Thursday, 14 February 2019

THURSDAY, 14 FEBRUARY 2019

THURSDAY, 14 FEBRUARY 2019

The Speaker took the Chair at 2 p.m.

Prayers.

Business Statement

Business Statement

Hon CHRIS HIPKINS (Leader of the House): The debate on the Prime Minister’s statement will conclude on Wednesday, 20 February. Legislation to be considered next week will include the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill, the Social Workers Registration Legislation Bill, the Crimes Amendment Bill, and the Accident Compensation Amendment Bill. At 5.45 p.m. on Wednesday, Agnes Loheni will make her maiden statement.

Hon GERRY BROWNLEE (National—Ilam): I thank the Leader of the House for that indication of work ahead. Can I just take this opportunity to thank the Government for the rapid answering of questions that were outstanding. That’s been most helpful—thank you. But I would like to know if the Government, given the current state of foreign relations, has any intention to pass the Autonomous Sanctions Bill in the near future.

Hon CHRIS HIPKINS (Leader of the House): With regard to the first part of the member’s comment, can I thank him for that. Can I note that I’ve been advised this morning that this may be the first time ever that there have been no overdue written parliamentary questions in the system. With regard to the second part of his statement, we don’t intend to progress that next week.

SPEAKER: Well, I want to add my thanks to the members for discovering that they can do what was regarded as impossible.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

1. Hon PAULA BENNETT (Deputy Leader—National) to the Prime Minister: Does she stand by all her Government’s statements, policies, and actions?

Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Prime Minister: Yes.

Hon Paula Bennett: How would she define our relationship with China, given her Foreign Minister has made it clear her Government is concerned about Chinese influence in the Pacific?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, words matter. When a very, very carefully crafted speech is given, what is said is factual; what is not said is malicious inference.

Hon Paula Bennett: Does she agree with her Deputy Prime Minister that New Zealand’s relationship with China is “excellent”, and would that remain a fair description if New Zealand exporters were now facing delays when trying to export their goods to China?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, the last time there was a delay was when the former Government was in office, where goods were on the wharves whilst they were trying to sort out the melamine scandal at that time. I recall who the Minister was and how hopeless he was in trying to solve it. There are no delays on our ports or Chinese ports at this point in time. In fact, if you look at the growth in exports, the growth in inter-country travel, the growth in expenditure between China and New Zealand, it’s all gone up in the last year dramatically.

Hon Paula Bennett: What recent reports or advice has she received from Government officials regarding delays for New Zealand exports at Chinese ports?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, making an allegation like that, impugning that there is a crisis when one does not exist—

Hon Gerry Brownlee: It’s a question. Try answering it!

Rt Hon WINSTON PETERS: Pardon?

Hon Gerry Brownlee: It’s a question.

Rt Hon WINSTON PETERS: Well, I know, “Mr Woodwork Teacher”, it’s a question—

SPEAKER: Order! [Interruption] Order! The member will resume his seat. I want to remind all members in the House that this is regarded by most New Zealanders as a very serious issue and should be treated that way. The level of interjection, or the type of interjection, is not helpful. I will remind the Deputy Prime Minister while answering to stay within the bounds of the Standing Orders and to apologise for the comment made about another member before the Deputy Prime Minister resumes the answer for the Prime Minister.

Rt Hon WINSTON PETERS: I, with great delight, apologise to all woodwork teachers, including Mr Brownlee.

SPEAKER: No. The Deputy Prime Minister will now apologise without any qualification.

Rt Hon WINSTON PETERS: I apologise without qualification and unreservedly. Can I say that in that question was the allegation or inference that there was some crisis with respect to the product arriving in China. I’m asking the member who asked that question to give us, for the first time in a long time of parliamentary questions, the facts to back it up, because it does not exist.

Hon Paula Bennett: I raise a point of order, Mr Speaker. I do ask permission to ask my question again without having to take one. It was very clear, it was a short question, there was nothing impugned in it, and it wasn’t answered at all.

SPEAKER: It was answered. It was very clearly answered, not just what reports but the fact that none existed.

Hon Paula Bennett: If, as the Prime Minister says, she has not sought recent reports or advice, how can she unequivocally state that there are no hold-ups of our exports at Chinese ports?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, thank heavens that my mind processes are not so convoluted. We do not start at shadows or go looking for false rabbits up unusual trees. The fact is that no businessman or woman has raised the issue with us. So why would the Prime Minister’s job require her to start making inquiries where there’s no concern about trade.

Hon Shane Jones: Does the Prime Minister stand by her comments on the Air New Zealand flight being turned around?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, most definitely yes, because, paradoxically, two Governments knew nothing about this matter: the New Zealand Government and the Chinese Government. Air New Zealand has admitted that it was a total botch-up and that they turned the plane around without any contact with China whatsoever. They’ve taken full blame.

Hon Paula Bennett: Is she aware that Government officials are actively discussing that exporters experienced delays at Chinese ports?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, that is not information that is presently before us, but we would welcome that member providing the background evidence that I hope is the substance of her question, but hitherto and now the answer is no.

Hon Shane Jones: Does the Prime Minister stand by her remarks pertaining to the five Ministers who, apparently, have had their visas revoked?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister—[Interruption]

SPEAKER: Order! Can I just—can the Prime Minister resume her seat; I’m not sure how we put this. Can I make it absolutely clear that it is the right of any member to ask a supplementary question. It was a very broad opening question, and the questioning of a member of the Government’s right to ask a supplementary that members don’t like is just not acceptable.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. There was no case of the Opposition not liking the question; it was just the inference that there had been a suggestion that visas had been revoked. The question that was asked yesterday was, “Have they simply had trouble getting visas issued?”

Hon Chris Hipkins: Speaking to that point of order, Mr Speaker. If you’re going to be ruling out on the basis of objection from the other side imputations in questions, then, actually, you’d be knocking out most of the questions being asked by the Opposition on the basis that we don’t agree with the premise of them.

SPEAKER: And, obviously, if the Prime Minister hasn’t made any such statement, then it’s up to her to say so.

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, the comments that I made were to do with the allegation from the National Party that five Ministers had had their visa applications stopped. That’s an accurate summation of the allegation. Now, the next question is: have the Chinese failed to process five ministerial applications? And strangely enough—we’ve got to wait for the punchline—the answer is yes, and guess why? Because not one of those five Ministers has made an application for a visa at this point in time.

Hon Paula Bennett: Will she now ask official advice on delays at Chinese ports, as we had New Zealand Trade and Enterprise (NZTE) in the select committee today saying that they had had phone calls of concern from businesses around exports on Chinese ports?

Rt Hon WINSTON PETERS: Can I just say that, on behalf of the Prime Minister, a comment from NZTE about phone calls which are mistaken and probably originate from—

Hon Nathan Guy: Throw them under the bus.

Rt Hon WINSTON PETERS: —base allegations that are not true—and if that Minister’s record was put on the line, we’d see how inadequate he was. It went on for months, you recall—at enormous loss—and when it was all over, we’d lost control of our infant formula business. This guy should have been retired a long time ago.

SPEAKER: Order! I am going to remind the Deputy Prime Minister—I understand that he shouted at the Prime Minister, but I will remind the Deputy Prime Minister that he is speaking for the Prime Minister and answering for her, and that might enter the nature of the answers given.

Hon Shane Jones: Does the Prime Minister stand by her comments in respect of the statutory process pertaining to Huawei and the delivery of independent information related to security?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, most definitely, yes. The legislation under which that decision was made was passed by the then National Party - led Government, not supported by the Labour Party or New Zealand First. I cannot recall what the Green Party did, but it was a National Party piece of legislation. So here comes the process which post the election was still in place, and the Prime Minister is not—nor are any Cabinet Ministers—involved. It is the process set up by the Telecommunications (Interception Capability and Security) Act that the National Party put in place. [Interruption] Yes, she does.

Question No. 2—Finance

2. ANAHILA KANONGATA’A-SUISUIKI (Labour) to the Minister of Finance: What reports has he seen on the economy?

Hon GRANT ROBERTSON (Minister of Finance): I’ve seen a number of reports that demonstrate the solid fundamentals of the economy. Statistics New Zealand’s labour market statistics published last week show that across the last two quarters, we’ve recorded the lowest unemployment rates in a decade. The Westpac McDermott Miller Employment Confidence Index for December showed that confidence in the labour market rose strongly to 121.3, its highest level since early 2008. Likewise, the Westpac McDermott Miller Regional Economic Confidence survey showed improved confidence across all 11 regions. In Gisborne, Hawke’s Bay, Nelson, Marlborough, West Coast, and Otago, at least a net 50 percent of households were expecting improved prospects in their region over the next year. Confidence in the main centres also rose, particularly in Auckland—up 30 percentage points. I’m pleased to see that these sentiment surveys show that Kiwis are seeing the reality of our economy’s strong base.

Anahila Kanongata’a-Suisuiki: What reports has he seen on the impact of international factors on the New Zealand economy?

Hon GRANT ROBERTSON: Well, yesterday the Reserve Bank released its February Monetary Policy Statement, which highlighted the continued strength and resilience of the New Zealand economy. What it also showed was the warning from the bank that slowing momentum in the global economy is expected to weigh on growth in New Zealand. The Reserve Bank also pointed to risks from political tensions and trade disputes overseas. In addition, the IMF is forecasting global growth to slow this year, with advanced economies averaging around 2 percent, well below New Zealand’s forecast growth rate. These international risks underscore the importance of this Government’s commitment to responsible fiscal management and building a more modern and resilient economy.

Anahila Kanongata’a-Suisuiki: How will the Government’s plan to reform New Zealand’s institutions help modernise the economy?

Hon GRANT ROBERTSON: This morning, the Reserve Bank Governor and I signed the first remit setting out the Reserve Bank’s new dual objectives around maximum sustainable employment and price stability. We also signed the charter that will govern the decision making of the bank’s new monetary policy committee. Under the remit signed today, the Reserve Bank’s operational objectives for monetary policy are to keep inflation between 1 and 3 percent over the medium term, with a focus on keeping inflation near the 2 percent midpoint, and to support maximum sustainable employment. These objectives will ensure that monetary policy better supports the New Zealand economy as we head towards the middle part of the 21st century.

Question No. 3—Finance

3. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Does he agree with the Prime Minister’s statement on Tuesday that “the economy is performing above expectations”?

Hon GRANT ROBERTSON (Minister of Finance): Yes, and let’s just run through a few comparisons with the member’s favourite document, the Pre-election Economic and Fiscal Update (PREFU). The unemployment rate has fallen to 4.3 percent from 4.7 percent at the election, and in the pre-election update it was not expected to reach 4.3 percent until 2020 under the previous Government’s economic settings—above expectations. The size of the economy at 30 September 2018—the latest numbers we have—was $291 billion against the PREFU forecast of $285 billion—above expectations. The PREFU forecast net core Crown debt would be 22 percent of GDP at the end of the 2017-18 year. We got it to 20 percent due to strong growth and healthier surpluses—above expectations. The latest monthly Crown accounts show a larger than expected operating balance before gains and losses surplus, because employment and consumption growth has been greater than Treasury expected not only at PREFU but also at the Half Year Economic and Fiscal Update 2018—above expectations. To sum up, the economy is stronger under the coalition Government than Treasury had expected at the election, when the previous Government’s settings were in place.

Hon Amy Adams: Is it a sign of an economy performing above expectations that the last quarter’s and the last year’s economic growth have been the lowest rates in five years, and yet the ANZ is still predicting future growth to, and I quote, “disappoint further”?

Hon GRANT ROBERTSON: The growth rates—in fact, let’s take the Reserve Bank’s Monetary Policy Statement—are expected to be 3.1 percent for 2018 and then staying close to 3 percent through 2019, 2020, and 2021. If the member was listening to my earlier answer, globally, growth amongst advanced economies is expected to be around 2 percent. New Zealand will be outperforming that.

Hon Amy Adams: Well, does he regard it as a sign of an economy performing above expectations that the number of people receiving jobseeker benefits has gone up 11,000 in the last year and there’s now 26,000 more NEETs than when he took office?

Hon GRANT ROBERTSON: In respect of the last part of that question, I’d encourage the member to look at the statement that Statistics New Zealand made about the reliability of the NEETs data in the latest forecast. What I can say, though, is that on this side of the House, we’re actually going to be investing, and are investing, in programmes that will get young people into work. We’ve got Mana in Mahi. We’ve got He Poutama Rangatahi. We have a range of programmes that are doing that, because on this side of the House we believe in investing in young people instead of writing them off as lazy and hopeless, as the previous Government did.

Hon Amy Adams: Is it a sign of an economy performing above expectations that job creation has fallen from 10,000 new jobs a month, when that Minister took office, to just 650 a month in the last quarter?

Hon GRANT ROBERTSON: Over the last year, I believe, the figure is around 60,000 new jobs in the economy. That is a good result. We are at the point now—when unemployment is at its lowest level in a decade—that it becomes harder and harder to create the next job, but businesses in New Zealand are doing that.

Hon Amy Adams: Is it above his expectations to see investor confidence falling again and farmer confidence at the lowest level since the global financial crisis?

Hon GRANT ROBERTSON: This highlights the member’s difficulty, because those investor confidence numbers zeroed in on concerns around global sharemarkets and global equities. The member might like to think that the New Zealand economy operates completely separately from the rest of the world. But, I have to say, I’d much rather prefer the endorsement of organisations like Standard & Poor’s and Fitch Ratings that have come out in recent times and said that the New Zealand economy is strong and resilient and able to face up to these international headwinds.

Rt Hon Winston Peters: With respect to the economy performing above expectation, is it or is it not a fact that we are building more houses now in New Zealand than back to 1978—that is, for 41 years?

Hon GRANT ROBERTSON: Indeed, that is in fact true, and what members on the other side of the House, when it comes to the place of house building in the New Zealand economy, need to remember is that this is a Government that came in and said we will stop the sell-off of State houses, because it’s not just not building enough of them; it’s that that lot were selling them off. For the first time in a very long time, we have a Government committed to building affordable homes for first-home buyers.

Hon Amy Adams: Doesn’t he think that New Zealand deserves a finance Minister who has higher expectations—[Interruption]

SPEAKER: Order! Start again, please.

Hon Amy Adams: Thank you. Doesn’t the Minister think New Zealand deserves a finance Minister who has higher expectations for this country than slowing growth, rapidly rising rents, fewer new jobs, and more people on benefits, which is the legacy of his tenure so far?

SPEAKER: Well, I’m tempted to rule it out for irony, but I will give the Minister the opportunity to answer it with a wide brief.

Hon GRANT ROBERTSON: Far be it from someone as modest as myself to speak about what kind of finance Minister we have today. What I can say is that I’m extremely proud of a coalition Government that has made sure that the New Zealand economy continues to be managed carefully. But, on this side of the House, we don’t believe that you can crow about a growth rate of 3.5 percent when child poverty’s growing, when homelessness is growing, and when our health and education systems are underfunded. That member over there wants to take a good, square look in the mirror and say “What is the point of a growth rate like that if New Zealanders don’t see the benefits of it?” On this side of the House, we’re making sure that happens.

Question No. 4—Housing and Urban Development

4. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Does he stand by his statement in regards to the Reserve Bank November 2018 Monetary Policy Statement that “I don’t accept those estimates”, and does he now accept the KiwiBuild estimates in the February 2019 Monetary Policy Statement?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): In general, yes and yes.

Hon Judith Collins: Does he agree with Adrian Orr, Reserve Bank Governor, who told the Finance and Expenditure Committee this morning, in regards to KiwiBuild, “If they were going to build 100 houses, that means that between 50 and 75 houses elsewhere aren’t built.”?

Hon PHIL TWYFORD: Well, there’s much that I agree with Adrian Orr on in relation to the comments about KiwiBuild in the Monetary Policy Statement, particularly the importance of overcoming the capacity constraints that this Government inherited to building houses. But when it comes to the issue of crowding out, I don’t entirely accept what the Governor had to say. KiwiBuild is fundamentally about building affordable homes, and if all these affordable homes were going to be built anyway, where have they been built over the last 10 years? The market has simply not been building affordable homes.

Hon Judith Collins: Does he believe his officials from the Ministry of Business, Innovation and Employment, who told him, in relation to developments at Te Kauwhata and Wānaka, that if KiwiBuild didn’t underwrite the houses, all 386 of the KiwiBuild houses in those two projects would have happened anyway, courtesy of the private sector?

Hon PHIL TWYFORD: Well, there’s a range of advice for Te Kauwhata, the Wānaka, the McLennan, and the Mason Square developments, and in all of those projects our priority is to incentivise the building of affordable homes, not just any homes.

Hon Judith Collins: I raise a point of order, Mr Speaker. Although the Minister said a few things, he didn’t actually answer whether he believed his officials, who have told him those houses were due to be built anyway by the private sector.

SPEAKER: No, I think, at a broad interpretation, the implication was pretty clear that he didn’t.

Hon Judith Collins: Does he stand by his answers to written questions Nos. 32124 and 38048 that in regards to the Porirua development, KiwiBuild is not making any financial contribution to the project, but its role is to simply “monitor the delivery and manage the ballot sales process”?

Hon PHIL TWYFORD: Yes.

Hon Judith Collins: Is it his intention that KiwiBuild will incentivise developers to build “smaller, medium-density dwellings in sub-urban locations”, as noted in the KiwBuild Buying off the Plans business case?

Hon PHIL TWYFORD: Yes.

Hon Judith Collins: Is he ready to acknowledge that KiwiBuild is not substantially adding to the house supply in areas where it is needed and in homes the sizes that people want to buy, but is simply redirecting workers away from private home builders?

Hon PHIL TWYFORD: Not at all.

Question No. 5—Education

5. MARJA LUBECK (Labour) to the Minister of Education: What responses has he seen to the vocational education reform proposals he announced yesterday?

Hon CHRIS HIPKINS (Minister of Education): We’ve had some very positive responses from business and industry. Business New Zealand was very positive about the change. The Motor Trade Association said that “It’s a phenomenally radical approach and we need it. We’re short of about 2,000 technicians just in automotive.” It’s been welcomed by the Canterbury Employers’ Chamber of Commerce, who say there are obvious benefits to having a centralised model; the Wellington Chamber of Commerce, who have called it a great step forward; and Federated Farmers, who say it fully supports the Government’s determination to put the spotlight on vocational education.

Marja Lubeck: What responses has he seen from the polytechnic sector itself?

Hon CHRIS HIPKINS: We’ve had some very positive and constructive comments from the polytechnic sector body. Some chief executives have expressed concern and some have identified concerns with the proposals that haven’t actually been made. The Ara Institute of Canterbury has called it “a strong vision for vocational education”. The Western Institute of Technology at Taranaki have said, “If anything it brings more teaching and learning to regions such as Taranaki.” Karla Davis, a student leader at the Universal College of Learning, has said that she’s excited for this necessary change, and the Tertiary Education Union has called it a “Bold proposal [that] puts people at the heart of vocational education”, and they go on to say, “having a single polytechnic provides a genuine opportunity to ensure long-term stability of jobs not just in [the] major centres but … in the regional communities who have been the big losers under the previous government’s failed market experiment in tertiary education,”.

Question No. 6—Transport

6. Hon PAUL GOLDSMITH (National) to the Minister of Transport: Is he confident that light rail from the city to the airport in Auckland is the best use of resources; if so, why?

Hon PHIL TWYFORD (Minister of Transport): Yes. It will be a magnet for private investment in urban renewal, and it will be able to carry 11,000 commuters per hour—the equivalent of four lanes of motorway. The New Zealand Transport Agency advises that the latest transport modelling results indicate that in 2048, there will be 20 million passengers per year using the light-rail line between the city centre and Māngere, including an estimated 70,000 people per working day. The aim is to provide modern and efficient rapid transit for communities that are now plagued by traffic congestion.

Hon Paul Goldsmith: Well, how does he know it is the best use of resources if he hasn’t yet received a business case?

Hon PHIL TWYFORD: Because I’m relying on the advice and the modelling of the experts. The business case is under way. The project will not be proceeded with until that business case has been accepted and endorsed.

Hon Paul Goldsmith: What evidence has he got that $3.7 billion—if that is the final figure—invested in light rail down Dominion Road will reduce congestion across the Auckland transport network as much as other potential investments, such as a second route south along Mill Road dealing with pinch points on the Southern Motorway, such as through the East-West Link, and other options?

Hon PHIL TWYFORD: Well, the evidence is contained in a number of studies that have been carried out by Auckland Transport, by the New Zealand Transport Agency, and by the Ministry of Transport, and, I think, in the fact that the only progressive transport Minister in the last National Government, the Hon Simon Bridges, adopted and endorsed light rail between the city centre and Māngere and announced a process of the route alignment.

Hon Paul Goldsmith: Is reducing congestion on Auckland’s roads his top Auckland priority in transport?

Hon PHIL TWYFORD: The top priority of our Auckland transport policy is to give people access to the things that they need, to spend money wisely, and to reduce the extreme car dependency that city suffers because of years of the last National Government investing only in expensive motorways and starving the rest of the transport system of the resources it needs.

Hon Paul Goldsmith: So is reducing congestion on Auckland’s roads his top Auckland priority in transport?

Hon PHIL TWYFORD: Well, reducing congestion is part of the wider goal of giving people access to the things that they need. But, as Aucklanders understand, simply building more motorways or adding lanes to the existing motorways induces demand and actually adds to the chronic congestion that the city suffers. Our policy is to give people genuine transport choices by investing in roads, motorways, walking and cycling, public transport, and rapid transit. That’s how we’re going to deliver a 21st century transport system for our country’s biggest city.

Question No. 7—Health

7. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: Does he stand by his statement that National Health Targets created “perverse incentives”?

Hon Dr DAVID CLARK (Minister of Health): The previous Government’s targets produced perverse incentives leading to what were traditionally cheaper surgeries being performed in more expensive environments. I want a health system that has honest and transparent measures. I want a system that doesn’t pump up numbers by counting Avastin injections and skin lesion removals that could have been done in primary care as surgeries only if they’re done in the most expensive environment. The answer to the member’s question is yes.

Hon Michael Woodhouse: Would he agree that the removal of the targets has created other perverse outcomes, such as for cancer patient Blair Vining, who described at a recent cancer conference that he would have died before the date of his first public hospital appointment?

Hon Dr DAVID CLARK: I think everybody in this House and I think every New Zealander would feel deeply for Mr Vining and his wife Melissa in their circumstances. They wrestle with the end of Blair’s life in coming months. What is really important here is that a cancer plan is developed. I was at the conference—the member was not there—and that’s what Mr Vining spoke passionately about. The Director-General of Health has promised to have that cancer plan in place—an interim plan—by June this year.

Hon Michael Woodhouse: Has cancer treatment timeliness improved or worsened since the Minister removed the national health targets for cancer treatment?

Hon Dr DAVID CLARK: The member will know that the results are on the website, and they are roughly in line across recent years.

Hon Michael Woodhouse: Well, in that case, can he confirm that, since removing the targets, the published data on the Ministry of Health website shows four of the five targets, including cancer, have got worse, not better, and that the data hasn’t been updated for the past six months?

Hon Dr DAVID CLARK: I can confirm that, across the targets, one more of them has been met than was the case in quarter one 2017-18.

Hon Michael Woodhouse: Is he aware that since the conference around 100 patients have contacted the Vinings to share stories of wait times for first appointments from just two weeks to more than two months, and isn’t this an example of the postcode medicine that health targets were designed to avoid?

Hon Dr DAVID CLARK: As I’ve said previously, the previous Government’s targets—some of them had merit; collectively, they were too narrowly focused. I want a system that delivers better quality healthcare across the board to New Zealanders. In particular, in respect to the faster cancer treatment target, I note that it didn’t cover all cancer types. I want honest and transparent measures that drive better outcomes across the wider health system.

Question No. 8—Health

8. ANGIE WARREN-CLARK (Labour) to the Associate Minister of Health: What recent announcements has she made regarding youth mental health?

Hon JULIE ANNE GENTER (Associate Minister of Health): Tēnā koe, Mr Speaker. On Monday, Minister Clark, my colleague Chlöe Swarbrick, and I launched Piki in Porirua, the first community to benefit from a pilot of free mental health support for 18- to 25-year-olds. Piki will be targeted at young people with mild to moderate health needs to ensure that they get the early intervention and support that they need. Piki will help an estimated 10,000 young people across Porirua, Wellington, the Hutt Valley, and the Wairarapa.

Angie Warren-Clark: How will people get access to mental health support through Piki?

Hon JULIE ANNE GENTER: There is no wrong door. Young people can access Piki through self-referral, contact through the Government-funded mental health support line 1737, seeking help from district health boards (DHBs), or their GP.

Angie Warren-Clark: Why is this Government involved in early intervention?

Hon JULIE ANNE GENTER: The mental health and addictions inquiry heard a lot about the need for intervening earlier to ensure that problems don’t escalate and become a crisis. This pilot is based off a United Kingdom model, which has a very strong evidence base. We need to ensure that that model works in a New Zealand context, particularly for Māori and Pasifika young people, who are especially vulnerable in this area.

Chlöe Swarbrick: Does this Government have the intention of expanding this pilot throughout the rest of New Zealand?

Hon JULIE ANNE GENTER: The vision that the Green Party and the Government share is that all 18- to 25-year-olds in New Zealand will have access to mental health support when they need it. I am extremely pleased that the pilot has launched, and I know that we need to ensure that it works for our young people. The pilot will be working through issues like workforce shortages and peer support scalability. We know that many communities need more support, and that is why this Government has prioritised mental health.

Matt Doocey: Why is the Minister using the figure of 10,000 young people across the three DHBs in the Wellington region when the Ministry of Health reported at the Health Committee that the pilot would be delivered to 3 percent of young people across the three DHBs in the Wellington region, approximately 61,000 young people—

SPEAKER: Order! Order!

Hon JULIE ANNE GENTER: I am not aware of the specific answer given at the select committee, so I don’t know if the numbers the member is referring to are correct. What I do know is that the advice we have from the Ministry of Health is that this pilot is expected to be accessed and used by 10,000 young people, which is nearly 20 percent of the population of young people in the affected area.

Question No. 9—Social Development

SPEAKER: Before the member asks her question, I have been warned, I think thrice, that this is likely to be a longer than normal answer.

9. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development: How many more children are living in hardship following an increase of 9,000 people on benefits compared to one year ago?

Hon CARMEL SEPULONI (Minister for Social Development): Answering the member’s question is problematic for a couple of reasons; however, I’m going to try to answer her question as best I can. The recent Household Incomes in New Zealand report did not include low income and material hardship figures for children in 2016 and 2017, because of a sizable change in levels that the officials cannot fully explain, even when the relatively small sample size of 3,500 is taken into account. This makes it difficult to directly respond to the member’s question.

What I can tell the member is that as at December 2018 the number of dependent children of working-age people on main benefits were 180,715. In December 2017, this figure was 178,310, an increase of 2,405. Through changes, like the winter energy payment, these families have been able to lift their incomes, which is critical to lifting children out of hardship. Treasury projects that this Government’s Families Package will lift tens of thousands of children out of poverty by 2021.

However, it is important that the member does not oversimplify hardship by confining it to beneficiary households. What we know from the Household Incomes in New Zealand report is that a sizable portion of poor children actually come from working families—it’s estimated around four in 10. That’s why this Government’s commitment to raising incomes through increases in the minimum wage is also important in reducing the number of children living in hardship.

Hon Louise Upston: Given her response about the number of children living in benefit-dependent homes not being the poorest, what’s her response to the Salvation Army State of the Nation Report released yesterday, that states most children living in households receiving only a benefit are likely to be the poorest?

Hon CARMEL SEPULONI: I wouldn’t dispute that statement. In fact, in my previous answer I said that four in 10 children living in households that are living in poverty are likely to be in households where someone is working. Four in 10 is not the majority; the other six in 10, yes, are likely to be in beneficiary households.

Hon Louise Upston: Why has the percentage of all children living in benefit-dependent homes increased under her watch, when it had fallen steadily and consistently since 2013?

Hon CARMEL SEPULONI: Can I just give some context to that. The unemployment rate at the moment is 4.3 percent. That’s the second-lowest that it’s been in the last 10 years. The lowest was actually the last quarter—both those figures under us. I’ve explained in the past that the dropping of the unemployment rate but the lifting of the numbers is largely due to population growth. As you can imagine, when there is population growth with adults, there’s also population growth with the children in those households.

Hon Louise Upston: Can the Minister explain what benefit numbers as a proportion of the working-age population means?

Hon CARMEL SEPULONI: The benefit numbers as a proportion of the working-age population means exactly what the member has just said. It is the proportion of the population that are on benefits.

Question No. 10—Workplace Relations and Safety

10. Hon SCOTT SIMPSON (National—Coromandel) to the Minister for Workplace Relations and Safety: Does he consider the recommendations made by the working group chaired by Jim Bolger are fair and will respect the right of individual workers to negotiate their own individual employment agreements?

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Yes. The Rt Hon Jim Bolger and his team of experts have done an excellent job of identifying longstanding problems with the New Zealand labour market and suggesting innovative solutions to those issues.

Hon Scott Simpson: Does he agree with the recommendation from that working group that just a small minority of only 10 percent of all workers within an industry would, by compulsion, be able to trigger a bargaining process, even if it goes against the wishes of the other 90 percent of workers in that sector and against the wishes of business owners?

Hon IAIN LEES-GALLOWAY: As is the case with all of the recommendations in that report, they are recommendations. The Government is considering its response to those recommendations, and that response will be made public in due course.

Hon Scott Simpson: Does the Minister agree that independence and freedom of choice are among the foundations of an innovative and competitive economy, and, if so, why is he intent on removing these freedoms from both employees and employers?

SPEAKER: Order! No, the member will rephrase the question and put it within order. There’s an assertion in that question that has not been clearly established.

Hon Scott Simpson: Does the Minister agree that independence and freedom of choice are among the foundations of an innovative and competitive economy, and is he planning on removing these freedoms from both employees and employers?

Hon IAIN LEES-GALLOWAY: I do agree that people should have the ability to make individual decisions and have freedom of choice and freedom of association. What we’re talking about with fair pay agreements, of course, is the opportunity for industries to negotiate minimum standards that apply and are relevant to those industries. So, just in the same way that having a minimum wage or minimum entitlements to holiday pay do not restrict people’s individual choice, neither will fair pay agreements.

Hon Clare Curran: What issues with the New Zealand labour market did the fair pay working group identify?

Hon IAIN LEES-GALLOWAY: The Fair Pay Agreement Working Group found that New Zealanders work longer and produce less per hour than most OECD countries. Our productivity growth has been poor and driven by people working more hours, not more efficiently. Wages in New Zealand have been growing more slowly for workers on lower incomes and have not kept up with labour productivity. In other words, we have both an equality and productivity challenge. The working group’s recommendations are set to address both.

Hon Scott Simpson: Will he make the agreements recommended in the working group’s report voluntary?

Hon IAIN LEES-GALLOWAY: As with all the recommendations in the report, they are recommendations that the Government will now take its time to consider. When the Government has done that and reached its position on the working group report, that position will be made public.

Hon Clare Curran: What have the OECD and other international institutions said about industry-based bargaining?

Hon IAIN LEES-GALLOWAY: New Zealand is an outlier amongst developed countries by having bargaining at only the individual enterprise level. Two-thirds of OECD countries have some form of sector-based bargaining, and as recently as 2008, the OECD has recommended a combination of sector- and enterprise-level bargaining because it is associated with higher employment, lower unemployment, better treatment of vulnerable groups, and less inequality.

Hon Scott Simpson: How does the Minister reconcile the concept of compulsory sector-wide collective bargaining without opt-out provisions against international labour standards that specifically state voluntary negotiations of collective agreements are a fundamental part of our labour laws?

Hon IAIN LEES-GALLOWAY: Well, again, I would refer the member to the fact that we are talking about setting minimum standards. We already have minimum standards that are compulsory. The minimum wage, holiday pay, sick pay, and bereavement leave, for instance, are all minimum standards that are compulsorily applied across the labour market. But I would also say this: the working group recommended to the Government—and we will do this—that we work alongside the International Labour Organization as we build a framework for fair pay agreements to ensure that we are upholding people’s individual rights.

Question No. 11—Housing and Urban Development (Māori Housing)

11. MARAMA DAVIDSON (Co-Leader—Green) to the Associate Minister of Housing and Urban Development (Māori Housing): Is she concerned with the finding in the Salvation Army’s State of the Nation report which shows Māori are almost nine times more likely to be on the social housing waiting list?

Hon NANAIA MAHUTA (Associate Minister of Housing and Urban Development (Māori Housing)): Yes, it is really concerning and a stark reminder of why we are in Government. Forty-six percent of people on the public housing register are Māori, so we can expect approximately 4,300 whānau will benefit from secure, warm, community homes that we are building. We know we need to do more, but we’re starting and I think we’re going in the right direction.

Marama Davidson: What specific Māori housing initiatives is she working on to help more Māori into homes, and does she think there’ll be enough to make a real difference in time for next year’s Salvation Army’s report?

Hon NANAIA MAHUTA: Well, like the member, the Government recognises that it’s important to address housing needs for Māori across the continuum, from homelessness to public housing through to homeownership. That’s why we’re actively working with the Salvation Army on housing solutions and we know that more can be done. We’re also working with Māori and iwi organisations to ensure that the solutions better meet the needs across our regions and that we are developing housing packages to better respond to those needs. What that will look like in a year is that we are having impact where it matters most, but you can’t fix things in a minute that have been left to linger for far too long under the previous administration.

Marama Davidson: Does the Minister agree that it is essential to empower Māori and ensure the housing is appropriate for whānau, and what are some of those specific plans to work directly with Māori providers?

Hon NANAIA MAHUTA: Yes, we do believe that it’s essential to work alongside Māori and iwi organisations. In fact, if we look across the spectrum as it exists now, many Māori housing organisations are participating in providing transitional housing as a step towards more secure housing options. We do understand that across the housing continuum there is more to be done, especially in terms of affordable homeownership options, but we’re starting where the need is most and where Māori organisations have identified that they want to make a difference. In fact, right now we have arrangements with 19 iwi-based organisations and are contracting with them in the areas where the need has been identified in specific communities.

Question No. 12—Transport

12. Hon TIM MACINDOE (National—Hamilton West) to the Associate Minister of Transport: Does she support NZTA’s current campaign, which promotes the message “The safer the car, the safer they are” to encourage New Zealanders to purchase safer vehicles?

Hon JULIE ANNE GENTER (Associate Minister of Transport): Tēnā koe, Mr Speaker. Yes, I do. Vehicle safety, along with road design and speed, can make the difference as to whether someone survives a crash or not. This campaign is about raising awareness with New Zealanders about vehicle safety before they buy their car, not after.

Hon Tim Macindoe: What is the total cost of the safer cars campaign?

Hon JULIE ANNE GENTER: You would have to direct that question to the New Zealand Transport Agency. They are entirely responsible for administering their own budget on road safety awareness campaigns.

SPEAKER: Order! That’s not a satisfactory answer. I think if the member is answering a transport question of this type, she has parliamentary responsibility for it, even if she doesn’t have operational responsibility. If she doesn’t have the figure, then she should say so and provide it later.

Hon JULIE ANNE GENTER: I don’t have the figure, but I can request it from the New Zealand Transport Agency. But it’s within the overall budget that has been allocated to road safety awareness campaigns.

Hon Tim Macindoe: Was she consulted by her colleague the Minister for ACC before he decided to increase ACC levies on New Zealand’s safest motor vehicles?

Hon JULIE ANNE GENTER: I assume that what the member is referring to is the fact that ACC levies are going to be the same for all vehicles now, which I think is a fairer policy. Of course, across Government, we had discussions about the vehicle risk rating (VRR) policy and whether or not it was effective at driving behaviour change, and the evidence is that it wasn’t.

Hon Tim Macindoe: I raise a point of order, Mr Speaker. I specifically asked the Minister if she was consulted by the Minister for ACC.

SPEAKER: She said she had discussions.

Hon Tim Macindoe: Were the Minister’s officials consulted on the proposals to increase ACC levies on New Zealand’s safest vehicles?

Hon JULIE ANNE GENTER: Officials and the Minister and myself all had discussions about changes to the VRR policy, which was to ensure that it was fair to all New Zealanders. I know that member is characterising it as raising levies. It wasn’t raising levies; it was ensuring that all New Zealanders pay the same levy for their motor vehicle.

Hon Tim Macindoe: What official data did she receive from those officials to inform the advice they gave her?

Hon JULIE ANNE GENTER: I have advice from the Ministry of Transport that there has been no change to the rate of vehicle scrappage since the introduction of VRR, and evidence from overseas is that annual charges, as opposed to those at entry, are not effective tools to modify vehicle purchase decisions. I understand where the member is coming from. The reality is that it sounds good in theory, but VRR did not work in practice to drive behaviour change, because the levy is after people have made the decision about what vehicle to purchase. The point of what the Government is doing is ensuring that we raise awareness so that New Zealanders can make that decision when they’re buying their vehicle and not be punished after they’ve already made a decision for which they had virtually no information.

Hon Tim Macindoe: I raise a point of order, Mr Speaker. I asked what official data the Minister had received. I don’t believe she’s answered that question either.

SPEAKER: I think quite early on she said she received information or similar.

Hon Tim Macindoe: Data.

SPEAKER: Well, you can’t have information without data. You can have data without information, but not the other way around.

Debate on Prime Minister’s Statement

Debate on Prime Minister’s Statement

Debate resumed from 13 February.

Hon PHIL TWYFORD (Minister of Housing and Urban Development): The Prime Minister began her speech on Tuesday by reflecting what a privilege it is to serve in this place. She said we’re here to make life better for people, to serve New Zealanders. I’m proud of the leadership of this Government, and, as the Prime Minister said on Tuesday—

DEPUTY SPEAKER: Order! Order! Could we just have a bit of respect for the speaker and a bit of quiet. The Hon Phil Twyford, you can continue.

Hon PHIL TWYFORD: As the Prime Minister said on Tuesday, Governments have choices: they can govern and manage the shop or they can choose to lead. After nine years of drift and neglect and managing the shop, we now have a Government that chooses to lead.

We’re leading on housing. When you look back on last year, I’m incredibly proud of what we’ve achieved in housing. We’ve built over 1,100 extra State houses. We stopped the National Party’s mass sell-off of State houses. We’ve built 1,100 extra State houses since we’ve been in office, 1,900 more families are now in public housing, and consent data shows that Government agencies are now building more housing than at any time since 1978.

Last year, for the first time in a number of years, wages grew faster than house prices. Last year, first-home buyers became the largest group of homebuyers for the first time since 2006. Last year, there were record numbers of building consents. We banned letting fees, we started investing in making all Housing New Zealand homes warm and dry, and we fronted up to Housing New Zealand’s poor treatment of vulnerable families and the misuse of the methamphetamine standard. Under this Government, Housing New Zealand is a very different organisation, and we’re going to enshrine their new social objectives in legislation to make sure that their focus is on continuing to be the compassionate landlord they’ve become. Housing New Zealand, under our Government, is a public housing landlord, looking after some of the most vulnerable citizens of this country. It is not an opportunity for Ministers to try and look tough or build a brand by stigmatising State house tenants.

Of course, we’ve built 62 KiwiBuild homes, 4,000 KiwiBuild homes have been contracted, and we’ve started a number of large-scale development projects, with over 20,000 State, KiwiBuild, and market homes to be built in them. That’s in the first six months of the programme.

DEPUTY SPEAKER: Can I just remind the Minister that the Standing Orders are quite clear that you don’t read speeches. A very experienced member of Parliament should be able to do it without notes.

Hon PHIL TWYFORD: Thank you, Madam Deputy Speaker. We have been upfront about the difficulties that we faced building additional KiwiBuild affordable homes in the first six months of the programme, but we knew it was always going to be tough. This Government is doing something in affordable homeownership that no Government has attempted since the 1970s. We are working directly with the market to get builders building affordable homes that the market simply hasn’t produced. We are changing things. We are a Government of reform, and after nine years of a Government that denied there was even a housing crisis, that sold off public housing by the thousands, and that took billions of dollars out of public housing in the middle of a housing crisis, we now have a Government that is committed to building more houses, and that is what we are doing.

This year, we return undeterred by the challenges and absolutely committed to ensuring that every New Zealander has a warm, dry, and secure home. This year, we’ll keep on building public housing. In this financial year, we’ve made 867 extra public housing places available already, and we’re well on track to meet the target of 1,600, which is the yearly target that we’ve committed to for public housing. That will mean more than 3,000 extra families in public housing instead of languishing in garages and overcrowded, substandard housing, which is what we saw under the former Government.

Our build programme and the private sector are both crippled by the constraints that we inherited from nine years of inaction by the former Government: high land prices in our major cities, high costs of building infrastructure, an overly restrictive planning system, and a shortage of construction workers. These are all constraints which hold back our plans, and that’s why we have a detailed and comprehensive plan to address all of those obstacles. Our Urban Growth Agenda is far-reaching and ambitious. It’s designed to tackle the fundamentals of restricted land supply to find new ways of financing the infrastructure that our towns and cities need if they’re to grow. And this year, we will continue to reform the planning rules to support quality built environments, incentivising quality intensification in our larger cities, and bringing urban land prices down. Later on this year, we’ll bring to the Parliament legislation to reform infrastructure funding and financing, which is currently a massive roadblock to urban expansion.

Yesterday, the Ministry of Housing and Urban Development announced new leadership for both the KiwiBuild unit and the new Housing and Urban Development Authority that we are setting up. I’m pleased to say that Sir Brian Roche, one of our most distinguished corporate leaders in New Zealand, has taken on the job of chairing the transition to the new Housing and Urban Development Authority. Helen O’Sullivan, formerly the chief executive at Ockham, one of our most successful residential developers, has taken on the job of being the head of KiwiBuild Commercial. She’s joined by Brad Ward, the deputy chief executive of the ministry, who will be responsible for KiwiBuild and large-scale projects. These appointments demonstrate that we are not cooling our heels; we are moving ahead with establishing the capability to implement our reform agenda and fix the housing crisis.

This year, we will also implement the Healthy Homes Guarantee Act standards. By passing that legislation in the first couple of weeks of this Government, we signalled our intent to drag residential rental housing stock into the 21st century. The Healthy Homes Guarantee Act standards will ensure that it will be mandatory for all rental properties to be insulated; to have a fixed, modern, affordable heating source; and to have requirements for ventilation, draft stopping, and drainage, as we have signalled. These homes—the cold, damp homes that are so predominant in the rental sector—cause significant respiratory and cardiovascular conditions, such as asthma and pneumonia, toxic reactions, allergies, and other infections that can have lifelong repercussions. We cannot continue to accept this in the 21st century, and our Government will not accept it.

This year, we will also introduce legislation to make life better for renters and to modernise the Residential Tenancies Act. It will improve the security and stability of tenure, which is such a harsh force in the lives of the one-third of New Zealanders who rent. It wasn’t uncommon during the peak of the last real estate cycle for renters to be moved on out of their homes every few months or even every year, because the law affords them so little security of tenure.

We’re also leading on transport and climate change. The Prime Minister talked about how we need to transition to a clean, green, decarbonised economy, and our transport plan is critical to achieving that. We’re investing nearly $4 billion over the current three-year period in rapid transit throughout the country to ease congestion in our cities and get people out of single-occupant vehicles into public transport, walking, and cycling, and mobility as a service, including things like Lime scooters. Throughout New Zealand, more and more commuters will be able to leave their car at home because of our investment in public transport and walking and cycling. Our Government is getting our cities moving after a decade of inaction, worsening congestion, and a blowout in the number of deaths and serious injuries on our roads. In Auckland, we’re building important infrastructure like the Eastern Busway and light rail from the city centre to Māngere.

We’re also investing record amounts in regional roads, and the spending on regional roads in the regions is $600 million more under our Government in this three-year period than it was under the former National Government over the last three years, who starved the regions of investment in their roads so they could put 40 percent of the entire transport budget into a handful of gold-plated expressways that carry 4 percent—4 percent—of vehicle journeys.

Brett Hudson: Why don’t you just build something? Just build something—come on.

Hon PHIL TWYFORD: If that member cares about spending on roads in the regions, he should support our transport policy, not his.

Hon LOUISE UPSTON (National—Taupō): I know we’re not allowed to make ironic statements in the House, but for the Prime Minister to say that this is the year of delivery is absolutely! From day one when a Government is elected, they should be delivering for New Zealand. But oh, no, no, they take a big breathing space. They send off 200-plus working groups to do the work and then decide nearly halfway through the term of Parliament that this year is the year of delivery.

Well, I’ve got news for Mr Twyford around housing. Or should we call him “Mr 47”? Forty-seven is not delivering.

Hon Phil Twyford: 47 percent.

Hon LOUISE UPSTON: Forty-seven is definitely not 10,000. It’s definitely not 1,000, and it’s definitely a lot less than 100—47! Forty-seven is a tragic amount, so if that’s the first result out of the gate in this Government’s year of delivery, goodness help us all. It’s going to be a tragic year.

Hon Phil Twyford: 1,100 extra State houses.

Hon LOUISE UPSTON: It was really interesting—Mr Twyford might be interested in this particular figure that came out of the Salvation Army’s state of the nation report yesterday. The report goes back 12 years, but one of the graphs that was put up in the breakfast yesterday was, over the last 20 years, the number of consents for new houses. The interesting thing is that 2007, the end of the last Labour Government’s term, was when the number of consents for new houses bottomed out. In 2006-07, it absolutely bottomed out. That figure has absolutely escalated over the nine years in National. Have we got enough houses for the people that we have? Not yet—

Hon Phil Twyford: You denied there was a crisis.

Hon LOUISE UPSTON: —but 47, Mr Twyford, isn’t going to cut it—10,000 may have; 1,000 won’t. Forty-seven KiwiBuild houses; $650,000—I’m not sure that that’s actually affordable, but anyway.

The other comment that Mr Twyford made in his first year, when he was definitely talking and not delivering, which is what we’re going to see more of, is in communities in this country—and as a local MP of a community that’s seen an increase in the number of people who don’t have access to housing, when I asked for financial support and I asked for financial support from the Government for people in Tokoroa who needed access to emergency housing, what was the answer? Zero—zero. So, delivering for New Zealanders, the Labour - New Zealand First Government: zero for vulnerable families who needed access to housing. The question was to the Minister of Housing and the response was quite clear: zero—zero dollars for those people, and the Minister said no one needs to live in a car. What a joke.

The other concerning thing that I think, given the back of the announcement yesterday around tertiary education and the massive reform—be very careful. Be very careful. In terms of our workforce and our people getting skills they need for the jobs of today, tomorrow, and the next decades, you’re buying an interesting challenge.

So, in terms of delivering, the Minister also made a comment about roads. I want to say, and I haven’t had a response to the letter that was written months ago now, inviting him to come and speak to people in Cambridge who are absolutely devastated that the Waikato Expressway extension from Cambridge to Piarere was cancelled. That was a planned, funded road that this Government cancelled. That’s delivery; it’s just delivery in the wrong direction. So I’m waiting for the Minister to say, yes, he’s coming to Cambridge to talk to the locals who are very concerned about the deaths on their roads, including one of the local schools at Karapiro. So I’m looking forward to your visit, Minister.

So the year of delivery—let’s have a look at what that means in the area of vulnerable New Zealanders.

Hon Aupito William Sio: Jobs.

Hon LOUISE UPSTON: Beneficiaries. Beneficiary numbers going up, actually—

Hon Aupito William Sio: You’re making that up.

Hon LOUISE UPSTON: —11,000 more people on jobseeker benefit. So if that member’s going to crow about the unemployment rate, explain to me, explain to this House, why there are 11,000 more people on jobseeker benefit. That figure was going down—had been going down for five years. All of a sudden this Government comes in—yes, you’re delivering; you’re delivering more people on benefit, you’re delivering more people on jobseeker benefit when unemployment is supposedly at 4.3 percent. And at the same time you’ve got businesses around the country who can’t find people to fill their jobs. They can’t plant Shane Jones’ billion trees. They can’t pick the apples that are hanging on the trees. That’s a year of delivery for you!

It’s quite interesting in terms of the increase in the number of people on jobseeker benefits, because, you know, it is somewhat puzzling that that would be occurring at this point. But at the same time the Government has cut the obligations and responsibilities for very simple things like someone getting a jobseeker support turning up to appointments. So, sanctions—and I’m expecting that’s going to be a big word in the Welfare Expert Advisory Group that comes back next month. This Government is delivering: it’s delivering fewer responsibilities for people who are receiving benefits and who, actually, we’d like to see in work. And the Minister today, when I asked her about the number of children living in benefit-dependent homes—yes, they are the children who live in the poorest households, and they deserve, they absolutely deserve, our support.

Hon Aupito William Sio: And the numbers grew under your Government.

Hon LOUISE UPSTON: No, that member is completely wrong: 61,000 fewer children living in benefit-dependent homes since 2011—61,000. So that’s what New Zealanders want to know. New Zealanders want to know, if this is the year of delivery, tell us the targets. Oh no, that’s right; the Government doesn’t believe in targets, because they know they can’t achieve them. KiwiBuild was 10,000, then it was 1,000, and guess what we got? Forty-seven.

So how are you going to demonstrate delivery? Delivery is not just about nice fluffy words and hot air. It’s about delivering for real New Zealanders up and down this country, whether it’s delivering to employers people to fill their jobs, whether it’s delivering for families and low incomes. Oh, and guess what? Talking about young people, we’ve seen the young people, 18- to 24-year-olds not in education, employment, or training, hit the highest record ever: 100,000—100,000 young New Zealanders not in education, employment, or training. What’s your response to that, Jan? What’s your response to that?

DEPUTY SPEAKER: Order!

Hon LOUISE UPSTON: My apologies—100,000 young New Zealanders not in education, employment, or training. Now, what does that do? That absolutely rips away the opportunity of that young person’s future.

Hon Aupito William Sio: That’s a legacy from the previous Government.

Hon LOUISE UPSTON: It is absolutely not a legacy. You’re dreaming. You are absolutely dreaming. I mean, the reality is this side of the House quite proudly believes that people are better off in work. The opportunities for their future are better. They’re also better able to provide for their family. And for a Government that is focused supposedly on children in poverty, I would have thought that reducing households’ dependence on benefit would have been a priority, but it’s anything but.

We think it’s important to support New Zealanders, and we did support the legislation around children in poverty, but we want to see the results. We want to see the results. We want to see the actions. We want to see delivery. Unfortunately, this side of the House isn’t too optimistic about what that’s going to look like, because we haven’t seen those results.

I want to touch on a couple of other areas, because it’s about trends and changes. Whether you’re looking at NEETs, whether you’re looking at recidivism with people leaving prison, whether you’re looking at those on job seekers, whether you’re looking at the number of children living in benefit-dependent homes, New Zealanders should be very disturbed to see that those statistics were all coming down over the last five years. Guess what? They’re all going up. So that’s this Government’s delivery. That will be the Labour Government’s delivery for New Zealanders. It’s hardship, it’s pain, it’s suffering, and this Government needs to do more than just talk about it; you need to deliver results.

So we’ll be watching. We’ll be holding you to account. That’s the job of the Opposition. We’ll be expecting 10,000, not 47, and New Zealanders will be watching to test whether your words actually count. Actually, a lot of them have decided that already. The Prime Minister’s statement, unfortunately, was a flop.

Hon SHANE JONES (Minister of Forestry): Kia ora anō tātou. Look, I will inject into my speech a tone of characteristic modesty—sentences that are designed to address some of the attacks that have been directed towards the Government, but in particular to the Prime Minister. I want to start with some of the falsehoods that have been spread around pertaining to China. I think it’s been a very, very dim and bleak episode when we had the other side of the House insisting that somehow, because our Prime Minister has yet to make her way to China, this is somehow hitherto unknown. In 2011, 2012, 2015, and 2017, John Key did not go to China. Now, they never developed the architecture that led to the free-trade China deal. That architecture lies with the largest party on this side of the House. So in terms of our Prime Minister being put under the pressure for not having gone to China, know your own history.

Secondly, the most egregious case recently, where matters did get very stressed in terms of exporters in China, was under the watch of the other party, otherwise known as the Opposition party, National, when their poor handling of the steel coming out of China being referred to the World Trade Organization—that did lead to problems for Fonterra; that did lead to problems for various other exports, including our major kiwifruit exporter. So it’s important that Kiwis realise that this is just fiction from the other side of the House. They realise that because we’ve struck out on a particular direction, where we value and do not conceive sovereignty through international popularity, we have changed the rules and changed the law so that it is not simply knock on the door and you can have whatever piece of land that New Zealanders own; you can sell it internationally. We campaigned to introduce those restrictions. Now, admittedly, I did provide some wriggle room for the forestry sector, as you would imagine—a forestry Minister concerned about forestry playing a bigger role in terms of climate change—but, by and large, what we campaigned on has been developed. That should not be construed or manipulated as to some sort of new set of problems in respect of China.

I want to now go on to the importance of what Mr Twyford is doing in respect of housing. There are two streams of work which the last regime failed to deliver on. I need to say no more than what Bill English said when he put up the white flag and gave in to the planners of the Auckland Council. He himself said—and I think he may very well have been the Prime Minister when he said it—that those unelected, obscure characters had more power than he did. Mr Twyford is bringing forward policy. We will have an uber - mega-authority where those shadowy, unelected officials will not be able to thwart the ambitions of New Zealand homeowners or the New Zealand Government. That organisation, unfortunately for both him and I, takes a tad longer than our rhetoric might suggest, but that organisation is going to root out those obstacles which have, under the last regime, gathered momentum and gathered strength. That’s the first thing.

The second thing: there are two sources of capital, initiative, and power to deliver on housing. One is through the State funding, developing, and owning houses. The other is finding the right mix of policies to unleash the ability of the private sector itself, not only to develop property to meet whatever the appetite is in the market but to work with the Crown and, within a certain envelope or permission space, develop property that can be onsold in partnership with the Crown. Now, why should we not harness the ability of the private sector to develop and deliver on those sorts of outcomes, because that’s what society wants? Now, we can’t be held responsible that there are land bankers rewarded by the last regime—probably funders to elements in the last regime—who sit and gloat—

DEPUTY SPEAKER: Order!

Hon SHANE JONES: It’s all public information, Madam Deputy Speaker.

DEPUTY SPEAKER: No, but there’s a very clear Standing Order about it, and the member knows it well—he’s been here long enough.

Hon SHANE JONES: I withdraw and apologise if anyone has taken offence. Please look at the pecuniary interests. After all, a number on that side of the House seem to, along with that discredited environmentalist Mr Norman—

DEPUTY SPEAKER: Order! Order!

Hon SHANE JONES: —do that with mine. However, I will continue with my speech.

DEPUTY SPEAKER: Thank you.

Hon SHANE JONES: I shall continue with my speech. I’ve identified two sources of power, two sources of capital, and two sources of initiative. I’ve identified that these things are long-term challenges because of the period of time that has elapsed since the State was a lot more atavistic in that regard.

I want now to turn to transport. Now, we’ve heard from various people, both elected on that side of the House and outside of the House—fiscal crock pots—alleging that, somehow, we are denying the regions of New Zealand roading relief because we’re no longer going to continue with this cult-like rhetoric, certainly in my area up North, that four-lane highways had one, been funded; two, the designations had been; and, three, they were just an insect’s distance away from starting—absolute rubbish. The four-lane highway mirage up North had never ever been funded. It has been allowed to gallop, as my own regional transport committee, unfortunately fouled by the presence of certain National MPs in that committee—what have they done? They have continued to use that committee as an echo chamber. That is wrong—in fact, that is wrong in politics, and I put them on notice: I’m not going to allow that sort of behaviour to be continued to manipulate and misrepresent what the Government is doing in terms of regional roads.

Of course, now I get to KiwiRail. KiwiRail was on—well, it actually wasn’t on life support, because the last Government hated rail. Now, this Government is investing in rail. Now, once again, these large capital infrastructure projects do take a long period of time to gather momentum. First thing you do is you change the settings. Second thing you do is you provide fiscal certainty. Third thing, get into execution and delivery, and this is the year of delivery. So we are already expanding KiwiRail’s reach into the regions. We are already endowing KiwiRail with capital to build new hubs, to build new logistics centres. Why? Because we want to effect the transfer from the roads of heavy transport and freight on to rail. And wait, there’s more: we’re now going to turn our attention to coastal shipping. However, I won’t steal the thunder, as I’m wont to do from time to time, from Mr Twyford.

I want now to turn to some of the foolish things that have been said by “Epsom salts”, otherwise known as Mr Goldsmith.

DEPUTY SPEAKER: Order! Order! I really don’t think that that is within the Standing Orders. Every member is entitled to respect.

Hon SHANE JONES: Right—OK. Let me elaborate what I’m meaning to say: there is too much sulkiness from that member when he stands against regional New Zealand, who are embracing, who are promoting, and who are owning the investment initiatives which are enlivening the economy of provincial and regional New Zealand. What do Kiwis see? They see that, number one, the National Party hates the idea. We’ve already had it stated by them: they’re going to close it down and they’re going to use that money for tax cuts—that’s what they’ve said—or they’re going to use that money, because there’s not enough money, to fund all these absurd promises they’re wandering around the country and making. Kiwis, do the maths: there is not enough pūtea for them to honour their promises.

But the reality is that deep down, it’s National Party grandees within the regions—and I’m not personally antagonistic towards them—who are bringing proposals and desire to see the fund dedicated to that purpose, and dedication is what we represent. For the next year, 18 months, until our date with success—whenever the next election is—you will find that we will roll out our projects and we will continue to fund them. We will not be deterred; we will not be put off by these sulky remarks emanating from the list member of Epsom. Now, to suggest in some manner or form that that’s breaking the Standing Orders—I fail to see that.

Look, my final point is that I want to stand with Mr Nash. Mr Nash has been very strong to ensure that our fisheries policy is a blend of environmentalism and industry. To suggest, as Russel Norman has done, that somehow he is breaking the law or breaking the rule, I say to Russel Norman—a known offender, who’s been in our courts—look in the mirror.

DEPUTY SPEAKER: I didn’t interrupt the member, but I will warn the member that you do not argue with the Speaker. You were disrespectful to a member. That is not within the Standing Orders, and if you do it again, I’ll send you from the House.

TODD MULLER (National—Bay of Plenty): If there is an image that defines the Labour - Greens - New Zealand First Government coalition, it is the image of the Labour Party component of that coalition coalescing together for their two-day conference, and the Prime Minister, with the television cameras there, working from table to table, extolling them that this is the year for delivery, which, as an aside, makes me wonder what last year was. The year of pre-delivery? Oh, the year of being, I guess, delivery-adjacent.

I know what it was. It was the year when that side of the House had to work out what they were here for, because they hadn’t planned it. They spent most of the time working out how the swivel chairs worked and what the buttons were for, and, in the meantime, sending 200 working groups—[Knocks over glass of water]—oops—away.

Greg O’Connor: Counting how many bills haven’t been paid.

TODD MULLER: No, this is called climate change! The water’s rising—you should know that, being a good man from Ōhāriu. So what is absolutely clear is that they weren’t prepared. They hadn’t done the work, hence, as my good colleague Louise Upston mentioned, we have all these working groups. But what was more spectacular was that they went from that moment to a press conference, where the Prime Minister, looking down the camera, said “This is our year of delivery.”, and then turned to her hapless housing Minister, who said, “You know that we said 100,000 homes in 10 years to be built in KiwiBuild—you know we said 10,000? Well, yeah, nah, it’s about 60. And, actually, it’s too hard to have a measurement of building KiwiBuild houses each year, and so we’re going to scrap it.”

In that vignette, you saw the flaw of this Government, in that when they were given the opportunity to stand behind a commitment that was front and centre for their election campaign, they have completely failed—completely failed—because they hadn’t done the thinking and hadn’t done the work. In all of these systemic, challenging, complex issues that Governments exist for to solve on behalf of New Zealanders, they have kicked to working groups to do the work for them, because they didn’t have the application while they were in Opposition.

Another example of such lightweight thinking, from my perspective, is this extraordinary rhetoric that we’re hearing emanating from the other side about the upcoming well-being Budget. I can tell everyone listening that I have a sense of what it’s going to be. For a start, there will be an extraordinary amount of money splashed out. They have $17 billion more in tax receipts expected than when we left as a Government. Off the back of their promises, expect a huge amount of money that they will flood around, and they will wrap it with an extraordinary amount of emotive language. They will say “We care.” because, in their view, the function of leadership, the function of caring, is how much money you spend, not the actual impact you make on individuals.

We had Better Public Services targets across the public sector. They were unyielding. They were tough. They were uncomfortable when we had to report against them every quarter. They’ve got rid of them because they don’t want to be held to account for delivery. They just would like the opportunity to stand in front of New Zealand and say “We care.” because they believe leadership and being in Government is a function of the warmth of your speech, not the ability to actually deliver an outcome.

The other aspect that sits, I think, quite strongly behind their well-being Budget rhetoric is a fundamental sense, almost, of paternalism—that, actually, well-being is something that is conferred by the State, and well-being is something that is a function of Government effort and contribution. They don’t have any sense that, actually, for lots of New Zealanders, well-being is something that is in their essence. It is who they are. It is what they bring to their communities, to their families, and to their lives. They don’t need to be anointed by Jacinda Ardern for well-being; they have it in essence in who they are.

That is a key philosophical difference in their view, which has well-being as rhetoric and well-being as emotive language that you can wrap around people in speeches, but no appetite at all for hard, difficult, uncomfortable measures that actually drive you to perform. All of those that were already in place that our side, when we were in Government, found difficult and hard to deliver against because that was their purpose—they’ve all gone. It’s much easier to give a warm speech; it’s much harder to deliver, as Phil Twyford knew as he looked down that camera and said, “No, not 100,000 homes; no, not 10,000; no, not 1,000; actually, 62.” That is woeful—absolutely woeful.

The other area that I’d like to cover off is an example that we have touched on already today, and that is Phil Twyford’s obsession with light rail at the expense of my community. We heard it earlier. It is roughly $3.7 billion, although we don’t have the numbers. We don’t have the business case. We have some theoretical assumptions of how many passengers might be impacted, and we don’t know when it’s going to be built and we don’t know when it’s going to be finished. I represent a community that had the numbers. I represent a community in the Bay of Plenty who were told “$520 million, April 2016, seven kilometres off Tauranga north”. The tender started in the middle of last year, and Phil Twyford and that Government took it off the table and said to the Bay of Plenty community, “We would prefer our little tram project in Auckland rather than your needs.” He doesn’t come to Tauranga, doesn’t come to front the community, and then will talk to the occasional local government representative and thinks that that’s actually delivery. It is hopeless, it is failure, and you have completely let down my community, Mr Twyford, and our community, I’m sure, will have a very long memory when it comes to that.

The previous speaker referenced China. My view is that this Government’s approach to that critical relationship is inept and clueless, because over the last nine years under the John Key - Bill English Government, what you saw were two leaders who understood the power of relationships and understood that if you have a critical relationship like we have with China, you actually have to invest in the relationship. You have to build it and, from that strong relationship, you can deal with the challenging issues that come along. But you have to have trust first. You have to have the connection first. This Government doesn’t believe in that. This Government is caught between the virtue signalling of Jacinda Ardern, who, in her heart, finds the projection of China influence and power very uncomfortable, and, reflecting back on her socialist youth, thinks, “Oh, I’m not really happy about this.”

On the other side, Winston Peters, who has built a career, in my view, of having an inbuilt anti-Chinese bias that would often come to the fore, who knows more than most people in this House about the power of words and the power of language and when to say it and when not to say it—and he is very deliberately sending a signal around where he thinks the priority relationships are, because that’s where his essence lies. He is not someone who is naturally aligned to the growth of China and the opportunity that that economy and country has delivered for my community and for this country.

It would all be funny if it wasn’t so important and critical to the lives of so many people in New Zealand, but they do not have the capacity to manage the relationship that they now find themselves in. You can see it in their eyes when we ask them questions. There’s that look, and you see it when people are in over their depth.

DEPUTY SPEAKER: I don’t actually see it.

TODD MULLER: You could see it in the Prime Minister’s eyes when we were pressing questions yesterday on this topic. They know when they are in over their depth, and at the moment, on this issue, with its sensitivity and the impact on this country and our economic fortunes, they’re making a complete hash of it, because they are caught in that half-pie student politics of “Let’s say what we think sounds good on television.” versus the responsibility that sits on that side for actually governing for all New Zealanders, and governing with a capacity and capability that articulates a vision for these critical trading relationships around the world.

They don’t have that vision. They don’t have that capability, and we are seeing it in terms of their failure of delivery, not only in a foreign affairs context, not only in a housing context, and not only in a jobs context. We left the economy with 10,000 jobs a month; now it’s 600. Climate change will be a very big test of their commitment. So far it’s rhetoric, with the exception of oil and gas, which is thumping Taranaki and, actually, from a net greenhouse gas global perspective, runs real risks of taking us backwards. Failure—an “F” for failure.

DEPUTY SPEAKER: Now, I understand this is a split call.

Dr LIZ CRAIG (Labour): Just in response to the member opposite’s conversation about targets, I’d just like to point out some of the limitations of the previous Government’s targets, where, month after month, they monitored waiting times for emergency department presentations, but what they failed to account for were the 40,000 hospital admissions every year for children with poverty-related diseases and their not actually thinking about the consequences of the previous Government’s policies on those children and their lives.

What I want to talk about today is just reflecting on some of the Prime Minister’s comments in her speech on Tuesday, because what she was talking about was the fact that the Government had to make a choice about the way they governed. What she was saying was that they could make a choice about governing the way the previous Government did—taking no risks; just governing year after year; deferring the challenges, which we call kicking the can down the road; and just doing governing—versus taking that strong leadership and tackling those big challenges that lie ahead, not just for the next three years but for the next 30.

Looking back on what we’ve done over the last 12 months, I’m really proud that we’ve taken that choice that the Prime Minister made to lead, because I look at all of the things that we’ve done in housing and for our children and our health system. But the other thing is, I look at the challenges that lie ahead in terms of building those new houses so people can get warm, dry homes and in terms of making sure people can access those hospital systems, and I’m still pleased that we took the Prime Minister’s approach, because even though achieving change is difficult, the consequences of delayed action are much, much more dire.

I think, for me, looking at what’s happening where I live in Invercargill, the best illustration of the consequences of a hands-off approach is what’s happening to our New River Estuary. What’s happened there is, year after year, we’ve just done the same business-as-usual. What’s been happening is, year after year, we’ve had sediments and nutrient from upstream agriculture pouring into our estuary. We’ve had our sewage discharging untreated waste water into the estuary. We’ve had stormwater mixed up with raw sewage going into the estuary because of the state of our pipes. We’ve had rubbish. We’ve had leachate from the old rubbish dump. We’ve reached a point now in our estuary where it’s completely tipped, so, basically, what we’re seeing now is just huge, thick, deep mud that’s smothering everything.

I just want to read you something from one of our recent reports. It says that in the most significant areas of oxygen depletion in the highly eutrophic areas of the Waihopai and Daffodil Bay, the sediments “were often characterised by strong odours of sulphur and, when disturbed near water, released black sulphide rich plumes.” Looking at our beautiful estuary that used to have that beautiful white sand and rocks going down to the water where people use to swim, now covered with black, thick mud, the problem is that year after year, resource consents were issued, and year after year, we just continued business-as-usual. The reports kept coming, but nobody stopped to think about the impact of what all that was doing to our environment. I think the problem is that we’ve got a lot of other areas around our country that are getting to the same point. They’re like an estuary that’s tipped—that’s at a point now where doing nothing is just not an option.

On the freshwater quality point, I’m proud to be part of a Government that’s going to take strong action and that’s going to develop strong environmental standards and a national policy statement for fresh water. But thinking about the same situation we’ve got in housing, where we’ve reached that tipping point, and now all those kids are coming into hospitals with poverty-related diseases, I’m proud of what we’ve done over the last 12 months. We’ve stopped that sale of State houses. We are starting to rebuild some new ones. In Invercargill, we’re having that conversation about how we can all work together to get those homes built as quickly as possible so that people can have warm, dry homes.

But also in our health system, we’ve made some huge changes. We’re making it much, much more affordable for community services card holders to go and see the GP. We’re increasing the wages for a lot of our health staff, and we’re looking at putting that huge investment back into those hospital buildings that have been let go for so long. We’ve just got so many other areas where we’ve got to move forward and where we’ve got to that point where we’ve reached the tipping point and we’ve got those huge issues we’ve got to grapple with. But, as a Government, instead of doing nothing, we’re taking that lead. We’re making that decision to tackle those issues, not just for the next three years but for the next 30. So I’m proud to be a Government that’s been so active in the last 12 months and working hard for the years ahead. Thank you.

Hon CLARE CURRAN (Labour—Dunedin South): Thank you, Madam Deputy Speaker. It’s a new year, and this Government’s got its head down and it’s working hard for New Zealand. It’s also got its eyes fixed firmly ahead on developing a long-term blueprint for a better New Zealand, which means building a productive and sustainable economy for everyone—not just for a few, but for everyone. It also means improving the well-being of New Zealanders, and it also means taking a new approach to leadership, an approach that’s about showing compassion, showing positivity, showing dignity, and also showing respect for each other.

Meanwhile, the Opposition barks at cars, practises the machiavellian dark arts, demonstrates petty and vindictive politics—politics that are about dog whistling. We’ve just heard speeches about this this afternoon: dog whistling, condescending, and mansplaining, demonstrated just recently by the production of sexist advertisements, which turn New Zealanders off, quite frankly.

If you ask any New Zealander what they want from their politicians, they will say a hard worker, a local representative, strong local representation, focusing on the bigger picture, delivering for everyone, and thinking about the future. I recently just delivered—well, not personally; I had a good team—23,000 surveys into homes in my electorate. Hundreds of responses are coming in. There are more coming in every day, and they’re yet to be properly analysed, but a cursory analysis of what the 2018 Government actions were that had the most awareness and that people were the most appreciative of were the free under-14 GP visits, the winter energy payment, and the fact that Dunedin will get a new hospital. Minimum wage rises, the first years of fees free, and the extension of paid parental leave were highly appreciated, and there was very high awareness of it as well.

This is the demonstration of a Government that is actually delivering things that mean something to people and are making their lives better. It’s a sign of a Government that actually is doing what it said it would do, which will benefit all New Zealanders. It’s a sign of a Government that’s not afraid to face up to the big issues and that’s actually not afraid to take some risks. It’s a sign of a Government that knows that the measures of success are about building that sustainable, productive economy but are also about the health and happiness of New Zealanders and protecting the environment, as well. My colleague Dr Liz Craig just talked about that metaphor—for the last nine years, really—which has ended up being that dark mud of that estuary, where there’s been just a complete disregard for the importance of protecting the environment.

We said that Dunedin would get its new hospital, it would be in the central city, and we’d start work on it in our first term—we’re on track. We said that housing would be a priority—we’re on track. This is a Government that has built 1,100 new State homes. That was a Government that sold 5,000 State houses and left thousands and thousands of people homeless. We said that we would get the Hillside rail workshops up and running. We’re on track to start doing that. The Parliament heard that this is a Government that is investing in rail, and we are heading in that direction. We are delivering. You are seeing it in the regions, you are seeing the growth, you are seeing the investment in regional development and regional New Zealand, you are seeing the hope in people’s faces, and you are seeing a sense in our Work and Income offices of a change in culture, a change in attitude. This is a Government that is delivering for New Zealanders.

DEPUTY SPEAKER: I understand that this is a split call.

GINNY ANDERSEN (Labour): Thank you, Madam Deputy Speaker. Look, I always looked up to my elders, and my grandfather was one who I always used to listen to. He was a tough old guy. He was Irish, he was Catholic, and he was a truck driver. The one thing I always remember him saying was “If you’re going to do a job, you should do it properly.”, and I’ve always stood by those words myself. He took pride in his work, and there was one thing that he hated more than a shoddy job, and that was a job that looks kind of OK from the outside but, when you lift the lid, it’s rubbish. That’s exactly what the National Party has done to New Zealand for nine years, and that is exactly what this Government has been repairing. And let’s have a wee look. Let’s have a compare and contrast over some areas to see what’s been going on, because what happened for nine years was we saw spin and buff and shine, but the real grunt, the real building of giving New Zealand what it needs, was ignored.

Housing: in Hutt South, where I reside, we saw houses torn down, vacant land, and people homeless. We saw people kicked out of their houses for earthquake reasons and vacant land for six years. That vacant land is now being rebuilt on, and all we can hear is moans from the other side of the House—rebuilding on vacant land that has lain vacant for eight or nine years.

Mental health: mental health in areas where people were ignored and put on waiting lists. We are now looking into how we rebuild that with a full mental health inquiry and pilots, like we announced just yesterday in Porirua for young people aged 18 to 24.

Meth testing: that’s a pearler, that one—making up stuff that didn’t even have a real meth-testing standard, which caused real issue. We’re having research, having a real basis to look at what’s happening, and establishing a meth-testing standard that actually works.

Paying people what they’re worth—that’s a good one. Front-line services have been worked to breaking point, whether it be teachers, police, doctors, nurses, or the midwives here today. All of those services have been relied upon for their goodwill and have had to work overtime without being paid. This Government has had a long job, and still much to go in advance, to put that right and reinvest in those front-line services.

The schools in which those teachers work and those students learn every day have been left leaking—left leaking and rundown, year after year. I only have to turn, again, to my own patch in Wainuiōmata, where just last year, we had the Prime Minister announce a complete rebuild of Wainuiōmata High School for $24 million. Kids in those areas had been going to a school which had leaked for well over a decade and had been left in disrepair, and what we see is that being rebuilt.

All through that we see families and New Zealanders with more money in their pocket on an average basis—another 75 bucks in the pocket for over 385,000 families. More money in their pocket and more money in the local economy, we see, because people can buy with that extra money.

We see making front-line services more responsive. I think the reason why New Zealanders are so pleased with this Government is because they can see the benefits of doing a job properly. They can see the benefits and the real examples of people being able to be put into homes instead of being fobbed off into motels—of being able to give people the services and the responses they need. All we hear from the other side is a complaint that we’re not fixing their mess quick enough, and that’s what I find difficult—not happening quick enough.

I believe that it is the Kiwi way to do a job properly, and that is why I am proud to be part of a Government that is doing exactly that, from building to reinvesting, to looking after people, and to governing with a heart. That is why I am proud to be part of this Government. Thank you.

GREG O’CONNOR (Labour—Ōhāriu): Thank you, Madam Deputy Speaker. As someone who’s come to this House a little closer to the end of my working life than the start of it, I reflect that while I’m a young man—in fact, I enjoyed a game of rugby on Saturday and showed that I was well able to keep up with some much younger men. However, it does leave me some limited time to be part of a very successful Government that is going to achieve a lot and that has to achieve a lot. In doing so, I’ve learnt—a little bit like my rugby experience—don’t try and get to every ruck. Pick the important ones, usually the ones where you’re close to the sideline, where the cameras are, perhaps. But yes, be very specific about what you want to achieve.

The one thing I would like to achieve before I leave this House is something that this Government is focusing on, and that is housing. It doesn’t matter what else we do. Every other problem we look at, so often, all roads lead to housing. I was fortunate enough to go to Australia on a select committee trip with the Social Services and Community Committee, and we were looking at social housing and we were looking at social issues. It was very clear—often after a few days of being out of your comfort zone, looking at these things, you sit down and think “Now, what did I really learn?”, and do you know what I really learnt is that all roads really led to housing. If you can fix housing, if you can focus on that one area—OK, we will all have problems. It’s not going to be all singing “Kumbaya”, and it never will be, but what you do is focus on the things you can fix.

I think it’s no accident that the Opposition are focusing on housing. Every day we have the Opposition housing spokesperson there, performing like a television character—possibly thinking that Mr Waldorf and Mr Statler are up there in the balcony, watching while she does so. But it’s good, and when I listen to that, I think it’s great—bring it on. We’ve just had Mr Bayly talking about the very thing. Is it Mr Bayly? Yeah, I can never quite remember which of the “Stepford husbands” I’m looking at when they speak over there. But they’re bringing the same thing up, talking about housing. Bring it on guys. Keep it up. Keep talking about housing, because every time you do, everyone at home here listening—and I know on a Thursday afternoon there’ll be many of them listening—is thinking, “Yes, it is about housing.” So keep it up. Keep the pressure on. We’ll feed off that. We have to feed off it for the sake of New Zealand, because I know that when I leave this place, if there’s one thing, short term—yes, there are lots of other things that we can fix. Yes, there are other things we do need to fix.

I mean, I’m not going to climb into the Opposition. They were led by “Teflon” and the cars. I think one of the best things I heard about the previous Prime Minister was he prepared New Zealand for sale, and that’s actually, I think, one of the best descriptions of where we find ourselves—you know, where we have New Zealand prepared for sale. It’s like that car you prepare for sale. You shine the wheels, you make sure you get—

DEPUTY SPEAKER: I’m not doing any of that.

GREG O’CONNOR: Sorry, Madam Deputy Speaker.

DEPUTY SPEAKER: My husband does it.

GREG O’CONNOR: That was a metaphorical “you”, but I will say one shines the wheels—an opportunity to repeat, please—shines the wheels. You know, one perhaps even goes over the scratches. But at the end of the day, it’s still a dodgy old thing, and so at some stage you’re going to have to do something about the engine. You’re going to have to do something about the diff, because—the other thing—it will grind to a halt. And that’s actually—

DEPUTY SPEAKER: I don’t even know what they are. Don’t bring me into it.

GREG O’CONNOR: I just really am going to have to start concentrating on that, Madam Deputy Speaker. I’ll come back down to earth if I can, but I’m finding myself so passionate about this that perhaps the vagaries of the parliamentary rules are escaping me, but I will endeavour at this moment to refocus, because refocus we must, and it’s all about focusing on housing.

You think about so many of the issues we have: health. I mean, growing up—how important is it? So many people stand up here and speak about their old family doctor. What family doctor, when you’re forced to move house every six months? We talk about education. I mean, how important is it, looking back—and I would say generally in this House, not everyone, but most of us have relatively stable backgrounds where we have family friends, where we get to go to family reunions. Our schooling was a big part of it. That’s where we build our friends. Imagine where you don’t have any stable housing, where you have to keep moving, and then, of course, you end up in trouble, because every time you got to a new school there are already established friendship groups. You’re trying to break into them, you end up in the wrong group, and you don’t only end up in the wrong group—part of the problem—you are the wrong group yourself, and so—

DEPUTY SPEAKER: I am not in the wrong group.

GREG O’CONNOR: Oh, there I go again, Madam Deputy Speaker. In the 25 seconds left to me, I’ll make sure. But, seriously, I invite the Opposition: keep it up. Keep up the attacks on housing. Keep it going, keep the debate out there, because that is what is going to be so important, because it does need fixing. What they are focusing on, they are focusing on the very issue they know that they have left—the biggest issue they have left. We will fix that. Thank you, Madam Deputy Speaker.

ANDREW BAYLY (National—Hunua): “We will fix that.”—isn’t that beautiful? I’ve just been sitting here, and for a start, my first observation is I haven’t heard one of these people talk about the Prime Minister’s speech—just nothing. It’s dead silence. But I’ve heard these lovely expressions. I loved the one before: “We have our eyes firmly fixed ahead.” Well, if you don’t, normally you fall over. I don’t know—it’s some sunset, going out there. And this sort of “Bring it on, let’s talk about housing.”—54 houses, actually. I just can’t understand why some of the members who have just spoken want to highlight that as your number one issue.

I’m just going to have a bit of a ramble here. Just over the last couple of months since I’ve had the opportunity to speak in the House—I just want to talk about some of the economic situations, and, of course, we’ve got a Government that likes to portray that everything is going swimmingly well. Well, it’s not, actually. In the last of couple of months since we reconvened, we’ve seen the growth rate of New Zealand drop quite substantially. So under a National Government, when we were in power, we were achieving growth rates of 3.5 to 3.6 percent. We are now at 3.1 percent, and every projection that the Reserve Bank have put out—and we had a meeting with the Reserve Bank today—has a figure starting with 2 percent next year. That is actually a travesty because, in many ways, the impact hurts most on people, but, for the Government, it means much less income—much less income that they talk about for all these social programmes they want to do. Every 1 percent drop in GDP is roughly a billion bucks—just a bit under. So that cuts to the core of their ability to govern and to be able to do the programmes they want. But through their poor management—and I’m going to talk about that in a minute—it means less revenue.

The other thing is it’s a loss of opportunity. It’s a loss of opportunity for New Zealanders, because it’s great to say we’re growing, but we could be growing so much faster in New Zealand, and that is the travesty about this. I just think what it leads to is a loss of security for people, particularly for their jobs and particularly for the small businesses that most New Zealanders work in, because when you have that environment, there is uncertainty and risk. Even the Reserve Bank stated in its Monetary Policy Statement—they’ve noted this, and I’m just quoting from them—“There is a risk that we have understated GDP growth”, and it’s shown to be more substantial than they believe at the moment.

Also, what’s happened is consumption growth: the spending that households go out and buy when they’re out shopping has dropped 2 percent from 6 percent two years ago to now just over 3 percent. That type of stuff is the stuff that fuels economies and that makes it more important for New Zealand, gives the money for Governments to go and do stuff, and it gives the money for people to go and spend and circulate it and make New Zealand a better place to live. That’s not taking place.

Why is there that uncertainty? Well, this is a Government that’s brought it on themselves. I know the Prime Minister wants to say it’s all international, and that unbelievable speech from the Deputy Prime Minister when he was only just the coalition partner—his first, inaugural speech—where he said, “We are about to go into Government with Labour, and it’s all about what’s happening overseas.” Well, actually, it’s not. It’s about what’s happening here in New Zealand. As a result of the policies of this Labour - New Zealand First Government, they have sown the seeds of uncertainty and risk in this economy. We’ve seen what’s happened with industrial relations, catering for their union mates. We’ve seen the issue around overseas investment and all of the stuff that’s going on, and we’re seeing a drop in the uncertainty around that. We’ve seen the slow but progressive slide in immigration, and, of course, we want to see only reasonable immigrants. We want to see the right immigrants coming to New Zealand, but for our certain industries—certainly in the area my colleague Todd Muller here beside me represents—where we do need workers, we need those workers and we should be getting them into New Zealand.

Of course, we’ve got other things like the idea that’s being floated about a capital gains tax—a lovely little proposition. So what happens when people get nervous, and businesses in particular?

Hon Kris Faafoi: They roll their leaders.

ANDREW BAYLY: They stop investing, Mr Faafoi. They stop investing and they also stop hiring people, and that’s the thing that bites into ordinary Kiwis—not us here in this debating chamber, but the ordinary Kiwis in our electorates.

We’ve seen the uplift in the unemployment rate in New Zealand. So what does all this mean? What does all this downturn in the economy mean? It means less money. When you’ve got a Government that sets about doing flabby spend, which is what this Government’s doing in a number of instances—flabby, inefficient spend—what are the other choices? Well, then you have a debate about debt, and we can already see the Labour Party and the Greens and all that sort of stuff saying, “Oh, we don’t like the debt word. We don’t want to have that discipline. We think we should spend more.” It’s fine if you spend that stuff on good stuff like capital spend, like infrastructure, like roads like Mill Road in Auckland, like the Tauranga one, or the Timaru motorways down in the South Island—those are the types of investment that we want to see, but not flabby spend.

So what do you do if you’re the Labour - New Zealand First Government and if you can’t raise the debt—and I think there will be a little bit of that in time, but what do you do? Well, what’s the only other option?

Hon Louise Upston: Tax.

ANDREW BAYLY: Tax. That’s right—tax. The incredible thing: this Government, in the last 14 months, has already put and imposed on ordinary New Zealanders another $2.6 billion of taxes.

Hon Kris Faafoi: It’s working.

ANDREW BAYLY: And they said they weren’t going to do it, Mr Faafoi. It only takes 14 months to turn that round and say, “Oh, no.” It’s a bit like the tram going down Mill Road—“Yes, we’re going to have it done by 2020.” No—14 months later, no. No—no.

So what are we going to do? I think, from our perspective, everyone in New Zealand should pay their fair share of tax, but no more. But does the Labour - New Zealand First Government regard New Zealanders, owners of businesses, like that? No, they don’t. They see them as a cash tin. I think the issue about this is that even without them changing anything from now, over the next four years there will be nearly $18 billion of extra revenue taken in by this Government on a per annum basis. That is a heck of a lot of money, yet this Government’s already talking about additional taxes. That’s not enough for them.

I think the issue around capital gains tax is going to be a fascinating issue, and I cannot wait for the announcement next week. Of course, who did they ask to devise it? The architect of some of the most complicated tax reforms in New Zealand—the very person. Of course, they’ve had him out there helping soften up the public on behalf of the Labour - New Zealand First Government. I can’t wait to see what happens, because that person was the architect of some very complicated reforms, and if you want to talk about complication, let’s talk about capital gains tax. It is complication innate. It is there, and it is the single most important issue about the introduction of this new tax.

I think the issue with it is that the need for it has not been proven—the need has not been proven. We all agree with the need to support our vulnerable and invest in infrastructure, but just to have this rapacious grab for money to fund ill-conceived goals is wrong. I think the issue around here is that there’s a perception that by imposing a capital gains tax, we are going to target the wealthy in New Zealand. The so-called wealthy—there’s this mystical sort of view about it, but, unfortunately, it is middle New Zealand who will be the worst off from a capital gains tax, because they’re the ones that own the investment properties. Forty percent of properties in New Zealand are owned by mums and dads. They are the ones who are going to be bitterly disappointed when they find out anything about capital gains tax and how it will affect them. It will also affect the 530,000 businesses owned by the mums and dads in New Zealand—the hard-working people who only employ one, two, or three people, or maybe none at all. They are the people who are going to be affected by capital gains tax. We cannot wait to see what you come up with next week.

ASSISTANT SPEAKER (Adrian Rurawhe): I understand this is a split call. I call the Hon Julie Anne Genter—five minutes.

Hon JULIE ANNE GENTER (Minister for Women): Tēnā koe, Mr Assistant Speaker. Tēnā koutou e Te Whare. I am so proud to be a Green Minister in this coalition Government. In fact, I was reflecting, listening to the Rt Hon Jacinda Ardern give the opening statement, that I have not been so proud—I never imagined I could be so proud—of where New Zealand is right now. In all my time as a member of Parliament, I’ve never listened to the PM’s statement with so much pride. On the world stage, at the UN, she is setting the tone. She’s demonstrating as a young woman leader what the next generation of global leaders will need to do and can do to solve the challenges that we are facing of climate change and inequality. Already, this Government is delivering on some of that good green change that we campaigned on and will make a real difference to New Zealanders.

In the area of transport, we are investing record amounts to make zero-emission transport the easy option, the affordable option, that will enable more people to access opportunities, education, and employment. The tired old way that the last Government and previous Governments before them were planning for transport improvements actually limited people’s choice and increased pollution, and this Government is turning that around. We are giving people real choice in how they get around, whether that’s by car, bus, train, bike, or even e-scooter. That will make the big difference to congestion in our cities. By giving people more choice, we take cars off congested roads and free them up for the tradies and the freight that needs to move on them.

We’re making it possible to build more quality inner-city housing and vibrant neighbourhoods by linking people’s homes to the city with world-class light rail lines, and I know the Opposition loves to scaremonger about light rail. The truth is New Zealand is so far behind the rest of the world when it comes to investing in quality public transport, and Aucklanders are desperate for it, but it’s not just Aucklanders who will benefit from quality public transport infrastructure in our biggest cities.

We are making our roads safer because we do not accept that 380 people dying on our roads every year is an acceptable price to pay. Our investment in road safety is really about drastically cutting the number of white crosses on the sides of our roads, right across the country. It’s not about cutting a few ribbons in a few National Party electorates. I know that the Opposition would love to believe that you can cut taxes and spend billions on infrastructure at the same time—actually, that’s not possible. But also, instead of just spending the money on a few flash motorways, like a couple of kilometres of the East-West Link—which that Government was planning to spend an eye-watering amount on for 5.5 kilometres of motorway—we are actually going to improve safety right around the country, because that’s how you reduce deaths and serious injuries on our roads.

As the Minister for Women, I’m incredibly proud at the progress we have already made in introducing pay equity legislation that will actually help women get a better deal, not put barriers in their way. Women in this country should be paid fairly for the work they do, and the undervaluing of so-called women’s work needs to stop. We need to recognise the incredible contribution—economic contribution but, more importantly, social contribution—that is made by women in the form of unpaid work.

In the health area, we are making real progress on mental health. When I was young, like so many other people, I went through some times that were extremely emotionally turbulent. I was fortunate enough to have access to counselling support when I needed it, and I believe all young people should have that kind of access to health. This week, I had the honour of launching, alongside Minister Clark and my colleague Chlöe Swarbrick, the youth mental health pilot Piki in Porirua. This was a key part of the Greens’ confidence and supply agreement with Labour. This pilot will help an estimated 10,000 young people access support when they are facing mild to moderate mental health challenges. Young people are already leading Aotearoa’s response on mental health and are demanding change. I am proud to stand with them and deliver real results.

This year, I look forward to the Minister for Climate Change and the Green Party co-leader introducing the zero carbon bill. As a new parent, this issue is incredibly important to me. We are making real progress on the issues that matter most to New Zealanders.

JAN LOGIE (Green): Tēnā koe, Mr Assistant Speaker. It’s really lovely to get the opportunity to stand up and reply to the Prime Minister’s statement this year, and a real feeling of optimism and a sense of just the chance to get stuck in again to making a real difference for the people in my community and the communities around the country. The Greens—it’s probably no secret to anyone—are really excited by the big vision about how we can create a society that’s sustainable, where everyone has a place and the opportunity to reach their potential, and that is safe. I just feel incredibly privileged to play a role in this Government around our collective efforts as a country—including with the Opposition—to end family and sexual violence.

In the first year of Government, we got more money to our incredibly important front-line services for victims of domestic violence, started a review in the Ministry of Justice around the Family Court reforms to ensure that they’re safe and effective, and got a whole-of-Government response set up that means we’ll be able to stop the ridiculousness where the Ministry of Justice had one programme to change the behaviour of people who had been using violence and the Department of Corrections had funded a completely different one. So, potentially, people using violence and wanting to change were being told two entirely different things about what they needed to do to change—ridiculousness. So we’ve set things up so that we can make sure that never happens again, so that we’re all on the same page, walking in the same direction to that future free of violence that I am really excited about.

We’ve ensured that we’ve got a partnership with Māori, because, actually, there are so many solutions held within Te Ao Māori that we need to unleash as a Government and stop blocking, and we introduced two new pieces of legislation last year. I acknowledge Amy Adams for the work that she did around the family violence legislation, getting that there, and a world first around workplace protections. I notice Scotland—a council there has become the first European council to introduce that, specifically name-checking New Zealand for providing the example that they are now following. We have repositioned ourselves, as a country, as world leaders, and it’s pretty blimmin exciting.

I know that, as the Prime Minister said, there is so much more to do, because we’re not just about moving things around; we want people’s lives to be changed by what we’re doing. I do want to then talk about my excitement and anticipation for the Welfare Expert Advisory Group report that will be coming out later this year. I am focused on those stories of those lives of those people in this country who have been devastated. It isn’t an exaggeration to say that children have been dying because of the low income - related diseases. We have research that tells us that, as well as people’s stories, and that is entirely preventable.

When we hear a rhetoric coming from the Opposition about just the numbers—the numbers—they actually committed an act of violence against the people who are those numbers by ignoring their lives and the complexity of their lives that drives to get people into work, regardless of their situation or the decency of their work, ignoring the fact that over half of the people receiving income support are receiving income support for disability- or health-related reasons that mean they are unable to be in full-time employment. The stigma that’s created by their drive to drive down those numbers ignores the stories that we have been hearing of—for example, a mum, with a newborn baby, choosing to live in a shed, sleeping on a mouldy piece of carpet because she did not want to go back into Work and Income. Her experience of that place, created by the last Government’s policies, was so traumatising that she chose to live in a shed with a newborn baby.

We are absolutely committed to fighting and doing everything we can to restore a sense of dignity and whakamana tangata to this country, and I am so proud to be part of that mission.

SARAH DOWIE (National—Invercargill): Thank you, Mr Assistant Speaker, and happy New Year to you. This is my first opportunity to take a call this year, and I’ve got to admit that I love the Government’s optimism, because, quite frankly, that’s all it is. When you look at the Prime Minister’s statement, let’s think about some of the imagery that she used. She wants to create an ambitious programme to build a stronger and fairer country—again, beautiful imagery; it’s something that I can actually agree with. She wants to put families and children at the heart of Government—again, that’s something that I would agree with on the face of it—and, as part of that, too, she says that she wants to back our regions. As a provincial MP representing the fair city of Invercargill, I would have to agree with that too. I didn’t vote for them, though—I didn’t vote for them.

I didn’t vote for them, because that Government does not have the competency to deliver, despite their saying that this is going to be a year of delivery. What have we seen in the past 365 days since they took office? Two hundred and thirty-three working groups, at a cost of about $300 million. They have, basically, farmed out decision making and farmed out policy making, because those people sitting over there now in Government failed to do the work while they were in Opposition. On the contrary, we have been here for 365 days, and we are embarking on a programme of intensive policy-making. We are going around the country listening to constituents, we are having mature conversations, and we are formulating policy that will take New Zealand forward and continue to grow its economy and create opportunities for all New Zealanders.

You can’t deny the stats. My colleague Mr Bayly, being the economist that he is, very aptly described to the Government how the economy works and talked about some of these stats, but you can’t deny the stats: GDP is falling. GDP was at, under our Government, 3.5 percent, and now there is a projection forecast for 2 percent. The economy is slowing, unemployment is up, 10,000 people are unemployed in the last three months, but what does that actually mean for families? What does it actually mean for people in the regions and for people in the cities who are just simply trying to get ahead and achieve their goals? Well, if GDP is slowing, policy making and decisions have been made that don’t back business, and businesses aren’t prepared to invest, then they’re not prepared to take on that extra person, to take a chance on another person being employed, and that means that people don’t have options. Mum and dad may not be able to get a job, mum and dad may not be able to earn, and that means that there’s no money to put into their families to feed their children and that they have to come cap in hand to the Government for a handout.

In real terms, what does that mean? Well, let’s look at it. The number of children in benefit-dependent households is up, and this is a Government that puts children at the heart of Government. The number of care and protection reports is up, family violence referrals for child abuse and neglect is up, young people not in education is up, household indebtedness is up, people on the jobseeker benefit is up, the cost of living has risen, and the number of early childhood education enrolments is down. This is not a New Zealand that I am proud of. I know that ordinary Kiwis want to achieve, I know they have their own hopes and dreams, and Government—responsible Government, competent Government—is about putting in place policies that enable that to happen and that enable people to feel a sense of productivity and contribution to their community to get ahead, to be skilled, to contribute to their community, whether it be in a paid way or through a community organisation, and to feel valued. But that’s not what we’re seeing out there with this kind and caring Government.

Let’s talk about backing the regions. Well, my goodness, what devastation has occurred with respect to this new vocational review? It was interesting at question time today, when the Hon Chris Hipkins answered questions about the positivity and the reception of his vocational review—well, not so much for the Southern Institute of Technology down in Southland. We are absolutely flabbergasted that this Government wants to take the autonomy of Southland Institute of Technology away from Southlanders and the community and centralise it and have some bureaucrats in Wellington calling the shots. Southland Institute of Technology is integral to our community. It is integral to our plan to attract 10,000 more people to the region by 2025. Its strength is that it attracts mature students and family members to our centre, and the pastoral care programme integrates them into the community, providing them with services and providing great networking opportunities. Centralising that decision making means that we will be a cookie cutter polytechnic, with nothing to sell and no point of difference to attract students to our town.

We need those skilled people to come to Southland to continue to grow our economy and to make life vibrant in our city, but this is a Government that simply wants to undercut that. Also, given that we have, approximately, a $3 million surplus because we do sell our international education, what’s going to happen to that surplus filtered off north to go into the deficits with the ill-performing polytechnics? Why should Southern Institute of Technology be punished because it’s a high performer? That is ridiculous.

The other thing that I’m not happy with is this lack of engagement with the sector. Six weeks of engagement and a meeting that only comes as far south as Christchurch? I don’t think that’s meaningful consultation. I think the decisions have already been made, and I think that it is simply about undercutting our region and centralising everything to a Stalinist model—Stalinist. It’s ridiculous.

I’m going to finish with something that’s close to my heart and, of course, that’s conservation. With the greenest Government ever, I’m quite surprised at the lack of direction that this Government is taking on environmental issues and its commitment to conservation. No cameras on commercial fishing vessels, despite the Minister of Fisheries promising to Forest & Bird that that would happen, and what have we seen so far? Hector’s dolphin deaths, seabird deaths, and a lack of commitment to conservation. Admittedly, there were technical difficulties to work through, and as a regional MP, I agree they needed to be worked through, but I actually believe that the technical difficulty is one Rt Hon Winston Peters and that it is simply New Zealand First calling the shots and holding the Green Party down with regards to their conservation agenda and not making any progress in that regard.

The other thing that I’m quite shocked about in respect of conservation is this lack of commitment to facilitating recreation and, again, engagement. For the most open and transparent Government of all time, there does really seem to be a lack of meaningful consultation with stakeholders and interested parties. It’s the same in conservation. Look at the tahr cull—completely ignoring recreationists’ and hunters’ views. The indigenous fish bill—riding roughshod over Fish & Game with regards to getting out and fishing game fish. And, when we move forward, looking at the Game Animal Council—completely undercutting them with funding. This is a Government that is not delivering, and they will not deliver in the future.

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

A party vote was called for on the question, That this debate be now adjourned.

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Motion agreed to.

Debate interrupted.

Bills

Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill

Second Reading

Hon STUART NASH (Minister of Revenue): I move, That the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill be now read a second time.

This omnibus bill simplifies and modernises New Zealand’s tax system, in particular for individual taxpayers. I’m therefore very grateful for the significant contribution made by the Finance and Expenditure Committee (FEC). The committee has made a number of worthwhile enhancements to the clarity and practicality of the bill.

When I introduced the bill in June last year, I talked in detail about the measures to simplify tax obligations for individual payers, especially the year-end income tax filing. In the quest to simplify tax requirements and processes, it is crucial to uphold the integrity of the tax system. I’ll therefore take this opportunity to talk about enhancements to the Tax Administration Act regarding the Inland Revenue Department’s ability to collect, use, and disclose information, which I’m pleased have been carefully considered by the Finance and Expenditure Committee.

Information collection and use: now, information is critical for the efficiency and integrity of the tax system. As part of providing better, more efficient services, there are occasions when prudent information-sharing is desirable. The public expects Government agencies to serve them efficiently and with care, particularly those agencies that manage sensitive and personal information. Inland revenue already shares information with other agencies, and these arrangements generally work well. The bill modernises and clarifies the rules to better provide for confidentiality and sharing in the future and more clearly balances the trade-offs associated with information sharing. These proposals will make the information-sharing rules more efficient and transparent and better focus the confidentiality rules to clearly protect taxpayer information and more clearly set out any expectations.

The bill also has two important improvements on how inland revenue collects information. Firstly, it will clarify the legislation that information collected for one inland revenue purpose can be used for that department’s other functions. This means that people won’t have to provide the same information more than once to different parts of inland revenue.

Angie Warren-Clark: Brilliant.

Hon STUART NASH: Brilliant—easy. Secondly, it provides a regulation-making power for repeat collection of third-party data sets. While inland revenue can currently collect this information, the new rules will provide greater transparency where collection is done on a regular basis. The changes to how inland revenue manages information strike the right balance between careful stewardship of taxpayers’ confidential information and improved customer service.

As the Minister for Small Business, I am pleased that the bill also proposes a new type of binding ruling called “a short-process ruling”. The new type of ruling is designed to be more accessible to small to medium sized businesses and individuals. This initiative responds to concerns raised by the small to medium enterprises that the current binding rulings regime was inaccessible and expensive. Binding rulings provide taxpayers with certainty about how inland revenue will apply the law to their specific circumstances. Currently, binding rulings can be prohibitive to many smaller sized entities due to time, cost, and expertise required to apply for one. I should note that binding rulings are, as mentioned, binding on inland revenue, but they are not binding on the taxpayer.

The ability for a wider range of taxpayers to obtain binding ruling advice from inland revenue will help more taxpayers get their tax positions right the first time. Therefore, the bill proposes to extend the ability to obtain binding rulings where the tax at stake is no more than $1 million to taxpayers who are in a practice who are excluded from this currently because of the complexity of the process and the fees charged. Well done, FEC. FEC has recommended increasing the turnover threshold for entities that can seek short-process binding rulings from $5 million to $20 million. This amendment will open up this regime to many more medium-sized entities. The process for applying for a short-process ruling will be simpler. Applicants won’t have to provide draft rulings or state the taxation law and propositions of law for which the ruling is sought.

Let me talk about KiwiSaver. The Government is keen to encourage people to save for their retirement, so I’m delighted to put forward some improvements to KiwiSaver that were based on the Retirement Commissioner’s December 2016 review of retirement income policies. FEC has generally supported the proposed changes to the KiwiSaver regime, which I will go over briefly. Two contribution rates of 6 percent and 10 percent will be added to give savers more flexibility and control over their KiwiSaver so they better adapt their level of savings to their personal circumstances.

We’re going to open KiwiSaver up to over-65-year-olds. The Government recognises there is no reason to limit access to a low-cost investment vehicle to those under 65. The bill removes the lock-in period for KiwiSaver, which currently affects members who joined KiwiSaver between the ages of 60 and 65. This lock-in period was introduced to prevent people in the 60 to 65 age bracket from joining KiwiSaver to receive the $1,000 kick-start payment and then withdrawing their funds soon after. Members may recall that the kick-start was repealed in Budget 2015, and this bill remedies an oversight at the time concerning the impact of the repeal of the kick-start payment. So there just is no sense to have the lock-in period in place. Without this kick-start, it makes sense to enable savers to withdraw their funds when they reach the New Zealand superannuation age regardless of how long they have been a KiwiSaver member.

We also propose changing the name of “contributions holiday” to “savings suspension”.

Hon Phil Twyford: Good move.

Hon STUART NASH: Good move—thank you. This is not just semantics. It may seem it is, but it is not. This name change more accurately describes what actually happens when a member takes a break from contributing to their KiwiSaver account. The savings suspension period will also reduce from five years to one year. It is not a holiday; it is a suspension from saving, and it should be called what it actually is.

Hon Phil Twyford: Exactly.

Hon STUART NASH: Yes.

Hon Kris Faafoi: Good move.

Hon STUART NASH: Thank you—thank you. Thank you, that’s my legacy. FEC agreed that taking a five-year contributions holiday can have a significant impact on members’ long-term savings. For many members, five years is longer than necessary for their financial position to improve to a point where they could resume contributing to KiwiSaver, and the one thing we know about KiwiSaver is that it will make retirement a lot more comfortable for every single Kiwi. What we also know is the sooner that Kiwis can contribute, the better off they will be in the long term.

FEC has considered these proposals, and they agree that they make sense if we want to encourage people to save more for their retirement—well done, FEC, again. When contributing to the KiwiSaver proposals, FEC proposed a further amendment to allow over-60s who join the regime before 1 July 2019, and are subject to a transitional lock-in period, to exit the lock-in period and make withdrawals upon reaching 65 years of age. I’m happy to accept this additional proposal into the bill.

There are a couple of other measures. The bill also adds 13 charities to the list of donee organisations with overseas purposes to Schedule 32 of the Income Tax Act 2007. It allows taxpayers to switch to the accounting income method from either the standard or GST ratio methods at any time during the income year. It recalibrates the use-of-money interest rule so interest on late payments is applied more fairly to taxpayers. It merges the adverse events Schedule intended for farmers struggling with an adverse localised event with the main income equalisation scheme. It proposes a new tax treatment to support bloodstock investment in New Zealand. It closes a loophole in the Goods and Services Tax Act as it relates to not-for-profits, and it implements a number of minor but important remedial changes to a number of Acts, including the Income Tax Act 2005, the Tax Administration Act 1994, and the KiwiSaver Act. Finally, the bill also sets the annual rates of income tax for the 2018-19 tax year, with no change from last year.

In conclusion, I would like to advise that FEC have removed the proposals that would allow inland revenue to make small changes to tax law to correct legislative anomalies. These changes are really important to get right, and they have been redrafted since the introduction of the bill. In order to allow full consultation with the Legislation Design and Advisory Committee and the public on the redrafted proposals, I intend to add them to the next taxation bill.

I’m very pleased to commend the bill to the House, and I look forward to its enactment. Thank you.

ASSISTANT SPEAKER (Adrian Rurawhe): Members, before I call the next speaker, I just need to slightly correct the wording of the motion moved by the Minister. The motion is that the bill be now read a second time. So the question is that the motion be agreed to.

ANDREW BAYLY (National—Hunua): Thank you, Mr Assistant Speaker. Very good. It’s nice to be following the Minister of Revenue. I’ve got to say, it’s a slimmed-down version of the Minister. Obviously, he had a very nice holiday. It’s good to be reporting back on this taxation—it’s a very long title. It’s very noisy over the other side there, too. It’s the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill, second reading.

Of course, there is much that is good about this piece of legislation, this bill, and I’m going to talk about it, but, of course, we cannot support it because it continues to enshrine the situation where New Zealanders are subject to paying too much personal tax. The key issue is it sets the tax rate for the 2018-19 year, and that’s the bit we do not like.

I was listening to some of the speakers before in the Prime Minister’s debate, going on about, you know, the new tax arrangements that are going to come in. Someone quoted $385 that’s going to benefit New Zealanders. Well, if this bill had encapsulated the stuff that the National Party had proposed, this would’ve meant that, on average, every New Zealander would’ve benefited by a thousand bucks—just over a thousand bucks—not that miserable $385 someone spoke of.

And when it comes to our superannuitants, they love talking about that winter payment, which, in my view, was slightly misleading, because the view was that everyone was going to get eight hundred bucks. Well, actually, it wasn’t, because the way it was calculated, there was only, I think, two and a half months, and so, on average, it was much less than 300 bucks. So for superannuitants, they were disadvantaged even worse. So this bill sets the rates for 2018-19, and it’s not right.

That brings us to the point about capital gains tax, which I just alluded to briefly before. That’s going to be another situation where we’re going to see this Government—this Labour - New Zealand First Government—piling on the taxes on those hard-working New Zealanders. It’s wrong.

Anyway—anyway, let’s talk about the good stuff. It was nice that the Finance and Expenditure Committee worked so collegially last year to bring about some of these changes, which, I must admit, did have their initial genesis under our Government, but it’s nice to see it coming to fruition, like all tax bills. I think the first thing is the issue round information sharing. Many of us have experienced the frustrations of having to provide your information to the tax department and to other Government departments on multiple occasions. One of the things about this bill, as the Minister spoke about, is the sharing of information amongst other parts of IRD, and also there’s some special arrangements with other departments. I think that’s a good thing, because we need a tax system that serves the people, not the other way round, and it’s part of the Business Transformation programme, the big IRD tax programme that’s been under way for, what, three years, 3½ years—a billion-dollar project. I think this is all about making it much easier for New Zealand and New Zealanders to go about doing their stuff.

I think, on that very issue, there is an issue about filing of returns, and this bill actually helps with that in terms of how people have to file their returns. So the issue is—and it’s under clause 21—that where you have reportable income—and “reportable” is defined as wages, salaries, or interest. If that is a pretty simple arrangement, and you don’t have it with a whole lot of other income sources, then, effectively, what’s going to happen under these new arrangements is that the automatic filing of that—the tax department will now move to a situation where they will assess your appropriate tax rate. We have many instances of where that’s wrong and, certainly, the issue of secondary tax, which we know is the bane of most people’s lives, particularly those with two jobs, is a real disincentive. So some of the streamlining of those processes of the IRD is a good thing and, I think, to be welcomed. As the IRD roll out their programme, this will come to the fore and we’ll see much of the benefit of that.

The other thing is the issue round tax write-offs, and, in many cases, people do file returns and they have a small margin of error in them. We talked about this extensively in the committee. So what we’ve said, for those with that reportable income, the definition I talked about before, if you have an error, or a benefit of some sense of less than $50, then the IRD will automatically pay that back to you or write off that debt. On the 2017 estimate that the IRD did for us, that’s going to benefit roughly 580,000 people. That is a huge gain, and part of that’s in making the system so much simpler.

There’s also the issue of correcting and finalising information on tax returns. Clause 21 also allows people to correct information provided to the IRD, and this is an issue we talked about—the threshold. At what point can you say, “I made a legitimate mistake, and I shouldn’t be penalised.”, and at what point should you be subject to a framework where you should incur penalties? One of the changes was that we increased that threshold in the committee and moved it from 1,000 to 10,000, or less than 2 percent of the tax or the GST amount of your total earning of that in the course of that year. So we increased that threshold, and I think that’s a very good thing. We also put in place this issue round no interest or penalties to apply to those with reportable income. So these are all good measures.

The other aspect I think, as a committee, we all felt strongly about is the issue around trying to get binding determinations from the IRD. Many of us have—at a personal level, but, certainly, at a business level—issues where you do not know whether they are tax deductible or not. So we wanted to facilitate. We wanted to promote that system so that people could proactively go to the tax department, have that conversation with them, and get a binding ruling. I think the outcome of that has been a good one in that what we did—the original proposition when the bill came to the committee was that it had a threshold of $5 million or a total tax bill of $1 million. So if you were under those thresholds, you could go and get a binding ruling.

We talked about it quite extensively—and I see the officials here—and so we increased the threshold where if your turnover was under $20 million, rather than under $5 million, as well as your tax liability being less than $1 million, then you could access and get a binding ruling from the IRD. That is a good thing—that is a very good thing.

The other thing that we talked about was the issue round ACC payments. We had a number of submitters come and see us and talk about the issue of where they had had an injury, they had got some treatment, and then, in many cases, the ACC, for process issues or as a result of other things that had happened, actually gave them money in the next financial year which related back to the previous financial year. Of course that meant, for all intents and purposes, that they technically hadn’t declared income—although they probably didn’t know about it—but also it just created a tax obligation which became very difficult. So the agreement in the bill for a schedule of payments such as that paid by ACC to these people that are indisposed was that any of these backdated payments from ACC could be treated in an easier manner and much more efficiently so it didn’t disadvantage those that were indisposed.

I think those are all good things. The other thing I think—well, actually, I’m coming to an end, but I know my colleague’s going to talk about the bloodstock issues, and also the KiwiSaver and the charitable status. These are other issues that were important in this bill, and I’d like to thank the committee, but I think we’ve made some progress towards improving the tax situation.

Dr DEBORAH RUSSELL (Labour—New Lynn): Tēnā koe e Te Māngai o Te Whare. I’m delighted to speak on this excellent bill, the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill. As I’ve said to other people, when I’m talking about tax, I’m in my happy place.

There are a number of aspects of this bill that I would like to talk about; we’ll see how the time goes. The first aspect I would like to talk about is just this phrase: the “Annual Rates for 2018-19” part of the title. As has been alluded to, this is a simple constitutional requirement. Every year, Parliament has to pass the rates of taxation. It has to happen within a certain time frame, so every year you will see a bill coming through the House called the annual rates for 2018-19, or 2019-20, and so on, to which other matters are attached as well in the particular bill. This bill fulfils that particular constitutional requirement. So when we pass this bill, we are doing what we need to do in order to keep our tax system running effectively, and because we keep our tax system running effectively, we also keep our Government running effectively, paying for all the goods and services that we enjoy in this civilised country. So that’s a simple constitutional requirement.

The second aspect of this bill that I would like to talk about—and to talk about why this particular bill is important and important to so many New Zealanders—is to do with secondary tax. Now, as any person who works in tax knows, or anyone who mentions the word “tax” and implies that they have a little expertise knows—when I say that I know about tax, so many people, so many of my constituents, say to me, “When are you going to get rid of secondary tax?” or “Secondary tax is the bane of my life.” or “Secondary tax is so unfair. Could you please just get rid of secondary tax? It would be good to do it right now.” This bill does make considerable progress towards ending the perceived secondary tax problem, and I say “perceived” for a particular reason. It is because secondary tax ought not to be a problem.

Let me explain why this is the case. I think it’s important to explain this because so many people don’t quite understand secondary tax, and I’m hoping that if we can explain it, then people will understand why this bill fixes the problem. I want people to imagine someone who has two jobs, earning about $250 a week each, and that person will get two payslips every week, as you’d expect from two jobs. But on the first payslip they get, after tax and ACC and so on, they’re going to end up with about $220 in their back pocket. They’ve earned $250, they’ve had tax and ACC deducted, and they end up with about $220 in their back pocket from their first job. But then they get their second payslip.

Kieran McAnulty: What happens?

Dr DEBORAH RUSSELL: Well, it’s really interesting what happens. They’ve earned $250, but unlike their first job, where they ended up $220 in their back pocket, in their second job, they only end up with $200. “That doesn’t seem fair.”, they say. “Why do I end up with $220 from my first job and only $200 from my second job?”, and they see the problem as being with secondary tax. They know that they’re paying secondary tax on their second job, and it looks like they’re getting hit with much more tax on their second job. That’s not fair, and that’s the secondary tax problem. People think it means that they get taxed more and that they get penalised for having that second job.

Kieran McAnulty: That’s a disincentive.

Dr DEBORAH RUSSELL: It is a disincentive in the person’s mind—and that’s where it’s effective—from taking a second job.

What people don’t really understand is that that tax that is deducted is not actually their income tax. What it is is a down payment on their income tax liability for the year. It means that as they go through the year, paying their taxes, they pay pay-as-you-earn, or PAYE. It’s like paying a little bit of their tax bill liability every single pay day. The problem is, if you didn’t take out the secondary tax at a higher rate, then at the end of the year the person would end up with a stonking great tax bill.

Here’s how this works. Look, if you earn about $50,000 a year—

Todd Muller: Can we have a PowerPoint?

Dr DEBORAH RUSSELL: —then your tax liability is about $8,000 a year. That’s just the way the maths works on the tax rates, Mr Muller. So, $8,000 a year from your job, but if you have two jobs worth $25,000 each, then all your employer knows about you is you have a job; you’re getting paid $25,000. If the employer doesn’t know that the person has a second job, then they just deduct tax as though the person was earning only $25,000 a year. Now, the tax on $25,000—plain and simple—is about $3,400. So, $3,400 from one job and $3,400 from the other job—that person ends up with $6,800 deducted.

If you earn all the money in one job, you get $8,000 tax deducted. That’s about the right amount. Earn tax from two jobs worth $25,000 each; if the employers don’t know about the two jobs, if they only know about the one job they pay you for, then each employer, correctly, deducts about $3,400 or about $6,800 in total. So you end up with the wrong amount deducted during the year. The person should be paying $8,000 in tax—that’s what you pay on $50,000—but the wrong amount has been deducted. So they end up with a tax bill of $1,200.

Secondary tax fixes that problem. More is taken out of the second job to reflect the fact that, in total, the person earns $50,000. But, even so, it seems unfair. Secondary tax means you do not end up with a big tax bill. The problem with secondary tax is sometimes the rate is wrong and it gets over-deducted. Now, that’s quite nice because the person who over-pays with a higher secondary tax rate ends up with a tax refund at the end of the year. Now, who doesn’t like getting a tax refund? Everyone likes getting a tax refund. It’s a nice lump sum of money. Trouble is, people have perceived it as unfair, and in order to get that tax refund, you have to do a tax return, and plenty of people don’t like doing tax returns or they find them scary. So perhaps the person doesn’t get their tax refund at all, or perhaps, even though the lump sum is very useful, that person could have done with the money during the year, could have done with it week by week, could have used it to pay the groceries week by week. Perhaps it would have been easier to get it paid week by week.

This bill helps to fix that problem. It helps to fix it because through this bill and through the Business Transformation at the Inland Revenue Department, every pay day, about the right amount of tax should be deducted for the particular individual person. Employers will be reporting on a regular basis to IRD, reporting every pay day to IRD. That will mean that IRD can accumulate all the information for a particular person on an ongoing basis during the year, and if IRD thinks that perhaps tax is not being deducted at the right rate, they can contact the person and contact the employer and offer what’s known as a tailored tax rate. If you get that tailored tax rate right, there is no secondary tax, there is no extra tax during the year, and there is no tax to pay at the end of the year. This bill fixes that problem, and that is one of the reasons why I support this bill.

I hope that everyone would support this bill. It’s a shame that the Opposition won’t. It’s a dense bill. There’s a lot in it. As a committee, we worked very, very hard through this bill, and people will see, if they read the revision-tracked version of the bill, there are many changes here, recommended by the Finance and Expenditure Committee. They were changes that all the members of the select committee agreed to. We worked hard on this bill, and I’d particularly liked to commend the leadership of Michael Wood, the chair of the select committee, and the people from both sides of the House who worked hard on that bill. From the Opposition side, I would commend Mr Andrew Bayly, who had great input into the bill, and, of course, there were people on our side of the House who contributed greatly to this bill as well. We agreed on so much about this bill. What a shame that the Opposition won’t support it for reasons, I suppose, because they lost. I support this bill.

Hon JUDITH COLLINS (National—Papakura): Thank you, Mr Assistant Speaker. So some of that speech was OK. It was OK because—well, it eventually ended, but it was actually quite a good rendition of some of the issues around secondary tax, and I say that as the person who was the Minister of Revenue when all of this work was put together, apart from the increase in tax rates, which is why we’re not supporting an increase in tax rates. But we are, however, very supportive of all the work around the business transformation, because it was actually a National-led Government that gave the funding to the Inland Revenue Department that allowed inland revenue to undertake the Business Transformation project. I’d like to acknowledge the former Ministers of Revenue before me, particularly the Hon Michael Woodhouse and the Hon Todd McClay, for the work that they did in this area as well.

I would, as well, like to acknowledge particularly not only the inland revenue people and the experts who worked so hard on Business Transformation but also the private sector and particularly the tax accountants and tax lawyers who I’ve had so much to deal with as a lawyer but also as the Minister, who worked so hard to make sure that the issues around Business Transformation and a simplified tax system were able to be put into a bill. Even if it is, as Dr Russell has referred to, a dense bill, it certainly is a very thorough bill, and we are very supportive of the Business Transformation parts. Unfortunately, it has a fatal flaw around tax rates.

Let’s just have another little explanation around some of these issues. For instance, one of the issues that Dr Russell hasn’t canvassed is the issue around the aim, which is actually another name for a situation where small business in particular finds provisional and terminal tax really difficult to deal with. Many people who have been in small business or families who have been in small business will know that provisional and terminal tax payments as they are now are actually what seems to cause so many small businesses to fail in their second or third years, and that is really all about the fact that people are having to prepay their tax when they haven’t even earned it or received it.

There are not many people who are in a business where they know exactly how much money is going to be coming in the door, so there are often penalties to revenue if they don’t pay enough tax before they’ve even earned it. Then there’s the other problem, which is a penalty, really, if a business takes money or capital out of the business to put aside for tax, worrying that they need to have enough money for tax, and that means they often don’t have enough capital invested in their business. This is something that is crucial for business, and particularly small business, because larger businesses do have different ways of dealing with it. There are actually entire businesses set up around having tax prepaid by particular organisations that do this and then they charge for it. But small businesses find it much more difficult to cope with.

So one of the issues was how can we give taxpayers a system where they can in fact pay on almost a PAYE, or pay as you earn, system, like salary and wage earners. That is pretty difficult when you’re trying to deal with small businesses. A tremendous amount of work has gone into this from revenue, but also from the private sector that works very, very well with revenue. It’s great to have such a good relationship between the private sector and inland revenue around how we can actually have small businesses—say, a dairy owner, for instance—being able to pay their tax on a monthly basis, along with their GST, because GST is paid either on a monthly or a quarterly or a six-monthly basis, and people are able to allow for that because they know what it is they’re supposed to pay.

So in order to do this, this requires a business to be set up on a system like Mind Your Own Business or one of the Vero products and some other products which work well with inland revenue. Those products, as long as they’re kept up to date, can actually feed straight through to IRD and work out what people’s taxes are, on a monthly basis or whatever. That means that people’s profit and loss is being calculated on that sort of basis. Some people might find that concept quite, sort of, Orwellian, but the trouble is if you don’t do that, then you end up with the same system of people having to predetermine, or pre-guess, really, what their tax is, and then getting themselves into all sorts of trouble as they don’t pay enough or they pay too much.

So this is crucial, I believe, for helping small business in New Zealand, helping particularly with cash flow and with capital, because we are very much remiss when it comes to having enough capital in New Zealand for business. It is really hard for a small business to get money from a bank. It is really hard. What a small-business owner will need to have, most likely, is a security over their home. Their home is often the one that gets sold when things go wrong, and those are the things—whether it’s that they haven’t paid the tax or something like that. This is a really good way of helping avoid that problem.

Of course, it doesn’t solve the problem if a business is just not successful; we understand that, but, actually, many successful businesses and business owners get themselves into trouble because of this problem, and I think just having this change will help. I do know that there are still some small businesses where people do everything very much on the basis of a handwritten or even a typed-up on the computer, Excel spreadsheet sort of system. That will still work for small businesses where there is no particular uncertainty around what their profit and loss is going to be. However, we like to hope that more businesses are actually growing than that, and we would like to hope that with people having to pay, businesses having to collect tax for PAYE for their staff, the student loan payments that they already do for their staff, the family support payments they already do when it comes to child support, any debts that are garnished against their wages—all of these things are payments that small businesses calculate, collect, and provide to the Government for free.

People should always remember that with small business: they are incurring, and business generally are incurring, a tremendous amount of cost in terms of time and in terms of being able to get things right, because if they get things wrong, there are penalties on them. They do all this and provide this service for the rest of us in New Zealand for free. That is something I’ve always thought, and I remember saying to revenue at one stage it would be really good if revenue was able to send out a note every now and again to people, at Christmas-time or some other time, saying, “Thank you for collecting tax for us for free.” I reckon that would be a good—I never quite got that done; I was only in the role for about eight, nine, or 10 months before the election. But I actually think that would be a nice thing, and I might suggest that to the current Government. Or not; we’ll wait till we’re back in charge, in which case I’m sure we’ll do it.

But, you know, it’s good to remember that. People forget that. So when we hear people slamming business, slamming this, slamming that, remember who, by the way, is collecting this tax. They collect the GST, they collect the PAYE, they have to pay their own tax, and they have to calculate what that all is. They do all these things and they sit there and no one thanks them. Well, I want to thank them, and I think this side of the House certainly wants to thank those businesses who comply with their obligations under the law. I just think we should be doing that, because no one asks anyone at inland revenue to work for free. No one asks us to work for free. These people work for free for us. In many cases, it’s taking them away from income-earning work so that they can help us with our work.

So it is actually a bill where most of it’s good. That’s why it would be wrong to vote for a bill where we’re putting up tax rates against the very people who, by the way, are collecting tax so that we can actually continue as a Parliament, that we can continue getting things done and services for it—

Hon Andrew Little: They’re selling goods and services and collecting tax as a result. There’s nothing unusual about that. Good grief.

Hon JUDITH COLLINS: —so people are—I wish Andrew Little would speak more clearly so I could hear him, I really do.

Todd Muller: He’s mumbling again.

Hon JUDITH COLLINS: Mumbling, yes. It’s the beard, Andrew.

I think it is important that we do remember that. This party will not be party to increased taxes against the very people who help do what we have to do, and I think it is really important that we do that. This is one of the things that we want to be able to do, which is to give more people more of their own money back and, by the way, along the way, to thank them for what they do for their country and for their community. Thank you very much.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you, Madam Assistant Speaker, for this opportunity to speak on behalf of New Zealand First and on behalf of this great coalition Government.

Ms Collins, thank you very much for that contribution. I was sitting on this side of the House, and I hate to admit it to my colleagues, but I was nodding away for, what, 90 percent of the time, until she got to the ridiculous statement about—did she actually use the words “tax increases”? Which are not in this legislation, by the way. There are no tax increases, unlike when National was in power, when they actually increased GST, when they promised the nation that if they voted them in, they were not going to put up taxes, which is what happened. I’ll get back to acknowledging a former Minister. I think—correct me if I’m wrong, Mr Muller—Collins, Woodhouse, and McClay did some fantastic work on this legislation. So what we have now is a piece of legislation that is incredibly enabling.

Todd Muller: It’s what you’ve come to Parliament for.

FLETCHER TABUTEAU: Exactly. That’s why we’re here. I was trying to reflect on the legislation votes of New Zealand First during that time. I was the revenue spokesperson for New Zealand First in Opposition, and I think we voted for all the revenue legislation that was coming through.

There were times when we were looking at the cost of the inland revenue digital transition system, because I think we’re going to get to $1.6 billion in terms of the implementation of that programme, and that’s quite a hard number to swallow, especially when you’re—well, this is exactly what this legislation enables. I apologise if I’m not making the link more overtly. This legislation is the enabling legislation that, along with legislation before, I admit, has been very much about enabling inland revenue with their digital processes, and moving into, essentially, the modern age.

It seems like really bad timing, actually, but I do—despite the farcical performance from the National Opposition yesterday at the Finance and Expenditure Committee, which was embarrassing and it was incredibly disappointing. But today, for example, we had another session which was rostered on anyway, and I just want to acknowledge those members opposite, because we were having a similar discussion with the officials on the issues that we saw being presented by submitters at the time. So it was a collegial select committee this morning, and I just want to touch on that with this legislation, because I’d like to acknowledge the chair, and I’d like to acknowledge members from both sides of the House who very earnestly took on the advice of submitters and heard what they had to say.

I just wanted to touch on a few of those slight alterations. The first one that comes to mind is around the mis-reporting or mistaken reporting of income tax, at such a low level—I think $50—that the committee on both sides thought it’s not appropriate, it’s not even fair, to get too heavy-handed on persons—especially persons whose only income is from income-tested benefits—who have to pay a tax in an extra period in that income year. So that was one example of kind of a fair approach from both sides of the House.

Taxpayers’ tax information could be amended to include missing information, as well as to correct incorrect information. The short process on binding rulings—maybe KiwiSaver is the one more I’ll touch on: allowing individuals that are subject to the transitional five-year lock-in period to opt out of the lock-in period and cease to be eligible for compulsory employee contributions. I think the Minister of Revenue touched on this in his address to the House in his offering earlier today. I think it’s little things like that that can actually add up to individual experiences.

I’ll take the rest of the call just to address what it is the bill’s trying to achieve at a higher level. So what we’ve been dealing with was the Tax Administration Act of 1994, which had set out rules and processes for collecting and distributing revenue. What that piece of legislation was about was efficiency, efficacy in collecting and distribution, and the rules and processes around it. This Business Transformation project of the Inland Revenue Department—it’s a programme that provides an opportunity to step back, which is what we did, in reflection, and look at the processes involved and see how it could be modernised. So the work to review and modernise these settings focuses on the core dimensions of the original bill, the Tax Administration Act.

Perhaps, with the short time I have left, I’d like to touch on—with your patience, Madam Assistant Speaker—the secondary tax issue, which Dr Deborah Russell touched on in great detail in her contribution. It seemed to me, with many of the Rotorua electorate who would come into my office, that one of the banes of their lives was having literally two or three jobs just to get by, and then the unfortunate circumstance of having this secondary tax issue where they were literally paying a higher tax rate, knowing that their actual total income tax was below the next threshold in the tax regime. So they were paying, throughout the year, a higher tax rate, and they were having that money taken out of their income of their second or their third job. That is incredibly hard to deal with for a lot of people from all across New Zealand, but in my home town of Rotorua, that was a common conversation.

So with the transformation process, what inland revenue has been able to do with increased capacity for digital technology and an interface with what we would call clients, I suppose—taxpayers—is determine tax rates while having a good and fair idea of their incomes for the period. Knowing that, they can give advice to the taxpayer on the appropriate tax rate on multiple jobs, and so, essentially, as Dr Russell set out for us in the House in quite explicit detail, which lost some of the members opposite, it meant a fairer system where people who have two or three jobs are now able to rely on inland revenue and their assessment of income and know that they’re paying the appropriate rate.

What’s important to note also is, I think, from memory, 750,000 people do not claim tax rebates which they are entitled to, and the automation and the updating of the system means that, actually, inland revenue should be paying out these rebates automatically. It’s an amazing transformation process, and, ideally, what we will see in the not so distant future is, actually, because of the efficiency of the system, the information gathered, and the way people’s information can be processed, we should see a great decline in rebates themselves and claims themselves because the system itself better reflects people’s circumstances in a much more timely fashion.

So there are no tax increases. Let me just qualify and point that out for the members opposite and those people listening at home. This is a very good piece of tax and revenue legislation, which I am happy to stand in the House to support. Thank you, Madam Assistant Speaker.

IAN McKELVIE (National—Rangitīkei): Thank you, Madam Assistant Speaker. Well, when you get to the stage of Thursday afternoon and you’re following Andrew Bayly and Judith Collins, you really think there’s nothing left to say. But I have got a little bit to say. I’ve got a little bit to say and a little bit of comment to make on the last speaker, Fletcher Tabuteau. But I wanted to comment on Dr Deborah Russell and thank her for probably the best lecture I’ve had for nearly 50 years. I listened to all 10 minutes of it, and, actually, I’d have to say, in my university days, I never would have understood anything as good as that. And, of course, Deborah Russell is ex-Rangitīkei.

I guess I stand to—not to support this bill, because we are of course unable to support the bill because of, I guess, the tax changes that, effectively, it signalled. Tax in New Zealand is quite a big item, and our leader, in recent times, of course, has signalled where we intend to go with some of these tax issues. Tax is a big issue for most New Zealanders because there are many, many New Zealanders earning in that $40,000 to $50,000 to $60,000 range, many of whom are paying way more tax than they should be, and very shortly the average wage will be on the maximum tax rate. So there are some significant issues in that area, and that’s one of the reasons we can’t support this bill.

I want to talk about one or two other things, and then I want to get on to—it won’t be quite a lecture of the Deborah Russell mould, but I want to talk about the bloodstock taxation stuff towards the end of my short contribution.

KiwiSaver I think is really interesting; I think it is a great product. I’m very supportive of the changes, and I, of course, fall into the age bracket where I could join KiwiSaver under this legislation. It would be wonderful. I am actually a member of KiwiSaver, but I could also withdraw my KiwiSaver had I ended it within the last five years. Interestingly, that’s something that you get quite a lot of comments through the electorate offices about, because people have been trapped in this, getting into KiwiSaver at age of 63 or whatever and not being able to get out until they’re 67 or 68, and that’s been the challenge for them. So the changes to KiwiSaver are, I think, very sensible.

Interestingly, during the course of the submissions on this bill, we had a young man and his mother come in—well, he wasn’t particularly young. I, in my spare time—and I think I’ve said in the House before—chair an organisation called Special Olympics New Zealand, which is a sporting organisation for the intellectually disabled. He came in to submit on the fact that he didn’t have a life expectancy the same as everyone else does. He’d joined KiwiSaver, very sensibly, had a pretty good saving; I think he told us he had about $8,000 or $9,000 in his KiwiSaver. What worried that family and worries many families in New Zealand—they join KiwiSaver, but they’re never going to get, necessarily, to 65 years of age. It was quite an interesting—well, it was a very interesting, very compelling submission. As it happens, it won’t get changed in the course of this bill, but it was something we learnt and something I’m sure that a Government of the future will pick up. It is a challenge of KiwiSaver, because there are many, many people also in KiwiSaver who get to a point where they suffer from hardship, and justifying that hardship’s difficult. The reason I use that as an example is because justifying the hardship and justifying the fact that you might not live till you’re 65 are equally fraught sort of issues. So it’s quite a challenging issue, and it will be a challenging issue for the legislator when it gets on.

I just wanted to talk about a couple of things that Fletcher Tabuteau talked about a minute ago. I myself think that the transformation is a great thing as well, and I think it’s going to be very useful for New Zealanders. The challenge we’ve got is that most New Zealanders have never contacted the IRD, and if they got a letter from the IRD they’d be absolutely terrified of it. I think it’s going to take almost a generation to work through, just like it’s taken a generation of us to work through some of the technology challenges that we face nowadays. It’s going to take a long time to work through some of this transformation. It won’t be picked up as quickly as the IRD would like to think it will be, and one of the reasons it won’t be is because most people—well, no, not most people; many of the older community in New Zealand and, certainly, many rural people in New Zealand don’t have access to the types of communications that are necessary to make this system work properly. That will be a little bit of a challenge for the Inland Revenue Department, I think, in the future; it will also be a challenge for our taxpayers, but, none the less, when it’s implemented it will be extremely successful.

The other thing I like, and I think it’s very good, is the idea of small-business men going to inland revenue to get a short-term process ruling on how taxation law applies. Very intimidating for many small businesses, very worrying for them, actually, and, even for some professionals in industry—quite worrying as to how you should apply some of these tax rulings. I think that’s also a great bonus for all New Zealanders. So there’s been some pretty good stuff happen in the course of this bill, and so you’d wonder, I guess, that I’m talking about it so favourably and, in fact, we’re not supporting it.

I want to now talk about, though, Supplementary Order Paper (SOP) 135, and I’m not talking about it because I want to criticise it, but I want to talk about it because it points out the fraughtness of trying to get a piece of legislation through that’s actually going to work. This legislation is the piece of legislation that was, I think unfortunately, called the “good-looking horses” issue in the course of the Budget, but it was introduced to try and enable people buying into the horse-breeding industry to access the tax system in the same manner as those already existing in the industry. So, in other words, current breeding programmes or current breeders have access to tax just like any other business does, but people buying into the industry didn’t, and this was put in place to try and enable that. Now, it was set at a level—I think $404,000 for a colt and $460,000-odd for a filly, something like that; I might have it the wrong way around, but it was something like that—and we heard at the time that it was going to cost about $4.8 million in year one. Now, we’ve just, of course, been through the first of the yearling sales. Probably almost half of the horses that will be sold in New Zealand this year have been sold, and by my reckoning, there might be three horses that might qualify for that tax deduction—they might not. In fact, I know that a fair portion of them won’t qualify. It’s a bit of a “might”.

Now, instead of a $4.8 million tax cost so far, we might be looking at $100,000. So what I’m trying to point out is the fraughtness of introducing legislation like this—and I’m not criticising it, because that’s the Government’s wish to put that bit of legislation; that’s right. It just hasn’t achieved what it set out to achieve—it can’t possibly achieve what it set out to achieve because there just aren’t the number of horses going to qualify in that bracket. I think there were only 24 or 25 horses sold in that bracket in New Zealand. The bulk of them went overseas, and so they were never going to qualify anyway. If you wanted to incentivise more people to get into that industry, you would have to lower that threshold significantly to make it work. Now, I think it would be to our advantage to do that, because if you think about it, it’s got to be a pretty brave business person who’s going into a new business who’s going to shove up $404,000 first up to get their business going; they’re going to have plenty of other costs before they do that.

The other interesting thing that I think was of concern to some on the committee and, certainly, was a concern to some of the officers was that people would then get close to the threshold price and want to ratchet up their price to get over the threshold so they’d claim the tax deduction. Now, by my reckoning, there were three horses that were sold in this last year’s yearling sales—and you’ve got to bear in mind there are 1,200 horses going through the ring. There were three horses that were sold just below that threshold, all to New Zealanders, none of which went over the threshold. So what I’m saying is there was no threat that someone was going pay more—well, it turned out there was no threat—just to qualify for the tax deduction. So it just shows how, when you try to introduce a piece of legislation to incentivise something, it really is very difficult to make it work.

So other than all the complications of SOP 135, there’s some very good stuff in this piece of legislation, but as I said earlier at the beginning of my speech, we can’t support this piece of legislation, simply because we believe that people should have their own money to spend and that they’re better at spending money than the Government is, effectively. So that’s my lot, and I commend it to the House but can’t support it.

Hon JAMES SHAW (Associate Minister of Finance): Thank you, Madam Assistant Speaker. I rise to take a call on the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Bill—a snappily titled piece of legislation which, belying its dry kind of title, is actually pretty significant because it actually impacts the lives of every single New Zealander. I just wanted to pick up on a point made by the previous speaker, Ian McKelvie, about the reasons why the National Party are voting against the bill here at this reading. The underlying philosophy that they have is that individuals can spend their money more effectively than the Government can. If you’re to follow that line of argument, then, by definition, tax should actually be eliminated entirely, along with all public services, because if an individual can spend their money more effectively than the Government, then there is clearly no need for the Government, which provides public services such as education, mental health services, environmental protection, transport, housing to people who can’t afford it, and so on. So I think it is kind of an absurd proposition to hold, the idea that you would suggest that you should eliminate all tax on the basis that how we work together as a community is not as effective as how a group of atomised individuals can operate.

I was reading a contribution online from a small-business person, a plumber, who, in relation to this bill, actually, had said, “Well, you know, I don’t feel that I need a tax cut.” He said, “I realised what the difference was between what I was being offered at the last election by the National Party with the package that they were putting forward versus getting rid of those changes that are outlined in this bill.”, which is that that little bit of money that he would have gotten back, actually, when you add it to that little bit from his neighbour and everyone in his street, enables teachers to get paid more, more nurses to get hired, more police to get hired, better public services—Better Public Services, of course, being a catchcry of the previous Government. That was actually something that he felt was more valuable than him being able to buy another cup of coffee every week.

As my colleague Chlöe Swarbrick said in her speech sometime in the last few days, in our work, when we go out and we talk to people about this, people have never actually said to us, “We want a tax cut.” What they have said is that they want a better quality of life, that they want better public services, and that they want more effective transport to get around their congested cities, particularly in Auckland. They want to be free and to live in a country free from homelessness, to be free from endemic child poverty, and to be free from the kinds of hospitalisation rates that we see in this country from entirely preventable respiratory diseases because we have such poor-quality housing. So rates of tax, as outlined in this bill, are really significant because they enable us to confront child poverty, they enable us to reduce hospitalisation rates for infants, and so on.

I thought Mr McKelvie’s contribution was very considered, very thoughtful, and, as he said, there are a lot of good things in this bill but, ultimately, the National Party feel that they cannot vote for it because they feel that we should get rid of tax entirely and return everything to the individuals who make up our society. I can’t support that line, which is why, of course, we will be supporting it.

Having said that, there are some things here that I do want to draw specific attention to which I’m really pleased about, one of which has been referenced before, of course: that’s around the simplification of the tax system. Again, as Mr McKelvie pointed out, the Business Transformation programme that the Inland Revenue Department are engaged in is very significant. It’s a massive investment. It runs across multiple years. It is fraught with risk and difficulty, as these kinds of projects are, but the results—what we’re able to do as a result of this programme—are extraordinary. Some of them are reflected here in the bill, particularly the ability of people not to have to fill out a tax return because we’ve been able to automate the calculation of their tax paid and then, essentially, also automate any kind of return or difference between what was actually paid versus what they need to pay.

The fact that you can do that for pretty much three million people and eliminate the need for three-quarters of a million people to ever have to fill out tax returns again—I know it sounds like a small thing, but it makes life for people, and particularly for small-business people and solo operators, so much easier and free of that kind of anxiety of having to interact with a system that they’re not familiar with and that causes quite a lot of stress. So it’s one of the things I just wanted to highlight in particular, because I think, in many ways, that will be one of the things that people in their everyday lives, as a result of this bill, feel have gotten better. For that reason alone, I think that the National Party ought to vote for it, because they’re all about—well, they say that they’re all about—small businesses and making life simpler and better for people, particularly when it comes to interacting with Government.

The other thing that I wanted to draw attention to is some of the changes around KiwiSaver. I know that this came up in the Finance and Expenditure Committee and with a number of the submissions, and I also know that the Retirement Commissioner had made a recommendation specifically to include the additional 6 and 8 percent contribution rates to provide a bit more flexibility for people. Again, I think this is one of the ways that this bill will make the lives of ordinary people better, because it gives them more options and, I think, gives people more reason to participate in the KiwiSaver scheme. At the moment, the existing options that they’ve got in terms of those contribution rates might just kind of bounce them out at that decision point, whereas if they see that they’ve got those additional options, they feel that, actually, it becomes more worthwhile.

So I do think that there’s a good chance that we’ll see KiwiSaver contribution and participation rates increasing as a result of that particular change. KiwiSaver is a fantastically successful scheme—like, wildly successful—and I think this just makes what’s a really good scheme even better and gives people more reason to participate. Likewise, scrapping the five-year contribution rule for people over the age of 60; I think that that will, again, increase the chances that people will choose to participate in the scheme, even for periods of time shorter than five years, because they will see the value of it. So those changes, I think, really do kind of add to the success of KiwiSaver.

So there are three main reasons why I endorse the bill, those changes to KiwiSaver being one; the simplification and the ability for literally hundreds of thousands of people, millions of people, to have that kind of automated interaction and to take that stress out of it; then also, finally, to return to my first theme, the changes to the actual tax rates, which mean that we can actually fund the kinds of public services that create a better quality of life for New Zealanders, which they clearly wanted and voted for in the last election. So for those reasons, the Green Party will support this bill as it continues its journey through the House, and I commend it to the House.

ALASTAIR SCOTT (National—Wairarapa): Madam Assistant Speaker, thank you for this opportunity to speak on this long-winded titled bill, the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill. I’m going to touch on half a dozen things but, first of all I’d like to make a couple of comments vis-à-vis James Shaw’s speech.

I suspect there’s a leadership issue in the Green Party. There must be—there must be. He’s been talking about increasing taxes. Here’s a guy who’s an environmentalist, and he’s talking about increasing taxes, not taxing the taxpayer enough. He’s talking about capital gains tax (CGT)—must have capital gains tax. He’s appealing to his members, who are the left of the left, and so I’m suspecting that there must be an issue inside the Green Party, and I imagine we’ll hear a little bit more about that down the track.

It is ridiculous that we need more taxes; we have surpluses. The Labour Government has inherited surpluses coming out of its ears. There is no need for further taxes, and that is why we support and legislated earlier for tax cuts by changing the thresholds. That is why Simon Bridges has recently announced the movement, by indexing the tax thresholds, to give more people their money in their pocket, because, after all, it is their money—it is their money. The sanctimonious attitude that comes from James Shaw to say that New Zealanders need to be taxed more for his purposes, to do what he wants, is outrageous.

We have to remember that we are spending taxpayers’ money. About a third of every dollar in the economy is spent by the Government. It’s far too much; it’s outrageous. In my view, people should be left to look after themselves, their communities, and their families, and they’ve proven—

Hon Andrew Little: So James Shaw was right?

ALASTAIR SCOTT: —and they know how to look after—we don’t need Andrew Little’s help in looking after our family, or James Shaw’s sanctimonious attitude to say, “We need more tax to do the stuff that we want to do.”, despite what the individual might want to do. It’s quite amusing. You might recall—

ASSISTANT SPEAKER (Poto Williams): All right, Mr Scott. I think we can come back to the bill.

ALASTAIR SCOTT: Well, I was just going to say: James Shaw’s maiden speech—look back on it. He reflects on markets. He actually quotes Margaret Thatcher, and I can’t understand the flip-flop that he talked about this afternoon.

Anyway, the six points that I would like to make: generally, I support the bill—the points in the bill. It’s all about simplifying and modernising the tax system around the Business Transformation process. I like it. You know, I’m a pretty simple sort of guy. I think I’m reasonably modern. So you’d think I might even support all of the bill, but I don’t. I don’t because of the tax rates—and we’ve touched on it already—that are implemented and accentuated in this bill.

The good bits of it some people have talked about already. The information sharing—very useful, very useful. I still advocate for and look forward to the day where delinquent fathers who have multiple children, or multiple lots of children—not even multiple; any number of children—and disappear on them, as delinquent fathers, and do not pay their paternal obligations through the IRD—this information sharing will help, and the Business Transformation sharing will help, track those guys down, because, as others have said, it’s almost a real-time situation. At the moment, we can have fathers who go from job to job and are never really called up by the IRD and miss out and do not fulfil their parental obligations to their children. That will change, I’m sure, as time goes on.

The KiwiSaver: the Minister said KiwiSaver is very good because it makes retirement easier for all New Zealanders. That’s not quite the case. Unfortunately, not all workers’ salaries or wages are in KiwiSaver, and I think there is still a lot of work to be done around that. In fact, most of the people who are not in KiwiSaver are the lower-income people because they simply cannot afford to contribute the 2 or 4 or 6 or—I think it’s even 10 percent that one can contribute now to the KiwiSaver scheme. So while it is an excellent tool for people who can afford to save, there’s still a lot of work to be done to ensure that those that are the most vulnerable at retirement should be able to contribute more easily.

The secondary tax: we’ve covered that off reasonably extensively with Deborah Russell’s contribution. I agree it is a problem. I’m forever explaining to people that the secondary income tax is something that if they overpay, they can get a refund on, and that they should still go for that second job because, at the end of the day, the total income is what is taxed, not just the secondary income. The secondary income is taxed at a higher rate, but it is balanced, and at the end of the year, it’s the total income that matters, and that’s really pleasing to see that this legislation enables that to happen.

The next point I would like to raise is around the volunteers. Again, this is a matter of simplifying and modernising, with the use of the technology as well. So this revolves around the volunteers. At the moment, volunteers, let’s say, are on a salary. They don’t need to put in a tax return—if you’re simply on a salary, that’s done automatically—but these guys who volunteer, who get paid an honorarium, that’s withheld at a higher tax rate, a little bit like your secondary tax rate. So to ensure that they’re treated fairly, they’ve had to put in a tax return, and as we’ve heard from a number of contributors this afternoon, people don’t. They just don’t bother. They’re just concerned that if they file a return, they might get a notice to pay a bit more. They’d rather just keep clear of the IRD—it’s a Government agency; you know, Big Brother. Whatever their reason is, they don’t necessarily want to interact with the IRD—unfortunately, because, in a lot of cases, they will be due a refund, whether it’s a secondary income or whether, in this case, they might be a volunteer fire or emergency service volunteer. So, again, that’s a good thing. That’s a very useful piece of legislation.

The other piece was around the brightline test where a property is bought off the plans. Prior to this legislation, the time would start ticking when the land was purchased. Now it’s when the contract is signed, if you like. So that brings the start date forward, if you like. It will compel the owner of the property to hold the property for longer, if you like, from the purchase date of the land, and that’s good, but remembering, of course, the brightline test is, essentially, a capital gains tax. The Labour Government moved it from a two-year brightline test to a five-year brightline test, and that has put a whole lot of landlords off investing in property. That has increased the cost of being a landlord. Obviously, if there’s going to be a possible or even an imminent tax burden, the landlord demands that cost of capital to be recuperated in some way, or they’ll leave. If they want to recuperate the cost of capital, they have to go to the tenant in increased rents.

Chlöe Swarbrick: Or they could sell their property.

ALASTAIR SCOTT: Or they could sell the property; that’s another point. They could sell the property, but the problem with that—and this is part of the problem with the capital gains tax: if you do sell the property, you’re going to be liable for a tax bill. So that’s a problem when these landlords go to the bank.

So you go to the bank and say, “Look, Mr Banker, I want to buy another property.”, and he looks at your balance sheet. You bought a property 10 years ago; it’s worth $200 today—that’s about a 7 percent return compounded—and you think you’ve, sort of, doubled your money, if you like. But, unfortunately, the bank is going to say, “Mate, your property isn’t worth $200 because that $100 is taxed. So I can’t bank you on $200 worth of asset; I can only bank you on $166 of asset.” So what you’re going to find is that bankers aren’t going to fund it. That’s a problem because if the bankers aren’t going to fund the landlord, the landlord can’t build the next property or invest in the next property to house the tenant.

So I think we’ve got to be a little bit careful about the unintended consequences of some of these legislative moves—well, I’m talking about the brightline test in the bill at the five-year point, but particularly the CGT that’s proposed, and that is why we have to be careful about what we do here. So at the end of the day, I reject and oppose this bill.

ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. Kieran McAnulty, you have five minutes.

KIERAN McANULTY (Labour): Thank you very much, Madam Assistant Speaker. It is my pleasure to stand here and prove to the nation that not everyone from Wairarapa is boring, and it is also my pleasure to come after Alastair Scott, because I’ve been coming after Alastair Scott for 18 months and it’s going very well indeed. But I wanted to speak in favour of this bill, just like everybody else that stood here to speak for this bill. Even on that side, they’ve all spoken in favour of it, but they’re not going to vote for it. On this side of the House, we are going to vote for this bill.

Now, I won’t go on and on like some of us have today, because, actually, there’s not too much more to say. I do want to mention one particular thing, and then I’ll sit down. The changes in here that look to address the issues surrounding our fire and emergency volunteers that go away, take time away from work, and get an honorarium to train up in Rotorua with the national training institute there, for the fire brigade—it’s a big ask and, at the moment, it is just a hindrance. To be honest with you, that is an absolute common-sense approach, and good on the Finance and Expenditure Committee. That was one day where National decided not to pack a sad. They sat there and they worked together as a committee and they came up with something simple. I commend the bill to the House. It’s a marvellous bill.

TODD MULLER (National—Bay of Plenty): Well, that’s such a disappointment, because I don’t sit on the Finance and Expenditure Committee, and, obviously, it’s been lovely to hear how collegial they are most of the time—at least when the Government members don’t forget what time it is. So it’s been very interesting to listen to the debate this afternoon. I was hoping for something far longer and more erudite from the previous speaker, Kieran McAnulty, but alas, we will never get to really hear what he thinks about the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill.

If anyone is still watching, it is quite a remarkable bill to be talking about at the end of the first week, on a Thursday. It’s felt, in fact, at times over the last 90 minutes, that as more people have spoken, the oxygen in here has got less. But there have been a couple of contributions that I really do have to take issue with. The first one was the contribution from the learned colleague the Hon James Shaw and his interpretation of our opposition to the tax rates which are inherent in this proposed legislation. He then moved on to give us a philosophical view of the National Party’s outline with respect to tax.

As I was listening to him talk about the wonders of increased taxation, it reminded me that for the Green Party in particular, there is not a social ill, there is not an issue in society, that increased taxes and Government spending can’t fix. At the core of their philosophy—in fact, it’s ironic; when he was extrapolating that because we are a party that is proudly of the corner that less taxes and more efficient use of taxpayer money should be the primary driver of Government policy, he’s essentially arguing that, really, if you follow that logic through, from a Green Party perspective, why not a 100 percent tax and we can all sit back and relax in the delight that the Government can manage all of society’s issues on our behalf. So it was a very interesting contribution from Mr Shaw.

Of course, as those who have listened today will have picked up, many aspects of this bill we support. Indeed, the pro-business simplification of the system enabling a business in particular to be able to do their job more effectively, in terms of interfacing with IRD, had its genesis in the previous National Government. The reason we oppose this bill relates particularly to the setting of the annual rates of income tax. The Government is right that it’s a rollover of what is currently in place, or was in place in the last financial year, but that, of course, is the core difference, because we had signalled and promised that had we got back into power, we would have made a threshold adjustment with respect to those rates, which I think, and we all think on this side, would have been welcomed. Indeed, close to 45 percent of the country believed, in voting for us, that that was indeed going to happen.

A lot of areas have been traversed. I won’t cover many, but I will touch on a couple. One is that I’m very pleased, from a previous small business perspective, that we are going to assist small businesses with respect to changes to the binding rulings regime. I have been a chief executive of a smaller business where we have gone through this process—or the business went through this process—and, certainly, providing some surety and more cost efficiency with respect to that engagement is welcomed.

Apparently, in this legislation, in the charities section, there are an extra 13, I understand, which have been applied to the list which is given charitable status. We support that, but it is added to the 2,500 that are already there. Certainly, from our perspective, we think there is opportunity to look into some of the issues with respect to those who are on that charitable status. I think there’s a feeling that not all of them necessarily should still be there, because their businesses and activities perhaps have moved on from being a true charity in that sense of the word. So we would encourage the Government to do some thinking in that space.

Interesting afternoon—my colleague Deborah Russell certainly provided a highlight with respect to secondary tax lecturing. I suddenly felt I was back at Waikato University, introduction to macroeconomics. It was very enjoyable. I hope you’ve enjoyed it at home, and I certainly, whilst commending the thinking behind this bill, for the reason outlined, cannot support it. Thank you.

GINNY ANDERSEN (Labour): Thank you for the opportunity to be taking a short call on the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill. As most of the key areas in this bill have been well traversed, I’d like to focus quickly on information sharing and collection. This bill does a great job at modernising some of the current provisions in how we work.

Two important improvements of how the Inland Revenue Department collects information I’ll touch on quickly. First, it clarifies in the legislation that information collected for one inland revenue purpose can be used, in fact, for other functions, which makes it far easier for people utilising the system. They don’t have to provide the same information again and again. Secondly, it provides a regulation-making power for repeat collection of third-party databases. While inland revenue always can collect current information, the new rules will provide a greater transparency where this collection is done on a regular basis.

Finally, it’s interesting to see that what this also does is it provides for the New Zealand Police information sharing. Already, police are allowed to use it for the financial intelligence unit. It contains police who are non-sworn, and the current legal provisions are that you have to be a constable to do that. So it’s great that this bill enables that unit, which does great work in the anti - money-laundering space for people who are not sworn who work within police, to be able to utilise that for good purposes. So without further time on this bill, I’d like to commend it to the House.

NICOLA WILLIS (National): I rise to take a call on the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill. Aren’t I lucky, because this is the first bill that I will speak on in 2019. I’d like to wish Madam Assistant Speaker and the members of this House a happy New Year in this, a year that some have hopefully described as a year of delivery and which others of us are very aware is the year that the Government’s chickens come home to roost, because when you overpromise and under-deliver, New Zealanders have a habit of noticing and voting accordingly.

So when it comes to this bill, we have had members opposite throughout the debate saying, “Oh, well, if you support so many measures within it, why is it that you would oppose it?” Of course, they’re right. There’s a lot of great work that the former Government did to create this bill: work around secondary tax, simplifying the system, work around KiwiSaver, some of the bureaucratic things that are inherent in a tax system and that any Government should work to improve over time. But what this bill also does, which members on this side of the House here, the National Party members, cannot abide, is it entrenches in our tax system a set of tax rates that are higher than New Zealanders should be paying. They are so high that very soon a New Zealander on the average wage will be paying our highest tax rate. We in the National Party say that is not right, that is not appropriate, and it is not something that we are prepared to support.

We put to you that if this Government had not repealed the personal income tax cuts that National had legislated for in Budget 2017, then the average New Zealander today would be a thousand dollars better off. Members opposite can say, “Oh, well, you know, that’s just a technical issue to do with tax.” Well, a thousand dollars, to the average New Zealander, would make a great big difference right now, particularly as we see living costs rising across the country and people struggling.

Now, James Shaw, in his contribution to this debate, decided to talk about the philosophy of tax and where National stands, and I cannot leave those remarks un-responded to, because what he said was that National opposes any form of taxation, that somehow we don’t believe in the collective provision of services such as education and health. That is verging on misleading, and it is certainly wrong, because it was the National-led Government that actually invested the highest ever record levels of expenditure in our education system and in our health system.

What is true of the National Party is that we do believe that taxation must be taken to invest in collective services, where the Government can best provide those services for the betterment of New Zealanders. But what we also believe and what we hold fast to is that any good Government should be sceptical of the power of Government to spend New Zealanders’ money better than they can in their own families and for themselves.

At the margin, where we are making those decisions, we should ask the question, because otherwise you can get yourself into the kind of situation that Phil Twyford finds himself in, where he’s gone out there and he’s said, “Give me a few billion dollars, and I’ll sort out the housing crisis. I’m Phil Twyford—I can do it.” And then he said, “OK, it’s going to be brilliant because the Government’s going to be running the show.”, and what is the reality? The reality today doesn’t need to come from the way I describe it or the way Judith Collins describes it; we can rely on the neutral commentary of the Reserve Bank Governor, who put it very clearly—who put it very clearly. He said that for every 100 houses that are built under KiwiBuild, between 50 and 75 elsewhere won’t be built.

The reason I highlight this is because what it shows you is that when Government takes too much tax, the result is that Government gets sloppy with New Zealanders’ money—gets sloppy, does not get the results that New Zealanders deserve, does not have the impact on their lives that they expect, and that is not acceptable. That is why 45 percent of New Zealanders said, “We want a Government that’s prepared to reduce tax rates.”, because we as New Zealanders in this country are inherently sceptical of Governments who say they can spend their way out of problems.

So when we turn to this bill and we turn to this philosophical discussion that James Shaw put to us, we can see that it is right—it is right for National to be opposing this bill and to be opposing the cementing of higher tax rates than New Zealanders need to be paying. You only need look at the detail of the clauses in this bill to understand how tax systems creep into New Zealanders’ lives.

Actually, I’d like to commend Deborah Russell for the contribution she made in terms of showing us in quite detail, in a way that really did make me feel like a young schoolgirl again, being lectured by someone from quite on high. I wondered to myself: how do the people of New Lynn feel when they get these wonderful, learned lectures? But what she did do in her contribution, that I commend her on, is that she detailed just how complex dealing with the tax system can be for New Zealanders’ everyday lives, and what she showed us is that New Zealanders don’t like it when the taxman intrudes; when the taxman gets in the way of people’s ability to invest in their business, to grow their business; and when the taxman gets in the way of New Zealanders’ ability to make decisions to grow things, to invest in their own families.

This is significant, because the more we tax, the more that happens. So National, in saying that, yes, it’s good to be improving the details, as this bill does, still absolutely stands on principle to say that where we can reduce tax rates, we must. It is a disgrace that this bill further entrenches tax rates that we oppose.

Hon Andrew Little: Here’s the hard right talking.

NICOLA WILLIS: When we—oh, Andrew Little. The Hon Andrew Little says that it is hard right—it is hard right—for me to suggest that New Zealanders enjoy being able to earn their own money and make choices about how they spend it. They enjoy a Government that looks after their own money carefully, that spends it wisely, that watches those dollars, and that ensures that they get results for the additional investments they make. He says that it is hard right to have a Government that actually delivers rather than just talks about how much they’re spending. It is hard right to take issue with Shane Jones—

ASSISTANT SPEAKER (Poto Williams): I apologise to the member. This debate is interrupted and is set down for resumption next sitting day.

Debate interrupted.

The House adjourned at 6 p.m.