and plan to address climate change. Climate change is possibly the greatest challenge to our future. Yesterday’s Budget pretended it was not happening at all. That exposes the total lack of vision of the National Government. This Budget fails to deliver any meaningful policy on climate change, and for that and other reasons it is a manifest failure.

On to the building supplies part of this bill—we have great difficulties with this. New Zealand First really does question this as well. New Zealand First anticipates that there will be all sorts of unintended consequences from this building supplies part of the bill. Removing anti-dumping duties could adversely impact the New Zealand economy. There is a reason for anti-dumping duties being in place. It was to protect local manufacturers. We have seen no evidence that the negative impacts on New Zealand jobs and businesses have been fully considered or taken into account in devising this bill. It smacks of being another of National’s knee-jerk responses to the housing crisis, a crisis of its own making. But instead of taking meaningful measures—specifically, curbing immigration and foreign buying of New Zealand housing stock—it decided to throw to the wolves the local manufacturers of construction products.

In this bill there is no actual mechanism for ensuring that the claimed cost reductions will, in fact, be translated into lower house prices. It is a hope and a dream that, by getting cheaper imported goods into this country for construction, the price of houses will go down. It will simply mean that the margins will go up for many of those constructing the houses and putting them up.

There may be cost reductions, but that remains to be seen, and, quite frankly, we are very sceptical. It is also questionable. Today Elephant Plasterboard, a New Zealand manufacturer of plasterboard, said that we also need to be very mindful of the products coming in—whether they will have full warranties, guarantees, and longevity. There will be increased supplies from the likes of China, Thailand, Korea, and Indonesia, and questionable quality standards.

Many of us have witnessed the leaky homes of the 1990s, which came about from the National Government changing the building code and allowing building products and kiln-dried timber to be used during the 1990s. Now in the 2000s, we have ended up spending at least an additional $11 billion, heading towards $20 billion, on leaky homes because of inferior products being used in the construction of our residential houses. We have the potential here, by knocking local, good-quality manufacturing on the head and allowing increased imports from questionable sources to go through another period where—what will the plasterboard standards be? What will the standard of the nails be? I can assure you that I have built a number of properties and I have used nails. Nails are deteriorating in quality year on year. So what will be the quality of the nails?

Recently I was told of trailers being sold in New Zealand that are coming in complete from Asia, and they are now being given only 2 years’ warranty when New Zealand manufacturers of similar trailers give you virtually a lifetime guarantee. They will go on and on and on. A good, decent trailer will last for ever, but the ones that are being brought in now out of China, and being sold considerably cheaper, are given only 2 years’ warranty.

The Government has plucked a figure out of thin air as the cost reduction on a standard house—a nice, round figure of $3,500, which sounds good but is totally unquantifiable. Where did this figure come from? Answer: the back of some envelope in Treasury. We predict there will be business closures in the building supplies sector. There will be job losses. The cost of building supplies is an important issue, but ill-considered legislation is not the answer. Reducing GST on building supplies was another and better option. There is no evidence that that option was considered.

It is critically important that we protect the manufacturing base—not just expose it at short notice to unfair competition. But once again the fate of the New Zealand manufacturing base appears not to matter to this Government. This Government has spent much of this year pooh-poohing the Opposition, which raised concerns about the state of our manufacturing. Sure, our agricultural manufacturing is doing very well, and some sectors of manufacturing are surviving in terms of IT and smart manufacture, but there are areas of what you would call manufacturing for home products, consumer products, and building products—products used in everyday life in New Zealand that are produced in this country—that are under real pressure. Those manufacturers, which in many cases are also exporters under a very high New Zealand dollar, heading towards 90c, are in dire straits in many cases.

This is yet another nail in the coffin for local manufacturers. Taking away the last of those anti-dumping duties will allow greater imports from many, many Asian countries, in particular, where their cost of production is so much less, where their cost of labour is so much less, and where their quality of materials is perhaps more questionable. Therefore, New Zealand First has great reservations about aspects of this total bill.

SIMON O’CONNOR (National—Tāmaki): I am pleased to rise to speak to the Budget Measures (Miscellaneous Fiscal Matters) Bill, the second of the Government’s Budget legislation. I am going to take a short call because this week is really all about checks. Think about it. National has balanced the Budget. Check. We have returned the country to surplus. Check. We have cleaned up years of Labour’s reckless overspending. Check. We have got a great plan to extend paid parental leave. Check. We are extending free doctors visits to under-13-year-olds. Check. We have invested almost $200 million more into the education system. Check. And we are getting rid of cheque duty. You had better believe that that is a check. I commend this bill to the House.

PHIL TWYFORD (Labour—Te Atatū): On Budget morning an opinion poll in one of the daily newspapers said that 76 percent of New Zealanders wanted to see the Budget prioritising tackling the housing crisis and doing something for first-home buyers. Oh, how New Zealanders have been let down and disappointed by this Budget. How badly the National Government has got it wrong after talking up the housing crisis for months and leaking suggestions that it was going to do something about the supply of housing in Auckland. Well, it has left New Zealanders feeling badly let down.

How bad is this housing crisis? Well, bear this in mind: the median house price in Auckland has now gone over $700,000. We have seen a 40 percent increase in house prices in Auckland since National took office in 2008. Foreign speculators are driving up the price of houses in Auckland, outbidding Kiwi first-home buyers from the end of the telephone. We have got people living in garages and sleepouts around the country. And because this Government has utterly failed to get a grip on the housing crisis the Reserve Bank has imposed lending restrictions and loan-to-value ratios requiring 20 percent minimum deposits, which have shut first-home buyers and low-income Kiwi families out of the housing market, handing the advantage to speculators, both foreign and domestic.

The best this Government could do was to announce the temporary suspension of anti-dumping duties and tariffs on some building materials. That is the best it could do, and that is a very inadequate response to the housing crisis. There is nothing in the Budget—nothing—for first-home buyers. There is nothing to put a stop to foreign speculators bidding up the price of houses in Auckland. There is nothing to guarantee that the 285,000 children growing up in this country below the poverty line who live in rental properties will have a warm, dry home. The best that National is willing to offer the country is to lift the anti-dumping duties and tariffs on some building materials. It has estimated on the back of a cigarette packet that this might save $3,500 off the cost of a new home, but we have heard nothing from the Ministers or from members in the House today about why they think that saving would be passed on to first-home buyers. What is to say that in an overheated housing market the builders and the developers will not just pocket that $3,500? That is even if we give any credibility to the estimate that it would save $3,500.

What else, alongside this measure, did the Government announce in the Budget? It announced $30 million for social housing organisations. That is $30 million over 3 years—$10 million a year—for social housing organisations. The supposed centrepiece of Nick Smith’s housing policy is to resource the community housing sector to provide more affordable housing. Alongside lifting the anti-dumping duties and the tariffs on varnish and nails and wall board, the Government has put $10 million a year into social housing organisations. I calculate that on the basis of a house costing $350,000, it will take Nick Smith 455 years to meet his target of transferring 13,000 houses to the community housing sector—455 years. The NGOs, having heard Nick Smith announcing with great fanfare in last year’s Budget the expansion of the community housing sector—just like this year’s great announcement of lifting the anti-dumping duties on Gib board—have been left waiting for the last 12 months to hear what kind of resource the Government would put into this initiative. But all they got was a measly $10 million a year—utterly pathetic.

The other initiative alongside the lifting of tariffs and anti-dumping duties is $80 million to the Ministry of Social Development for the purposes of implementing the eligibility assessment for people to get into State housing. So the Government’s single biggest announcement alongside the lifting of anti-dumping duties and tariffs is $80 million to pay the bureaucrats in the Ministry of Social Development to do the job that Housing New Zealand has been doing within its baseline funding. This is unbelievable stuff.

But, look, there is more—there is more. There is $7 million in the Budget to pay the Ministry of Social Development to kick pensioners and disabled people out of State housing. Alongside lifting anti-dumping duties and tariffs, which has been talked up as this Government’s huge contribution to solving the crisis in affordable housing, this is all it has got. After Nick Smith has been the Minister of Housing for a year and a half, this is all the Government has got—to pay the Ministry of Social Development $7 million to kick people out of State housing. Paula Bennett announced it in a press release entitled “Helping more families into rental housing”. Actually, it is $7 million to kick people out of their State houses—unbelievable.

I want to say that the public have been left open mouthed and astonished that the Government would talk up the housing crisis for the last few months, dropping generous hints that it was going to do something for first-home buyers. This temporary suspension of tariffs and anti-dumping duties is estimated by someone in Treasury to save $3,500 off the cost of a new house. Even if that is true, it is still a tiny, pathetic amount. It is less than 1 percent of the median cost of a house—less than 1 percent. Get this—it is 2 to 3 weeks of house price inflation in Auckland. It is 2 to 3 weeks of house price inflation. That is all it is going to save.

The Productivity Commission, which Nick Smith loves to quote in this House as his bible, the font of all wisdom, heard a lot of submissions on the question of building costs. Its report indicated that building supply costs in Australia are 76 percent of those for a standard home in New Zealand. So New Zealand is paying a lot more. In fact, based on that data and adjusted for inflation and for the exchange rate, New Zealand is paying more than $20,000 more for the building materials for a standard home than consumers in Australia are paying. And the best this Government can do, after an extensive working group exercise to look at building costs—Ministry of Business, Innovation and Employment officials did a market study on residential constructions, we had extensive public consultation, and a whole range of options were foreshadowed—is come up with the temporary suspension of anti-dumping duties and tariffs on varnish, nails, and Gib board. It is unbelievable.

I just want to say, in the context of this being the Government’s showpiece announcement on affordable housing, that it is worth noting that the Budget’s own figures tell us that under the current policy settings of this National Government the housing crisis is going to get much, much worse. The Budget figures themselves, the interest rate track, and the projections on wage growth tell us that in 5 years’ time, by 2018-19, it will take 63 percent of the average full-time wage to service an 80 percent mortgage on a standard home—63 percent of the average full-time wage. It is currently bad enough. It is currently 49 percent, and everybody but the National caucus and Nick Smith would agree that that constitutes a housing crisis. In 5 years, under this Government’s policies, it is going to go from 49 percent to 63 percent. And if you live in Auckland, that figure is 86 percent. So under this Government’s policies, hard-working Kiwi families paying off a mortgage in Auckland in 2018-19 will have to spend 86 percent of an average full-time wage just to service a mortgage. That is, if they can afford to get into their own home.

What is the upshot of this? The Government with this Budget has basically run up the white flag. It has admitted defeat. It is telling New Zealanders that the dream of Kiwi homeownership is over. It is finished. The Government has given up and it has surrendered.

Hon KATE WILKINSON (National—Waimakariri): It is a privilege and a pleasure to speak at the first reading of the Budget Measures (Miscellaneous Fiscal Measures) Bill this morning. What a great Budget we had, and this is a good bill. This is but one component of the Budget, and the Budget, actually, is one component of our fantastic management of the economy. The speaker who just resumed his seat, Phil Twyford, I think demonstrated fairly well, actually, the politics of envy. Labour members are envious of our Budget. They are envious of our economic management. A wee bit of hyperbole, he said—

Phil Twyford: Nothing could be further from the truth.

Hon KATE WILKINSON: —nothing. He said we have done nothing to give families warm dry homes. Well, we have. There are now over 280,000 homes that are warmer and healthier through our successful insulation schemes. If he thinks that is nothing, I would hate to think what he thinks is something. I have great pleasure in supporting this bill to the House.

The ASSISTANT SPEAKER (Lindsay Tisch): I understand that the next call is a split call—5 minutes. Dr David Clark.

Dr DAVID CLARK (Labour—Dunedin North): I think the short call by the member opposite is indicative of the vision of this Government. Not only was it limited but it was also late. The member, Kate Wilkinson, stood and said that it was a real pleasure to take a call on this bill, the Budget Measures (Miscellaneous Fiscal Matters) Bill, this morning. I hate to inform the member that it is, indeed, nearly 1 o’clock. The member is, of course, behind the times. She is from that party opposite that is always following, always playing catch-up, and always trying to catch up with where Labour is at, in terms of policies that have vision for New Zealanders—for those New Zealanders who want to get ahead. We are working with New Zealanders. We are determined to work with New Zealanders to deliver policies that have vision, that have purpose, rather than the scattergun, backward-looking approaches that we see this Government pushing.

This bill removes cheque duty. That is one of the things that it does. I have to say that all those years of waiting for a surplus just to splash out on removing cheque duty is rather a delicious irony. It really does speak to the backward-looking view of this Government. It is still obsessed with the old cheques. I know that I do not own a cheque book. I look around this House, and there will be members who do and members who do not, but, really, it is a small and diminishing part of the Budget.

Iain Lees-Galloway: John Banks gets them.

Dr DAVID CLARK: John Banks takes a lot of cheques, says a member in front of me, and he is probably right, but I do not know whether he will be doing that much longer, though, for reasons that we cannot discuss in this House. Cheque duty is being canned, but, unfortunately, New Zealanders are left with a credit card bill of about $58 billion from this Government’s borrowing—$58 billion—and we know that credit cards attract greater interest than cheques. So here we are with a Government opposite that has borrowed more money than Robert Muldoon did, presenting its vision to the world: cancelling the fee on cheques. That sums it up, aside from the belated catch-up of the member discovering that the afternoon has arrived and the yardarm has moved on.

Dr Cam Calder: Don’t mention it.

Dr DAVID CLARK: We will not mention the yardarm too much in respect of those members opposite. They were busy last night. This Budget is, unfortunately, as I have said, backward-looking and scattergun, but we think that it is a lost opportunity more than anything else, because it lacks aspiration and because the Government is facing higher unemployment numbers than when it took office at the height of the global financial crisis—and unemployment is still higher in New Zealand. It is a lost opportunity because real median wages are lower than when it took office, because this Government has overseen the highest gap between rich and poor in recorded history in New Zealand, and because middle New Zealand struggles and continues to struggle under this Government. It is a Government that has failed to raise those real median wages. It is a Government that has overseen interest rates rising but has no plan—no plan—to help New Zealanders into their first homes. There is nothing in this Budget for them. The $3,500 estimated to be saved from the housing tariff is insignificant in the context of the $200,000 increase in house prices in Auckland over the last few years. It is a fraction of 1 percent, as my colleague Phil Twyford pointed out earlier.

This is a visionless Budget. We know that the Government has got to surplus, of course, through a series of fudging attempts: first, through keeping artificially high ACC levies—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

Dr DAVID CLARK: Another is through transport spending—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

Dr DAVID CLARK: —being couched as a loan, and so on, but that has been all to produce cheque duty reductions. This is the big vision from the Government that we are being told right now. It is not interested in housing, it is not interested in jobs, and it is not interested in wages; instead, we are here under urgency passing legislation to remove cheque duty. So, ladies and gentlemen at home, I am informed that this might save you up to a dollar a year.

Iain Lees-Galloway: No, 35c.

Dr DAVID CLARK: Oh, 35c a year. My apologies—35c per year this may save you at home.

Moana Mackey: Don’t oversell it.

Dr DAVID CLARK: I should not oversell this policy. And there will be some people for whom that 35c does make a difference, but it is not the same kind of difference that would be made from having the kinds of policies that Labour is proposing to bring in when in Government, such as universal KiwiSaver, and the ability to use monetary policy to make sure that interest rates are kept low whilst having the money that is used to do that going into savings rather than into offshore banks.

STEFFAN BROWNING (Green): I am pleased to have an opportunity to speak to the Budget Measures (Miscellaneous Fiscal Matters) Bill. There are a number of concerns, but I will be focusing primarily on the building and wood products part of the bill. I will note what Kennedy Graham said, when speaking before on the emissions trading scheme aspects, that it is about time there was some catch-up on the rorts that have been done by predominantly overseas interests in the forestry area, but that it is absolutely unfair that forestry cops it when other major industry are not being dealt with in the same way. So I support his statements on that.

I want to move through to the removal of duties and tariffs on building products. I spent a lot of the morning trying to work out how broad that goes and what things will be affected. I think we all need to reflect on the processes; the tradesmen in our towns and in our cities who are working on everything from kitchen cabinets and bathroom cabinets to trusses, doors, window frames, and things like that, the people with skills; and the businesses that are feeding into the local economy. These are going to be knocked heavily by this allowance of dumping of materials into the New Zealand market.

Hon Craig Foss: No, they’re not.

STEFFAN BROWNING: You say that. I look at the tariffs and I see 5 percent on some countries. If that is not going to impact when we have industries that actually need boosting—you are talking of savings here going on to $30 million. Not savings; costs to the Government of $30 million. Why do you not put that into boosting those local industries instead of hitting them with the costs here?

Sitting suspended from 1 p.m. to 2 p.m.

STEFFAN BROWNING: I was able to use the lunch break to look a little bit further at the bill and I had a good discussion with the Minister. I certainly appreciate, and the Green Party appreciates, some of the intention of the part of the bill that I was debating, which was to deal with some of the monopolistic behaviour of some of the suppliers in terms of plasterboard in particular. However, my concern in the earlier part of my speech, and also now, is with what I would call the collateral damage of that. I think that the bill needs some fine-tuning to look out for the New Zealand businesses that are involved in the construction of joinery, for example, and some of the timber products.

We would like to see a Christchurch rebuild in wood. We would like to see it done with New Zealand producers, New Zealand manufacturers, and New Zealand tradespeople for New Zealand people. I checked with some suppliers, manufacturers, and joiners, and I talked with a kitchen manufacturer from another town nearby. I was checking as to how much they were using that was imported, and it was very little. But I also talked to a Christchurch door manufacturer business down there. They are New Zealanders doing New Zealand stuff and they have tooled up in anticipation of the growth that is expected with the rebuild. I am concerned that this bill will impact very negatively on them, on timber products, and on New Zealand businesses and that. So it is collateral damage. I realise that my time is nearly up, so we will talk more on this later. Thank you.

JOHN HAYES (National—Wairarapa): I have been listening to the debate from across this House today and yesterday afternoon—I think we have had something like 9 hours of debate—and you can come to two conclusions. The first is that our country is really lucky to be so well governed by John Key, Bill English, and their team. Secondly, the Opposition members, judging by the quality of their debate over the last 9 hours, are clearly not up to running this country. We have just seen it with the last speaker, Steffan Browning. He was concerned that by removing protection, you are going to cause damage for some New Zealand companies. But he loses sight of the goal that we have to secure, which is to build the cheapest possible houses to get as many people into homeownership as possible. If he thinks he can do that by maintaining artificial duties and not reducing the cost of a house by $3,000, then he is in a space that he should not be.

I would also like to draw attention to some of the debate that came up this morning from the Labour deputy finance spokesperson, David Clark, the wizard from Treasury. He spent all of his debate—

Phil Twyford: The Reverend.

JOHN HAYES: The Reverend. Yes, the “Red Reverend” from Dunedin.

Grant Robertson: The Rev. Dr David Clark to you.

JOHN HAYES: Dr David Clark, the “Red Reverend” from Dunedin. He focused on removing cheque duty. He overlooked telling the people of this country that, one, it is an outmoded tax, and, two, the cheque duty does not raise substantial money at all—$4 million a year. It is distortionary, it is easily avoided, and it does not apply to eftpos, internet, or credit card transactions. That is why we want to get rid of that duty. It costs more to administer than the revenue it collects. The Budget Measures (Miscellaneous Fiscal Matters) Bill is a very good bill and I support it entirely.

A party vote was called for on the question, That the Budget Measures (Miscellaneous Fiscal Matters) Bill be now read a first time.

Ayes 109

New Zealand National 59; New Zealand Labour 34; Green Party 11; Māori Party 2; ACT New Zealand 1; Mana 1; United Future 1.

Abstentions 7

New Zealand First 7.

Bill read a first time.

Second Reading

Hon CRAIG FOSS (Minister of Commerce) on behalf of the Minister of Finance: I move, That the Budget Measures (Miscellaneous Fiscal Matters) Bill be now read a second time. Part 1 of this bill repeals cheque duty from 1 July 2014. Cheque duty no longer raises substantial revenue, largely due to the decline in popularity of cheques as a method of payment. Cheque duty raised about $17 million in 1991-92 and about $10 million in 2001-02, but now raises only about $4 million per annum. Cheque duty is a relic of a previous age and the bill proposes to consign it to history.

Part 2 of the bill corrects an unintended consequence in the operation of the New Zealand emissions trading scheme. The bill limits participants to surrendering New Zealand Units only when they are deregistering an area of forest from the emissions trading scheme. Participants can still use Kyoto units for emissions from deforesting or harvesting to repay overallocation, and they can still sell Kyoto units on either domestic or international markets. The bill will come into force on 16 May 2014 and the amendments will not affect deregistration applications received by the Ministry for Primary Industries on or before 15 May 2014.

Part 3 of this bill suspends for 3 years the application of anti-dumping duties to residential building materials. This means that the anti-dumping duties currently in place on standard plasterboard from Thailand, on reinforcing steel bar and coil from Thailand, and on wire nails from China will be suspended for 3 years from 1 June 2014. It also means that no new anti-dumping duties can be imposed on a wide range of residential materials over the 3-year suspension period.

The purpose of suspending anti-dumping duties is to reduce the cost of constructing houses and is intended particularly to benefit the Christchurch rebuild but also increased house construction in Auckland and other parts of the country. For the purpose of determining the types of residential building materials covered by the suspension, the bill broadly defines building material and residential building material. It also includes a range of specific building materials that fall within these definitions.

For clarity, the bill lists some items that do not fall within the core market for residential construction material and are therefore excluded from the scope of the suspension. The 3-year period over which the anti-dumping duties are suspended is defined as the period from 1 June 2014 to 31 May 2017.

The bill also provides that any decision by the responsible Minister to impose an anti-dumping duty on residential building material or to reassess the rate of anti-dumping duties on a residential building material will not take effect until 1 June 2017. This means that New Zealand manufacturers can still apply for a dumping investigation into residential building material. Any decision to impose a new anti-dumping duty on a residential building material would, however, not take effect until the end of the suspension period on 31 May 2017, and would apply only after that date.

New Zealand manufacturers also retain the right to apply for a review of a suspended duty to determine whether it should remain in place for a further 5 years. If a review finds that the duty should remain in place, it would continue to be suspended until the end of the suspension period on 31 May 2017, and would be reapplied only after that date.

The bill also contains some minor technical provisions relating to the definitions of “ministry”, “Minister”, and “secretary”, to bring these definitions into conformity with current drafting practice. I believe that the combined effect of these measures will, in the longer term, have a significant impact on housing affordability and allow more New Zealanders to own their own home. Although the combined effect of these measures will have a significant impact on housing affordability in the longer term, the suspension of anti-dumping duties as proposed in this bill will provide an immediate benefit by reducing the cost of building materials, which will particularly benefit the Christchurch rebuild. I commend the bill to the House and move that it now be read a second time.

GRANT ROBERTSON (Labour—Wellington Central): The second reading is the stage of the bill at which we would normally be reflecting upon what people might have said when the bill went to the select committee. That is when members of the public have their opportunity to assess a bill in terms of its value to the country. And what might those members of the public have said had they had the chance to have a look at this legislation, the Budget Measures (Miscellaneous Fiscal Matters) Bill? I suspect we would have heard words like “piecemeal”, “fragmented”, “timid”, and “hopeless”, because that is actually what this bill is. This is meant to be, under urgency, the big moment of the National Government’s Budget, revealing the transformational changes to our economy that will drive higher wages and better jobs—and it is not here.

What is here is cheque duty. The 1980s have been caught up with by the National Government. It has worked out that people are not writing out as many cheques, although I am a little confused, I have to confess, about what the Government is trying to achieve with the repeal of cheque duty. Is it meant to be the return of the cheque? Is it the idea that we take the duty off and we will all be out there writing out our cheques? Perhaps that is what it is. Or is it saving New Zealanders that massive 35c a year? Is that what it is? Is it about the dividend? Finally, after all these years of austerity, New Zealanders get the dividend, the 35c mixture at the dairy. That is it. That is what they are going to get. If people were making submissions on this bill, I suspect what they would say is: “Where is the vision? Where’s the plan?”. New Zealand is facing some serious economic and social problems, and the Government’s response is removing cheque duty. That is the brighter future, ladies and gentlemen, that you were promised by the National Government.

What we do not see in here is the way that we will lift wages and get better jobs. We have to diversify our economy. We have to add value. It is not just about volume any longer. It has to be about adding value to products in New Zealand to help create those jobs, and that is absent from this bill. Perhaps submitters might have gone looking in the bill for how to reduce inequality and how to see that New Zealand becomes a fairer place. Surely, that is the goal of any Budget, but people come looking to the Budget legislation passed under urgency and they find nothing. The reason for that is that there is nothing in the Budget that will truly do that. The lowest-income New Zealanders, the most vulnerable New Zealanders, have been left out of the Budget in the measures that are there, so those hoping to make submissions on that will not be able to find that either.

John Hayes: Stop telling porkies.

GRANT ROBERTSON: I say to Mr Hayes, a man who spent his life in the Foreign Service before he came here, that maybe New Zealanders would go looking for how the export sector was going to be supported, and how regional economies were going to be able to drive products that would be exported. They might have wanted to submit on that in the Budget legislation, and they would find nothing. They would actually find a cut to the Regional and Industry Development Fund in the Budget, so they would find none of that.

What they would find when they were submitting on this legislation would be a confused response to a problem created by the Government within climate change legislation, designed, it would appear, to annoy the forestry sector and iwi, and not respond, in fact, to the major challenges that are there in climate change. They would also find a very odd bill on removing some tariffs and changing some anti-dumping legislation. I do note, and we will come to this in the Committee stage, that the Government’s belief that the housing crisis will be solved by plasterboard, varnish, and nails being a little bit more affordable is somewhat remarkable from this Government.

So in this second reading debate, really, on this side of the House we are deeply underwhelmed by what the Government has brought before us. We strongly believe that as a country New Zealand needs to address the economic and social difficulties that we have: the housing crisis, the inequality crisis, the absence of a plan to lift wages, and the absence of a plan to create better jobs. None of that is solved by pieces of threadbare, piecemeal, fragmented legislation that the Government has brought before the House. It is a deeply disappointing piece of legislation.

PAUL GOLDSMITH (National): That was a somewhat underwhelming speech from the other side here for the second reading of the Budget Measures (Miscellaneous Fiscal Matters) Bill. Mr Robinson asked—

Hon Clayton Cosgrove: It’s Robertson, not Robinson.

PAUL GOLDSMITH: Sorry. Mr Robertson said: “Where is the plan?”. Again, I think the problem is that members opposite do not like steady, sensible, predictable Government policy that everybody can understand in terms of where the Government is coming from and that is built up in lots of little steps that together bring the economy in the right direction. Theirs is the politics of the grand gesture, where somehow you are going to wave your wand in a transformational way.

If you overturn monetary policy and start changing the very foundations of what has been part of the successful New Zealand economy, if you suddenly upturn the tax system and bring in a capital gains tax, or if you overturn the electricity sector and start nationalising it—all those radical things Labour members are opposing, but I do not quite understand what basis there is for this when we have a strong, successful economy that is so much stronger than so many other parts of the developing world today.

We are looking at the books being back in surplus well ahead of many other countries, we are seeing growth at 4 percent, and we are seeing wages rising faster than inflation, and more money being made available in this Budget for families, for businesses, and for the most vulnerable. That seems to me to be a plan that is working, a plan that is working very well, and a plan that we are all proud of on this side of the House.

Again, I do want to remind the House of the whopper by David Cunliffe in his Budget debate speech. He said that Labour produced nine surpluses in a row. Well, that is rubbish. The final one ended up being a deficit of $3.9 billion, because Labour had increased spending by 12 percent in 1 year, and it was 50 percent over the last 5 years of Government. That is how a Labour Government works.

Yes, it is true. To give Labour its merit, it was reasonably disciplined in the first two terms of the Labour Government under Clark, but the third term was a runaway train. Spending went out of control and it left us with an economy pregnant with a decade of deficits.

This Government has had the fortitude to get us back to where we are today, after 6 hard years and the hard work of New Zealanders—New Zealand businesses and New Zealand people all around the country, from the top to the bottom, bringing us back to surplus today. And that is something we can celebrate. This bill is about some specific details, but we should not lose sight of the broader picture, and the broader picture is the very successful one.

I do want to talk just briefly about what we mentioned on the temporary suspension of dumping duties. Again, that was mocked on the other side by Mr Robertson, who said that it was just a small thing and that having cheaper nails is a terrible thing. But this is all about a plan that brings together a whole number of issues that help bring about affordability of housing.

Who would have thought—I did not think it was imaginable—that we would be able to work so successfully with the Auckland Council in terms of bringing the special housing accords together and seeing upwards of 30,000 houses planned to be built in Auckland over the next little while, which will produce so much more supply, which is what we need. It will have a much better result than any sudden introduction of a capital gains tax. All the small businesses in the country, all the farmers, and everybody you can name who has risked their money in an entrepreneurial venture is suddenly going to be hit by a capital gains tax. Somehow that is going to make housing in Auckland more affordable, just as it has in Australia and elsewhere in the world. It seems it is a hard one to follow.

Our policy of focusing on a whole range of issues on housing affordability, starting with getting greater access to land and more supply in housing and then working our way through the specific issues, is hard and detailed work, but the cost of building is an important part of what makes housing expensive in New Zealand. When the Productivity Commission did its thorough review of housing, it pointed out that New Zealand materials were more expensive than those in Australia, so we are doing what every good Government should do by drilling down into the details. This legislation removing duties and tariffs on building products will increase competition and reduce costs in the industry, saving Kiwis around $3,500—

Hon Clayton Cosgrove: Wow!

PAUL GOLDSMITH: —to build a standard New Zealand home. The member opposite mocks. I do not know about you, but I would prefer to have $3,500 in my pockets than not.

Hon Clayton Cosgrove: Do you know how much a house costs to build?

PAUL GOLDSMITH: Yes, I am very familiar with the general costs of housing, but I will not go into that detail. On that basis—

Hon Clayton Cosgrove: It wouldn’t even cover the heat pump.

PAUL GOLDSMITH: —heat pumps are a lot cheaper than that, actually; you just have to shop around—what we will find is that this Government has made a great contribution to housing affordability with this temporary suspension of dumping duties. On that basis, I commend this bill to the House.

MOANA MACKEY (Labour): Let us just be clear what the Budget Measures (Miscellaneous Fiscal Matters) Bill actually does. We had a very grandiose speech from Mr Goldsmith, but very little of it was based in reality. This bill will save people 35c a year on cheque duty.

Sue Moroney: How much?

MOANA MACKEY: That is the first thing—35c a year savings by abolishing cheque duty.

Sue Moroney: That will fix inequality!

MOANA MACKEY: That is what this bill does. That will fix inequality; that is quite right! When it comes to affordable housing, there will be $3,500 that the Government cannot even guarantee that will be passed on to the people who are building houses. There is no guarantee that the ticket will not be clipped on the way through and that homeowners will actually see the benefit of that, but my colleague Phil Twyford will talk more about that in his speech.

Let us just put the facts on the table about the last Labour Government. There were nine surpluses in 9 years—nine surpluses in 9 years—and zero net debt. We paid the debt off while National was screaming at us to give tax cuts, and we did not. We paid the debt down because we knew that when a rainy day like the global financial crisis came, we would need to be prepared. We were incredibly exposed, and the only reason we have come through the global financial crisis as well as we have has been the last Labour Government’s economic management. There was the lowest unemployment in the OECD. Labour has committed to getting us back to below 4 percent unemployment; National says that it cannot be done. Guess what? Over 5 years, Labour averaged below 4 percent. It can be done if you want to do it, if you care enough to do it, and if you take economic development and unemployment seriously.

But I want to talk about Part 2 of this bill, because, as my colleague Grant Robertson has said, this bill should have gone to a select committee. Had it gone to a select committee, it would have given the forestry sector the opportunity to appear before the committee to say: “Why do you hate us so much? Why do you continue the sustained attack on our industry?”. What looks like a very innocuous piece of legislation is actually a vicious attack, once again, on the forestry sector. It is the only sector in this country that has been doing the heavy lifting on greenhouse gas emissions reduction. The whole reason that we came out of the first commitment period of the Kyoto Protocol in the black was not because of Government policy. In fact, as we know, Government policy will result in only a 0.4 percent reduction of emissions compared with doing absolutely nothing at all. So we are basically doing absolutely nothing at all. We are doing 0.4 percent better than absolutely nothing. The only reason we came out net positive was forestry, so why does the Government keep attacking and undermining the forestry sector?

The forestry sector earns New Zealand Units when it plants trees, but the Government is stopping the sector from using cheap international units in place of New Zealand Units and then basically pocketing the difference when it deregisters or harvests the trees. Of course, we do not want that to happen, but the reason it is happening is that there is such a big price differential between the Kyoto unit and the New Zealand Unit. That is the actual problem here, and this Government has done absolutely nothing about it for 5 years. It voted against amendments that Labour put up to stop that by restricting cheap international units across the board to everyone, which would have helped fix the problem. The Government opposed that, but when it comes to the forestry sector, it is going to say that that sector does not get access to those cheap units.

But guess who does get access to them: National’s big, heavy-emitting, industry mates. Its mates get access to those cheap units to meet their obligations. They are given a free allocation of New Zealand Units to help transition them into the emissions trading scheme—90 percent. They get New Zealand Units, and they can then use these cheap units to meet their pollution obligations and pocket the difference. So it OK for the mates of National to engage in what is called arbitrage, but God forbid that forestry should do it, the one sector that is actually doing something about reducing emissions.

The Minister for the Environment is in the House. I would like to know why this does not apply to everyone. She is desperately pretending to be reading something. Why does this not apply to all people in the emissions trading scheme? Why pick on forestry, Minister?

Sue Moroney: She doesn’t know.

MOANA MACKEY: She does not know. She does not care. We know why: it is because the Government hates forestry and it loves big industry. These are its mates. It is Rio Tinto. It has already given them a big taxpayer subsidy. We should not be at all surprised that the Government is also prepared to let big industry continue to speculate on these emissions units when it is clamping down on forestry.

The Minister of Commerce said that this is an unintended consequence of the emissions trading scheme. What a load of garbage. This is not unintended; this is deliberate. It has deliberately let the carbon price collapse, it has deliberately let these cheap Kyoto units flood into the country, and it has deliberately not stopped that from happening, so to say that it is an unintended consequence is deeply, deeply misleading, and I am being polite when I say that.

One of the reasons talked about by members opposite is the fiscal risk to the Crown in not clamping down on this arbitrage, and that is true. The Government estimates it as being from about $11 million to $66 million. But when you look at the arbitrage that is being carried out by the other sectors that hold New Zealand Units, what is the fiscal risk for that? The fiscal risk for that is $107 million. That is $107 million of fiscal risk from the New Zealand Units held by the Government’s mates versus between $11 million to $66 million of fiscal risk from forestry. Which one of those are we clamping down on today? Is it the $107 million or the $11 million? No, we are clamping down on the $11 million so that the Government’s cronies can continue to engage in arbitrage and it will not do anything about it, although it is quite happy to once again take a whack at the forestry industry, which is crucial to our battle in avoiding the worst—

Sue Moroney: Are they not in the Cabinet club?

MOANA MACKEY: Apparently the forestry industry is not in the Cabinet club—clearly—because if it was, we would not be passing this legislation.

Another reason we are doing this is the reputation risk to the emissions trading scheme—that is, the risk of the reputation of our emissions trading scheme being defiled by the forestry sector engaging in speculation on New Zealand Units. The biggest reputation risk to the emissions trading scheme is that lot sitting over there. Our emissions trading scheme has no reputation now. It has no credibility, it has been completely undermined, and it is nothing more than a fig leaf. The emissions trading scheme’s reputation went out the door long ago when this National Government was elected. For the Government to say that it is going to clamp down on one small industry—an industry that is doing very, very positive things in terms of climate change—and think that that will somehow restore the reputation of the emissions trading scheme is laughable. It is absolutely laughable.

Our emissions trading scheme is designed to put a price on carbon. If it is not going to do that, then, quite frankly, why have it? I bet you that it is costing us more to run than it is actually achieving. The thing is that when the emissions trading scheme was first introduced by the last Labour Government, it had a price on carbon of around $20 to $25. That was what sparked off the wind industry in New Zealand. The price on carbon gave it the advantage it needed to really take off. That is entirely what the emissions trading scheme was designed to do. It is not doing that now, because this Government has allowed the price of carbon to be completely suppressed. The reason the Government says that it is not prepared to act on that is that it wants to reduce costs to struggling businesses and households. It says that if you have a proper price on carbon, that is going to feed through to electricity and fuel bills. What it does not tell you is that consumers are being charged carbon prices well in excess of the actual carbon price by fuel companies and energy companies.

And the Government has done nothing about that. It is quite happy to let the fuel companies and energy companies price gouge consumers. What we know is that the price of carbon is currently about 35c, but from what we have heard—and this all comes from anecdotal evidence that we have heard from people—consumers are currently being charged between $15 and $25 for a tonne of carbon at the petrol pump and through their power bills, despite the fact that the emissions that they surrendering are 35c. So, in fact, any benefits from a collapsed price on carbon are not being passed on to struggling businesses and households at all. Again, what has it done about that? Absolutely nothing. So what looked like an innocuous piece of legislation is actually the exact opposite. What makes it even worse is here is a sustainable forestry bulletin from the Ministry for Primary Industries telling people how to register and deregister their forests. So the very thing that we are clamping down on today is the same thing that the Ministry for Primary Industries has been promoting as early as February this year.

I can understand why the foresters are angry. I can understand why they might have had reason to believe that the Government was OK with them doing this, given that Government literature tells them how to do it and gives them tips on things to consider when removing and reregistering. I understand why they are probably a little bit shocked that under urgency this is going through with no select committee process and with no consideration about what the impact might be on the very sector that we are still hugely reliant on to reduce our greenhouse gas emissions, because this Government is doing absolutely nothing else.

Dr KENNEDY GRAHAM (Green): In this second reading I want to pick up on the concern expressed by Grant Robertson about the lack of due democratic process in the passage of this bill, the Budget Measures (Miscellaneous Fiscal Matters) Bill, particularly as it relates, as Moana Mackey has said, to something as important as Part 2 of the bill and the proposal to eliminate the arbitrage against post-1989 foresters.

Given that the public of New Zealand are not going to have any possible input into the passage of this legislation, let us speak on their behalf as faithfully as we can. Rather than presume to input their views, let us ask some questions that simply hang in the air because of the import of this draft legislation. The questions have to be asked. I think there would be five questions the people of New Zealand would wish to have answered. Given that neither the Prime Minister nor the Minister of Finance are here but the Minister for the Environment, Amy Adams, is here, let us ask Minister Adams, or her colleague who happens to wander into the Chamber and sit down in the chair, to address these questions in Committee. Let us see what the answers are to these five questions.

The first question to the Minister, the Hon Amy Adams, is: do you think that climate change is just another economic problem or is it a qualitatively new, unprecedented threat to human society? If it is (a) just another problem, where can we find it in your four Budget priorities, which are: responsibly managing the Government’s finances; building a more productive and competitive economy—it cannot be either delivering better public services or rebuilding Christchurch, so it has to be one of the first two. Do we find climate change in the responsible financial management of New Zealand’s economy or do we find it in a better, productive, and competitive economy? Actually, the 195 states that are party to the United Nations Framework Convention on Climate Change, competing among themselves and punching above their weight, will fail, Minister, to solve the global problem. If it is the other—if it is an unprecedented threat to human society, which 99 percent of humanity thinks it is—why are you and your Government not calling attention to this and calling for a national debate in the forthcoming election? That is question one.

Question two is: the United Nations has concluded that to prevent dangerous climate change, the developed countries must reduce emissions below 1990 levels, within the range of 25 to 40 percent by 2020. If the Minister continues to look down, she can pretend the questions are not here, possibly. That 25 to 40 percent is designed to meet a threshold of a 2-degree temperature rise, or 450 parts per million volume of carbon atmospheric concentration. That 450 parts per million was actually signed off by your Government, Minister, in—I think it was—August 2009.

Given that there is a range of 25 to 40 percent, how can you justify any of the developed countries, including New Zealand, being outside that range and below the 25 percent? Can you explain the Treasury paper to Cabinet that says that it does not follow that every country has to be within this range, when the scientists make it clear that they have taken into account all the common but differentiated responsibilities—all the differences in national circumstances—when they give a range of 25 to 40 percent? If, in fact, you insist on being below 25 percent, which you do with your 5 percent unconditional target, Minister, will you wish to nominate another developed country to make up the shortfall? And will you or your Prime Minister address that issue to that developed country, explain the reasons, apologise for New Zealand, and then nominate the country and help them, perhaps, to make up the shortfall?

Question three—are you confident that New Zealand is doing its fair share when we set a 5 percent reduction? Are you aware, Minister, that global emissions at the moment are projected to produce an increase of anything between 2.6 degrees and 4 degrees Celsius? Are you equally aware, Minister, that New Zealand’s projected increases go above that range of 2.6 to 4 degrees Celsius and are more on track, if emulated by every other country, to go closer to a temperature increase of 5 to 6 degrees Celsius, which, in the case the World Bank has described, is not dangerous but catastrophic climate change for your children and mine?

Question four: are you—or perhaps your colleague, the Minister of Finance—able to name and identify the global least cost of carbon as of mid-May 2014? And is it sufficient to avert dangerous climate change of a 2-degree threshold?

Finally, question five, which has been asked repeatedly in this House today, and no doubt you or your colleagues will have a chance to answer it in the Committee: why is this Government discriminating against post-1989 foresters in eliminating the arbitrage, which in itself is a good thing but is iniquitous in relative terms of equity compared with the other sectors that you and your Government are deliberately and somewhat cynically protecting? They are the five questions, Minister. We are waiting for those answers.

SIMON O’CONNOR (National—Tāmaki): Although I might not be the Minister for the Environment, I think the answer to those five supposed questions is that we do not believe in the politics of fear. We do not believe in the politics of fear wrapped in sanctimony, and we do not believe in them wrapped in pseudo science.

John Hayes: Or pomposity.

SIMON O’CONNOR: Or pomposity—that is a very good word. I find it is very interesting with the Greens because, of course, there is a lot of science around climate change, but what I find fascinating with the Greens, of course, is that when it comes to the science of drug use, they are not interested in that. The science around fluoride—they are not really interested in that. The copious amounts of science around genetic engineering—oh, the Greens do not want that, but they are happy to pick elements around climate change, which is quite real, but then turn it into the politics of fear. Counterbalance that with National, which is moving forward in a balanced and prudent way that embraces, of course, the environment—and we are seeing that through one part of this Budget Measures (Miscellaneous Fiscal Matters) Bill as it approaches arbitrage in our forests—but also the economy as a whole.

We look at something like cheque duties—about $4 million of revenue to the Crown a year. That is being removed because it is an unbalanced tax now. We use eftpos and other mechanisms, and they are not taxed per transaction. So the Government looks at this and asks: “How do we make things more efficient? How do we reduce regulation? How do we reduce those things that get in the way of us as human beings being able to live a balanced, prudent life without fear?” We want to be able to run our businesses, love our families, walk in the bush, swim in the lakes, engage with the world in a multicultural society, and be pleased with that. That is what this bill is ultimately about.

This is a Budget measures bill. It is the second one of such bills we are putting forward here. I look forward to discussing this more in the Committee stage and, of course, in the third reading. It is, as I said, a prudent, balanced approach to four important areas for the Government.

ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First on this omnibus bill, the Budget Measures (Miscellaneous Fiscal Matters) Bill, which covers the cheque duty, climate change, and the building supplies bills. It was very interesting to hear Mr Paul Goldsmith of National giving his checklist of all the positive things in this Budget and what people were getting out of it. He could have equally put up a checklist of what was coming out of the Budget as well, on the counter-side, which he did not do. He seemed to show only the glossy side.

He could have said that $18.5 million is coming out of output expenses for the Department of Corrections. He could have said that $22.5 million is coming out of the courts. He could have said that $2.2 million is coming out of the Customs Service. He could have said that $1 million is coming out of economic development. He could have said that $53 million is coming out of education outputs. Further, with his checklist that he was so proud to show us, he could have gone on to say that internal affairs is being chopped by $25 million, that justice is being chopped by $14 million, that labour is being chopped by $31 million, and that the Police is being chopped by $42 million. In total, when you add up what is being chopped out of the Budget, Mr Goldsmith, the checklist shows that $284 million is being chopped out of operating output expenses of Government departments this year. That is nothing to be proud of. In a population that is expanding, and we have heard that 42,000 more people are going to come into this country—the size of Wanganui, or Whanganui, depending on whether you put an “h” in it—in the coming year, $284 million is chopped out of the operating expenses of Government departments to come up with the contrived figure of a $372 million surplus. That is not anything to be proud of.

At the same time, today we hear about the building supplies bill and how this is going to save $3,500 per house built at a time when in Auckland house prices have gone up by 51.9 percent in the last 3 years. That has been the increase in house prices. We are talking many, many tens of thousands of dollars, if not hundreds of thousands of dollars, not just an average over the whole country of $3,500. And that $3,500 is coming about not because of the cost of building itself but because of the cost of competition to buy houses.

Today I received from one of our constituents this real estate paper from Auckland, and, lo and behold, it is all in Chinese. I guess the members from—

John Hayes: Are you racist?

ANDREW WILLIAMS: No, no, not at all. I guess the member from Wairarapa or the member from Waimakariri or the member from Taupō would be quite surprised if in their own town there was a 50-page newspaper, all in a foreign language, selling properties in your home town. I think, Mr Hayes, you would be surprised. You would—I am sure you would—because it does not happen anywhere else in New Zealand apart from in Auckland.

John Hayes: You’re a xenophobe.

ANDREW WILLIAMS: No, I am not.

Melissa Lee: You’re a xenophobe.

ANDREW WILLIAMS: No, not at all, Ms Lee. I have three children aged 20, 25, and 28, who are saying they will struggle to get a home in Auckland because the people their age, in their 20s, Ms Lee, are unable to afford even a deposit on a home in Auckland any more, because they have been driven out of the market. I have many real estate people in Auckland say to me that people are walking in the door and offering up to $200,000 or $300,000 more than what a property is estimated to be worth—offering cash. It has nothing to do with loan-to-value ratios or with going to the bank and lending or anything else. They have got the cash, they are walking in, and they are paying serious money, over the odds. So, Ms Lee, do not give me a lecture about that. I know what is happening—I know what is happening.

We are seeing auctions for houses on the North Shore that are sold to cash buyers who are literally on the other ends of agents’ mobile phones, back in foreign parts, and they are buying properties left, right, and centre, pushing up the prices. So the problem here is not tinkering around the edges, cutting out the costs of a few nails, cutting down the cost of a bit of plasterboard, and cutting out a few of the costs of materials. The problem we have here, which is the big elephant in the room, is that the Auckland market—and the Auckland market drives the rest of New Zealand—is currently seeing a huge amount of property being bought from interests abroad, and that is pushing up the price of the market.

Ms Lee, next to my property in Auckland, there recently was a 550 square metre piece of land carved off the next-door neighbour’s back lawn. What would a 550 square metre piece of land go for in the Wairarapa, Mr Hayes? Probably—I do not know—$50,000, $60,000, $70,000, or $80,000. At that particular auction, that small pocket of land the size of a handkerchief in Auckland went for $1 million—$1 million—and it did not go to a New Zealand buyer. It did not go to a New Zealand buyer. It did not.

Melissa Lee: How do you know they’re not New Zealanders, for God’s sake?

ANDREW WILLIAMS: It did not go to a New Zealand buyer. Furthermore, the second and the third bidders on the property were not New Zealand buyers either. They were not. And all the people in our neighbourhood asked “How on earth will our own children and our own families ever be able to stay in our own suburb?”. We have lived there for 30 years, Ms Lee, and our friends in the neighbourhood who have lived there for 30 years all asked how our families are going to be able to afford to stay living in our own suburb. How are they going to stay living in our own suburbs? The answer, Ms Lee—

Melissa Lee: Xenophobic racist.

ANDREW WILLIAMS: No, I am not. The answer is to stop selling our houses and our land to foreigners. Put a stop on it. New Zealand First is going to do it. New Zealand First is going to bring a halt to selling land if you are not a resident here or you are not a citizen here. We do not want you coming here and buying our houses. We do not want you coming and buying our houses, because what that is doing is making New Zealanders tenants in their own country.

At the same time, it is interesting that this building supplies bill is going to have an effect on local manufacturers. It is going to cause concern for some of our manufacturers of goods. It is also going to have questions about whether inferior products, building materials of inferior quality, will start to replace New Zealand - manufactured products. Questions are already being asked by some manufacturers about whether those products will come with the same level of warranties, guarantees, and longevity of product, and the source of those materials. Today on the stock exchange Fletcher Building, the largest company in this area in New Zealand, dropped 11c. Its shares are down 11c today. It has gone down 1.2 percent in capitalisation. That is about $75 million knocked off the Fletcher Building capitalisation. That is the first effect of this—Fletcher Building. If that is one indication, then I am sure that many of the other businesses involved in construction and that sort of thing in New Zealand will equally be going down.

So the effect of this is a trifling $3,500. It is a fictitious, contrived figure on a saving on a house that cannot be quantified. It is probably another one of the back-of-the-cigarette-packet formulas that the Government has worked out—$3,500. The Government should really get stuck in and say: “We’re going to have a land register in this country. We’re going to work out who owns the property, who owns the land. We’re going to work out how we can control it. We’re going to take the heat out of the housing market, and we’re going to help good Kiwi New Zealanders get back into houses.” The Government has done nothing, absolutely nothing, in this Budget for first-home buyers. It has done nothing for young working families—nothing at all—in terms of helping them get into houses, and the Government’s answer to it is to try to knock off the price of a few nails and a bit of gib board. Well, New Zealand First will not be going along with that.

Hon KATE WILKINSON (National—Waimakariri): It gives me great pleasure to rise and support this non - race-based piece of legislation, the Budget Measures (Miscellaneous Fiscal Matters) Bill. It is an omnibus bill that amends four other pieces of legislation. I support it at its second reading and look forward to its Committee of the whole House stage.

PHIL TWYFORD (Labour—Te Atatū): I am glad to have the opportunity to make a few more comments about the Budget Measures (Miscellaneous Fiscal Matters) Bill, which is the most insignificant contribution that could possibly have been designed. If the Government had set out to trivialise the issue of housing affordability in this country—if it had set out to disappoint New Zealanders who were looking for the Budget to actually make some meaningful contribution—it could not have designed a measure better designed to let people down and disappoint them.

I want to respond to some of the comments that were made by the member Andrew Williams about the issue of offshore speculators and how they are bidding up the price of houses in Auckland, and I want to respond also to a number of the comments and interjections that were made from the National benches. The National Government refuses to acknowledge that offshore speculators are bidding up the price of houses in Auckland and it is denying young Kiwi first-home buyers the opportunity to buy their own home.

I do not know why it is in denial. It refuses to recognise that this is going on. Everybody in Auckland knows that this is a reality. It is happening every day in real estate auction rooms all around Auckland. Young Kiwi first-home buyers are being outbid by offshore speculators bidding on the end of a phone. It is a reality, it is happening, but the National Government, for some reason, is in denial. We had Nick Smith in the House earlier this week trumpeting Inland Revenue Department figures that he purported to claim said that only 1 percent of properties were owned by foreign buyers. Well, he was misrepresenting the data. He was being far too cute, as Nick Smith is wont to be. Although the data is limited and not comprehensive, I think it is pretty clear to most observers that at least several percent of the houses that are being bought in the real estate market are going to offshore speculators.

Every time we raise this issue in the House, members on the National Party benches accuse members of this House of being racist and xenophobic. Well, I ask members of this House when it has been racist or xenophobic for a Government to stand up for its own citizens. That is all we are asking, but National is in such denial that it refuses to even collect the data. Nick Smith, on the one hand, says: “This is not a problem”—and that offshore speculators are not bidding up the price of houses in Auckland—“but the data is rubbish, and I refuse to even collect the data.” That is complete intellectual dishonesty, and it shows that this Government is running scared because it knows that New Zealanders care about this problem. In fact, all of the polls on this issue indicate that by a ratio of 2:1, New Zealanders want restrictions on offshore speculators.

Nick Smith has also been going around saying that it would cost a packet—in fact, he said that it would cost mega-millions—to even collect the data on offshore speculators.

Hon Clayton Cosgrove: They’ve got a department of statistics.

PHIL TWYFORD: Yes, the Government does have Statistics New Zealand, but even so, there are cost-effective and reasonable ways to go about solving this problem. It would be as simple as requiring the conveyancing solicitor to certify on the sale and purchase agreement whether or not the purchaser was a New Zealand citizen or a New Zealand resident. In the case of companies and trusts, you simply apply the Overseas Investment Act criterion, which means that if there is a beneficial interest or a foreign shareholding of 25 percent or more, then you regard the entity as a foreign entity. It is as simple as that. It would cost hardly a thing. The Government could have done this months ago, and it could have settled this debate once and for all.

JOHN HAYES (National—Wairarapa): I think this is a great Budget. The Budget Measures (Miscellaneous Fiscal Matters) Bill is a superb piece of legislation. I support it. Thank you.

Mr DEPUTY SPEAKER: Clayton Cosgrove—a 5-minute call.

Hon CLAYTON COSGROVE (Labour): That was an outstanding contribution from the member for Wairarapa. I think the shorter his speeches, the more outstanding they get. The Budget Measures (Miscellaneous Fiscal Matters) Bill is an interesting bill in that it is sort of one of the big hits, one of the big platforms, for the National Government. I will leave it to my learned colleague Moana Mackey to deal with the climate change issues, but I am intrigued by the two other propositions contained within this bill.

These include, namely, the cheque duty, which, in some sort of spin, the National Government promoted as a big sort of tax saving and cost saving hit for the populace. I am assuming that Mr Foss, the Minister of Commerce, being, as he is, a Minister who covers all the details and knows everything that is happening in his portfolio, would have canvassed the Bankers’ Association, and it told him that people now write out, on average, seven cheques per year, and that this would give an absolute net saving of 35c a year—35c a year. I know that Mr Hayes would be astounded by this. You know, he would be going back to the people of Wairarapa and going around every outlet that he could. He would be standing outside every bank branch, handing out his business card and saying: “I have delivered to you, the people of Wairarapa, 35c per year. You should be grateful.” If he was standing again, they should vote for him again—that is what he would be saying. He will be telling the new candidate to go around and do that. I am sure that he will produce a pamphlet, and the pamphlet may well cost more than 35c to produce, but he will hand it out, saying: “Be grateful. The National Government has provided you with a huge benefit.”—that is, 35c a year.

Then we come to the great sort of housing policy. I did note that when Mr Foss talked in his address about this wonderful $3,500 that he would save New Zealanders on the construction of their new homes, he used the words “might”, “could’, and “maybe save it”. He did not tell us how he actually calculated the $3,500 saving that would be made in construction costs. He did not tell us that because, I suspect, there is no analysis. He did not tell us that, at all. He said: “It might save three and a half grand. It could save three and a half grand. Maybe, if we are lucky and people believe us, they might get a few shekels back.” I note that the measures are temporary. They are for only 3 years. It begs the question: has any work been done as to the impact, positive or negative, in respect of the industry? I suspect not, and that is why the Government has put it in for 3 years. If it was sure of itself, it would be a permanent disposal.

But then you look at the list. You look at things like varnish. I am a bit old-fashioned, and I call it shellac, and there is plenty of political shellac in this legislation. If you look at the conveyancing cost and perhaps the consenting cost of a new home, the $3,500 would not cover even that expense. So somehow New Zealanders are going to be so grateful to the National Government for the fact that, allegedly, they are going to save, in building cost, $3,500, when we know that last month alone the cost of construction in Auckland in 1 month went up in excess of $6,000. So this will give people a couple of weeks’ break—temporarily—and then it will be superseded by probably 200 percent or more, if those figures are consistent increases, month to month, and people will save absolutely nothing. So it is smoke and mirrors. It is worse than smoke and mirrors—it is political shellac.

So on the one hand, if you are out there in cheque-writing land, brace yourself because you are going to get 35c a year back, and according to the National Government, you should be damned well grateful for it—

Phil Twyford: Happy days.

Hon CLAYTON COSGROVE: —happy days are here again—and if you are a homeowner in Auckland or in other places, you might have sat back last night, read the paper, and said: “This is not too bad. Maybe it is a heat pump, or half a heat pump.” You know, mum and dad might have sat back and said: “This is not a bad start.”, until they realised that a 200 percent increase last month would have left them in negative territory. So I say to Mr Foss that it is not good work; not good detail. I will look forward to the Committee stage, when you tell us how you get to $3.5k and what the impact will be, in that detailed analysis that you and your department have embarked upon, so that you can actually tell New Zealanders and they can be confident that you are telling the absolute, detailed truth and you are guaranteeing them $3,500 a year in savings.

Bill read a second time.

In Committee

TIM MACINDOE (Junior Whip—National): I seek leave for the Committee to debate the Budget Measures (Miscellaneous Fiscal Matters) Bill as one question, with the votes to be taken separately.

The CHAIRPERSON (H V Ross Robertson): Is there any objection to that course of action? There appears to be none. Then that will be the case.

Parts 1 to 3 and clauses 1 and 2

PHIL TWYFORD (Labour—Te Atatū): I am glad you did not mistake me for Grant Robertson!

The CHAIRPERSON (H V Ross Robertson): Certainly not!

PHIL TWYFORD: I want to talk briefly about Part 3 of the Budget Measures (Miscellaneous Fiscal Matters) Bill, which deals with the suspension of anti-dumping duties. This is the centrepiece of National’s housing policies in the Budget, and a sad, sad, underwhelming policy it is. I want to talk about the whole question of housing costs, because I think everyone would accept that we have a housing crisis. The evidence is plain to see. House prices in Auckland have increased by 40 percent since National came to office.

Currently, it costs someone on the average wage 49 percent of their income just to service an average mortgage. That is unsustainable and very, very unaffordable. Under the numbers contained in this Budget, the projections are that that will go to 63 percent, so 63 percent of the average wage will go to service a mortgage. So things are not looking good, first-home buyers are locked out of the market under this Government, and Government agencies like Housing New Zealand are routinely referring people to live in camping grounds. We heard the Minister for Social Development, Paula Bennett, say the other day that people who live in camping grounds are not regarded as high priority for eligibility for a State house. That is how bad things have got.

Why are houses so expensive? There are clearly a number of factors. The question of building materials and the high price of those materials is just one of those factors, but I want to touch on the other factors in the course of these comments. Land, particularly in Auckland, is a major factor that is driving up the cost of new homes and residential developments. This Government thinks that the answer to the land supply shortage in Auckland and the high price of land is these special housing areas that it is splattering all over suburban Auckland at the moment. I want to say that Labour’s policy, KiwiBuild, will drive down the cost of land in new residential developments by the Government taking a much more hands-on role in the development process and foregoing the developer’s margin. A capital gains tax under Labour will also put the frighteners on the land-bankers and the speculators who are making a killing at the moment at the expense of first-home buyers.

One of the other major factors is construction costs. About half the costs of a new build are the construction costs, excluding materials. This Government has no answers to that. It has been wittering on about the construction industry’s productivity for the last 5 years. It has not done a thing about it. Under Labour, the building of 10,000 new homes a year for a decade, at scale, will open the door for off-site manufacturing and modern prefabrication that an industry working group recently estimated would slice $32,000 off the cost of a new standard home—$32,000. I hope the members opposite are listening to this, because compared with the paltry $3,500 that they have put on the table in this Budget, $32,000 amounts to a real and substantial saving. Add to that the possibilities, which are unprecedented in New Zealand, for bulk purchasing of building supplies. That would enable us to strike deals the likes of which have never been seen in New Zealand. By being able to bulk-purchase the components of 100,000 homes, we will be able to strike deals that are better than we have seen the likes of in New Zealand.

Tony Sewell, the head of the Ngāi Tahu Holdings Corporation, has been very active in talking about the high cost of building materials in New Zealand, and was recently pointing out that we are paying 25 to 30 percent more than Australian consumers for many of the new components of a new build. I think he is quite right. There is clearly something wrong with the industry, and I think that most observers would agree that it is fundamentally a lack of competition. We essentially have a duopoly in the building materials industry. It is not the scale of the country; it is fundamentally a lack of competition.

I invite the Minister in the chair, Craig Foss, to take a call and tell us what he and his colleague Nick Smith are going to do about this. What they have done is that they have chosen the low-hanging fruit from the Ministry of Business, Innovation and Employment’s residential construction industry market study. By suspending or lifting tariffs and anti-dumping duties, they have chosen the low-hanging fruit. They do not appear to have any political will to do anything about the core problem in relation to the high cost of construction materials, and that is to address the lack of competition in the industry. So those are some of the factors.

But we all know that if you are going to think about the cost of new housing, it is not just about the cost of the component parts of a new house. The price of a new house is set by supply and demand. It is inexplicable to me that this National Government refuses to consider the demand side of the equation. It refuses to do anything about speculators who are bidding up prices in Auckland. Auckland is a speculator’s paradise. People are farming Kiwi houses for a capital gain. The collateral damage is to first-home buyers, who cannot keep up with median house prices that are now in excess of $700,000 in Auckland. But this Government refuses to consider what almost everybody else now thinks is a no-brainer, and that is a capital gains tax. As we have said earlier in this debate, offshore speculators are contributing to this problem. Cashed-up speculators—whether they are in New York, London, or Shanghai—are bidding on the end of a phone and driving prices beyond the reach of ordinary Kiwi first-home buyers.

National refuses to do anything about the demand side of the equation, and on the supply side all it has is this lame Auckland Housing Accord, which, on its own figures, will deliver only 5,500 new dwellings in the next 3 years in the special housing areas. Auckland needs 13,000 houses every year for the next 3 years to catch up on the shortfall and keep up with growing demand. We know from the Budget figures yesterday that surging net migration is going to add 40,000-odd new residents to Auckland, which will make it almost impossible under the current policy settings for this Government to make a dent in the housing crisis.

We know that if you walk into Home Depot in California, you can buy treated four-by-two framing timber for a quarter of the price that we pay in New Zealand. It is 25 percent of the price in New Zealand if you walk into Home Depot in California. Why is that? Is it that the Americans are much more efficient at growing pinus radiata than we are? I do not think so. There is a problem in the building supplies industry. It is fundamentally a lack of competition, but this Government has no will to address that problem.

All that the Government has brought to Parliament in this Budget and offered the people of New Zealand in relation to the housing crisis is this pathetic measure to lift the tariffs and anti-dumping duties on nails, varnish, and wallboard. It may, if we are lucky, take $3,500 off the cost of a new house, but there is no reason to believe, on the evidence that we have heard so far, that this Government has even thought about how you would ensure that that saving is passed on to first-home buyers. It will undoubtedly be pocketed by builders and developers, taking advantage of an overheated seller’s market. The $3,500 that the Government has promised will be saved off the cost of a new build is less than 1 percent of the cost of an ordinary house—less than 1 percent. It is 2 to 3 weeks’ house price inflation in Auckland. It is pitiful, it is pathetic, and the people of New Zealand expected a lot more.

MOANA MACKEY (Labour): I want to speak to Part 2 of this Budget Measures (Miscellaneous Fiscal Matters) Bill, which amends the Climate Change Response Act. I have a number of questions for the Minister in the chair, the Minister of Commerce, which I hope he will respond to. This is an incredibly damaging piece of legislation for the post-1989 forestry sector. My first question would be: why does the Minister hate forestry so much? Why does this Government hate forestry? Time and time again we have seen Government policies undermining the very sector that is doing all the heavy lifting in terms of climate change response. I would like to know from the Minister in the chair why this applies only to post-1989 foresters.

This is not actually about foresters not being able to reregister once they have deregistered and double-dip, because we could have stopped that if that were the case. We could have just said that within any single mandatory emissions reporting period you cannot reregister; you can only register once. That would have fixed it. We could also have limited these international units across the board—treated everyone the same—to try to narrow that differential in price between the New Zealand Unit and the Kyoto units. That would have fixed it. If we had a proper price on carbon and that differential was not there, then we would not have this issue at all. I want to know why the Minister is applying this only to post-1989 forestry. And the Minister should really be listening, because we are talking serious money, jobs, and investment for a very important sector.

The National Party likes to say that it is all about business—well, here we go, passing a piece of legislation that is unfair, retrospective, and inequitable, and the Minister is not even doing me the courtesy of listening to or acknowledging any of these concerns. Maybe we should just put the officials in the chair, because I do not actually think Minister Foss understands the emissions trading scheme or this bill at all, but I would not want to do that because I would not want to have to put them in the horrible position of having to defend what is being done here. All I can say is that help is on the way. Come 20 September you will have a Labour Government that will take climate change seriously and that will support, not undermine and attack, the forestry sector.

Jami-Lee Ross: The arrogance.

MOANA MACKEY: Jami-Lee Ross, here we go—climate change denier No. 1. Oh no, sorry—that is Gerry Brownlee. Jami-Lee Ross is climate change denier No. 2. Simon O’Connor is climate change denier No. 3. He called it pseudo-science in his contribution—pseudo-science. The science of climate change is pseudo-science! Well, I can say to New Zealanders and to our long-suffering officials who do wonderful work on behalf of this anti-environment Government that come 20 September you will have a Government that takes climate change and environmental matters seriously, so hang on in there—hang on in there.

I want to know from the Minister in the chair why this does not apply to the heavy industrial emitters who are engaging in arbitrage. Minister? Hello? No, no answer.

Hon Phil Goff: The lights are on but no one’s at home.

MOANA MACKEY: That is right—the lights are on but no one is home. Why does this not apply to your mates in the heavy industry sector like Rio Tinto? Why are they allowed to engage in arbitrage but the post-1989 foresters are not, Minister? Nope, no one is there. The wheel is spinning but the hamster is long gone. Why does it not apply to your mates in the heavy-polluting industry sector? There is no answer to that.

The other question I have for the Minister is if this is such a dreadful, awful thing, why was the Ministry for Primary Industries, as late as the beginning of this year, promoting it in its Sustainable Forestry Bulletin? Why was the ministry providing hints on things to consider when removing and reregistering post-1989 forests in the emissions trading scheme? I think it is fair to say that from this you could probably assume that the ministry thought the Government was OK with it, so this has probably come as quite a nasty surprise to it, which is why this bill should have gone to a select committee.

My next question for the Minister is if this is about reducing the fiscal risk to the Crown—and we all accept that that is a good thing to do—why, when the fiscal risk to the Crown of arbitrage being carried out by the post-1989 forestry sector is estimated to be between $11 million and $66 million, are we not applying the same restriction to the industrial sector engaging in arbitrage? If we use the same methodology, the fiscal risk to the Crown from that sector is $107 million. Why is $11 million of fiscal risk not OK, but $107 million of fiscal risk is just fine?

This is the most appalling thing. This is a serious piece of legislation. It was presented to us as being something minor and technical. On further investigation, it absolutely was not. The Minister in the chair is refusing to even acknowledge these concerns. I would welcome him to stop sitting there like a dried arrangement, get up on his pins, and answer some of the questions that have not been answered. This bill has not been consulted on. No one in the forestry sector knew this was coming. The Government has not consulted with anyone. There was no select committee process. So these are very, very simple questions, and I hope that the Minister is going to respond to them.

The next question I would put to the Minister is that if this is about reputational risk to the emissions trading scheme, then should he not be more concerned about the fact that in his Government’s plan for addressing climate change the difference between the results for that and doing nothing at all is a 0.4 percent reduction in greenhouse gas emissions? So the difference between the Government’s great climate change strategy on the one hand and absolutely nothing at all on the other hand is 0.4 percent. So, basically, we are doing nothing. If the Minister is concerned about reputational risk, then I suspect he need only look in the mirror to see who is responsible for reputational risk to the emissions trading scheme and to New Zealand for our complete lack of action in this area.

I have an amendment in my name, and we will be voting against this part of the bill unless my amendment is agreed to. That amendment would restrict international units across the board for everyone. That is actually what the post-1989 forestry industry has been calling for, for years. So this is not about the industry saying it wants these cheap units and it thinks they should be able to stay in our scheme. For years industry has been saying: “Please restrict them. We want to see them restricted. We want the New Zealand Unit to be the prime unit used in New Zealand, but apply that to everyone.” So for the Government to turn round and say it is going to restrict them but only to that industry, so it will be the only sector in the emissions trading scheme that cannot get access to these units, is highly inequitable. It is also retrospective.

This is, I think, one of the worst things about this particular change to the Climate Change Response Act. There are people out there right now who are holding Kyoto units that when this bill passes they will not be able to use. They purchased those units in good faith. They purchased those units because legally they were entitled to surrender them to meet their obligations. They purchased those units in accordance with the law, in accordance with Government policy—the Government had been promoting this activity—and they are now left hanging. If they have not started the deregistration process with the Ministry for Primary Industries by today, then they are stuck with those European allowance units. If they have not got New Zealand Units—if they have sold their New Zealand Units because they did not think that they were going to need them—then that makes it even worse.

I have another question for the Minister, which he will obviously choose to ignore because he does not understand it or appreciate how damaging this actually is. Why did he not allow the European allowance units that have already landed in the country from today to still be allowed to be used? Why is he retrospectively hurting people who have purchased these units in good faith and in accordance with the law but who have not started the deregistration process? Does he care? Do you care, Minister, that people are actually seriously out of pocket because of something that you refuse to even stand up and take a call on, while you sit there and pretend that you are not listening to me and pretend to be reading the papers in front of you? It is just embarrassing. Seriously, a quarter of a million dollars for this—that is what we pay this guy, for no answers, for a complete lack of understanding, and for no sympathy at all, no remorse for the business people who are out of pocket or the foresters who are going to be hurt by this change. So the amendment in my name will equitably apply that restriction across the board to everyone. That is the way we should be dealing with it.

But the primary question that I want to ask this Minister is: why is he giving his mates a free pass and whacking forestry? Minister, you should be thanking forestry. It is the only reason we came through the first commitment period of Kyoto in the black—the only reason. This Government has no plan to deal with climate change at all. Forestry saved us. You should be thanking the industry, not taking yet another whack at it. So I ask again: why are your mates getting a free pass and forestry is being disadvantaged? Minister? It is cronyism, plain and simple. It is what we have seen right through the Budget. It is what we have seen right through the 5 years of this National Government—cronyism. It is unfair, it is inequitable, it is damaging, and it is embarrassing.

For the Minister to say that this is about our reputation—give me a break. This damages our reputation. This is a massive breach of faith with people who made investment and business decisions based on what they understood the law to be, based on what the ministry was actually promoting.

Dr KENNEDY GRAHAM (Green): Thank you, Mr Chair. I am grateful that you allowed me to take the next call, because it follows immediately on from what the previous speaker, Moana Mackey, was saying, which was about the iniquity of discriminating against a particular subsector of New Zealand’s economy, the post-1989 foresters, and, in the broader context, the sheer inadequacy of this Government’s climate policy. I think, to pick up on her point, we could call this Government the 0.4 percent Government. What does that mean? It means that, as I said in the second reading, this Government’s policies will result in our emissions projections, which, if they were emulated by every other country in the world, would result in something like a 5 to 6 degrees Celsius increase.

During the second reading I asked a number of questions. Because of the truncated democratic process, it was necessary to speak on behalf of the New Zealand people, who will not have an opportunity to have input into the passage of the Budget Measures (Miscellaneous Fiscal Matters) Bill. We simply wish to ask questions. There were five questions that I asked the Hon Amy Adams, who was in the Chamber at the time. I know she took careful consideration of those five questions. She will presumably have passed those on, with the suggested answers on behalf of the Government, to Minister Foss, who will be able to get up, having answered Moana Mackey’s questions, and answer the five questions that I lodged, as well.

Just in case his colleague Minister Adams omitted to convey them to him, the first one was whether they think climate change is just another economic problem, or is it a qualitatively new, unprecedented threat to human society? The United Nations says that to stay within the 2-degree temperature rise and 450 parts per million volume of carbon atmospheric concentration—which Cabinet has signed off on—developed countries have to stay below 1990 levels, within a 25 to 40 percent range of reductions, by 2020. The second question was why does the Government then respond that not every developed country has to stay within that range when that range is very clearly calculated to account for every different national circumstance of those countries? Question No. 3 was did he think that New Zealand was doing a fair share when global projections are on course for a 2.6 to 4 degree temperature increase, whereas New Zealand’s projections, as I said earlier, are on course, if emulated elsewhere, to 5 to 6 degrees?

The fourth question—and Minister Foss can answer this one effortlessly because he knows about these issues—is what is the global least cost of carbon in mid-May 2014, is it sufficient to begin the challenging task of bringing down global emissions, and is it the right criterion to bring to bear on New Zealand’s climate policy when we are trying to bring our own national emissions down? The fifth question, which both Moana Mackey and I have touched on, is why discriminate among subsectors when you profess equity in your climate policy inter-sectorally in New Zealand? Those five questions are now lodged with Minister Adams and Minister Foss, and we will look forward to those answers so that the democratic passage of this bill can be honoured as we go through the course of the next 60 minutes.

I am also encouraged by my colleague Moana Mackey’s creativity in terms of responding to Part 2 of the bill with an amendment. I have just put forward an amendment in the last few minutes as well. It comes from the bill titled Climate Change Response (National Emissions Reduction) Amendment Bill, which is in the ballot and has been in the ballot for 2 years. The reason “National Emissions Reduction” is in the title of the bill is that it is necessary to highlight the fact that the Climate Change Response Act does not specify emissions reductions as the primary goal—certainly not in the title. The title is about trading, not about emissions reduction, so the important thing was to have an amendment to the Climate Change Response Act that has in its title “National Emissions Reduction” to emphasise the point that we are not in the business of trading carbon; we are in the business of reducing it. That is the critical thing. That is the distinguishing thing between this Government and the Opposition.

So within that bill there were a number of purposes stated—there were about six—and they were, very briefly: introduce a carbon floor price and terminate the price cap; phase out the one-for-two surrender obligation; terminate the issuance of free allocations to participants; restrict international units that can be traded and surrendered in New Zealand; introduce agriculture into the scheme; and put an obligation on the Minister to prohibit the entry of any international carbon credit. The further measure in the bill was an obligation on the Minister to prohibit the entry of any international carbon credits that may in his or her judgment depress the price in New Zealand below the carbon floor price.

Updating that to put it into an amendment in response to the particular nature of this piece of legislation before us, Part 2 of this bill, my proposed amendment is headed as addressing the Budget Measures (Miscellaneous Fiscal Matters) Bill. The proposed amendment would be a new clause 8A, which would alter the Climate Change Response Act to insert new section 222I, which would have the Minister regulate trading and international carbon credits. It would simply say: “The Minister must, by notice in the Gazette, prohibit the entry into New Zealand of any international carbon credits that he or she considers may depress the price of carbon credits below the level required to commence a reduction in gross emissions.” That is designed explicitly to ensure that the status of New Zealand Units in the domestic currency and their relationship to any international foreign carbon credits is such that if the latter are going to depress the price of the former down below whatever level—in the judgment of the Minister and the Government—is required to begin the process of curbing our emissions growth and introducing omissions reductions, then those units are not allowed in. They are prohibited.

That is a response to the necessary but minor component of Part 2, which is to halt arbitrage on the part of post-1989 foresters. This goes considerably further. Halting arbitrage on the post-1989 foresters will halt arbitrage on the subsector. It will not in itself bring down New Zealand’s emissions level. It will not curb the growth in New Zealand’s emissions. This amendment will meet the challenge of bringing down New Zealand’s emissions, and I commend the amendment to the Committee.

ANDREW WILLIAMS (NZ First): I am going to speak just a little bit on the area of the building supplies part of the Budget Measures (Miscellaneous Fiscal Matters) Bill, in relation to the regulatory impact statement that was prepared in relation to residential construction materials. It is very interesting when you analyse this—the impact that it will potentially have on New Zealand manufacturers. It says in the regulatory impact statement: “One of the preferred options—to temporarily suspend the anti-dumping regime in relation to key construction materials—was not explicitly consulted on. It emerged as an option through the latest round of consultation, which highlighted the potential for unforeseen effects on other sectors (beyond residential construction). The new option minimises this risk. MBIE”—the department of everything—“is comfortable that the consultation provided sufficient information to assess the risks, costs, and benefits of the additional option, notwithstanding that it was not explicitly consulted on. Consultation on the final suite of proposed options has not occurred due to Budget sensitivity.”

So here we have a Government policy that has had minimal consultation and that has a potential effect on other sectors beyond the residential construction industry. It has not been widely consulted on, but the Government is hanging its hat on it, saying that it is going to save $3,500 per house.

If you look further into the regulatory impact statement, it then says: “Cost of residential construction—As indicated above, our preferred options package would reduce the cost of a newly built 202m2 house by around $900.” I am seeing the figure $900, not $3,500, Minister. Could the Minister please explain, or is $3,500 another figure that has popped out of the air? It says here “by around $900”. Then it says: “21,300 new dwellings were consented throughout New Zealand in 2013. If a similar number of consents are issued in 2014 and each saved $900, the total savings would be $19,170,000.” Well, that is interesting because today Fletcher Building has already had $75 million knocked off its capitalisation. So the Government is doing a good job here. It is saving $19 million over the industry, but it has managed to knock $75 million off Fletcher’s in one day.

Further in the regulatory impact statement it says: “Dumping can be remedied by the imposition of anti-dumping duties at the border to ‘level the playing field’. Since 1990, anti-dumping duties have not been applicable to imports from Australia.”, which is fair enough. Under CER you would not expect so. “Anti-dumping duties are currently applied to three construction materials: reinforced steel bar from Thailand; plasterboard from Thailand; and nails from China.”

It is interesting that the regulatory impact statement refers to those three particular materials. It also refers to Winstone Wallboards bringing a case in 2011 in terms of plasterboard coming out of Thailand: “The investigation found that Thai plasterboard was being dumped, that this was likely to continue, and this would likely cause a recurrence of material injury to Winstone.” Secondly, duties on wire nails from China were put in place. Again, it was found that three New Zealand companies, particularly, were potentially being affected by this, particularly the largest one, Wireplus, which had the largest market share. It says that Wireplus “had suffered material injury caused by dumped imports [of nails] from China.” So there are another three companies in New Zealand that are obviously now going to be feeling the heat of cheap, questionable-quality materials from China.

The third one was reinforcing steel bars and coils from Thailand. That was New Zealand’s Pacific Steel Group. Again, in the case of Pacific Steel there was dumped steel coming out of Thailand, which caused “material injury” to Pacific Steel. Pacific Steel, as many of us know, is the biggest recycler of New Zealand metals in New Zealand. It takes a large amount of the recycled steel and cans and all sorts of aluminium—all sorts of stuff—in New Zealand that you put out in your recycling bins. A huge amount of that ends up at Pacific Steel, it is melted down, and put back into steel. Some of it does end up going into reinforcing and that sort of thing, to go back into our construction industry. But this Government is quite happy to basically set Pacific Steel adrift in a leaky boat and say to it and the likes of—[Bell rung] Mr Chair—

The CHAIRPERSON (H V Ross Robertson): The honourable member Andrew Williams.

ANDREW WILLIAMS: Thank you very much, Mr Chair. Mr Goff, you can have your call in a minute.

It is interesting. These companies are iconic companies, like Pacific Steel in New Zealand, like Winstone Wallboards, and like the other companies making plasterboard. It is interesting that this Government, which is so close with the Chinese—well, it is, because it has got Ministers going up to China every second week, having lovely private dinners and having all sorts of things in China. It is so close with China and obviously with some of these other places that it is very happy to sell our New Zealand companies, our iconic New Zealand companies, down the river, leave them out in the cold for the next 3 years, and watch cheap, nasty nails coming in from China and perhaps wallboard coming in from Thailand, which might look good on the wall for the first 6 to 12 months, but a year later, when it is all cracking, and with no warranties and guarantees—

Paul Goldsmith: Oh!

ANDREW WILLIAMS: —what is it going to be like then, Mr Goldsmith? And when the shoddy steel reinforcing goes into the concrete floors and in 5 to 10 years we see it all rusting and bowing, and concrete floors cracking in New Zealand—a bit like the leaky homes that the National Government gave us—what are we going to say then? “Oh well, we saved $900 per house and we saved $19.7 million, but, boy, we’ve got a bit of a problem in our construction industry because we’ve got a lot of shonky, unwarranted products in the market that also possibly put a lot of our good hard workers in some of these industries in New Zealand down the road because the sales of their products went downhill.”

Well, I am sorry but New Zealand First does not support that. We do not think it stacks up. New Zealand First stands for putting New Zealanders first, and we will continue to put New Zealanders first. We will certainly not abandon the manufacturers in New Zealand.

Hon PHIL GOFF (Labour—Mt Roskill): We are meeting here as the House of Representatives at 3.36 on a Friday afternoon under urgency. A member of the public might assume we had matters before us of great consequence, requiring our urgent attention—legislation that perhaps reflects the vision and the big ideas of a Government determined to tackle the major challenges of our time. But what are we doing? We are looking at a bill that is called the Budget Measures (Miscellaneous Fiscal Matters) Bill. And what are the big issues that require us to be here under urgency on a Friday afternoon? Well, the first one is the repeal of cheque duties—the repeal of cheque duties.

Grant Robertson: Transformational.

Hon PHIL GOFF: You know, that is going to be so transformational that it is estimated it will save New Zealanders, on average, 35c a year. The big challenge in this is how to pay them the 5c, because we do not have them any more. And then we have two other areas that are major challenges facing this country—one is climate change and the other is the housing crisis, which dominates much of the discussion, particularly in Auckland and in Christchurch. But neither of the other two measures, the other two parts of this bill, does anything that has any meaningful consequence in tackling those crises.

I want to focus on Part 3 of the bill, which deals with housing. You know, I am a free trader. That is my record as a Cabinet Minister, as a Minister of Trade. I do not mind the removal of tariffs. This bill does not actually do the removal of tariffs; that is apparently done in some other measure. It will not have much effect. We do not have tariffs against Australia. We do not have them against China. They are our two biggest trading partners. We do not even have them against the ASEAN members, including Thailand. But we do have something called anti-dumping levies.

Anti-dumping levies are not against free trade. What they are against is allowing a country to subsidise its exports below the cost it would sell those products at in its own country, maybe even below the cost of manufacturing them, and send them to another country. The reason we have anti-dumping levies is to stop other countries unfairly dumping their materials in our country in a way that is not about competition and is about not having a level playing field. I wonder where the Government’s principles are in removing anti-dumping levies, because surely as a country that believes in free trade we also believe in fair trade that should set a level playing field. This bill undermines the concept of a level playing field, and I do not think that is an appropriate measure.

The big claim made on this is that it will save $3,500 in the cost of building a new home. Where are the figures to substantiate that, Minister Foss? There are no figures to substantiate that. You have plucked that figure from the air. How do you even know whether a building company is going to pass on to the consumer any savings that might be made? There is no guarantee of that.

What is so bad about this legislation is that it pretends to find a solution to a serious problem when that solution does nothing at all to help the average New Zealander, the first-home buyer, or the lower-income household to achieve that dream of owning their own home. If it were $3,500 being saved, that would be half the amount of house price rises in my city and your city of Auckland last month. That is what the saving would be—half the $6,000 inflation in house prices, Minister, that occurred in Auckland last month. Is it any wonder that our first-home buyers have given up hope of being able to save to get into their first home? Does this bill help those people? Not at all. Most first-home buyers, as you know, actually buy existing homes, not new homes, so it would not have any impact anyway. If the saving was what the Government claims, it would be less than the cost the people would be paying on conveyancing and a fraction of the amount they would be paying to the real estate agent in commission.

You see, the problem in my electorate is that median house prices since this National Government has been in office have gone up by 40 percent to $700,000. Paul Goldsmith came from my electorate. He knows that it is a working-class electorate—a working-class electorate where the median house price is now $700,000. My kids could not afford to buy in that area even though they are tradesmen on good incomes. That is a problem. Does this bill solve that problem? Not at all.

What does this bill do about the problem of speculation on house prices? Every young first-home buyer who is out there in the market trying to buy a home on the savings they can make by working hard is faced with competition from speculators. Some of them are New Zealand speculators, who can claim the costs of the mortgage off their profits. That is tax deductible. It is not for the home buyer; not for the first home - buying couple who desperately want to own a home of their own. Then there are the speculators from overseas. I want those people on the other side of the Chamber, who say that it is all about racism, to explain to this Committee why it is that first-home buyers in New Zealand should be competing with people who are not New Zealand citizens, are not New Zealand residents, and do not intend to ever come and live here but want to make a profit in a country that has no capital gains tax.

John Hayes was with me and others when we were in China. China is one of the countries that are interested in buying. It is not the only one, and it does not matter whether they are Chinese or Americans or British or whatever. What we discovered in China was this phenomenon where speculators were buying up apartments, relying on an income from the capital gain, and not even tenanting their apartments. There were hundreds of thousands of empty apartments because the attitude there is to buy the apartment, not worry about renting it out, wait to farm the capital gain, and leave the house empty.

How does that solve our housing crisis? Why is it that we do not do things to stop the foreign speculator on the other end of the telephone outbidding the young couple desperate to own their own home? Why is there nothing about that in this Budget? I would not mind being here on a Friday afternoon if we were doing something worthwhile to help those hundreds of thousands of young New Zealanders who will never realise the Kiwi dream of being home owners and are bound to remain tenants in their own country because this Government will not act.

Then we have got a Treasury warning in this Budget document that says we are getting so much immigration at the moment—38,000, well above what was predicted. They are all coming to Auckland, and that also will push up the price of houses. I am not anti-immigration at all. I have an electorate full of people who are migrants. Many of the people who are migrants in my electorate are also desperate to buy their own homes, but what they do not want is a level of migration coming through that is well in excess of our ability to supply the houses. Where are the measures in this legislation that will help those New Zealanders—my Indian constituents, my Chinese constituents, my Pasifika constituents, and my European constituents—to get homeownership? There is nothing there.

What else does Treasury tell us? It tells us that at the moment, a person will spend 49 percent of the average full-time wage on an 80 percent mortgage on the average home. It is 49 percent at the moment. It sounds pretty grim, does it not? But what does Treasury say also? In 5 years’ time they will be paying 63 percent of their wage, and if they are in Auckland, it will be 86 percent of their wage. No wonder more than half of all Aucklanders are caught in a trap of paying high rents and never being able to get their own homes.

What does this Government do? It says it will remove anti-dumping on plasterboard and nails. What a Government of vision this is! What a Government that understands the needs of the people! Why do these Government members not understand it? Half of them have their own investment properties. They do not understand what it is like for the people trying to buy. They are not even interested in the people trying to buy. Well, I am standing up here, speaking out for those young New Zealanders to whom I want to give a chance to do the same thing that I did when I was in my early 20s—buy my own home, work on my own home, live in my own home, and have that chance for the future.

STEFFAN BROWNING (Green): I want to principally talk to Part 3 of the Budget Measures (Miscellaneous Fiscal Matters) Bill. Again, I am speaking up for the owners of small and medium sized businesses who will be impacted. Some will go out of business because of this bill. These are the ones who are not the big companies like Winstone Aggregates or Fletcher Building or others, which the paperwork around the bill suggests will be able to adjust. Yes, they will adjust, because they have got the sheer bulk and size. In fact, instead of being manufacturers, they will end up being the importers that will knock out some of the small businesses that I am particularly concerned about.

We have had a discussion around the forestry sector, but we need to be doing value adding for our forestry sector too. The logs that I see out my window on the wharf of Wellington heading off could be being processed and value added in New Zealand. This bill in part puts even more pressure on those who would do that value adding. It actually puts more pressure on them, to the point that they will go out of existence. New Zealanders will lose jobs because of this bill. They will not be losing jobs just at businesses like Winstone Aggregates; they will be losing jobs out of unique businesses doing very skilled work—cabinet makers, door makers, window frame makers.

There is another aspect too, and that is around insulation. Being here with a primary production focus, I am interested in fibre as well. More and more we are seeing a move towards wool and natural fibres rather than fibreglass batts. This bill does nothing to support the natural products that our sheep producers can be part of producing. It pushes back against that initiative too. Wool is a healthier, better product, but it will be priced out of existence for most New Zealanders. For $3,500 for a new home, I do not think that the bill is worth it. It is not worth it.

What the Government could be doing is supporting those New Zealand businesses to innovate and to tool up to be able to compete in the areas that they want to. There are businesses in Christchurch—and I spoke to one, as I said earlier—that have actually tooled up to help with this need that the Government has at last recognised in Christchurch. New Zealand businesses can come to the party and they can be helped to come to the party.

But what has this Government done? It has just opened up the borders and said: “Come on in, it doesn’t matter.” There is no recognition of a border here. There is no recognition of fairness. If something comes in from one of these other countries, will we be looking to see the wage structure and the conditions of the workers where it was produced? Will we be looking to see the environmental impacts where it was being manufactured? No, we will not. We will just be looking at that bare-bone price and saying “That’s great. We’ve got competition and we’ve got cheap commodity products coming into this country.” We will be worse off for this, because of the nature of this bill.

I do recognise the need to look at big businesses when they are rorting the system and ripping off New Zealanders big time, but there are other ways of doing it than this, which actually costs us throughout. The Greens support aspects of the initiatives in here for sure, but we do not support anything that is going to go against a fair trade and reasonable conditions for our businesses and our workers. So, on this part of the bill, or the third bill when it is divided, we will be opposing it. Thank you.

A party vote was called for on the question, That Part 1 be agreed to.

Ayes 107

New Zealand National 59; New Zealand Labour 33; Green Party 10; Māori Party 2; ACT New Zealand 1; Mana 1; United Future 1.

Abstentions 7

New Zealand First 7.

Part 1 agreed to.

The result corrected after originally being announced as Ayes 87, Abstentions 7.

The question was put that the following amendments in the name of Moana Mackey to clause 7 be agreed to:

add the following subclause:

(4) Despite anything in this Act, where a participant is liable to surrender units under this Act, a minimum of 50% of those units transferred under section 18C must be New Zealand units.

add new clause 7A:

7A Section 134 amended (Penalty for failing to surrender or repay units)

In section 134, replace subsection (1) with:

(1) This section applies if—

(a) a person fails to surrender units by the due date when required to do so under section 65(4), 118(5), 189, 191, or 193; or

(b) a person fails to surrender sufficient units to meet their obligation under section 63(3) by the due date when required to do so under section 65(4), 118(5), 189, 191, or 193; or

(c) an amendment to an emissions return under section 120 or an assessment made under section 121 results in a liability for a person—

(i) to surrender units or additional units under section 123(3); or

(ii) to repay units in accordance with section 123(6);

(d) a person is required under section 125 to repay units transferred in error.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 51

New Zealand Labour 33; Green Party 10; New Zealand First 7; Mana 1.

Noes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

The question was put that the following amendment in the name of Dr Kennedy Graham to clause 8 be agreed to:

add new clause 8A

8A New section 222I inserted (Minister to regulate trading in international carbon credits)

After section 222H, insert:

222I Minister to regulate trading in international carbon credits

The Minister must, by notice in the Gazette, prohibit the entry into New Zealand of any international carbon credits that he or she considers may depress the price of carbon credits below the level required to commence a reduction in gross emissions.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 44

New Zealand Labour 33; Green Party 10; Mana 1.

Noes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Abstentions 7

New Zealand First 7.

Amendment not agreed to.

A party vote was called for on the question, That Part 2 be agreed to.

Ayes 74

New Zealand National 59; Green Party 10; Māori Party 2; ACT New Zealand 1; Mana 1; United Future 1.

Noes 33

New Zealand Labour 33.

Abstentions 7

New Zealand First 7.

Part 2 agreed to.

A party vote was called for on the question, That Part 3 be agreed to.

Ayes 96

New Zealand National 59; New Zealand Labour 33; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 18

Green Party 10; New Zealand First 7; Mana 1.

Part 3 agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

The Committee divided the bill into the Cheque Duty Repeal Bill, the Climate Change Response (Unit Restriction) Amendment Bill, and the Dumping and Countervailing Duties Amendment Bill (No 2), pursuant to Supplementary Order Paper 451.

The CHAIRPERSON (H V Ross Robertson): Just before I report this bill, there is a correction to the voting on the question that Part 1 stand part. It was recorded as 87 for and 7 abstentions. It should have been 107 for and 7 abstentions. So the record is therefore corrected.

Bill reported without amendment.

Report adopted.

Bills

Cheque Duty Repeal Bill

Climate Change Response (Unit Restriction) Amendment Bill

Dumping and Countervailing Duties Amendment Bill (No 2)

Third Readings

Hon CRAIG FOSS (Minister of Commerce) on behalf of the Minister of Finance: I move, That the Cheque Duty Repeal Bill, the Climate Change Response (Unit Restriction) Amendment Bill, and the Dumping and Countervailing Duties Amendment Bill (No 2) be now read a third time. The Cheque Duty Repeal Bill repeals cheque duty from 1 July 2014. The Climate Change Response (Unit Restriction) Amendment Bill prevents reregistration arbitrage by post-1989 forest land participants from 16 May 2014. The Dumping and Countervailing Duties Amendment Bill (No 2) temporarily suspends dumping duties on building and construction materials from the day after the bill receives the Royal assent.

The Government’s decision to suspend anti-dumping duties arises from a market study that found that anti-dumping duties are having a chilling effect on competition in building materials markets. So suspending these duties will increase competition and reduce the cost of constructing new houses. The bill is intended to provide an immediate benefit to the Christchurch rebuild and to increase residential construction elsewhere, particularly in Auckland, by reducing the cost of building materials. As well as preventing the imposition of any new anti-dumping duty on a broad range of building materials, it suspends the anti-dumping duty currently in place on standard plasterboard from Thailand, reinforcing steel bar and coil from Thailand, and wire nails from China.

The Government’s decision to suspend anti-dumping duties was made together with a decision to temporarily introduce tariff concessions on a wide range of building materials. I expect these decisions to reduce the cost of building materials both through a direct reduction in duties and tariffs and through increased competition in the residential construction sector. Reducing the cost of building materials is part of the Government’s wider approach to improving housing affordability, which includes work being done on standards and regulations to increase competition and reduce the price of New Zealand building materials, freeing up new land for development, improving sector productivity, and reducing compliance costs.

To sum up, Part 3 of this bill aims to reduce the cost of building materials used in residential construction by temporarily suspending the application of anti-dumping duties to those materials. This will provide an immediate benefit to the Christchurch rebuild, and allow sufficient time for the development of a bounded public interest test so that consideration can be given to amending the Dumping and Countervailing Duties Act to provide for the wider public interest to be taken into account before anti-dumping and countervailing duties are imposed or extended. I commend these bills to the House and move that they now be read for a third time.

GRANT ROBERTSON (Labour—Wellington Central): Here we are at the end of the Government’s turbocharge of the economy—through the removal of cheque duty. I want to make sure that we get this right. The Cheque Duty Repeal Bill will go down in the annals of Parliament as one of the Government’s finest measures. Not only will it transform the economy but it will also give New Zealanders the social dividend from the 5 years of austerity in the Budgets—the social dividend of 35c a year. It is 35c a year, which Moana Mackey tells me will not buy you even a K-Bar at the dairy any more. It will not even do that. This is a pathetic bill. It is a pathetic piece of legislation to have us here in urgency on a Friday afternoon at 4 o’clock.

The legislation is emblematic of a Budget that contains some good things. And let us be honest that everybody in this House would agree that reducing the cost of going to the doctor is a good thing, building on the Labour Government’s achievements over 9 years in reducing the costs of seeing a general practitioner. We had an extensive debate on the importance of paid parental leave, and I acknowledge the shift in the National Government’s policy to support paid parental leave and now to see it increase. It is a timid increase. It could go much further. It is not responsive to the evidence that says that 26 weeks is the minimum that would be appropriate for paid parental leave, but it is a step in the right direction, so we acknowledge the Government for that. But these small steps in the right direction pale alongside a Budget that has no vision or ambition for the New Zealand economy. There is almost nothing in this Budget about economic development, about job creation, and about actually creating the economy that will deliver better jobs with higher wages. We cannot go on with politics as usual delivering policies as usual and outcomes as usual. We cannot go on pretending that commodities will get us there, pretending that unprocessed dairy and logs are all we need. We have to be adding value to the economy and we have to be training and educating people to do those jobs, to lift those wages, and this Government and this Budget simply fail to do that. It is a step in the right direction, but to where. It is totally absent.

These bills before us show that the Government does not know where it is going. It has prioritised putting Parliament and all the costs associated with Parliament through the Cheque Duty Repeal Bill. It has put up the Climate Change Response (Unit Restriction) Amendment Bill. If this is the response, we are in trouble as a country. Climate change is a serious issue, and the response to it requires all New Zealanders to be involved. It requires a partnership between Government, business, and the community. Instead, this climate change response bill here targets one sector, the forestry sector, and leaves alone the big polluters with which the National Government is friends—the members of the Cabinet club. So it is not a climate change response bill that as New Zealanders we should be proud about.

Then we have the Dumping and Countervailing Duties Amendment Bill (No 2), which is the response of the National Government to the housing crisis. Let us set the problem here. The problem in the last month in Auckland is that the cost of a home went up by $6,000. We see in the Budget that in the future if you are going to be servicing a standard mortgage and you live in Auckland, you will need 83 percent of your wages to do that—83 percent. At the moment it is 49 percent, and that is tough enough for someone who wants to get into the housing market. In Auckland by 2018 it will be 83 percent. This is a crisis. It is a major problem, and the Government’s response is to make varnish, nails, plasterboard, and things like that a little bit cheaper. The Government does not know how much cheaper. The Minister of Commerce was totally unable to respond to questions asked of him about where the $3,500 figure came from. It was plucked out of the air, and, in reality, it might pay for a little bit of the conveyancing fee. That is what it might do. But it certainly is not going to address the housing crisis. This Budget is woefully inadequate in terms of housing, with absolutely no hope for first-home buyers from this Budget. They are the three bits of legislation that the Government has decided it wants to show off and showcase as being what this Budget is about. Well, it is probably right. This is a Budget that is about a fragmented, ill-conceived, inadequate response to the needs of New Zealanders.

What Labour has been saying from day one is that it believes that what New Zealanders wanted in this Budget was something that gave them confidence that there would be jobs for them and their children in the future, that there would be a quality of life that means the Kiwi dream of homeownership is still there for New Zealanders, that there would be some hope for the future, and that there would be opportunities for New Zealanders and their families. That opportunity has been completely missed and completely lost by this Government. This Budget is a massive missed opportunity for New Zealanders to build for future generations a sustainable economy. These three bills, sad and pathetic as they are, are the best the National Government has to offer.

PAUL GOLDSMITH (National): I speak on behalf of the Government on the Cheque Duty Repeal Bill, the Climate Change Response (Unit Restriction) Amendment Bill, and the Dumping and Countervailing Duties Amendment Bill (No 2). I think what disappoints me is that the member opposite Grant Robertson does not seem to understand that is it not Governments that create jobs; it is businesses that create jobs. The role of the Government is to create an environment in which businesses feel confident to invest, confident to employ people, and confident to grow their businesses.

This is a Budget that has carried on in the right direction for the last 6 years and we have arrived at a place where we are back in surplus. It is a Budget that is a confident Budget for a confident nation, a nation that is overwhelmingly heading in the right direction. It is a Budget that sees the books back in surplus, growth at 4 percent, wages rising faster than inflation, and more money available for families, businesses, and the most vulnerable. That, I think, is something to celebrate.

That is why we are growing so well, in contrast to our friends across the Tasman, who have suffered the blight of 6 years of a Labour-Greens Government and runaway spending and debt. We see ourselves back in a position of great optimism. On that basis, I commend these bills to the House.

MOANA MACKEY (Labour): It is a bit rich for Paul Goldsmith to talk about business confidence after he has just completely pulled the carpet out from under the post-1989 forestry sector. I am guessing that it is not feeling particularly confident right now, Mr Goldsmith, and it has every reason to be absolutely irate with this Government for the nasty surprise it has dropped on the industry in this urgency motion. As my colleague Grant Robertson said, it is astounding that this legislation has been done under urgency. If you look at the 35c saving that families are going to make from the abolition of the fees on cheques, as seen in the Cheque Duty Repeal Bill, that is kind of up there with the tax on paper boys that the Government brought in in a previous Budget. This is just pathetic, it really is, and it does not need to be progressed under urgency. Although I am sure that every little bit helps, I do not think getting that 35c a year to families is going to be what makes or breaks the Budget.

The second bill, the Climate Change Response (Unit Restriction) Amendment Bill, which amends the Climate Change Response Act, definitely should not be in an urgency motion, because of the wide-ranging implications it has for the post-1989 forestry sector. This is a sector that was not consulted on about these changes. This is a sector that did not have the ability to come to a select committee to ask the National Government why it hates the forestry sector so much. The Minister responsible for forestry, the Associate Minister for Primary Industries, is in the House. Go and talk to some of the sector, Minister Goodhew. You have? Yes, it loves you. Here we go: someone is actually responding. Why was it not consulted?

Hon Jo Goodhew: Actually, if you understood—

MOANA MACKEY: Oh! Actually, if I understood—right, OK, I do understand. I understand that you are not applying this to your corporate mates in the heavy-emitting industries. They still get to engage in arbitrage between New Zealand Units and Kyoto units. The Cabinet club still gets access to these cheap units, so why are we not limiting access to those cheap units for the Cabinet club heavy-polluting industries and instead applying that only to forestry? The Minister responsible for forestry is now ignoring me, just as the Minister in the chair did during the Committee stage of this legislation, because there is no good reason why you would not apply this across the board. The great irony, of course, is that iwi are also going to be disproportionately impacted by this, and I am very disappointed that the Māori Party voted for Part 2 of the Budget Measures (Miscellaneous Fiscal Matters) Bill and voted down my and Kennedy Graham’s amendments, given that iwi are going to be disproportionately affected by this. I am very, very disappointed.

Ironically, iwi and the post-1989 forestry sector have been calling for a restriction on these units for years, and that has fallen on deaf ears. The sector has called for a restriction on these units across the board, in a more equitable way that applies to everyone fairly, not with one rule for it and another rule for National’s mates who are heavy polluters, who got a free allocation of New Zealand Units, but are perfectly entitled—according to the National Government—to go out and engage in arbitrage and speculate on those units, playing off the differential price between the New Zealand Units and the Kyoto units. But now we are saying that the forestry sector, the one sector actually doing anything to reduce our greenhouse gas emissions, is not allowed to do it. We did not tell the sector about it. We did not consult with it. We did not check what the impact would be. We are not allowing any kind of—

Iain Lees-Galloway: The Government didn’t.

MOANA MACKEY: —the Government did not, sorry. There is no transition period and no select committee process. This is an absolute outrage and the Minister responsible for forestry should absolutely hang her head in shame.

There are going to be a lot of people out there—and a lot of these are mum and dad foresters—who have bought emission reduction units, these cheap Kyoto units, and they know that they are going to deregister or harvest and that they need to meet that obligation, and they now cannot do anything with those emission reduction units. Those units are worthless, and those people have paid good money for them. They have made investment decisions based on having those units and being able to surrender them to meet any deregistration obligations. How is it fair to completely remove retrospectively the value of those units? And then they are going to have to go out and buy New Zealand Units to replace them. We could have simply said that from today no more emission reduction units can land in the register for post-1989 forestry, and that would have taken away the completely unfair retrospective element of this bill.

What we should have done is what the forestry sector and iwi for years have been calling for, which is to apply this provision across the board to everyone. I look forward to the next National speaker explaining how they can justify allowing these cheap units to be accessed by their mates in the Cabinet club—the heavy emitters—whilst they are removing access to the one sector that got them out of a hole when it came to the first commitment period of the Kyoto Protocol. We would have ended up with a financial liability at the end of the first commitment period at Kyoto had it not been for forestry offsetting our ever-increasing gross greenhouse gas emissions. Emissions kept going up and we were just lucky that there was enough forestry to mitigate it.

So how does a National Government say thank you? By yet another attack on the forestry sector. It is absolutely outrageous. This is not about fiscal risk, because the fiscal risk to the Government of foresters sitting on New Zealand Units is estimated to be between $11 million to $66 million. The fiscal risk to the Government of all the other New Zealand Units that are being sat on by the other sectors is $107 million. So why are we attacking the $11 million fiscal risk and leaving the $107 million fiscal risk? The answer is that the Government hates forestry and it likes heavy-emitting industries. That is the simple answer.

The Minister referred to this as an unintended consequence. I want to point out that this is absolutely not unintended; it is absolutely deliberate. For years we have been putting up Supplementary Order Papers in the House, bills in the ballot, and calling on the Government to restrict these cheap international units across the board, and those amendments have been voted down. The calls from the forestry sector and from iwi have been ignored. The Government has allowed the carbon price to collapse. It has allowed a differential in price to open up between the New Zealand Units and the Kyoto units, and so it is about $3.20 for a New Zealand unit at the moment and about 35c for a Kyoto unit. That is the problem. That is what we should have a bill fixing. There should be a bill to fix the carbon price and to reduce the differential between the international units and the New Zealand Units, and this will all go away. We will not end up hurting the one industry that we are hugely reliant on in terms of our climate change response.

This bill is not about reregistration at all, as the Government has claimed. This is not about the fact that foresters can go in and register and deregister and then reregister again and get more New Zealand Units and continue to speculate on the differential in that price. We could have fixed that by simply saying that in any 5-year reporting period you can register only once. That would have fixed it, without all the down sides of this piece of legislation. That was one of the options that officials actually put up to the Government in the regulatory impact statement. That option was simply saying that you get to register only once in a reporting period, and the problem would have gone away. Instead, the Government went with the most brutal, over the top, unfair, retrospective option. So for the Government members to sit there and talk about business and being friendly in terms of business investment—give me a break. Give me a break.

Tell that to the foresters out there who have suddenly had the carpet whipped out from underneath them with absolutely no warning and absolutely no ability to submit on that piece of legislation, to let us know how damaging it would be. They found out about it only when we sent an email to a few of them saying: “Have you seen this? Have you been consulted?”. Suddenly it went around the industry, and the reaction has been incredible. They have every right to be furious, because this is an absolute betrayal of good faith. Minister Goodhew, the forestry Minister, thinks it is funny. Well, we will be taking that out on the road, Minister Goodhew, because whatever the forestry industry thought of you before, I have to say that this is an absolute indictment on your Government. As forestry Minister you should be ashamed of yourself—absolutely ashamed of yourself—because this bill is yet another attack on forestry by an anti-forestry, anti-environment Government.

That is why we need a change of Government on 20 September—so we can have a Government that takes climate change seriously, that takes the environment seriously, that supports regional development in sectors like manufacturing and forestry, and that does not continue to whip the carpet out from underneath them so that it can snuggle up to its cronies, its Cabinet club mates, giving them favours, protecting them, and shielding them whilst all the time hurting one of the most important industries in this country, the forestry sector.

GARETH HUGHES (Green): Kia ora, Mr Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise to vote in favour of the Cheque Duty Repeal Bill and the Climate Change Response (Unit Restriction) Amendment Bill but to oppose the Dumping and Countervailing Duties Amendment Bill (No 2).

This is my first Budget call in this patch of urgency. From listening to the debate in my office and in the House over the last 2 days, I think what you can see in the two bills we have seen in front of us in urgency is the Budget actually summed up in the legislation. Obviously, we heard the Budget in the Hon Bill English’s speech and we heard it in the leaders’ debate, but I believe you can see it in the bills this Government decides to put through in urgency. The fact that these bills, which do not require urgency, are being put through in urgency also sums up the Government very well.

We see a Government that has repeatedly used urgency with no need and a Government that has not given New Zealanders true, accessible democracy and the right to a fair hearing and parliamentary scrutiny of legislation, which we have seen over and over. We have seen the likes of democracy being taken away in Canterbury. You can see it in the likes of this Government choosing to breach New Zealanders’ human rights by putting on our law books the ability for the Government to terminate people’s internet accounts for copyright infringement. This is a Government that did that in urgency—a Government that made the unlawful lawful with the Government Communications Security Bureau Amendment Bill.

You can also see the nature of the Government and of its Budget in 2014 in the substance of the legislation. With the paid parental leave bill, the Budget Measures (Financial Support For Newborn Children) Bill that we previously debated, you can see a Government that is moving only slightly in the right direction, a Government that is extending the inequality we see in New Zealand, and a Government that votes against extending the right to the most vulnerable New Zealanders—those on a benefit who are raising kids.

You can see it in the housing legislation we are debating right now, where the Government is focusing on the 0.7 percent of housing affordability yet ignoring the real issues facing us, like how our young Kiwi families can get into homeownership and how we can see cheaper house-building materials, greater competition, and the State taking a more active role in building more State houses. We are seeing a Government that is throwing the wood industry under the trucks.

On the climate aspect of the legislation in front of us you can see a Government that is singling out the forestry industry, and a Government that says: “We’ve got one rule for the big emitters and the big polluters if they are a smelter or a factory or a steel mill, but if you’re a forestry company, you’re out of luck.”

You have got to wonder—did they somehow forget to pay their Cabinet club dues and that is why they are missing out? In all the reviews of the Budget and in the actions of this Government what we are seeing is this sector missing out. They are the losers. This is a Government that is quite willing to pick winners, sadly, in the polluting industries, but throw them under the truck.

As I am a bit of a greenie who used to work for Greenpeace, I am often accused of hugging trees. I am proud to say that I have hugged a few trees in my time. This Government, however, cuts down the trees, pours petrol on the roots, and sets them on fire. That is its approach to forestry in New Zealand.

I have described some of the legislation we are seeing passed in urgency today, but what is the big issue that we see in front of us? Well, it is the Cheque Duty Repeal Bill—the 35c that Kiwis are going to be saving, the 35c tax cut Kiwis got this election year. That sums up the lack of vision, the lack of direction, in an economy that, sure, is doing slightly better than Australia temporarily at this point in time—an economy that has the stimulus of the Christchurch earthquake—but an economy that has no long-term direction. What we need is to embrace the entrepreneurialism, embrace the innovation, and actually go into the future with confidence with a national strategy so that we can deliver a richer New Zealand, and so we can build a more prosperous country for our kids.

What we are seeing in New Zealand is Kiwis working hard—we work some of the longest hours in the OECD for some of the lowest wages in the developed world, and we pay some of the highest costs of living. Yet this country, on the economic rankings, is losing the race. Every year we slip a little bit more down those OECD rankings.

When we are dealing with wood, which is a major part of the legislation we have in front of us, it reminds me of my home town of Gisborne. You can actually see our country’s economic story graphically laid out on the waterfront. When we are looking at wood, what you see is the beautiful old freezing works. They were demolished, and now all you see is literally almost a mile or more of raw logs piled up for export. What you can see is a good example where 100-plus years ago our country embraced the future, new technologies, looked to the future trends, and invested in technologies like refrigerated shipping. That is how we built our wealth. That is how we raised our kids in a prosperous country. Yet what we are also seeing now is the short-sighted nature of our modern economy—the simplification, and the reliance on simply exporting raw logs and milk powder around the world. That is not a recipe for a prosperous country or for lifting those 290,000 Kiwi kids out of poverty.

So when we look at the wood aspects of the countervailing measures part of the separated bills—the bill that removes the dumping tariffs, or suspends them temporarily—you have really got to question the reason for urgency. I have not heard a compelling reason from the Government benches. This should have gone through a due process. We should have seen a select committee. We should have been able to hear from the companies that are being affected by this legislation, because when you look through the Government documents it describes the impacts on the companies, but this is what you see: black marks—the redacted parts of the regulatory impact assessments. We should have been able to hear from these companies being affected. Every New Zealand company, just like every New Zealander, deserves a fair go.

We should have had the chance to debate the pros and cons, because I admit that there are pros and cons. But on something as, let us say, arcane I think many New Zealanders would not be aware that we have tariffs on dumping provisions overseas. We have not had a chance for a national discussion, because there are, I acknowledge, pros and cons. But at a time when we are seeing our sawmills close, like Southern Cross Forest Products sawmill recently, and at a time when we have recently seen 4,000 Kiwis laid off in the timber and forestry sector, we should not be risking further job losses and contraction in that sector with bills under urgency, when we cannot even hear from the sectors involved. We cannot keep going on as we are at the moment, just hoping countries will continue to buy our raw logs.

The cost of this suspension of the tariffs is estimated at $27.8 million. We should have been able to have a conversation nationally involving the sector, involving experts, economists, academics, the public, and our Parliament. Gee, could that $27.8 million have been better spent on supporting the New Zealand home-building supplies industry to become more competitive, to ramp up with the challenge of scale in the Christchurch rebuild? We should have had that conversation.

Both the Labour Party and the Green Party have put out comprehensive, well-thought-out strategies for our timber and building sectors in New Zealand. A few weeks ago Dr Russel Norman announced a structural timber award. In the rebuild of Christchurch we should be using timber products and supporting them. What we need to see is a comprehensive plan for cheaper housing. Focusing on the 0.7 percent, as this legislation does, is no panacea for the chronic crisis we see. With the new data showing we can expect up to 41,000 immigrants to New Zealand, the challenge, or the crisis as it already is, is going to get a lot, lot worse.

What we see in this Budget legislation is a lack of action for first-home buyers, a lack of action to drive down the costs of housing for Kiwis. Too many of our Kiwis are living in housing poverty. They are spending too much of their income on it, and that is increasing every year over those historical trends.

When it comes to climate change—and I am running out of time—what we see is that the arbitrage rule is changing. Sadly, it is changing for only one sector. Very briefly, what is happening is that the Government over the last 6 years has gifted New Zealand emission units to polluters but also to foresters who do the right thing by sequestering carbon. But it has also said you can bring in any number of cheap offshore credits from Ukraine or Russia, where they did not actually see real emissions reductions.

What you saw in the last year, and I think this most graphically demonstrates it, was that the Government handed out, on a platter, $110 million of New Zealand Units, but all the companies had to do in reply was purchase $7 million equivalent of offshore junk units, making a $93 million windfall profit. That is not good for the New Zealand economy, that is not good for New Zealand competitiveness, and it is not good for us building a smart economy, which takes the gravest challenge of our time, climate change, into effect.

What we need to do is do what the amendment and the member’s bill by Dr Kennedy Graham would do, which is stop these junk, hot air credits coming in offshore and to actually focus on building an economy that is a low carbon one, that grows jobs, that has people planting forests, people using timber products in their buildings, people insulating under people’s roofs, and other people installing solar panels on the top, and investing in public transport. That is the smarter, greener economy that we are going to be building and taking to the public on 20 September this year. Kia ora.

SIMON O’CONNOR (National—Tāmaki): I am pleased to stand to speak to the third reading of the Budget Measures (Miscellaneous Fiscal Matters) Bill, which has now, of course, been split into several bills. I think we are hearing a strong contrast here between the Government’s approach and the approach of the Opposition. We are a Government that believes in the market. At its most basic, it is that we produce what other people want.

We have heard a lot of talk about logs, raw logs, and added value. The thing is that if there was a demand and drive for value-added wood products, there would be a market for it, not an arbitrary decision by Moana Mackey and friends to just back it. You have got to study the contradiction that has been going on here today as well, about how the Government is supposedly backing winners and losers. Yet if you listened to members on the other side, they are choosing who they want to back as winners and losers. We know from their supposed policy announcement that they effectively want to nationalise the electricity industry too. They do not believe that you can choose, in areas of insulation, say, whether or not to put wool insulation into your home—no, the Government must be involved.

It is a very, very different approach. You see too with this particular legislation an understanding of the importance of removing regulation, and you see it around things like tax duty. Yes, it is a small amount—even in total, it is only about $4 million a year—but this is a Government committed to removing stumbling blocks, be they large or small, to make it more efficient for New Zealanders to do business, in order to ultimately look after their families. That is another element that we looked at in the first bill around this Budget debate. I commend this legislation to the House.

ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First on the legislation arising from the omnibus bill, the Budget Measures (Miscellaneous Fiscal Matters) Bill: the Cheque Duty Repeal Bill, the Climate Change Response (Unit Restriction) Amendment Bill, and the Dumping and Countervailing Duties Amendment Bill (No 2).

Just to cover them briefly, in terms of removing cheque duty in the Cheque Duty Repeal Bill, New Zealand First supports that change. We feel it is very late, it is overdue, it should have been done a long time ago, and we cannot understand why it has taken this Government 6 years to get around to it. I pulled out a cheque book a few weeks ago to write out a cheque. I do not think I have used it for more than about 2 years. I noticed that that particular cheque book was first issued in about 2007 or 2008, so I paid that $2.50 some 6 years ago. Cheque duty is a bit of a nonsense and, really, it should have been done away with a long time ago. Again, it was a little fiddle around the edges in the Budget—another little lollipop—to try to make things look good, but, at the end of the day, it was immaterial.

The second thing, in terms of climate change in the Climate Change Response (Unit Restriction) Amendment Bill, again, we think it is just fiddling around the edges. New Zealand First has no time for the emissions trading scheme. We think it is just another money-laundering scheme for bankers, financiers, and people from the likes of Merrill Lynch to take and extort money from the New Zealand economy and put it into places like New York, London, Frankfurt, and other financial markets trading on the emissions trading scheme, and, basically, New Zealanders, the New Zealand Government, and the New Zealand economy will pay dearly. We, again, will be the guinea pigs, the suckers. We will pay out around the world to these people, and probably in years to come we will all look back in hindsight and say: “How on earth did we get dragged into that? Why did we bother?”. Well, New Zealand First says we should not have a bar of it. We should get on with our own problems here in New Zealand in terms of our emissions, and we should sort out our own emissions here in New Zealand. We should work constructively in New Zealand in terms of what is polluting our own environment and what is happening around our own country in terms of emissions, levy the polluters here in New Zealand, and make sure the money goes back constructively into sorting out the issues with pollution here in New Zealand and not send it off to some money-making scheme administered by the likes of Merrill Lynch in New York.

The third part of the bill, which is the main part, in our view, in terms of issue to New Zealand, is the building supplies bill, the Dumping and Countervailing Duties Amendment Bill (No 2). We have huge opposition to this bill. New Zealand First believes that this is another attempt by the National Government to undermine New Zealand manufacturers. Again, New Zealand manufacturers bear the brunt of this. We sat on the manufacturing inquiry in the last year, and we were prepared—the Government was not prepared—alongside other Opposition parties, to listen to our manufacturers. Those who are in the manufacturing sector—not in the agricultural manufacturing sector, not in sectors that are exporting our primary produce and other things, but those that are in basic, everyday manufacturing—are finding it pretty tough. With our dollar up around US86c and heading towards US90c, they are finding it very tough. Therefore, they do need some assistance to stay viable here in New Zealand when they are up against very, very cheap sources of materials, such as those in the building industry coming out of the likes of China, Indonesia, Thailand, and other places, which have already been identified in the last 2 or 3 years as being dumped in this market and seriously undercutting our own manufacturers of wallboards, steel coil, steel reinforcing, nails, and other such construction materials. It has already been proven that that has gone on and it is having a very serious, detrimental effect on our manufacturers in New Zealand.

We in New Zealand First say we will stand up and support our manufacturers. We will go into battle for them. We will make sure that they do have that level of protection, because they are up against other economies that have got huge scale, much lower wage rates, much lower standards of production in terms of quality and warranty that come with it, and, therefore, it is not a level playing field. So the whole idea of these anti-dumping tariffs is to try to create a level playing field to ensure that those New Zealand manufacturers are not disadvantaged. The Minister of Commerce refused to answer some of the questions I put to him in the Committee stage. In the regulatory impact statement from the Ministry of Business, Innovation and Employment—the “Ministry of Everything”—it said that it was going to be something that would give us a $900 saving per house in this. We have heard from the Minister that it is going to be a saving of $3,500. It is very interesting that there are contradictory pieces of information being provided, and, yet, the Minister has not stood up throughout this whole debate today and given an explanation as to why those figures are different. There might be a reasonable explanation. It might be justifiable. But when I read a regulatory impact statement that says that the saving is only $900 per residential household, that is the figure I take—when I see it in writing from the officials.

We have also heard from the Minister that this will help reduce house prices in Auckland. I held this document up earlier in the day and said that the problem in Auckland is that houses are being bought by people from all over the world—not just by people from Asia but by all sorts of people from all over the world. These people are buying them because the Auckland housing market is hot and it is going up, and it is going up at a rapid rate. They are bidding via telephones to auction floors in Takapuna—rooms full of people in Takapuna. And those people are on phones overseas—

John Hayes: Where?

ANDREW WILLIAMS: They are, Mr Hayes, I can assure you. I have a daughter who has been in the real estate market and she gives me information as to what is happening. I have got other friends in the real estate market who have told me, as well. They are bidding, and half the time these people are sitting back overseas and bidding blindly on properties and buying them in Auckland. There are properties on the North Shore that are bought, closed up, left empty, and nothing is done with them. They are sitting there on the basis of a speculative purchase, knowing how fast property prices are going up in the Auckland market. Those houses are sitting empty—million-dollar homes sitting empty. Three houses in a row in a street are being bought, they are taken off that land, and six dwellings are being built in their place for speculative purposes. And it is all being done in a large cash market. Then there is a paper in Auckland like this one—a huge paper, huge paper—and it is not in English, selling properties all over Auckland, but a New Zealander would struggle to read it. They would struggle to read it. So this is of concern. I stand as a fifth-generation New Zealander, whose family on both my mother’s and my father’s side came here in the 1840s, and I stand up for the young people of New Zealand who ask us as politicians, and they ask us all the time: “How on earth are we ever going to afford to buy a house in the likes of Auckland when the properties are being bought from many offshore sources?”. It is incredible.

At the same time through this whole thing, the Government has said through the Budget that it is going to try to massage things—it is doing so well, we heard from Mr Goldsmith. He gave his checklist of how wonderful the Government was and he was checking off all these things and saying how it is saving all these various things. Then you hold up this piece of paper from the Budget documents, which shows contributions to superannuation from the Government in the next 5 years. For 2015, it is zero; for 2016, it is zero; for 2017, it is zero; and for 2018, it is zero. Mr Goldsmith, you cannot claim a $372 million surplus and say how wonderfully you have done while New Zealanders and future New Zealanders—and with the baby-boom bubble coming before us—will be retiring in years to come with a superannuation scheme that your Government will not have contributed 1c to in the decade between 2008-09 and 2018-19. That is a whole decade of no contributions to the future of this country, while at the same time the young people of this country are up against this sort of thing when trying to buy a house in Auckland.

This Government is really disappointing. Then it comes to this House, under urgency, puts forward these pathetic little things like the removal of cheque duty on cheque books and a little bit about climate change, and it thinks that that is the urgent business of the Government, under urgency. Well, it is not. New Zealand First says otherwise. We think that there is a much bigger picture here—a much bigger picture in terms of what is happening in our economy—and New Zealand First will address that on 20 September.

PHIL TWYFORD (Labour—Te Atatū): I am conscious that I am standing between the House and the end of the sitting week, but I feel that I should put on record at the conclusion of this debate the view of the Labour Opposition on the Dumping and Countervailing Duties Amendment Bill (No 2), which was Part 3 of what was the Budget Measures (Miscellaneous Fiscal Matters) Bill, and which contains the centrepiece of this Government’s offering to the public of New Zealand in its rather haphazard and inadequate response to the housing crisis.

If you were a Government that wanted to do something about the housing crisis, there are a number of options open to you. You could do something about taxing speculators, for example, with, for instance, a capital gains tax. You could, as Andrew Williams was just saying, put a stop to foreign speculators bidding up the price of houses in Auckland. You might like to consider building large numbers of affordable homes and selling them to first-home buyers. That would address the supply shortage that really lies at the heart of the sky-rocketing house prices. You might like to build more State houses, because people right at the bottom end are struggling under this housing crisis. You could master-plan ambitious, new urban development projects, revitalise town centres, and invest in transport infrastructure. You could do all of those things, which would make a huge difference to the housing crisis that we have now.

But if you are a Government that does not care for those kinds of bold gestures, or if you were a Government that prefers to tinker round the edges and you prefer the photo opportunity and the insignificant gesture, then there are a number of other options that are open to you. One of those might be trying to do something about building and construction costs. If you were serious about tackling construction costs, you might, for example, hold a Commerce Commission inquiry into the lack of competition in the building supplies industry. You might, for instance, use a Government-backed building programme to build at scale, thereby allowing off-site manufacturing and prefabricated construction to drive down the cost of housing. As a recent industry group estimated, doing that could knock $32,000 off the cost of a new house.

But if you were determined to look at building and construction materials and at what they add to the cost of a new home, and you had read the Productivity Commission report that said that New Zealanders are paying an extra $20,000 per newly constructed house because of higher prices in this country, then what would you do about that? Well, if you were serious, you would address the anti-competitive practices and the lack of competition in the building and construction industry. But if you wanted to just tinker round the edges and look as if you were doing something, then you might look at a measure contained in the third part of this legislation, which is to temporarily suspend anti-dumping duties and tariffs for certain building materials.

This is the Government of the insignificant gesture. Nick Smith is the “Minister of the Photo Op”. The credibility of the housing initiatives in this Budget really sum up how pathetic this Government’s record has been on housing. It has got nothing. After a year of running around doing photo opportunities, talking up the problem, blaming councils, blaming the banks, and blaming the construction industry, it has run out of scapegoats and other people to blame. All it has really got is a lame housing accord with the Auckland Council, which, on its own numbers, will deliver only 5,500 new houses in the special housing areas over 3 years. That is all it has got, and this pathetic, little gesture in this legislation, which it claims, after doing some calculation on the back of a cigarette packet, might save $3,500 on the cost of a new house—with no evidence brought to this House to justify those calculations and with no assurance that that saving would not be swallowed up by builders and developers. This is all that the Government has got, and it is a very sad thing for New Zealand.

Cheque Duty Repeal Bill read a third time.

A party vote was called for on the question, That the Climate Change Response (Unit Restriction) Amendment Bill be now read a third time.

Ayes 72

New Zealand National 59; Green Party 8; Māori Party 2; ACT New Zealand 1; Mana 1; United Future 1.

Noes 37

New Zealand Labour 30; New Zealand First 7.

Bill read a third time.

A party vote was called for on the question, That the Dumping and Countervailing Duties Amendment Bill (No 2) be now read a third time.

Ayes 93

New Zealand National 59; New Zealand Labour 30; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 15

Green Party 7; New Zealand First 7; Mana 1.

Bill read a third time.

The House adjourned at 4.49 p.m. (Friday)