Tuesday, 22 May 2018

TUESDAY, 22 MAY 2018

TUESDAY, 22 MAY 2018

The Speaker took the Chair at 2 p.m.

Prayers.

Oral Questions

Questions to Ministers

Budget 2018—Priorities

1. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government’s policies and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Yes. That was a firm yes.

Hon Simon Bridges: What extra funding did the Budget provide to fulfil her promise to pay early childhood education (ECE) centres more for employing 100 percent qualified staff?

Rt Hon JACINDA ARDERN: As the member will know, Budget 2018 included a 45 percent increase in education funding. The fact that we could put 45 percent more into education—new funding—and still have additional needs that we need to meet demonstrates just how bad things were for the education sector.

Hon Michael Woodhouse: I raise a point of order, Mr Speaker. The question was very specific about ECE funding, and the answer related to Vote Education overall. I don’t see how that could have been addressed.

SPEAKER: Well, it was very clearly addressing the question. The member well knows that when a general primary is set down, there is considerable latitude and less expectation of specific responses on supplementaries. If members want Ministers to come prepared with specific details, then they’ll ask specific questions.

Hon Michael Woodhouse: Speaking to that point—

SPEAKER: I hope the member’s not going to relitigate that.

Hon Michael Woodhouse: Not at all, Mr Speaker.

SPEAKER: I’ll be seriously concerned if he does.

Hon Michael Woodhouse: Accepting that point, we are reaching something of a conundrum because a very specific question today, where the Minister would have been expected to answer it, at question No. 7, has been transferred to another Minister.

SPEAKER: The member will resume his seat.

Hon Simon Bridges: Is the answer that there is no funding for ECE centres to employ 100 percent qualified staff?

Rt Hon JACINDA ARDERN: I take this to mean that that side of the House now agrees with our policy on funding 100 percent qualified staff. Budget 2018 delivers the first universal cost adjustment for early learning centres since Labour was last in Government. We have made sure there’s also an additional 62.5 million early learning hours over the next four years. Early learning services had a huge number of priorities. We gave them the boost they waited 10 years for, and we have three Budgets, of course, to deliver on things like qualified staff, which, I take this to mean, the National Party now supports, because you didn’t fund it before.

Hon Simon Bridges: How many schools will be ending school donation requests to parents next year, as a result of last week’s Budget?

Rt Hon JACINDA ARDERN: Again, I do come back to the point that if you spend an additional—[Interruption]

SPEAKER: Order!

Rt Hon JACINDA ARDERN: An additional 45 percent increase in education’s funding demonstrates how much catch-up we had to do after the under-investment of that last Government, including an increase in operational funding for the compulsory sector, 1,500 new teachers, and new capital investment. It shows how much we have to do over the next three years.

Hon Simon Bridges: Is the answer “None. There’s no new funding to end school donations.”?

Rt Hon JACINDA ARDERN: There’s 45 percent more new funding in education, and we will, over the term of our time in office, also ease the costs of education on parents.

Hon Simon Bridges: Is there funding in the Budget to double the refugee quota?

Rt Hon JACINDA ARDERN: You’ll see in the Budget that we’ve increased the funding to support additional support for refugees through the migrant centres, and it is explicitly in the Budget.

Hon Simon Bridges: Why did she reject the recent comparison to President Trump, responding, “We are a party who at the same time were campaigning to double our refugee quota.”, and how is that campaign going, given that last week’s Budget had nothing on the refugee quota?

Rt Hon JACINDA ARDERN: That is actually incorrect. First of all, you don’t put refugee quotas into a Budget; you do make sure that you’ve got money in a Budget to make sure you can house them and reintegrate them, and that was in the Budget.

Hon Simon Bridges: When she told me, the day before the Budget, that there would be 1,800 sworn police officers over three years delivered, has the Budget borne that out?

Rt Hon JACINDA ARDERN: Yes; we’ve said that, over three years, we would be delivering on that. We’ve put $300 million into Police and over 900 new police officers as a result, and we’ve got another two years to finish it off.

Hon Simon Bridges: Does the Budget, in fact, show far fewer than 1,800 sworn police officers delivered over a much longer time frame than three years?

Rt Hon JACINDA ARDERN: As I just said, we have set ourselves a goal, over three years, to reach 1,800 police officers. We get roughly half out of our first Budget, and we’ve got two more to go. In fact, at this rate, I’d wager that we’ve got about nine more to go.

Hon Simon Bridges: Does she still maintain that DHBs are in a “crisis” and that “it’s worse than I thought, because coming in there was no suggestion that they were quite so underfunded”; if so, why is her Government putting only $2.9 billion of new operating money into health, compared to Budget 2017—

SPEAKER: Order! [Interruption] Order! The question’s finished.

Rt Hon JACINDA ARDERN: Again, we’re putting $3.2 billion into health. We’re putting $2.2 billion into DHBs; it’s one of the largest investments they’ve seen in a decade. The only thing I would add to the comments that the member has quoted me on is that at first I said we didn’t quite see the extent of the issues the DHBs were facing; well, actually, the moment the mould and poo arrived, we all saw what the DHBs were facing—every single New Zealander.

Hon Simon Bridges: Is her Government putting less in operating funding into health this year than we did last year?

Rt Hon JACINDA ARDERN: No. What the member continues to include is the $1.5 billion, from memory, for home care workers. Home care workers, yes, were something we all supported, but it is absolutely misleading to say that was general funding for health, which is why the investment we’ve put in outstrips anything that’s happened in the last 10 years on capital funding: $750 million; that last Government: $150 million.

Rt Hon Winston Peters: Is it a fact that, in the last Budget, health, education, police, defence, infrastructure, and the environment, to name just a few, got massive injections of much-needed money?

Rt Hon JACINDA ARDERN: That is absolutely correct, and it gives me the opportunity to also clarify—the members on the other side of the House seem to have a grievance with the fact—that we’re counting the investment for midwives in that as well. I am happy to acknowledge that, yes, we put an 8.9 percent increase for fees for midwives because that was neglected by that last Government, and we’re proud of it.

Hon Simon Bridges: Why did her Budget take $100 million out of mental health and put only $10 million back in?

Rt Hon JACINDA ARDERN: I’m happy to clarify that the $100 million that the member is speaking about was actually not allocated to any specific project. It was a list of pilots, some of which didn’t happen. What we have funded is a project to enable under-25s to access free mental health care. We’ve extended nurses in schools for young people to decile 4. We’ve already funded mental health support in Canterbury and Kaikōura, and amongst the $750 million in capital for health it includes upgrades for mental health facilities.

Hon Simon Bridges: Why is $900 million for the Ministry of Foreign Affairs and Trade more important than $100 million for mental health?

Rt Hon JACINDA ARDERN: I’m surprised that that member no longer supports New Zealand upholding its international obligations, and I take this as now being on record that, under National, there would be a cut in overseas aid and development. I look forward to that member joining the Minister of Foreign Affairs and me on our next Pacific mission, because they might have something to say to you.

Budget 2018—Response

2. KIRITAPU ALLAN (Labour) to the Minister of Finance: What responses has he seen to Budget 2018?

Hon GRANT ROBERTSON (Minister of Finance): Budget 2018 has been received positively by institutions ranging from the large banks to the UK The Guardian newspaper. Economists at the ANZ said Budget 2018 was “A pragmatic balance between aspirational goals and fiscal prudence.” Those at the ASB said, “the new Labour-NZ First Government has effectively passed its first fiscal credibility test. The Budget and healthy forecast show that the Government is on target to achieve its fiscal targets.”, and BNZ economists stated, “The fiscal numbers look good, with a string of reasonable surpluses causing the net debt to GDP ratio to slowly decline below … 20% … This leaves headroom for extra spending in future budgets as long as the economy stays strong … There is nothing jumping out suggesting that announcements in the Budget will provide any impediment to the good growth outlook which we have.”

Kiritapu Allan: What responses has he seen in major financial markets?

Hon GRANT ROBERTSON: The ASB reports that the overall market reaction was very muted, indicating financial markets are quite comfortable with the fiscal numbers. Matthew Circosta, sovereign analyst from Moody’s Investors Service said that “the budget projections of continued fiscal surpluses and a gradual reduction in debt highlights the government’s ongoing commitment to preserving strong public finances.” He also said, “sustained commitment to fiscal prudence provides the government room to buffer the economy from any potential future shocks, which could stem from another natural disaster or a sharp fall in global trade.”

Kiritapu Allan: What responses on Budget 2018 has he seen on increases to public sector funding?

Hon GRANT ROBERTSON: I said on Budget day that this was a foundational Budget, and the first of three for this term. Social service providers and advocates, understandably, want to make up for years of underfunding, but have seen this Budget as a good start. For example, Trevor McGlinchey, executive officer of the New Zealand Council of Christian Social Services says more needs to be done, but noted—

Hon Judith Collins: Oh, for goodness sake—the completely independent commentators.

Hon GRANT ROBERTSON: I’ll tell him you said that, Judith. I’ll pass it on. In the social services sector, we see a much-needed boost in funding for community-based family violence services, which is fantastic news for this sector. The increasing funding going to community-based transitional housing and Housing First initiatives is what is needed to support those who are homeless to be homed. Lyndon Keene, director of policy and research at the Association of Salaried Medical Specialists, said, “the Government’s health budget revealed today offers some relief to the cash-strapped public health system but clearly more will be required to fix years of under-resourcing.”

SPEAKER: Mr Goldsmith will stand, withdraw and apologise.

Hon Paul Goldsmith: I withdraw and apologise.

Budget 2018—Priorities

3. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Does he stand by his statement, “It’s a perfect Budget I knew it was”?

Hon GRANT ROBERTSON (Minister of Finance): In keeping with my well-deserved reputation for modesty, I made that comment in jest at the end of my post-Budget speech on Friday when there were no questions from the audience, indicating that all 600 of them were happy with the Budget.

Hon Amy Adams: Well, if that comment was made in jest, were the tax deductions only available to “good-looking horses” also meant to be a joke?

Hon GRANT ROBERTSON: Absolutely not. The bloodstock tax initiative actually puts in place a policy that was first put forward between 2005 and 2008, that that Government failed to deliver on.

Rt Hon Winston Peters: Could I—[Interruption]

SPEAKER: Order! [Interruption] Order! Could the member resume his seat? The only reason that there are not a substantial number of deductions from the National Party for those interjections was the fact that there were a significant number from my right as well. I know the House is excited, but I think it can just settle down.

Rt Hon Winston Peters: Now that the subject has been raised by the Opposition, is the Government’s intention in its bloodstock policy, with respect to races, to pay the money out to horses that can look good or run fast?

Hon GRANT ROBERTSON: The intention here is that horses that can breed other horses that can both look good and run fast will be supported.

Hon Amy Adams: Does the Minister think it’s perfect to be increasing Crown debt by billions of dollars in nominal terms during a period of rising surpluses and solid economic growth, and under what economic conditions would he actually pay off debt?

Hon GRANT ROBERTSON: We are beginning to pay off debt at the end of this forecast period, which will indeed be the economic conditions we talked about. But as I’ve been going around talking about the Budget, it’s actually members of the business community who’ve been saying, “We think you should borrow more because we’ve got a desperate need for infrastructure that wasn’t funded by the previous Government.”

Hon Amy Adams: Is it perfect that he’s planning to have 14 out of the next 15 years with residual cash deficits, as shown in Treasury’s Fiscal Strategy Model, despite the solid economic conditions that he inherited?

Hon GRANT ROBERTSON: Well, the previous Government also had some residual cash deficits in their forecast as well. But I just repeat: there is a desperate need in New Zealand to invest in quality infrastructure, all the way from housing to education to health to our transport system, and we’re getting on with the job.

Hon Amy Adams: Does he consider it perfect that the Government offers nothing for the squeezed middle in the Budget, with increased taxes, no action on ending school donations, no action on their early childhood education promises, no universal cheaper GP visits, and the Government already having taken $1,000 a year off the average worker in cancelling tax cuts?

Hon GRANT ROBERTSON: I’m interested in the member’s recent conversion to universalism in the provision of social services and look forward to seeing some more policies in that regard. What I can say is that the Families Package reaches middle-income New Zealanders because we are actually restoring the funding for Working for Families that was undermined for years by the previous Government.

Hon Amy Adams: Is he confident of the accuracy of Treasury’s economic forecasts given that his future operating allowances and debt to GDP track rely heavily on those numbers, or does he consider that Treasury are, in the words of his colleague Phil Twyford, “completely disconnected from reality”?

Hon GRANT ROBERTSON: I think, in general, Treasury do good forecasting about the big GDP numbers. We’ll always have differences of opinion with them from time to time, but I’d also say to the member that every Budget that’s been produced since the Public Finance Act was created is based on future Budget forecasts.

Kiritapu Allan: Noting the various feedback that the Minister has had, what negative responses has he seen to Budget 2019 announcements?

Hon GRANT ROBERTSON: I’m sure the member means Budget 2018, as we haven’t had the opportunity to do that. Naturally, not all commentators are positive or well informed. I’ve received some commentary that Pharmac will be losing $200 million from its budget. Pharmac themselves announced that the combined pharmaceutical budget will be increased to a record level of $985 million, an increase of just under $114 million. I’ve also heard reports that this Government will be reducing the level of services available to stop child exploitation material. The Department of Internal Affairs instead states that it’s boosting the workforce from 15 to 27.5. I’ve further heard reports that instead of targeting spending on middle and low income families, we should instead be offering to “return $1,000 a week to the average worker”, and early—

SPEAKER: Order! [Interruption] Order! That’s enough.

Housing and Urban Development, Minister—Statements about Treasury

4. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Does he stand by all his reported statements regarding Budget 2018?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Yes—except my description of Treasury officials; I accept the Prime Minister’s advice that this went a little too far. But I agree with the Prime Minister and the Minister of Finance that Treasury’s forecast is wrong.

Hon Judith Collins: If he no longer believes he should have called Treasury “kids” who were “fresh out of university and … completely disconnected from reality”, then why did he do it?

Hon PHIL TWYFORD: I accept the Prime Minister’s advice that that choice of words went a little too far.

SPEAKER: No, no, the Minister will answer the question—at least, address it.

Hon PHIL TWYFORD: Repeat the question.

Hon Judith Collins: Essentially, why did he call them that?

Hon PHIL TWYFORD: Because I was frustrated at forecasts that had been made by Treasury that were blatantly wrong.

Hon Judith Collins: Has he received ministerial advice that some of the Treasury analysts are completely disconnected from reality when they have said that there is a “high degree of uncertainty” regarding impact of KiwiBuild policies?

Hon PHIL TWYFORD: Look, I think everyone should take a turn at being wrong. I got the price points wrong last week; that member is wrong almost every week. It shouldn’t surprise anybody that with a policy that’s as big and complex as KiwiBuild, different Government agencies will end up with different views.

Hon Judith Collins: When he told the media last Friday that in relation to KiwiBuild and Budget 2018 “Treasury have made a number of highly questionable assumptions”, what are those highly questionable assumptions?

Hon PHIL TWYFORD: Well, Treasury previously assumed that the $2 billion appropriation would be spent in two halves over the next two years and recycled thereafter. They changed that assumption, and they now think that it will happen over three years. That assumption is wrong. The Ministry of Business, Innovation and Employment (MBIE), on the other hand, estimate that KiwiBuild will generate between $4.8 billion and $11.6 billion in additional residential construction investment over that period. MBIE, who are implementing this policy, have pointed out that Treasury’s assumption excludes the fact that the KiwiBuild capital investment will be recycled repeatedly. They’ve included those homes that will be paid for on completion or built because of the KiwiBuild underwrite, and they’ve ignored the actual expenditure plan of KiwiBuild.

Hon Judith Collins: What does he know as a Minister that means he is better qualified than Treasury analysts to make assumptions as to the economic impact of KiwiBuild in Budget 2018 and on the economy of New Zealand?

Hon PHIL TWYFORD: When Government officials give advice, it is just that; it’s advice, and in this case, I believe that MBIE’s advice is better grounded in the reality of the policy.

Budget 2018—Housing Initiatives

5. MARJA LUBECK (Labour) to the Minister of Housing and Urban Development: How will the initiatives in Budget 2018 and the Government’s 100-day plan build more homes for Kiwi families?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Through Budget 2018, the Government will build 6,400 more public homes for families in need and expand the Housing First programme. As a result of this measure, 6,400 more families will have stable and secure homes and 1,472 more Kiwis will be participating in Housing First. That comes on top of our commitment to provide shelter to 1,500 more families by the end of winter through our winter 2018 package, and build 100,000 affordable homes through KiwiBuild.

Marja Lubeck: How many new houses will be built under these plans?

Hon PHIL TWYFORD: Well, the Ministry of Social Development (MSD) estimate that at least 5,800 of the 6,400 new public homes will be new builds, depending on the plans of individual community housing providers. This is on top of KiwiBuild, which may deliver up to $11 billion in additional residential construction over the next four years, as we build 100,000 homes for first-home buyers by 2028.

Marja Lubeck: How will the initiatives in Budget 2018 help reduce the public housing register?

Hon PHIL TWYFORD: Well, we’ve known for some time that the national housing crisis and hidden homelessness was worse than we thought, and it will get worse before it gets better. But Budget 2018 is the first step in tackling the national housing crisis right across the housing continuum. We’re investing in Housing First, providing short-term transitional housing for 34,000 households, building more public houses, building affordable homes for 100,000 first-home buyers, and increasing the supply of market housing.

Budget 2018—Education Commitments

6. Hon NIKKI KAYE (National—Auckland Central) to the Minister of Education: Does he stand by all his promises in education; and if so, does he agree with Labour’s Education spokesperson, Chris Hipkins, who said on the morning of 26 October 2017, that the end of school donations will be in his first Budget?

Hon CHRIS HIPKINS (Minister of Education): In answer to the first part of the question, yes. In answer to the second part of the question, as Minister of Education I’ve been clear that the commitments in the Speech from the Throne, the coalition agreement, and the confidence and supply agreement would all be considered as part of the first and subsequent Budget processes. Budget 2018 marks the biggest increase in education spending in over a decade. However, it will take some time to deal with the nine years of neglect we inherited.

Hon Nikki Kaye: Is he telling this House that on the morning that he was sworn in as a Minister, where he committed to end school donations, it’s not valid because he hadn’t signed his ministerial warrant; if so, are all promises that he made prior to signing this warrant invalid?

Hon CHRIS HIPKINS: Budget 2018 had to accommodate the largest cost pressures due to population growth in several decades. We are not happy to leave kids in corridors, libraries, and gymnasiums because their schools don’t have classrooms to put them in and because we cannot recruit teachers to put in their classrooms because of the neglect that we inherited from the previous Government. That does not mean that we are not going to deliver on those commitments. To quote Rachel Hunter, “It won’t happen overnight, but it will happen.”

SPEAKER: Not for me, it won’t.

Hon Nikki Kaye: Does he stand by his statement on 12 February 2018 as a Minister, when he refused to talk about the cost of his Government’s donation policy because it was “Budget sensitive”; and does he think that he misled parents who had an expectation that school donation funding would be in this Budget?

Hon CHRIS HIPKINS: Budget matters are considered over several Budget cycles, as the former Minister should be well aware. It was considered as part of this year’s Budget. It didn’t make it up in this year’s Budget. It will be considered as part of subsequent Budgets.

Hon Nikki Kaye: Does he stand by promises he made to increase teacher pay after Budget 2018 slashed $47 million in potential salary payments for teachers and principals, making him one of the only education Ministers—

SPEAKER: Order! [Interruption] Order! That’s an unnecessary part of a question. I’m not going to rule it out, but I’m going to ask the Minister to answer the first part.

Hon CHRIS HIPKINS: I’m unclear where the member gets her fiction that we’ve cut funding for teacher salaries from. It certainly wasn’t in this year’s Budget. I don’t know where she possibly could have made that up from.

SPEAKER: Order! The Minister will now stand, withdraw, and apologise.

Hon CHRIS HIPKINS: I withdraw and apologise. I raise a point of order, Mr Speaker.

SPEAKER: I hope the Minister’s not going to litigate my ruling. He should know very well that members cannot indicate that other members have made something up, because if they’ve made it up they would know it’s not true and they would be breaching the Standing Orders in a number of ways.

Hon Nikki Kaye: Why should parents and teachers be able to rely on promises that he makes when he’s broken more than 18 education promises, including providing funding to end school donations, to provide devices for all students, increasing postgraduate allowances—

SPEAKER: Order! The member’s not going to go through the list.

Hon Nikki Kaye: —providing vocational excellence awards, $20,000 grants for young entrepreneurs?

Hon CHRIS HIPKINS: There’s a clear difference between a broken promise and one that is yet to be delivered upon. For example, if we’d promised to lower teacher-child ratios in early childhood services and nine years later failed to deliver on that, that would be a broken promise. If we’d promised to lift the daily cap on the number of hours for children in early childhood services and nine years later failed to deliver it, that would be a broken promise. Those are just two examples of the countless broken promises of the previous Government. Unlike them, this Government will deliver on the promises we made.

Budget 2018—Mental Health Funding

7. MATT DOOCEY (National—Waimakariri) to the Minister of Finance: How much new funding is there for mental health in Budget 2018, and what unsuccessful bids did the Minister of Health make, if any?

Hon GRANT ROBERTSON (Minister of Finance): I have been advised that increased funding to district health boards (DHBs) in Budget 2018 will see a minimum expected extra $50 million per year for four years going to mental health services. On top of that, Budget 2018 also provided for $17 million for more nurses in secondary schools, $10.5 million for an integrated therapies pilot for 18- to 25-year-olds. In addition, this Government has already allocated $22 million for mental health services in Christchurch and Kaikōura schools. In answer to the second part of the question, all Budget bids were carefully considered, and in keeping with the practice of previous Ministers of Finance, I will not be revealing the details of them in the House.

Matt Doocey: So is the Minister saying that the Minister of Health did not bid for free mental health GP visits or mental health coordinators in primary care, as promised in November?

Hon GRANT ROBERTSON: No.

Matt Doocey: Does his new funding for mental health in Budget 2018 match the $100 million contingency fund his Government inherited from Budget 2017; if not, why not?

Hon GRANT ROBERTSON: The $25 million per year that was promised but not detailed by the previous Government is, in fact, eclipsed by the additional $50 million per year that will be coming via DHBs.

Matt Doocey: What does he say to the New Zealand Drug Foundation, who said in reference to Budget 2018 funding, “So it looks like we all have to wait until the mental health and addictions inquiry for any new money for treatment. That’s really disappointing.”?

Hon GRANT ROBERTSON: As I said in my primary answer, we expect to have an additional $50 million per year going to mental health services. I’d also note that the feedback that we’ve had is that people who are affected by mental health issues and their families are very pleased that we are taking the time to do an inquiry and come up with the right responses rather than band-aid election year ideas.

Matt Doocey: So is the Minister satisfied a mental health inquiry that costs $6.5 million allows only 15 days for the public to make oral submissions?

Hon GRANT ROBERTSON: I believe that the inquiry will provide significantly more—

SPEAKER: Order! Order! No, I’ve just reflected on the question—no responsibility whatsoever.

Matt Doocey: I raise a point of order, Mr Speaker. In response to supplementary question three, the Minister brought up the mental health inquiry.

SPEAKER: Yes, and just because it’s referred to doesn’t mean that the Minister has responsibility for it. The Minister said funding would occur after the inquiry. The details of the inquiry are not this Minister’s responsibility.

Matt Doocey: I raise a point of order, Mr Speaker. This question was originally for the Minister of Health, as you know. If he wasn’t in hiding, it would be helpful to ask him that.

SPEAKER: Order! The National Party just lost five supplementary questions.

Budget 2018—Public Broadcasting Funding

8. MELISSA LEE (National) to the Minister of Broadcasting, Communications and Digital Media: Does she stand by all her policy commitments?

SPEAKER: Sorry, before the Minister answers, I’m also going to require Matt Doocey to withdraw and apologise.

Matt Doocey: I withdraw and apologise.

Hon CLARE CURRAN (Minister of Broadcasting, Communications and Digital Media): Yes, in the context they were given.

Melissa Lee: Does she consider it a broken promise that she only managed to obtain funding of $15 million in Budget 2018, given that in a Cabinet paper released on 25 February 2018 she sought $152 million over four years to deliver on the Labour Party election promise?

Hon CLARE CURRAN: First of all, I reject the premise of that question. Secondly, $15 million is the largest increase in public broadcasting in more than a decade. The Minister of Finance has described this as a down payment. It is part of a foundation Budget. It’s going to take more than one Budget to fix the starvation of public media by the previous Government. We have three years to implement this policy, and a Budget bid in the next year will address the long-term needs of the public media sector.

Melissa Lee: I raise a point of order, Mr Speaker. I didn’t want to disturb the Minister when she was speaking, but if it is actually in the Cabinet paper, can she actually dispute it?

SPEAKER: I think the member has addressed the question. Members mightn’t like the answer or might question the accuracy of it. I think the best way of sorting it out is by the member asking a more detailed supplementary on that question. The trouble was she had two legs, and therefore it was easier to address.

Melissa Lee: Plenty of time. Does she agree with the chair of Better Public Media, Dr Peter Thompson, that “It is doubtful that $15m will be sufficient to develop RNZ+ into a non-commercial television service” and that RNZ+ needs somewhere between $25 million and $30 million to have a chance of success?

Hon CLARE CURRAN: At the risk of repeating the whole of the previous answer, I would say that $15 million is significantly more than the measly $2.84 million that the previous Government allocated last year, after nearly a decade of funding freezes. I have said it’s going to take more than one Budget to fix the starvation of the public media sector under her Government, and that’s why we’ve got three years to implement this policy.

SPEAKER: I’m going to ask the member to repeat the question.

Melissa Lee: Does she agree with the chair of Better Public Media, Dr Peter Thompson, that “It is doubtful that $15m will be sufficient to develop RNZ+ into a non-commercial television service” and that RNZ+ needs somewhere between $25 million and $30 million to have a chance of success? Simple question.

Hon CLARE CURRAN: I understand the frustration of Better Public Media because this sector has been so—[Interruption]

SPEAKER: Order!

Hon CLARE CURRAN: —chronically underfunded, so I agree with his frustration. We cannot deliver—every single Minister has had to make compromises in this Budget. We will deliver. We have three years to do that.

Budget 2018—Early Childhood Education

9. JAN TINETTI (Labour) to the Minister of Education: How does Budget 2018 support quality and affordable education and care for children aged six and below?

Hon CHRIS HIPKINS (Minister of Education): This year’s Budget commits $105 million over four years to increase funding rates for early childhood education (ECE) centres and kōhanga reo. This is the first universal, full inflation adjustment to subsidies for ECE centres and kōhanga reo in 10 years. It will assist them to manage increasing costs of provision and maintain the quality and affordability for parents and families. For a two-year-old enrolled in full-time education and care, this could add up to an additional support of around $100 per year.

Jan Tinetti: How is the coalition Government working with the early childhood sector to ensure that all children, regardless of their background, learning needs, or disability, receive early learning that enables them to learn and thrive in all aspects of their life?

Hon CHRIS HIPKINS: We’re working with parents, teachers, stakeholders, and communities to develop a new 10-year strategic plan for early childhood education, building on the previous strategic plan for early childhood education discontinued by the last Government. We want to ensure that increasing participation in early childhood education is accompanied by an increase in the quality of early childhood education being received. We understand the importance of early learning and getting children off to a great start with their learning, and we do know that the sector has been under significant pressure over the last decade.

Jan Tinetti: What is the coalition Government doing to address the long waiting lists for early intervention services for children before they start school?

Hon CHRIS HIPKINS: Budget 2018 has provided funding to halve the current waiting list for early intervention services for children before they start school. The $21.5 million being spent over the next four years will help over 7,600 more children get the support that they need.

Prisons—Future of Waikeria Prison

10. Hon DAVID BENNETT (National—Hamilton East) to the Minister of Corrections: Does he stand by all his recent decisions and statements relating to the corrections portfolio?

Hon KELVIN DAVIS (Minister of Corrections): Yes, in the context they were made.

Hon David Bennett: When did the Minister first take a paper to Cabinet regarding plans over Waikeria, and how many has he taken since then?

Hon KELVIN DAVIS: I can’t remember the exact date, but I have taken a couple of papers to Cabinet.

Hon David Bennett: I raise a point of order, Mr Speaker. The Minister certainly would be able to remember a date—

SPEAKER: Order! The question around the quality of the answer is one for me to judge, and the Minister very clearly addressed the question and indicated that he could not remember the exact date. That’s addressing the question.

Hon David Bennett: How will the Minister guarantee the safety of corrections staff without the Waikeria Prison build, when Public Services Association spokesperson Willie Cochrane has asked, “If [the] expansion isn’t going ahead, we want to hear what … he’ll do to expand the capacity of our prisons in the short term and keep our members safe in the workplace.”?

Hon KELVIN DAVIS: We’re aware of the concerns of corrections officers and the unions, and take their feedback into account when making decisions.

SPEAKER: Question No. 12—

Hon David Bennett: Supplementary question?

SPEAKER: No, you’ve had all the supplementaries.

Budget 2018—Benefits for Māori

12. RINO TIRIKATENE (Labour—Te Tai Tonga) to the Minister for Māori Development: What initiatives in Budget 2018 and the Government’s 100-day plan will benefit Māori?

Hon NANAIA MAHUTA (Minister for Māori Development): There are so many—so, so many—which will give Māori an assurance that as we turn this waka around, we’re looking to improve the well-being in a number of ways, such as the Families Package, which will see a transfer of approximately $1.2 billion to Māori whānau. But let’s go to the 100-day plan, because that’s where we see the real gains. We’ve raised the minimum wage to $16.50 since April. We’ve set child poverty targets, and we know this is an area that crucially hurts a number of Māori children. We’ve stopped State house sell-offs, which had a huge impact on a number of our whānau in our communities—

SPEAKER: Order! [Interruption] Order! When I stand up, the Minister sits down. She’s had a fair crack.

Rino Tirikatene: How will the Families Package benefit Māori whānau?

Hon NANAIA MAHUTA: This Budget is focused on whānau, and the Families Package will transfer approximately $1.2 billion directly into the pockets of Māori families in a number of ways. But let’s speak to the real impact that it could have—the winter energy payment, for example. That will make a huge impact for a number of families, including Māori, and people can turn on their heater when they need it most. The other thing is that in terms of the Best Start tax credit, approximately 17,000 Māori babies will receive that, and how much of a difference it will make to families who need it most. There’s so much—

SPEAKER: Order!

Rino Tirikatene: How will the other initiatives help improve the lives of Māori?

Hon NANAIA MAHUTA: Well, there are a number of specific initiatives that really align with the priorities that the Government has set. For example, we want to make sure that the young people who are disengaged from education, employment, and training will actually benefit. That’s why we’ve set aside $15 million, of which Minister Willie Jackson will be stewarding through $7 million, around the Whenua Māori Fund, because we know that Māori land owners need support to develop their land and, potentially, plug into other opportunities around regional development. But, more importantly, what we do in the space of papakāinga will not be just about building houses. It will be creating communities, encouraging social enterprise, and doing a lot of good for a lot of people.

Rt Hon Winston Peters: Could I ask the Minister as to whether or not she’s had representations on the improvement of Māori housing and health from the Leader of the Opposition, who’s discovered his Māoridom somewhat the way Columbus discovered America—purely by accident?

SPEAKER: Order! [Interruption] Order! That question is ruled out, and because we’re at a point in question time where rebalancing is somewhat ineffectual, I think there’ll be a number of extra questions tomorrow which I’ll communicate to the Opposition.

Budget Debate

Budget Debate

Debate resumed from 17 May.

Hon DAVID PARKER (Associate Minister of Finance): We won, they lost, let’s do this! Some of those with a historical perspective, like the Hon Nick Smith, will recognise a historical reference in that saying, updated to reflect the kinder and more inclusive approach of this Government. We won, they lost, let’s do this—and we are doing this. We’re rebuilding the foundations for the future across the board for a stronger economy, for a fairer, more egalitarian society, and for a clean environment. And—and this is galling for the other side, but it’s true—we’re in surplus. Growth forecasts are strong. Unemployment is dropping. Wages are going up.

The improvements that this Budget is making reinforce each other. We’ve chosen solutions that make society stronger at the same time as making the economy stronger. We’re promoting measures that improve the efficiency of the rural economy while we clean up our rivers. This interconnection of things is something that I think is notable in this Budget. Other people have spoken about the significant improvements in funding for education, and we heard some of it during question time. A tripling of new funding for learning support for children in need—this is enormous. The parents who struggle, the schools that struggle with kids who need extra support, the disruption that’s been caused in the classroom by those kids not properly supported—there is an enormous step towards improvement in this Budget.

There is the large increase in operating funding for schools, the additional support for preschool education, and, of course, the post-school training and education to help those New Zealanders whose employment might be disrupted through technological change.

In health, $700 million of new capital funding—seven times the amount in the last Budget of the National Government. In housing, we’ve not only stopped the selling off of State houses; we’re building over 6,000 new State houses in the next four years. That’s more than our election promise, in the Labour Party part of our promises, of 1,000 a year.

In the economy—the Opposition’s now headed by the Hon Simon Bridges. He still believes in trickle-down theory. You know, it’s true: exports have trickled down under the last Government from 30 to 27 percent of GDP, against an ambition to lift them to 40 percent of GDP. But we on this side, we don’t believe in trickle-down theory. We do not think it works. We think we have to lift the economy.

My goodness, there is some significant economic policy in this Budget. First off, we’re introducing a research and development tax credit. It’s worth a billion dollars over four years. That’s, effectively, a tax cut for businesses that are investing in research and development of a billion dollars—a billion-dollar tax cut in support of innovation, as we try and lift New Zealand’s export performance by growing the complexity of our economy as we move from volume to value.

But that’s not all: a billion dollars per annum in the Provincial Growth Fund—investments up and down the country in productivity-enhancing measures in our regions, where so much of our exports come from. This will be transformative. You add to that the green growth capital fund of $100 million, and you can see how we are supporting this transition to a cleaner environment, whilst we’re also growing the productivity of our economy, growing new jobs. You know, at one level, economics don’t change. In order for us to reverse that trend of declining exports under the last Government, we’ve got to grow new points of comparative advantage in the world. That means we’ve got to invest more of our precious financial capital and more of our human resources in those efforts, and that’s what we’re doing through the R & D tax credit, the Provincial Growth Fund, and the green growth fund.

In addition to that, we’ve got more funding for the Ministry of Foreign Affairs and Trade. Now, the other side deride that. They seem to miss the fact that we’re on the brink of a trade war. Maybe we’ve just averted it in the weekend, as between China and the US. I hope that’s the case. But none the less, we’ve got rising protectionism all around the world. All around the world, our exporters are facing non-tariff barriers, and we’re finding it harder and harder to dismantle the tariff barriers they face.

Well, we’ve got an enormous programme of action. It was, of course, the last Labour Government, in concert with other partners at the time, that brought home the China free-trade agreement. We’ve landed the Comprehensive and Progressive Trans-Pacific Partnership agreement. We hope in the next day that we’re going to start what the National Party could not achieve in nine long years, which is a negotiation with the European Union. If we do—well, I heard the other side slagging off the Prime Minister when she went to Europe, saying it was a photo opportunity, that there was no substance to it. Well, what was the focus of that? It was trade, trade, trade, with President Macron, with Chancellor Merkel. If this comes off, we can say well done to the Prime Minister, because you never know exactly what it is that tips the balance but it has been hanging in the balance. We’re doing this.

Hon PHIL TWYFORD (Minister of Housing and Urban Development): This House is full of contrasts. On this side of the House, we are coalition Government, united in our purpose of laying the foundations for a confident and prosperous New Zealand, committed to rebuilding public services that all Kiwis need and deserve. Our Government believes that every Kiwi family deserves a warm, dry home. We want to end homelessness, to build more State housing, and to ensure that everyday Kiwis can afford to buy their own home. This Budget tackles the national housing crisis head-on. New Zealanders have told us they want the housing crisis fixed, and that is exactly what we are going to do.

But on the other side of the House, what do they stand for? Well, who would know? National want us to spend more, but also spend less. They want us to borrow more, but also pay down debt faster. They say that the priority is tax cuts, and then, on the other hand, the priority is health and education. Are they unhappy that we’re investing too much, or too little? Perhaps it’s the record investments in health and education and housing, after a decade of neglect. Perhaps those are the things that they don’t like, on that side of the House.

But inconsistency isn’t the only problem here. Simon Bridges, in his bizarre Budget reply, said that National were investing more in health—a laughable assertion. Amy Adams says that we’ve cut Pharmac’s funding, despite the combined pharmaceutical budget being increased by $114 million, to $985 million in this Budget year. Then, Amy Adams said that we were cutting the internal affairs child sex abuse team—an incredible accusation to make and one that is utterly false because we are increasing, we are doubling, the size of the team.

Let’s not forget National’s claim that we inherited a residential building boom. If there was a boom going on, it was the quietest boom in history. A silent boom is what we inherited from that Government—a boom so quiet that only 8,600 new homes were built in Auckland last year, when the city needs 14,000 just to stand still. Is it any wonder that we inherited a shortage of 71,000 houses in this country from that Government?

I’m going to call it: the biggest winner of Budget 2018 was Judith Collins’ leadership ambitions.

I’m proud of Budget 2018 and the work of Grant Robertson in putting it together. Budget 2018 lays the foundations for New Zealanders to have better lives in the decades ahead. It starts with the critical rebuilding of public services, taking action on child poverty, housing and homelessness, and investing in our economic future. This Budget is also the first step in tackling the national housing crisis. Our Government is making a multibillion-dollar investment to build public housing and thousands of affordable homes to help house our most vulnerable people.

Now, for me, this conversation begins and ends with this: that no one in this country thinks that it’s OK for children to be growing up in the back of a car. New Zealanders have said unequivocally—

Hon Amy Adams: But it’s going to get worse, right?

Hon PHIL TWYFORD: —that homelessness is unacceptable. Amy Adams said it’s going to get worse before it gets better, and she’s right because the legacy of nine years of utter negligence in relation to the housing crisis means that you can’t fix this problem in six months—it’s going to take longer than that. But this Budget lays the foundation for fixing those problems. Through this Budget, we’re building 6,400 extra State houses and—

Hon Amy Adams: Slower—slower. Slower than it was going to happen.

Hon PHIL TWYFORD: —community-provided houses. And the member again tries to claim that it’s more—or she’s saying it’s less than her Government did. Her Government presided over a reduction in the total supply of public housing of 1,500 houses over nine years, in the middle of a housing crisis. We’re not selling them off. That’s not our policy; our policy is to build more houses, and that’s what Budget 2018 does.

The coalition Government is investing $169 million to address the shortfall, to achieve the target of 2,155 emergency and transitional housing places. That’s a commitment that that former Government promised, but they never funded it properly. Budget 2018 not only funds it properly but it extends the supply of emergency housing and Housing First, that that Government started but didn’t fund properly. This Government is investing $63 million to support 1,472 Housing First places. This includes funding for 550 new places as well as fully funding the places that the former Government promised but never followed through on.

Housing First is a world-recognised approach for helping people who find themselves literally without shelter. It’s an acclaimed method for dealing with chronic homelessness, and we are now not only continuing the work in Auckland, in Hamilton, and in the extension of Housing First to Wellington and Tauranga, but we are now rolling it out to places around the regions, like Rotorua, like Blenheim in Marlborough, like the Far North—places who are experiencing acute levels of unmet need and homelessness. Homelessness is not just a big-city problem; it is severely affecting a number of our regional centres.

There’s much to do, and this Government, with Budget 2018, is getting on with laying the foundations for fixing the housing crisis. Homeownership rates have fallen to the lowest in 60 years, with Māori homeownership declining to only 28 percent—28 percent. That is why we are investing $2.1 billion to build 100,000 affordable homes for first-home buyers—100,000 affordable homes for first-home buyers Now, if there’s ever any doubt about this Government’s commitment to the housing crisis, look at what we are currently investing in this work: $862 million in a range of initiatives announced in Budget 2018, nearly $4 billion invested in the building of extra State housing—$4 billion—$235 million in income-related rent subsidies, and $3.8 billion invested by Housing New Zealand in the building of extra State houses. Now, that Government, when they were in office, took more than a billion dollars out of Housing New Zealand in dividends and taxes and interest payments, and put that money straight back into the consolidated account. Our Government’s policy is to invest those surpluses in the building of new State houses, and that is exactly what we’re going to do.

Furthermore, KiwiBuild will, through our buying off the plans programme, enable developments to be completed that otherwise would not have been undertaken. It will speed up developments that are not happening, and it will ensure the construction of new affordable homes, not McMansions that ordinary young Kiwi families can’t possibly afford to buy.

This Budget delivers on our commitments. In the Speech from the Throne, we committed to be a Government of inclusion. Everyone who lives in this country is entitled to live a life of dignity and respect. Everyone is entitled to live meaningful lives to the best of their ability. Everyone is entitled to care and compassion. Everyone should have a roof over their head this winter, and everybody should have food and a table to put it on. We committed to being a Government of transformation, one that will lift up those who have been forgotten or neglected; a Government that will take action on poverty and homelessness. We will restore funding to the education and health systems after nine years of neglect in health and education. We will build a truly fair and prosperous nation, together. We are committed to being a Government of aspiration, one that aspires to make this a nation where all cultures and human rights are valued and where everyone can have decent housing and meaningful work. This Budget lays the foundations for that vision.

Hon AMY ADAMS (National—Selwyn): Madam Deputy Speaker, thank you very much. The tragedy, for me, of this Budget is that it is a Budget of wasted opportunities. This is a Government that has inherited some of the strongest economic conditions that any incoming Government in more than a generation has had at their disposal, and yet they have wasted those strong economic conditions that, yes, this Government was a part of, but, actually, it was the hard work of New Zealanders and New Zealand businesses.

The Government spent weeks and weeks talking down the Budget, didn’t they—talking down expectations and lowering expectations. The incredible thing is they didn’t go low enough. We were all expecting that they were going to lower expectations and then over-deliver. In fact, they lowered them and then failed to deliver on those lowered expectations. For all the promises they made, for all the expectations they built, and for all the money that they had available, this is a “biggest loser Budget”, really, isn’t it? I mean, it is a trail of broken promises, one after the other. Today in the House, we had Chris Hipkins telling us that there’s a difference between a broken promise and a promise we just haven’t delivered. Well, that is now how this Government is explaining their broken promises: “They’re not broken promises; they’re just promises we haven’t delivered.” Well, Mr Hipkins, I wish you well taking that line out to New Zealand.

But let’s look at some of the actual numbers. Teachers, who are pretty grumpy; we’re hearing a lot from that sector—the average operations grant increase to schools in this Budget is 1.6 percent. But do you know what the average increase to the ops grant was per year under the National Government? It was 1.9 percent. So Labour have done less for operations grants for schools than we did.

The midwives, we know, are desperately unhappy that the expectations weren’t met. Health: $390 million of new money into health under National’s last Budget; just $320 million under this Budget. District health boards (DHBs)—let’s look at the part where it actually goes to the DHBs who deliver the services. Under our Government, the average increase in the last Budget across DHBs was an average of 4.2 percent. Under this Budget, where there was a crisis—remember the crisis in underfunding?—it was 4.1 percent; less, again, than we did.

Tertiary education—tertiary institutes—

Hon Paula Bennett: Oh, not good.

Hon AMY ADAMS: —no new funding. And they are not happy, are they, Ms Bennett. They are not happy.

Police—what a mess of a police policy: 1,800 additional police were promised in the Speech from the Throne. Now it’s going to be “Well, we’re going to actually count the new ones National was already doing, and, by the way, a lot of them won’t be on the front lines. Oh, and, by the way, it’s probably going to be five years now, not three.”

Biosecurity—a critical issue for this country. We’re dealing with M. bovis right now; we’ve got the brown marmorated stink bugs coming to us. Mr Damien O’Connor told us that this was the most important priority he had—half the increase that National gave to biosecurity.

And, of course, we’ve got the good-looking horses, who do quite well, but no money, Jacqui Dean, for the Roxburgh health camps. No money for children in Roxburgh who are traumatised, but there’s money for good-looking horses.

We can debate—of course we can—the merits of each of these promises. You know, we will have an argument with Labour about whether it was a good promise and whether it was the right promise. The point is that Labour made these promises to New Zealand. They went out and said, “If we get elected, this is what we will do.”, and they’ve failed to do it. It’s a matter of trust, and they have let this country down, already, in their first Budget.

I have to say, though, it really is what we’re coming to expect. We get a lot of rhetoric, we get a lot of sound bites, we get the bumper stickers, and we get all of the slogans, but, actually, very little delivery and very little substance. In fact, the unabashed spin, the unadulterated obfuscation, is quite astounding, and it just doesn’t stand up to any scrutiny. The last speech we just heard was a classic example of that.

So let’s just have a quick look at the numbers. In this Budget—I’ve talked about the strong economic conditions—Labour have already put up their operating allowances over the next four years by $5 billion more than they said they were going to do back in December—right? So just bear that in your mind: $5 billion more they’ve given themselves in spending. Then, in addition to that, they’ve put up borrowing in Crown entities—which doesn’t feed the allowances—by another $6 billion. So what that means is that they have had to find $11 billion more money than they thought they were going to need to meet their promises. Does that number ring a bell at all? Anybody remember where that number might come to—$11 billion they’ve quietly slipped into the numbers to try and even begin to meet their promises.

Now, let’s be really clear about this. This is not because of some sort of underfunding of core services, and do you know how New Zealand can be really confident of that? Because if it was about underfunding, with all of the money available to this Government—$20 billion extra in tax revenue, all this extra debt, the growing surpluses and the like—we would have seen Labour put considerably more into health, education, and housing than the National Government did when we were in office, and they didn’t. They put in often the same and, in many cases, less than National did. How can that be a crisis of underfunding? It is patently not correct.

I’ll tell you what it’s actually about. There are two very good reasons why the numbers are not adding up for Labour. The first is Winston Peters. This is the cost of the marriage of convenience. This is the “dowry Budget”. This shows us what the bride price was for Winston Peters, and it was big and it was hairy and it was untargeted. That is where the funding has gone. But even more than that, it is because, very simply, Labour got their numbers wrong. The much-touted fiscal plan that was bill-certified and that Grant Robertson staked his reputation on—the numbers never added up, they were never going to be defendable, they were never going to be adequate to run the costs of the business-as-usual Budget processes. We knew that; we warned them of that. They insisted they were right, and yet, already, six months in, they’ve had to squeak in $11 billion of extra funding to even get anywhere close to meeting their promises.

I want to talk a little bit more about that fiscal plan, because I had a look at it over the weekend. Seventeen line items that were going to be delivered in this first Budget—and you can see, year by year. I know they’re all trying to rewrite history now, and it’s all a trilogy and “It will come to you.” They were very clear, in the first Budget, of 17 line items that were going to be delivered; 16 of them are not there or are scaled back. Of 17 commitments in the first Budget, 16 of them were scaled back or not delivered at all. This is a Government who is now realising that their fiscal plan was a shemozzle. It was never going to get them through, and they have had to rewrite all of their funding plans, all of their debt plans, and they are trying to do a smoke-and-mirrors “somehow it’s all the previous Government’s fault”, because they don’t want to take responsibility for what they did.

Let’s have a look at the police numbers. Quite apart from the 1,800, which we know is now a pipedream, and quite apart from the fact that they’re not delivering it over three years as they promised, in the fiscal plan Labour said to us, “We’re going to do 1,800 brand new extra police, and do you know what it will cost over three years—$160 million.”, they said. Forty million dollars a year—$160 million. Do you know what it’s costing now? Well, in this Budget, they’ve already put aside $300 million, so they’re only out by 100 percent or so, and today, in question time, the Prime Minister told us that’s only the first instalment of the costs. So even their $160 million fully costed fiscal plan was out by orders of magnitude. That’s how fiscally competent and responsible this Government is.

Economic growth is the most critical thing to the prosperity of New Zealand. The ability for our economy to earn, for the economy to keep those tax revenues up, is what will deliver better lives for New Zealanders. That is the reality. That’s what pays for everything in a Budget, and those GDP numbers in this Budget have absolutely already been, effectively, spent by Grant Robertson in his spending allocations, his forward projections, and his debt track.

Now, unlike Mr Twyford, on this side of the House we don’t think that Treasury forecasters are a bunch of kids disconnected from reality. Of course people will disagree and there’ll be a range of forecasts, but, actually, these are a bunch of very qualified people, who take their job seriously and shouldn’t actually get shouted down when they give advice that the Government doesn’t like. But even on Treasury’s numbers, in the last six months we’re already seeing GDP per capita slowing. Now it’s no surprise, because business confidence has been falling off a ledge over the last six months. That’s what tells you where the future prosperity of this country is going, and that can be landed squarely at the feet of this fiscally incompetent, broken-promises, poor-priorities Government. This will be the first of three, and then I hope we see the back of them.

Hon AUPITO WILLIAM SIO (Minister for Pacific Peoples): Thank you very much, Madam Deputy Speaker. That was a typical Opposition speech during these particular debates. We will continue to hear in the House that line of speech over and over again as they try to clutch at anything to criticise this Government’s Budget. That speech was typical, but one would need to understand the issues that the Opposition is facing. Ms Amy Adams is probably putting in a pitch to become the leader of the National Party, not too far away.

But this is Budget 2018. It’s a new Budget. It’s a new Budget for a new Government that has been in Government only six months. This Government is made up of three distinct parties: Labour, New Zealand First, and the Green Party. All three parties agree that the direction where this country has been heading is the wrong direction—the wrong direction. This is the first Budget of three in our first term, and, hopefully, many more terms. This is the first Budget as this Government pivots this country to head into a different direction, where we place people at the centre of our policy. That is a stark difference from where this country was heading under the previous Government, where they were so fixated on tax cuts that only favoured the top 10 percent of high-income earners.

We now have inherited problems that we anticipated would be there, but we’ve uncovered that many, many problems are much worse than we anticipated. Therefore, we’ve decided that this Government cannot just sweep things under the carpet, cannot just neglect these problems and believe they are not there. This Government—all three parties—is now committed to directing this country into a different direction, where all peoples benefit from a strong and sustainable economy. Therefore, our priority is immediately fixing some of the problems that we have inherited and putting in a firm foundation—with strong investment in the foundation—that will build strong families, strong communities, and a strong New Zealand. That’s why we make no apology that our priorities are housing, health, education, lifting incomes for families with children, tackling poverty, and prioritising the elderly and our young people in terms of our health system.

This Budget resembles $11.4 billion of new net operational money. That sounds like a lot. It’s going to be divvied out over four years’ time. It sounds like a lot until you understand the magnitude of the problems that we have to tackle. Therefore, in dividing it over four years, we know that we’re not going to solve all the problems that our communities, the length and breadth of New Zealand, are experiencing at the moment, but we’ve got to start, and we’ve got to tackle it head-on.

For health there is $3.2 billion in operational funding plus $750 million in capital funding. Why is that $750 million in capital funding? Because we have got to fund new hospitals. We’ve got to fund existing hospitals. We did not know the extent of the problems—that the previous Government did not maintain our existing hospitals, did not consider the growing population, and did not consider the rising costs. It was cheaper to fix a hospital in 2009 than it is in 2018. Therefore, we’re not going to be able to fix all the problems in this first Budget, but we are going to make a start, and we make no apology about that.

In my own neck of the woods, in Middlemore, South Auckland, Middlemore Hospital has got issues that, actually, I’m angry about. I’m angry because somebody fiddled with the numbers. I’m angry about it, because they knew the problems in 2002 but did not do anything about it. And so $11.5 billion will go in to try to fix the hospital there in Middlemore, the reason being it is one of the busiest hospitals in all of New Zealand. The rest of the money will be distributed to hospital care throughout this country of ours—$3.2 billion is operational money. That money, significantly, is invested in ensuring that the elderly are able to receive healthcare when they need it and that our young people, 13 years and under, receive healthcare when they need it. These are the priority areas. We believe that if you’re sick you should be able to see a doctor and get the healthcare that you need. You shouldn’t have to avoid the doctor because it is costly, and so, fundamentally, that’s why that investment is for health.

With education, we know that the future relies on ensuring that the next generation gets the best educational qualifications, and $2 billion is invested in ensuring that our young people are able to get a tertiary education and get a qualification. Education should not be for only those with money. Our belief as a Government is that everybody should receive the best education in a public system so that you’re able to provide your contribution to this country.

Housing is such a big issue. For nine long years, the previous Government refused to acknowledge that there was a problem, and even today they continue to talk as if there is no problem. We need to fix that problem. We need to fix it, and so we are embarked on ensuring that every Kiwi deserves a warm, dry home. We want to end homelessness, and we will end homelessness by building more State houses, by making emergency houses available.

We also believe that there is a myriad of problems that some of our communities face. It’s complex and, therefore, you can’t fix some of the education problems that some families are facing or the health problems that they face unless they are properly housed first. That’s why there’s the investment in Housing First. It is our belief as a new Government that when somebody is housed, when a family is properly housed, then you can wrap support around them and help them with other problems that they might be experiencing. Homeownership is one of the keys, and I am so pleased that with this Government, the Minister of Housing and Urban Development and his associates, that is our focus. When we’re focused on homeownership, it actually lifts the ability of the next generation to be able to work with confidence and to contribute with confidence to this country.

For Pacific, we have the lowest homeownership rate than ever before, and we’ve seen it fall in the last nine years. It just pains me to think that if a person does not own their house today, when they come to retire they will be spending a significant portion of the pension to rent somebody else’s home. So homeownership is one of the keys, and I and all of our colleagues here are going to be working really, really hard to ensure that every Kiwi, every first-time homeowner, has the opportunity to be able to buy an affordable home. By September of this year, we will begin to roll out the homes that we’ve built under the KiwiBuild scheme—$2 billion is how much that we’ve allocated for this.

Look, to give you some examples of just how bad things are for some communities, particularly communities like mine in South Auckland, we’re worried that even though we’ve started the work, even though we’ve begun the building process, we’re not going to be able to house people come this winter, and that’s why significant investment is also invested into transitional homes or temporary homes for some of those families. If we don’t move people out of cars, out of garages, out of tents to properly home them in warm, dry homes, we’re never going to be able to fix the problems that we’ve inherited from the previous Government.

So it is the first of many Budgets. We know we’re not going to be able to fix it straight away, but we are determined to fix some of the immediate problems. We are determined to direct New Zealand towards a future where everybody gets the benefit, where everybody makes a contribution to New Zealand. Thank you.

Hon PAUL GOLDSMITH (National): Thank you, Madam Deputy Speaker. I think this is clearly a Budget that any political party in the history of New Zealand would have loved the opportunity to deliver. It’s a strong economy that we have here in New Zealand. We’ve averaged 3.5 percent GDP growth for an extended period of time, and the forecasts, even though they’ve been downgraded a little bit in the last little while, still show 3 percent average growth out into the future. So it’s a strong economy that’s generating a lot of jobs and creating opportunities for New Zealanders.

If we look at the longer-term forecast, again, it drops a bit but it’s still over 2.5 percent. Under National, we saw GDP growth around 4 percent. These estimates are based on a steady flow of immigration, so that’s one of the issues that we’re going to have to be dealing with going forward, and I’ll come back to that later in my speech. So you’ve got strong growth in the economy. Then you’ve got a set of Government accounts which are the envy of many countries in the world, where we have surpluses out as far out as the eye can see, and this Government has spent a lot more money but still there is capacity and still surpluses out into the future. We have debt that was on track to be down to 20 percent of GDP. Now, this Government has increased that debt, but it is still overall, in international terms, an area of relatively low debt.

So as well as plenty of growth and good Government accounts that have been inherited, we also see a more confident nation and prosperous nation. That is a reflection, I think, of the hard work of many New Zealanders over the past decade but also a reflection of the results that you see from strong, stable, predictable competent government such as we saw from the previous National Government. I’m certainly very proud of our contribution in this previous Government to leaving what is such a wonderful inheritance for this Government to build on over the next few years.

So when we look at that and we see this is what we’ve got, what was the opportunity for this Government? From my point of view, I would say that one of the most precious gifts you can give any New Zealander is the opportunity to have a job, to look after themselves and their family, and to make a contribution to the community in which they live. Over the last couple of years, there have been more than 200,000 new jobs created. So this is a golden moment in the history of this country where we have the opportunity to solve and address some of the longstanding social issues that we’ve had, where children have grown up in households where nobody has worked for generations, in some parts of the country, and we’ve poured resources over many years to try to deal with that group who have struggled for decades.

You can have all the programmes and Government officials helping groups and community groups trying to help people, but if the jobs aren’t there it’s very difficult to make progress. But right now, the jobs are there and so we have this once-in-a-generation opportunity to make real social progress in this country. In my view, the Budget that we should have had in the last week or two would have focused very much on building on that opportunity, focusing on keeping that economy strong in the years to come, and building on and using the resources that we have available from a strong economy to continue to invest in infrastructure and delivering better public services.

So we’ve seen some of that in this Budget, and I’m not one of the ones who says it’s all terrible. No, there are many good things in this Budget, many good investments being made in public services, and that is exactly what we would have done if we had had the opportunity to form a Government. We would have invested more in education and health, and that is precisely what you do when you have the opportunities and the resources available such as we have in this Budget.

But we certainly would have kept our promises. That is the starting point of how you go about building trust and confidence with the population that you seek to serve in Parliament. So when political parties go out on the election campaign and promise to reduce the costs of GP visits for everybody, it’s not difficult—you have to do it. And they didn’t. When they promised to do away with school fees, you have to do it; they didn’t in this Budget. I was involved in tertiary education and went to many meetings where the promise was made from Labour that they would deal with the medical students’ situation, give them more money—they didn’t. When they made promises around increasing the police numbers—I could spend five minutes trying to disentangle all the numbers that have been put forward by the police Minister, Stuart Nash, but they haven’t kept that promise.

So what you have seen is a lot of extra spending—some of it will be useful; some of it’s not well targeted—and some extra taxation, more borrowing, but they haven’t kept a number of the promises that they made to the people of New Zealand. Then, what we’ve seen is a very large pool of new spending, some of it poor quality, such as the massive investment in fees-free tertiary education, which has not yielded any more students whatsoever, and, as the universities are realising now, the cost of that has been a zero increase in the basic budget for the universities in New Zealand. So they’ve gone backwards in real terms. They’ve actually lost money this year. There’s only one conclusion from that, which is that they will have to make academics redundant. So you may have free access to a third-class university, if you’re not careful, if you continue this process for an extended period of time.

And we see an absolute absence of any focus on particular outcomes from the extra money invested. They’ve done away with all the rigour and robustness of the process that we had in social investment of actually holding the bureaucracy to account for every dollar that we’re spending and looking for particular outcomes and having clear milestones in place. That seems to have been replaced with just giving more money here and giving more money there, with no clear outcome in mind.

The classic example of that is the Provincial Growth Fund, which is $3 billion over three years—a lot of money—and there’s no doubt whatsoever that there will be some useful things bought with that $3 billion. You can’t spend $3 billion and get no outcome, but the worry that I have is that the immense haste with which the Minister responsible is shovelling that money out the door in order to have outcomes before the next election—we will have a lot of waste in that period. It was interesting to find, of course, that rather than being $1 billion of new funding, it was actually only three-quarters new funding and one-quarter old funding, but that’s by the by.

So we’ve got this wonderful opportunity. We’ve had a lot of new spending; much of it will be not very well targeted or focused. There’s extra taxes, there’s more borrowing, but the most important thing, I think, that we need to reflect on as a country is that there was very little in this Budget about how we’re going to grow the economy.

The thing that worries me about this Government is they take our prosperity for granted. We’re seeing a dropping of business confidence, and that is a reflection of the attitude of many of this Government’s Ministers. I don’t like to pick on Shane Jones, but we saw the latest example over the weekend, where that Minister blustered away, saying that businesses struggling for workers should just invest in automation, and he’s not going to lose any sleep over that if they have to go out and buy some new machines. Well, I’ll tell you, the people who are struggling to find anybody to help them pick the kiwifruit at the moment, for example, are losing sleep over that, and they can’t just wander down to Mitre 10 and buy a machine that plucks the kiwifruit, because there isn’t one.

Actually, we invested several million dollars in a regional research institute based in Te Puke, with one of the focuses being to build such a machine, but it’s hard. It’ll take years. It’s actually very tricky. So just to blasé say “Oh, well, you should just invest in automation.” is just a reflection of the lack of any understanding of the business realities of how to compete internationally in this world. And it comes after Mr Lees-Galloway saying that any employees who are worried about having to deal with higher labour costs are just clearly not resilient and maybe they should be doing something else, then we had Mr David Parker pouring scorn on farmers, and the list is going on and on and on.

The thing that worries me about this Government is that they’ve inherited a strong economy, but everything they’re doing is threatening the sustainability of that strong economy in the years to come. So we will certainly be very focused over the next few years, reminding them of the foundations of that strong economy that they’ve inherited, so that we can nurture it and continue to have a successful, prosperous, outward-looking, and dynamic country such as we’ve seen over the past few years, and I hope that is what we’ll see. Thank you, Madam Deputy Speaker.

Hon SHANE JONES (Associate Minister of Finance): As the first-born son of the provinces, it falls to me to inject some vitality, some energy, into what has been a host of lacklustre contributions from the other side of the House.

Now, the speaker that has just finished his speech, Paul Goldsmith—“gold” may be in his name, but his feet are made of clay. The delivery, the predictable criticisms, they show a flaw, and that flaw is widespread on the other side of the House. That is because they are caught by the green-eyed monster. Now, what is the green-eyed monster? The green-eyed monster is someone who is possessed or in thraldom to jealousy. Underlying the views of the other side of the House is a deep sadness, because jealousy leads to resentment, and it’s only a short period of time before the back-biting, the nastiness, and the spirit of resentment will turn upon themselves. That is the story of the green-eyed monster, unlike on this side, where it is sunrise politics.

Now, let me just go through where the sun rises. The sun rises first upon the provinces of the Tai Rāwhiti, the East. What are we doing in that particular province after nine long years of continual degradation of water, erosion of soil, neglect of roads, and forgotten people? The modest Matua Shane Jones and his able assistants have arrived with the pūtea.

Now, the pūtea is going to be married to the ideas, the desires, and the energy that has been neglected and stuck in “Strugglers’ Gully” throughout provincial New Zealand. That pūtea has grown from $11 million to $1 billion—$11 million to $1 billion. Now, the reality is that no one, unless they came with the level of creativity, vision, and spontaneity—a spirit of purpose—as reflected by the coalition Government, would be willing to face up to that challenge and put on the table over a three-year period that extraordinary amount of pūtea. Now, why are we doing it? We are doing it because this is a transformational Government.

Let’s just go through a couple of simple points as to where the powers of our transformer-like approach to politics will actually be visited. Number one, we’re going to tidy up biosecurity. Now, I have to talk about biosecurity, because over the last nine years not only did the kiwifruit industry suffer through Psa; we had the stink bug—

Hon Dr Nick Smith: Which arrived during the last Labour administration.

Hon SHANE JONES: Ah! Green eyes he may not have, but a monster he is—that be the member from Nelson. The stink bug, Psa, M. bovis, myrtle rust, velvetleaf, kauri dieback—now, you’ve got to ask yourself, what was the Government doing if it could not consistently fund or lead remedies to biosecurity?

What more profound purpose is there for a Government that’s meant to be a friend of the provinces? It’s meant to be a friend of the countryside. Hundreds of millions of dollars lost in terms of wealth, in terms of cost, and it comes to this side of the House now to pick up the pieces, undoubtedly, as the treasurer has stated, at significant cost.

We’re going to do that, not only to advance the interests of the stakeholders in the provinces, but I would say one thing: that whoever the person is who thought it was a good idea to bring M. bovis into the country, I hope the cops get him. I hope the police undertake a robust investigation, bring a prosecution, and send that person to jail. If any farmer is out there and you know the name of that person, please let us know, because there’s one place we can name and shame, and that’s in this House. Those individuals have brought an enormous amount of pain and anguish, not only to an industry but in cost to society.

That’s partly why I’m a doubting Thomas, often, about the quality of agricultural leadership in New Zealand. They claim they have a God-given social licence to continue with agriculture and related businesses. I was born and bred on a farm, but if these problems are traceable back to delinquent behaviour from within their own sector, then I’m all for ramming responsibility home in that regard.

But let me continue. When my colleague has been talking about housing, we’re going to actually tackle the problems that Bill English gave up on. There’s one thing that Bill English said—and I kind of agreed with—which was the town and country planners had assumed a greater level of power than certain Cabinet Ministers. I presume he was talking about earlier housing Ministers—that be the former member for Whangarei, the current member for Nelson—where they themselves gave in, surrendered, and put up the white flag.

Hon Dr Nick Smith: Never—never.

Hon SHANE JONES: OK, they never gave in. They were promising to build 7,600 houses in the Tāmaki regeneration—7,600 in Tāmaki regeneration in Panmure and Glenn Innes—and they built 280 houses. Divide 280 houses by 7,600—that gives you a reflection of how hopeless their stewardship was.

But there were some very good points that we learnt for those of us who are opposed to that development. Did they actually change the law? Did they simplify the process? Did they de-constipate the statutory process to enable land to be opened up and used? No, they didn’t. They already owned the land. They transferred the land from Housing New Zealand into the Tāmaki regeneration authority and created less than 3 percent of their houses—an absolute failure.

Now, not only did they not make progress in that regard—and our colleague will—did they make progress on the question of amassing capital for expanding housing? No. They came up with a type of alchemy, believing you could create special purpose vehicles and amass capital and hoodwink the Audit Office and circumvent the international rules of accountancy. No, they never made any progress. Did they put serious dough on the table, as the treasurer has for housing? Absolutely not—absolutely not. What they did was they went through a type—as I’ve already said—of very constipated calculus which did not lead to any major development of houses.

The third thing is enterprise. Did they do anything to smash the monopoly behaviour of those who sell building products? I’ll say one thing for Nick Smith: he promised to do it, but he never ever delivered. He’s had an entire career and he’s an epitome of someone on that side of the House. They have squandered nine years to take on the big end of town. We now know that the big end of town is still very robust.

So, on the land question in the regulations: failure. On the question of capital for developing better outcomes for housing: failure. On the question of changing the character and the composition of the enterprise part of the building industry: failure.

So did they do anything on the question of the people—labour? Did they actually increase, substantially, the number of young men and women who have valuable skills? No, they surrendered to the tide of cheap immigration. They surrendered to the tide of cheap immigration, so we’re left on this side of the House, yes, relying on vital and rare skills to be brought into the country, but our labour, our human capital ambitions—as articulated by the treasurer in the Budget, it’s going to invest in garden-variety young Kiwis, and they’ll get two years via the first instalment of post - secondary tertiary education for free.

Was there anything, New Zealand, on that part of the House that emulates what we’ve done now? I tell you what they were going to do. What they were going to do was take $8.5 billion and hand it out as a tax cut, because they don’t believe in putting back into the ability of the State to deliver on public-good functions. That is one thing they don’t believe in. They believe—

Hon Dr Nick Smith: People should keep their hard-worked money.

Hon SHANE JONES: That’s exactly right. They believe that people should—especially the big end of town—enjoy inordinately expensive tax cuts, on the belief that, somehow, it will trickle down into the very weary, bleak end of town.

New Zealanders had an opportunity to make them the Government. They refused to make them the Government. They made this side of the House the Government. Why? Because they don’t believe the mantra of that side of the House, which is very hostile to the provision of essential services, social goods, and public goods. That is what this Government stands for, which is why we’re in power.

Hon LOUISE UPSTON (National—Taupō): This is a Budget that was delivered just under a week ago and already the bulk of New Zealand has forgotten about it, and here’s why: because there were massive expectations as we led into the election last year, massive promises, and then, in the last month, all of a sudden, a big kind of U-turn—a big rewinding so that everybody’s expectations dropped through the floor. So what was Budget 2018 about? Well, there was a yes to diplomats but a no to cheaper doctors visits. There was a yes to more bureaucrats in the Beehive, but a no to vulnerable children’s camps in Roxburgh. There was a yes to a manufactured health crisis, but no to assistance with long-term contraception for those on the very lowest incomes. There was a yes to more taxes and no to spending on mental health, and a yes to the America’s Cup but no to those on benefits.

It’s really hard to see who was pleased by this Budget, and Shane Jones, the member who just resumed his seat, seemed to get a little bit excited about what they’ve been up to. But what he won’t have told you, and what he won’t have told the House, is the significant cut that they have made to programmes for young people who are not in long-term education, employment, or training. That’s a massive cut for a group of people who are represented in regional New Zealand. So no, Mr Jones, you are not the champion of the regions, because you are leaving behind the most vulnerable young people in every corner of those regions. Shame on you—shame on you for leaving them behind. It’s a disgrace. It’s an absolute disgrace that Budget 2018 would cut funding for young people who are not in education or employment or training.

So I want to come to the list of those who aren’t happy, because the teachers aren’t happy. They were promised big wage increases by those members opposite, and I think they’ll be disappointed. I met with a number of midwives across my electorate over the last month, and they had big hopes. I don’t think they were unrealistic, but they’re not happy now, either. The day after the Budget was announced, another midwife was leaving the sector. Nurses won’t be happy.

We’ve heard prison staff who are also unhappy. Nobody wants to build new prison beds, but the reality is if you’ve got prisoners that need housing, guess what? Make it safe, make it humane, and build them somewhere where they can get opportunities to be rehabilitated. But no, they haven’t delivered that, either. The 1,800 new police officers—well, I think we’ve had about six different versions of how many police officers we’re having now, and can I tell you, the public of New Zealand don’t like being strung a line of all sorts of empty, vacuous promises that aren’t—

Hon Shane Jones: Oh, you mean the National Party?

Hon LOUISE UPSTON: —being delivered on by that side of the House—1,800 new front-line police officers is 1,800. They can count, Mr Jones. They can count, and they are expecting that side of the House to deliver 1,800.

But it’s also medical students, and another group that are very, very unhappy are those involved with Whānau Ora. So, again, they are those that are dealing with some of the most challenged families in New Zealand—and yes, in the regions—and are they getting any additional funding? Is there any commitment? Is there any appreciation for the work they’re doing? No—none at all. So they are also incredibly frustrated with this Budget. Even the Salvation Army didn’t think it was a good Budget.

So for all of the spending that was supposedly delivered in Budget 2018—health: there was less than we’d invested last year, but, supposedly, there’s a health crisis. So no, the health sector’s not happy. I’d be really hard-pressed to find anyone who thought that Budget 2018 was a great one for anyone in New Zealand, because the reality is, spending money is quite easy, but where is the ability of this country to earn its way?

You know, we do have a challenge in this country, in rural New Zealand, with M. bovis. Having spoken to a farmer in my electorate whose farm was the first case in the Waikato, they were looking for the commitment from the Government in the Budget and they couldn’t find it. Biosecurity spending has gone backwards. So, Mr Jones, if you’re going to talk about biosecurity in this House in this Budget debate, at least get your facts straight. Biosecurity spending has gone down. I don’t think it’s that helpful to run down the rural sector of New Zealand, and I think it diminishes the contribution that they make to the New Zealand economy. So shame on you for doing that.

So in terms of the ability to grow the economy, that’s where a significant effort needs to be. So what did Budget 2018 deliver? A slush fund—not targeted, not measurable, and hard to see what progress it’s going to make. Then, from a Minister who thinks it’s great that we should have more technology replacing workers, and then a contradiction from another Minister, who thinks that we should—oh actually, no, there’s several contradictions. So for those doing seasonal work, no, we want to bring people into the country to do that work, but then there are young unemployed people in that area, so should they be offered the opportunity to work? Oh no, they can’t, because it’s too hard, and that’s where we have a conflict between a number of the coalition parties. So what did they do? They just cut the funding. They just cut the funding for the programmes in regional New Zealand for those that are not in education, employment, or training. Well, shame on the Government for removing another opportunity for young New Zealanders who should be given an opportunity to get ahead, and haven’t been.

So I was looking in the Budget for big spending in social development, and I looked and I looked and I looked again. What was there? An undertaking that the previous Government had made around a clothing allowance for unsupported children. So that was good—we were happy with that. What else was there? Well, the Families Package, but that was all December’s news, and really just offset what people got to keep in their own back pocket anyway. So the winter energy payment was the big kind of hurrah. But, again, for those over 65 who get the winter energy payment, by the way, they’re getting nearly half what they expected to get. So if that’s not a broken promise to the public of New Zealand, I don’t know what is—$700 was the promise, and what are they getting? Nearly half. So, again, a lesson to the other side: make sure you keep your promises, or the public will punish you for that.

Budget 2018 has been kind of interesting. I think the fact that most people over the weekend, if you’d asked them what was in the Budget—and I did—no one really knew. No one really knew what was there, and they knew there was nothing in it for them.

Hon Shane Jones: Billion trees.

Hon LOUISE UPSTON: They don’t believe the billion trees, and they don’t believe the 100,000 houses, and they don’t believe that immigration will be reduced by 20,000 to 30,000. They don’t believe what the Government has said because already, less than nine months in, they’ve broken more promises than they’ve kept.

They have shown a few things. You know, we did know that they would be introducing new taxes; they’ve done that. We did know that they would increase spending without it having any focus or target; they’ve done that. We’re waiting for what other new taxes are going to arrive. We knew they would borrow more money; they’ve done that. But what is surprising, and what will be disappointing for hard-working New Zealanders, is low-income and middle-income New Zealanders have been ripped off by this Budget. They’ve got nothing out of the Government. Shame on you for not delivering for hard-working New Zealanders.

GARETH HUGHES (Green): Kia ora, Madam Deputy Speaker. Ngā mihi nui ki a koutou, kia ora. Now, Budgets are always a big deal in this place. I mean, there’s so much pomp and ceremony and grandeur. The finance Minister’s got a special speech tied up in a ribbon. There’s the lock-up, the debate—you know, what type of tie is the finance Minister going to wear? What’s the meal he’s going to have to celebrate? Is it sausage rolls or pies? But I think for many people out in the public it doesn’t resonate as much. What they want to know is “What’s the Budget going to do for me?”, and that’s what I want to touch on in this speech, because that’s what I think Kiwis really want to know.

Sitting there, hearing the finance Minister and the various speeches, I thought about the people whose homes I’ve visited, where families have literally opened up their doors to invite me in to tell their story. Now, I was thinking of those families—one in particular in south Wellington, where a family didn’t use most of their house. They all slept—the whole family, with, I think, three or four kids—in the lounge, because that was the only room they could afford to heat. This was a room covered with black mould on their roof. I think of other people I’ve visited, such as students down in the South, where, literally, you could tear chunks of wood off the timber framing around the windows because it was so cold, so damp, and I think of talking to people who, literally, were salting the toilet at night because their house was so unaffordable to heat they were scared their pipes were going to freeze over in the middle of winter. What I was thinking about those people is this is a Budget that delivers for them. I’m proud to stand here today as part of a Government which has brought back the home insulation scheme, one of the most successful Government policies we’ve seen in the modern time.

Now, this was the Greenest Budget in New Zealand’s history, with wins for conservation for our threatened animals and our beautiful, treasured threatened places, and wins for the green investment and cleantech sector. A Budget that invested in research and development, where family and domestic violence was actually addressed, and special education saw a big boost—the Greenest Budget in New Zealand’s history. Insulation was one of those areas where I think it really epitomises good Green solutions, because it’s great for the environment, it’s great for the economy, and it’s great for society. It’s got huge health benefits for those families who benefit, huge educational benefits for those kids when they go to school. This isn’t just a win-win; this is a win-win-win-win-win. This is why it’s so great to see in the Budget $142 million extra for insulation, because, look, this House should be able to say that every New Zealander deserves to live in a warm, dry, well-ventilated house.

Now, I’ll do an acknowledgment to the National Party. We worked with them back in 2009, with Jeanette Fitzsimons, on insulating 180,000 Kiwi homes. It made a huge benefit to hundreds of thousands of New Zealanders. The tragic thing was, though, the job wasn’t finished. The funding was cut before all the houses that needed it could be done. We know we had about a million substandard houses in New Zealand. In probably one of the greatest myopic acts in New Zealand’s history, we didn’t even have insulation in our building code until 1978. The job was started, but the job wasn’t finished. Under this Government, the job will be finished, and that’s why I’m proud to say that the $142 million for home insulation is going to make a huge difference to those Kiwis who suffer from black mould and whose kids are getting sick and missing school, and the workers who can’t go to work because they’re suffering from the health impacts. It’s going to be one of those win-win-win-win-win schemes.

So I’d like to acknowledge our coalition and confidence and supply partners in the Government that have rolled out this home insulation scheme. I’d like to acknowledge the Hon Megan Woods, the Minister of Energy and Resources, who’s rolled it out. What this new scheme, the Warmer Kiwi Homes scheme, will deliver is two-thirds of the cost for underfloor and ceiling insulation and for a clean heating device. When you work with community partners, you can see up to 100 percent of the costs of insulation covered. When you couple this with the new winter energy payment that the Government’s instigated, we are going to solve energy poverty in New Zealand.

What we’ve seen is some of the fastest growth rates of energy poverty in the developed world. In fact, our electricity prices rose the fifth-highest in the entire developed world. The only four countries above us were ex-Soviet countries coming out of communism. This is a major problem facing our country. It’s been estimated that a fifth, or 20 percent, of New Zealand families are suffering in energy poverty, so this Government is making a clear statement: every New Zealander deserves to grow up in a warm, dry, ventilated home, but also no New Zealand family should be suffering in energy poverty. Home insulation and a winter energy grant are going to make a huge difference.

Another area that I’m incredibly passionate about is the state of our environment, and every New Zealander can see it with the “Closed” signs on rivers and the scientific reports that point out that two-thirds of our lowland streams and rivers are considered unsafe for swimming in. Even the National Party now acknowledges the rise of pollution and the impact on our environment. The problem is that for nine years, they didn’t do anything about it, despite seeing the clear evidence. In fact, what they did was throw taxpayer moneys at subsidising intensive agriculture to promote more pollution entering our environment. We saw plenty of talk the talk under National, but none of the actual walk the walk, and our waterways are suffering as a result. So that’s why I’m proud to stand here as part of the confidence and supply partner of the Government, rolling out additional funding for the Sustainable Farming Fund.

Now, the Green Party’s always acknowledged those good farmers, and there are heaps of them out there doing fantastic work. In fact, just a couple of weekends ago, I was in the Hawke’s Bay talking to great farmers there about the work they’re doing to protect the environment, because what these farmers want to do is pass on a farm to their kids, to future generations. They have a special relationship with the land, and they want to protect it for future generations. It’s great that this Government’s announced an additional $15 million for the Sustainable Farming Fund. These projects, some of the leading edge of sustainable farming practice and research and development, will then flow through the entire farming sector, cleaning up our primary industries.

Ultimately, for me, the Budget in this place is all about the ceremony, which we get wrapped up in, but we should focus on what it means for everyday New Zealanders. What this Budget means is warmer, drier homes and insulation under the roof. It means our waterways are going to be cleaner and our farms more sustainable. So look, it’s a great Budget, and it’s going to make a huge difference for this country. Kia ora.

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Deputy Speaker. The Hon Chris Hipkins said it all, I believe, when he said today, “There’s a [big] difference between a broken promise and one that’s yet to be delivered”. Well, thank you, Chris Hipkins, because I think you have entirely encapsulated what this Budget has delivered, and what it has delivered is broken promises. I think Chris Hipkins unwittingly said much, much, much more than he ever intended, and, like the Hon Amy Adams and no doubt every other politician on this side of the House, we will be taking those words to the country. Words like that from a senior Government Minister matter to New Zealand because they have the Treasury benches, the Labour - New Zealand First - Greens Government are spending our taxpayer money, and they are spending our taxpayer money on some pretty dodgy things, like good-looking horses.

I think what Chris Hipkins’ words did—no such thing; “there is a big difference between a broken promise and one that’s yet to be delivered”—speaks volumes, and it speaks to the realisation that Labour, New Zealand First, and the Greens have come to that they do not have the money to meet their excessive campaign promises. So now what they’re doing—and Phil Twyford is doing it too—is trying to give themselves a little bit of wriggle room. Every day, he stands up in this House, and every day he goes out into the community, all around New Zealand, as other Ministers do, and they are just trying to give themselves just a little bit of wriggle room, because they know in their dark little hearts that they have overpromised, and now they are under-delivering. “But it’s not a broken promise! It’s not a broken promise; it’s just a promise that has yet to be delivered.”—yeah, right. I’ve heard that one before.

So let’s traverse some of the measures that this Government has brought in its Budget. Of particular interest to me is local government. Local government, of course, is a major part of the New Zealand economy. It traverses communities from Stewart Island to the Chatham Islands to Northland to Auckland, and everywhere in between. It’s a huge part of the New Zealand economy. It generates wealth; it generates jobs; it has huge responsibilities around things like environmental protection, provision of infrastructure, and provision of tourism infrastructure; and it is a sector which, I am sure, is looking very hard at the Budget.

So what did the Budget deliver for local government? Well, as it turns out, not very much at all. If we have a look at the allocation that has gone to the Local Government Commission, that has, effectively, been reduced by 50 percent.

Hon Tim Macindoe: How much?

Hon JACQUI DEAN: The allocation in the Budget this year to the Local Government Commission has, effectively, been reduced by 50 percent. They have lost $1.178 million in their appropriation. Now, the Local Government Commission—members will know, people of the public might know—is the body to whom local authorities go when there is an application for amalgamation—

Hon Aupito William Sio: You’re far better than that, Jacqui. Don’t listen to them.

Hon JACQUI DEAN: —of local authorities. It’s important work that the Local Government Commission do, and they dealt with a number of amalgamation applications in the last term of Parliament. It’s very important. The Hon Su’a William Sio is saying something over the House—it’s indistinguishable—but I think he should take this a little more seriously. I think he should really take this a little more seriously because, I tell you what, local authorities are taking it seriously, and losing half your funding, for the Local Government Commission, is not showing good faith in local government.

The Three Waters project got $3 million over two years. Well, that is a modest allocation, building on the work of the previous Government, so no shouting and flag-waving over that policy should be done, because it is merely continuing on the work of the previous National Government. Tourism New Zealand—now, I go slightly sideways here, but it is important—lost $6 million in their Budget allocation. Why does that matter? Because tourism and local government are inextricably linked, and it is so important that tourism, which is our largest export income earner and provides huge benefits into regional New Zealand as well as places like Queenstown and Auckland and Christchurch, is supported as a destination by Tourism New Zealand, who just lost $6 million out of this Budget.

Also lost out of this Budget was a key funding out of the Tourism Infrastructure Fund. Members will recall that that was a $100 million fund put in place by the previous National Government—gutted. Absolutely gutted—$75 million gutted out of that fund and placed into Shane Jones’ fund. How about that? So what that means is that those local authorities who are making applications for infrastructure funding for tourism growth now, instead of having a dedicated fund for themselves they have to go up against foresters, tree-planters, every other regional economic development grant application. They don’t have a dedicated pool for themselves; they’re now just in the mix. Well, they lost big time over that measure in this Budget.

Finally, there are one or two other little rats and mice. Frankly, there’s not much in the Budget for local government. There is the rates rebate scheme—good, so there should be—continuing on the good work of the previous Government. There is support continuing for Kaikōura District Council—good, there should be. The National Government poured many, many billions of dollars into earthquake recovery in Canterbury and Kaikōura, and that work should continue. Business as usual under this Government—nothing new to see here.

Continued support for the Chatham Islands wharves and for governance—good, business as usual. Just as a sidebar, here’s a question: how many Labour Ministers and Green Ministers does it take to open a wharf? I’m taking answers.

Dr Shane Reti: Six.

Hon JACQUI DEAN: Two? One to cut the ribbon and one to pour the tea? No, not two, not three—six. Thank you. Six Ministers travelled all the way to the Chatham Islands to open the wharf. Talk about having your eye on what matters to New Zealanders. What else could they be doing? Well, they could have been getting out into the regions and supporting regional New Zealand, and paying mind to local government.

I just want to spend a few minutes now on this Government’s Budget allocation for small business. Let me just go down through the list—oh right, that’s right. There’s nothing. Just as there was no mention in the Speech from the Throne around small business and economic growth in this New Zealand, there was no direct allocation for small business in the Budget. How about that? So I scratched around, because I’m a glass half-full type of person, and I did see that there is progress for the e-invoicing project in the Budget. Well, good on them, the Labour - Greens - New Zealand First Government, for supporting business in that way. Well, they should do, because it was a project which was started by the previous National Government.

So I’m not seeing anything new here for two very important parts of the New Zealand economy—for local government, for tourism, and for small business. In fact, there is no plan. There is no plan to grow the economy. This Budget is silent on any measures—apart from e-invoicing, which was started under the previous Government—to advance our economy. So how’s that going to pan out in the future? This Government is very good on spending, but without a focus on growing the pie, without a focus on growing the economy, we ain’t going nowhere, and we are going nowhere in a hurry.

So, finally, I just want to go over a couple of the reports that this Government is progressing. One of them is the local government rates inquiry. Well, that’s interesting, because they did a rates inquiry back in 2008—it was called the Shand report. It was done at huge expense and had something like 86 recommendations, none of which they progressed. So they shelved that report and they’re doing another one.

And then, finally, a working group to develop solutions to freedom camping. Good work, except this kind of work has been undertaken for years and years and years. And where was the Minister, Nanaia Mahuta, throughout all this work? Well, she wasn’t invited to the meeting of mayors in Wellington to discuss freedom camping. How much does she care? She received one briefing towards the Budget on freedom camping. She took no papers to Cabinet pre-Budget on freedom camping. This is a Government which is full of self-congratulation, full of giving themselves wriggle room. It has no plan for the future of New Zealand, no plan for several very important parts of our economy. Shame, shame, business as usual—“nothing to see here Budget”.

Hon JENNY SALESA (Minister for Building and Construction): Thank you, Madam Assistant Speaker, for this opportunity to speak about the Budget of 2018. Budget 2018 lays out the foundations for the future, and my comments this afternoon will be focused mainly on housing.

We are investing a total of $2.8 billion in housing. But I will focus my speech on Vote Social Housing funding—the $513.4 million that this Budget is investing in housing. But before I do, can I just speak about one of the many reasons why we are focusing on housing this year. We came into this Government and we know—because we asked several experts to let us know exactly—the challenge that we’re facing in housing. What we were told is that throughout Aotearoa New Zealand we are short by 71,000 houses.

Hon Peeni Henare: How many?

Hon JENNY SALESA: Seventy-one thousand houses in Aotearoa. In our largest city, in Auckland, we are short by 45,000 houses. I will cover a little bit later on in my speech the effect that this has especially on one particular vulnerable group, Pacific people, because the majority of Pacific people live in Auckland.

But let me cover the good news first. The additional funding for public housing, for State houses—this coalition Government has invested $234.4 million to meet the cost pressures in public housing, as well as to provide additional new State houses. This will build 6,400 new additional State houses. That’s 1,600 new State houses per year over the next four years.

For those of us—and many of us here on this side of this House are local members of Parliament. We see so many of our families coming to ask us for assistance. The number one issue that they ask us for assistance with is housing. Many of these families are families who work full-time, families who have never actually accessed a public or a State house before, but because rent is so expensive nowadays, not just in Auckland but right throughout Aotearoa New Zealand, because homelessness is an issue that we’re facing as a country, not just in Auckland but everywhere else in Aotearoa—in many of our cities, homelessness is an issue. We are—well, we have been, since a year or so ago—facing homelessness in terms of we are number one in the OECD for the rate of homelessness, something that we have never dealt with before. So one of the reasons why we are investing so much in housing, why we are tackling housing head-on, is because there is so much to do in the area of housing.

Another area that we’re investing funding in to expand is Housing First. So we’re investing $42.9 million to purchase an additional 550 Housing First places, not only in Auckland but in the regions. As I said earlier on, unfortunately homelessness is something that has gone out to the regions. Another investment that this coalition Government is doing is for transitional housing. In order to address cost pressures in transitional housing, we’re investing $169.9 million to address the shortfall in transitional housing, as well as for us to meet the current target, which is 2,155 transitional housing places.

If we’re just to walk down in history, did we need emergency housing before? Did we need transitional housing to this level before? No, we did not. In fact, if we look back in history, a short history, in 2008 we had just over 69,000 State houses. That was in 2008. The wisdom, or lack thereof, of the folks on the opposite side of the House—they sold off a whole lot of our State houses. They sold them off. And so now, we only have just over 60,000 State houses.

In a period of time that we are experiencing the rate of homelessness—and we’re number one for homelessness in the OECD—the other side of the House sold off our State houses. Of course, one of the first things we did, as a coalition Government, is we put a stop to that. We do not sell off the State houses. We are building State houses. In terms of ensuring that we serve our families well, one of the things that we are also investing in is making sure that we have the front-line staff members to deal with so many of our families who are seeking help. So we’re investing $30 million to continue funding for the current level of staff—that’s 102 full-time equivalent staff members to deliver housing services. We know that when our families are in strife, when they are living in cars, when they are living in garages, when they’re living in caravans, they go and seek assistance—either at Work and Income or with Housing New Zealand—and they do want to be served. They want to be served by actual people. And so we’re also investing in that.

This coalition Government is committed to building State houses. This current Government is committed to housing our most vulnerable families and our children. Too many of our families, way too many of our kids, are living in unhealthy houses where it is cold and damp. One of the things that we are doing as a Government is we’re making sure that our houses are indeed healthy.

Can I just touch a little bit more on Housing First. Housing First, as an initiative—one of the reasons why we’re investing money to ensure that we actually have Housing First in other places, like in Tauranga, Christchurch, Wellington, and other high-need regions, is because Housing First as an approach is a simple one. It provides housing quickly, and then it offers tailored support for as long as those folks need that support. Housing First, as an initiative, aims to end homelessness. It aims to end homelessness; not just to manage homelessness. The goal for Housing First is to end homelessness, so that homelessness is brief, rare, and so that it does not occur again.

There is so much that this coalition Government is doing in terms of housing. It is focusing on the fact that we need to build more houses. The Minister of Housing and Urban Development, the Hon Phil Twyford, of course has covered KiwiBuild. We need not only to house our vulnerable families; we also need to build houses so that our first-home buyers can afford to get into their first home. The Budget announcement that we have made on housing cannot come sooner for all of us.

Can I just, as I wrap up, talk about Pacific families. The majority of Pacific families live in Auckland. We know that 24 percent of State housing or public housing tenants in Aotearoa New Zealand are Pacific families. But we also know, because the majority of them live in Auckland, that they make up a higher percentage of State house tenants in Auckland. So many of these families—some of them who have never lived in cars before, some of them who have never lived in garages before, but who are working full time—I have met in person when they’ve come to seek assistance. It is heart-breaking when you see these families with their children coming in the cars that they live in. But we are a Government that is focused on ensuring that all of our kids have a roof over their heads, that they do not continue to live in garages, and that they do not continue to live in cars.

This week, as well as the Budget announcements earlier on last week, is a great time for the coalition Government. It is absolutely something that Pacific families, that vulnerable families, that families who live in South Auckland, where I am an electorate MP—they are rejoicing that there has been a change of Government. They’re rejoicing and they’re happy that there is a Government on this side of the House that is focused on addressing the housing crisis, that actually acknowledges that there is a housing crisis, and a Government that is building houses to house our families. Madam Assistant Speaker, thank you for this opportunity.

Hon DAVID BENNETT (National—Hamilton East): Thank you, Madam Assistant Speaker. I’d just like to congratulate you on being such a great Speaker in this House, and to just ask that last member, Jenny Salesa: why didn’t the Labour Government house our prisoners? Why didn’t they build Waikeria Prison? Why are the Labour Party so averse to actually building a prison in New Zealand?

Let us answer that question, because the Labour Party have made a promise—they’ve made a promise to the public of New Zealand that they will reduce the prison population by 30 percent over the next 15 years. That is what they have said, and they will not build Waikeria on the basis of that promise, even though Waikeria was a deal that had been set by the last Government. Actually, go to Waikeria; I challenge any member of that side to go to Waikeria. What do they see as they drive towards Waikeria Prison? They see a road upgrade that has been undertaken by the local district council. When you come into Waikeria, you see the land works there for the new prison build—$7 million has been spent on that so far, and if you look at the Budget, that $7 million is clearly identified in the Budget from last year as what is being spent on earthworks and roading to get into Waikeria. And then we look at this year coming forward. How much will be spent at Waikeria in the Budget? Zero. Nothing. Nothing—$7 million is already wasted, $7 million is already spent, and they will not do anything to house our prison population.

In fact, this is a Labour left-wing Government that prides itself on looking after the most vulnerable, and what is it going to do to some of the most vulnerable people in our community that are prisoners? They’re going to put them in gyms, in triple bunking. If any of those members had ever been to Waikeria and seen the conditions that prisoners have to be in, they would understand that it’s not going to work. There would be no rehabilitation there. There is no prospect that those people will change their lives around under the conditions that Labour will make them stay in. We will see prisoners being put into tent-like accommodation on our prison sites. We will see prisoners that will be forced into large areas together, and we will see prison guards that will be forced to deal with the consequences of that. That is going to be dangerous for prison guards.

The corrections union has come out publicly and asked for this Government to commit to Waikeria. This Government will not commit to Waikeria; they will not look after those people that are looking after the most difficult of all the prisoners.

Kieran McAnulty: He’s looking out for the unions.

Hon DAVID BENNETT: We are looking out for the union, and it would be great to see the other side do that. We’ve even got some union members over there that haven’t actually dealt with their union since they’ve come into Parliament. That’s what happens when you’re a socialist: you come into Parliament and you’re on top of the world—

ASSISTANT SPEAKER (Poto Williams): Order! Order! Don’t bring me into the argument. Thank you.

Hon DAVID BENNETT: —and you forget the people that actually need the help. So why will the Government not build Waikeria? Why will it not house the very people that need rehabilitation and education to change their lives? Why not? Why don’t the Government invest in the most vulnerable in that society?

Hon Shane Jones: Lock ‘em up and throw away the key! National policy—National policy.

Hon DAVID BENNETT: They will not do it. They will not do it. Now we’ve got Shane Jones, the whale from the north, coming in here and telling us to throw away the key. That’s New Zealand First rhetoric before an election; New Zealand First policy after an election is to just roll over and do whatever they’re told as long as they get the baubles of office. That is what we see from New Zealand First.

I cannot understand why that Government has taken away so much rehabilitation from our prisoners. When we look at the list of rehabilitation programmes that were funded last year in our Budget—they were Budget line items last year, and this year, guess how much is funded for them?

Hon Members: How much?

Hon DAVID BENNETT: Zero—no money for these rehabilitation programmes. Enhanced Mental Health Support Services; This Way for Work; Addressing Barriers to the Graduated Driver Licence System; Methamphetamine Targeted Screening and Rehabilitation for Prisoners; and the Expansion of the Brainwave Trust Programmes in Prison have not received any funding. The rehabilitation programmes that were funded last year are not funded this year. Why won’t they invest in the rehabilitation of our prisoners?

Hon Shane Jones: Māori Party policy—Māori Party policy.

Hon DAVID BENNETT: “Māori Party policy.” That is what New Zealand First says—that Māori Party policy is to invest in rehabilitation. Is there something wrong with that, Mr Jones? Is there something wrong with investing in rehabilitation for people? I think not, and it is a disgrace for that party to take away that rehabilitation.

But it actually gets better. It gets better because not only are they not going to build Waikeria Prison, and they are actually taking away rehabilitation, but the third thing is they’re taking away any investigation as to what is happening in our prisons. So when we have a look at the criteria to evaluate our prison system, guess what’s happened in the Budget?

Hon Dr Nick Smith: Tell us.

Hon DAVID BENNETT: Well, a number of those key indicators are removed. So let’s have a look at some of these indicators: the number of escapes will not be measured any more; the number of breakout escapes as a proportion of all escapes will not be measured—

Hon Dr Nick Smith: This can’t be true.

Hon DAVID BENNETT: No, it says, “Not a measure for 2018/19”. OK, look at this: the number of prisoner on prisoner assaults that are serious—not to be measured. The number of prisoner on staff assaults that are serious is not to be measured—that is, prisoner assaults on staff are not to be measured. The number of justified complaints by prisoners to the corrections inspectorate upheld for not meeting process requirements—not to be measured. The number of justified complaints by prisoners to the corrections inspectorate upheld for reasons of materiality—not to be measured.

They are taking away all the measures that would indicate the success of a corrections system. Whether someone escapes or not will be taken away, and they will take away the number of assaults that are recorded by prisoner on prisoner, and take away the number of assaults by prisoner on prison staff. Why do you take those away? What’s the matter with having an open, democratic system where people can see what’s actually happening in our corrections system? Why did the Government take away the rights of prisoners to actually have their cases heard, as well, and the other requirements that have been taken away?

So not only do we have no Waikeria Prison—because this Government see it as a symbol and they have put their pride ahead of what is actually best for our corrections staff, and our prisoners themselves, and our wider community. If we have an effective corrections system, that keeps New Zealanders safe, and the Labour Government has taken that away—taken away that. Secondly, they’ve taken away the rehabilitation to actually make sure that any of those prisoners could actually get a fairer chance in life. And, thirdly, they’ve taken away any review or indication of what’s actually happening in our corrections system.

Matt King: No transparency.

Hon DAVID BENNETT: There is no transparency, and that is a terrible blight on a new Government, within nine months of coming into Government. Why do they not do the things that are needed for one of our biggest parts of Government? Why do they take away the ability of some New Zealanders to make a change in their life? Isn’t that a Labour Party value? Isn’t that something that the Labour Party always says it’s there for? And yet, when it comes to the money, they take that away. Another Labour Party value we always hear about is the rights of the individual—the rights of the person that’s vulnerable—and they take that away. They take away prisoners’ rights again in what they’re doing in this Budget.

So let’s have a look at corrections. Would New Zealanders want to support a system that puts themselves at risk—their personal security is at risk—because there are not the facilities there for our criminals? Would they want to put the people that work in that system—the good New Zealand civil servants that work in our corrections system—at risk because this Government is too proud to agree to something that a previous Government did? In doing that, their pride has meant that New Zealanders are at risk, our prison staff are at risk, and, actually, the prisoners are at risk at well.

Hon Aupito William Sio: You’re breaking my heart!

Hon DAVID BENNETT: Because there is nothing—breaking your heart; well, that’s exactly what the Labour Party needs to do. They need to get real, they need to do things, and they do not need to look at ideological things, but actually look at what’s right for New Zealanders, what’s right for our prison system, and what’s right for the prisoners. Instead of that—

ASSISTANT SPEAKER (Poto Williams): Order! Order! The member’s time has expired.

Hon PEENI HENARE (Minister for the Community and Voluntary Sector): I recommend getting that member, David Bennett, a ghost mop for his ghost tears. Here is a member claiming that on this side of the House we don’t care about New Zealanders. Well, I’m really proud to say, on this side of the House, that the Budget delivered in the past few days has definitely delivered for New Zealanders far and wide. Before I continue on in my applause for the great Minister of Finance, the Hon Grant Robertson, I just want to pause and reflect and say, in Te Reo Māori, ki a koe e te pāpā, e Te Murumārā, te toa o te reo Māori kua ngaro atu ki roto i ngā rangi kua taha ake nei, e tangi mōteatea ana tō taonga, tō tātou taonga, a Te Reo Māori mōu kua ngaro atu ki te pō. Nō reira, mai i a mātou o te Whare nei ki a koe, haere, haere, haere.

[To our esteemed elder, John Moorfield, the champion of Māori language who has passed away in the last few days, your treasure, nay our treasure, the Māori language, laments your passing. From the House we say, farewell sir, farewell, farewell.]

I just wanted to acknowledge Professor John Moorfield, otherwise known as Te Murumāra, who was passionate about Te Reo Māori. I think his passing actually reminds me of Matariki. Why is because of this: in our Budget recently we have made provision to ensure that Te Reo Māori—the resources, the teachers needed to teach Te Reo Māori—will be strengthened. We have also made allocation in the Budget to ensure that, in the words of the Associate Minister of Education, “we grow tohunga and speakers to fill taumata marae across Aotearoa New Zealand.” Now, those are bold steps, steps that will address long-held issues and needs within my community and small Māori communities far and wide.

I’m proud. I’m proud that we’ve started this journey to make sure that—it’s easy, all fair and well, to say, “Let’s have compulsory Te Reo Māori in schools.”, and I agree that’s an ambition, but we must make the first steps. In order to do that, we must provide a Budget that will allow the growth of Te Reo Māori teachers, the growth of Te Reo Māori resources, so that kids of all ethnicities, throughout Aotearoa New Zealand, will benefit from having a richness of language, that I was able to benefit from as a young person.

I’m proud. I’m proud that those steps have been taken in education. I’m also proud around housing. Many members on this side of the House have already mentioned it: emergency housing. We have a plan, on this side of the House, to address the housing crisis. Primarily, that’s around supply. But what we know is right now, in particular in my electorate of Tāmaki Makaurau, there is an urgent need for emergency housing. We need more beds. We need more places. We need more good community providers who are willing to step forward and help our most needy in our community: those who sleep rough; those who sleep on the street. I’m proud that in our Budget, not only did we deliver the building foundations for fixing the housing crisis, we are also solving the problem at the sharp end of the stick. What is that? That’s emergency housing—significant funds to grow bed placements and significant funds to support those who are already working in this space are just one part of a fantastic Budget.

I want to talk too about the member who gave his contribution before me, because he constantly talked about rehabilitation and reintegration. Can I acknowledge the good work of my colleague here the Hon Willie Jackson and the good people of Manukau Urban Māori Authority (MUMA), and their work that they have done to reintegrate whānau who have come out of prisons back into our community. How dare that member accuse this side of the House of not caring about the rehabilitation of prisoners. On that side of the House, over nine years, they locked up more people than they rehabilitated. They put more money and effort into locking them up than rehabilitating them and reintegrating them back into our communities. I’m proud of the work that the likes of MUMA do. I’m proud of the work that many organisations across Aotearoa do. But what they’ve always said to us is that there must be a better plan. There must be a better way forward. Do not build a bigger mega-prison—do not do it. What we need to look at are the contributing factors that actually push our people into prisons. What we also need to look at are those rehabilitation services that are needed to reintegrate those people back into our community so that they can give meaningful contribution to our communities and to our society. That is a plan that I’m proud that on this side of the House we’ve been developing.

And, of course, in our Budget we deliver on some of those things. We know that it’s not going to be solved with one single shot. It’s not going to be a silver bullet that is going to actually—how shall we say—solve everything in our country. What we know is it’s going to take planning. And in the Budget that was delivered by the Hon Grant Robertson there’s certainly the foundation for greater things, which gives me excitement. It makes me believe that there’s aspiration for our country into the future. In order for that to happen, we must, of course, rebuild those foundation stones that have been stripped away over many, many years.

Another area—and I want to touch on this also—is, of course, youth. I’m proud to be the Minister for Youth, and I know that in the Budget there’s an allocation to reintroduce something that was taken away under the last Government. That side of the House have always said “you must make decisions on sound data research.” Well, guess what? On this side of the House, we’re bringing that back, in particular for young people. We’re bringing back the research programme that was taken away under the last Government, to make sure that young people are heard and to make sure that decision makers on this side of the House know what our young people need and what they deserve. I’m excited that that funding has been reintroduced to make sure that that particular piece of work and research will be undertaken again and that the decisions made for the benefit of young, far and wide, will be ones made on sound research, and, of course, sound data.

In the few minutes I have left, I want to talk about Whānau Ora. Now, it’s been mentioned in this House that Whānau Ora has missed out in the Budget. Well, that’s the classic siloed approach of looking at things. I say to that side of the House that whānau ora isn’t funding; whānau ora is a concept of well-being for our people. It isn’t simply a vote that’s given in the Budget. Whānau Ora is about housing, Whānau Ora is about health, Whānau Ora is about education—that is Whānau Ora. I’m really proud, as the Minister for Whānau Ora, that we are undertaking a review to make sure that the role that Whānau Ora providers play across the country can only enhance the good work that was announced in this Budget. I’m proud of that. I’m proud of all of the people out there that work hard to make sure that Whānau Ora, in its entirety, actually delivers for our people.

People get caught up on numbers, and I’m proud that over the past few years Whānau Ora have had an outreach to approximately 12,000 families—12,000 families. Here’s what I want to say to that side of the House: if we do things right to rebuild housing, health, and education, guess what? Whānau Ora will reach far more families right across the spectrum—right across the spectrum. Whānau Ora providers are already saying they’re proud of this Budget, because what are the key issues they see when they go into families? Poor health services and healthcare. What else do they see? Lack of education opportunities. What else do they see? Housing issues, many of which have already been raised in this House: mould on ceilings and poor, dilapidated houses that make families sick. Whānau Ora providers far and wide are saying that this Budget is taking us in the right direction.

In the final minute, can I just say—and reiterate the point—that rebuilding a house that’s broken and torn down actually takes time. We have now put in the foundations, and the Prime Minister was right today when she said we can look forward to at least another eight Budgets into the future to make sure that this country is headed in the right direction. I’m excited. I’m excited for the championing of the regions. I’m excited for our Minister of Education doing the hard yards. I’m excited for this side of the House, who are aspirational for our people, and I can’t wait to see what the next Budget will bring.

JONATHAN YOUNG (National—New Plymouth): Well, we certainly hope that the next Budget that that party brings has got far more aspiration and hope for this country than this Budget.

This Budget is a disappointing Budget, because it does not use the resources of taxpayers for the best gain. I am disappointed that Whānau Ora has not been funded to the capacity that it ought to, because it’s a good policy and it was brokered by a very progressive party called the Māori Party. I believe that it had and continues to have a very good aspiration and organisation to it.

When I think about the speech of my colleague David Bennett from Hamilton East and his concerns around the corrections system and the absolute derision that members of the Government have about this institution called the Department of Corrections—we have a very good police system in New Zealand. It has been upheld and recognised around the world. They have a policy and a mode of operation called Prevention First. We all understand that when people end up in the corrections system it’s the long end of a tale of failure not only of that person but often of the society and community around them. But it’s not always their fault either, because there are choices that people make and there are choices that are also imposed on them simply by their background.

But what we see, through the New Zealand Police, is a tremendous attitude of working with people in Prevention First so that it will prevent crime before it happens. Then, through their activity, through their behaviour, through their law-breaking, if they do end up in the corrections department, then what we have seen, as I have visited many prisons in this nation—I have seen rehabilitation and reintegration, and those two terms can get lost in people’s thinking. I have seen people learn how to read and write and become educated and learn trade skills, and they have earned in their own stead great self-pride in their achievements, and self-respect. That’s what we want New Zealanders to have, and it has happened through the corrections system, because it was funded.

It’s not a matter of ever throwing away the key, because that’s never the case unless there are very specific circumstances for the safety of New Zealanders. There is always the intention that somebody who enters the correction system will exit it, and there is a very good probation service that supports them in the community. Yes, it’s a tough job, because there are communities and there are families that not only need to have the reintegration of family members but also need protection. So, for all of those points that my colleague raised in terms of areas where there’s no longer a measure, they are areas of concern, because you can’t change something which you can’t measure in terms of inclusion, acceptance, support—all of that aroha. But at the same time, we want people to progress in life, and so we need to apply the resources we have and the intent we have and I’m disappointed that this Budget isn’t doing that to the extent that it could.

I would have to say that as I look across what’s happening in our society I do have concerns and I do have disappointment in the decisions of this Government. I see nothing in that space of energy and resources when we have seen such a devastating decision by this Government that has the effect of knee-capping not only an industry but the hopes and aspirations of those who contribute to it. I believe that—and I look to my colleague across the way who administers the Provincial Growth Fund and I know that he has an intent to bring some lift and transition to the people of Taranaki. But I ask him: 4,500 people that will see in the horizon, in the distance, the end of their employment and their hopes and their aspirations—what’s going to keep them in Taranaki? What’s going to keep them in New Zealand when they have skills and they have qualifications that find them attractive to most other countries in the world? What’s going to happen not only to the region I come from and the industry that I support; but what’s going to happen to New Zealand when we start to have those shortages, when we start to have the—

Kieran McAnulty: Scaremongering—that’s all this is.

JONATHAN YOUNG: —huge demand upon electrification that we don’t have the capacity or the infrastructure to support? And, you might say “scaremongering”; why don’t you learn and dig a little bit deeper about the information that you think you know—Madam Assistant Speaker, I understand what you’re going to say.

ASSISTANT SPEAKER (Poto Williams): Thank you.

JONATHAN YOUNG: The member opposite needs to think a little bit more deeply and also investigate a little bit more thoroughly around the issues and the decisions that the Government have made. I believe that it’s been a very poor decision. I don’t see much in this Budget that will support that industry, and I think they have been cast adrift and left on their own, and we’ll just see what will come of that.

I certainly believe that there is a very important part to play for that industry in our society, and right around the world that is also the case. When we think about the energy needs of New Zealand, it’s very important that we have security of supply, that not only do we expect when we go home every day that we’ll be able to turn on our lights and all those sorts of things, but that industry can do the same, because they’re the people who employ New Zealanders, and they’re the ones who need to have an efficient and cost-effective energy supply to their industries.

I remember back in 2011 when there was an earth shift in northern parts of Taranaki and the Māui pipeline cracked in one of its seams. It was interesting, because I went to visit and look at this massive pipe that was being repaired. I went there with Hekia Parata, the Minister of Energy and Resources at the time, and saw that there was a very skilled welder—the sort of welder that is above the average, because they were welding steel that had gas in it, and it’s an incredibly skilful job with a very careful operation and procedure that they must follow. He was one of the people who, 30 years earlier, had actually put it in place. That proves the longevity of that sort of employee, because they are highly skilled, highly sought after, and highly paid. This is what we do not want to lose. But as they repaired that pipeline and as they had to close it down for that repair, it took 138 hours. Over that period of time, the north of Taranaki economy—the upper North Island economy—lost $200 million.

So, what happened is that the Government, under the Ministry of Business, Innovation and Employment, needed to ascertain the issue around energy security, so they did a study. If there was such an outage that lasted longer than just one week; if it lasted a month—very similar to the refinery to Auckland pipeline—what would be the economic effects on New Zealand? So they looked at just the upper North Island, where only 60 percent of the gas connections are, and they ascertained that over a four-week period there would be a half a billion dollar loss to the economy—to industries, to companies, to businesses, who needed that gas.

I would ask members opposite and also Mr Shane Jones, who has the opportunity through his Provincial Growth Fund to make a difference in this country, what are you going to do to replace that when he and many others have been part of a decision to bring that energy supply to an accelerated end? Because this is where it starts to affect not just a region, not just an industry, not just thousands of jobs; but it starts to affect businesses all over our country who employ New Zealanders. I believe that we must be very prudent and thoughtful about these sorts of decisions. We should not make them because of ideological positions, because we know, in this decision around ending offshore oil and gas, it makes no difference to New Zealand’s emissions. There’s nothing in this Budget that actually does or says anything about the future of New Zealand’s industries around the security of energy. I think that this Government needs to think more deeply and differently than the way they presently are. I’m very disappointed.

ASSISTANT SPEAKER (Poto Williams): Order! Sorry—your time has expired.

Hon WILLIE JACKSON (Minister of Employment): Tuatahi, e tika ana ki te tautoko ngā mihi ki tō tātou rangatira kātahi anō kua hinga nō reira e te pāpā, John, moe mai, moe mai, moe mai rā. Ā, ka nui tēnā. Ki a koutou o te Whare, tēnei te mihi ki a koutou, tēnā koutou.

[Firstly, it is appropriate that I echo the acknowledgments to our chief who has recently passed away, therefore esteemed sir, John, rest in peace. I now conclude paying my respects. To those of you in the House, greetings one and all.]

It’s with great pleasure that I rise to speak about this Budget. I want to congratulate our Minister of Finance for delivering a measured but successful Budget that has set up a foundation for this Government going forward.

I want to congratulate him too for delivering for Māori, because Māori have got more funding from this Budget, more than any other Budget in the history of Budgets in this Parliament. Fantastic—despite the nonsense and rubbish that’s come from the Opposition and their mates, who we successfully got rid of in the last election.

As the Minister of Employment, I’m particularly pleased that I’ve got a bit more pūtea for our people. I’ve been administering this Poutama Rangatahi scheme for our “neets” people, our young ones who are a bit lost in the Shane Jones area of the North, his nephews, and on the East Coast, Ngāti Porou, our nephews, who are wandering around—some of them, too many of them, sitting on the couches, as Minister Jones would say. But we’ve got a bit of a pūtea in place where we can get in with the community and organise them and get them on a road back to life. I’ve got that funding now successfully built into the cities. It’s an urban fund of $14 million, and I thank the Minister of Finance for that and, of course, the Minister for Māori Development, Nanaia Mahuta, because the funding came in under that portfolio.

At the last election, I was the campaign manager for our Māori caucus, and we ran a campaign based on bread-and-butter issues. We didn’t run a campaign like the Opposition did with their mates, based on the foreshore and seabed and the water and tino rangatiratanga and every other kaupapa. We ran a campaign based on need—based on need. When you have your people sleeping in cars and when you have your people freezing in their homes and when you have your people hungry—

ASSISTANT SPEAKER (Poto Williams): Order! Not me.

Hon WILLIE JACKSON: My apologies, Madam Assistant Speaker.

ASSISTANT SPEAKER (Poto Williams): Thank you.

Hon WILLIE JACKSON: My Apologies. I need to get that right. I’ve only been here four years. But, thank you, Madam Assistant Speaker.

When a Government sees this happening, and that was a legacy of the last Government and their mates from that other party, you have to invest where the need is. You can’t worry about—

ASSISTANT SPEAKER (Poto Williams): Order!

Hon WILLIE JACKSON: Sorry. I did that again, Madam Assistant Speaker. We can’t worry about who owns the water, not at this stage. We’ve got to worry about the basics, the bread-and-butter issues. We can’t worry about Te Puni Kōkiri going down a few dollars, as my good colleague Kiri Allan said. You’ve got to worry about the basics. We ran a bread-and-butter campaign, and that’s what our people wanted, that’s what our people got, and that’s what they’re getting in this Budget.

So we don’t accept any nonsensical criticism from the Leader of the Opposition, who wouldn’t have a clue about Māori things, who said that we let Māori down. Māori are celebrating, Shane Jones says that—more Māori are benefiting in the regions than anywhere else. They’re benefiting off our rangatahi schemes. We can’t go down this nonsensical track that the Opposition talk about when homelessness reached an all-time high—an all-time high. That’s a fact. Māori homeownership rates are at the lowest level they’ve ever been—that’s a record. Frankly, the previous Government should be ashamed of the state of affairs that they left things in.

Thanks to this Budget now, we have $1.2 billion—$1.2 billion—going directly into Māori people’s pockets. When did that last happen? There is $250 million going in terms of the accommodation supplement, which will have a huge impact in terms of Māori, and the winter energy payment is another great benefit to our whānau. That’s what matters. That’s what matters. So when we talk about targeted and universal funding and we hear nonsense from the other side, “Oh, the Māori Party got $120 million, and you only got $57 million.”, while they were selling off State rentals, while they had the dirty, rotten, filthy Te Ture Whenua Māori Bill, while our people at kōhanga reo were not getting equity, while they were going to expand on oil and gas—it doesn’t matter. It doesn’t matter. It’s all peanuts. What matters is the big stuff. The Opposition does not understand things Māori, and the Māori Party doesn’t understand things Māori. Understand where your people are at before you say, “We got $120 million, and you only got $57 million, so that makes us more successful than you!”

ASSISTANT SPEAKER (Poto Williams): Order!

Hon WILLIE JACKSON: Sorry, I’m talking about what they’re saying.

ASSISTANT SPEAKER (Poto Williams): I know that. However, can I just encourage you to not use the word “you” because that brings me into the debate. Thank you.

Hon WILLIE JACKSON: Yes. I do understand that, Madam Assistant Speaker. But I’m just trying to—and my apologies, again. But I’m trying to replicate this nonsensical analysis that we’re getting in the media from idiots who would have us believe that they are so successful, because they got their measly $120 million while the whole world was falling down—the Māori world was falling down. Our kids are killing themselves in record numbers, homelessness is at a record high, our young Māori are in the regions wandering around doing nothing—but they got a $120 million. It’s just nonsense.

Māori development is more than just targeted funding, which is important—don’t get me wrong. Don’t get me wrong. We support our Māori groups, our Māori organisations. For goodness’ sake, I was a CEO of one for many years, and I chaired many Māori organisations. But the reality is most Māori, sadly, are not part of our Māori organisations. Most Māori don’t speak Māori. Most Māori kids go to mainstream schools. This is the reality for Te Ao Māori.

So for this Budget, the Māori caucus has invested in the greater good—invested in the greater good. We’ve said, “We are with our party, we’re with Grant Robertson. We’re with our Pākehā and Pacific and Indian and Asian—and who else have we got in our party? Pasifika. We’re with all our groups. We’re in it. We’re for the greater good.” We could have got greedy and got $121 million in terms of targeted funding, but no. We said, “We’re here for the greater good.” So stop the rubbish from the other side. I am getting sick of this simplistic analysis about who did well and who didn’t do well. We did well. We are putting real money into the pockets of whānau: $14.5 million into Te Reo Māori, $250 million into households, accommodation allowances, winter allowances—what part of that does the Opposition not understand? What part of that don’t you understand? This is a Government that cares about Māori; that doesn’t patronise Māori the way the previous Government did, with the Māori party. We believe in Māori. Most of the Opposition wouldn’t know a Māori if you fell over one. There were only two in the last Government, for goodness’ sake!

So I say, well done. Well done for the positives that we’re doing: $1.2 billion going into the pockets of Māori. Again, they wouldn’t know; they don’t know any Māori. The only Māori they know are the ones who they’re looking at across here in Government. And I’m saying to Grant Robertson, “Thank you, Grant. Thank you for what you’ve done.” We know that our providers will take this, because they’re making a contribution in terms of this country. We’re here for the greater good. The Māori caucus is here for the greater good, unlike the Opposition over there who wouldn’t know a Māori if they fell over one—no, they wouldn’t. We know going forward that the foundation has been put in place for a better New Zealand for everyone.

I say to our people out there, believe in this Māori caucus—our 13 people who are making a great contribution, with the greater caucus in Labour. It’s a special partnership. It’s not a patronising relationship like the last Government had with the Māori Party. It’s a real relationship, a partnership that’ll go forward—one that our Prime Minister supports, one that the Minister of Finance supports—and we’re looking good for the next Budget come 2019. Nō reira, kia ora koutou.

ASSISTANT SPEAKER (Poto Williams): I understand this is a split call?

Andrew Bayly: Yes, that’s right, Madam Assistant Speaker.

ASSISTANT SPEAKER (Poto Williams): Andrew Bayly, you have five minutes.

ANDREW BAYLY (National—Hunua): Thank you, Madam Assistant Speaker. I think the quote of the day has got to be “There is a difference between a broken promise and one that is yet to be delivered.” Don’t you think that’s a good one? That’s a fantastic statement from the Leader of the House, the Hon Chris Hipkins, trying to explain why this coalition Government hasn’t delivered in the Budget. Despite all the talk of crises that we heard from the coalition Government over the preceding month or so, there has only been one winner in this Budget and that has been Winston Peters—Mr Winston Peters, who’s got the carpets and the curtains for Stockholm and the tax cuts for horse breeders.

If you look at the Budget, health and education are brought in line with what National had done last year and in the Budgets before that. There is nothing additional at all. So, what I find funny is that the middle New Zealanders, the hard-working New Zealanders, are the ones that are going to miss out in this Budget. They’re the ones that are going to be hit by a whole raft of new taxes. In fact, if you look at it, $2.3 billion of new taxes are being collected by this Government in this Budget—one is around the regional fuel tax and, of course, we know how that’s going to bite soon; they’re increasing the five-year brightline test; there’s the Amazon tax; and the tax on GST on online goods is being introduced by a Government who campaigned on no new taxes—no new taxes. We didn’t campaign on no new taxes; it was that Government, on the other side, who campaigned on it. That is incorrect and wrong. If you’re not going to increase taxes, you should say that and make sure you stick to it.

Against that, they’ve cut off the $1,060 of average tax cuts. Who that hurts most of all is the students; it’s the people out there going to university who want to do a job in the holidays and earn enough money; it’s the young couple trying to save for a house who do not yet have a family; and it’s the older people who’re only going to get a measly couple of hundred bucks for the winter energy payment in this first year, when they were promised they were going to get an $800 payment this year. That is the travesty around this Budget.

But what I also want to focus on is the question of housing. I’ve got to ask: what is wrong with Mr Twyford, who talks of highly-qualified Treasury officials as being kids at Treasury, or bean counters at Treasury? They are derogatory terms—absolutely derogatory terms. We know they are highly qualified people. They may be young but it does not mean their view should be discounted. I think the issue that Mr Twyford forgot to look at is that at the end of the Budget documents, of course, those projections around housing, which Treasury had dropped from $5 billion over five years to an estimated $2.5 billion benefit from housing coming in over the next five years, were actually signed off by the Secretary of the Treasury—the Secretary of the Treasury. So, it had all been through the cascade, in the entire Treasury process, and yet Mr Twyford took it upon himself to launch a personal attack. I think it’s dreadful. That follows the Reserve Bank, who had also come to their own view and downgraded the KiwiBuild projections in the last update they gave in December late last year, and, of course, what Fran O’Sullivan said only just a couple of days ago—this is a quote from her—was “It’s obvious that the KiwiBuild affordable housing programme will not produce 100,000 [new] houses over the next decade”.

So what I think was missing in this Budget was there was nothing in the Budget about the urban development authority they’ve spoken of, nothing in the Budget about training people involved in the building construction sector, nothing in the Budget about speeding up the consenting process for new homes, and nothing in the Budget about putting in place a process to speed up new products coming into the country. All we hear about and read about today is K3T panels being installed in houses in Northland. This Budget is a travesty.

ALASTAIR SCOTT (National—Wairarapa): Overpromising, under-delivering. We’ve heard a very good list of things that were not done by the Labour Government—not in the Budget. But, of course, they’re all about rhetoric. It’s all about saying stuff that they will do at some point, and even Mr Hipkins said today that the promises he hasn’t kept are not broken promises; they’re just some things to do later, to do at some point. There is no urgency by this Government to do anything that they promised to do.

Instead, well let’s just look at one example. Let’s just look at one sector. Let’s look at education. Apparently, there’s a 45 percent increase in the education budget, we heard today in question time. Where has that money gone? It’s gone to the tertiary students who do not need the money. In fact, it’s been proven that there’s been no new students turn up as a result of having a free year’s education. Ineffective—$2 billion wasted, down the tubes. Why on earth couldn’t the Government use that money more effectively?

Why has there not been more funding put into early childhood education, for example? Why has that money not been used to alleviate or to keep the promise that was made regarding school donations—targeted where the money can be utilised effectively? But instead, it was used in a universal grant that is given to people like myself. I have a first-year university student in Auckland who will get her first year free—her older brothers, they went. They were going to go. She was always going to go. All the kids that have gone to university, they were always going to go, but the Labour Government have chosen to waste more than $2 billion and leave early childhood education for dead and leave school donations without changing them whatsoever.

The other promises that have been broken—we heard them today in question time. Where’s the money for the doubling of refugees? Where’s the petition that was asked to be signed during the campaign by my opposition—Mr McAnulty? He gathered signatures, tried to gather signatures, for doubling the refugee quota because that was a policy that he was going to stand up in Parliament and advocate and demand—that there be money for these refugees that needed to be brought into New Zealand, for their benefit and for the benefit of New Zealand. A culturally fantastic idea, but what a disgrace that that was all hot air, a broken promise, rhetoric that does not mean anything. In fact, the New Zealand public is learning quite quickly not to believe anything that that Government might say on the street corner or in a policy, or perhaps even in Parliament. The credibility of this Government is waning fast and they can only blame themselves.

We’ve got the police officers—another broken promise. We’ve got money—well, where’s all that extra money that’s going into the district health boards? It’s not. There is no extra money. In fact, there’s less extra money than what the National Government had promised. So the Government has cut back on health expenditure only because Winston Peters needed the $900 million to be invested in foreign affairs. You see, the problem here is there’s money to burn. We left it for the Government because we set them up. In fact, Mr Parker sounded today like he’d done all the work. I mean, it was quite obnoxious, actually, hearing Mr Parker claim that this fantastic surplus and the fact that the economy’s in great order is due to the Labour Government.

Hon Willie Jackson: It’s true.

ALASTAIR SCOTT: Mr Jackson says it’s true. He’s been there six months and he’s claiming that the surpluses, the never-ending surpluses, the increasing surpluses, were all down to the good work of Grant Robertson, and that is just laughable. Again, it just undermines the credibility of the Government when they make such claims, because it is clear to the man on the street that it’s nonsense. It is just a nonsense.

So, unfortunately, there’s a lot of the taxes that it was promised were not supposed to be coming in. They’re here—the petrol taxes—and they’re only hurting those that need to be supported the most.

RINO TIRIKATENE (Labour—Te Tai Tonga): Tēnā koe, Mr Assistant Speaker. I’m delighted to be able to stand and I’m so proud to speak in support of this year’s Budget. Can I congratulate our Minister of Finance, Grant Robertson, on an absolutely splendid job that he’s done, because Māori are moving forward under this Budget.

I want to endorse the remarks from my colleague the Hon Willie Jackson, someone who has devoted his life to working among our people. We know that this Budget does deliver. We’re not quibbling around little bits of money that some people are saying we’re giving here or there; we’re doing the big things in this Government, and this is what we can do when we’re in Government. We’re looking across the whole range of services. We’re healing the deficits and the underfunding and the damage that has been done after nine years. So that’s why I’m really pleased to be able to stand in support of this Budget, because we are laying the foundations, we are putting things right, we’re driving those investments into the areas that need them most, and Māori whānau are recipients, are beneficiaries of this Budget in a major sense.

Can I just give us some examples. We are investing through our Families Package, our Best Start payments for our pēpi—our babies—and our winter energy payments. That’s going to be $1.2 billion going directly into Māori households, directly into those households over the next four years. That’s going to make a huge difference. On average, that’s around $75 per week extra that will be going into those households, and we know how they’ve been struggling after the last nine years, under that previous Government. We’re making investments right across the board in our health and education sector, and also Māori are benefiting from housing. We’re supplementing the massive work that we’re doing in KiwiBuild, and we’re supplementing that with our Papakāinga housing as well. Whakamahana—we’re warming up our land through our regional provincial fund, spearheaded by the honourable matua Shane Jones, which is benefiting our Māori interests in the regions and our Māori land owners, in addition to the work that the Hon Nanaia Mahuta is doing in that area. We’re doing the Papakāinga housing. We are providing pathways for our rangatahi.

The previous speaker, Alastair Scott, spoke about our first-year free tertiary education. I was in Otago University. There are 2,000 Māori students at Otago University, and many of them—a bulk of them—are first years who have benefited from our policy. That is a major chunk—2,000 Māori students—so that needs to be celebrated.

So we are doing great things in our Government, and I just want to re-emphasise the point that we are about doing the big things. We’re not about a few million here to Te Puni Kōkiri that mostly goes into the pockets of contractors and consultants; we’re about driving resources into communities, into whānau, directly helping them out through the likes of our Families Package and the winter payments.

Can I just say there are 17,000 Māori babies born every year, and we celebrate that. Those families—those babies and their parents—will directly benefit from the tax credits that we are doing through our Best Start payments. Now, that’s a real difference that will be made to all of those families, not to mention the winter energy payments. It’s making a huge difference. So we mustn’t quibble. This is a great Budget. It’s doing some wonderful things right across the board.

Now, we know we can’t fix all the problems overnight. We can’t fix them overnight, but this Budget is laying the foundations for the start that we are doing to repair the social infrastructure of our country, and we’ve made huge strides in doing that in this Budget. More work will be happening, I can assure you. We’ve got many years of Budgets to come, whereby we will be doing much more targeted and focused efforts and resources and initiatives to further build on the work that we’re doing. There’s a Māori proverb and, if I can adjust it slightly, it goes like this: mā whero, mā pango, mā kākāriki ka oti ai te mahi—with red, with black, and with green the work will be done, and we will get the work done. Kia ora tātau.

Dr DEBORAH RUSSELL (Labour—New Lynn): I am absolutely delighted to take a call on this excellent Budget that builds real foundations for the future, and that expresses the values of this coalition Government.

I just want to address some of the points that the Opposition have raised, and I’m particularly perturbed by what Mr Alastair Scott said about our tertiary fees policy having no new students. That is a mistake, Mr Scott, and the mistake is this: the mistake is not about whether or not there is an immediate increase in the number of students; what matters to us on this side of the House is relieving the debt pressure from students, and what matters to us is education and the value of a free education. Labour Governments have always been Governments of education, and we have expressed that through our values—our value of a free education. We’re making a start on getting back to a fees-free education in the tertiary sector for university students, for polytechnic students, for apprentices, and for anyone who is undertaking post-school education. That’s the value we’re expressing. That’s what we’re going to be counted by.

I want to talk about the values of that Opposition. In the last few days they told us a lot about the Stand Children’s Services facility in Roxburgh, which has closed down. They said, “Why?” They challenged us: “Why is this cruel, heartless Government closing it down?” Well, we are going to provide those same services through other facilities. The services to children will not cease. But let me tell you why that particular facility, the Roxburgh Stand Children’s Services, has closed down. Let me quote from an Otago Daily Times article from 6 April: “The charity had not had a funding increase since 2009 … It had met operational shortfalls in the past by dipping into its own reserves,”. Let me quote Bryan Cadogan’s writing, again, in the Otago Daily Times, on 18 May: “[The charity] have been put in this impossible situation of having Government funding frozen since 2009.” That’s the values of the Opposition: freeze the funding and then blame the Labour Government. If those charities have closed down it’s because of their values, their shallow values of cut, cut, cut.

I see this expressed no better than in housing. The market will provide in housing—that’s the ethos of the Opposition. And what has happened in the market over there? House prices have skyrocketed, rents have increased, families are living in precarious housing, there is increasing homelessness—that is the market solution. The market solution—and it betrays a terrible failure of government by the previous Government, a Government that has failed to attend to the basic needs of people for secure housing. On this side of the House, we are rebuilding after years of neglect. We are rebuilding the foundations of a secure society, where people have a decent, warm, dry, and secure home to live in.

I think about my own electorate of New Lynn, where we have a chronic homelessness problem. We have a group of homeless people who travel around the electorate, living in various places. We’ve been working with them, talking to them, and getting the resources around them. Some of those people, who have been homeless, are now ready in themselves to move into homes. We have put money into helping them: $100 million into homelessness and a huge chunk of that is going into the Housing First programme, where we will simply put people into homes. The Lifewise Trust in New Lynn and VisionWest in Waitakere area will be working on this Housing First programme to do what a decent Government does.

We do not accept homelessness; we do not accept that market outcome. We will step in, we will step up, and we will fix the problem of homelessness in this country. Those are the kinds of values we have on this side of the House. We actually care, and when there is a failure we will take action. That is why I am so proud to be part of this coalition Government, which has the heart, which has the values, and which has the capacity to address this terrible problem. I commend this Budget to the House.

Hon MAGGIE BARRY (National—North Shore): Thank you very much, Mr Assistant Speaker. Well, Budget 2018. Despite the protests, the shouting, and the belligerence of the other side, we don’t believe them. This is a bad Budget. We heard Willie Jackson shouting and bellowing. Shouting about it, Willie Jackson, doesn’t make it so. It might’ve on Radio Live, but it doesn’t cut it here. Patronising platitudes that we don’t know Māori—well, what a delusional zone that member’s living in. What a lot of blather and nonsense about values from Dr Deborah Russell, the member who just resumed her seat.

Let’s have a good look at this Budget, shall we? After it’s very flat delivery—and I notice they’re getting very shouty over on the other side of the House—how will this coalition Budget, their first one, actually be remembered? Let me count the ways. Some have described it as an epic fail—that’s quite kind, I thought. Our National leader, Simon Bridges, said it was a classic Labour effort of old: big spend, big tax, big borrow and hope. Bernard Hickey, a journalist, called it “the biggest missed opportunity in a generation.” My eloquent colleague the Hon Amy Adams earlier described it, somewhat whimsically but I thought very accurately, as the “dowry Budget”, to prop up the marriage of convenience for the cost of doing business with Winston Peters, which is a not inconsiderable cost—a billion dollars here, a billion trees there, slush funds, and really attractive horses and fillies. Who knows where the lack of substance will lead us? I know I’m not backing that team.

But it is very apparent from the coalition divvy up which of the partners is the most powerful—I mean, New Zealand First cut the Greens’ lunch. The very weak Minister of Conservation had said she would double the budget for the Department of Conservation. Well, that didn’t work out. It hasn’t delivered a darned thing, except to put our most vulnerable species closer to the brink of extinction.

I’m more concerned, as the spokesperson for seniors at this time, in looking at the Budget to find out what this Budget actually delivered for vulnerable New Zealanders. I looked and I looked; it was nowhere to be found. Ching-ching—the unwise people who backed New Zealand First got plenty of pay-offs. The older people in New Zealand, the ones who are vulnerable and who are being abused in terms of elder abuse—financially, psychologically, and physically—they got nothing. There was absolutely nothing that Labour delivered of its promises. The aged care commissioner—a lot of big talk on the campaign trail about having to have one to represent seniors—didn’t happen. The Minister for Seniors, again, was missing in action.

Dementia, I think, was probably one of the most disappointing—Alzheimer’s New Zealand said it included no enhanced specialist dementia services. Why not? This is a group of people—more than 60,000 of us now in New Zealand are estimated to be living with dementia. That number is set to triple to more than 170,000 by 2050, by which time—actually, the recent economic report that was put together by Alzheimer’s New Zealand said that the annual cost of dementia and its care in New Zealand will be about $5 billion. That’s 170,000 people requiring a great deal of help. As Alzheimer’s New Zealand said, we need to put that investment in now. We need to do it or the vulnerable will suffer, and that’s what this Labour Government, with its coalition members propping it up, has delivered—nothing to the vulnerable.

Let’s look at palliative care. That is something that, you know, the Justice Committee is considering at the moment. Why do we need to consider euthanasia when we need to be putting money into decent palliative care that will be delivered wherever and whenever people need it in this country? That’s the kind of warm-hearted response and sensible, finger-on-the-pulse response that I would have expected from a Government who understood what vulnerable New Zealanders were going through.

I think that when we look at what health got in this Budget and see what we would have done if National had been in Government, it would have been a far different outlook. When we look at the vulnerable and the way that we have, as a Government in the past, enshrined their needs and looked after them, I feel that we really are in a position where we can look across the House and call them out for what they are, which are heartless people, not in touch with the vulnerable communities around New Zealand, uncaring, and unfeeling. Whether they’re Māori elders with dementia—I see Willie Jackson looking up there, looking quizzical, as well you might because your Government did nothing whatsoever to help these people. Māori also missed out big time in this Budget, and I feel that New Zealanders are really grasping the lack of substance and the flimflam that accompanies most every utterance from this Government.

I feel that this Budget represents the Government: it is disappointing, it is an epic fail, and it could do better—much better. Thank you, Mr Assistant Speaker.

ASSISTANT SPEAKER (Adrian Rurawhe): I call Kanwaljit Singh Bakshi—five minutes.

KANWALJIT SINGH BAKSHI (National): Thank you, Mr Assistant Speaker, for the opportunity to participate in this Budget debate. I would like to start with a reference to the speech given by the Hon Jenny Salesa. She spoke for 10 minutes and did not mention once the main issues of South Auckland, and those are the promises which were made by the Labour Party before the election. They were the cheaper GP visits, which she did not mention. She did not mention the delayed winter energy payment, which has come up during this Budget debate.

There are increased petrol prices. There was a promise there would be no increase in any kind of tax, but what we are seeing is that there are increases in a number of taxes, as my colleagues have mentioned earlier. Reading through the media, they are predicting that petrol prices will increase up to $3 a litre, which is going to affect a lot of households in South Auckland. We have to consider that in today’s terms, $3 a litre, up from $2 a litre, means a 50 percent increase in the price, which will affect their back pockets. We heard that there will be a $75 increase in the benefits for families, but how are they going to cope with this increase in the price?

What we are seeing is there is a constant decrease in the dollar price because the businesses are losing confidence in which direction this economy is going. We are seeing that because of that, the petrol prices are also increasing. The Auckland region is proposing a 25c-a-litre increase in the fuel price, and what is the Auckland Council trying to do? They are talking about building another stadium on the waterfront. We support that, but this is not the right time. When there are surplus funds available, we can do that, but not today. This is the wrong time to consider those things.

We have been listening to many claims being made by the speakers from the Government benches that there has been a sudden increase in the education budget, but what the teachers or the principals are saying, that is totally different. I was reading through the media that two principals from up north, they both have given this Budget a minus C for their rating, which shows how much confidence the teachers have in the funding which has been provided by this Government.

Another issue, which I have already touched on, is the lower price of a GP visit. The Labour Party promised that $10 will be the maximum that a family will be paying, but what we are seeing is that the National Party’s policy is being implemented, where we promised that all the community card holders will have cheaper visits to the GP. So they are just borrowing our policies—they are just borrowing. On the Order Paper, if you look, we haven’t seen that much new legislation has been introduced. They are just working upon what we did.

Despite all the talk of the crises and the building up of expectations that they would fix all the issues in one go, whether it was health, education, or any other issue for the ordinary citizen, they are not doing anything. What we are listening to today from the Labour leadership is that these promises will not be delivered on now, but will be delivered some time later, which means that they are just talking in the air. They say that they will be delivering their promises, but nothing is going to happen in this Budget.

The losing of confidence of the businesses makes a lot of difference, because people are worried about how their businesses will progress in the next few years. I am talking to the small and medium sized businesses all the time, and they are very concerned about the way that the legislation is being changed. More red-tapeism is being introduced, and they are concerned about how they will progress in their businesses. The people who are in employment are concerned. If there are changes to the legislation, then they might lose their jobs. There is a sudden increase in worry among the people about what is going to happen. I think this Budget is a total disappointment for everyone, and I don’t support this Budget.

ASSISTANT SPEAKER (Adrian Rurawhe): I understand this is a split call—five minutes.

PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Assistant Speaker. It’s an absolute delight to rise and take a call in this House to talk about the Budget—for the first time as a new MP—that this Government is delivering. What is much less delightful, though, is listening to a whole bunch of misguided speeches from members opposite.

For example—and I’ll just pick a few, because there are way too many to go into—I’ll just point out the fact that the member Alastair Scott talked about the fact that we haven’t included doubling the refugee quota in our Budget. Can I just what reiterate what the Prime Minister said today: that’s not where you put a policy like that, Mr Scott. As a new MP, even I know that. Mr Scott also talked about the fact that this Government is investing less in health than they did, but perhaps Mr Scott needs to go back to school, because we’re investing $3.2 billion in health versus the $2.3 billion that they invested, and if they try to say that they did a lot more, it’s only because of the TerraNova Homes and Care case that that previous Government was dragged kicking and screaming to deliver. So it’s a little bit disingenuous to add that in.

Maggie Barry mentioned that there’s nothing in this Budget for the most vulnerable, and the member David Bennett—his ode to Waikeria Prison, lamenting the fact that on this side of the House we don’t really want to build a mega-prison. What about the drivers of crime? That’s what this progressive side of the House is much more interested in, not building mega-prisons that we throw more and more people into, locking them up and throwing away the key, because that’s been done. It’s been done by the Opposition members when they were in Government, and it’s failed miserably. It’s a travesty. And so we’ve got a much better plan, and that’s the plan that we are delivering through this Budget that I am extremely proud of.

It’s about addressing those drivers of crime. Look at family violence. Family violence, if you look at youth justice, underscores a lot of the experiences of those young people. We’ve put over $76 million into front-line family violence services. I visited some of those soon after those that announcement was made, and was told to my face that that was the first time they’d seen an increase in nine years. What about housing? What about making sure that we invest in education so that our young people have a hope, so that they have opportunities? Health, housing—those are all the foundations that lead to people actually having better lives, so that they don’t go on to commit crime.

So let’s talk about housing a little bit. Let’s focus on that, because, frankly, out on the doorstep before the last election, that was one of the most talked about issues to all of us on this side of the House. What are we doing? That’s why it’s so exciting to stand up and speak, because we get to deliver on what we’ve talked about—building more houses. Residential construction, which was forecast to fall this year—this was alarming, considering we were already 71,000 houses short—is actually increasing. We’re building more affordable homes—not just more houses, but more affordable homes—so my generation, that’s been locked out of homeownership, can actually afford to buy a home, or to rent a home if they so wish. We’re ensuring that we have healthier homes, so that we don’t have 40,000 children a year, or whatever it was, falling ill because of preventable respiratory illnesses.

Social housing, emergency housing—we’re building more of all of those, as well. We’re building 6,400 more State and community houses, unlike those on the other side of the benches of the House, who were selling them off en masse—selling off State houses such that homelessness rose to dramatic levels. We’re building an additional 1,400 emergency housing places, so that no child needs to sleep in a car or a garage and to do their homework in the back of the car. There’s $63.4 million in funding for Housing First. We’re investing so that our homes are healthier. We’re investing in the winter energy payment so that we don’t have to sit in the living rooms of the superannuitants any more who tell us that they put on layer after layer or go to sleep early because it’s too cold and they can’t afford to heat their homes.

We’re investing in people. We’re investing in improving the lives of people across the spectrum, and that’s why I’m proud to be on this side of the House. Thank you.

Dr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe, Mr Assistant Speaker. The starting place for this Budget, as it should be, is how we can make the biggest difference for the people of New Zealand. I must say, as the Christchurch Central MP, it’s great to see that that was the starting place for the people of Christchurch as well, because this is a Budget which finally recognises what is needed in Christchurch—not how to win the next election, but how to have a vision for the next 30 years. What we want is to build a resilient country and a resilient city—resilient not just in a physical sense; resilient in body, in heart, in mind, and in spirit, and that’s what this Budget is about.

In terms of Christchurch, we know seven years has been too long. Seven years has been too long when a Government was sitting on its hands, letting things go wrong in Christchurch, and that’s now changed. It’s changed in a whole lot of ways already. Minister Megan Woods has already taken steps to sort out the debacle that was left in the Earthquake Commission. An interim chair has been appointed and an independent commissioner is in there, but do you know what? This Budget sets aside funds and appropriations to address the problems. So we’ve got a tribunal being set up. The former Government was spending money through Government organisations on fighting the people of Christchurch. Well, we’re going to spend money on solving the problems of Christchurch, not in an adversarial way, but in a common-sense way. It is a tribunal that is based on mediation, not one where the money is funnelled through to lawyers and other professionals, but where the money is properly used on solving problems.

You know, we’re going to have breakthroughs in Christchurch now, at last. Test cases are going to be funded, but probably one of the most important things that’s going to be funded is $28 million to address the mental health needs of children in Christchurch schools, because the mental health of some of those children has been broken. They need fixing. There are going to be mental health workers available through those schools that are needed, and it’s going to be funded by that $28 million. That was needed from day one. We’re here, we’re doing it now, and this is something which we’ve said is going to be rolled out throughout New Zealand, right up to decile 4 schools. So that’s another move here for the health of New Zealand children. Mental health has been ignored for far too long.

Then there’s the cost-share agreement—no more loose ends. We want to give Christchurch back to the people of Christchurch—$300 million for infrastructure. That is $300 million for the people of Christchurch to determine where to use it, whether it be on the huge land drainage problems that exist, which are exacerbated with climate change—another thing that this Government is addressing—or whether it be on the use of the red zone land. A huge opportunity, a legacy opportunity—one which we don’t want to be talking about what we can do today, tomorrow, in one year, or in five years, but something we’ve got to leave for generations and generations of New Zealanders.

I am very proud that the people of Christchurch are going to be able to choose something, and what is being looked at now is an innovative and a forward-looking proposal which is about a green spine—about having the Avon, the jewel of Christchurch, preserved. That’s what this money can be used for, but I tell you what there won’t be. There won’t be some vague agreement where this Government holds the Christchurch City Council and others to ransom. It’s about a cooperative working relationship, at last—one free of conflict and looking for solutions. So this is a Budget whose entire tenor is about working together to build a city and a country for the future.

Of course, something that will be dear to many people’s hearts—perhaps not mine as much—is about the Christchurch stadium. It was another anchor project scheduled for completion in 2015, and what have we got? A vacant lot. Well, now with a $300 million capital fund, we’ve got progress. The Minister has said, and I’ve heard her say, that if the stadium will be built, it’ll have a roof. And you know what? It’s going to have a retractable roof. Do you know why? Because God likes to see his favourite team play. Thank you, Mr Assistant Speaker.

ASSISTANT SPEAKER (Adrian Rurawhe): I understand this is a split call—five minutes.

Hon TIM MACINDOE (National—Hamilton West): One of the most basic mistakes that any Government can make is to overpromise and under-deliver, and that is exactly what this Government has done. But when you compound that mistake by absolutely letting down groups and organisations out in the community who worked so hard to get you elected in the first place, it really does amount to the epic failure that Maggie Barry mentioned earlier on. I can only imagine that the Prime Minister and the Minister of Finance must have been delighted and hugely relieved when all that saturation coverage of the royal wedding took the pressure and the coverage off their lame effort last weekend.

This was a terrible Budget for my constituents in Hamilton West. Gone are those vitally needed roading projects that we in the National-led Government had promised to extend the Waikato Expressway down to Tīrau, to make driving safer and faster between Hamilton and Tauranga—two of the fastest-growing cities in the country.

There’s no commitment in this Budget to tackling the major shortage of doctors in rural and provincial centres. We in the National-led Government committed in last year’s election to doing something serious about that, and it just so happened that the Waikato Medical School proposal would have been a superb and internationally proven model to be able to deliver those services, yet there is nothing about that in the Budget. We know that 40 percent of country doctors are expected to retire in the next five years, yet the current Minister of Health is burying his head in the sand and wouldn’t even look at the Waikato proposal. If this is a Labour Government, that’s not putting people first.

There’s not even a mention in the Budget of Labour’s much-touted commuter railway link between Hamilton and Auckland, and they were going to go on to Tauranga as well. That was the one thing that they really did promise in my region, and it’s not even mentioned in the Budget.

It is no surprise that so many organisations and individuals are hugely disappointed after this year’s Budget dashed all their hopes and expectations, especially those that had been raised over and over again in last year’s election campaign. We said then that their promises were reckless and unaffordable, and this Budget shows that we were right. As the Hon Amy Adams said in the House this afternoon, this is the “dowry Budget” as far as New Zealand First is concerned, but for the Labour Party it’s a litany of broken promises, and for the Greens it’s abject humiliation.

We’ve seen that it’s a Budget that delivers for Winston Peters with his billion dollars for diplomats, and for Shane Jones with his $3 billion slush fund to drum up support for areas that most matter to his particular party. But the Greens have had to take about 10 percent of that—there’s only a one-seat difference between the two; you’d think that the Greens had only 10 percent of New Zealand First’s MP numbers—and they have to pretend that they’re pleased about it.

It’s a Budget of massive disappointment to Labour’s friends and campaign supporters. They promised cheaper doctors visits in this year’s Budget. Did they deliver? No. It was slim pickings in the ACC portfolio. Where was the Government’s commitment in this year’s Budget to pay equity funding for those who work in areas funded by our ACC system? Absolutely not there. During the election, they talked that talk. Labour campaigned on their commitment to that goal, but judge them not by their words but by their actions. What did they do? Not only is there no provision in last week’s Budget for that pay equity funding but when they had the opportunity to vote for something similar—a very good pay equity measure that was promoted by my colleague Denise Lee MP just a few weeks ago—they voted it down.

They splashed the cash before Christmas on their tertiary education zero-fees policy, at a cost of $2.8 billion over the next four years, but now they can’t find funding for the children’s camps that have made such a difference in people’s lives. They can’t find the promised funding for Whānau Ora, and yet it’s one of the most important things they could have done. They can’t meet their promises to our most vulnerable citizens.

This Budget is a con and a fraud. It is fraudulent. It’s dishonest. It’s an irresponsible first Budget from the Labour - New Zealand First - Green coalition. It’s a litany of broken promises. Well, I can only hope that in the next two years that they rediscover their principles, that they—

Hon Scott Simpson: And their heart.

Hon TIM MACINDOE: —work out their heart and discover some priorities, and that they remember their promises, because if they can’t find all of those things before they deliver another one, they are destined, quite rightly, to be evicted in 2020.

BRETT HUDSON (National): How would you describe the Government’s Budget? It’s a flop. It’s a real flop, but it’s not a Fosbury flop. No, it doesn’t scale those great heights—it’s an absolute belly flop. It is a Budget of broken promises. It is a Budget that promised so much and delivered so little to so many.

Let’s take, for example, all of the talk that the Government was making about their support and understanding and caring for teachers and nurses, ahead of the Budget. In Ōhāriu, almost 20 percent of our workforce are in teaching, education, or health services. So those men and women would have been eagerly anticipating a Budget that would support them the way the Government claimed, and that perhaps they would see something in the Budget that would give them the pay rises, or at least some way towards the rises, they felt that they were due. What did they get instead? Well, basically, nothing.

So those men and women remain in Ōhāriu tonight. They’ll go to work tomorrow, and they’ll know that in their immediate future they’ll still be struggling for their pay rises, and the Government has let them down. But it’s not just let them down in terms of pay; it’s let them down in terms of the other promises that they’ve failed to deliver on. For instance, they promised funding to get 100 percent registered teachers in early childhood education. Where’s that in the Budget? You don’t need to look, I can tell you: it’s not there. It’s not there.

The day the Hon Chris Hipkins—the day he became honourable, or at least in title—was sworn in as a Minister, he said, “I will remove school donations in the very first Budget.” So which line removes the requirement for donation requests? Where’s the funding to offset that? It’s not there. It’s not there. It gets worse, though. Another area which is high for the employment in Ōhāriu is public administration and safety. The Government came in promising 1,800 sworn police officers in three years, and that’s going to cost them roughly, I think they said, $180 million—it wasn’t a great deal, they claimed. So what do we get instead in the Budget? Well, we get $300 million, which is a lot more, for a lot less: 900 officers. Interestingly, that’s only 20 more than National was going to do, and they crow like they’re somehow doing a great thing.

It’s a Government that promises much and delivers so little in health. It is spending less than our Government did—less. They say, “Oh, you’re including the TerraNova settlement.” Do we think for a moment that they wouldn’t, had they done it? The only interpretation we can get from them saying “Oh, you’re including the TerraNova settlement.” is that if they had had the opportunity, they wouldn’t have done it. So they wouldn’t have supported those care and support workers. They wouldn’t have settled a case. They wouldn’t have given them that money, because they weren’t going to count it. You can’t count it. Obviously, they weren’t going to spend it.

Well, there’s more. Mental health: $100 million set aside in a contingency fund. It’s wiped out; gets $10 million instead. But wait, there’s more. What about the universal cheaper doctors visits? Well, they didn’t make the cut either. But what did they do? What they have done is quite interesting. What they’ve done is take a look at all of those working New Zealanders—and I’ll tell you, Ōhāriu has the highest proportion of people in the labour force of any electorate in the country, at around 73 percent. What have they done? They’ve said, “Well, how can we sting you—where’s your back pocket? We want a piece of this.” What have they done? Taxes. Taxes on taxes on taxes.

Excise tax—that’s going to be 3c to 4c a year for three years. We know it’ll be the maximum—12c, plus GST. Regional fuel taxes that are being legislated for: Auckland gets theirs on 1 July, but the Greater Wellington Regional Council, in select committee, has already said that they’re going to apply for one. So from 1 January 2021, Wellingtonians will be paying 25c a litre more for their fuel as well.

Hon Member: But wait, there’s more.

BRETT HUDSON: There’s more: there’s also the Amazon tax, there’s the brightline test, there is about $2 billion of extra taxes imposed on hard-working Kiwis over the next four years. It’s just going to hurt them.

But what do they do with the money they get? They waste it. They spray it around—$2.8 billion on free fees, and they’re going to get 900 fewer tertiary students. Well, that’s not a good investment. There is $3 billion for a Provincial Growth Fund, which some call Shane Jones’ slush fund. It’s already delivered one failed project in a roundabout, apparently, outside Shane’s house, plus a few million dollars for good-looking horses.

This is this Government. You’ve got to question: are they just simply incompetent and they can’t add up and they can’t make things work, or do they spray around so much money in the wrong areas, so that instead of calling them fiscally incompetent you could call them fiscally incontinent? This is an incredibly bad Budget.

RAYMOND HUO (Labour): Tēnā koe, Mr Assistant Speaker. Good news: I feel obliged to report to the House that the number of Chinese developers, builders, and financial providers expressing strong interests in or queuing up to join the KiwiBuild programme is growing, not monthly, not weekly, but daily. Congratulations are in order, not only for Minister Phil Twyford but also for those developers, builders, and financial providers.

The KiwiBuild initiative will help develop more affordable homes for New Zealanders. The initiative will also offer great opportunities for the building sector. The “buy off the plan” initiative, for example, is a unique opportunity for developers to partner with the Government to increase the supply of affordable homes for New Zealanders. Some of the Chinese developers have already included affordable homes in their subdivision projects, but the KiwiBuild programme, through the “buy off the plan” initiative, gives developers the certainty and backing that they need to deliver suitable developments that they would otherwise not proceed with.

This is not only happening in Auckland; it is happening, and it will be happening, in Hamilton, Wellington, Christchurch, Napier, Whangarei, Whanganui, Tauranga, and Queenstown, etc. In Auckland, property prices have doubled and in some suburbs have trebled in the last nine years. Speculation in the residential housing market was rife. Foreign speculation was a significant influence. According to the New Zealand Herald, US$1 trillion of capital flowed out of China in 2015—US$1 trillion of capital flowed out of China in 2015. It is reasonable to assume that that movement of money would have some impact on New Zealand’s residential property market. But the problem is nobody knows about the impact of the problem, and nobody knows about the impact of foreign speculation on the New Zealand residential property market. Why? Because the last National Government failed to intervene, failed to collect any reasonably reliable data to help gauge the scope of the problem.

Hon Members: Shame!

RAYMOND HUO: It is a shame, because the previous National Government collected no such reasonably reliable data and it failed to intervene in the runaway market.

Well, the previous National Government did collect something, but even the Minister at that time admitted that the information was incomplete and should not be viewed as a foreign buyers’ register. Those figures were based on the low side of the market and were collected after the introduction of the new IRD disclosure rules in October 2015, and the data did not include trusts or business purchases.

It is kind of an open secret that so many foreign purchasers used trusts or incorporated companies to purchase New Zealand residential properties. But what National had done in the Chinese community was nothing but resorting to play the race card, although, to be fair to the National Party, there is a difference. It has gradually emerged that there is a difference between the National Party as it is and the National Party as it was presented by its representatives in the Chinese community.

As a result, there is a significant level of confusion between speculation and investment. We support investment, but we are strongly opposed to foreign speculation. A Kiwi-Chinese investor can buy any property anywhere in New Zealand, but should his or her cousin or brother live in a foreign country, it’s got nothing to do with New Zealand—

ASSISTANT SPEAKER (Adrian Rurawhe): Order! The member’s time has expired.

PAUL EAGLE (Labour—Rongotai): Thank you, Mr Assistant Speaker. Look, it’s a pleasure to come to the House early to talk about one of my favourite topics, and that’s housing. Nothing gets me more excited than talking about housing. But before I just leap into that, can I acknowledge our finance Minister, the Hon Grant Robertson, for a fantastic Budget, known in my electorate as the “ ‘Thank God for Labour, you’ve arrived just in time’ Budget”.

I say that because in the context of housing, there are just so many issues. Only the other day, I was reminiscing about the Service of Lament held out in Strathmore Park. When many of you fly out from the wonderful electorate of Rongotai and you leave my electorate and the city of Wellington to go to where you live, what you may not notice is that on the left-hand side, on the hill, there is a whole lot of State housing. Isn’t it interesting? Nothing’s changed there for nine long years, to the point where on the flat—as I’ve said in this House before—the previous Government sold off those valuable homes for those most in need to the wealthiest school in Wellington.

Look, I respect the children, and the parents who send their children there. But what defies me most is that the housing for the most vulnerable, for those most in need, for those who really needed it, went to those who could most afford it. That’s outrageous.

Just down the road, there’s a rugby field - sized plot of green land that I used to walk past. In fact, I went and put up two hoardings in there. There was so much land there, and I thought, “I don’t know who owns this. I don’t know if it’s the Housing New Zealand Corporation.”, but I thought it would make a great hoardings site. One of the things I did was put up my signs up there that said, “Look, vote for me”—and they did—“vote for this party” and they did, because there was nothing else going on there.

Luckily, we’ve got a Labour Party that says we’re going to build houses on this green site. I thought, “Thank God”, and no wonder, as I said, the good people of Rongotai are calling this the “ ‘Thank God for Labour’ Budget”, because there will be 6,400 more State houses built in this country. I’m hoping—fingers crossed—that there will be some houses there. In fact, I know that there are 12 being built there. That’s good; that’s a start. We need thousands more. I know, as my good colleagues here tour the green of this country—they tell me stories that could replicate, if not reminisce, in the same way that I do about how, after nine long years, there’s simply not the State houses there.

Let’s get on to emergency housing. Some of you will go up Taranaki Street there and you’ll see a night shelter, opposite Wellington High School there. You’ll think, “Jeepers. Why is there still a night shelter?” I remember talking to the Home of Compassion nuns—that’s a local Catholic order. They said to me—you know, we had a good chat about, again, the people who need housing the most. I said, “What does success look like for emergency housing, to you?” The sister said to me, “I wouldn’t be here.” I said, “That’s exactly right.”, because you wouldn’t need her or her organisation, who have been in place for 130 years, to be there any longer.

This Government is saying that there’ll be 1,400 emergency houses in place and that no more children will need to sleep in cars. Because that’s what’s happening, even in the capital city here. Some of you have even come up to me, saying, “Oh, I was frightened when I walked through parts of your electorate and saw them sleeping here.” They’re everywhere. But these 1,400 houses will go a long way to saying, “Look, this is unacceptable.”, whether it’s in the capital city of Aotearoa New Zealand, whether it’s in the Wairarapa, Auckland, the East Coast—wherever. It’s unacceptable in this day and age that we have a New Zealand that reflects that. I didn’t grow up, you didn’t grow up in that—through you, Mr Assistant Speaker; sorry. But what I am saying is that this is the “ ‘Thank God for Labour’ Budget” because it fundamentally goes back to the heart where every New Zealander, Kiwi, deserves a roof over their head.

This is the plan. I haven’t even talked about the hundreds of other things in here—the great things that this Government is putting in place for housing. But I’ll be back. I’ll be back, at some stage, to talk about that stuff. I haven’t talked about the 100,000 new houses—

ASSISTANT SPEAKER (Adrian Rurawhe): I’m sorry to interrupt the member, but it has come time for me to leave the Chair for the dinner break.

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

PAUL EAGLE: As I have been saying, thank God for Labour, thank God for the Labour Budget—there we are.

STUART SMITH (National—Kaikōura): Thank you, Madam Deputy Speaker. What a fine three seconds that was, so I’d like to acknowledge the previous speaker, Paul Eagle. Given that he put two hoardings up on a spare bit of land in his electorate, I think he’s achieved more in construction than the housing Minister has in his short stay in Parliament, so he has to be congratulated.

This is my fourth Budget that I’ve witnessed as an MP; the first one as an Opposition MP. It was with some trepidation that I came into the House last Thursday for this Budget, wondering—because the Government had been talking down the Budget all week, and I was expecting them to pull some sort of a rabbit out of the hat. Of course, when we were all, in our spokesperson roles, reading the Budget for the first time as it was being read out, we were quite surprised that, actually, they had underdone the talking down, and, in fact, it didn’t reach any heights at all.

I’d have to give Grant Robertson credit; he read the Budget well. You know, it’s got to be difficult to read for forty minutes, a prepared speech, and he did that well. And then the Leader of the Opposition stood up and gave what was a phenomenal speech—an absolutely phenomenal speech. It was lively. Every interjection that came his way he used, and it really brought the whole House to life. That took the wind out of the sails of the Government, and they spent the rest of the day and today trying to defend the indefensible. So I thought that was a very interesting start, in the Opposition, to a Budget, and I’m sure my colleagues share my view.

But coming to the issues around my own particular spokesperson roles, I was a bit disappointed to see some money go out of civil defence. I’m still trying to get to the bottom of what—I know the text alert system has now been paid for, and perhaps that explains part of it, but it seems a bigger chunk has gone out of it, but I haven’t quite got to the bottom of that yet.

In terms of the wine industry, it’s a great concern to see the funding much reduced on what was put in by National, and I think, particularly now that we’ve got Mycoplasma bovis as a real threat and the potential of brown marmorated stink bug—all of those issues; that’s not the right time to not increase funding in biosecurity. So I really am concerned about that.

But it’s the Earthquake Commission (EQC) that gives me quite some concern. There was $2.4 million put aside for an inquiry into EQC—

Andrew Bayly: How much?

STUART SMITH: $2.4 million.

Andrew Bayly: 2.4?

STUART SMITH: Yeah, I know—it’s quite a bit of money for an inquiry, but, you know, these things cost money, I guess—and $8 million towards a tribunal. You know, there are some serious—

Dr Duncan Webb: What price justice, Stuart? What price justice?

STUART SMITH: There are quite a lot of issues with EQC, and I fully accept that, as the member has just raised. However, I do think the Minister responsible for the Earthquake Commission is struggling. I have put 592 written questions to her, and I’ve had 23 satisfactory answers. The Minister is clearly struggling. She’s got four portfolios. Steven Joyce was able to handle that with ease, but it’s not everybody’s cup of tea, and I just feel for the Minister. I really know that there are other people that could help. She needs help, and I think Dr Duncan Webb—he’s very experienced in this area, a very experienced member. He is a new member, but quite clearly very capable, and I’m sure he would be able to help the Minister. Or, maybe, if the Minister’s got too much on her plate, she could step aside, he could take over, and she could help him.

Christchurch deserves better. It deserves that, and if we’ve got someone who’s on the case, then we wouldn’t need an inquiry and a tribunal. I’m prepared to reach across the House, if the Minister was to give me some information—more than delighted to help her with this portfolio, because, quite clearly, she needs that help. We are, after all, supposedly in the era of the most open and transparent Government; 592 questions with 23—

Andrew Bayly: And how many—23.

STUART SMITH: 23. She’s consistently late answering them. It’s not good enough to do that, but, you know, I do accept that she’s probably overwhelmed and not able to carry out the job. So the offer of help is there.

It was quite interesting today, as well, to hear the Hon Amy Adams coming up with two numbers: a $5 billion increase in operational allowances and $6 billion borrowed by Crown entities. My maths tells me that’s $11 billion, and I think the familiarity she was talking about was Steven Joyce’s $11 billion. He did warn them; he was good at his spreadsheets. That $11 billion is a big hole in the Budget and they are trying to cover it up with a different—creative accounting. So, with that, I commend the Leader of the Opposition’s amendment to the bill and no confidence in the Government. Thank you.

DEPUTY SPEAKER: I omitted to say at the beginning: this is a split call.

NUK KORAKO (National): E Te Mana Whakawā, tēnā koe. Can I, first of all, acknowledge all here on this side of the House particularly, because they support me, and the fact is that we do not support this Budget 2018. I want to talk around the Māori development budget. I don’t want to talk yet—that’ll be later—around the Treaty settlements one, which actually, the Budget has dropped by $30-odd million.

But talking about the Māori development allocations, I want to go back to the beginning of this year, when I watched the posturing earlier of the Prime Minister and her Māori Ministers and Māori MPs at Rātana and also at Waitangi. The Prime Minister talked about a shared social and economic well-being for Māori, and she also said to those gatherings, “You need to hold us to account.”—you need to hold us to account. So here we are, May 2018, and where is this Government at with their promises to Māori?

Their rhetoric, like their Māori development budget, is empty—it’s totally empty. There was $37 million more for Māori quoted by the Hon Nanaia Mahuta and also Kelvin Davis. The reality is that it’s $15 million less in the Māori development budget. There’s no $37 million more for Māori; there’s $15 million less.

Well, here’s the response that the Prime Minister will have to give at Waitangi next year to the iwi chairs and also to those marae that she will visit. It goes like this: she’ll have to say, “Labour cut your Māori development budget—that’s what we have done. Labour cut your ability to utilise your Māori lands by $11 million.” Labour took $9 million away from the Parihaka development projects. Labour cut $6 million from Te Puni Kōkiri funding because they don’t want to see Te Puni Kōkiri having the ability to ensure that they’re going to give proper advice to Government departments.

The other thing that Labour did is they have cut by $1.5 million the funding to provide practical assistance and resources to whānau Māori housing projects—that is, to improve housing outcomes for Māori. They cut it—$1.5 million. Oh, and if you’re not feeling bad enough already, Māori people, Labour has promised you $20 million in funding for Whānau Ora—$20 million—but now there’s no intention of making that any good, because there’s nothing in the Budget for it. That’s what the Prime Minister will have to say when she’s held to account at Waitangi next year.

Now, the previous speakers across the House have fudged the facts—as have both the Hon Nanaia Mahuta and Kelvin Davis and others. They say that they have increased Māori funding. What they are doing, though, is quoting mainstream Budget allocations. Labour may call that new Māori money; I call it assimilation. It’s pure assimilation. Māori are being assimilated by this Labour Government. They’ve slashed the Vote Māori Development fund, and then claimed ordinary Budget expenditure as Māori-specific funding. Māori should be prepared to kiss tino rangatiratanga goodbye under this Government. They’ll need to get used to more Government dependence.

So the reality is there’s less money for Māori development, there’s less money for Māori health, there’s less money for Māori education, and, also, with this disaster called KiwiBuild, there’s less money for Māori homes. This Budget, for Māori, is a travesty. This Budget, for Māori, is an own goal for Labour. And this Budget, for Māori—we’re going to see some real negativity here. This could be the first winter of discontent coming up for Māori now. Kia ora.

JAN LOGIE (Green): Thank you, Madam Deputy Speaker. Well, this is my first Budget in support of a Government, and I must say it’s quite different. I might not go quite as far as the forever modest Minister of Finance and call it perfect, because I’m a little more impatient for change, but, crikey, when I look back over things I’ve written in response to previous Budgets over the last six years, it’s quite a different perspective of looking at this. When I was looking at some of the things that I’d written in response, I was looking at a blog post from 2014 where I was looking particularly at the area of family violence—how changes to legal aid under that previous Government had meant that women were paying thousands of dollars to get protection orders, that changes to Housing New Zealand and Work and Income had made it increasingly difficult for women and children to get and stay safe, and that we heard that the funding had been cut for women’s refuge from $9.3 million in 2019 to just $7.3 million in 2012-13 despite an increase in demand. We had been talking about cuts to the It’s Not OK programme and White Ribbon being told they needed to be self-funding, and treatment programmes for people using violence had also been cut by millions of dollars despite increasing demand and increasing intolerance for this kind of violence in our society.

I will admit, there was a moment of reprieve after the parliamentary select committee inquiry into funding for specialist sexual violence services prompted a $46 million injection of funding from the previous Government, but the pattern was just years and years of bleak struggle in our communities. They wanted to wipe out family and sexual violence from their communities but were just not being given the resources from the previous Government to be able to do that.

So it is an absolute pleasure to see that starting to turn around with this Budget. I want to take a look at at least some of the Budget announcements in the area of family and sexual violence and what they might mean for people in my community—and communities all over New Zealand, but my community in Porirua. The increase in funding for front-line services—of women’s refuges, as an example—will mean that people in my community will be able to get the help they need from the local staff at their women’s refuge, because those staff will have more time to help them work through what they’ve experienced and unpack that violence in their head and help them find a pathway to a new life free of violence. To me, that’s worth celebrating.

It means if they separate from their abusive partner and are still at risk in their home, they’ll be able to access security advice and security monitoring with locks and alarms. That’s a programme I was initially critical of, because it seemed to me that just providing a security service around your house wasn’t really doing enough, but I’ve heard of instances where that absolutely saved women’s and children’s lives, when women had a safe room and had been taught to have that space in their house to be able to escape to and to be able to be safe from the person—their ex-partner—trying to break in. I believe that it is important that women and kids who are trying to re-establish themselves away from the violence have that peace of mind to sleep at night. I think it’s the least we can expect.

The additional money for the police will also help make sure that the police can attend call-outs and have the time to properly assess what was going on and be able to look at everyone’s safety needs in terms of a family violence call-out, instead of just arresting the person in front of them and having to move on quickly. It also means that the additional funding for the sexual abuse assessment and treatment service will mean that if someone is sexually assaulted, there will be trained medical people to sensitively collect the evidence for a case to proceed to court and to provide the right medical and specialist help regardless of whether they’re going to court or not.

It will also, hopefully, ensure that the courts can keep victims safe and reduce the trauma of having to give evidence in court by enabling victims of sexual violence—and domestic violence, hopefully, one day—to have a quiet and restful room to give evidence via audiovisual link rather than having to go into the courtroom and face up against that person who has been torturing them and hurting them previously. It will mean that delays caused because there hasn’t been enough funding or people available to do expert assessments for the court are a thing of the past. This Government is working to ensure that those who go to court are supported rather than revictimised and that the process is as easy and as efficient as is helpful and that people choosing to use violence are held accountable and given the support to change their behaviour.

So they’re some small but very, very significant interventions that have come through in this Budget across this Government that I am pleased and grateful to see. There is another item in this agenda, though, that I really am very excited about, and that is $2 million for a central agent for a new response to family and sexual violence. While I can imagine right now that my mother’s eyes are glazing over at the sound of the words “central agent”, I just want to explain it for a minute.

We know that many victims of family violence—and it’s also very similar for sexual violence—may tell people multiple times. There’s an example that came from the Family Violence Death Review Committee that’s been mapped out, where a woman had initially sought counselling for alcohol and drug support. She’d been a victim of family violence. She told that counsellor five times before she got a referral. Nobody checked that that referral was followed up, that it was appropriate for her. She never followed up on it. When the police were called out, they never arrested her partner who was hurting her, and, again, she didn’t get the help she needed and he wasn’t held to account. Then it went to court and he was sent to a programme, but, again, nobody followed up and checked whether she was safer and whether he had stopped using violence. Ultimately, there were many, many chances for us to intervene through our health system, through the education system, through the police, and through the courts, and we failed to do it. This is what we see happening over and over again. Sadly, in that case, that woman was murdered by her partner.

This happens on a regular basis in this country, and even if it doesn’t end in death, too many women’s and children’s lives are so deeply compromised by the trauma they’ve experienced through their relationship or through the sexual violence, because we didn’t respond when we could have. Her partner had shown signs of violence right from his early stages, having been a victim living in a household with family violence as a child. We didn’t intervene.

So that thing called a central agent is how we pull together our response to make sure that every single chance we have to be able to step in and make sure that somebody gets the help they need, we take that chance and we get it right—to make sure that they can be safe and that the person who is choosing to use violence is held to account and stopped from using violence again. That, for me, is the real hope in this Budget: it is the hope for a society that is free of family and sexual violence, where we are all able to thrive and live and experience healthy relationships. That, to me, is something worth putting all of our resources towards. I look forward to seeing this develop over time.

MAUREEN PUGH (National): Thank you, Madam Deputy Speaker. Well, today I had the privilege of sitting in my office between appointments and I heard some speeches from the opposite side of the House, and I couldn’t believe how pessimistic and gloomy they were and how backward-looking they were. The part of those speeches that impressed me the most was how much they tried to bag the National Party policies. So, clearly, they have no appetite for simply sticking to the job of promoting their own plans and their own Budget. I had to wonder whether that was because there was so little in it that for them to fill up a 10-minute speech, the only way they could do that was to resort to criticising their Opposition.

So what that tells me is they have no plan. They are failing to deliver on their pre-election promises. They sat around for nine years with their feet on the desk, never expecting to be in Government and hadn’t done the preparation work necessary to run this country. Now they’re caught, like a possum in the headlights, and they’re scrambling to deliver on the narrative they expressed in the campaign. The only thing they have been successful at doing is breaking promises.

So I did a bit of navel-gazing myself today and I looked back on the 2017-18 Budget, delivered by the then National-led Government. It focused on improving public services, not just in terms of the funding but also in terms of the performance. We wanted to be sure that the investment that was going into the Public Service actually delivered measurable results. This Government has removed the Better Public Services targets. We focused on lifting incomes with our $2 billion-a-year families’ income package. That was leaving more money in the pockets of hard-working Kiwis to spend how they chose to spend it: that got cancelled. There was $32.5 billion in new infrastructure over the next four years, the biggest investments in decades in new roads, schools, and hospitals.

I’m extremely grateful to the National Government for the investments they have made into regional New Zealand. I’m especially grateful for the ones that we are seeing on the West Coast right now. The new Grey Base Hospital’s certainly taking shape, and it’s nearing completion. The new Taramakau bridge is just about ready for the first car to drive over. One of the biggest improvements that has been made in the future economic development of the coast is the investment that was made in the cycle trails. We are seeing more and more visitors coming to the region, bringing with them the benefits and the challenges that we get with added visitors, and—recognising that—the further investment that went into tourism infrastructure funding.

The last Budget in 2017 was focused on reducing debt, not increasing debt. We were investing in other infrastructure that was needed for a growing country and a growing economy, like fibre to the regions, like cellphone black spots being infilled. That provides the same opportunities for Kiwis no matter where they live.

But this Government thinks that New Zealanders are not up to the challenge of growing. They believe we should shut down growth, and from what I can see the only thing they’re consistent in is their negativity. No to growth, no to supporting low-income families, no to “no new taxes”, no to 1,800 front-line police, no to the funding for the Rural Health Alliance Aotearoa New Zealand, no to the funding of the Roxburgh health camp for traumatised children, no to the midwives, no to Māori, no to Whānau Ora, no to Radio New Zealand, and what does Phil Twyford say to his advisers on housing? No.

So what we do know is that the main source of income for Governments is employees via businesses through their wages and taxes. And we also know that that business confidence is falling. What we’ve seen from the New Zealand business confidence report: in April it fell 3.4 points from March, all sectors in the red, services the least pessimistic and agriculture the most. Construction plummeted to its lowest level since 2008. “Let’s do this.” they said; they just didn’t say when.

Dr SHANE RETI (National—Whangarei): Thank you, Madam Deputy Speaker. It’s really a privilege to stand and address the Budget, which for me is a “show-me-the-money Budget”. They may be awash with money, but for me it’s “show me the money”. Where exactly is it? Where has it gone?

Well, let’s start with surgical mesh. Where’s the money for surgical mesh? In 2006, the Labour Party stated, “This is the most widespread crisis involving surgical devices in health and the Ministry of Health has adopted a hands off approach.” Where is the money? Where’s the cost-benefit analysis, Minister, that you’re currently doing to show that a mesh register can be built? Where are some steps towards the universally agreed recommendations from the Health Committee that progress be made on surgical mesh, or any of the recommendations? Where is the money? Show me the money. Show us that you can keep your pre-election promises and actually give this very important issue due diligence and due attention. Show me the money.

I then want to talk to personal health services. Four million dollars axed from personal health services. Well, which ones are actually going to be axed? Let’s have a look at what the options are. Is it going to be Healthline? Is it hospices? Maybe cancer control? Mobile surgical? Long-term cardio vascular? Oral health? InterRAI, which is the software that rest homes run to quality assure the work they’re doing? Or diabetes? Where’s the money going to come from? Where are you going to take that $4 million from in personal health services? Oh, and by the way, if you look at their reporting framework not only is $4 million gone from that budget, but there’s extra work. There’s actually a whole category of cardiac services for clinicians and others to do. So less money; more work. That’s not a formula that anyone can certainly apply. Show me the money.

There are other parts of this Budget that don’t make sense. Health information sectors—a very meagre $2.2 million increase. Now, how is that going to roll out? So you’ve got the National Oracle Solution, currently being reviewed by Deloitte—I’ll come back to that—that’s clearly failing. Where’s the top-up going to come from for that? We know there’s going to be a top-up because I got your Official Information Act (OIA) request back, Minister, last night. I can see that the ministry’s looking to top it up. Where’s the money coming from? You’ve only put $2.2 million into the health information services budget. That’s not even going to come close. That’ll probably pay for the $150,000—that’s the number you didn’t want to tell me in the House, Minister—that you’re paying Deloitte for their pretend-to-be-independent budget. That was in the OIA request last night as well. We’ll see how independent that is in the coming few weeks.

What else have you got coming down the line? Well, let’s talk again about what you’ve taken away. So a measly $2.2 million—

DEPUTY SPEAKER: I haven’t. I haven’t.

Dr SHANE RETI: Sorry, Madam Deputy Speaker—what this Government has taken away from health information services. The electronic oral health record, $340,000 a year outward each year for the next four years—gone. The population health data warehouse, $136,000 a year, established under our Government—gone, not present. Health information technology’s a problem that’s going to come back and bite this Government and all they’ve done is put $2.2 million, a very small amount, towards it.

Disability, one of the few vote areas that actually has a shrinking-lid policy on their additional support. How can their disability support services reduce each year from $58 million to $54 million to $46 million to $42 million? How does that work? Do you think chronic disabilities suddenly get better? Is that what the thinking is? Well, I’m here to tell you it’s not. That’s not what happens. One of the only vote areas where there’s a shrinking-lid policy and—shame on you—it’s in the disability sector. Furthermore, their core funding has only increased by 0.003 percent; that’s even less than inflation—again, shame on you. We could talk about Rural Health Alliance Aotearoa New Zealand (RHĀNZ) and rural mental health, but I actually want to send a message to the Māori caucus of Government: where were you? Are you afraid of Grant Robertson? Is the Māori caucus afraid of Grant Robertson? Is the Labour Māori caucus too afraid to challenge the Minister of Finance and say, “Give us the money; we need this funding.”? Where is the money for Whānau Ora? Where is the money for Māori economic development? It’s not there. Where were the warriors? They weren’t brave enough to stand up to the Minister and say, “Minister, we need this funding.”

In fact, I think the funding’s gone to conservation. I think the only brown thing I saw in this Budget was the survival of, I think, a brown, mudded shank bird, somewhere in New Zealand; that was the only brown funding I saw in this Budget, in conservation. That’s where the Māori funding’s gone. It’s not good enough. I expected the Māori Labour caucus to stand up and challenge the Minister. Don’t be afraid of him. Stand up for us. Thank you, Madam Deputy Speaker.

DEPUTY SPEAKER: Just to remind the member—just before I call, I remind the member that there’s a Standing Order, which I just haven’t found, about accusing other members of the House about not having courage.

WILLOW-JEAN PRIME (Labour): E Te Māngai o Te Whare, tēnā koe. Nā te mea e rima noa iho ngā miniti kua hōmai ki ahau, kotahi noa iho te kaupapa e hiahia ana ahau te kōrero. Ko tērā ko te Whare. Kua hōhā noa atu au ki te whakarongo ki tērā taha o te Whare, e kōrero mai ana, e pātai mai ana, kei hea ngā moni mō ngā Māori. He aha te take i iti ake te moni mō ngā Māori. E mōhio ana ahau kei hea te moni mō te Māori. Kei roto i te pūtea mō te hanga whare, mō te whakatikatika i ngā whare o tēnei motu. Kei reira te moni mō Ngāi Tātou te iwi Māori.

Nā te mea i roto i a au e haere ana i roto i taku takiwā o Te Tai Tokerau, ki roto i ngā whiringa pōti, i rongo ahau i ngā kōrero he whānau noho kore whare i roto i Moerewa, Kawakawa, Kaikohe, Kaeo, Kaitaia, puta noa ki Te Kaipara anō hoki. Horekau he whare. E noho ana i roto i ngā motokā, i ngā wēne, i ngā tēneti, ngā tēneti. Kei hea te moni mō te iwi Māori? Kei roto i tēnei o ngā tahua pūtea e hoatu ana ki te mahi, ki te whakatikatika whare, me te hauora, me te mātauranga, ko ērā mea katoa. Tino pōuri ahau te tūtaki i ngā whānau e noho ana i roto i te pōharatanga, e noho ana kore, e noho kore whare ana.

E huri ana ahau ki te māuiuitanga kua pāngia e rātou e noho ana ki roto i ngā whare mākū nei, ngā whare makariri nei. Neke atu i te whā tekau mano ngā tāngata i uru atu ki te hōhipere e mate ana i te maremare, te rewharewha, me te rūmātiki anō hoki. I tēnei wiki tonu i tūtaki ahau i tētahi māmā i te hōhipere i Whangārei. Te take te rūmātiki. Mōhio ana tātou tērā mate puta mai i roto i te noho whare makariri, me te whare mākū anō hoki.

Nā e aha ana tātou te rōpū Reipa, e aha ana tātou mō ngā whānau Māori? Nā, e hoatu ana neke atu i te kotahi mano whā tekau mā toru mano whānau, tēnei mea te Winter Energy Payment. He pūtea tēnei mō te hōtoke, mō ngā whānau pōhara nei, kia awhi i a rātou i tēnei wā taimaha. Whā tekau mā ono mano o wērā tāngata, he kaumātua, he kuia, e noho ana i roto i te makariri i tēnei wā o te hōtoke.

I tērā tau i pahure hoki he ture mō te whare, kia pai te mahana, kia pai te maroke anō hoki. Nā Anaru Iti tērā pire i kawe ki roto i te whare nei. Neke atu i te kotahi miriona tāra, whā tekau mā toru miriona tāra, hei whakamahana i ngā whare. Mōhio ana tātou i piki ake te nama o ngā Māori e noho ana i ngā whare me kī ko ngā rentals. He aha te take? I neke atu, a, piki ake i te whā tekau mā tahi paiheneti ki te whitu tekau mā whitu paiheneti. He aha te take? Nā te mea nā koutou i hoko atu ngā whare o te Karauna.

Nā ko tēnei ture, ko te tikanga, kia whakamahana ake, kia whakapai ake ngā whare. Ka hoatu neke atu i te kotahi rau whā tekau mā toru miriona tāra hei whakamahana ake i wērā o ngā whare. Te nuinga o ngā whānau e noho ana ki roto i ngā whare he Māori.

Nā, e mōhio ana ahau, ā, e hanga ana tēnei Kāwanatanga neke atu i te ono rau ngā whare a te Kāwanatanga. I hoko atu koutou i ngā whare, engari e hanga ana mātou ngā whare. Te nui o te tangata e noho i runga i te rārangi tatari mō wērā o ngā whare. Anō hoki, ko te tekau mā rima miriona tāra mō te hanga papakāinga e mahi ngātahi ana me ngā whānau, hapū, iwi, kia hanga i ngā papakāinga i runga i ngā whenua Māori. He pūtea anō hoki mō tērā kaupapa.

Nā kua tata pau te wā ki ahau. I mea mai a Jacinda, she would rather be known as a PM who tried rather than a PM who never tried at all. Tāku ki a ia, whāia te iti kahurangi. Ki te tuohu koe, me he maunga teitei. Jacinda, me he maunga teitei. Kia ora.

[To the Speaker, I greet you. Because I have been allocated only five minutes, there is only one matter that I wish to speak about, and that is the House. I am very tired of hearing the talk and questions from across the House, asking where the funding is for Māori. Where is this? Why is there a decrease in funding for Māori? I know where the funding for Māori is. It is in the funding for housing construction and renovations throughout the country. That is where the money is for our Māori people.

As I travel around my region of Te Tai Tokerau, within the electorate, I heard about homeless families in Moerewa, Kawakawa, Kaikohe, Kaeo, Kaitaia, and right up to Te Kaipara as well. They have no home. They are living in cars, vans, and tents, in fact. Where is the money for Māori? It is in the Budget going towards building and maintenance of homes, as well as health and education, all those areas. It is heartbreaking to meet families living in poverty and homelessness.

I will now talk about the health issues that are caused by living in damp and cold houses. Over 40,000 people were admitted to hospital because of coughing, influenza, and rheumatic fever, and this week I met a mother at the hospital in Whāngārei. The reason she is there is because of rheumatic fever. We know that that illness is caused by living in cold and damp houses.

So what are we, the Labour Party, doing for the Māori people? Over 143,000 families will receive the Winter Energy Payment. This funding is for winter, for poor families to assist them during that difficult time. Of those who live in cold conditions during winter, 46,000 are elderly.

Last year, legislation was passed aimed at housing, focusing on dry and warm houses. Andrew Little brought a bill into the House. Over $143 million is for warm homes. It is known that the number of Māori living in rentals has increased. Why is that—an increase from 41 to 77 percent? Why is that? It is because you sold off the Crown-owned houses.

This legislation, its purposes, are warm houses and better housing conditions. Over $143 million will be given to insulate homes. Most of the people living in these homes are Māori.

Therefore, I know the Government will be building over 600 Government houses. You all sold off the houses, but we are building houses. There are so many people on the waiting list for those houses. Also, there is $15 million for building papakāinga housing, working with whānau, hapū, and iwi to establish papakāinga on Māori land. That is more funding for that initiative.

I have almost used up my time. Jacinda said to me that she would rather be known as a PM who tried rather than a PM who never tried at all. My advice to her is, seek something of great significance, if you bow, let it be to a lofty mountain. Jacinda, let it be a lofty mountain. Thank you.]

Hon RUTH DYSON (Labour—Port Hills): Can I begin by just acknowledging my friend and colleague Willow-Jean Prime, who’s just resumed her seat, and put on the record how proud I am of her and all our 2017 intake, particularly as I’ve watched them in response to the Budget. They just wouldn’t take prepared lines from the research unit in the way the National Party do. They read the documents, they asked questions, they challenged us, and they have come down to this House well prepared to be able to contribute. I am really proud of the work that they’ve done.

I want to also acknowledge and thank the Hon Grant Robertson, the Minister of Finance. This is his first Budget, and I know it will be his first of many. He’s had such a huge and positive response around the country as he has travelled around, talking to people about the Budget and answering questions. It’s just been fantastic. We had a meeting in Christchurch yesterday morning—packed, not a single spare seat. People were trying to get in but couldn’t, because it was fully sold out. Dr Megan Woods outlined the Canterbury component of the Budget—that was great, as well.

I also want to acknowledge New Zealand First and the Green Party and commend, particularly, the Ministers from all three parties for the work they have put in to prepare this Budget. It’s not easy. There’s only a certain amount of money, and every Minister wants to make the most of the opportunity to improve the outcomes. But instead of just saying “We want more money.”, I’ve watched every Minister saying, “We’re moving to focus on outcomes. What difference will this contribution make?” That’s where you can make a really smart impact on the well-being of people.

This has been a Budget that’s based on values, with people at the centre of it. I just want to mention one contribution in the Budget that I’m particularly pleased about, because it will benefit people on benefits and superannuitants, many of whom are the most vulnerable people in our community. Many superannuitants, for the last decade, have been unable to afford to buy a home—not enough money to put a deposit on a home—and end up living just on superannuation and renting. In this Budget is the winter energy payment, and I am delighted that people will get an extra $30 a week for a couple or someone with children—an extra $30 a week—which I know will give them the confidence to turn on the heater and keep their house warm, instead of what they’ve been doing under the National Government, and that is going to bed early and not having a life.

Andrew Bayly: No, we were going to give them a big tax relief.

Hon RUTH DYSON: I know that the member, whose name escapes me, would have preferred to have given himself a tax cut and a superannuitant no winter energy payment, but that’s not the way this Government thinks. We want to ensure that the most vulnerable have warm, dry homes, where people will be able to afford to buy a home, or when they can’t save a deposit, there will be a State house for them.

This is a Budget for people. This is a Budget that ensures that we are acting responsibly with our finances but that we are also putting the money not to the highest income earners, who didn’t need a tax cut—no one in this Parliament needed a tax cut—but to people who genuinely find it hard to get by day after day. That should be the priority for us. So we’ll have more houses for Kiwi families, we’ll have more construction, and we’ll have more stable house prices. The previous National Government sold off State houses. They sold off State houses so that people in entire regions—in the Wairarapa, as an example, there are no State houses left because the National Party sold them off. Some people might think, well, that’s quite good if they use that money for housing, but they didn’t put one cent of the house sales money back into housing. So we’ve ended up with a housing crisis, which our Government is determined to address.

This is a positive Budget. This is a Budget that is forward-looking and lays the foundation for a solid future. It has balanced the books properly. We’ve had a surplus declared after nine long years of borrowing and increasing the debt from the National Party. We’ve finally got a Budget that works for all New Zealand. I am so proud of our Ministers, of our Prime Minister, the Rt Hon Jacinda Ardern, and so pleased to work with New Zealand First and the Green Party.

CHRIS PENK (National—Helensville): New Zealand has just seen a Budget of broken promises, and there are a number of reasons that people across this land have observed that this last week. First, they overpromised in a way that was quite reckless, which now leads us all to ask a very important question: is a promise not yet fulfilled the same as a promise broken? Making a promise and not fulfilling it is the same thing as breaking it. Policy of a Government should bear some resemblance to that which the parties making up the Government campaigned upon. In particular, a Budget should reflect spending promises, again, of those particular parties. “Return to what was said on the campaign trail” would be my advice to the various parties and Ministers who are now disappointing New Zealanders up and down this land. For example, having said that as a result of the first Budget there would be no further need for school donations, we find exactly the opposite of that is true this week. Election 2017 should have been about gaining a mandate to govern for whichever party or parties won that election, from now until 2020, but, again, the opposite is true. Funding only some of the extravagant promises of the coalition parties entails a democratic deficit.

In my first occasion to speak in this House, I made some remarks reflecting on the constitutional nature of coalition formation under MMP and, now, as I speak for the first time on a Budget that has been presented into this House, I’d like to return to some of those themes. I observed that the process in 2017—to be fair, as it had been in previous times—had reflected a three-stage process; namely, an election which the people of New Zealand were able to participate in, then a selection of political parties operating in secret behind closed doors. And, finally, a collection of policies that those parties between themselves—again, without further reference to the people—decided would be in the people’s best interest for the next three years. Fair enough to those parties that did form Government. They did it in a way that was legitimate under the MMP rules. But here’s the thing: in the formation and presentation of a Budget, it is all the more important, that being said, that the promises that each of those parties made is now kept. And if those promises are not kept—and they have not been kept—then what we have is a democratic deficit. This is—[Interruption]

DEPUTY SPEAKER: Order! [Interruption] Order! Minister, colleagues, please show some respect to the speaker.

CHRIS PENK: Thank you, Madam Deputy Speaker. I believe I was saying, although it was difficult to hear over ambient noise—I must confess, I sometimes find it difficult to think and speak at the same time, but I note that members opposite seem to have the same problem. I was reflecting on the MMP nature of Government formation and how that entails a higher responsibility in the presentation of a Budget, such that the promises that each of those parties has made must be reflected in some way if the Government as a whole is to have democratic legitimacy. So each of the times that the Government might say now, in response to criticism over their Budget, “Well, we couldn’t do all these things effectively, because if you add up all the promises of the constituent parties, we would not be able to afford them.”—and, make no mistake, this is exactly what we have been hearing, whether or not they acknowledge it openly or not. The fact of the matter is that New Zealanders voted for those parties—again, I acknowledge, in a way that led legitimately, under MMP, to them forming the Government—in a way that now sees New Zealanders, quite rightly, feeling disappointed about the result. They have been disappointed, and so have other organisations in the land.

Radio New Zealand has received $23 million less funding as a result of a certain breakfast at Astoria. Well, that’s a lot to pay for a breakfast. That must be the most expensive breakfast of all time. The only way in which this Budget reflects a stable Government is the stable in which the good-looking horses that have been the subject of the only tax cut in the Government are now housed. Like many New Zealanders, I am disappointed in this Budget of broken promises.

HARETE HIPANGO (National—Whanganui): E Te Mana W’akawā. This is my first Budget that I speak on as an elected MP of Parliament and as the Whanganui electorate MP. So the rural regions which are included within my electorate—Waverley, Pātea, Hāwera, Manaia, Eltham, Stratford, Te Kiri, and of course W’anganui—they’ll be wondering what this Budget might deliver for them apart from a jolly good taxing time. During campaign mode and post-election, Labour and New Zealand First promised to W’anganui $6 million for the velodrome roof, $3 million to the north mole, $3 million to the port development, and $3 million to rail—nothing; still waiting to deliver. Is it a case of a Government that’s soon to be broke or a case of yet some more broken promises?

The Budget is about priorities and carving out a piece of the Treasury pie: carving out and serving up some treasured pie; a decent piece of the Budget pie to whichever, whatever, whomever is considered of importance in priority—some of greater and others of lesser importance. This Budget should have been a Budget of pai ora: a healthy pie for those healthy pieces. However, for Māori in New Zealand it is far from being a “pai ora”, and, as National Party spokesperson for Māori tourism, Māori and New Zealand tourism have been starved—in fact, denied any slice of the pie. There is nothing—kua kore: nothing—for New Zealand and Māori tourism. The Government slashed $6 million from Tourism New Zealand’s budget—a short-sighted cut that will cost the economy significantly through lost export earnings.

The tourism infrastructure fund of $25 million—and under a National Government it was $100 million, recognising the importance to grow that pie—has now been assimilated and immersed into the Provincial Growth Fund. You have to ingredient—you have to invest in—the pie in order to grow it. It’s now a lesser priority, mainstreamed into that $1 billion - a-year Provincial Growth Fund. At the opening and closing of the World Indigenous Tourism Summit in April 2018, Ministers Mahuta and Davis affirmed New Zealand tourism as New Zealand’s biggest export industry, contributing 21 percent of New Zealand’s exchange earnings, affirming Māori tourism as a crucial dimension to New Zealand’s tourism sector. Where is the piece of the pie? Kua kore—nothing.

So a rapid tourism growth industry in New Zealand—nothing is being invested there. How can we expect decent returns without those ingredients to this pie? The Ministers also each questioned whether New Zealand has capacity to sustain growth in our visitor numbers in spite of the obvious economic benefits these visitors have brought to our country. Not one slice of the pie—not even a skinny slice; not even a crumb. The New Zealand and Māori tourism industry is starved of any treasured slice or crumbs of the pie. No “kei te pai” in this Budget round—sorry, New Zealand tourism; sorry Māori tourism.

I move now to Māori development. Kua kore—empty. Not just broken—nothing. Whānau Ora: nothing, despite the $20 million that had been promised during the campaign. Vote Māori has been halved—again, Whānau Ora: nothing. Whānau Ora is about cultural and social transformation of Māori back into Māori hands. I simply do not buy the fact that mainstreaming and assimilating Māori interests into the Budget pie is the way to address this. Auē. What of Labour’s promises to voters before the election? Whānau Ora: nothing—nothing healthy or nutritional about this Budget pie for Māori.

Many are saying that this is a typical laboured approach under this Government. There are more Māori MPs in Government than ever before, but this Government coalition still refuses to believe and back whānau and Māori communities.

I acknowledge your Māori MP colleagues across the House, your 13 Māori MPs having laboured. I emphasise, e ngā mema mā, despite your numbers—though they may be significant—sadly, your presence and influence have lacked. It has fallen on deafened ears. It seems to have been that those priorities that you may have advocated for have been deflected, and they’re certainly not reflected in any way whatsoever in this Budget pie.

It’s a bad and unhealthy Budget pie for Māori interests and for New Zealand Māori Tourism. Auē. Kua kore—nothing.

Hon TRACEY MARTIN (Minister for Children): Kia ora, Madam Deputy Speaker. Thank you very much. This is my first experience of a Budget, and I’m proud to stand on it, but I’d like to just start by addressing some of the comments by—it’s Mr Penk, I think. Is that right?

Kieran McAnulty: I think so.

Hon TRACEY MARTIN: Mr Penk. What we heard from that contribution was a really interesting statement with regard to how our democracy works, and that is around the process of MMP. Now, Mr Penk, in the first instance, acknowledged that the New Zealand public voted—that’s nice. He noted that they had the right to vote. He then talked about closed doors. Can I direct Mr Penk to talk to Bill English, Gerry Brownlee, Paula Bennett, Todd McClay, and Wayne Eagleson. I’m trying to think of the other people who rushed to that room with the closed doors, as the first people that New Zealand First spoke to, as they had committed to during the election, to the first people that they had a conversation with—

Andrew Bayly: Is that the day after you filed papers in the court or the day before? Which day did you file the court proceedings, Tracey?

Hon TRACEY MARTIN: —when we took over 300 policies. Mr Bayly, it is not this Government’s fault if your people do not tell you how those negotiations took place. Three hundred policies taken into the room, 300 policies discussed with the National Party, and 300 policies discussed with the Labour Party—the same policies, on the same days, over the same period of time.

This is MMP at work. There were no closed doors to any political party. It is unfortunate that the National Party cannot understand how MMP works, but that led to this Budget. There were no secrets, no closed doors; there was open dialogue between that political party that apparently—

Stuart Smith: Who paid for the advertisements?

Hon TRACEY MARTIN: —now a member of their backbench wishes to deny happened, Mr Smith. So perhaps Mr Smith and Mr Bayly might take aside their newer colleague and explain to him how these things work, recognising that in 2020 there will be another election, and they might like to figure out how it works before then.

With regard to this Budget, I have in my hand the coalition agreement between the Labour Party and New Zealand First. Mr Penk said that every election promise was broken. That has been the rhetoric of the National Party sitting on the benches. Those are the notes they have had from the few researchers they have at their disposal: “work on the broken promises, work on the broken promises.”

If I can just quote: “Together, we will work to provide New Zealand with a transformational Government, committed to resolving the greatest long-term [changes] for the country, including sustainable economic development, increased exports and decent jobs paying higher wages, a healthy environment, a fair society and [a] good government. We will reduce inequality and poverty and improve the well-being of all New Zealanders”—all New Zealanders—“and the environment we live in.”

Sixteen points inside this coalition agreement have been delivered in the Budget for 2018-2019: a $1 billion per annum Regional Development (Provincial Growth) Fund; re-establishing the New Zealand forestry service, located in the regions—Rotorua; $15 million—an increase in the Ministry for Primary Industries (MPI)—

Alastair Scott: Waste of money.

Hon TRACEY MARTIN: Beg your pardon, Mr Scott? A waste of money? “A waste of money”, Mr Scott says. Mr Scott from the Wairarapa says that it’s a waste of money to open a forestry service in Rotorua. I will tell the people of Rotorua that the next time Mr Bridges is on a regional tour. No problem there, Mr Scott; I’ll pass that on.

An increase in MPI’s biosecurity resourcing: $9.3 million. Honour existing Crown Irrigation Investments commitments: done. Examination of agricultural debt mediation: done. Review the Reserve Bank of New Zealand Act: under way. Progressively increase the minimum wage to $20 per hour by 2020: we are on track, and nobody lost their job so far, Mr Scott. Work to increase the research and development spending to 2 percent of GDP over 10 years: on track. Strengthening the Overseas Investment Act: on track. Free doctors visits for all under-14-year-olds: done—and remember, it was 2005 to 2008 where Labour and New Zealand First introduced free doctors visits for under-six-year-olds. Develop a 30-year strategic plan for New Zealand education—my goodness, haven’t they been popular? Strive towards adding 1,800 new police officers and commit to a serious focus on combatting organised crime and drugs, unlike the previous administration, who thought, “We’ll just let them work it out on their own.” Increased funding for family violence networks including women’s refuge and Shakti: $76.2 million over four years. Provide 800 extra places for Limited Service Volunteers scheme: $26 million. Introduce a programme for long-term unemployed to improve work readiness, such as Ready for Work. Specifically increase funding for the Department of Conservation: $181 million over four years. Support New Zealand First’s racing policy: $4.8 million over four years, plus $10 million for a covered—and so on.

Mr Penk does not understand how Government works. Mr Penk needs to sit down and be quiet and listen. Breathe through your nose for longer, Mr Penk. This is a three-term Government. Sixteen points out of the coalition agreement are already delivered. Two more years to go, and years and years and years beyond that if that is the level of Opposition we are going to get; an Opposition that goes to the press and says that the Department of Internal Affairs is cutting—is cutting—areas that will protect our children from pornography, which is blatantly untrue, and the department itself comes out and says so. What has happened to the front bench of the National Party that they will work on gossip rather than make sure that they know what they are talking about, particularly when we start to actually frighten the people of New Zealand by making such strange allegations?

Not only is the Department of Internal Affairs not cutting any such thing; they are increasing that department to 27.5 employees. Who was the Government that decided that we would actually invest in more money for those of our children with intensive needs around disability and learning support? It was this Government. Which was the Government that said to their members on the Education and Science Committee, “You can make as many changes as you like, but do not spend more money.”? It was the previous Government. These are the things that this Government is doing.

New Zealand First entered into this coalition Government because we need to change the direction of this nation. Trickle-down doesn’t work, Mr Bridges. Trickle-down doesn’t work, Mr Smith. It is fine for somebody at the top of the tree to decide that eventually their largesse will trickle down. The people of New Zealand have waited too long for that to happen. This Government will take action. This is the start of a three-year pathway, and probably a six-, a nine-, and a 12-year pathway by the time we’re ended. We will change the direction of this boat. We will not leave New Zealanders in cars and in garages. We will not ignore our children. And the next step—and then we will build on and build on with the child poverty action plan, with the child well-being strategy. We will make sure that we put a line in the sand that we will not let our citizens fall below.

This Budget is the start of it. I commend every Minister that worked on it. There was a lot of dialogue and a lot of collegiality around this, where we had to make sure that we put in the priorities we could while also being responsible. It is fascinating that those on the other side of the House, on one hand, complain that this is a spend-and-borrow Government and, on the other hand, complain we haven’t spent enough. Please, for goodness’ sake, make up your mind. Make up your mind, and educate your members into how this democracy actually works so they don’t embarrass—

Alastair Scott: Priorities.

Hon TRACEY MARTIN: —themselves when they stand on their feet. Make sure, when you’re out around the regions, Mr Scott, that you let them know that you don’t think that we should be putting Government departments out in the regions. Just make sure that you let the people of the Wairarapa know, in all the adverts that you’re putting out there with their taxpayer dollars, that it is not your opinion that we should put anything out into the regions. So in those adverts, just make sure, sir, while you’re spending their taxpayer dollars promoting yourself, that you let them know that is a point of view—a point of view—that you particularly hold. Kia ora, Madam Deputy Speaker.

LAWRENCE YULE (National—Tukituki): I want to thank Tracey Martin, the former deputy leader of New Zealand First, for her contribution, because while it was energetic and it stood up for everything in the coalition Government, it actually didn’t say much about the Budget. For me, as a new MP and with this being the first Budget, I’d have to say the Budget that was delivered by the people that sit across from our side was completely underwhelming. You know, despite a lot of promises in the election campaign, not one new house has been built yet, and this winter, people will still be sleeping in cars—all the things they said they were going to fix—and, do you know, in this Budget, hardly a move was made on that dial. I do want to reiterate what Bernard Hickey said, which is that this is a fundamental opportunity lost.

They might reflect, on the other side, on how this Budget was delivered, because at this time, we have record job growth. We had economic confidence at a record high. It’s dramatically plummeting under a lot of the policies of this Government, but none the less we have had confidence in this country that we haven’t seen for a long time. There are surplus funds in this Budget of over $2.3 billion for this Government to play with, and there are massive trade surpluses. There has never really been a time in the last 15 years where the economic conditions have been so good. As well as that, what’s happened is this Government has increased a whole lot of taxes—a new fuel tax, a brightline test that’s brought in extra revenue, an Amazon-based tax. At the same time—and I think this is the thing that particularly galls me—the projections of net Crown debt are set to increase by $17 billion. So not only is the income at a record high but the Government is going to borrow and spend like we haven’t seen before.

My view on this Budget—and the core competencies of what this Government has stood on—is that it’s actually delivered very little. It’s given a lot of free fees for the students—$2.4 billion worth, or thereabouts—but the actual increase in the Budget for education has gone up by only about 1.6 percent, which is actually very similar to what our Government, when the National Government was in power, used. All the promises about doing away with compulsory donations and all those things were just conveniently parked as though they never existed—“We never said those in September—don’t go back to that. We’ve just ignored it.”

If you look at health, there are massive claims being made by this Government. They have all been refuted by the Hon Simon Bridges in his reply. Where have the $10 doctors visits gone? Oh, it got a bit hard. But, actually, I remember in the campaign, on national TV: “We are going to make doctors visits $10.” Not six months later; that is too hard. I consider that is actually a broken promise. It was a really simple thing to do and it hasn’t been done.

Around $100 million has been taken out of the mental health system, based on what was promised at the last election. Those were promises that were heartfelt and well made on the campaign trail, and they were simply walked away from.

In my own district health board (DHB), the increase in funding for the Hawke’s Bay District Health Board this year is 3 percent—exactly the same percentage increase as under the National Government. So you cannot say to me in Hawke’s Bay that my people are somehow way, way better off. In fact, the chair of the Hawke’s Bay DHB said that because of that little amount of funding, they’re likely to have to look at making $12 million worth of savings in the next financial year just to break even. That doesn’t even account for all the claims and the expectations of nurses right across New Zealand, including in my own community.

So the people I represent, I consider, have been fundamentally ripped off by this Budget. Not only have they lost a tax cut of a thousand dollars a year; we have lost the four-laning of the Napier to Hastings expressway, which was $300 million or $400 million.

Hon Stuart Nash: Oh, it was never funded, Lawrence. You know that.

LAWRENCE YULE: We’re actually going to have to pay 12c a litre extra for fuel tax. All of that’s going to go to Auckland.

And, actually, something that really matters—and the Hon Stuart Nash should listen to this—is around biosecurity. You know, under the Ministry for Primary Industries’ budget, despite the significant risks of M. bovis and the brown marmorated stink bug, actually, the amount of money increase in biosecurity only went up by $9 million. The National Government put it up by $18 million last year.

So I think this is actually a tax and spend Budget. The Government is relying on Shane Jones spending about $3 billion over 2½ years in the regions to make it right, but what we’re doing is borrowing and spending. There’s little confidence in this Budget. That’s why this side of the House doesn’t support it.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Deputy Speaker. Missed opportunity—that’s what springs to mind, first and foremost. This Budget was a huge opportunity. There was huge potential for our new Government to make New Zealanders proud. It was absolutely underwhelming, what they’ve delivered for us.

I must say, going through this budgeting process for the first time, I was really excited. I was really looking forward to hearing some of these things, and whilst I would have loved to have been on the Government benches, that wasn’t the case. But I thought, “Well, hey, this Government has got $34 billion to invest in the future of New Zealand. Surely, they’re going to have plenty of fantastic policies—plenty of great things for everyday New Zealanders.”, and yet, what have they delivered? They have absolutely underperformed with this fantastic opportunity they’ve been presented with. Huge surpluses—they had so much available, and on top of that, they were borrowing another $10 billion to add to that massive cash pool. New Zealanders deserve better. They have been severely let down by this Budget, and although the Government did every effort to decrease expectations, they have actually underperformed those decreased expectations significantly.

It was interesting to note that the Prime Minister herself said that she’s not proud of New Zealand and she wants to be proud of New Zealand again. Well, I’m proud of New Zealand now. This is a fantastic country that has a fantastic history. We’ve had a great past nine years. The economy has been in a fantastic position, and yet the Government squanders that opportunity to make it even better still, and all we’re hearing from the other side is attack—attack about what’s coming from this side of the House. No attempt to try and justify or explain why it’s fantastic. It’s just “try and pick the Opposition to pieces.” Well, that suggests that they don’t even back their own Budget. They can’t even have confidence.

You can look across the House now and see all those heads hanging, because they all know that they have severely under-delivered on this opportunity. Look at agriculture—and in the Waikato that’s a major industry for us; we’re proud to be a heartland of agriculture in New Zealand—and they have significantly under-delivered, again. Biosecurity, as we’ve just heard from Mr Yule, is a fantastic area that is hugely important for all of us as New Zealanders, and yet we’re seeing that investment cut by 50 percent, as we’re seeing such a focus on Mycoplasma bovis.

Simeon Brown: By how much?

TIM VAN DE MOLEN: A 50 percent reduction, Mr Brown. That is outrageous.

They get up here and tell us that we are not doing enough for biosecurity, and then they cut it in half. Where’s the sense in that? That is outrageous and disappointing for all of rural New Zealand. On top of that, they decided that, actually, they need to break apart the Ministry for Primary Industries, because it wasn’t doing a good enough job. Well, OK, so what have they done? They’ve broken it into four new segments and they’ve lifted the cost to run it. What’s the point of that? Adding more cost into bureaucracy, and what are they gaining from it? They’re stripping the funding to achieve that, actually, out of the Primary Growth Partnership. So, on the one hand, they’re saying we need more innovation in agriculture if we’re going to change the way we farm and we’re going to be better at managing biosecurity, and yet they’re cutting that very funding in the research and development space for the Primary Growth Partnership. It does not make sense.

And then we come to the family side. Well, our families, as we know, are paying now a thousand dollars more in tax than they would have been. They’ve been given an untargeted “spray and walk away” winter energy payment. And, of course, there is the broken promise around the $10 cheaper doctors visits. Kiwis should be, and rightly are, disappointed in this, and this Government will find that you cannot talk your way out of something you’ve acted your way into.

Hon Iain Lees-Galloway: I miss Lindsay Tisch.

TIM VAN DE MOLEN: Feel free to write that one down, Mr Lees-Galloway. Think about and reflect on it, because I think you’ll find that you have sorely disappointed New Zealanders across the country—broken promises. We’re seeing priorities left, right, and centre—and they haven’t got them right. We hear about diplomats and foreign aid, and, hey, these things are great if you can afford to do them. But they’re sacrificing so many other key areas that they could have—could have—made a fantastic contribution on. Roading is another massive one for the Waikato. The expressway projects have been cut—three of them—and yet we hear the New Zealand Transport Agency saying we’ve got six of the 10 highest-risk rural intersections, and they’re not doing anything with these projects to support it. It is a huge missed opportunity, and it’s disappointing to see.

Hon CHRIS HIPKINS (Leader of the House): I move, That this debate be now adjourned.

Motion agreed to.

Debate interrupted.

Bills

Taxation (Neutralising Base Erosion and Profit Shifting) Bill

Second Reading

Hon STUART NASH (Minister of Revenue): I move, That the Taxation (Neutralising Base Erosion and Profit Shifting) Bill be now read a second time. As a small, open economy reliant on trade, this is a very important bill for New Zealand and for our tax system. Along with other countries, New Zealand is taking action to prevent multinational corporations from engaging in aggressive tax-planning. This practice, known as base erosion and profit shifting, or BEPS, is a challenge for tax systems around the world. The overall result of these BEPS strategies is that some large multinational companies pay little tax in New Zealand, or, in fact, anywhere else in the world, despite having a significant economic presence here. This threatens the revenue base that Governments need to deliver public services.

Multinationals benefit from taxpayer-funded investments in areas such as education, infrastructure, economic development, regulations, and property rights, so they should rightfully contribute to the costs of these investments, and I don’t think anyone would argue with that. Aggressive tax planning distorts competition and effective and efficient allocation of resources. It enables some multinationals to exploit gaps and weaknesses in tax rules to get an advantage over other businesses who do not engage in BEPS. Finally, BEPS erodes the overall fairness and integrity of our tax system. Fixing this is most important. The tax system must be fair for all income earners, regardless of their size or complexity.

The Taxation (Neutralising Base Erosion and Profit Shifting) Bill contains a comprehensive package of measures designed to combat BEPS and ensure fairness and equity and improve system integrity. These measures will prevent multinationals from using a large number of BEPS strategies, including using artificially high interest rates on loans from related parties to shift profits out of New Zealand. The bill also prevents related-party transactions which are intended to shift profits into offshore group members in a manner that does not reflect the actual economic activities undertaken in New Zealand and offshore. Further, the bill tackles hybrid mismatch arrangements that exploit differences between countries’ tax rules to achieve an advantageous tax position, as well as preventing artificial arrangements to avoid having a taxable presence or a permanent establishment in New Zealand.

The final major item in the bill addresses certain tactics which can be used by non-cooperative multinationals to stymie an Inland Revenue Department investigation, such as withholding relevant information that is held by an offshore group member. The Government is determined to address these issues because we want to improve the fairness of the tax system, but at the same time we want to ensure that New Zealand remains a good place to invest and do business in. We also want to ensure that the measures we introduce do not impose unnecessary compliance costs but, at the same time, not only maintain but enhance our reputation for transparency.

I am very grateful to the Finance and Expenditure Committee for their careful consideration of both the bill and the public submissions on the bill. This is a complex piece of legislation. A number of the submissions were highly complex. I know the members spent a lot of time and energy working collaboratively to come up with a consensus on this, and I do thank them. A number of changes have been made to the bill, though, in response to public submissions. These, together with the committee’s recommendations, make this a better bill by making important adjustments. For the benefit of members, I will explain the most important of these changes very briefly.

The first is cross-border related borrowing. The use of debt is one of the simplest ways of shifting profits out of New Zealand. The bill as introduced proposes a new transport pricing approach to price-related party loans between non-resident lenders and New Zealand borrowers, or inbound cross-border related borrowing. However, submitters were concerned at the risk of double taxation. Adjustments have been made to strike a better balance between addressing the problem of subjectivity or manipulability of standard transfer pricing, and reducing this risk.

The income interest ratio, which was one of the three tests intended to prove a company is not a high BEPS risk, will now be removed. This is because the rule could result in double taxation where companies are in loss or only have recently started trading. The remaining two tests will be sufficient, we believe, for establishing whether a company is a high BEPS risk or not. In the bill as introduced, where a New Zealand borrower failed any of the tests to show it was not a high BEPS risk, its credit rating would generally be restricted to one notch below its worldwide group credit rating. For example, if a worldwide group’s credit rating for long-term senior unsecured debt is AA+, a one-notch margin means the maximum deductible interest rate on a related-party loan to a New Zealand subsidiary would be based on an AA rating.

Andrew Bayly: Say it like you mean it.

Hon STUART NASH: And I do mean it, Mr Bayly, very much so. This is an important piece of legislation, and I look forward to your contribution, as well. To alleviate concerns about double taxation, the spread will be increased to two notches, provided the New Zealand borrower’s credit rating is BBB− or higher, because, as we all know, BBB− is the lowest investment-grade credit rating. We need to get this right.

In examining the terms of a loan between related parties for BEPS risk, inland revenue will consider—they will consider—whether such terms are in line with a commercial loan between unrelated parties. Some features of the borrowing can be disregarded by the IRD—amazing—unless it is a feature in significant third-party debt. In the bill as introduced, one key aspect was to restrict the credit rating of the New Zealand borrower. The bill as introduced allows a borrower to include a feature in pricing a related-party loan when it is a feature of significant third-party loans, but an equivalent test was not available to determine a borrower’s credit rating. We think this is unduly harsh, so a third-party exclusion is proposed to be extended to the credit rating of high BEPS risk borrowers.

Time bars—inland revenue currently has four years from the end of the tax year in which a taxpayer files an income tax return to investigate and amend their tax position. This four-year limit is known as the time bar. The bill as introduced included a provision that would extend the time bar for transfer pricing issues to seven years, which is consistent with Australia’s time bar for transfer pricing. The committee, however, recommended an amendment so that the time bar would only be extended to seven years in those cases where inland revenue had begun a transfer pricing tax investigation within four years of the relevant tax return being filed, and has notified the taxpayer of this investigation.

This amendment ensures that the vast majority of taxpayers will benefit from the same level of certainty as the current four-year time bar. Taxpayers will know their tax position is final, including any transfer pricing positions, if they have not heard from inland revenue within four years of the tax return being filed.

Powers to request information from offshore group members and associated parties: the bill proposes to extend the scope of inland revenue’s existing powers—most important. So they allow inland revenue to request information that is held by any member of a large multinational group. To reduce privacy concerns and to ensure that the new information power is appropriately targeted and investing in multinationals’ tax affairs, the proposal is amended to require the requested information to relate to an investigation of a multinational group’s own tax position—

Dr Duncan Webb: Very wise.

Hon STUART NASH: —very wise indeed—rather than relating to an investigation of a natural person, such as a bank customer who is not part of that multinational group.

The bill as introduced also includes both criminal and civil penalties for failures to provide information that was held by an offshore group member of a large multinational group. However, when failure may have been caused by an associated offshore group member, it was not appropriate to apply a criminal conviction to a New Zealand person. The criminal penalty therefore has been removed from the proposal. We believe that the proposed civil penalties should provide sufficient incentive for multinationals to comply with any inland revenue information request.

That is a brief overview of the most important changes made to this very important bill. New Zealand’s response to BEPS, or base erosion and profit shifting, is generally aligned with Australia’s. It is also broadly consistent with the OECD and G20 action plan, although the specific proposals are tailored for the New Zealand environment. Once again, I thank the committee for their important contribution to this bill. I commend the bill to the House.

ANDREW BAYLY (National—Hunua): Thank you, Madam Assistant Speaker. It was good to see parts of that speech where Minister Stuart Nash showed some real interest in this topic.

Hon Member: Bit of life.

ANDREW BAYLY: A bit of life. As I was saying, it is a pleasure to be talking on this second reading. Of course, this follows a hard-working process where the Finance and Expenditure Committee has worked its way through a lot of this detail. You’ve got to ask yourself what this bill is actually about, and I thought I just might summarise it very briefly. It’s about the way multinationals manage their businesses in New Zealand and how they arrange their structures to minimise their tax. That’s what base erosion and profit shifting is actually about.

For corporates, they have lots of choices. They can charge a high amount of interest on debt. They can, in fact, take on large amounts of debt, which means that the profits of the New Zealand subsidiary or branch or whatever are lower than they would otherwise be, and therefore the tax is less than what it might be. Or they might charge high management fees—again, lowering the profit in there for the tax. Or they might set it up so that they can benefit from different tax treatments in different countries. So in one country, it might be deductible for tax purposes; in another country, they might be able to write it off, and therefore they get a double whammy tax benefit.

So what happened was New Zealand took a leading role, along with the OECD, to try and come up with complex rules to try and deal with these large multinationals, who are very sophisticated in their approach. To give it a scale, we’re talking between US$100 billion and US$240 billion a year, or between 4 and 10 percent of global income flows that are affected by these base erosion and profit shifting mechanisms. That’s why it was so important that the National Government started this process, but, of course, it is continuing under the auspices of that former speaker, the Hon Stuart Nash.

It has been a hard-working committee, because we have made a number of changes to this bill. The Minister spoke briefly to some of those changes, but I just want to highlight some of the more important ones. What we’ve done is we’ve looked at the issue of this artificially high interest rate. There were three tests, and one of those tests related to a definition around EBITDA to interest costs—EBITDA being, of course, earnings before interest, tax, depreciation, and amortisation. The officials had specified 3.3 times. We questioned that because we thought in some cases, particularly with start-ups, etc., that test would not be appropriate. So that was one of the tests that was removed.

The second thing we did was we focused on this issue of using a credit rating, because people were trying to be formulaic about the approach by saying that if a multinational had a certain credit grade which meant that was the borrowing costs they would incur borrowing it—its credit rating—then the New Zealand subsidiary could only be a maximum of one below that credit rating. We questioned that and, through the committee, we agreed that we would drop that by two notches.

We’ve also imposed a de minimis rate of $10 million of tax, and we’ve allowed for the provision where a third party has provided the interest rate or debt to the company in New Zealand—that interest cost should be the relevant test, rather than reverting back to this convoluted credit rating test I spoke of before. That’s one of the crucial bits.

The other ones were around the time bar test. I think this is a crucial one, because the officials and the IRD wanted to have the ability to be able to take seven years to look at a tax situation and assess it properly before—and that provided a lot longer than the original provision of four years. We said no. We said no as a committee. We said, “You must make sure that you have”—and I’m talking about the IRD—“told the company that it has an issue after four years, and it has a further three years to take that issue through the courts.” So that was an important balance between the rights of the IRD and also in terms of making sure that we got a good outcome in terms of collecting all the tax we wanted.

There are other measures around how we get information flows from New Zealand companies about their parent, particularly about their debt arrangements. As the Minister spoke of, we talked about the issue of reducing it from criminal and civil liability for that New Zealand subsidiary or branch and making it only a civil liability. But there is still a strong requirement for New Zealand representatives to provide the requisite information to IRD.

So a very complicated bill. There were actually other issues, but I’m going to leave it to some of my colleagues to pick up on those. It’s a good bill, and I’d like to congratulate the members of the committee.

MICHAEL WOOD (Labour—Mt Roskill): Following on from six minutes of Andrew Bayly’s best, I’m going to give 10 pretty solid minutes, I think, on this very, very important bill and actually add some substance to the matter. This is an important bill, the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. Why is it important? Well, tax touches a whole lot of things. I’d actually like to start at the very base of this issue. To me, this is actually very much a moral issue. It’s about the rights and obligations that we have to each other in this country. I think what has concerned a lot of people over recent years, not just in New Zealand but around the world, has been this notion that very, very large, very, very wealthy, very, very powerful corporations can utilise aggressive tax planning to avoid the obligations to the society in which they operate.

So the reality here in New Zealand is that for the very most part, we welcome the operation of multinational companies in our country. They often bring valuable goods and, more commonly, very valuable services to New Zealand consumers, and those are good things which enhance our quality of life. But they do operate within the context of our society. They benefit from the fact that we have an established legal system in this country. They benefit from the rule of law. They benefit from the infrastructure. Be it roads, be it public transport, or be it telecommunications, all of those things the multinational companies who operate in New Zealand benefit from. So the moral argument here is that having benefited from those investments, having made profit out of them, there is an obligation back to the society in which they operate. Of course, the reality is that the person working down at the local factory, the person sweeping the streets, and the person working in an office just down the road here, on Lambton Quay—those folks will, generally, pay their taxes. The person running a small business, a lawn-mowing run—they’ll generally pay their taxes, to contribute to those things. Yet we have some very, very large and powerful corporations who have been avoiding that here in New Zealand and around the world.

What was really interesting was the range of submissions that we received in the Finance and Expenditure Committee. The submissions were useful, and I thank all of the submitters, in fact, because we received many, many considered submissions. But across the vast majority of them, there was a recognition of the problem.

I actually want to just read this out, from Deloitte, which I think was quite representative of the tone of a lot of the submissions. Now, they often went on and said, “We think these things need to change in the bill. We don’t think you’ve got this quite right. Have you thought through that fully? What about this? What about that?”, but they all started out with this basic premise—or most of them, anyway. This is what Deloitte says: “We agree that [the] Base Erosion and Profit Shifting … by multinational enterprises is a major concern, undermining tax authorities and stoking public feelings of unfairness. We appreciate that the Government is committed to taking decisive action to address BEPS issues to maintain the integrity of the New Zealand tax base.”

I think that’s notable, because I don’t think five years ago we would necessarily have had major corporates coming to a select committee and saying, “Yes, we think there’s something wrong here, and the rules need to change.” But that’s what we had from Deloitte and many, many other submitters to the select committee. I think that is a tribute to quite a lot of people in the political world, in the third estate, and out there in civil society who’ve been raising these serious issues around multinational tax avoidance for quite a number of years.

One of those organisations is Oxfam New Zealand, and we had a good submission from them as well. They were encouraging us to go even further with a number of areas. They reminded us that, generally, very credible estimates estimate that New Zealand’s probably losing somewhere between $200 million and $500 million worth of tax revenue because of multinational tax avoidance per year. The Tax Justice Network estimates it could be as high as $1 billion, and I think between the previous National Government and this Labour Government we’ve estimated a range of around about $200 million to $300 million in forgone revenue per year. So that’s why we need to address these issues.

This is forgone revenue that could be supporting our health system, our education system, our infrastructure, and it’s about maintaining the fairness, the integrity, of the tax system. In fact, the Tax Administration Act reminds us that the Inland Revenue Department has a duty to protect the integrity of the system, because if people see organisations over here ripping off the system, then what’s the onus on them to play by the rules? That’s important. It’s important that we get that right.

I do need to acknowledge that this is a complex bill. You get that when you look at the bar 2 version of the bill that’s before the House. It’s one of the ones that’s not stapled; it has to be spiral bound.

There have been a lot of changes made at the select committee, and can I acknowledge the other members of the select committee for the very positive and constructive work that we were able to engage in with our officials. Can I also acknowledge the independent adviser to the select committee, Therese Turner, who gave excellent advice to the select committee around this bill.

In fact, Therese said that in her 30 years of looking at tax legislation, this is the most complex tax bill that she has come across. I know that for those of us on the select committee who are not subject matter experts—and that’s I think about 12 out of 13 of us—having her advice, her really pragmatic advice, was incredibly useful. She is the adviser who will say to us, “Well, OK, maybe this is OK for your Apples and your Googles of the world, but what about a New Zealand business person who wants to set up a little bit of a chain over in Australia or in the Pacific Islands? How’s this going to affect them? Are they going to be able to understand this when they look at it? Is it going to work for them as well?” That’s an incredibly invaluable contribution that I would like to acknowledge.

The key areas that the bill addresses, and these have been touched on in a couple of the previous addresses—we’ve got the issue of related party debt. This is a really important issue when it comes to base erosion and profit shifting. It’s one of the major ways in which multinational organisations can avoid paying a legitimate share of tax. It’s sort of the loading up of a subsidiary organisation with a significant amount of debt, often at very high interest rates, which means that, effectively, the interest payments mean that no profit is made in the host country. That’s a significant issue that the original bill attempts to deal with, and I’ll touch on some of the changes made at the select committee soon.

The issue of hybrid mismatches, where we have rules that are slightly different across different tax jurisdictions—people who know what they’re doing and are good with their tax planning can take advantage of their tax rules, to end up, basically, paying tax in none of those jurisdictions, and, obviously, that’s something that we can’t just fix here. We need to work with our partners on this. That’s why the Labour Party has always said that, yep, we need to do our own thing in New Zealand. We need good legislation here. We need to go after the bad guys who aren’t doing the right thing in this area, but we do need to have a strong regime that is linked up with our partners in the OECD. It’s only by working together that we can really work on these issues. Actually, this legislation comes out of that work, substantially, and largely brings us into line with the OECD guidelines.

The issue of permanent establishment—this is incredibly important. It’s when we have companies—not exclusively, but particularly in the tech sector they’ve often been identified—that kind of create this sort of mirage or fiction that they’re not really extant in New Zealand. Even though they might be doing millions of dollars’ worth of business and earning millions of dollars of profit here in New Zealand, they’re able to structure their operations to say that there is no permanent establishment in New Zealand. I’ll just note that in terms of the bill, we’re talking about applying new permanent establishment rules to the big guys—to multinationals that have got a turnover of over €750 million per year, which is the benchmark set at the OECD level.

If you want to bring it down to a really simple level, the bill—and I think it’s in one of the schedules at the end—sets out what permanent establishment looks like. It’s actually a bit of common sense about looking at whether there is a genuine operation here in New Zealand that is carrying out business interests and earning profit. Is there an office? Is there a factory? Is there a quarry operating? Some of these things are listed in the schedule. You can kind of go from there and you can work out—or the Inland Revenue Department can work out—whether there’s a permanent establishment here.

And then the issue of transfer pricing: this is where the parent organisation overseas might charge management fees or a royalty or some other such payment which, effectively, means that revenue is artificially sucked out of the New Zealand operation, making it look as though it’s not really profitable at all, and therefore not liable for taxation. So the bill deals in different ways with all of these matters.

I want to touch on a couple of the key changes that the bill did make, in the remaining time I have. The two that were of particular interest to me—we had questions and concerns from submitters around the significant powers that the Inland Revenue Department has in these matters. The department does need to be empowered, but we as a Parliament also need to make sure that those powers are appropriately tempered and used appropriately.

So for the issue of the time bar for transfer pricing issues—this was in the original bill, to extend it from four to seven years, which I believe would bring us into line with Australia. But there were real concerns that even though these investigations might take a long time, and there needs to be a decent amount of time for the IRD to carry them out. If you’re an organisation and, potentially, six years and nine months after an original transaction took place, you can suddenly be told that you’re in the gun, that was pushing the boat out a bit too far. So we said to IRD, “OK, seven years to complete them, but you have to start and notify the organisation within four years.” I think that was an important change.

The final thing I just want to say is: is it working? I think it’s going to work. One of the submissions was from Google, and they basically said in their submission that because of the work that’s going on, because these issues are being taken more seriously, particularly around permanent establishment, they’re starting to change their practices. So I think this is a win for this Parliament. It’s been a bipartisan and multipartisan effort around the House.

Hon PAUL GOLDSMITH (National): Thank you, Madam Assistant Speaker. It’s my pleasure to speak on this bill, which National introduced and supports, the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. There’s no question that we’ve moved a long way from the early days of the tax system, where you physically could find a company down the road that was making sugar or shoes, and taxing that. It was relatively simple. It’s never simple, trying to work out what the actual profit is, as opposed to the turnover—

Fletcher Tabuteau: Was it one shoe or two shoes?

Hon PAUL GOLDSMITH: That’s right; whether it’s one shoe or two. But as we’ve had an increasingly internationalised and, particularly, an increasingly digitised global economy, the tax-collecting process has become immeasurably more complex and difficult to handle. So we only have to think of New Zealanders consuming products that are produced digitally in many other countries. The arguments about where the actual value is added are complex and ongoing. It’s not something that New Zealand can fix on its own and it is not something that we can respond to on our own, but only, effectively, as part of wider international efforts. That’s why New Zealand has been at the forefront of a lot of the work done by the OECD, particularly to work on trying to internationalise more effective rules. So we’re part of the broad global stream here and I think New Zealand has been one of the more active countries, and I’m pleased that we’ve made progress with this bill.

Will we have got everything right in this piece of legislation? Absolutely not. I’m sure there will be things that we will be revisiting in this House next year and in the years to come. Because of the inherently complex nature of the work, we’ll have to monitor it very closely and expect to have a rethinking of elements of it. But, overall, I do commend the work of the officials and the select committee process, and the many submitters that put a lot of time and effort into it. Some of them will be disappointed that the Government hasn’t picked up on all of those changes, but we certainly agree with several of them that were done.

If I could just use one example of changes that went through the Finance and Expenditure Committee, it was in relation to the income interest tests for New Zealand borrowers from foreign lenders. Just to give people an idea of the complexity here, the original bill stipulated that a New Zealand borrower who borrowed funds from a non-resident lender had to pass three tests to prove it was not a high base erosion and profit shifting risk. The point here is that the primary mechanism for avoiding the taxation is for countries to lend a New Zealand resident outpost money at an artificially high interest rate in order to reduce the profits made in New Zealand and accentuate the profits made in the other country which has a lower tax base. So there are all the arguments about what the appropriate interest rate to hold is and how to assess that. So the revised version of the bill removed one of the three tests because we thought that was too high a hurdle, and that was in relation to whether a New Zealand borrower had an EBITDA—that’s an earnings before interest and tax, etc.—of at least 3.3 times after the interest’s expense.

Now, I’m conscious of the fact that many eyes will have glazed over even touching into the topic, so the reality is—

Fletcher Tabuteau: Just the delivery.

Hon PAUL GOLDSMITH: Well, that could be it—I’m labouring under a bit of a cold. So the only point, in conclusion, I would say is that this is one of the areas that all sides of Parliament try to work on as collegially as they can in order to bring about an effective outcome on our tax policy.

Like I say, I think we’ve made progress in this area with this bill. It’s a bill that the National Party in Government formulated, and it’s part of an ongoing effort by “New Zealand Inc.” to ensure that its tax settings are just, that there is good integrity in our tax system, and that it meets the demands of the modern technology in which it operates. But I’m quite sure that it’s only the start of a very long, ongoing process because of the inherently complex nature of the work. On that basis, I’m very happy to support this bill. Thank you.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Madam Assistant Speaker—

Hon Ruth Dyson: This’ll be better.

FLETCHER TABUTEAU: Yeah, it will be so much better. Look, what we’ve got here in the House this evening, ladies and gentlemen, is a coming together of the parties in this House, agreeing on something that is actually, despite what we just heard, the tone that we heard—

Hon Member: The drone.

FLETCHER TABUTEAU: —the drone of the previous speaker, Paul Goldsmith—exciting legislation. It is exciting legislation because this was an incredibly collaborative effort on behalf of the select committee in formulating this legislation. Despite the years it took us of political campaigning and public pressure for the National Party to actually start down this track, we got there eventually. So I say to the House and I say to the New Zealand public, this is exciting and this is incredibly important.

What this means—and I will, invariably, go into the dreadful detail—the summary of what this achieves is that New Zealand businesses will be competing on a competitive, level playing field. Some of the other speakers noted this in their addresses this evening, but what we’re saying now, and what has been acknowledged in this legislation, is that New Zealand firms who were playing by the rules—and there are examples very close by of Kiwi firms who weren’t able to be competitive because of the nature of the tax avoidance regime that these multinationals were allowed to carry on with for far too long.

There were lots of excuses from the previous Government about an approach—a worldwide approach—originating out of some of the work from the OECD, and the need to bring jurisdictions together. I respect that argument because, as jurisdictions who are working together, we do need to be unified in our approach. But there has been, as of last week even, some cynical commentary on what some of the European multilateral providers, operators, have been working on in this space, in that we think they’ve been dragging the chain and we think that it looks like they’re not actually getting to the point that we want them to get to in the timely fashion that New Zealand and other independent jurisdictions have said we need.

So I do commend the now Opposition for finally getting there, and what I would like to add—and I haven’t done it specifically—is to compliment the operation of the select committee. As I will touch on—hopefully briefly, for the forbearance of the public—there was a lot of good work done and there was a lot of good advice given to the select committee from tax practitioners who genuinely wanted to get this right. Those multinational operators themselves, who see this as the way forward, who understand that there is no such thing as a free ride as far as they’re concerned—if they want good operations in New Zealand, then they have to be part of contributing to that. So when they use New Zealand roads, when they use New Zealand IT infrastructure, they are part of that provision in the first place and they can profit from that. All power to them if they’re paying their fair share, and that is what we have been trying to achieve for a good amount of time.

I know others have spoken to the nature of the New Zealand economy, about the nature of foreign investment in New Zealand, and I will absolutely go on record: it’s critical. We’ve got to get that right. We’ve got to make sure that we enable good investment into New Zealand. But it’s got to be good and it’s got to be real, so when we get there, we also need to ensure that they’re good and fair operators in terms of their compliance in terms of tax.

I don’t think, for the purposes of this evening, that there’s any need to go into the piecemeal nature of each and every part of the legislation as we’ve got to this point. I do want to say that we absolutely wanted to ensure, as a Government, when we carried on with this legislation, that it was imperative that what we were trying to achieve was fair, transparent, even, and open, so that not only New Zealand businesses but those multinationals who want to operate in New Zealand understood what it was that they were coming to and understood what their compliance was, but, more importantly, understood that we were serious about making sure that they paid their fair share. We can’t build our roads, we can’t upgrade our hospitals, we can’t do those core, basic things if these big players are avoiding their contribution to our tax base.

So, fundamentally, I actually hope that the revenue derived from these changes will be greater than forecast. The Government and Treasury have given what I think are quite, I don’t know—how do you put it? They’re quite low.

Hon Tracey Martin: Conservative.

FLETCHER TABUTEAU: “Conservative” is a good word; thank you, Minister—conservative estimates on the tax revenue from this legislation.

Prior to this coming to the House, the debate raged around just what it meant, and some of the numbers per annum were close to a billion dollars, not the kind of $100 million that we’re talking about now. So New Zealand First hopes that an empowered tax department—which is part of the Budget—will work towards compliance and fair operations and that even playing field, and I think we can look forward to more than was forecast.

I congratulate this House. It’s great to see a unanimous piece of legislation being passed through this House. I think it’s great to see that we’re all on the same page. Here, I think it’s great to see the Opposition eventually come on board and, to be fair, start this work. I’m not detracting from that—it was a good effort.

Chris Bishop: Oh, how generous of you!

FLETCHER TABUTEAU: Look, I’m not trying to defame you there, Mr Bishop. I’m just giving credit where credit is due [Coughs]—and I’m choking on it, apparently. So, with that, it’s great that we can all support this bill, and I do so myself. Thank you very much.

Rt Hon DAVID CARTER (National): I also rise to make a very brief call in support of the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. Can I start by commenting on the previous speaker, Fletcher Tabuteau, and saying that the longer you spend in the House the more interesting it gets to know your colleagues—be they from another party. Here is a man who must lead a very dull life, indeed, if he gets excited by this legislation. He was the only one around the Finance and Expenditure Committee—be it Labour; be it National—that got excited by the legislation. But whatever turns you on, Fletcher Tabuteau! If you’re excited by this legislation, then I feel a little sorry for you.

Can I say that unlike the chair of the committee, Michael Wood—who, I must say, did a very good job in chairing it—I don’t need 10 minutes to explain National’s position on this legislation. But can I also, for the point of view of protecting Labour’s image in this case, note that this is not a new tax. For a Government that campaigned throughout the campaign on no new taxes and has now introduced what I think is up to seven, this is not a new tax.

Fletcher Tabuteau was quite right in suggesting that this was very good work done by the former National-led Government, and, in fact, the history of this legislation is quite interesting. It goes back to sort of 2011-12, when most of the developed world realised there was a real trouble, a real problem, with multinationals managing the tax system to their advantage and, in fact, not paying fair tax in any country in which they operated. Upon recognition of the problem, the OECD was charged with doing some very good work, which concluded at the end of 2015. In response to that, in 2016, the then National-led Government introduces this legislation and takes it through into the House and to the select committee, and, of course, with the change of Government, it’s now the role of the Labour - New Zealand First Government to complete this process.

The tax legislation that’s before the House tonight is, by nature, very complex, and it has to be. This issue is one where some very sharp tax lawyers work for the multinationals. They spend their time living and breathing and finding ways to minimise their tax burdens. The most common one, which has been mentioned in the debate now, is by artificially high interest rates being charged by the parent multinational to the subsidiary operating in a country like New Zealand. Another one that we learnt about was, of course, the ability for them to structure a management system or a management fee, overcharge the New Zealand operation, and minimise the operation in New Zealand.

What we want—and it’s bipartisan on this issue—is that those companies should be able to operate in a country like New Zealand, but we, collectively, want them to pay fair tax on the profits that they make in this country.

There was talk about quite an important change which we made, really, at the instigation—from memory—in the discussion from Dr Deborah Russell. The IRD wanted the ability to go back seven years and suddenly start an investigation into a multinational. We did not think that was fair. We think there should be an alert from the IRD to the particular multinational of an issue within a four-year time frame, and that that may then drift on for a further three years, but it was unreasonable for us to suddenly have IRD raising it in issue after seven years.

This is good legislation. It has been taken through in a very cooperative, collegial fashion by the Finance and Expenditure Committee. It is complicated. I don’t expect that it was easy even for the committee members to get their heads around it without the help of a very good independent adviser, Therese Turner, who gave us good advice. I think the committee has made good progress in bringing it back to the House this evening. I commend this legislation to the House.

CHLÖE SWARBRICK (Green): Tēnā koe e Te Māngai. Tēnā koutou e Te Whare. I rise in support of this bill on behalf of the Green Party of Aotearoa New Zealand. It should surprise nobody that I am not a tax expert, but I think that’s kind of the point. I wouldn’t hesitate to say that the majority of us in this House are not tax experts, and of the people that we represent—the 4½ million New Zealanders around this country—by far and away the majority are not either.

The technical detail has been incredibly well traversed by both the Government and Opposition benches, and I don’t intend to read from the same song sheet there. As has been stated, it is complex and nuanced but, indeed, there is no silver bullet to fix tax loopholes.

I’d just like to quote a well-known economist in Aotearoa, Shamubeel Eaqub, who said, “At its core, tax is about pooling our resources and redistributing so that society is better off.”, and this final part may be somewhat contentious, particularly with members of the Opposition, but he ends with “Tax is love.” I believe that by far and away, fundamentally, the majority of New Zealanders would believe in the argument that a tax system should be fair. New Zealanders should be comfortable in knowing that at the end of each week, each fortnight, or each month, as they get their payslip and note the tax contribution they’ve made to this country, billion-dollar multinational companies making money here are paying their dues too.

As was noted by the former speaker, David Carter, this was work which started in 2011, and in 2012 it was coming into the public consciousness. In 2013, the OECD found that base profit shifting strategies distort investment decisions and give multinationals a competitive advantage over more compliant or domestic companies. They result in the loss of substantial corporate tax revenue, and jeopardise trust in the integrity of the tax system. All of those things, I think, are pretty critical points indeed. To note what’s been raised by a few members of the Opposition—that this was a plan, a body of work, which started under the previous Government—I’d just like to point out a slight fact check, which is that the IRD flagged that this was happening in 2013, and warned the Minister of Finance and the Minister of Revenue at the time, in 2013, that this was an issue that needed to be moved on and should be a key focus in the next 18 months. It did, however, take explosive headlines in and around 2016 to get some movement on it—in particular, the incredible work of investigative journalist Matt Nippert.

I’d like to read an extract from his piece in the New Zealand Herald on 7 June 2017. He found that—and I quote—“the 20 multinational companies most aggressive in shifting profits out of New Zealand overall paid virtually no income tax, despite recording nearly $10 billion in annual sales to Kiwi consumers.” He goes on to say, “Of those companies who responded to questions, all insisted that they were meeting their legal obligations. Several pointed to their New Zealand operations being almost solely as distributers, with the vast majority of their employment, research and manufacturing taking place offshore.” I think that relates quite nicely to the points that were raised by my colleague Michael Wood around the fact that what we’re talking about tonight is not just the strict legal definition but what kinds of ethics and values we would like to see playing out in the social contract in our society.

The estimations of costs to our economy are pretty astronomical. Treasury, as has been noted, estimates that it’s somewhere in the region of $200 million to $300 million per year, but Matt Nippert, who I mentioned earlier, estimates that it’s around $500 million. That’s enough tax to fund the salaries of 9,259 nurses, 7,601 police, or 10,498 primary school teachers. So that’s an estimate of around $500 million, but I’d also note that Professor Craig Elliffe told Radio New Zealand National that the amounts could be closer to $1 billion. Meanwhile, the UK-based Tax Justice Network found in March 2017 that here in New Zealand our likely losses are somewhere nearer to $700 million.

What we’re looking at here is a piece of legislation that is complex and technical and, indeed, possibly quite dry and boring to some, but I hope people are able to get a little bit of excitement out of it because, indeed, it levels the playing field. It feeds into a more equitable, more just, more fair society. So I’d like to say that there was incredibly good work done by the Finance and Expenditure Committee on this. I’m incredibly proud to stand in this House tonight as we unanimously support it through. I commend this bill to the House.

IAN McKELVIE (National—Rangitīkei): Thank you, Madam Assistant Speaker. Well, most things that need to be said sensibly have been said so I’ll talk about some other things tonight. I joined this select committee during the latter stages of this bill and took a while to pick up the threads of it. I was impressed with the way the committee worked through this very complicated piece of legislation.

I also want to make comment on Therese Turner, who was the adviser appointed to that committee. In my experience in this Parliament, wherever we get a well-qualified independent adviser appointed to a committee to assist with complicated pieces of legislation, it gives the committee great confidence going forward because, as has been said by a number of people tonight, it’s quite a complicated piece of legislation and I don’t think too many of us pretend to be tax experts. A lot of us have a lot of trouble with the tax department, but we’re not tax experts, and I think there’s quite a difference. So I was really impressed with the advice the committee received and the way that Therese Turner, particularly, made her points. I thought it was really worthwhile, and I think the committee accepted that pretty well.

As has been said, the bill originated with the National Government under Judith Collins. It was written to pick up recommendations from some work done by the OECD. It’s an attempt to tax and, consequently, prevent multinationals from using various accounting methods and other methods to ensure their New Zealand branches pay no tax. Having said that, it shouldn’t be taken from those comments that all multinationals in New Zealand behave in that manner, because many of them are very good corporate citizens of New Zealand and behave as you’d expect them to. Of course, some of these things that happen with taxation happen—I guess they’re almost accidents of history. So you’ll get interpretations of taxation law that change over time, and the IRD clearly have great difficulty keeping up with some of the interpretations that are used by numerous very talented tax experts around the world. Obviously, these companies, as has been said already tonight, employ the very best operators, I guess, not to avoid tax but to minimise their tax exposure, and I think most people do the same sort of thing.

So it’s been estimated that up to $200 million in tax may be collected—in fact, we just heard a much larger figure than that—but I think it’s very unlikely as the earliest estimates of the previous Government were as low as $50 million. I suspect that somewhere between the $50 million and the $200 million will be the amount that’s collected. But no matter what that amount is, it’s important that we use the principle of applying firm and fair tax law that doesn’t impact on international confidence in the New Zealand economy. So we have to have tax law that’s fair and acceptable by international standards. I think this bill probably meets that measure.

Taxation’s an ongoing challenge for the IRD and for the Finance and Expenditure Committee as tax law needs constant revision. As I said, every new generation of tax expert finds another way of short-circuiting the tax law that’s in place, and, consequently, we’ve got to update and upgrade our tax law. Some of the tools that companies have been using to deal with this or to avoid paying tax are the ability to charge excessive interest to their New Zealand arms and, consequently, lower their profits or take the profit completely out of the country. There are plenty of other artificial methods of overstating costs, which can be used quite easily. Some related-party transactions are designed to ensure profits are not generated here.

The other interesting thing that really interested me—and I want to concentrate on it a little bit longer tonight—was the issue of the provision of information to the IRD and how the IRD goes about getting information from those foreign-domiciled companies. That’s a challenge in lots of pieces of legislation—not just tax law in New Zealand—where we need to get information from the foreign owners of New Zealand operations of all sorts. So I was quite intrigued by the bill’s approach to try to find or try to get that information. So the revised bill requires that the requested information relates to an investigation of a multinational group’s tax position. This reduces privacy concerns because the bill as originally written could’ve requested information from a natural person such as a bank customer who is not part of a multinational group. So there were some changes made to the way in which the IRD or the investigating body could go after the information, but none the less it’s cleared it up pretty well, and I think it’s come up with a very fair solution to that challenge.

So the chairman of our committee said earlier that this will work and that some of the bigger companies are changing their practices as a result already. I just hope that they’re changing their practices in a positive manner and not a negative one, because they think well forward, a lot of these people, and so it is easy to change the intent of some of these pieces of legislation if we’re not careful how we handle it.

So I look forward to the discussion in the committee stage and I commend the bill to the House. Thank you, Madam Assistant Speaker.

ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. Tamati Coffey—five minutes.

TAMATI COFFEY (Labour—Waiariki): Thank you, Madam Assistant Speaker. I am filled with emotion about standing here to talk about the Taxation (Neutralising Base Erosion and Profit Shifting) Bill for the second time, actually—as much enthusiasm as I had sitting through the many submissions on the Finance and Expenditure Committee listening to this. This is, indeed, a hard bill to understand. I want to give special thanks to Therese Turner, who was our independent adviser. She wrote up her report with me in mind. She said, “If you get this, Tamati, then I’m doing OK.” So she pointed that out to me.

She also, in the introduction to her report back to us, said, by her own admission, “This is the most complex and technically challenging tax bill that I’ve seen in the 30 years during which I’ve been a full-time tax professional.” That sentiment was also echoed by submitters, who were also full-time tax professionals with extensive experience. But, of course, it is, as previous speakers have indicated, a very necessary piece of legislation.

I do find it also slightly ironic that when it comes to closing tax loopholes, the whole debating Chamber is in agreement that we need to close these loopholes up, especially from the lens of a small-business owner. As a small-business owner from regional New Zealand, when we look and we see the kinds of loopholes that multinationals are finding and getting away with, it definitely makes you a little bit angry.

This bill was a wee bit convoluted in some of the terms. You had one term which was used three times but was actually talking about the same thing. My case in point is this: “restricted transfer pricing rules” which was also referred to as “interest limitation rules”, and in the bill it was referred to as “cross-border related loan rules”—all of them mean the same thing. So trying to wrap your head around not just complex taxation legislation but also having to decipher the jargon in the bill was definitely a challenge.

I want to thank all of the submitters that came before us from all across New Zealand that had very certain problems—some problems, some praises—with how we were doing things; the officials that sat and pored through all of the amendments that we made as a committee; and, again, to our adviser, Therese, for all of the work that she put into this.

The purpose of this bill is, of course, to strengthen the integrity of our tax system and protect our tax base by introducing measures to address the issue of base erosion and profit shifting by multinationals. Now, we pored through this time and time again in the submissions process, with the main proposals being strengthened interest limitation rules, a permanent establishment anti-avoidance rule, updated transfer pricing rules, hybrid and branch mismatch rules, and increased administrative powers for the Inland Revenue Department so that it can more effectively investigate into large multinationals that were seen to be avoiding their share of tax—all riveting stuff.

It is definitely a 21st century problem and it requires a 21st century solution. To think that these multinationals have found aggressive tax practices to ensure that they pay very little to, sometimes, no tax anywhere in the world is reason for action, and that’s exactly what our committee did as we pored over these submissions. We need to protect the fairness of our tax system here in New Zealand, and, for that reason, whilst we are dealing with this particular piece of legislation now, this Government has also established a Tax Working Group to look at more fundamental changes that would improve the structure and the fairness and the balance in our tax system. This is all part of a bigger package, because this Government is committed to getting it right, through all of those submissions but also through our Tax Working Group, which the MP for Hutt South over there is a very big fan of, as well—and I know that.

Our response to base erosion and profit shifting is generally aligned with Australia and is broadly consistent with the OECD and the G20 action plan, although specific proposals are tailored for the New Zealand environment. I don’t expect that many regular New Zealanders out there would understand the intricacies of this bill—

ASSISTANT SPEAKER (Poto Williams): I apologise to the member. Your time has expired.

ANDREW FALLOON (National—Rangitata): Good evening, Madam Assistant Speaker. It’s a pleasure to be taking a brief call tonight on the—

Chris Bishop: Is it?

ANDREW FALLOON: —Taxation (Neutralising Base Erosion and Profit Shifting) Bill. It is actually a pleasure, Mr Bishop. I’ve actually been fascinated by this bill as it’s passed through the House. But, look, my very learned colleague Mr Andrew Bayly gave, I think, a very good technical summary earlier this evening of the bill, so I’ll keep my comments relatively brief.

Mr McKelvie, who also sits on the Finance and Expenditure Committee—now, he mentioned during his comments that he came on to the committee quite late, and that, I guess, put him on the back foot. Well, I don’t sit on the Finance and Expenditure Committee at all, so I’m probably several yards behind him. But I was fortunate to be subbed on from time to time, and so I have been involved, somewhat, in the passage of this bill as it’s wound its way through the House.

I have to say it is a very good bill. Some of my colleagues on this side of the House have mentioned why it’s such a good bill. It’s because it was actually drafted by this side of the House when we were in Government, based on the very good work that was undertaken by the Hon Judith Collins and also Steven Joyce to address base erosion and profit shifting.

Now, as we all know, we have a multitude of multinational entities that operate here in New Zealand, and it’s important that they all pay their fair share of tax and that we limit the opportunity for them to exploit gaps in the tax arrangements both of New Zealand but also in other jurisdictions around the world. Many multinational companies that operate here in New Zealand do so in a competitive environment with other domestic New Zealand - based companies, and what we don’t want on this side of the House—in fact, on all sides of the House—is for those companies that operate here that are multinational companies to have an unfair advantage against domestic companies that are just trying to make an honest dollar.

During the first reading of this bill, some of the members opposite, unfortunately, did make some interesting comments about unilateral action by one individual Government. I’ve never been in favour of unilateral action when it comes to multinational tax arrangements, for the precise purpose that they are by their nature international and, therefore, are multinational.

Chris Bishop: It’s in the word “multinational”.

ANDREW FALLOON: Exactly. We have to work with our other partners overseas to ensure that multinational companies are paying the tax not just in New Zealand but, frankly, in every country around the world. So that’s why we’ve worked for a very long time with the OECD on their very good report that they put out, I think at the end of 2015, and that resulted in some of the work that we’re looking at now, coming to the previous Government in 2016.

So that does take some time. That’s the unfortunate thing, I think, as we all find about working in Government, and particularly when you’re working across multiple Governments—not just your own—that things do take much longer than you’d like. So this bill is the culmination of some very hard work, and I think that there’ll be more of that good work coming through from the OECD and other multinational tax partners for the next few years. As has been commented earlier tonight, this isn’t going to completely fix the problem. It’s one step in the process of making sure that all multinational companies pay their fair share of tax. It’s a very good bill, though, and I commend it to the House.

Dr DEBORAH RUSSELL (Labour—New Lynn): Our colleague Chlöe Swarbrick referred to something that economist Shamubeel Eaqub said: “Tax is love.” In fact, it was brought out again recently on Q+A on Sunday morning, when Corin Dann said to Shamubeel Eaqub, “Do you think people are willing to pay higher taxes?”, and Mr Eaqub replied—he said, “When I said ‘tax is love’, I got a whole lot of hate mail, so I don’t think so.” Perhaps most people don’t regard tax as love, but certainly they are prepared to regard taxation as the price of civilisation. It’s what we pay for a civilised society.

I’d like to say that the select committee process was also remarkably civilised in respect of this bill; indeed, even rather lovely—moving back in that circle. I came into the process late, as a new MP, so, like many of the other new MPs on the Finance and Expenditure Committee, we had to do a lot of work to catch up on what was actually going on in this bill. But it was a very collegial process. Sometimes we fight tooth and nail about taxation, but not on this bill. We actually had a lot in common, a lot of stuff we wanted to achieve together, and, like my colleagues, I am very grateful to our officials and also to Therese Turner, who helped us immeasurably in understanding exactly what was going on in this bill.

So what is going on in this bill? Well, it’s about base erosion and profit shifting. Now, what that means is the tactics by which big multinational companies can shift profits from one country to another. Typically, what they want to do is they want to shift the profits from a country where they are taxed at a comparatively high rate to a country where they are taxed at a comparatively low rate. If they can do that, they can erode our base of taxation in the high - tax rate country. What we’re trying to do in this bill is to put some measures in place to stop those practices.

Before we talk about the measures, exactly how do companies shift profits from one country to another? Well, they can do it by charging a management fee. So the overseas company charges a management fee to the high-tax country. That means there’s a big tax deduction in the high-tax country, and in the low-tax country the management fee is received as income and it’s taxed at a comparatively lower rate. So that’s a management fee transfer. You can do the same thing transferring goods from one country to another—all right? So the overseas company makes the goods at a low price, but it charges a high price in the country which has a high tax rate. That means they get the effect of a high tax deduction. It has the effect of shifting profits across borders quite straightforwardly.

The way they do it when it comes to loans or to interest rates is the overseas company, the parent company, will lend money into a high-tax country and in a high-tax country—and that is New Zealand, in terms of its corporate tax rate—it will, you know, pay interest. It can claim a very good tax deduction because of that high interest that it pays, and as the interest flows back to the low-tax country, it’s regarded as income there and it gets taxed at a low rate. So the effect is to shift profits from one country to another, and ideally you shift them from a country with a high tax rate to a country with a low tax rate.

It’s not fair. That’s the problem with doing this sort of thing. Look, people are entitled to structure their tax affairs in order to pay the least tax possible under the laws. But there’s a different thing going on here and it’s to do with the fairness of the tax system. But what is fair? What is fair when it comes to taxation? That’s actually really hard to judge, especially when it comes to these multinational companies, particularly if we’re trying to work out whether the price they’re charging across borders is actually fair and right and proper. It involves a lot of back and forth, a lot of documentation, and a lot of hard work.

So in this bill, when we are trying to ensure that we’re going to tax multinationals fairly and that they pay their fair share in New Zealand, what we want to make sure that we do is we don’t involve everyone in a whole lot of unnecessary work. So one of the first things this bill does is it identifies companies which we think are highly likely to engage in this base erosion and profit shifting (BEPS). We’ve got a couple of tests for that. There were three tests. One of them we took out on the advice of submitters and the advice of our tax expert, but two of them are still sitting in there.

So if you’ve got a multinational structure where one company has a very high debt ratio, so they’ve got a lot of debt to equity—40 percent—we say they are perhaps going to be more likely to be caught up in this BEPS stuff, and so we want to have a close look at them. Or if we’ve got a company where they are borrowing money from a parent which is in a low-tax jurisdiction, then we say they’re a BEPS risk and we are going to investigate them fully. You’re doing one of those factors, then we’re going to have a look at how we apply these base erosion and profit shifting rules to you, but we’ve got a de minimis in there.

Look, if the New Zealand company only borrows $10 million or less from its overseas parent, even if they were in a low-tax jurisdiction, we say, “No, we’re not going to apply the rules.”, and it’s worth working through the numbers on that. People say, “Well, why wouldn’t you apply the rules?”, but, actually, there’s only a small amount of tax involved. So if you think of $10 million of borrowing at a 10 percent interest rate, that might be $1 million worth of interest expense. The tax deduction on that in New Zealand—the amount your tax is reduced by—is about $280,000. Now, if the loan has come from a low - tax rate country—say, a 12.5 percent tax rate—it means that in New Zealand, you would have tax reduced by $280,000. In the low - tax rate country, their tax would be increased by $125,000. The difference is $155,000 of tax. Now, that’s a lot of money to most ordinary people, but in terms of the Inland Revenue Department spending its time and energy chasing after it, they say, “Let’s not do this.” They just say, “Let’s not do that particular one.”

So there’s a safety rule in there to make sure that companies don’t get involved in unnecessary work and that they don’t have to sort of do too much. But then what do we actually do? You know, the company here in New Zealand is still entitled to a tax deduction. Let’s say we’ve found them, they are engaging in this profit shifting—they can still get their tax deduction; it’s just that we’re going to impose a different interest rate. We’re going to reassess the transactions and impose a fair rate of taxation, and we’ve got a way of assessing that.

You know, companies do lend money across borders. That’s a perfectly legitimate thing to do. But what we are trying to do is make sure that the interest rates on it are fair and reasonable. So the rule we’ve got is this: we look at the overall credit rating for the worldwide company, and then we say, “Well, look, the interest rates implied by that credit rating—have they implied those interest rates here in New Zealand?” But the fact is, here in New Zealand, we’re a slightly riskier economy because we’re small.

So what we’ve said is that it’s actually okay to charge a slightly higher interest rate here, but how do we assess that? Well, we take the worldwide credit rating and we chunk it down a couple of notches. So say you’ve got an A+ credit rating. We’ll chunk it down a couple of notches to a—I think it’s an A. I don’t know exactly how those things work so maybe it’s an A-. How much interest would you pay that’s implied by an A- credit rating? Well, that’s the interest deduction you can claim. So we still allow the interest deduction; you’ve just got to make it at a fair and reasonable rate.

So it’s all quite complicated stuff, but what we’re trying to do with this is to make it fair and reasonable. We’re not trying to deny deductions. We’re not trying to stop companies from operating across borders. All we’re trying to do is make sure that the interest rates that they charge are fair and reasonable. That’s part of the idea of what’s going on here with this.

We’ve got a whole set of other rules in this legislation. There’s rules around permanent establishment, there’s rules around hybrid mismatches, and all of them are oriented towards making sure that companies pay their fair and reasonable amount of tax in the countries where they earn the income, and that’s really important.

If taxation is the price of civilisation, then we all need to pay towards it, but we need to pay our fair share—no more, no less. And if ordinary citizens see multinationals getting away with not paying their tax and they see them getting away with this base erosion and profit shifting, then why would ordinary citizens want to pay their tax, too? How can you say to a hard-working farmer, to a small-business owner, or to a wage and salary earner that they have to pay tax when the multinationals don’t? That’s why we need to make sure that we tax multinationals fairly, so that we are all in it together—all of us fairly paying the price of civilisation.

LAWRENCE YULE (National—Tukituki): It’s 5 to 10—the last run of the evening—but it’s my pleasure to speak on the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. I do want to congratulate the committee because, as a member of the Finance and Expenditure Committee, working through this bill has actually been a pretty collegial affair. Dr Deborah Russell, who spoke just before me, alluded to some of the technicalities of the bill. It actually is a complex piece of legislation, and I want to congratulate the chair, Michael Wood, and other members of the committee on getting us to this point.

This bill is around aligning us with the OECD and a set of regimes and taxation regimes that we actively participate in. Our broad based - low rate tax system in New Zealand continues to perform very well by international comparisons. However, it’s important that we keep up and evolve our tax system so that companies operating in New Zealand pay their fair share and, importantly, multinationals are not advantaged over our own companies. So most multinational companies actually do follow the rules, but there are some that attempt to minimise or eliminate their New Zealand tax obligations and, actually, that’s what this piece of legislation is about. This bill targets those, and I’m pleased that the Government has carried on what National started in this space.

We’ve talked about some of the measures—and I’ll just briefly go through them—that international companies have been using. There are artificially high interest rates on loans from related parties to shift profits out of New Zealand, and they are called interest limitation rules; artificial arrangements to avoid having a taxable presence in New Zealand is another one that we are trying to cover, and I believe we have; related party transactions, or transfer pricing payments, to shift profits into their offshore group members in a manner that does not reflect the actual economic activities undertaken in New Zealand and offshore—in other words, they’re fudging the arrangements—and a hybrid and branch mismatch that exploits differences between countries’ tax rules to achieve an advantageous tax position. Now I do have to admit that getting my head around this took a little bit of time, and I’m not sure I’ve completely got it right.

But there are also certain tactics to hinder the Inland Revenue Department from investigating, such as withholding relevant information. I will comment on what the previous speaker Mr Ian McKelvie said, because, actually, the ability for the Inland Revenue Department to reach out into those companies internationally is important, but also we run fair and square up against privacy provisions and other international jurisdictions.

So I was pleased as we worked through this that we actually managed to find some solutions, and I am actually pleased, as this House finishes for the night, that we have actually come up with a collective approach that all political parties are going to support. It makes common sense and I support it at this stage of the proceedings.

KIRITAPU ALLAN (Labour): It’s an absolute delight to be called to speak at this time. There should be many members who are very interested in my enthusiastic contribution this evening.

Hon Member: Up the East Coast.

KIRITAPU ALLAN: The East Coast will be watching with extreme pride, I am sure.

Let’s say it’s been an interesting journey sitting on the Finance and Expenditure Committee and hearing submissions in respect of the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. Now, I cannot give the eloquent address that my colleague Dr Deborah Russell has just provided this House with, but I do actually want to make comment and commend the contributions of my colleague Dr Deborah Russell, who has been, I think—and I think that would be agreed across the House—quite a steady hand in, and guide for, our Finance and Expenditure Committee as we have undertaken the task of considering this piece of legislation.

It has, I think, taken some time, through a great deal of advocacy, both internationally and domestically, and on both sides of the House, to come to the agreement that I think we’re working towards it being a full House in unanimous support of the—[Serjeant-at-Arms enters the Chamber] Oh no, I was just finding my flow. There is the unanimous agreement that we have all come to in respect of seeing the passage of this bill through the House. I also really want to—

ASSISTANT SPEAKER (Poto Williams): I apologise to the member.

Debate interrupted.

The House adjourned at 10 p.m.