Thursday, 14 December 2017

THURSDAY, 14 DECEMBER 2017

THURSDAY, 14 DECEMBER 2017

Mr Speaker took the Chair at 2 p.m.

Karakia.

Business Statement

Business Statement

Hon CHRIS HIPKINS (Leader of the House): Thank you, Mr Speaker. Today, the House will go into urgency to pass the Families Package (Income Tax and Benefits) Bill, a cornerstone of the Government’s 100-day plan.

On Tuesday, 19 December, the House will consider the first reading of the Overseas Investment Amendment Bill and the remaining stages of the Christ Church Cathedral Reinstatement Bill.

On the morning of Wednesday, 20 December, there will be an extended sitting for the first reading of the Ngāti Tūwharetoa Claims Settlement Bill and the second reading of the Iwi and Hapū of Te Rohe o Te Wairoa Claims Settlement Bill.

On Wednesday afternoon, the House will consider motions relating to the Intelligence and Security Committee and will confirm the sitting programme for next year during the adjournment debate. The House will then adjourn until Tuesday, 30 January 2018.

Hon GERRY BROWNLEE (National—Ilam): I wonder if the Leader of the House could confirm that the bill to be discussed this afternoon under the urgency motion is, in fact, an omnibus bill.

Hon CHRIS HIPKINS (Leader of the House): Well, yes, and my understanding is that it was tabled in the Table Office at 1 o’clock. It is now available on the Table.

Hon Gerry Brownlee: It’s an omnibus bill?

Hon CHRIS HIPKINS: Yes.

Oral Questions

Questions to Ministers

Fiscal Strategy—Half Year Economic and Fiscal Update

1. Rt Hon BILL ENGLISH (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government’s economic and fiscal policies?

Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Prime Minister: Yes, when those policies are fairly represented.

Rt Hon Bill English: Can she confirm that in today’s Half Year Economic and Fiscal Update (HYEFU), the coalition and Government promises that have been included are just the Families Package and the tertiary education changes?

Rt Hon WINSTON PETERS: I can confirm that those are in the HYEFU, and that the 100-day plan costings are also there.

Rt Hon Bill English: Can she confirm that additional spending promised by the Government in health and education is not factored into the half-yearly update?

Rt Hon WINSTON PETERS: Well, that’s correct, because, basically, the document is the end of the last administration and signals the beginning of the new one. And the next Budget will point that out.

Hon Members: We can’t hear him.

Mr SPEAKER: Sorry, can I ask the people in charge of the volume to turn it up a bit. Could I also ask the Deputy Prime Minister to use his outside voice. Thank you. That doesn’t apply to any of his colleagues.

Rt Hon WINSTON PETERS: My point—I will say it more loudly, and not in my demure way. The reality is that the HYEFU is really the end of the last administration’s report, and the matters that he’s seeking to find clarity on will be in the next Budget.

Rt Hon Bill English: Can the Prime Minister confirm that if the half-yearly update is, as described, essentially the end of the last administration’s coverage, that it shows forecasts for consistent economic growth around 3 percent and the Government’s books in surplus, with growing surpluses?

Mr SPEAKER: Any one of those four.

Rt Hon WINSTON PETERS: Well, all of them are not a good picture—neither the first two, nor the last two, for that matter. But what it can point to, of course, at the end of their report is that there is a serious decline in trade against GDP in this country and there was a serious growth in debt against the countries—

Hon Steven Joyce: I think you’re mucking this up, actually, Winston.

Rt Hon WINSTON PETERS: No, no, we haven’t bungled up. I’ll tell you what it is. In 2008, GDP was 5.4 percent when it comes to debt. By 2016, it was 20.0 percent—a fourfold increase—and total Crown borrowings in the same period increased by $67 billion, from $46 million to $113 billion.

Rt Hon Bill English: Has the Prime Minister asked the Deputy Prime Minister whether he believes these forecasts, given his public statements that the economy is headed for a downturn, if not a crash?

Rt Hon WINSTON PETERS: Yes, the Prime Minister can confirm that—that it was a cause to be careful about into the future, not to spray money around on consumerism and on giving tax break breaks to your mates, and, in short, not to take from the needy to give to the greedy.

Rt Hon Bill English: Can the Prime Minister confirm that when she raised these matters with the Deputy Prime Minister, he demonstrated his own political technique with respect to spending of spray and walk away?

Mr SPEAKER: No—

Rt Hon WINSTON PETERS: This is seriously important. What the Prime Minister did appreciate—and all her colleagues—was the difference between borrowing for production and long-term infrastructure, some of it lasting a hundred years, as opposed to wasting it on his mates and on tax breaks for the rich.

Clayton Mitchell: What reports has the Prime Minister seen about the previous administration’s economic management?

Mr SPEAKER: No, no. Order! The Prime Minister will—there’s a vital word that’s wrong, and seeing reports is not a matter of responsibility. Are there any further supplementary questions?

Rt Hon Bill English: Why, then, does the Prime Minister support measures in the package that provide to the highest income households in New Zealand either a baby bonus of $3,000 a year, regardless of income, and one year of free tertiary education to the value of $12,000 to $15,000, regardless of income, if he’s so concerned about targeting those families most in need?

Rt Hon WINSTON PETERS: There’s a substantial difference between means testing and universality, whether you’re talking about student loans or talking about power costs or whether you’re talking about superannuation, and the difference is that we haven’t gone out to lend only to our mates, but rather to lend a help to everybody.

Rt Hon Bill English: So can the Prime Minister just explain why she believes in universality for free tertiary education—that is, assistance regardless of the circumstances of the individual and for young children—but not universality when it comes to reducing taxes for hard-working New Zealanders?

Rt Hon WINSTON PETERS: The answer’s extraordinarily obvious, because all people have costs whether they’re wealthy, whether they’re middle-incomed, or whether they’re poor. If they were on a high income but with a large family, they’d have extraordinary costs, and we understand that. And that’s why the tertiary help is being given, because it goes way beyond the elitist tertiary institutions that they talked about. It includes apprentices and all sorts of people needed in the trade industries of this country.

Clayton Mitchell: What reports has the Prime Minister received about the previous administration’s economic management?

Rt Hon WINSTON PETERS: Well, this sort of report, for example: of the $20 billion Defence Force upgrade in the 2016 white paper, not one dollar was accounted for. It appeared in the last Budget as a fiscal risk. That tells you how irresponsible they were.

Clayton Mitchell: What reports has the Prime Minister received about the previous administration’s levels of debt?

Rt Hon WINSTON PETERS: Oh, Mr Speaker—a very good question: widespread discontent across Government departments. With no increases accounting for inflation, something had to give and it did—it ran down capacity and services with countless district health boards being in debt, educationalists being concerned, the police being under-resourced and underfunded. You name it; it was a shortage.

Government Financial Position—Spending Commitments and Debt

2. Hon STEVEN JOYCE (National) to the Minister of Finance: Does he stand by all his statements on economic and fiscal policy?

Hon GRANT ROBERTSON (Minister of Finance): Yes, in the context in which they were given.

Hon Steven Joyce: Does he stand by his comments about the importance of fiscal responsibility; and if so, why is his debt track increasing so much from the next few years when the economy is performing well and tax revenues are rising—increasing from a Pre-election Economic and Fiscal Update forecast of around $60 billion at the end of last year to $69.4 billion over the next 4 years?

Mr SPEAKER: I’m going to let the Minister answer it, but I’m going to warn the shadow finance Minister to make his questions a lot shorter. There was quite a long bit on the end of it that was not necessary for the sense of the actual question.

Hon GRANT ROBERTSON: As the Government is committed to, net debt as a percentage of GDP will go, in fact, below 20 percent within five years of us taking office. In terms of cash debt, well, we’ve inherited a massive infrastructure deficit from that Government. We’ve got to build some affordable houses, we want to contribute to the Superannuation Fund, and therefore we will take on debt to clean up the mess of the previous Government.

Hon Steven Joyce: Can he confirm, then, that he is happy being the finance Minister that takes the pre-election fiscal update that was reducing debt down to $56 billion and instead taking it up to $70 billion in four years?

Hon GRANT ROBERTSON: Here is a member who oversaw the increase in debt by $50 billion while his Government was in office. Trying to lecture—

Mr SPEAKER: The member will now address the question.

Hon GRANT ROBERTSON: We need, as a country, to invest in our future, and we will do that by taking on additional debt in the short term to make up for the deficit that we have been left with.

Hon Steven Joyce: Why is it that there’s only a couple of coalition policy changes included in the half-year update? Where is, for example, the $1 billion Provincial Growth Fund, where is the funding for health, and where is the funding for early childhood education?

Hon GRANT ROBERTSON: The half-year update includes the costs of the Government’s 100-day plan, including the investment in families that will reduce child poverty by nearly half. The other matters, as is normal, are part of the Budget policy process and there are operating allowances and capital allowances in the forecast, in the Budget Policy Statement where they will be accounted for.

Hon Steven Joyce: Can he confirm that he’s absolutely confident that he can meet the coalition commitments—all 51 of them—in the Budget operating and capital allowances as set out in the Budget Policy Statement and half-year update?

Hon GRANT ROBERTSON: Yes, I am, and I am proud to stand by that document, because it’s a document that actually addresses the underfunding in health, in education, and police that we have been left with.

Hon Steven Joyce: Can the finance Minister confirm that Treasury has added 28 separate new fiscal risks to the half-year update of things that it doesn’t believe are taken into account in these documents?

Hon GRANT ROBERTSON: As is normal, when a new Government takes over, Treasury will, where costings have not been completed, put them in that section. But the member completely misrepresents them. What that shows is we’re an ambitious Government with a lot of plans and that’s why Treasury will cost those into the future.

Fiscal Strategy—Budget Policy Statement

3. TAMATI COFFEY (Labour—Waiariki) to the Minister of Finance: What are the key priorities outlined in the Government’s Budget Policy Statement?

Hon GRANT ROBERTSON (Minister of Finance): The parties that make up this Government are not satisfied with the status quo. The Budget Policy Statement sets out how the Government will lift incomes to reduce child poverty, protect the environment, create more jobs, and build affordable houses while running sustainable surpluses and reducing net debt to GDP. The Government’s Budget Policy Statement clearly sets out how our priorities are different from the previous Government. Not all New Zealanders received the benefits of economic growth in recent years. Our Budgets, led by the Families Package, will ensure that all New Zealanders share in prosperity.

Tamati Coffey: How will the Government’s priorities, as set out in the Budget Policy Statement, affect families?

Hon GRANT ROBERTSON: The Government’s policy platform has families at its heart. Our Families Package, which reverses the previous Government’s tax cuts and better targets the spending at those who need it most, will lift 88,000 children out of poverty by 2021—39,000 more than the previous Government’s package, which would have seen 20 percent of the benefit go to the top 10 percent of earners. This Government has different priorities. We will target our spending at the time of life and to the people who need it most.

Tamati Coffey: What is the outlook for wage growth and house price growth in the Budget Policy Statement over the next four years?

Hon GRANT ROBERTSON: Good news—wages are forecast to grow, on average, by over 3 percent over the next four years due to this Government’s policies. This is stronger than in the pre-election update, and it is also stronger than the forecast house price growth over the next four years. Our policies to increase wages, stabilise and moderate the housing market, and build affordable houses through KiwiBuild will be in favour of first-home buyers.

Hon Steven Joyce: Can he confirm that it is still one of his priorities to lift the return from work for Kiwi workers; if so, why is he planning to remove $1,060 from average median-wage workers from 1 April next year, which will not be compensated by his 3 percent wage growth?

Hon GRANT ROBERTSON: The fact that that member believes that the way to increase wages is to cut taxes shows just how limited his vision is. We want to lift wages by building productivity, building skills, and having a workforce engaged in high-wage jobs.

Hon Steven Joyce: Can the finance Minister confirm, then, that real money in the hand for Kiwi workers isn’t real money if it’s a reduction in tax and is only real money to them if it’s actually a lift in wages, in which case, is he saying that they are on the wrong planet if money in the hand is important to them?

Hon GRANT ROBERTSON: The tax cuts promised by the previous Government were never real money because they’d never come into force.

Tamati Coffey: What does the Budget Policy Statement show about the Government’s Budget responsibility rules?

Hon GRANT ROBERTSON: The Government set its Budget responsibility rules to provide certainty to New Zealanders that we will manage the Government books prudently. The Budget Policy Statement shows that we will keep expenditure within its recent historical range, we will run sustainable surpluses, and we will reduce net core Crown debt to 20 percent of GDP within five years of taking office. We can deliver a better and fairer New Zealand at the same time as managing our books responsibly.

Overseas Investment—Overseas Ownership of New Zealand Land, Singapore

4. Hon GERRY BROWNLEE (National—Ilam) to the Minister of Foreign Affairs: What reports has he received on New Zealand’s relationship with important allies?

Rt Hon WINSTON PETERS (Minister of Foreign Affairs): A number of reports on New Zealand’s relationship with important allies have been received. These reports cover successful meetings with leaders and Foreign Ministers at international meetings such as APEC and the East Asia Summit, and, indeed, some of those reports reflect on their delight at an appointment of a new Foreign Minister.

Hon Gerry Brownlee: Oh, I should’ve asked if you’d read the reports. How many Singaporean Government representatives or Ministers raised concerns with him about Singaporeans being banned from purchasing houses in New Zealand, as proposed under the Overseas Investment Act amendment, which would be in breach of New Zealand’s Singapore free-trade agreement?

Rt Hon WINSTON PETERS: Well, we had a very excellent meeting with the Singaporean Foreign Minister and he said at the opening, “I will not be raising this subject with you.”, because he understood that we’re working on it into the future and that there was a possible way of resolving it and resolve it, we will.

Hon Gerry Brownlee: Will Singapore, like Australia, be carved out of the proposed amendment to the Overseas Investment Act?

Mr SPEAKER: No.

Rt Hon WINSTON PETERS: I can answer it, though.

Mr SPEAKER: No, sorry, I apologise to the member. I know that he’d like to answer it. This is not a matter of responsibility for the Minister of Foreign Affairs.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. If that were the case, then he should not have answered that it’s something he’s working on.

Mr SPEAKER: I think it’s something the Government is working on.

Hon Gerry Brownlee: No, he—

Mr SPEAKER: Well, I—no.

Rt Hon WINSTON PETERS: I’m very happy to answer, Mr Speaker.

Mr SPEAKER: The Minister of Foreign Affairs is seeking leave of the House to answer the question. Is there any objection? There appears to be none.

Rt Hon WINSTON PETERS: Thank you very much. The reality is that our relationship with Australia is controlled and regulated in a way that he is asking that question by our CER arrangements, and not the deal that was signed in 2001 with Singapore, so they are different.

Hon Gerry Brownlee: Can he confirm, then, that it’s his Government’s intention that there would be no other countries carved out by the Government in this proposed Overseas Investment Act amendment?

Rt Hon WINSTON PETERS: The Government’s made it very clear that our commitment that we made with respect to overseas ownership concerned every country, with the exception of Australia because of the CER arrangements that we had. That is a fact and that’s what we’re working on.

Hon Gerry Brownlee: Can he confirm that the proposal for Singapore to conduct air training at Ōhākea is still on track?

Rt Hon WINSTON PETERS: I’m delighted to confirm that we’re continuing our talks with respect to the suitability of Ōhākea, and there are other matters to do with costing and long-term budgeting that are being worked on, as we speak. We can’t announce that with finality today but we are on the case, and given that we’re the new Government with a bit of drive and unction, we’ll get it settled much faster than the last one.

Hon Gerry Brownlee: Will that drive and “unction” lead to the Singaporean Government being able to purchase land in New Zealand?

Rt Hon WINSTON PETERS: Could I say, Mr Speaker, relating to the previous question, they at no time said that they were wanting to buy the Ōhākea base.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. First, I should clarify that this is something I’m reasonably familiar with, and the question was not about them buying an air base; it was about them buying land in New Zealand, given that they’re bringing 600 people to live here.

Mr SPEAKER: I think what we’re now getting is evidence of the problems when Ministers are being asked questions outside the areas where they have indicated they have had discussions or had responsibility for. In this case, we’ve had no indication of that from the Minister of Foreign Affairs, and I think the member, as a result, is just going to have to take the answers he gets.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. This particular project was under the auspices of the Minister of Foreign Affairs in the previous Government. Can we perhaps get an indication as to whether or not it’s been taken away from the current Minister of Foreign Affairs and given to some other Minister?

Mr SPEAKER: Yes, you know the member can, if he asks a question to that effect. [Interruption] No, no, no. He’s got to ask a question, not do it on a point of order.

Hon Gerry Brownlee: Is the proposal for Singapore to conduct air training at Ōhākea still something that is in the ambit of the Minister of Foreign Affairs?

Rt Hon WINSTON PETERS: Precisely, it’s in the ambit of the Minister of Foreign Affairs, the Government, and, indeed, the Minister of Defence. But I can say, having seen the briefing on that proposal, at no point did the Singaporeans ever raise the issue of buying land in New Zealand.

Health Services—Funding

5. Hon Dr JONATHAN COLEMAN (National—Northcote) to the Minister of Health: What measurable outcomes, if any, will his policies deliver?

Hon JENNY SALESA (Associate Minister of Health) on behalf of the Minister of Health: Improved health for New Zealanders.

Hon Dr Jonathan Coleman: If the Government’s projected 2018 health allocation of $846 million is, in his words, “pretty much spent” on $300 million for primary care and $550 million for district health board (DHB) pressures, how will he fund his other promises, like the $10 million cancer agency, more palliative care, more mental health services, and operations for everyone?

Hon JENNY SALESA: This Government is committed to ensuring that we fund the health system much more appropriately. Unlike the member who asked the question, we will fund it in the same way as other Governments in the past have. We will fund it through the normal budgetary process.

Hon Dr Jonathan Coleman: If there is only $500 million in the half-yearly financial update for capital expenditure over the next five years for all 20 DHBs, where will the $1.4 billion for Dunedin Hospital come from, considering that he’s committed to building it within that period and he’s ruled out a public-private partnership?

Hon JENNY SALESA: This Labour-led coalition Government, with New Zealand First, is committed to ensuring that we fund health appropriately. The last Government did not adequately fund the health system. One of the reasons why we’re looking at a health system now—most DHBs are telling us that they’re underfunded—is because that member and his previous National Government did not fund the health system appropriately. We will go through the Budget process and we will fund it just like every other Government before has.

Hon Dr Jonathan Coleman: I raise a point of order, Mr Speaker. I’ve asked two questions asking how the money will be funded, and the questions haven’t been addressed adequately.

Mr SPEAKER: The member’s had answers that are far too long, but included that they will be funded through the Budget process. That is a perfectly good answer.

Dr Liz Craig: What action is the Government taking to improve health outcomes in winter months?

Hon JENNY SALESA: Today we announced the Families Package, which includes the winter energy payment. This will go a significant way in reducing respiratory conditions caused by cold, damp homes and will keep New Zealanders out of hospitals with preventable illnesses.

Hon Dr Jonathan Coleman: Will older people who go to the Gold Coast and Hawaii each year also be eligible for the winter heating package?

Hon JENNY SALESA: No. Read the details in the Families Package. [Interruption]

Mr SPEAKER: Order! If Mr Brownlee would like Dr Coleman to have another supplementary, he’ll be quiet now.

Hon Dr Jonathan Coleman: What does the Minister estimate that Vote Health will be in four years’ time, given that it’s $16.2 billion this year and he has stated repeatedly that he’s increasing Vote Health by $8 billion over four years?

Hon JENNY SALESA: The member knows that the budgetary process is a really robust process. He has been in Government before, for nine long years. We will go through the Budget process very soon, and he’ll just have to be patient and wait for the Budget process.

Climate Change Policy—Adaption

6. JAN LOGIE (Green) to the Minister for Climate Change: What is the Government doing to work with local authorities and communities to help plan for the effects of rising sea levels caused by climate change?

Hon JAMES SHAW (Minister for Climate Change): Tomorrow, I will be releasing two reports, the coastal hazards guidance for local government, as well as a draft of the Climate Change Adaptation Technical Working Group’s stocktake of the kinds of risks that New Zealand will be facing in the future. There have been a number of requests from local authorities and from communities for this kind of information, so that they can plan better for the future.

Jan Logie: What plans does the Government have to support communities to adapt to the impacts of climate change?

Hon JAMES SHAW: Our Government intends to support local authorities, communities, and businesses to adapt to the effects of climate change by providing them with the most up-to-date information that we can, as soon as we can. Many people will have seen reports this week by the news service Newsroom that illustrate the kind of poor planning, investment, and development decisions that can arise when this kind of information is unavailable.

Jan Logie: How will the Minister work alongside communities to support them to adapt to the effects of climate change?

Hon JAMES SHAW: In addition to the two reports I’m releasing tomorrow, there will be a further report in March next year from the Climate Change Adaptation Technical Working Group, which lays out the policy options that will be available to central and local authorities, as well as private and community sector organisations. Alongside the work that we’re doing to reduce New Zealand’s greenhouse gas emissions, adapting to the effects of climate change is a major priority for this Government.

Todd Muller: What feedback has the Minister received from affected councils, stakeholders, and community groups, who actually requested, and were provided by the Ministry for the Environment, additional consultation on the draft guidance earlier this year?

Hon JAMES SHAW: As I understand it, the final report that we’ll be releasing tomorrow contains a number of changes and additions based on the feedback that was received during the consultation round.

Todd Muller: What is the Government going to do to work with the community of the West Coast to prepare them for the new Powering Past Coal Alliance obligations that the Minister signed up to last month, which will see New Zealand phase out coal from power generation before 2030? [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Mr O’Connor—the member may ask a supplementary question if he wants, but we’ll finish this one first.

Hon JAMES SHAW: And I’d be pleased to take it. Contained in the confidence and supply arrangement between the Green Party and the Labour Party is a commitment to providing just transition plans for the energy sector and the agricultural sector before we put in place the targets to move to 100 percent renewable energy by the year 2035. So it is our absolute intention to work with communities to help them plan for not just reducing greenhouse gas emissions, not just adapting to the effects of climate change, but also transitioning to a low-carbon future where everybody has good, green jobs and better incomes than they have at the moment.

Hon Damien O’Connor: Can the Minister confirm that over 1,500 jobs were lost to the West Coast when Solid Energy was forced to take on higher levels of debt to pay a dividend to the National Government under the last tenure of their control?

Mr SPEAKER: No—it might be a very important issue to the West Coast, but it’s not directly the responsibility of the current Minister for Climate Change.

Environment, Minister—Resource Management Act and Priorities

7. DAVID SEYMOUR (Leader—ACT) to the Minister for the Environment: Does he agree with his officials from the Ministry for the Environment who stated in their Briefing to the Incoming Minister that “failures in the resource management and planning system have system-wide effects that impact all New Zealanders, such as the ability to deliver sufficient development capacity for housing”; if so, does he intend to overhaul the Resource Management Act 1991 in this term of Parliament?

Hon MEKA WHAITIRI (Minister of Customs) on behalf of the Minister for the Environment: Yes, I agree with the Ministry for the Environment. Cabinet is yet to make any decision about whether to review the Resource Management Act (RMA) in this term of Parliament.

David Seymour: How, then, will this Government build an additional 10,000 houses per year when its own officials say that the regulatory system for land use planning is not fit for purpose?

Hon MEKA WHAITIRI: The housing crisis that developed over the past nine years is of paramount importance to this Government, and we are considering a range of options. I’m working closely with the Minister of Housing and Urban Development, the Hon Phil Twyford, on this issue. [Pause in proceedings]

Hon Dr Megan Woods: What’s going on?

David Seymour: Is the—well, it’s just common courtesy—Minister saying that the officials who wrote that briefing to the incoming Minister are wrong and the problem with building more homes is not a fundamental problem with the Resource Management Act? Is she saying that this Government will get different results with exactly the same policies?

Hon MEKA WHAITIRI: Like I said, we are always willing to consider sensible options to address the housing crisis. If the member has any sensible proposals to address the housing crisis, he is welcome to forward them to the Minister for the Environment’s office.

Hon Scott Simpson: Of the short-term priority options for decision presented to him by his ministry in their briefing to him as incoming Minister, which is his top priority?

Hon MEKA WHAITIRI: Like I said, I am considering all options, including reforming the RMA, which is but one. Once those options are considered, Cabinet will make their decision in due course.

Hon Scott Simpson: I raise a point of order, Mr Speaker. I asked a very precise question—asking which was the top priority.

Mr SPEAKER: Yes, and I think the member got an answer saying that that will be something that’s considered by Cabinet.

Tree Planting—Quantity and Definitions

8. Hon Dr NICK SMITH (National—Nelson) to the Minister of Forestry: Does he stand by the policy in the Speech from the Throne, “this Government is committed to a new planting programme, planting 100 million trees a year to reach a billion more trees in 10 years”?

Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Minister of Forestry: Answering this question in segments: is this Government committed to a new planting programme? Yes. Will 100 million trees be planted each year? Yes. Does 100 million trees multiplied by 10 years equal 1 billion trees? Yes.

Hon Dr Nick Smith: How can counting the existing 50 million trees planted each year for restocking meet the commitment of “new planting programme” and a “billion more trees in 10 years”, when it is just replacing existing forests that are harvested each year—or does the Government intend to stop all current logging?

Rt Hon WINSTON PETERS: In case that member wasn’t paying attention when he was a Minister, there was a decline in plantings under the last administration—10,000-plus per year. Now, here’s the real point: at 1,250 workers, each planting 800 trees a day, those workers planting for 100 days a year will reach the target. Is there a new plan, as said by the Prime Minister at the time? Yes, there most definitely is.

Hon Dr Nick Smith: Will the Government be counting towards its billion more trees in 10 years those seedlings that are planted and thinned out at ages five to nine, amounting to about 40 percent of seedlings, which is current best-practice silviculture?

Rt Hon WINSTON PETERS: Could I say that if a seedling is planted and it starts growing into a tree, it is a tree. And I suggest that Minister start taking a positive attitude to our most exciting policy, rather than barking up a tree.

Hon Dr Nick Smith: Can the Minister confirm the intent in the Speech from the Throne that 100 million more trees will be planted by October 2018, another 100 million by November 2019, and a further 100 million by November 2020?

Rt Hon WINSTON PETERS: That was not what was said in the Speech from the Throne. I want to commend to that member the need for linguistic exactitude when you’re dealing with this party, because we believe in the facts. If somebody as authoritative as the president of the Forest Owners Association says, “It’s an optimistic but achievable target”, maybe he might know, against that member’s lack of knowledge.

Hon Dr Nick Smith: Has the Government become so desperate, given that it wants to count trees that are thinned out before they even get to age 10 and that it wants to count those trees that are, simply, planted for restocking, that it’s now—

Hon Tracey Martin: I raise a point of order, Mr Speaker. Is it within the Standing Orders to start what I suppose is going to be a question with “Has that Government become so desperate …”?

Mr SPEAKER: The answer to that is probably not, but I have been listening very carefully to her leader when he has been requesting that he answer questions that are out of order, and therefore questions to him I’ve been slightly more liberal on.

Hon Dr Nick Smith: Given that the Minister is wanting to count those trees that are simply the restocking that occurs each year, and as well as that he’s wanting to count seedlings that are thinned out before the age of 10 years, can I also take it that he wants to count this year’s Christmas trees in his billion-dollar target?

Rt Hon WINSTON PETERS: Don’t go on the road as a comic—that member’s bound to fail. Could I just say it’s very, very clear that if you intend to have planted a billion trees over 10 years, then that is what the plan’s all about and that’s what we’ll do, unlike under his administration, where there was a decline of over 70,000 hectares in tree planting between 2008 and 2015.

Hon Dr Nick Smith: I seek the leave of the House to table the Ministry for Primary Industries’ record of tree planting, which actually shows an increase—

Mr SPEAKER: Order! [Interruption] Order! The member knows that as well as giving the source, he’s got to give the date, and if he is giving us something that has come from a website, the member knows that that is now regarded as trifling with the Chair.

Hon Dr Nick Smith: The specific report is the provisional estimates of tree stocks planted each year over the last 10 years, published and provided by the Ministry for Primary Industries in response to questions from myself.

Mr SPEAKER: Right, leave is sought to table that document. Is there any objection? There appears to be none—[Interruption] Sorry, it will not be tabled. Are there further questions? Question No. 9.

Hon Gerry Brownlee: No, no, supplementary—supplementary to the Minister.

Mr SPEAKER: Oh, the late Gerry Brownlee.

Hon Gerry Brownlee: That’s just slightly premature, Mr Speaker. Will the Government be importing any seedlings in order to achieve their target in the next two years?

Rt Hon WINSTON PETERS: I can say that every step has been taken to ensure we have the plantings ready to fit this plan, and it’s a very important plan because the reality is—and this is why language matters; this is why language matters—there was a decline in hectares of forest of 70,000 hectares in the last five years.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. That was an interesting address to the question, but it went nowhere near the question. It’s a simple one.

Mr SPEAKER: I think if the member had listened carefully, he would have got it in the middle. A number of methods to obtain or a number of ways of obtaining—something like that.

Winter Energy Payment—Period and Amount

9. MARJA LUBECK (Labour) to the Minister of Energy and Resources: Is she satisfied that all New Zealanders are able to properly meet their heating and energy needs over the winter months; if not, what is the Government doing to support them?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): No. Too many New Zealanders are facing ever-rising power bills, and this is forcing some people to avoid heating their homes or unable to cover other expenses to ensure that they and/or their families are kept warm and healthy. This Government doesn’t think that’s good enough. That’s why today the Government has announced a Winter Energy Payment from 1 July 2018, available to those receiving New Zealand superannuation or a veterans pension, as well as people receiving a main benefit. This will help nearly a million New Zealanders afford the heating they need to keep their houses warm and healthy.

Marja Lubeck: How long will the Winter Energy Payment run for each year, and why is this period important?

Hon Dr MEGAN WOODS: The Winter Energy Payment will run for 13 weeks from 1 July 2018 next year. In future years, it will start on 1 May and continue for 22 weeks. These months are when we face some of the worst weather conditions in New Zealand, and helping nearly a million people keep their homes warm at these times is vital. And it’s important to note that there are 184,000 children living in households who will receive this payment.

Marja Lubeck: How much will recipients receive to help them warm their homes?

Hon Dr MEGAN WOODS: When fully implemented, superannuitants and those on a main benefit will receive a total of $450 if they are single with no dependent children or $700 for couples. This is important, especially for older people on fixed incomes, as this extra money will make a huge difference to their lives and help them keep their homes warm and dry.

Research and Development—Funding

10. Dr PARMJEET PARMAR (National) to the Minister of Research, Science and Innovation: What progress, if any, has she made lifting research and development expenditure towards the Government’s target of 2 percent of GDP?

Hon Dr MEGAN WOODS (Minister of Research, Science and Innovation): The Government’s target of lifting R & D to 2 percent of GDP in 10 years is, of course, an economy-wide target—that is, a mix of Government and business expenditure—so I am happy to report that I am making good progress towards that target with the design of an R & D tax credit that will lift New Zealand’s business expenditure to be more in line with OECD countries that have innovation at the heart of their economies. Detail of the expenditure will, of course, be part of the Budget 2018 process. This is an important part of our Government’s plan for a higher productivity and high-wage economy.

Dr Parmjeet Parmar: How can she increase R & D spending by taking money away from the Primary Growth Partnership (PGP) fund that was going to fund research and development but has now been diverted to fund bureaucratic reshuffling in Wellington?

Mr SPEAKER: No. No. Members are going to learn not to use ironic expressions as part of their questions. Does the member want to have another—I’ll let the member have—[Interruption] Well, I’m going to finish ruling first. I will allow the member to rephrase her question without the use of irony, if she wishes.

Dr Parmjeet Parmar: How can she increase R & D spending by taking money away from the Primary Growth Partnership fund that was going to fund research and development?

Hon Dr MEGAN WOODS: Of course, the PGP partnership falls within the primary industries portfolio, but we have an ambition to raise expenditure on R & D in this country by lifting New Zealand’s business expenditure beyond its current 50 percent. We have also signalled, through our coalition agreement, areas where we intend to put through the Budget 2018 process additional areas for funding.

Dr Parmjeet Parmar: As the Minister of Research, Science and Innovation, does it not concern her that the first thing her Government has done for R & D is to cut R & D spending when she has such a lofty target of increasing R & D spending to 2 percent of GDP?

Hon Dr MEGAN WOODS: No, this does not concern me, because I know that this is a Government committed to making sure that science research and development lies at the heart of our economic future. We are not content to let New Zealand languish at the bottom of the OECD targets, like the previous Government did.

Virginia Andersen: Why is it important that we introduce an R & D tax credit?

Hon Dr MEGAN WOODS: Because we need more business R & D being done in this country. Under the previous Government, a small number of firms contributed to the bulk of business R & D, with 26 percent of all expenditure being carried out by only six firms in 2016. With the introduction of an R & D tax credit, we want to see a much wider group of businesses undertaking R & D that will help us move towards a higher wage, innovative economy that works for all New Zealanders.

Dr Parmjeet Parmar: How much new money has been allocated in today’s Half Year Economic and Fiscal Update for her commitment of increasing R & D spending to 2 percent of GDP?

Hon Dr MEGAN WOODS: The additional funding for R & D expenditure will, of course, like other forms of Government funding, be part of the 2018 Budget process.

Dr Parmjeet Parmar: I raise a point of order, Mr Speaker. I asked a very specific question, and if there is no money, the Minister should just say that.

Mr SPEAKER: I think she got an answer that the whole House understood.

Net Neutrality—Federal Communications Commission Announcement

11. MELISSA LEE (National) to the Minister of Broadcasting, Communications and Digital Media: What are her immediate priorities for the Broadcasting, Communications and Digital Media portfolio?

Hon CLARE CURRAN (Minister of Broadcasting, Communications and Digital Media): There is a great deal of work ahead, and my priorities include enhancing the voice of independent non-commercial public service media, to increase the variety of media platforms people can access public media, to support the people to tell New Zealand stories that reflect and reinforce our unique culture.

Melissa Lee: Does the Minister agree that internet freedom and a strong telecommunications system in New Zealand means the freedom to access lawful content, the freedom to use applications, the freedom to attach personal devices to the network, and the freedom to obtain service plan information—and to achieve this the telecommunications sector needs a light-touch regulatory framework under which a free and open internet can thrive?

Hon CLARE CURRAN: Yes.

Melissa Lee: In light of that answer, what official advice has the Minister received on the issue raised by the Federal Communications Commission work on broadband as a common carrier in United States and its applications in the New Zealand context?

Hon CLARE CURRAN: I haven’t received any advice on that.

Melissa Lee: Why does the Minister consider issues around net neutrality so unimportant for New Zealanders?

Hon CLARE CURRAN: I’m not sure what that member is getting at and how she could draw that conclusion. Of course net neutrality issues are important for New Zealanders. At this point in time net neutrality is not a significant issue, but we are maintaining a watching brief.

Raymond Huo: Is public broadcasting one of her immediate priorities?

Hon CLARE CURRAN: Thank you, Mr Speaker. Yes. And do you know why? This is not you, Mr Speaker, but the House. This is because thanks to that previous Government, New Zealand public broadcasting has among the lowest level of fundings in the OECD. Nine years of funding freezes by the previous Government have presented major challenges for our public media. This Government believes in the value of public broadcasting, and I look forward to enhancing the voice of independent public service media.

Melissa Lee: What advice has the Minister asked for, considering the fact that the Federal Communications Commission announcement is actually today?

Hon CLARE CURRAN: If that member is so concerned about that issue, she can put it in writing and talk to me about it. [Interruption]

Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

Brett Hudson: I raise a point of order, Mr Speaker. The question was very simple and direct—

Mr SPEAKER: No, sorry. I haven’t called any member yet. It’s very clear who has precedence in this matter.

Rt Hon Winston Peters: Thank you, Mr Speaker. Look, one can be as reasonable as one likes, but we cannot have a House where people are allowed to shout out like that—[Interruption]

Mr SPEAKER: Right!

Rt Hon Winston Peters: Thank you, Mr Speaker. That is specifically what I am complaining about. We can’t hear a thing over here from the Minister, giving a very sound answer, because she’s being shouted down, and I would advise the National Party to just get over themselves and accept what happened.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker.

Mr SPEAKER: No, sorry. I’ve got something to deal with first, and that is the member had a very good point of order and he was being very helpful right up to the final phrase, and can I ask him to use his experience in the House to help settle it down, not to wind it up.

Hon Gerry Brownlee: Well, speaking to that point of order, Mr Speaker—

Mr SPEAKER: No, well, there is no point of order left at the moment.

Hon Gerry Brownlee: Well, in that case, I’ll ask you a new point of order. I raise a point of order, Mr Speaker. Noting that the Deputy Prime Minister just used a point of order to talk about the way in which the House should react in certain circumstances, is it going to be your ruling that when people do give points of order they do not use ironic expressions

Mr SPEAKER: Well, I think, actually, Mr Brownlee, I did. I commented on the unhelpfulness of the expression at the end—

Hon Gerry Brownlee: No, no, that was—

Mr SPEAKER: I certainly did, and—

Hon Gerry Brownlee: No, it was before that.

Mr SPEAKER: Oh, well, if it was another one before that. I’m probably immune to them and missed it.

Brett Hudson: I raise a point of order, Mr Speaker. Sorry, the member’s supplementary question to the Minister referred to a matter that’s in the public domain—a decision that is anticipated—and it simply asked if the Minister had requested any information. We’d like her to answer the question.

Mr SPEAKER: And it might have been that the member was interested in the answer. If he was interested in the answer, he would have got his colleagues to be quiet.

Working for Families—Family Tax Credit Rate

12. PRIYANCA RADHAKRISHNAN (Labour) to the Minister for Social Development: How does the Government propose to make being in work more sustainable for families, and lift them out of poverty?

Hon CARMEL SEPULONI (Minister for Social Development): This Government recognises that financial support provides much-needed stability to families that struggle to hold down a job while caring for children. Not only will more New Zealanders be eligible for Working for Families but the family tax credit rates are being increased for each child. Around 368,000 families will benefit from these changes. In 2018-19, 26,000 more families will be eligible for Working for Families, building to 39,000 in 2020-21. This package recognises that caring for children is one of the most important things families can do. It helps families remain in work and provide for their children.

Priyanca Radhakrishnan: Why is it important that the rate for younger and older children is made the same?

Hon CARMEL SEPULONI: Parents of small children currently get less support than families with teens. I’m very proud that this Government will change that. Helping families with small children create a stable home environment will combat the insecurity and continual hardship these families face. This entire package, including the Working for Families changes, will lift 88,000 children out of poverty.

Priyanca Radhakrishnan: Why is the Government raising the Working for Families abatement threshold, and what does this mean for families?

Hon CARMEL SEPULONI: Currently, if your income is above $36,350 a year, your family tax credits start to reduce. The previous Government wanted to make this threshold even lower. Our Government knows that this bar was far too low already and that more families need help. From 1 July 2018, Working for Families tax credits will begin to reduce only when your income hits $42,700 a year. This Government is committed to ensuring low- to middle-income families are better off in this country.

Urgent Debates

Fiscal Strategy—Budget Policy Statement and Half Year Economic and Fiscal Update

Mr SPEAKER: I have received a letter from the Hon Steven Joyce seeking to debate under Standing Order 389 the Government’s release of the Budget Policy Statement and Half Year Economic and Fiscal Update. This is a particular case of recent occurrence for which there is ministerial responsibility.

The Budget Policy Statement and Half Year Economic and Fiscal Update are regular features of the Government’s financial cycle. The Budget Policy Statement is debated each year, after it is considered by the Finance and Expenditure Committee. In the normal course of events, the regular release of these documents would not warrant an urgent debate. However, there has been a change of Government after three terms. The new Government has a 100-day plan that it is implementing, and has said that the detailed costings for the 100-day plan will be revealed in the release of the Half Year Economic and Fiscal Update. Waiting until after the 100 days are over to scrutinise those plans and costs may not be satisfactory.

I have considered an earlier precedent for a similar situation. In 1990, shortly after the opening of the Parliament, the new Government made a general economic statement to the House before introducing a finance bill; that statement resulted in an extensive debate involving the Prime Minister, the Leader of the Opposition, the Minister of Finance, and several other senior members.

In the absence of any indication of a ministerial statement, I have concluded that this matter does warrant the immediate attention of the House. I am aware that the Families Package (Income Tax and Benefits) Bill has been introduced today. This bill implements some elements of the Government’s 100-day plan. Because of the granting of this urgent debate, the debate on the bill will be more closely restricted to the content of the bill, rather than on the general fiscal and budgetary plans. I invite the Hon Steven Joyce to move that the House take note of a matter of urgent public importance.

Hon STEVEN JOYCE (National): I move, That the House take note of a matter of urgent public importance.

It is excellent to have the opportunity to debate in this House a very important document. It’s an important document because we have seen so little up until now of the new Government’s fiscal commitments, of how they are going to pay for their coalition promises, of how they are going to structure their fiscal commitments over the next several years. So this is not just this House’s first opportunity, it is also the public—[Interruption]

Mr SPEAKER: Order! Sorry, I’m going to ask both the Hon Carmel Sepuloni and the Rt Hon Winston Peters to sit down. We did have a slight problem the other day as a result of this.

Hon STEVEN JOYCE: Thank you, Mr Speaker. This is not just this House’s first opportunity; it is also the public’s first opportunity and the business sector’s first opportunity to have a look at the fiscal and economic plans of the new Government.

I thought I’d start this discussion with the economic plans. There is no doubt that in the short to medium term the Government and Treasury are now expecting softer growth than was predicted just a few months ago in the pre-election fiscal update. More than that, they’re expecting Government expenditure to make up more of that economic activity than we saw just a few months ago, and that is something that we’ll be keeping a very close eye on, because actually substituting the activity of households and businesses with more Government spending leads to long-term problems in terms of increased debt and higher Government activity choking off the private sector of the economy. So we’ll be watching that very closely.

If you have a look at the fiscal numbers that are in this particular update, at first blush they look sort of positive. But, actually, you just have to look a little bit below the front cover of the book to find that they are, let’s just say, “ambitious”, to quote the finance Minister, in the extreme. These are very ambitious numbers. Why are they ambitious numbers? It is because they have only a very small number of costings of the new Government’s plan actually included in the document—a very small number of those costings indeed. Yes, it does identify the tertiary education package. Yes, it does identify the changes to the previous Government’s Family Incomes Package, and, yes, it does include paid parental leave. But beyond that, the numbers are very squishy indeed. We have a whole range of things that this Government has said they will do, but they haven’t included any numbers for them at all in this half-yearly update.

This is interesting, actually, because in the Public Finance Act, if you are making a decision to do something, then actually you are honour-bound to include it in the accounts pretty quickly after you’ve decided. I’ve sat in this House and heard how the new Government is going to spend $8 billion or thereabouts additionally on health over the next four years, and, weirdly, that number doesn’t appear anywhere in this Half Year Economic and Fiscal Update. Similarly, we don’t see anything here about early childhood education.

There are also absolutely no numbers here for the Regional Development (Provincial Growth) Fund. You may recall that the Provincial Growth Fund is a very, very important part of the new Government’s Budget, but there is a little inset box that says, “We’re talking about it. We’re not quite sure how we’re going to do it yet. We don’t know how much of it will be capital or how much of it will be operating. We’re not sure exactly how it’s going to be laid out, but as soon as we get Shane Jones off the couch and actually get him to do some work, then we’ll be able to actually have some understanding of what the Provincial Growth Fund is.” Then he’ll be able to get his nephews off the couch to do some actual work. So it’s a bit of a chain reaction that’s required before we’ll actually get some details of the Provincial Growth Fund in this half-yearly economic update.

There are a few other things that aren’t here. There are a few other things that aren’t included in this document, which is a bit of a concern—I think a genuine concern—for New Zealanders. We’ve heard a lot about, for example, increasing police numbers. There’s been a lot of talk about that in recent times, and also a lot of talk about increasing police salaries and how those need to be funded, but, of course, there is no reference in this document to those commitments in terms of additional money. So we have to assume that the increase in police numbers has been put a bit on the long finger by the finance Minister.

So that’s some of the things, and there’s more. We had a colleague of mine asking about science investment, because the new Government has made a big commitment to increase science and research investment. However, so far, there has been nothing included. Now, the finance Minister, when he stands, will, undoubtedly, point to the new Budget operating allowances, and it is true that he has increased one of those for the next financial year. It’s gone up to $2.6 billion. I think for the previous Government we had about $1.8 billion—

Hon Grant Robertson: $1.7 billion.

Hon STEVEN JOYCE: Thank you, Grant—$1.8 billion, and $2.6 billion is the actual number that he’s put up now.

However, a very straightforward calculation of his health commitments and his education commitments and his Provincial Growth Fund means that he would have absolutely nothing for anything else whatsoever. That does explain to this House why it is the Government has got very wound up about the fact that it hasn’t allocated $350,000 to KidsCan: because the finance Minister is undoubtedly wandering around to his colleagues and saying, “Whatever you do, don’t move, don’t spend any money, because it is so tight, it’s tighter than it was for the previous Government during the global financial crisis.”

He is expecting to spend so little additional money on the actual operation of Government over the next couple of years that he’s had the agricultural Minister raid the primary growth fund to pay for the rebadging of the Ministry for Primary Industries to please their friends in New Zealand First.

So that’s the problem, immediately, but there’s more. And it’s really interesting, this question of exactly how many fiscal risks are included in this document. I’ve counted 28 new fiscal risks—

Hon Member: How many?

Hon STEVEN JOYCE: —28—that Treasury has identified at this time that have not actually been included. For example, the Green Party: the coalition partner is very keen on the Green Infrastructure Fund. Treasury identifies that as a specific fiscal risk because no money has been allocated to said Green Infrastructure Fund. While we’re on the Green Party: funding for Department of Conservation. Treasury notes that there’s significant increases required there, but also notes that nobody’s given it any indications, so it can’t include any allocation for it. It’s just a specific fiscal risk.

Then there’s the small matter of the 36th America’s Cup. Now, you’d think, actually, that under the Public Finance Act, once you have David Parker going around measuring up Halsey Wharf and the Wynyard Wharf in Auckland—you know, a layperson might think that that could be the time to put some money into the Budget for the America’s Cup bases, because the new Government is going to invest in those, they’ve made absolutely clear. But, weirdly, it’s included only as a specific fiscal risk. No actual money, no ability to spend any money, and yet it’s just sitting there.

Another one, which is closer to Grant Robertson’s heart, is that Treasury points out that there is a commitment to extend further the “fees-free” tertiary education policy. But there’s nothing in this document about that either, in the out-years. Then we have a whole range of some things that are actually passed. The healthy homes legislation is passed, but it’s still listed only as a specific fiscal risk, because nobody’s got any idea how much it will cost the Government’s housing provider to actually provide the additional money.

And it goes on. I want to focus on one in particular, because I see the deputy leader of the Labour Party over there, the Minister of Corrections. Justice commitments are noted as a specific fiscal risk in this document because the Government doesn’t want to do public-private partnerships anymore, because it’s ideologically opposed, including that finance Minister, to doing public-private partnerships. And so, suddenly, they have created their own little justice hole, and Treasury has noted it as a specific fiscal risk. Those of us on this side of the House who have been involved in this area know that if you’re not prepared to build a prison with a public-private partnership, you’re up for a very big number indeed. And that’s not included in here.

Another one that isn’t included is Mr Twyford’s rail priorities in Auckland and Wellington. They are not included in here at all. You may recall, actually, Mr Robertson earlier this week talking about how he was going to spend $15 billion building light rail, not just to the airport but out to Phil Twyford’s house. They were going to do that and it was going to be $15 billion, but, weirdly, that’s not included in here, despite the absolute assurance from the finance Minister that it was coming. So we have Auckland and Wellington rail priorities to add to the 27 other specific risks, which leads me to believe that it might have saved a tree or two—with deference to Mr Peters—if they’d just listed one specific fiscal risk. They could have just said, “Specific fiscal risk: Grant Robertson, finance Minister.” That would have been the right specific fiscal risk to list in this document, and could have saved us all a huge amount of time.

Then, it’s interesting that, even with the fact that they’ve left out 28 things, that they’ve left out all their other commitments, and that they’ve left out the various Budget things and they’ve only put in a very tight allowance for next year—despite all of this, they are lifting public debt. Despite what they’ve left out, they are lifting public debt.

So, under the pre-election fiscal update just a few months ago, Government debt—the amount owed on behalf of taxpayers of New Zealand—was dropping from just under $60 billion at June of this year, over the next five years, to $56 billion. People said, “Well, that’s actually what we need to do.”, because, as has been pointed out plenty of times on the other side of the House—plenty of times on the other side of the House—debt has built up because of two big events: the global financial crisis and the Canterbury earthquakes. Those involved the Government of the day borrowing money to support vulnerable New Zealanders. That’s what we did. We built that debt, and now, when it’s the good times, it’s time to pay it down—until Mr Robertson comes along. And now, in four years’ time, he plans for debt to be at just under $70 billion. So instead of dropping to $56 billion, it is going to go up to nearly $70 billion, and that is before the 28 specific fiscal risks—before the 28 specific fiscal risks.

Before I conclude, I want to make a brief note on the Families Package that the Government has tabled today. We get to discuss that shortly, when the bill comes before the House, but the documents that come with the Budget make quite a significant point about the number of children lifted out of poverty—and that’s important, because we all want to see that occur. The interesting thing is that the previous Government’s package lifted 50,000 young people out of poverty immediately when the package came into force. So here’s the interesting thing: the Government are now comparing that with a number that is 88,000, which seems a lot better, until you note the fine print, and they’re not talking about until 2021—they’re not talking about until 2021.

So I call on Mr Robertson, when he stands up, to explain to this House why he didn’t compare apples with apples. Why didn’t he actually put the number in and compare apples with apples? Why did he feel the need to embellish it by using 2021? He knows that the previous Government was planning a second Family Incomes Package in 2020.

Hon Grant Robertson: Oh, you were planning it?

Hon STEVEN JOYCE: That’s right, because we weren’t going to spend all this money on tertiary students instead of actually paying median - wage workers more money so that they would be encouraged to work harder, earn more, and grow the New Zealand economy.

The problem with this half-yearly fiscal update is that there is very little in it. This is like the dance of the seven veils, and this is Grant’s first veil. This is the first thing he has shown us—

Mr SPEAKER: Order!

Hon STEVEN JOYCE: Grant Robertson’s first veil—sorry, Mr Speaker—Grant Robertson’s first veil. And he’s shown us a little bit, the 100-day plan. He hasn’t shown us all the other commitments. He’s left out 28 fiscal risks and he’s left out the biggest specific fiscal risk of the lot, and that is the Minister of Finance, Grant Robertson.

Hon GRANT ROBERTSON (Minister of Finance): I never thought I would see Steven Joyce as the Labour sleeper in the National caucus, until today when he actually asks for an urgent debate for us to talk about a Budget Policy Statement and a half-yearly update that we’re proud of, on this side of the House. So I thank Mr Joyce for his generosity in giving me that opportunity today.

It was my great honour to release the Budget Policy Statement today and to sit alongside Treasury’s half-year economic and fiscal update. What we were able to show in our Budget Policy Statement today was that it is possible for a Government to be both fiscally responsible and implement progressive policies. That is a lesson that the previous Government completely forgot.

So when we look at the economic and fiscal outlook that is in the documents today, growth will continue to be solid; it will average nearly 3 percent over the forecast period. I heard throughout the election campaign from the National Party that growth would collapse under a Labour-led Government. It would be all over. There would be no growth in the future.

Well, actually, what the fiscal outlook says today is that next year, growth will be a little softer—or in the second half of this financial year, growth will be a little softer. That’s actually about activity in the second half of 2017. By 2019, when the Government’s policies are being rolled out, guess what happens? Growth goes back up—3.6 percent—and Treasury directly says that that’s the result of having a Government that invests in the economy, having a Government that lifts the minimum wage, having a Government that builds some affordable houses, having a Government that invests in the regions. That’s what you get; you get growth, and this Government is proud of it. It is not the kind of growth that we’ve seen under the National Government, which is driven by population increase and housing speculation. So, yes, the forecast growth for 2018 is a little softer, but in 2019 and 2020 we start to see the transition to a productive economy, and I am proud that this Government will be leading that.

Also in today’s half-yearly update is the news that Treasury expects unemployment to fall to 4 percent by the end of the first term of this Government. That’s a promise. We’ve actually said we want to do that and we’re proud that Treasury realises that that will happen. But it also says—and this is very, very important—that wage growth over the next five years will average at 3 percent.

Finally, New Zealanders are going to get the dividend of their hard work, because the members on the other side of the House seem to believe that the reward for New Zealanders’ hard work should be a tax cut. But, actually, we’re more ambitious than that, because if that’s how you reward workers, where does it end? Where does it end? Do you stop? Do you just keep cutting taxes as a reward? Or do we actually invest in productive growth that lifts wages? And that’s what this side of the House will do. So we will see much higher wage growth under this coalition Government.

Then we come to the issue of surpluses, which Mr Joyce included in his statement. On this side of the House, we have committed ourselves to sustainable surpluses. They’re not surpluses manufactured by underfunding public services. They’re not surpluses manufactured by failing to invest in our infrastructure. They are real surpluses once we have done what New Zealanders need us to do. And by the end of the forecast period, in the half-yearly update we see the surplus reaching $8.8 billion higher than what National’s forecast was, so not what Mr Joyce said; in fact, the opposite of what Mr Joyce said. But, again, as I say, he is obviously now the Labour sleeper in the National caucus.

Then we come to the question of net core Crown debt. This is a very important point because in the last Government, I, as an Opposition member, asked many questions about the issue of debt, and every single time I got an answer from the Minister of Finance about the percentage of debt relative to GDP, because that’s how Governments measure it. And the previous Government had a target to lower that percentage, and they didn’t seem to quite be able to meet it so they pushed it out and pushed it out, and that target was 20 percent. Well, we have adopted that target but we’ve said we’re going to take a little longer to get there, and the reason that we’re going to take a little longer to get there is because of the infrastructure deficit that this country is facing. So in this Budget Policy Statement and half-year update there is extra capital spending from this Government, and that is for the affordable housing programme called KiwiBuild. We can either be a Government that sits on the sidelines and says housing will become more and more unaffordable, the lowest homeownership rates in 50 or 60 years—

Hon Member: They don’t care.

Hon GRANT ROBERTSON: They don’t care about that, but we’re going to invest, so we’re going to make sure that we invest in the future.

The other element of that increased borrowing is to restart contributions to the New Zealand Superannuation Fund. I am extremely proud that after nine long years of zero contribution to our super fund, finally the Government, this Government, is stepping up to do that, and that first payment will happen tomorrow. So Mr Joyce wants action—it’s happening tomorrow. He can come along if he likes. He can come along and watch as we start again to invest for future generations. And it is the combined commitment of the parties that make up this Government that we will have sustainable superannuation. The very first thing a Government can do is contribute to the super fund, and we are doing that.

So all of that is part of what contributes to the fact that over the next five years we will reduce debt as a percentage of GDP to 20 percent, exactly the same target that National had, but over a longer period of time because there are investments to make.

What Mr Joyce now has is an obsession with the cash amount of debt. Well, let me say this: on this side of the House, we remember the fact that when the last Labour-led Government left office, net debt in cash terms was tiny; it was even under $10 billion. When we come back into Government, it’s at $60 billion. What happened in the meantime? To hear Mr Joyce blame the global financial crisis—I also sat in this House when Bill English said that the global financial crisis was over, in 2012. What happened in the remaining five years? What happened then? The previous Government has no credibility when it comes to the issue of debt. We will pay down debt, reduce New Zealand’s debt, but we’ll do it in a way that is responsible and allows us to invest in the assets that we need to invest in.

The Half Year Economic and Fiscal Update presents a picture of an economy that—yes it was growing, but it’s going to grow more, and it’s going to grow sustainably under this Government. It presents an economy that was drifting along and not delivering benefits to all New Zealanders. We will return to the Families Package, which is a critical element of this Budget Policy Statement. But can I say right now that that is the chance for all New Zealanders to share in prosperity.

There is no point in crowing about high growth rates, if people are living in cars and garages. There is no point in crowing about high growth rates, if our hospitals are turning people away. There is no point in crowing about high growth rates, when the average age of our schools is more than 40 years. We will invest in New Zealanders’ future to give them a share in prosperity, not simply allow ourselves to be comforted by the numbers that are on the sheet. All of this means that the Labour-led Government with New Zealand First and the Greens have delivered on our Budget responsibility rules. All of them have been delivered on, and I am extremely proud of that.

I now want to turn to what Mr Joyce seemed to be obsessing about, which is the question of what is and what is not in the half-yearly update. Mr Joyce has been part of enough Budgets to know that when you actually do Budget 2018, it happens in 2018. What the half-yearly update does is tell us where the books have reached, halfway through the year. Due to the excellent work of the officials since this Government has been in office, we have been able to include in the half-yearly update the cost of the 100-day plan. It’s actually an amazing achievement, in 40-odd days, to be able to put all of those costs in there.

Think about what’s in that package: the first year free post - secondary school training and education—one of the most transformative policies for the productivity of the New Zealand economy that we will see in many, many years. Despite the Opposition trying to make out that that policy is only about universities, we know that the vast majority of people who will benefit from those policies will actually be people who’ve never studied before, who will go and train in polytechnics, who will take up apprenticeships, who will be in the trades. That policy is costed in to the Half Year Economic and Fiscal Update, as is the Families Package, as are the other commitments in the 100-day plan: setting up the Pike River recovery agency; setting up the tax working group; starting work on the independent Climate Commission. All of those things have been costed in, so we’re well in advance of where previous Governments have been. We’ve got that work in there. It’s in the accounts.

And then, we come to the Budget Policy Statement. So the operating allowances that we have and the capital allowances that we have are over and above and beyond what we’ve already committed to in the 100-day plan. So we have an operating allowance for the 2018 Budget of $2.6 billion. Now, we are an ambitious Government. I don’t want any of my Ministers to get ideas that they may be able to spend all of that money, but we are an ambitious Government. We have ideas. They’re contained in the coalition agreement. They’re contained in the confidence and supply agreement. And they are going to be implemented. Right now, all around Wellington and New Zealand, Public Service agencies are working out how those will be delivered. When we come to Budget 2018, all of that detail will be set out.

But those operating allowances and those capital allowances are larger than the allowances that the members on the other side had. So bear in mind that we find ourselves in a position now where, with careful financial management, we can actually make a big difference in the lives of New Zealanders.

I want to finish my contribution around the Budget Policy Statement because this is a document that lays out our priorities for the future. It does something that I don‘t think has been done before inside a Budget document. It talks about the fact that we, as a Government, will measure our success differently in the future. We will not be satisfied simply by having GDP growth. That’s important. We need the economy to grow. We need activity in the economy. But we do not learn about the quality of that activity just from GDP numbers.

So we are going to add to that by looking at how we improve the well-being of New Zealanders in everything that we do. How do we support the environment? How do we improve outcomes on child poverty? The Prime Minister has already said in this House that there will be a piece of legislation that will be introduced very shortly that will mean that when I get up to deliver Budget 2018, I will be obliged by law to report on how we have reduced child poverty. That is exactly as it should be. It’s not just about the numbers on the page; it’s about what good we can do for people with the money that we are privileged to look after in each Budget.

So we will measure our success differently; we will measure our success by well-being. By the time we get to the 2019 Budget, I have asked Treasury to make sure that when I am presenting that Budget, I am able to present it by looking at how we’ve improved health outcomes, how we’ve improved education outcomes, how we’ve supported the environment, and how we’ve reduced child poverty.

This is world-leading work. Treasury have been doing a great job on their Living Standards Framework. I don’t think Mr Joyce has got past page 1 of the Budget Policy Statement, but if he got up to page 9, he would see an excellent table that outlines the way in which we are going to improve living standards. I’d be very surprised if he made it to page 13, but if he had, he would have found a description of the Provincial Growth Fund.

Of course, the detail of that has not been worked out yet. We’ve only been in Government for 43 days. But what is written down here is the plan for reigniting the regions of New Zealand. I want to thank the New Zealand First Party for their contribution to bringing that to the table during the coalition negotiations. When we look at the criteria in that Provincial Growth Fund, it says everything about what I want this Government to be marked out for.

The investments in that fund will be about jobs and sustainable economic development, social inclusion and participation, climate change and environmental sustainability, and resilience. That’s the kind of economy we’re going to grow, one where we are resilient, where we are adaptable, and where we’re inclusive; one where we don’t think leaving out people is right, one where we don’t think child poverty growing is actually OK in this country, but a Budget where we actually try to build a fairer and a better New Zealand, because it’s about what we do with the economy that matters. We will grow this economy sustainably, we will be responsible in how we spend money, but we’ll be ambitious for our people and our environment. We will never, ever, on this side of the House, settle for the status quo. New Zealand is a great country; it will be greater still. It will be fairer and better when we implement the policies in this policy statement.

FLETCHER TABUTEAU (NZ First): Thank you, Mr Assistant Speaker. I am proud to be standing on behalf of New Zealand First, a New Zealand First that has proudly chosen to form a coalition Government with this Labour Party, working with the Green Party, here together for the benefit of New Zealand. I stand with pride to speak to this Half Year Economic and Fiscal Update (HYEFU) on behalf of New Zealand First—this fiscal update.

Actually, let’s just slow down a bit, because I want to make this point very clearly to all of the members in this House and the public of New Zealand: New Zealand First made the right choice six weeks ago. We picked the right people, and we picked the right side of the House. We stand here as a Government for meaningful change, and what we see here in these documents—which, clearly, Mr Joyce doesn’t quite understand—is a Government that represents meaningful and sustainable change for all New Zealanders, and it is with pride that I rise on behalf of New Zealand First.

The former Minister of Finance does need some form of congratulations, and I note the actual Minister of Finance did acknowledge him for being what seemed to be a plant for the Labour Party, because this is exactly what we wanted to do this afternoon: celebrate success and stand here in front of New Zealand and show, with pride, just exactly what it is that we have been able to achieve in this short time. I say that former Minister Joyce didn’t seem to understand because this is quite an exceptional debate. This isn’t what normally happens. So whilst we are grateful to the former Minister of Finance, actually, what he needs to realise is you need to wait for the actual 2018 Budget before you can start debating those numbers and throwing the apparent lack of those numbers in our face. It doesn’t quite work that way, former Minister.

We have been given an opportunity for New Zealand, and it is in these pages that the—I actually take this opportunity, and I should’ve done this first, Minister, to congratulate the Minister of Finance on his work. It is the reflection of not only the negotiations but the hard-working Ministers who have brought this information together so that we can reflect, at this half-yearly stage, just how we intend to move forward. We’re in a 100-day phase, and the HYEFU is a kind of reflection of the legacy that we’ve been left with, but what we’ve been able to show here is how we would like to move forward.

Speaking of a legacy that we’ve been left with, it has been my privilege to take on the role in the space of regional economic development. I spent three years following regional economic development plans around the country, work from the former Government—and, I put it to this House, work that was kind of shockingly put out there in response to what was then the Northland issue, as they saw it, and their lack of presence in the regions, and that party’s apathy as far as our provinces and our regions were concerned.

I think we’re up to 13 regional economic development plans, and there was, essentially, no money attached. So I’ve had the privilege of sitting in meetings with officials and the Minister, discussing how we’re actually going to put money in these plans, because let’s be fair and give credit where credit’s due: some of the ideas that originated out of the regions are actually good ideas. And we’re not mercurial; we’re not malicious. There are some good ideas and they need to continue, and we will seek to continue them, but now we are part of a Government that actually will seed those ideas with real money, real support, and real resources.

I also have the privilege of working with the Minister of Foreign Affairs. Just by way of brief summary, can I just say that it has been a shock, and slightly disappointing, when we have spoken with officials who have kind of hinted at the decrease in budget, the decline in money—our foreign aid commitments have declined over the years—

Hon Grant Robertson: That’s actually a fiscal risk.

FLETCHER TABUTEAU: And it was identified as a fiscal risk from them, from the other side of the House. There was $148 million tagged for frigates within our navy, and yet there was no money attached—no budget. There was no forward budget for the youth justice in Oranga Tamariki. So they talked a good talk about looking after our youth and creating systems and programmes to look after them, but you look at the Budget

Hon Tracey Martin: There’s no money.

FLETCHER TABUTEAU: —there’s no money. There’s just no money. Thirty-eight million dollars missing in addressing the teacher shortage, especially in Auckland—they spoke about it, they made an announcement to New Zealand about addressing the teacher shortage, and there’s no money.

Brett Hudson: There’s nothing in your BPS.

FLETCHER TABUTEAU: No money, Mr Hudson. And yet they come up with a flag referendum that nobody particularly wanted,

Hon Member: $28 million.

FLETCHER TABUTEAU: —and that was a resounding response from the New Zealand public. What was that—$28 million, I think; $28 million. We had a showcase Middle East sheep farm—sheep farm in the Middle East. Jeez! So millions of dollars sunk into there, and then business after business being offered money with no return to the Government. I’m not here to attack private business, so I’ll skip over some of the notes I made in preparation.

Mr Joyce spoke about how we’re now in the good times, and, actually, New Zealanders do think we are now in the good times. We are here now as a Government that will be working hard towards that. He spoke about how we needed to—he kept talking about lowering tax. I’m not sure why he keeps talking about lowering tax, but what we’re trying to do is tell New Zealanders that everyone needs to be able to share in the good times, not a few people. So when Mr Joyce talks about the good times, what were the good times for people who couldn’t afford a House—

Brett Hudson: We’re talking about the 1.2 million Kiwis who are going to be worse off now.

FLETCHER TABUTEAU: —who were living on the streets, Mr Hudson, who were living in their cars and under blimmin cardboard. Don’t give me that. There were lines for the lines into our hospitals. That is the surplus—the supposed surplus that that party was extolling—that we are addressing here in this HYEFU.

This Government is today announcing all this work around the Families Package. We have a Prime Minister who has decided that she will be representative of the children of New Zealand as the reflection back to us about how well we are doing our jobs. We are willing and able to discuss youth suicide and the poverty in our families that they are struggling with every single day. I became a member of Parliament because of increasing levels of inequality within New Zealand, and it is this coalition Government that recognises that GDP as a measure of success in and of itself is like Mr Joyce looking in the mirror and saying everything’s fine. Mr Joyce, everything is not fine. You need to look beyond that mirror.

We are a party and we are a Government that is proud to be presenting a Provincial Growth Fund that represents a billion dollars per annum into the heartland of New Zealand. In fact, Mr Joyce, we did talk about that—we did talk about that. We laid down the guidelines that we’re hoping to work towards, that Cabinet will be addressing very shortly, that the Budget—the Budget, the actual Budget—will be addressing in terms of numbers.

I am proud to be a member of this New Zealand First - Labour Government, in support with the Greens. We will be working for New Zealanders, and, actually, unemployment’s going down, growth’s going up, GDP per capita is increasing, and we will look to other measures to measure that success. Thank you, Mr Speaker.

Hon AMY ADAMS (National—Selwyn): Thank you, Mr Speaker. I can tell you very simply, and tell this House very simply, why it is that this side of the House wanted an urgent debate on this Half Year Economic and Fiscal Update (HYEFU), and that’s because, for the last few weeks now, we’ve had this big build-up that this was going to be the big reveal when the new Government laid it all bare, showed us the plan, showed us the costings, told us how it was all going to work; it was going to be the mini-Budget, in which all would be revealed. We can see that, because they’ve created this whole dog and pony show about today. Not just the traditional briefing over at Treasury—oh no. This Minister of Finance had to move it all to the Banquet Hall and have the full three-hour lock-up because this was going to be the big centrepiece of this new Government’s programme. They were so desperate to show some sort of fiscal credibility that they tried to build this into a serious attempt to set up their costings.

We heard this afternoon, earlier, from Steven Joyce about the Public Finance Act responsibilities that require Governments to properly include the costs of commitments they have made. So when Governments commit to making a change, it is incumbent upon them to understand the cost. In fact, when we were in Government, in the Cabinet that I was a part of it was incumbent upon Ministers to know the costs long before they took things to Cabinet, not at some point in the months following an announcement to the public. But, none the less, the Public Finance Act requires Governments to make sure that when a commitment has been publicly made, that those costs are included in the fiscal plan.

We awaited this Half Year Economic and Fiscal Update with some anticipation. Finally, we were going to see some of the numbers around the programmes that the Government had been talking about. In fact, all they’ve done is included just enough in this document to cover off the first 100 days and make sure that the numbers just about make sense—that’s it. That is it. There is very, very little information in this at all, and yet Grant Robertson is happy to stand up and crow about how prudent he’s being, because, “Look, the numbers add up.”

The story of this document is what isn’t in here. You have a long, long portion of the document—and I can assure Mr Robertson we certainly have read into it, and for his reference it’s pages 63 to 97; 34 pages—that sets out unfunded, uncosted fiscal cost pressures and policy risks that this Government hasn’t yet worked into the numbers. Every number in this document—this hefty tome that’s come out today—covers only a very small part of their 100-day plan. It leaves out 34 pages’ worth of real fiscal cost pressures, real policy pressures, and none of that, yet, is costed.

Former Minister Steven Joyce talked a little bit in his contribution about some of those. He talked about the billion dollar regional economic development plan—not here. He talked about the 1,800 extra police, which has been announced—not here. He talked about conservation and the like.

Some of the ones he didn’t highlight, which I want to turn to, are commitments that this Government has made to the public; formal commitments they’ve made that remain uncosted, unfunded, and untransparent. The gender pay gap is a great one, and the living wage. So I have taken the opportunity to say to the Minister, “Well, OK, you’ve made a commitment to remove the gender pay gap in the core Public Service and to ensure that everyone in it is paid a living wage.” That is a commitment that this Government has made. So I, of course, looked to this document to see, with interest, what it would cost. When I asked the Minister what the expected cost of those was, the response that I received was, “Well, we’re just starting a piece of work to figure that out.”

So here is the story of this Government: make an announcement with absolutely no idea what it’s going to cost to implement and then put out a fiscal plan that is absolutely silent on the cost of any of that. Fundamentally, we are being told by this Government that they will tell us the cost of things after they’ve done them—after they’ve done them. It is an appalling way to manage Government and to manage the public purse. This is a Government that is full of all of the sound bites in the world, but doesn’t understand how they’re going to pay for it or even what it will cost. Now, how the public of New Zealand can be expected to have any confidence in any fiscal update that leaves 34 pages’ worth of announced commitments completely uncosted and unfactored-in is quite beyond me.

This afternoon in question time, the Deputy Prime Minister himself acknowledged that the HYEFU is, fundamentally, a reflection of the state of the economy that the new Government inherited—and I agree with him. I agree with the Rt Hon Winston Peters. This document, one of the things that it absolutely does do is reflect, very clearly, what the economy was that this Government inherited. What it shows us—and even Mr Robertson has been forced to grudgingly and somewhat mean-spiritedly but none the less acknowledge—that he was left with a strong, growing economy where incomes have been rising faster than the rate of inflation, where 10,000 extra jobs have been created, and where the National-led Government—every month, every month on average for two years—got us through some of the toughest fiscal conditions in the global financial crisis and the earthquakes.

The reason that New Zealand needs to have low debt levels is because when those sorts of shocks hit, we have to be able to respond. We were in a position—and I acknowledge that we inherited a low debt level and that has been critical to New Zealand’s ability to survive those shocks. If I go back to my farming roots—every good farmer knows that when the sun’s shining you put hay in the barns for the bad times. That’s what this debt picture is all about. It’s not some esoteric economic accountants’ argument. When the times are good, you put the feed in the barn to feed out when times are rough. These are New Zealand’s good times—this is New Zealand’s sunny season, our harvest time, where we need to be getting our economic ship in order so that when the next shock comes we’re in a position to respond to it.

Instead, we’ve got a Government—and I was going to say, you know, generously, sort of two months in. In fact, as the Minister of Finance noted, we’ve got 43 days in—43 days in, and they’ve blown the lot. They have blown the lot. We left a strong economy with strong surpluses and a growing economy, and already it’s gone. What this HYEFU shows us, in terms of the Government’s plan, in just in what they’ve done already—in 43-odd days—they have blown the lot. They had one idea for how they were going to generate revenue, and that was to cancel the tax package; cancel New Zealanders getting a thousand dollars of their own money back to keep, to spend it. That was it. And, OK, we disagree, we think it’s a terrible idea, and we’ll have that debate over the course of the next few days. But, legitimately, a new Government gets to take that approach. But that’s it. That is all they wrote for how they will fund their commitments, and that, as of today, is gone. It’s gone on their baby bonus and their untargeted fully funded gap year for students while they figure out what to do next.

What’s really interesting is you’ve had both the Minister of Finance and the New Zealand First Party getting up and talking about the children and housing and health and education, and yet none of that is funded—none of it is funded. They have spent all of the surpluses we left them. They have spent all of the money created from the one idea that they had for generating income for them—which we oppose; but that was their one idea—and they haven’t spent a single cent in those areas that they claim to care so much about. That’s not in the first 100 days.

If this is a Government that’s going to be all about putting money back into health and education and transport and more police on the beat—if they really cared about that stuff, why isn’t it the 100-day plan, and why have they left no money for it?

Now, Mr Robertson, in his contribution, said, “Well, that’s all right, because we’ve got our out-year operating allowances in the Budget to provide for that.” But let’s be really clear. The operating allowances are only sufficient to cover the regional development fund. Take that out and there is not a cent; not a cent for the pay rises, not a cent for the 10 or 15 percent increase in pay that the social workers at Oranga Tamariki are going to be looking for, not a cent to pay for the extra police, not a cent to pay for the transport commitments.

So, again, even after we’ve had the big reveal—even after Labour has had their three-hour lock-up and big dog and pony show—New Zealand is still none the wiser about how they’re going to pay for a single one of their promises that wasn’t in the 100-day plan or how much it’s going to cost. And what we’ve found out today is that the Government doesn’t know. The Government has got no idea what it’s going to cost to pay for what they’ve promised New Zealand or how they’re going to pay for it, but already we know from the history of the difference in the blowout between their pre-election fiscal numbers and this that they can’t be trusted to have any idea of what it will cost, where the money will come from, or how they’re going to do it. New Zealand should be very worried.

Hon JAMES SHAW (Leader—Green): Thank you, Mr Assistant Speaker. I’ve been quite enjoying this debate, particularly with the Hon Steven Joyce’s opening kind of volley, I guess, when he was suggesting that the central complaint about this Half Year Economic and Fiscal Update (HYEFU) is that he doesn’t know what’s in the Budget. I was just sort of reflecting on the time that I spent in Opposition—three Budgets—watching Mr Joyce and Mr English say, in the week leading up to Budget day, to the then spokesperson on finance for the Labour Party, “Well, Mr Robertson, there’s only three more sleeps to go.” or “There’s only two more sleeps to go before we reveal what’s in the Budget.” Well, Mr Joyce, I’ve got some news: there are only 183 more sleeps to go before we tell you what’s in the Budget—only 183—and if you want to ask the question every single day, I’m quite happy to count down how many sleeps there are until we tell you what’s in the Budget. That seemed to be the central complaint that Mr Joyce had in his opening statement—that is, that he doesn’t yet know what is in Budget 2018. And I note that it isn’t even 2018 yet, but there are only a few sleeps to go before that starts.

The other complaint that Mr Joyce seems to have is about the nature of what’s termed the fiscal risks that are outlined in this document, which are the things we are flagging that we say we are committed to in next year’s Budget, right. In next year’s Budget—not in this document; not in this major mini-Budget, but in next year’s actual Budget.

I just want to reflect on the use of that word “risk”, because one of the things that he is saying is a major risk to this country is the idea that women will get paid as much as men for the same work. That’s a massive risk, which he has a huge complaint about—the idea that we’re actually going to—finally, after decades—close the gender pay gap in this country. What a huge risk that is that we need to take care of!

There also seems to be a massive risk that we are actually going to build, in this country, infrastructure that is resilient and adaptable to climate change; that we are going to deal with the huge shortfall, particularly when it comes to three waters and public transport and all of those things that we are currently exposed to as actual risks because we haven’t invested in those things in recent years; and that there is a massive risk, somehow, that we’re actually going to close that massive, multibillion-dollar infrastructure gap in this country.

There seems to be an enormous risk that people will get paid the living wage! How about that? That’s a huge risk, especially if you’re currently on the minimum wage. There is a massive risk that you will actually suddenly be getting paid enough to live on in this country! It seems to be a huge complaint of Mr Joyce: that there is a massive risk that people will actually get paid enough to live on, which might mean that they are able to move out of their cars and into some houses. What a risk that would be to this country if we actually did that! So those are the complaints that Mr Joyce has about next year’s Budget, which he hasn’t seen, and there are only 183 sleeps to go.

He also has a complaint about the fact that the tax cuts that he legislated for in last year’s Budget are going to disappear, and the thing about this major mini-Budget that Mr Robertson is presenting here is that there will be 83,000 kids lifted out of poverty over the course of the next couple of years as a result of the Families Package that is being introduced later today.

So you’ve got a choice, Mr Joyce: either you can lift 83,000 kids out of poverty or you can have your tax cut, right. Do you really want to do that? It’s like, no, actually, Mr Joyce would rather pocket his tax cut than lift 83,000 children out of poverty. Here’s a question: do you want to invest in the kind of infrastructure that this country needs in order to cope with climate change or with the risk of rising seas, or with the fact that we’ve got a creaking water infrastructure that, in some parts of the country, is at great risk of making thousands of people sick, or do you want to cut debt two years earlier than we are planning to? Twenty-four months—all that takes is 24 months—and we’re able to invest billions of dollars in this country’s economy.

There is a good question here about debt, which was raised by Amy Adams in her contribution earlier. It was about maintaining low levels of debt in order to be able to borrow or leverage up when another crisis hits, and we know that other crises will hit. It is a good question: what is a prudent level of debt? I have to say that this Government is committed to paying down debt to precisely the same level that the last National Government was prepared to pay it down to—20 percent of GDP—but only two years later.

There are two views of debt. There are two completely valid views of debt. One is, as Amy Adams pointed out, that you get it as low as possible as soon as possible so that when a crisis hits, you can borrow up to deal with the crisis. That’s one view of debt. The other view of debt is, of course, that at a time of historically low interest rates, when you’ve got a massive infrastructure deficit, why wouldn’t you borrow to invest in the future? So you borrow to invest in the future. That is what businesses do all the time. It’s actually what families do when they get mortgages to buy houses. They’re borrowing to invest in the future.

So you’ve got those two views, and where we came down was we said, “Yeah, 20 percent seems like a pretty reasonable number.” Compared to the rest of the OECD, it’s actually incredibly low—20 percent of GDP is incredibly low. What that allows us to do, if there is another crisis, is be able to borrow to fend off the crisis, but also we actually do want to invest in our future, because the last Government sucked so much money out of the economy in order to hit these magical numbers of theirs that, actually, they’ve left us with a multibillion-dollar infrastructure deficit in water, in housing, in schools, in hospitals, and in transport in particular, and especially in Auckland. If you look at the infrastructure deficit that we’ve got to pay for, I think we’ve got it absolutely right there.

I wanted to reference, in the time that’s available to me, some of the other good news about this. Obviously, one of the things that everyone kind of obsesses about is gross domestic product, and, in Opposition, one of my criticisms of the then National Government was that the GDP growth rate does not tell you how good things actually are. It doesn’t tell you anything about how good things are. You can have an earthquake that actually drives up GDP. If someone breaks a window and replaces it, that adds to GDP. GDP is only an economic measure of activity; it doesn’t tell you if that’s good activity or bad activity. Crime adds to GDP. Building prisons adds to GDP. Building warships adds to GDP. But that does not tell you anything about the people who are living in cars and garages or about the kids who have got respiratory illnesses and hospitalisations, and all of that kind of thing.

So one of the things I am delighted about in this HYEFU here is the commitment to measuring our success more holistically and more sustainably so that we have a much greater range of information about the nature of what actually makes a country well and what our measures of success are, and the idea that, as part of the Budget process, the Minister of Finance will be responsible for reporting on genuine measures of progress in this country, not just a number that tells you virtually anything. And while we’re at it, there is a number in this HYEFU that I’d like to talk about briefly, and that is GDP per capita.

Under the last National Government, GDP was growing, but GDP per capita was not. In other words, people were actually going backwards in this country while the economy was growing—right—because our GDP per capita was falling. Under this HYEFU, what it shows is that that gap is narrowing. It will narrow under this Government. Our GDP per capita will increase and the gap between GDP growth and GDP per capita growth will narrow at last. That means that, while there is an economic adjustment that we are going through, at the end of it, we will have a more productive, higher-wage economy than that which was presided over by the National Government previously. I think if there is one reflection for why they ended up on the Opposition benches, it would be that.

So I’m very delighted with the Budget statement. I’m proud that we are a part of it. I’m glad that we were given the opportunity to debate it, and I’m looking forward to the legislation that accompanies it shortly. Thank you, Madam Assistant Speaker.

Rt Hon DAVID CARTER (National): Thank you, Madam Assistant Speaker. I just want to take a couple of minutes in my contribution to explain the reason that we have the release of the Budget Policy Statement and the Half Year Economic and Fiscal Update at this time of year, for the benefit particularly of the member who has just resumed his seat, the Hon James Shaw, leader of the Green Party. Mr Shaw spent a lot of his time talking about policies that are proposed by the Government, the merits or otherwise of the policy, and that’s a debate for another day. The reason we have these documents presented to Parliament today is the result of two important pieces of legislation: the Fiscal Responsibility Act—I think, of 1994—and the Public Finance Act.

Both of those pieces of legislation came about as a result of the Labour Government of 1984-90, when, at that time, the incoming National Government found that the books had, effectively, been cooked and that an incoming Government could not rely on the financial information that was entered to it—totally unfair for any Government to come into that situation. Consequently, over time, we’ve developed a very transparent position whereby Governments have to outline the true financial position of a country prior to an election, so that an incoming Government can appropriately cost its policies and work out what it can promise in an election campaign with some transparency and some accountability to the voters of New Zealand. So that is the purpose of these two documents that we are debating today.

I’ve got to say, looking particularly at the Half Year Economic and Fiscal Update, that on this occasion I don’t think I’ve ever seen one presented to this Parliament in the time that I’ve been here that is so empty of information and outlying risks, and I’ll go through some of those risks in a minute. But I just want to say that I feel very sorry for the Secretary to the Treasury having to put his signature to the first few pages of this document and then to have to outline the financial risks that exist throughout the document simply because policy hasn’t been adequately costed at this stage. I note that Mr Robertson had no hesitation putting his signature on the same page as the Secretary to the Treasury. But I suspect the comfort zone of the Secretary to the Treasury was not the same as the comfort zone of the Hon Grant Robertson.

What we see in these documents presented to Parliament today is that we have a typical Labour Government—now associated with the Greens and, of course, with “Mr 7 Percent” New Zealand First. It’s a high-tax, high-spend Government. That is what every Labour Government has been in the time that I’ve been watching politics. It’s a high-tax, high-spend Government. And if you look particularly at the tax revenue—

Hon Tracey Martin: Not the Lange Government. Not the Lange Government. The Lange Government wasn’t high-tax, high-spend. They stripped the—

Rt Hon DAVID CARTER: Well, let me just explain to the Hon Tracey Martin what I mean by “high-tax Government”. If you look at the tax revenue here, Crown tax revenue grows, under these documents, by $22.2 billion—that is a 30 percent increase in Crown tax revenue over the next five years. Now, a 30 percent increase in five years is a high-tax Government, and it is then noted, in my expression of a high-spend Government, that one has to look at the debt figures. Again, debt grows. Now, Mr Robertson comes in and only wants to talk about debt as a percentage of GDP, and I know that when we were previously in Government, we were quite keen on that same statistic. But when you look at the actual figures, debt grows from $59.5 billion to $66.8 billion by 2022. That is a substantial increase in debt.

Now, you can argue that it should only be expressed not in absolute figures but as a percentage of GDP, but if you accept that argument, why don’t you do the same with health expenditure? When you look at page 36 of the Half Year Economic and Fiscal Update forecasts, health expenditure, under the former Government, went up by a huge amount—a huge amount—106.1 percent increase in the dollar spend on health expenditure, which this Government now criticises, but as a percentage of GDP, it goes down with this Government from 5.9 percent now to 5.0 percent.

So the point I’m making is that anybody who wants to examine these figures and take out the facts that suit them can do so. Mr Robertson has attempted to do that today by arguing that debt should only be talked about as a percentage of GDP and not in absolute terms. I suggest that if he wants to adopt that attitude, he have a look at his own figures here in this and the way the last Government should be congratulated for the huge increase—huge increase—in health expenditure. This Government, despite making it a so-called priority through the election campaign, will actually cut the expenditure on health in percentage of GDP terms, and I think the public need to know that.

I want to now talk about policy change risk by portfolio, because this must’ve been a huge concern as this Secretary to the Treasury picked up his pen to sign those pages, knowing that he had written such comments as this: “ACC Impacts of Changes to Accident Compensation … Each such area could generate options with fiscal impacts in excess of $10 million to cash claims per year or to the Outstanding Claims Liability. The combined effect of the policies identified could … exceed $100 million per year.”

Hon Tracey Martin: Could.

Rt Hon DAVID CARTER: And the Hon Tracey Martin yells out “Could.” That’s right. It’s the very point I’m making. We have got no accuracy in this document at all. Listen to this one, Tracey Martin, “Broadcasting”—

Hon Tracey Martin: Honourable—honourable.

Rt Hon DAVID CARTER: Well, yes, the Hon Tracey Martin. I’ll give her that. She won; we lost, and we’re sucking it up. But it doesn’t change what’s in here: “Broadcasting, Communications and Digital Media … The Government has committed to transform Radio New Zealand into a multi-platform provider dedicated to quality New Zealand programming”—etc.—“The total costs … are still being finalised.”

“Conservation … The Government has committed to significantly increase the Department of Conservation’s funding. The exact quantum of such an increase is yet to be determined. Any significant increases in funding may have an impact on the operating balance and net core Crown debt.” That is symptomatic of this Government. It went to the election campaign ill-prepared for a campaign, certainly ill-prepared to be the Government, made promises liberally right around the country, has had 40-odd days to price them and come in here with a Half Year Economic and Fiscal Update 2017 with some real credibility, and it has failed at the first test.

The other thing that I noted: why are we doing it today? Would it possibly be because the press gallery is having its function tonight and the journalists won’t be bothered to exam this? And then we’re going into urgency for legislation to come in to effect on 1 July next year. Why the urgency? And then we hear in the Business Statement today, despite the fact they’ve said we’ll sit till Thursday next week, they’re pulling the plug on Wednesday—one less day for examination.

This is a Government that’s not prepared to let us examine its fiscal position at all. They’re about curtailing debate in this Parliament because they know full well they’ve made a mess of this document. They’ve sat around now for 43 days and have dealt with only legislation advanced by the former National Government—legislation they criticised when they were on this side of House, and now they’ve spent the last four or five weeks passing it. As soon as we get on to their policy—their legislation—we’ll do it in urgency to avoid scrutiny. We’ll do it on the night of the press gallery party so that the journalists won’t give it the scrutiny, and then we’ll get out of Parliament a day earlier because they don’t want scrutiny.

Well, I say to the Hon Tracey Martin: look out; this argument won’t go away. We’ll be back early next year vigorously enthused to hold this Government to account. It’s got only, at a maximum, three long years and then it’s all goodbye to the Hon Tracey Martin.

The ASSISTANT SPEAKER (Poto Williams): I call Michael Wood—you have five minutes.

MICHAEL WOOD (Labour—Mt Roskill): I want to commence my remarks with a couple of sets of congratulations in the spirit of generosity that pervades the Government benches on this very positive day for New Zealand. The first congratulations are to the Minister of Finance for delivering a set of figures and for delivering a vision for our economy and society that balances fiscal responsibility with a willingness to invest in the people and the infrastructure of New Zealand to make this a better and a fairer country.

I also want to congratulate, actually, the previous speaker, David Carter, for giving the best Opposition speech of this debate so far. I would go so far as to suggest that he is a good Opposition member who actually engaged in the facts and actually engaged in the Budget Policy Statement (BPS) and the Half Year Economic and Fiscal Update, unlike Steven Joyce, who led off the Opposition’s contribution.

I might say, there was a pretty extraordinary omission from Steven Joyce’s comments in this urgent debate, which I do believe he called. For about three or four months up until the election, we heard an awful lot about an $11.5 billion fiscal hole. Every single day: “the Labour Party is going to deliver an $11 billion fiscal hole”—bang, bang, bang, through every single medium. Did we hear anything about the fiscal hole today when the Government presented its accounts? Did we hear anything about it from Steven Joyce? Somehow that has dropped from view.

The reason that it has dropped from view is that when the facts get put on the table it is absolutely clear that this is a Government that is acting within the fiscal responsibility rules that it set down. This is a Government that is delivering growth of over 3 percent every single year. This is a Government that is going to do what that former Government could not do in its nine years in office and get unemployment down below 4 percent. This is a Government that is going to get net Crown debt down below 20 percent. And I do have to just reflect on one of the comments from the previous speaker, who said that this Government will be achieving those things under a high-tax regime. Well, that’s interesting, of course, because the tax rates that this Government is confirming through this process are exactly the same tax rates that we had under the previous Government.

This is a Government that is going to invest in people and infrastructure, and what this Budget Policy Statement identifies are the very different priorities of the new Labour-led Government. I want to acknowledge there our coalition partner, New Zealand First, and support partners in the Greens, who share a common vision of investing in people and infrastructure.

Let’s compare those. Over the next five years, what do we see in the BPS? We see that whereas the National Government was going to throw away $8.3 billion in tax cuts, a huge proportion of which went to the already well off, this new Government will invest $5.5 billion in the families of New Zealand—$5.5 billion that will go towards making sure that our old folks aren’t shivering through the winter, through a winter payment; $5.5 billion that’ll go towards make sure that every single child gets a best possible start in life, because we will not tolerate the stain of child poverty in our country for one year longer.

I’ve yet to hear a member from the Opposition benches say anything meaningful about the fact that this Government’s package will pull 89,000 of our precious tamariki out of poverty—89,000 children out of poverty. That’s the kids in my electorate who are living in cars, who are living in shabby run-down hotel units that that previous Government spent $150,000 a day putting people up in because there is simply no decent and affordable housing for them. So this Government, instead of that $8.3 billion on tax cuts, is going to put $2 billion into KiwiBuild, because we fundamentally believe that every single Kiwi family deserves a decent, healthy, and affordable house to live in, and that is what we are showing through this Budget Policy Statement.

Do you know what else? This is a Government that is about the future; not just about today, not just about the political moment. So I am very proud to be able to round off my statements by affirming that this Government, over that five-year period, is going to invest $3.3 billion into the New Zealand Superannuation Fund—something that that former Government did not lift a finger towards in its nine years in Government.

Brett Hudson: That’s only speculation, Michael.

MICHAEL WOOD: “It’s speculation”, says Mr Hudson. I call it maths, sir—I call it maths. I call it investing in the future, and when you look at the figures, we know that that’s going to be an investment that makes sure that the children of today can have superannuation in the future.

I’m extraordinarily proud of this Budget Policy Statement. It’s about a Government that is managing the books well and investing in our people and our infrastructure, and I thank the Opposition for the debate about.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Assistant Speaker. Relentless positivity: that’s the catch cry of the people on the other side of the House, and the last speaker, Michael Wood, got up and said that this was a very positive day for New Zealand. Well, actually, it’s not a very positive day for New Zealand, because if you look at all the confidence surveys that have been coming out over recent times, the confidence level of New Zealand is going down, down, down. The reason is that this Government is dreaming. This document is a wish list. Every time they’re asked how they’re going to do something, they come up completely lacking. This document today has completely added to that doubt.

Grant Robertson talked before, when he got up to speak, about it being not just about the numbers on the page—“It’s about what we can do for people.” Well, guess what? What you can do for people depends on how well you can develop this plan, and the way we read this document is that this plan is not very well developed at all. We can go through 28 points where there are risks. I mean, it was mentioned before about conservation—significantly increasing the Department of Conservation funding—but the exact quantum of this money is as of yet unknown.

Then we look at the Healthy Homes Guarantee Act. Now, I know that up until this point this Government has largely been doing the previous National Government’s legislation, but this one here was actually the Healthy Homes Guarantee Bill (No 2). It was a member’s bill of one of their members, and even when you read around this today, it talks about up to $2,000 per dwelling to pay for up to 50 percent of the cost of insulation upgrades, double glazing, etc., to meet the building code, and yet further work’s going to be required to determine the scope of the policy. So even on bills that were currently before the House that have now made up part of this current Government’s focus—

Brett Hudson: The missing billions.

BARBARA KURIGER: Yeah. So, again, it’s going to depend on what this Government decides it can finally afford when it actually gets its total numbers together. There is no plan here.

Then, again, we talk about 1,800 new police officers. It talks in here about the extent that this is not able to be funded within baselines—that new funding will be required. And guess what? It depends on the focus on community prevention. It depends on a greater use of alternative resolution and a reduction in remand prisoners. It all depends. Everything depends.

Then we go to this Regional Development (Provincial Growth) Fund. Now, this one intrigues me because we keep talking about the billion-dollar growth fund. Well, it keeps remaining a billion-dollar question—very similar to the trees—because the scope of such a fund has not yet been designed. So it talks about “small-scale”, “mid-scale”, “large-scale”, “large infrastructure investments”—I’ve got communities out there, all over the place, asking, “How’s this going to work? How do we apply? What are we going to get?” Oh, sorry, the scope has not yet been developed. There’s a fund there, but I have got no idea as yet, because the Government has not yet told us how you are going to be able to apply for it. So then, again, it’s another wish list, another dream, something that’s extremely poorly thought-out.

Then the Government has committed to increased funding for primary care services, and that’s really important out in our regions because we can’t all live next to a big hospital. So they’re going to increase the funding. This document talks about funding extra places to train GPs and it talks about free health checks, but the implementation details and funding arrangements for all of these commitments are still yet to be finalised.

Everything we read, as we go through this document—all of these risks—exactly lines up with all of the questions we’ve been asking for the last—how many was it, Grant Robertson? Forty-three days? We are still asking questions, and, obviously, the answers are going to be very slow.

So all of the promises this Government has made depend on its ability to do the maths, make the plans, and fund the proposals and the dreams that are on its wish list. It depends. Thank you.

Hon CARMEL SEPULONI (Minister for Social Development): I just want to start by saying happy birthday to Willow-Jean Prime. We’re not singing it, because that would take up too much time from my speech, and I’ve got too many important things to say here today.

I just really want to start, because I have been part of this process with the Families Package, by acknowledging our finance Minister, who has done a fantastic job. So Grant Robertson, our finance Minister, can I just acknowledge you for the work that you’ve done on this. It’s fantastic to have a finance Minister who is focused on the well-being of New Zealanders and on making that a priority. It’s great to have a finance Minister that understands the economic benefits of New Zealanders being well. That’s what we’ve been lacking for the last nine years, so I do want to acknowledge Grant.

I also want to acknowledge the rest of the team, because working alongside Grant have been myself, Minister Tracey Martin, Minister Stuart Nash, and Minister Phil Twyford. We have been supported by some very able officials from the different relevant Government departments, and I want to acknowledge the work that they have put into this.

Unlike what the previous speaker said—that speaker being Barbara Kuriger—I’m going to disagree with her. She said that today is not a positive day for New Zealand. Well, actually, it is a very positive day for New Zealand—

Mr SPEAKER: Order! I will ask the member to address the member—I accept that it’s a misunderstanding as to the member’s name, rather than deliberate. It’s “Kurijer”.

Hon CARMEL SEPULONI: “Kurijer”? Apologies, Barbara.

Brett Hudson: It’s Kuriger. Hard “g”—Kuriger.

Mr SPEAKER: Kuriger? Well, I apologise if I got it wrong as well, but I think the member was worse, which is a pretty—

Hon CARMEL SEPULONI: Thank you, Mr Speaker. Can I just say that it is a very positive day for New Zealand, and I want to point out a number of reasons why.

Today, we have announced our Families Package. It is a transformational families package, and one of the biggest, most positive aspects of this Families Package is that 88,000 children will be lifted out of poverty. How can the Opposition say that that is not positive? I guess, after nine years, with the fact that they did nothing—nothing—to actually address the issue of child poverty in this country, they are in a position now where they’re looking across the Chamber with envy that now we have a Government, and it’s not them, who is actually capable of doing something to address that.

I want to say that it is also positive that we’re going to have 384,000 families in this country better off. These are 384,000 families with children better off in this country by an average of $75 a week. How can that member say that that is not positive? We have had families on Struggle Street coming to us over the last nine years, increasingly with issues around housing and with issues around food security. We live in a First World nation, and yet we have people living in our country with issues around food security. Now we are putting more money into those families’ pockets, and that side of the House says that that is not a positive thing to do.

I want to touch on some of the changes that we’re making and introducing and to talk about the positive aspects to those. And I want to start with the Best Start tax credit. This is an evidence-based policy. We didn’t pull this out of thin air. Those first three years of life are crucial, and making an investment into one- to three-year-olds is essential for us if we want to make sure that, moving forward, we have a positive future as a country. So, today, we’ve introduced the fact that we will be giving an additional $60 per week to families—to every family—in this country that have a zero- to one-year-old. How is that not positive? Then, after that, we will make it more targeted for the two- to three-year-olds. That supports low to middle income families, and that supports those one- to three-year-olds, whom we should be investing in for the future of this country.

Working for Families—we’ve made crucial changes. We’ve lifted the abatement threshold. Before, you could earn only, I think it was, 37,000 and something or other before it started to be abated. Now families are going to be able to earn $42,700 before that threshold kicks in. That’s positive. We’re opening up Working for Families to more people. When, in question time, I was asked how what we’re doing will make things more sustainable for work for New Zealand families, it’s because, actually, when you take into consideration the cost of childcare when you’re working and the cost of transport when you’re working, supporting families to be able to work is actually a really positive starting point. They want to care for their children. They want to work. We as a Government need to support them to do that, and that’s exactly what we will be doing.

Some of the other changes we’ve mentioned are the winter energy payment. People have questioned—well, that side of the House is questioning—why we would do that. Why would we not do that when we have something like, I think Minister Martin was telling me, 9,500 senior citizens admitted with pneumonia or bronchitis every year? Actually, that was just in the last year. So why would we not want to help them heat their homes?

Brett Hudson: You took away their increase.

Hon CARMEL SEPULONI: Why would we not want to help them heat their homes, Brett Hudson?

Can I also say that we’ve talked about the fact that there will be a million households that benefit from this, but I need to also point out the fact that there will be 184,000 children who live in households that will be receiving the winter energy payment. That is positive. It is positive that we are going to have heated homes and be less likely to have senior citizens and our children admitted into hospital over those winter months for respiratory problems, because they are warm. How is that not positive?

Can I also point out the accommodation supplement changes that have been implemented, and I do need to acknowledge that they’re the same changes that the National Government were also going to implement. It is just unfortunate that we’ve had to make these changes because of the housing crisis. They are one way—it is not the most desirable way, but it is one way—in which to support New Zealanders with the high cost of housing that they’re experiencing after having been under the watch of the National Government for the last nine years, who did nothing to address the housing crisis. Hence why we are in this position.

I’m not going to continue on, because I think I’ve made my point, along with my colleagues, but I do want to say that today is a very, very positive day for New Zealand. The Families Package is incredibly significant and will make a huge difference to thousands of New Zealand families and will lift—again, I have to say this—88,000 children out of poverty. And I, for one, and, I’m sure, everybody else on this side of the House—that side of the House should be—are very proud of what we have in front of us today.

The debate having concluded, the motion lapsed.

Urgency

Urgency

Hon CHRIS HIPKINS (Leader of the House): I move, That urgency be accorded the passing through all stages of the Families Package (Income Tax and Benefits) Bill.

This is a piece of legislation that delivers central elements of the Government’s 100-day plan as announced in the Speech from the Throne. In addition to reversing the former Government’s tax package from Budget 2017, which was itself passed under urgency, it introduces a Best Start payment and a winter energy payment, boosts Working for Families, and makes other changes that will benefit a wide range of New Zealanders, particularly those on low and middle incomes.

Different elements of the package come into effect on 1 April and 1 July 2018. We have been advised that the Ministry of Social Development and the Inland Revenue Department do need to build and test systems and processes necessary for the delivery of the package, and that is one of the reasons why urgency is required. Passing the bill through urgency also provides certainty for payroll providers, who will have to rearrange their systems to accommodate the tax changes. It will also ensure that families have certainty in knowing what they will receive and be entitled to. The Government has been advised that any delay in enacting the package would make the delivery of the new systems and processes necessary to give effect to it very difficult and potentially put those at risk. That is the reason why urgency is required.

Mr SPEAKER: The question is that the motion be agreed to. Those of that opinion will say Aye, to the contrary No—[Interruption] Well, you know about the voice and the vote, don’t you, Mr Brownlee? A party vote is called for. The Clerk will conduct a party vote.

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

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56

Motion agreed to.

Bills

Families Package (Income Tax and Benefits) Bill

First Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Families Package (Income Tax and Benefits) Bill be now read a first time.

This is a transformational package. It will transform the lives of low and middle income New Zealanders, especially those with children. It will lift 88,000 children out of poverty when it is fully implemented. That will nearly halve child poverty when that happens. In short, this piece of legislation will make New Zealand a better, kinder, and fairer place. This package represents the shared desire of the three parties that make up this Government to not be satisfied with the status quo. We have different priorities from the previous Government. We want all New Zealanders to share in prosperity. We want all Kiwi families to have the means to provide for their children and to live in warm, dry, and safe homes. We see an opportunity to better support families, especially those on low and middle incomes, to ensure that their children get the best start in life, and I want to thank the New Zealand First Party and the Green Party of Aotearoa New Zealand for joining us in transforming New Zealand society in this way.

This coalition Government’s families package will do these things by boosting the incomes of low and middle income families through extending Working for Families; introducing a Best Start payment to help families with supporting a child’s early years; introducing a winter energy payment for our superannuitants and low-income families; introducing 26 weeks of paid parental leave by 2020, which has already been passed into law; reinstating the independent earner tax credit; implementing the accommodation supplement and accommodation benefit increases announced in Budget 2017; and, finally, to pay for it all, repealing the tax cuts announced in Budget 2017.

The Government can confidently fund these important measures by scrapping the previous Government’s tax cuts. Those tax cuts were an untargeted and irresponsible election stunt. In the face of growing inequality, a housing crisis, and a health and education system under stress, the previous Government prioritised delivering $440 million a year to the top 10 percent of earners. Rather than cutting taxes for high-income earners, this Government wants to focus our support on families at the time of life when they need it most. Accordingly, this bill repeals the changes that the previous Government made to increase two tax thresholds, instead keeping the tax thresholds at their current rates. It is important to note that the changes proposed by the previous Government have not yet come into effect. No one will be paying more personal income tax than they do now as a result of this legislation.

In the recently completed election, New Zealanders were clear that they wanted something done to reduce the gaps they saw growing in New Zealand. It is not the New Zealand we know and love, where your future is not determined by your hard work but rather by the circumstances of your birth. We want a New Zealand where every child has the opportunity to achieve their potential and is supported by a kind and empathetic Government. The message from voters was clear: now is not the time for tax cuts when there are pressing social issues to be solved. That message was heard by all three parties on this side of the House.

Scrapping the tax cuts will save the Government almost $8.4 billion over five years. Of this, $5.5 billion will be used to fund the Families Package, leaving $2.8 billion that can be used for other purposes such as health, housing, education, and infrastructure. The bill also repeals various consequential amendments that were enacted following the previous Government’s changes. The bill gives effect to aspects of the Families Package that require primary legislation. For Working for Families, the bill will introduce a range of new measures effective from 1 July 2018. Most significantly, the family tax credit rate for the eldest child will be increased by $575, to $5,878 per year. This, combined with the removal of age bands so that there is only one eldest child rate and one subsequent child rate for the family tax credit, represents a real boost to household incomes. In addition to these increases, increasing the abatement threshold from $36,350 to $42,700 will significantly increase the number of families eligible for a tax credit. In 2018-19, 26,000 more families will be eligible for Working for Families as a result of these changes. Moreover, these changes will restore much of the value lost when the last Government cut Working for Families in 2010.

Some further amendments will ensure that families remain better off in work than on a benefit and are otherwise not left behind. This includes the minimum family tax credit, which will be increased from $23,816 to $26,156. We are also including those in receipt of the orphans benefit, the unsupported child’s benefit, and the foster care allowance, to have their allowances increased by $20.31, to reflect the changes that have been made to the family tax credit, and we are very pleased to be able to include this additional support.

The Families Package also includes the extension of paid parental leave, which was passed into law last week, giving parents 22 weeks of paid leave from 1 July 2018, increasing to 26 weeks by 2020. Providing a weekly payment to families with newborns, through our Best Start package, helps establish a strong foundation for a healthy family. Best Start will provide all families with $60 per child per week in the first year of a child’s life and, for low and middle income families, the support until the child turns three.

The evidence from sources such as the Children’s Commissioner’s Expert Advisory Group on Solutions to Child Poverty and the long-running Dunedin longitudinal study is clear: support for the first three years of life is critical to a child’s development. This is also the time when many families struggle to manage care and work responsibilities together. We want families to have more choice when it comes to the first three years of their child’s life. Best Start will be available to children born or due to be born on or after 1 July 2018 and replaces the parental tax credit. For families who receive paid parental leave, the Best Start payment will begin after the paid parental leave ends. In addition, Best Start will also be available to caregivers receiving the orphans benefit, unsupported child’s benefit, and foster care allowance. Best Start is the recognition that the well-being of children must be at the centre of everything we do as a Government.

The winter energy payment will also be available to those who receive a main benefit, New Zealand Superannuation, or a veterans pension. On an annual basis, it will be worth $450 for a single person and $700 for a couple. This payment is in recognition of the increasing cost of living that often leads to those on fixed and low incomes struggling to heat their homes in winter. Around 1,600 New Zealanders die each year due to living in cold homes, and thousands more end up in hospital. That is not acceptable. Eligibility, Mr Joyce, will be conditional on people being resident largely in New Zealand in the winter months, and it will be possible for people to opt out from receiving the benefit if they do not believe they need the assistance. One million New Zealanders will receive the winter energy payment. One million New Zealanders will be warmer and safer as a result of this package.

This bill will reinstate the independent earner tax credit cruelly taken away by the last Government. Around 500,000 individuals received that in 2016-17. The Government has also opted to retain the increases to the accommodation supplement and accommodation benefit payments announced in Budget 2017. It is estimated that $135,000 New Zealanders will benefit by an average of $35 a week. Taken together, this families package will transform the lives of people all across New Zealand: 384,000 families will be better off by an average of $75 per week when it’s rolled out; 652,000 families without dependent children will gain an average of $14 a week; and 88,000 children will be lifted out of poverty—a reduction of 48 percent, and 39,000 more than the Budget 2017 package.

This is a package that sets out to build a fairer New Zealand, one where we take a significant step towards our aspiration to be the best country in the world to raise children and where we reject the hollow, selfish, individualism of the last nine years. It is with great pleasure that I commend this bill to the House.

Rt Hon BILL ENGLISH (Leader of the Opposition): As the Government implements, in this package, two-thirds of what was announced in Budget 2017—I didn’t hear then the warm, aspirational rhetoric about the increases, for instance, in the housing assistance that was announced in Budget 2017 under the National Government. It’s directly replicated in this package, but now it’s a revolutionary move to show a kinder, gentler New Zealand! Just a few months ago it was—

Hon Steven Joyce: The end of the world!

Rt Hon BILL ENGLISH: The end of the world! No, it was niggardly, unkind, uncaring, fiscally too tight. But now: “transform”. So the transformation that we’re talking about today is not so much the transformation for the families who will receive the dividends of a strong economy and good Government books; it’s simply that the Labour Party now has the chequebook. So that’s the difference that Grant Robertson was showing, which he was talking about today.

Let’s see—well, the Minister did a great job of looking like the cat’s got his cream. But what he has no understanding about is where the cream comes from. That became clear today in the Half Year Economic and Fiscal Update, which showed that this Government is inheriting the strongest economy of any incoming Government, with stronger Government books than any incoming Government. And the test is not: did they do something with that? The test is: did they do what could have been done? Have they done a really good job of it, or, as we see here, an intellectually muddled job—and I’ll go through that.

Here are the components of the Family Incomes Package from 2017. It had three components. A big increase in housing assistance—and I’m pleased the Government’s kept that, because the families with the lowest incomes and the highest housing costs are those most under pressure. Some families in high rental areas like west Auckland will benefit by well over $100 a week from that. That is one of the single biggest impacts on lifting those families above the poverty line of 50 percent of the median household income. Then there are the child payments under Working for Families. They’re targeted. The Government’s increased those by a bit more than was announced in Budget 2017—just a little bit more. They’ve changed the abatement threshold. That does mean that more higher-income families get it—not more lower-income families but more higher-income families. So that’s the Working for Families part—that’s targeted and they’ve kept that.

Then, of course, they’ve abolished the changes in tax thresholds. So someone on the average wage, we heard from the Deputy Prime Minister today, is greedy. They greedily thought that with Government surpluses—$20 a week or $1,000 a year is far too much for their share of all the hard work over the last 10 years! This is where the Labour Party message is grinding with New Zealanders. They’re acting as if they’ve discovered some new country. Well, maybe they have, but everyone else over the last 10 years has worked hard. We’ve all been careful with the Government finances. Businesses and households have reorganised themselves. The people in Christchurch found their way through an earthquake. And now is the opportunity where the whole country could benefit from that. But, instead, what’s actually happened is a very simple thing: the Government has cancelled the tax reductions for New Zealanders across the board, and that money has gone on the tertiary package. That’s what’s happened.

We saw the Deputy Prime Minister struggling today to explain why they are against universalism when everyone gets $1,000 a year but they are for it when you give it to every student, regardless of their income. As I asked the Prime Minister the other day, why is it so much fairer if they’re against MPs benefiting by $1,000 a year but they then give our children $12,000 a year? Because that’s what happens.

Well, I know about that, because I’ve got some. I can tell you, that’s the irony of this: my household is miles better off—miles better off under this intellectually incoherent, stupid policy. My household is, I think, something like $10,000 a year better off. What sense does that make? None. Because I appreciate the people—well, I feel guilty about it, because I know who’s worked for it. I know who has given up: people on the average wage who voted for that Minister are giving up $1,000—[Interruption]

Mr SPEAKER: Order! I am going to ask Andrew Little to settle down, but I’m especially going to ask Brett Hudson to stop making those gestures. Thank you.

Rt Hon BILL ENGLISH: Just to summarise in more normal tones, my household’s miles better off because the Government has taken away $1,000 a year from average wage earners and handed that to those people who are getting a free tertiary education for one year. That’s actually, technically, regressive, because almost all of them tend to come from higher-income families than those on the average wage who are paying the bill.

That just brings me to the issue of child poverty. You see, the finance Minister is acting like the cat who’s got his cream, but he’s getting one saucer of it. You see, this is one shot, one plug of cream that he gets to lick his lips on, because all the money is gone for the next five years. And here’s the difference: if they’d stuck with the law as it stands, and the fiscal management that was in place, then within two years we could have had another round of tax reductions and child poverty reductions. So it’s good that under this—well, you know, when it was 50,000, they took no notice and said it was terrible and said New Zealand was an unkind country, but now, today, as they implement this, it’s 70,000 and suddenly it’s a revolution—we’re in a completely different world.

Well, it’s good that there are 70,000 kids coming out of poverty, but, of course, what they’re missing there is the other half of the equation. The households where there’s long-term benefit dependency, where there’s family violence, where there’s serial criminal offending, and where there’s gambling problems—what do you think is going to happen to the extra money if you do nothing to support those families? The other half of the equation was always the social investment approach, and that is to recognise that not only is it about low incomes; it’s also about social dysfunction. If you don’t deal with the social dysfunction honestly and in the gritty and long-term way that’s required, then increases in incomes will certainly have some benefits but will not deal with persistent deprivation.

Those members know that that is true. But here’s where the Minister of Finance has slipped one past them: there’s no money to do it now. Social investment is exactly about investment. It is expensive. It costs money to deal with highly complex families, but there’s no money left to do it because it’s gone to the people who don’t need it—that is, the first-year students at university and polytech. So the Government has not put—it has not put—our most disadvantaged households at the core of its strategy, and that is the incoherence of this package.

It’s an odd mix of copying the last Government’s policy and adding some untargeted, misfired, universal cash going to households who don’t need it. And the long-term issues remain untouched and there’s no threat that that Government will get near them. They’ve got no money and no will to do it.

Mr SPEAKER: Order! I’m inviting the member to sit down. I assure him I’ll get him to stand up again relatively soon. I just want to make clear to members on both sides of the House, because I think Grant Robertson transgressed slightly and the Leader of the Opposition transgressed greatly, we are now debating not the economic package, not the student arrangements, not social investment; we are debating the Families Package (Income Tax and Benefits) Bill. And because we have had a previous debate on the general economic package, this bill, which would otherwise have been treated in a more liberal manner, given the lack of the opportunity to debate the package, will now be debated as a bill. It is not going to be a general economic debate.

Hon GERRY BROWNLEE (National—Ilam): I seek leave for the discussion on this bill to be slightly wider than the purpose of the bill, in order that it might traverse some of the wider economic issues that clearly are important to the Government.

Mr SPEAKER: The question is that the debate be—

Hon Grant Robertson: Leave is sought—you’re seeking leave.

Mr SPEAKER: Yes, sorry.

Hon Grant Robertson: Leave is sought.

Mr SPEAKER: Leave is sought—I apologise—for the debate to be widened, in order to discuss matters that are outside the scope of the bill. Is there any objection to that? There is objection. [Interruption] Mr Little—second warning in about 10 minutes.

Hon STEVEN JOYCE (National): I raise a point of order, Mr Speaker. In terms of this level of wideness or narrowness, can I just ask: is it OK to talk about—in relation to the tax cuts, which obviously is a significant part of this bill, the cancellation thereof—where the money’s being spent in relation to that? Keeping it narrow—

Mr SPEAKER: In a passing manner, yes, but as the substance of a member’s contribution, no.

Hon STUART NASH (Minister of Revenue): Thank you, Mr Speaker.

Mr SPEAKER: Sorry, I’m just going to—[Interruption] Order! I am on my feet. I do apologise to the member again, and I reiterate my assurance that he will get a chance to stand up this time. I do want to make it clear, though, Mr Joyce—I probably didn’t make it clear—that that will be on the first and second readings and on the third reading. Of course, when we’re doing the committee stage, at that stage it is a very narrow technical debate. The Hon Stuart Nash.

Hon STUART NASH: Thank you very much, Mr Speaker—finally. The speech you just heard from the Leader of the Opposition versus the speech you just heard from the Minister of Finance is the reason why we are in Government and they are not. Yet again, you heard a speech putting down the people of New Zealand—putting down the families, putting down the students—whereas over this side—

Hon Gerry Brownlee: I raise a point of order, Madam Speaker. I don’t mean to interrupt the member, either—I do apologise to him—but I do need to correct him. The reason they are in Government is because that’s what Winston wanted.

The ASSISTANT SPEAKER (Poto Williams): Thank you, Mr Brownlee. We don’t need any further points of order of that nature.

Hon STUART NASH: Thank you, Madam Assistant Speaker. The reason we are in Government is because that member and his cohort spent far too long in their ivory towers. What we on this side of the House did is we went out, and I’ll tell you what we heard, Mr Brownlee, in the street corner meetings and the town halls and the cottage meetings up and down this country: that, you know what, it’s just not time for a tax cut—it’s just not time for a tax cut. It’s time to once again reinvest in our communities, in our schools, in our health system, in our police force, and in our housing. It’s time to give those who need a little bit of help a hand up. That is what the people of New Zealand want.

This is the reason why I got into politics. This bill is the reason why I got into politics—the long hours, the mountains of readings, the street corner meetings in the pouring rain in the middle of winter and in the hot summer of Hawke’s Bay. To really make a difference—this is what politics is about, to make a difference to Kiwi families, and this is what this bill does.

The sort of families we’re talking about are those that work hard. They pay their taxes. They get out there. They coach their kids’ sports teams. They look after themselves. They play with their mates. They enjoy a beer every now and again. They have dreams. They have aspirations—both for themselves and for their children. They don’t often take a holiday. There are no expensive presents for birthdays or family trips to Fiji, because you know what? Despite everything else and all the work they do, life is tough. Life is tough—not necessarily bad and not without love and support, but tough.

They want to believe that we as politicians, as their elected representatives, are here for them, are standing up for them, and are going hard for what they believe in. And you know what? Then what they hear is that the last Government’s tax cuts give $440 million to the top 10 percent, and they come to a street corner meeting and they go—

The ASSISTANT SPEAKER (Poto Williams): I’d appreciate reference to the bill.

Hon STUART NASH: —yes, but this is about families, Madam Assistant Speaker—how can this be fair? How can this be fair?

As New Zealanders, we actually don’t ask for much; we really don’t. All we want is a fair deal—all we want is a fair deal—and this is what this bill is about. Under a Jacinda Ardern Government, they see that, in fact, the New Zealand First - Labour coalition is about making a difference in supporting our families—New Zealand First, Labour, and Green MPs working together really hard to make a difference. This is what this Families Package does. It really makes a difference.

This Families Package is transformational in a way that will make life just that much easier for 384,000 Kiwi families, by an average of about $75 a week. This includes those on a pension as well, but, don’t worry, it’s not those who are going to go over to the Gold Coast and spend it there. That’s been sorted, Mr Brownlee. For some listening, I know that $75 a week might not seem like a lot of money, but for nearly 400,000 families it makes a real difference. It determines what sort of food they eat, if their children can afford to play sport, if there’s something under the Christmas tree. Of course these families are still going to have to work incredibly hard; they’re still going to have to make sacrifices. No one’s retiring on these payments at all, but they know that this Labour - New Zealand First Government has got their back.

For me, this is what this bill and this Government is about—about lifting 88,000 children out of poverty. Seriously, how can you knock that?

Hon Gerry Brownlee: Slowly.

Hon STUART NASH: Eighty-eight thousand children out of poverty—and Mr Brownlee’s right; “slowly”. You can knock that slowly, but I think the vast majority of New Zealanders understand that living in a country where poverty is rife is just not right, and this is why this package is going to help 88,000 kids get out of poverty. I don’t know how, Mr Brownlee, you can disagree with that.

The question is, of course: how can we afford this? How can we afford this? Well, what we did is we rolled back the tax cuts to those who didn’t really need them. Again, this is the message I heard right across my electorate. You know what that message was? “Mr Nash, instead of a tax cut, we would rather this money went into our core infrastructure, like our schools, like our hospitals, like our police force, but, most importantly, into the families in our communities who are working really hard, but who are struggling.” We all know them. Those of us who are electorate MPs, we see them in our offices, because often they’re at their wits’ end. They just don’t feel as if they’re getting a fair deal. The thing is that these are Kiwis who are working hard—they’re working hard, they’ve got kids, they just can’t make ends meet, and this is what this is about.

This is the New Zealand way. This is the Labour way. This is what a great coalition Government believes in—families. This is what this Government believes in—standing up for families. And what that actually looks like—Ministers from all parties collaborating in a way that makes a real difference. That’s what coalition politics looks like, and that’s how you make it work really well.

Our Families Package—I just want to reiterate—is going to lift 88,000 children out of poverty. It is going to make 385,000 families better off by an average of $75 a week; 710 Kiwis on the pension will get help to pay their winter power bill—in fact, a million Kiwis are going to get help to pay their power bill. There are 40,000 children every single year who end up in hospital during winter with respiratory diseases and ailments—40,000 Kiwis end up in hospital with respiratory diseases and ailments. That is not the New Zealand that I grew up in, and not the New Zealand I believe we can be.

The orphans benefit, the unsupported child’s benefit, and the foster care allowance are going to increase by $20 a week. It mightn’t sound like a lot of money to some of those members, but to the people who are looking after our orphans, looking after these kids, who are foster parents, it makes a difference—it really does.

The independent earner tax credit will be reinstated. That Opposition over there, when they were in Government, got rid of this. Five hundred thousand Kiwis are going to be better off. Again, it’s not a lot of money but it makes a difference. This is where that Government lost touch. They forgot that—you know what?—for a whole lot of Kiwis, this makes a difference. We’re going to increase the Working for Families non-abatement period to $42,700 because we know this is important.

This is a Labour - New Zealand First Government that’s got the backs of our families and has the back of New Zealand families. This is a Government that cares about our families. We know there’s a lot more to do. We know there’s a lot more to do over the next three, six, nine, and 12 years, and this is just the start of it—this is just the start of it. Imagine—this is what we can do in our first 100 days; imagine the first 100 weeks, and then 100 months—

Hon Grant Robertson: And then 100 years.

Hon STUART NASH: And then 100 years. But this is the thing: we’re setting this up for 100 years. I believe that the Ardern Government is going to be the most transformational since the first Labour Government. I also believe, because I’ve sat in a number of meetings with our finance Minister, Grant Robertson, and boy, this man has a feel for the facts. He knows where the money is and he knows how to drive the economy in a way that is going to create meaningful growth and meaningful change.

I have never been more excited about being in politics than I am now. We are making a difference to New Zealand families, and that is what politics is about.

Hon STEVEN JOYCE (National): Listening to the earlier speakers on this bill, I was moved at the level of contradiction that was occurring. Mr Nash was busy telling us how important $20 a week can be for a family or for somebody in a difficult situation, and how important it is to increase that. And yet, this is the same Mr Nash who doesn’t think that should happen for the average wage earners in his electorate of Napier—that somebody who’s working hard to get ahead, who might be a tradie or somebody who’s doing a couple of jobs, shouldn’t get $20 a week. Because it’s important for somebody that Labour bestows their favour on, but it’s not important for ordinary, everyday Kiwis.

Then we had Andrew Little going on at this side of the House and being aggressive about Labour’s package. Is this the same Andrew Little that used to represent workers—middle-income workers, who used to be important to him? Is this the same Andrew Little who actually used to stand up for those people, but who’s now sitting in this House, and if you don’t have the good fortune to have young children, then Labour is not going to help you at all with this package—1.2 million New Zealanders are invisible to the New Zealand Labour Party; 1.2 million. And that’s why they got only 37 percent, because they told everybody else to take a running jump. That’s what they did.

The other thing that’s really important—

Hon Grant Robertson: You need friends, Steven.

Hon STEVEN JOYCE: Well, let’s talk about friends—let’s talk about friends. Mr Robertson accused middle-income earners of having hollow, selfish individualism. So the journalists that I just saw in the press gallery who happen to be single or don’t have a young family are hollow, selfish, and individualistic if they would dare want to have a tax threshold change that would give them a bit more income—that this time of selfish individualism was gone because he was removing the tax threshold changes. There’s no other way to write it than to say that anybody who is single or who has grown-up kids or who is a couple trying to get started is guilty of hollow, selfish individualism, according to Grant Robertson. I’m sorry if that’s appalling; that’s appalling. If that’s the attitude in this bill, there’s no wonder that we’ll be opposing it.

Hon Iain Lees-Galloway: Oh, you are going to oppose it?

Hon STEVEN JOYCE: We are opposing it—definitely. Don’t you worry about that. We are opposing it. We of course support the accommodation supplement changes, but we’ve already put those in place. We don’t need a bill to change that. We supported the Working for Families changes that we put in place. That side of the House is very excited today that they’ve collapsed the rates. Actually, they didn’t; that’s already happened. That’s already happened because the previous Government had already put this in place. But what we won’t subscribe to is calling New Zealanders who don’t have young children hollow, selfish, and individualistic. We are not going to subscribe to that, as Grant Robertson did, which is an appalling treatment of New Zealanders that just happen to be in different circumstances from the Labour Party’s current favoured group.

Now, we need to talk a little bit about the claimed public endorsement of this package, as raised by members opposite, because there’s a bit of a problem with that. Only one party campaigned for this package, and that party got less than 37 percent of the vote. The New Zealand First Party voted for Budget 2017 and then campaigned to remove it. It’s going to come as a surprise to New Zealand First supporters that they actually lose the $670-odd for the veterans pension, that they’ll lose the $670-odd for superannuation, because none of them heard Tracey Martin running around the country saying, “Hey, elect us and we’ll remove the superannuation increase.” Nobody heard that because it didn’t happen; it didn’t happen. And now she’s sitting in this House and saying that she will change what she voted for and what she didn’t campaign on, and that’s what’s going on in this House. And then we have the Greens, who also voted for it. They also voted for the package of the Government of the day, in Budget 2017.

So there is no mandate for this change, and that’s why we’ll be arguing against it. The only party that argued for it got 36-point-something percent of the vote and are walking around arrogantly saying that anybody who doesn’t support this is guilty of hollow, selfish individualism. I’m sorry, but that’s not a fair way to describe New Zealanders. All they want—

Hon Grant Robertson: I raise a point of order, Mr Speaker. I take offence at the fact that at least half a dozen times during that speech, Mr Joyce has completely misrepresented what I have said—completely misrepresented what I have said.

Hon Gerry Brownlee: That is not a way to raise a point of order about a matter like this. It is a debating point, unless you’re about to rule that it’s not, in which case chaos will reign throughout the House, because those sorts of comments are frequently made, and, of course, the man who makes them most frequently in this House is none other than Grant Robertson.

The ASSISTANT SPEAKER (Adrian Rurawhe): I thank both sides’ members. This is a robust debate, and I did hear the word “misrepresent” coming from both sides. I encourage all members to abide by the Speaker’s ruling made at about 10 minutes to 5 and speak to the bill.

Hon STEVEN JOYCE: Thank you, Mr Assistant Speaker. Of course, we come to the very timing of this bill, because, actually, this is not a big bill. This could’ve actually been tabled probably some weeks ago. It’s certainly been on the books for a while, but the Labour Party didn’t want to run it until 10 or 11 days before Christmas, because they’re so embarrassed about what it is, and they’re hoping that nobody will notice exactly what’s going on. Well, I have news for them, because New Zealanders do notice, and that’s why they’re still well behind the National Party in the polls, because they are the only ones arguing that people that actually want a tax package are guilty of hollow, selfish individualism.

We come now to the matter of the extra subsidies. We have two extra here. This is a poorly designed package. It’s a poorly designed package, and it actually involves resurrecting one tax credit that had already been sorted by providing people with tax cuts instead, and adding two more, including one that, apparently, you get to auto-enrol for but you have to report to the commissar if you’re going to leave the country and have a winter energy payment and pay it back at that point, which is something that we’re no doubt going to have a look at through the course of this debate.

This is a party opposite who claim that we shouldn’t be having universal payments for things, that tax is unfocused and shouldn’t be given to everybody, but then turns around, in its incoherent way, and says that we should give a baby bonus to everybody—baby bonus to every parent—irrespective of income, and also a winter energy payment to any superannuitant irrespective of income. So superannuitants are not allowed to have an increase in superannuation, but, actually, they’re allowed to have a winter energy payment. This is ridiculous politics. This is just creating an ever larger spaghetti of entitlements that New Zealanders don’t understand, because the Labour Party can’t bring itself to allow middle-income earners to have a tax reduction. They want everybody paying a 30c-in-the-dollar marginal tax rate. It’s the only conclusion you can come to, because 30c in the dollar is where we’re all headed.

Already, more than half of all full-time workers in New Zealand pay a 30c-in-the-dollar tax rate. That’s what’s going on, and if they are paying Working for Families abatement or they’re paying accommodation supplement abatement, they are already above 50 percent of every additional dollar that they earn going back to the Government. And this is a party on the other side who claim to care about the taxation of workers, who say, “Oh, we should be valuing work more. We should be making sure that people get more of the value of their work.” And the very first thing they do—the very first thing they do—is actually reduce the amount of return people see in their hands from their work. That’s their first act. This is the party opposite who claims to be concerned about the wages of workers, and the very first act of this party, in relation to workers, is to come to this House and take $1,060 off people on the median wage from 1 April next year. That is not lifting their incomes. That’s not helping them afford the costs in their lives. That is actually taking money from them. That’s what’s going on, and that’s why we will oppose this bill.

Hon TRACEY MARTIN (Minister for Children): Thank you very much, Mr Assistant Speaker. It’s a delight to stand and take this call on behalf of New Zealand First on the Families Package (Income Tax and Benefits) Bill. This is a true example of what is, in reality, probably the first real MMP Government this country has ever had. This is not an example of a large party with some cling-ons. This is not an example of a large party that said, “Here, have some crumbs from the table. Give us your vote, and then we’ll just go about our business.” This is, finally, for New Zealand, an example of what MMP was supposed to bring in. Finally, we have a coalition Government, between the Labour Party and New Zealand First with support partners from the Green Party, cohesively, cooperatively, and collegially working together to create this piece of legislation.

It is no shock that the National Party has stood—or their speakers to date, anyway—to say that they hate this bill. It’s no shock, because they’re still living in the neo-liberal 90s. They’re still living in a situation where they believe that every one of the New Zealanders—the massive number of New Zealanders—who are going to be lifted out of poverty by this bill should be an individual in their own right, that they should look after themselves and that the State will not care for you.

In Part 1 of this bill, the Best Start tax package is going to support, once again—since the universal family benefit was abolished in this country by a National Government, this will be the first time since, I think it was, the 1990s that we will once again as a Government say to New Zealanders, to the world, “We will put children first. We will support our babies.” This Government has already moved a piece of legislation to make sure that we showed that to New Zealanders and the world, with regard to the extension of paid parental leave to 26 weeks, and once again we do it again.

I want to just show—this is a file that I was working on, on behalf of New Zealand First, before the election, and it’s labelled “universal child allowance”. This is how in tune this coalition Government is, that this work was already being done by New Zealand First at the same time as it was being done by the Labour Party, because the need for this piece of legislation is so great. What we have inside of this piece of legislation with the Families Package is an opportunity, in the next so many hours, to pass a piece of legislation that will lift 88,000 children out of poverty.

But it’s not just those children. There will be—I think I’ve got some numbers here about the number of families. By 2019, this piece of legislation will have assisted 385,000 families. They are middle and lower New Zealand families. These are the families—the women who came up to us to have a meeting with me up in the North, who said, “We’re middle-income earners at home looking after our children, and we get nothing from the National Government. We get no recognition from our Government that looking after children is actually important work. We get no recognition that this is part of what must be done—we must care for our children.” And this is what this Government will do.

There is estimated to be 748,000 children living in those 385,000 families. That is what this piece of legislation will do. This piece of legislation—no, it will not, because it will repeal the tax cuts that the National Government put forward last year. Oh, it was earlier this year, probably—lots of water’s gone under the bridge since then. And I acknowledge that New Zealand First voted in favour of that piece of legislation. We did so because of the accommodation supplement. We knew how desperate—desperate—New Zealanders were to actually get anything more to assist them to get out of cars, to get of motels, and to get out of garages with family members. That is why New Zealand First supported that piece of legislation, because at that time we knew the desperation of the New Zealanders and their living conditions. As per normal with the National Government, they rolled up a sweetie with a drop of poison, and that was the tax package.

So this is an opportunity to take the piece that New Zealanders need and leave behind the bit that nobody asked for. None of the New Zealanders that will be helped by this package, none of the 385,000 families, none of 748,000 children, none of the 608,000 families—the 63 percent with children in this country that will benefit in an enormous way—asked for a tax cut. They asked for a Government that cared. They asked for a Government that had empathy and understanding. They asked for a Government that put them first—not international speculators, not international buyers, not other people, but them. They asked for the divide between the rich and poor to be addressed, and this will go some way for it.

Mr Brownlee made a comment that the only reason this Government is in the manifestation that it is—he suggested it was because of one man. I don’t know what dictatorship the National Party works under, but I can confirm for the New Zealand public there was nothing dictatorial about the intense conversation that the New Zealand First caucus and the New Zealand First board had about the responsibility of selecting a Government for New Zealand during the negotiation process, and I know because I was there every day.

What we chose was the change that needed to take place. We chose a truly MMP environment—finally. We chose a Government that would recognise and acknowledge that these steps needed to be taken to turn back the neo-liberalism that had taken place and that had harmed our country—harmed our country.

We know that there will be fewer families showing up at food banks. We know that there will be fewer families and children and older people showing up at our hospitals.

Hon David Bennett: Enjoy it, Fletch. You ain’t going to see it again. Ha, ha! You’ll have to get a real job now, bro.

Hon TRACEY MARTIN: Mr Bennett is shouting out, because, Mr Bennett—he always shouts out. He doesn’t seem to take this place very seriously, which is interesting for the length of time he’s been here. There were 9,300 senior citizens hospitalised last year with pneumonia—no, keep smiling Mr Bennett. Keep smiling, Mr Bennett. There were 9,360 superannuitants who ended up in hospital last year because they couldn’t afford their winter energy bill, and now this Government will do something about it.

Now this Government will do something about it, because for nine long years that Government did nothing. They suggested we might give you $20 a week. They suggested that you can look after yourself—“Well, there’s a foodbank down the road.” or “Let’s let another charity start up.” How Dickensian. How Dickensian to decide that in this nation, a nation of plenty, what would be the answer is charities and non-profit organisations to deal with what the Government should have held responsibility for.

This Government takes the responsibility. This Government will deliver for the people of New Zealand, and this Government holds the majority of the votes that were cast in 2017—this Government.

Hon David Bennett: They hold the majority—the Greens. They’re your mates.

Hon TRACEY MARTIN: This Government holds the majority of votes in 2017, with our supply and confidence partner. The first good rule of Government, Mr Bennett, is to count. Figure out how to count—57-63 doesn’t cut it. It doesn’t cut it. This is the unfortunate thing: that party still lives in a first-past-the-post environment. That party still lives in a neo-liberal—

Hon Amy Adams: I raise a point of order, Mr Speaker. In Speaker Mallard’s ruling, when he gave the urgent debate this afternoon, he made it very clear that, as a consequence, the debates on this bill would be strictly limited to the matters in this bill, and we’ve just had a long diatribe from the member Tracey Martin wanting to relitigate the election results. While that might make her feel better, it certainly cannot be construed as a narrow, tightly focused debate on the principles of this bill.

Hon TRACEY MARTIN: Speaking to the point of order, Mr Speaker.

The ASSISTANT SPEAKER (Adrian Rurawhe): I don’t need any more assistance, thank you very much. I take the member’s point. There has been some drifting. Most of the member’s speech has been relevant—just not the point at the end, about 30 seconds, and maybe that’s enough.

Hon TRACEY MARTIN: I finish my time with this. I’m very grateful to my Labour Party Cabinet colleagues and to the Green Party support members there for the inclusion of orphans, unsupported children, and foster children inside this piece of legislation. So often, they had been forgotten. So often they had been neglected, particularly by the previous Government. So it’s wonderful to work with people who actually listen, have collaborative conversations, and make sure that the voice of all New Zealanders are inside of the legislation we pass. Kia ora.

Hon AMY ADAMS (National—Selwyn): Mr Assistant Speaker, thank you. In rising to take a call in this first reading, in the first of what I’m sure will be many calls over the course of the next few days on the Families Package (Income Tax and Benefits) Bill, the first matter I actually want to bring to the House’s attention is that, while we are debating this bill under urgency and given that with urgency we have a very limited time as the representatives in this House who have the job of holding the Government to account, it matters, of course, even more that we have access to the relevant information. While the bill maintains that the regulatory impact statement is available on the Treasury website, it is, in fact, not. I want to put on record that I think it is most unacceptable to be debating a piece of legislation brought in by this Government where they are spending the largest chunk of their economic plan that we’ve seen released today, and yet they have made it impossible for members debating on this side of the House to have access to the regulatory impact statement, and I think that is, frankly, shoddy.

It is interesting that the first real piece of legislation we’ve seen from this new Government that isn’t just a re-run of an old member’s bill that’s been hanging around in the ballot or isn’t National Party legislation is acting to take away money from hard-working New Zealand taxpayers. That’s the reality, and Labour want to use all sorts of other ways of describing it, but these are tax cuts that are in law. They are in law. They weren’t our policy that would have happened if we were the Government; these are changes to the tax thresholds that are fundamentally necessary to maintain the fiscal relevance of those thresholds and address what’s called fiscal drag. If you don’t keep amending the tax thresholds, you get what’s known as bracket creep, and you get more and more low-income families paying higher rates of tax. If this was a Government that was genuinely concerned about addressing the take-home pay and the incomes of low and middle income families, they would want to do what the National Government did when it was in power, which was address bracket creep and fiscal drag and address the relative reduction in buying power of those various income tax thresholds.

We’ve heard in this debate numbers thrown around of the number of families who are going to benefit from these changes, but here’s what I’ve managed to take out of the information—scarce though it is—on the bill. Two-thirds of those who benefit from this package will be $400 a year worse off. So two-thirds of the people that Labour are claiming benefit are worse off as a consequence of this bill. Let me take you through why that is. Six hundred and twenty-five thousand people, by Labour’s own numbers—so if members on the opposite side read their own documents; they probably haven’t—625,000 families, according to the Government’s own information, benefit from this package by $13 a week. But they are losing $1,060 a year, meaning they are $400 a year worse off under this package. That is two-thirds of the people that the Government claims this package helps. Now, even apart from those two-thirds—that’s 625,000 families who they’re claiming as beneficiaries, who are worse off under this package—there are another 1.2 million who get nothing from this package and lose the $1,060 that they would have had from 1 April next year.

Now, we heard the finance Minister, in the general debate, talk about this being the reward for workers. Well, if the reward for workers is being used as an increasing cash cow, an ATM, for the Government on the opposite benches, then I think it’s a reward that those workers would refuse. Why would you take $1,060 out of the pockets of every hard-working New Zealander earning low and middle income to fund this package, when most of the people it claims to benefit are going to be worse off? It makes absolutely no sense.

In addition, they say, “Well, the superannuitants will be compensated by the winter heating payment.” Well, actually, no, because quite apart from the superannuitants who are off travelling around the world and despite what Jenny Salesa said in the House today, in speaking for the Minister of Health, that they wouldn’t be able to access it if they were on the Gold Coast and Hawaii, patently they will. They can have repeated holidays of up to four weeks at a time each and still fully qualify. So while we’re looking after those superannuitants who patently don’t need it, even though it’s claimed to be a targeted package, we’ve also, in this bill, now found that superannuitants who are in residential care will miss out on this and will miss out on their tax cut. So for those superannuitants—and I hope New Zealand First are listening to this, because they are the party that claims to stand up for them—who are in residential or rest home care, they lose $1,060 a year and get nothing under this package. Now, why a party that claims to stand up for those people would support that is patently beyond me.

It seems to me very clear that this is about that old left-wing Labour Party ideology that says, “We know how to spend your money better than you do. We would rather take the money out of your pocket, filter it through a large bureaucracy, and then, if we deem it appropriate, we might give you a little bit back if there’s any left over.” How arrogant. How arrogant to think that people are better off if Labour take money from them and then pick and choose who gets a little bit of what’s left after they have filtered it.

On this side of the House, in National, we respect people who get up and go to work, and we worked hard in Government to create surpluses so that we could give some of that back, so we could let people keep their own money. Straight away, in the first action of this new Government, what they’re doing is saying, “Forget that. The Government might be collecting more than it needs, but we would rather keep it and spend it on our wasteful programmes, which aren’t well targeted, than let taxpayers keep a bit of their money.”

So we’ve heard a lot today about the fact that this is a better-targeted package—it’s going to go to those who need it. Well, I’ve already highlighted the situation of the idiocy of having those who might be over 65 who are perfectly well able to care for themselves and pay for their own heating and who are travelling around the world taking repeated breaks in warmer climates being eligible for the support, but not lower-income people who are on rest home care subsidy. As well, within this package we have, of course, the baby bonus, which is paid out to everyone who has a baby, whether they need it or not, and yet this is the targeted package for low-income earners that the Government wants to believe we’re buying.

There’s another thing about that baby bonus that I find quite incredible. I’m glad Mr Lees-Galloway is in the House, because while parents are taking his much-vaunted extension of paid parental leave for half the year—six months—they will not get the baby bonus. So, straight away, they’ve taken back half of their gift to new parents: “Have $3,000 a year. Oh, but, actually, you don’t get half of it straight away.” Isn’t that incredible?

While parents are on paid parental leave, as I pointed out when we were debating paid parental leave in this House, they are getting considerably less than the minimum wage. So parents on paid parental leave get almost 20 percent less than the minimum wage, and yet Labour is saying that during that time they don’t need the extra baby bonus. I would say that they need it more than anyone. They need it more than anyone. So, straight away, the Government that is talking about giving new parents—all new parents will get $3,000 a year. Quite apart from the fact that that is not targeted at all—

Hon Iain Lees-Galloway: So where’s your policy to give them more money?

Hon AMY ADAMS: Well, our policy, Mr Lees-Galloway, is to let them keep their own money and fund it for themselves, because they don’t need a Government to tell them how to spend their money. Our policy would be much more sensible. So, quite apart from the fact that they’re not targeting it at all to those who need it—the baby bonus is not targeted and it goes to people at the top—but, straight away, Labour gives with one hand and takes half of it back, because, actually, you don’t get it at all if you’re getting paid parental leave, even though that’s significantly underfunded.

So it is not a well-targeted package, and look at the increases to Working for Families. This change will see more high-income families getting Working for Families. So, again, we see that this is not a targeted package supporting the low and middle income earners. If it was, they would be concerned about fiscal drag and bracket creep. If it was, you wouldn’t see universal free tertiary education eating up almost all of the spending. And if it was, you wouldn’t see the universal baby bonus going to those who don’t need it, and you wouldn’t see a winter heating payment going to those who don’t need it. This is simply Labour wanting to increase the dependency of people on the Government.

Now, the one thing in this package that Labour have kept from National’s Budget—and I commend them for keeping it—is the accommodation supplement changes. But what I find astounding was the sitting and listening to the debates that we had after Budget ’17, when member after member from the Labour caucus got up and railed against the accommodation supplement changes. It was a landlord subsidy, it was giving to our rich mates—which is their standard refrain, regardless of what we’re debating—it was an appalling way to do it, and it was absolutely wrong. And what’s the one thing they keep? National’s accommodation supplement changes. So I think you really have to take this with a grain of salt.

Finally, this package purports to take 88,000 children out of poverty. Well, good on them. They’re only 12,000 short of what National would have done.

JAN LOGIE (Green): Whoo! That was a painful listen, I’ve got to say. That speech from Amy Adams was, to me, the perfect speech of neo-liberalism, which just outlined right there the messages of this side. The accusation that we would rather take people’s money and spend it on wasteful, poorly targeted programmes and take that money and spend it on poorly targeted universal healthcare, poorly targeted universal basic education systems, maybe poorly targeted community-based police services, or—I don’t know—poorly targeted and at least adequately funded community services or poorly targeted decent wages—

The ASSISTANT SPEAKER (Adrian Rurawhe): Order! The member needs to come to the bill.

JAN LOGIE: This is the philosophy of that side. They believe that taxation and Government providing basic services is wasteful. They believe that those basic things, which are the foundations of any decent society, should be paid for by the individual and that it is wasteful for us to be using our tax money on those things.

Well, I will stand up here and say that we have a different philosophy on this side of the House. It is a philosophy that is grounded on experience of what delivers the best results for the most people, and that is a universal approach to the provision of the foundations of our society, which are decent education, decent incomes, and a decent healthcare system.

So, to get on to more specifics of the bill, I do want to recognise the antecedence of this piece of legislation, which I think can be significantly attributed to the campaigns from our communities to address child poverty. This week, I was at the Tick for Kids celebration in this Parliament, which was a meeting of young people and community leaders from all around the country. There were hundreds of people present, celebrating this moment in time. This moment is where we have come to the point where, in the election, I think every single party acknowledged that child poverty was a shame on our country, and we have the election, I assume, of a Government that has already made a commitment to addressing and reducing that poverty. This legislation today, in the first 100 days, is part of demonstrating to the country the commitment of this Government to reduce inequality and progressively eliminate child poverty from this country.

Ensuring everyone—especially families—has enough to sustain themselves has been a driving force for the Green Party for years, and I do want to specifically acknowledge the political commitment, the intellectual leadership, and the moral courage from Metiria Turei, working alongside many advocates in our communities and around the country in this fight. He mihi aroha ki te mareikura a Metiria Turei mō tana tū kaha mō ngā whānau me ngā tamariki katoa.

[A warm greeting to my esteemed friend Metiria Turei for her strong support of families and all children.]

Our children and our friends and families and neighbours who are struggling need us to see them and address their needs. In the words of one of the speakers from the Tick for Kids celebration, it is time we shifted the burden of child poverty away from those who are experiencing it. This House has the ability to lighten that load and to take some of that load, and I am pleased today that there is a will in this House to do that.

This bill, alongside the Prime Minister seeking cross-party support for legislation to ensure that we actively reduce child poverty, was a major reason for the celebrations this week. This bill doesn’t remove the burden of poverty from all of our children, but it is a start. It is a critically important milestone, a signal from this Government that addressing inequality and ensuring that families have enough is a major focus for us in this term. It may not have escaped the notice of the National Party members that the Green Party supported their dodgy Budget legislation. They may seek to suggest that we were divided on that legislation, and I do want to put it on record in the House again that it was a very, very difficult call for us. It came down to the urgency of need amongst the people on lowest incomes experiencing extreme housing stress, and the long-term fundamental harm of eroding our tax base. So, I have got to say, it is a real relief to be able to support this legislation that undoes those egregious tax cuts and ensures that families have got the support that we were initially supporting in terms of changes to the accommodation benefit.

This legislation will ensure that the Government has the money to start rebuilding the foundations of an egalitarian society and, entirely consistent with that, provide more money in the pocket for families who have been doing it too hard for too long. This legislation will lift 88,000 children—and we can only assume their caregivers as well—out of poverty by 2020-21. This is 48 percent more than the status quo, and 39,000 more children out of poverty than under National’s reforms.

I want to take just a moment to remind this House of some of the consequences of poverty: homelessness, which in turn undermines people’s employment opportunities and education, as well as their health and sense of value in our society. Poverty results in overcrowding in homes, which creates a significant health risk as well as exacerbating stress and increasing the risk of violence. It results in sickness and hospitalisation and more than one death a week from low-income related diseases. There are poor educational outcomes for kids having problems concentrating, reduced opportunities for learning outside of school, sickness, and the impact of transience for not having enough money for the family to pay the rent. It results in social isolation, something that is not often talked about but is a really profound impact of poverty, where children are too embarrassed to bring friends home. They don’t have the money or the resources to be able to get to events or to participate in sports or cultural groups or to go on school trips. They become ashamed and embarrassed and worried about their clothes—that they are out of place and they don’t fit. That isolation has profound and lifelong consequences and results in mental health illness resulting from the stigma and stress and anxiety. We can and we need to do better for our children and the people who are out of the paid workforce.

This legislation, and the winter payment in particular, I think of—during the election campaign—a woman in my street, whose door I knocked on, who was on a sickness benefit. It was winter and it was cold and she told me that after paying her rent she had only $20 to $30 left for everything. She could not turn on the heater, and she was a sick woman, unable to be in the paid workforce after years of being in the paid workforce and contributing. She was left unwell and unable to get well, because she did not have the money to turn on the heater and feed herself. This piece of legislation will make a difference for her, and I am so, so pleased that New Zealanders voted to make a difference for that woman, because she matters and we all are a little bit less of ourselves if we don’t acknowledge her value and support her in getting well.

This legislation does a lot of things, and I’m sure in the subsequent speeches over this debate that I will get to drill into some of the details of it. But I do just want to say that if the Green Party had been leading the Government, this isn’t the legislation we would bring in. We would do it differently, but this is a start. It’s a quick fix in the interim before we get into solving the problems of Working for Families and the complexity and problems of the accommodation supplement. But this Government has a commitment to doing that and ensuring that everyone in this country has a right and an ability to participate and be well.

Rt Hon DAVID CARTER (National): Mr Assistant Speaker, can I start—as this is the first contribution I’ve made with you in the Chair—by extending my congratulations to you. You already show a very dignified aura as you sit in that Chair, and I wish you very well in your role as an Assistant Speaker.

I do want to return this debate to the legislation, the Families Package (Income Tax and Benefits) Bill. It’s not about universality of healthcare or education; it is a piece of legislation that is quite specific. It’s in urgency, because, of course, it comes into effect on 1 April and 1 July, and that justifies coming into urgency according to the Leader of the House—can’t quite understand the logic myself, but, anyway, here we are.

I’m having trouble—I know the National caucus has taken a position of voting against this bill, but I’m reminded of the prayer we start the day with: “Putting aside all personal interests as we debate matters”. I don’t know what I’ve done to deserve so much generosity and favouritism from this Labour - Greens - New Zealand First Government. I didn’t ask for their generosity, but I’m about to get it.

I have a daughter Laura who’s off to university in Auckland next year, so, conservatively, that’s about $10,000 or $12,000 that I’m better off. I have a daughter Isabella who’s doing her last year at school—and congratulations to her; recently nominated deputy head girl. She will definitely go to university the following year so that puts me about another $10,000 or $12,000 better off. Then I’ve got my son, Morgan, who’s determined to be an architect when he finishes school—he’s got a few more years to go. He’s only 13. But that gives me another opportunity through the generosity of this Labour Government to pick up about $10,000 or $12,000 a year.

Then there is, of course, the situation—I don’t look to be over 65, but I do admit that I am. So I’m looking forward to the winter energy payment of $750, and when I eventually get home, perhaps on Saturday afternoon when the urgency finishes, I will have a discussion with my wife about the potential of trying to become eligible for the baby bonus. I’m not confident that will be a discussion that ends well, but I am certainly doing very, very well out of this package. But having considered the $10,000 or $12,000 for three children and the winter energy payment of $750, I am going to put personal interests aside and I will be voting against this legislation.

One of the reasons that I do it is I think you’d best describe this legislation as intellectually bereft. It is simplistic legislation. It delivers universality to people that don’t need it. We heard the speech from the Hon Tracey Martin saying that this was all about targeting. If it was about targeting the people she’s identified in true poverty, then I might be prepared to vote for it. But when they generously give this sort of money to somebody in my situation, why is that good legislation?

Kiritapu Allan: What about the tax cuts?

Rt Hon DAVID CARTER: What about the tax cuts? That’s a very interesting—I did take that into account. I could have got $1,060 a year and now they’re talking about $35,000 a year. How’s that sensible—how’s that sensible? It is taxpayers’ money that you’re wasting by delivering it to somebody like me who doesn’t need it. By all means, target assistance; we all support that. But the stupidity of passing out this sort of package and making it universal to people that don’t need it just leaves me wondering what intellect, what planet were the people who decided this package on.

A winter energy payment that I understand will automatically be enrolled, so it’ll come with superannuation payments, and then the option to opt out. Who’s going to bother to opt out? Stephen Tindall?

Hon Member: Winston might.

Rt Hon DAVID CARTER: The Rt Hon Winston Peters might—well, we’ll watch with interest. He was very, very slow to reveal when he was picking up a whole lot of superannuation that he shouldn’t have been picking up. But maybe he will opt out. I don’t think many people will.

Hon Willie Jackson: No, you won’t.

Rt Hon DAVID CARTER: The Hon Willie Jackson interjects and said that I won’t. Well, he doesn’t actually know that situation, but give me one reason why I should. You’re passing the legislation. You’re the one who’s designed the system to give it to people who clearly don’t really need it. Why should anybody opt out? Why should the responsibility go to somebody to opt out of stupid, ill-considered legislation that the Hon Willie Jackson is about to vote for.

This Government needs to be past slogans. When the Hon Grant Robertson introduced this legislation he used the words, and I quote, “We want all New Zealanders to live in prosperity.” Who doesn’t want that—who doesn’t want that? We all do. Then it’s a matter of intelligently delivering policies that will give the opportunity for all New Zealanders to live in prosperity. But to take a tax cut off me of $1,000-odd and, effectively, give me a gift of perhaps $30,000 is just plain stupidity. There is no other way I can explain it.

Why does the Government hate the idea of tax cuts? I don’t understand, and I know it’s been a philosophical argument we’ve had from the time I got here. People earn their money. They should pay reasonable taxation to a Government to deliver those essential services, which we expect a Government to deliver. But once you are in surplus, the fundamental philosophical discussion that should be had is: can a taxpayer spend their own money better than recycling it back through a central bureaucracy for a Government then to generously decide where they will put that money? I know the philosophy of that Government, because I’ve watched it time and time again. What it does is it identifies a sector of the voting community where it will spend its efforts over the first three years that it’s in Government to try and lock in that particular sector to vote for them.

I’ll tell you where they did it so blatantly. It was interest-free loans for students. Once there, difficult to remove, and I accept that, but there was a sector of the community they targeted specifically to make sure, they hoped, they’d vote for them.

I’ll give you the next one. It’s free tertiary education that’s been announced. That’s where the tax cut money’s gone—$2.8 billion swapped over to $2.5 billion to provide tertiary education for students going into their first year with the promise that they’ll develop that over time. That’s another group the Labour Government’s determined to lock into its catchment of votes for the next election.

Kieran McAnulty: Rubbish!

Rt Hon DAVID CARTER: But New Zealand—who said rubbish?

Kieran McAnulty: I did.

Rt Hon DAVID CARTER: Kieran McAnulty said that’s rubbish. Well, I don’t think it is. He can think it is. When he’s been in that Labour caucus a bit longer than 45 days he’ll then know that, actually, it’s not rubbish at all. It’s the way they operate. But the interesting thing is New Zealand voters are smarter than that. They’re a lot smarter than that and they work out for themselves as to whether churning taxpayers’ money back through a system and giving it out to sectors that receive particular favouritism from the Labour Government is at all appropriate, and I don’t need that favouritism, I don’t expect that favouritism, and I think it’s stupid.

Can I make my final point. This legislation will sign the death warrant for New Zealand First as a political party. They have stood for years to support the superannuitant, and they’re not going to support the superannuitant who has seen superannuation rise by over 35 percent during the period of the National Government, and now that particular trajectory of rise has ceased simply because that Government, supported by “Mr 7 Percent, New Zealand First”, has now removed that tax cut, which was absolutely critical to the calculation of further superannuation payments. They know they’re in trouble, and that’s why they’ve come up with the stupid idea called a winter energy payment, which Tracey Martin says is designed to deliver to those people who live in cold houses, ending up in hospitalisation. That applies to some. Target the assistance to them by all means, Government, but don’t give it universally to the many, many thousands of people who do not need it.

PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Assistant Speaker. It is truly an honour to rise in support of the Families Package (Income Tax and Benefits) Bill. It is, however, incredibly disappointing that the member who has just resumed his seat, the Rt Hon David Carter, thinks that it’s stupidity to lift families—entire families—out of poverty and to invest in education.

I’ve been reflecting on the changes that this bill will have on so many lives: people that I’ve met, young mums who are just managing to support their families, who work multiple jobs and still struggle to put food on the table, who have to make choices like taking their children to the doctors or putting food on the table. I appreciate that it’s free for those under 10, but it still costs to take them there, and, in some cases, if the parents are unable to pay for their doctors fees it gets taken out on the children. So there are multiple issues there: wages not keeping up with inflation, as we’ve seen they haven’t; rising house prices in rentals; families that are just managing until they suddenly have to replace a tyre, or the warrant of fitness is due, or, Heaven forbid, they have to go and see a doctor, and then it’s Struggle Street. There are elderly people whose living rooms I’ve sat in whom I’ve spoken to—people who tell me that they wear layer upon layer in winter because they don’t have the money to pay for heating.

He aha te mea nui o te ao? What’s the most important thing in the world? He tangata, he tangata, he tangata. It’s the people, it’s the people, it’s the people. Throughout this campaign—and for years, in fact—we’ve talked on this side of the House about the kind of Government that we would be if we were given the chance, and now we have been. People have voted for change. We’re a Government that puts people first, that puts people at the heart of policy making; a Government that cares; a Government that brings justice and compassion back. In the first few weeks of this Government, in less than—what was it?—six weeks, we voted and passed the paid parental leave bill to extend paid parental leave to ensure that parents can spend more time with their baby so that families are benefited.

We passed the Healthy Homes Guaranteed Bill—

The ASSISTANT SPEAKER (Adrian Rurawhe): No. The member needs to come to the bill. This is not a general debate.

PRIYANCA RADHAKRISHNAN: Absolutely, but all of this impacts families as will this Families Package. So now this, the Families Package, will lift 88,000 children out of poverty as a direct consequence—a bill that will boost the incomes of low and middle income families with children; a bill that will introduce the Best Start payments, which will give every child in this country the best start in life possible. The winter energy payment will directly impact those people I talked to in their living rooms, those people who couldn’t afford to pay for heating. We will implement the accommodation supplements, and I think we’ve already talked about that at length.

We will do this by reversing tax cuts that would have put an additional thousand dollars a year into the pockets of people like me and members in this House, people who don’t need it; $400 million per year to the top 10 percent of income earners—the most benefit to those with the highest incomes, while taking away resources from those who need it, starving vital public services, starving the education sector, the health sector, while we have a mental health crisis and a housing crisis, so that they could ensure that there was a surplus. That they now put it into the pockets of those who don’t need it doesn’t make sense. What we are proposing to do—what we will deliver—will actually deliver prosperity while we grow the economy.

On this side of the House we talk about economic growth not as an end in itself, but as a means to an end—as a means to ensure that we improve the well-being of all New Zealanders. And I am proud to be part of a Government that makes things fairer for the many and not just the few at the top.

We’ve heard speakers or members from across the House say that Labour’s not the party for people without children. I have no children; the tax cuts would have directly benefited me, and I’m proud that we are actually putting our money where it is needed the most.

ANDREW BAYLY (National—Hunua): Thank you, Mr Assistant Speaker. Well, we’re finally debating—

The ASSISTANT SPEAKER (Adrian Rurawhe): Oh, my apologies to the member for those few seconds. The time has come for me to leave the Chair for the dinner break. The House will resume at 7.30 p.m.

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

ANDREW BAYLY: Well, today we are debating the centrepiece—the so-called centrepiece—of the Labour or coalition Government: its Families Package (Income Tax and Benefits) Bill. First of all, I want to congratulate the coalition Government for actually introducing a bill of its own. We on our side were getting a bit sick of passing all our old legislation from our last, 51st, Parliament.

All New Zealanders want to ensure that everyone having children gets the support they deserve, in providing financial, physical, and emotional support during the life of their children as they grow to adulthood. National, of course, provided a tax package, which is already legislated, that would’ve helped New Zealanders in that situation. Disappointingly, the coalition Government will now scrap those legislative changes and implement its new package, which we’ll be debating over the next few days.

And, of course, it comes with a hefty price tag. The Minister states that it’s going to improve the lot of 384,000 families, but I’ll just draw Madam Deputy Speaker’s attention to the fact that the National package, the legislated National package, actually benefited 1.64 million families. What this new piece of legislation that’s been introduced today does is rip off the $1,060, which everyone would have received through a tax cut, from 1.2 million working New Zealanders and gives nothing in return. That is the bad thing about this.

Worse than that, these hard-working people, who have enjoyed the benefits of working and seeing their wages increase over time, are now suffering the consequences of fiscal drag—mainly because of the fact that their wages have gone up, they’re now into a higher tax bracket. As the Hon Willie Jackson will now know, wages have increased by approximately $10,000 since National took power over the last few years, and this means that these people are now paying 30c in the dollar, rather than what they would originally have been paying—around 22.5 percent. That’s what our tax reform is about: addressing that inequity.

However, we have got a new policy promoted by this coalition Government, and, of course, it makes a lot of claims. The first claim I heard was that the Prime Minister and the Minister of Finance claimed that the new tax package would lift 88,000 households out of poverty—

Dr Duncan Webb: Children.

ANDREW BAYLY: —or children, I should say—children—by 2021.

Alastair Scott: 2021?

ANDREW BAYLY: 2021, and that, in fact, is below what National had intended.

So the legislated tax package already would have lifted 50,000 children out of poverty, and what we had committed to was a subsequent tax package that would have addressed the poverty of another 50,000 people. In my terms—and I think I’m OK at maths—that’s more than 88,000 children. But the worst thing about this tax package that’s been put forward today is that all the money has been blown, so there is very little capability for the Minister of Finance to be able to put in place any further tax cuts to actually benefit those people in poverty.

I just also want to focus on the issue around the district health boards. I know it’s a topic that hasn’t been canvassed before. I’m keen to understand why the Minister, or some of his colleagues, have gone silent on the issue of the capital expenditure for the health sector.

Madam DEPUTY SPEAKER: Talk to the bill—talk to the bill.

ANDREW BAYLY: It’s in the bill.

Madam DEPUTY SPEAKER: Talk to the bill.

ANDREW BAYLY: I’ll tell you why I don’t believe that the members have read the Half Year Economic and Fiscal Update, and I draw the attention—

Madam DEPUTY SPEAKER: No, we’re actually debating the bill.

ANDREW BAYLY: OK. Madam Deputy Speaker, the reason I want to draw this attention is that because there is money being spent in this family tax package, this is restricting the ability to make substantial capital programmes for the health sector, which goes against the stated wishes of the coalition Government, and I don’t believe they’re in a situation to be able to do it in the future.

Hon CARMEL SEPULONI (Minister for Social Development): I had the opportunity during the urgent debate to really cover off the more substantive parts of what I wanted to speak to about this bill, so I won’t go into too much detail in this speech, but what I do want to do is respond to some of what the previous speaker, Andrew Bayly, mentioned during his speech. He very facetiously congratulated us for introducing our own bill. What I’d like to say is that at least this is a bill with impact. It is a bill that will make a difference, so it was definitely worth waiting for, and there is going to be much, much more to come from this side of the House.

This is a bill that is going to lift 88,000 children out of poverty. I want to just go back to what Andrew Bayly said about how their commitment was to actually lift 50,000 out of poverty, I think, in 2018-19, whereas the 88,000 is 2020-21. Fair point, but, actually, our number for 2018-19 is 71,000, which still tops what they were attempting to achieve. I really wanted to make that point.

We’re really proud of this package, and want to remind that side of the House that there are 385,000 families that are going to benefit from what we put forward today here in the House. It is the changes to Working for Families, it is Best Start, it is the accommodation supplement, and it is the winter energy payment. There are changes to a number of other areas, and all of them are going to have a positive impact on New Zealand families. I’m really proud that we’ve been in Government, what, seven weeks?

Hon Grant Robertson: Yes.

Hon CARMEL SEPULONI: Seven weeks, and we’re going to make a bigger impact for children in poverty and for New Zealand families than what that Opposition managed to do in the nine years that they were in Government.

I’m not going to continue on. All I’m going to say is, again, thank you to the officials and to the team that was involved in this, and acknowledgment to our finance Minister and also to our children’s Minister, who I’ve had a great time bonding with over Working for Families.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Deputy Speaker. It’s a pleasure to take a call on this bill. It deeply disappoints me to see the reversal of this piece of legislation. It’s really been interesting over a period of time that the argument has been that people aren’t going to miss what they didn’t already have. But there was a piece of legislation in place designed to give people tax cuts on 1 April 2018.

All the arguments that we’ve had to date say, “Well, it didn’t matter because they didn’t see it—they didn’t have it.” This piece of legislation clearly says that it’s going to repeal the tax threshold changes. If you’ve actually been and had a look at the dictionary definitions of repeal, it talks about “revoke”. We talk about “rescind”, “cancel”, “reverse”. So it’s the revocation, the reversal, and the retraction of a law or an Act of Parliament. So, Grant Robertson, anything that denies in the future that this is a reversal of something that already exists—I’ll give you the definition afterwards. If you haven’t had a chance to look it up for yourself, I’ll give it to you.

It’s also deeply ironic that the first significant act of a Government who has the stated aspiration of lifting workers’ wages is to reduce what hard-working Kiwis have already received in the hand. Now, I’ve got an uncle that says if he buys a Lotto ticket every week, and he takes the $5 out of this pocket and he puts the Lotto in that pocket, over time he’s going to come out about the same. This is actually something working on a very similar theory. So it’s actually—people earn it, they put it in this pocket, and then you come along and take it out of the other pocket, and then they end up exactly the same.

Madam DEPUTY SPEAKER: I don’t take it—I don’t take it.

BARBARA KURIGER: Sorry, Madam Deputy Speaker. So look, it’s taking hard-earnt money out of people’s pockets, and, you know, Grant Robertson said before that the money could be used for other purposes. Well, I’m sure that those other people could use that money for those other purposes, especially those one million people—over one million people—that are missing out.

Now, they may not have children, and it’s really unfortunate that they’re going to miss out by virtue of that reason, because they still work just as hard for their money. But imagine if every one of those million people took that $1,060 and bought two trees with it, there’s two million trees—so there you go. So people can actually decide with their own tax cuts what they actually do with that money.

The other piece of this legislation that’s really interesting is that there’ll be a lot of explaining for some of the Government coalition partners to do, because $676 a year will be taken from superannuitants and veterans. So, actually, they are going to be worse off, and New Zealand First is actually going to have to go back and explain why they voted for this piece of legislation and then they decided to repeal it.

Hon Chris Hipkins: Just table the research unit notes.

BARBARA KURIGER: Mr Hipkins, I have the intelligence to be able to find out my own research, OK? I did this all in my own time. Thank you.

The other things around this bill—I really resent the fact that Mr Robertson talked before about the hollow, selfish individualism of those people that work particularly hard. I don’t think they’re going to be very impressed out there hearing us repeat that comment. Now, we’ve talked today also—Grant Robertson and a number of other members across the other side of the House have talked about the 88,000 kids that are going to come out of poverty supposedly by 2021. Now, you’ve got to have a plan around that, because giving people money doesn’t necessarily get them out of poverty, because there’s a whole other part to that poverty story.

So you can legislate for tax changes and money changes, but there’s an element of social dysfunction that we all as politicians have to own up to, because if we don’t own up to it we can’t fix it. There was a great package that we had from our previous Prime Minister and now excellent leader, Bill English, around social investment. So there’s a different view on this side of the House around how you lift those kids out of poverty. It’s actually not taking money out of people’s pockets; it’s actually putting the right things in place in our society and in our communities so that they can actually help deal with this whole issue.

The other interesting thing about this piece of legislation is it introduces a new winter energy payment. So if those people decide—they’re going to get it automatically—they don’t want it, it’s up to the person to go back and say they don’t want it. Well, it’s like “Yeah, right!” That sounds a little bit to me like an advertisement that advertises beer. It’s the whole “Yeah, right!” thing. Of course they’re all going to come and give it back, so it doesn’t actually make any sense to give money and expect people are going to come and offer it back of their own accord.

I was going to say I came down in the last shower, but given that there’s quite a lot of very dry weather going on around in the country at the moment, it’s not a very productive statement to use, because it makes me older than I would like to think I would be.

Also, I really think when it comes to this taxation bill it’s about people feeling that when they go to work in the day they’ve actually earnt their money. I was actually reading the income tax and benefits bill disclosure statement and regulatory impact statement before—doing my own research, Mr Hipkins—with the material that was actually provided on the Table over here.

Under the section where it talks about benefits and costs, it says in number three over the page, “What are the likely risks and unintended impacts …?” and under the number it talks about, “Potential for reduced work incentives as a result of high effective marginal tax rates in some cases. This results in workers paying more tax for every dollar of … income earned.” So it may not be that good for productivity in the long run, because what you have to remember is we are talking about one type of tax here, but this is not the only type of tax that people are paying.

As I go through here and look at page 27 of 45 of the same document, the question in here is about the problem definition and objectives and “What is the policy problem or opportunity?” It says that the “Family Incomes Package would be less likely to meet the current Government’s objectives for the wider Families Package (outlined below).” And if you look at number three—and there seems to be something about number three in this statement—it talks about freeing up “fiscal resources over the next four years to contribute to further investments in housing, health, education, and other priorities.” Well, that’s a very commendable and laudable thing—to free that money up. The problem with that money is it’s already been spent. It’s been spent on what they call the fees-free package, provided for by a lot of—again—hard-earning people who pay their taxes.

So while you think it’s laudable to send people out to work, let them earn money, take the money off them, put it in the other pocket, give it to the students, and then say that you’re going to contribute over the next four years to health, education, housing, and other priorities, it’s not giving a very good fiscal example to the people of this country to say actually, “I’m going to use the money for something one day, but, actually, I’ve already spent it. Oh no, what am I going to do now? The money’s already gone.” So it’s not very good. It’s not very good planning, and it’s not very good prioritising to actually spend the money before you promise to use it on something else.

So all in all, I’m not overly impressed with this repeal, because I think people are going to be a whole lot better off and a whole lot more incentivised to get out and work productively for this country and earn money and pay the taxes they deserve, but no more than they deserve. I’m deeply opposed to this piece of legislation. So thank you, Madam Deputy Speaker.

Dr DUNCAN WEBB (Labour—Christchurch Central): Madam Deputy Speaker, I am sick to death of hearing that lot talking about hard-working New Zealanders as if it was only the high-income earners. How do they think that a bus driver, a cleaner, a security guard—they are hard-working New Zealanders, and many of them are working three jobs just to make ends meet, and they’re the people that this Families Package will help. So you know what? It’s not about you and your mates.

At last, we’ve got a Minister of Finance who knows about balance. This is not some blunt tool; this is not lolly scramble. At last, what we’ve got here are some financial measures that target. At last, here we have something that says, “Who needs this? Lower-income working families.” We’re not going to ask someone to fill out 30-page forms for their heating payment. No, what we’re going to do is say, “Here it is.” This is not some dirty little social investment scheme. This is a thoughtful package that a Minister of Finance that I am very pleased to be working with has thought out very carefully.

So you, the member for Taranaki - King Country, stop thinking of your dairy farmers, start thinking about the people who milk the cows. So you know what? I can think of nothing better—nothing better—than this package, which helps out families, people with new members—

Barbara Kuriger: I raise a point of order, Madam Speaker. I did not mention the dairy farmers. I was actually thinking about the bus drivers—

Madam DEPUTY SPEAKER: Order! [Interruption] Order! That is not a point of order.

Dr DUNCAN WEBB: Yeah, well, perhaps you should try catching a bus from time to time. All I’ve got to say—there’s not much more to say but, at last, there’s a Minister of Finance who has a package that has balance, that at last targets help where it’s needed, and that will lift 71,000 children out of poverty next year. Thank you, Madam Deputy Speaker.

A party vote was called for on the question, That the Families Package (Income Tax and Benefits) Bill be now read a first time.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Bill read a first time.

Second Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Families Package (Income Tax and Benefits) Bill be now read a second time.

It’s my honour to once again speak in favour of this comprehensive package to lift at least 88,000 children out of poverty, when it is fully implemented—and, for the benefit of Andrew Bayly, 71,000 out of poverty in 2018-19.

It is actually, perhaps, quite useful just to reflect on—if we are looking to compare the package that the National Party put up in Budget 2017 versus this package—and to bear in mind that, at 71,000 children coming out of poverty, that’s a 44 percent reduction, and then, by the time we get to 88,000 children, that’s a 48 percent reduction, nearly halving child poverty. If we look at the package that was put forward in 2017, in 2019 it would’ve been a 34 percent reduction, and then, moving to 2021, actually, it went down, to 27 percent. So it’s not quite as good a package when it comes to actually lifting children out of poverty.

This package is one that covers at least 384,000 families. It does focus on boosting low and middle income families with children. We have never said anything else, on this side of the House, other than “We want to support children to have the best possible start in life.” We make no apology for the fact that this package targets supporting families with children. It targets supporting families with children and lifting those children out of poverty.

I am extremely proud of this bill. I have no desire to elongate my speech, other than to commend it to the House.

Hon STEVEN JOYCE (National): Madam Deputy Speaker, thank you for the opportunity to speak on the second reading of this bill, a bill that just seems to unravel the more we hear about it in the House. Actually, I think it would’ve benefited hugely from going to a select committee. As a result of not going to a select committee, we’ll have to improve it here in the House.

There’s a number of things about this bill that are quite strange—many things, actually. We’ll try and deal with a few of them in the time allotted to me. One of them is why the Government talks a lot about the benefits of targeting but then does universality. I’m trying to work out how that’s consistent. They say that they don’t like universal tax threshold changes, because everybody benefits from that, but then they promote as an alternative three universal bits of support. The winter energy payment applies to everybody over the age of 65, irrespective of their income levels, irrespective of their asset base, irrespective of where they come from or what they do, irrespective of whether they work as well as receiving superannuation. Those people—everybody over the age of 65—qualify for a winter energy payment. So that’s an interesting one.

And then everybody that has a baby, irrespective of their income, qualifies for the Labour Party’s baby bonus. That’s interesting. So somebody who’s on an income of $250,000 qualifies for the Labour Party’s baby bonus. It’s hardly a targeted programme.

And then, of course, we have the other part, which is the bit that is being paid for by this package, and that’s the tertiary education, “fees-free” thing, which applies to every family, irrespective of their income. It is irrespective of their income.

Hon Iain Lees-Galloway: Speak to the bill, Steven.

Hon STEVEN JOYCE: Actually, Madam Deputy Speaker, the Speaker earlier clarified that I could refer to how the money was being spent—

Madam DEPUTY SPEAKER: Briefly.

Hon STEVEN JOYCE: —and it’s quite clear, in this document from the Labour Government, that it talks about $2.84 billion for other Government priorities. The other Government priority is “fees-free” tertiary education.

So if you are to consider this package in the round, you have to consider the whole amount of money and where it’s going. And what we have is a whole amount of money taken from ordinary New Zealanders and targeted in a universal fashion to university students, superannuitants, and people having babies, and you get it irrespective of how much you earn. It would’ve been great to explore the sensibility of that at a select committee, because I think it would’ve actually fallen apart under the first examination from a submitter.

The second thing I wanted to focus on is a little bit more on this winter energy payment, because it does make very little sense at all. It is, on the one hand, universal. Everybody over 65 will get it. They’ll get an auto-enrolment, I understand. But they’re required to operate an honesty-box system. They are not allowed to receive it if they leave the country for a period of time to go on their winter “summer” holiday on the Gold Coast or in Rarotonga or, perhaps, Hawaii, if they’re wealthy superannuitants. They are supposed to write to, I suppose, a Minister—that’d be a good idea, to write to the Minister—and say to the Minister, “Dear Sir or Madam, I am leaving the country. I, therefore, have to own up with my honesty-box system on the winter energy payment.”

Or perhaps they will actually monitor people as they return to the country. Perhaps there’ll be a border assessment of when somebody is coming back into the country and how long they’ve been away. So they could actually check their passport to find out how long they’ve been overseas. Or, alternatively, they could use the IRD officials that are checking student loans to check whether somebody has actually overstayed and been claiming their winter energy payment while they’re offshore. That is, if I may put it politely, the stupidity of this proposal. I think it would’ve been significantly improved with a bit of time in select committee, if we had the opportunity to flesh that out.

Another thing I think would be really good to explore further is why the current coalition Government favours certain groups in society and the way that they lead their lives against other groups in society. Now, we’re all in support of people with young children. In fact, our package, which is largely not being unwound tonight, provides support through family tax credits to people with young kids. But what’s the limit to that? What about people who don’t have young families? What about people who, through misfortune or no choice of their own, are unable to have children? Don’t they actually have a right to keep a bit more of their own money?

You may say that they don’t, but let’s have a look. Let’s have a look at the impact of fiscal drag on some of these people in recent years. We last made the changes to the tax system in 2010. Somebody on the median wage then paid $7,325 in tax. Now those same people on the median wage, which has now gone up, pay nearly $8,000 a year in tax. Why shouldn’t they be able to get some of that back? What have they done wrong that means they’re not entitled, they’re not favoured by Grant Robertson, and they’re not able to get some money back? Don’t they have aims and goals and aspirations? Don’t they have the right to have their own dreams about their futures, that they get the opportunity to pay off their house a little bit quicker? What’s wrong with them, that the Labour Party doesn’t think they deserve anything, that they don’t think they should get anything? That, instead, the Labour Party picks out, as it has traditionally done—to be fair, they are nothing if not consistent—a small group of people like students and says they’ll have a bucket more dough?

What about the people, the ordinary Kiwi wage-workers, who aren’t going to university, who aren’t actually planning to travel overseas and get a winter energy payment, who aren’t actually, for reasons of their choosing, able to have a child at a particular point in time? Why shouldn’t they benefit a bit from the hard work of New Zealanders? That’s the problem with this proposal: the lack of fairness to those people. It is a lack of fairness to the 1.2 million New Zealanders—and we’re not talking, despite the talking points of the Labour Party, about the wealthy people. This package was across the quintiles. What happens to the ordinary people who actually are just getting on, just doing their job, just earning a bit of pay, who deserve to get a little bit of a break because of how hard New Zealand has worked over the last 10 years? Those people are invisible to the Labour Party. And many of them are the sort of people that a Labour Party would have supported in the past, would have encouraged, but these days they are not interested in those people at all.

We had Mr Webb pop up, possibly the other side’s equivalent to our dear departed friend Mr Quinn, from times gone past. He’s popping up and saying his bit. He’s putting together a class war, but the class war is actually an interesting class war because it leaves out middle-income workers. Ordinary Kiwis paying 30c on the dollar are missing out with this.

These are some of the problems that we should actually be looking into. Why are we bringing back the independent earner tax credit when it’s only actually claimed by about 30 percent of people during the year?

Hon Grant Robertson: That’s because you didn’t tell anyone about it.

Hon STEVEN JOYCE: No. Why would you have to—why not do the sensible thing and, when you have the opportunity, shift the bottom threshold? I mean, how capitalist is that—shifting the bottom threshold from $14,000 to $22,000? What a capitalist initiative that is that we have to stop! That’s an outrageously capitalistic initiative: to lift the bottom threshold from $14,000 to $22,000!

What we could have done at the select committee is explore why lifting tax thresholds at all is completely anathema to the Labour Party. We also could’ve explored just how genuinely their fellow parties, who voted for the previous tax package, really do believe in signing up to this, because, actually, they didn’t campaign for this—neither of them did. They did not campaign for it. They did not, actually, at all, and they voted for the previous package. There’s only one party in this house that campaigned for this package, and they got 36.9-odd percent at the election—36.9 percent—which, I know, hurts them, but they wander around saying that everybody supports them, until you look at the numbers and they don’t.

It would have been good to test all of these things at a select committee, but they’ve decided to take the long way round, and we’ll have to test them all in the House. Thank you.

Madam DEPUTY SPEAKER: I call the honourable—

Hon Iain Lees-Galloway: Iain Lees-Galloway.

Madam DEPUTY SPEAKER: Iain Lees-Galloway.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): That’s the one. Thank you, Madam Deputy Speaker. Well, that contribution by the member Steven Joyce, just like many of the contributions from the Opposition benches this evening, was absolutely riddled with what I can only describe as basic stupidity, or BS.

The first piece of BS that I’ve heard from the Opposition this evening came from the mouth of none other than the Rt Hon Bill English, when he said that this bill, which will indeed put more money in the pockets of people who are on the lowest incomes and, indeed, some people who are on benefits—those people will waste that money on cigarettes and alcohol. What a patronising old Tory Bill English has proven himself to be. He is all about personal freedom and personal choice, and he wanted to try and say that this legislation tonight is part of some nanny-State agenda, but he’s sure pretty keen to tell poor people how they should spend their money. That was the opening statement from Bill English.

Then we heard—

Hon Gerry Brownlee: Back on the bill.

Hon IAIN LEES-GALLOWAY: Gerry Brownlee agrees. Well, this is part of the bill, because that is the view that your leader, Mr Brownlee, took on this bill—that it does put money into the pockets of poorer people, which is true. That’s what it’s designed to do, and Bill English thinks that’s a bad idea because poor people don’t know how to spend their money and should be dictated to by the Government.

The second piece of BS that I heard from the Opposition benches is that this money is going to—

Hon Members: Point of order.

Hon IAIN LEES-GALLOWAY: —basic stupidity—

Madam DEPUTY SPEAKER: Order! I think we just want a bit of decorum, thank you, with the language.

Hon IAIN LEES-GALLOWAY: The second piece of basic stupidity that I heard from the Opposition benches is that this bill is somehow going to make—

Hon Steven Joyce: I raise a point of order, Madam Speaker. I sense that the member did not actually listen to your advice. We’re now being told about basic stupidity and all sorts of things like that. I know he is cheapening his own argument, but it would probably be better if he just sort of improved the tone and actually argued the case. [Interruption]

Madam DEPUTY SPEAKER: I don’t need any help. I thank the member for that point of order, which wasn’t really a point of order.

Hon IAIN LEES-GALLOWAY: Look, there is so much basic stupidity on the other side that I have not got time to list it all. I will simply say this—

Madam DEPUTY SPEAKER: I would appreciate it if you would discuss the bill.

Hon IAIN LEES-GALLOWAY: If you cut through it, you will simply see what this bill does, and this bill does a couple of very important things. One is that it lifts 88,000 children out of poverty, something that the National Party could not achieve in nine years in Government, and this coalition Government has legislated for it in less than seven weeks.

The second thing it does—

Hon Gerry Brownlee: That’s not true. The member’s a liar.

Hon IAIN LEES-GALLOWAY: —is it raises incomes for over 60 percent—

Madam DEPUTY SPEAKER: Order! Mr Brownlee, you will stand and withdraw.

Hon Gerry Brownlee: I withdraw.

I raise a point of order, Madam Speaker. You’ll understand that you’d get a little bit annoyed to hear someone misrepresenting somebody else’s—

Jan Logie: Point of order.

Madam DEPUTY SPEAKER: This is a point of order, and you will be silent.

Hon Gerry Brownlee: So, grossly misrepresenting the bill that’s in front of us that of course it’s going to incite a degree of response. I do think that calling him back to the bill would be a good idea. What everyone knows is that this bill is a shadow of what was passed by this House last May.

Madam DEPUTY SPEAKER: That’s very interesting, thank you very much, but the member’s been here a long time and knows that he cannot interrupt a speech to say that someone has misrepresented him.

Hon Gerry Brownlee: I raise a point of order, Madam Speaker. With all due respect, it was the Chair who interrupted the speaker to ask me to withdraw.

Madam DEPUTY SPEAKER: Yes, thank you, and, in making your point of order, you then claimed you had been misrepresented, to atone for your unparliamentary language. Thank you.

Hon IAIN LEES-GALLOWAY: Over 60 percent of families are going to be better off under the Labour - New Zealand First - Greens Families Package than they would have been under the National one. That’s why people voted for this Government and that’s why this bill is going to be put through before Christmas this year.

Hon AMY ADAMS (National—Selwyn): I’ve come down to the House, of course, to take a second call in quick succession after the first reading debate on this Families Package (Income Tax and Benefits) Bill, because it is vitally important that New Zealanders who are listening to this debate, who go back to it, understand the real impact of what’s happening here tonight.

The starting point is very clearly that the bill in front of us repeals legislation that is currently on the books, which would have moved the income tax brackets from $0 to $14,000 to $0 to $22,000 for the first tier. That means that anyone earning under $22,000 a year would have, with the law as it currently stands, been paying only 10.5 percent income. Now, as a consequence of this bill, most of that income will flick up into the next tax bracket and they’ll be paying 17.5 percent. Similarly, anyone earning under $52,000, under the law as it currently stands, would pay a maximum tax rate of 17.5 percent. But the Labour Government wants to make them pay upwards of 30 percent. So what we’re doing here is targeting those on the very lowest incomes and saying, actually, they should be paying some of our highest tax rates.

Now, when National was in Government, we were very clear that over the passage of time, when the value of money changes, it is important that we continually reflect that buying power of money and the increase in the average and median wages, so that you don’t end up getting more and more of the lower-paid workforce paying the higher rates of tax. It is just crazy to have a bill that insists on lower-paid workers paying income tax rates that are targeted to and designed for those on higher incomes. So, if you want to talk about targeting support, the most sensible, basic thing that you can do is ensure that those lower tax brackets, which are designed under our incremental tax system to apply to those who earn the least, are actually relative and keep pace with the value of the money and the increase in the average wages. And yet, the first thing that we’ve seen this new Government do is move to force all of those lower-paid workers back into higher tax brackets. That is a simple, incontrovertible fact that cannot be challenged. That is the law at the moment, and this bill changes the law so lower-paid workers pay more tax than they should and that they need to.

When a Government is successful at managing the economy and we are successful at ensuring that Government spending is controlled, we get to a situation where we realise that we are taking more money from people, from their pockets, every week than we need to. In that case, the responsible thing to do is to not take it out of their pockets to begin with. You don’t take it, add a bit more, filter it through a whole lot of crazy schemes, and then dribble a bit out. When the Government is taking more than it needs from hard-working Kiwis, it is its duty to allow those workers to keep what they earn. Governments should only take what they need to run the country properly and efficiently.

Within just days of this Government taking office, we are seeing them move to not only pull more and more money out of the pockets of hard-working Kiwis, to use them like the ATM and the cash cow that they obviously see them as, but they’re doing it in ways that don’t even follow their own narrative.

We have heard speech after speech today about how this package is somehow better at getting help to those who most need it. Well, that’s a fine-sounding piece of rhetoric but, if that were true, even in the slightest, why would you have a baby bonus being paid out to millionaires? Why? If your concern was genuinely to make sure that it was targeted, you would do a couple of things. First of all, you’d make sure that the lowest tax thresholds actually were kept for those who are on the lowest incomes. They haven’t done that. And you’d make sure that the benefits that you provide are actually made available to those who need them the most, and they haven’t done that.

In fact, the biggest spending item that this Government is funding by cancelling the tax cuts, keeping more of Kiwis’ money, is providing a universal gap year in the first year of university for every single young person, whether they need it or not. We can argue the merits of free education, but let’s not kid ourselves that this is about targeting. If you wanted to target, you would do it, first and foremost, by ensuring you don’t take any more money away from low-paid workers than we need to.

I want to just spend a moment reflecting on the fact that this is being done under urgency. This doesn’t come into effect straight away. There are a number of months more in which this could have gone to a select committee. While there is no doubt we will continue to have significant principled differences between the Government and this side of the House—and they’re differences that I’m very pleased to stand up and defend in this House—I don’t think it’s sensible to suggest that there aren’t questions and improvements that could sensibly have been worked through.

I just want to highlight a couple of those. There are some very strange and inexplicable—maybe members on the opposite side would like to explain them to us—calculations and figures that have been set for which we’ve heard no explanation. I would have thought, in the select committee process, members of the public would have been very interested to know, for example, why, when you have the baby bonus in years two and three—not in year one, when it’s universal and everyone gets it, whether they need it or not; not when we’re effectively paying them to have that child, irrespective of need. In years two and three that payment does begin to abate with income, but that income threshold kicks in at the very logical and round number of $79,000. Now, why $79,000? What is the logic of the abatement rate starting from $79,000?

Even more inexplicable is that the abatement rate itself is 20.8 percent. Now, in what universe would you illogically go to starting an abatement from $79,000 and then applying it at an abatement rate of 20.8 percent? Not 28 percent—two zero point eight percent.

I’m assuming that Grant Robertson has got some genius behind that and there are very sensible reasons for it. But what he hasn’t done—

Hon Grant Robertson: Of course. That goes without saying.

Hon AMY ADAMS: I’m trying to be a little bit—you know, it’s the spirit of Christmas—magnanimous to the Minister of Finance. But what he hasn’t done at any point is come up with any good reason why 20.8 percent was right; not 20.9 percent, not 20.7 percent, not 21 percent, not 20 percent. He’s very carefully, obviously, determined that 20.8 percent abatement was right. If there was a good rationale for that, perhaps we will hear it. But in the select committee process, we would have had the opportunity to go through that and examine it in some detail.

We heard, for nine years, outrage and rallying and indignation at the inappropriate use of urgency. I remember a time when we were debating something that would take effect that afternoon. In fact, it was so urgent we had to get the bill—well, actually, we worked around it, but at one stage we were going to get an air force plane to fly the bill to the Governor-General to give his assent because it was that urgent. And still, Chris Hipkins and Gareth Hughes, in particular, said it wasn’t appropriate to use urgency.

So in that case, with that sort of time frame, you shouldn’t use urgency, because even a short select committee process would help. But, here, we have a bill that no party other than Labour campaigned on, that doesn’t take effect, even in its very early stages, until 1 April next year—in fact, most of it takes effect much later than that—that has strange and inexplicable thresholds and measures and complications to it, and that has a lack of clarity around how things like the winter heating payment will apply to superannuitants. Do they have to apply? Do they get it contemporaneously? What happens if they do go overseas for four weeks and one day, not three weeks and six days because, I don’t know, there was a volcano erupting in Bali and their flight was delayed? Do they have to pay it back? How does that work? Do they have to go and re-enrol? None of that is clear. Superannuitants will be none the wiser as to what they get and how it works. We’ve got no idea what the bureaucracy required to run it is.

All of that could have been worked through in a select committee process. And yet, even with that, we have the issues of superannuitants who find themselves in residential care, as many do in the later stage of life. They will now find out tonight that not only will they not get any sort of winter heating payment but they also lose $1,060 that they were due to get on 1 April.

Where in all of the glossy material is the Labour Party saying, “By the way, all you superannuitants who are in care: sorry about that. You get nothing, because we’re going to take away the increase in your superannuation payment and you don’t get anything else. To all you other superannuitants who aren’t in care: good luck for all of those of you who don’t need it, because you’ll get it anyway; and those of you who do, well, we can’t really tell you what you’re going to have to go through to get it, what’s going to happen if you get your travel dates wrong by a couple of days, and what sort of penalty rate will apply.”

This is not only a bad bill; it is a rushed bill. It won’t achieve what it’s setting out to achieve. It could have been improved through the select committee. Worst of all, it is taking money away from the workers who earned it and who deserve to keep it.

Hon TRACEY MARTIN (Minister for Seniors): Thank you, Madam Deputy Speaker. It’s a real joy to rise and speak after the member who has resumed her seat, Amy Adams. I can hear the questions from the National Party Opposition benches. They’re all around the winter energy payment, their extreme concern for seniors, and some confusion that they have but, I can tell you as the Minister for Seniors, seniors do not.

It is a great shame to me that this is a Government who knows more in 43 days about how seniors interact with Work and Income New Zealand than the people who were sitting on these benches for nine years. Now, I don’t know if the previous Minister for Seniors just didn’t have a working relationship with everybody else in her Cabinet, or whether those people just chose not to listen to the older people of our country. Considering that 1.2 million of our citizens are going to be our seniors in the not too distant future, it is a great shame that that party has no concept of how seniors already interact with Work and Income New Zealand. If a senior citizen—

Chris Bishop: Winston knows a bit about it.

Hon TRACEY MARTIN: —listen up, Mr Bishop, because some senior citizen in your electorate might want to know—is already going overseas for more than 28 days, they must notify Work and Income New Zealand. This has been the situation for a large number of years, and especially for the last nine.

Hon Nathan Guy: What happens if they don’t?

Hon TRACEY MARTIN: During that period of time—they can’t contact Work and Income New Zealand, Mr Guy, but they’re travelling to the south of France? Really? This is the question your side has asked? This is the question the Opposition has asked, and I’m answering it for you, Mr Guy.

Already, there is a method by which Work and Income New Zealand must be notified by seniors when they leave the country for more than 28 days. The winter energy payment will be attached to the existing mechanism—no more expense, no more paperwork, no more nothing for our current seniors. They can opt out in the same way that they can opt out now. The Opposition may not know, but for some period of time, seniors have been able to opt out of getting their super. They can opt out of getting the winter energy payment. But they can also opt back in, under this piece of legislation, should their circumstances change—and many a senior’s circumstances had changed over the last nine years.

It interests me, the tone of the conversation coming from the National Party Opposition benches, with regard to the rhetoric around our seniors. What the National Party does not seem to understand is that this bill positively affects babies—all New Zealanders who are under one year old. This bill positively affects children up to the age of three. This bill positively affects all families with an income from $79,000 down. This bill positively affects every senior citizen in New Zealand. A previous piece of legislation, which that Opposition could not bring themselves to do, positively affects every single citizen in New Zealand—

Chris Bishop: Why are you giving millionaires free money?

Hon TRACEY MARTIN: —without ageism, Mr Bishop. Those of our seniors that wish to retrain or re-educate, under this Government actually have an opportunity to do so. But that Opposition stripped away any right from our seniors, stripped away any right from our older citizens, to be able to re-educate themselves to re-enter the workforce. Twenty-five percent of our seniors are still in the workforce, Mr Bishop, and this bill accepts that those seniors continue to contribute to our community. They may be asset-rich, as Mr Bishop might call it, because they might be sitting in a house that they’ve had for 50 years, but they are cash-poor. We know that 9,300-something seniors were hospitalised or diagnosed with pneumonia because they could not afford to pay their power bill. This side of the House, finally, for the senior citizens of New Zealand, is actually listening.

I have no idea what the previous Minister for Seniors was doing for the period of time she was sitting there, but what I do know is that seniors—thousands upon thousands of seniors—are contacting us, saying thank goodness that, finally, a Government has seen their need; that, finally, a Government acknowledges them as contributing members of our society and gives them an opportunity to have a standard of living. Because they’re not so individualised but they understand the concept of community, and it is our seniors that know the value of community in New Zealand.

Rt Hon DAVID CARTER (National): How galling it is to be in the House tonight and receive a lecture from a New Zealand First member about how easy or hard it is to sign up to superannuation and engage with Work and Income. I’ve done it. It was easy to do. I went there as required, with my spouse—or, in my case, my wife. I filled out my forms correctly and I’ve since received my due super. It is not difficult, so why can’t the Hon Tracey Martin tell Mr Peters how easy it is to do, because it’s not difficult. It’s not difficult.

Hon Tracey Martin: I raise a point of order, Madam Speaker. That is an issue in the courts. That is an issue in the courts, and members of the Government and their parliamentary servants are part of it.

Madam DEPUTY SPEAKER: You will resume your seat. I understand the point you were trying to make, but I do not understand it is in front of the court, and therefore I will take some advice. [Seeks advice] Your point of order is not correct; it is not before the courts. However, I would refer to the Hon David Carter to be careful about the inferences that he’s making about another member’s character and to focus on the bill. [Interruption] Excuse me, I ask that member just to calm down.

Rt Hon DAVID CARTER: Madam Deputy Speaker, the point I’m making is that the Hon Tracey Martin said it is not difficult for people to engage with Work and Income. I agree with that. All it takes is honesty, integrity, and a little bit of intelligence to fill out the forms properly, and, having engaged with Work and Income, there is no difficulty—it’s a good system. It’s a good system, but if you go in there forgetful of the information, not mindful of the correct information, or, indeed, in some cases, deliberately giving misinformation, I can understand why you could fall foul of the system.

Being in the second reading, I wanted to consider why it has been debated under urgency and why it has been done in the last few days of this Parliament when the Government’s had 43 days to do this classic character legislation. I’ve figured out what the problem’s been. There has been great difficulty getting the coalition to manage this, because there has not been a meeting of the minds at all on this particular legislation. If you look at the Green Party policy, particularly in regard to the winter energy payment, their policy going into the election was that it should be an energy supplement to all our selves that earn less than $50,000. Now, there is some merit in that. It’s about targeting those who might need it. But, obviously, the Greens—and it’s not the first time in the last 43 days they’ve been rolled by this coalition Government—have had to back down on that position and they’ve had to accept that it’s going to be universal and that winter energy payment is going to be available to somebody like myself.

If you look at the New Zealand First election position around benefits, they were requiring greater scrutiny of the benefit system, adjustment to benefits and abatement level, and better targeting. So New Zealand First have been rolled by the “genius” Grant Robertson—and I use that word only because Grant Robertson himself interjected that he indeed was a genius. I think that will surprise many of the 119 fellow members of Parliament in this House. But New Zealand First clearly campaigned on better targeting of benefits, so why have we ended up in this situation when there is, effectively, no targeting at all and the benefits that are being dished out by this package are super generous, certainly to those that need them—and so they should be; no objection to that at all—but they’re equally generous to a person like myself. Mr Robertson, through question times, argued that they were very keen to make sure the National tax cut package—$1,060—did not proceed, because it would be available to people like himself and me, and, yet, as I outlined in my first reading contribution on this legislation, I’m significantly better off—

Angie Warren-Clark: Opt out.

Rt Hon DAVID CARTER: The member yells out that I should opt out. Why should I be given the responsibility of opting out of a winter energy payment when the Government is prepared to give it? It’s like asking me to opt out of superannuation payment. Why do it? It’s the Government’s job to target assistance. It’s not the citizen’s job to then go back and say, “Well, it’s a bit of a foolhardy policy, why don’t I opt out.” It’s not the way it works, I say to that member, whose name, I’m sorry, I can’t recall. That’s not the way it works, and I’ll be interested as we get—

Hon Clare Curran: I raise a point of order, Madam Speaker. The member has just told us how easy it is to go to Work and Income, so if he wants to opt out I’m sure it’s very easy—

Madam DEPUTY SPEAKER: That’s not a point of order. That is not the way that this House works—to interrupt a member’s speech with what is not a point of order. That is a debating point.

Rt Hon DAVID CARTER: No, and I was desperately trying to explain to that member why people won’t go, and that’s the question I’ll be raising in the committee stage. Presumably some budgeting has been done on this. We know, I hope, how many people are eligible to pick up the winter energy payment, and I hope, equally, the Government’s done its research on how many people it thinks might opt out of the winter energy payment. So when we get to committee stage, I give warning to the Minister in the chair that I’ll be asking those questions. I hope we get the answer, but I’m sure we’ll get assistance from Madam or Mr Chairman at the time that if we’re not getting the answers, the debate will be allowed to go on for longer, so we could be here for some time.

The other issue I wanted to take up was the claim that’s been made that people will be significantly better off with this package. I think the figure mentioned by the Minister Grant Robertson was 384,000 people.

Hon Grant Robertson: Families.

Rt Hon DAVID CARTER: Families—384,000 families, so let’s work on the average family size being 2.2 or 2.3; that’s about 750,000 people. Yet the National Government had passed tax cuts into legislation that affected 1.2 million people. How can the Government possibly argue more people are better off under this package that they’re proposing than are better off under the previous National Party tax package passed—and voted for by the Green Party, and voted for by the New Zealand First Party—at the time. So there’s another question we will ask throughout the committee stage: how do they equate these numbers, because to me they don’t make sense.

As I said in my first reading contribution, there are a lot of people in hardship in this country—far too many people. Any package that addressed that hardship and was seriously targeted, I think we’d have had a rational debate within the National caucus in an attempt to find common ground to support it. But when you come in with a package like this that spends billions of dollars, and you spray it around with universal acceptance and eligibility, that just does not make sense. I say to the Government it’s had time to do this policy work; it’s had 43 days. Labour would claim they campaigned on this through the election campaign. Why has it taken so long to bring the New Zealand First Party and the Green Party into agreement on this? Has it been part of that coalition deal that we haven’t been able to see? Why have they then brought it to Parliament today and are attempting to pass it in urgency when there’s no implementation date at all before 1 April or 1 July next year—and the Minister of Finance, Grant Robertson, nods his head at that. Surely, Mr Robertson—

Hon Grant Robertson: It takes a bit of time to prepare.

Rt Hon DAVID CARTER: Oh! If it had gone to a select committee and we’d had a chance to help the Government with this package, I think we’d have ended up with a far better piece of legislation than liberally spraying taxpayers’ money around.

Universality is the problem with this package. It is giving money to people that do not need it.

Hon Tracey Martin: Ideology—ideology.

Rt Hon DAVID CARTER: The Hon Tracey Martin, who interjects yet again, gave a passionate speech about the people who are cold through the winter and need assistance. National accepts that those people need assistance, but I’m not sure that she can convince me at any stage that I need that assistance. But if she thinks I’m going to opt out, I doubt it. Why should I? If the Government comes into the House tonight close to the Christmas break, when the press gallery’s party’s on and they know they won’t get scrutiny by the journalists—they come in here because they’re ashamed of this package, to get it passed. They don’t get my support, but rest assured, the Hon Tracey Martin, in three years’ time this National Opposition will be back to tidy this mess up, and we will do so very, very quickly after the election of 2020.

Madam DEPUTY SPEAKER: I call Jan Logie. [Interruption] I’m sorry, can I just ask the Minister—it’s a constant barrage. I don’t know whether it’s because of where you’re sitting, but it is a constant barrage, and my right ear is really good.

JAN LOGIE (Green): Ha, ha! It was sounding very good from here. I do just want to pick up on one of the points from the previous speaker, David Carter, when I start. I guess I’d fallen a little bit into being sucked in by the rhetoric of the National Party as the party of personal responsibility. I don’t know; I’d heard this over and over again, and I admit to being sucked into it a little bit. But then I heard that last speech—it’s like, “You shouldn’t give me this winter energy payment”—

Madam DEPUTY SPEAKER: I’m not giving it to you.

JAN LOGIE: Oh, sorry, Madam Deputy Speaker. That member was saying he shouldn’t be given this winter energy payment, but he’s not going to opt out—why should he do that? It’s the job of the State to make sure he doesn’t get that! Where is the personal responsibility in that? I just don’t see it. I think there’s some kind of internal inconsistency coming from that side.

I do want to address some of the other arguments that I’ve heard. There’s been a lot said about the value and the importance of targeting and the problem of universalism—that’s been a constant thread. Now, I do just want to bring into this debate some of the problems with targeting, just to put that out on the table—that we have different views that we’re contesting here, and we’re being told that targeting is always better. Well, actually, there’s quite a lot of evidence and people’s experience that certain ways that targeting is done increases stigma. If you target to a group in need, then you make the provision of that thing associated with people in a bad position, and it creates stigma. There is very, very good research around that point.

The other thing around targeting is that it creates gaps. There are always going to be people who are in need who don’t meet the strict criteria that you have targeted to, and there they get no support. So there’s breakdown of our social infrastructure, and people fall between the cracks. That is what happens with targeting.

One of the other problems with targeting is that, actually, people need to know about whatever it is; the service that you’re providing. We’ve heard some debate about the independent earner tax credit as an example, and how only 30 percent of the people who were entitled ever picked it up because there was no advertising around it. While it’s a useful thing—and put the advertising into it; it’s worth bringing back—but it is a targeted thing and has flaws. If people don’t know about it, they don’t access it when they actually still fundamentally need the assistance. So to present out there as if universalism is automatically bad and targeting is automatically good is just not consistent with reality.

I also just want to challenge the view that’s come from that side of the House that by supporting this Budget legislation we are anti-worker. Ha, ha! It’s a little bit painful, when on this side of the House there’s been the commitment to increase the minimum wage to $20 an hour by 2021. Actually, that’s where we want to see people’s increase in keeping money in their pockets—by their wages and the income support, and ensuring that that system is there, not taking it out in terms of the money that we need to provide good social services. We know that when we take money out of the tax system, we have less for providing for our hospitals and our schools. So while you may say—

Madam DEPUTY SPEAKER: I don’t say it.

JAN LOGIE: I’m sorry—I’m sorry, Madam Deputy Speaker. I’ve heard from that side of the House that things will be better off and that the Government should take only as much tax as it needs to do the job. We’ve been told—it’s been suggested—that for the previous Government, that was their approach: just enough. Well, the “just enough” that we are hearing from parents is that they can’t cope with the pressure on them for donations to be able to get their kids to be able to participate in school. The kindergarten in my area was fund-raising for crayons, because that was the approach of the previous Government on what social service funding they needed.

The fact is that people were starting to go to private health insurers because the waiting list for our public health service was getting so long that they were worried they would die waiting to get a service. Now, that is what the previous Government’s definition of funding “just enough” was, and then they were introducing tax cuts. We want people to have money in their pockets and we want to have enough money to run the country decently, so that people aren’t having to take that money that you’ve given them back out to provide those basic services and protections.

I will allow what was said by one of the other members who referenced our policy, which was for a tax cut for people earning under $14,000—and, right at that end, absolutely, that is our policy. But we understand that in this time frame, to be able to make the difference for the people who need it the most, this legislation gets the ball rolling. We get to ensure that they can be warm through winter and they’re not going to end up in a hospital next winter and that those kids have got food in their bellies—those 88,000 children who are going to be brought out of poverty by this legislation. They will be able to attend the school trips and they won’t be too embarrassed to bring friends home to their house because there is no heating, there is no food in the refrigerator, and they don’t have another pair of shoes. We are committed to changing that, and in this time frame, the first 100 days, this Government is putting a stake in the ground and saying that we are prioritising those children.

I’ve heard criticism from that side of the House about the Best Start payment, which they have—rather pejoratively, I thought—started calling the baby bonus, as if it’s kind of a bonus and that babies are a function of a factory workplace activity.

Hon Jacqui Dean: Oh, stop it, Jan.

JAN LOGIE: Well, that is the underlying tone of “baby bonus”, is it not—rather than “Best Start tax credit”. There’s a really different world view in those two phrases, and they’re both applying to the same thing. So we’re going to refer to it as the Best Start tax credit, and the point about it being universal—and this certainly wasn’t Green Party policy, but I get that this has come out of Sir Peter Gluckman’s research about the importance of those first three years of a child’s life. [Interruption]

Madam DEPUTY SPEAKER: Order! I’m sorry to interrupt the member, but you cannot, I say to the Hon Maggie Barry, have a debate across the House, particularly interjecting when you’re on your feet and moving around the House. Please have some respect.

JAN LOGIE: Thank you, Madam Deputy Speaker. So that is coming from a really solid research base about the difference and the importance of those first three years of life. The point of making that universal in the first year is to ensure that every child gets the benefit of it, that nobody falls between the cracks, and that all children are supported by us as a country so that there is a message that we actually welcome children into this country and we will support their families in that difficult time.

I also want to just touch as well on some of the things in Green Party policy that aren’t in here and that we do want to see, which are around—

Madam DEPUTY SPEAKER: No, I’m sorry, but the Speaker was quite clear that you can’t debate what isn’t in the bill. You debate the bill.

JAN LOGIE: OK. I would point out one point around the baby payment—Best Start payment: it’s a positive that there is that welcoming. But I would say that it is adding to the complexity of our system and that the Greens do have a concern about that. Working for Families, as it operates at the moment, is incredibly complex and this does build more complexity into the system. It’s important in the short term, but we are absolutely looking to engage in that conversation about how to reform support for families to simplify it and to remove the discrimination that exists within the in-work tax credit as it is at the moment, to ensure that all of our families can easily access the support they need to be able to be healthy and well and to be able to properly participate in our society, because surely that is the core role of the Government.

ANDREW BAYLY (National—Hunua): Thank you, Madam Deputy Speaker. It is fascinating just watching tonight. It was only a few months ago that the Greens and New Zealand First supported the wonderful National Government’s tax bill, and, of course, there were all the good reasons why they supported it, and, of course, we are just watching everyone tonight—particularly from New Zealand First and the Greens—now backtracking on all that sort of stuff. I just think it is a fantastic opportunity to see consistency in action.

The thing I’ve just listened to from Jan Logie, the previous speaker, was that the Greens are saying their policy was that they’d like to see the bottom threshold for income tax changes to be increased, which, of course, was part of our package that was passed and is now enshrined in legislation. Then I heard a comment around targeting winter fuel payments that “Well, we don’t now believe in targeting payments.”, but as I understand it, it was actually the Greens’ policy during the election. So we’ve got all this backtracking and this lack of consistency.

Anyway, I spoke earlier about the claim around the 384,000 families that are going to benefit from this package put forward by the coalition, but I still want to reiterate the same point I made earlier. Under our bill, 1.64 million families were going to be better off. That’s 1.2 million families that are going to miss out on some form of financial advantage as a result of this bill tonight—as a result of this bill tonight. Most of those people are the hard-working people that that party over there—as we do—claim to represent. But, somehow, we protected them and looked after the 1.2 million. Somehow, these guys have forgotten.

Of course, a key part of our strategy was about reducing the income tax thresholds to deal with the fiscal drag that I spoke about before. Of course, that was about raising the minimum tax threshold from $14,000 to $22,000, at which point you pay only 10.5 percent, and then the next threshold, at 17.5 percent, was raised from $22,000 to $52,000. Again, every single taxpayer in New Zealand—anyone who paid tax—would have benefited by at least the first of those changes. But somehow, perversely, the coalition Government think that is a poor thing and a wrong thing, and I just don’t get the logic of that. These two changes made sure that everyone was going to participate in the benefits of a growing economy.

Now, I just want to turn to a couple of the key elements—new elements—of this package. Bear in mind that the Labour coalition Government has adopted broadly our family credits package changes and also the accommodation supplement changes that we had proposed. So those two parts are a substantial part of their tax bill. They’ve just—if I can use the word—borrowed it from National. The two new parts are the bits that I struggle with a little bit. The first one is the Best Start. It’s a $1.4 billion package over four years for newborns and up to the age of three, so on the face of it, it sounds a wonderful policy. But my first question to the Minister of Finance is: why use this mechanism?

It is interesting. I looked at the Australian Government’s position on this, and I think the Minister may have just borrowed a little bit from the Australian situation, as well, in developing this package. It was very interesting that this Best Start—or they talked about a baby bonus—was implemented in Australia in 2004, but it was dumped by the Labor Government in the 2013-2014 Budget. It was the Labor Government that actually dumped it. My question is: what evidence has the Minister of Finance got to support the amount of $3,000 per child? Where is the evidence for that? Secondly, where is the evidence that by paying $3,000 to everyone, rich and poor alike, that that will lead to better outcomes? What is the justification for the $3,000? Or is it just a politically motivated figure that sounds great? I would like to see the research from the Minister on it.

It was noted, actually—in the Australian scheme there was an independent review by the Henry tax review, and, again, I hope the Minister is listening to this—when they did a review of the Australian system, which they started out as A$3,000, just the similar amount that the Minister suggests in the Budget, they estimated the real cost for the first child was $2,000 and subsequent ones were $1,000, and that’s why the benefit changed over time, before it got scrapped by the Labor Government. Now, another interesting aspect is the extent of what the baby bonus actually did. There’s a review that just got completed early this year that showed that it led to a significant increase in new babies being born—and that in itself is not a bad thing. But I think the Minister just needs to be clear in what he is trying to achieve with this and to what extent that it is justifiable—the amount of $3,000—because in Australia it wasn’t justified.

The second element I’d like to just turn my mind to is the winter energy payment. Again, this is a universal payment, as we’ve heard tonight, which means that rich and poor alike share in its benefit. Of course, there’s the differentiation between a single household who gets $450 and the couple who gets $700. Again, there doesn’t seem to be a lot of logic for this, and for some reason that we haven’t heard yet heard from the Minister as to what the logic is and why there is a difference in the amount of money paid between a single and a couple, because, essentially, if you look at the stats, there is no difference.

Furthermore, the actual cost will differ depending on where you live, the type of heating system you’ve got, and the type of energy system you use. For some reason—there is no research on this issue that I’ve heard spoken about by the Minister. So one needs to question whether, in fact, this is something that has been calculated with some certainty or whether it, again, is just a politically motivated figure that’s been adopted to fill in the gap in the tax changes to make sure that superannuitants were not worse off. I think the issues that we’ve heard earlier about the wealthy having to go back and make an express claim that they don’t want to receive this benefit is just downright flabby policy—flabby policy. In terms of designing a policy, that it means that it’s reliant on people voluntarily going out and doing that is just bad flabby policy.

I just want to round off. To me this package raises some issues that I think just need to be drawn out. The first is that there are conflicting policies and they’re deeply inconsistent—deeply inconsistent. One is around a universal payment, which is the reason given for doing away with a lot of the tax cuts, and yet in two of the new ones they have adopted a universal approach. That is illogical.

The second one is just the extent of the Best Start package that abates at $79,000, which is a significantly high income level, but it starts abating at $79,000. For a single parent with one child that, under a broad calculation, will require that that family can earn up to $119,000 before it’s abated. That in itself is a very expensive and overgenerous policy by anyone’s account.

The last thing I just want to draw attention to: these two elements have made the tax system even more complicated. One of the things that we were trying to do was to simplify the tax system. What we’ve now got is a Minister who’s introduced complexity—unnecessary complexity—into this tax system.

The ASSISTANT SPEAKER (Poto Williams): Before I call the next member, could I just ask for the file box on the Green Party benches to be turned the other way please. Thank you. I call Paul Eagle—five minutes.

PAUL EAGLE (Labour—Rongotai): Madam Assistant Speaker, thank you. I think I’ve been given less than that, because the words I’m going to say can be said in less time, so there we are.

Matt King: This is going to be good.

PAUL EAGLE: Thank you, Mr King. Remember, I do the big work—you are the “king”, but I do the big work.

We’re in urgency for good reason, because this is urgent—this is urgent—and I’ll tell you why. This is why I don’t need much time. I was given leave—it’s hard to get out of this prison sometimes, but I was given leave, and, I’ll tell you what, I went out to South Wellington Intermediate School, because I had to go to check on something that the former Minister of Finance said when he claimed there was no public endorsement of this legislation. Well, members, after getting nearly 52 percent of the vote in my electorate—7,000 more votes for the Labour Party in my electorate—I think that’s a mandate, I think that’s an endorsement, and there’s not an ounce of arrogance in that.

There was a chair of a board—and I won’t talk about national standards, because that’s off-topic—who talked about this legislation. They’d heard about it. They know that there are families in the school that said, “This will make the sort of difference that the people who have children at this school need.”, and there was a standing ovation. I don’t know what gets more public endorsement at a low-decile intermediate school in the heart of Wellington City. They gave that endorsement: a standing ovation.

So, members, please, if there’s any doubt that there is no public endorsement of this, there is. What it shows is that this is a Government that is in touch and that this is a party that got it right. Tax cuts were never going to wash with the people in my electorate, but they get it when the houses they live in, the payments they’ll get—because the former Government didn’t do any maintenance on the Housing New Zealand Corporation’s housing stock, all 68,000, now 64,000, of it; there are a lot of them in my electorate. They actually get this. A standing ovation, members, says it all.

So check in with the people who voted for you—check in, because there’s no better mandate, there’s no better endorsement. As the Minister of Finance proudly said, this legislation will lift 88,000 people out of poverty, and there is no better figure than that.

The ASSISTANT SPEAKER (Poto Williams): I call Lawrence Yule—five minutes.

LAWRENCE YULE (National—Tukituki): I rise to take a call on this, and I say, respectfully, to the front bench, I’m only going to limit my call to something quite specific. Actually, I feel quite strongly about this: a week before Christmas, under urgency, you seek to pass a bill that will actually be majorly detrimental to 700,000 superannuitants in New Zealand, without even a mention of it. [Interruption] No, no. Let me go through, the Hon Mr Robertson.

Under National, superannuitants in New Zealand were going to benefit by $676 a year. Under your winter energy package—and that’s from 1 July next year—they will only get $265. They are now going to be $411 less well-off than they were from today. It’s in the paper here. That’s what it says. So while you talk about 388,000 families being better off, and that’s a lauded goal, actually, on the other side you are disadvantaging—[Interruption] On the other side, the Government is disadvantaging 710,000 people on superannuation, a week before Christmas—a week before Christmas.

I also note to New Zealand First, who are part of this coalition, and the Hon Tracey Martin, who is the bastion for superannuitants with the gold card, you’re actually ripping them off a week before Christmas without them knowing. So when you talk about these changes—to the Minister of Finance, when you talk about these changes I wonder why you have made it so complicated.

The ASSISTANT SPEAKER (Poto Williams): Can I remind the member not to bring the Speaker into the debate. Refrain from the use of the word “you”.

LAWRENCE YULE: Thank you. The coalition arrangement has brought in a winter energy package, when actually I can see next year that about a whole heap of people will be going offshore. Companies like Air New Zealand and House of Travel will say: give me your trip to the Gold Coast funded by the winter energy package. It will become the winter holiday package for some people, because this is so untargeted, unfair, and, actually, what it will end up meaning is you’ve got a farce of a scheme. For the life of me, I cannot understand why you don’t simply put the same amount into super, because you’re calling it a winter energy package yet it is not targeted. You can spend it on anything.

The ASSISTANT SPEAKER (Poto Williams): Can I remind the member—

LAWRENCE YULE: My apologies, Madam Assistant Speaker. The Government is calling this a winter energy package, but, actually, it really is a package that is available to all. It is available to people who are superannuitants and to those who are on the benefit. It is available to all. There is no guarantee it will be used for anything towards winter energy. It can be used for anything.

So whether you live in the winterless north, as the honourable member across the House does—does he need as much winter energy as somebody living in Invercargill or Otago? No. But you have made it universal across the whole country. I believe this part of the bill is very unfair on some of our most vulnerable people who are superannuitants. They have no idea this is happening. And you are bringing it out a week before Christmas—a big package for families, but, actually, for 700,000-odd people, you are taking around $400 off what they would have got from 1 July next year.

I want this coalition Government to actually own up to that. I’ve read the documentation. I’ve read it all here—[Interruption] The Hon Tracey Martin, yes, you’re getting exercised over there. Maybe I struck a nerve. Maybe I struck a nerve a week before Christmas that you are, as one of the parties that strongly supports superannuitants—you’re actually ripping them off.

Hon TRACEY MARTIN (Minister for Children): I raise a point of order, Madam Speaker. He cannot keep saying that you are ripping New Zealanders off.

The ASSISTANT SPEAKER (Poto Williams): That’s exactly right. Thank you very much for that intervention. I remind the member. Thank you.

Dr DEBORAH RUSSELL (Labour—New Lynn): Madam Assistant Speaker, I’ve been a bit worried about our friends across the House, because there is a particular number that they’ve been deeply concerned about. In fact, earlier this evening Mr Andrew Bayly memorably talked about the particular figure, and so have a number of other people on the other side of House. They’ve been deeply concerned that the average worker—they allege—is going to be $1,060 worse off because they’re not going to get something they were never going to get in the first place.

Hon Members: That’s right—they were!

Dr DEBORAH RUSSELL: Now, that’s a fine philosophical point, but I have some special reassurance for our friends on the other side of the House. You see, under this Labour-led Government, year on year over the next five years the average wage is predicted to grow by 3 percent, and if you crunch the numbers on that 3 percent, what it tells you is that over the next five years the average worker will be $7,800 better off before tax, $5,400 better off after tax, and that is $1,090 a year better off under a Labour-led Government. So I offer you that reassurance. And, more than that, we are restoring the independent earner tax credit, making the less well off, better off. So you are reassured that we are looking after the average worker. We are doing our best for workers and we are making them better off.

I want to raise one further fine philosophical point, and that is the point about what we pay taxes for. We pay taxes, we contribute what we can, because taxation is the price of a civilised society—a civilised society that supports its children. Children are not consumer accessories. They’re not nuisances. They’re not things that people just have. They are citizens and they deserve our support. This is what this bill does. It supports our younger citizens. It will lift 88,000 children out of poverty over the next three years—71,000 in the next year alone. Why do we pay our taxes if not for our children? That is why I support this bill.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Assistant Speaker. Look, I went through this bill before, but after listening to the speakers, the clarity with which we read stuff in this piece of legislation becomes very unclear, and I’m really looking forward to the committee stage to hear some of the explanations from the Minister of Finance to some of the questions that have been asked today. Because, to be honest, all that’s happened over that side of the House is the issue has been confused. So just a few examples here, in that we had Tracey Martin actually, when she was doing her presentation, she talked about how seniors were struggling. So then, Tracey Martin, why are we giving them less money? If the seniors are struggling, why are we giving them less money? This package does not seriously address the issue. We’ve had other speakers like Deborah Russell, who was just up, and Iain Lees-Galloway, who got up before, and talked about 88,000 people being lifted out of poverty, and that’s by 2021.

I refer back to what Grant Robertson said earlier today about it is not always the numbers that are the only thing that’s important; it’s about helping people. So you can actually give people more money, but you’ve also got to put some other tools around some of those people to help them. There’s a very well-known saying that says you can give a person a fish and you can feed them for a day, or you can teach them how to fish and you can feed them for a lifetime. So while extra money is important in people’s pockets—I had a visitor today from the budgeting service, and some of you on the other side know that person very well. Now, that budgeting service runs a good organisation that actually helps people. I think it would be quite advisable maybe for Grant Robertson to go along to the budgeting service and see if he can get some really good tips out of it.

This piece of legislation is leaving people out. It would be helpful for Duncan Webb to know that in our provincial electorates, we have truck drivers, we have plumbers, we have electricians, we have baristas, and we have coffee makers, we have all of those people, and guess what? They just lost a thousand dollars each.

The other thing I find really, really valuable in our communities—and Mr Hipkins might be interested in this when he’s finished doing his research about the repeal and revoke—is that we have a whole lot of primary schools who have 10, 12, 13 students in them. They’re very, very important geographically where they are. A lot of the people that support those schools are the grandparents. They are a three, four, five generations’ school. You’re actually whipping money off those grandparents, which actually, logically, they don’t spend that money on themselves. They donate it back to the schools. We had Jan Logie talking before about people fund-raising for crayons for school. Well, actually, those people, they take great pride in going back to their own school, and they take great pride in spending money. If you’ve ever been to an auction at any of those schools, some of those cakes that those kids make, their grandparents pay a fortune for. So you’re actually just distinctly disadvantaging the population.

Now, the other reason I would like an explanation on some of this, and I’m sure that a whole lot of people out here watching this tonight would like explanations—let me just quote you something out of an email that was sent to one of our members today about the heating allowance. It says, “Can you explain how it is calculated that two people heating their lounge get $700, and a single person heating the lounge gets $450? Something not right here. This is discrimination against a single person. This is”—

Hon Tracey Martin: They’re emailing the wrong person.

BARBARA KURIGER: Excuse me, this person’s written in and wants some answers from Mr Robertson, so maybe if you listen Mr Robertson might be able to answer these questions. “Please don’t say you cannot arrange for the discrimination to be adjusted. Surely it would have been made on a residence basis at $700. Again, what happens if three pensioners are living together? Do they claim $450 each to heat the room? Something not right here.” Again, what happens if a pensioner is living in a flat with power included in rent?

Hon Tracey Martin: Tell them to email the party in Government. We’ll answer it.

BARBARA KURIGER: Look, I am actually asking you general questions that have been sent in by members of the public, because we’re standing here and we can’t get any common sense about it.

With the heating allowance, the other thing we’ve talked about today is that people can go out of the country for a period of time, and then they’re not eligible for the heating allowance. I believe it’s four weeks, and I believe they can go out a number of times at that rate. Again, it’s another layer of red tape. How on earth are we ever going to find out—our sniffer dogs and our detector dogs at the border, they’re absolutely fantastic, but this doesn’t pass the sniff test. What are we going to do? Our customs officers are busy looking for drugs and they’re busy looking for people that shouldn’t be coming into the country, and now we’re going to ask them to actually target people who are going out of the country for a holiday in the cold and getting away with not paying back their heating allowance.

Hon Kelvin Davis: Barbara, that’s stupid.

BARBARA KURIGER: The other thing—well, it is stupid. It is stupid. So when we get to the committee stage, I want you to actually—

The ASSISTANT SPEAKER (Poto Williams): Excuse me, not “you”—thank you.

BARBARA KURIGER: —explain to me—sorry, Madam Assistant Speaker; I would like the Minister to explain to me why that is so stupid.

We’ve had a number of conversations throughout this debate about targeting. We had Jan Logie stand up before, and she talked about targeting creating stigma. Now, most people, when you go to them and you offer them the opportunity for help, if they know the places to go and they know the resources they can use, they are very, very relieved by an offer of help. We have a very good example of that, and that is—I’m just using it as an example relating to stigma and targeting—in the area of mental health. We have spent a lot of time targeting—

Dr Duncan Webb: Bill.

BARBARA KURIGER: Yeah, no, it’s an example related to the bill. We are talking about targeting. For so long people on mental health have felt targeted, and now they’re free. Actually, they’re owning up, and it’s a great relief to them all to be able to stand up and say that—you know, bring it out in the open and get some help. So I don’t think Jan Logie’s argument stacks up.

If we use targeting, and we use it to help find people that need help, and we actually have the right services and programmes set up around those people, we have a far better chance of lifting those people out of poverty. So you can talk about 88,000 people being lifted out of poverty by a certain date, and I think most people in this country would be very thrilled if that were to happen, but everybody’s watching with interest, because you cannot do that with a policy like this alone. You have to be out there. You have to be targeting people. You have to know who they are. You ask anybody in the community who those people are—they know, and those people are quite prepared to go out and offer help to those people that need it, with the right structures around them.

The last point I want to make is about the Best Start package, and I don’t think anyone in this House would want to deny people with young families who need that money. I also need to inform Jan Logie that this side of the House doesn’t believe that babies are made in factories. We actually know where they come from, despite her comments before. I’ve just recently had a new grandchild, and they’re very precious. But we don’t need to give that money to people that are quite well off. It’s one of those things where if people don’t need it, why should we, irrespective of whether they need it or not, pay it to them? It just uses money. Why do we give it away to people that don’t need it? All it does is it uses money for things that we could use for something else.

Hon Member: Something like tax cuts?

Hon Member: Lack of imagination.

BARBARA KURIGER: Yeah. It’s just a complete lack of logic and policy in putting this bill together. Despite the 43 days, there’s a lot of work to be done on this bill. I wish there was a select committee stage, because there’s a whole lot of things that are red tape from a red party.

Hon Peeni Henare: Sit down and let’s move on.

BARBARA KURIGER: Peeni, you were asking me to stand up before.

Mr SPEAKER: Order!

BARBARA KURIGER: I’ve got six seconds to go—three seconds to go—there we go; I’ll sit down. Thank you, Mr Speaker.

KIRITAPU ALLAN (Labour): It’s with absolute delight that I get to rise and speak on the Families Package (Income Tax and Benefits) Bill. This is exactly the type of legislation that this side of the House entered into this Parliament to do. What it does is it absolutely flips on its head the last nine years and the trajectory that we’ve been going on that the last Government has led us down.

But before I turn to the substantives, I just want to make a comment on the previous speaker, Barbara Kuriger’s, speech. She said, “Now, why would we give money to people that don’t need it?” Exactly. That’s a great point, because every single one of us was going to get an extra thousand bucks a week, and we don’t need it. The reality is the people that do need it are the people up in Te Teko, the people up Te Ka’a, the people up in Tolaga. Those whānau need that cash in their back pocket.

Now, what I was just thinking about, because the last time I was in Te Ka’a—you guys probably don’t get up there except to go to your fancy holiday homes, but when I go up there I’m dealing with the nannies and the koros. I’m thinking of Haki McRoberts and the whānau up there. When I step into their homes they’re not that warm, and they don’t have a lot of cash in their back pockets. What they’re saying to me—there were almost tears when I spoke to some of them, when we talked about what the implications of this legislation would be for those nannies and those koros up the coast. And when I talked to their mokopuna, and I said, “No, you know what, Nan and Koro, they’re going to get an extra 700 bucks to help pay for the heat.”, they were stoked, because what that meant was that they could ensure that their nannies and their koros wouldn’t be sleeping on the floor in their kitchen next to the ovens, as they’re currently doing and as they’ve been currently doing under the last Government. Go and see it for yourselves, because if you haven’t seen it, then I say that you haven’t been out to provincial New Zealand.

Now, I know that the member Barbara Kuriger represents a provincial seat, but I don’t know whether that member spends a lot of time with those that aren’t in the upper echelons. I’ll tell you what: there are so many people out there in our rural provincial electorates that are getting in touch with me right now saying thank you—thank you for—

Hon Member: Why didn’t they vote for you?

KIRITAPU ALLAN: Well, I actually picked up a few extra votes. I was pretty surprised myself, but anyway, that’s a point for another day. But what they are saying is “Thank you—thank you to a compassionate Labour-led Government; thank you, the Hon Grant Robertson, for building on the movement that started in our previous Labour Government; thank you, the Hon Chris Hipkins, for introducing a raft of amendments that dump the prior legislation that did nothing to educate our kids.” I don’t want to go on and on this evening, but I want to wholeheartedly swing in behind and say thank you to our executive for the stunning job that you’re doing. I commend this bill to the House.

A party vote was called for on the question, That the Families Package (Income Tax and Benefits) Bill be now read a second time.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Bill read a second time.

Instruction to Committee

JAMI-LEE ROSS (Senior Whip—National): I move, That it be an instruction to the committee of the whole House on the Families Package (Income Tax and Benefits) Bill that it have the power to consider and, if it thinks fit, to adopt amendments that are not within scope of the bill but are broadly related to family incomes, reducing child poverty, and the well-being of families.

I move this instruction to the committee, which the House will note is a debatable instruction, because we are debating today and will be debating in the committee of the whole House very shortly, a bill that seeks to do some honourable things. It seeks to look at issues to do with targeted social assistance, improving incomes for low and middle income families with children, and reducing child poverty. There will be amendments that are moved by this side of the House that will be in the scope of the bill, but this side of the House is of the view that we should be discussing things somewhat broader than that.

So this instruction that I have moved today—after looking at a few Hansards from an honourable gentleman who’s done this a few times in the past, seeking some inspiration, in fact, we’re of the view that we should broaden the scope of what the committee can consider, we should extend the powers of the committee of the whole House, and, as you would know, sir, the way to do that is to move—[Interruption]—well, maybe one day. As you would know, Mr Speaker, the way to do that is to move an instruction to the committee of the whole House, so I do that.

I’ve moved this instruction and, should it be accepted by the House, the instruction would allow the committee to consider in a broader fashion matters that are important to the Parliament and important to members of this House. I’m of the view that the wider issues around family incomes, the wider issues around reducing child poverty, and the wider issues around the well-being of families should be considered as part of the committee’s consideration of this bill. There are matters that we want to raise and we want to debate and that we want to have considered by way of amendments that we will be placing on the Table, if we get the opportunity, after this instruction has passed by the House. We’d like those to be debated, and some of those issues will be out of the scope of the bill but they should be debated. So we want to broaden those powers that the committee has.

We have been doing some research. We’ve got former Ministers of Finance and former Associate Ministers of Finance, who have been beavering away upstairs on matters that we could put up to improve this bill. They’ve been beavering hard—Mr Joyce—but we want to go broader than what the current Standing Orders would allow and we have come up with a range of issues. I mean, we are aware that the Labour Party, for example, has a strong view on setting measures for child poverty. If the committee was given more power to consider this bill, then we should be considering broader matters around measures on child poverty. It’s not necessarily something that we would support if it’s in the form that the Labour Party might have put up, but we think we should be having that debate. We think the committee should have the power to consider amendments along those lines, and whether they come from this side or that side, it’s completely up to members.

There are issues to do with food in schools, for example. We know there’s a political debate right now around funding for a charity. It would impact on food provided in schools, and so as an issue that broadly is in line with issues to do with the well-being of families, we should have the power to be able to debate that by way of a Supplementary Order Paper (SOP) and by way of an amendment if we wish to. Giving the committee the power to do that would be important.

This side of the House has some strong views on early childhood education and some strong views on how that impacts on the well-being of families. Also, we know that the cost of early childhood education is an issue that can contribute towards reducing child poverty in this country. If the committee had the power to consider SOPs and amendments along those lines, those are the types of issues that we’d like to see discussed.

We are also aware that school fees and the cost of school uniforms are issues that are important to families. Those go to the heart of many family budgets and the way in which parents can afford to provide things for their children to enable them to attend school. We’re of the view that that should be an issue that should be debated through the committee stage on this particular bill. So giving the committee power to consider those issues, giving the committee broader power than what currently is allowed for under the Standing Orders, is very important.

There are also other issues that our members have put up by way of members’ bills—members’ bills about issues that we think should be debated by the Parliament. If we give the committee of the whole House power to consider those issues by way of an amendment here, that would give us the ability to put forward for the Government’s consideration important issues to do with families. I mean, I know that Dr Parmjeet Parmar, who may be in this House right now, has a newborn child bill, which is of importance to many people and it is something she believes passionately in. Should the committee be given the power to consider that very issue, then we would want to put that forward as an amendment that we might want to consider.

There are other issues that have come forward. I know that there are some issues to do with dental costs, which is an issue that’s important for many members on our side of the House. We believe that goes to the fundamental question of well-being for families. It’s a matter to do with reducing child poverty if it can assist those children longer term and in the future as well. We believe that compulsory GP registration is something that should be considered. Income splitting was something that Peter Dunne—let’s just consider Peter Dunne for a moment. He was someone who was in favour of income splitting. I’m not sure it’s something we would want to pick up, but they might. They might want to pick it up. Training allowances—all of these types of matters are costs to families. All of these types of matters impact on the income that’s available as disposable income for families, and all of these matters, we think, the committee of the whole House should have the power to consider.

So I appeal to the other side. The other side of this House has put forward a bill that, in their view, has some honourable intent. They’ve put forward the view because they believe that there are some issues this House should be debating under urgency. They believe they’re urgent matters to do with family incomes, urgent matters to do with the well-being of families, and we are saying, “Yes, if the committee is going to debate that, then we should be considering it in a broader sense.” Having a broader debate in the Parliament, in the committee of the whole House, just before Christmas, so we can put on the table all of the views that parties in this Parliament have around families, around incomes, around the well-being of families—we should be doing that. We should be signalling to New Zealand, and we can do that by way of the committee of the whole House if we give the committee wider power to do that.

So I know there are other members behind me who have issues they wish to raise. I know there are other members who feel strongly about giving the committee broader powers to do this, and so I’m going to—

Mr SPEAKER: The member’s going to sit down. All I’m going to do is ask the member to stop being repetitious. He’s now gone on a bit of a track that is repetitious. This is a very, very tight debate and repetition is not allowed.

JAMI-LEE ROSS: Well, I think I’ve made myself clear.

Mr SPEAKER: I think several times.

JAMI-LEE ROSS: There are other issues that this side of the House may wish to debate on this very motion, so I’ll allow my members to do that now.

BRETT HUDSON (National): I rise in support of Mr Ross in his motion to give the committee of the whole House greater ambit for discussion and potential amendments. Look, I would never stand here and seek to in any way sound like I was giving advice to a member who has much more experience in these matters than I could hope to at this stage. But I do think it is important, in talking about why we should do this, to acknowledge that the circumstances we find ourselves in today, with a bill that is a Government bill and introduced under urgency, in no way obviate the right or stand in the way of the right of Parliament to determine its own proceedings and destiny. If I might offer just one simple example: although urgency meant we moved immediately from first to second reading—

Mr SPEAKER: I am going to interrupt the member and ask him to come back to the very narrow subject matter of it, and while I’m on my feet I’m going to ask Jan Logie for the second time—thank you.

BRETT HUDSON: Thank you, Mr Speaker. The simple point I’m making is it is right for Parliament to determine whether or not the committee of the whole House should look at a wider ambit for its discussion, debate, and potential amendment in the committee of the whole House stage to come, because if we look at the ambit of the bill itself and the way it explains its objectives, it is very broad—about low and middle income families, about child poverty in particular, also about assistance—

Mr SPEAKER: Order! I am going to refer members now to Standing Order 176, in particular paragraph (5), “Any debate on the question for an instruction is restricted to the subject-matter of the motion. It may not extend to the principles, objects, or provision of the bill …”, which the member is now doing.

BRETT HUDSON: Thank you, Mr Speaker. So the point that I think could also be raised—not to traverse areas that Mr Ross has—that is relevant to the matter in front of the House is, for instance, the area of digital inequality. I raise a comment that the Minister of Broadcasting, Communications and Digital Media made recently in a public speech that the lack of home internet access is the highest factor in social deprivation—a matter that we are considering this evening. Now, a little bit earlier this year, in her role as an MP—but, obviously, not as a Minister—she was even more clear in a statement that “Digital inequality is going to be the new measure of poverty.”

So that’s a matter that’s very relevant to the discussions in the House tonight. It’s something I think that members on both sides of the Chamber may wish to debate. That member who raised that comment in her capacity as a member of Parliament for Dunedin South, and, indeed, at the time, as the Labour Party spokesperson for ICT, also made comments at the meeting where she made that comment that—and I can’t quite quote, but I can remember the substance of it. It said, “We don’t need any more research. We know what needs to be done.”

Mr SPEAKER: Order! [Interruption] Order! This is now—I think it’s the second of the three-strikes warnings. The member will refer to the subject matter of the motion.

BRETT HUDSON: The point I simply make is that members have an interest in the elements that contribute to poverty, and that by giving the committee of the whole House the ability to have a broader discussion, it allows members on both sides of the House to raise matters that we might know that me, personally, or other members—my colleagues—may have an interest in but also that, through their public utterances, other members have also acknowledged some level of interest in.

So the point I’m simply trying to raise for the House and for you, Mr Speaker, is that by us saying that we think this is a good thing for the House to consider, there are at least some utterances in public that suggest that the elements that we think could be covered are matters that members have shown some interest in in public. So we’re not simply stating a hypothetical—that they might have an interest in something. I’m merely trying to reinforce that there is some matter of public record that the things that we are mentioning are not simply a figment of our imagination or our own personal desires.

But I do think that if the House were at least to consider and possibly grant this leave, or motion, to broaden the debate, it does allow the House to consider matters that are of import to the bill.

Mr SPEAKER: OK. We’ve now hit repetition.

Rt Hon DAVID CARTER (National): Oh, thank you, Mr Speaker, and I assure the House I’ll be very brief with my contribution. But I think, when you consider the motion and you consider the debate that’s occurred, what the motion is asking for is for the House, or the committee, to have the power to consider and, if it thinks fit, to adopt amendments that are not within the scope of the bill.

And, in speaking to that point, I want to raise a couple of points that you, Mr Speaker, made at the start of the debate—that you wanted, after giving an urgent debate earlier, the debate to be relatively concise. And, if you had the opportunity to be listening to the debate, it has been anything but, and there have been some very wide-ranging contributions from members. I can think of Jan Logie raising the issue of the universality of the health system and the universality of the education system. I can think of the Hon Tracey Martin raising issues around the ease of engagement with Work and Income when one applies—

Hon Chris Hipkins: I raise a point of order, Mr Speaker. I want to draw your attention to Speaker’s ruling 76/5, which says, basically, that matters that are one step removed or foreign to a bill cannot be introduced by way of an instruction; they can be introduced only by way of leave. I think both the motion moved by Mr Ross and now the debate are certainly one step removed and foreign to the bill.

Mr SPEAKER: Yes, I—

Rt Hon DAVID CARTER: Speaking to the point of order.

Mr SPEAKER: No, I don’t think I need—I mean, while I respect the member, I don’t think I need his assistance. I’ve been listening clearly to his speech, and my view is that while he might’ve been come up to the edge of some problems, I think as far as he went, he was all right. I’m not saying that, looking at that Speaker’s ruling, it would’ve applied to the two previous speeches.

Rt Hon DAVID CARTER: Thank you very much, Mr Speaker. If I could finish by just quoting a member from Hansard on 16 November 2010. This member said, “the ability for the House to instruct the Committee is one that has been used on a number of occasions. It is a way of bringing things into scope that would otherwise be out of scope.” This very sage member went on to say that “The Leader of the House and other … members have the ability to vote against the motion if they so wish, and [that] is their right to do so, but it is also the right of members to move such motions. It has happened at least two or three times in this Parliament”—and the member was referring, of course, to a previous Parliament—“[when] the House was considering a matter and before it was referred to the Committee.” That, of course, Mr Speaker, is yourself—the Hon Trevor Mallard, as you were then, pointing out—

Mr SPEAKER: I thought it was very well put.

Rt Hon DAVID CARTER: And I must admit I had a huge number of examples from Hansard that I could’ve used, all of which were the Hon Trevor Mallard taking the opportunity to widen the scope of a discussion in the committee stages. I have taken one that I think is succinct and to the point.

Members have the right to raise this. At the end of the day, it will, at some stage in the evening, or perhaps tomorrow, after 9 o’clock, be put to a vote, and then the House will decide about the widening of the scope.

Mr SPEAKER: The Hon—oh, Dr the Hon? No—the Hon Dr Nick Smith.

Hon Dr NICK SMITH (National—Nelson): Happy to take it either way. Look, I want to join—

Hon Members: Ha, ha!

Hon Dr NICK SMITH: That’s with respect to the “Hon” and the “Dr”—no other reference intended. I’m delighted to join my colleagues in supporting the motion to give a clear instruction to the committee to enable a wider discussion of bills. The reason, firstly, that we need to do that is this isn’t some minor matter. This is a bill, under urgency, involving over $5.5 billion of New Zealand taxpayers’ money, and we are also in a—

Mr SPEAKER: Again, I’ll refer the member to Standing Order 176, which is very, very tight. The member cannot traverse what’s in the bill.

Hon Dr NICK SMITH: The argument that I want to present is why the motion that has been moved by my colleague makes good sense in allowing a wider range of issues to be referred to. The motion—and I’m happy to read it so that it’s very clear—is that the committee needs the power to be able to adopt amendments that are not within the scope of the bill, but are broadly related to the issues of family income, reducing child poverty, and the well-being of families. So, fundamentally, it’s about whether we’re going to give the committee the power to be able to discuss alternative, and better, ways of spending the $5.5 billion.

Now, it’s absolutely right that this is not the time to debate the specific issues in the bill. This is the time to debate whether we want to let the committee of the whole House debate those broader issues as to whether there are other, and better, alternatives. We are in the unusual circumstance where we are in urgency. It’s either extraordinary in the sense that the package that is contained in this bill was not supported by the largest numbers of voters in the election that just passed a few months ago—quite different.

Mr SPEAKER: Right, the member will resume his seat.

KIRITAPU ALLAN (Assistant Whip—Labour): I move, That the question be now put.

Mr SPEAKER: Yes, I have no doubt that members are ready to make a decision on the question.

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

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Motion agreed to.

A party vote was called for on the question that it be an instruction to the committee of the whole House on the Families Package (Income Tax and Benefits) Bill that it have the power to consider and, if it thinks fit, to adopt amendments that are not within scope of the bill but are broadly related to family incomes, reducing child poverty, and the well-being of families.

Mr SPEAKER: Sorry, I’m just going to interrupt now. I do want to remind members that all votes are to be held in silence and that this is the last warning for that member.

A party votewas called for on the question, That it be an instruction to the committee of the whole House on the Families Package (Income Tax and Benefits) Bill that it have the power to consider and, if it thinks fit, to adopt amendments that are not within scope of the bill but are broadly related to family incomes, reducing child poverty, and the well-being of families.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Motion not agreed to.

In Committee

Part 1 Income Tax

Hon AMY ADAMS (National—Selwyn): I’m happy to be taking this first call in what I know will be a detailed and comprehensive committee stage on the legislation that we have before us. While we have been debating this matter this afternoon, this bill of course hasn’t had the opportunity to go to a select committee. There are, in Part 1, a number of the most important and substantial changes in this piece of legislation, so there will be a number of contributions that the members on this side of the committee will be wanting to take as we work our way through the detail of some of those changes.

In starting it, and given that Part 1 does contain the changes to the tax package that National had put in place in the 2017 Budget, and clause 46 in Part 1, of course, repeals those changes, it’s only right, I think, to point out to Kiritapu Allan—who spoke last in the second reading, which has just been completed—that it isn’t in fact a $1,000 a week tax cut that is being cancelled; it is, of course, $1,000 a year. Now, the difference may not be substantial to that side of the committee, but, actually, for New Zealand workers, $1,060 a year is what the Government was going to let them keep, of their own money. This isn’t Government money. This isn’t public money. This is the money of those workers, and when National was in Government the decision had been made that, actually, the economy was running well, the Government was running well, and we could afford to let hard-working New Zealanders keep more of their money.

That $1,060 of tax cuts was well-supported in this House. It was supported by every party in this House except for the Labour Party. What you’ve got, of course, in this bill is the cancelling of that legal entitlement that taxpayers currently have to keep more of their money. It isn’t simply about returning surpluses; it’s also very importantly about reflecting the real cost of those tax thresholds that are being debated, because the way the tax cuts were being delivered was not simply a reduction, but adjusting the thresholds at which the graduated levels of our tax system applied. In doing that, it is important that this committee is mindful of the fact that over the period of time, the real buying power of the average wage, of course, decreases, but the average wage itself increases.

If you want to maintain the relative parity between the taxpayers in New Zealand and the income earners in New Zealand and the respective tax rates that they should be subject to, you have to periodically ensure that those tax brackets are adjusted. The brackets that were focused on, which this bill is now seen to repeal in Part 1, were the lowest brackets in the tax system. They were the tax brackets in which the entire income of people on low to middle incomes are paying. So this bill undoes tax cuts that were exactly designed to ensure that the lowest paid in our economy got to keep more of their money. That is something that this side of the committee feels passionately about. I know that other speakers will want to spend some more time on that.

One of the other matters that I wanted to touch on in this first contribution is the strange reinstatement of a little known—and in a moment I will talk about why it’s little known, or how little known it is—part of the tax system, which is called the independent earner tax credit. The independent earner tax credit is one of those strange little parts of the system that effectively says, well, if you are a single person without children, if you’re a married couple that doesn’t have children or you have older children—at one point in the system where there was a lot of focus on especially supporting our families with children, actually there was a desire to want to give a little bit back to those earners as well.

It is the part of the system, or it used to be the part of the system, that really supported those childless earners. The amount of that independent earner tax credit is $10 a week. It isn’t a huge amount of money. Over the course of a year, even my grasp of maths tells me that that’s $520 a year.

Hon Grant Robertson: I can confirm that.

Hon AMY ADAMS: I’m pleased to get the confirmation from the Minister of Finance. I’m touched and honoured that the Minister has confirmed my maths. So, $520 a year. But let’s think about this it this way. If the taxpayers listening at home, the workers watching this debate at nearly 10 o’clock on a Thursday night, or those who are following this with interest—and actually, when you’re talking about people’s own money and how much of it a Government helps itself to, I think people do care. When they’re following this debate, what they need to understand is that, while this bill will give independent earners who don’t have children $10 a week—[Time expired]

Hon Dr NICK SMITH (National—Nelson): Thank you, Madam Chair Williams. The first point I want to make, in debating Part 1 of this bill, is how unusual and how lucky the Government is to be in a financial position where we are able to introduce such significant increases in income for New Zealanders.

I just ask the committee to reflect for a moment. Can any member of this committee remember a time when an incoming Government has had the sort of fiscal room to increase family incomes as much as this incoming Government? I do note my colleague Bill English is in the Chamber. Has there been the courtesy of either the new finance Minister or any member of the Government acknowledging the wise stewardship that actually puts us in this privileged position where we can increase the income of New Zealand families?

The second really important point I want to make is that we should not just be focused on how we spend, but actually on how we structure our tax and our family support packages to ensure that we continue to grow the economy. What really upsets me in this part is the degree to which we are going to increase the marginal tax rates and remove the incentives for New Zealanders to create wealth.

If we look at a person on the average wage, under the current law they’ll be paying a marginal tax rate of 17.5c. What members opposite, with this part, are saying is that they want to take another 12.5c, and remove the incentive for average Kiwis to go out and do another hour of overtime, and the small-business person to create an extra hundred bucks of wealth. What this party is doing is removing the incentives to create wealth.

Let’s just add it up. What members opposite are saying, with the combination—

Greg O’Connor: No, they have to do the overtime. They have to, to be able to afford the food. That’s why they’re taking the overtime.

Hon Dr NICK SMITH: No, I say to the member over there, you are taking incentives away from people who want to get ahead. Let me just explain it to him. What you’re doing is you are saying you’re going to put up not just the marginal tax rate; you’re also going to put up the abatement rate. In fact, if you’re on the average wage and you add up this new tax rate, you add on to it the 25c in the dollar abatement for anybody with children, you add on to it the ACC income levy, and you’re, effectively, saying to someone on the average wage, “Go out and earn an extra dollar, and we’re going to take 70c off you.” Earn an extra dollar, and they’re going to take 70c off you if you add these tax rates, the student loan abatement, and the family support abatement.

I simply say to the members opposite: what they do not get is that spending is easy; creating wealth is more difficult, and with this part of the bill you’re actually creating the ingredients in which you are taking away the incentives for New Zealanders to get ahead.

And then the third part is this: a key part of New Zealand’s competitiveness story has been the simplicity of our tax system. You talk to those from Australia, you talk to those from Europe, and you talk to those from the US, and what they say is great about New Zealand is a simple system that provides incentives to work, and what we see in this part is a hotchpotch that takes our system backwards. There’s been a pretty broad consensus over the last 25 years that a simple tax system is a good one, and between the measures to bump up the tax rates, to introduce these new baby bonus - type provisions, the provisions for heating allowances—why not just let Kiwis keep more of what they earn? Why do we want to make a tax system with all these fiddles, these bells and whistles that might, Mr Robertson, get you a cheap headline during the election campaign but fundamentally undermine the quality of public policy in New Zealand, our tax system, and our benefit system, that means more money spent on bureaucracy, less people understanding how it works, and, basically, making our country poorer as a consequence. That’s why we should oppose this part.

Hon AMY ADAMS (National—Selwyn): Madam Chair Williams, thank you. Well, I look forward to continuing on with what I was saying in my earlier contribution. When I was making that contribution, I was talking about the independent earner tax credit, and I wanted to talk about it. It isn’t the biggest part of the bill, but we’ve had a lot of discussion around the core aspects already today, and this is a part that I think does deserve some attention. So in making this change—let’s just be really clear about this—this bill, and the Labour Government, will be enabling those earners to retain $520 a year, on the face of it, but in return they’re taking away from them $1,060 per year. So they get to keep $520 a year but lose $1,060. Just earlier, the Minister of Finance was complimenting me on my maths, and I’m sure he will agree with me that $1,060 being lost is a heck of a lot worse than $520 being given back.

Actually, there’s a common theme here—there’s a common theme in here—because when you look through the package, the bulk of it, in Part 1, and you look at the families that it purports to help, 625,000 families that are included in the numbers that the Government claims this package will help are only $13 on average a week better off. Now, again, it doesn’t take a whole lot of maths to know that those families will, therefore, be worse off than they would’ve been under the package that the National Government put in that this bill that we’re debating tonight is repealing.

So let’s just be really clear that there are at least 1.2 million New Zealanders—and I would argue a heck of a lot more than that—who lose under this bill; 1.2 million New Zealanders who work every day, and, as Dr Smith was saying, who understand that money has to be earned and that earning it is the hard part, are going to lose out under this bill. In addition, even some of the people who, under this bill, on the face of it, get an extra entitlement, are getting less than they lost. They’re getting less than they lost, and I think that is something that the taxpaying members of New Zealand certainly want to hear about.

Again, when you look at another part of what’s included in Part 1, we have the baby bonus. We have this strange anomaly where, in a package that has been sold to the public as being a better way of targeting spending, we have a baby bonus that is paid out indiscriminately. And, again, over the course of this afternoon, I’ve heard so many crocodile tears and so much railing against any sort of indiscriminate giving back of money to the poor people who earned it, because they don’t need it because they’re too wealthy, and yet in Part 1 we have a baby bonus paid out to anyone, irrespective of need, irrespective of income, just for having a baby. Why would you put up a package that is supposed to be about targeting better those in need where 1.2 million New Zealanders, at least, are worse off, and the money is spent in a large part without any sort of targeting at all, paying a baby bonus to the very people they say don’t deserve a tax cut—the very people who don’t deserve a tax cut?

The tax cuts that are cancelled through Part 1 of this legislation have almost—well, the biggest part of them has been used to fund even more untargeted spending, which is the free gap year at university for young people. And, again, none of that’s targeted. So the very people who the Labour Government say don’t deserve a tax cut and who can support their children through university—and in my case are happy to do that—still get funded, and as a result the hard-working plumbers, cleaners, truck drivers, and sparkies around New Zealand are told they don’t deserve a tax cut.

Well, I’m sorry, Madam Chair, and I’m sorry to the members of this committee, but I cannot accept that a Government should take money that it doesn’t need off people who’ve worked damn hard for it, and spread it around in a way that even Treasury says they have no idea whether it will make a difference or achieve its goals. If you read the departmental disclosure statement, Treasury have said they cannot assess whether this package would achieve its goals. So why would you breach the fundamental duty of a Government not to take more money away from people than it needs, to do something that isn’t giving attention to the purposes of the bill, in terms of targeting it; isn’t allowing people to keep money that they’ve worked damn hard for; and isn’t, according to Treasury, even able to tell us whether it will meet its goals? It makes simply no sense at all.

Hon GRANT ROBERTSON (Minister of Finance): Madam Chair Williams, thank you very much for granting me the call. Part 1 of this bill does several extremely important things. The first of those is it creates a brand new tax credit, the Best Start tax credit—a tax credit that is fundamentally based in the best evidence that we can find about what will make a difference in the lives of children. The Children’s Commissioner expert group recommended that there be a universal payment for all newborns—that’s what they did. The reason they did that is because every single family faces costs at that time; every single family has to balance up the needs of looking after their newborn children with other parts of their lives.

Then the expert advice—not only from the Children’s Commissioner’s group, but also from things like the longitudinal study in Dunedin—tells us that the first three years of life are the most important in a child’s development. What Part 1 of the bill does is actually take action on that. Sixty dollars per week will make a massive difference to families, especially low and middle income families. Around 65,000 newborns every year will benefit from this from 1 July.

In earlier parts of the debate, the genesis of this idea was raised. It may have been the Hon Tracey Martin who did so. There was, once upon a time, a thing in New Zealand called the family benefit. There was a time when New Zealanders said, “We’re all in this together.” It doesn’t actually matter whether you’re rich or poor, we think that children deserve the best start in life. We think that families can be given strength by being given support by a Government that thinks that they are all equal, so that is the basis of this kind of payment. I am very proud that Part 1 of this bill says it’s time to bring that back—it is time to have that kind of support for all of our children. And then, yes, as we go on that begins to be targeted more, and it’s targeted more because low and middle income people raising children in New Zealand are struggling.

I do want to respond to the contribution from Amy Adams in this regard. It is vitally important that we understand that Part 1 and indeed Part 2 of this bill do focus on children, and we make absolutely no apology for that. We have done this package on the basis of evidence. We have done this package on the basis of what will help child development because we want New Zealand to be the best country in the world to raise children, and this is a step in the right direction for that. So I am extremely proud of the fact that Part 1 of this bill introduces the Best Start package. But I can respond to Amy Adams’ question about why we’re doing this: because, yes, we do want to focus on children and support for families with children.

Part 1 of the bill also goes on to implement the Working for Families changes and also repeal the Taxation (Budget Measures: Family Incomes Package) Act 2017. I do want to say to this committee: we have made a deliberate choice to repeal that Act because that Act did not deliver the fair outcomes we wanted. It did not deliver that, because it gave over $400 million to the top 10 percent of earners. On this side of the House we’re proud to have put up a bill and a piece—

The CHAIRPERSON (Poto Williams): I’m sorry to interrupt the honourable Minister—[Interruption] Order! I’m sorry to interrupt the honourable Minister. The committee is suspended until 9 a.m. tomorrow, when we will resume. Pō mārie.

Debate interrupted.

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

THURSDAY, 14 DECEMBER 2017

(continued on Friday, 15 December 2017)

Bills

Families Package (Income Tax and Benefits) Bill

In Committee

Debate resumed.

Part 1 Income Tax (continued)

The CHAIRPERSON (Adrian Rurawhe): Mōrena e Te Whare. The House in committee is resumed for further consideration of the Families Package (Income Tax and Benefits) Bill. When the committee suspended last night, we were debating Part 1. The Hon Grant Robertson had the call, and he has 55 seconds remaining if he would like to take a call.

Hon GRANT ROBERTSON (Minister of Finance): Mr Chair, the best 55 seconds of your day is coming up right now. The Working for Families tax credits are being extended by clauses 48 to 51 and clause 55 of Part 1. This will bring 26,000 families into Working for Families in the 2018-19 year, and then another 39,000 families in by the time this part of the package is fully rolled out. So to finish this part of my contribution, Part 1 of this bill introduces a Best Start tax credit that will make a massive difference to the 65,000 newborns born in New Zealand every single year. It will continue to be rolled out, targeting in years 2 and 3 those on middle and low incomes, and we will extend Working for Families. This part of the bill is a critical part of our families package.

ANDREW BAYLY (National—Hunua): Thank you, Mr Chair. I’m intending to make a few contributions around Best Start today, but some of my questions at the outset—I just want to understand the proposals a little bit better. Before I ask these questions of the Minister of Finance, I just want to state categorically upfront that every MP, no doubt, in this House wants to make sure that all families in New Zealand are in a position to look after their children in the best manner they can. So, with that in mind, I’d like to understand a little bit more about these Best Start provisions and particularly around the figure of $3,120 and why the amount has been set aside in clause 22(MG 2).

I think the issue—I referred to it last night, and I actually asked the Minister last night about why that figure was adopted in the bill. He rather—if I may say, with all due respect—glibly referred to a couple of reports that he underpinned the assumption to adopt $3,120, namely the Children’s Commissioner report and also the Dunedin Multidisciplinary Health and Development Study, which, no doubt, shows a lot of information around the benefits of supporting children at an early age. I don’t think there’s any dispute about that.

But that wasn’t the question—that wasn’t the question. The question is not whether young children should be supported; the question is: why $3,120? Why not $3,000? Why not $5,000 or whatever? So the question is: what was the evidence? What was the basis or rationale for that figure? Bear in mind that this Best Start package is worth $1.4 billion over the next 4 years or, in other terms, 25 percent of this total Families Package that the Labour coalition Government’s putting forward. The first thing is: is the $3,120 consistent with the Labour policy, the Greens policy, and the New Zealand First policy? Where’s the rationale for all this? Is this a figure that’s just suddenly being plucked out of the air?

But the other thing, and I did refer to this last night, is that when you look around the world for other examples of where these types of proposals are being put in place, of course, Australia, being our near neighbour, is a classic example. As I noted last night, when the scheme was initially put in place in Australia, it started at $3,000 and then it was progressively increased to $5,000 before it was scrapped by the Labor Government in Australia in 2013-14. One of the issues that led to that scrapping of that scheme after just a few years was that the mechanism—and I’m going to ask another question about that separately, but the issue was that the actual assessed cost of having children, undertaken by the renowned Henry tax review, showed that the cost was substantially less than what was in the scheme. That led to one of the reasons why the Labor Government scrapped that scheme, as I said, and reverted to the more traditional families package they have, although it’s termed slightly different in Australia.

So here we are in New Zealand. We’ve got a Labour Government adopting this Families Package, which we know failed in Australia, but, underpinning it, we do not know the basis of the $3,120. It’s easy. I’ve looked on Google and I’ve looked at a number of cases in New Zealand and overseas about the costs of raising children, and, of course, it varies quite substantially. Particularly in New Zealand, it showed quite a large difference between those on a low income, and what they’re prepared to and have to spend on their children, and what it does for wealthy families. Again, that’ll raise another question we’ll talk about later.

But one of the most common things, the most agreed thing, when you look at the cost of raising children, the single conclusion that you can draw is that the cost of successive children reduces over time. So I am absolutely keen to understand what analysis underpinned the Minister of Finance’s reasoning to pay the $3,120.

Hon STEVEN JOYCE (National): Thank you very much, Mr Chair, for giving me the opportunity to take a call on this stage of the bill. I want to raise a few questions that perhaps the Minister of Finance will be able to answer and address in due course, around this Part 1 of the bill.

Firstly, I want to focus on the calculation of children lifted out of poverty and the various numbers that have been pushed around as a result of the Best Start approach and also the increases to Working for Families. As we know, most of the increases to Working for Families were done by the previous Government through the original Family Incomes Package. Of course, the accommodation supplement changes were a very significant part of alleviating poverty, and that was also done by the previous Government. The calculation—I assume that we’re using the same database that was used at the time—was that it would lift 50,000 children above the OECD definition of 50 percent of median incomes by 1 April 2018. So, effectively, that was to happen straight away from 1 April 2018 as those things and the lifting of the low-income tax threshold took place at that time.

Labour have talked of a couple of numbers that they say their package will address, but the dates are quite different. Now, obviously they weren’t going to achieve anything by 1 April 2018 because it doesn’t start by 1 April 2018, but then they talk of achieving 88,000 by some point in 2021, I think, which I presume is 1 July, or 30 June 2021. But that actually, of course, includes a number of things that are occurring or are predicted to occur at the same time as this package beds in, particularly, of course, the continuing lift in incomes, and the increase in employment and so on that has a significant impact. So we’re not actually comparing apples with apples in this case, and I think—and the Minister might choose to address it at some point—the Minister’s listed another number, which is 71,000, which is apparently going to apply at some point in 2019. So, again, we see we have a continuum of numbers. We have our number of 50,000, which was going to apply from 1 April next year. We have a 71,000 number and an 88,000 number three or four years hence.

So from 71,000 to 88,000 presumably applies to both parties’ packages, because the income and the employment continues to rise in the economic situation that is being laid out both prior to the election and since the election. Then, on top of that, the National Government had scheduled a second Family Incomes Package in 2020, which would target—as was said before the election by Bill English—another 50,000 young people at that time. Of course, we now know that Mr Robertson has no money for that—he actually doesn’t have money for lots of things—to be able to repeat the same programme of his in 2020.

Hon Andrew Little: You had none either. It’s all on the never-never. It’s all you ever do.

Hon STEVEN JOYCE: Perhaps Mr Little could start by taking his pills. So we have an issue of comparison, and, actually, if you do the comparison properly, it is more than possible, in fact, probable, that the National Government’s programme would lift more children out of poverty than this Government’s programme—more children out of poverty. So that’s something that we will want to continue to unpick, because if I may get into the mechanisms by which that’s done, it’s not immediately clear how providing three thousand and something dollars to people on very high incomes actually helps alleviate poverty. And I do want to address that part of the calculation because the lifting of the threshold of Working for Families also doesn’t actually target that group of people at the lower end who are affected by poverty. So you look along the list and there’s not much in that package beyond what the previous Government was doing that is actually going to contribute to alleviating child poverty—the stated aim of the Government.

I think that’s one of the issues that this side has with the package: it doesn’t appear to be well-designed or coherent compared to the stated objective of the package. That’s something we need to focus on, I think, in this House. We will submit over the course of the day other things that may achieve more—other things that may achieve more—for poverty. For example, one of the things that the Government is cancelling in this part of the bill is the lifting of the bottom tax rate—the bottom tax threshold—from $14,000 to $22,000. That could hardly be described as a hard right move—lifting the bottom tax threshold from $14,000 to $22,000. You couldn’t actually turn around and say that that’s a really nasty thing focused at the top end of society. That’s literally trying to improve the rewards for work for people who actually get the least money from work.

That’s the bit I don’t understand. How is it that this Government has forgotten the link between work and income? Actually, this Government has, after stating how important it was to lift the linkages, to improve the linkages between work and income, to get more working people to have the opportunity to see more from their work—the first thing they do is take away some of that linkage, some of that improved linkage. They take away the improved tax rates for people at low levels of income and they take away the tax benefits for people on median incomes—for the sort of people that Andrew Little used to represent back when he was a unionist and cared about them. Those people are missing out through this package and they have—

Hon Andrew Little: You’ve done nothing for them. They saw their wages going down.

Hon STEVEN JOYCE: Well, you’re definitely doing nothing for them, Mr Little. You’re doing less than nothing for them by cancelling the tax threshold changes that would improve their lives. Cancelling those—that’s less than nothing that the new Government is doing for those people, less than nothing. That’s actually what this committee has to face today: we are dealing with a package that, yes, provides more money to a group of people—and Mr Robertson is fond of saying it’s 70 percent of a certain type of family arrangement. Fine; but what about the people who don’t qualify? They are not just being left neutral; in the course of this day we are planning—if the Parliament agrees to take money off those people from 1 April next year, we are literally saying to those people, “No, your work does not qualify you for more.” We are saying that those people shouldn’t have more.

So we will be presenting some alternative options to the Government through the course of the day when we say, “Actually it is important that you recognise that these people are moving into higher levels because of bracket creep, because their incomes are growing.” I mean, median incomes have gone up around $10,000 since 2010. I know it’s not something that the Government likes to concede—

Hon Andrew Little: But it’s just not true.

Hon STEVEN JOYCE: But it’s true, actually. Well, Mr Little, I suggest you go and digest some statistics books for breakfast, which would have a dual benefit: you’d learn something and we’d have a quieter time in the Chamber while you’re digesting the books. But that $10,000 means that people move into higher tax brackets and they end up paying 30c in the dollar, and, as we discussed last night, people on the median income are now paying around $800 or $900 a year more tax than they were six or seven years ago, and this Parliament needs to address that.

The failure to address that—if we walk away today having undone an attempt to address that—then, effectively, the Parliament is saying to those people “Your work is not valued. The way you live your lives is not valued, because we’re not actually valuing your type of living arrangements—whether you’re a single person, a young couple starting out, you’ve got grown-up kids and you trying to pay off your mortgage and perhaps support one through starting their own small business or whatever, then we don’t value that. The only thing we value is this narrow group over here, which we all value.”

Actually, the previous Government has done most of the work of lifting children out of poverty. This Government has just added a little bit to it and rebranded it. It’s a bit like the housing programme: rebranded it and called it their own. That’s what they’re doing.

But we need to address this fairness issue and we need to address this issue of balance across the different groups in society, because everybody’s worked to deliver the strong economy that this Government has inherited and they all deserve some say and some benefit from it in terms of their lives.

Hon GERRY BROWNLEE (National—Ilam): Mr Chair, I think it’s appropriate that that Parliament does take a reasonably long period of time to discuss this particular part of the bill—the parts that are going to be proposed for insertion in the bill—and then, ultimately, the next part. The bill itself is one that New Zealanders need to understand a lot better, and beyond the headlines that I think have been quite skilfully created over the last 12 to 24 hours or so. Essentially—essentially—this is the Labour Party rebranding what is already in the law when it comes to the Families Package.

I just need to respond, if I may, to the interjections made by the Hon Andrew Little and Mr Greg O’Connor. So, working in reverse, Greg O’Connor is over there saying, “All your mates don’t pay tax. They don’t pay tax.” Well, firstly, I think that apart from that being a dreadfully prejudicial statement to make and, essentially, a nasty and envious, envy-based statement, the reality in this country is that the vast majority of tax is paid by the higher-earning part of the tax base, and if it were not for the extraordinary revenue picture, I say to the Hon Andrew Little, then this Labour-led Government would not have the funds necessary to enable this package.

The fact is there is a very stable and sound economy working in New Zealand at the moment and providing significant revenue to a Government, and it is this Government that has decided that, somehow, those who are contributing most to it are the ones who should be punished the most. So all of those people out there who have no children under the age of 18—young people who are trying to save up to get a first home, essentially—get absolutely nothing out of this package. What is being overturned is a law that was saying to all New Zealanders who are in work that it was a good thing that those people kept more of the money they earn. Therefore, it was a pretty minimal tax reduction for those people, but it was significant in each case because it allowed them to do those things like save for their first home, or whatever it might have been, in addition to the efforts they were already making.

That goes as of the passing of this bill, and where it goes to is a suite of payments that are being touted as universal but that—as one of my colleagues will explain later in the morning—comes with significant terms and conditions. We all hear those ads on the radio that sound great and say, “Let’s get along to one of these appliance places”—or wherever it might be—“and buy at a hugely discounted price.”, and then at the end they say, “T’s & C’s apply.” Well, this is very much the case with the programme that’s been laid out. Mr Robertson sits in the Minister’s seat, smiling away, knowing that he’s got fine print all through this thing that won’t work well for a lot of people.

So, going back to the fundamental question here about the—no, no, there are lots of fundamental questions. The fundamental question I want to have addressed, as Mr Bayly has already raised—and has had no answers on this—is: how did the amount for the Best Start get selected? Why is it not a round number? Why is it not a higher number? Why is it not a lesser number? How is it that the magic number—well, there he is. He just says, “I plucked it out of the air and decided to put it on the bit of paper.” When you look at the Treasury advice that was given on this, then of course all they say is, “Oh well, that’s the number, because it was part of Labour’s 100-day programme.” Now, that is a justification, apparently, for this huge expenditure.

Couldn’t there have been a mention about the fact that it is believed that it will help young couples as they get established as a family, having been single prior to that time, or as they bring a new child into their family? Those sorts of justifications might be a good thing to see, to know that this Government works on a little bit more than just—as we saw from Mr Robertson’s gestures—plucking all sorts of things from the air.

So as we progress through the morning, I hope that we do get answers to that. I think the bill can be enhanced by some of the parts that the National Opposition will be putting on the Table. They will all reflect what our policy is, and I’m sure—[Time expired]

ALASTAIR SCOTT (National—Wairarapa): Thank you, Mr Chair. Well, what a cheeky and quite confused lot we have over on the other side. For a start, we had a contribution yesterday that suggested that a strong Labour Government enabled these benefits to be increased, that all of this $5.5 billion package was due to the fantastic governance of the three-way coalition Government. What a lot of nonsense. What a lot of nonsense.

The funds that are available to be distributed to those in need are a direct result of the previous National Government building surpluses over time, which are enabling and giving the privilege to Mr Robertson to distribute hard-earned taxpayers’ funds to those that need it most. But they haven’t done that. They haven’t even done that. They have not distributed to those that need it most.

The Best Start tax credit is available to anyone who has a newborn child—anyone. And look at them: they do not like that point. Finance Minister, can you answer this question: why are you giving this money unnecessarily to those that do not need it? Why is that? The reason I heard the Minister say earlier is that it is because it’s needed. It’s needed.

It’s very expensive, and I know it is very expensive, to have kids—I’ve got plenty of them. I’ve three of my own, and I picked up three on the way, so I know the cost of having children. I know the cost of having children, and I can tell you, Mr Robertson, it is not the zero- to three-year-olds that are the most expensive. It is certainly not the zero to threes that are the most expensive. Mr Robertson, if I could have more kids—and I can’t; well, I could, but it would mean a reversal—but if I could, and if I did, I would not need the tax credit. Thank you for the offer, Mr Robertson, but I do not need it, because I earn $160,000 in this place, and it is just ridiculous to suggest that we here, if we have newborn kids, need this money. So it’s not needs-based, as the Minister suggested in his last contribution late last night; it is a universal benefit that is absolutely unfair to those that do need it most.

So my question is, why not take it from those that don’t need it? I don’t know where you might want to cut off the threshold—is it the average wage or the median wage? Willie Jackson might know the difference between those by now; I’m not sure. Or is it $79,000, which is a number that’s also somewhere in this bill? Why not cut it off at some point and give it more to those that need it most?

It’s interesting that we’ve been talking about universal benefits. The Labour Government is voting against, essentially, a universal tax credit of $1,060. They’ve cut it, right. They’ve cut it. So they’re against the universal tax credit—and it’s fine to take that stand. I’m against the universal baby bonus. But the difference is that the baby bonus is taking money from people who are hard-working Kiwis and giving it to people who don’t need it. Hard-working Kiwis—1.2 million of them—are not benefiting at all out of this package. They pay tax and they, essentially, will be giving their hard-earned tax money to people on high incomes. That’s not on and that’s not fair. The fairness in the universality of the $1,060 is that it is their money. This is what the Labour Government’s forgotten—that it is the taxpayers’ money that we’re dealing with here. Hard-working Kiwis, $1,060—why can’t they keep it? Why are they not able to keep it? Why should they not be keeping it?

I’d like that question asked as well. Of course, we’ve talked about the universality of the free tertiary education—another problem.

The CHAIRPERSON (Adrian Rurawhe): That’s not in Part 1 of the bill.

ALASTAIR SCOTT: Yep, fine, fair enough. My main point here is the universality—[Time expired]

BRETT HUDSON (National): Thank you, Mr Chair. I want to talk about the muddled—quite frankly—elements of unfairness in the targeting that is in Part 1. Before I move on to that, I’d just like to make a comment on comments my colleague the Hon Gerry Brownlee made when he suggested that Mr Robertson had plucked figures for Best Start out of the air. Well, I’m very sorry, Mr Brownlee, but I don’t think it was the air that Mr Robertson plucked those numbers from.

Also, Mr O’Connor was making a comment about—which I think was a scurrilous accusation, but none the less. He was making allegations that, through rebates at university, the rich were getting a far better deal for their kids and were rorting the system. Well, if that is the case—and I don’t actually believe it to be the case, but if it is the case—how could that member, in good conscience, and in supporting and representing the good people of Ōhāriu, and if he actually believes that, how could he possibly stand with a Government that’s going to give one free year of tertiary education for everyone, irrespective of income and circumstances? I suggest that that man have a single standard for his behaviour, not multiple standards.

This bill does some targeting in some areas, and lacks targeting in others. For instance, the Best Start payment itself is not income tested for the first 12 months. So whatever you earn, if you are Bob Jones—and he may well be still capable of fathering another child—you would get the Best Start payment. The Rt Hon Bill English, I’m sure, is capable, and he would also get that payment. So that, in that sense, is universal. All you have to do is have a child. What your individual circumstances are don’t matter. But then, in Part 1, the Government is making some targeting choices that I want to talk about, because I believe very strongly that they are deeply unfair, and, quite frankly, unfairly discriminative between people in different circumstances.

So the nature of Best Start is that, even within that first 12 months, if a parent is receiving paid parental leave, they will receive the paid parental leave instead of the Best Start credit. At the end of paid parental leave the Best Start credit will then continue through until three years of age, but after 12 months is subject to some income testing. Well, not all new parents are in circumstances or are desiring to take leave. Some of them see work as part of the appropriate circumstances for themselves and for their families when they have a newborn child. For some years, the parental tax credit has been available for those families. It was some years ago that it was eight weeks; the National Government changed that to a 10-week eligibility. Well, this Best Start is going to replace that entirely. So we increased the value and the duration of that—it’s now worth $220 a week for up to 10 weeks, as a credit. This Government—this mean-spirited Government—are replacing that completely with a $60 a week payment.

So basically, if you are a new parent or a family and you determine that what is right for you or right for your family is to remain in work, then the Government is saying you get almost nothing—that you are of less worth to them than a parent or a family who chooses to take Government-paid leave. I think that’s absolutely disgraceful, quite frankly. I think they are passing judgment on the circumstances that are for individuals and families to determine, and they are, effectively, saying that your choice for one set of circumstances makes you more valuable and worthy to this Government than if you remain in work for that period of time.

Clause 17 makes a very simple change to the Income Tax Act 2007, which basically says that if you have a child after the end of June next year, then you are not eligible for parental tax credit. So they’re basically saying that Best Start will replace it—you’ll be on 60 bucks a week instead of 220 bucks. That is quite significant for families in those circumstances. It’s only a 10-week period, so I have questions for the Minister of Finance that I want to ask—and I’ll seek another call—and that is: why? Why do you treat these—[Time expired]

Hon GRANT ROBERTSON (Minister of Finance): Thank you very much, Mr Chair. After half an hour of fairly repetitive contributions from the National Party members, I thought I’d respond to some of the questions that were asked—and they have all been pretty much on the same theme, which is around the question initially of Best Start and why the figure was set at $3,120. Well, that is $60 per week multiplied out for the year. Mr Brownlee was concerned it needed to be a round number; that number of $3,120 emerges from a round number of $60 per week.

Andrew Bayly: Well, what’s the basis for 60 bucks?

Hon GRANT ROBERTSON: That was assessed as an amount that would be a useful additional contribution to the outgoings of New Zealanders. It needs to be balanced against other requirements within the Government’s budget, and the $60 is the accurate balance, Mr Bayly, of what we do to make sure we can improve the lives of New Zealanders.

So, yes, the Best Start payment is universal for the first year—to respond to the questions that were asked about that by Mr Bayly, Mr Joyce, and Mr Brownlee. The Children’s Commissioner’s Expert Advisory Group on Solutions to Child Poverty recommended a payment for children in the early years of life with a maximum amount in year one for everyone. So we’re using—

Hon Steven Joyce: But why? It’s not enough just to say they said it.

Hon GRANT ROBERTSON: Well, on this side of the House we believe that actually bringing experts in and getting evidence from experts is a good way to make policy, and so we have drawn our conclusion from there.

Mr Joyce and Mr Bayly all raised the question of the difference in terms of the number of children lifted out of poverty, and I do want to respond quite specifically to those questions. So just to get it absolutely clear: 71,000 children—

Hon Steven Joyce: Ah! Why didn’t you put that in the press release?

Hon GRANT ROBERTSON: —will be lifted out of poverty in 2019, representing a reduction of 44 percent. The comparable number, for Mr Joyce’s benefit, in the package in the Budget 2017 Families Income Package would have had 55,000 children—a reduction of 34 percent. So there’s a significant increase in there.

But there is an interesting point to note, which is why it’s important to look at what happens when the package is fully rolled out. So under the package in front of us in the bill today, 88,000 children will be taken out of poverty, representing a 58 percent reduction. When we look at what would have happened under the previous Government’s package by the time we reached 2021, we would have seen a reduced then of 49,000 children—in other words, going down—and the percentage of children lifted out of poverty would have been 27 percent.

Hon Steven Joyce: No, no, I don’t trust that calculation at all.

Hon GRANT ROBERTSON: That calculation is based, Mr Joyce, on the fact that, actually, as incomes rise you have to do a little bit more. So let’s be absolutely clear, comparing apples with apples exactly, using exactly the same measure—when our package, which is covered here in this bill, is fully rolled out: 48 percent reduction, 88,000 children lifted out of poverty. The previous package, when fully rolled out: 49,000 children out of poverty, 27 percent. So to answer the questions asked, a demonstrably better package across the board.

I want to respond to Alastair Scott’s questions that he asked, essentially about why the decision has been made in this part to reverse the tax cuts and focus more on children. Well, that actually is a philosophical decision. I absolutely own the fact that that is about this Government’s desire to improve the well-being of children. We have focused this package on families with children. I absolutely understand that members on the other side of the House may not support that, but that is the decision we have made because we want New Zealand to be the best place in the world to bring up kids, and we will redirect resources to be able to support children. So I congratulate Mr Scott on seeing that difference and identifying that difference, and that is my response to his question.

We had a series of repeated questions from Brett Hudson that built on questions that have already been answered around why Best Start is universal. We should be proud that we are returning to a benefit like the family benefit that many of us grew up with—universal in year one, and then means-tested on in years two and three. This is a proposal supported by evidence.

SIMEON BROWN (National—Pakuranga): Thank you very much, Mr Chairman. I notice that the Labour Government has called it a “Best Start” package, and I think it’s because they haven’t had one themselves, so they’ve had to come up with a name that helps. But I’ve got a few questions that I’m keen to ask today, and it’s to do with taxpayers, because I’m standing here today on behalf of the taxpayers in my electorate who get nothing—nothing—from this package.

I’d like to speak in favour of an amendment in the name of the Hon Steven Joyce, who is proposing an amendment to the tax rates to increase the bottom threshold from $1 to $14,000 for a 10.5 percent tax rate to $20,000. Those who don’t have children—those who are just earning income and don’t have any responsibilities, or any children—get nothing from this package. What I am arguing for today, and asking the question, is: when will inflation and tax creep be addressed by this Government—when? They have removed the tax cuts that National had put in place in this year’s Budget, which were to address the issue of bracket creep to ensure that people aren’t having money taken off them because of inflation.

This mini-Budget could be called “spray and walk away”, because they’re taking money off hard-working New Zealanders and just spraying it around the place—giving money here, giving money there, and then walking away. But people who have been paying taxes are getting nothing out of this.

In 2010, people on the median wage paid $7,325 in tax; they now pay $8,020. Under National’s changes, that would drop to $7,210. And I’m not talking about rich people here; I’m talking about people on the median wage of $50,000—$50,000. Now, if you think those people are rich, I think you need to have a bit of a reality—Mr Chairman, I apologise. I shouldn’t bring you into this debate, and I do ask that you accept my apology. Please forgive me as a new member. Members opposite, if they think that $50,000 is a large wage, then I think they need a bit of a reality check and to maybe spend more time talking with some of their constituents. In 2010, people on the average wage were paying $9,137 in tax; now they pay $10,972. With National’s changes, that would drop to $9,912. When is this issue of bracket creep going to be addressed?

The other issue is: why not give a tax cut rather than having a complicated independent tax credit? Why not give a tax cut so that people don’t have to go through a complicated process where they have to apply to get this? We know the statistics: 60 percent of people in total were actually making this application. So what you’re seeing here—

Hon Member: Wrong—80 percent.

SIMEON BROWN: Oh, is it less, is it? [Interruption] Sixty percent.

What we know is that a large proportion of people who were entitled to this tax credit were not applying for it. So why not give these people a tax cut by increasing the bottom rate, the bottom threshold, and ensuring that they can get that automatically, that it’s a fair, simple system, where they just simply don’t have that money taken off them in the first place, rather than have to file a return and go through some complicated bureaucracy, to then go through this.

But that’s what the other side like. They like complication. They like inflation. They like bureaucracy. All it does is it means the Government holds the money back, rather than giving the money to people who earn it, who work hard, and who have worked hard and continue to do so, so that they can support their families. They can then make the choices as to how they want to spend their own money.

On this side of the Chamber, we believe that those who work hard, those who are seeking to get ahead, they deserve to have a tax cut. They deserve to not have inflation constantly eating away into their pay packet. They can then make the choices as to how they wish to spend that money in their own lives. Thank you.

Hon TIM MACINDOE (National—Hamilton West): Thank you, Mr Chair. I’m delighted, at last. Can I just say what an eloquent and intelligent contribution that was from a very capable new member of Parliament. Well done, Simeon Brown.

I was delighted, a moment ago, to hear the Minister of Finance take a call, but I have to say it was a very churlish call. I don’t think there’s any doubt at all that so far this morning what members opposite and those who are listening, either on their radios or televisions, will have heard is a very wide range of intelligent contributions across a whole breadth of topics relating to Part 1 of this bill. That is really impressive.

One of the things that’s been particularly notable is that, apart from Mr Robertson, we have been treated to a barrage of interjections while my colleagues have been making these intelligent points, and yet none of them have actually been seeking the call. So I would say to them, particularly those members opposite who, just seven months ago—just seven months ago—were voting in favour of the measures that the National Government was introducing in our tax measures of Budget 2017, “What has changed?” [Interruption] I look forward, Mr Patterson, to seeing you get up and explain how New Zealand First’s position has changed so much.

In his contribution, Mr Robertson, who seems to be having a little bit of a problem at the moment, actually failed to acknowledge most of the points that have been made this morning. A number of questions have been put to him, and I want to pick up on a question that was raised by my very fine colleague the Hon Amy Adams last night, which he certainly hasn’t given any attention to at all. That is, how on earth can this Government justify reinstating the independent earner tax credit of $520 a year while at the same time removing from a far greater number a far greater sum—approximately double that sum—which we have already legislated for? And now this Government is proposing to take it away from those New Zealanders who were really looking forward to it, and were appreciative of it—they clearly felt that way because they voted for it when they went to the polls in September.

I want that Minister of Finance to please explain that, and I also want to put to him a particular issue. He and I both represent urban marginal electorates. So, Mr Robertson, I would assume that the voters of Wellington Central and the voters of Hamilton West have quite a lot in common on this. I want to ask Mr Robertson, how many New Zealanders were not claiming the independent earner tax credit? That’s number one. Then I want to ask him how many of his Wellington Central constituents contacted him or wrote to him or came to see him after the Budget in May, to say, “Oh, this is appalling that the National Government is getting rid of the individual earner tax credit.” I can answer from the point of view of Hamilton West. The answer was not one. I can ask my colleagues, “How many of your constituents came to you with that?” Zip, absolutely zero.

What we can actually say is that a huge number of New Zealanders were not claiming the independent earner tax credit. Most of them didn’t even notice that it had gone and, more importantly, they were benefiting from the tax measures that we had put in place, which a large number of New Zealanders are now going to lose, despite this Minister of Finance claiming that this is a families package. It’s a “devil in the details” package, and it’s actually mean-spirited.

As we’ve already pointed out, this is the man who’s stealing Christmas from a large number of New Zealanders. I would implore him to recognise the fact that hard-working New Zealanders, particularly those on lower incomes, really needed that assistance and welcomed it. Many of them went to the polls and voted for it. It is just extraordinary that this Government, for ideological reasons, has decided to get rid of something—even though the Greens, and I’d be interested to know whether the Hon Julie Anne Genter or Chlöe Swarbrick are going to explain why it was such a good idea seven months ago, but now, no. Now it’s got to go.

As I say, Mr Patterson, and anyone else who might be here at the moment from New Zealand First, ought to be able to explain to us this complete about-face. When they spoke in the Budget—and let’s remember, it did create quite a bit of tension with the Labour Party. The Labour Party was saying, “Hey, hold on, you guys. You’re our mates. You can’t do that.” And they were saying, “Well, of course we can, because it makes sense. It’s a good idea. New Zealanders need it.” And we thought: well, good on the Greens and good on New Zealand First at that stage, for actually putting their kinship with the Labour Party to one side in order to support a measure that was really important.

Sir, I look forward to the Minister, when he next takes a call, explaining some of those things. But I also send out this challenge to all the members opposite, not one of whom has yet sought the call, to stop all the cackling and the barrage of interjections while members on this side are speaking, and actually stand up and explain how you’ve come to these very inconsistent positions.

ANDREW FALLOON (National—Rangitata): Thank you, Mr Chair, for the opportunity to speak in the committee stage of the Families Package (Income Tax and Benefits) Bill. I tabled several amendments to the bill last night. Two of those relate to the abatement rates for the Best Start tax credit package—one of which is to align it with the family tax credit abatement rate, and the second is to align it with the top personal tax rate of $70,000, which is, of course, the rate at which you become a “rich prick”, according to Dr Michael Cullen.

But I want to focus my comments this morning on my other amendment, which relates to clause 22, new Subpart MG 2(3) of the bill. It discusses a person’s eligibility for the Best Start tax credit after the death of a dependent child. The bill as drafted at the moment cuts the eligibility for the tax credit less than a month after the death of a dependent child. I’d like to think that most members in the House wouldn’t have been through such a tragic circumstance as losing a child. Fortunately, I haven’t, but I’m conscious that my parents did go through that. It is, I think it’s fair to say, an all-consuming period of somebody’s life. It is one of the most traumatic things that a family can go through.

So my amendment is proposing to increase the period that a person can continue to receive that tax credit from four to eight weeks. I accept it is a very small change. I’m not going to pretend that it will bring any comfort to any family, but what I hope it would do is extend out that period for a little bit, for a few weeks, just to give people the opportunity to take some time to rearrange their circumstances from that initial period of the tragic circumstance of losing a child.

I would like members to consider it seriously. It is a very small change. I just want to, I guess, get across to them that it won’t make life easier for people but it will just remove that additional headache. I guess we’re fortunate that we don’t have a lot of infant deaths in New Zealand. I did some research last night. In 2014, there were just 331 infant deaths registered with Births, Deaths and Marriages.

Sarah Dowie: Still too many.

ANDREW FALLOON: It’s still too many, as my colleague Sarah Dowie says. Interestingly, there is an unfortunate ethnic breakdown. Māori and Pasifika are far too over-represented in these statistics—7.2 per thousand for Māori and 7.1 percent for Pasifika.

Simon O’Connor: How much?

ANDREW FALLOON: 7.2 for Māori and 7.1 percent for Pasifika, which is 1.5 times the rate for New Zealand European families.

So, look, it is a small change, but it will have a material impact—more, I think, for Māori and Pasifika families. Also, as members would imagine, there is an unfortunate correlation as well with socio-economic deprivation, where the infant death rate is much higher in more deprived areas than in wealthy areas.

So, look, it is a small change. I do hope that Government members and, in particular, Minister Robertson consider it. I’d like to hear his thoughts on it, perhaps, and also members opposite. I also understand that one of my colleagues will be taking a call on this amendment as well. I would like members to seriously consider it, and I thank the Chair for the opportunity. Thank you.

Hon AMY ADAMS (National—Selwyn): Thank you, Mr Chairman. I am very pleased to take another call in this Part 1 debate, because there are a number of matters that we still haven’t had a chance to address, and I want to talk to some of those this morning in this call.

And, to begin with, I want to put a question to the Minister in the chair, Grant Robertson, which I raised during the second reading debate, and, of course, this is our opportunity to now ask the member to address that. I raised in that contribution the incongruity and the seemingly inexplicable reason for the matter that my colleague Mr Falloon has just been talking about, which is where the Best Start abatement rates have been set in this legislation. Mr Falloon has just talked very wisely about some changes he’s proposing, but the question I have for the Minister—and I think he needs to take a call and explain—is why we have these odd thresholds set, like a $79,000 threshold for the abatement to start on the Best Start payment for years two and three, and also this very, very odd abatement rate of 20.8 percent. And, look, the use of abatement rates and thresholds is, obviously, a well-known and well-used tool, but these seem to be very, very inexplicable levels to have set them at.

I raised that question in the second reading debate because, actually, bringing in complexity to the tax system is something that we’ve always tried very hard to stay away from. And when you introduce a very odd, unusual, and unprecedented level, there has to be a reason for it—surely, otherwise you wouldn’t do it. And when I made the comment in the second reading debate, the Minister nodded and said, “Yes, there were very important reasons for it.”, and so I think now is the appropriate time for the Minister—and he’s nodding again now. So we will look forward to hearing from him a detailed explanation of why it is there is a 20.8 percent abatement rate, as opposed to a more predictable and expected rate.

I’d also like the Minister to talk to us about why the baby bonus starts to abate at $79,000 where the other abatement rates in this legislation are far more usually around the high $30,000s to low $40,000s. So I’d be interested to know why this baby bonus, which is universal in year one, when it does start to abate, abates in such a strange and unexpected way, and I look forward to the Minister explaining that to this committee.

I want to talk about an important aspect of the changes in this legislation, and how they change the law that’s currently on the books, and that is around the timing of them. You have now a period—or we will have, if this bill passes—where the tax cuts that are legislated, which the National Government put in place in the 2017 Budget, will be abolished. So from 1 April, taxpayers will now not get the extra $1,060 a week in their pockets that they would’ve got, and yet, the changes in this legislation don’t take effect until 1 July.

So I’m interested to hear from the Minister, again, why it is that for those three months, the Labour Government is quite contented to see people going backwards. And, if they were so keen to replace our tax changes with a different package of assistance and they were true to their word that this was simply replacing one form of benefit with another, why don’t they start on the same date? Why is the Labour Government leaving every taxpayer of New Zealand substantially worse off for those months of April, May, and June of next year? I think those are important issues that really do speak to the very real world effect of this legislation on the people of New Zealand, which the Minister does need to explain to this committee, and I will look forward to him taking those calls.

I started talking about some of the abatement rate changes, and that is something I want to come back to, because there are some, again, very incongruous approaches in this legislation that make a significant difference, and one of our jobs in this committee stage is to really explore those so that the beneficiaries of any of these entitlements understand why they start losing money when they do.

There are a number of amendments on the Table in my name that speak to this very point, and I want to take a little bit of time to address the rationale for those changes and to talk to the committee about why I believe that those changes are sensible. The amendments in my name around the abatement rate changes really relate to the family tax credit. Other members in the committee have discussed and are proposing changes to other abatement thresholds, but the abatement thresholds and rates and timing for the family tax credit are what I’ve focused some of my attention on in this set of amendments.

They are ensuring that we have, first of all, a much more smoothed effect, because, actually, as a parent you know that there are costs that go with parenting. And the way the family tax credit system works is that there is one rate paid for the eldest child, and then there is a lower rate paid for each additional child. Now the changes that National had put in place and had legislated for said, “Look, we’re not going to penalise families if their eldest child is a certain age and then give them more when they’re older.” Actually, the National Party, when it was in Government, was of the view that that eldest child rate should apply irrespective of the age of the eldest child. I don’t see any good reason why the eldest child rate would apply at a higher level for children over 16 and not for children under 16—for the eldest child. I can tell members of this committee—and many members of this committee will know themselves—that many of the costs of having children are actually particularly noticeable in the first 16 years of their life. As the children get past 16, in fact, often they’re out working and providing some income for themselves and funding some of their costs, and, actually, as a parent it’s quite a good thing to be encouraging them to be contributing in some way, however small.

So our view—and the one that my amendments reflect—is that when you have this eldest child rate, it shouldn’t be discounted if the eldest child is under 16. The National Party, and the National Government under our changes, had made sure that the eldest child would get the highest rate going, irrespective of whether they were over or under 16. I’d like to hear from the Minister why he thinks that that eldest child rate—a family should be penalised if their eldest child is younger. So, actually, that’s making it harder for families with younger children.

We’ve heard a lot from members—well, we haven’t heard a lot from members from the other side in this debate at all. But, you know, in the first and second reading debates, when they had to take calls, they were keen to tell us how this was all about supporting younger children, and yet, in this family tax credit space, the way that the Labour Government has set up the abatement rates penalises those with younger children.

Now, we think that’s crazy. Our changes were very clear that the rates would be paid for the eldest child and then for subsequent children irrespective of their age. But in the framing we have in this legislation, we’ve gone back to penalising younger children in a family and letting them get to those top levels only when the children are older. I don’t see any good rationale for that. We’ve certainly heard none from the Minister in the chair. The amendments that I’ve put up—and there are a number of them; I see the Clerk doesn’t appear to have used a numbering system but a time system to refer to them, but members have them available. I have a number of amendments in my name that relate to the various aspects of the bill that are in clause 55, inserting changes to new section MF 4G(4) and MF 4F(8) and (4). And the reason for the number of different references is, obviously, because of the point I made earlier, which is that this bill differentiates between people missing out for those first months before the 1 July changes kick in and then the rates from there.

So those are the points that I really want the Minister to respond to. Why do we have these strange, odd, complicated, and seemingly incomprehensible abatement rate thresholds and rates for the Best Start grant? Why has the Labour Government and the Minister in this bill chosen to give less money to younger children and more money to older children in the family tax credits? And why—and this is an important one—has the Government, if this is about retargeting the National Government’s tax cuts, chosen to have families missing out entirely for that three-month period between 1 April, when our changes would’ve kicked in, and 1 July, when these changes kick in?

It doesn’t seem to fit with the narrative. If the narrative is actually replacing one for the other, why don’t they start on 1 April? If the narrative is actually about helping children with young families, when we know the costs are the greatest, the pressures are the highest, and incomes are often lower, why is the Government penalising those families by removing access to the higher rate of family tax credit and providing eligibility for that only when the children are older and the families, almost always, are actually in a better financial position as the years have passed?

Those changes seem completely at odds with the Labour narrative, as does the very fact of replacing many of our universal tax cuts, which they say are too universal, with equally universal benefits. So I do implore the Minister to explain to us how his narrative makes sense and why he has left every taxpaying New Zealander worse off over the period from April, May, and June of next year.

The CHAIRPERSON (Adrian Rurawhe): I call Simon O’Connor.

SIMON O’CONNOR (National—Tāmaki): Excellent choice. I’m very pleased—

Hon Ruth Dyson: He says modestly.

SIMON O’CONNOR: Modesty—yeah, it’s maybe not a virtue. I am very pleased to take a call, but, I mean, fundamentally around all of this, it’s the classic left dynamic of bribing people with their own money. I want to reserve though—obviously, it’s not a general sort of commentary, as I want to actually focus in, rightly, on Part 1, Subpart 1, and I want to draw attention to the amendment of Sarah Dowie, the MP for Invercargill. What she’s doing here in the amendment is, effectively, putting through a bit of an eligibility criteria to do with the Best Start tax credit.

In this contribution, I’m not so interested in getting into the Best Start grant itself. Other colleagues are—rightly—taking calls and showing up the myriad of problems, particularly around how it’s defined and structured. So I want to focus in on the eligibility criteria and, in particular, this amendment of Sarah Dowie.

For those members not familiar with it, particularly on the other side of the Chamber, what the honourable member Sarah Dowie is suggesting is that any person receiving a Best Start tax credit, as referred to in amended section MC 1, shall ensure that any dependent child has attended a 15- to 18-month core Well Child check. Now, having chaired the Health Committee, I am very familiar with this programme. In effect, it enables children from pre-conception up to three years old to get elements like oral health checked and to get their vitamin K injections. There’s at least a chance or, if not, two to see their general practitioner. The Well Child checks also engage the family at large, particularly the mothers. It’s everything from breastfeeding techniques to how one sleeps with a child in bed—basically, the advice is do not sleep with the child in the bed—so what this amendment is doing is putting, I think, a very constructive eligibility check here.

So, out of this there are a number of questions that arise for the Minister. The first, fundamentally, is whether the Minister is happy to have further eligibility criteria. Is he willing to see that the—I suppose, in a sense, it’s a carrot and stick approach. In just throwing money about through this Best Start tax credit, is he willing to also provide an inducement and encouragement—excuse the very bad pun on the word “inducement”—to induce and to encourage people into some other positive behaviours. I think, and I would hope—though I would like to hear also from the Minister—that he can see the value in the Well Child check. If so—if he sees value in that check, in those actual series of checks from pre-conception to three years of age—is he willing to entertain this as eligibility criteria?

Again, I think the member Sarah Dowie has done a very good job to put down this amendment. I think, obviously, with amendments that are done in urgency, it may need to be filled out further, but that’s another question for the Minister. If he, in conception—again, bad pun—knows that things like the Well Child check criteria are good, is he willing to attach that to the Best Start tax credit, which would be an encouragement to have those parents take their child along? It’s very particular in this amendment from Sarah Dowie that it’s the 15- to 18-month core check. Importantly, the Well Child checks begin, as I say, at pre-conception. There’s a whole array of engagement week by week, so I’d be interested too—and I encourage the member who’s put the amendment to get up and speak a bit more specifically, and maybe more informatively, for the Minister as to why she has chosen this particular part. I’m not going to bore the committee by going through every element of the check, but why she’s gone for this one in particular.

The fundamental question that I think the Minister needs to address is that if he’s going to push ahead with this tax credit—as I say, throwing money about—is he willing to use this as a health opportunity? We’ve heard a lot from both him in the chair and in the wider debates from the Government and supporting members that these tax credits sit within the whole wider child poverty concept, and a big element they continually push is the health of children. So here is not only a remarkable opportunity to give money—which is effectively the people’s own money, as I said at the start—but an opportunity to encourage good healthy behaviour in, obviously, the parents, in the mum and dad.

As I say, that is part of the Well Child checks, but it’s also a good opportunity for the child, because we know if they get those vitamin K shots, if they have the little prick test on their foot, and if the family are getting through all the discussions, that’s really good for the child. I’d make the argument—which I think the Minister can address too—that those things are in some ways more important than the money. They are more important than the money. So I welcome the—[Time expired]

Hon GRANT ROBERTSON (Minister of Finance): Thank you very much, Madam Chairperson Tolley. I am just rising again, after another half an hour of repetitive contributions from National Party members, to respond to a number of matters that have been raised, including ones that have already been raised.

I just want to deal, firstly, with the questions from Simeon Brown and Tim Macindoe around the independent earner tax credit (IETC). For the specific factual matters: in 2016, 516,000 individuals claimed the independent earner tax credit. The estimation is that there were around 79,000 people who appeared to be eligible but did not claim them at all. I have good news for members who’ve raised their concern about the bureaucracy around getting the independent earner tax credit. IRD advise us that it’s likely in the future, as its Business Transformation programme is rolled out, that, actually, the IETC will be able to be automatically included in what people do.

We’re very confident that the IETC reinstatement is something that will be, certainly, appreciated by members. I don’t really believe that the previous Government made a lot of effort to let people know that that tax credit existed for them. So well done to the 80 percent or so of people who did manage to take it up, mainly, I acknowledge, at the end of the taxable year. But certainly it is an important thing.

I do just want to let—I’m not allowed to say that. I do want to let Tim Macindoe know that—I would hate to compare Hamilton and Wellington; two quite different places for a range of reasons—certainly the voters of Wellington Central, I know, were very concerned about what had happened in the Budget package in terms of the independent earner tax credit and will be very grateful to see this restored.

In order to respond to Brett Hudson’s question, families who would have benefited from the parental tax credit are in fact still better off with Best Start—$2,200 maximum from the parental tax credit now becomes $3,120 from Best Start in year one.

Brett Hudson: Not over the same period, Grant.

Hon GRANT ROBERTSON: It’s all about when it’s fully rolled out, Mr Hudson, so that is in answer specifically to your question.

I want to acknowledge Andrew Falloon for the amendment that he’s put forward. He is raising a very important issue. The response I’d like to give at the moment to him is to just explain the rationale that the four weeks came from and just to make clear that four weeks is actually a longer extension than other Working for Families tax credits in terms of the unfortunate and tragic circumstances of the death of a child. So we’ve already extended it out here. I understand the point that the member is trying to make, and I think, you know, in a debate like this it’s easy to have a very large number of amendments that may or may not be seen to be serious; this one clearly is. I want to acknowledge the issue that the member is raising. No one in this House would feel comfortable with the idea of people who have suffered that tragic event being put under any pressure or feeling any pressure. We were attempting to recognise that by extending it to four weeks, beyond what it is for other Working for Families tax credits. But I certainly acknowledge what the member is trying to do there.

Amy Adams and, indeed, a number of other members have raised the question—and I have responded to parts of this before—around the Best Start abatement threshold. The $79,000 figure was chosen to align with the cut-out point of the accommodation supplement. So it was designed to be alongside that—that’s where the number came from.

In terms of the abatement rate, the member has highlighted the fact that abatement rates are tricky things to get right. This 21 percent figure was chosen—

Hon Amy Adams: No, 20.8—20.8.

Hon GRANT ROBERTSON: —as a precise figure, and the member should be delighted that the Government has worked so hard to get such a precise figure that balances targeting low and middle income families with minimising the impact on effective marginal tax rates. We did actually work very hard to make sure that we made this as least disruptive as possible in terms of the other tax credits that people are eligible for. So it is actually an instrument of precision. The former Minister was concerned that it was unexpected, but it is actually to be exactly precise in order to ensure that we minimise the effect of marginal tax rates.

In terms of responding to Amy Adams’ question about the eldest child rate, the bill doesn’t have a lower rate for younger children. The bill’s aligned for all children aged under 18, which actually is the proposal that National put through previously.

So there have been a number of questions asked. They are beginning to be on the same theme, which is really about whether or not members opposite support there being a Best Start tax credit that is available to all children in the first year of life, and then targeted beyond that. There is not a lot of new material coming forward, and all I can do is respond again to say that this Government is very proud of reintroducing such a family benefit.

TODD MULLER (National—Bay of Plenty): Thank you, Madam Chair. I look forward to the first of, hopefully, many contributions today and into the night.

Look, first, I can’t help but acknowledge that all those years ago, I worked with a student union president who was very, very keen then to spend other people’s money as if it would never run out of fashion, and it’s good to see he’s remained consistent over the 20 or so years subsequently.

Hon Scott Simpson: He’s still leading a student union.

TODD MULLER: Yes, you’re not wrong there, Mr Simpson. But, specifically, I would like to take some of my comments this morning to the regulatory impact statement (RIS). I have a few questions relating to Part 1 that I would be interested in having the Minister of Finance respond to. There is a theme—he talked about themes just before, in his short contribution—and the theme that comes through when you look at the RIS is very much the sense of a rushed process. Indeed, on a number of pages—and I’m going to quote them—the advice that we can see here talks to the fact that this was rushed and that there was limited time for consideration of comprehensive advice, and I have quite some concern about that. I’ll be very interested, specifically, to get the Minister’s comments on it.

On page 24, there’s a very specific comment with respect to the time frame for providing advice being limited: “the Treasury was not in a position to undertake [any behavioural] modelling” with respect to the policies. This is unusual and this is obviously listed here, and I want to understand from the Minister why that is. They also note, in a broader observation with respect to consultation, that there has been “no public consultation”—

The CHAIRPERSON (Hon Anne Tolley): I just remind the member we’re on Part 1.

TODD MULLER: —“and limited consultation”, with respect to the bill.

Now, moving specifically, Madam Chair, to Part 1, particularly relating to the changes in the family tax credits and Best Start payments, there is in the RIS some specific criteria that are required—that any new policy needs to be assessed to. I note that on page 30, with respect to the Best Start payment, the advice says that this tax credit is—and I quote—“not targeted to reduce child poverty.”

So I want to understand from the Minister how he can make the statements that he has with respect to this package, when the advice is very clear with respect to the Best Start payment that it’s not meeting one of his particular criterion. It also says—and I quote, with respect to Best Start in Part 1 of the bill—that “its abatement at 21% will increase disincentives to work for a group of families between $80,000 and $95,000.” The advice goes on to say, “The combination of abatement on different transfer payments and tax means some families receiving Best Start could face an effective marginal tax rate of over 100%.” I ask the Minister again: how can he promote a policy that has such a clear disincentive for New Zealanders as listed in terms of the advice that is in front of us?

I’m moving to the independent earner tax credit. Again, there are objectives that this package has to meet. There are three specific objectives. It is inconsistent with both of them from a policy perspective. This is very clear, on page 31 of the regulatory impact statement. It is inconsistent—reinstating the income tax credit—with two out of the three policy objectives, and partially consistent with one. I think that is a significant failure. I’d like to understand from the Minister, again, how you could be promoting a particular solution that is so at odds with the objectives that you’ve set—and that’s actually included in your own document, which we are reflecting on here this morning.

When you look at the other options that have been ruled out of scope or not considered—[Time expired]

Hon ALFRED NGARO (National): Madam Chairperson Tolley, thank you. I rise to take a call on this Families Package (Income Tax and Benefits) Bill in the committee stage on Part 1. I suppose what tweaked my interest in taking a call was when Minister Robertson stood and made some comments, and I suppose the comment from the Hon Amy Adams was just that if we look at clause 55 in Part 1, at new section MF 4F, in regard to the calculation of instalments—the comments that the Hon Amy Adams made were just in regard to that in this process—it just seems that there is a penalising for younger children, and we’re talking specifically in regard to the amounts that are here. So if we talk about section MF 4F(4) in that calculation, the prescribed amount here is the sum of the following amounts.

Now, the Minister did talk about this and tried to explain this, but there still seems to be a discrepancy, and so I’d like to see if the Minister can take the call. Subsection (4)(a): “for the eldest dependent child for whom the person is a principal caregiver during the entitlement period,”—and I’m reading from this just so that we can get the specific detail, because it did seem that it was incongruent with what the Minister was saying.

Hon Amy Adams: He said there was no difference.

Hon ALFRED NGARO: So he said there was no difference. In subsection (4)(a), it is “(i) $4,822, if the child is younger than 16: (ii) $5,303, if the child is 16 or older:”. I go down to subsection (4)(b): “for each dependent child for whom the person is a principal caregiver during the entitlement period, other than the eldest dependent child, 1 of the following … [is] applicable:”—and I’m reading from this particularly because this is a point that I think needs some clarification from the Minister—“(i) $3,351, if the child is younger than 13: (ii) $3,822, if the child is 13, 14, [and] 15: [and] (iii) $4,745, if the child is 16 or older:”. Now, that clearly delineates the fact that there are lesser amounts going to those younger children, and I think that’s a—

Hon Amy Adams: That’s right. They’re penalising young families.

Hon ALFRED NGARO: That’s the point that we’re trying to make. The Minister got up and tried to tell us that it wasn’t. I don’t want to use unhonourable words in this Chamber, but I just would like the Minister to just give some clarity here. It just seems incongruent with what the Minister’s trying to say, and I was very specific to read that out because I wanted to sort of get some clarity around that. I know it’s a technical point, but it is critically important, as well—particularly if you then look over to new section MF 4G, and we know that the calculation instalments will extend themselves out from 1 July 2018 to 30 March 2019. So he’s explained that and talked about that, but I go back to the point in MF 4F—in that calculation in subsection (4)—where the prescribed amounts just do not seem to match up. Now, I know the Minister, in his attempt, was trying to sort of explain that it’s important, but it just doesn’t seem right. I think it’s important for the Minister, then, to give some clarity.

Look, this is not just for those in the committee. There are those that are out there—we know that the media have already had calculations that are in the Dominion Post where family income packages are being calculated now. Families are now taking into consideration: will this be the package that gives them some benefits, some gains? In fact, I know in the Dominion Post it talked about the four different types of families where there would be a certain gain from this package. So I think it’s important. This is not just clarity for the committee, but clarity for our communities, who are there. Some may be listening. There’ll be beneficiary advocates that are out there saying, “Let’s look at this package. Let’s see how, actually, it will benefit those.” I just think that even though it’s a small point and a technical point, it’s an important point. They need to know, actually, if they have younger children, whether they will be penalised because of this. It just seems that on the face of it, and in the reading of the bill, that seems to be the case here.

So I really would like to see the Minister take a call to be able to just clarify that. Who knows? The numbers may not be correct, and if he could give us some clarity, I just think that it would be important for those that are out there. I know that I’ve had calls from others that are in the community groups that are working with families that are looking at this package. Some have said, “Look, there are some benefits in it.” They can see the gains that are being made. But I think the benefits are in the detail. I think that’s really important—we need to have the member talk about that. So, again, I just reiterate, it’s really simple. It’s a small call. New section MF 4F, “Calculation … instalments,” subsection (4), “Prescribed amount”—clearly, from here, as I’m reading it, and I think as others are looking at this—I think it’s a small point but a significant point. I’d like to see the Minister take a call, answer the question, to give us some clarity in regard to this, because, on the face of it, it just seems that younger children are being penalised.

DENISE LEE (National—Maungakiekie): I’d like to address the amendment in the name of Andrew Falloon. It amends new Subpart MG 2(3), in clause 22, by replacing “4 weeks” with “8 weeks” in regard to when the bill, as drafted, cuts a person’s eligibility for the Best Start tax credit less than a month after the death of a dependent child.

I didn’t think I’d be speaking so soon again on something so personal, but the House will recall that in my maiden speech I referred to the death my own two-year-old son. So this is a topic that I have a very unfortunate circumstance to have such a personal journey with. The idea of cutting off the Best Start tax credit less than four weeks after the death of a child is incomprehensible to me, and I want to be very clear on what I say. The journey that you go through in the first four weeks after a child dies means that you can’t eat, you can’t communicate, and normal household functions are the furthest things from your mind. You’ve got funeral arrangements. You’ve got an incredible amount of things to think about. You’re absorbing how people are absorbing your grief. You cannot function. The idea that, in an insensitive and cold-hearted manner, you get, ironically, a Best Start in life package and in that worst start in life you get something cut off—often you won’t notice, you won’t see, you won’t understand what’s happening for your finances—

The CHAIRPERSON (Hon Anne Tolley): Don’t use “you”. Try not to use “you”—that means me.

DENISE LEE: OK. Thank you, Madam Chair. As the weeks go on—and I’m now referring to a little bit further than four weeks on; around the six-week mark—you begin to see a little bit of clear air. You’ve got things like—and this depends on the nature of the child’s death, of course—ambulance costs, medical bills, the coroner’s process, the police inquest officer process. You’ve got funeral costs and worst of all you’ve got the idea—well, not the idea—the concept, the possibility, that you’ve got to begin to pack away children’s clothes and address that very practical nature. This is all at the time—as this bill is drafted—you would have something that you enjoyed and received then coldheartedly cut off. You can’t change the death of that child, but you can show some sensitivity and some respect.

So I’ve got some questions for the Minister, and they’re really pertinent. They are: what evidence from the grief cycle is four weeks based on? Was the grief cycle taken into consideration when it came to that four-week decision? Is the nature of the death of the child taken into account? For instance, with the impact of sudden death, which was my case, you’ve got no time to adjust and you certainly won’t have time to adjust to a financial adjustment. So how was that taken into consideration? I would also like to ask that if this was at a select committee, how would this have been different? I know for a certainty that there would’ve been a whole line of parents, grieving parents, appearing before a select committee to talk through what I’ve just talked through in terms of what it’s like to handle grief in the first four weeks.

I’d like to see those questions answered. I acknowledge that the Minister acknowledged Andrew Falloon and this particular amendment, and in doing so he referred to the relationship to how other Working for Families entitlements are cut off on the death of a child. But this is different. You’re starting with the terminology “Best Start”; I’m referring to the worst start, and I would like to see more sensitivity and respect. Thank you.

The CHAIRPERSON (Hon Anne Tolley): I call Sarah Dowie, but, just before the member starts, can I just advise her. She has two amendments tabled. The first, on a new clause 12A, is in scope, but her second amendment, inserting a new Part 3, is out of order, as it’s out of the scope of the bill. The two defining features of this bill are income tax and benefit, and the member’s amendment is outside of those. So there is no debate on that second amendment, but the first—

Sarah Dowie: The family proceedings amendment.

The CHAIRPERSON (Hon Anne Tolley): That’s right.

Hon AMY ADAMS (National—Selwyn): I raise a point of order, Madam Chairperson. The purposes of the bill actually go beyond that and they speak very clearly to giving children the best start in life. Actually, if you read through the general policy statement of the bill and the explanatory note of the bill and the objectives of the bill, it is very clear that the bill is around tax changes, benefit changes, and giving children the best start in life or a good start in life. It is an omnibus bill. It is intended to be very wide ranging and cover any number of initiatives that speak to those three purposes.

My understanding of the Standing Orders in this respect is that when the purpose of the bill provides for an area like giving children the best start in life and when we have an omnibus bill, then anything that members want to put up that speaks properly to giving children that best start in life is within scope. I think if your ruling is that it is limited only to the benefit system and the Income Tax Act, then that is a misunderstanding or a misdescription of what the purpose of the bill is expressed to be, and I would invite you to reconsider that ruling, because, on the wording in the general policy statement, the purpose of the bill is substantially wider than that, and this is a matter of some considerable importance to this side of the Chamber.

The CHAIRPERSON (Hon Anne Tolley): Yes, I thank the member for that very eloquent point of order. However, the bill has been quite cleverly arranged into two different themes: one is around income tax—not even particularly around the Income Tax Act, I would say, but around income tax—and the other around benefits. So any amendments that relate to those two themes are in order, but if you go beyond that, even given the description in the preamble to the bill, it is still focused on the benefits system and benefits. So that is the ruling that that is deemed to be out of scope.

Hon AMY ADAMS (National—Selwyn): I raise a point of order, Madam Chairperson. I absolutely understand and accept the Chair’s ruling in respect of the arrangement of the bill into parts, and, clearly, amendments within those parts would need to reflect the subject matter of the parts. But where you have, as you have in this situation, an omnibus piece of legislation, my understanding—and in terms of advice we have sought—is that it is entirely within the scope of the bill to insert entirely new parts. And I take your point that those two parts are arranged in those ways and are therefore restricted to those ways, but where an amendment is made to insert a new part that is within scope of the broad objectives of the bill, you are not similarly constrained to the content of those two parts. That certainly reflects the advice that we’ve had on this side of the Chamber.

Hon Iain Lees-Galloway: Speaking to the point of order—

The CHAIRPERSON (Hon Anne Tolley): I will take a point of order from the Hon Iain Lees-Galloway, but I just want to make the point that we’re unlikely to get to be voting on this, so I can give it further consideration.

Hon IAIN LEES-GALLOWAY (Deputy Leader of the House): I raise a point of order, Madam Chairperson. Just very briefly, you’ve ruled, obviously, so I don’t think there can be any further discussion about your ruling, but, secondly, the purpose clause, which is what determines what is in scope and is not, is very clear. There is no scope for Ms Dowie’s proposed Part 3 because it does not fit with the purpose clause. It is as simple as that. You have ruled and there should be no further consideration.

Hon Dr Nick Smith: Can I speak to that point of order, Madam Chairperson?

The CHAIRPERSON (Hon Anne Tolley): Look, what I’m going to do is—as I say, we’re unlikely to get anywhere near a closure at this stage where we would have to vote that amendment out of order. I was simply informing the member before she spoke. I didn’t have to. I could have left it until the voting. So I will consider it further and I give the member the call at this stage.

Hon Dr NICK SMITH (National—Nelson): I raise a point of order, Madam Chairperson. As you reflect—

The CHAIRPERSON (Hon Anne Tolley): I hope you’re not going to disagree with my purpose.

Hon Dr NICK SMITH: No, I’m not. I’m very appreciative of the fact that you’re going to consider the amendment that my colleague is wishing to advance. But in that consideration, the points that have been made both by my colleague Amy and members opposite, I would ask you to reflect on the precedent that was set in the previous Parliament around the addition of new parts. What the previous Speaker ruled was that providing they were parts that the Government could have legitimately included as parts within that bill—there should be no difference in this Parliament as to whether it is a new part that’s proposed either by the Government or by the Opposition—the test that should be consistently applied with those previous rulings of the Speaker is whether, if the Government wanted to include the part that my colleague wanted in the bill, that would meet the requirements of the omnibus bill. I do ask you, as you make that ruling, to consider on those previous rulings that were advanced by members opposite so that we’re getting some consistency about new parts.

Hon Chris Hipkins: Point of order. Point of order, Madam Chair.

The CHAIRPERSON (Hon Anne Tolley): No, sit down. I’m not going to take any more. I will consider that, but I say to the member respectfully that the decision to rule it out of order isn’t that you can’t create a new part; it’s whether it fits within the two themes of the bill. And that’s what I will consider. OK. I call Sarah Dowie.

SARAH DOWIE (National—Invercargill): Thank you, Madam Chairperson, and thank you for that information. I was going to restrict my first call on this bill to Part 1 regardless, and to my amendment relating to Part 1, which was so ably talked about and introduced with the honourable Simon Connor’s contribution before. Of course, it relates to the Best Start tax credits that the Government wishes to put in place with respect to a new tax credit in the Income Tax Act 2007. My amendment, of course, relates to the eligibility of the people receiving those tax credits and relates to adding to section MC4 of the Income Tax Act 2007, and states that “any person receiving a Best Start tax credit as referred to in section MC 1 shall ensure that any dependent child has attended a 15-18 month core Well Child check.”

Look, where I’m going with this is it’s all very well to give families money, and I don’t think anyone would disagree that giving families money is, if you can be a Santa Claus, a good thing—if it is targeted and necessary, obviously, for that family—

Brett Hudson: If it’s targeted.

SARAH DOWIE: Exactly, Mr Hudson: if it is targeted and necessary for that family, to enable that family and their children to get ahead. It’s not OK, obviously, to take money away from hard-working individuals to give to those people carte blanche. This is where I’m going with this amendment. It’s that there needs to be criteria put around these Best Start tax credits so that we can monitor the progress of children as they’re getting that money. Writing a cheque simply does not work.

So where I’m going with this is to feed it into the Well Child / Tamariki Ora programme, which is very well accepted in New Zealand. It is a universal health programme that has a number of different checks, where a mother or father and child, or guardian and child, will go to Well Child providers and they will check the progress of a child. Now, that feeds into eligibility because we want to make sure that these tax credits are being well spent and that they are making effective change in the child’s life.

The reason I’ve picked the 15 to 18 months core health check is that that is specifically looking at around about the age that a child would, generally speaking, go to early childhood education (ECE). In the system of Well Child core checks, we have a B4 School Check, and now I’m looking to extend that, more or less, to an early childhood education check.

There’s often emphasis on the very early beginnings of a child’s life, through Well Child, when the mother is pregnant, when the child is born. But this is that further follow-up, to have that check as an eligibility criteria for that final Best Start tax credit payment. In particular, that 15 to 18 month core Well Child check looks at the overall health and development of a child. Of course, it focuses on the physical. You have the hips check as well, to make sure that the child is doing well, growth-wise, and hearing and vision—so, again, focusing on, if they’re going to ECE, that they have the ability to engage in early childhood education in an effective way and to engage in that so that they start off their education in the best way possible, so that they make the most of that education and can move on to primary school with all the necessities in place to help them do well. Of course, there is a focus on immunisation and mum’s health as well.

I think that this would be a good change to the bill, to make this an eligibility criteria so that it’s not just giving money for the sake of giving money, without results.

The CHAIRPERSON (Hon Anne Tolley): Just for the benefit of the member Sarah Dowie, I have had a look at her amendment in detail—the amendment to insert a new Part 3. This is about enabling a male to get a paternity test to achieve knowledge of his paternity. I think that’s a pretty long bow to then link that to a benefit for when a child is born and its first couple of years of life.

SARAH DOWIE (National—Invercargill): I raise a point of order, Madam Chairperson.

The CHAIRPERSON (Hon Anne Tolley): I’ll take a point of order from Sarah Dowie.

SARAH DOWIE: Thank you. Speaking to that, Madam Chair, the way I see that new part being inserted is that the United Nations convention with respect to the rights—

The CHAIRPERSON (Hon Anne Tolley): I understand that, but to fit it within the context of this bill, it’s either to do with tax or to do with a benefit. And just because you use the term “to give the best start to a child, knowing who their father might be”, as a human right, is a bit of a long bow. But I will give it further consideration, I think. I’m just warning you.

SARAH DOWIE: Yes, well in all fairness, obviously, that relates to child support payments and other benefits that would be received by the child in that regard. So I would seek your clarification and your ruling in the positive.

The CHAIRPERSON (Hon Anne Tolley): We move on.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chairperson Tolley. I’m really pleased to speak in this particular debate. The families package that National would have had very much focused on children, and particularly those that were particularly vulnerable. Sarah Dowie’s amendment, which I want to commend to the committee, is basically saying that we would expect that a parent who is receiving a Best Start family tax credit would then actually have at least the 15- to 18-month core Well Child check, and that is absolutely in line with this Government’s objectives around improving and ensuring that children get the best start in life. I do want to commend the Government on that. It is something that we absolutely have in common on this side of the House. I would say that one of the differences, though, is that we would like to ensure that any taxpayer funds are actually spent in the most effective way, and that is by ensuring that every child—every child—in this country gets the benefit of that investment.

So I want to commend Sarah Dowie for putting this amendment before the committee. We have a fantastic framework in the Well Child check. It’s allowing families to choose who their Well Child provider is, but it’s also a really important checkpoint on a child’s well-being.

I’d be really interested if the Minister in the chair, Carmel Sepuloni, could provide some really clear advice in terms of their consideration of the Well Child programme—and, in particular, the core checks—and whether or not this was considered as part of the Best Start payments. But I am very, very optimistic, given the intent and the stated objectives of the Families Package (Income Tax and Benefits) Bill. It’s very well aligned. It’s very in support of the objective of this piece of legislation. So I would be hoping that the Minister in the chair would take a call to go through this in more detail in terms of ensuring that children get the best start in life.

But I do think also, because of the other stated objective around reducing child poverty, the Well Child programme is one that reaches every child in New Zealand. So it provides the opportunity for professionals of a parent’s choice to be able to understand and perhaps identify if that family is having some challenges or some struggles, and provides the opportunity, whether it’s physical learning issues—and my colleague the MP Sarah Dowie has identified specifically some of the things that would prepare a child for early childhood education, whether it’s hearing or vision.

But also the Well Child checks are a really important part of engaging with someone else in the community—a professional—who is able to spot, you know, are there any family violence issues, potentially, in that family. Is it a family that’s struggling financially, and perhaps there is support through the benefit system that they are not getting, for example. So we do want to make sure that this is an important opportunity to connect with a family to ensure that the children in that family, through this Well Child check—this core check at 15 to 18 months—are identified, and we maximise the opportunity of making the taxpayer investment in these children to make sure that every child, and particularly those children with additional needs, have their needs met.

So I think this is a fantastic amendment and I want to really commend my colleague Sarah Dowie for putting it in. I think this is a wonderful opportunity to set children up for the rest of their lives, and to prepare them and to ensure that they are ready for full participation in early childhood education. But it’s also a really great opportunity to see if there’s further assistance that would be required for a family in order to support them in, you know, what are challenging times for families anyway, but we know that some New Zealand families have even greater challenges that they are facing. On this side of the House, we don’t want them to face them on their own. We want to ensure that those who have access to those families can ensure that they have greater protections and greater access to the support that they need in times of need.

Hon Dr NICK SMITH (National—Nelson): Thank you, Madam Chair Tolley. I want to ask the Minister in the chair, Carmel Sepuloni, whether she thinks it’s good public policy for people to be worse off as a consequence of getting a pay increase or working harder. I want to draw her attention to the regulatory impact assessment, and it says this: “The introduction of Best Start and its abatement at 21% will increase disincentives to work for a group of families … [it] means that some families receiving Best Start [will] face an effective marginal tax rate of over 100 percent.”

Hon Members: What?

Hon Dr NICK SMITH: Of over 100 percent. Now, in my constituency office, so often I meet with New Zealanders. They work in fish factories, they work in the fruit industry in Nelson, and they come to see you as a constituency MP, frustrated by the complexity of Working for Families, the accommodation supplement, and the tax system, which is made worse and more complicated by this bill. But the part that they just find unfathomable is that they go work an extra five hours a week, and then they find out they’re worse off. We are setting up a situation where when the boss comes along to a worker and says, “Look, you’re doing a great job. I’m going to give you another $5,000 a year, or another $100 a week.” , and—

Hon Andrew Little: Oh, yeah? Which boss is that?

Hon Dr NICK SMITH: —the worker, Andrew Little, is going to say, “No, please don’t increase my wage. I’m going to be worse off.” Really? Is that what we somehow believe in this Parliament is going to make us a—[Interruption] What is the member’s objection? Does the member think that’s a good thing? Well, what happens if the boss comes along and says, “Would you like to take some extra responsibility and earn another $3,000 a year?” What this bill’s going to do is actually mean that a worker will say, “No, the Government’s going to take more money off me than what that pay increase will provide for me.”

I just remind the Parliament of the journey New Zealand’s been over. Remember the debates where, actually, members opposite in the Labour Party said that an economy would never grow when you are having the marginal tax rate of 66c in the dollar that once existed in our income tax rates? Yet what we are doing with this bill is exactly that for a whole lot of middle-income families. These are families where the combination of the average person on an average wage is going face a higher tax rate. They’re going to face a higher abatement rate for their Working for Families, and now, with Best Start, we’re going to make people worse off when they earn more, as a consequence of an abatement and tax combination that is more than 100 percent.

Why does it matter? Because this Parliament can spend weeks—months—arguing about how we should divide up the cake and how much individual groups should get, and that’s a zero-sum game. What this Parliament should be focused on is how we grow the cake, how we provide the incentives so that all New Zealanders can grow and be better off. So I want to know from the Minister in the chair why on earth this Parliament would want to pass changes in tax and entitlements that have abatement regimes of over 100 percent, where people are going to be worse off as a consequence of increasing their earnings. There is only one outcome from this, I say to members opposite, and that is that people do what is absolutely logical: not earn, not work, not contribute, not grow the economy—

Hon Andrew Little: There’s the National Party, right there.

Hon Dr NICK SMITH: —and we are all poorer as a consequence. I challenge Mr Little, who’s interjecting: please explain to me how, with what Treasury says about the part of this bill where we are going to get marginal rates of tax of over 100 percent, we can possibly defend that as sensible policy for New Zealanders. I’m just not looking forward at all to my regular session with constituents when people come to me and say to me, “I’ve got a pay increase. I’m worse off. How can that be?” I just want the Minister or a member opposite to explain the logic of why on earth we’d want to do that.

Dr PARMJEET PARMAR (National): Thank you, Madam Chair, for this opportunity. I’m taking this call to speak on Part 1, which contains the Best Start tax credit, and to my amendment, which says that “any person receiving a Best Start tax credit as referred to in section MC 1 [of the Income Tax Act] shall ensure that any dependent child is enrolled with a Well Child provider.” My amendment flows on really well from my colleague Sarah Dowie’s amendment, which is to insert another step in the Well Child provider services—that is, to have a pre-school check. We know that every child is not enrolled with a Well Child provider. By making this a criterion, I think we will be actually further enhancing the social outcomes and also health outcomes for newborns.

With a child being enrolled with a Well Child provider, they’ll get several services. As we know, at the moment there are 12 core contacts, and these contacts are about checking the child’s health and well-being and also looking at the mother’s health. So now, if my colleague Sarah Dowie’s amendment is adopted, it will become 13 core contacts. But what I am proposing is that it should become a criterion that a child or a family should qualify for Best Start tax credit only if the child is enrolled with a Well Child provider.

In these 12 core contacts that exist at the moment, there is a check-up at birth, and then there is a check-up at the first week, and then after that it is between two to four weeks, and then there is also a transition service provided for that newborn when the family is moving from the lead maternity care provider to their general practitioner. Then there are visits to check that the child’s growth and development are going well. The family’s health and well-being are also examined. The next check-up is between eight to 10 weeks, and then the next are three to four months, five to seven months, nine to 12 months, and 15 to 18 months, and that’s where we want to have that amendment, where we want to bring in that preschool check. So then there is a check-up between two to three years. The next one is at four years, which is the B4 School Check, which includes child growth and development, oral health, immunisation visits—all that is also covered in that.

By enrolling a child with a Well Child provider and making that as a criterion, what we will see is that we are not only getting what the Government believes are, by giving this $60 per week, better social outcomes for these children in these families but also getting better health outcomes. Maternal well-being is also important, and through this we will achieve better outcomes not only for newborns’ health but also for maternal well-being as well—that is, mother’s health. Physical and emotional health and well-being especially become really important in those starting days.

As the Government acknowledges that it’s important to provide the best possible start to all newborns, and especially since the first few years are really critical, it becomes really important that we don’t only look at providing more financial help but also see that we are able to provide more improved health outcomes as well for these newborns.

I know that there are some other qualifying criteria for Best Start tax credits in this legislation in Part 1. It’s not that there are no other criteria, so I would like to see this become a criterion that a newborn should be enrolled with a Well Child provider to qualify for Best Start tax credits. When I say “qualifying criteria”, as we have noted, families that are on paid parental leave, while they are on paid parental leave, will not be getting the Best Start tax credit. Another criterion that is already in this part is that if they are receiving a parental tax credit, then they will not be getting Best Start tax credits. So there are some other criteria already in this legislation so it won’t be a new thing to insert this as a criterion, which will enhance the overall outcomes that we want to achieve for newborns.

I was listening to the Minister, the Hon Grant Robertson, last night and he said that a tax credit is fundamentally based on the best evidence that we can find about what will make a difference in the lives of children, so this was his reason for bringing in the Best Start tax credit. I would like to know what the evidence is, and if, in that evidence, all the recommendations that were made—[Time expired]

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. I’ve been looking forward to taking this call on the Families Package (Income Tax and Benefits) Bill. I specifically want to talk to Part 1 and the Best Start package. I’ve got some genuine questions for the Minister that I would like the Minister in the chair, the Hon Carmel Sepuloni, to address.

We understand that in the first year of a child’s life, a family will receive $60 a week—$3,120 a year. This is a universal benefit. There’s no abatement applied for the first 12 months, as we understand it—except if you’re receiving paid parental leave. Now, in the last financial year, 28,400 people received paid parental leave, and that’s a lot of people in my electorate. What they need to understand is that, actually, they won’t receive that full $60 a week for the whole year. They’ll receive it only for the second half of the year, effectively.

So what I want to understand from the Minister is what the Government’s thinking around that was, especially because if you are on a sole parent benefit, you will be entitled to receive the full Best Start payment. If you are a sole parent and you’re receiving your benefit of approximately $330 a week plus a housing subsidy plus temporary additional support, that all adds up to a number of hundred dollars, probably approximately over $500; yet if you are a working mother and you are receiving the full paid parental leave rate, you’re receiving $538.55 before tax, so when you take tax off, it’s approximately $400.

As you can see, my dilemma here, and the dilemma for many working mothers, is that they won’t be receiving this universal benefit and, in fact, they’re worse off than someone who is on a benefit. So working mothers in this situation are worse off. We’ve heard a lot from Mr Robertson about how this is universal, but in reality it is actually not universal at all, and I can only assume that the Labour Party are assuming in all of this that working mothers have more money, have more savings, have more income to be able to support themselves through that first year of life. Therefore, it’s not really universal at all. You are making assumptions that there are people who have more income.

I want the Minister to explain to us why it is that working mothers, under this policy, are actually worse off. That’s where I’m coming from, because a lot of my constituents will come in and say to me, “Well, look, I’m so excited about receiving this money.” I’ll have to say to them, “Well, actually, if you’re one of the 28,400 people in New Zealand over a year’s period taking paid parental leave, you won’t actually be eligible for this.” So the universality of it all is really undermined by that. It really is actually targeted, in a way, and if that’s what the Labour Party are doing, then I would like them to explain that and explain why it actually isn’t universal. I’m genuinely interested to see why working mothers are being penalised in this instance.

The second part of my question to the Minister—Mr Robertson got up yesterday and talked about the fact that this was universal, even though it’s not, because of the fact that every family faces costs with a newborn. I would argue that working mothers on paid parental leave face those same costs. He also went on to say that there will be an abatement rate for years two and three, so it is more targeted for years two and three. He then went on to say that the first three years of a child’s life are the most important years, and yet, in this policy, he is taking the first 12 months as the most important.

But I would actually argue that the costs that you face—and I’ve been through this recently. I’ve got a five-year-old, in fact, so I’ve been through this recently. I have some recent experience in this. Your costs of having a child in years two and three are so much more than in the first 12 months because you’ve got more food, more clothing, more activities, haircuts, shoes, and potentially childcare with having to go back to work. There are so many more expenses in those years than you do face in the first 12 months. We also have to remember that in that first 12 months, if you’re a working mother, you’re getting only half of the rate, effectively. So you get half of the rate and then it gets abated when you get all of your big costs of having a two- and three-year-old. I’d like to hear from the Minister specifically around those questions, please. Thank you.

The CHAIRPERSON (Hon Anne Tolley): Sorry, just before I call, can I just remind new members that when you’re speaking in the Chamber, you are speaking to the Chair. So when you’re talking “you”—I mean, I was a working mother, so I do understand, but, actually, I’m not a working mother at the moment; I am the Chair of the committee. So when you’re making your speeches, just leave out the “you” and rephrase it.

Hon CARMEL SEPULONI (Minister for Social Development): I’m not going to take a long call. I just want to respond to an issue that the member Erica Stanford raised with her concern that women who are beneficiaries may be given preferential treatment over working mothers. Not the case at all—I’ve just checked with the officials. If you’re a working mother and on paid parental leave, you still have access to the accommodation supplement and Working for Families, and everything else. So in no situation would they be worse off than a sole mother on a benefit. Thank you.

Rt Hon DAVID CARTER (National): Thank you very much, Madam Chair. I appreciate the opportunity to say a few words. I’ve been listening to the debate and I want to thank the Minister, the Hon Carmel Sepuloni, for finally taking a call and answering a question, because the purpose of the committee of the whole House is for us to ask questions and tease out the validity and the effects of this legislation. There have been a large number of questions asked and I want to move to a specific range of questions and I certainly hope the Hon Carmel Sepuloni will take the opportunity of answering those questions to my satisfaction.

The first thing I want to do is to refer the Minister to the regulatory impact assessment, page 12, and this is the point that was raised earlier by the Hon Dr Nick Smith, which hasn’t been answered by the Minister in the chair, and I hope she will. This impact assessment says, “The introduction of Best Start and its abatement at 21% will increase disincentives to work for a group of families between $80,000 and $95,000.” So I want the Minister to tell me: in the research that was done, how many families sit in that bracket? I would have thought most low to middle income families, two parents working hard, will probably sit in the bracket of a gross household income coming into that house of $80,000 to $95,000. If that’s so, what this document is saying is that there will be a distinct disincentive for those people to work harder. How’s that going to lift the productivity of this economy? I don’t think it’s going to.

I note now we’ve got a relief Minister in the chair, so my question to the Hon Iain Lees-Galloway is for him to explain to us how many families sit in the bracket noted in the regulatory impact assessment as people who will be worse off by the introduction of the Best Start payment. Not only do I want to know how many families are worse off, I want to understand the rationale from this Government—from this Labour - Greens - “Mr 7 percent” New Zealand First Government—

The CHAIRPERSON (Poto Williams): Order!

Rt Hon DAVID CARTER: I want to understand the rationale for why—

Hon Scott Simpson: Actually, 5 percent.

Rt Hon DAVID CARTER: Yes. Anyway, we’re not into percent—the only thing I want to know is the percentage of taxpayers who sit in this bracket and will be worse off. The encouragement will be for them—as the Hon Dr Nick Smith said, when they’re offered a pay rise for additional responsibilities, when they’re asked to do further work, their abatement rate will exceed 100 percent. That’s an incredible position for any Government to put people into.

The second point I want to tease out is clause 47, “Income Tax Act 2007 amended”. I take it that that is the clause that takes away the tax package that was passed in May this year by the previous National-led Government—so confirmation of that. Then I want the Minister to tell me what discussions occurred between the coalition partners as they brought this legislation before Parliament, because I take the opportunity of reminding the committee that only seven months ago New Zealand First and the Greens voted for a provision they’re now apparently going to vote to take out. There doesn’t seem any logic to me that two rather small parties in this Parliament—

Hon Scott Simpson: Very small.

Rt Hon DAVID CARTER: Very small and getting smaller, might I add, Scott Simpson—getting a lot, lot smaller. I want to know why those two parties were supportive of a package to help 1.2 million New Zealanders yet have now come forward today to support a package that, I calculate, helps—perhaps, if I believe Government figures—750,000 New Zealanders but, as I have identified in my earlier part of this contribution, significantly disincentives probably the majority of low to middle income partners within a relationship working hard to better themselves for their own children. I’d be grateful if the Minister would answer the questions.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair. I wanted to—just continuing my questions of the Minister—go back to the comments that were made by Erica Stanford, in particular, because I think the Minister in the chair at the time misunderstood the point that she was making. The point that she was making was that if somebody is on paid parental leave, why should that family forfeit their Best Start payment. There’s been no adequate explanation of why there should be such a discrimination against a parent that is working, as opposed to one who is not. I think the Minister confused it. The Minister in the chair confused it at the time around a discussion around benefit or not. That wasn’t the point. The point that my colleague Erica Stanford was making, very, very clearly, was that if somebody is receiving paid parental leave, there is absolutely no reason that we on this side of the Chamber see that they should not also get the Best Start payment. That is an absolute discrimination against working parents in this country, which I think is outrageous.

I’m really hoping—I’m hoping that that was just an error, that it was a mistake that was made, and I’d like the Minister to give due consideration and to answer the question: firstly, was it deliberate or not; and, if it was, what was the rationale and the reasoning behind it? From this side of the committee some of my fantastic counterparts have spoken who understand the challenges and the costs associated with being a working parent, and if there is going to be a universal entitlement of $3,120 a year—universal means universal. So I’d like the Minister in the chair to explain how something can be universal but they’re not, and discriminate against working parents.

I want to then also reflect on some of the comments that my very, very able and capable colleague Dr Parmjeet Parmar has introduced in two of her amendments. The two amendments also relate to the Best Start payment, because, you know, on this side of the Chamber we do recognise that families should be supported, which is why our package focused on Working for Families and people keeping more of what they earned. But let’s just focus on the quality of this Best Start payment. Our party believes that in terms of the quality of the spend—and the total spend of the Best Start package is quite significant—then, in terms of two elements, there should be two elements added to the criteria for receipt of that Best Start tax credit.

The first is enrolment—enrolling a newborn with a general practice or a primary healthcare provider. There is a significant amount of detail in the amendment that my colleague Dr Parmar has put forward, and I would really encourage the Minister to ensure that he gets adequate advice on this, because this is really critical in terms of children’s well-being. It’s an important amendment that deserves full consideration, and I’m fairly confident that the members of the Government will be supporting this amendment.

The second part of the criteria for receipt of the Best Start tax credit is that the dependent child is also enrolled with a Well Child provider. The Well Child provider is, of course, of the family’s choosing, so there’s no specific requirement in terms of who that provider is, but it is absolutely critical. It fits perfectly with the stated objectives in the bill, which are around the Government’s focus on ensuring children get the best start in life. I want to commend them for their focus. We agree with that. We agree with that, but we agree that this amount of money that’s being invested—collected from taxpayers up and down the country—actually should come with some degree of confidence that the money is being spent well, and in the best interests of every child, in every family, in every town in New Zealand, which is why I really want to commend the two amendments from Dr Parmar. I would specifically invite and ask and request the Minister in the chair to answer questions to the committee about these particular amendments, because I think they are really, really important, and it would be helpful for the Committee to hear the answers.

The other point that I want to make for those that are watching this debate live, or that are watching from home—

Hon Scott Simpson: Or listening on the wireless?

Hon LOUISE UPSTON: —or listening on the wireless, as we like to call it—is that at this part of the debate, the committee stage, it is absolutely critical that we get answers from Ministers. This is in urgency; there is no public opportunity to raise issues—no scrutiny. This is the only opportunity, so it is absolutely vital that the Minister in the chair gives fulsome answers, gives sufficient detail to enable quality debate and scrutiny. I know that the senior Minister sitting in the chair will be able to answer the questions that I’ve asked, that the Rt Hon David Carter asked before me, that my colleagues Erica Stanford and Dr Parmar have asked, and Sarah Dowie before that. These are questions that deserve answers.

This is the only opportunity in this House for us to scrutinise this legislation on behalf of New Zealanders. Because it’s in urgency, even though this doesn’t come into effect until July next year, the public don’t have the opportunity to scrutinise this and provide their own feedback. So they are relying on this side of this House asking questions of the Minister in the chair. So there is a high expectation that the Minister in the chair will answer those questions to provide that clarity so that New Zealanders can ensure—the 36.6 percent that voted for the Labour Party—that there is sufficient scrutiny of this particular piece of legislation and ensure that Supplementary Order Papers that are very well drafted, and that raise very real concerns on behalf of New Zealanders, are answered.

Let’s not forget that this is actually about the well-being of children in New Zealand. They don’t have a voice in this Parliament, so we bring it for them. And, as I said before, I commend the Government for their objectives. They are fairly broad in terms of the objectives of this legislation: to target social assistance to improve incomes for low- and middle-income families with children and to reduce child poverty, and to ensure that children get the best start in life. It does, then, put a high level of responsibility on the Minister in the chair to answer in detail the questions that not only I have asked but my learned colleagues on this side of the House have asked.

I know the Minister has been taking notes, and we are looking forward to the answers. In particular, I want to come back to where I started in this particular contribution, which will be one of many today: the contribution around the clear discrimination between those parents who are receiving paid parental leave and why the Labour-led Government have decided that if a parent is getting paid parental leave, they are not entitled to the so-called “universal” Best Start payment.

I am quite fascinated, given that parties that support them, whether that’s New Zealand First or the Green Party, who are also supporters of paid parental leave, would allow this huge discrimination and would really make sure that those who are working, families that are producing their own income, working hard to do it—some of them are the very same low- and middle-income families that are stated as one of the objectives of this piece of legislation. So why? Why? I want to know why there is discrimination against working families in this so-called universal entitlement—$3,120 a year. They are excluded from it. It is not included for those parents that are working and on paid parental leave. Now, it doesn’t matter whether they’re male or female, whether it’s the mother or father, or whether it’s a father and father, or mother and mother: this is about equity.

Now, I have heard that side of the House debate for hours and hours and hours about equity. This is your golden chance. This is your golden chance, to the Labour-led Government, to provide equity for parents across the board, of every income level, whether they are working or not. Remove the paid parental leave requirement, and that discrimination against them, and say that if it is universal then it should be universal across the board for every parent, for every child in New Zealand, regardless of what their parent is doing in terms of work or not. In Opposition, that side of the House constantly banged on about why should you discriminate against someone who is in work and someone who isn’t. This is your golden opportunity to right what is clearly a wrong in this piece of legislation, and to remove the discrimination—[Time expired]

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

Hon STEVEN JOYCE (National): I’d like to follow on with a couple of issues and also underline Louise Upston’s point about how important this debate is, because I think what we’re learning through this debate is a couple of things. One is that, actually, this is a marginal lift on the previous Government’s package—if that—a marginal lift. Secondly, the package is not well-thought-through at all. There are some things in here that will either get fixed now or get fixed later. This is the reality of it. I actually think the public of New Zealand deserve these things to be fixed now, because they are sending some very bad signals.

First, I’d like to ask the Minister in the chair, Iain Lees-Galloway, a particular question in relation to a contribution by the Minister of Finance, Grant Robertson, earlier today. Mr Robertson came up with some numbers about how many children would get above the low-income measure of 50 percent of median household income. Mr Robertson suggested that the number was 71,000 versus the 50,000 of the previous Government’s package, rising to 88,000 by 2020-21. Well, I would like to refer the Minister in the chair to page 21 of the regulatory impact assessment, which is the officials’ view of the world. Table 2 of that document appears to say that the reduction in number of children in low-income households from this package additional to the Budget 2017 changes is actually 12,000.

Hon Louise Upston: How many?

Hon STEVEN JOYCE: Only 12,000 more. Now we’ve been told it’s 20,000; we’ve been told it’s 38,000, and the officials are now saying 12,000. Actually, I do think we need a number that the officials back up in this regard, in relation to Table 2, because this I do believe is the apples-to-apples comparison that the Government has been saying it’s giving us, and obviously hasn’t been giving us. Unless I’m misreading this completely, it appears to be fairly black and white and says that going above 50 percent of median household income the number is 12,000. So I’d appreciate a response from the Minister in the chair on that.

The more substantive issue that I was referring to is this concern that Nick Smith has raised, rightly, because it is again quoted in this document on page 12, about marginal tax rates and Treasury’s warning that some families will face effective marginal tax rates of 100 percent. Now I actually think it’s not good design if families face effective marginal tax rates above 50 percent, or even 60 percent, and certainly not 80 percent, but we are going to have some families that, effectively, get less money in the hand if their income goes up. It’s 100 percent effective marginal tax rate. That doesn’t make sense.

Now one of the reasons we’ve got this problem is because we’ve set up yet another entitlement in the spaghetti of entitlements that New Zealand is developing, and we need to stop doing that. We need to stop adding more entitlements, because, actually, we have an entitlement now, if we want to provide to more parents with young children—it’s called the Working for Families tax credits. So why don’t we just add money to that entitlement and then you don’t get this problem of abatements of different packages at different times, which all add on top of each other to give these very high, effective marginal tax rates.

I have proposed to the committee another amendment in this regard. I have proposed that, rather than introducing the Best Start payment, if the Government thinks that this is the right thing to do—and we could debate the amount of money, and we would continue to do so, and we’ll debate what should be required of people to get this money, and my colleagues have put forward some excellent amendments in that regard. But I would like to propose that, actually, the smartest thing to do, if you think this is the right amount of money to provide, would be to provide it through the Working for Families package, and then the abatements could apply in the normal way. Now, if that was the case, it would simply involve adding back in, for children less than three, a particular rate of payment.

And again, if the Government wants to proceed with the exact amount as is in the current baby bonus, well then, that would be providing $8,734 a year to parents with children under three, and then that would abate progressively as we went. I think that would be an elegant solution. It’s the sort of solution this House should debate properly, and I look forward to that debate as this discussion continues. Thank you, Madam Chair.

Hon TIM MACINDOE (National—Hamilton West): Thank you, Madam Chair. I’m very grateful to be able to take another call. I must admit I sought it a little bit more vigorously this time because I was so pleased a few moments ago, before the Hon Steven Joyce spoke, to see that the Hon Ruth Dyson, with all of her experience, was seeking a call. Boy, it’s well past time for members opposite to start answering some of the questions—the very important questions—that members on this side of the House have been putting forward all morning. Frankly, we have not been getting answers, and I want to implore the current Minister who is in the chair, Minister Lees-Galloway, to start engaging in detail with the very significant questions that members on this side of the House have been putting forward.

I was appalled when the Hon Ruth Dyson considered putting forward a closure motion, because Part 1 of this bill is a very substantive measure that, as the Hon Louise Upston articulated so eloquently a few moments ago, is not open to any further public scrutiny—not going to select committee. This is the one opportunity that members of the public will have to hear the rationale behind some of the measures that have been put forward.

I strongly echo the suggestion that’s just been articulated by the Hon Steven Joyce. One of the real problems that you have with a package of this nature is that rushed legislation is often fraught with risk, and in Part 1, I think, it is clear that there are all sorts of anomalies and inconsistencies that are going to lead to chronic unfairness, which will affect those who, presumably, were meant to benefit from Part 1. So I want to commend all of my colleagues behind me for the very intelligent range of amendments that we are putting forward, that we are wishing to hear answers to and if the Government is not going to support them. Part 1 is a very significant measure, and there’s a whole range of things there.

I’d like to just return to the independent earner tax credit, because I asked the Minister of Finance a question earlier, and he gave me a fairly glib answer, but I have to say he didn’t actually answer it in detail. I was making the point that none of my constituents—not one—had contacted me to express concern about the fact that the independent earner tax credit was being removed.

Hon Members: Nor mine.

Hon TIM MACINDOE: And my colleagues on this side are all echoing the same thing. So I’m, frankly, incredulous at the idea that Mr Robertson was contacted by a whole lot of people. He certainly didn’t put a figure on it, and I’m sure that there were very good reasons for that. The question remains: why would you reinstate the independent earner tax credit at $520 when, at the same time, you’re taking away more than double that amount from a much greater number of people?

The other thing, of course, is that we had legislated—and this bill will take it away—for everybody who would have been eligible for that tax reduction to get it. They wouldn’t have had to go through a convoluted process. With the independent earner tax credit, of course, they have to go through quite a significant process, and many of them have been totally unaware of it and have never done it.

In the departmental disclosure statement, we read the following: “A person cannot claim the independent earner tax credit if they, or their partner, are eligible for a Best Start tax credit. This is achieved from defining a Best Start tax credit as a Working for Families tax credit in section MA 8 to the Income Tax Act 2007. The eligibility criteria for the independent earner tax credit already excludes people eligible for Working for Families tax credits.” Even if I’d read that a little bit more slowly, I doubt whether there are many people who are listening to this particular debate who would have understood what that all meant and how they could personally benefit from it. That is why it is incumbent on this particular Government, at this time, as they’re rushing this bill under urgency, to explain the rationale for something that is actually so inconsistent that it borders on being ludicrous.

I want to commend, as I say, the colleagues on this side of the House for their many significant amendments. I will be strongly supporting Sarah Dowie with her amendment—

Brett Hudson: What about mine?

Hon TIM MACINDOE: —because a well-targeted—ha! And Mr Hudson’s—and Mr Hudson’s. I will be supporting all of my colleagues’ amendments; it probably won’t come as a great surprise to them to hear this. But I just wanted to mention one or two, because a well-targeted credit can make really significant difference to those who are most in need in our country, and in that, I presume, all members of this committee are united. What we really want to do, and what we were doing through our own Budget in May of this year, is try once again to focus assistance on those who most need it. I would have thought that the current Government, who claim that they represent many of those people, would have been only too pleased to support us in that. But instead, no—we’ve had no indication yet (a) of how they’re going to respond to most of our amendments, or (b) whether they even understand the rationale behind them.

I make the point: I am so proud to be part of a really cohesive Opposition that is putting forward substantive amendments to this bill. This is not frivolous opposition; this is serious, wide-ranging debate on a number of measures that will make a very real difference in the lives of those people who this bill is supposedly meant to impact.

Why—why—are we not hearing any response at all? Surely this is the opportunity, this is the moment. These are the people who have, for the last five weeks, wasted parliamentary time on a whole range of measures that had unanimous support in the House, to the point where they filibustered and voted down their own closure motions, and yet now, when they have an opportunity to stand up and debate something of substance—something that actually makes a real difference to those New Zealanders—they are utterly silent. It’s a disgrace. It is a disgrace, it really is, and I think that the members opposite should be hanging their heads in shame. I really want at least one of them to stand up now and answer one significant point that has been made.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): I thank the members for their questions. I’ve just taken some time to get some advice from officials, and I will do my very best to answer some of the questions that have come from Opposition members.

A couple of members asked about the statement in the regulatory impact statement that some families could theoretically face tax rates above 100 percent, so in effect—[Interruption] Would members like to hear the answers or not? Some families could, in very unusual and specific conditions, find themselves with an effective tax rate of more than 100 percent. The Rt Hon David Carter asked what our best estimate is for how many families might be in that position. To date, we have found no one who would be in that position. So our best estimate right now is zero families would be in that position.

Hon Steven Joyce: Why’s it in the paper?

Hon IAIN LEES-GALLOWAY: Well, the member interjects and asks: why is it in the paper? Because, as an open and transparent Government, we want to acknowledge that there is a theoretical possibility, and we’re happy to include theoretical possibilities. We’ve done our best to see if the theory actually applies in practice and, to the best of our knowledge, the theory does not apply in practice. So I hope members appreciate that answer.

Members have asked if it is intentional that the Best Start payment is not available to parents who are receiving paid parental leave. Yes, it is intentional. The reason for that is that people are already receiving a Government payment—paid parental leave—that is significantly greater than the Best Start payment.

Hon Louise Upston: In absence of work.

Hon IAIN LEES-GALLOWAY: The good news of course, if members are interested in listening, is that people who do not currently qualify for paid parental leave and get nothing now receive the Best Start payment of $60 a week.

Mr Joyce asked: why don’t we just roll this into Working for Families? Well, I give a similar answer: not everyone qualifies for Working for Families—not everyone qualifies for Working for Families. So we are ensuring that families who do not currently qualify for Working for Families, including many families who are not in work, actually get the $60 a week payment. So that is the answer to that question, Mr Joyce.

The other question that Mr Joyce asked was—there is a table that has a different estimate of the number of children who will be lifted out of poverty to the number that was used by the Minister of Finance. That is quite straightforward: different departments have used different forecast assumptions. Now, Mr Joyce, as a former Minister of Finance, will be well aware of this—that different departments will use different assumptions—and that’s why that number is different. I thank members for their questions, and I hope those answers help.

Hon NICKY WAGNER (National): Thank you very much, Madam Chair. I would like to start by asking the Minister, Grant Robertson, a question. Why does he keep talking about the family benefit, when his Best Start tax credit is a very shabby, thin version of that type of proposal? He’s been singing the praises of Best Start, and evokes the old family benefit. He’s talking about the universal payment to all babies, to help all families.

I have to say, that sounds fantastic. Even the Salvation Army has been endorsing it as a fabulous universal initiative. But who has read the terms and conditions? Who has read the small print? Well, I have and it is nothing—nothing—like the old family benefit. In fact, it is an enormously restricted payment. Firstly, it’s not universal, and I have to pay credit to Erica Stanford for bringing this up. Not all babies are equal, under this. Every baby, I believe, should get this tax credit. Every family should benefit. But, under this legislation, everyone will, except if you are a working mother—except if you are a working mother with a premature baby. Can you believe that? Working mothers are being discriminated against, and a working mother who’s entitled to parental leave.

Yes, give them parental leave. We all sang and danced about that. But, actually, if you’re entitled to parental leave, that’s your entitlement; ah, ah, your baby’s not good enough—

The CHAIRPERSON (Poto Williams): Can I just remind the member that paid parental leave is a benefit and it will be applicable to Part 2. We are talking about Part 1.

Hon NICKY WAGNER: This is absolutely critical to Part 1. This is where the legislation is—

The CHAIRPERSON (Poto Williams): I just encourage the member—we’re not to talk about paid parental leave, which is part of Part 2.

Hon NICKY WAGNER: I beg your pardon. But the reason that these working mothers can’t get this Best Start payment is because they’re getting parental leave. So that’s why it’s connected. So, again, I’m encouraging everybody to read the terms and conditions, to read the small print.

The other thing that is interesting, when you think about the family benefit, is that the family benefit was truly universal. The family benefit went for 18 years. No wonder it added a bit. This one is not even universal for one year. After one year, only a small number of families will be able to get it to three years. So the old family benefit was totally universal—18 years. This one is not universal for even one year, and then only for a very small number of families in the second and third years. So it’s absolutely nothing like it.

So I would like to ask Grant Robertson why he’s talking about this. I don’t think you can take his statements at face value. I absolutely think parents should look into this and make sure that they understand what’s being said in the papers. I also think, when you look at other areas as well, you need to read the terms and conditions and look at the small print. I think some people are going to be bitterly disappointed that this bill is not delivering what they expected, and certainly not delivering what they could have had under National’s plan.

These people, these working mothers, are probably the ones that won’t get the payment in the second or third years. These working mothers are probably the ones that have also lost the $1,000 a year that they would have got under moving the tax thresholds.

So I don’t think this policy is what it’s cracked up to be and I don’t think the public know. I’m really advising all parents to look at the terms and conditions. I take offence that working mothers, who have got a tough road to hoe when they’ve got a new baby—working mothers, who are contributing to our society, who are out in the workforce—I take offence that they have been discriminated against. They, of all the people in our communities who should be looked after, are being discriminated against by this Government, and it’s not good enough.

MICHAEL WOOD (Labour—Mt Roskill): I move, That the question be now put.

Hon DAVID BENNETT (National—Hamilton East): Madam Chair Williams, thank you very much. I just want to start with a comment that was in response to a question to the Hon Grant Robertson. He said that he is proud that we are returning to a benefit. He said, “New Zealanders should be proud that they are returning to benefit.” That is the disgrace of this legislation here today.

I think the Hon Louise Upston and the Hon Nicky Wagner and others have exposed what a problem we do have in this legislation, how it discriminates against working women, how it doesn’t encourage people to go out there and work, and how it is a piece of legislation that the Labour Party is putting forward to return people to a benefit and a life of dependency.

Just looking at that last example, which I think the Hon Louise Upston explained very well, about how a working mother would not actually get the Best Start payment—that is a disgrace, for this legislation to take away that opportunity for that working mother. If it is going to be a Best Start payment that is going to be universal, why is it not for the person in that exact position? Why do they lose it because they are working and have made that conscious choice? And that—

The CHAIRPERSON (Poto Williams): Could I just ask the member—I just want to seek the indulgence of the committee. I’ve heard several arguments that are very similar, and I’m looking for some new arguments in this debate.

David Seymour: Hello?

The CHAIRPERSON (Poto Williams): This is part of a—no, that’s not appropriate. I’m looking for less repetition and some new material to come into the debate.

Hon Steven Joyce: I raise a point of order, Madam Chairperson. I appreciate your concerns, but I must say that there has been a lot of substantive new material raised in just recent times. In fact, Minister Lees-Galloway has I think substantiated that by standing up and answering some questions that have been raised by members.

Now, those questions beget further questions, which I think we’ll hear in the next little while. But I have to say that in nine years of sitting in this Chamber, I don’t think I’ve heard more new substantive arguments than I’ve heard in the last 15 or 20 minutes. I appreciate the Chair’s point, which is a good reminder to members, but I would just point out that I think we’re seeing a lot of new material added, and I’m sure we’ll see a lot of new material added.

The CHAIRPERSON (Poto Williams): I thank the member for that intervention, but I do have to say that I have been in the Chair for 40 minutes and there have been some speeches that have repeated what has already been said in the Chamber. So I am encouraging members to find some new material in this debate, and there is plenty to be had. So thank you.

Hon DAVID BENNETT: Thank you, Madam Chair. The last point I was talking about was the young mother and the Best Start programme. But also, young single people that actually make the conscious choice to go into work have lost their tax cut under this bill. Under this bill, the incentive is not there for those young people to go into work. The incentive for them is to seek to go on to a programme of becoming a beneficiary, which is the very point that the Hon Grant Robertson made in his replies to members in this Chamber when they were asking questions about the incentives and the dependency that this will create for families.

I also want to talk about the amendments that Sarah Dowie has put forward. That is in regard to—Sarah is in front of me. She has put forward an amendment in regard to the Best Start tax credit, Subpart 1. That would add a new clause 12A. That would, effectively, mean that any person receiving the Best Start tax credit shall ensure that the dependent child has attended a 15- to 18-month core Well Child check. That is putting an incentive in there for parents, or those that are receiving the Best Start tax credit, so there is actually an obligation of some attempt to make sure that that child has had the best start in life by actually getting that Well Child check. It is a very important part of any beneficiary regime that there is also a requirement to do something, and we’ve heard in this committee from the Ministers involved in the beneficiary areas that they would like to see and continue to see that there are requirements put on beneficiaries.

So to get the Best Start tax credit, effectively, the individual would be a beneficiary from the Government, and, therefore, there should be some obligations placed on those that do receive that benefit. Sarah Dowie has put forward a very good amendment that would require some kind of consideration on behalf of the person that is getting the benefit to actually have the 15- to 18-month core Well Child check.

I’d like the Minister to explain why the Government has not put any requirements on parents in this situation to undertake those kinds of obligations when they talk about something that is going to be for all and really is not—it is only limited to certain groups in our communities, and especially those that are on a benefit.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you, Madam Chair Williams. I’ve heard one novel question since I last answered questions from members, which is the one from David Bennett regarding Sarah Dowie’s amendment. Why no requirements? Because this Government trusts parents.

DAVID SEYMOUR (Leader—ACT): Thank you, Madam Chair Williams. And now for something completely different from the ideas factory of the fifth National-led Government. I want to bring to the Minister of Finance’s attention the question of indexation of some of the tax changes and the benefit changes, because I note that the Best Start credit has provision to be changed simply by Order in Council whenever there is a change in inflation. That means that your benefits under Best Start are inflation-proofed. They are protected from increases in money supply, reducing what you can buy at the shop. If that happens, the Government’s going to give you more.

I can actually see why that’s not such a bad thing. We shouldn’t have inflation changing the real benefits that people get, because inflation is something that is completely outside the control of people in this House and of most New Zealanders. So what I’d like to ask the Minister is how did he see fit to inflation-proof the benefits that New Zealanders will receive under this bill but he didn’t think to inflation-proof the tax thresholds that people will be moving to a higher rate of taxing? Because, you see, people have been paying approximately $500 a year extra in tax every year for the last few years, due to the previous Government’s failure to index tax brackets to inflation.

Michael Wood: I raise a point of order, Madam Chairperson. Questions around the indexation of tax rates had been raised 2½ hours ago in this debate.

The CHAIRPERSON (Poto Williams): That’s not a point of order.

DAVID SEYMOUR: I apologise to the member for making a slightly abstract argument, but if he keeps on listening, it might become clear to him. It is a travesty that the so-called tax cuts that are being repealed in Part 1 were not tax cuts at all. They were a change in tax brackets that merely caught up with the way that people had been pushed into higher tax brackets by inflation. More and more people were paying the top tax rate simply because of inflation. If you look at these changes—at $48,000 you are paying 30 percent. It won’t be long—in fact, it may be within the term of this Government—that someone working full time on the minimum wage will be paying 30c, nearly the top tax rate.

If we’re going to have a debate about how much money we’re going to give back to people from Treasury, if we’re going to have a debate about protecting that income—as they like to call it—from inflation through indexation, which is done in this part on the Best Start package, then who is standing up for the taxpayers who actually pay the bills to make this whole show possible? Who is giving them protection against inflation, being pushed into higher and higher tax brackets each and every year, being pushed into those tax brackets that most people never thought they would be in—with so many people now in the top tax bracket, with people on the minimum wage working full time nudging a 30c tax rate—simply because the previous Government did not index tax brackets to inflation, and this Government, in this bill, has now discovered that indexation is a good thing when they are giving away money but are not prepared to protect the taxpayer by indexing tax thresholds?

They are very conscious of tax thresholds. In fact, one of the points of this part is to adjust the tax thresholds, but they’re not prepared to index it to inflation. They’re very conscious of inflation indexation, because they’re prepared to do that with the Best Start credit, but they’re not prepared to put these two concepts together and give the taxpayer a break and some surety about their tax bill and the effects of inflation pushing them into higher tax brackets. So I’ll conclude with a question for the Minister, and it’s this: will the Minister consider adopting an amendment that would attach an adjustment to tax thresholds in line with inflation, as he has for the Best Start tax credit? Why does he protect beneficiaries of this bill from inflation but not the people who pay the bill for this bill, and that is the hard-working taxpayers who show up and make it all possible?

Hon Dr NICK SMITH (National—Nelson): I want to question the Minister in the chair, Grant Robertson, on how many people with this package are going to be caught up in the ridiculous position of facing a more than 100 percent—

Hon Steven Joyce: Or even 90 or 80.

Hon Dr NICK SMITH: Sorry? Or even 80 or 90. But I think everybody in this committee would say it is ridiculous if people, when they earn more, end up worse off.

So I just want to give the Minister in the chair a practical example. Let’s say you’ve got a teacher, they’re earning $80,000 a year, they’re living in Auckland, and, as a consequence of the generous new Government, they get an increase in their teacher salary of $5,000 a year, or $100 a week.

What this part does, firstly, is it says they’re in the top tax bracket. So out of that $100 a week, they’re going to lose $33 in tax. And then, as a consequence of the Working for Families abatement, they’re going to lose another $25 of the $100. And then, as a consequence—quite likely in Auckland; we know they’re facing rental costs—they face an abatement of their accommodation supplement of $25 per week. And then, with this Best Start, they face an abatement of $21 per week. So they get an increase in their pay of $100 a week, but the Government takes $104 off them. Now, how can that possibly be good policy? And, actually, it could be worse than that. If they’ve got a student loan, they’ll actually have another $12 a week that they’d need to contribute there, and, if we want to throw in the ACC levies, then that puts it up—they’d actually earn an extra $100 a week and the Government takes $116 a week off them.

Now, can the Minister in the chair please explain as to how that’s good policy? How would we possibly want people who are getting $100 a week extra—

Darroch Ball: You’re making it up.

Hon Dr NICK SMITH: —ending it up—well, the member says, “Which part?”.

Darroch Ball: No. “You’re making it up.” is what I said.

Hon Dr NICK SMITH: Oh, well, the member says I’m making it up. Is it true that they’d lose $33 worth of tax? Yes. Is it true that they would lose $25 a week from their Working for Families? Is it true, under the parts of this bill, they’ll lose $21 of their Best Start? Is it true that they will also lose $25 on their accommodation supplement? Well, if I add 33, 25, 25, and 21—that comes to 104. Do you know why I know it’s correct? Because the regulatory impact statement for this very part says—we’re warned by Treasury, “Some people will face over 100 percent abatement on their extra earnings.” Is this scenario somehow unrealistic? Well, actually, $80,000 a year is not an unreasonable income.

Now, even if it’s 80 percent, I remember debating in this House saying that having a marginal tax rate of 66 cents in the dollar completely destroyed the incentive to work, and, actually, I give credit to the Labour Government that realised that and made reforms. What I am shocked by is that after 25 years of a broad consensus in this Parliament that there needs to be an incentive to work, there needs to be an incentive for people to earn a higher income—and I just want to know from Winston Peters of New Zealand First, when did he tell New Zealanders that he was going to be taking $116 a week off somebody who earns an extra $100 a week? How is that, Mr Peters, going to provide an incentive to work? Why would you want to be part of a policy that actually is going to undermine the capacity for us to grow the wealth of this country?

The bottom line of what these provisions mean is that people have a disincentive to work. You’re going to have the ridiculous situation of the employee turning up to the employer and saying, “Hey, you know how I work 35 hours a week? I’ve worked out I’m actually better off if I only work 30.”, or the person ridiculously saying, “Hey, I don’t want the pay increase, because this bizarre Government is actually going to make me worse off.”

My challenge to the Minister in the chair: please explain Treasury’s comment that a group of families will face an abatement regime over 100 percent and why on earth would we want to do things like introduce a Best Start payment and not go with the amendments of Mr Joyce for a more sensible regime.

Hon IAIN LEES-GALLOWAY (Deputy Leader of the House): I move, That the question be now put.

Hon LOUISE UPSTON (National—Taupō): I would like to take the opportunity to speak on a tabled amendment in my name that hasn’t been discussed in this debate. As I said before, because this is being debated in urgency, for something that doesn’t come into effect until July, it is important that there is the opportunity to fully debate amendments in this House and that the Minister in the chair will answer any questions related to these amendments.

The amendment that I’m referring to is one of equity. This is of the fact that a dependent child who has been adopted wouldn’t actually get the Best Start tax credit. The members opposite, when they were in Opposition, talked a lot about equity, so I want to know from the Minister in the chair, why it is that a child that’s been adopted—whether at three months, six months, or 2½ years—is not eligible to be supported by taxpayers across New Zealand.

Hon Tracey Martin: They are—through the orphans and unsupported child’s benefit.

Hon LOUISE UPSTON: It is a really important question that I would like answered. This is a child that’s been adopted—a child that’s been adopted. Their parents are valid parents like any other parent in New Zealand, and I’m really hoping that the Minister for Children isn’t suggesting that a child that’s been adopted in this country has any less rights and support than any other child in New Zealand. If the Minister is suggesting that, I think the House should be deeply, deeply concerned. That means we should have a greater opportunity to debate this amendment, given there’s no other opportunity for the public of New Zealand to have their say—and I know that families who’ve been involved in adoption would have a lot to say about my amendment. I do ask for the Minister of Finance to consider it, because it is a matter of equity.

The current Government is, you know, clearly committed to the best interests of children, which is what our Government was—and 50,000 children would have been lifted out of poverty. Steven Joyce has raised some issues around, actually, the numbers being very confused in the regulatory impact statement in terms of whether it’s an extra 12, which would get us to 62, when, actually, the number of 88 is referred to, but I’ll let some of my colleagues pick that point up.

The point I want to come back to is around equity. I raised in one of my earlier comments the equity around someone who’s working and, therefore, getting paid parental leave, but this is the fact that an adopted child isn’t getting the same amount of support from taxpayers.

I want to refer to the contribution that the Hon Iain Lees-Galloway made, although his tone was incredibly dismissive in terms of the importance of a debate under urgency—I think people listening would have been quite shocked at that. The comment was around trust and around who they trust. Clearly, that side of the House doesn’t trust taxpayers, because if they trusted taxpayers, then they would accept the amendment that’s been put forward by the Hon Steven Joyce around lifting Working for Families payments, because that would enable families and taxpayers to make those decisions themselves.

Anyway, dealing with the bill, as that side of the House has drafted it, my request, and my question to the Minister, is around equity, because—and I’ll use the Rt Hon Bill English as an example—the equity is that a member of Parliament and their family on their income would get the full entitlement to the Best Start payment in the first 12 months of their baby’s life, yet a low-income family who is currently accessing paid parental leave won’t. I want the Minister in the chair to explain to me how that provides equity. How is that fair? How is that fair when we talk about something that is universal, and we talk about equity—there’s another example—and there’s no equity for the child of an adopting set of parents? My question to the Minister in the chair—

Hon Ruth Dyson: We’ve done this.

Hon LOUISE UPSTON: —is about equity. Madam Chair Williams, I’m a bit bothered that members of the Government are interjecting about an amendment that I am speaking to for the very, very first time. It bothers me that they are not—[Time expired]

Hon STEVEN JOYCE (National): Thank you, Madam Chairperson Williams. I’d like to take up a couple of points, if I could, that were partially answered by the previous Minister in the chair. Now that we have the finance Minister back, I’d like to get him to expand on them if possible. My colleague Nick Smith raised the issue of 100 percent effective marginal tax rates, and the officials, I understand, have basically said, “There will be some; we haven’t found them yet.” I think it would be very helpful for the committee to understand other high effective marginal tax rates that might apply as a result of this package, in particular, say, perhaps in the bands of 70, 80, or 90 percent, which are very high effective marginal tax rates anyway.

I am confident the officials will have done the work to check the impact of the Best Start payment in combination with other entitlements on effective marginal tax rates, and I’d very much appreciate the Minister being able to share that information with the committee, which will give us a bit of an indication as to how big an issue these effective marginal tax rates are that the committee is worried about.

The second point I’d like to address is the tabled amendment in my name—as to why, instead of doing the Best Start payment, it wasn’t considered that the same amount of money could have been added to the Working for Families family tax credit. Now, Mr Iain Lees-Galloway suggested the reason for that was that they wanted it to be universal, and yet the objective of this particular bill is to focus on incomes for low and middle income families, so that would suggest that if the concern is for those families, then using the abatement regime of the Working for Families programme would achieve a better targeting, and it would also mean that we don’t have a doubling up of abatement rates of the type that would give us those effective marginal tax rates. It would be very straightforward to just simply, as I have proposed in my amendment, add a new band at nought to three. If that’s the Government’s key concern, as the Minister says through the Children’s Commissioner’s work, then why not do that in preference? It would be a much simpler, cleaner, and easier to understand approach than the current approach of a new package.

Hon Iain Lees-Galloway: You may not have liked the answer, but you got this question answered about 20 minutes ago.

Hon STEVEN JOYCE: No, it hasn’t been answered, Mr Lees-Galloway, because your answer was, if I may say, given your personality, a little bit flippant, and therefore we’d like a more substantive answer, because I think it’s a very reasonable proposal.

The other point I’d like to raise at this point is these tax thresholds at the low end of—or the low tax threshold. Now, the Government is proposing to reverse the current law, which was to lift the bottom tax threshold from $14,000 to $22,000. They’re proposing to undo that, which does seem to not only cut across the objectives of the legislation but also cut across the stated policy of one of their key coalition partners—well, confidence and supply partners—the Greens, who have themselves proposed the idea of adjustments at the bottom end of the income range and around that $14,000 a year tax bracket.

So I have proposed a number of amendments that would go some way to acknowledging that that bottom bracket should be adjusted, as an alternative to the very sensible approach of the previous Government. It is a chance for the new Government to show that, actually, they’re not religiously against moving tax thresholds in principle, but, actually, they are prepared to show some adjustment for hard-working Kiwis. It is something also that the Greens could support, given that it is, indeed, their policy. I’m assuming that as confidence and supply partners, they could at the very least consider actually endorsing an amendment to the bill that provides an opportunity for the lowest tax threshold to be adjusted.

So these things are, I think, really substantive questions for the Minister. They go to the heart of some of our concerns about this particular bill. Why not do something that addresses these very high effective marginal tax rates, which occur when you have too many entitlements that all abate on people? Why not simplify the system and include the money in Working for Families—and I want a substantive answer to that, not the one we got before from Mr Lees-Galloway. And these low tax thresholds—why not adjust those?

Hon ALFRED NGARO (National): Thank you, Mr Chair. I rise to take a call on this Families Package (Income Tax and Benefits) Bill in support of the amendment from my colleague the Hon Louise Upston in regard to Subpart 1 and the inclusion of an amendment to clause 22, after new section MG 1(1)(d), to insert paragraph (e): “for the purposes of this section, ‘dependent child’ includes any adopted child between the ages of 0 to 3 years”.

I think that’s important, because I want to add to this—and I’m glad that the Hon Tracey Martin is in the Chamber, because she and I did some work in regards to the equity of allowances for kin carers, especially in regards to foster carers. So what emerged out of that was that there are a number—and this is a families package, but we know there are many different make-ups, and sometimes complex situations, of those families. So while this clause is really important because it actually wants to include and make clear in the legislation and in this package the inclusion of adopted children, I know that the Minister—who’s actually just popped out—will know that, in fact, in those—

Hon Iain Lees-Galloway: Point of order.

Hon ALFRED NGARO: Apologies for that. I do apologise for that comment.

Hon Ruth Dyson: New member!

Hon Member: Touchy. Touchy today.

Hon ALFRED NGARO: Well, I did apologise for the comment. The importance of the point that the Hon Louise Upston has made is just in regards to ensuring that we don’t miss in these—they may be small anomalies, but they’re actually critically important.

There are many families that have adopted children. In fact, probably members in the House also, too, have adopted children. So why—and can Minister in the chair, Grant Robertson, answer this question—would he not want to see this? This is not an amendment that’s trying to subvert the whole intent—in fact, it’s wanting to include in the intent. So to the Minister—and I’m sure he’s a good man, and I’m sure that he will see that inside of this clause, it’s important to do that.

I want to include in that the important point that there are also other anomalies. So while we talk about the superannuitants that are here and those who will be benefiting from this, there are many grandparents raising grandchildren who have adopted children as well, and so there will be another complexity. I think it’s important that if the officials that are out there can also, too, ensure that when we’ve got grandparents raising grandchildren, and often they’re in the process of where they’re actually applying for guardianship orders—will they too, when they’ve got the burden of pressure to be able to meet the demands of raising their children, be covered in this?

I genuinely want to sort of see that the officials that are out in the backrooms—if they can actually give some assurance, give that to the Minister, and if the Minister can answer that question, because I think that’s critically important. I know Di Vivian, who’s with the Grandparents Raising Grandchildren Trust—I’ve been and had contact with her many times over. I’ve actually heard from her at times about the importance of where these grandparents, who are often late in their years, have now been burdened with the task of raising their grandchildren and have often had to suffer the costs because of that. So I’d like the Minister to ensure that the officials can actually ensure that’s there.

But, again, I’d like to reinforce the point that this point here that the Hon Louise Upston is putting forward in Subpart 1—that is very clear. I don’t think there’s any question that anyone in the committee would object to the fact of including this for the purposes of the section that “dependent children” includes adopted children between the ages of zero and three. But I would just add the other part in regards to grandparents raising grandchildren—superannuitants. It’s an anomaly that often doesn’t get picked up and doesn’t get raised, but I know that the work that I did with the Hon Tracey Martin—her and me—in regards to that, which was to include that there was equity of allowances. So all I’d ask is that there is an equity of opportunity where they too could apply for this and be eligible in the entitlement, so that they could receive that.

I’m not sure how that would actually work, because they’re in the middle of their guardianship orders that they are applying for, but I just want to make this plea to the Minister just to check this out and give them some assurance. I know that I will be taking phone calls from Di Vivian and others who are grandparents raising grandchildren and their whānau, but I’m sure that this would give them some assurance that this package actually would support them and meet their needs at this point of time as well.

So to the Minister, I want to thank you for this and for the opportunity to be able to speak on this. I look forward to his response. I also—just in the short time I have—make a request of the Minister in regards to another part, where there just seemed to be some incongruence in regards to new section MF 4F, where it was described that it just seems to be that younger children were being penalised. If you look in subsection (4) of that, it was quite clear that those who were older children seemed to be getting $4,822 in their allowances, whereas—[Time expired]

Hon GRANT ROBERTSON (Minister of Finance): Just to repeat some of the explanations that have been given, particularly on the last points that the member Alfred Ngaro raised—which I explained in an earlier call—there is only a single child rate. It is now the same. It’s the same approach that the previous Government took.

Also, to repeat the point that there is no one that the officials can find at the moment in the situation that Dr Nick Smith raised. The Government has a commitment to undertake a review of the tax and transfers system overall as we go forward, and we’ll be able to identify any other potential things that came from arrangements that the previous Government might’ve had in place. So that question has, indeed, already been answered.

I can reassure both the member who’s just sat down and Louise Upston that children who are adopted are considered to be the dependent children of their principal caregiver, and so will qualify for Best Start, just as they qualify for other Working for Families tax credits. Again, to reiterate something that’s been said a number of times during this debate, the orphans benefit, the unsupported child benefit, and the foster care allowance have been increased to match the family tax credit changes, and those people who are in receipt of those benefits are indeed able to get Best Start—something that has been mentioned in the first reading and second reading and has also been mentioned in this committee stage.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

DAVID SEYMOUR (Leader—ACT): Mr Chair, thank you. I find it necessary to take another short call because I put a question to the Minister that—you know, I would say it myself, I guess—I feel is concise and clear and of interest to a large group of New Zealanders known as taxpayers. I have to say I feel obligated to raise this because in the Epsom electorate, there’s a particularly acute concentration of these taxpayers, and they feel taxes more acutely than in most constituencies.

I think they’d be justified in having an answer from the Minister of Finance, whom they pay for as taxpayers, as to whether or not they would be able to get support from the Minister and his Government—[Interruption] and Tracey Martin—and the Green Party. They would like to know: could they get support for indexation of their tax thresholds to inflation? The reason they’d like to know—and I’ll just spell it out again for the Minister, because he didn’t see fit to answer the question when it was put to him very fairly and reasonably and quite eloquently, I thought. Is it fair to expect that if he is going to index the Best Start payments to inflation, if it’s true that the benefits people get funded by taxpayers should never be eroded by inflation and this Government will protect them against inflation, then will those taxpayers also be protected against being pushed further and further into higher tax brackets?

I’ll also just repeat for the Minister, since he didn’t answer last time, that it may be of greater interest for him then he realises, because it is not just those people in Epsom that have a very acute interest in being taxpayers; actually, it is people up and down the country. Indeed, somebody working full time on the minimum wage will be getting very close by the end of this Government’s term—if it believes that it’s really going to put the minimum wage as high as it would like—to paying 30c in the dollar. If the Government gets to the end of this term and it finds that people on the minimum wage—if they haven’t been priced out of the labour market by the stupid increases as proposed by the Government, that is—are paying 30c in the dollar, so their marginal tax bill goes from 17.5c up to 30c overnight, then it is not just going to be a few people in Epsom that are worried about this tax thing; it’s going to be a lot of people—a lot of people—that support this Government.

On behalf of those people, the constituents I represent, and that long-suffering and much-ignored group in this debate—the taxpayer—I’d like to ask the Minister for a response this time. If he understands the concept of indexation, is he able to index the tax thresholds, the point at which people go up another tax rate, to inflation, the way that he has indexed the benefits? That’s all we want to know. Is there anyone in the committee at this point that doesn’t fully understand the question? I’m sure the people watching at home get it. If we can index benefits to inflation, can we index tax thresholds? Is there anyone that feels that the question’s not clear at this point? No? Everyone gets it. Does everyone understand the question?

Hon Members: Yes.

DAVID SEYMOUR: Yes? Let me put it another way, does anybody not understand the question? OK; so it seems everybody understands the question. Will the Minister support my amendment to index tax thresholds to inflation? Does he value taxpayers, who pay his salary, as much as he values the people that he is giving money to? OK; I don’t think I could make the question any clearer. If there is any way I can make the question clearer, then someone give me a call. But I can’t make it any clearer. So now, Grant Robertson, you have to answer the question. You understand what the question is, so now can you get up and tell the taxpayers: will you index their tax thresholds to inflation the way you’ve protected everyone else’s benefits?

Hon IAIN LEES-GALLOWAY (Deputy Leader of the House): I move, That the question be now put.

The CHAIRPERSON (Adrian Rurawhe): Members, I won’t accept the closure motion at this point. But I will say to members that I’ve sat here from 9 o’clock till 10 o’clock, and I’ve been watching the debate throughout. There have been certain points within the bill that had been debated extensively, and simply asking a question in a new way, giving a different example, does not make it a new question. So if there are any new arguments to be had, now is the time to have them.

JAMI-LEE ROSS (Senior Whip—National): I raise a point of order, Mr Chairperson. I respect that it is for your judgment to determine when we take closure. However, I do want to make the point, very strongly, on behalf of this side of the Committee, that there are amendments that have been placed on the table somewhat recently that have not been debated, and there are members here that wish to do so.

The CHAIRPERSON (Adrian Rurawhe): I don’t need any additional help. And that would come under the category of bringing out new arguments and not going back to re-asking questions that have already been asked in a different way. Now is the time to bring that out.

Hon STEVEN JOYCE (National): I raise a point of order, Mr Chairperson. I appreciate that guidance. I think one of the reasons, though, that members are seeking to re-raise or, if you like, elucidate further on previous arguments is because these are quite substantive amendments proposed to the bill and they’re not getting any response from the Minister of Finance or any member of the Government at all, so members feel the need to continue to raise those points again and expand further in the hope that they can actually be seriously addressed. There are some very significant proposals. I’ve seen some very positive proposals that have been raised, so, perhaps, to help with the process, and I appreciate that you want to make sure that the debate brings up new material, perhaps we could address some of the material that’s already in front of us. [Interruption]

The CHAIRPERSON (Adrian Rurawhe): No, I don’t need any more assistance, thank you. I thank the member for his contribution. As I said before—and I accept what the member is saying, but now is the time to bring those arguments in. Kia ora.

SIMON O’CONNOR (National—Tāmaki): Thank you very much, Mr Chair. I’m very pleased to—through an amendment I’ve tabled only in the last few minutes—bring a new avenue of thought in, particularly in this Part 1, and particularly addressing the question of eligibility. In this particular regard, my amendment is seeking to add a new clause 12A—so this is in relation to MC 4, and, to get to it relatively succinctly, it’s do with the National Immunisation Schedule. I’ve put down here that “any person receiving a Best Start tax credit, as referred to in MC 1, shall confirm that any dependent children have fulfilled the requirements of the New Zealand Immunisation Schedule as they relate to the age of the dependent child.”

So if we accept—and I don’t fully do—that the Best Start grant is a positive step forward and that the handing out of cash will do the trick, then I would argue, or suggest, that this is also a mechanism by eligibility to ensure the good health of that child through existing mechanisms—that being the National Immunisation Schedule. I would also make the argument, and hence why the amendment has been tabled within the last few minutes, that it’s also for the public good. So members will, hopefully, understand that we have a register from, effectively, birth right through to, actually, old age, but we’re talking about four sections of the schedule here, up to but not including four years of age where children receive various vaccinations. I for one am a very strong and ardent supporter of vaccinations. In fact, you may even go as far as to suggest that I am for the mandatory immunisation of our children, as a number of countries—I think including Australia—have gone down the line recently. I see with this piece of legislation being proposed that we have an apt mechanism via the Best Start tax credit to encourage, if not mandate, the vaccination of children.

So, fundamentally, this amendment in my name comes back to how we can constructively use the eligibility criteria for the Best Start tax credit, to ensure that the parents get their children immunised. And I’d like to put it to the Minister of Finance: does he see value in using his tax credit to bring about further individual and public good? I think, fundamentally, that this is a good idea and I’d like to understand if he sees it as such. It is possible—I don’t want to presume the Minister’s response. He may feel that this is not quite the right way to do it, and if that were the case, I would welcome a discussion, be it in this debate or elsewhere, of how we bring this about. As I say, this is a public good. We all know that the immunisation of the many protect the few that do not, but it’s also good for the child, and I suppose that’s—

Hon Grant Robertson: I raise a point of order, Mr Chairperson. I’m sorry to interrupt the member, but I do wonder, and I know this amendment has only just been tabled in the House, but the issue of the National Immunisation Schedule is not covered in any form whatsoever in the Acts being amended in Part 1.

The CHAIRPERSON (Adrian Rurawhe): No. It’s my opinion that the member can speak to this tabled amendment. At the end of the day, it will be up to the committee to decide.

SIMON O’CONNOR: Thank you, Mr Chair. Look, I’m more than happy to engage in a discussion and a debate with the Minister around how the schedule works in the various Acts and Orders in Council that bring it about. It’s quite a legitimate thing in and of itself, but I think what’s really important, and now I need to absolutely hammer it home, is this is about providing the Minister and the Government with an eligibility option to obviously access the Best Start grant but also bring about some other particular goods.

So I’m really just suggesting that we enable this amendment to be considered, to be inserted in, as I say, as a new clause, clause 12A. It’s relatively simple. The legislation, the mechanisms, the regulations are already in play. I do accept that I may need to go away and provide a few more amendments to bring about how we verify this. Obviously, the parent or parents will have to verify—I assume it’s through the IRD that this is being done—but I am very aware that there are mechanisms or agreements, if you will, in place between various Government agencies at the moment. And, without going on too much of a tangent because I’m conscious of my time, the Ministry of Health already records all of this in its internal systems. So I don’t think it will be overly difficult for, say, the Ministry of Health to inform IRD that actually this particular dependent child has received all the immunisations. There are quite a number of them. If the Minister is interested, it is on the Ministry of Health website.

But, fundamentally, I’m asking the Minister not to deny that the register is there, but to say: does he see a benefit in these eligibility criteria? If he doesn’t, then why are we missing an opportunity to actually help the child simply, beyond handing money to the parents? I would hope that most members of this committee, and the Minister indeed himself, would understand the good reasoning and scientific principles of why we need our children immunised. So let’s not simply give them the money; let’s also protect them.

JAN LOGIE (Green): Thank you, Mr Chair. As this debate continues, I would just like to take an opportunity to answer some of the questions that were directed towards the Green Party about why we supported the National Party’s piece of legislation previously and the tax cuts that we’re now supporting being overturned.

I would say, and I have said earlier in the debate, that it was a really tough call for us, because we supported the increase to the accommodation supplement. We recognised the extreme need in our communities. We see the people on the streets. We see the families in cars and babies living in sheds. We knew that we had a moral duty to respond to their need. We were put in a situation of supporting that legislation because of that need while recognising that that legislation was going to take money out of our tax system by giving $444 million to people in the top 10 percent of earners—people like me. That was really uncomfortable, but we did it because we saw the need at the time.

We are really pleased, while we don’t see this legislation as a perfect solution, that, actually, we can address the need without giving people like me the opportunity to buy more lattes, because the truth is that I don’t need any more lattes. I know that people could say, well, OK, I could use that money to donate to groups I care about, and that’s true. I do that. But the truth is I don’t believe that Women’s Refuge and Rape Crisis—all those groups that are spending so much of their precious time fund-raising and trying to get me to support them should be using their time doing that. I think that the taxpayer dollar should go to towards ensuring they have the money to deliver.

Those tax cuts would have taken money away from being able to do that. I hear some people say: well, those tax cuts, I could have used that to give money to the people on the streets—all of those people on the streets that I see every day. Sure, I enjoy having the chance to chat to those people, but that is not my picture of the future of this country. That kind of Dickensian approach where I get to feel smug and righteous and great about myself because I bestow my beneficence on those poor people. I want those people to get enough through our basic way we structure our society that they don’t need to be there on the streets. That is why we are supporting this legislation, because it is turning around that charity model that was so much a part of that last Government’s philosophy.

I heard in previous speeches from that side of the Chamber that people actually like participating in fund-raising to buy crayons for their kindergarten, that there hasn’t been an underfunding of those core public services, and that people like that and they don’t want that taken away from them. But the community I live in does not have the resources for that. It is entrenched inequality between those communities where people have the time and they have the money to get out and fund-raise amongst their friends to give to their local kindy. In communities like mine where that money is not spare, if that money is put into the kindy it comes out of the money that went into the food bill to help people put food on the table. It is our duty in this House to even out that inequality. That is part of what this legislation is trying to do.

I would just briefly also like to address the point around immunisation and Well Child checks and to reinforce the message that we trust parents. We don’t believe that children will be better off by removing money from them, and they’re not going to get any better results from that.

Dr PARMJEET PARMAR (National): Thank you, Mr Chair. I would like to take this opportunity to speak again on my amendment, which is to add a new clause 12A in the Income Tax Act 2007. It is to add—the wording is—“and that any person receiving a Best Start tax credit as referred to in section MC 1 shall ensure that any dependent child is enrolled with a Well Child provider.”

I feel it’s really important that we look at the full evidence when we are talking about providing the best possible start to newborns and also providing the best possible support to the family of a newborn. The Minister—and I have heard the Minister the Hon Grant Robertson talking repeatedly about the evidence—says that this Best Start tax credit is based on evidence and it is the best move to give $60 a week to these families, which adds up, and becomes $3,160—somewhere around that. If the Minister believes that amount is based on evidence, I want to ask: what is the full evidence that the Minister has seen to provide the best possible start to the families of newborns?

Another interesting thing is that the Minister also talks about the longitudinal study in Dunedin, saying that it tells us that the first three years of life are the most important in a child’s development. Yes, that is important, and the study that the Minister has cited is a very important study, because we are really proud of the work that the University of Otago is doing through these two studies, the Dunedin Multidisciplinary Health and Development study and the Christchurch Health and Development Study.

So these studies are about the overall health and well-being, which, of course, includes behaviour as well. These studies have been monitoring 1,000 babies that were born between 1972 and 1973. These studies are about full health, development, and well-being. So when the Minister talks about evidence—that he has based this payment on evidence—I want to ask the Minister: was there any evidence on health checks? Because when you talk about providing the best possible start to newborns, health definitely becomes a very important component, and health is interrelated to social outcomes. So we cannot exclude health and just talk about social outcomes.

I also want to ask the Minister about the evidence when he says that just providing financial help—just financial help—will be actually good for newborns, and we can just be assured that the social outcomes for these children will improve. No, we cannot just assume that.

There is another study, Growing Up in New Zealand, which is happening in Auckland. It started with tracking 7,000 New Zealand children before birth. So this is to see what kinds of things happen in early development and what kinds of interventions work. So I want the Minister to look at the full evidence, not look at just the evidence the Minister wants to look at to come up with this idea of giving this $60 a week payment to families of newborns. Of course, as my colleagues have mentioned before, if parents are working and they are on paid parental leave, they are excluded while they are getting paid parental leave.

Paid parental leave was increased by us to 18 weeks, and now by this Government to 22 weeks, and now it is going to go up to 26 weeks. So those families will not be getting this payment for 22 weeks now, and when that comes into effect—the increase of paid parental leave to 26 weeks of paid parental—then those families will not be getting this Best Start tax credit for 26 weeks. How is that fair? My amendment is to see that this should become a criterion—that a child should be enrolled with a Well Child provider. In enrolling a child with a Well Child provider, they are getting the full health and overall well-being check-up—not just for the child only but for the mother as well.

There are simple things sometimes that can affect the well-being of the child, and as a mother I know that really well—for example, at birth, safe sleep practices and vitamin K. These things are really important. There is the first week check, then the two to four week check, and then it goes up to four years. So there are really good, intensive checks that are available through Well Child providers, and I want to see that all these children are able to access these services, which are fully free.

I would like to see that the Minister considers this really seriously, if he’s really serious about overall well-being and giving a very good start to newborns.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): I move, That the question be now put.

DAVID SEYMOUR (Leader—ACT): Thank you very much, Mr Chair. I just wanted to update members with a bit of progress. Not only have I imagined an amendment that would index tax brackets to inflation under this bill but I’ve made one materialise. It’s on the Table. If members would like to see it, it’s on the Table. It’s a pretty eloquent piece of drafting, and there will actually now be an opportunity to vote on this amendment.

Hon Tracey Martin: What nice handwriting.

DAVID SEYMOUR: Well, I always said, if you want an MP with nice handwriting, vote for the other guy. But the critical thing is that this actually—

Hon Ruth Dyson: Paul Goldsmith said that too.

DAVID SEYMOUR: Oh, there’s a bit of comedy in all of us, isn’t there, Ruth Dyson?

In any case, I’d just like to take members through my amendment, because it’s actually important to taxpayers. It replicates clause 21 in the current bill before us. That clause, of course, allows, by Order in Council, the Governor-General to index the thresholds for the Best Start benefit. This will do the same thing for schedule 1, Part A, section 1, table 1, column 2 of the Income Tax Act, and that is the infamous table that tells you how much tax you must pay at which amounts of income. What the amendment would simply do is allow the Governor-General, instructed presumably by the Minister of Finance, to change those thresholds by an amount corresponding to movement in the New Zealand Consumers Price Index that has not already been taken into account, rounded up to the nearest whole dollar. This is not actually a requirement—I’ve drafted this in a way that might get some sympathy from the Minister. This is not actually a requirement for the Minister of Finance to adjust tax thresholds to inflation, but what it does is it gives him the statutory enablement to be able to make such a change. Currently, he’d have to legislate.

This gives the Minister of Finance more power, if he wishes to use it. For example, the Minister of Finance might find himself in a time of deflation, and he might wish to be able to lower tax thresholds to protect Crown revenue. It could work both ways. There’s a lot of commentary around the world that we may be going into a deflationary period. Who knows? This amendment will fortify the Minister’s revenue against that turn of events, but it’s much more likely that he will be able to use it to raise tax brackets so that people on lower incomes don’t get pushed into higher tax brackets by inflation through no fault of their own whatsoever. Now, again, it’s not a requirement. It’s not an obligation on the Minister. It is an enablement. It means that the Minister will be able to stand up in this House and tell people whether or not he has used this power to give taxpayers much-needed relief at any time.

If he feels that he is able to justify his position in this House, in a democracy, then he’ll be able to do it, but he’ll no longer be able to hide behind the fact that he has no power to change tax thresholds, because this amendment will give him the power. He will be able to choose what sort of Labour finance Minister he will be. Will he be a “We won. You lost. Eat that!” finance Minister, such as Michael Cullen, with scant regard for the welfare of the taxpayer, or will he be a legendary liberator such as Sir Roger Douglas? It’s going to be difficult for the Minister because he has such a wide heritage to draw upon, and I want to help him make that choice with this enabling amendment, which will enable the Minister to be in control of tax thresholds. He’ll be able to adjust them by making a phone call to the Governor-General—just call up Patsy any time and say, “I’d like you to protect taxpayers by”—

Hon Tracey Martin: I don’t think you can refer to the Governor-General like that. You can’t refer to the Queen’s representative like that.

DAVID SEYMOUR: Under this amendment, he will. He’ll be able to protect taxpayers from inflation the same way that he’s protected beneficiaries of this bill.

So that is the question for the Minister. If he’s not prepared to stand up and answer the question—will he support an amendment that requires him to protect taxpayers from inflation?—will he at least allow an amendment that enables him to do so? Members, the amendment is on the Table.

SARAH DOWIE (National—Invercargill): I rise to take a second call on Part 1 of this Families Package (Income Tax and Benefits) Bill.

Hon Amy Adams: A second; gosh. Lots left.

SARAH DOWIE: Yes, absolutely. There’s lots left. I have taken the advice of the previous Chair and had a rejig of my amendment relating to paternity orders. So we have now rejigged that and would like that to be considered as Part 1, which goes, again, to the eligibility criteria for receiving the Best Start tax credits.

I’ve already talked about my previous amendment to Part 1, which relates to eligibility with respect to the Well Child programme and having parents check in for their 15- to 18-month Well Child core check before they receive the third payment for the tax credit, which, of course, puts in place an obligation to make sure that the money from those tax credits is well spent, that the children are getting the best start in life, and that the money is not just being sent out and spent on whatever the parents’ wills may be. It is actually designed to go to lifting children and the family out of poverty, which is the overarching aim of this bill.

My second amendment relates to paternity orders. Now, at the moment, fathers do not have the right to have a paternity order. Basically, what they have to do is apply to the court for either a declaration or, if they want to know the paternity of a child, the mother can actually thwart that test and refuse a test to be undertaken. Where I’m going with this is that I think it’s important, because under the United Nations Convention on the Rights of the Child it has been said that the child has a right to know who their father is. So this amendment goes to the heart of that, making it a criteria that if there is a question about the father’s paternity for a child, then that test must be carried out so that the child can know their father before those Best Start payments are paid out.

Of course, this has wider ramifications in regards to raising children and families out of poverty, because, of course, if a father is found to be the parent, then he is eligible for child support payments. That, then, adds to bringing more money into the family and raising the amount of poverty. But, also, it allows that child to have a connection with their heritage and it allows that child’s well-being to be better taken care of so that they know their heritage. They can hopefully establish a relationship with that father should the couple be estranged, and, again, that goes back to the wider principles of this Families Package (Income Tax and Benefits) Bill, which is talking about using benefits to raise children out of poverty and add to their well-being.

So this amendment makes it an eligibility criteria that to receive a Best Start tax credit, under new Subpart MG 1 of the Income Tax Act, they will have to comply with sections 47 to 49 of the Families Proceedings Act 1990. So that, I think, is fair enough to add to the child’s well-being to make sure that the father of the child is known, and that will allow further benefits to the family to raise them out of poverty. I think this amendment should be supported. I think that we need to look wider at these ramifications that add to the well-being of children and simply not just hand out money without there being obligations on the parent to adhere to.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put. [Interruption]

The CHAIRPERSON (Adrian Rurawhe): I’m going to repeat what I said before, and there are a number of new amendments on the Table. The last two speakers have spoken to tabled amendments that they have made. I am not accepting the closure motion right now, but the debate is narrowing down and I would suggest to the members that tabling new amendments hasn’t actually introduced new arguments; just it put a different way on to the Table.

DAVID SEYMOUR (Leader—ACT): I raise a point of order, Mr Chairperson. I seek your assistance. I understand that it’s incumbent upon members to bring up new arguments and that eventually the debate may narrow to a point where there’s no longer a need to proceed. However, I also understand that one of the purposes of the committee is for the Minister to satisfy the committee that there is workable legislation so that we can detect faults that might cause us all harm later on.

The CHAIRPERSON (Adrian Rurawhe): So can you come to the point, please.

DAVID SEYMOUR: Yes, I was just getting there. The question I have for you is: if a Minister, after being repeatedly asked, refuses to answer a question, what do the people have—

The CHAIRPERSON (Adrian Rurawhe): No, the member will be seated, thank you. I’ve listened to almost the entire debate and questions have been answered. They may not have been answered to the member’s satisfaction, but it is up to the committee to decide that.

JAMI-LEE ROSS (Senior Whip—National): I raise a point of order, Mr Chairperson. I just wish to seek your assurance on one matter when it comes to your decision making about seeking a closure. We have had a call from Jan Logie—

The CHAIRPERSON (Adrian Rurawhe): I have not accepted a closure motion. [Interruption] Be seated. I have not accepted the closure motion. I have given my reasons for not accepting it, and I have given some guidance to the committee around my decision.

JAMI-LEE ROSS (Senior Whip—National): I raise a point of order, Mr Chairperson. I just want to seek your assurance, when you do eventually come to make decisions, as we had a call from Jan Logie and it’s important that we get to respond to that call.

The CHAIRPERSON (Adrian Rurawhe): Order! The member will be seated. Members will have to trust my judgment. You are seeking my assurance. That would tend me to think that the member isn’t trusting of my judgment. It is my judgment. My judgment was that I was not accepting the closure motion.

Hon GRANT ROBERTSON (Minister of Finance): Thank you very much, Mr Chair. I will now repeat the point I made—for the benefit of members who have already been responded to, around the Best Start criteria and what the criteria should be. And I take the point that the Chair has made, that simply introducing different versions of health checks doesn’t actually introduce new material. We have been very clear. Those matters are best dealt with through their primary legislation. This is not the place for it. It’s actually foreign to the Income Tax Act to be introducing material like that into the Income Tax Act. So that point has been made. That applies to all of the amendments, which are, in fact, of a very similar vein.

The other question that I have been asked, since I’ve been sitting here, does come from Mr Seymour. I do want to say to him, firstly, at the outset, that I have no intention of being a finance Minister like Roger Douglas. He can be absolutely confident of that question that he asked me. I also need to tell him, as I’m sure he well knows and understands, that the powers that he is looking to bestow upon a Minister of Finance in his amendment are ones that I suspect he might, on reflection, think are ones that he wouldn’t want a Minister of Finance to have. In fact, Parliament would be the best people to make such a decision, as they do now when it comes to whether or not income tax rates should be indexed.

The Government has no intention of supporting Mr Seymour’s amendment. I understand that, philosophically, it is most definitely one that he will support, but I will be interested to see if other members across the committee support an amendment like that. The opportunity to have indexation of tax has been around for a long time. Governments have not taken it up because of the restrictions that it would apply upon taxation. I think, to answer Mr Seymour’s questions, there will not be support for this, but good on him for having a go.

Hon DAVID BENNETT (National—Hamilton East): Thank you, Mr Chair. I just wanted to follow on from the speech from Jan Logie. I think she made some very important points that this committee needs to address during the course of the next day or so. The first thing is around the importance of this committee providing for those in most need. The Hon Jan Logie mentioned some very important needs of the people in her community. I just want to recognise some of the needs of people in other communities as well that seek to have assistance, and especially the Hamilton community, as my good friend the honourable Scott Simpson has mentioned. That relates to an amendment that has been tabled in this committee in regards to schedule 1 of the Income Tax Act 2007.

In that schedule, it seeks to change—this is an amendment in the name of the Hon Steven Joyce—the tax rate, in table 1, row 1, to 9.5 percent for income between zero dollars and $14,000. The reason I raise this in regard to Jan Logie is because there are a lot of young people that are out there that have started in their first jobs in my community—that are working. They do not have the ability to take up any of the packages that are in this bill, because they do not have children. They are hard-working Kiwis that are finding it very difficult to get ahead in their life because they are paying high taxes for other people and they do not get the benefit of not having children.

As Jan Logie mentioned in her speech, and as we reflect on, there are a lot of people in a state of need, and these people are also in a state of need. And just because they are single and don’t have children but they are on a low income does not mean that they are not in a state of need, Ms Logie. The thing is that those people need to have some kind of support from this House and this Government, and this does not happen. This amendment would give them that because it would give them that tax cut that would enable those very people to have more money in their hand, because they’re not going to get any money from family assistance or any of the tax credits.

Taking your point, Jan Logie, that we need to look after those people in most need, that community has not been represented here today, and it is not represented in the effect of this legislation that keeps their low incomes at high tax rates when we could be looking after them and giving them lower tax rates, so that they can actually look after themselves.

Jan Logie: Nine long years.

Hon DAVID BENNETT: Jan Logie talks about nine long years. Well, these are nine long years that those people have been waiting to get some money back in their hand so that they can get ahead. It was given to them and taken away by the Hon Jan Logie, and it has been and it will be a long nine years for them, because there’s nothing in there for those people that are struggling out there that are single and have no children.

I raise also another point in regard to a new amendment in the name of the Hon Louise Upston, and that is in regard to new section 58A. That seeks to include Better Public Services targets in the legislation. That’s really important because we need to look at all mechanisms so that we can evaluate the success of Government and the impact on our communities. Those Better Public Services targets are looking at the outcomes for low and middle income families with children, looking at reducing the number of working-age clients in point 2, the Government ensuring that 90 percent of pregnant women register with a lead maternity carer—

Michael Wood: Not in the bill.

Hon DAVID BENNETT: Well, it is an amendment to the bill. That member across the other side needs to look at this. This is an amendment so it is relevant to this bill, and that is what we are debating here today. They are looking at literacy and numeracy rates and also reducing the number of the children living in households earning less than 50 percent of the minimum wage. So those are very good points.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

The CHAIRPERSON (Adrian Rurawhe): The question is that the question be now put.

Hon SCOTT SIMPSON (National—Coromandel): I raise a point of order, Mr Chairperson. We’ve had a fairly short debate on this process so far, but I want to raise with you a point relating to the amendment that has been very recently put on the Table by David Seymour, the MP for Epsom. This is a handwritten document and although—

The CHAIRPERSON (Adrian Rurawhe): Can the member come to the point of order, please.

Hon SCOTT SIMPSON: Although he is a graduate of that very fine school Auckland Grammar School, it’s barely legible, and for the committee to be able to consider properly his amendment, I wondered if we could seek your guidance about the legibility of the handwritten amendment that’s been put on the Table—or maybe invite the member to perhaps read it out so that the committee can fully comprehend it.

David Seymour: Point of order. I might be able to assist.

The CHAIRPERSON (Adrian Rurawhe): No, I don’t need any more assistance, thank you. I’ve read the tabled amendment. If it is ineligible, then—

Hon Members: Illegible.

The CHAIRPERSON (Adrian Rurawhe): —thank you—it will be ruled out of order. I have read it and understood it. So the question—

Hon LOUISE UPSTON (National—Taupō): I raise a point of order, Mr Chairperson. Less than a minute of this committee’s debating time has so far been available to the amendment that I have tabled and I would request, Mr Chair—

The CHAIRPERSON (Adrian Rurawhe): Order! That’s not my responsibility. The amendment arrived when it arrived, and this debate has been going for almost four hours and 25 minutes. The member had plenty of time to get that in here. I believe that members have had enough time to peruse those amendments and the question—

Hon Members: Point of order.

The CHAIRPERSON (Adrian Rurawhe): There are—how many?—one, two, three, four, five, six, seven points of order all at once. Now I’m starting to think that points of order are being raised to stop the vote from taking—[Interruption] So if this is in any way trying to relitigate my decision to accept the closure motion, then there will be consequences.

Hon LOUISE UPSTON (National—Taupō): I raise a point of order, Mr Chairperson. Thank you, Mr Chairperson. The amendment that came into the committee within the last quarter of an hour, I had tabled first thing this morning. I had asked the Clerk if it was out of order and nobody had advised me. I had then issued a new amendment for consideration by the committee, so I think, Mr Chair, the consideration should be that I had tabled it and hadn’t been advised in terms of—

The CHAIRPERSON (Adrian Rurawhe): And your point of order is?

Hon LOUISE UPSTON: The point of order is that less than a minute has been debated on the amendment.

The CHAIRPERSON (Adrian Rurawhe): Unless the member can point to a Standing Order or a Speakers’ ruling around that, I’m not going to accept that.

JAMI-LEE ROSS (Senior Whip—National): I raise a point of order, Mr Chairperson. The point of order, which I feel was unfairly considered there, is that we are under urgency and we have had limited ability to write amendments and limited ability to consider what is a very far-reaching tax bill. The right of the Opposition, under urgency, to have the ability to write amendments and have them debated is paramount. The argument that my colleague was making—who is a senior member, who has been a Minister in the past Government. She was making the point that it deserves to have debate. And this side of the House does deserve to have that right under urgency.

The CHAIRPERSON (Adrian Rurawhe): Thank you. If the Hon Louise Upston is referring to the tabled amendment on Better Public Services, then I’m ruling this out of order. So there will be no debate on this, OK? It’s outside the scope, sorry—outside the scope of the bill.

Hon LOUISE UPSTON (National—Taupō): I raise a point of order, Mr Chairperson. The objective of the bill is clearly stated—about supporting low and middle income New Zealanders. It’s about child poverty and it’s about ensuring children have the best start in life. My amendment, if the committee would give it time to be debated, is all about measures to support—

The CHAIRPERSON (Adrian Rurawhe): I’m sorry. The member will be seated. The member can’t relitigate my decision to rule this out of scope. This amendment, effectively, creates a new Better Public Services Act or amends that. This is outside the scope of the bill we are debating. I go back to my call.

Hon Members: Point of order.

The CHAIRPERSON (Adrian Rurawhe): Sit down. I’m warning members. If there’s going to be continuation of questioning my decision to accept the closure motion—I can assure the members that the closure motion is not going to go away. So repeatedly asking questions about different tabled amendments through a point of order will be ruled as causing disorder in the committee.

SIMEON BROWN (National—Pakuranga): I raise a point of order, Mr Chairperson. It’s a fresh point of order and it relates to the Minister when he was last in the chair, Grant Robertson. He was replying to the honourable member David Seymour, and the Minister said he is interested in the views of the Parliament on tax indexation—

The CHAIRPERSON (Adrian Rurawhe): I’m sorry. [Interruption] The member will be seated. That is not a point of order, and I repeat what I said before. Please, no more points of order trying to relitigate parts of the debate and tabled amendments.

BARBARA KURIGER (National—Taranaki - King Country): I raise a point of order, Mr Chairperson. I put an amendment on the Table about 12.20 and—

The CHAIRPERSON (Adrian Rurawhe): No. E noho! [Interruption] E noho ināia tonu nei!

[Sit down! [Interruption] Sit down right now!]

I have had enough of this. If anyone relitigates that decision again, they will be leaving the Chamber. The question is that the question be now put. Those in favour—

JAMI-LEE ROSS (Senior Whip—National): I raise a point of order, Mr Chairperson. A member of our party did not even get an opportunity to get her point of order out. I say, Mr Chair, that a member should at least be shown the respect to be able to put her point of order to you. If you wish to say she’s wrong, you may, but she has the right to assert the point of order.

The CHAIRPERSON (Adrian Rurawhe): That will be for the committee of the whole House to decide. [Interruption] Oh yes, it will be. It will be for the committee of the whole House to decide. When the vote is taken, the decision of the committee will be final. If they want to hear from members that have tabled amendments, then they will have opportunities to do that—if the committee of the whole House decides it.

Hon Dr NICK SMITH (National—Nelson): I raise a point of order, Mr Chairperson. I actually think you have been very fair in your chairing of the session this morning, but I would make one request of you. In your latest ruling, you chose to use Te Reo, and that’s entirely appropriate, but there was not an interpretation service. So I simply ask that if the Chair is to use Te Reo in their rulings, can they please ensure the Māori interpretation is available so that we can properly respect what I think has actually been very effective chairing by the member.

The CHAIRPERSON (Adrian Rurawhe): Yeah, that’s not a point of order. There was a translation. And, second, when the first language obviously wasn’t working—[Interruption] sit down—I went to the second language, and perhaps that worked, and it did.

Hon Members: Point of order.

The CHAIRPERSON (Adrian Rurawhe): No, I’m going to put the question now. The question is that the question be now put. Those of that opinion will say Aye, and against say No. The Ayes have it. [Interruption] The Ayes have it?

JAMI-LEE ROSS (Senior Whip—National): I raise a point of order, Chairperson. My first point of order is that I have the right to raise a point of order. I am the chief whip for a party that represents 56 seats in this Parliament. For you, sir, to refuse to even allow me to raise a point of order is grossly disorderly and disrespectful of members of this House.

The CHAIRPERSON (Adrian Rurawhe): So what is your point of order? Because that surely could not have been your point of order when you stood up. So what was that point of order?

JAMI-LEE ROSS: I wish to make two points of order. That was my first. My second point of order is that we have gone past 1 o’clock. It is in the Standing Orders of this Parliament that there is a break for the lunch break. I was trying to raise that point of order to you before you dismissed me and did not hear me.

The CHAIRPERSON (Adrian Rurawhe): No. I have accepted the closure motion, and the vote will take place.

DAVID SEYMOUR (Leader—ACT): I raise a point of order, Mr Chairperson. Could I put it to you that you have lost control of the committee because of the way you’ve chaired it, and if you’re not going to allow me to speak when I have substantive things to say in response to the Minister’s constructive comments on my amendment, then there is no point in being here, and if you’re going to expel members for relitigating the point of order, we might as well go anyway.

The CHAIRPERSON (Adrian Rurawhe): The member will leave the Chamber.

David Seymour withdrew from the Chamber.

JAMI-LEE ROSS (Senior Whip—National): I raise a point of order, Mr Chairperson. This is now at a point where we are questioning the very process and procedure of the House. I submit to you that your decision not to allow points of order from this side has led us to the point where we are in a grey area, where, I assert to you, it is for you to rule, and you should rule, that we did not vote before 1 o’clock. It is only when a vote has been taken before 1 o’clock or we are in the middle of a vote that you cannot rise for lunch. We did not vote. We did not have the ability to vote before 1 o’clock or during 1 o’clock, and, therefore, the committee must break for lunch.

Hon Members: Point of order.

The CHAIRPERSON (Adrian Rurawhe): No, I took the closure motion before 1 p.m. and the voting started before then. [Interruption] I took the closure motion before 1 p.m. [Interruption] Just one more clarification: as soon as I accept the closure motion, that is when the vote starts. So the vote clearly started before 1 p.m. Relitigating that is not going to change it.

Hon LOUISE UPSTON (National—Taupō): I move, That the Speaker be recalled.

The CHAIRPERSON (Adrian Rurawhe): Can the member explain to the committee the exact point that she wants?

Hon LOUISE UPSTON (National—Taupō): Yes—because points of order have been raised, and they have been ignored. Points of order, from any member in this Chamber—I believe there is a duty for the person in the Chair to accept the points of order, and I have requested that the Speaker be recalled.

The CHAIRPERSON (Adrian Rurawhe): The member can deal with concerns around points of order with the Speaker at a later time. Once the closure motion has been accepted, everything has to be relevant to that. That’s what I say to—

Hon Louise Upston: Point of order.

The CHAIRPERSON (Adrian Rurawhe): Can I clarify, then, with the Hon Louise Upston: does she want to recall the Speaker about the closure motion? Because that’s not what she said.

Hon Louise Upston: I want to recall the Speaker because of points of order that have been raised in this committee.

The CHAIRPERSON (Adrian Rurawhe): Then my original ruling stands.

Hon LOUISE UPSTON (National—Taupō): I raise a point of order, Mr Chairperson. I’m seeking clarification from the presiding officer in the Chair that you are refusing my request to have the Speaker recalled. Because if that is the case, sir, I’m not sure that this has ever happened in the New Zealand Parliament.

The CHAIRPERSON (Adrian Rurawhe): Well, could I make it easier, then: the member can request to recall the Speaker on the closure motion. That is not what she said.

Hon LOUISE UPSTON (National—Taupō): I raise a point of order, Mr Chairperson. I have requested that the Speaker be recalled because the presiding officer has not accepted points of order that have an impact on the closure motion.

The CHAIRPERSON (Adrian Rurawhe): OK, that is fine. The question is that the Speaker be recalled. Those of that opinion will say Aye. Those against will say No. The Ayes have it. The Speaker will be recalled.

Motion agreed to.

House resumed.

Speaker Recalled

The CHAIRPERSON (Adrian Rurawhe): Mr Speaker, the member the Hon Louise Upston has asked that you be recalled about a closure motion that I have accepted. I believe that there were a number of points of order that were repetitive and trivial, relitigating the same points that I thought I had dealt with. The member’s disagreed, and so has asked that you be recalled.

Hon LOUISE UPSTON (National—Taupō): Thank you, Mr Speaker. There are a number of points that I wish to put on the table for your consideration, sir. The first is around points of order that, as well as myself, others were raising regarding amendments that had been tabled in the latter part of this debate. One, sir, in my name, had been tabled at the start of the day, and I had not been given any indication—

Mr SPEAKER: Can I ask the member to refer to the particular Standing Order or Speaker’s ruling she’s asking me to uphold or change?

Hon LOUISE UPSTON: I’ll come back to that point, sir. In terms of my understanding of the order of the House, members have the ability to raise points of order, and, in this instance, points of order were being raised very close to 1 o’clock. The presiding officer at the time ignored multiple members that were raising different points of order, and moved further in the proceedings. My understanding of the House’s procedure is that at 1 o’clock the bells ring and the House lifts. At the point in time that that was happening, there were multiple members with different points of order, and, given the House is in urgency, sir, I think it is important, given this is the only opportunity for scrutiny—

Mr SPEAKER: Right. I think the member’s made her point. Is there anyone from the Government who wants to add to it?

Jami-Lee Ross: Point of order.

Mr SPEAKER: I will call Jami-Lee Ross, but I’ll remind him that I’ve watched the television.

JAMI-LEE ROSS (Senior Whip—National): Sir, I’m glad you watched the television, because there are a couple of points of order I wish to raise. The first point—

Mr SPEAKER: No, no. The only thing that the member can do is to address the question before the House—sit down, please—on the reference made by Louise Upston. There is nothing else before the House.

JAMI-LEE ROSS: I will raise the other matter with you later, then. Standing Order 58, “Effect of urgency”, says when the House sits till, and it says that the House will suspend at 1 p.m.—the committee will suspend at 1 p.m., in this instance. The committee must suspend at 1 p.m. unless the committee is in the middle of a vote. Whilst we have disputed the reasoning, we must accept that the Chair did accept a closure motion. However, that was not voted on. We were not voting, and at the point when we got to 1 o’clock, there were members who were seeking to raise points of order and there were members who were seeking to have a ruling from the Chair. We are very unhappy that the Chair was not willing to entertain any points of order. We also dispute the Chair’s decision to continue to go past 1 o’clock, when the Standing Orders are very clear. We were not voting—

Mr SPEAKER: OK, thank you. Thank you. Is there any other member who wishes to make a point on this?

Hon CHRIS HIPKINS (Leader of the House): Thank you, Mr Speaker. I just want to raise that, relating to the point of order raised by Louise Upston, once a vote has been commenced, is it in order for a member of the House to scream at the presiding officer through the conduct—

Mr SPEAKER: Order! The member will resume his seat. I did indicate that I had been watching the television and am aware of the behaviour in the House at the time. This matter is a very simple matter. The question of the closure is something that is at the discretion of the Chair. I have not known, ever, of any circumstances where a Speaker has overruled a Chair in accepting a closure, and I’m certainly not going to do that. Speaker’s ruling 61/3 is the one that is very clear on that.

The question then becomes: was the closure accepted before 1 o’clock? It was clearly accepted before 1 o’clock, probably around 5 to 1, and members will be absolutely aware—members will be absolutely aware—that it would totally defeat the purpose of having closure motions if they could be indefinitely delayed by points of order. My ruling is that the closure was properly accepted before 1 o’clock. The motion will be voted on now, and voting on amendments and the substantive questions will continue until they are completed. Thank you.

In Committee

Debate resumed.

Part 1 Income Tax (continued)

The CHAIRPERSON (Adrian Rurawhe): OK, I’m going to restate the question that I already put.

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

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Motion agreed to.

The question was put that the following amendment in the name of Sarah Dowie be agreed to:

add new clause 12A:

MC 4 of the Income Tax Act 2007 amended (Second requirement: principal care)

Add to MC 4 of the Income Tax Act 2007:

and that any person receiving a Best Start tax credit as referred to in MC 1 shall ensure that any dependent child has attended a 15-18 month core Well Child check.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Louise Upston be agreed to:

add new clause 12A:

MC 4 of the Income Tax Act 2007 amended (Second requirement: principal care)

Add to MC 4 of the Income Tax Act 2007:

and that any person receiving a Best Start tax credit as referred to in MC 1 with a dependent child who has not attended 3 or more core Well Child checks before the age of 18 months, any dependent child in that person’s care will be subject to regular monitoring by the Ministry for Vulnerable Children, Oranga Tamariki until the age of 5.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Dr Parmjeet Parmar to be agreed to:

add new clause 12A:

MC 4 of the Income Tax Act 2007 amended (Second requirements: principal care)

add to MC 4 of the Income Tax Act 2007:

and that any person receiving a Best Start tax credit as referred to in MC 1 shall ensure that any dependent child is enrolled with a Well Child provider.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Simon O’Connor be agreed to:

add new clause 12A:

MC 4 of the Income Tax Act 2007 amended (Second requirement, principal care)

Add to MC 4 of the Income Tax Act 2007:

and that any person receiving a Best Start tax credit as referred to in section MC 1 shall confirm that any dependent children have fulfilled the requirements of the New Zealand Immunisation Schedule (as empowered by the Health (Immunisation) Regulations 1995) as they relate to the age of the dependent children.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of David Seymour to clause 21 be agreed to:

after section MF 7(1)(d) insert:

(dc) change the amounts in Schedule 1 Part A Section 1 Table 1 Column 2 by an amount that—

corresponds to the movement in the New Zealand Consumers Price Index that has not yet been taken into account by an increase:

is rounded up to the nearest whole dollar, without affecting the calculation of later increases made under this paragraph.

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

Ayes 57

New Zealand National 56; ACT New Zealand 1.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Andrew Bayly to clause 22 be agreed to:

after new section MG 1(1)(d) insert:

(e) notwithstanding anything in the Bill, eligibility for the Best Start tax credit is not affected by any principal caregiver taking any part of their Paid Parental Leave entitlement.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Louise Upston to clause 22 be agreed to:

amend section 22 (new subpart MG inserted (Best Start tax credit))

after subsection MG 1(1)(d), insert:

(e) for the purposes of this section, dependent child includes any adopted child between the age of 0 to 3 years.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Andrew Falloon to clause 22 be agreed to:

in clause 22, new section MG 2(3), replace “4 weeks” with “8 weeks”.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Andrew Falloon to clause 22 be agreed to:

replace new section MG 3(2)(a) with:

full-year abatement is,—

if the person has no spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income for the relationship period containing the entitlement period is more than $70,000, 21 cents for each complete dollar of the excess; or

if the person has a spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for the relationship period containing the entitlement period is more than $70,000, 21 cents for each complete dollar of the excess:

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Andrew Falloon to clause 22 be agreed to:

replace new section MG 3(2)(a) with:

full-year abatement is,—

if the person has no spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income for the relationship period containing the entitlement period is more than $79,000, 25 cents for each complete dollar of the excess; or

if the person has a spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for the relationship period containing the entitlement period is more than $79,000, 25 cents for each complete dollar of the excess:

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Brett Hudson to clause 22 be agreed to:

delete new section MG 3(2)(b)(i):

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The CHAIRPERSON (Adrian Rurawhe): The Hon Louise Upston’s tabled amendment to Subpart 1 of Part 1 seeks to amend the Social Security Act 1964. Subpart 1 amends the Income Tax Act 2007. Part 2 deals with amendments to the Social Security Act 1964, and this amendment will be considered there.

The question was put that the following amendment in the name of the Hon Amy Adams to clause 55 be agreed to:

replace new section MF 4F(4)(a) with:

for the eldest dependent child for who the person is a principal caregiver during the entitlement period, $5,303; and

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Amy Adams to clause 55 be agreed to:

replace clause MF 4F(4)(a)(i) with:

$5,000, if the child is younger than 16:

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Amy Adams to clause 55 be agreed to:

replace new section MF 4F(4)(a)(ii) with:

$5,250, if the child is 16 or older:

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Amy Adams to clause 55 be agreed to:

replace clause MF 4F(4)(b) with:

for each dependent child for whom the person is a principal caregiver during the entitlement period, other than the eldest dependent child, $4,745.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Amy Adams to clause 55 be agreed to:

in clause MF 4F(8)(b)(i) and (ii) replace the following values with the new value shown each time they appear:

replace “$36,350” with “$35,000”

and

replace “22.5 cents” with “25 cents”

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Amy Adams to clause 55 be agreed to:

replace clause MF 4G(4)(a) with the following:

for the eldest dependent child for who the person is a principal caregiver during the entitlement period, $5,303:

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Amy Adams to clause 55 be agreed to:

replace clause MF 4G(4)(b) with the following:

for each dependent child for whom the person is a principal caregiver during the entitlement period, other than the eldest dependent child, $4,745.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Simon O’Connor to clause 22 be agreed to:

amend clause 22, after new section MG 4, to insert new section MG 5:

that a further tax credit, no greater than $500 or the cost of a “baby box/Pepi Pod/Wahakura”, whichever is the lesser be paid upon application.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Steven Joyce to clause 48 be agreed to:

in new section MD 3(4)(a), replace subparagraphs (i) to (iii) with:

$8,734, if the child is younger than 3:

$5,614, if the child is aged between 3 and 15:

$5,734, if the child is 16 or older:

a weighted average of the amounts in subparagraphs (i) and (ii) that reflects the proportion of the period for which those subparagraphs apply to the child, if the child turns 3 during the entitlement period:

a weighted average of the amounts in subparagraphs (ii) and (iii) that reflects the proportion of the period for which those subparagraphs apply to the child, if the child turns 16 during the entitlement period; and

in new section MD 3(4)(b), replace subparagraphs (i) to (v) with:

$7,517, if the child is younger than 3:

$4,397, if the child is aged between 3 and 12:

$4,514, if the child is 13, 14, 15:

$4,745, if the child is 16 or older:

a weighted average of the amounts in subparagraphs (i) and (ii) that reflects the proportion of the period for which those subparagraphs apply to the child, if the child turns 3 during the entitlement period:

a weighted average for the amounts in subparagraphs (ii) and (iii) that reflects the proportion of the period for which those subparagraphs apply to the child, if the child turns 13 during the entitlement period:

a weighted average of the amounts in subparagraphs (iii) and (iv) that reflects the proportion of the period for which those subparagraphs apply to the child, if the child turns 16 during the entitlement period.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendments not agreed to.

The question was put that the following amendment in the name of the Hon Steven Joyce be agreed to:

in Schedule 1 Part A clause 1 of the Income Tax Act 2007 replace table 1 with:

Table 1

Row

Range of dollar in taxable income

Tax rate

1

$0 – $14,000

0.095

2

$18,001 – $48,000

0.175

3

$48,001 – $70,000

0.300

4

$70,001 upwards

0.330

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Steven Joyce be agreed to:

in Schedule 1 Part A clause 1 of the Income Tax Act 2007 replace table 1 with:

Table 1

Row

Range of dollar in taxable income

Tax rate

1

$0 – $14,000

0.100

2

$14,001 – $48,000

0.175

3

$48,001 – $70,000

0.300

4

$70,001 upwards

0.330

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Steven Joyce be agreed to:

in Schedule 1 Part A clause 1 of the Income Tax Act 2007 replace table 1 with:

Table 1

Row

Range of dollar in taxable income

Tax rate

1

$0 – $16,000

0.105

2

$16,001 – $48,000

0.175

3

$48,001 – $70,000

0.300

4

$70,001 upwards

0.330

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Steven Joyce be agreed to:

in Schedule 1 Part A clause 1 of the Income Tax Act 2007 replace table 1 with:

Table 1

Row

Range of dollar in taxable income

Tax rate

1

$0 – $18,000

0.105

2

$18,001 – $48,000

0.175

3

$48,001 – $70,000

0.300

4

$70,001 upwards

0.330

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Steven Joyce be agreed to:

in Schedule 1 Part A clause 1 of the Income Tax Act 2007 replace table 1 with:

Table 1

Row

Range of dollar in taxable income

Tax rate

1

$0 – $20,000

0.105

2

$20,001 – $48,000

0.175

3

$48,001 – $70,000

0.300

4

$70,001 upwards

0.330

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The CHAIRPERSON (Adrian Rurawhe): Dr Parmjeet Parmar’s tabled amendment inserting new clauses 79 to 85, requiring newborn enrolment with general practice—this amendment was tabled as a new Part 3. However, the form of the bill is such that the clauses are more appropriately located as a subpart to Part 1.

The question was put that the following amendment in the name of Dr Parmjeet Parmar be agreed to:

after clause 78, insert:

79 Newborn enrolment with general practice

No person entitled to a Best Start tax credit under section MG 1 of the Income Tax Act 2007 shall be eligible to receive a tax credit if they have a newborn child and fail to enrol that newborn with a general practice or primary healthcare provider.

80 Interpretation

In this Part, unless the context otherwise requires,—

DHB has the meaning given to it in section 6(1) of the New Zealand Public Health and Disability Act 2000

enrolment, in relation to a newborn, means that he or she—

(a) is enrolled with a general practice and a primary health organisation; and

(b) is confirmed as eligible for publicly-funded health and disability services

general practice means a multidisciplinary team whose members—

(a) have the complementary knowledge and skills of medical practitioners and nurses; and

(b) may include other health practitioners; and

(c) work together to provide primary health care to improve the health of the enrolled population

lead maternity care provider means a person selected by a woman to provide her lead maternity care, and is—

(a) a registered midwife, an obstetrician, or a general practitioner who has a Diploma in Obstetrics (or its equivalent, as determined by the New Zealand College of General Practitioners); and

(b) either a lead maternity care provider in his or her own right, or an employee or contractor of a lead maternity care provider

pre-enrolment, in relation to a newborn, means that—

(a) he or she is preliminarily enrolled with a general practice; and

(b) publicly-funded health and disability services begin for him or her and continue for at least 1 financial quarter; and

(c) the general practice has the period of 1 financial quarter within which to ensure the newborn’s enrolment to continue funding

registered, in relation to a newborn, means that he or she:

(a) is listed on a general practice register:

(b) is entitled to publicly-funded health and disability services:

(c) does not receive subsidised health care

registered midwife means a health practitioner who is, or is deemed to be, registered with the Midwifery Council established by the Health Practitioners Competence Assurance Act 2003 as a practitioner of the profession of midwifery

responsible practitioner, in relation to a newborn, means the relevant—

(a) DHB maternity service; or

(b) lead maternity care provider.

81 How pre-enrolment request made

A newborn’s responsible practitioner must, before the newborn is discharged from the hospital or from maternity care,—

(a) consult the newborn’s mother and any other family members the responsible practitioner considers appropriate about which general practice to nominate as the newborn’s primary health care provider; and

(b) send a pre-enrolment request on behalf of the newborn to the nominated general practice; and

(c) ensure that the request is entered into the maternity system.

82 What nominated general practice must do when pre-enrolment request received

(1) Within 2 weeks of receiving a newborn’s pre-enrolment request, a general practice must, unless section 6 applies,—

(a) take action to ensure the newborn is pre-enrolled with the practice as his or her primary health care provider; and

(b) take any other action required to ensure that—

(i) the pre-enrolment takes effect in the maternity system; and

(ii) the enrolment process for the newborn is set in progress; and

(c) the newborn receives the 6-week immunisation pre-calls.

(2) The general practice must take the actions referred to in subsection (1)—

(a) within 2 weeks of receiving the newborn’s pre-enrolment request; and

(b) prior to the 6-week immunisation pre-calls and immunisation event, if the request is received before the newborn reaches 6 weeks of age.

83 Process if nominated general practice unable to enrol newborn when pre-enrolment request received

(1) This section applies only if a nominated general practice is working at full patient capacity, or there is another good reason why enrolment cannot be completed, when it receives a pre-enrolment request made on behalf of a newborn.

(2) The general practice must—

(a) consult the newborn’s caregiver and any other family members the provider considers appropriate as to another preferred general practice; and

(b) supply a list of general practices in the newborn’s area of residence if so requested; and

(c) if the family chooses another general practice, refer the pre-enrolment request to that general practice.

(3) If the nominated general practice is unable to assist the family in finding another primary health care provider, it must refer the pre-enrolment request to the relevant DHB and primary health organisation.

(4) The DHB and primary health organisation that receive a referral under subsection (3) are responsible for assisting the family to pre-enrol the newborn with another provider prior to the newborn reaching 6 weeks of age.

84 Newborn not eligible for enrolment

A nominated general practice that receives a pre-enrolment request from a newborn who is not eligible for enrolment must change the newborn’s status in the maternity system to either registered or casual, as the case may be, so that the newborn may receive fully-funded immunisations, if desired.

85 High-risk newborns to be monitored

(1) Any enrolled newborn that is deemed to be high-risk will be monitored by the general practice or primary health care provider.

(2) The determination of high-risk will be established through regulations made by Order in Council.

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

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendments not agreed to.

A party vote was called for on the question, That Part 1 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Part 1 agreed to.

Hon LOUISE UPSTON (National—Taupō): I raise a point of order, Mr Chairperson. I seek leave of the committee, in the interests of the Copperfields’ staff, for the committee to be adjourned until 2.30 p.m.

The CHAIRPERSON (Adrian Rurawhe): No, that’s something that the whole House has to decide; the committee cannot decide that. The committee is suspended until 2 p.m. Kia ora.

Sitting suspended from 1.43 p.m. to 2 p.m.

Part 2 Benefits

Hon STEVEN JOYCE (National): We are now examining Part 2 of this bill, and, while it won’t be the exclusive focus in this part from this side of House, it is certainly going to have some focus, and that’s the winter energy payment. I thought it would be worth discussing, at the outset, just how this winter energy payment came about. It is a peculiar beast indeed, because it is neither a payment for winter or, indeed, a payment for energy—but we will come to that. It is definitely a payment. I think it could probably best be described as a payment in lieu of a superannuation increase that was arranged by the previous Government for superannuation.

The gestation of it is this: that, actually, under the previous Government, the Family Incomes Package was of course adjusting the taxation thresholds, and that was to flow through to superannuitants. A superannuitant couple would receive just under $700 in the course of a year in terms of increased superannuation, on top of the superannuation adjustment that they would normally receive on 1 April each year.

Of course, the difficulty for the Labour Party was that when they reinforced their abhorrence of any change to tax thresholds and decided they weren’t going to change the tax thresholds, they were left with an inconvenient truth, which was that that meant the superannuitants wouldn’t get anything as a result of the Family Incomes Package. And so the winter energy payment was born. Of course, it was, weirdly, created to be just slightly more—just ever so slightly more—than the superannuitants would have received under the previous Government’s package. Or is it? Because, actually, in the first year, it looks like it will be less—significantly less. And I know my colleagues will want to look into that at some depth.

Also, then, there’s the issue of who actually qualifies for it. We’re going to want to examine that significantly, because there are some fish-hooks in this. Initially, we were told at the time of the election that there was going to be a signing-up process. We were going to have thousands and thousands of superannuitants lining up at Work and Income offices across the country—no doubt with their passports, to avoid any suggestion that they were foreign superannuitants—and they would then have to register.

Now, thank goodness—thank goodness—the Government has dropped that. We now have an auto-enrolment process. And yet, at the same time as having the auto-enrolment process, we are told, with a straight face, that superannuitants who leave the country during winter won’t be able to continue to keep claiming the winter energy payment. It’s going to be on an honesty box system, I understand, not unlike when you go to somebody’s house and they leave out something that you can buy—for example, some eggs—and you have a little honesty box and you put your money in. So that’s an honesty box system, which is admirable, but, generally, to ensure the system is robust and there is integrity, there has to be some way of actually monitoring the honesty box system.

In our case, in this country, when we provide somebody with a benefit—and this is undoubtedly a benefit—then we do police the requirements of the benefit, otherwise it’s unfair on other people. So either the Government is actually going to do something about this to ensure that there is some form of confirmation that we don’t have superannuitants abusing the system, such as they say, or we’re going to actually do what Carmel Sepuloni wants, in making it so that there are no responsibilities for any benefits. This just might be the precursor of how they’re going to handle the benefit system from here, which is an honesty box system all the way across.

There are some very significant things to address in this system that is being proposed in this part of the bill, but can I say this: it’s a shonky idea, it comes around for a shonky reason, and we’re very, very cynical about it.

Hon Dr NICK SMITH (National—Nelson): I firstly want to deal with the issues in this part that directly contradict assurances that were given by the Prime Minister and the Deputy Prime Minister during the election campaign. We both know that around the country, the issue of the previous Government’s tax cuts was raised at many of the Grey Power meetings around New Zealand. I was particularly interested in the very large Grey Power meetings and the absolute reassurance that was given by Jacinda Ardern that superannuitants, under the Labour Party’s policy, would be no worse off than under National’s tax package, which would deliver, as Steven Joyce said, just under $700 per year for 750,000 New Zealanders.

What we see in this bill is that 700,000 superannuitants are going to be worse off—a direct contradiction of what the Prime Minister, Jacinda Ardern, said, and also Winston Peters, who pretends to be the champion for superannuitants but has actually, by sleight of hand, taken hundreds of dollars individually—hundreds of millions of dollars—off them in Part 2 of this bill.

Let me explain why. Under National’s changes from 1 April next year, every superannuitant would be better off by $680 as a consequence of the tax reduction. That amount actually increases in 2019 and 2020, and if you calculate that based on the December economic update that we’ve just had this week, we would expect that to get up to $705 in year two and $730 in year three. So in every one of the next three years, this Government is taking money off superannuitants. That is, in year one, next financial year, the winter energy payment provides superannuitants with $466—$466 is the energy payment for the year—whereas the tax cuts would have provided them with $680. That is, they’ve robbed $260 off every superannuitant couple across New Zealand.

When did they tell them that? Is that what Winston Peters—and I’d like to challenge the New Zealand First member in the Chamber: when did they tell superannuitants that a Labour - New Zealand First Government would make them over $260 worse off? When did they tell them that they were going to take $150 million collectively off superannuitants? So that’s my first problem—my first problem is the Prime Minister and Winston Peters have broken their word to superannuitants.

The second is, of course, that the tax package provided for that amount to increase each year with the average wage increase—no such provision in this winter energy payment. It’s a fixed amount. Each year going forward, superannuitants will be worse off.

The third challenge I’ve got for the committee is this: I would have heard a speech from Winston Peters at least a couple of dozen times, screaming in this Parliament that superannuation is not a benefit. And what does this part say? This part, New Zealand First, defines superannuation as a benefit and not an entitlement. So, in this part, New Zealand First rats on their assurances to superannuitants. Those 750,000 New Zealanders that have contributed so much in their life to this country are being fiddled against assurances that were given during the election, as a consequence of the parts in this bill.

So I want to challenge both the Minister in the chair, Stuart Nash, and particularly the New Zealand First Party: why are you taking money off superannuitants? Why are you breaking your word, both from the Prime Minister and Winston Peters, to Grey Power? Why, at a time when New Zealand’s books are so good, are you depriving superannuitants of these benefits?

Hon ALFRED NGARO (National): Thank you, Madam Chair Tolley. I rise to take a call on Part 2 of this Families Package (Income Tax and Benefits) Bill. On the other side, as you’ve heard, we are challenging this bill. At the same time, too, there are parts of it where we’d like to make the bill better. We know the training wheels are still on at the moment. They’re still sort of wobbling a little bit—they’re struggling a little bit—and so we feel that with some of the expertise that we have, we’d like to offer some suggestions around that. I know that members over there will appreciate this.

My contribution is on the amendment that I’ve put forward in regard to the winter energy payment, section 61FE in new Part 1KA. In particular, to do with: “The purpose of the winter energy payment is to provide … financial assistance” and support—in particular, section 61FI(1), to add an extra subsection (c), and this is how it reads: “if the person has nominated, in a form and manner approved by the chief executive, to use their winter energy payment for additional home insulation or heating sources, in 1 annual instalment.” Also, in section 61FI, “Winter energy payment: instalments, rates, and payment”, to insert new section 61FI(2)(c): “for recipients who have nominated to use their winter energy payment for additional home insulation or heating sources”.

We believe that’s important. The Government on the other side, only two weeks ago, had the Healthy Homes Guarantee Bill (No 2) where they advocated very strongly for the importance of insulation—in fact, on many occasions they talked about the importance of that in regard to the current building code and standard, from 1978. They want it included to 2008, so there was very strong advocacy and support that insulation becomes critically important. What I would add is that what this is—it is actually to create some flexibility. When we talk about the winter energy payments, it doesn’t specifically say what those payments could be used for; it could be all sorts of manners of things.

We think it’s important—and I’m sure the Government would think it’s important—to put some checks and balances in there, create a bit of flexibility, and focus on insulation. This committee has heard about the importance of insulation and what that gathers. We know that there are approximately one million houses that are still uninsulated. Under the previous Government, the National Government, we had insulated at least 30,000 Housing New Zealand houses, and another 350,000 houses in the general populace as well, so this would add to that as well.

So I think it’s really important, and I’d like to hear from the Minister about the fact that this amendment would be something that would add to it. It would create flexibility. If we’re going to talk about the efficiency and saving for the family in their situation, during that winter period of time, then you can spend a whole lot of resource and money on paying the power bills, but if you’re not creating a home that is warm, that is dry, then it’s money that’s just wasted. I would say that’s critically important.

The second part of my amendment also includes heating sources. We know that’s critically important, because when we think about the heating sources, the most common heating source at the moment that is not only efficient in its use but also cost-effective is the heat pump. Many homes now are actually ensuring that they install heat pumps there. The heating source means that now we are also putting it down specifically to an appliance that, again, would ensure that the home is dry, is warm, and actually meets those needs for the family as well.

My contribution for the amendment that I’m proposing to new section 61FI, in the winter energy payments, is to ensure that there is an opportunity, a flexibility, to look at home insulation—as I said, there are over a million homes that aren’t insulated at the moment, both ceiling and floor—and also the importance of heating sources. I know that as an electrician—when I first started my apprenticeship I was working for Ward Chandler Electrical and Jim Cato Electrical, who had contacts with Housing New Zealand. Part of my role was to go into many of those Housing Corporation homes, but also into other homes, too—homes owned by residents who were low-income families. And, in many cases, I had to remove appliances that were not only inefficient but were costing those residents at that time huge amounts in their power bill.

So I think that what I am proposing is not something that’s unreasonable. I’d like the Government just to consider this. This is a practical solution. It’s a practical amendment that, again, is for the insulation, and what it would do, what we’ve heard from experts is that it would increase the efficiency of the warmth of a home by 35 percent—35 percent.

So rather than actually just saying that it’s for winter payments such as your power bills, why not allow the flexibility for those that need their homes to be insulated to have a heating source that would be reliable and efficient and effective to heat the home? I think, actually, it’s a very practical solution that I can offer to the House and to the Government as well.

Hon STUART NASH (Minister of Revenue): Thank you very much, Madam Chairperson Tolley. I think it’s important at this early stage to just get some things clear here. First of all, what we heard—Dr Nick Smith talks about the meetings he attended up and down the country. What I heard in the meetings that I’ve attended is that for about the 60 percent of pensioners or superannuitants who rely solely on the pension to live—solely on the pension—the winter power bills were one of the greatest imposts they faced in wintertime. So what we have said is, “We’re listening. We heard what you had to say.” New Zealand First and Labour thought long and hard about this, and said, “What we will actually do is help you during those, sort of, six months where we know your costs increase significantly. So what we’re going to do is we’re going to give you some money to help you pay that power bill.”

But when the Hon Steven Joyce said, “Well, how is this going to be policed? You’re going to put something in place that means if you’re away for 28 days—how’re you going to know this?” Well, I would’ve thought that a former Minister of Finance would’ve actually known that the 28-day period exists for superannuitants who head overseas for longer than 28 days if they’re receiving any sort of supplementary payment. And, in fact, there is an information-sharing agreement between the Customs Service and the Ministry of Social Development (MSD), who administer this. So this is not new here. This is not new in any way, shape, or form. And the reason we did this is we just felt it was unfair to those who were here for others who’d gone to the Gold Coast, as has been brought up a number of times on this side of the Chamber, and were wintering on the Gold Coast—this is not for them; this is for Kiwis who are here in winter to ensure they can pay their power bills.

Now, one of the reasons we did this is we looked at the stats. We looked at the stats and said, “Is it acceptable in this country that 40,000 New Zealand children end up in hospital in the middle of winter for respiratory diseases? Is it acceptable in New Zealand that, in fact, 9,000 superannuitants end up in hospital with pneumonia? No, it’s not—not acceptable in any way, shape, or form. So what can we do to alleviate this?” And we felt that the winter energy payment was the perfect way to do this.

Now, if that side wants to argue that it’s not important to help superannuitants over winter, go hard. Do that. But we just think this is the right thing, because it’s what we have been told. The other thing that is quite false—and I was interested in Dr Nick Smith’s comments here when he said, “We are actually taking money off pensioners because of the average wage.” And, again, the former Minister of Finance should know—because, of course, he would’ve read the Half Year Economic and Fiscal Update—that the average wage is predicted to grow under Labour, therefore, we are actually giving more money to superannuitants than they would’ve received if the Opposition had been in Government. Luckily—luckily—they are not.

And it is universal, because we felt it was important to make it universal. So it’s not an honesty box in any way, shape, or form. So, Mr Joyce, I just want to repeat this point, because Mr Joyce was not in the Chamber when we made this point: there is an information-sharing agreement between customs and MSD, so they will pick people up who are offshore—

Hon Steven Joyce: Oh!

Hon STUART NASH: —for over 28 days, Mr Joyce. So it’s OK.

Having said, though—having said that—this side actually trusts superannuitants to do the right thing anyway. We don’t distrust everyone in any way, shape, or form.

As to the Hon Alfred Ngaro’s amendment, we won’t be supporting this. It’s really just a practical reason. That goes back to the 28 days. If you receive it in a lump sum, then you decide to take off on the 27th day—or you decide to take off—then how is that equitable? What we’ve got to look at here, Mr Ngaro, is the equity around this. It’s the equity.

Hon Alfred Ngaro: But if they stay, though?

Hon STUART NASH: If they stay, then they’re going to get it in equal payments, which is how it should be. Getting it in a lump sum is just not fair. What we’re about, on this side, is fairness and equity. As the honourable member will know, under the healthy housing legislation that will come through under this Labour - New Zealand First Government, we will ensure that landlords actually do have to provide a warm, dry house.

Hon Alfred Ngaro: Low-income families who are residents that own their own home.

Hon STUART NASH: Low-income families—they will also be covered under the Healthy Homes Guarantee Act. So if they’re renting a house the landlord will also have to provide a warm, dry house.

One thing I would say is we think this is fair, we think this is equitable, and this is not taking money off pensioners whatsoever. We have listened to pensioners when they said one of the greatest costs for them is the winter power bill.

The CHAIRPERSON (Hon Anne Tolley): I’m going to call Ian McKelvie, and before I do I’m just going to say to him, I think he has already talked with the Clerks but he has two amendments in place. One is to insert new clauses 79 to 81 to increase the age qualification for superannuation. He was hoping that that would be a new Part 3. The form of the bill means that it’s more appropriate to be a subpart of Part 2. However, his second amendment that’s on the Table, inserting a new Part 3, requiring the Retirement Commissioner to report on the impact of the bill on the well-being of retired persons is acceptable as a new Part 3. If I give the call to the member, he can talk to that first amendment as a subpart of Part 2.

IAN McKELVIE (National—Rangitīkei): Thank you, Madam Chair Tolley. The arthritis has got pretty bad this morning, getting up and down in this place and not getting a call, so I’m very pleased you’re giving me one. I did want to say a couple of things—[Interruption] I do need to qualify that comment with a couple of things.

Hon Alfred Ngaro: This will not help you. This package is not for you.

IAN McKELVIE: The first thing is—this package absolutely is for me, and I’ve got to declare a conflict of interest. So I must declare a conflict of interest as we go into this discussion, but that was not really where I wanted to get to. I do want to commend the objectives of a lot of the stuff in this bill. I also accept that a lot of those objectives have been borrowed from a previous Government and had their meaning changed, but that’s absolutely fine by me, as long as it achieves what we want to achieve in the end.

I think the challenge I’ve got with some of Minister Nash’s comments a moment ago is that it isn’t necessarily equitable. One of the things I want to raise that’s particularly inequitable is that superannuitants in care, and those in rest homes who are currently cared for in a different manner than those that are, in other rest homes, caring for themselves, don’t get the same benefits out of this. So I think that the point I’m making is that the power supplement, I guess, or the winter energy payment, the “WEP”, as it’s named—sounds like a power company to me—isn’t necessarily equitable for everyone. I think the other thing that really challenges me about that—and it’s particularly pertinent in the Rangitīkei at the moment, when in the southern end of my electorate you’ve got to have the heat pumps on because it’s so blimmin hot the grass hasn’t grown for months, and in the northern end of it, we’ve still got snow coming—I think that that’s the other inequitable thing about this: that it’s useful for the cold parts of New Zealand, but not necessarily so useful for the parts of New Zealand that aren’t so cold. So it isn’t altogether equitable.

I wanted to pick up the point that the Hon Nick Smith raised, because I think it’s a very important point, and that is that this proposal does, effectively, potentially take money away from superannuitants who otherwise may have got a benefit under the National Government’s tax cuts. I think that was significant, as well. I think the other point the Minister raised that I find a little confusing is that if we’re going to apply this to power bills, for example, we should have specifically applied it to power bills. It would have been a much more suitable way of doing it, I think, because, effectively, it doesn’t necessarily mean the power bill gets paid any better than it does now. I think that we heard earlier in the discussion that people are responsible for their own ends. They certainly are, but I guess one of the challenges we have is that people don’t necessarily use that responsibility in the manner they should. So I think that’s a little bit of, I guess, a deficiency under this project, and it probably needs a bit of attention.

I think the point I wanted to make was that I don’t think it is equitable. It certainly is taking income away from our beneficiaries. The other point I wanted to raise quite strongly was that I don’t think that our superannuitants should be termed as beneficiaries, either, and that point was raised by the Hon Nick Smith, as well. That’s continued right through this bill. It talks about our superannuitants being beneficiaries. In fact, it’s an entitlement that you work for all your life, and you get to my age or a little younger, and you qualify for it. So just on to the—

Hon Member: Yes, it’s great.

IAN McKELVIE: It is, too—ha, ha! No, but it is.

I’ll just very quickly get on to my amendment, which, Madam Chair Tolley, you have informed me has been appended to Part 2 and become an amendment to Part 2. In fact, I might just read it: “The purpose of this part is to tie the age of superannuation eligibility to the winter energy payment provisions of the Family Package … to ensure the affordability of the provisions of that policy by raising the superannuation eligibility age to 67 no later than twenty years after the enactment of the Families Package … Bill.” That does two things. One is it, effectively, would raise the eligibility to 67, and the second one is it attaches the benefits of things like the electricity benefit to those changes. In other words, it makes it continuous. That takes us back to the policy that the National Government implemented some time ago—

Fletcher Tabuteau: So you’re trying to be advocates for superannuitants, and now you’re going to raise the age.

IAN McKELVIE: —and I think that despite New Zealand First’s bleatings, that is a point that I think is strongly accepted by the New Zealand community. I think also that for those of us of that age—[Time expired]

Hon ALFRED NGARO (National): I raise a point of order, Madam Chairperson. My point of order is in regards to scope. In the response from the Minister, he included comments in regards to the healthy homes package that the Minister was talking about in regards to the upcoming Budget and the package that was soon to be released—potentially, in 2018. I take it, then, that we’ve been quite clear in our directions from the Speaker around scope, but because the Minister has entered this comment into his reply, can I take it that we can make comment on the comment of the Minister?

The CHAIRPERSON (Hon Anne Tolley): No, because we are in the committee of the whole House and we are examining part by part.

Dr SHANE RETI (National—Whangarei): Thank you, Madam Chairperson. It’s a pleasure to speak to this bill and speak to an amendment. I particularly want to speak around the winter energy component.

I wanted to focus on this bit of the bill, and I want to focus initially on the objective of the winter energy payment (WEP), which is stated in the explanatory note of the bill as follows: “The WEP will support those recipients to meet their household heating costs during the winter period.” I want to just focus there—I’ll come back to it—on heating costs during the winter, not cooling during the summer. I will come back to that point.

I think the dilemma this amendment seeks to correct, and the amendments I wish to make are several—firstly, with the definition of winter and its correct application in this bill to 122 days, starting initially in July and then later progressing to a May start. Secondly, there is the duration of 22 weeks, or 154 days.

Now, it’s a winter energy payment, so what do we understand by “winter”? Well, why don’t we ask our premier meteorologist, the National Institute of Water and Atmospheric Research (NIWA). They decide, or they define, that winter is June, July, and August—92 days. Internationally, the Southern Hemisphere is considered to have had winter this year from 21 June to Sunday, 23 September—92 days. Surprisingly, Tourism New Zealand calls winter June, July, and August—92 days. New Zealand.com has it as June July, and August—92 days. Across a whole range of domains, winter is defined as June, July, and August, and as a much shorter period.

Maybe there’s some alignment, actually, with the electricity sector. Why don’t we go and ask some of the retailers what they consider winter to be? So I had a look around and Meridian does define a buy-back period for solar energy as winter, and, again, it doesn’t match at all what this bill is calling winter. You know, it may well be that the public and the retailers have got used to some concept of winter—particularly, winter in the electricity domain—and yet we’re going to change everything and confuse people.

I think introducing another definition of winter would be confusing, so there are some questions here. Why is the start date next year in July? That’s too late; winter’s already started. And then, when it’s moved through to May, that’s too early; winter hasn’t started. Why is it 22 weeks—154 days—when everyone is saying winter’s actually 92 days? Why does the winter period not align with any other definition of winter that I could find?

Now, if we look at 154 days—let’s say that the programme had been in place and we add 154 days to 1 May this year. That would push the winter energy payment through to October. If we look at the NIWA’s latest report on October, they tell us this: first of all, it was 30 degrees in Cromwell in October—way too warm to need an energy payment. Secondly, they also state that temperatures were “well above or above average temperatures for most of the country” in October—again, hardly winter.

The bill specifically says “heating” and not “cooling”. If the programme were in place right now—and it started in May and went right through to the hot month of October—many consumers would have their heating devices, heat pumps etc., on auto-regulating thermostats. What would happen is, as the weather warmed, the device would change to cooling, at exact counter-purposes to what the objective says the energy payment can be used for. It very clearly aligns to heating—which makes sense—in the cold periods, but because of climate change and various other reasons, as it gets warmer, and as this period projects the 154 days, those devices will automatically change to cooling. I would suggest that’s at counter-purposes to this bill.

So the problems that I’m finding here are that the dates suggested are too long and are outside of anyone’s definition of winter. Secondly, pushing into the warmer periods makes the heating requirements redundant, and auto-cooling is at cross-purposes to this bill. Now, a couple of suggestions: the suggestion with this amendment is that if we align the definition of winter with the NIWA definition, then it does actually solve a lot of these problems. Secondly, if we resolve or we try to resolve the thermostatic auto-adjustments by changing the definition of the purpose to “cooling” as well—I think that’s going to make the bill messy and diminish the intent and purpose that you have. So the amendment that I have on the Table is that the NIWA definition of winter be considered by the Minister. Thank you.

MATT KING (National—Northland): I want to talk about the winter energy payment. This winter energy payment in Part 2 of this bill is a random, plucked out of the air, nonsense payment. Let’s be honest here: when they cancelled the tax cuts, as the legislation does, the vulnerable members of our community found out they’d be out of pocket. They thought, “Oh, there’s a lot of votes there. We better sort that out.”, so the brains trust at Labour dreamt up a winter energy payment, because it sounds good. It’s a bit of fluff. So let’s now look at the specifics of this fluff.

Hon Member: Oh, he’s got the fluff out.

MATT KING: Ha! The winter energy payment is there for those in receipt of a main benefit, New Zealand superannuation, or veterans pensions, to heat their homes in winter. With all due respect, it’s not about winter, it’s not about energy, and it bears no relationship to the underlying winter energy costs. It is simply a stopgap measure contained in the provisions of this bill. That coalition Government is all about fluff. It feels good, it sounds good— good intentions, but no substance.

In schedule 18A of the bill, they made it $700 a year for superannuitant married couples, which is a cynical attempt to beat our change, which was worth $676 per year in our tax package. Creating random payments like this just adds another layer of bureaucracy that bleeds the system dry.

But back to the relevant parts of the bill: this will make superannuitants have to go cap in hand to Work and Income to get their winter energy payments. It’s ad hoc policy. It feels good. It just adds complexity to the tax and transfer system—for example, in the regulatory impact assessment: this payment “creates a situation where some beneficiaries become worse off when they earn additional income in a particular income range, creating disincentives to moving into work or increasing hours of work.” The payment mainly affects job seekers who have no children. This is especially relevant to my electorate of Northland—the great Northland—where we have a higher number of beneficiaries than the national average. Any disincentives to encouraging people into work I oppose.

This bill has provisions that say: if recipients of this payment are out of the country for four weeks, they don’t qualify. Who polices this? Is it the Customs Service? Is it IRD? Is it in Work and Income? That’s the question I’d like the Minister to answer. It just adds another layer of bureaucracy to the system.

This is a tax and spend Government, which we differ philosophically and fundamentally with. We believe in working hard, allowing people to keep to keep more of their hard-earned money, because it’s their money. So that’s why we resist the moves by this bill to cancel the excellent tax package relief we put in. This coalition Government is replacing this with an unclear, ad hoc measure like a winter energy payment in Part 2 of this bill. Of course we oppose it.

Rt Hon DAVID CARTER (National): Oh, Madam Chair Tolley, thank you very much. I want to acknowledge the Minister of Revenue, the Hon Stuart Nash, in the chair, and I hope that he will help me with a few answers to the questions that I raise. The first question I have is a very basic question: why is it called the winter energy payment—why is it called the winter energy payment? Because when I look at the purpose, the purpose of the winter energy payment is to provide targeted—and I want members on the other side of the Chamber to note that word, “targeted”—financial assistance to help certain people meet their household heating costs during the winter period.

Now, Mr Nash, when he took his earlier call, talked about targeting 40,000 kids who lived in unacceptably cold houses through the last winter. If it’s targeted to those people and only to those people, he’s got my support. But I don’t think it is targeted. Because maybe the Minister is not aware, but I’m going to receive it, and I don’t think I do live in a cold, uncomfortable house in the winter. I don’t need it, and therefore I cannot see that it is targeted.

My second point—reading the purposes—is it says it is for people to meet their household heating costs. How will the Government ensure that the payment of $750 to a superannuitant is used to meet their energy costs? Because I suspect some might look on the internet and see an Air New Zealand Grabaseat option to go from Christchurch to Nadi for a couple of weeks in Fiji. And that’s what they could use their $750 for, and I want the Minister to tell me how he will know that that won’t happen.

Then the other one that’s been raised in the committee today is the question of superannuitants who are then out of the country for more than 28 days and whether they will continue to receive the payment. The Minister, in his earlier comments, said that there’s a memorandum of understanding between Customs Service and the Ministry of Social Development (MSD). So I want the Minister to tell the committee how effective that memorandum is. Does it catch 100 percent of superannuitants who last year took a good Grabaseat fare and took that flight from Christchurch to Nadi? Did it catch them if they were out of the country for more than 28 days?

Because I’ve got to say, as a recent superannuitant, I didn’t know about the need to inform MSD if I was out of the country for 28 days, and I suspect a large number of other superannuitants don’t know that either. So I want the Minister to tell us, to get to his feet, and explain to the committee succinctly: how effective is this memorandum of understanding and how many people did it catch last year who left the country and did not inform MSD that they’d done so? Because I suspect it’s not an effective mechanism, and if it’s not an effective mechanism, then people will continue to take this payment whilst they’re out of the country.

The other question I want raised and clarified—and it would be better if it was done early in the debate rather than later—listening to the comment from the earlier speaker, Matt King, is there is confusion about whether there is auto-enrolment or whether it’s a matter of going to MSD to enrol. I think superannuitants need to have that clearly said to them today in this Chamber. Is it auto-enrolment for all superannuitants whereby, effectively, they get a winter energy payment but it is not necessary for winter heating costs; it’s an addition or a discretionary spend.

The other question I have for the Minister—so I hope he’s making note of all these—is: what adjustment is there to be made to this winter energy payment for different parts of the country, which have different mean average temperatures through the winter? The member comes from Napier. Let him tell the committee today: what is the mean monthly temperature in Napier in August, as compared to my city of Christchurch or as compared to Sarah Dowie’s city of Invercargill? I can tell that Minister. He may not have the figure, so let me help him: 10.3 degrees is Napier, 7.9 degrees is Christchurch, and poor old Invercargill shivers all winter at 6.6 degrees—and sometimes that’s not only for August; that could also be for December. So what is the adjustment that’s truly made to equate this payment to the actual temperatures that people face?

In the last question, was any consideration was given to Shane Reti’s people who will actually be constituents and pensioners who find they need it in the summer, not in the winter?

Hon PAUL GOLDSMITH (National): Thank you very much, Madam Chair Tolley. It was very kind of you to answer my call. I’m delighted to talk about this. It seems to me that the winter energy payment, which we’re focusing on at the moment, is emblematic of the intellectual and moral incoherency of this bill and much of the Government policy that we’re talking about here. The Government has decided that it will not allow superannuitants to benefit from a tax adjustment, which, just to remind listeners and viewers to Parliament—

The CHAIRPERSON (Hon Anne Tolley): No, we are actually on Part 2.

Hon PAUL GOLDSMITH: Yes, indeed, we’re on Part 2, but I’m just—

The CHAIRPERSON (Hon Anne Tolley): Deeply on Part 2.

Hon PAUL GOLDSMITH: —trying to explain the context for this winter energy payment, which is $700. I’m trying to get an understanding of why, and I’d be interested if the Minister could explain again to us why they settled on exactly $700 for a couple and $450 for a single person. Because it seemed to me that there seems to be one speculative reason for that, and that is just to try and plug the gap that is left by withdrawing the tax adjustment, which would have had the consequence for superannuitants, because their payments are linked to the average wage, of seeing their income rise by nearly $700 a week if they were a married couple. So I’d be interested to understand the rationale for the number that they came up with for this winter energy payment.

But the broader point I’m wanting to make is that rather than allow people to receive money on the back of rising average incomes and choose what they want to do with it, they have taken the view that, no, they want to come up with a whole lot of—and Mr Joyce has referred to spaghetti—spaghetti in terms of a number of allowances that complicate the system, make it more administratively difficult, and start to flow. Because, of course, if you have a winter energy payment because people are concerned about the cost of energy, well, I suppose there’s a logic we should probably also introduce a fresh vegetables payment as well, because they get expensive at times of the year. And there should be also a payment that relates to the rates increases, and there should be payments that relate to a whole host of things that superannuitants have to deal with.

If you go down this track, what you end up doing is rather than entrusting and believing that people can make judgments for themselves about what they want to spend their money on, instead you have a whole lot of allowances, and what you end up with is a very complicated system that is difficult to administer, difficult to understand, and difficult to predict for older people as they’re trying to work out how to manage their affairs and budget, and that undermines the simplicity and coherency of the system we have.

But, anyway, getting back to the incoherency of the broader policy, it’s terrible, this idea that Mr Peters in the House yesterday referred to, a dreadful process of taking from the needy to give to the greedy, which he would never support. That’s why he didn’t support the tax cuts. But now we’re talking about a winter energy payment that goes to some of the richest people in the country as well. So there’s no coherency about how he’s gone about doing that. That is replicated time and time again, right across the Government decisions that were made around not agreeing with this idea that things should be targeted to those most in need, but, instead, putting on the table a cumbersome, administratively expensive, and confusing way of doing things in order to appease what they see as particular groups that were left out because of decisions that they made earlier.

Why would we think it was a good idea for a superannuitant to receive a one-off payment over the winter, supposedly to spend on winter heating, rather than for it to continue to be pegged to the average wage, which was rising because of tax cuts? They were only adjustments to the thresholds and everybody should have had them anyway. They would continue to get that adjustment every year and that amount of money would continue to grow and they would get a much better result than what is being delivered here by this winter energy payment. For me, I struggle to understand the logic of it, and I’m very keen to hear from the Minister as to where they came up with the figure for the $450 and $700 and how they explain it.

The CHAIRPERSON (Hon Anne Tolley): I call the Hon—

Hon Stuart Nash: Stuart Nash.

The CHAIRPERSON (Hon Anne Tolley): Stuart Nash.

Hon STUART NASH (Minister of Revenue): Ex - Deputy Mayor of Napier—ha, ha! There are a number of questions here that I would like to answer. First of all, to the Hon Paul Goldsmith: it is not a one-off payment. OK. The former Minister said it was a one-off payment; it is an equal payment over six months. OK, so it is not a one-off payment. When that member mentioned that in fact it was going to some of the wealthiest, is he suggesting that this should be means tested? If that member is suggesting that the Opposition wants to start means testing pensions, then we completely and utterly refute that.

Now, the Rt Hon David Carter—there is one point that he made that I would like to utterly refute, and that is that the winter temperature in Napier is only 10 degrees. It’s at least 15 degrees. It’s a lot warmer than that. I don’t know where you got your figures from.

Rt Hon David Carter: I raise a point of order, Madam Chairperson. I seek leave of the committee to table some parliamentary information prepared for me by the Parliamentary Library, which will confirm that the Napier August mean monthly temperature is 10.3 degrees.

The CHAIRPERSON (Hon Anne Tolley): That is not a point of order. The member is interrupting the Minister to seek leave, so just—

Rt Hon David Carter: I said point of order and then I sought leave to table the document.

The CHAIRPERSON (Hon Anne Tolley): I will put the leave. Is there any objection? There appears to be none.

Kiritapu Allan: Objection.

The CHAIRPERSON (Hon Anne Tolley): There is objection? Well, I did look over and I did ask; it’s a bit late. It may be tabled.

Document, by leave, laid on the Table of the House.

Hon STUART NASH: The Rt Hon David Carter also talked about the fact that he is getting the winter energy payment and how can that be fair. Well, I would like to inform the right honourable member that under clause 61FH it is called the “Winter energy payment: election not to receive”. So if the member would not like to receive the payment, then he is more than able to opt out, and I suggest he probably does, as will the Dr Nick Smith, because I’m sure he’s 65, as well.

I want to address a couple of points that the Hon Shane Reti made as well, and also Ian McKelvie made the same point. It’s been made a number of times, so let’s address this now, and that is the definition of winter. Are we actually suggesting—are the members actually suggesting—that, in fact, people do not turn on heat pumps or electric blankets or heaters before June or after August? Of course they do—of course they do. This is a practical response to when the seasons turn cold.

We all know that and this is what this is addressing. If we just said, “OK, there is very pure evidence that no one touches a switch to turn on a heater before June, or after September, or whatever the honourable member’s definition was, then maybe.” But we know that that is absolutely not the case. What we do know as an absolute fact is that power bills increase over winter. Now, the Rt Hon David Carter mentioned, “Well, how do we know this money’s going to be spent on power bills?” Well, what we do know is that as power bills heat up over winter, you pay more for the power bill. This money is to go towards paying that power bill. So what we are doing is we are making a practical solution to what we know is a good issue.

Now, I’m not too sure who made the point—I think it might have been the Rt Hon David Carter. He talked about, “How will Customs Service know when someone is out of the country for longer than 28 days?” I made a mistake earlier. It’s not a memorandum of understanding; it’s actually an information-sharing agreement between customs. What happens is that it picks it up automatically when someone is out of the country for longer than 28 days. So the payment will stop automatically. So it is auto-enrol—we’ve made that clear. When they’re out of the country for longer than 28 days it will un-enrol. You don’t have to do anything else. However, my understanding is that if someone re-enters the country, then they will have to sign up, once they return after they’ve been away for longer than 28 days.

I think that’s all the points—yes, I think that’s all the points I’d like to make at this stage. But I would just like to reiterate the point that this is a practical solution to an issue that we have identified and that is that well over 60 percent of those receiving the pension rely on the pension as their sole source of income.

Hon TIM MACINDOE (National—Hamilton West): Thank you, Madam Chair Tolley—a tremendous choice. It’s been fascinating listening to the Minister in the chair, the Hon Stuart Nash. I have to say that he did not answer the point that was raised quite fully and impressively, I think, by the Rt Hon David Carter. What an impractical suggestion. He was suggesting it’s a practical measure. What an impractical suggestion it is to have a bill where you, effectively, say to any member of the public who’s eligible, “Here’s some money. The taxpayers are happy to give you a dollop of money. But don’t take it.” Really, Minister—are you seriously suggesting that that is going to work? It’d be like, Minister, you saying to your children, “We’re going to take you out and we’re going to let you spend quite a bit of money on Christmas presents, but you don’t have to.” I wonder how many children, realistically, are going to say, “Well, I’m not interested in taking that. I’m very happy just to sit down and watch my father have a latte or something.” It is not realistic, and it’s very, very bureaucratic and cumbersome, as is the measure he just talked about, about people being out of the country for a certain period of time.

Well, I think it comes as a surprise to all of us on this side of the Chamber that we’re even debating Part 2 at this very early stage in the day. I think most of us expected we wouldn’t get on to Part 2 until tomorrow morning or later, because, after all, Part 1 had so many weighty measures in. The important point about that was that we were putting a whole raft of questions to the Government, very few of which they even acknowledged and hardly any of which they actually answered. And so here we are this afternoon already looking at Part 2, and there are also some very important and weighty matters in Part 2 that do require a detailed engagement from the Government. I acknowledge the fact that we’ve had a couple of calls so far from the Minister in the chair, Stuart Nash, but apart from that, again, we’re seeing Government members with their heads down, clearly not taking any notice. They’re here only because they’re on the roster. They’re showing no interest at all in the fact that these are fiscally very important measures. They must look at Part 2 of this bill and consider just what they are doing—

Hon Member: It’s only happened in the last two minutes.

Hon TIM MACINDOE: I say to Mr Faafoi—Mr Faafoi who’s suddenly woken up from his deep slumber. It’s always lovely to see Mr Faafoi awake and smiling across the Chamber. Ha, ha! He must understand that in this bill the Government is spending the lot. This is a one-hit wonder where they’ve dished out everything they’ve got for the next three years. They really should be taking a much more intelligent approach to how they answer the questions and why they’ve made some of the decisions they have. And they certainly must give the public some answers. They’ve got to answer the very legitimate point that was raised by the Hon Nick Smith as to why Jacinda Ardern, when she was the Leader of the Opposition, and the man who’s now her Deputy Prime Minister, Winston Peters, went around the country, effectively, misleading superannuitants who now lose under this bill. And there is no question that superannuitants are losing. Dr Smith has rightly posed the question, the Government cannot run away from answering it, and I challenge them to do so. Mr Nash certainly didn’t in his first call.

For superannuitants, who we all acknowledge will struggle with power bills—anybody on a low income, anyone who’s on a benefit, and superannuitants will struggle with power bills. But this is not the way to assist them with that. When I take one of my later calls on this particular part, I am going to speak very specifically to my amendment and, I think, also that of the Hon Jacqui Dean and the Hon Alfred Ngaro, who’s already mentioned his. We’ve all got some very practical suggestions on how to improve this aspect of the bill, and I really urge the Government to focus very clearly on those proposed amendments, to look at the practical suggestions that we’re all going to be putting forward across the next few hours. Because this is what constructive Opposition is all about, and which we believe will make those much more effective measures to assist those, particularly the superannuitants who may struggle with their power bills, or, at least, with dealing with the issues that they confront during the winter.

So, at this stage, because time is running out, I just want to urge the Government again to engage in this debate. These issues matter. They shouldn’t just be dismissed because the Government members are hoping to get home in a hurry. This is the choice of the Government to introduce this bill under urgency. We’re here engaging seriously on it. We expect the Government to do the same, and, in particular, to explain why they’ve made some of the decisions that they have, which have now been legislated for in this bill and are poorly focused, hugely expensive, in many ways will not meet the target—[Time expired]

Hon LOUISE UPSTON (National—Taupō): I rise to speak on Part 2 of the Families Package (Income Tax and Benefits) Bill. I have a number of amendments that I have presented. I want to just talk specifically about two of these so far. I want to echo the comments that the Hon Tim Macindoe made, and that is about how the Opposition is using the opportunity of the committee stage to support the Government in their objectives and to improve the law, and to make sure that the legislation is drafted—given that it doesn’t have the scrutiny of a select committee process. I would urge the Minister in the chair, the Hon Stuart Nash, and other Ministers responsible, who perhaps—for example, the Minister for Social Development, who may have a particularly stronger interest in some of these clauses.

I want to talk to one of them and that is the one related to the Ministry of Social Development (MSD). My proposition is that the Ministry of Social Development must take reasonable and appropriate steps to explain to every person about the rules of absence from New Zealand. The Minister in the chair talked about those who are receiving superannuation payments after the age of 65, and how there’s this kind of complicated Customs Service checks you in and out type of process, but then the person has to sign something when they return.

My proposed amendment is actually putting a responsibility on MSD for explaining it to those who receive benefits. I’m not just talking about superannuitants; in this case I’m actually also very, very clearly and specifically looking at those on main benefits, who are also going to receive the winter energy payment. I have a strong interest in those who are receiving main benefits. I want to make sure those people who have real needs get the support that they are entitled to. In this instance, while they could have had a lift in benefit payments across the board, like we did when were in office, this is an increase but in a slightly different way. So I would want to ensure that MSD have taken practical and reasonable steps to ensure those that would be entitled to receive this benefit understand the rules around their absence from New Zealand. If, as the Minister in the chair says, it’s important for those on benefits as well as superannuitants to receive this winter payment, for the betterment of their own health and the health of their children, I think this is an important, practical change that would enable MSD to better support the clients they are working with.

Another one that is similarly related, and relates to the ability of those who, in reality, over time will become very reliant on this benefit—just as it was a great move when we increased benefits for the first time in 43 years, this will be incredibly important for those on main benefits. So my second proposed amendment is to provide a number of limited—and I say limited—exemptions. The Minister, I’m hoping, will take this into consideration. It is that a person may apply to the Chief Executive of the Ministry of Social Development for an exemption on the absence on the following conditions: if, for example, they have to care for children who, for a period, might be located overseas—that particularly would relate to those who are over the age of 65—or health conditions that may require time in warmer conditions. It would be a little unusual if, on the one hand, the objective of the Government is to improve the health of New Zealanders, to then insist that they stay in New Zealand if they have a health condition that would be affected. In some cases, there would be people who would be required to travel overseas if they had a family member, for example, that had a serious illness.

These are compassionate grounds, and so I would seek the opportunity to allow those who are receiving the winter energy payment two things: one, to be able to apply to the ministry’s chief executive for exemptions; and the other to be clear that the ministry had provided their information.

Hon Dr NICK SMITH (National—Nelson): Madam Chair Williams, I want to come back to the effect of this part on superannuitants and get some clarity from the Minister in the chair, Stuart Nash, in that he has failed to answer some questions that are crucial for 750,000 older New Zealanders.

The first question—I’d be more than happy for the Minister in the chair just to indicate with a nod of his head: does he accept that the consequence of this bill is that our superannuitants next year will be worse off? The Minister says he doesn’t—that’s OK. I’d just like to take him through it, and if it gets him advice from the officials, I’d be very delighted.

The previous tax changes that we’ve made were going to provide a benefit from 1 April next year based on the wage of $686 per year. So, for that first year, from 1 April 2018-19, if this bill had not gone through, every one of those 750,000 New Zealanders would be better off by $686. When I read this bill, it tells me that in the first year, the winter energy payment comes to an amount of $466. Now, look, you don’t have to be a mathematician to work out that $686 is quite a lot more than $466. So the only conclusion the committee can draw is that this bill is taking money off superannuitants. It’s a bit of a facade to dress it up as a winter energy payment, or what it is, because it’s not linked to anything; it’s just money that our superannuitants get in the bank.

So the real question I’ve got for members of the Government: what have they got against superannuitants that they want to take about five bucks a week off them next year? At a time when our books are so good, when so many New Zealanders are being able to share in the benefits of the strong economy, why does this coalition Government want to make all our superannuitants five bucks a week worse off next year? I’ve not received any explanation from members opposite.

I suspect what’s happened is that Mr Robertson has had difficulty getting these numbers to add up, and so he’s done a sleight of hand and delayed the winter energy payment from what was promised during the election campaign of 1 May, pushed it out by two months, and, as a consequence, robbed superannuitants in New Zealand of a bit over $150 million.

Fletcher Tabuteau: For goodness’ sake, this is a clause by clause, line-by-line analysis of the bill.

Hon Dr NICK SMITH: Well, the member from New Zealand First—he’s popping his head up. Why doesn’t he take a call and explain: why is New Zealand First backing $150 million being taken off superannuitants? Can any member on the Government benches explain to me: where did they tell New Zealanders that they were going to take $150 million off them next year?

Rt Hon David Carter: Professor Tabuteau didn’t know.

Hon Dr NICK SMITH: Well, I suspect Mr Tabuteau didn’t know, but here’s the thing: I’ve always assumed that the Deputy Prime Minister, in Winston Peters, was “Mr Superannuitant”. I’ve heard him so many times wanting to champion their cause, so my question for New Zealand First: why, within six weeks of getting your hands on the baubles of office, are you screwing the superannuitants by 150 million bucks?

Hon Kris Faafoi: You’ll be home for dinner, Nick.

Hon Dr NICK SMITH: Why? Well, the member up at Mana is interjecting. Can he explain why every one of the superannuitants in his electorate will be worse off by five bucks a week as a consequence of the bill and what’s in this part? The Government is silent, and so I simply challenge the Minister in the chair to come clean and to explain to the committee why, next year, they’re going to take $150 million off superannuitants, or five bucks a week.

That’s not what Labour campaigned on, it’s not what New Zealand First campaigned on, and it’s not what the Greens campaigned on, and I’m looking forward to going to the next Grey Power meeting and saying that Helen Clark and Winston Peters broke their word. I’m actually organising a mail-out to all of my superannuitants to tell them how much worse off this Government is, and I’d delight in the clarity from the Minister in the chair as to why—under the tax cuts they would have got $686, and next year they’re getting $466, and they’re being robbed.

Hon STEVEN JOYCE (National): Thank you, Madam Chairperson Williams. I would like to thank my colleague Nick Smith for that contribution, because it is a very, very important contribution that he’s just made. I actually think the good news is there may be a solution, if the Government is prepared to entertain it. They haven’t entertained much so far, but perhaps they’ll be up for this one, given that it will make superannuitants not lose out through this package.

So I’m proud to tell the committee that I’ve lodged an amendment to the bill, which I think will be discussed in a later debate, that will give us the opportunity to shift the start date this year to 1 May so that the superannuitants get exactly what was advertised before the election. I’m always here to help. That way, we’d be able to ensure that those superannuitants get that.

There is, of course, a simpler way. This whole charade, actually, needs to be simplified and in particular in relation to this so-called winter energy payment, which isn’t about winter and isn’t about energy at this point. All it is, in fact, is a payment. So why doesn’t the Government just make it a payment? After all, all they’re doing is compensating people for the loss of missing out on the previous Government’s package. That’s all they’re doing. So why didn’t they—rather than go to this elaborate charade, why didn’t they just say, “We’ll legislate to give superannuitants a one-off increase over the next 12 months.”? And then it could just flow on.

The other thing that the superannuitants miss out on now is that the $680 that they were going to get goes up each year by the average wage. This winter energy payment doesn’t go up each year by the average wage. So it diminishes over time. So a much simpler way would be not to do the winter energy payment at all; just to bow to inevitability and to actually pay the superannuitants the amount they were going to get under the Family Incomes Package of the previous Government—much, much simpler. But, once again, we’re seeing the Government wanting to take the long way round, wanting to do more complicated things, wanting to confuse New Zealanders.

So we have the other part of the ludicrous charade. It’s been declared to be a winter energy payment, therefore we have to maintain that charade and start policing whether people are leaving the country at the wrong time to qualify for the winter energy payment, which is only called a winter energy payment because you have to call it something.

So now we’re going to have—and I appreciate the Minister in the chair, Stuart Nash, saying that he’s got an agreement between Inland Revenue Department officials and Customs Service officials, so the beady eye of Government will be watching which superannuitants leave the country at the wrong time and, more importantly, which ones return at the wrong time. Mr McKelvie, where are you? You’re in trouble, mate, because they’ll be watching you to make sure that Mr McKelvie doesn’t actually miss out or, more importantly, doesn’t take the winter energy payment that he’s not allowed to take.

So they’ll have a list of superannuitants that leave the country in winter, and they’ll have another list of superannuitants coming back—I presume this is what’s happening. I presume they’ll have another list of superannuitants as they return to the country. Is that right, Mr Nash? And then they’ll be checking that the right period of time has elapsed between the departure and the arrival, so that the winter energy payment is not lost. So, as complicated as that is, I think that’s how it’s going to work, so far.

But then the very interesting bit happens after that. What happens next? Does the IRD just simply whip it out of the superannuitant’s account? I mean, do they actually take it out of the superannuitant’s account? That’s a fair question. How does the money get recovered if, for example, the superannuitant is stuck overseas because the flight is delayed? What will be the appeal process by which they can go to IRD or perhaps it is to customs and say, “Look, I’m terribly sorry but Air New Zealand’s plane got a flat tyre”—or whatever it was—“and I wasn’t able to come back into the country.”? What is the process of appeal that we’re going to see, through this?

I think we do need to know this stuff. Actually, this is going to affect 750,000 superannuitants from next year, and they need to know whether “Johnny Clipboard” is going to pop up at their place and interrogate them about how long they went overseas for—whether “Johnny Clipboard” is going to come around and sit them down and say, “I need to see your tickets. Perhaps I should have a look at your suntan, just to verify that you went and you came back.”

This is serious. It is a ridiculous idea, and it’s what happens when you start with a small problem and you try and change it, and it becomes a bigger problem. So now we have a winter energy payment that’s not a winter energy payment.

The CHAIRPERSON (Poto Williams): I call the Hon Jacqui Dean.

Hon JACQUI DEAN (National—Waitaki): Oh, good choice, Madam Chair. Thank you very much. I’d like my contribution to follow on from my colleagues who have raised very real issues around the winter energy payment. I’m glad the Minister in the chair, the Hon Stuart Nash, is still here. I just want to clarify, firstly, something that he said and I am interested in his answer. In his intervention three or four speeches ago, he noted that the payment would—the heat pump would go on in about May, and the energy payment would last for six months. So I would just like the Minister to take a call in due course to confirm whether it is—in his words—six months, or whether or not it is the 22 weeks, as is noted in the bill itself. We need some clarification around that, because I think the Minister, by saying six months, just adds to the confusion that people who are eligible, which is most people because it is an untargeted benefit—most people who are on a super payment or are on a benefit payment to which they’re entitled. So I’d like clarification on that for those people.

I’d like also to question—and, in the spirit of wanting to help the new Government craft a decent piece of legislation, I’d also like to suggest a slight change that, in my humble view, will make this payment more useful to those people to whom it applies, and that is by way of my amendment, which seeks to replace all references to “winter” with “eligible”. The reason I’m suggesting taking “winter” out and inserting “eligible” in its place is to propose that in places like, say, Alexandra, where winter temperatures indeed drop to quite low levels—well, as night follows day and as summer follows winter, in the summer it gets piercingly hot. So the temperature can rise to the mid - 30 degrees Celsius or the high 30s on day after day after day, and I’m sure I’ve got colleagues on my side who represent different parts of New Zealand who will also wish to comment on this amendment that I have introduced and on the benefits and the improvements I hope to make to this payment by way of it.

So let’s think about somebody on national super in Alexandra. It’s a fiercely hot summer afternoon in early February and it will probably continue that way, with high temperatures all the way through till around April and to when winter comes, and then suddenly it’s cold. If you think about a frail elderly person in a small council flat or in a small home, it gets so hot, and just as the cold has a bad impact on older folks’ health, so does the heat. So why, then—and I’d really like an answer here from the Minister, on behalf of his Government—does this winter energy payment relate only to winter? What is it about being cold that is so much more detrimental to health than overheating?

I can assure the Minister in places like Alexandra, in places like Northland, and in places like Gisborne—all around New Zealand—older folk and people on benefits suffer in the heat as much as they do in the cold. I don’t accept that winter power bills are any greater than summer power bills in those parts of New Zealand, because I know for a fact that when the weather does climb above 35 degrees, the heat pumps go on and the fans go on. They are burning day and night and day and night, and the power bills go through the roof.

So that is my suggestion. That is my suggestion to the committee. I know that there are many, many of my colleagues who have read this amendment and will take the opportunity to express their concerns around their part of New Zealand, and I know the committee needs to hear these concerns. I don’t think a winter energy payment is good enough. I think it needs to be taken out and replaced with an energy pay-out that satisfies the needs of those people whom it seeks to assist, and I’d like to see that happen by way of my amendment.

The CHAIRPERSON (Poto Williams): I call the honourable—oh, I’m so sorry. I’ll call the Hon Stuart Nash.

Hon STUART NASH (Minister of Revenue): Thank you very much.

The CHAIRPERSON (Poto Williams): I didn’t hear you there.

Hon STUART NASH: That’s OK; I should’ve shouted louder. There are a couple of points I’d like to make for the honourable member who just stood up, Jacqui—oh, she’s obviously not interested in hearing the answers. But that’s OK; I’ll let the committee know.

Hon Alfred Ngaro: I raise a point of order, Madam Chairperson. It is part of the Standing Orders that we’re not to refer to a member who’s left the Chamber.

The CHAIRPERSON (Poto Williams): That’s entirely correct. I remind the Minister of that.

Hon STUART NASH: My apologies—my apologies. Now, what the honourable member talked about is actually inconsistent with the purpose of this, which is to help people pay their winter power bill. Now, I do accept there are places in summer where it gets incredibly hot, and I do accept that perhaps the heat pump will go on and cool air will come out and this sort of carry on, and that may increase the cost of the power bill. I accept that, apart from the fact that there is nowhere in New Zealand that has an average summer temperature over 35—but that’s beside the point.

But one thing I do know is that, for the average power bill in winter, about 30 to 40 percent of that is around heating hot water. The cost of heating hot water in winter can be substantially greater than it is in summer. So I don’t think you’ll find, in the vast majority of houses, that the power bill in summer, even on a hot day, is as consistently high as it is in the middle of winter. The member is right—I do want to reiterate this—that, as it says in the bill, it starts from 1 May and it goes for 22 weeks.

The Hon Louise Upston made a couple of points, and I would like to just answer those questions. This is about helping people who need help to pay their power bill—helping superannuitants and people on the main benefit and veterans pension to pay their power bill. There are no exceptions. The member mentioned someone who is overseas. Well, if you are overseas, then there is no need for help to pay the power bill.

Hon Nathan Guy: Well, why didn’t you target it, then? Why didn’t you target it?

Hon STUART NASH: Member, we did target it; that’s why we’ve said that you have got to be in the country to accept it. If you’re overseas for 28 days or longer, you don’t actually get it. That is what targeting is.

The other thing is that I think that the members miss the point. The point of the winter energy payment is to help people who live in New Zealand to pay their power bill. If they are overseas, they are not having a power bill. I must say, though, that if it’s a couple and one heads overseas and the other remains at home, they will continue to get the winter energy payment.

And as for Mr Joyce, I just want to remind Mr Joyce that these days there are these amazing things called computers. We don’t actually operate on ledgers. We don’t have people at the Ministry of Social Development sitting there with a paper ledger that records on paper who’s there and who isn’t there. We have systems that actually record when people leave and when they return. You will not see someone who comes along with a clipboard and assesses your tan to make sure that you haven’t been away for longer than 28 days. In fact, if you are away for 29 days or 30 days or 31 days, the intention is that, as soon as you get home, you can turn on your computer, you can go online, and you can re-enrol. It will be a very, very simple process for re-enrolling.

This is very targeted. It targets people in winter, from 1 May, for 22 weeks, to help them pay their power bill. What is more targeted than that?

Hon MAGGIE BARRY (National—North Shore): Thank you, Madam Chair Williams. To the Minister who’s just resumed his seat, Stuart Nash, I would make a couple of points. In response to the Hon Jacqui Dean’s points around the fact that heat in the summer is as debilitating to seniors as cold is in the winter, he countered with the idea that it costs more to heat your water in the winter to have your showers. Might I point out that superannuitants are not fond of being malodorous. Through the summer months, they will also want to keep clean. They will also need to have their water heated, unless you’re suggesting that people over the age of 65 deserve only cold showers—that that is all they deserve?

I think that there are a number of issues that have been raised by this Minister that are a little bit frivolous. To his point around the idea that superannuitants just come back and go online: as the Minister for Seniors for the past three years, I can tell you that many seniors are very resistant to the idea of going online and doing that sort of thing. The Minister needs to propose—and I’d be very interested in his response—what other mechanisms would exist for the expedient and convenient and accessible means of superannuitants communicating with the Government about the way that they choose to travel and the way that they choose to spend this untargeted, poorly named payment.

The idea that it is winter and it is energy has already been dispelled by some of my colleagues, and the “Johnny Clipboard” notion of people coming around to check on superannuitants who might tend to go away to get warm over the winter is also something that he hasn’t countered—to my satisfaction, at least.

I could talk about Ophir, which has recorded the highest temperatures and the lowest temperatures in New Zealand during a single year. These people have very particular difficulties, and I know a lot of older people who live there who would feel that the Minister has—and, in fact, the Government has—been unfair to them with this package.

I’d also like to talk, though, about some of the inequities in this, not just the summer/winter thing but also about the people who do not live in their own homes. I wonder why there is not proposed within this the notion that long-term residential care—people who live in hospitals or rest homes—might be eligible for this. I guess the question is: do people who live in residential care not get cold in winter? Is that what we’re expected to believe here?

Hon Tracey Martin: They don’t pay the power bill.

Hon MAGGIE BARRY: Oh, there’s a chihuahua in the background again. It doesn’t recognise that the noise in the plumbing, that high-pitched squeak, is inaudible in terms of its intelligibility. Mind you, is it an intelligent comment anyway? Hard to tell, but the incessant squeaker will be ignored by me as by all other members, yet it does tend to persist.

Eligibility for this payment, under new section 61FG, is really something that I would like the Minister to respond to. I think people receiving long-term residential care in either a hospital or a rest home—and these are people who are paid under the New Zealand Public Health and Disability Act 2000—ought to be eligible, because they feel just the way we all feel, whether they’re in their own homes—

Hon David Bennett: They’re paying power bills.

Hon MAGGIE BARRY: Yes, indeed. The Hon David Bennett has pointed out that they are paying power bills through the expenses that they pay for their residential amounts. Why should they not get what others are getting? This is unfair. This is dividing up superannuitants into the ones who live in their own homes, who get an advantage, and those who will be disadvantaged because they live in residential facilities.

In case the Minister is unaware—and I’m sure the Minister for Seniors is, because she’s unaware of many things to do with her newly gained portfolio—let me reassure these members who are woefully out of the picture when it comes through.

Rt Hon David Carter: Even the SPCA would put this one down.

Hon MAGGIE BARRY: That’s a shocking comment that my colleague made. Shall I repeat it? No, I’d better not.

I think, in terms of the way that superannuitants like to think, they are not beneficiaries; they are people who get entitlements. They are entitled to get what they get, whether they live in their own homes, residential facilities, or hospitals, because they are all equal in the fact that they’ve paid their taxes. They are people who have given us the values that underpin this great country of ours, and for the Minister for Seniors to demean them, for this Minister to try and insist that, really, they don’t have the same equality, depending on where they live, is, I think, a real equity issue. There is no equality in this.

It’s a “terms and conditions” sort of a winter energy payment, really, isn’t it? That’s what one of our colleagues was talking about this morning. Read the fine print, superannuitants, because it’s very different according to where you live and what this Government, in a very arbitrary fashion, is going to be deeming you to be deserving of. They don’t know very much at all. They need to learn fast. I will talk about an amendment later that also talks about equity.

ANDREW BAYLY (National—Hunua): Madam Chairperson Williams, I am most humbled and grateful that you’ve taken my call. Before I start, I do want to rebut the comment from the Minister in the chair, Stuart Nash, who made the absurd statement that energy prices in the summer can sometimes be higher than in winter.

Well, I actually have some information here. It’s interesting; if you just look—I’ll just take Auckland, because I’m from Auckland, of course. January energy prices that reflect both price and usage: 138c; but if we go through to June: 207c, 231c. There is huge variation between summer and winter.

I think this part of the bill, around the winter energy payment, should be called the “Dodo Bill”—the “Dodo Bill”, because this is about protecting people from extinction. When I say that, I mean the members from New Zealand First. We all know that this thing wrapped up in something called a “winter energy payment” is just to make up the difference in the tax calculations in the package to ensure that New Zealand First members can say to their constituents—the people that did vote for them—“We got something for you in this package.” I will remind the committee that under National they would have got more, if they’d voted for us—much more than this whole fallacy called the “winter energy payment”.

I put forward an amendment, and it is, of course, about the winter energy payment. It is about inserting a change to adopt the quarterly survey of domestic energy prices prepared by the Ministry of Business, Innovation and Employment (MBIE). What that tells you, if you go and look at this—published by one of our renowned Government departments—

Hon Member: The library.

ANDREW BAYLY: No, no, from MBIE—from MBIE, quarterly. That shows that you can calculate the energy price in different regions, and they do vary. I have the price in Pukekohe—right in the heart of my wonderful electorate—just the recent price, and this is retail and it does break it down by lines companies and also the energy costs. Of course, I’m going to quote you the retail price: about 29.6. If we go up to Kerikeri, it was 30, actually. If we go down to Balclutha, it’s 40. So what my amendment says is that if you’re going to have a winter energy payment, why don’t you reflect the actual price? Of course, the Hon Jacqui Dean talked about usage and about temperature variation across regions, so you can actually determine what the real price is for people when they incur it in their homes.

What I just think about this whole winter energy package is that it is part of three new pieces of tax benefit introduced into this Families Package bill, and I don’t know why you need to do it. You know, we’ve got the Best Start—which is a brand new initiative that could have easily been catered for under some of the other elements of the tax bill—we’ve got the introduction of this winter energy package, and we’ve got the reintroduction of the independent earner tax credit.

I just think that by introducing this raft of these new taxes, all we’re doing is building complexity into what is otherwise a relatively simple tax system, and that’s what our changes were about. The current legislated changes were about making the tax system much more simple. So if you don’t, what you do is you end up making hard-working New Zealanders unable to understand the entitlements that they are actually due, and therefore they don’t claim them.

Also, it increases the cost of compliance. Of course, I have heard the Minister of Finance talking endlessly at the Finance and Expenditure Committee meetings about the need to reduce compliance, and, of course, here we are, we’ve got three new ones making it much more difficult and much more complex. Of course, it leads to the likelihood of errors and, of course, increased fraud.

So that’s why I think this winter energy payment is wrong. It’s wrong in principle. It is just a tax that’s been put in there to be a sop for New Zealand First.

Hon NATHAN GUY (National—Ōtaki): Madam Chairperson Williams, thank you very much for giving me the call. It’s been great exercise this afternoon for the last 40 minutes—up and down, wanting to seek a call. This is a very important bill, and what the committee has heard this afternoon from the Opposition is that if we’d had some time in select committee, we certainly could have ironed this bill out. But on the, what is it, seventh week, this Government has chosen to put the House into urgency, which just goes to show—we’re almost on Christmas Eve and they’re already showing signs of arrogance, just in the early stage of their tenure, and I’m really disappointed about that. Certainly, there’s a lot of expertise on this side of the House that we’ve heard, particularly to do with Part 2, around the winter energy payment.

There’s been a lot of discussion this afternoon about trying to define what “winter” actually means. Well, in my view, this isn’t a winter payment to do with energy use, because everyone gets it. It’s not targeted, and we just heard from Andrew Bayly about the different energy charges up and down the country. I have the largest number of over-65s, on a proportionality basis, in my electorate of Ōtaki—number one—so I have the highest number of superannuitants in my patch. I have a huge variance. I’ve got pockets of deprivation in Levin and Foxton and Ōtaki, and then I’ve got high - net worth individuals and couples down in Paraparaumu and in Waikanae, and a huge variance in between. But this winter energy payment is not targeted.

We have an amendment on this side of the House talking about if you really wanted to get specific about the elderly in need and about deprived communities, why wouldn’t you target this to the community services card? I can’t believe it. Then we’ve had a debate about wealthy superannuitants who are going to leave, and, indeed, they could take their 700 bucks and head over to Brisbane in the winter and come back again. You could have wealthy superannuitants that could go to Brisbane, come back within the month period, and go back again. That’s the ludicrous aspect of this bill that hasn’t been thought out. Why has this bill—and, in particular, this part—not gone to a select committee? It could have gone to a truncated select committee for a week or a few days, and we could have helped iron this stuff out. But the arrogance of the Government is already playing out in the first six or seven weeks.

What’s also interesting is how National were proposing to change the tax thresholds, which would ultimately mean that superannuitants would be better off, particularly in the first winter that we’re going into in 2018. Superannuitants, under this bill, under the Labour-led coalition, will be worse off than what they would have been under a National Government. In fact, when you do the numbers—like Nick Smith and Steven Joyce have talked about this afternoon—it’s robbing superannuitants of $150 million.

Now, I bet that Stuart Nash won’t be calling a public meeting of the Napier Grey Power before Christmas or anytime soon. I challenge the Minister to stand up and answer those detailed questions about why this isn’t targeted around the community services card. Why are the Labour-led coalition going to vote down Andrew Bayly’s amendment that is going to refine it down to pricing of different lines companies up and down the country? That’s where you get the real detail.

Have the Greens thought about, or have there been any costings done on, what impact this bill could have on climate change targets? Indeed, you could find that coal—more coal—goes on the fire. That’s going to make it challenging for the Prime Minister and James Shaw to make New Zealand—what is it?—carbon-free by 2050.

I really want to hear from Stuart Nash now about those very detailed questions, because he’s been good. He’s been standing up and answering them.

Rt Hon DAVID CARTER (National): Thank you, Madam Chair Williams. I just want to offer a bouquet to Minister Stuart Nash, who I think has been very helpful in this debate. We’ve asked questions, and on two occasions he’s risen to answer those questions. There are now quite a number more questions being asked. Can I just say to the committee of the whole House that if we get Ministers that engage constructively, then we find that these sessions are of value for everybody listening to them, so I certainly hope he will take a call.

I want to take this opportunity to apologise to the Minister for embarrassing him when I asked him the mean monthly temperature through the winter in August in his own electorate and he had no idea. He suggested it was 15 degrees Celsius. I’m here to inform him that it does reach 15 degrees Celsius, during April, but, of course, the winter energy payment won’t be available then.

I want him to then consider the point I raised and the question that he hasn’t answered, which is very, very important to me: how many superannuitants have they worked out will be ineligible for the winter energy payment and how many superannuitants are they budgeting will voluntarily opt out? I want those figures expressed to the committee, because I don’t think there will be many that will opt out. At the moment, superannuitants could opt out of receiving superannuation, and I’m sure the number involved in opting out to receive superannuation is very, very small indeed, if any, because most superannuitants I know don’t see it as a benefit, despite the Minister and the Government describing it as a benefit. They actually see it as an entitlement after having worked for 40-plus years and paying due taxes through that time.

So I certainly hope the Minister will take the opportunity of talking to his officials and finding out those figures, which are important. How many superannuitants are eligible to receive the winter energy payment, and how many have they budgeted will voluntarily opt out using new section 61FH, which the Minister referred me to earlier.

The second thing I want to tease out—and I hope the Minister will help us with this—is the information-sharing agreement, which I understood he said was between the Customs Service and the Ministry of Social Development (MSD), but other speakers have referred to it being an information-sharing system between customs and IRD, and maybe it’s all three, but I think that needs to be clarified.

Then I want the Minister to prove to me that that system of information sharing is effective, because I suspect that last year there were many superannuitants who left New Zealand for more than 28 days and were unsure of their obligations and returned none the wiser that they should have actually reported to MSD that they were away for greater than 28 days. But if the system’s working as well as the Minister assures the committee that it is, then he’s going to be able to tell me exactly how many superannuitants they caught in the last year—in fact, he can do his homework, let’s have it for the last three years—exactly the number of people they caught who left New Zealand, stayed overseas for a winter holiday greater than 28 days, and were caught within the system and had their superannuation correspondingly adjusted.

If the Minister can’t assure us that that occurs with superannuation, then he is foolish to believe for one minute that they’re going to use the same system to then catch superannuitants who then leave New Zealand during the winter for a well-deserved break in Denarau Island in Fiji, enjoying themselves in the sun and dodging that winter of Christchurch, which I know only too well. If they’re not catching them now, they won’t catch those people who are then, according to the legislation, not entitled to the winter energy payment.

Then the final question I have for the Minister is: if we take the situation of a superannuitant scientist, still gainfully employed, say by someone like the National Institute of Water and Atmospheric Research, who goes to Antarctica, to Scott Base, throughout the winter—in other words, will be away to winter over for well over 28 days—will that person be eligible for the winter energy payment? It’s a simple question. They are out of New Zealand for a long period of time. They’re going all the way down to Antarctica—

Hon David Bennett: Representing the country.

Rt Hon DAVID CARTER: —working for the country—will that person be eligible for the winter energy payment, because, by hell, that person’s going to need it.

Hon STUART NASH (Minister of Revenue): Thank you very much. The Rt Hon member David Carter asks some very pertinent questions, and I hope I answer all of them.

First of all, the information-sharing agreement is with the Ministry of Social Development (MSD). What happens currently is it will be automatically triggered. So if a superannuitant is heading overseas, they won’t have to automatically notify MSD—it would be good if they did, but they don’t have to. It will be picked up. But this isn’t a new system. So if a superannuitant heads overseas at the moment and they’re receiving any other form of supplementary benefit, then that also cuts off after a 28-day absence. So this isn’t new. This is already in place. Also we do know that if a superannuitant is overseas for 30 weeks or more, they actually lose their entitlement to the pension. We are not creating a precedent here about being away for a certain amount of time.

The second thing is, if they head to Scott Base for 28 days—the purpose of this bill, just to clarify once again, is to help people pay their own power bills. If they head down to Scott Base, then they won’t be paying their own power bill, so they won’t need to pay their power bill. Therefore, they won’t be eligible for that winter warm-up payment. Now, I think that’s all the questions that the right honourable member asked.

There are a couple of others. Andrew Bayly actually nailed it. He actually nailed it when he produced the data that showed that over winter power bills are almost double than they are over summer, and that is the exact point we are making. In winter, power bills are significantly more than over summer, and Mr Bayly has the information. Thank you very much, Mr Bayly. It’s exactly what I wanted to see. So we do know that power bills are higher in winter. That is why we have said, “From 1 May for 22 weeks, we recognise this and we’re gonna help you out.” The other thing I must say is that this is actually not a tax. We’re not going to take money from you. It is actually a benefit. We’re going to give money to you. So when Mr Bayly characterises this as a tax, he’s actually got it wrong. What we are going to do is we’re going to give you $450 if you’re a single person paying your power bill. We’re going to give you $700 if you’re a single person with one or more dependants, or are in a relationship. We’re not going to tax you; we’re going to give it back to you. It’s fantastic, isn’t it. We’re going to help you pay your power bill.

The Hon Maggie Barry brought up a couple of points that I’d like to answer as well. The honourable member said that it differentiates where you live in the country. It actually doesn’t. This is the thing. It is really, really simple. It doesn’t matter if you live in Cape Reinga or Bluff. It is very simple. You will get the same amount of money. The other thing is, the honourable member mentioned what other channels a superannuitant would have to enrol in if they come back from overseas. I mentioned that they can go online, and the honourable member is right. We acknowledge that there are superannuitants who may have travelled overseas who don’t like to do things online or to use the internet. So there are multiple channels. You can actually go into an MSD office. We are going to make this easy. The other thing that we’re going to do is—and I think it exists already—we are providing a whole lot of information. Certainly when the bill passes, we’re providing a whole lot of information to let people know their obligations.

The Hon Nathan Guy mentioned a couple of points that I would like to talk about. The Hon Nathan Guy mentioned that there is a loophole in this bill. Nathan Guy said that you could fly over to the Gold Coast and then after 27 days you could fly back, collect your payment, and then fly back again. And you could do that after another 27 days. Technically, I suppose you could—I suppose you could. But I suspect that people aren’t going to be paying $700 in airfares to come back for a week and then go back to collect $31—they might, but I very much doubt that that is what they are going to do.

I just want to reiterate the point that we have made over and over again—and that Mr Bayly so eloquently made—that we understand that power bills are more in winter than they are in summer.

Hon Amy Adams: Oh, wow!

Hon STUART NASH: We understand that—and I know, the Hon Amy Adams, it is not a revelation, is it. It’s not a revelation. But what we also know is that in the middle of winter, people struggle to pay their power bills. This is to at least help them pay their power bills over winter.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chairperson Williams. I want to just look at some other aspects in this particular bill. I think, for those who have been watching the debate from home or listening on the radio, I just want to go back to the objectives of the legislation around providing targeted social assistance to improve incomes for low- and middle-income families, reducing child poverty, and ensuring that children get the best start in life.

I’ve got a couple more amendments that I would like to discuss in this part of the debate. I may not get through the details of both of them, but I will give it my best shot. I would really like the Minister in the chair, Stuart Nash, to be able to answer some of the questions that I have got, because I think they’re really important in terms of just how the Government is going to actually deliver on the objectives of the legislation. So I know the debate has focused quite a lot in this recent time around the winter energy payment. I want to go broader than that, because a significant amount of this legislation is about supporting people on benefit. It’s about supporting children from low-income families and about lifting the opportunities for them.

The first amendment that I would like to talk about is a proposed change to the Social Security Act 1964, both in terms of the principles and also in terms of the interpretation. One of the things that was clear in our time in office was that one of the significant contributing factors to children living in poverty and hardship was coming from a benefit-dependent home. So I am proposing to assist the Government in that the interpretation should include a definition of the risk of long-term welfare dependency in relation to a person, meaning the risk that the person will for an indefinite period not be able to obtain full-time employment, and, secondly, will be likely to remain wholly or largely dependent for the person’s financial support on all or part of the main benefit under the Act.

I’m very specific about this, Madam Chair, and I want to applaud the Government. A big part of this package is supporting children in benefit-dependent homes. So I do think that it’s really important, in terms of adding this interpretation, so that the Government has a focus on the children of long-term beneficiaries. And the second part of it is amending the principles to include the ability to assist them in getting better outcomes than currently, the best possible outcome for people at risk of long-term welfare dependency—that there is the ability for the Ministry of Social Development (MSD) to identify appropriate assistance, support, and services, under this Act for those people. So that speaks to the very heart of social investment.

I know that the Prime Minister in particular has come out and talked about the fact that child poverty is her number one priority. Well, I offer the Prime Minister the nine years of experience of the previous Government in social investment and the work that has gone into understanding real people with real needs and how to provide assistance. And I would really encourage the Minister in the chair, the Hon Stuart Nash, or, for other members on the other side, and in particular the Minister for Children, I’m sure will have an interest in this—that is being able to provide greater ability to support those on benefit, using social investment. Yes, specifically this talks about a winter energy payment, but for those on benefit, actually, MSD may identify additional ways to serve that family and to serve those children.

I would really hope that the members opposite take up this opportunity, if they are seriously committed to reducing the amount of children living in poverty in New Zealand, to address this particular issue with this amendment that I have put, in my name, in this committee stage. It is important that it is debated. It is at the heart of what this Government says is a priority, and, in fact, the Prime Minister on every occasion talks about it being her priority. I say: this is the access. Social investment is the access to changing the lives of the very—[Bell rung] Madam Chair?

The CHAIRPERSON (Poto Williams): I call the Hon Amy Adams.

Hon Amy Adams: Thank you, Madam Chair.

The CHAIRPERSON (Poto Williams): I apologise to the member. I will call the Hon Louise Upston again.

Hon LOUISE UPSTON: Thank you, Madam Chair. One of the things that’s become a little concerning in the legislation and, in particular, in the regulatory impact statement is that the number of children that will be lifted out of poverty under this package isn’t the 88,000 that has been talked about in the media but only an additional 12,000. So, as I said, I’m hoping that members on the other side will give the committee the opportunity to have the factual information. Is it 88,000? Is it 12,000? Is it the 49,000 that would already benefit from the previous Government’s legislated Budget package?

So I do then want to talk to another amendment that I have tabled in the committee that would add new subsections into the Families Package (Income Tax and Benefits) Bill. The first one is: to reduce child poverty and ensure children get the best start in life, the Government will set measurable targets to improve outcomes for low- and middle-income families with children. Again, this piece of legislation, at the very heart of it, is about improving the lives of young New Zealanders. I’m sure that New Zealanders up and down this country will want to know how the Government is measuring its progress—how the Government is tracking—and, as I said, I’ll put to one side for a moment the complete confusion around the numbers, about whether it’s 12,000 additional, whether it’s our 49,000, or whether it is 88,000 some time out in the future. But I want to focus on the fact that this incredibly important objective, set by the current Government, should actually come with some targets, it should come with some measures, and it should come with the ability of New Zealanders to actually see whether these measures and whether this piece of legislation is working.

So the second subsection that I would propose to the committee for its inclusion in this legislation is: “To reduce child poverty the Government must set a target and measure progress on reducing the number of children living in households earning less than 50 percent of the median wage by 88,000, by July 2021.” That is about the Prime Minister and the Labour-led Government basically walking the talk and saying, “Here is how we will prove to New Zealand, here is how we will openly and transparently show that we are making progress towards this critically important area for New Zealand.”, for the very children that supposedly are at the heart of this Prime Minister’s view. We can add this today. I think this would put us off to a really strong start in being able to, with the Christmas present that the Labour-led Government is giving New Zealanders—I want them to add that they will set a target and they will measure progress on reducing the number of children living in households earning less than 50 percent. And I encourage the Minister in the chair to answer a question in terms of why that’s not already in the legislation, because it is absolutely critical. It’s important in terms of backing up the Government’s words around openness and transparency, and with their number one priority.

Also I’d like the Minister in the chair, or members opposite, to address the issues that I’ve raised around social investment and the progress that we’ve seen with 61,000 fewer children living in benefit-dependent homes in the nine years we were in office. I’d like to see that side of the Chamber—you know, one member would be fine, three would be great. Whether it’s the Minister for Children or the Minister in the chair addressing these very important issues that are about absolutely supporting those on benefits, supporting those and targeting—the words in the bill are around targeting social assistance, and the risk framework enables the Government to do that, and to improve incomes for low- and middle-income families with children, but critically, if nothing else, to reduce child poverty.

When the National-led Government was in office we made progress on this. It’s incredibly difficult, I accept that, but I think—[Time expired]

Hon AMY ADAMS (National—Selwyn): Thank you, Madam Chairperson Williams. This is the first opportunity I’ve had to take a call in Part 2 of this very important piece of legislation that we’re debating today—important, because it is important that New Zealanders understand exactly the impact of this on them. We’ve had a number of opportunities to discuss the tax changes in Part 1. The parts that I want to reflect on in this contribution—well, the first of the contributions I will have on this part—are firstly relating to the winter energy payment. Then I also want to touch on the accommodation supplement, because it is an issue that is a critically important and substantial part of this package. It’s a part of this package actually that the National-led Government, when we were in office, announced and funded during the 2017 Budget. And I want to acknowledge the Hon Steven Joyce, because in fact it was his Budget that put in place the substantial increases to the accommodation supplement.

It’s not just the increase in rates in the accommodation supplement; it is the re-drafting of the areas of the accommodation supplement, which will see hundreds and hundreds of thousands of New Zealanders getting real tangible assistance with their housing costs. I can see why the new Government wants to include it as part of their package, as if it was theirs, but it is important to put on record and to make sure that this committee and the public understand that those accommodation supplement changes are the work of the National Government and were funded under the National Government’s Budget, and, interestingly enough, were opposed by the then Labour Opposition.

I remember listening to the Budget speeches, and those very accommodation supplement changes that are now in Part 2 of this legislation were roundly criticised, abused, and opposed by the Labour Opposition. None the less, they’re now in Government and, of course, their words in Opposition don’t mean a lot, and now we are pleased that they are adopting our changes because they are important changes.

The one question I have for the Minister in the chair, which I think he should address for the record, relates to Subpart 3, and particularly clause 72—that is, the deeming of the operational date for these changes is 26 June 2017. Now, it’s quite unusual, of course, for legislation to act retrospectively, and to pick a date in the past at which these changes will apply. I think it is important as a matter of record that the Minister in the chair, Stuart Nash, explain the rationale behind clause 72, where the appropriate date for the changing in the areas is somewhat randomly 26 June 2017. So I do look forward to the Minister explaining that change.

I want to come back to the winter energy payment, and I want to speak particularly in support of the Supplementary Order Paper in the name of my colleague the Hon Louise Upston, which is on the Table. It relates to what I think is a very, very unfair exclusion from the winter heating payment for some superannuitants. Now, we need to remember that this winter heating payment is what superannuitants get instead of their core indexed weekly super payments going up. So it’s critical. Every single superannuitant would have got that core indexed, repeatable increase in their super, but a big chunk of those superannuitants will miss out on anything, because the way this legislation is drafted says that if a superannuitant is in long-term rest home care, in part funded by the Government, they miss out.

The point I want to make, and the reason I think the Hon Louise Upston’s Supplementary Order Paper should be supported, is that any fees a superannuitant is contributing towards long-term rest home care includes the cost of their energy. You don’t get rest home fees that don’t include energy. And there are a lot of superannuitants. You know, of the 750,000 superannuitants, a large number certainly spend part of their time in long-term rest home care. They won’t get the substantial increase in their super payment, which the National Government had legislated for them to have. They won’t get the indexed, increasing payment that they would have had, and now they won’t get this winter energy payment even though they still have to pay and contribute towards their energy costs. I think that’s outrageous. It’s unfair, and we haven’t heard an explanation for it.

In this call, I want to just respond to the Minister about when he answered David Carter’s question. David Carter had asked what would happen if a scientist went to Scott Base. The Minister responded that of course that scientist would miss out, because he’s left New Zealand. Of course, Scott Base is in New Zealand. He won’t miss out, the Minister might like to know.

Hon ALFRED NGARO (National): Thank you, Mr Chair. I rise to take a call on this amendment, which is a good one by the Hon Alfred Ngaro, to clause 61FE—only because none of my colleagues have chosen to support the amendment, but it’s a great amendment.

I want to acknowledge the Minister, who is here and was taking questions. I felt that he had actually responded to a number of those questions. In fact, if I could move a motion that he’d become the new Minister of Finance I would, but I can’t. He was very forthright in giving information to us. But in response to some of his comments in regard to the amendment I put forward—what I’ve put in the amendment was to give flexibility. But, more importantly, if you want to be practical and want to be smart, then what you want to do is not just put resources and funding and payment to the power bill. You want to reduce the power bill, and if you want to do that, the best way to do that is to reduce the cost that’s incurred.

Now, the Minister actually talked about hot-water cylinders. I’ve got some experience of that, having installed a number of them. The average hot-water cylinder is 180 litres and, inside of that, the cost to the average household—in the average running costs and the energy costs—is approximately around about 40 percent of the cost. There is also the heating source, which adds another 40 percent, so 80 percent of the energy costs in any one household is both the heating source and the hot-water cylinder as well—hence the reason why I think that my amendments that I’ve included here are very pragmatic and practical.

Let’s just go round to some of those costs and what they could look like. The average cost, in regard to the winter period and over that month—the average cost in the heating cost and the energy cost—is around about $200 a week. That’s roughly around about the average. Now, if we look at what the savings could be if you’ve got a hot-water cylinder that’s approved—say, like a Rheem 180 litre hot-water cylinder, and it’s energy-saving—we’re talking about a saving over one year of $720. Think about the cost of that. If you receive the benefit of the amendment, which means you get a bulk amount of payment, you can actually have savings that will go on not just for that year but throughout the years following as well—those out-years—hence the reasons why I think that what I’m proposing here is very pragmatic and is very practical as well. So what I want to do is add something extra to that. It’s pragmatic and it’s practical as well, in that regard.

One of the other things we also have been talking about with this is around insulation. As you’ll know, there’s been plenty of conversation around it in the Healthy Homes Guarantee Bill (No 2), and I want to reiterate the importance of ensuring that homes and houses are insulated. The savings that we’re talking about are at least 35 to 40 percent for a home that is well insulated. In the House previously, in the Healthy Homes Guarantee Bill, there was a huge amount of debate—it was about the importance of that. When we think about the technical aspect of insulation, they call it the R rating—in other words, that’s the thermal rating of insulation. The 1978 regulations that were there were at 1.9—that’s what the rating was then. In 2008, it’s 2.9. But again, I reiterate; here’s where the saving is: 35 percent heating savings will be had by a home that’s been insulated, and I think that’s incredibly important.

But the reason why I started off by acknowledging the Minister, the Hon Stuart Nash, is the fact that in one of his responses he actually said that the new Budget that’d be coming up would be talking about the healthy homes package, and in that package they would be talking potentially about a package of support that would go towards insulation. So I look forward to hearing more of that, and it’s great to hear the Minister sort of giving us a little bit of a sneak preview—just a little sneak preview—of what that Budget may look like.

However, here’s the point of difference, where I think that this amendment will be more pragmatic: if you think about when this will come into force, and we think about when Budget 2018 will come into force, we’re talking about a space of at least a year. Now, if you’re saying you want to make a difference in your 100 days as a Government, then I think that what I’m proposing is pragmatic. It means that over a long period of time we’re going to reduce the costs in regard to energy savings that could be had.

When we’ve looked through that and looked at what those who are currently the energy savers and energy-smart practitioners—if you have good insulation, if you have a hot-water cylinder that’s been able to ensure greater efficiency, if you’ve got a heating source, then you are looking at a 75 percent saving in your heating costs. Why would you not see this as pragmatic? Why would you not see this as practical? I think what I’m offering is new evidence to further prove the point that this amendment is a good amendment. I encourage the Government to take it on board.

Hon STEVEN JOYCE (National): Thank you, Mr Chair. I’d like to acknowledge my colleague Alfred Ngaro’s contribution, because on this side of the Chamber we’re doing our best to make this, I have to say, interesting winter energy payment that’s currently not for energy and not for winter into something a bit more useful to people; that includes trying to fill the gap that has appeared in next year’s numbers compared to what superannuitants would have got under the previous Government.

I am informed that we’ll be debating amendments to the schedules with this part, so I want to note a Supplementary Order Paper that I would like the Minister to consider. We’ve noted that the winter energy payment doesn’t start till 1 July next year. Obviously, things are a bit tight down at Treasury, because actually that means that superannuitants will miss out on what they would have got next year from the previous Government to the order of a couple of hundred dollars. We’re going to talk about that a lot, obviously, in weeks to come, unless it gets repaired today or even over this weekend. I offer helpfully to the Minister an amendment that fixes this up for him.

This particular amendment, which we’ll get the opportunity to vote on in due course, is to bring forward the start next year to 1 May 2018. I think that would be in the spirit of glasnost that has descended upon the Chamber this afternoon, and in the spirit of Christmas. I mean, I might be calling Grant the “Grant that stole Christmas” but this would actually rehabilitate some of his reputation in my eyes, and in others’, I am sure, including superannuitants; which still leaves out everybody who loses their tax, but there’s a group of superannuitants who would feel better about it. So I think it’s worthy of consideration; I’d appreciate the Minister’s view on that. I’d also appreciate knowing why it isn’t 1 July, because if it’s not a fiscal constraint, then why doesn’t it just go the same time as it is going to go in subsequent years?

Or there is another alternative, and I’ve been thinking about this a lot, and, again, in the spirit of helpfulness to the Government, we know that this winter energy payment is one of those bit of a dog of an idea that somebody thought up in a hurry and it’s got progressively more difficult as you look into it.

Hon Amy Adams: And more expensive.

Hon STEVEN JOYCE: And more expensive, and we’ve now got the ridiculous situation where we’re going to have the Customs Service and IRD checking whether superannuitants are in the country or not, matching them on a database, and sending them—I don’t know—“Johnny Clipboard”, we talked about before, to go and check whether there were any redeeming features that allowed them to hang on to their winter energy payment.

I think there is a much more simple way; there’s a much more simple way to actually try to panel-beat this winter energy payment into shape, and I congratulate my colleagues on the work they’ve done to try and panel-beat it into shape, and those, of course, remain very valid options that are on the table. But I would also like to offer the Minister another option, which I would say is even simpler, and that is to quietly lose the winter energy payment and, instead, actually increase superannuation on 1 April next year by the amount that they were going to give in the winter energy payment. That would solve all the hassles with it, in terms of superannuitants. And I actually think that would be a very straightforward, clean, and tidy way to approach it. In other words, do what was intended all along and give the superannuitants the increase that they were expecting, and then they can decide how to spend it. Because, I mean, that would be cool. They could spend it on their winter vegetables, which, as we know, get more expensive in winter, or on other things that they might want to spend it on, even though we know they don’t have to spend it on winter energy. It’s just the name of the thing; it’s not what you actually have to do with it.

So I recommend this to the Government. The idea is free, gratis, and for nothing, and what it will provide is a much simpler solution that actually delivers for superannuitants. The other very important thing is that it fixes up the problem that the winter energy payment is not indexed and it actually decreases in value every year, whereas the original superannuation increase continues to increase. If you put it in the superannuation, it gets increased and indexed every year, and the superannuitants would be made whole by this. That’s my recommendation.

KIERAN McANULTY (Junior Whip—Labour): I move, That the question be now put.

Hon TIM MACINDOE (National—Hamilton West): If you may recall, in a previous call I urged members opposite to engage in this debate. I want to repeat that because while it is unusual when the House sits under urgency for the Opposition to dominate, particularly in the committee stage, it is very unusual, and I would suggest utterly unacceptable, for members opposite to remain utterly mute, as they have done now for 2¼ hours since debate on Part 2 began, and as they did all this morning. The really extraordinary thing is that they felt it was so important for most of the last five weeks to take long calls and filibuster on important measures like the subordinate legislation bill, the Financial Services Legislation Amendment Bill, and the Electronic Interactions Reform Bill. We had all of those measures and yet, when we come to Part 2 of this most important bill, in the view of the Government, they sit there absolutely mute. Members of the public are asking why that should be so.

Let’s now focus on the winter energy payment. That is a significant feature of Part 2 of this bill. While the winter energy payment may be well-intentioned and appreciated by many New Zealand superannuitants or people who are in receipt of a veterans pension—and I acknowledge that—nevertheless, the problem is that it will be so difficult to administer in a way that guarantees that the money will be spent for the purpose that the Government intends. If anyone doubts that, let me give you a bit of an analogy, because in my view it’s a bit like an employer telling a staff member that he or she may have an extra $5 a week in their pay packet, as long as they guarantee to go and spend that money on fresh fruit and vegetables.

Well, that sounds good in principle too. We all need the healthy vitamins and other things that come from fresh fruit and vegetables. But if the employee is heavily in debt or struggling to pay a mortgage, or facing crippling medical expenses, or any of those many other problems that beset many people, particularly those on lower incomes, it is highly unlikely that the employer’s condition will be honoured. In fact, frankly, you’d have to say there’s virtually no chance of that at all. So it is with the winter energy payment, and I’m asking the Minister of Finance, who’s grimacing at the moment, to explain why—

Hon Grant Robertson: For obvious reasons.

Hon TIM MACINDOE: Well, I’m asking the Minister to explain why that analogy isn’t correct, because it’s very hard to understand how you could possibly put on a condition like that and then enforce it.

So that I’m not just asking a question or criticising the measure—I want to stress that the Opposition are doing our level best today to put forward constructive suggestions that will improve this bill, and I’ve been very proud of the effort, the energy, and the thoughtful engagement that’s been going on on this side—I am today proposing a much more realistic and workable amendment to the bill. It will make a tangible difference to the many New Zealanders who clearly do struggle to keep themselves warm during the winter months. We all know many people in that category.

My amendment provides for those who are eligible for the winter energy payment to receive their entitlement in a lump sum to enable them to purchase a heat pump, or possibly more than one, depending on their needs and circumstances and obviously the type of heat pump they go for, or perhaps a season’s supply of firewood if they reside in a house or flat or some other dwelling where that is available to them and that is their preferred option, so that they may ensure that their heating needs are met from the outset of those colder winter months.

My amendment is a simple, practical, workable solution and one that would make a real difference to many older New Zealanders, who, in many cases, currently rely on costly, inefficient, and older heating appliances. A well-chosen heat pump will be cheaper to operate, safer if younger grandchildren happen to be visiting the grandparents in their home at that time, and much more environmentally friendly. So for a whole host of reasons—

Simeon Brown: Keeps them cool as well.

Hon TIM MACINDOE: Indeed they do, Mr Brown. Thank you for that suggestion. For a whole host of reasons, what I am proposing here is practical, workable, good for the environment, good for the safety of the children, and particularly good for the budget. As I say, there’s a host of reasons to encourage more and more New Zealanders to switch from their antiquated heating appliances.

Hon GRANT ROBERTSON (Minister of Finance): Thank you very much, Mr Chair. I’ve been listening very closely over the last, as Mr Macindoe helpfully informed the committee, 2¼ hours to the repetitive statements from the National Party members, failing completely to actually do what they say they’re going to do. But I thought I would respond to the questions that I have been asked here.

To reiterate—and this is in specific reference here to Steven Joyce’s amendment around removing the winter energy payment and increasing superannuation rates instead—that fails a pretty fundamental test of this piece of legislation. But perhaps it is not unsurprising that Mr Joyce has forgotten that the winter energy payment is also for people in receipt of a main benefit. It isn’t surprising to me that Mr Joyce may not actually care about those people, but that would fundamentally fail the purpose of the bill if that was to be undertaken, and so it won’t actually happen.

I’d also note that increasing superannuation rates directly is not what the National Government was going to be doing in its previous package; they were consequential increases as a result of the tax cuts that they put in place. So neither of those things is going to happen.

We also had a question put forward by Amy Adams around the accommodation supplement issues and the date of 26 June 2017. This is to confirm the Government Statistician boundaries used for the accommodation supplement. This is exactly as per the previous Government’s changes, and this was to avoid the need for an update on 1 January 2018, which, actually, would potentially have disadvantaged accommodation supplement recipients. So that answers Amy Adams’ question.

In terms of the amendment by Tim Macindoe to allow a lump-sum payment, it is very unclear how this would operate. We have had some criticism of the idea that people might be offshore—on the Gold Coast or somewhere—sunning themselves and still getting this payment. This would make that problem much worse. This would actually create that problem, because you would be giving them money and then not be able to find out when it would be. I’m also advised that there’d be huge administration costs created by this, given the large number of recipients. So we want to get this work done but do it in the most efficient way possible.

Going back some distance to a question that was asked earlier on, around the number of people who are eligible for New Zealand Superannuation but do not take it up, I can confirm the advice that that is 6 percent.

So, thus far in this debate on this reasonably narrow Part 2, on this winter energy payment, we’ve answered the questions that have been asked. I think we all understand, on this side of the Chamber, by the repeated commentary from those in the Opposition, that they would rather we didn’t do this—I think we understand that—and that they would rather we simply went back to the previous Government’s package. Amendments around that kind of approach, I want to flag, are unlikely to get the support of the Government.

SIMEON BROWN (National—Pakuranga): Mr Chairman, thank you for giving me the opportunity to speak to Part 2 of the Families Package (Income Tax and Benefits) Bill. This bill seems a bit like going into Briscoes: whenever you go into Briscoes, you get a special. I have been into Briscoes once and not had a special, but generally when you go into Briscoes, there’s something on special. Here you have a special winter and you have a non-special winter. So next year is a special winter, which is only three months long, and the following winter will be just a normal winter. But the first one’s a special one, where superannuitants are going to get paid only three months of the winter energy payment. That raises a question: why not from 1 May? I’d like to endorse the amendment in the name of the Hon Steven Joyce, which means that next year won’t be a special winter but will be a non-special winter, which will be a 22-week period starting on 1 May.

This is about ensuring that there is some certainty and some fairness for those who would have had, under National’s tax cuts, which were coming into place next year, $700 for a couple or $450 for a single person, which has been removed. And now, because of budgetary constraints, it seems to be that we are going to have to put in place a winter special period of energy payment to compensate for that.

I’d like a member from the New Zealand First Party to please explain. Please explain why you have agreed to this when you went out and campaigned—[Interruption] You voted—[Interruption] Again, I apologise. The New Zealand First Party voted, in this year’s Budget, for a tax cut that would have ensured that superannuitants would receive $700 a week due to the—[Interruption] They are now getting a cut. So why have they changed their minds? Why have they changed their minds?

I’d also like to speak in support of the Hon Tim Macindoe’s proposed amendment, which actually puts some certainty around where this money is going to go and targets it. It’s one thing just to say we’re going to have winter energy payment where the money’s just going to be given to people; it’s another thing to actually give money to help them with their heating—and help them in a way that is going to be efficient, effective, and actually make sure they are going to be warm. I’d like to endorse that, because we could, instead of paying superannuation, just have a winter food payment, a winter energy payment, a winter petrol payment, a winter water payment, a winter housing payment, a winter medication payment, a winter clothing payment, a winter travel payment, a winter rates payment, and we could then have a summer food payment, a summer energy payment, a summer petrol payment, and we could divide up all the money that is divided, but on this of the House—

Hon Alfred Ngaro: An autumn payment.

SIMEON BROWN: A water payment, that’s right.

Hon Alfred Ngaro: Autumn payment.

SIMEON BROWN: Autumn payment—that’s right. We need a spring payment as well. But I’m not sure which ones would be more and which ones would be less, but you’d need to have an army of bureaucrats to be able to determine all of those questions.

On this side of the House, we actually think that people are able to decide how they should spend their money and make those choices for themselves. On the other side, they think that they can know best and that they need to then come up with bureaucratic ways around how to make this sound palatable to the public.

Just one other point, when I was thinking about—I think there was a conversation earlier—what would happen if someone went down to Antarctica for four weeks, well, what if someone went for a four-week cruise and the starting point was Auckland and the finishing point was Wellington, or cruising around the country.

Hon Ruth Dyson: They start from Bluff.

SIMEON BROWN: Well, they might start from Bluff, they might start from Cape Reinga, but what I am saying, Mr Chairman, is that there are a number of flaws, a number of holes in this entire bill, and I think it’s part of the narrative that this Government is showing: that there are holes in this Government too.

KIERAN McANULTY (Junior Whip—Labour): I move, That the question be now put.

Hon AMY ADAMS (National—Selwyn): Thank you, Mr Chairman. Mine won’t be a long call in Part 2, at this stage. There’s just a question I do want to put to the Minister, and I’ll simply put the question and leave it for him to answer. It is one—I’ve been listening to this debate all afternoon—that I really don’t think we’ve got clear, and that’s just understanding how the winter energy is paid.

The reason I ask the question is that we know that when a superannuitant or a beneficiary is out of the country for more than four weeks at a time, then they are not eligible for the period they’re out of the country. We’ve raised many concerns about that—the application and the equity and the like. But the question I wanted to put to the Minister is simply this. If the payment is not payable if they’re out of the country it implies to me that the payment is made retrospectively, once we know whether or not they’ve been in the country and for how long. The alternative, I imagine, is that the payment is made proactively and then there is a claw-back system, should they be out of the country—when they haven’t been here.

The simple question I want to have cleared up by the Minister is: will the payment be made proactively on a weekly basis, on an auto-enrolment basis, with some sort of checking and claw-back? If that’s the case, is it intended that there will be a penalty system in place for the use of money interest, or is it the case that the payment is made at the end of the winter and at the end of the eligible period, once the system can check how long someone’s been out of the country, in which case it’s not available for them to pay their energy bill? So it’s a very straight question. I haven’t been able to get that answered through this debate, and, as I promised, it will be a short call, simply to put that question to the Minister.

ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chairperson Rurawhe. I’ve been yo-yoing up and down for some time. I had a Big Mac for lunch and I’m beginning to regret that. I’d like to start by thanking the previous Minister in the chair, Mr Nash, who was very helpful with some of his answers. In fact, part of one of his answers answered something I was going to ask, but it didn’t quite go far enough so I’ve got some very specific questions. The reason I have these questions is I have worked in an electorate office for a number of years and one of the things we find is that a lot of the elderly people that come in are coming in because they don’t understand their entitlements, and they often get their benefit cut when they’ve been overseas for a certain amount of time and they didn’t understand. So I need to get this clear in my mind to make sure that we haven’t missed anything in here that perhaps needs to be tidied up.

One of the questions I’ve got is that I understand that if you are a single person receiving this winter energy payment, you get $450; if you’re a couple you get $700. My question is: the eligibility for this is that if you are a couple, only one of you receives that payment, but if that person then goes overseas, can they transfer it to their partner? Do they need to transfer it to their partner? If they go overseas—what I understand from Mr Nash is that if they’re overseas for a long period of time, their entitlement will be cut, but if they’ve left their partner at home and he’s not the person under whose name that entitlement is, will the entitlement be then cut, because he will still obviously have a power bill?

My second question is: if one of those people—for example, a grandmother—goes overseas to visit her grandchildren for a couple of months in the UK and she leaves behind her husband who doesn’t like travelling, for example, would the couple rate that they would have been paid of $700 now be reduced to the $450 rate? Because, obviously, there’s one person living in a house for that amount of time and they won’t be using as much power. It would make sense that it would be cut down, but I’d just like to get that clarified by the Minister.

My next question is around if that person doesn’t go overseas but they go into hospital. Now, we’ve already heard that that person wouldn’t be eligible if they’re in hospital, but, again, what if they leave behind a partner who’s living in the house? Do they receive the same entitlement as a couple or does that get reduced?

One of the things that I am very concerned about, however—as I say, a lot of the older people that come into my office are upset because their entitlement had been cut off and they didn’t realise they had to let the Ministry of Social Development know they were going overseas—is that if the person that leaves the country has the entitlement tagged to them, will their benefit or their entitlement be stopped, even though they’ve left someone behind? Those are the questions that I have for the Minister.

The second part of my call I want to dedicate to supporting the amendment raised by Tim Macindoe. We did have some answers from the Minister around whether or not this could be paid as a lump sum, but I don’t think it went far enough. I think that one of the things that needs to be considered here is that older people especially are relying on heating equipment that isn’t up to standard, and they’re wasting a lot of money on oil fin heaters, for example, that aren’t energy efficient and are not good for the environment. I would think that the Green Party, of anyone, would actually be saying, “Well, hang on a minute, don’t we want to be paying people a lump sum to upgrade their heaters so that we’re not wasting energy?” It doesn’t even have to be a heater. Has the Minister considered paying a lump sum so that people could in fact put in curtains to stop heat loss, double glazing to stop heat loss—in fact, upgrading their insulation to stop heat loss? All of these things go to saving energy.

So there are some very specific things in here that I’d like the Minister to answer. The last thing that I want to say is: has the Minister considered the temperatures in Auckland? Because, from my experience in May, it’s not a month when you turn up the heater. In fact, this year, for example—as it was in 2011—we have a La Nina weather pattern, where in fact we have an Indian summer. So throughout May—and I went back on Facebook and looked at pictures of myself in 2011, and found that, actually, we were still paddling in the water; we were still wearing light jackets in the evening. We weren’t cranking up our heaters. Has the Minister considered La Nina weather patterns when he’s looking at these—[Time expired]

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

CHRIS PENK (National—Helensville): Thank you very much indeed, Mr Chair. It’s a pleasure to take a call—I might add, finally—on the Families Package (Income Tax and Benefits) Bill, Part Deux. I think there’s been much—[Interruption] Just to clarify, that’s the French of that, and not a more general expression of reaction to the bill. It seems to me that this bill contemplates the scenario for 2018 but is not very future-looking, not very forward-focused, at least in respect of the lack of indexing of the winter energy payment.

Now, I understand that discussion has been had in regard to a different part of the bill, on which obviously I will not dwell, but it seems to me that we could very readily, even from a drafting perspective, replicate some of the ideas behind that, but I do want to expand into some new territory about different ideas that I would respectfully offer to the Minister. I would welcome his comments on whether each of those, in his opinion, has merit, in the form of a Supplementary Order Paper (SOP) or otherwise. In fact, it would be in the form of an SOP if it were to be adopted as an amendment, so my suggestion at that point would be that I could quickly draft it up for him. I know that this is about energy saving, or at least it should be, as my colleague Erica Stanford has pointed out. So I would like to save some energy of the finance Minister by giving him some assistance with re-drafting along those lines.

So then, in relation to the possibility of indexing the amounts that are later recorded in the bill, possibilities would include indexing to the consumer price index all goods, commonly known affectionately as inflation, of course. In relation to that, though, I would point out that if such a suggestion were to be adopted by the Minister, he contemplates some sort of ratchet clause so that, rather than merely the movement in the consumer price index, it would be an increase, if any, in the consumer price index. It would be a perverse outcome indeed if the amount of the winter energy payment, as defined, were to be reduced over time by reason of deflation.

Other options include perhaps indexing the amount that would payable to a person or persons according to the increase in average energy costs. I know from my albeit brief time so far on the Transport and Infrastructure Committee that the energy sector is very much one of moving feasts, as I suppose we could characterise it. So there are lots of different factors at play and it’s not beyond the realm of possibility that energy costs from year to year could increase substantially. It seems to me sensible at least to contemplate—and so I ask the Minister to do so—that the payment should increase accordingly if indeed its intention is to provide coverage for energy payments that will be incurred by persons who qualify for the bill.

Other options would include, of course, indexing to housing costs more generally. I think it’s accepted pretty widely that housing costs are a major component of household expenditure. To the extent that Part 2 of this bill is focused on addressing that, it seems to me that energy as a component of housing costs should, again, potentially increase if housing costs more generally were to increase.

Other options, of course, would be to link a percentage increase—again, an increase as opposed to a decrease, in the event that other levels of payments were to reduce. We could perhaps index it to the increase of the relevant benefit, which would see the person qualifying for the winter energy payment. So if, for example, they were on a standard superannuation type of arrangement, if that were to increase by a certain amount, as indeed the law and other statutes already provide for, then the winter energy payment could increase commensurately.

Finally, and again directing a suggestion, and by implication, a question to the Minister, it would also be possible to index an increase in this—again, I emphasise an increase, as opposed to going backwards—to the average wage. So the median wage or the mean wage—either way, of course, the relevant Minister of Employment doesn’t seem to know it, but that would be a useful thing for him to know and for you to base an increase on.

KIRITAPU ALLAN (Assistant Whip—Labour): I move, That the question be now put.

JO HAYES (National): Thank you, Mr Chair. I’m pleased to take a call on this bill. Now, I’ve been listening to all the discussions in the debate in the Chamber today about those that are actually missing out on this winter payment—those that are in rest homes—but I want to talk about those who are actually living with their families, where the family is actually looking after their elderly parents. They will miss out on this winter payment. They will miss out because that’s not their home; it’s the home of their daughter or their son, and there are a number of families in New Zealand that look after their families at home. Don’t sit there Minister and go, “No, there isn’t.” There are a number of people that actually look after their families in their homes. So these people, their elderly parents, will miss out on the winter payment.

One of the questions that I want to ask the Minister is: will he consider letting those people have their winter payment so they can pass that on to their families to help pay for the increased electric power costs that it will take as part and parcel of their care? It is very similar to those in rest homes, but this is people who are living with their families in their homes and are consuming the additional power. If we’re going to give our superannuitants winter payments, let’s give it to all of them, regardless of where they live or who they live with. They have to have this. This is about equity, and this bill, especially this part, has no equity for those people in rest homes and those people who are living with their families in their homes, in their son’s or daughter’s home.

I want the Minister to say why these people don’t qualify. It’s there as an equity issue here. It needs to be answered. Sitting there saying, “Oh no, there’s not that many.”—there are people that actually come in under this category, and I’d love the Minister to actually say why he is turning his back on those superannuitants that need to have that winter payment added to their superannuation. It has been spoken about so many times in this House, about the inequality of this bill.

Simon O’Connor: Who will think of the elderly?

JO HAYES: That’s right—who is thinking about the elderly? Obviously not that side, not the Government, in this bill.

So, as I go to sit down, I do want the Minister to get up and answer: why is he cutting these superannuitants out? Why doesn’t he give them that winter payment?

Brett Hudson: Mean-spirited.

JO HAYES: Exactly—and it’s Christmastime. Come on, Government, give them their winter payment—something that they’ve worked hard for over the years. This is their right to that winter payment. Mr Chair, thank you.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

BRETT HUDSON (National): Thank you, Mr Chair. I rise to take a first call—my first of maybe several on this part of the bill—and I’d like to focus on schedule 1. I think there is something here that the Government has overlooked that will disadvantage some members of New Zealand society.

Schedule 1 inserts new schedule 18A, and it sets the rates of payment but, in doing so, it classifies or categorises what sorts of living arrangements will qualify for what payment. I link that, also, back to the eligibility requirements under new section 61FG, inserted by clause 61. What it states there is, if you’re single and living alone with no dependants you get one rate; if you’re single and have dependants—one or more—you get another rate; and if you’re in one of many types of relationships that we’ll broadly describe, just for the general public, as something akin to marriage—so a relationship of closeness.

What it doesn’t seem to cover are those situations that we know all too well from student days—which, of course, are not part of the eligibility. But in these times, when we’ve heard members opposite when they were in Opposition scream loudly and long about house prices and housing crises, it is not just conceivable but should be expected that even today in New Zealand we will have individuals on benefits who will be sharing accommodation in the manner of a flat—a flatting arrangement. There’s nothing intimate, there’s nothing akin to marriage; they are simply sharing the same accommodation, sharing expenses, because it makes it more affordable—a little like the student flatting arrangement, but these people are perhaps on a main benefit. It is equally possible that it could apply to people aged 65 and older for the same reason. Because they’re on fixed incomes, they can share accommodation—at least two, maybe more—and that would help to keep the cost down per individual.

So my question to Minister Robertson in the chair, of course, is, how could they have possibly overlooked these people? Is it the case that they both get the same payment because they’re both single? It doesn’t seem to actually preclude that, because the eligibility only talks about one person where there’s a spousal or partner relationship with the other, so the bill, on that, is actually quite silent. It’s possible that they could both get the full single amount. Or it could be possible that only one of them gets it, in which case the question to the Minister is: how is it determined who gets the payment? Hopefully, it’s not pistols at 20 paces; hopefully, there would be some reasonable, fair, and equitable measure. I could suggest to the Minister that it might actually be to share the payment between each of them, because it would also be wrong, from the taxpayer’s perspective, for each of them to get the full single rate. Obviously, that would be paying much more than we would reasonably anticipate the winter energy payments to be.

That, I think, is a very relevant thing to concern ourselves with. We certainly don’t want them, in their housing arrangement, to miss out if this bill passes. We want to make sure that the housing arrangement still gets the value of the energy payment, but the question is—the bill as it’s written doesn’t seem to foresee such a situation, so it doesn’t actually seem to have provisions that are specifically tailored to addressing that. Actually, I want the Minister to perhaps admit that perhaps it’s something they overlooked, and if they didn’t overlook it, why didn’t they make it clearer?

They are expecting Parliament, under urgency, to consider this without the sort of detailed scrutiny that you would get through a select committee process, with all of the opportunities to have people come in and give evidence—all the opportunities for members of Parliament, not just the Government, to question officials; all of those opportunities that allow the teasing out of the finer points of detail—which generally leads to better legislation, even if it’s legislation that’s not universally supported across the House.

So I really hope the Minister will rise and respond to that point. There is a hole here. We might call it a glaring hole, but it is obviously not clear enough, and he could elucidate and help us all to understand.

JAMIE STRANGE (Labour): I move, That the question be now put.

SIMON O’CONNOR (National—Tāmaki): Thank you very much, Mr Chair. I’m very, very pleased to take a call on this Part 2. I’m wanting to focus on two amendments that hitherto I don’t believe have been discussed, and that’s around—

Matt Doocey: Oh, new ones—the first time?

SIMON O’CONNOR: Yeah, first time—that’s why hitherto they haven’t been discussed, so it’s good. These are the amendments in the name of the Hon Jonathan Coleman, and it’s probably going to be no surprise to the Minister in the chair that I’m picking up, firstly, two things that are health-related and, secondly, how we can actually work with what’s already in the bill to make it just a little bit better.

In this particular case, the first amendment in the name of Jonathan Coleman is looking to insert a new clause after the current clause 71. So we’re suggesting this is new clause 71A. It reads, for those who probably haven’t read it: “Any person who is eligible to receive an accommodation supplement will be eligible”—

The CHAIRPERSON (Adrian Rurawhe): Sorry to interrupt the member, but the tabled amendment that the member is speaking about will be ruled out of scope, so there is no debate on this part. So the member needs to move on.

SIMON O’CONNOR: I raise a point of order, Mr Chairperson. It’s for your advice, if you don’t mind, in that “it’s going to be ruled out of scope” means that it’s currently in scope until it’s ruled out by voting?

The CHAIRPERSON (Adrian Rurawhe): No. It is my determination from the Chair that it will be ruled out of scope. Therefore, it cannot be debated on. The member can continue to debate on the rest of Part 2, but when the vote comes, that is when it will be formally taken out.

SIMON O’CONNOR: Thank you very much. I suspect the same is going to be true—so I better seek your guidance as I continue to debate then, Mr Chair. Looking at the other amendment that I have here from the Hon Jonathan Coleman, which is looking to insert two new clauses 79 and 80 at the end of Subpart 4. in this case, we are looking at how we look at income-related rents and, as the Chair is moving, it probably would be good—

The CHAIRPERSON (Adrian Rurawhe): Yes.

SIMON O’CONNOR: —to ask the question that you will be formally ruling it out, but at the moment you are indicating that it shall be?

The CHAIRPERSON (Adrian Rurawhe): Yes. If it was going to be accepted, then it would be part of a Part 4 debate. This is a Part 2 debate. So, no, there is no debate on that at this part.

SIMON O’CONNOR: Well, look, I’ll continue happily with the call, because we’re looking around accommodation supplements, as that, obviously, was going to look at the amendments that were going to develop some changes there. But we do have to look, first and foremost, I think, around areas for accommodation purposes. I know—having worked in the Ministry of Social Development many years ago—that in this bill, as well, there are different areas that have been put down, and I suppose one of the challenges I want to put then to the Minister is why those areas have been chosen, particularly in this day and age. He’s looking very concerned all of a sudden. It is one of these days and ages where, actually, we have a whole lot better use of data, particularly around geospatial technologies—which is another area of interest of mine. Why are we not actually looking to update those areas, as well?

We get a lot of focus these days on those four areas—we get a lot of focus particularly around Auckland. But having been—and am—an MP in Auckland, I can tell the Minister right now that the accommodation needs in the likes of my area of Tāmaki vary differently, from the likes of Ōrākei and St Heliers to right across the border into Glen Innes. Looking at that particular example in this legislation as proposed, it doesn’t matter if you are in something like St Heliers, one of the best—well, wealthiest, but not the best. It is one of the wealthiest areas in the country. You’re going to be able to receive the same effect of being in area 1, 2, 3, or 4 as someone who, just a few streets down, is living in Glen Innes, which is also one of the best suburbs in the country, but often has lower socio-economic groups.

So what I’m suggesting here is we’d like some guidance from the Minister on why an opportunity wasn’t taken to review the areas, and why not link it to the whole geospatial technology. We now can get quite specific by area, and there are two reasons for that—which I think need a little bit of elaboration, Mr Chair, but not too much. One is we have the technology around to be able to do this now—it’s not as if we have to sort of pull out our abaci and work on things. The second is: why would we not take these opportunities to be more specific, to be able to target New Zealanders more?

I suppose that’s been one of the wider debates that we’ve had here—one of the wider debates around specificity versus universality. I understand that this Government, across this bill, but particularly in Part 2, is trying to be relatively specific. I’m asking the question, ultimately: why didn’t the Minister choose to be even more specific in this regard around areas 1 to 4? I mean, eight is a great number—very lucky in some communities.

So I very much welcome as I conclude this call—and the Minister is looking enthusiastically to jump up. If he would like to address that, seeing he hasn’t been able to address—quite understandably, from the Chair—the two amendments that have been ruled out of scope.

Hon GRANT ROBERTSON (Minister of Finance): I am very pleased to rise to respond to that filibuster from Simon O’Connor. The reason I know that that’s what it was is because he decided to devote his call to criticising a provision that the National Government passed in the Budget in May. That’s where the accommodation supplement provision comes from.

I think we have reached the point where the National Party’s desperation, in order to try to keep the debate going, with their repetitive calls, has finally jumped the shark. Mr O’Connor has begun criticising his own type. We have heard rumours about that, I might add, over here. But in this particular example, Mr O’Connor can just be satisfied that on this particular issue we have accepted the wisdom of the previous Government on that matter.

Can I say to Joanne Hayes that she’s wrong; she is completely wrong. The people in the circumstances that she raised, those who live with their family members, are still fully entitled to the winter energy payment. So they can go to Christmas, as Joanne Hayes said, absolutely happy that that problem she raised is not actually—

Hon Maggie Barry: What about residential facilities, rest homes, hospitals?

Hon GRANT ROBERTSON: That’s been answered before, Maggie Barry. That’s been answered before by my colleague Stuart Nash.

Hon Maggie Barry: No, not to our satisfaction.

Hon GRANT ROBERTSON: No, clearly. But the point here is that prolonging the debate by just asking questions that people already know the answers to isn’t actually a way of adding new material to the debate, and we come to Mr Hudson’s point. I think he also knows that indeed there’s no point in looking into a piece of legislation to try to find a different meaning than the words that are written on the page. So the words that are written on the page say that the entitlement is with the person. It stays with the person. Nothing changes in that. So there’s no hidden meaning in the language. It’s exactly as it’s written in there.

Hon Member: What if there’s more than one person, both single?

Hon GRANT ROBERTSON: No, it stays with each individual person. Now, there are already rules within the Ministry of Social Development system about whether or not people are in couples. Those rules apply just the same for this payment as they do for any other payment. So there’s no difference whatsoever in that matter.

Simeon Brown talked at some length about indexation. There’s no point in just coming up with different forms of indexation. That’s actually just the same argument, and that was dealt with by my colleague Stuart Nash—that that is not proposed for this. Just mentioning a different kind of indexation does not actually focus on this.

The other point, which the Hon Amy Adams raised with us, was about when the payments would be made. I think I might have misled her by saying I thought I’d responded to that; I responded to another point of hers. Again, it is paid with the normal instalments of benefits and New Zealand superannuation: for main benefits that is one week in arrears, and for superannuation that is fortnightly, based on the previous fortnight.

So it’s clear to me that the questions we’re getting now are simply ones where people are reading out parts of the bill, and not making a point. I don’t believe—

Brett Hudson: I raise a point of order, Mr Chairperson. It’s not for the Minister in the chair to determine the relevancy of statements made in the Chamber—or repetition. That is only for you to determine. [Interruption]

The CHAIRPERSON (Adrian Rurawhe): Points of order should be heard in silence, members. Thank you for the point of order. You cannot also stand up on a point of order just to interrupt someone that is making a debating point that you don’t like. I’ll invite the Minister to continue his speech.

Chris Penk: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Adrian Rurawhe): Is it a—

Chris Penk: It’s a fresh point of order; merely that the Minister did helpfully give a response to the contribution that I’ve made, but he said—

The CHAIRPERSON (Adrian Rurawhe): No, that’s not a point of order. Sit down.

Chris Penk: He misidentified me—

The CHAIRPERSON (Adrian Rurawhe): E noho. Kia ora.

Hon GRANT ROBERTSON: Erica Stanford will need to remind me. What was her one, again? Don’t stand up. Just tell me.

Erica Stanford: I wanted to know, if you were to leave and go overseas, if you’d have to transfer your entitlement to your partner.

Hon GRANT ROBERTSON: No. The answer is no. If you go overseas with the entitlement and you’re a couple, and it’s assessed as a couple, you don’t.

GREG O’CONNOR (Labour—Ōhāriu): I move, That the question be now put.

Hon JACQUI DEAN (National—Waitaki): Mr Chairperson Rurawhe, thank you so much. Thank you for the opportunity to have another contribution on this part. I’m particularly concerned with the winter energy payment and how it is going to play out in real time for those of whom it is intended. There are a couple of points that I wanted to raise in the committee that have not been canvassed before, I believe. I’ve been here for most of the debate.

The first one is around the sheer management of the payment. The payment, when it is fully rolled out, is going to be for the winter months only, for 22 weeks, and it’s going to be paid out over those 22 weeks. That’s fair enough, except that the billing period for those winter months comes a month after the electricity is actually used. That brings up budgeting issues for people on fixed incomes. I do know that in many parts of New Zealand, whilst winter is severe and a lot of electricity is used, it is also the case that in some parts of New Zealand, such as my part of New Zealand in the South and even further South where it gets even colder, a lot of energy is used in that time. But we also experience periods of great heat during the summer. I have brought an amendment to the committee with regard to that thought. My proposition in my amendment is to have the allowance for regional variation. I’ve made those points and I’m not going to be repetitious.

The point I want to make around that is that in terms of budgeting for those payments, would it not be of benefit to people to be able to spread those payments more evenly across the year, to take account of the high energy use at, say, Christmas, when the family comes? The nephews all want to have five showers a day and have the TV going all night and the fan going all night. Electricity for people on benefits and on national super isn’t always concentrated over the winter months. It can be spread over the year, in different circumstances. I would like to think that this Government would consider putting a little more flexibility into the system and the payment of that. It’s $20 a week for 22 weeks for single people living alone without children, and about $31, I believe, for people with children or for couples. So how much more easy would it be for people to budget if the payment of that benefit could be more flexibly applied so that people could budget better?

The other aspect of that is also around budgeting, and the reason I’m delving into the minutiae of this payment is because of my experience as a constituency MP and people coming into my office with problems and issues around budgeting, when they are on fixed incomes, and just how very tight their budgets can be. So many people on fixed incomes will make a payment to their electricity company that is equalised across the whole year. So they will pay something like $35 a month or whatever their payment is, and that takes account of the highs and lows. Now, that works for a lot of people because it provides for predictability. They know what they’re going to face with their fixed costs. They don’t get any nasty shocks, potentially, over the year, and then, perhaps at the end of the year, they might even enjoy a month where they don’t have a power bill because they’ve overpaid throughout the course of that year. That is going to be thrown into some disarray when this benefit is rolled out.

Now, I just wonder whether the Government, in their policy work, has considered the real impact of this benefit to those people for whom it is intended. And I’d like to know from the Minister of Finance, in the development on new Part 1KA, whether or not any policy work, or how much policy work, was done, and whether or not the application of this grant—and I accept I will probably lose the battle about having the regional variations. So let’s just turn to making the payment of it better suited for those it’s intended for.

So I would welcome the Minister of Finance to get up and address that question and perhaps point the committee and my constituents who are listening and who are affected by this—give them some comfort that this policy will be more finely tuned.

NUK KORAKO (National): Kia ora, Madam Chair Tolley, finally; this is almost the best for last. Ha, ha! Kia ora, Madam Chair, thank you for the opportunity to be able to speak in the committee stage. It’s always interesting listening to this, which I have all day; I’ve been in and out of here. But I want to cover off—in this House the other day, the member Kiritapu Allan gave an impassioned speech, actually, about her kaumātua on the East Coast thanking her for this bill, that it would keep her home warm in the winter. She even actually went so far—and that was the enthusiasm of this wahine—to say that it was a $1,000 a week tax cut, as opposed to per annum; but that’s OK.

I’m standing to support all of the various amendments concerning the manner in which this winter energy payment is applied. I have a question for the Minister, because I’ve also had a telephone call, actually, from Wharekauri, but I’ll come to that very shortly.

Can the Minister explain why it’s so difficult to target the funding so it goes exactly where his colleague Kiritapu Allan says it’s most needed, and that is to the heating of the homes that actually really need it. The other part of it is that—and this is about kaumātua. I mean, it’s great to see the Māoris on the other side—the Māori caucus; kia ora to you—who actually have been not here a lot, and I haven’t heard any of them get up except Kiri Allantapu.

Hon Peeni Henare: Kiri Allantapu?

NUK KORAKO: Sorry—Kiritapu. Sorry. But, anyway, at the end of the day, when looking at this, what we should be looking at is that it’s actually about equity on where this money actually goes. And so my question, then, is that—isn’t it that a really important part of this is specifically about the kaumātua, about their energy bills? I’m just specifically coming down to that, because you’ve got the largest Māori caucus on the other side of the House, and yet we haven’t actually heard a lot from them. All we’ve actually heard is a media statement that was a cut and paste from the Hon Kelvin Davis, and then that’s about it. But what we need here—

Hon Ruth Dyson: Which bit of the bill is this? Which bit of the bill is this in?

NUK KORAKO: —and that’s why I’m asking, OK? I’d really like to know, then, why can’t we have that kind of equity? Because I’ve had the call—because when we look at this sort of regional situation, what about the people who actually live on Wharekauri or the Chatham Islands? It’s three times to four times as much for their electricity bills compared to actually being here on the mainland. So that was one of the calls.

The other call was actually around Rakiura, which is down in Stewart Island. So these are Māori that are living in those ancestral communities, and this is where I would’ve expected the Labour Māori caucus, along with their coalition partners, to actually be asking those questions as to why haven’t we got, sort of, equity right across the board when we take into account those whānau that want to live in ancestral communities in everywhere else except right in the Te Wai Pounamu, Te Ika-a-Māui, and all of that. So that is my question to the Minister—and whether it was taken into account; I’m not sure.

But, I think, the other part of it, though, is that—just to finish off on the fact that there were all of these amendments. Even though we’re talking, actually, about all New Zealanders, I would’ve thought that the Māori caucus on that side of the House within the Government would’ve been championing a lot of these sorts of different things that actually do really affect our people. I mean, you’ve got the Minister of Defence over there. What about our mōrehu? What about those that are actually going to lose their entitlements and benefits when it actually comes—well, I mean, that’s what we had in our bill. But they’re going to lose that, actually. So there are the other parts with kaumātua right across the board.

So, on that note, my question—maybe the Minister can answer it—is: where is the equity? Was there any thought that has actually gone into Māori that live in ancestral communities?

GREG O’CONNOR (Labour—Ōhāriu): 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 Labour 46; New Zealand First 9; Green Party 8.

Noes 48

New Zealand National 48.

Motion agreed to.

The question was put that the following amendments in the name of the Hon Jacqui Dean to Part 2 be agreed to:

replace “winter” with “eligible” in each place;

in clause 61, new section 61FF, delete the definition “winter period, for a calendar year, means the 22-week period starting on 1 May”, and also insert in its appropriate alphabetical order:

eligible period for a calendar year, means either:

the 22-week period starting on 1 May; or

for any 22-week period where the first week has an average mean temperature of over 30 degrees Celsius

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendments not agreed to.

The question was put that the following amendments in the name of the Hon Steven Joyce to Part 2 be agreed to:

omit Subpart 1—Winter energy payment; and

insert new Subpart 1A—New Zealand Superannuation increase

Subpart 1A—New Zealand Superannuation increase

59A New Zealand Superannuation and Retirement Income Act 2001 amended

Section 59B amends the New Zealand Superannuation and Retirement Income Act 2001

59B In Schedule 1, Annual adjustment of standard rates of New Zealand superannuation,

after clause 15(6), insert:

15(7) For the adjustment to be made on 1 April 2018, an additional adjustment shall be made, equal to an increase of $13.46 per week for a person who is married or in a civil union or in a de facto relationship, and $8.65 for a single person living alone.

15(8) For the adjustments to be made to other applicable rates, these are to be done with reference to the increases in subclause (7).

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendments not agreed to.

The question was put that the following amendment in the name of the Hon Louise Upston to Part 2 be agreed to:

insert new clause 60A; and

amend section 1B of the Social Security Act 1964 to add:

(f) to reduce child poverty and ensure children get the best start to life, government must measure the impact of the winter energy payment on material hardship of children in low to middle income households to ensure the payment is adequately targeted.

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The CHAIRPERSON (Hon Anne Tolley): The Hon Louise Upston’s remaining tabled amendments inserting new clause 60A amending section 1B of the Social Security Act 1964 and further amendments to sections 1B and 3 of the Social Security Act 1964 are out of order as they are outside the scope of the bill. Again, the two defining elements of the bill are not taxation and benefits, and proposals for providing poverty reduction targets to improve outcomes for low-income families and reducing the number of children in low-income households and introducing new principles into the Social Security Act extend beyond the provision of benefits.

The question was put that the following amendment in the name of Dr Shane Reti to clause 60(1) be agreed to:

replace clause 60(1) with:

in section 3(1), definition of benefit, after paragraph (b)(iii), insert:

(iiia) a winter energy payment consistent with the NIWA definition of winter:

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendments in the name of the Hon Alfred Ngaro to clause 61 be agreed to:

in new section 61FE, Winter energy payment: purpose, insert as subclause (2):

The purpose of the winter energy payment is also to provide financial assistance to help certain people meet their heating needs during the winter period by providing for additional home insulation or new heating sources.

in new section 61FI , Winter energy payment: instalment, rates, and payment, after subsection (1)(b) insert:

if the person has nominated, in a form and manner approved by the chief executive, to use their winter energy payment for additional home insulation or heating sources, in 1 annual instalment.

in new section 61FI, Winter energy payment: instalment, rates, and payment, after subsection (2)(b) insert:

for recipients who have nominated to use their winter energy payment for additional home insulation or heating sources, by 1.

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendments not agreed to.

The CHAIRPERSON (Hon Anne Tolley): I know it’s been a long day, but I just remind members that the voting is done in silence, and you can relive that tension during the voting by doing your Ayes or your Noes.

The question was put that the following amendment in the name of the Hon Louise Upston to clause 61 be agreed to:

delete new section 61FG(2)(c) and (d).

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Louise Upston to clause 61 to:

replace clause 61FI(1)(a), with:

if the person’s qualifying benefit is a main benefit under this Act, directly to that person’s electricity provider; or

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Tim Macindoe to clause 61 be agreed to:

replace new section 61FI with:

61FI Winter energy payment: instalments, rates, and payment

A winter energy payment is payable,—

if the person’s qualifying benefit is a main benefit under this Act, in 22 weekly instalments or one lump sum payment of equivalent value to the 22 instalments; or

if the person’s qualifying benefit is New Zealand superannuation or a veterans pension in 11 fortnightly instalments or one lump sum payment of equivalent value to the 11 instalments.

The amount of an instalment is ascertained by dividing the appropriate rate per winter period set out in Schedule 18A—

for recipients of a main benefit under this Act, by 22; or

for recipients of New Zealand superannuation or a veteran’s pension, by 11.

However, the amount ascertained under subsection (2) must be rounded up to the nearest whole cent, and then reduced to reflect any 1 or more days of the week or fortnight covered by the instalment that are days for which—

the person is not entitled to the payment; or

the payment is not payable (for example, under section 61FJ).

An instalment must be paid on the relevant payment date.

A lump sum may be paid on the earliest relevant payment date.

This section overrides sections 11D, 80, and 82(1) and (2), and (6).

The recipient must provide evidence that the winter energy payment was spent on heating requirements during the winter months.

If a recipient fails to provide the evidence required by subsection (7) they must refund the payment.

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Louise Upston to clause 61 be agreed to:

insert after section 61FJ(3):

A person may apply to the chief executive of the Ministry of Social Development for an exemption to section 61FJ(1) on the grounds of, for example:

(a) caring for children who may be located overseas

(b) health conditions which require time in warmer conditions

(c) serious illness to immediate family overseas.

The question was put that the following amendment in the name of the Hon Louise Upston to clause 61 be agreed to:

insert after new section 61FJ:

61FK

MSD must take reasonable and appropriate steps to explain, to every person who is, or appears to MSD to be likely to be, affected by them,—

the rules about absence from New Zealand contained in the following provisions:

section 203 (general rule: benefit, including a winter energy payment, not payable while beneficiary absent from New Zealand):

regulations made under section 415 (regulations that contain exceptions, and other contrary or related provisions); and

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Andrew Bayly to clause 61 be agreed to:

after new section 61FJ, insert:

61FK Winter Energy Payment: mandatory consideration to be taken into account

In determining the amount of the winter energy payment to any entitled person, the Chief Executive must take into account the regional variations which occur in the Quarterly Survey of Domestic Electricity Prices prepared by the Ministry of Business, Innovation and Employment.

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

Ayes 48

New Zealand National 48.

Noes 56

New Zealand Labour 46; New Zealand First 9: Green Party 8.

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

Amendment not agreed to.

The CHAIRPERSON (Hon Anne Tolley): The Hon Jonathan Coleman’s tabled amendment inserting new clause 71A is out of order as being outside the scope of the bill. That’s because the proposed amendment extends the eligibility for the community services card, which does not deal with income tax or benefit under the Social Security Act 1964. It does not include the community services card.

That brings us to the Hon Amy Adams’ tabled amendment inserting new clauses 79 to 82. This amendment was tabled as new Part 2A. However, the form of the bill is such that the clauses are more appropriately located as a subpart to Part 2.

The question was put that the following amendment in the name of the Hon Amy Adams to Part 2 be agreed to:

insert in Part 2 the following new clauses:

79 Principal Act

This Part amends the Parental Leave and Employment Protection Act 1987.

80 Section 7 amended (Meaning of primary carer)

In section 7(1)(b)(ii), replace “is the primary carer” with “is a primary carer”.

After section 7(3), insert:

(4) A person and their spouse or partner may both be primary carers simultaneously if—

(a) the person meets the criteria in subsection (1)(a) or (1)(c); and

(b) the person has transferred part of their entitlement to a parental leave payment to the spouse or partner under section 71E; and

(c) the person and their spouse or partner decide to take parental leave in concurrent or overlapping periods in accordance with section 9A.

81 New section 9A inserted (Primary carer leave may be taken consecutively or concurrently with primary carer leave taken by partner)

After section 9, insert:

9A Primary carer leave may be taken consecutively or concurrently with primary carer leave taken by partner

This section applies if—

(a) an employee takes a period of primary carer leave; and

(b) the employee, their partner or spouse, or any dependent child of either of the aforementioned people has a health condition or disability of any sort, including but not limited to mental health conditions, physical conditions, premature birth, illness, or injury; and

(c) the employee transfers part of their entitlement to a parental leave payment to their spouse or partner under section 71E.

The employee’s primary carer leave may be taken for a period that is consecutive, concurrent, or overlapping with the spouse or partner’s primary carer leave.

82 Section 71J amended (Duration of parental leave payment)

In section 71J(1)(b), after “1 continuous period per person”, insert “(which, in accordance with section 9A, may be consecutive, concurrent, or overlapping)”.

The CHAIRPERSON (Hon Anne Tolley): Joanne Hayes’ tabled amendment inserting new clauses 79 to 81—this amendment was tabled as a new Part 3. However, the form of the bill is such that the clauses are more appropriately located as a subpart to Part 2.

The question was put that the following amendment in the name of Joanne Hayes to Part 2 be agreed to:

after clause 78, insert:

79 Principal Act

This part amends the New Zealand Public Health and Disability Act 2000 (the principal Act).

80 Purpose

The purpose of this part is to require Ministers, when negotiating Crown funding agreements on behalf of the Crown must negotiate the provision of subsidised dental care for pregnant individuals.

81 Section 10 amended (Crown funding agreements)

after section 10(2) insert:

(2A) When negotiating a Crown funding arrangement, the Minister must negotiate for the provision of subsidised dental care for individuals who are pregnant for a period lasting no longer than 12 calendar months after the end of their pregnancy.

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The CHAIRPERSON (Hon Anne Tolley): Ian McKelvie’s tabled amendment inserting new clauses 79 to 81, increasing the age qualification for superannuation—this amendment was tabled as a new Part 3. However, the form of the bill is such that the clauses are more appropriately located as a subpart to Part 2.

The question was put that the following amendment in the name of Ian McKelvie to Part 2 be agreed to:

after clause 78, insert:

79 Principal Act

This part amends the New Zealand Superannuation and Retirement Income Act 2001 (the principal Act).

80 Purpose

The purpose of this part is to tie the age of superannuation eligibility to the winter energy payment provisions of the Family Package (Income Tax and Benefits) Bill and to ensure the affordability of the provisions of that policy by raising the superannuation eligibility age to 67 no later than 20 years after the enactment of the Families Package (Income Tax and Benefits) Bill.

81 Section 7 amended (Age qualification for New Zealand superannuation)

after section 7(1), insert:

(7A) For the purposes of subsection (1), the age qualification for New Zealand superannuation shall rise to 67, no later than twenty calendar years after the enactment of sections 61FE to 61FJ of the Families Package (Income Tax and Benefits) Bill.

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The CHAIRPERSON (Hon Anne Tolley): The Hon Dr Nick Smith’s tabled amendment inserting new clauses 79 to 81 provides for a family HomeStart contribution to KiwiSaver account holders. This amendment was tabled as a new Part 3. However, the form of the bill is such that the clauses are more appropriately located as a subpart to Part 2.

The question was put that the following amendment in the name of the Hon Dr Nick Smith to Part 2 be agreed to:

after clause 78, insert:

79 Principal Act

This part amends the KiwiSaver Act 2006 (the principal Act).

80 Purpose

The purpose of this amendment is to introduce a Crown contribution paid directly into the KiwiSaver account of a person for the purpose of facilitating the purchase of a family home upon their application to withdraw a portion of their KiwiSaver under section 8 of the Act.

81 New Section 226A inserted (Family Home Start Contribution)

After section 226 insert:

266A Family Home Start Contribution

(1) The Crown must pay a contribution to the KiwiSaver scheme of which a person is a member upon application of the person if—

(a) the person has applied to make a withdrawal under section 8, the Crown must make a contribution to that person’s Kiwisaver account in accordance with the calculations in subsection (2):

(b) that person’s Kiwisaver provider has confirmed that they have received notice of withdrawal.

(2) The calculation of the payment the Crown must make to a person’s Kiwisaver account under subsection (1) is:

(a) For a couple who is purchasing a new home jointly the amount shall be $30,000:

(b) For a couple who is purchasing an existing home jointly the amount shall be $20,000:

(c) For a person who is purchasing a new home as a single buyer the amount shall be $15,000:

(d) For a person who is purchasing an existing home as a single buyer the amount shall be $10,000.

(3) The payment by the Crown must be made as soon as practicable after an application for withdrawal is made.

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

A party vote was called for on the question, That Part 2 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 48

New Zealand National 48.

Part 2 agreed to.

New Part 3 Changes to the age of eligibility for New Zealand Superannuation

IAN McKELVIE (National—Rangitīkei): Thank you, Madam Chairperson Tolley. It is interesting. This is the first time in my time in Parliament that I’ve had the opportunity to move an amendment twice in a day. The world must be changing, or has changed, I guess.

This amendment requires the Retirement Commissioner to report on the impact of the Families Package (Income Tax and Benefits) Bill 2017 on the well-being of retired persons. If you think about when we add a payment like this or like the winter energy package to superannuation, it is, effectively, there for ever, because it would be very difficult for future Ministers or Governments to take that away, in my view. So as a consequence of that, I guess, it really becomes part of the superannuation package in New Zealand, and the concern about these sorts of payments being added to a superannuation package is whether that superannuation remains sustainable in the future.

The reason for inserting this part in the bill is that to get the Retirement Commissioner to provide that reporting will ensure that in the future superannuation in New Zealand is sustainable. Of course, we’ve seen a number of reports from the Retirement Commissioner over the past few years stating quite clearly that she feels that superannuation in its current form is not sustainable in the long term. That’s what drove the previous Government to look at changes to the entitlement age of superannuation, some 20 years in the future from now. By adding a payment like this to the superannuation entitlement, that puts a whole lot more pressure on this sector of the Government’s accounts. So I think that it’s very wise that we get the Retirement Commissioner to look at this, to review it, and to report on the significant policy changes that have taken place as a result of this quite significant payment being added to superannuation on an annual basis.

So the aim of this is to ensure the sustainability of superannuation in the future, and I think that’s pretty important. We’ve got, of course, the Superannuation Fund, which will kick in in some 20 or 25 years’ time. So that gives the opportunity to add more money to the superannuation system in New Zealand. But in the short term, this is going to put more pressure on the system. I think that to provide an annual report on the impact of the Families Package, which are the benefits that come from the family package announced in this bill, is a very sensible move for us in New Zealand.

I, obviously, have a very strong interest in the future sustainability of superannuation in New Zealand, as we all do. I think it’s important that we are able to ensure for all of our community, whether they are young, old, or wherever, that the Government is, in the future, going to be able to maintain this entitlement that all New Zealanders feel they are entitled to and, certainly, that they have. It is most important that we ensure that this is sustainable. In adding Part 3 to this bill—it is a pretty simple part—it requires the Retirement Commissioner, at least, to report on the sustainability of superannuation in the future.

I think it’s a very good move. I think I’ve probably said all I need to say on it. I think it would be an effective tool for the Government to use in the future, and it will certainly add something to the strength and the comfort of superannuitants in the future. So thank you, Madam Chair.

Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Madam Chairperson. The amendment in question changes the New Zealand Superannuation and Retirement Income Act, or the principal Act, which was not part of the original bill. The bill, as the purpose clause points out, makes changes to income tax and benefits, and it is clear that the principal Acts being amended are, in fact, the Income Tax Act, another tax Act, and the—

Hon Grant Robertson: Social Security Act.

Hon CHRIS HIPKINS: —and the Social Security Act. So this does seem to stray well beyond what is a fairly clear general policy statement at the beginning of the bill.

Hon AMY ADAMS (National—Selwyn): I am somewhat puzzled by the point of order raised by the Leader of the House. There is no purpose clause to the bill, and the general policy statement makes it very clear that the objectives of the bill are to raise incomes, to alleviate child poverty, and to provide targeted assistance. Clearly, this is an amendment that has been accepted by the Clerk. There have been numerous that haven’t been. I would argue that it’s been quite a narrow interpretation, but I think that this absolutely sits within those, and I would question that there is a purpose clause, as the leader has suggested.

Hon Chris Hipkins: Point of order.

The CHAIRPERSON (Hon Anne Tolley): I don’t need any further help. I have heard both members. Actually, this amendment is requiring the commissioner to report on the impact of the Families Package itself on the well-being of retired persons. That is a major target for the package and, therefore, it is reasonable to have that reporting. So it is in order. It is still quite a tightly focused debate.

Hon AMY ADAMS (National—Selwyn): Thank you, Madam Chair. Thank you for allowing me to take this call on Ian McKelvie’s excellent amendment suggesting this new Part 3. As we’ve just canvassed on that point of order, this is a very important aspect of ensuring that the families income package, as the Government has introduced it in this legislation, is reported on and tracked, and the committee and therefore the public—and more importantly the public—are able to themselves see the impact on savings and the wealth of our people as they move towards retirement, and whether the objectives of the bill as set out in the general policy statement have in fact been delivered. I would just quote for the committee again that the general policy statement tells us very clearly that the objective of this package is to provide targeted social assistance, to improve incomes for low- and middle-income families with children, and to reduce poverty.

Now, those are all laudable goals, and I don’t think there’s a member in the committee who would disagree with the goals. We will all disagree—vehemently, often—about how you best achieve them, but if that is the stated purpose of this legislation and this package, which it is, then it is quite right that you would have an independent and well-respected body like the Retirement Commissioner issuing an annual report that tells the public in a very unbiased, measurable, objective way whether this package has reached those goals.

We commented in the earlier stage of this debate—I certainly did—that one of the concerns that this side of the Chamber has had about this process is that Treasury, in their regulatory impact and disclosure statements, have made it clear that they haven’t been able to assess whether this package will meet its intended outcomes. So without any sort of assurance at the front end of the process that this package will in fact raise incomes of those who need it most and alleviate child poverty, it is vitally important that there is some measure of assurance for the public, who pay for the funds to fund this package—and have lost income from their own pockets to pay for this package—that they can have some assurance and some way of checking and holding the Government to account as to whether in fact this package has done what the Government has been very proud to crow that it will do.

They are laudable aims; no one is doubting that. What we have doubted and questioned from the moment this debate began is (a) is this the best use of the money involved, and (b) is it the best way of meeting those purposes? Now, the Government has shown no willingness to create their own targets and their own reporting mechanisms for this committee, but we have a very, very useful and appropriate mechanism in the retirement and savings commissioner, who can assess absolutely whether the sorts of expenditure that this package involves—and we’re talking billions and billions of dollars, so it is a significant amount of public money. There is a genuine right and need to know whether that has improved the financial outcomes, the incomes, and therefore reduced poverty of those concerned. If the Government doesn’t want to have their own measurable targets that they report on—and we know they don’t, because they voted against my colleague the Hon Louise Upston’s excellent amendment that would have set that in the legislation—it makes entire sense to have a body that already exists, like the Retirement Commissioner, tasked with preparing that annual report.

So I’m happy to give my full support to this review mechanism. I think it’s important that the committee reflects on the fact that this won’t be a lengthy or expensive process in and of itself. It’s not a new agency, it’s not a new bureaucracy, but this is the very raison d’être of the retirement and savings commissioner. Are New Zealanders in a position where they are better able to save for their retirement? Have the changes that have been made in this package—not generally, that is the commissioner’s general piece of work. This will ask the Retirement Commissioner to look specifically at the changes in this bill: the changes to the tax threshold, so the fact that people have lost those tax benefits that they would have had putting more money in their pockets; the baby bonus that is in this legislation; the winter heating payment; the accommodation supplement changes; the Working for Families changes; the family tax credit changes through thresholds and rates.

There are a wide number of different moving parts in this package, but it only matters if those working parts are for the benefit of the low- and middle-income families that this bill, in the face of it, in the objectives, tells us is its purpose. The whole reason for having this package is to lift the incomes of those families. Now, if that is the case, surely we would want to know as a country whether that has been effective. I think that a Retirement Commissioner annual report is an excellent way of achieving that.

KIERAN McANULTY (Junior Whip—Labour): I move, That the question be now put.

Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Madam Chairperson. I just want to draw your attention to Speaker’s ruling 113/3, which says, “An amendment must be drafted with some precision, in a form of words that may be embodied in law.” I note that the amendment by Mr McKelvie, as tabled, has a heading, “Part 3—Changes to the age of eligibility for New Zealand Superannuation”, and then his new provisions, clauses 79, 80, 81, and 83, in fact bear no correlation to the heading that he has inserted. So, clearly, it should be ruled out of order, on the basis that the words could not be embodied into law in the form in which they have been presented to the committee.

Hon LOUISE UPSTON (National—Taupō): One of the challenges, obviously, is the time frames in which we’re trying to put these issues forward. The copy I have in front of me clearly has the comment in the purpose “to require the Retirement Commissioner to report on the impact”. So while I accept there may be a typo on this particular copy, it is very much about the purpose, requiring the Retirement Commissioner to report on the impact of the package.

SIMON O’CONNOR (National—Tāmaki): If I might speak further to the point of order, the clarity of the Speaker’s ruling—while I acknowledge the Leader of the House, it does continue on to say, which is rather important, “An amendment that is merely an attempt to criticise the provision will not be accepted.” I think that actually puts that entire Speaker’s ruling into context, that an amendment that is designed to merely criticise a provision shouldn’t be accepted. I think this is a contributory, not “criticisory”, dynamic.

The CHAIRPERSON (Hon Anne Tolley): Yes. Look, I thank the members for their well-made and eloquent points. However, this has been accepted as a valid amendment and we have commenced debate on it.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair Tolley. I’m pleased to speak on this new part, put forward by Ian McKelvie. Mr McKelvie has put a lot of thought and effort into how to actually ensure that the legislation is delivering on the Labour-led Government’s intention. One of the things that I think is important is that this part of the committee stage gives the opportunity for the committee to contribute to the improvement of the legislation. The Retirement Commissioner is independent, has a really important role in terms of ensuring the well-being of retired persons in New Zealand, and as those—[Interruption]

The CHAIRPERSON (Hon Anne Tolley): Order! Sorry. Could the member have respect for the speaker.

Hon LOUISE UPSTON: Madam Chair, thank you. So, for those that have been watching parts or all of this debate, they would have followed the significant impact intended by the Labour - New Zealand First - Green coalition around this package that is being introduced today. While many of us in the House will disagree with parts of it, none of us would disagree with the need to improve the lives of low-income New Zealanders, and part of that is being able to—

The CHAIRPERSON (Hon Anne Tolley): Order! Sorry. Can I just ask the Hon Jacqui Dean to resume her seat. It must be awfully difficult for the speaker.

Hon LOUISE UPSTON: Thank you, Madam Chair.

Hon Ruth Dyson: Quite difficult listening to it.

Hon LOUISE UPSTON: So it is really important, and I know that the Hon Ruth Dyson doesn’t think that this stage of the committee is important for the public, but when a bill is put through in urgency that is not being enforced and put into place until 1 July, it is the opportunity for the committee of the whole House of Parliament to bring these issues to the fore, because the New Zealand public don’t have a chance to. So I do think it’s important.

I do think that Ian McKelvie has raised a really important point in the opportunity for the independence of the Retirement Commissioner to assess the impact on an annual basis, to report on the impact of the Families Package (Income Tax and Benefits) Act of 2017 on the well-being of retired persons.

My colleague the Hon Amy Adams did bring to the committee’s attention some of the limitations, I guess it’s fair to say, pointed out by the regulatory impact assessment. So this provides another opportunity that’s been lacking in the short time frame in which the Government has attempted to throw this bill together, and, actually, to throw something together that would be better for New Zealanders than what we had proposed in our time.

But this is then being able to say, right, with things like the winter energy payment, which is a bit curly in terms of eligibility and people capturing it or not—

Hon Steven Joyce: It’s not for winter and it’s not for energy.

Hon LOUISE UPSTON: Yeah, it’s not for winter, it’s not really around for energy. So this gives the ability for the Retirement Commissioner to assess the impact, for New Zealanders to be clear about what the impact of this intended piece of legislation has, and, as I said, Ian McKelvie has considered this at great length. And, really, we’d come back to the objectives that the Government has put in the bill itself around targeted social assistance—targeted social assistance to improve incomes for low and middle income families. And it will be interesting to see the first report of the Retirement Commissioner, because I’m assuming that the Government wants to measure the impact of their changes.

So I’m assuming that the Government will be accepting this amendment in Ian McKelvie’s name. They’ve talked about openness and transparency, they’ve talked about the impact on real people, so I am taking the step of assuming that the Government will be supporting this amendment in Ian McKelvie’s name and that we will then be able to see in a year’s time a report from the Retirement Commissioner on the well-being of retired persons, who, of course, make up a large percentage of the New Zealand population, and it’s growing. So we do want to ensure that policies that speak like this actually deliver the intended outcome.

So I am pleased to support my colleague’s amendment to insert new Part 3, which involves the Retirement Commissioner’s ability to measure the impact.

Hon GRANT ROBERTSON (Minister of Finance): Thank you for the opportunity to speak on the new Part 3 in Mr McKelvie’s name. I’ve listened very carefully to the contributions from Ian McKelvie, Amy Adams, and Louise Upston. They’re all very similar, so I think I can make a judgment from that on what is being attempted here with the new Part 3.

We’re certainly very interested to judge the outcomes of the work that we’re doing with the Families Package that’s coming through. The Retirement Commissioner already makes a number of reports each year on the well-being of elderly New Zealanders. This Government isn’t interested in waste. The Opposition might be interested in waste and producing more unnecessary reports, but we’re not. We know that the Retirement Commissioner, when they go through their normal reporting process on the well-being of older New Zealanders, will undoubtedly reflect upon the package that’s going through the House today. So this is an unnecessary report, and the Government will not be supporting Mr McKelvie’s new part as a result.

The question was put that the following amendment in the name of Ian McKelvie to insert new Part 3 be agreed to:

After clause 78, insert:

Part 3 Changes to the age of eligibility for New Zealand Superannuation

79 Principal Act

This Part amends the New Zealand Superannuation and Retirement Income Act 2001 (the principal Act).

80 Purpose

The purpose of this part is to require the Retirement Commissioner to report on the impact of the Families Package (Income Tax and Benefits) Act 2017 on the wellbeing of retired persons.

81 Section 83 amended (Functions)

After section 83(h), insert:

to provide an annual report on the impact of the Families Package (Income Tax and Benefits) Act 2017 on the wellbeing of retired persons.

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

Ayes 48

New Zealand National 48.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

New Part 4

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair Tolley. I’m pleased to rise to speak in support of my amendment, which introduces a new part, Part 4, and changes to the functions of the Children’s Commissioner. I am hoping that the Government, although they weren’t interested in measuring the impacts of the well-being of retired people, will be interested in measuring the impact of their legislation on children. So I’m very pleased that the Minister in the chair, Grant Robertson, is nodding and agreeing, and agreeing that this amendment is important and that measuring the impacts are important.

So the amendment that I have tabled is to require the Children’s Commissioner to report on the impact of Part 1 of the Families Package (Income Tax and Benefits) Bill on the well-being of children. There have been lengthy debates in this House today, as there should well be when a bill is being debated under urgency without the public’s input. The debate has been not so much on the objectives of this bill but how the objectives can best be delivered through legislation. This side of the Chamber has put forward a number of suggestions, and this one is quite simple and quite straightforward, and that is that a new function is added to the Children’s Commissioner to provide an annual report on the impact. In this House, and across New Zealand, actually, we understand and respect the important role that the Children’s Commissioner plays, a very important role, both in terms of their independence but their advocacy for children.

I know this Government has made a lot of children and that the Prime Minister has taken on a role herself in terms of reducing child poverty. So I’m sure that’s why the Government will be giving serious consideration to supporting my amendment to ensure that such a significant policy—such a significant policy—that the Government has introduced actually delivers. I think that annual report by the Children’s Commissioner and the ability to report openly and transparently on the impacts—because it might well be that in the first year it’s not been as successful as the Government may have wanted—the ability, in measuring the impact, means you can then adjust. I think it’s a sign of a responsive and responsible Government who measures, reports, and then is able to adjust where necessary. It might be by providing greater levels of support in one area than another.

Using the Children’s Commissioner and having this annual report into the impact, I think, provides a fantastic way—it’s a fantastic barometer—for the Government to be able to then say, “Right, in the next Budget, we’re going to put even greater amounts of support in this one area.” By using social investment, for example, by having greater levels of data and analysis, they may then say, with the support of the Children’s Commissioner’s report, that it might be that we need to put more into paid parental support, or it might be that the Government may backtrack on the unwise decision they’ve made today that those who are on paid parental leave can’t get the baby bonus, for example.

And it may well be that in the annual report on the impact of this policy and the implementation of this legislation might highlight that that’s been an opportunity that should then be taken up. I would really encourage the Minister in the chair to answer any questions around this new Part 4 that I’m proposing in terms of measuring impact, because there’s been a lot of talk but there is nothing in the legislation currently, which is why I think this amendment fills a much-needed gap in terms of being able to measure and report on impact. This is, probably, of anything the Government does, probably in the next three years, the most expensive. So I do think that there is a duty and obligation on the Government to report on its impact, and to do that independently through the Children’s Commissioner, I think, is the best avenue available. At the end of the day, the speakers on the other side—and there haven’t been that many, to be fair—have talked about the fact that this is about increasing the well-being of children and some that have been in poverty they want to lift out of. Well, I think the New Zealand public deserve to know if it’s worked or not.

SIMON O’CONNOR (National—Tāmaki): Thank you, Madam Chair Tolley. Look, I want to take, I think, a relatively brief call on this, but we’ll see if that ends up being true. I think the concept of this is a good thing, and why it’s quite positive—it’s in a very similar vein to the previous one in terms of having someone do an overview. But why this is particularly important, and why I believe the Hon Louise Upston has put it forward, is that it is an acknowledgment, first and foremost, as we would expect, that the Minister, his officials, and the various ministries will be doing their reviews. We can anticipate that the Ministry of Social Development, the Ministry of Business, Innovation and Employment, and so forth will actually be reviewing, and that’s excellent. I imagine various select committees will be looking at this; that’s excellent too.

So I think it’s important in the initial context that we understand there are some reviews. But, really, there isn’t much better than having an independent source, and I know from both sides of the House that there is respect for what the Children’s Commissioner does. We’ve heard throughout the course of the day—in fact even in the policy development over all this of this entire bill, which this particular amendment addresses—the talk about reviews and evidence base.

Well, I think—and I would hope, but we would welcome the Minister’s reply—that a little bit more evidence would be a welcome thing. Again, “evidence-based” is being used many, many a time here, and if you couple that with the respect that the commissioner has, regardless of the particular person, then here is a great opportunity. So even though someone like myself is broadly opposed to a lot of what this bill is doing—or more the how it’s doing it—I am supportive that there is going to be, if this tabled amendment is accepted, a further mechanism to review.

Now the Children’s Commissioner will have a very prescribed role. The fact that it’s every year, I think, again is positive. It could have been for longer. It could have been a three-year cycle, but when we’re talking about our children, in particular, they grow up and they grow up quickly. For those of us with children—or, in my case, inherited—you realise that they change very quickly in a short period of time, so I don’t think it’s unreasonable of the member who’s put this amendment forward to make it a yearly report.

As it says, it’s there to look at the impact of every element of this bill. It’s not here to be particular on any part; it’s an overall impact. I think, and I would hope for—and it’s perhaps something outside, effectively, what the amendment needs to be—is actually a conversation between the Minister and the Children’s Commissioner for what that review might look like in coming in front of the House. And, look, there’s always the chance that the Minister or the Ministers responsible for this will get challenged.

But you know what? The Minister too might even get—to put it into a little bit more childish parlance—some warm fuzzies. He might even get some—not literal ones, but, you know, some warm fuzzies from the Children’s Commissioner. And, actually, perhaps if I could even float this as a small token, a positive set of reports from the Children’s Commissioner as a result of this amendment may provide that Minister the opportunity to ask this side of the House to reconsider its position. So think of the opportunity—think of the opportunity. [Interruption] That member too, but I’m sure it wouldn’t go to his personality, might be able to take such reports, which would be glowing of his families package, and beat the Opposition around the head. Now, I know that’s not his style. He’s a very quiet man, but there is that opportunity.

Look, I think overall this does sit—and I’m sorry that the previous amendment was defeated down, but this one is particularly looking at our young people. Maybe as a way to try and influence the other side in thinking about this—while we may be looking, in the previous part, at superannuitants, and there isn’t necessarily a lot of change in their lives, this is about the young people in those first years of their life, which this overall families package is addressing and seeking to embetter. There is an enormous amount of change, and perhaps, just perhaps, the initiatives being put forward in this bill aren’t quite landing in the space that they’re required. So I’ll conclude by returning, as I often do in my speeches, to where I started from, acknowledging that there are a lot of good speech tactics.

Hon Member: A very small circle.

SIMON O’CONNOR: Oh no, not a whirlpool—going up, actually. But, no, seriously, I understand the Minister will have many people providing him advice, but the Children’s Commissioner provides a very particular if not unique perspective—one that is independent, and, dare I argue here, it actually could be that independent type of review and commentary that all sides of the House would be able to take, respect, and understand. So I commend this amendment to the House and certainly urge members to give it serious consideration.

LAWRENCE YULE (National—Tukituki): I rise to speak on this amendment, which inserts a new Part 4. I’ve sat here this afternoon listening to the contention around the winter energy payment. The real reason for that is it’s both untargeted and a “spray and walk away” type of approach. Actually, what we need to do is if we’re doing things like this we need to be able to measure them. So to have the Children’s Commissioner reporting on an annual basis on how this winter energy plan is going to work, I would think, would be a very useful thing for this Government to have. If you look, and I’ve done a bit of research and I think—[Interruption] Sorry. If we look at what’s involved here and you look at what the Government has proposed, then, actually, you will find it’s very similar to the UK model, only very different.

Sitting suspended from 6 p.m. to 7 p.m.

LAWRENCE YULE: Before we left for dinner, I was talking about the UK winter energy package, of which I presume this Government has chosen to follow a similar example. But in the UK, it’s a lot more targeted. There is actually also a cold payment—for really cold days, you get an extra amount. Actually, the older you are, you get an extra amount. So it is way more targeted than what we are doing here. As part of the winter energy package and Part 4, we are talking about the Children’s Commissioner having a role in managing and looking at and monitoring what the winter energy package does. We think that’s important, because when you look at the laudable goal of lifting people out of poverty and making sure they live in warm homes, then there are a number of things that are really important: insulation; heating; clothing, as already said by some of my colleagues earlier in the day; and even curtains. So how do you know, actually, if this winter energy package is going to do anything to alleviate poverty or improve living conditions if you don’t measure it?

The Children’s Commissioner is an ideal way of measuring it, and this side of the committee—and I’m sure you are really important about the welfare of our children. Unless we measure it, we don’t know this is going to work. There is actually no guarantee that this package will achieve what the Government wants for the most vulnerable people we’re trying to look after: our young children and their families. It will work for many, but we cannot be guaranteed it’ll work for all, and the Children’s Commissioner is actually a perfect way of measuring this.

I’ve sat in this Chamber this afternoon and listened to hours of debate, actually, and wonderful contributions from my side of the Chamber on the winter energy package. The reason I say that is because if the winter energy package, and this part of the bill, had gone to a select committee, then many of the suggestions that this side of the Chamber has recommended today may actually have been incorporated into the bill. So our amendments and Part 4, which has been added, are a genuine attempt by this side of the Chamber to make a difference to the children that we in this Committee are caring about. If we’re not careful, if we do not measure it, we will end up in exactly the same situation as in the UK, where next year there will have to be another amendment to it, where, in fact, there will be different variants of it. Actually, while most of this day has been spent on superannuitants as part of the winter energy package, there is a big hole in this unless we measure it. So whether we spend money on heating, clothing, curtains, insulation, or paying people more, there actually has to be a robust way of measuring this or, actually, we have no guarantee whatsoever that this scheme will work.

When I entered this House, I did so on the basis that we could make a difference to things, and I think this Government is trying to make a difference to things in a positive way. But what I’ve seen and observed this afternoon is that, actually, we’ve spent a lot of time talking about something quite small and yet when we’ve tried to offer solutions, that side of the Chamber has been dismissive, hasn’t been interested, and hasn’t even taken notice of it.

A party vote was called for on the question, That new Part 4 be agreed to.

Ayes 45

New Zealand National 45.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

A party vote was called for on the question, That schedule 1 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 46

New Zealand National 45; ACT New Zealand 1.

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

Ayes 45

New Zealand National 45.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

New Part 4 not agreed to.

The CHAIRPERSON (Poto Williams): OK, members, Barbara Kuriger’s amendment inserting a new Part 3 amending the Children, Young Persons, and the Families Act 1989, now named the Oranga Tamariki Act 1989, is out of order as being outside the scope of the bill.

Sarah Dowie’s amendment inserting a new Part 3 amending the Family Proceedings Act 1980 is out of order as being outside the scope of the bill.

Nicky Wagner’s amendment inserting a new Part 3 providing funding for IVF treatment is out of order as being outside the scope of the bill.

The Hon Jonathan Coleman’s tabled amendment inserting a new Part 3 extending the eligibility of the community services card is out of order as being outside the scope of the bill.

The Hon Louise Upston’s amendment inserting a new Part 4 creating a Better Public Services bill is out of order as being outside the scope of the bill.

Schedule 1

Schedule 1 agreed to.

Schedule 2

The question was put that the following amendment in the name of the Hon Maggie Barry to schedule 2 be agreed to:

in Schedule 2, Part 1, new Part 7, delete clause 30(2)(e) and (f).

The question was put that the following amendments in the name of the Hon Steven Joyce to schedule 2 be agreed to:

in schedule 2, Part 1, new Part 7, replace clause 30(1) with:

For the purpose of Part 1KA and Schedule 18A, winter period, for the 2018 calendar year, means (despite section 61FF) the 22-week period starting on 1 May.

in schedule 2, Part 1, new Part 7, delete clause 30(2).

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

Ayes 45

New Zealand National 45.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

A party vote was called for on the question, That schedule 2 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 46

New Zealand National 45; ACT New Zealand 1.

Schedule 2 agreed to.

Amendments not agreed to.

Schedule 3

A party vote was called for on the question, That schedule 3 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 46

New Zealand National 45; ACT New Zealand 1.

A party vote was called for on the question, That clause 1 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 46

New Zealand National 45; ACT New Zealand 1.

Clause 1 agreed to.

Schedule 3 agreed to.

Clauses 1 and 2

CHRIS BISHOP (National—Hutt South): Thank you very much, Madam Chair Williams. Well, I haven’t had the opportunity to take a call so far in this debate, and—

Hon Member: Lazy, lazy, lazy.

CHRIS BISHOP: Well, so many of my erstwhile colleagues were so keen to speak on the substantive parts of this bill and what a terrible bill it has been. But I want to make a few suggestions now we come to the title and the commencement clauses about what this bill should actually be called, because the name Families Package (Income Tax and Benefits) Bill is a prosaic and boring title for the bill.

What this bill should really be called is the “Families Package (Free Money for Millionaires) Bill”, because the Best Start package gives free money to everyone who has a baby in that first year. Members opposite have been hilarious about the benefits—or the non-benefits—of universality and targeted assistance during the debate. We heard Dr Webb, the member for Christchurch Central, standing up earlier and lauding the benefits of this highly targeted social assistance—except this is not targeted; this is universal, and it’s completely untargeted.

It should also be called the “Families Package (Untargeted, Generous Spending) Bill” because the winter energy payment is the exact opposite of targeted assistance. We should also call it the “Families Package (Spaghetti of Entitlements) Bill”, because what is concerning about this is just the further complication of an already complicated taxation and benefit system. We’re reintroducing the independent earner tax credit. That credit that the National Government repealed in the 2017 Budget—well, that’s coming back in with all the complications that it creates. You’re going to have to apply for it; most people don’t.

Then we’ve got the baby bonus as well and Steven Joyce’s amendments that were put in the earlier part of the debate on this bill to roll the baby bonus, the Best Start package, into the Working for Families tax credits.

Alastair Scott: Very sensible.

CHRIS BISHOP: “Very sensible”, my colleague Alastair Scott says. Those were opposed by the Labour Party for no good reason. We never heard a real reason why we needed to create a whole new entitlement, the Best Start scheme, and so we have another spaghetti of entitlements. Look, the system is complicated enough as it is already, and the National Government in the last Budget started the process—the very worthwhile process—of starting to simplify a complicated system, and now we’re getting just more spaghetti of entitlements.

This should also be called the “Families Package (Less Money for 1.2 Million Kiwis) Bill”. That is the really regrettable part about this bill, because it reverses those tax cuts that came into effect—or were going to come into effect on 1 April 2018—and it takes away $1,060 per year from the average Kiwi on the average wage. That is really disgraceful.

We should also call it the “Families Package (Regressive and Inequitable) Bill”, because that is actually what the bill is. I think it is regressive. This Government talks a lot about how it wants to be a progressive, reforming, transformational Government. Well, what is progressive—what is progressive—about taking money from people on the average wage to give it to students going off to university who would otherwise have gone to university, and who over the course of their working life will get an income premium from the degrees that they get that far exceeds the value of the loan that they take out? What is progressive about that? That is regressive. That is inequitable. That is regressive and inequitable because those who go on to tertiary education benefit hugely from that education, and we on this side of the Chamber think it’s fair that they pay for a bit of that.

Isn’t it interesting—what was the first move of this Government? They talk a lot about child poverty reduction. That’s been a theme of the last nine years. The Prime Minister is the Minister for Child Poverty Reduction. What was the first thing they did? What was their first big spending promise once they came into office—the first serious spending effort that they put into place? It was hundreds of millions of dollars—billions of dollars—on a tertiary education package on fees free. More money for 18-year-olds from wealthy areas to go off to university, for kids who would otherwise go to university anyway; not on child poverty reduction but on fees-free tertiary education. This bill is regressive, it’s inequitable, and we should rename it so it reflects the actual accuracy of what this package actually entails.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Chair Williams. It’s a pleasure to take a call on the title and commencement, and I, like the last speaker, Chris Bishop, think the title and commencement of this particular bill are completely the wrong way round, because it talks about the Families Package (Income Tax and Benefits) Bill, and what this bill has actually done is it has taken income off those people who have gone out there and hard-earned—every day they go to work, they come home, and it actually gives them their wages in one pocket and it takes it out of the other pocket.

The benefits in this bill—that’s an intriguing one because what it’s done here is it’s actually given the benefits largely to the wrong people. So it’s given $60 a week to those people with young families—and that’s fine if you’re going to target it and you’re going to give it to those families that need it. But, actually, we’ve heard a few times today about “spray and walk away”, and this may well be the “Spray and Walk Away Bill”, because you’re going to spread it around and you’re going to ask people with the energy package to give it back if they don’t want it. So you’re just going to spray it around, walk away, and hope that people are going to come along, go through the red tape that the red party puts in place, and give it back. Actually, it’s not targeted at all; it’s just all over the place.

What disappoints me, if we look at the objectives in here, is it talks about this bill providing targeted social assistance. Now, I’ve heard Grant Robertson say that it’s not all about the dollars and cents; it’s actually about what we can do for families. So, Minister Robertson, what I would like to say to you is that this package alone is not going to do what you think it’s going to do in terms of getting 88,000 children out of poverty, because unless you do the other targeted social things that go with the money, you’re not going to achieve the result. So what it says here is it’s part of the Government’s focus on ensuring children get the best start in life, and complements other legislation.

You’ve made a bill here that is so tight that every time we’ve tried to link it to something else, you’ve broken that chain. Ministers have sat in the chair today and they’ve talked about being able to link the data. So we asked a lot of questions about the energy package—people going overseas. They can go overseas for a period of time; if they do, they have to pay it back.

We’re actually told that the Government departments are linked up. That’s really funny, because every time we talk about linking up Government departments and using data for social investment or for any other sort of social assistance, we get pushed back and we get told by members of this Government, particularly the Green Party over there, that it breaches privacy. So this is not targeted social assistance and neither is it social assistance, it’s actually taking money off those people that earn it—Duncan Webb, I think we had the conversation last night about the fact that it’s hard-working truck drivers, it’s plumbers, it’s electricians, and it’s all those people out in the workforce. You put together housing targets, you put in roading targets, and you put a whole lot of things so then what you’re doing is you’re going and penalising the people that are doing all those projects for you, by taking those tax cuts out of their pockets.

The CHAIRPERSON (Poto Williams): Excuse me, not for me.

BARBARA KURIGER: Sorry. Sorry, Madam Chair. The other question I’d like to ask is: why are we repealing the tax cuts that were aligned to come in on 1 April, and a lot of these benefits are starting on 1 July? Can I suggest that maybe that’s got something to do with the fact that we’re just trying to squeeze a little bit more money out here. If the Government was really serious and the Minister was really serious about this, then the Minister would actually put these so-called benefits—and we can disagree on what we call the benefits—in place on 1 April 2018 so that that could fill in. He’s just trying to create a gap so he can make his own Budget balance. So he’s leaving 90 days where they don’t have to pay anything, buying themselves a gap.

The other thing that’s become very clear by turning down Louise Upston’s amendment just before is that this Government is very reluctant to measure and manage the things that they’re putting in place. Thank you.

The question was put that the following amendments in the name of the Hon Steven Joyce to clause 2 be agreed to:

replace clause 2(2) with:

Subpart 1 of Part 1 (Best Start tax credit) comes into force on 1 April 2018.

replace clause 2(6) with:

Subpart 1 of Part 2 (winter energy payment) comes into force on 1 April 2018.

replace clause 2(7) with:

Subpart 2 of Part 2 (rates of orphan’s benefit and unsupported child’s benefit) comes into force on 1 April 2018.

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

Ayes 45

New Zealand National 45.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendments not agreed to.

A party vote was called for on the question, That clause 2 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 46

New Zealand National 45; ACT New Zealand 1.

Clause 2 agreed to.

House resumed.

Bill reported without amendment.

Report adopted.

Third Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Families Package (Income Tax and Benefits) Bill be now read a third time.

What a fantastic day for New Zealand. We have managed now to come to the third reading of a piece of legislation that will transform the lives of thousands of New Zealand children. At the very outset, I want to pay a special tribute to the officials from the Ministry of Social Development, IRD, Treasury, and other departments who have put this package together for this legislation within a very short time frame.

This was a core part of the 100-day plan of this coalition Government. It was a core part of the 100-day plan of this coalition Government because it will make the lives of children and families in New Zealand better. Yesterday, when we saw the reactions from UNICEF and the Salvation Army, what they said was that $60 a week makes a difference to these families, the Best Start payment makes a difference to these families, and lifting Working for Families makes a difference for these families. On this side of the House, we are incredibly proud of that. Let’s be absolutely clear: 88,000 children out of poverty by 2021, 71,000 children out of poverty next year—and Steven Joyce didn’t quite manage to read all the up-to-date documents. He got some documents that were out of date. When Treasury came to look at the package in full, they said 88,000 children lifted out of poverty, and they said 354,000 families benefiting by an average of $75 per week.

What this bill is about is it’s about making sure that New Zealanders get a fair share in prosperity. When we put out the Budget Policy Statement and the Half Year Economic and Fiscal Update yesterday, yes, it showed the books in good shape, yes, it showed the New Zealand economy growing, but what we all know is that that economic growth has not reached many of our citizens. So, faced with a tax cut package that would’ve seen over $400 million go to the top 10 percent of earners each year, parties on this side of the House said, “That’s not fair.”

It’s time to finally start to reduce inequality in this country; to give every single child the best start in life. The New Zealand that I know the parties on this side of the House want is one where your success and your future is determined by your hard work and by the strength of the community around you, not by the size of your parents’ bank balance; a country where every single child, whether they live in town or country, whether they come from means or not, knows that the Government will be there to support them, knows that the Government will be behind them all the way. That’s why we have prioritised an investment in children.

During the debate that we’ve had on this bill, we heard time and time again that money was being taken off people. It was not. It had not got into their pockets—it had not got into their pockets. Yes, we repealed tax cuts, but they had not come into force. So New Zealanders know that in the future, under this Government, they won’t be paying more personal income tax than they have in the past, but that there will be a package that actually sets out to improve the lives of people in New Zealand.

I am incredibly proud of this package. I’m incredibly proud that in our first 100 days this Government has been able to show that we will make the legislation and we will develop and implement the policy that will make a massive difference in the lives of New Zealanders.

I want to thank the New Zealand First Party and the Green Party for their support of this coalition Government. This is a Government that means business. This is a Government that’s going to get on with reducing inequality. This is a Government that is united in giving every single New Zealander a fair go. I am delighted to finally commend this bill to the House.

Hon STEVEN JOYCE (National): It’s transformative, all right. It’s transformative in that it makes 1.2 million New Zealanders worse off. That’s the only thing that’s transformative about this bill. This bill is all about Grant Robertson being the “Grant that stole Christmas”. He tries to rock in and say that he’s gifting things to people, but, actually, here we are frozen 11 days out from Christmas—10 days out for everybody else—and 1.2 million New Zealanders know that it’s the “Grant that stole Christmas”.

And you’d think that Grant Robertson could at least say to New Zealanders who are losing their $1,060—he could at least acknowledge that that’s what’s going on. Instead, he stands there like King Canute pretending that that’s not what’s happening. He stands there and says, “Oh, it didn’t happen, it’s not in my talking points.” Well, it happened all right, and he is removing it, and he needs to own up to that. Perhaps then people would respect him, because then he could say, “Well, actually, I know you were going to get this money, but I’ve decided to give it to the university students; I’ve decided to give it to people on high incomes via a baby bonus; I’ve decided to do a winter energy payment because I can’t bring myself to lift tax thresholds and provide money for superannuitants.” But he didn’t say that; all he did was try to pretend that it hadn’t happened—that it hadn’t been put into law.

There are some good things about this package. The good things are those that were put in place by the previous Government: the accommodation supplement changes and the Working for Families changes. The bulk of what this Government achieves in lifting people out of poverty, and children out of poverty, is achieved through the changes that were announced in Budget 2017—which are left in place.

Then we’ve had the rather moving feast of how many other people, how many other children, would be lifted out of poverty. We were told yesterday it was 39,000 more; then we were told that’s not till 2021; then we were told it’s 21,000 next year, not 39,000—21,000 next year—and then, in the regulatory impact statement, it says 12,000. Now, apparently, according to Mr Robertson, we got the wrong copy. He’s now been out and strong armed the officials—strong armed the officials—to make it a bigger number, because his number was bigger, and that is in spite of the fact that that was signed out by the IRD, Treasury, and Ministry of Social Development, and, undoubtedly, it was inspected by his office. It was wrong, apparently. It was wrong, and, actually, they were all wrong; he’s right, the 12,000 figure is wrong! Well, it’s not wrong—it’s what is in the disclosure statement in the regulatory impact statement of this bill. I’ll tell you what, this side of the House thinks that his numbers are very squidgy indeed.

So what we haven’t had in this 14-hour debate is any explanation why 1.2 million New Zealanders should miss out on the benefits of their hard work over the last nine years from 1 April next year—why people on the average wage should have to pay $1,060 more in income tax from 1 April than was scheduled for them, and is now the case when this bill passes into law. We’ve had no explanation why the first thing a Government that says it wants to lift wages does is to reduce what workers get from their wages. There’s been no explanation for that, and the Andrew Little that used to be proudly standing up for the workers of New Zealand is quiet or angry, depending on his perspective, when that happens.

It is ridiculous that we should be having more than half of full-time wage-workers on 30c in the dollar marginal tax rates. We need to change that, and Parliament will have to change that, and it’s a regressive step to cancel those changes, which is what the Government has done.

And then there’s the baby bonus. Weirdly, tax cuts are bad because they’re universal and everybody gets them, but it’s right to give $3,120 for wealthy people when they have a child—a baby child. And then you’ve got this big problem with this baby bonus, which are these very high effective marginal tax rates. Again, in the regulatory impact statement—and for all I know, that’s wrong as well, because, after all, Grant gets to edit it once it’s been tabled in the House—

Mr SPEAKER: Order!

Hon STEVEN JOYCE: Grant Robertson gets to edit it once it’s been tabled in the House—thank you very much, Mr Speaker.

Mr SPEAKER: Someone’s listening.

Hon STEVEN JOYCE: That’s good. And good news for you, Mr Speaker: quite a few more than just you—my mum and dad as well. The $3,120 abatement rate—Treasury has warned of effective marginal tax rates of over 100 percent because of the spaghetti of entitlements that this Government is making worse rather than better.

Now we offered them the idea: why don’t you include this in Working for Families? It would have been straightforward, easy—we even offered them a one- or two-page Supplementary Order Paper that would have done it for them, and they turned us down because it wasn’t their idea. We know how much this lot doesn’t like it when it’s not their idea.

Then we have the winter energy payment—that is truly an embarrassing piece of legislative fluff, to quote my good friend from Northland. It is an embarrassing piece of legislative fluff. It’s a Winter Energy Payment that is neither for winter nor for energy: you don’t have to use it for your power bill and it doesn’t come to you in winter. It’s a hastily designed piece of fluff to cover for the drop in superannuation from when the tax threshold changes were cancelled. It is pointless bureaucracy.

It also short-changes superannuitants, as Nick Smith pointed out. This next year, superannuitants will get only $466 instead of the $680 they would have got under the previous Government. It’s not indexed, so, actually, the real value of it declines every year.

And then there’s the silly last-minute thing about the fact that you have to stay in New Zealand, or you can go on holiday but then you have to get reported by the Customs Service if you go overseas so you get your money cancelled and a big hand comes out of the ATM and grabs your money back—that’s what they’re offering. It’s weird. Again, we offered them a solution. We said, “Don’t do all this rubbish. You’ve got yourself stuck in a hole. Why don’t you actually turn around and just do a one-off increase for superannuation?” It would have been a much simpler approach, but no—again, too proud. They have to persist with the charade of a poorly designed programme.

This is the problem: we have a very proud 36.9 percent party that’s come into Government and is now executing a programme that was not supported by anything like the majority of New Zealanders, in terms of this package. It wasn’t campaigned on by New Zealand First or the Greens—in fact, they voted for the previous Government’s package. That’s what they did, and here we are—we have all these Ministers lining up, members lining up, and saying, “This is supported by the majority of New Zealanders.” Well, I’ll tell you what: it isn’t. It is clearly not supported by the majority of New Zealanders; it is supported by only 36.9 percent, if that, of New Zealanders. It was so messy many of them would not have been able to even make head or tail of it. It is messy, poorly designed, confused, rushed, and that’s the quality of this new Government’s lawmaking. In the last 14 hours, we’ve been able to show what a shonky piece of legislation it is.

The interesting final point is that this was their one shot. If you look at the fiscal programme that they’ve laid out, it is so tight that they will never get another shot to do this. They already have 28 specific fiscal risks—29 if you count Grant—

Mr SPEAKER: Order!

Hon STEVEN JOYCE: Mr Robertson—28 specific fiscal risks that they have. There is no way that they’re going to do another package.

Mr SPEAKER: Two strikes.

Hon STEVEN JOYCE: This was their one shot—this was their one shot, and now they have blown it. [Interruption]

Mr SPEAKER: Order! The member will resume his seat. I’m trying to tidy up the quality of debate in the rules here, and Kris Faafoi is not helping.

Hon STEVEN JOYCE: Thank you, Mr Speaker. This was their one shot, and they’ve got it wrong. What they’ll be forever known as is the party that delivered us all the “Grant who Stole Christmas” for 1.2 million New Zealanders, and took $1,060 away from average-wage workers. That’s what’s happened in this House tonight.

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Mr Speaker, this is a proud day for this Parliament. This is a proud day when we can stand here and say that we have made law that is going to deliver for 384,000 New Zealand families $75 extra a week. This is the kind of thing that makes a difference, and is why many of us come here.

Steven Joyce, in his previous speech, said that we hadn’t given any reason why 1.2 million people were going to miss out; well, all of those people are in the top five deciles. We make no apologies for the fact that what we are doing here in this House tonight is redistributing money to where it is needed—to families—and supporting those families. The fact that I will forgo a tax cut and that will contribute to lifting 88,000 children out of poverty is something I am happy to do—and something that I am proud to be part of a party that has come to this Parliament to make that kind of change. It is my absolute pleasure to be part of a party that supports this and to take a call on it.

I would like to congratulate my colleague the Hon Grant Robertson; our Prime Minister, Jacinda Ardern, who has led on this as well; and my colleagues Carmel Sepuloni and Stuart Nash, who have worked hard on this legislation. This is the kind of thing that makes a difference. This isn’t tinkering around the edges; this is making people’s lives better, and I am proud of that.

Rt Hon DAVID CARTER (National): It’s an absolute pleasure to take call in the third reading of the Families Package (Income Tax and Benefits) Bill. I listened to the contribution from the Minister of Finance, Grant Robertson, and I just wonder what planet that man is on. This isn’t about, as Dr Megan Woods said, delivering to 88,000 children and lifting them out of poverty.

I know we’re only 10 days out from Christmas, but why is the Government passing a package that’s so generous to me? I’m a huge beneficiary out of what’s happening here. We’re wiping the tax cuts that are currently in legislation, ostensibly to make sure there’s enough money for a tertiary package. I’m one of those people with three teenage kids about to start their university studies. So they’re going to be better off—or potentially I’m going to be better off—by $10,000 or $12,000 for each one.

Not only that, then I looked through the legislation and found the winter energy payment there. I don’t need to declare a conflict of interest I’m sure, but I’m eligible for the $700 winter energy payment. I tell those members on the other side that I very much doubt that I’ll spend that to lower my energy bill, and I certainly assure members on the other side that I won’t be one of those that opt out. If this Government is stupid enough to pass a package that they say is delivered to people in poverty and they spray around taxpayers’ money as liberally as this and I’m a beneficiary, give me one reason why I should opt out of that generosity.

I do accept, in my first reading speech, that there was one other bonus that might have been available—the baby bonus. I’m not sure I’ll make it. I’m not sure I’ll make it, so that might be a saving to the Government.

I said earlier to my learned colleague the Hon Chris Finlayson that urgency is a wonderful team building exercise for the Opposition. I want to acknowledge the team that we’ve had here, who have—[Interruption] Well, Kieran McAnulty interrupts again. That’s all he’s done throughout the last 14 hours. I don’t think he’s taken a call, apart to ask for one closure, and I think that was lost because he got it wrong. I have never seen a Government, through a period of urgency, so demoralised—so demoralised—as this Opposition has presented hundreds and hundreds of amendments. They’ve all been voted down—not even considered by the Government for their merit in tidying up some very messy legislation.

So what we’ve seen over the last 14 hours is a shambolic process, but it’s a continuation of 44 days of shambolic Government—shambolic Government. There are many, many useful amendments that we offered in good faith to the Government. [Interruption] Kris Faafoi interjects again. I don’t think he’s taken a call in the last 14 hours. He’s very vocal now, as we get towards the end of urgency. Those amendments could have been very, very useful, but they were all rejected with arrogance.

I have been around this place for a while. In my opinion, arrogance normally comes after about three terms of Government. What we’re seeing here is arrogance after about three weeks of Government. So God help New Zealand voters as we move towards the next election.

Madam Speaker—ah, Mr Speaker, I should say. [Mr Speaker holding baby]

Hon Tim Macindoe: A little bit of both.

Rt Hon DAVID CARTER: I won’t make any comment on that. But I do want to say to all members of this House that I won’t be here next week, so I want to take this opportunity of acknowledging the tremendous effort that’s been put into this debate by my colleagues. I want to wish them the very, very best for Christmas. They deserve a break. They’ve worked extremely hard.

To the Government members, I also take this opportunity of wishing you a very merry Christmas. Have a good break. But over that break, just think about—

Hon Chris Hipkins: Here it comes.

Rt Hon DAVID CARTER: I’m not going to leave it there. Chris Hipkins wants me to leave it there. But I’ve got an important message, particularly for the Leader of the House: Government’s not about student politics, Mr Hipkins. This stuff gets serious. The voters of New Zealand deserve a Government that’s truly got to focus on the issues. As the Government members reflect over the Christmas break on what a shambles it’s been in the last 44 days—what a shambles this urgency process has been with them—I want them to reflect on the fact that it won’t be too long before this House needs to sit again and tidy up many of the inaccuracies and foolhardiness and stupidity that’s been written into legislation tonight, as we pass the Families Package (Income Tax and Benefits) Bill.

As I said to the House earlier, I don’t consider myself a person that should have benefited by the benefits that are given in this bill, but if the Government really thinks that I’m in desperate financial circumstances and wants to extend its largesse and generosity to me, well, I’d be silly not to take it, and I intend to. So I say to those members, as they reflect over the Christmas break, just remember that with the perks comes responsibility.

Hon TRACEY MARTIN (Minister for Children): Kia ora, Mr Speaker. Thank you very much. I rise on behalf of New Zealand First to add our voice in support of the Families Package (Income Tax and Benefits) Bill. This is probably the first major statement to show New Zealand that this Government is a Government of change, which is what the majority of New Zealand voters voted for.

This is a Government that has decided that we will support our seniors, through a winter energy package—and many other families as well. This is a Government that has decided that, as many members of the Opposition’s parents experienced through the universal family benefit, we will start to move our country back to a place where, rather than introduce at least 15 more taxes on the New Zealand public—which is what the previous Government did over their term, while they, with one hand, said that they were putting more money into the pockets of New Zealanders. Remember the phrase “fiscally neutral”? Does anybody remember the phrase “fiscally neutral”? When they gave with a tax cut with one hand, they raised 15 other taxes with the other. One of them was the paper boy tax. Anybody remember that?

So, just to put things in a little bit of perspective, I am delighted to stand to say that the turn that needed to take place in New Zealand, to show that a Government will support our citizens more fully, more appropriately, in a way that all New Zealanders can see has benefit specifically, more logically for our children, then we will stand and support it. We have worked collegially with the Labour Party and with the Green Party.

Talk about team building. I can see why the Opposition has had to be team building. They filibustered all the way through, with some of the most bizarre arguments, like “it’s not cold in spring” or “it’s not cold in autumn”, or something like that, and showing an amazing amount of ignorance, which they shared around themselves by not knowing the 28-day rule, which has been in place for something like 25 to 30 years, with regard to superannuation. I mean, they’ve had to be team building, because it’s the first time, probably, they’ve actually had to do work without a whole lot of support staff behind them to prep up. So no wonder it’s team building, and I hope it works for them as they go forward.

But I want to close by reading a comment from the Children’s Commissioner. He says, “We welcome the Families Package announced today and we hope it will make a big difference to the lives of many New Zealand children … These are really positive steps, many of which echo recommendations … by the Expert Advisory Group on child poverty in 2012.” The expert advisory group was formed and asked to do that work by a National Government, who then didn’t put in place the recommendations their own expert advisory group asked them to do. It took this Government to have the courage to actually put in those recommendations.

He continues by saying, “Raising family incomes, enabling warmer homes, and providing additional assistance for the first year of a child’s life (targeted thereafter), will do a great deal to improve outcomes for our children. Income is fundamental to better outcomes for families. … We are excited to see this commitment by Government, along with the continued contribution by the philanthropic sector, NGOs and the whole community, … ensuring all children have the opportunity to develop and thrive in … New Zealand.”

I think the word “excited” is a good one to highlight, because that’s one of the words that most NGOs and charities have used since 26 October. The other word that is being used a lot throughout New Zealand right now is “hopeful”.

Kiritapu Allan: Hopeful.

Hon TRACEY MARTIN: Hopeful. Young people—young people are hopeful, finally, after nine years. Our older citizens are hopeful, finally, after nine years. Our families are hopeful, finally, after nine years. Our student body is hopeful, because now they see a Government with empathy. They see a Government that hasn’t decided that the dollar is king; they see a Government that knows that it’s people that make up a country, it’s people that the Government must support, and that is what this Government will do.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Mr Speaker. We have a Minister in Grant Robertson who talks a lot about the future of work, and I guess the message that’s been given out after summarising this piece of legislation and the last day and a bit is that you work and the Government will take it off you.

And we’re talking about people who are on the average wage. We’re not talking about people who are in that highest category. And we’ve heard a lot of debate, and I, you know, respect the fact that the Rt Hon David Carter’s stood up in the last few hours and talked about the packages that you’re delivering to him—

Mr SPEAKER: Order!

BARBARA KURIGER: —that the Government is delivering to him. And the whole thing is about you’re taking it off people who are on the average wage. You’re taking it off people with less, and the Government is giving it to people with more.

I have seen a lot of amendments go up in the last 24 hours or so, and some of those amendments had merit.

Hon Chris Hipkins: Some of them. Ha, ha!

Hon Grant Robertson: Not all of them.

BARBARA KURIGER: A lot of them did, and I didn’t expect the Government to pick up all of those amendments. There was merit in all of them, but some of those amendments I would’ve expected the Government—if they were a Government who put in this piece of legislation that they were going to provide targeted social assistance.

Now, I saw an amendment go up from Andrew Falloon, and I thought I saw some light in the eyes of the Minister of Finance when he said to our member Andrew Falloon that he was having some sympathy for the message. That amendment was around just an extra four weeks for families who had lost babies. And I didn’t think it would’ve taken even a calculator to work out what that would’ve cost. You could’ve added that up in quite a short time, and I’m really quite disappointed that the pride that Megan Woods talked about—she talked about the Government being so proud. Well, actually, sometimes pride gets in the way.

And if I have anything to say that I’m most disappointed about, it was that that amendment could’ve been quite easily picked up. I wouldn’t have cared if you’d changed the name of it. You could’ve called it your own. You did that with the Trans-Pacific Partnership—you put a different label on it. Surely the Government could’ve done that to support some of the vulnerable parents at a time in their life when they most need it. So I’m really disappointed about that one.

So summarising the week—$1,060. We’ve had the debate about whether it’s being repealed. We talked last night, and I know Mr Hipkins was a little bit interested in some of the research that’s been done, but it’s not hard to look up “repeal” in the dictionary. It’s about revoke. The Government can no longer deny that they’re taking money off the average wage earners who need it in this country, who get up, they work hard, they go to work every day. But I’ve actually not only seen the “Grant that’s Stolen Christmas”, I’ve also seen some meanness in not accepting, in particular, one amendment today from this Government. And I’m very disappointed, and I hope that, Minister Robertson, you might see it in your heart to, at some point in the future, at least look at that amendment.

There are some very good ideas in some of the other ones. I know that the Hon Louise Upston worked very hard around measuring and managing and, if you don’t measure and manage this, you are not going to get 88,000 children out of poverty. Thank you, Mr Speaker.

JAN LOGIE (Green): Tēnā koe, Mr Speaker. Tēnā koe, Heeni. [Mr Speaker holding baby] It’s beautiful to see a baby in the Chair as we go into this debate, and passing legislation that is—

Hon Dr Megan Woods: Your microphone.

JAN LOGIE: Microphone? Oh. [Adjusts microphone] Thanks. Ha, ha! I couldn’t work out the sign language.

It is really fitting to see a baby in the Chair as we go into this final debate on the Families Package, which is—

Hon Members: Two babies.

JAN LOGIE: —ha, ha! And the Speaker; yeah, it’s late—in this legislation that will lift 88,000 children out of poverty and 384,000 families getting an average of over $70 extra a week. This is what it’s about: that baby right there and all of those other babies around the country living in households that are cold because they don’t have enough money to put the heater on through winter, that don’t have enough kai for mum to be able to look after herself while she is caring for baby, where the future that that family is looking forward to has been informed by the poverty that’s come before.

This is a day where we say, “We are changing that story for our country.”—that we are putting our children first. And this day hasn’t come out of nowhere. This has been a result of conversations happening in our community from amazing groups like Child Poverty Action Group and Tick for Kids, which is a massive coalition of organisations and individuals, who’ve been asking, I think, 15 years, for this House to put children first.

So as we go in almost to the holiday period and look forward into the next three years, I am proud to stand here and to say that children are at the centre of this new Government. And I do want to say that, for the Greens, we don’t see this as the end of the conversation—that this isn’t the end of what we are going to do for children. We recognise the outstanding issues in terms of the in-work tax credit, in terms of benefit levels for those families as their children get older—that they aren’t sufficient yet. We recognise that there is still entrenched inequality in our tax system, and we would lower the tax rate at the bottom and raise it at the top. But we also know that we need to be able to support people in and out of paid work, as we have so much churn in our workplace. These are issues that this Government is committed to engaging with. They’re not going to be solved in 43 days. We’ve had a blimmin good start—my pretty language: blimmin good start—in 43 days at putting children first, and those larger issues, we are going to grapple with.

We recognise that the accommodation supplement is necessary now, but it is also a structural problem that is feeding money into the property owners who already have a lot and is driving up rents. We do want to engage with that as a problem and find a solution, and this Government is going to do that because we are putting children and families first.

As we go into this holiday period, I do just want to remind and bring in the focus of the experience of children that has been given to us from kids over the years talking about that impact of poverty. I assume that many people in this House, when they think about holidays, have kind of romantic images of maybe what it was like for them. And I’ll speak for myself, for me, when I had school holidays. It was time at the beach, it was time camping, it was time roaming with friends and coming back for barbecues, and a Christmas holiday with a full table on the day and eating too much and waiting to open the presents.

It’s a time that I think many of us assume kids are going into right now. But the truth is that children in this country right now, whose families are in poverty, are worse off now than when they’re at school, because when they go to school there’s charity, that they’re having to be reliant on, that will give them breakfast and give them lunch. The holidays are a time of hunger, and they’re a time where there is no Christmas dinner, there are no trips away, there are no ice creams at the beach, they’re lucky even to have the money to be able to get to the beach if they live too far away, and they can’t even necessarily be sure to be able to hang out with their friends, because their friends might also be in the same situation and they are too embarrassed to bring people home, because there’s no food in the fridge and there’s nothing to play with.

That is a shame on all of us, and that is what this legislation starts to fix. It’s not going to fix it for these holidays. The last Government’s tax cuts wouldn’t have either. But we are making that commitment that we are hearing those children’s experiences and their voices and we are committing to doing better, because all of those children deserve that idealistic holiday of running wild on the beach or in the park or on the streets. That matters in terms of building a life; not just existing. So the Green Party is proud to support this legislation to put our children first.

Hon AUPITO WILLIAM SIO (Minister for Pacific Peoples): Now that I see the baby is awake, I’m reluctant to be loud and I’m reluctant to be long in my speech. [Mr Speaker holding baby]

Mr SPEAKER: Good.

Hon AUPITO WILLIAM SIO: But I look across the other side and I see Mr Joyce, his head hung over. He looks tired. He looks ragged. He looks rundown. I see the chief whip. He’s just trying to put on a brave face, but they’re rundown. The new member Lawrence Yule—he’s trying to put on a brave face. I was expecting this supposedly strong and big Opposition to fight tooth and nail to defend their record for the past nine years. It’s not even midnight. We were expecting them to debate this until midnight tomorrow.

What a sour bunch of I don’t know. Why should anyone believe a single word that—[Interruption] Shh!—the baby. Why should anyone believe a single word of what they have argued for? Why should anybody believe their feigned caring for families with babies? Nobody believes that, not when you consider the nine years that they’ve been in Government—nine long years.

Mr SPEAKER: Order! Order! I am going to ask the member now to address the bill.

Hon AUPITO WILLIAM SIO: That’s why this bill is critical. It is crucial. For nine years, they’ve allowed the gap of inequality to grow—for nine years. That’s why this bill is so important for families with children. That’s why this bill is so important for working families, working families that have been standing in long lines—long lines—for food parcels to subsidise their low wages that this Government allowed for nine years.

We’ve seen people homeless—that’s why we’re raising the accommodation supplement. This lot, despite homelessness spilling out on the streets, in cars, in garages, and in public toilets, still denied there was a crisis.

Hon Member: Now you’re filibustering.

Hon Member: You’re filibustering.

Hon AUPITO WILLIAM SIO: Shh, you guys! Watch the baby, OK, and listen. Listen up—this is important. For nine long years—nine years—they did nothing as elderly people died in the cold, damp houses during the winter time. That’s why the energy payment is important.

Nobody believes a darn word they’ve said to try and pretend they care about that baby that Mr Speaker is holding. They don’t. They don’t care one iota. They don’t care about the elderly. They don’t care about mums with young children. They don’t care about families with teenagers. They don’t care about people who have struggled, year in, year out, under their Government—struggled while their mates made it good. Because the tax cuts that they introduced—that concentrated wealth in a small minority of this country.

I’m proud to support this package. I want to acknowledge the leadership of Jacinda Ardern, our Prime Minister. I acknowledge Grant Robertson, the Minister of Finance, who’s had the gusto to make this happen. I also want to acknowledge these things happen because of New Zealand First and the Green Party here.

The message from this package is that everybody has a responsibility in raising children. Everybody has a responsibility in caring about the support that parents ought to receive in raising children. That’s a collective responsibility. These buggers, this lot here, haven’t cared one iota for it.

Mr SPEAKER: Order! Order! No, no. No, no. The member will withdraw and apologise.

Hon AUPITO WILLIAM SIO: I withdraw and apologise. I want to wish that baby and you, Mr Speaker, a merry Christmas.

ANAHILA KANONGATA’A-SUISUIKI (Labour): I am absolutely happy to speak on the third reading of the Families Package (Income Tax and Benefits) Bill. We know that Labour always is at the forefront of change. Fifty-two years ago, on 1 April 1939, under the leadership of the late then Prime Minister Michael Joseph Savage, the first Labour Government’s Social Security Act of 1938 came into force. It came into force because the then Labour Government listened with our heart and enacted action in legislation. The then Labour Government listened—they listened.

Fast track that to now—fast track that to now. After nine years of a National Government, we find children are hungry, the elderly are cold, and they are doing it tough. So how did we get here? How did we get to a point where a roof over our children’s heads and food in their bellies became a luxury? Well, it didn’t happen overnight. Nine years it took us to get here. This does not happen overnight. The working poor is something new that we now hear about. Thank goodness—thank goodness—that the Labour values are enduring, that the Labour coalition Government are listening with their heart and putting these ideas into legislation, because we have heard the pleas from the families, from the children, and from the elderly that they are hungry, that they are cold, and that they need help.

Today, one of my favourite four-letter words starts with F. It drives through my blood. It is called “fair”. Is it fair that we spent the whole day today hearing the other side moaning about “Oh, why isn’t there a summer payment? Oh, doesn’t winter start in May? Oh, why don’t we wait for this? Oh, is it fair that I receive it?” Is it fair that we had a whole day—a whole day—of listening to some fancy words? Is it fair? No.

Last night—[Interruption] OK, I’m coming to an end. Last night, I attended the graduation of Vaka Tautua, in financial management, with the Pacific EFKS church in Westmere, Auckland. Women: 51 percent of the population are women. Women live longer than men. When we look at pay inequality, which the Minister for Women talked about, the brown women are at the bottom. I’m telling you this: with this Labour-led Government bill, the women will not only be warm; they will outlive you men, but we will be warm in winter.

Mr Speaker, I’m coming to my point because I know—I’m coming to my point. This bill is transformational for families. I like to call this bill the “Bill of Love”—the “Bill of Love”. Labour is caring for New Zealanders by taking action—taking action—and legislating it; not just fancy words.

I wish everybody a merry Christmas and a happy New Year, and I commend this bill to the House. Malo.

Hon CHRIS HIPKINS (Minister of Education): Thank you, Mr Speaker. It’s with great pride and humility that I rise as, I think, the last speaker for this bill and the last speaker in this urgency motion. I’d like to begin by noting what a strong and cohesive Government has been able to achieve in this period of time.

I would like to congratulate the Ministers that worked together on bringing this package together—particularly the Minister of Finance, Grant Robertson; Carmel Sepuloni; Stuart Nash; our great Prime Minister, Jacinda Ardern; and Tracey Martin from New Zealand First, who worked cohesively together to pull this package together and to shepherd it through the House over the last—just over—24 hours. We were expecting it to take longer. I’d like to acknowledge the contributions of the Green Party and the work that they have also put in to making this a reality. It is a very good day for New Zealand families as we pass this into law—lifting 88,000 New Zealand children out of poverty, instead of giving $440 million to the top 10 percent of income earners. We make no apology on this side of the House for providing universal entitlement to public services and to family support.

I say to the members opposite, I look forward to campaigning against them in the next election, when they pledge to remove universalism. Are they going to do it with superannuation? Are they going to do it with education and with healthcare? If they’re that opposed to universalism, let’s have that debate at the next election, because I know that this side of the House will come out even more triumphant than we did in the last election campaign.

Mr Speaker, finally, I’d like to acknowledge you, the Deputy Speaker, Anne Tolley, and the two Assistant Speakers, Poto Williams and Adrian Rurawhe, for your presiding over these proceedings, and, particularly, the members who presided over the committee stage of this debate, who did so with enormous humility and dignity and patience.

I have to say—I’ll leave the Opposition with this one final thought. I’ve enjoyed many urgencies during the nine years that I was in Opposition—it’s much more fun to be on this side of the House—and I have to say that through that I learnt that it is possible to be passionate and it’s possible to give the Government a run for its money whilst still preserving the dignity of the House. Over the next few years, I hope that all of the members on the other side will reflect on that.

A party vote was called for on the question, That the Families Package (Income Tax and Benefits) Bill be now read a third time.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 43

New Zealand National 43.

Bill read a third time.

The House adjourned at 8.14 p.m. (Friday)