Thursday, 19 May 2022

THURSDAY, 19 MAY 2022

THURSDAY, 19 MAY 2022

The Speaker took the Chair at 2 p.m.

karakia/prayers

karakia/prayers

DEPUTY SPEAKER: E te Atua kaha rawa, ka tuku whakamoemiti atu mātou, mō ngā karakia kua waihotia mai ki runga i a mātou. Ka waiho i ō mātou pānga whaiaro katoa ki te taha. Ka mihi ki te Kuīni, me te inoi atu mō te ārahitanga i roto i ō mātou whakaaroarohanga, kia mōhio ai, kia whakaiti ai tā mātou whakahaere i ngā take o te Whare nei, mō te oranga, te maungārongo, me te aroha o Aotearoa. Āmene.

[Almighty God, we give thanks for the blessings which have been bestowed on us. Laying aside all personal interests, we acknowledge the Queen, and pray for guidance in our deliberations, that we may conduct the affairs of this House with wisdom and humility, for the welfare, peace, and compassion of New Zealand. Amen.]

Petitions, Papers, Select Committee Reports, and Introduction of Bills

Petitions, Papers, Select Committee Reports, and Introduction of Bills

SPEAKER: A petition has been presented to the Clerk for presentation.

CLERK: Petition of Barnabas Fund New Zealand requesting that the House urge the Government to officially recognise as genocide the mass murder of Armenian, Assyrian, Syriac, and Greek Christians in the Ottoman Empire.

SPEAKER: That petition stands referred to the Petitions Committee. On 17 May, the Ministry for the Environment, Manatū Mō Te Taiao, Aotearoa New Zealand’s First Emissions Reduction Plan, together with Aotearoa New Zealand’s First Emissions Reduction Plan: Table of Actions were presented. Those papers are published under the authority of the House. Select committee reports have been delivered for presentation.

CLERK:

Report of the Finance and Expenditure Committee on the Reserve Bank of New Zealand’s Financial Stability Report May 2022

report of the Justice Committee on the petition of Karl Thomas

reports of the Regulations Review Committee on the complaint about the Resource Management (National Environmental Standards for Freshwater) Regulations 2020 and on the examination of COVID-19 orders presented between 16 and 29 March 2022.

SPEAKER: The reports of the Finance and Expenditure and Regulations Review committees are set down for consideration. The Clerk has been informed of the introduction of bills.

CLERK:

Appropriation (2021/22 Supplementary Estimates) Bill, introduction.

Repeal of Good Friday and Easter Sunday as Restricted Trading Days (Shop Trading and Sale of Alcohol) Amendment Bill, introduction.

Electoral (Strengthening Democracy) Amendment Bill, introduction.

Increased Penalties for Breach of Biosecurity Bill, introduction.

SPEAKER: Those bills are set down for first reading.

SUPPLEMENTARY ESTIMATES DOCUMENTS

SUPPLEMENTARY ESTIMATES DOCUMENTS

Hon GRANT ROBERTSON (Minister of Finance): I present the Supplementary Estimates of Appropriations for the Government of New Zealand for the Year Ending 30 June 2022.

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

Budget Documents

Budget Documents

Hon GRANT ROBERTSON (Minister of Finance): I present the 2022 Budget speech; the Budget at a Glance 2022; the Wellbeing Budget 2022, including reports on the fiscal strategy, on child poverty, and the summary of initiatives; the Budget Economic and Fiscal Update 2022; and the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2023.

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

Bills

Appropriation (2022/23 Estimates) Bill

Introduction

CLERK: Appropriation (2022/23 Estimates) Bill, introduction.

SPEAKER: The Appropriation (2022/23 Estimates) Bill is set down for first reading forthwith.

First Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Appropriation (2022/23 Estimates) Bill be now read a first time.

SPEAKER: The question is that the motion be agreed to.

Motion agreed to.

Bill read a first time.

Budget Statement

Second Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Appropriation (2022/23 Estimates) Bill be now read a second time.

It is my great pleasure to present New Zealand’s fourth Wellbeing Budget. In each of this Government’s three previous Wellbeing Budgets, we have not only considered the performance of our economy and finances but also the wellbeing of our people, the health of our environment, and the strength of our communities.

In Budget 2020 and 2021, we applied that wellbeing approach to dealing with COVID19. This meant taking a health- and science-led approach, focusing on caring for our people and our communities. It has meant that New Zealand has reached this stage of the pandemic in as good a position as any other country. That is not just because we still have one of the lowest death rates from COVID but also because our economy is in a stronger position than most. This has been recognised by two triple A credit ratings from leading ratings agencies, and by the likes of the OECD and IMF. It has been a tough couple of years for New Zealanders. I want to again thank businesses, workers, and all members of the community for your hard work. It means we are now in a strong position to meet the next set of challenges and take the new opportunities to provide all New Zealanders with economic security in good times and bad.

The investments we are making in this Budget build on the progress made in Budget 2021 towards the Government’s three goals for this term. These are: continuing to keep New Zealanders safe from COVID-19; accelerating the recovery and the rebuild from the impacts of COVID-19; and laying the foundations for the future, including addressing key issues such as climate change, housing affordability, and child poverty.

Budget 2022 invests $5.9 billion a year in net new operating spending while introducing multi-year funding packages that also draw from Budget 2023 and Budget 2024 operating allowances. We are investing $2.9 billion from the Climate Emergency Response Fund (CERF) to meet our emissions reduction plan and lay the foundations for a long-term transition to a low-emissions, high-wage economy. We are also supporting New Zealanders to meet the rising cost of living caused by global inflation pressures, through a targeted package of support focusing on low and middle income New Zealanders, including a short-term cost of living payment for around 2.1 million people.

New Zealand’s overall wellbeing has held up well during the COVID-19 pandemic. Our mortality rate remains lower than those of our international peers, and life satisfaction remains high across all ethnicities. While the economic contraction associated with COVID-19 was much deeper and much more sudden than what New Zealand experienced during the global financial crisis, the economy has proven to be resilient, with economic activity in the December 2021 quarter 3.5 percent ahead of pre-pandemic levels.

Unemployment at 3.2 percent is at record lows, household incomes have continued to rise, and balance sheets are strong across almost every sector. We have done this with some of the lowest debt in the world. Our net debt is forecast to be around one-half of Australia’s, a quarter of the UK’s, and a fifth of the USA’s, using a comparable measure. As I have indicated, we are moving to a new debt indicator that is more in line with how other countries measure their net debt, and more accurately reflects the Government’s fiscal position. On that indicator, net debt will now peak at 19.9 percent of GDP—or 41 percent using the old indicator—before reducing further over the forecast period.

Economic growth is forecast to peak at 4.2 percent and average 2.1 percent across the forecast period. We are forecast to reach an operating balance before gains and losses—the OBEGAL—surplus in the 2024-25 financial year. This will be five years after COVID hit us and is a year earlier than the previous Government returned to surplus after the global financial crisis. New fiscal rules will oblige the Government to run a small surplus on average, over time, once we have returned to surplus, and maintain net debt at a ceiling below 30 percent of GDP.

This approach means that current expenses will be met from current revenue. We will have a prudent level of debt that allows for a buffer against future shocks while providing room for high-quality and much-needed investment to close our infrastructure deficit. This balanced approach to fiscal policy is critical as we face the immediate challenges that are in front of us and as we address the long-term issues in our economy. The impacts of COVID-19 remain with us. Experiences of the pandemic differ greatly among New Zealanders, and its long-term effects have yet to be seen. Longstanding challenges around climate change, child poverty, productivity, and housing quality and affordability have not lost their urgency.

On top of that, Budget 2022 is being delivered in a difficult time for the global economy and for many New Zealanders. The impacts of rising inflation due to COVID, supply chain challenges, and pressure on oil prices from the Russian invasion of Ukraine are being felt at the petrol pump and at the supermarket. This Budget responds to these immediate challenges facing New Zealanders while also looking ahead. The here and now matters, but so too does tomorrow and making sure that we provide for a secure future. This Budget is about both—a careful balance to provide economic security into the future and make sure we invest for what is needed now without adding to the drivers of inflation.

I will talk more about our long-term initiatives shortly, but first, I want to focus on our immediate challenges. I am acutely aware of the cost of living pressures that exist for many people, particularly those on low and middle incomes. While the current levels of inflation are expected to be temporary, this doesn’t take away from the impact it is having on households and businesses. New Zealanders are not alone in feeling these pressures: recently, the US has recorded inflation of 8.5 percent; Canada, 6.7 percent; Germany, 7.3 percent; and, as of last night, the UK, 9 percent. The very latest OECD average was inflation of 8.8 percent in March, putting New Zealand about middle of the pack. Such international comparisons, however, do not diminish the impact on New Zealanders who are currently struggling to deal with rising costs.

The Government, throughout COVID, has supported households and businesses. More than $20 billion was provided in across-the-board support from the wage subsidy scheme, resurgence support, and COVID support payments. This has kept many people in work: 62 percent of all jobs were supported in 2020 by the wage subsidy scheme, and 47 percent in 2021.

In response to the rapid spike in global oil prices following the war in Ukraine, we moved quickly in March to reduce the fuel excise by 25c a litre. For a family that fills up an average car every week, that represents up to $17 per tank, or more than $220 worth of support over the three months. Road-user charges were similarly reduced and public transport prices halved for the same period. These measures were on top of changes we made to increase income support for low and middle income families from 1 April this year, including a third lift in weekly main benefit rates following those in 2020 and 2021. The changes we have made since coming into Government mean that 364,000 people who receive income support are better off by an average of $109 per week. For those with children, they are better off by an average of $175 per week.

As we move through these next few months, further targeted support is being provided for low and middle income New Zealanders. The resumption of the winter energy payment from 1 May is providing this for superannuitants and those on income support, with at least $80 per month from the beginning of May until the end of September.

But the increasing cost of living is affecting those on middle incomes as well. To provide targeted support to a wider group, through this Budget the Government is investing more than $1 billion in a cost of living package targeted at low and middle income households. The package includes: an extension to the reduction of fuel excise duty introduced in March, by two months until mid-August; an extension of the road-user charges cuts introduced in April, until mid-September; and an extension of half-price public transport fares introduced on 1 April, until the end of August. I can also announce today that, from September, we will introduce Community Connect, to extend half-price public transport to the more than 1 million community services card holders on a permanent basis. In addition to helping reduce costs for households, the public transport price cuts will also further our climate change and emissions reduction objectives.

We will also provide short-term targeted support to low and middle income New Zealanders through a $350 cost of living payment, across three monthly instalments from August 1. This works out to about $27 per week for an estimated 2.1 million New Zealanders. This payment will be available to people aged 18 and over who earn below $70,000 per annum, based on last year’s tax data, and who are not eligible for the winter energy payment.

We are well aware that this is only a contribution to the increased costs that people are facing, but it is a targeted way we can support people through this challenging period while not excessively exacerbating inflation. The payment has been set at half of the couple rate of the winter energy payment and is a recognition of the impact of inflation on a wider group of New Zealanders than those currently eligible for the winter energy payment. As a result of both the winter energy payment and the cost of living payment, 81 percent of working-age New Zealanders are being given temporary support to deal with cost of living pressures.

The Budget provides further important changes that will support those on low incomes. Budget 2022 will change how sole-parent beneficiaries receive child support payments. These payments will be directly passed on as income to sole parents receiving benefits from 2023, giving them more money to help their families and whānau. This change is estimated to lift between 6,000 and 14,000 children out of poverty.

We are also delivering on a manifesto commitment by more than trebling the level of dental grants available to low income earners to $1,000 per annum. Criteria changes will ensure these grants can be used for multiple visits for immediate and essential care.

While much of the inflation being experienced in New Zealand is driven by forces beyond our shores, we are also focused on addressing the supply constraints and other underlying issues that fuel it. This includes increasing labour supply through our immigration rebalance, and reducing our reliance on volatile commodities like oil by decarbonising our transport fleet through initiatives like the Clean Car Discount.

We are also committed to boosting competition in New Zealand’s grocery sector to ensure people pay fair prices for food and other basics. Today, we are introducing legislation that will remove barriers to new retailers entering the market. Specifically, this will prohibit the restrictive covenants on land that major grocery retailers use to limit site availability for competitors. Such covenants will be prohibited immediately once the bill comes into effect, and I anticipate that competitors can begin to consider new sites shortly thereafter.

There are other measures the Government will take in response to the Commerce Commission’s recommendations, but this is one thing that can be done relatively simply and quickly. Overall, the cost of living package in Budget 2022 represents a targeted response to the pressures being faced by low and middle income households and provides support without making the cause of the problem worse.

Moving to our longer-term challenges and opportunities, Budget 2022 marks an historic milestone in tackling climate change. Climate change is the most pressing long-term challenge we face. It will have a significant impact on New Zealanders’ living standards in the coming years, impacting the natural environment, our health, and our economic, social, and cultural wellbeing.

Recent reports that have highlighted worsening predictions for sea-level rise remind us again that we must act now for the sake of future generations. The action required presents opportunities to increase our economic security as we develop new low-emissions industries and the knowledge and skills needed to transition to a high-wage, low-emissions economy. New Zealand’s reputation in the world, and the brand on which we trade, is tied to the action we take on environmental issues, including climate change.

Mitigating and adapting to climate change requires a sustainable, forward-looking response and significant investments across multiple Budgets. To address this, we have established the Climate Emergency Response Fund with an initial $4.5 billion down payment from the expected cash proceeds from the emissions trading scheme (ETS).

For Budget 2022, investments are focused on mitigation, particularly initiatives to deliver actions in the emissions reduction plan. In future, the criteria will be extended to include adaptation. As announced earlier this week, the CERF investments for Budget 2022 total $2.9 billion and include a strong focus on transport initiatives. These include $569 million to support low-income households to shift to low-emissions alternatives when scrapping a vehicle, and $375 million to reduce reliance on cars and support the uptake of active and shared transport modes.

There are also significant climate-focused energy and industry investments, including $653 million to fund further decarbonisation, including increasing the scope of the Government Investment in Decarbonising Industry Fund to support businesses to shift to low-carbon energy sources, and $73 million to deliver more insulation and heating retrofits for low-income homeowners by extending the Warmer Kiwi Homes programme.

In the agricultural sector, climate investments include $339 million of funding for a centre for climate action in agriculture to support innovation and research to reduce emissions, and $6 million for the implementation of an agricultural emissions pricing scheme, based on the outcomes of the Primary Sector Climate Action Partnership—He Waka Eke Noa.

In the forestry sector, $91 million is allocated to reduce the use of coal and other carbon-intensive fuels and materials by increasing woody biomass availability, and $145 million to create large-scale native forests as carbon sinks, to offset emissions in other sectors where abatement is difficult.

The Government’s emissions reductions plan will help us meet the carbon budgets set by the climate commission. They are achievable but will require all sectors to play their part. They will also require sustained investment. Treasury has updated its forecasts for ETS cash proceeds by a total of $800 million, and the Government has agreed to use this increase to top up the fund, leaving $1.5 billion remaining. We will review the size of the fund on a regular basis, with the next opportunity being the Half Year Economic and Fiscal Update in December.

The climate investments we’ve announced in Budget 2022 are funded by those who pollute, not from increasing debt or other revenue. They will see the Government, in partnership with business, do the initial heavy lifting in our climate response and, in doing so, give households greater choice about how they participate in climate action.

I would like to acknowledge our cooperation agreement partners, the Green Party, and in particular the Hon James Shaw for his role across two terms of Government in bringing this work together. It is no longer good enough to just talk the talk on climate action. At Budget 2022, we walk the walk—or take public transport or another sustainable mode of transport; a dad joke for Minister Shaw.

COVID-19 has highlighted the need to reform New Zealand’s health system and ensure we are delivering quality services nationwide in an equitable and sustainable way. Our health system is staffed by dedicated and talented health professionals, but the system in which they are working is fragmented, inefficient, and financially unsustainable. For too long, New Zealanders’ access to health services has been a postcode lottery. For decades, we have seen inequalities grow in the health outcomes for Māori and Pacific peoples. Today, that changes.

Budget 2022 provides the largest investment ever in our health system, with $11.1 billion in new funding to put that system on a sustainable financial footing. This will ensure that Health New Zealand and the Māori Health Authority are able to make the changes needed to deliver better health services to New Zealanders wherever they live. To set this system up for success, we need to change the way we provide funding for health.

In recent years, district health boards have consistently run deficits, with funding unable to meet growing demand and address historic cost pressures. Relying on the annual Budget cycle for funding has made it difficult to plan for future investments and address long-term challenges in the health system. To address this, we are introducing a new multi-year funding model for health, beginning with two years of funding before eventually moving toward a three-year funding cycle from Budget 2024.

The two-year transitional package agreed through Budget 2022 begins with an investment of $1.8 billion per annum, including funding to deal with the deficits of the previous system. This will be followed by a further $1.3 billion per annum from 2023. Unlike in previous Budgets, where cost pressures for specific services have had to be traded off against each other, delayed or partly funded, this general increase will allow Health New Zealand to take a central view and identify priorities for funding across the system. The transformation of our health system will take time, but these first investments will make significant progress towards a fully equitable, sustainable, and quality health system for the future.

Within the funding allocated in Budget 2022, there is $488 million for primary and community care. This will roll out local models of care that are tailored to the populations they serve, as well as securing and developing the capacity and capability of Māori and Pacific healthcare providers.

The investments for Māori healthcare providers contribute to a wider package of initiatives totalling $580 million across the health, social, and justice sectors, which contribute to Māori health and wellbeing—this includes $166 million for Whānau Ora providers to continue supporting more than 40,000 whānau.

The Budget will also make the largest ever single contribution to Pharmac’s medicines budget. We’re investing $191 million over the next two years to make more medicines and other health treatments available. The two-year funding will align Pharmac with the new overall multi-year health funding allocation. Pharmac’s total funding will be $1.2 billion, which is up 43 percent since we took office in 2017.

There is significant support in Budget 2022 to secure the future of our ambulance services: $166 million over four years provides funding to add 48 more ambulances and 13 other vehicles to New Zealand’s road ambulance fleet and to allow up to 248 more paramedics and front-line staff to be recruited; $90.7 million over four years will go towards New Zealand’s air ambulance services—this includes the replacement of some ageing aircraft with modern, fit for purpose helicopters and at least one new helicopter with additional crew.

Budget 2022 allocates $202 million to further improve New Zealanders’ access to mental health and addiction services. This Budget focuses on improving care for those who have the highest needs. We’re investing $100 million to increase the availability of specialist mental health and addiction services and to strengthen existing services in targeted areas across the country. We’re also continuing to invest in two programmes that support young people’s mental health: Mana Ake, which provides mental wellbeing support for primary and intermediate school - aged students, and Piki, a pilot scheme which provides integrated mental health and addiction support for young people.

We’re also continuing our significant investment in hospitals and other health infrastructure, with an injection of a further $1.3 billion. This will include a further investment for the rebuild of Whangārei Hospital and the initial works to re-develop Nelson Hospital. This takes total health capital investment since Budget 2018 to more than $6.9 billion.

In every Budget, there are always smaller projects that might get lost on the day but are very meaningful. To highlight just one example: this year, we’re providing $7 million of funding for the operation of portable retinal cameras to ensure equitable access for screening premature babies, to address one of the leading causes of blindness.

In total, around a third of Budget 2022 investments are for health. This speaks to our priorities as a Government. Our vision is for all New Zealanders—no matter where they live or who they are—to have access to high-quality health services to support the best quality of life. I am proud to say that this Budget is a significant step towards making this vision a reality.

In response to COVID-19, we went hard and we went early, an approach that has paid huge dividends. Key to this success was the establishment of the COVID-19 Response and Recovery Fund. This fund has allowed us to invest in crucial response functions and targeted supports that enable New Zealanders to weather and recover from the economic impacts of COVID-19. As our policy response to the pandemic evolves and we adjust to living with COVID-19, our fiscal response is evolving as well. Our COVID-19 response is increasingly part of standard Public Service delivery, so we no longer expect to need the funding flexibility that was essential early on. As a result, we have closed the COVID-19 Response and Recovery Fund. We are reprioritising the remaining funding and bringing future COVID-19 - related costs within standard Budget processes. We continue to have fiscal headroom to respond, as necessary, in the event of a major resurgence or a new variant. We are taking a prudent approach to that possibility by setting aside $1.2 billion so we can respond rapidly to any immediate public health needs related to COVID19 that cannot wait until Budget 2023.

The uncertain and volatile global economic situation highlights the need for an economic plan that supports diversification of the New Zealand economy, creates new products and services, and increases our resilience in an uncertain world. Our economic plan is to build a high-wage, low-emissions economy that provides economic security in good times and in bad.

This Budget includes a substantial package to unleash the potential in our economy. We’re funding the ongoing development of industry transformation plans (ITPs). ITPs bring industry players together to increase productivity and resilience. Budget 2022 invests $37 million for the Construction Sector Accord Transformation Plan to increase the productivity, capability, and resilience of our construction sector; $30 million for the Advanced Manufacturing ITP—this plan focuses on identifying existing and emerging points of comparative advantage and maximising our global brand and international connections; an additional $5 million for the Agritech ITP to build the skills and practices required to transform the sector into a sustainable and competitive export industry; and $20 million for the digital ITP to grow the software-as-a-service sector and ensure that we grow the skills and talent we need to create more high-wage jobs.

The Budget also recognises the importance of the tourism sector to rebuild in a sustainable way. An innovation programme for tourism is being created by reprioritising funding not required from earlier emergency support. It will be designed with the sector to ensure it targets investment to where we can truly innovate and develop our tourism offering.

Small businesses are a key component in the transition to a high-wage, low-emissions economy. We are setting aside $100 million of capital funding for a business growth fund being developed alongside New Zealand’s major banks. This will improve small and medium enterprises’ access to finance, enabling them to grow, create jobs, and increase their contribution to our wider economic development.

We know that when our regions do well, all of New Zealand benefits. To help the people, businesses, and industries based in the regions reach their full potential, we are fully funding the $200 million Regional Strategic Partnership Fund to invest in local projects tailored to a region’s particular needs and advantages. To further help those in the regions, we are fulfilling another manifesto commitment by investing $60 million to improve broadband infrastructure in the worst-served areas, enabling stronger connections and greater productivity.

This Government is focused on delivering better infrastructure, and that is a key component of our vision for a high-wage, low-emissions economy. Our first 30-year New Zealand Infrastructure Strategy from Te Waihanga, the New Zealand Infrastructure Commission, shows that, if we continue on the path of the past four decades, we will not be able to meet our future infrastructure needs. Under-investment in our crucial infrastructure is one of New Zealand’s greatest long-term economic challenges. We have dedicated more than $60 billion to infrastructure over the next five years, but that alone is not enough. We need to be smarter about the way we plan, deliver, and use our infrastructure. This will mean getting more from the infrastructure that we do build, reducing costs, and prioritising for the greatest impact. Te Waihanga’s strategy will be a key enabler of many of our Government’s priorities—tackling the housing crisis, responding to climate change, and building a more secure economy.

Budget 2022’s new investments in infrastructure include $349 million of capital funding to replace and modernise our rail assets, and $1.3 billion to upgrade our health infrastructure to support current and future demand. In total, Budget 2022 includes $4.7 billion of capital investments from the $9.8 billion multi-year capital allowance.

Budget 2022 also has a strong focus on transitioning to a digital economy, improving how we deliver public services and keeping our existing digital services safe from cyber-security risks. Key investments include: setting aside funding for a new digital system for our courts, making it easier for New Zealanders to interact with the justice system; $220 million of operating and $100 million of capital spending set aside for investments in health system data and digital infrastructure and capability; and an investment in critical satellite capability to improve the accuracy of GPS.

The Government is committed to delivering quality education, training, and skills development so that all New Zealanders get the opportunities they need to live the lives they value. The Budget 2022 package includes a total of $2 billion in operating funding and $855 million of capital for the education system, including investments in infrastructure, new initiatives, and funding to address critical cost pressures.

The newly developed Equity Index will receive $293 million operating and $8 million capital funding to replace the outdated decile system and significantly increase equity funding to schools.

As part of the Government’s commitment to strengthening the role of te reo Māori in our education system, Budget 2022 provides $75 million to support providers of te reo Māori immersion and kaupapa Māori learning throughout our education system. As demand for Māori language education grows, we are investing $21 million operating and $105 million capital investment to provide quality classrooms for our kura.

Investing in quality education means not only investing in students but also those who support them. Budget 2022 builds on the investment made in the past two Budgets by providing $275 million towards progressing pay parity in our early childhood education sector.

The Government’s investment in supporting employment opportunities for New Zealanders has been crucial to the COVID-19 response and recovery and has supported the record-low unemployment rate. We are providing further funding for successful programmes like Mana in Mahi, which provides significant support to people furthest from the labour market to upskill and enter employment.

We are also extending the Apprenticeship Boost initiative, supporting firms to keep early-stage apprentices employed and to bring on new apprentices, and strengthen the skilled workforces New Zealand needs to recover from the impacts of COVID-19. More than 190,000 Kiwis have been supported through our investments in trades training since the start of COVID, and 38,000 apprentices are expected to benefit from the extension of the Apprenticeship Boost through to the end of 2023.

Budget 2022 also sets aside $60 million to support progress on the continued design and implementation of the New Zealand Income Insurance Scheme. This scheme is being jointly designed with BusinessNZ and the Council of Trade Unions to better support New Zealanders who lose their jobs through no fault of their own. The scheme will better protect workers and incomes, and also increase the availability of skilled workers. It will help communities and industries during economic shocks and transitions, contributing to a more secure economy. There is considerable work to get the scheme up and running, and it is now expected to be operational in 2024.

Budget 2022 includes over $1 billion in investments to support better Māori health, education, and economic outcomes, as well as stronger cultural wellbeing. We are continuing to foster employment opportunities for Māori through the continuation of the cadetship programme and support for Māori entities delivering employment training through the Māori Trades and Training Fund.

We’re laying foundations to support Māori economic development, with $10 million for Te Ringa Hāpai Whenua Infrastructure Fund, which will enable owners to undertake economic, cultural, social, and environmental projects on their whenua. Our continued support for the progressive procurement programme, with an additional $26 million, will help to build capability for Māori businesses to effectively participate in public sector procurement processes and increase supplier diversity.

Building capability and employment opportunities is also key to our investment in Pacific peoples, with $18 million for Pacific STEAM futures and $8 million for delivering employment and training services through Tupu Aotearoa.

We remain committed to protecting and uplifting Māori and Pacific culture, knowledge, and history. Budget 2022 supports the growth and development of the Māori media sector and provides funding to protect mātauranga Māori and other taonga.

We are also following through on the commitment made to empower Pacific communities to tell their stories of the Dawn Raids, making progress towards reconciliation through community grants for multimedia projects, an online histories platform, and creating an official historical account.

As a Government, we are committed to taking substantial action to reduce child poverty and hardship in New Zealand beyond the 66,500 children already lifted out of poverty. While our targets are ambitious, the latest figures for 2020-21 are encouraging. They show rates on all nine income and material hardship measures in the Child Poverty Reduction Act are trending downwards, and we have achieved two out of three of our first three-year targets and made significant reductions against the third target. Through Budget 2022, we are continuing to support families through direct and indirect investments in child poverty and wellbeing.

This Budget also has a strong focus on providing more equitable access to services and improving wellbeing outcomes for New Zealanders who live with disabilities. A $943 million package will enable disability system providers to meet demand, establish a new Ministry for Disabled People, and invest in the regional-based roll-out of the Enabling Good Lives approach to disability support services.

Budget 2022 also includes $1.5 billion of investment in public, transitional, and emergency housing as part of the Government’s continuing efforts to address challenges to housing access and affordability. This adds to the 9,000 extra public housing places already delivered under this Government. This funding includes $1 billion for public and transitional housing, $355 million for changes to the emergency housing system, $75 million to progress the Homelessness Action Plan, and $221 million for the affordable housing fund.

Targeted support for first-home buyers through the Budget includes increases to the First Home Grant caps, which will help more Kiwi families get the security of homeownership as prices become more sustainable against a backdrop of record house-building in this country.

Budget 2022 continues to embed a wellbeing approach into the Budget process and the wider public finance system. The innovations introduced as part of Budget 2022 will allow us to better address complex, multi-generational challenges and facilitate longer-term investment. These changes include a multi-year funding cycle for health services and establishing the multi-year Climate Emergency Response Fund, as well as a pilot of two clusters of agencies in the justice and natural resources sectors.

Key to all these innovations is a focus on driving delivery and value for money. The clusters help break down silos between agencies and also help Ministers to collectively make trade-offs across related areas. Three years of funding gives agencies the certainty to plan ahead, with a focus on achieving longer-term outcomes and managing cost fluctuations.

Ministers and agencies have worked together to develop a funding package based on four priorities for a more effective overall justice system. Key justice cluster investments include: $46 million to develop a cross-sector model to guide future investment in services for victims, and increasing the uptake of financial grants under the Victim Assistance Scheme; and $190 million to maintain and strengthen legal aid to ensure access to justice for people who cannot afford a lawyer.

Budget 2022 also invests in solutions to prevent harm from crime in communities and improve the safety of our front-line workers. This includes $92 million of operating and $2 million capital funding for effective implementation of the Government’s end-to-end strategy to prevent harm from serious and organised crime in New Zealand.

Reforming the resource management system to deliver better outcomes for our natural and urban environments is a priority for this Government. It is a key focus of the natural resources cluster, with $179 million to support the successful implementation of these reforms. Other key natural resources investments include $118 million operating and $5 million capital funding for a permanent network of advisory services to support more sustainable and productive use of rural land, and $40 million total operating to progress industry transformation plans for our primary sectors, including fisheries, forestry, and the food and beverage sectors.

Budget 2022 comes at a time when the global economy is uncertain and volatile. Our response to that requires a careful balance. Faced with the current elevated levels of global inflation, some would have us pull back on supporting New Zealanders with the public services that they need. But that will not reduce the prices that Kiwis are facing at the pump or in the supermarket; it will only undermine the wellbeing and security of our people, and it is not an option I am prepared to consider.

Instead, this Budget backs New Zealanders in shaping the new normal that is life with COVID. It builds on the collective hard work that has delivered a strong economic base to meet core needs across health, education, and housing, while also supporting climate action and investing in the skills, infrastructure, and industries we need to grow higher-paying jobs. We are providing support in the here and now for those facing cost of living pressures, while carefully managing our spending and keeping debt under control. This Budget represents a major step towards a future where we provide economic security to all New Zealanders while delivering higher-wage jobs that support a low-emissions economy.

Aotearoa New Zealand has navigated COVID better than almost any country in the world. We did that by putting our people first, by taking a wellbeing approach, and by targeting our support where it was needed the most. We will now take the success of that approach and build on that foundation to overcome the challenges we face and seize the opportunities for a secure future for all New Zealanders.

I commend Budget 2022, A Secure Future, to the House.

Budget Debate

Budget Debate

CHRISTOPHER LUXON (Leader of the Opposition): I move, That all the words after “That” be replaced with “this House, and the people of New Zealand, have lost confidence in this Government, because this Budget takes them backwards. Households are going backwards. The books are going backwards. Outcomes are going backwards. The country is going backwards.”

Grant Robertson had one task in this Budget, and that was to ruthlessly focus everything in this Budget around overcoming the cost of living crisis and to stop New Zealanders going backwards. But it’s clear that he’s failed, because Grant Robertson has delivered the “backwards” Budget. Now, I have to say, we had a moment. We thought about calling it the “Budget blowout” Budget, then we thought maybe it’s just the “band-aid” Budget, but we landed on the “backwards” Budget, because when you cut through all the words and you strip out all the spin and look at the facts of it, the sad news for New Zealanders is that Kiwis are going backwards, the books are going backwards, and the outcomes are going backwards.

Now, the sad part of this Budget is that the reality is that Kiwi families and Kiwi households are going backwards. They’re being squeezed by this massive cost of living crisis. And I want New Zealanders to get really clear about where we are and what’s happening with this cost of living crisis, because inflation is at a 30-year high. It’s higher than most of our trading partners, despite what Jacinda Ardern and Grant Robertson will tell us, and it’s actually getting a grip in this economy.

Now, some people, like David Parker, are students of economic history, and if you go back to New Zealand in the early 1980s, we remember interest rates being at 20 percent and we remember double-digit inflation. You look around the world, and inflation destroys economies. And once it gets in, it’s hard to get out, and it causes hurt and pain to people everywhere. We’ve got inflation now at just under 7 percent, we’ve got wage growth only at 3 percent, and that means all Kiwis are going back faster than they’ve been going in the last three decades. Mortgage costs are up because interest rates are up, rents are up $150, food prices are up the highest they’ve been in over a decade, and petrol is up over $3 a litre. And I can tell you, Kiwis up and down this country are feeling that pain. And this Budget will be putting Kiwis backwards into the future.

The Budget forecasts that inflation isn’t actually due to come down below 3 percent until 2025. And what that actually means is that this cost of living crisis is going to go on for longer and for some time, and Kiwis will keep going backwards. And rising inflation is going to mean that our mortgage rates and our interest rates are going to have to go higher for longer, and, sadly, there is more pain on the way for Kiwi households. And what we saw in this Budget was that the growth forecasts have been slashed. Growth in 2024 will be less than 1 percent, and only a few months ago, growth in 2024 was going to be 2 percent, and now it’s been slashed, and unemployment is going to continue to rise, and by 2025, we expect it to be just under 5 percent. Kiwis are going backwards under Labour, and the Budget shows that it’s going to continue.

Now, to Grant Robertson, my advice to you is quite simple: you need to get out more; you need to leave the Beehive, get out of the Wellington Central beltway, and go meet some real people up and down this country, because I can tell you—the Kiwis will tell you—they’re going backwards and you’re not listening to them. And every week, I get out of this place, and I go to maybe two or three towns across this country, and the message is clear: there is a big cost of living crisis, it is broad-based, it’s affecting everyone, and it’s impacting everything.

But there was, basically, nothing in the Budget for the hard-working young couple who came up to me on ANZAC Day at Stockade Hill in Howick the other day. They were a teacher and a nurse, and they said to me, “Chris, we’ve got good jobs on average incomes, we’re really good with our money, and we’re trying really hard to save for a deposit for a house.” But because of rising rents, because of the rising costs on everything, they can’t get ahead, and they can’t get that deposit together. And then they started to say to me, “We think there might be more opportunity for us if we move to Queensland.” And I thought that is a tragedy that young people don’t think that this is a country where there’s opportunity for them and that they can get ahead. And they are what we call the squeezed middle, because the Government doesn’t care about them. They earn too much to get formal Government help and support, but they don’t earn enough to deal with the cost of living crisis, the rising mortgage payments, the rising rents, the rising food, and the rising petrol prices.

So let me be really clear: the cost of living package that this Government announced in the Budget today is just a band-aid on a major wound—it’s a band-aid. They deny that there was, in fact, even a cost of living crisis for a long period of time, and now they’ve added a temporary band-aid, which just runs out after three months. And I can tell you, what we just saw was inflation’s going to be running at 3 percent right out to 2025, so Grant Robertson’s big solution to the current cost of living crisis is a temporary payment to a small group of people. And I have to tell you: if you’re earning $71,000 a year, you get nothing.

And that means nobody on the average wage gets a cost of living payment, because these are the people that would have benefitted from income relief through a very good, sensible, logical plan—our plan, which was just say, “Take the current progressive tax system, and in fairness, why don’t you just lift the tax thresholds up by the amount of inflation? And an average Kiwi household would have had $1,600 a year to fight this cost of living crisis that they’re facing.” But Grant Robertson said no. And why did he say, no? Because the dirty little secret is that inflation, while it destroys savings, it destroys people’s purchasing power, and it gets into an economy. The dirty little secret is that inflation helps Grant Robertson. Why? Because he’s collected $17 billion more in tax revenue because, as prices go up, taxes go up. And Grant Robertson, as we know, is utterly, totally addicted to spending, and that means that he won’t let Kiwis keep a single cent of their own money, because he thinks he can spend it better than them. And on this side of the House, we know Kiwis with cash in their pockets will spend it and save it a lot better than Grant Robertson.

So, in the spirit of wanting to help Grant Robertson, I wanted him to think about—he could have adopted the National Party inflation fighting plan if he wanted to deal with the cost of living crisis. And what is that? It’s (1) return the Reserve Bank to a single mandate to fight inflation; (2) remove the costs that you add to business, so we don’t pass through higher prices that further drive inflation—get rid of the rental property taxes, get rid of the national awards, get rid of the national income insurance; (3) remove the bottlenecks that are stopping productive growth in our economy—why don’t we wake up Kris Faafoi and get the immigration settings in this country set right?; (4) why don’t we review all the existing and new spending? It’s obvious that it hasn’t happened with this Budget. We have an unprecedented amount of money being spent here. And (5) prioritise tax relief, as I just said, for those workers. It wasn’t ideological; it was sensible, practical, common sense just to say, “Take the tax thresholds, index them to inflation, and give people a break.” And what I want to say is anyone earning over $50,000 would be better off under National’s proposed inflation-adjusted tax brackets compared to Labour’s cost of living package.

Let me lay out the facts on why the books are going backwards, because it is very, very important that Kiwis register what has gone on here today because of the economic mismanagement and the lack of economic leadership from this Government. Kiwis up and down this country are tightening their belts at their kitchen tables. They are doing it. Grant Robertson should be doing exactly the same, but he’s not. And what we have seen from this Government is a loss of a culture of financial discipline. We’ve seen a loss of targets. They don’t care about every single dollar being spent as if it’s their own, and they should because it’s not their money; it’s taxpayers’ money. But I’m telling you, Grant Robertson has a problem, and his problem is that he is so deeply and utterly addicted to spending, and I want to say that the impact of his addiction on our fiscal books is incredibly clear, and when you think about it, he’s damaging New Zealand’s economy very strongly. This is—be under no doubt—a massive Budget blowout.

This Government—and I want to just step it through—has increased Government spending since coming to power by 67 percent. You haven’t seen a 67 percent improvement in outcomes or services. And, consequently, we’re spending $127 billion this year in Government spending. That is unprecedented and that is $51 billion more this year than it was in 2017—$51 billion more. And now, let’s just look at this year, because Grant Robertson said he would spend $6 billion in the biggest Budget spend-up in the history of New Zealand, and he’s actually spending far, far more than that. And I want to take the House and the country through this because it’s actually really important everybody understands what’s going on, because he’s trying to make out that he’s fiscally prudent. And the reality is he’s more addicted to spending than he’s ever been before. There’s the $6 billion he’s already announced, and then you have to remember, earlier in the week, he spent $3 billion from the Climate Emergency Response Fund, earlier in the week—a lot on Labour projects and buzz words and strategies and plans and plans for plans.

But not to be done there, he’s gone off and spent another $2 billion of new spending from the Budget next year. And then on top of that, he’s added another $400 million from the Budget after that. That’s called Budget 2024. And he’s so desperate to spend up that he’s actually robbed $2.5 billion from the next two years of Budgets. But it’s even worse than that, because the cost of living payment is actually outside that new allowance. There is a massive Budget blowout and, when everyone thinks seriously about 2023—he’s going to be spending a lot more next year, you just know it. Like someone who’s addicted to spending, he can say all he likes about the future, but we just don’t trust him, because when you’re addicted to spending, you can’t let it go, and we know he’ll continue to do it in the coming years.

So it’s no surprise that the surplus is pushed out another year; it’s no surprise that a $2 billion surplus has now evaporated, like a mirage, into a $2 billion deficit; and it’s no surprise, when you think about the hyper-spending levels that we’ve now got more Government debt—it’s nearly tripled; I mean, Government debt has tripled to $173 billion. And the problem with that is there’s no modern monetary theorist—you actually have to pay the interest on the debt, and that bill is almost $5 billion a year, and that means that that is twice what we spend on our police force. So that means that Kiwis cannot get better public services as a result of that debt, because of his out-of-control spending addiction.

Now, I want to say that the books are going backwards, and Kiwi households are going backwards, and the outcomes are going backwards, and the people of New Zealand see through this Government. I’m telling you now, they can see it is all spin, no delivery. They can see it is all talk, no action. Lots of activity but no achievement is what’s going on here. Listen, I’m going to give you some advice, because the fundamental problem with this Government is that they conflate and they confuse spending announcements with actually getting things done and getting outcomes for New Zealanders, and they are two very different concepts. For you to spend money and to deliver outcomes, there’s something in the middle called “implementation, execution, delivery”. Those are the things you need to do. But if you haven’t run anything, you don’t know how to get things done, and that’s exactly the story of all of this front bench: they don’t know how to convert the spending into outcomes. And you can pick any topic you want—any portfolio you want—and you’re going to see a consistent pattern: more spending, more bureaucrats, worse outcomes.

Let me give you an example; let’s take Chris Hipkins and education because, without doubt, that’s the most damning set of stats I’ve seen since I’ve come into politics, and to this place, 18 months ago. He spent $5 billion more, hired 1,400 more staff—staff earning $120,000 or more has tripled—and yet we have less kids attending school, and we have worse academic outcomes. What we’ve got from Chris Hipkins is more spending, more bureaucrats, and worse outcomes.

Let’s look at Megan Woods and housing, because, if you remember something called KiwiBuild—remember KiwiBuild?—we don’t talk about it anymore, but the flagship KiwiBuild; only delivering 1.3 percent of the promised 100,000 houses. But, even if we put that aside, just think about the four outcomes you actually have to deliver in housing: house prices are up $400,000; rents are up $150; there’s a quadrupling—a fourfold increase—of people wanting a State house; and, sadly, this morning, 4,500 kids woke up in a motel in emergency accommodation. So what I’ve got to say is that from Megan Woods, we’ve seen more spending, more bureaucrats, and worse outcomes.

Let’s talk about Kris Faafoi, because he’s probably going to wake up now. He spent an extra $150 million. He’s hired another 500 people and, on every single visa processing, the wait time has got even longer. What is that? More spending, more bureaucrats, worse outcomes.

I want to talk about Kelvin Davis just quickly, because we should talk about Kelvin and Corrections. He spent $139 million. He increased the back office staff of Corrections by 50 percent, and then those prisoners that desperately need alcohol and drug rehabilitation services dropped from just over 6,000 down to 1,000. More spending, more bureaucrats, worse outcomes.

I really want to talk about Michael Wood and transport—that’s the one I really want to get to, because who would have thought that an $800 million bike bridge across the Waitematā was a killer idea? Brilliant idea. And then you go and spend $55 million on consultants looking at it, and then we’re still hiring an empty office building on Auckland’s waterfront to run a cancelled project for $600,000. He’s tripled the communications staff, we’ve had a tenfold increase in those that are paid over $100,000, and even then they still can’t communicate why you need two props of zeroes for $10,000. I mean, you honestly can’t make this stuff up, and I could go through every single portfolio and the story’s the same: more spending, more bureaucrats, worse outcomes. They don’t know how to get things done.

I just want you to take yourselves back two weeks ago because, two weeks ago, Andrew Little came to this House and he stood up and he realised he had a problem with wait-lists on health. And he had a cunning idea, I thought, you know, because the reality is this: there’s been a fifteenfold increase in people waiting more than four months for their first specialist appointment, and that was from when they came to power before COVID in February 2020, and it’s only got worse since then. Anyway, so Andrew Little came to the House and he said, “Look, I can’t just go and create another working group, because that’s what we used to do. We spent nine years in Opposition, we had no ideas, we arrived in Government on day one and we formed 230-plus working groups.” Now, we lost count of them but that’s what they did. So he didn’t just create a working group; he thought about it a bit more and he created what we call a “task force”—that was task force. And the great thing about a task force—this wasn’t just a normal task force, or a bog-standard task force; no, this was a “high-powered task force”, OK. [Cheers from Opposition members]

Yes, and I’ve been thinking about it because, as I look here and I look across the other side, what you see is people who are tired and struggling to get things done in this Government. And New Zealanders are looking at this Government, and they can see they’re tired and struggling to get things done. I’ve been thinking about how I can help and how we can help, and I think what this Government needs is a high-powered task force. Here’s the idea for you: what I want to suggest to you is you could employ a high-powered task force called “the National Party” to actually go off and take over and run this Government and get outcomes for the New Zealand people. And I can tell you, the National Party is ready. We are able and we are willing to step up and deliver for the New Zealand people—and the New Zealand people, they trust us, because they know we’ll have an economic plan. They know that we can provide the economic leadership that this country so desperately needs. The bottom line is that we have to kick-start and enlarge this economic engine in this country of ours. And, on this side of the House, we know strong economic management, a strong economy, is actually how we lift prosperity for people. We know that a strong economy is actually how you lift wages; how people get ahead. It’s actually how you get a world-class healthcare system. A strong economy is how you improve education, a strong economy is how you have a police force that can keep communities safe, and a strong economy is what enables us to protect our environment. A strong economy is how you get Kiwis ahead, and that is what a National Party Government will deliver.

You might remember but, years ago, Grant Robertson used to talk about an economic concept called “productivity”, and he was actually on to something, but he’s actually given up talking about it now, because he’s got this addiction to spending that’s running his life and taking control of everything. And the biggest thing that we can do is we can lift incomes for Kiwis by improving the productivity of our economy and what that means, when you look at it, is you’ve got to get into the fundamental drivers of an economic plan, and that is about improving education, it’s about a world-class infrastructure system that connects us to each other and to the world. It’s about technology and capital and innovation. It’s about making sure we have a pro-business environment, because we know the Government doesn’t do things and get things done; it’s businesses, the lifeblood of New Zealand, that get things done in this country. And we need connections with the world in order to sell our best products and services to the 7.8 billion people sitting in 195 other countries. That’s how we back Kiwis to succeed, that’s how we get higher wages and incomes, and that’s how we give people more choice and freedom.

In closing, let me say that New Zealanders deserve far more than this Government has delivered. Labour has taken so much in taxes, they’ve added so much debt, and they’ve spent so much money, but yet they have delivered so little in public services and outcomes. And this is indeed, sadly, the “backwards Budget”. The books are going backwards, Kiwi households are going backwards, the outcomes are going backwards, and, sadly, the country’s going backwards and we’re heading in the wrong direction. New Zealanders deserve a Government focused on outcomes and getting things done, that listens and works with communities and businesses to do so, and we’re going to do that in the National Party Government that we lead. We do live in the best country on planet Earth. I’m optimistic about New Zealand. I believe we can do so much better than this. I want us to be confident. I want us to be aspirational. I want us to be ambitious. I want us realising our maximum potential—economically, socially, and environmentally. And that’s what New Zealanders can expect, and that’s what they’ll get with a National Government in 2023. Thank you.

SPEAKER: If the members would like the amendment put, they will sit down. The question is that the amendment be agreed to.

Rt Hon JACINDA ARDERN (Prime Minister) (remote): It is a pleasure to speak to this Budget, the fifth we’ve had the privilege of delivering, and in no less extraordinary circumstances. The business and cycle of Government is, in some ways, no different to life itself: navigating difficult times while also making necessary progress, dealing with the unexpected, and always—always—planning for the future; challenges not least of which include a one-in-100-year health crisis, followed by the biggest economic shocks since the Great Depression. And just as the world was recovering, it’s been plunged into the uncertainty of war.

Giving people as much certainty and security as possible in uncertain and insecure times is hard, but it’s what we must pursue, and that is what we have set out to do in Budget 2022: deal with the immediacy of the economic and health challenges Kiwis are facing, while also looking to the challenges of tomorrow, and seeking to buffer our people from both. It’s an approach that, as always, is focused on people.

Today, we deliver our fourth wellbeing Budget. Now, my virtual presence in the debating chamber is, obviously, not my preference on such a significant day. It means, for instance, that I’m not able to pay tribute to the Minister of Finance, Deputy Prime Minister Grant Robertson, in person. New Zealand has navigated some incredibly difficult times in recent years. It was only two years ago, for instance, that the Minister of Finance created the COVID Response and Recovery Fund, and delivered a jobs Budget that included investments in business support, infrastructure, and trades training. It protected half of all workers in New Zealand. It delivered a record amount of new apprentices. It enabled us, in spite of a pandemic, to deliver our nine-thousandth additional public housing place, an economy bigger than even before COVID, and the lowest unemployment rate on record.

Now, these results weren’t a given. When COVID first emerged, we faced sobering forecasts. Treasury predicted 10 percent of people would be unemployed. That would have meant hundreds of thousands of people looking for work, and the financial scarring that would bring. Now, today’s statistics speak for themselves, numbers that it is clear the Leader of the Opposition has not read. Our growth rates are higher than pre-COVID, and, in this Budget, forecast to reach 4.2 percent over the next financial year. Now, compare that to the aftermath of the global financial crisis (GFC), where rates were less than half that, at around 2 percent. Debt sits at 16.9 percent, and it’s forecast to reach 15 percent in 2026. We’ve had a bigger economic knock from the pandemic but managed with a smaller debt impact than the GFC. We will return to surplus in the 2024-25 financial year, a total of five years after COVID hit; compare that to the GFC, where it took six.

Finally, unemployment sits at 3.2 percent and is forecast to reach as low as 3 percent. Māori unemployment sits at 6.3 percent and Pacific at 6.7 percent. And while we have work to do, compare those figures to the GFC, where for our Māori and Pacific families, it was more than double those rates. Now, that is not to say that times aren’t tough for many New Zealanders right now—they are, and not just here but around the world—but in the midst of a crisis, in the midst of such tough economic times globally, we are well placed to recover, with one of the best economies in the world. And while there are many reasons for that, Grant Robertson is one of them, and for that, I thank him.

It was Labour who got us through COVID, and it is a Labour Government who will get us through the next set of challenges as well, and that is what this Budget is all about: addressing the challenges of today but also of tomorrow. Now, when it comes to today, there is no more universal challenge right now than the cost of living: globally, we know that we’re not alone, as inflation pushes up prices around the world. The average rate of inflation in the EU is 7.7 percent. It’s high in Canada, in Germany. Just yesterday, the UK hit 9 percent; in the Netherlands, it’s nearly 10 percent. And while there are many reasons for it, one thing that forecasters are predicting is that it will improve in the latter half of 2022. But that doesn’t help Kiwis now, and while we can’t control global inflation forces, our job is to take the hard edges off it for Kiwis, and that is why this Budget includes a cost of living package to cushion the impact for middle and low income families. Now, we’ve had to be incredibly careful in developing this package, to make sure it reached those who needed it most. Anything too broad could make inflation worse, and that’s exactly what the National Party’s tax cuts to the wealthiest would do. They would feed inflation while giving the biggest benefit to those who need it the least.

We also needed to make sure that our response was sustainable, and that it eased pressure on families who are also keeping up the investment in their healthcare system and in their education system. After all, no one would thank us for short-term relief that came at the expense of long-term services that Kiwis rely on. And we also wanted to make sure that what we did was timely. The result is the cost of living package we’ve delivered today. First, it continues the reduction of the cost of fuel at the pump by 25c a litre through till August. The war in Ukraine is continuing to make prices volatile, and this is some certainty that we can provide in the meantime for everyone.

Secondly, in August, a short-term and targeted cost of living payment kicks in, helping to transition from the excise reduction. It will be paid to middle and low income earners over the age of 18—everyone who earns up to $70,000 who isn’t already getting the winter energy payment. It means those who are doing the vital but unpaid work of caring, such as stay-at-home parents, will be eligible for the payment, which will be paid monthly for three months and equates to an extra $27 a week or $350. In total, it will ease the pressure for more than 2 million people, and means that 81 percent of New Zealanders aged 18 and over will either be receiving the winter energy payment or the temporary cost of living payment this year.

Now, no temporary fast relief can be perfect, but it can make a difference. Thirdly, half-price fares for public transport will remain through August, and then a new change kicks in: all community services card holders will continue to be able to travel for half-price, permanently. This change will not just last through the current inflation spike but for good, because we believe subsidised public transport makes a difference for people and the planet.

Fourthly, as part of our urgent Budget night legislation, we begin the process of addressing the root causes of high prices in our grocery sector. We have a lack of competition in this country, and it is impacting food prices and it’s impacting families. While there is much to do following the Commerce Commission report, we are starting today with unravelling some of the tactics to block competitors—that, I can assure you, is just the start.

Finally, today, we right a longstanding wrong that hits those who can least afford it when the cost of living spikes. For those on Government support, we are finally dealing with the issue of child support pass-on. Many people may not know this, but in New Zealand, those who are on Government support do not receive the child support payments made by an ex-partner, spouse, or parent. Whatever payments are made are retained by the State. That is unfair on a child and also lessens the incentive for a parent to pay. Budget 2022 changes this. It means our kids—those with a parent often on the lowest of incomes—will get extra support not from the Government but from their parent, and it will lift up to an extra 14,000 children out of poverty.

While in this Budget, the forecasts show that cost of living pressures are set to subside, there is no question that while they are here, it hurts. We’ve done what is possible to blunt the hard edges while ensuring we don’t pour more fuel on the inflation fire. It’s a position other countries we compare ourselves to are taking as well, and that’s one of the reasons I would hope the Opposition would support the package we have presented today. In fact, I call on them to do so, because in the Leader of the Opposition’s speech, I hear not one other idea—not one. Now, I know that they’re opposed to the 1 April income changes we made to increase the family tax credit. They’ve spoken openly against subsidies for things like public transport, in the same way they have opposed just about any climate-related policy, even ones that ease the cost of living. They have a policy of giving $2 a week to those we have proposed giving closer to $30 a week. But if they are genuinely concerned about the cost of living and not just politics, surely they will support this package because it does more for people here and now, and it does not leave the tin empty when there are so many other challenges we must address. If it is that they would rather stick with their policy of tax cuts for the top-income earners, then we know for sure that they don’t support the substantial health investments in this Budget—because you cannot do both.

That brings me to our health system. New Zealanders know how excellent it can be. I frequently receive letters from New Zealanders so grateful for the care they’ve received, but it is often supplemented with this: please do more to improve the system our health professionals work in.

Today, Budget 2022 provides the largest ever investment in our health system: $11.1 billion more for nurses, more medicines, and to end the postcode lottery to ensure that Health New Zealand and the Māori Health Authority are able to make the changes needed to deliver better health services to all New Zealanders, whether they live in Tairāwhiti, Buller, Whāngarei, Masterton, or Dunedin. And, yes, we have given health certainty about their future budgets to help them plan—something I see the Leader of the Opposition has taken issue with, once again showing he’s more of a short-haul than a long-haul kind of guy; or, perhaps more accurately, if you live in the regions, no haul.

In this Budget, we’re also making the largest ever single contribution to Pharmac’s medicines budget, bringing total funding to $1.2 billion, up 43 percent since we took office. I’m going to say that again: Pharmac funding is up 43 percent since we took office.

Our lifesaving ambulance services: supported to recruit an extra 248 more paramedics and front-line staff, and 48 more ambulances as well as chopper replacements.

We know that COVID has left scars on the mental health of many New Zealanders. So $202 million has been allocated to further improve access to mental health and addiction services, particularly for those with acute needs. And we are continuing to invest in two programmes that support young people’s mental health: Mana Ake, which provides mental wellbeing support for primary and intermediate school-aged students; and Piki, a pilot scheme which provides integrated mental health and addiction support for young people. And I acknowledge the Green Party’s support for these programmes.

But I want to make mention of one of the smaller initiatives in the health budget: $7 million for more portable retinal cameras to check the eyes of premature babies to address one of the leading causes of blindness in children.

A third of Budget 2022 investments go to health. In the wake of a health crisis, we know how important our health system and the health of our people is. This investment speaks clearly of the priorities of the Government: the importance of the wellbeing of our people, and the vital services they deserve. We are nothing without our health. And there can be no greater response to the COVID pandemic than ensuring we have better funded and stronger health services—and that is what this Budget delivers.

We know there are a myriad of other challenges we face. While in Opposition, I remember once speaking to a social worker, who had been in the job for 30 years, about what we could do as a nation to change the sometimes intergenerational issues children face. Without hesitation, her response was one word: education.

Now, no one wants to oversimplify what past Children’s Commissioner Russell Wills called wicked problems. And while there are many contributing factors to complex societal issues, we need to look at both prevention and the cure. Yes, we must support the police to bring a stop to violent behaviour and for there to be consequences for those who victimise others, but we must also support our young people on to alternate paths. That’s why we’ve put not just half a billion dollars into law and order initiatives to deliver the largest police force ever, we’re also a Government committed to delivering quality education, training, and skills development so that all New Zealanders get the opportunities they need and deserve to live lives of value.

Budget 2022 invests $2 billion in operating funding, and $855 million in capital for the education system. The new Equity Index relegates the decile system to the past. We take the largest step forward yet towards pay parity for our early learning teachers. We’re supporting Māori-medium education and kaupapa Māori sector. And beyond this, skills and training is a further area where we invested throughout the COVID pandemic to ensure that we retained and built a workforce for tomorrow as our economic recovery took off. We have the lowest unemployment rate on record, and so we need to reach into every corner to grow our domestic workforce. Successful programmes, like Mana in Mahi, which provide significant support to people furthest from the labour market to upskill and enter employment, receive continued investment in this Budget. We’ve also extended the Apprenticeship Boost.

Just last week, I received this letter in response to that pre-Budget announcement. Perhaps the Opposition member for finance for the National Party received it as well. “Thank you for extending the trades apprenticeship funding. We are so happy at the stability and certainty this will give to my children’s futures as they progress through the recently started mechanics and auto-electrical programmes. We all believed this programme would be cancelled from this August, and so we’re so excited about what this would mean. I come from an intergenerational depravity, which is extremely difficult and severely restricts our lives daily. Witnessing my kids begin on an actual qualification pathway has been a life-changing and a very positive experience for me.”

More than 190,000 Kiwis have been supported through our investment in trades training since the start of COVID, with tens of thousands more supported today—all necessary as we continue, for instance, the considerable agenda we have on housing, which continues in this Budget.

Now, that brings me to our partnership with business—so what I learnt the Opposition considers to be “corporate welfare”. Small and medium businesses contribute 30 percent to our GDP. Many are poised to grow and have the potential to accelerate our economic growth, which is why Budget 2022 invests in a new Business Growth Fund—$100 million over the coming year. But Crown investment is a minority shareholder, alongside New Zealand’s major banks, ensuring easier access to upfront finance and the quicker production of more jobs. It works overseas—in the UK, Ireland, Canada, Australia—and we’ve been told it fills a much-needed gap here.

Finally, we said that this Budget was focused on the challenges of tomorrow. No challenge is more present today and in the future than that of climate change. Where many choose to dwell on what can’t be done, we choose to move on what is not only possible but also the greatest opportunity in our history to move to a high-wage, low-emission economy that provides security in good times and bad.

We’re delivering in an emissions reduction plan that puts us on track to meet our carbon budget. I acknowledge the Minister for Climate Response, James Shaw, for the work that he’s done alongside us in Government to release that plan this week—which includes the biggest investment in climate action ever, paid for through recycling the emissions trading scheme payments on pollution. This $2.9 billion investment is the most comprehensive plan New Zealand has ever had on the issue of climate change. It’s because we cannot responsibly postpone a transition we need to start making today—one where every sector of society and the economy is considered part of the solution, where we have warmer, drier, more energy-efficient homes, more native climate sinks, energy production that doesn’t require fossil fuels, an upskilled workforce, and the most sustainable food production in the world.

When our future generations look back, I want them to see that we tackled climate change in the way we tackle all other crises: with people and the security of their future at the centre of our decision making, because, ultimately, for Governments, as with life, we will always face challenges—it’s not just how we manage a country through a crisis; it’s how you manage the country out of one as well. New Zealand navigated COVID, for two years, better than most because we put people first. That is an approach that Budget 2022 builds upon, tackling the issues we face today while also seizing the opportunities for a secure future for all New Zealanders, because we must do both and, with this Budget, we are.

Hon JAMES SHAW (Co-Leader—Green): E te Māngai o te Whare, tēnā koe. Well, the Leader of the Opposition delivered a speech that wasn’t so much 2022 as 1992. They reckon that they can help out New Zealand’s lowest-income families by giving our highest-income earners a tax break. Ruth Richardson called and she wants her speech notes back. The National Party might be dressed up in a nice new sheepskin kimono, but you open it up and it’s the same old wolf underneath.

When they finally get up to speak, I have to say that the ACT Party, no doubt, will continue their call for a robust and sober and rational debate about governance in this country, right after they yesterday issued a press release that called for a senior public servant to be beheaded. Maximilien Robespierre called and he wants back his guillotine. It is becoming clearer by the day that the reason Mr Seymour worked so hard in the last term to dispatch Winston Peters was so that this term he could become Winston Peters. So I guess there’s only room in this town for one alt-right populist.

Can you imagine what this warmed-over Richardson-Robespierre, all-you-can-eat duo would do to this country if they actually got back into power? It has taken at least 4½ years to even start to turn around the legacy left over from the last time they were in Government.

I have to say we do have a long journey in front of us, but Aotearoa is at last heading towards a future that is fairer, cleaner, and more prosperous, and all within the limits of our fragile planet. That is the vision that the Green Party was founded on some 30 years ago, a vision of thriving communities where everybody has the means to live in a warm, dry home; food that is healthy for us and healthy for the land that it is grown on; vibrant, flourishing ecosystems that underpin the kind of healthy environment that we all rely on; clean and healthy and swimmable rivers; new jobs and prosperity for our communities; and a sustainable, low-carbon economy. With a strong Green voice in Government today, more people up and down Aotearoa New Zealand can now make ends meet. Our communities are safer, they are cleaner, they are greener, and we are healing nature.

The Green Party is committed to progress, even when we have to fight for it inch by inch, and so we will be voting in support of Budget 2022.

In recent years, as we have battled a pandemic, there has been more than one Budget that has attracted the moniker “historic”, but I do want to say that despite that fact, Budget 2022 is a Budget of firsts. It is the first Budget ever to put climate action at its heart. It is the first Budget ever to fund a national family violence and sexual violence strategy. There is a lot to celebrate in this Budget. I also want to acknowledge that there is still so much more that needs doing for people and for planet.

This Budget continues to deliver on the foundations that Green Party Ministers laid last term, and I want to acknowledge again the work that they did then. It does also make some very important progress to support some of the Green Party campaign priorities of the last election campaign.

But if the Green Party had, say, 65 members of Parliament and we were writing this Budget ourselves, a number of things would happen. Mike Hosking’s head would explode. The country would be a lot better off, and not just because Mike Hosking’s head had exploded but also because this Budget would look different. A Green Budget would have done more to help the thousands of families who are struggling to make ends meet and towards that most basic of human rights—a roof over our heads. A Green Budget would have done more to halt the degradation of our wild spaces and the harrowing decline of our taonga species. The Budget report, I have to say, shows that there has been no significant improvement in child poverty statistics. A Green Budget would have done more to eliminate the scourge of child poverty in Aotearoa New Zealand.

I remember sitting in this House five years ago to watch Steven Joyce deliver the 2017 Budget. In a 40-minute speech, Steven Joyce did not mention climate change once—not once—but things have changed. Our Government over the last 4½ years has seen more action than in the previous three decades combined. We have passed the zero carbon Act, enshrining the 1.5 degrees Celsius goal in primary legislation. We’ve reformed the emissions trading scheme to ensure that polluters pay the real price of the emissions that they put into the atmosphere and we’ve put the proceeds from that reform towards establishing the $4.5 billion Climate Emergency Response Fund, and we have published a comprehensive plan to cut emissions right across the economy. This Budget is a landmark in our journey to continue that work and to build a clean and green and climate-friendly future.

Through this Budget we will decarbonise industry, with $678 million of funding for smaller businesses, commercial heating decarbonisation, and energy-efficient equipment. We will establish native forests at scale to develop long-term carbon sinks and to improve biodiversity, with $65 million. We’re going to reduce and divert organic waste away from landfill and reduce emissions from waste overall, with $103 million. We’re going to give people more transport options and achieve significant mode shift to active transport and to public transport, with $375 million of funding.

All of this investment makes this the first real climate Budget, but it must not be the last. This climate Budget is a huge step, and I do want to take a moment to celebrate that, but tomorrow it is back to the work of turning around decades of inaction on climate.

Another Minister, of course, is also starting to turn around an immensely challenging problem. The Minister I’m talking about, of course, is my co-leader, the Hon Marama Davidson. Marama continues to work tirelessly on the pernicious problem of family violence and sexual violence, a problem that requires bringing together many different Government departments and community organisations. Last year, Marama delivered Aotearoa New Zealand’s first ever national strategy and action plan to eliminate family violence and sexual violence: Te Aorerekura. That work built on the foundations laid by Jan Logie in our first term in Government, as well as Marama’s own deep experience working in and alongside vulnerable communities and tangata whenua.

Now, I’ve said it before and I’ll say it again, but Te Aorerekura is nothing short of a landmark in New Zealand’s social history. This Government inherited an underfunded, largely ignored sector broken up into many groups that didn’t have a clear understanding of their roles let alone a national strategy. Thanks to Marama, that is now in place, and Budget 2022 has provided the funding to deliver on it: $114.5 million over four years to prevent and respond to family violence and sexual violence across Aotearoa. With that funding, we will address the drivers of harm and will enhance protective factors and shift community and social norms that condone violence with $38 million, we’ll strengthen the existing integrated community-led response approach with another $38 million, we’ll develop workforce and organisational capability frameworks for the sexual violence centre and fund the implementation of new family violence frameworks and tools with $7 million, and so much more.

I cannot overstate the importance of this work. Everybody has the right to live in a peaceful home, to be respected, and to be safe from the mistreatment and violence that has been a shame on this country’s history. We must have a future where children and families and whānau can thrive, knowing that their homes are safe, and the initiatives in this Budget are crucial to getting there.

Our cooperation agreement with the Labour Party has delivered significant investments in people and in planet in today’s Budget. Last term, we helped to turn around decades of underfunding for conservation, which had seen the health of our forests, the rivers, and the birds in decline. There is a long way to go yet, but we do welcome today’s commitments to fund new work to protect our forests from the damage that’s caused by wild deer and goats; renewed investments in Tiakina Ngā Manu to protect our taonga species; and investment in huts and tracks so that more people can have the opportunity to spend time and enjoy nature by walking or tramping or hunting or fishing or mountain biking.

Department of Conservation (DOC) rangers and other staff are on the front line of protecting nature, and we do welcome the Government’s commitment to increase their incomes and to maintain staff housing in really remote areas whilst also upgrading the DOC vehicle fleet to low-emission and electric vehicles.

On Budget day, I do think it’s important to highlight some of the relatively modest amounts of investment that actually will make an immeasurably large difference to people’s lives but that tend to get overlooked with all of the big headline initiatives that get announced. Budget 2022 delivers funding for eating disorder support services that will improve the lives of hundreds of young people and their families. I would like to acknowledge the Hon Dr Ayesha Verrall for her collaborative work with the Green Party on this often unseen but deeply felt crisis in our communities. We welcome the continuation of Piki, the youth mental health programme that was begun in the last term, and also the expansion of Mana Ake to five more areas of Aotearoa.

For our rangatahi and their whānau, we welcome the expansion of child and youth mental health and addiction services for an additional 1,300 people. The Opposition makes a lot of noise about being tough on drugs, but it is precisely that hollow rhetoric that has seen drug harm explode over the past 40 years. The Green Party has always fought for evidence and compassion in drug policy, and the approaches and the investments that genuinely build resilience and healing. These are important initiatives in the cooperation agreement between Labour and the Greens.

The Budget also delivers on areas that the Greens have long campaigned for which are not covered by our cooperation agreement with Labour. For example, we welcome the affordable housing fund, that will provide support for not-for-profit rental providers and we do applaud the huge commitment to give Pharmac the funding that it needs to make more lifesaving medicines available to more New Zealanders who need them.

I just want to take a moment to acknowledge the people who have been campaigning for these investments for many, many years. That is a strength of the Green movement: tireless work to put a political issue on the map, to raise public support, and to put forward positions and solutions that Governments adopt. So we are very happy for any Government to copy our homework.

For decades, we have known that the health sector has been underfunded. So today’s announcement is obviously a very good start at turning this around, and, together with the pae ora reforms, that will help to ensure that everyone gets the healthcare that they need, regardless of where they live.

I particularly want to welcome the funding announced for the Māori Health Authority, because the Green Party campaigned at the last election for an independent Māori health authority, and we’re delighted that has not only been set up in legislation but funded in today’s Budget. We do need to see this, though, paired with a genuine commitment to partnership, to Māori-led approaches to determining how primary healthcare is funded and provided to Māori communities—particularly those in rural areas, who have missed out for so long.

We know that good health outcomes will only be possible when we fully address the social drivers of physical and mental health problems, including poverty and inadequate housing. So we will continue to work towards a future where everybody is supported in their wellbeing at all stages of life—that is health policy. We will continue to push for better wages for our essential healthcare workers—that is health policy. We will continue to push the Government to go further than today’s announcement and to commit funding for pay equity across the whole sector, including for the lowest-paid staff who do essential work in related areas, like aged care—that is health policy.

Many families around Aotearoa on low incomes are struggling to manage rising costs and other pressures. Budget 2022 contains an array of measures to ease those difficulties. I am very pleased to see more examples of making people’s lives better and, at the same time, reducing emissions and taking care of our planet—so, for example, we particularly welcome the $73 million to expand and improve Warmer Kiwi Homes. This will mean more families will have access to warm and dry and safe homes, at the same time making those homes more energy-efficient and climate-friendly.

We welcome the commitment to half-price bus and train fares for low-income households. This is work that was begun when there was a Green associate transport Minister. We welcome the extension to half-price public transport—but also wouldn’t it be better to make public transport free for everyone, for all time, for good? The funding that’s announced today will help something like a million people to ditch the car and to switch to cheaper public transport, and, at the same time, that will help to cut emissions in such a critical sector.

We have an abundance of renewable energy sources. We do welcome funding that will help to enable low-income communities to access cleaner and more affordable and more secure energy supply.

So this is a welcome step forward, and, at the same time, the Green Party is firmly of the view that the next way to lifting living standards is to lift incomes and to make sure that families actually have enough money in the first place. That means fair wages and higher benefits.

There is a quiet revolution in this Budget in the form of a new fiscal strategy. For too long, there has been huge political pressure on an arbitrary debt-to-GDP ratio, but we carried the debt in other ways. We have a housing deficit, we have a transport deficit, we have a deficit of three waters infrastructure, we have an environmental deficit, and we have a social deficit. The new approach that’s been announced by the Minister of Finance will now mean that arbitrary debt restrictions will not stop good fiscal infrastructure projects that stack up on all other metrics, such as cutting climate pollution.

Now, we have never shied away from the need for a fundamental shift in our economic thinking—a shift that means putting a focus on the wellbeing of our people and the limits of our planet above the pockets of property speculators. The way that we need to fund our public services in this new fiscal strategy is by broadening our tax base, and it just so happens that there is a massive gap in our tax system where those who earn a salary pay their fair share of tax, but those that own vast amounts of wealth do not. A wealth tax would provide the revenue necessary to increase important, necessary operating expenditure, it would plug a hole in our tax system, and it would mean that the wealthiest New Zealanders would pay their fair share of tax. It would also make David Seymour’s head explode, and that’s an added bonus.

The Green Party has always had a clear, progressive voice in this House, a voice that says that we should tax wealth fairly, don’t just be happy to sit by while many of the wealthiest have a lower tax rate than middle and low income earners. It is a voice that says that the environment and the economy are intertwined, and only with a healthy planet will we have healthy communities. So this is a Budget of firsts.

But to solve climate change and to address inequality and also our biodiversity crisis, we need the next Budget to break new ground, and the one after that and the one after that. The status quo will not work. We can do better—we can do so much better. So we do look forward to a series of bold, progressive Budgets. We look forward to a future where everybody lives in dignity, comfortably within the limits of our planet. Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa.

DAVID SEYMOUR (Leader—ACT): Thank you very much, Mr Speaker. I heard Grant Robertson and I thought that Grant Robertson had one shot, one opportunity, to make sure this Budget did not go down in history as the brain drain Budget. What he had to do was give relief from the cost of living crisis, light at the end of the tunnel, and hope to those people who get their money from doing something called working. Unfortunately, he did no such thing.

What Grant Robertson basically said was “I will continue to satisfy my insatiable appetite for Government spending, I’m going to put on welfare, kind of, for three months at the end of the year, and I’m going to extend your cheap train fares for another couple of months.” That’s it—that’s it. There’s no hope or light at the end of the tunnel for New Zealanders with get up and go, more and more of whom, you can understand, after today’s effort will be thinking “Maybe it’s time I got up and left.”, because this Government and, increasingly—while this Government’s in control—this country does not give hope and opportunity or light at the end of the tunnel in the cost of living crisis to people getting squeezed from every angle.

What’s interesting is the Minister of Finance, Grant Robertson, called this securing the future. Do you know what’s interesting? It’s that that’s not even original. In fact, he copied it from the Saskatchewan Party’s 2007 election campaign, and the difference is that the Sask. Party got elected that year. They cut taxes, and they stopped the province of Saskatchewan’s brain drain. They saw the stubble-jumper province grow in population for the first time in decades.

Well, there’s no such relief in this Budget. This Budget won’t be remembered for securing the future, unless it’s Australia’s future. This Budget will be known as the brain drain Budget, because all those people who rely on working see no hope in it; in fact, there’s no hope in this Budget from Labour unless you act like a no-hoper. This is the culture of victimhood that the Labour Party imbues through our whole country. That is why people will leave. That is why we need a Government and a Budget that are prepared to make things better and give people hope that it’s worth staying in this country.

We’ve heard a lot about a cost of living crisis and the squeezed middle, but what does that actually mean? Well, it could mean a family with one earner who is at the average wage for a full-time worker—about $70,000—and another earner who works part-time and earns $30,000. Together, that couple earns $100,000 and they pay $18,290 in income tax, and that’s not including GST. If they’re renting and they pay the median rent, then their rent’s gone up $70 a week, or $3,640 a year, in just the last two years. If they own a home, and they have, say, a half-million-dollar mortgage—which would be nice, my fellow Aucklanders would say—then they’ll be paying $12,500 more in mortgage interest than they were two years ago.

If they used to spend $300 a week on the weekly shop, then it’s gone up $20 in the last year. It’s hard to believe, but that’s 6.4 percent inflation in food costs in the last year. It’s gone up 40 bucks a week on the weekly shop just in the last four years. If they are really bad people—meaning that they use a car to get around—then they have found that the cost of filling up has gone up by around $1,700 a year if they each have a car and put in 50 litres a fortnight.

Those people are paying more tax than ever, because remember the GST? Well, if inflation is a thief in their wallet, then the Government is a silent partner, because every time the prices go up because of inflation, “Greedy, Grabby Grant” is there for an extra 15 percent, which he calls GST, and the squeezed middle call the rising cost of everything, squeezing them from every angle.

What hope has Labour given them in this Budget? Has Labour given them a sign, or even just a little flicker of light at the end of that cost of living crisis tunnel? No, they have not.

In fact, I was very interested to read some of the numbers in the back of the big Budget documents, and what I found in those numbers was gravely concerning, because, you see, Treasury makes a forecast for the future of this country’s economic and fiscal outlook, and they make that forecast every six months—someone called Ruth was responsible for that happening—and the thing is that the forecasts we have for New Zealand’s future today released at 2 p.m. this afternoon are vastly worse than the same forecasts Treasury made in December. In December, they said that inflation was going to peak. They said that by next year, inflation will only be 3.1 percent. Well, they’re now saying that next year’s inflation is going to be 5.2 percent.

So if people thought that there’s a light at the end of the tunnel for this cost of living crisis, well, when “Grabby Grant” satisfies his insatiable attitude for spending taxpayers’ money, what happens is that it drives inflation, and that’s why even Treasury is forecasting that inflation is going to increase more than we have ever forecast. It’s going to be 5.2 percent next year. We’re not even halfway through this cost of living crisis.

The funny thing is that when I said this was going to be a brain drain Budget, even I didn’t guess that Treasury would update its forecast to show that there’ll be less people in New Zealand. Treasury is now assuming that 15,000 more people are going to leave than they had assumed in December. Even Treasury is predicting a brain drain, and why wouldn’t they? Well, because their forecast for our net debt just as a Government is now $15 billion higher than it was only six months ago. This is just the change of forecast in six months. It’s now going to peak at $15 billion, and that’s because we’re spending more. The thing is they’re now forecasting that we’re going to be in deficit until 2025 instead of 2024.

One of the effects of that borrowing is that interest rates are also rising, and we’re going to spend an extra $1.7 billion a year on interest on Government debt than they thought we would in December. Even in just six months of forecasting, Treasury now thinks our outlooks are worse. We’re going to have more debt, more interest on the debt, more inflation, and a longer cost of living crisis. So if people were looking for hope from this Government, not only has the Government failed to take the bull by the horns and make things better; they have also witnessed this situation deteriorating because of their spending.

This Budget could have been so much better. In fact, the ACT Party is one of two parties in this Parliament that has produced a fully costed Budget for New Zealand this year. There’s the Labour Party, with Grant Robertson, and there’s the ACT Party, and I would say to you that this one would give a much better future for New Zealand, where people want to stay, because the risk is we become a place that’s nice to visit but not so nice to live, especially if you need lifesaving drugs—and we’ll get to that, too.

First and foremost, this Budget needed to kill inflation dead before we get inflation expectations built in and we go on a wage-price spiral leading to stagflation. That is now, unfortunately, a very real prospect.

It’s not often I agree with Adrian Orr, but Adrian Orr, the Reserve Bank Governor, says that monetary policy needs friends, and what does he mean by that? What Adrian Orr means by that is that if Grant Robertson doesn’t stop spending in the way he has, then someone else is going to have to reel in expenditure for the country to stop inflation, and do you know who that will be? It’ll be Adrian Orr, and do you know what tool he’s got? He’s got the official cash rate, and do you know what that does? It puts up your mortgage so that people have less money to spend, and he’ll stop inflation that way. So either Grant brings in Government spending or Adrian brings in household spending, and it’s the second one because Grant can’t stop spending, so it’s going to hurt.

Some people might think, “Well, it’s a lucky thing I rent. I’m not going to be faced with rising mortgage rates.” Well, I’m sorry to say that you just have to ask yourself who pays a landlord’s mortgage if not the tenant? This spending will lead to higher interest rates, higher mortgage rates, and higher rents. It is inflationary for everybody.

The second thing that it needed to do was give relief to all those families we’ve talked about that are battling away and wondering why they bother. There needs to be light at the end of that tunnel so that if you strive and do the right thing for yourself and your family, you’re not going to be fodder for Labour fuelling its hand-out culture.

The third thing it needed to do was secure the future—that was in my speech before Grant took it up—in order that we can have sustainable fiscal settings. That’s why we need to be honest with ourselves about the age of superannuation: 65-year-olds are not decrepit, and we can afford to save $16 billion of taxpayer money by gradually, respectfully, increasing the age of national superannuation to 67 over 12 years, while allowing people to get their KiwiSaver at 65 if they would still like to. That’s the kind of boldness and honesty this country needs right now; not just more spending and delusion.

Finally, and by far most importantly, what we needed to do in this Budget was to actually imbue a culture of striving and success. Here’s how we would do that in our alternative budget. You know, Michael Cullen, who was the Minister of Finance a long time ago, and I acknowledge his recent passing—may he rest in peace. Michael Cullen had two tax rates when he became finance Minister: 19.5 percent and 33 percent—that was it. It was that simple. He also had a low-income rebate, giving relief only to those who really needed it. Since then, successive Labour and National Governments have made our tax system more complex, less effective, and less efficient. Now we have six tax rates: five personal income tax rates—10.5, 17.5, 30, 33, and 39 percent—and a company and trust tax rate of 28 percent. The funny thing is that we say to our kids, “If you want to get ahead, study hard, work hard, save, and invest carefully, you’ll be rewarded.”, and then in the tax code we say, “We’ve got six different tax rates so that for any level of effort, we’ll be there to take a little bit more off you.” Talk about mixed messages—a labyrinth of punishment in a Byzantine tax code.

Then some people say, “Oh, that’s all fine. Just adjust the tax brackets for inflation.” Well, ACT says that we need to put the values of aspiration that other parties say they believe in into our tax system to make it fairer, simpler, and more competitive. ACT’s tax policy shows how we could get to just two rates: a top rate of 28 percent and a bottom rate of 17.5 percent, and that would allow us to do two things. First of all, we’d be able to stop inflation because we would be cutting expenditure by $6.8 billion, but, second of all, it means that people right throughout the income structure would get significant tax rates. You take the example of somebody earning $70,000—maybe a nurse, somewhere in the middle of their income stream, of their career, earning $70,000. They would keep $2,309 extra under ACT’s tax policy to make up for the cost of living increases that they’ve dealt with under the first five years of “Hard Labour Government”.

But there’s other things that we’d do. Do you know that this country is one of the hardest places in the world for foreigners to send money? It’s true. Myanmar, Saudi Arabia, China—those are the three countries that the OECD says make it harder to invest in as a foreigner. We wonder why it is that Israelis and Estonians—people that used to be much poorer than us—get twice as much investment per worker as we do, and we wonder why it is that those countries like the Czech Republic, Slovenia, and Lithuania are overtaking us. Well, it’s partly because we just don’t get investment capital.

The ACT Party says it’s time for New Zealand to be open for business and say that we’re going to be the easiest place to invest if you are a member of the OECD. If you’re a democratic country, then New Zealand is open for business for you, because we actually want our friends around the world to bring their skills and their money and their ideas to enrich our country. We don’t want to be a xenophobic backwater conducting some sort of bizarre bicultural experiment. We want to be globally connected citizens with the best that the world has to offer.

Here’s the next thing we’d do. Do you know that this Government owns about $16 billion worth of State-owned enterprises (SOEs) like New Zealand Post, like KiwiRail, like Kiwibank, like AsureQuality. Some of them are or have the potential to be good businesses. Now, the evidence is crystal clear that when the Government sold half of Genesis, half of Meridian, and half of all of the energy companies, in fact, their performance improved so much that the Government actually got a bigger dividend from owning 51 percent of them than it did from owning 100 percent. The ACT Party says that we would partially privatise more SOEs in order that we can raise their productivity and—

Hon Member: Same old ACT—same old, same old.

DAVID SEYMOUR: —reduce New Zealand’s debt by $8 billion. I just ask people on the other side of the House: if you’ve got a policy that works, that keeps New Zealand control of the businesses, and that raises productivity and pays down debt, why would somebody be against that, other than pure ideology? Is this something we can afford not to do, or are we too rich already?

We had a big opportunity today for a Government to stand up and overcome its ideological opposition to cutting taxes, and then we had the opportunity to give people relief from the cost of living crisis. We had the opportunity to reduce wasteful and inflationary expenditure. That would have all been good, but we had the opportunity to do even more: to invest to actually secure the future.

ACT’s Budget would have invested strategically in three areas. We would have taken $250 million for principals to pay their best teachers more, because our teachers are the biggest determinant of where New Zealand is going to be in 30 years’ time, of all the Government employees. We’d not only give them tax cuts of between $2,000 and $3,000 each; we’d also give a teaching excellence reward fund to pay the best ones more.

Our geopolitical situation has changed since Helen Clark said that we lived in a benign strategic environment. The ACT Party would invest in defence up to 2 percent of GDP in order that we can go to the Australians and say we want Anzac back. We want an independent but interoperable Anzac defence force in the South Pacific because—let’s be honest—our neighbourhood has changed.

Finally, we would share $1.2 billion per year with councils so they can afford to build infrastructure, but only if they say yes to building more houses for the next generation. That is smart, strategic investment in ACT’s alternative budget to genuinely secure the future and give light at the end of the tunnel so all those people—all those young people, in particular—who are asking after this Budget, this bluff and bluster from Grant Robertson, “Is there really a reason for me to stay here? Is there light at the end of the tunnel from the cost of living crisis? Is there a strategy to get ahead of former communist countries that are now richer than us?” Well, ACT’s gives hope to those people that next year, things will change. We’ll take our Budget seriously, and New Zealand will have a bright future after all. But Labour’s Budget today—that ain’t it. Thank you, Mr Speaker.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori): Tēnā koe e te Pika. That is the first time I’ve stood up with ACT clapping.

When we look across our world as tangata whenua on 19 May 2022, this is what we see: a landscape where we once owned 100 percent of our whenua, and now we own less than 4 percent. One third of people on the dole are Māori, 65 percent of women in prisons are Māori, and they were put there for just trying to survive and feed their tamariki. More than a quarter of our people are living in poverty, 99c in the dollar was taken from us, and we are supposed to turn that deficit around with 1 percent returned in iwi settlements. The richest 10 percent own 70 percent of the wealth and the top 1 percent own a quarter, while 50 percent of Aotearoa own just 2 percent of the wealth. We have the highest indigenous incarceration rates in the developed world, the highest homelessness rates, and the highest domestic violence rates in the developed world.

This damning state of affairs would shock anyone, but what’s even worse than the numbers is what this means for ordinary people. Some of the whānau I know on the ground in Te Tai Hauāuru who are on benefits are paying up to a quarter of their incomes to service Government debt that was incurred to cover basic needs like food and bills during the COVID pandemic. This is on top of rising prices, an insecure job market, and the Government dropping support they brought in during the pandemic such as the double winter energy payment. The theft of our assets over generations is what has built the fortunes of the rich in this country and it has fuelled this extraordinary wealth divide.

Our world, our reality, as Te Ao Māori is never reflected in the speeches, policies, legislation, or Budgets that are put forward in this House by successive Governments. That is why we are here. It is the role of Te Paati Māori in Parliament, whether on the cross-benches, in Opposition, or in Government, to fight to ensure that every Budget that is put forward in this House is a Budget that restores power and resources to whānau, hapū, and iwi; that every Budget is a Budget that delivers for Māori and honours Te Tiriti o Waitangi. Funding for Māori programmes will not work if these programmes aren’t conceptualised, designed, managed, and governed by Māori. Funding for Māori programmes indeed have to be ma te Māori, ki te Māori, mo te Māori, e ai ki te Māori—by Māori, to Māori, for Māori, according to Māori.

This is what we mean when we talk about mana motuhake. We are here to be an unapologetic voice for tangata whenua, for our aspirations, our visions, our imperatives, our dreams, and, as a descendant of Ngāti Ruanui growing up in Pātea, I know all too well the real impact on the ground when Budgets fail to deliver for Māori grassroots and fail to honour Te Tiriti. I spoke in my maiden speech of the hardships our people endured in the 1970s and the 1980s as we faced the loss of jobs, factories, schools, banks, and infrastructure. While the State could have responded to this widening inequality with the compassion and care, instead, in the 1990s, we got benefits cuts, more police, prisons, and racist and bigoted rhetoric aimed at Māori and the poor. The persistent disparities in social incomes for Māori are the result of decades of under-investment and deregulation by successive Governments, red or blue.

In recent years, there’s been a continued bipartisan refusal to level the playing field and significantly redistribute wealth back to working people, back to tangata whenua. Instead, Governments have tried to address problems with bureaucratic solutions, never enabling communities to address the root causes. As a result, inequality in Aotearoa is only getting worse. As Bernard Hickey has reported, the pandemic has made the rich $952 billion richer, while the poor were forced $400 million further in debt to the Government itself. Foodbank use more than doubled. Any Budget that is put forward must focus on reducing inequality and restoring the wealth of the grassroots.

Te Paati Māori acknowledges the Prime Minister and her Government on Budget 2022. It makes some great progress in a few areas, and we, again, are grateful that she has decided to adopt some more of our policies. Anei he koha—feel free to take the rest of them, too.

However, sadly, e te iwi, this is not a Budget that delivers for Māori or honours Te Tiriti; this is a Budget that tinkers with the generational challenges that we’re facing. It doesn’t deal with the root causes in a systemic or sufficient way.

During the pandemic, Te Paati Māori was proud to work alongside Whānau Ora and our grassroots hauora providers across the country to hold Government to account and to pressure them to ensure that funding was invested directly into our own front-line organisations. This was essential in turning around the Māori COVID response and it led to its huge success—surprise, surprise. If given the chance, we know how to look after each other; we just need the Crown to step out of the way.

Off the back of the pandemic response, it seems crazy that the Government realises that the success of the Māori COVID response could be replicated across social service delivery, economic development, environment restoration—go figure. We may then be seeing in this Budget a wholesale devolution of funding to Māori organisations to continue this success model to enable us to do what we do best, which is look after own and lead as kaitiaki. That would have been revolutionary. It would have allowed us to realise our dreams for self-determination and self-sufficiency in an Aotearoa where our mokopuna have everything they need to thrive and are supported to grow up and be proud to be Māori. That would be a Budget that truly delivered for Māori and honoured Te Tiriti.

However, in this Budget, what we largely see is business as usual. It’s vanilla, it’s lacking ambition—more money going into broken systems that have failed our people for generations.

Even in the one area where the Government can be acknowledged for making progress—health—this Budget lays bare the reality of the Government’s inadequate vision for Māori health. Aotearoa has been starved of health funding for decades. Our system did not cope with the pandemic, and the State finally had to realise that the best outcomes for Māori occur when the bureaucracy steps aside and resources Māori to lead our own solutions.

Still, even after agreeing to the Māori Health Authority, the Crown continues to put up financial and legislative barriers to it being truly successful. I was on the select committee and the Government refused to put tino rangatiratanga into the legislation. A Budget that delivers for Māori and honours Te Tiriti would have looked like a Budget for the Māori Health Authority that matched that of Health New Zealand.

It is pleasing to see an increase in Vote Health, but we, as Māori, are actually worse off. The more the mainstream gets, the more the inequity is increased and the more we fall behind. The announcement today is even worse than we thought. The Government’s own memos show that the Māori Health Authority only receives 0.7 percent—0.7 percent—of the Vote Health budget. That is 0.7 percent for a people that make up more than 17 percent of the country—20 percent, if they’re in Taranaki—with entrenched inequities. This actually increases the inequity gap in funding. It’s shocking. We expected to receive 2 percent. Even on that basis it would take 1,840 years to reach parity—1,840 years.

We do acknowledge the $191 million increase for Pharmac cover over two years. We have constantly pushed for increased funding for lifesaving cancer drugs, but this still needs to go further. More mental health funding is good, but it must be proportionate to need, and in this Budget, it’s not.

A Budget that delivered for Māori and honoured Te Tiriti would be a Budget that ensured everyone has enough to do well: lifting the incomes of beneficiaries, students, and kaumātua, raising the minimum wage to $25, and honouring pay equity claims in health and education. It would look like a Budget that shifts the burden of tax on to the wealthy end of town.

We acknowledge the rebate for low-income whānau. This would be only for those who don’t receive the winter energy payment and benefits. This is a cruel, cost-cutting way of looking at whānau wellbeing.

We cannot believe that half-price public transport has not been permanently put in place. Extending it for another two months only is just pathetic.

The change with child support payments is greatly welcomed, and it is something that whānau have been pushing for for years. This will make a big difference for whānau.

When the National Party and ACT Party talk about their cost of living crisis, what they’re talking about is their wealthy friends feeling the pinch for the first time and having to put off that second yearly overseas holiday, or thinking twice about that second Tesla. That’s why their solution is tax cuts for the wealthy paid for by the poor, and then they have the gall to call us bottom-feeders while we fund their wealthy lifestyles—go figure.

When Te Paati Māori talk about the cost of living crisis, what we are talking about is the hard-working whānau not being able to afford the cost of basic necessities like food and petrol—whānau who already live pay cheque to pay cheque. This crisis is only deepening the entrenched, persistent poverty and deprivation that our people have endured for generations. That’s why our solutions include shifting the tax burden from the poor to the rich, lifting wages, transformative changes to the welfare system, free public transport, regulating and breaking up the supermarket duopoly, and removing GST from food—a policy which a recent poll showed that more than 75 percent of this nation supports.

A Budget that delivered for Māori and honoured Te Tiriti would be a Budget that enabled everyone to have a warm, dry, and affordable house to call their own, where they choose, where they are on their own whenua, in the city and in the local community. It would recognise that for Māori, the housing crisis has only been made worse, and is already a depressing reality that has locked us out of securing housing and homeownership. The Government has comprehensively failed on housing.

Māori make up 50 percent of the waiting list for social housing, 30 percent of Māori pay rent that is over 30 percent of their weekly income, and 33 percent of all Māori will shift residence every three years. At least 12,000 tangata whenua are homeless on their own land.

We acknowledge that the Kāinga Whenua loan cap will also be increased from $200,000 to $500,000, and that there will be more funding for insulation and heating in homes. But this Budget will not address the housing crisis in any meaningful way. It barely shifts the dial.

Despite much-needed investment in Māori housing in Budget 2021, this has yet to result in many houses actually being built, or whānau actually securing somewhere to live. We must massively increase the pace of construction of State houses while enabling papakāinga and community housing at scale through regulatory reforms and devolving funding and power to tangata whenua and our communities.

We must stop all sales of freehold land to offshore foreign interests. Rather than ruling out the very policies that would help people the most, as the Prime Minister has a habit of doing, we must do what actually works. That means a capital gains tax, excluding the whānau home. That means rent controls. That means scaled-up, equity-based rent-to-buy schemes.

A Budget that delivered for Māori and honoured Te Tiriti would invest in the prevention of crime through kaupapa Māori philosophy. It would defund racist systems that target, harass, and kill our people. Te Paati Māori has been absolutely consistent in highlighting that the new funding for police and corrections will not address the drivers of crime. What it will lead to is even more dead Māori on the streets, and, as my tungāne Rawiri has said, we can’t police and jail our way out of problems caused by failing education and failing health, housing, and welfare systems. The burden of harassment, arrest, conviction, and imprisonment are all carried disproportionately by Māori.

What’s more, we are also pumping more money into the military. The Government’s defence capability plan released in 2019 reveals that they intend to spend an extra $20 billion on the military by 2030. Aotearoa should be ramping up our military capability in the 21st century. Yes, we need to be able to defend ourselves. Yes, we should contribute to peacekeeping. But we have no business getting involved in imperialist proxy wars, whether they are instigated by Russia, the US, China, or anyone else. We should stand as an independent and neutral force for security, order, and peace in the South Pacific. At a time when the finance Minister has caved to establishment pressures to restrain spending, why would he choose to invest millions and millions of new funding into the police and the military?

The Government is both refusing to take on the vested interests whose greed is driving the crisis we face and is refusing to lift the ambition for Aotearoa and invest to deal with the entrenched disparities and systemic barriers that are holding up our people and holding our people back, because—let’s be very clear—it’s our people who pay the price: those who are working two or three jobs and still struggling to put food on the table, those who are trying to raise babies while paying a quarter of the income in debt to Work and Income, and those unable to put a warm, dry roof over their kids’ heads. Tangata whenua pay the price; tangata whenua suffer the consequences.

Until this House makes a stand and redistributes wealth, it’s simply putting nails in the coffin of ngā tangata whenua o Aotearoa. Te Paati Māori will continue to hold this Government to account. We will continue to work with them and acknowledge where they have made real changes that will benefit our people. We will fight to ensure that future Budgets do deliver for Māori and, indeed, honour Te Tiriti o Waitangi, and that Budgets progress us towards our mana motuhake. We will continue to build the strength of our movement for tino rangatiratanga. We will continue to grow our numbers and influence in this place, and we will always strive unapologetically to restore the self-determination and self-sufficiency that is uniquely ours. Nō reira, tēnā tātou katoa.

Hon DAVID PARKER (Minister for the Environment): I move, That this debate be now adjourned.

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

Ayes 75

New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.

Noes 44

New Zealand National 32; ACT New Zealand 10; Te Paati Māori 2.

Motion agreed to.

Debate interrupted.

Urgency

Urgency

Hon CHRIS HIPKINS (Leader of the House): I move, That urgency be accorded the introduction and passing through all stages of the Taxation (Cost of Living Payments) Bill and the Income Insurance Scheme (Enabling Development) Bill; the introduction, first reading, and referral to select committee of the Commerce (Grocery Sector Covenants) Amendment Bill; and the introduction and passing through all stages of the Companies Office Registers Funding Validation Bill, the Customs and Excise (Tobacco Products) Amendment Bill, and the Coroners (Coronial Cap) Amendment Bill.

Very briefly to summarise the reasons for urgency for these pieces of legislation, there are six bills—five to go through all stages and one to have a first reading. The Taxation (Cost of Living Payments) Bill establishes the Cost of Living Payment scheme that was announced in the Budget today, and the scheme comes into effect on 1 August—hence the need for urgency.

The Income Insurance Scheme (Enabling Development) Bill enables ACC to prepare the Income Insurance Scheme. It does not initiate the scheme; that will be subject to further legislation.

The Companies Office Registers Funding Validation Bill deals with the way the Companies Office funds its corporate registry functions, and deals with an urgent issue there around the validation of the use of funding, which other parties have been informed, and consulted on, about.

The Commerce (Grocery Sector Covenants) Amendment Bill, again, deals with an issue announced in the Budget today, which is the Government’s desire to ensure that competition in the grocery sector is not blocked through the use of grocery sector covenants. That bill will have a short select committee process.

The Customs and Excise (Tobacco Products) Amendment Bill deals with a particularly narrow form of tax evasion around water-pipe tobacco.

And the Coroners (Coronial Cap) Amendment Bill is a small bill that just increases the number of coroners, which is a Budget measure. We want to have the coroners in place as soon as possible, given the level of demand there is for coronial services.

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

Ayes 75

New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Motion agreed to.

Introduction of Bills

Introduction of Bills

SPEAKER: I understand it is the intention of the Government to introduce bills.

CLERK:

Taxation (Cost of Living Payments) Bill, introduction

Income Insurance Scheme (Enabling Development) Bill, introduction

Commerce (Grocery Sector Covenants) Amendment Bill, introduction

Companies Office Registers Funding Validation Bill, introduction

Customs and Excise (Tobacco Products) Amendment Bill, introduction, and

Coroners (Coronial Cap) Amendment Bill, introduction.

SPEAKER: The Taxation (Cost of Living Payments) Bill is set down for first reading, forthwith. The remaining bills in the urgency motion are set down for first reading, presently.

Bills

Taxation (Cost of Living Payments) Bill

First Reading

Hon DAVID PARKER (Minister of Revenue): I present a legislative statement on the Taxation (Cost of Living Payments) Bill.

DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon DAVID PARKER: I move, That the Taxation (Cost of Living Payments) Bill be now read a first time.

The world is experiencing inflation at higher rates than we have seen for many years. This is a combination of the effects of COVID-19. COVID-19, of course, disrupted methods of production and transportation around the world, and those effects are not yet over. This is part of the cause of inflation, as is the rising domestic demand in New Zealand and around the world which has meant that most of the world’s rebounding economically from COVID at the same time, creating inflationary pressures.

So inflation was already building when the war in Ukraine sent energy, fertiliser, and food prices higher, squeezing household real incomes. This is not just a New Zealand phenomena; around the globe, we’re seeing all countries grappling with the same issue. In the US, inflation is running at 8.5 percent; in the UK, it’s 9 percent; and, as the Minister of Finance in his Budget address today said, the OECD average is 8.8 percent.

We know that the cost of living affects just about all households, but it most affects those who are on low to middle incomes. We’ve already taken a number of steps to help those households: we’ve, of course, significantly increased the minimum wage each and every year; we’ve increased family tax credits; and we established the Best Start payment and the winter energy payment.

Treasury says that inflation will outstrip annual wage growth this year for the first time since this Government was elected in 2017. I noted in the Budget documents that the prediction for this year is wage growth of 4.6 percent against inflation of 6.7 percent. This follows years of strong wage growth and the same Budget forecasts from Treasury that next year, under this Government’s economic plan, wages will once again grow much more strongly than inflation. I would point out this is in contrast to the record of the prior National Government, where real wage growth was negative through the global financial crisis and remained very anaemic long afterwards.

In recent months, we’ve helped in other ways: we have slashed fuel excise duty, we’ve cut road-user charges, and we’ve halved public transport fares. Today’s Budget extends those measures and also halves public transport costs to more than 1 million people on a permanent basis. We’re also committed to dealing with some competition issues in the grocery sector to ensure that people pay fair prices for food and other basics—that issue will be covered in more detail in respect of other legislation which we are proposing to pass through all stages as part of this urgency motion to remove barriers to new retailers entering the market.

In addition to all of those measures, the Government is, by this bill, introducing a payment of $350 to help low and middle income people cope with current inflationary pressures. For each individual recipient, this is equal to half the couple rate for the winter energy payment. The payment is a temporary measure to provide support for individuals who earned up to $70,000 in the last tax year and are not receiving the winter energy payment. The income cap of $70,000 has been set to provide support to those who earn up to around the average annual wage, which is around $65,100. On that issue, with respect, the Leader of the Opposition had it wrong in his Budget address, about an hour ago.

This initiative is not aimed at people who are on a main benefit or superannuation; those people are already being supported through the measures I previously described, such as annual cost of living increases and by the winter energy payment which provides support for their living costs through the winter months.

A large group of people is supported by this payment—approximately 2.1 million New Zealanders will be eligible for the payment. The total payment of $350 will be split into three monthly instalments, each of around $160 million, with the first on 1 August, and this will be paid out by Inland Revenue. There is no application process. For those eligible, Inland Revenue will make the payment by direct credit into the person’s New Zealand bank account. To achieve this, we need to make some relatively minor changes to tax legislation to allow Inland Revenue to make that payment using information that Inland Revenue already holds.

As I said before, the first instalment will be made to eligible people by 1 August. This date allows Inland Revenue time to prepare for the payments, including obtaining bank details for the over 200,000 taxpayers for whom we don’t hold a bank account currently. It will also enable more people to complete their tax returns for the year ended 31 March 2022, upon which the entitlement is based.

The International Monetary Fund has said that now is not the time for substantial tax cuts. In contrast to other parties, we are not promising tax cuts that give hundreds of thousands of dollars each year in tax cuts to CEOs and little to others; we believe our solution is better and fairer. In conclusion, this payment will help more than 2 million New Zealanders, and I commend this bill to the House.

DEPUTY SPEAKER: The question is that the motion be agreed to.

NICOLA WILLIS (Deputy Leader—National): We have, today, the spectre of band-aid economics for an economy that is broken, for an economy that is sending New Zealand backwards, that has New Zealand households struggling with a cost of living crisis that is not only the deepest that’s been experienced in 31 years but a cost of living crisis that we learn, in the Budget today, is set to continue for many years to come. This is not a temporary cost of living crisis, which you might believe while you listen to David Parker talking about a three-month measure. This is a cost of living crisis that is set to have inflation outside the band that New Zealand has accepted for 30 years, above 30 percent, well out to 2025. If you think it’s bad this year, New Zealand, with inflation meaning that everywhere you go, the groceries, the petrol, every price you pay is going up each month, then don’t think it’s getting better under Labour.

Today, the Treasury confirmed that next year inflation is going to keep pumping hard. It’s going to be at 5.2 percent. Then the year after that, in 2024, are we going to see it come back then? No. It’s going to be at 3.6 percent. So what does that mean for hard-working New Zealanders? It means under Labour, every dollar buys them less. It means that their wages will not go as far. It means that their household budgets will be going backwards.

Do you know who else is going to be hit hard? That is every New Zealander who has a mortgage. We have not had a situation in this country for many, many years where inflation continues outside the band that the Reserve Bank is meant to accept as acceptable for three years. What that tells you is the Reserve Bank is going to be hiking interest rates high and fast, and New Zealanders are going to be paying thousands more for their mortgages.

So every New Zealander needs to know right now that this cost of living crisis is not temporary; it is the permanent gift that Labour is giving New Zealand, and it is set to bite very hard. It is set to take many people backwards. Not only that but we have an economic picture where growth is starting to stall, where we have growth out in the future years falling off a cliff, and we have the prospect of greater incomes in the future falling away.

So what is the Government’s response to this permanent set of challenges? Are they doing what we believe would be sensible and bringing some discipline and rigour to their own spending? No, no. Instead, what they are doing is the biggest Budget blow-out in New Zealand’s history. Fresh from having the highest levels of spending that we’ve ever had to get us through a pandemic, are they winding it back—are they winding it back? No, they are not winding it back.

In fact, what we have is a finance Minister who is not content with the biggest operating allowance in New Zealand’s history at $5.9 billion. No, that’s not enough for him. So ill-disciplined and careless has this Government become about its spending that he’s raiding next year’s Budget kitty as well. That’s right. He’s taking $2 billion from next year and he’s allocating it this year. That’s not enough either. He needs more. His thirst for New Zealanders’ money is insatiable. So he’s taking half a billion from the year after that Budget and he’s allocating that in the Budget this week.

You would think that at $8.4 billion, that might be enough to satiate the thirst that this Labour Government has for spending New Zealanders’ money, but no. On top of that, they’re going to spend the money that they get through the emissions trading scheme. They’re going to spend it on a whole bunch of climate change initiatives, including ribbon-cutting ceremonies for big business. Then what they’re going to do is they’re going to keep spending COVID money on top. So we have the biggest blow-out in Budget history being presided over by this Labour Government in a time of record inflation with a cost of living crisis biting in.

So what should they do? Should they take a band-aid approach and pretend that this is just a temporary thing? Should they say to New Zealand, “Hey, look, it’s only going to hurt for September, October, and November, so we’ve got a little payment just to make it OK.”? Well, we say that is disingenuous in the extreme, because New Zealanders deserve to know that this cost of living crisis isn’t temporary. It’s not a three-month thing. It is going to go on for years. In November, we will christen Grant Robertson “Mr Christmas”, because do you know what the Grinch will deliver for Christmas? He’ll take away the temporary payment. He will say—Mr November will say—“Now, now. Labour’s done all we can. We gave you back a little bit of your own money for a little while and we didn’t like how it felt. I’ve got more spending to do. It all stops now.” Will New Zealanders be better off? No, they won’t, because they’ll be looking forward to more inflation, higher prices. They will be looking forward to slipping further behind each week.

So what is the alternative? Well, actually, what New Zealanders need is a disciplined Government that will get more bang for their buck, and not a Government that thinks it’s OK to just keep hiring public servant after public servant, spending more and more money on strategies and plans that don’t get results, that don’t get outcomes—a Government that will be more disciplined about its spending. Then what they need is a Government that will give them permanent tax reduction, because it is not acceptable for Grant Robertson to let inflation be his stealthy tax, his silent tax increase, that pushes more and more New Zealanders into higher tax brackets and forces them to pay more tax. They deserve permanent tax reduction.

That is why National has put forward a package that would give every taxpaying New Zealander some tax relief by indexing their income thresholds. Our package would be more generous to more people. Anyone earning more than $50,000 or more is better off with our tax reduction plan. For those on the median wage, $55,000 a year, listen in to this: National thinks you deserve $800 per year, not just this year but every year. What does Labour think? They reckon all you’re good for is 350 bucks. Well, I know what New Zealanders are saying right now. Some of them are saying, “350 bucks—you know what I could do with that? I might be able to get a cheap ticket to Australia, and if I buy that ticket to Australia, then I might find a place where I can get ahead once more.”

So we say choose a tax plan that is more generous to more people. Don’t choose a plan that says to some of our skilled, experienced teachers, police officers, some of the doctors in our community, some of the social workers in our community—don’t say to them, “You’re excluded from the plan.”, because that’s what Labour’s saying today. They’re saying to all of those teachers who are on the high step, “If you’re a teacher and you’ve got a partner at home or you’re a single earner and you earn over $70,000, nothing for you.” Because at the heart of this idea is a principle, and the principle is this: Grant Robertson believes he can spend New Zealanders’ money better than they can, and he intends to confiscate growing amounts of their incomes so that he can waste it and then redistribute it to them and expect them to be grateful for it.

Here on this side of the House we say it’s not working. If New Zealanders felt that the extra spending, the 67 percent in extra spending, was making them 67 percent better off, then they might have something to listen to, but they’re not seeing it. They’re sick of the big promises with no delivery. They’re sick of people who stand up and say, “We’re going to give $2 billion—$2 billion—of your taxpayer cash to KiwiBuild, and it’s going to solve the housing crisis, and there’s going to be 100,000 houses.” Then what do New Zealanders actually get out of the end of that? They get 1,300 houses. That’s all they get. They get a housing crisis that worsens, with rents up the most they’ve ever gone up—up $150 a week—with a situation where housing is more unaffordable than it’s ever been, where the State house waiting list has quadrupled, and where last night around 4,500 kids were forced to sleep in a motel room.

So they know not to trust this Government. They know not to trust Grant Robertson when he says he can spend their money better than they can. We say to New Zealanders: you deserve better than band-aid economics and a knee-jerk reaction because Grant Robertson realised he was out of touch and that there was a cost of living crisis. You need a Government that will actually get on top of the cost of living crisis, reintroduce discipline to spending, make sure that inflation is pushed down with a Reserve Bank who actually focuses on price stability—a Government that won’t let interest rates go through the roof, a Government that will give you the permanent tax reduction you deserve so that anyone earning $50,000 a year or more who works hard for their money will be better off. When the band-aid gets ripped off in November, New Zealanders can look forward to the smiling face of the Grinch: Grant Robertson.

Dr DEBORAH RUSSELL (Labour—New Lynn): The Opposition live in some fantasy world. They live in a world where they can say that an economy is broken when unemployment is down to 3.2 percent, an extraordinary low. The live in a fantasy world where they think it’s a broken economy when growth will be about 4 percent by about June 2023. They live in a fantasy world. We will have net debt topping out at about 19.9 percent of GDP. They call that a broken economy—it is fantastical stuff. It’s the sort of fantastical stuff that refuses to admit that there has been a global pandemic, refuses to admit that this is a Government that has responded nimbly to the global pandemic, and seems to think that New Zealand exists all on its own and doesn’t have anything to do with the rest of the world.

On this side of the House, we are realistic about what is happening in New Zealand and what we need to do to help New Zealanders. Inflation worldwide is rampant; it is running. In the US, inflation is at about 8.5 percent; in Canada, it’s 6.7 percent; in Germany, it’s at 7.3 percent; and in the UK, it’s heading towards 9 percent. The OECD average is around 8.8 percent. In New Zealand, we are not immune to worldwide phenomena, we were not immune to the global pandemic, and we are not immune to what is happening with inflation around the world. In Australia, they are currently at 5.5 percent inflation, and their Reserve Bank over there is predicting it is going to head towards between 6 and 9 percent.

Here in New Zealand, we are experiencing inflation too. But all the predictions are, in the real world, that it will ease off next year—this is a somewhat temporary problem. It is a spike. Do you know why that will happen? It is because central banks around the world are taking action to curb inflation—just like ours. We know that even though all the respectable predictions are that this will be a temporary phenomenon, driven by the supply chain crisis and the war in Ukraine—both situations are expected to ease up—it is nevertheless hard for New Zealanders at the moment. So we have a cost of living package that is designed to help all New Zealanders. Bear in mind that part of this cost of living package is the cut in the fuel excise and the reduction in road-user charges, which has been extended for another two months. It is the subsidising of public transport with a 50 percent fare subsidy, which is being extended for another two months. These are measures that help all New Zealanders.

Every single New Zealand family is better off as a result of those changes, but this particular change that we are debating now is cold hard cash in the back pocket of people on incomes below $70,000. On that side of the House, they oppose it. They oppose helping out families and helping out people who are earning less than $70,000 a year. What did they say? “Oh, we don’t like that.” They just want to carry on their mantra, “Tax cuts, tax cuts, tax cuts.” without thinking seriously about the nature of our taxes.

There’s a really good reason why we have chosen this approach in terms of helping out families through the winter that is coming. It takes time to put tax cuts in place. They don’t just happen magically overnight because someone in fantasyland decides that they should happen. It takes time to get them implemented and through systems. We can do this payment now. It will take a wee while to get it up and going, but it is money that will be in people’s back pockets this year. Unlike the Opposition, we are going to help everyone who has earned an income—who is not currently on a benefit or on super—from zero dollars to $70,000. So more people will be better off with what we’re offering to help them get through in this time when inflation is hurting. That is part of a package that we’ve put together. It is a package that is designed for all New Zealanders. It is a package that puts straightforward cash in people’s back pockets. It won’t cover all the costs. It’s a contribution to the cost of living, and it’s a contribution that on this side of the House we are proud to make to help New Zealanders out during the tough times. I commend this bill to the House.

CHRIS BISHOP (National): Three hundred and fifty dollars is an interesting amount of money for three months. I’ll tell you what 350 bucks buys: a one-way plane ticket to Sydney, Melbourne, and Brisbane—and that is what young Kiwis, in fact middle-aged New Zealanders, will be thinking about as they stare at this Budget and this paltry, pitiful amount of money that the Government has deigned, in its wisdom, to give back to New Zealanders.

This bill and the Government’s Budget summarises the difference in approach between National and Labour. Labour wants to rapaciously take as much of your money as it’s possible to take, churn it round the giant bureaucracy in Wellington—which has had 10,000 more bureaucrats added to it in the last four year—take all the dead weight loss that is involved in the tax system and all the bureaucracy in the tax system and all the bureaucracy of the tax system and all of the reduction in economic activity—take all of that, and then, if Grant’s generous enough, he’ll give a little bit of that back to you for three months.

DEPUTY SPEAKER: Order! I just want to make a comment. There’s been quite a bit of using incorrect names and shortened names. Please use full names, it will reflect in the Hansard, and people will know who members are talking about.

CHRIS BISHOP: Grant Robertson, the Minister of Finance for the next 18 months—after which, hopefully, New Zealand will never be subjected to his rapacious, tax-hungry ways ever again—is a man who believes that the Government can just take as much money as it’s possible to take, and then, if he’s generous enough, he’ll give some of it back to you: the poor, long-suffering taxpayer.

So there’ll be a big group of New Zealanders who will stare at this Budget and stare at this bill and say, “Yeah, 350 bucks, OK, well, look, I’m not going to turn down 350 bucks; it’s better than nothing, because I’m staring at inflation of 7 percent and my wages are only going up 3 percent, and I’m staring at inflation above the 3 percent threshold over to 2025.”, but they will also look ashore and say, “You know what? Actually, I’d be better off in Australia or further afield.” So $350 is an interesting sum of money, because it’s about a one-way flight to Sydney, Melbourne, and Brisbane. It probably won’t get you to Perth, but it would definitely get you to the east coast of Australia.

Let’s be extremely clear about the numbers in this Budget: 6.9 percent inflation, now a wage growth of around 3 percent. What does the Budget say? It says that, for the next three years, inflation isn’t going away. This is not a one-time thing. This is not a temporary thing. Deborah Russell said, “You know, oh, well, it’s forecast to come down.” Yeah, it’s forecast to come down; it’s forecast to come down from 7 percent to 3.6 percent to 3 percent. That is still massive inflation. Kiwis—

Hon David Parker: No, it’s not.

CHRIS BISHOP: Yes it—David Parker says, “No, it’s not.” David Parker remembers—I’m not having a go at his age but it is just literally true that David Parker remembers inflation of 7 percent, 8 percent, 9 percent, 10 percent; I don’t, because I’m 38 and people my age and below don’t remember serious levels of sustained inflation above 5 percent or 6 percent. They don’t remember it because they’ve never experienced it, and what they’re about to experience is what that is. It’s the robber in your back pocket. It’s the thief that you can’t do anything about. It’s happening here in New Zealand and it’s going to continue and it’s going to be bad. It’s the thief in your back pocket.

There are things the Government could do to make it better; not this—not this band-aid approach which the Government is proposing in this bill—but have some fiscal disciple. Grant Robertson has spent, since 2017, an extra $51 billion. He said that, for this Budget, he was going to be fiscally prudent and it was going to be all balanced and all of the rest of it, and everyone went, “Well, OK, well, whatever.; $6 billion is actually the single biggest increase in the new operating allowance in New Zealand history, but OK, $6 billion.” What they have tried to submerge within the paraphernalia sent out alongside the Budget, what the Government has neatly tucked under the covers, is that it is not just $6 billion of new spending this year; it’s much, much more than that.

You take your $6 billion—it was actually $5.9 billion, to be fair—but they’ve also pre-spent $2 billion from Budget 2023, so that’s money that’s been allocated in the 2023 out-year that has been brought forward to 2022, and, to make matters worse, they’ve taken $400 million from Budget 2024 and brought that forward. So that brings us up to $8.4 billion. Then, on top of that, the Cost of Living Payment package, which we’re legislating to allow the IRD to do, is separate. Grant Robertson has just decided that that’s separate to the operating allowance, that’s outside it. So that’s another big chunk of money: $800 million, or so. This is not prudency; this is profligacy. This is an attempt to submerge within the Budget papers a massive Budget blowout. It’s a huge increase in spending.

Does anyone seriously think that in Budget 2023, which we hope will be Grant Robertson’s last one, he’ll turn up and say, “Well, look, I’m just going to have to rein in the fiscal spending; I’ve just spent too much.”? Does anyone seriously think that? No, because for five years now—Budget 2018, Budget 2019, Budget 2020, Budget 2021, and Budget 2022—there’s always a reason; there’s always another excuse. There’s always a reason. He just turns up and there’s another reason to spend more money, and now we find ourselves, if we spend an extra $50 billion—spending’s up by 70 percent in the last five years. Does anyone seriously think that we’re going to turn up to Budget 2023—which, by the way, is an election year, which is not normally a year in which Governments fiscally constrain themselves; normally, they turn on the spending spigots—and Grant Robertson’s going to say, “Well, I’m very concerned about the fiscal discipline; I’m going to have to wind it back.”? No. Of course he’s not going to do that; we’re going to have another spend-up.

The best indication of a future with Grant Robertson and Labour is what happened in the past. They just spend, spend, spend. They’re addicted to it—absolutely addicted to it, and it’s not good quality spending.

What is the outcome of 10,000 new bureaucrats? Are we getting a 68 percent increase in effectiveness off that spending? Absolutely not. I’ll tell you what it’s going on: have a look through the emissions reduction—I hesitate to call it a plan; it’s more a propaganda paraphernalia produced by the Ministry for the Environment. I have no doubt that a lot of people have spent an awful lot of time doing a lot of website design work and coming up with strategies and developments and every synonym for “strategy” and “plan” you can think of under the sun. But all that is within that is just more plans. Climate change is what is happening while you’re making other plans. Like, it’s just literally a series of plans and strategies and development.

New Zealand Transport Agency spin doctors—they spend more money on consultants, more money on plans and strategies and propaganda from the transport agency, than we actually do building roads or any public transport projects. We know that all too well here in Wellington, where we’ve spent five years stuck in gridlock because the absurdly named Let’s Get Wellington Moving project is doing the exact opposite while a lot of people make a lot of money doing consultancy reports for something that is just not going anywhere. They spent $2.5 million on the Mongrel Mob, $51 million on a cycleway that’s never been built—a cycleway across the Auckland Harbour Bridge—more money on health restructures. Poor quality spending.

The point is that this poor quality expenditure is driving up inflation. If you don’t believe me look at page 44 of the B.3 in the Budget: “Inflation is being driven by strong domestic demand pushing up against constrained supply.” Strong domestic demand of which Government spending—extremely high Government spending—is a massive component of it.

So the question is: is this enough or is there a better way? Our argument is that there is, because if you’re someone on the average wage, you get nothing from this, and anyone on 50,000 bucks a year or more gets more from National’s plan. There’s no doubt about it. Our view is that we need permanent spending restraint and fiscal disciple and permanent adjustments to the tax thresholds, which would deliver more money in New Zealanders’ back pocket.

What is the Government seriously saying? “We’re going to have a three-month increase in people’s take-home pay, and we’re going to get to November and December and then it’s going to go back up again, running into Christmas.”? Yeah, right! This will just be continued. Why don’t you just legislate for what we should do in the first place: legislate for National’s plan which delivers more money in New Zealanders’ back pockets and actually reflects the cost of living crisis that we are experiencing?

BARBARA EDMONDS (Labour—Mana): Thank you, Mr Speaker. It’s a real privilege to be able to stand and take a call on the Taxation (Cost of Living Payments) Bill. Now, I’ve been an MP now for around 18 months, and I’ve watched politics for a number of years, and it’s quite clear that the National Party have never had a good history with numbers. Their previous Budget had a massive hole in it, but, you know, what did they do? They shifted their spokesperson, and they moved them on. So based on what the National Party is suggesting—because they haven’t actually provided us with an alternative budget. Based on their tax policy that they’re standing by, which are tax cuts, they’re saying a person on minimum wage would receive $110 in a tax cut. So based on the measurement that the previous member had used, $350 under this side of the House’s policy gets a person a one-way ticket to Australia. Under the National Party, they would dump you in the middle of the Tasman Sea, because that’s exactly what the National Party tax policy of tax cuts does.

A person who earns over $180,000 underneath their policy would receive an $8,000 tax cut; a person on the minimum wage would receive $110. There is an absolute injustice and imbalance in that sort of policy, so that’s why we are saying we need people to get short-term relief. This is targeted; it is focused. It is focused on those who are in the most need, those who earn the median wage and have the lowest incomes. Under this tax policy, they will get short-term relief of $350. So let me put that to you in practical terms: that is enough money to help you with your warrant of fitness; that is enough money to help you with the registration. What does $110 a year get a person on the minimum wage? Doesn’t even get you your registration. So that’s why this Government is absolutely supporting a cost of living payment amendment that we’ve got on the table today.

One of our previous members—Dr Deborah Russell; fantastic academic and tax lawyer—said there was a lot of fantasy world, a bit of misinformation that was coming from across the other side of the House. So let me put down the real facts, the real information: a return to surplus in 2024-25—

Chris Bishop: Oh yeah, I’ll believe that when I see it!

BARBARA EDMONDS: —unemployment rates projected to remain at record lows—3.2 percent. Yes, Mr Bishop, “Oh yeah”, because, actually, even though you’re saying you’re looking at the Budget documents, we had the Reserve Bank in last week, and we talked about the actual pressures that are causing the inflation, so it would have been good if members on the other side of the House had actually paid attention, because a third of it is from the Ukraine-Russia pressure overseas—international pressures; a third of it is around tradables, which has come through a lot of the pressures coming from all the supply pressures; and a third of it is within New Zealand. So I’m saying to you, the unemployment rate at 3.2, the net debt forecast peaked at 19.9 percent of GDP—that’s lower than Australia, the US, the UK, and Canada. And economic growth—growth—4.2 percent in 2023.

If you don’t believe me, then how about you listen to the IMF—the International Monetary Fund; independent. And what did the IMF say? When they released their annual review for New Zealand, they found New Zealand was in a strong position. They also said, “Now is not the time for substantive tax cuts that give more significant amounts to CEOs than low-income earners.” The IMF said, “Now is not the time for substantive tax cuts.” So, therefore, this payment is a temporary measure to provide short-term support for those who earn up to $70,000. And these are the people that are hurting. It’s that middle. It’s that $70,000 and below. The payment is a temporary measure for those who are not receiving the winter energy payment, which came through earlier because we knew that we had to provide support for people over those winter months.

The income cap of $70,000 is set to provide support to those who earn around the average annual wage of $65,000. So what does that mean? It means that 2.1 million people will be eligible for the payment. What is 2.1 million people? That’s Auckland, Wellington, and Christchurch. That is the population of people who will benefit from the changes that are covered in this bill. So, therefore, I’ve got nothing much more to say other than the substantive tax cuts across the road will dump New Zealanders in the middle of the Tasman Sea, whereas this will provide a short-term measure of relief for our families—for 2.1 million people. Let me leave that again: 2.1 million people will benefit from this. So, therefore, I commend this bill to the House.

RICARDO MENÉNDEZ MARCH (Green): I rise on behalf of the Green Party to speak on the first reading of the Taxation (Cost of Living Payments) Bill. It’s been quite the ordeal listening to the National Party members who keep talking about expenditure and advocating for austerity, ignoring that, right now, many of our low-income communities are struggling to get by. This bill is an acknowledgment that many of our communities are struggling to make ends meet. It is a temporary payment of $350 targeted towards people earning less than $70,000.

But there is a problem. In an acknowledgment that people are struggling, what we are ignoring are some of the communities that actually are doing it the toughest—that the sign of this legislation, and the intent of this policy, seeks to leave behind people on main benefits. We’ve known for years that these are the communities that are on the breadline. I think it’s appalling, and a disservice to the communities that we’re supposed to be serving, to not include them in a stimulus package, effectively, lifting incomes to allow people to make ends meet at a time where inflation is growing, where global events are putting pressure on supply lines, and, therefore, the cost of basic essentials is going up.

Yes, people on the benefit are already receiving the winter energy payment—but the Government knows that it is not enough. This is why, in 2020, the Government acknowledged this by doubling the winter energy payment at a time when things were tough. And things are still difficult for those families. It is a shame that over a million people will be excluded from this payment by design and by political choice. It didn’t have to be this way. The Green Party has advocated that, as part of responding to our inequality crisis, we need permanent increases to incomes so that families can thrive, not just survive.

Recently, there was a group of organisations, under the Te Tapeke Fair Futures group, that released a report explaining just how much some families were struggling to make ends meet. Some of them were under $307 in order to just provide for basic essentials.

This research was backed by some of our organisations that are doing the most at the front lines—including Barnados, the Manawatū Tenants Union, Monte Cecilia Housing Trust, Auckland Action Against Poverty, New Zealand Disability Advisory Trust, Auckland City Mission, Child Poverty Action Group, the Disabled Persons Assembly (New Zealand) Inc., FIRST Union, Save the Children, and many others. These organisations know the struggles that our communities are going through. In fact, people on the ground have been speaking to the media and to politicians for many years, explaining that we need permanent fixes to our income support system.

So I’m stoked for the families that will find some temporary relief through this legislation, but I’m deeply disappointed that we are ignoring the reality that incomes remain too low. I’ve heard members of Government talking about how this is a Budget of health. I want to say that researchers and communities have told us, for many years, that we need to be focusing on the things that determine whether someone will be healthy—and incomes play a massive role in that. When families are struggling to make ends meet, they go through toxic stress. That toxic stress builds up and contributes to families getting sick. If we’re serious about building an infrastructure that is fit for purpose, and a health system that delivers for all people in Aotearoa, we need to have livable incomes. This is a massive missed opportunity to ensure that everyone is looked after.

The inequality crisis is not going to go away in three months’ time; in fact, it is not new. So we’re calling on Labour to look at the many recommendations their own Government reports have put out. The recommendations that people on the benefit have been talking about—to increase main benefits; to individualise the income-support system; to scrap benefit sanctions; and to look at genuine, transformative solutions so that our families are able to fully participate in their communities. Kia ora.

DAMIEN SMITH (ACT): I wonder, do the Green Party, as partners with the Labour Party—did they know about this initiative? And, if not so, I can understand the disappointment in the member’s communications.

This Government has lost its nerve tonight. Grant Robertson treats our income as if it’s just there to be chopped up into taxes, and I see the Minister’s left the room. He believes that every—

Hon Carmel Sepuloni: You’re not allowed to say that!

DAMIEN SMITH: He believes your money is—

Hon Carmel Sepuloni: Point of order, Mr Speaker.

ASSISTANT SPEAKER (Ian McKelvie): Order! Order! The member shouldn’t refer to people who have left the room.

DAMIEN SMITH: Thank you. This Government believes that your money is a Government resource, even before it’s taxed. And, once again, with this Budget, we’ve now found out the price to gain political support, and it’s $350. That’s $27 a week, which probably gets you a slab of Speight’s. I’d like to price check that, but I haven’t had the opportunity yet to do that.

In terms of the Taxation (Cost of Living Payments) Bill, there’s been no regulatory impact assessment; no advice from Treasury on this. So when was this constructed? Was it just dreamt up because, “Hey, we’ve got a problem with the cost of living, under the pressure from the ACT and the National parties.”? And was it slipped in before the Budget was printed a couple of days ago? Because this can’t seriously be a strategy that will help people with the cost of living. It’s temporary, it’s got to be wound down quickly—just like the fuel taxes—and it doesn’t actually lead to success.

That’s why the ACT Party argues for major tax cuts—and the public deserve them this time—where we have a simple, three flat-rate structure of 17.5 percent for people under $70,000, and 28 percent for those above. That would have stimulated the economy, it would have helped with the cost of living, it would have actually made sense in the mind of the public, and it would have been something the IRD would have backed and administered easily. But no, we’ve come up with Mr Parker’s initiative that—after his great speech to the nation on taxation and helping people, this is what the Labour Party has come up with.

Now, in terms of the Commissioner of Inland Revenue using their powers to do this and to sign it off, we’ve got a situation where, under urgency again, we’ve missed the story. It’s as if Labour has missed the story of the golden goose, or maybe it hasn’t. A key part of the “brain drain Budget” is to not tax too many productive people. Households are facing the greatest cost of living crisis ever. Even though the Prime Minister and Mr Robertson were sharing cheese rolls today, people this weekend will be going, “Can I pick up that kilo of cheese which is more expensive, or do I do without?”

It’s only four years ago that—under this Budget, the amount of tax per person has gone from $15,825 up to $21,945. So it’s not even giving and taking away; this is just taking away. This is, potentially, the greatest piece of political spin this Government has ever done. It’s not transparent; it’s just been a hit, and it hasn’t been thought through in a fashion that actually will get traction in the household this weekend. It’s going to fuel inflation, it’s going to drive up—with the Monetary Policy Statement next week—the rates of mortgages and rentals. Everything this Government does is like pouring fuel on the fire.

The public would rather have tax cuts like ACT is proposing, and not to leave for Australia. We’re now the highest taxed country in the Asia-Pacific region; our Aussie friends have pulled ahead, our Singaporean friends have pulled ahead, and our South Korean friends have pulled ahead because they’re more productive. And so we want real change; not something that’s thrown out which lasts for a year. There’s three monthly payments—it’s like going down to Noel Leeming, right? This is not how Government tax should be administered, and it is money out the door to try and cover up that this Government has a cost of living crisis—it admitted it today, and we know that this is not going to fix it.

So if you look at a nurse under ACT’s alternative budget, they’d be $2,000 better off if they had a better tax rate. A family on an average full-time salary of $73,000, a part-time worker earning $30,000, and two children could be $2,800 better off. A nurse, and a teacher, or police officer near the beginning of the year earning $60,000 would be nearly $800 better off. So why is this Government just not giving back to the people? Why is it so intransient, considering the other programmes that it’s given out billions and billions of dollars to? The first people that should have got this money are the citizens of New Zealand. So everyone’s getting squeezed—nothing’s changed today except a few extra dollars chucked out which will buy a few loaves of bread. The Kiwi battler is going to make a decision about this Government, on how it earns its money, how it pays its bills. It wants the Government to get out of its life, and it wants transparency in the day-to-day management of its household income.

This was the day for Grant Robertson to tighten his belt, but, no, he loosened it. He’s fuelled inflation, he’s off to the races again with a five-year plan that doesn’t make sense in a holistic way, and Mr Shaw says we need two more Budgets of enlightenment. Well, where does that leave the country at a net debt level? So we’ve got to start earning away in a productive economy, and we’ve got to accept that things are tight. But, you know, in the New Zealand household people are tightening up their budgets, they are saving $27. They are actually doing it, right? They’ve been doing it for a long time now, before this Government has stepped in today.

So Grant Robertson needs to stop treating our revenues like he’s going to tax them and fill the gaps in his Budgets. And he needs to stop telling the people—and insulting the people—of New Zealand that this is what you’re going to get to get through this crisis. This is the greatest crisis of living we’ve seen in a long time in this country. And Mr Parker needs to adopt his attitude about Government resources and taxes, where he’s taken in so much money that it’s time to contemplate a cross-party alliance to reduce taxes and give Kiwis a break.

So in terms of this piece of law tonight, and the explanatory notes—they’ve very, very interesting—under the scheme, a cost of living payment has been indexed to $70,000 per annum. I asked Treasury today, in anticipation of this moment, “Could you define to me what a low and middle income earner was?” And they said, “We don’t know. We haven’t got a definition in the Budget packs.” I said, “Well, how are we supposed to do the calculations?” So Treasury has not defined what a low and middle income earner is, and that just about sums it up. So there needs to be changes there as well. So thank you for the opportunity, Mr Speaker, to speak on this bill. We will look at the numbers very carefully, but we won’t be supporting it.

GREG O’CONNOR (Labour—Ōhāriu): Thank you, Mr Speaker. This is shaping up as a fairly typical post-Budget day, you know: we propose, they oppose. That’s what we’re doing. I’m happy to be on the side that’s proposing, at this stage, because there are no alternatives. But just in case there are people listening, they’ll listen to the various speakers here—and I’m now following the ACT Party. Now, the ACT Party—there’ll be accusations, there’ll be people yelling meaninglessly across the House, as we’re just hearing now, but I’d just like to quote a little interaction that took place on the radio today—on Radio Live—where one very distinguished New Zealand economist Shamubeel Eaqub was speaking, in fact, with the leader of the ACT Party. And during the leader of the ACT Party’s continual accusations that somehow this Government was responsible for inflation, Mr Eaqub shook his head during most of Mr Seymour’s speech, saying it made him angry to listen to, calling it “economically illiterate”: “It is not Government spending that is driving inflation. We had the UK hit 9 percent inflation yesterday because there is a global inflation crisis. Yes, we should talk about inflation, yes, we should talk about Government spending but you can’t just tell lies about what’s going on in the economy. [The] whole thing that … is wasteful Government spending that is causing inflation is simply not true. If you’re ACT you can say there are parts of the spending that we don’t like, and we wouldn’t do that because it doesn’t add value, it’s not efficient. That’s fine. But don’t do it on the basis of what I think we completely wrong to things to say,” Eaqub said to Newshub.

David Seymour: Point of order, Mr Speaker.

GREG O’CONNOR: So, those who are listening to that—

Hon David Seymour: I hope that Greg O’Connor didn’t mean to accuse me of lying—

ASSISTANT SPEAKER (Ian McKelvie): In fact, I don’t think he did.

Hon David Seymour: I hope not.

ASSISTANT SPEAKER (Ian McKelvie): I think what he did was quoted someone else—

Hon David Seymour: Who did, and read it—

ASSISTANT SPEAKER (Ian McKelvie): And he’s entitled to quote someone else. He certainly wouldn’t have accused you of lying, himself.

Hon David Seymour: —into the record, because—

ASSISTANT SPEAKER (Ian McKelvie): Order!

Hon David Seymour: —the British have spending too.

ASSISTANT SPEAKER (Ian McKelvie): That’s enough—that’s enough.

GREG O’CONNOR: I will never be the only person to do that, Mr Speaker. Anyway, I’m a fairly conservative sort of a chap, and a lot of the accusations here are about the spending today. Going back to when we first had COVID and we were looking at, basically, shutting down our economy, we were looking at giving workers or businesses the wage subsidy, and I struggled to get my head around—I’ll be quite honest—that we could do this, and it would turn out to be the best thing we could have done, not only for health but for the economy. But, actually, it turned out to be absolutely the best thing we could have done, and, even, I think, the greatest detractors of our Government across the other side will think that that’s the case. Now, come forward two and a half years, we are at another crisis, and a crisis that I won’t repeat that’s happening around the world—although I will repeat our economist’s facts about what’s happened in the UK: projected to get to near 11 percent by the end of the year. So we are in another crisis, and we’ve got to look at a pragmatic approach to it, because the losers of that are ordinary New Zealanders.

Now, those who are going to speak after this, from the other side, just imagine a world where none of these things had happened. Imagine we didn’t have the winter energy payment. Imagine we hadn’t increased benefits. Imagine we didn’t have tax relief at the pump. Imagine we hadn’t halved public transport. Where would we be? The accusations being made across the House there is “Get more money into the hands of New Zealanders”, which is exactly what we’re doing.

On a select committee I’m on, we’ve had the shipping companies in, we’ve had the port companies in, and the general belief that the crises we have in supply chains—caused by a shortage of ships, caused by a shortage of containers and, latterly, caused by China’s shutting down their ports—are things that actually can be relatively temporary. The other thing I would ask those who are going to stand up and cast aspersion on this, say: what would happen if the Ukraine war were to end in the next month? I suspect that those petrol prices that we drive past every day would very quickly go down.

So this is a world that there are things that could happen, are likely to happen, that actually could have us in exactly the same place as we were after the lockdown, after the wage subsidy in particular that, actually, we’ll look back and say that this was the best thing we did for New Zealanders. In the past, we gave that money to the businesses; now we’re giving it to people. In fact, those that are great believers in the trickle-down theory might just stop and think that maybe what we’re doing here, and what we’ve so successfully done, we’ve actually introduced the “trickle-up” theory. So I’m very happy to support this.

Hon PAUL GOLDSMITH (National): My pleasure to speak on this bill—although not a great pleasure, in the sense that we are not supportive of this bill and we’re not supportive of this Budget. Fundamentally, we don’t think their plan for dealing with the cost of living crisis that New Zealanders face is any good, and our plan would be a lot better. That’s why we’re standing up for our plan, which is actually about leaving more money in the hands of New Zealanders, not using inflation that has been partly created by Government activities, partly by global factors, to sneak more taxes out of the hands of New Zealanders.

So if this Government had adopted National’s policy of just simply adjusting the tax rates for inflation, Kiwi households on the average income would be $1,600 a year better off. So they’ve taken that extra money from their pockets and then they turn up at the Budget and say, “Oh, you should very grateful because we may give you a cheap bus fare for two months and possibly a cheap railway fare for a couple of months, and some people will get a winter payment, but if you’re on the average wage, tough luck—you’re not getting anything.”

So if we go back to what this Budget was all about: Labour, I think, up until about a month ago, had their clear plans that the Budget was all about climate change and health restructuring. They’re going to spend a lot of money—billions and billions of dollars—restructuring the health system just as we’re coming out of a COVID crisis, which nobody thinks is a very smart idea, but there’s billions of dollars being spent on all that and, unbelievably, no measures of actual outputs of what we’re going to get which is better for all that money. That doesn’t seem to be an issue at all.

So they were going to talk about climate change and health restructuring, and then, I think, about four weeks ago, they woke up and thought, “Aw heck—aw heck. The issue of the day is actually a cost of living crisis and we haven’t done anything about that. Maybe—maybe—people aren’t so focused on those issues right this moment when they can’t afford to buy a block of cheese and they can’t afford to pay the rent and they’re wondering how they’re going to feed their family and have an opportunity to get ahead. Maybe we might have miscued and maybe the $6 billion of extra spending—the biggest amount of extra spending in the history of New Zealand all focused on other things and not to help New Zealanders deal with this cost of living crisis. Maybe we may have miscued!” and so what we see is, on top of the $6 billion, they suddenly came up with an extra package. I think they scrambled it in very late in the piece—that’s partly why there’s no great deal of information backing up this piece of legislation. So they scrambled it in, added it on top with a little bit of cherry and cream, and said, “There you go, New Zealanders, you should be happy because we’ll give you an extra two months of cheap bus fares and if you’re very lucky you’ll get a short-term bit of help with winter energy payments.”

Well, New Zealanders deserve a lot better than that. New Zealanders deserve better than a backwards Budget that is taking this country backwards, back into debt, back into slow growth, and also New Zealand families going backwards where the cost of living and inflation is going forward faster than wages, so that New Zealanders are going backwards. The only thing going forward in this country right now is those stolen vehicles driven by 11-year-old kids, ram-raiding shops up and down the country. That’s the only thing that’s going forward!

This Government has just missed so many opportunities to help New Zealanders. You don’t see anywhere, in any of the Budget material, is a plan to get the country growing more quickly, to actually generate more money; it’s all about restructuring and redistributing money from those who work. Nowhere do you see—apart from a slimmed-down version of Shane Jones’ original growth plan, which I have no confidence will be well thought through or anything like that—anything about the regulatory reform, the plan for growth that New Zealanders need to get ahead. The recipe for that is pretty simple, it always has been the same, which is to provide a stable, predictable environment where people feel confident to invest, where they know that the rules aren’t going to be changed underneath them all the time, and where they’re not overtaxed and over-regulated so that New Zealanders can get ahead and actually back themselves to succeed globally.

All we hear in this backwards Budget is more costs, lots of money being spent, and no accountability for the outcomes. That’s why this bill is not what we need. National has got a better plan which would leave more money in the hands of New Zealanders’ pockets.

WILLOW-JEAN PRIME (Labour—Northland): E te Māngai o te Whare, tēnā koe. Thank you for the opportunity to speak after our finance Minister just delivered a wonderful Budget. I’m really proud of the tough job that he has balancing everybody’s wants and needs, and we are here in the Chamber this afternoon, passing the first piece of legislation, under urgency, to give effect to those Budget announcements.

We are here debating the Taxation (Cost of Living Payments) Bill. I take this opportunity to take the Māori Party’s call this afternoon. This particular bill is so that we can give effect to the announcement that we will be introducing a payment of $350 to help middle-income people cope with the current inflationary pressures. I have heard from my constituents about the impact that the cost of living is having on them and their whānau and so I know that this announcement today is going to make a real difference for those whānau. That is on top of the package that we already introduced, and have been implementing, on 1 April, which boosted support for families through Working for Families, the family tax credit, Best Start, and expanding childcare assistance. It also boosted the student allowance and the student loan living costs. We’ve also lifted the minimum wage, reduced the cost of fuel, and increased superannuation, and we have kick-started once again the winter energy payment.

Today, those who are not receiving any of those things I have just mentioned, which is approximately 2.1 million people, will be eligible for a payment of $350. The income cap for that is $70,000. The reason that is the cap is because that is around the average annual wage, and I have heard from people who have contacted me about what we’re doing for those on middle incomes. This is what we are doing to help you, who, we know, are also impacted by the cost of living crisis. Approximately 2.1 million people are going to benefit from today’s announcement once we pass this legislation through the House this evening.

One thing I want to add to that is that there will be no application process. That’s one of the things that I often find when we make these announcements—people straight away ask where they apply and what they have to do. The Inland Revenue Department are going to be able to use the information that they are already able to gain, under the authority they have, to be able to determine those who will be eligible for the payment, and it will be processed.

I don’t want to prolong this contribution in the first reading. We’ve got plenty to get through over the course of this evening and possibly tomorrow. So with that, I commend the bill to the House.

INGRID LEARY (Labour—Taieri): I received emails and Facebook messages this afternoon from Gina, Zaha, David, and Ahman—I hope I pronounced that correctly—saying thank you to Grant Robertson for the cost of living payments. I said I would pass their thanks on because they are constituents in my Taieri electorate in South Dunedin and South Otago who will benefit from these cost of living payments, who have felt pressure from the cost of living because 37 percent of people in my electorate over the age of 15 earn between $10,000 and $30,000, and only 13 percent earn more than $70,000. So this $27 a week will mean much more than the proposed tax cuts by the National Party. My constituents, many of them in that bracket will get $350 per adult in three monthly payments from 1 August. They are the people who are earning under $70,000 who don’t qualify for the winter energy payment. So that is getting money where it is really needed, and if we put that together with those who do get the winter energy payment across New Zealand, that equals 81 percent of people receiving targeted support. That’s 2,136,000 people. So that is part of a plan that we have to take away the short-term pressure that has been caused by short-term inflation.

Let’s look at what National’s plan is. Well, it doesn’t actually have a plan apart from tax cuts for the rich. So their plan would give about $2.50 a week in tax cuts for the lowest-paid workers, $18,000 for leader Chris Luxon if he was to become Prime Minister, and a $270,000 tax cut for Mr Luxon had he still been the chief executive of Air New Zealand.

Hon Member: Per annum.

INGRID LEARY: Now, that’s per annum—that’s right. And if they had to go into Government with ACT, which is highly likely, they would have to freeze the minimum wage because it’s what David Seymour has said, and reverse climate change initiatives. We know that climate change is the biggest existential threat that we have at the moment. They would reverse that, and Mr Luxon has not ruled out actually abolishing several of the ministries that serve our people, including the Human Rights Commission, Ministry for Women, Ministry for Pacific Peoples, Ministry for Ethnic Communities, and Ministry of Māori Development—all ministries which have received funding in today’s Budget to make sure that we leave no New Zealanders behind.

I am proud and congratulate Grant Robertson for this balanced Budget because he’s done this in an environment where the global economy has been volatile. We’ve seen inflation in the UK shoot up overnight to 9 percent. That’s a 40-year high. But with his prudent fiscal management, he has been able to continue to put people first. We can support low and middle income New Zealanders, and that is also from the work that all New Zealanders have done to pull together during COVID to make sure that we keep New Zealand going, and I really want to thank all New Zealanders for doing that.

The fourth Wellbeing Budget talks about a secure future. It’s a long-term approach. It takes a long-term approach to health and climate, but we have seen these cost of living pressures on people. It is not stagflation, and anyone who doesn’t believe me, just look at the Reserve Bank report and their appearance in front of our Finance and Expenditure Committee meeting last week where stagflation was asked about repeatedly. They said it is on their radar; it is not currently a threat to New Zealand, and anybody who tries to say that is talking it up. These are temporary pressures and they need swift and temporary solutions, and that’s what we’re doing by passing this legislation under urgency so that we can get money into the pockets of New Zealanders to make a difference as quickly as possible. That’s 1 August and that will be targeted support, along with the two-month extension to the fuel tax cuts, there is also the extension of half-price public transport, and for those people on community service cards—and there are many, many in my electorate—they will be able to use their Community Connect, which means they will permanently get half-price public transport.

That is going to be an absolute game-changer for people in my electorate, people have lobbied me for many months saying, “Please, can I have changes to public transport.” so they can get out and about. It will help their wellbeing. It will help them studying at the university.

So to those people who contacted me this afternoon, thank you so much for passing on your good wishes to our Government. I just wanted to share that with the House tonight and to say congratulations to Grant Robertson for an excellent Budget in a very difficult time globally.

SIMON WATTS (National—North Shore): Thank you very much, Mr Speaker. It is a pleasure as the member of Parliament for North Shore and part of the National Party to talk on the Taxation (Cost of Living Payments) Bill first reading.

For those watching at home, we’ve only received this bill within the last half hour to 45 minutes or so, so you will appreciate that most of this is pretty new. But when you look through this bill, this Government has had a significant amount of time to put together a piece of legislation to deal with a cost of living crisis that has been impacting Kiwis across this country for a very long time. But when you get into the detail of this bill—and I’m looking forward to future stages, and I look across there to the Minister Parker—there has not been much detail done on this bill. And that indicates to me—it indicates to those watching at home and those stakeholders who have not been consulted on this bill—that this has been put together in a rush. These guys are panicking. They are seeing the numbers on the walls, they can see the polling data, and they have worked out, “Surprise, surprise, we’ve got nothing in our tool kit which deals with the cost of living crisis.” And that is a big issue for them.

So what is their solution? Well, you’d think, let’s do something of substance. Let’s do something that’s actually going to impact those individuals across this country that are just so heavily impacted, those ones that are struggling to pay their mortgage as a result of interest rates increasing by 2 percent, those that are paying a lot more at the pump or those that are paying a lot more for food when they do their weekly shop with groceries. So what this Government have decided to do is they’ve decided to do a bit of a lolly scramble, a bit of a sugar hit, and say, “Here you go. Here’s $27 a week, $350 one-off, that’s it. By the way, we’re going to take away the other benefits we’ve given you around extending the fuel excise and halving public transport fees probably in the future. We’ll do this as a bit of a carry over and good luck.”

Well, I tell you what, I’ve probably only had about 45 minutes to look at this bill, but I’ve had enough time to look at a one-way flight to Sydney, and you know how much that is, Mr Speaker? On 1 August, when this bill comes into effect, it’s $300. So I tell you what, they’ve got $50 to buy a packet of cashew nuts when they get to the shop at Auckland Airport before they leave this country in the brain drain which will result because Kiwis no longer have confidence in this country being able to deliver for them, and that is because of that Government over on that side.

I tell you what, for the ones that decide not to leave to go to Australia on 1 August, they’re going to use this money to buy 9 litres of petrol every week for their Toyota Corolla. That’s all it pays for: 20 percent of a tank of fuel. That is absolutely nothing for these things. Or maybe they might decide, “I’m going to go into the supermarket, and with my $27 I’ll buy one block of tasty cheese and I’ll buy 3 litres of milk.” That is it.

And when you look at the criteria of this bill—and I can tell you what, this Government have not done the detail, and I’m not surprised, because they are not over the detail. They do not have the capability in this space, and it is coming out of this bill like you would not believe. The criteria is pretty much undefined. I’m looking forward to the future stages to be able to question the Minister around, actually, what information does Inland Revenue have in order for them to be able to assess the criteria for these payments to be made by 1 August? I’ll let you in to a little bit of a secret: they haven’t got all the information required in order to make those payments by 1 August. That’s why they’re waiting for 1 August, because they can’t make it happen tomorrow. They have not got all the criteria and information and the data required, and that is because they’ve just worked out this policy pretty much last week. That is the type of lack of planning from this Government, and this bill personifies the attitude on that side of the House of a Government out of touch; a Government not willing to listen to Kiwis. They haven’t even consulted on this taxation bill with people outside of Government. What is going on? It is a band-aid Budget, and Kiwis are going backwards.

I had a look at the eligibility, and, of course, you have to, according to this—and I’ll go into a little of that later on—earn under 70 grand a year to qualify. Well, there is 495,000 Kiwis who earn between $70,000 and $100,000. And what about that point that was made by the ACT member before around the fact that “low to middle income” has not even been defined by Treasury? This is an absolute scam. It is not dealing with what the title of the bill says around impacting and benefiting low to middle income New Zealand. It excludes a whole lot of people. The criteria, actually, will end up to say that, actually, a large number aren’t going to get it.

And then they have to work out both New Zealand tax resident and present in New Zealand. So what does that mean? Does that mean I can’t go on holiday for three months? Does that mean if I’ve all of a sudden gone over to Australia on the day that this is eligible, I can’t get the payment? Have you seriously thought through this bill? No they haven’t; they’ve made it up last week. That is what’s happening in this country.

We have got a Government that is making up as they go along. And you know what? That is such a huge disgrace for my children and for my grandchildren that will inherit the significant amount of growing debt by this Government, sitting around 41 percent before you adjust it to the lower number that looks a lot better. They are going to inherit that. Total borrowings have clicked over $200 billion. That is the legacy of a Government who are spending like there is no tomorrow. That is the legacy of a finance Minister—Grant Robertson—who is addicted to spending. And you know what? When you’re addicted to something, you can’t get off it. And he is going to keep on spending all day long. And that is a real concern. That is a concern for hard-working Kiwis like the people in my electorate of the North Shore, or down in Southland at the bottom of the South Island, or Invercargill or in Auckland Central or wherever you are across the country—

Hon Carmel Sepuloni: What about South Auckland and West Auckland, are they hard-working as well?

SIMON WATTS: —because those Kiwis are hard-working and they are not going to benefit.

And, of course, I can hear the Minister over there yapping on about something. I can’t hear her in detail, but I’ll read the criteria, because who are not eligible or qualify for this payment, of course, include sole parent support, those on the jobseeker support, student hardship, emergency benefit, superannuitants, all those individuals are excluded from this $27 a week payment. So on the outside, this looks like a really nice thing to do, but I tell you what, when you scratch the surface—like what you do when any of you, any time you scratch the surface on this Government’s policy—the truth comes out. And what we can see is this is a policy that is not going to deliver the benefits required for middle New Zealand and those that are squeezed so hard.

What is so disappointing is, again, the fact that this has been so poorly planned. And we have had a long opportunity and chance in order to be ready for today. It is no surprise that we face a cost of living crisis in this country. We have had ample opportunity to consult, to engage, to listen, to be informed by Kiwis in terms of what they are facing in terms of the challenges that they face day in, day out. But have that side of the Government used the time that they have been given to do the simple task of getting out of their offices in Wellington and listening to hard-working Kiwis? Well, the simple answer is no. And this bill proves the fact that they have not done their job.

We’ve mentioned in terms of where we could be today if they had only taken on some of the advice around National’s economic plan: a plan that takes into account fiscal responsibility, a sensible and pragmatic plan that puts money in the back pockets of hard-working Kiwis, a plan that will actually benefit those across this country who are contributing a significant amount. But they have squandered that opportunity, and that is a great, great issue in itself.

I want to end with a fact that the spending today was in the region of $6.5 billion of increased spending—increasing to $7.5 billion next year. That is an absolutely horrific scale of expenditure. And the challenge is that will not deliver the outcomes that Kiwis in this country deserve, and that’s why National oppose this bill.

GINNY ANDERSEN (Labour—Hutt South): Getting a lecture from National on the cost of living feels a bit like getting tips on frugal living from the Kardashians. I struggle to take it seriously.

I definitely struggle to take it seriously because this bill provides here-and-now support for those people facing a cost of living crisis in New Zealand. It provides $350 in the pockets of middle New Zealanders over this winter and that is what is needed right now. I would like to acknowledge Grant Robertson for delivering a fantastic Budget that delivers right now what we need and continues New Zealand on the right track. Our economy is one of the strongest in the world, with a triple A credit rating, record low unemployment, and lower debt right now than Australia, Canada, the United States, and the United Kingdom.

However, despite those positive results, we know that global inflation pressures are hurting New Zealand families right here, and the world remains an uncertain and volatile place. That is exactly why Budget 2022 provides further relief to those on lower and middle incomes in New Zealand to help pay for food, to help pay for petrol prices, and to help pay for energy bills until inflation is brought back under control.

So what is National’s plan that we’ve heard so much about? National’s plan is to point to the global phenomenon of inflation and blame the Government for that and to say quite a lot about fiscal discipline—a lot—but will not actually say what they’ll do about it.

But I’ll tell you what: you only have to look back on National’s track record in the history of New Zealand to see what they do. They cut health, they cut education, they cut housing, and they cut welfare into those areas. What they do is what they’ve said already: put money in the pocket of those top brackets of New Zealanders. Offer no real solution except for tax cuts—that’s all we’ve heard.

An interesting fact is that money—that $350 that we’ve heard today in the House that will not buy very much—is still far in excess than what that family would receive under a National programme of tax cuts. It is far more than what they would receive under that programme.

So it’s a sad thing today that those members opposite will vote against a bill that provides here-and-now support for middle New Zealand families, and I find it quite trite that they vote against that and still cry aloud. The payment is a temporary measure to provide short-term support for those individuals who earn up to $70,000 in the tax year who are not receiving the winter energy payment already.

The income cap of $70,000 has been set to provide for those who provide around the median wage of $65,000 a year. The group we’re targeting is specifically those who are less likely to have had those increases on 1 April that have already come into force, and to provide more help for those who haven’t been able to receive Working for Families and the increases in the minimum wage.

Approximately 2.1 million people will be eligible for the payment and that’s a significantly large amount of New Zealanders. The total payment of $350 will be split into three monthly payments of around $116 each, beginning on 1 August, and will be paid by the Inland Revenue.

Now, we know for a fact there is no silver bullet fix to inflation and the rising cost of living in New Zealand. But we are taking a range of actions. We’ve cut fuel tax to provide immediate relief for Kiwis as the war in Ukraine drives up prices. From 1 April, we’re increasing support for families, pensioners, and students, and, in May, our winter energy payment restarts, giving the 1 million people an extra boost to help with their heating bills.

From the day we came into Government, we’ve worked hard to lift wages, to reduce cost pressures on Kiwis through measures like cheaper doctors visits, free lunches in schools, and a family tax credit. I’m proud to be a part of a Government that delivers a Budget that keeps New Zealand on the right track and provides the support to those people who need it the most.

I commend it to the House.

A party vote was called for on the question, That the Taxation (Cost of Living Payments) Bill be now read a first time.

Ayes 65

New Zealand Labour 65.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

Bill read a first time.

Second Reading

Hon DAVID PARKER (Minister of Revenue): I move, That the Taxation (Cost of Living Payments) Bill be now read a second time.

I’m going to start with a quote from Audrey Young on Budget 2020: “Robertson’s $1 billion cost of living package, including a $350 payment for those earning under $70,000, to address immediate inflation pressures is a good one and well-designed, politically. It is hard to see how the National Party could oppose it (although it will) when cost of living pressures consumes its political agenda these days. Labour’s Budget measure of payments is targeted, it gives the lower-paid more than National’s”—[Interruption] Sorry, I’ll say that again for the member: “Labour’s Budget measure of payments is targeted, it gives the lower-paid more than National’s tax-indexation plan, and it is temporary … The Budget cements Robertson’s credentials as careful economic manager, for good times and bad, the Goldilocks manager: not too much, not too little.”

It’s so hard when you’re a member of the National Party, born to rule but languishing on Opposition benches, completely irrelevant, not even able to implement their flawed economic plans. They’re left with jingoistic messages and misrepresentation of both the current state of the economy and their own history over the years. You know, the National Party seems to always forget that average growth rates under Labour administrations compared with under National administrations—Labour does better. This is not just the short-term average; this is an average that goes back to World War II. Since World War II, growth rates are better under Labour administrations than they are under National administrations.

The tone of gloom from those depressing, if irrelevant, speeches from the National Party in the first reading—it ignores the fact that we’ve just had two triple A credit ratings from the top credit rating agencies in the world. Did you hear the National Party make any reference to that? No, no. Unemployment rate—did you hear them celebrating historically low unemployment rates of 3.2 percent per annum? No—3.2 percent unemployment rate, historically low in New Zealand, and the National Party cannot acknowledge or celebrate it. They talk about Government debt—Government debt—

Hon Paul Goldsmith: What’s this got to do with the bill?

Hon DAVID PARKER: What’s this got to do with the bill? Well, it’s got as much to do with the bill, Mr Goldsmith, as it had in your contributions from your side when you rattled on about Government debt, which in New Zealand is half the rate of Government debt as a percentage of the economy in Australia, a quarter of that of the United Kingdom, and a fifth of that of the United States.

Then they said—and this is to quote one of the last speakers for the National Party—“spending like there’s no tomorrow”, “addicted to spending”, “a horrific scale of expenditure”. This sort of exaggerated rhetoric from the National Party falls on deaf ears amongst the public because they know it’s not right.

I thought I’d drag out the record of the National Party under Bill English and their expenditure as a percentage of GDP compared with the expenditure of this Government in this Budget as a percentage of GDP. This Budget projects expenditure of 31.6 percent of GDP. How does that compare with the National Party’s expenditure? Quietness from the other side. Perhaps they’ve forgotten. I’m quite happy to remind them: 2009-2010, 32.3 percent. They’ll say, “Oh well, that’s just after the Labour Party left office.” OK, fair enough. What happened the next year? It went up: 34.1 percent of GDP compared with this year, 31.6 percent of GDP.

I see the Speaker wants me to come back to the bill. I will do—I will do. This bill promises 2.1 million New Zealanders a payment of $350 each, spread over three months. This will help New Zealanders facing cost of living pressure. It is very, very good. It’s equivalent to $27 per week over that period, and it’s much more than the National Party’s alternatives that they have been speaking of.

The legislation is necessary because at the moment the revenue department has not got the ability to use information that it holds for tax return purposes, like bank account numbers, for the purposes of this payment of $350. We want to get this payment out to people as soon as we can, and, in order to do that, we’ve got to give the revenue department the powers that they need to do it. There are a number of technical amendments that are made through this legislation, which I have no doubt that we will have a discussion about in more detail in the committee of the whole House stage.

Far from spending like drunken sailors, as has been alleged, we have a very balanced Budget here, although it’s primarily focused on expenditure in the health sector. There is cost of living support here—a package that totals $1 billion, the largest part of which is $800 million, which relates to this $350 per person paid to over 2.1 million New Zealanders.

I find it absolutely astounding that the National Party, after all of their rhetoric about being on the side of the pressed middle, is opposing this legislation—

Todd Muller: Squeezed middle.

Hon DAVID PARKER: The squeezed middle—the squeezed middle. And they are squeezed by inflation. We agree with that. The Budget projections show that, in out-years, wage growth again exceeds inflation. Of course, in the Labour Party we don’t have a problem with people getting wage increases, which the National Party seems to squeeze when they’re in Government and have very low rates of wage growth.

So I commend this bill to the House in the second reading and look forward to the committee stage

ASSISTANT SPEAKER (Ian McKelvie): Members, the time has come for me to leave the Chair for the dinner break. The House will resume at 7 p.m.

Sitting suspended from 6.02 p.m. to 7 p.m.

Hon PAUL GOLDSMITH (National): Well, thank you, Madam Speaker. Thank you for the opportunity to speak. We’ve had the dinner break. We’ve all watched the news and reporting of this Budget, which has flocked across the country. The previous speaker referred to Audrey Young’s glowing reference to the “Goldilocks Budget”. I’m afraid, being the true Goldilocks around here, that Audrey was a bit off beam there and what we’ve seen, actually, throughout the rest of the country is an incredulity that this Government could take so much money off the hands of New Zealanders with extra taxation, with proposals for a new jobs tax coming around the corner, and then expect everybody to be happy with $350—to some people. Some people have been unkind enough to suggest that’s about almost an economy flight to Sydney to start a new life in a place where hard work and enterprise gets better shrift than it does under this Government. And so we’re absolutely focused on the cost of living crisis.

There’s been no debate in this House this evening around the issue facing all New Zealanders, and that is this cost of living crisis that New Zealand families are facing, the difficulty of funding their way through to pay for the food on their table, the gas in their tanks, and to make ends meet. The only difficulty, and, I suppose, the only complication, is that the members of this Government, the Ministers in this Government, and the backbenchers who are sitting over there hanging their heads wondering about what their future is going to be—the only surprising thing was that those people, those 50-odd New Zealanders, were the last people to wake up to the fact that there was a cost of living crisis in this country and that’s what people were focused on. And so their plans for this Budget all along were to focus on climate change and the biggest health restructuring in the middle of a COVID crisis. And that was the plan for the Budget and it was all sweet.

Then, about three or four weeks, maybe a couple of months, ago, perhaps related to the publishing of some polls—I don’t know—the Government suddenly woke up and thought, “Heck, we haven’t done anything about that that, in any remote way, addresses the issue of the day, which is the issue that is most in front of mind of all New Zealanders: how do we actually make ends meet? How do we deal with the fact that prices are going up everywhere and it’s harder to make a living and it’s harder to keep food on the table?” There was nothing really planned, and so they threw together this last-minute piece of legislation that we’re dealing with today, which, along with a couple of cheaper bus fares for a couple of months, and another couple of months trying to deal with the issue of petrol prices and diesel prices, which will all be welcomed—but all they’re doing is applying a band-aid on to a much deeper, long-term situation, which is the fact that inflation has got out of control in this country and that New Zealanders are going backwards under this Government, and inflation, the costs of goods are going up faster than wages. Therefore, as everybody can see, everybody can understand—it’s as obvious as the nose in front of your face—New Zealanders have been going backwards under this Government. As I said in the previous speech, the only thing going forwards is the stolen cars driven by 11-year-olds into ram raids. That is not what New Zealanders are hoping for or looking for, and they’re looking for a Government that understands the importance of having a strong economy, fighting inflation, and ensuring that wages are going faster than inflation.

So this legislation comes in and brings in a $350 payment. That’s their plan. That’s their belated plan to deal with the cost of living crisis, and we are voting against it quite simply because we think our plan is better. Our plan is to leave more money out of the pockets of New Zealanders, not take like this Government is doing sneakily. Every week, every month, this Government is stealthily putting up taxes. They’re increasing taxes because they are not adjusting the tax thresholds for inflation. And over the course of a year it adds up significantly, to the extent that the average household on an average income have had $1,600 dollars a year of extra taxes taken off them by this Government to fill Grant Robertson’s insatiable hunger for more tax revenue. This Minister, this Government, Grant Robertson has been the most rapacious tax collector in this country’s history. I thought nobody would ever beat Michael Cullen, but he has. There is never enough tax for this Government because they will always spend more, and we’re always going to be left with larger deficits and they’re going to be wanting to spend more.

Now, New Zealanders can, quite rightly, look at this situation and say, “Well, there are some things that we could usually spend more money on, but it’s just a pity that there is no connection between the spending and the delivery in this Government, and that’s the slight problem.” And so when they see the billions of dollars that are going to be thrown at the health system, there is no confidence that it will lead to better outcomes, because we all looked, two years ago, to $1.9 billion promised on mental health and there has been no actual improvement in the services available to people who need the mental health work in so many areas. So people are rightly sceptical of the potential for actual progress from all the money that has been spent. Everybody agrees that New Zealanders are doing it tough right now. Everybody agrees that we need to put more money into the pockets of New Zealanders so that they can deal with the rising prices and cost of living crisis.

The difference is that on our side we believe that actually a very simple way to start is to stop taking quite so much money in the first place and not use inflation to stealthily and sneakily take more taxes from New Zealanders, as this Government has. That’s our proposal. This Government, instead—“No, no. We’re going to keep on putting taxes up. Every month, every year, we’ll just sneak a little bit more. We’ll use inflation.” That’s why tax revenues are flooding into this Government. “We’re going to use it all and spend it”—on a very poor quality spend most of the time. “And in the meantime, because we’re a little bit worried about the broader issue, we’ll extend the cheap bus rides for an extra couple of months and we’ll extend the winter payments for $350. And if you’re earning the average wage in this country, tough luck. You’re too rich. We’re not interested in you.”

That is not the message that New Zealanders want to hear. It’s not the messages that we need to be hearing in this country. That’s why we won’t be voting for this band-aid economics that the Labour Government seems to have picked up. Throw a little bit of sugar around for a few months, hope for something to turn up, and kick the can down the road. I don’t know how Mr Robertson and his team are going to wind up all the extra help on the diesel and the petrol. It’s going to be interesting. When it comes to an end in a couple of months, what are they going to do? That’s going to be quite difficult for them. The point is what they’re not prepared to do is to give back some of the taxes that they keep on taking from the pockets of New Zealanders.

So he’s clearly thrown this together at the last moment just before the Budget to deal with the issue of the day, which hadn’t really been on their radar up until then. They’ve been focused, as I said, on a massive health restructuring that continues to leave the whole health sector in a state of complete chaos in the middle of winter when we’re dealing with COVID. If we think of, even, the Upper Hutt Hospital situation, the people that are supposed to be dealing with it are about to lose their jobs—they’re about to lose their jobs and they’re supposed to be dealing with a health crisis. They’re going to be replaced in six months and there’ll be a whole lot of emails in the inbox of this new organisation for some manager that will appear from somewhere, and they’ll have to figure out what’s going on while everybody else has left the room. So it’s a bizarre situation there and that’s where most of the new money in this Budget has gone: into feeding this great beast; the most ill-timed restructuring that you could possibly imagine.

And in the meantime, the Kiwis who are doing it tough in Kaitāia, in Whangārei, in Huntly, in places all around the country, looking at the price rises, going up, looking at all the pressure that they’re under in their households, particularly the hard-working families who are both working hard, getting an average income in New Zealand, getting 70,000, 80,000 bucks a year, working hard, trying to provide for their family, feeling like they’re not getting ahead because of the increased rents that they are having to face. Rents have gone up substantially under this Government.

Chlöe Swarbrick: Shall we do rent controls, Paul?

Hon PAUL GOLDSMITH: They’ve—pardon me?

Chlöe Swarbrick: Shall we do some rent controls, then?

Hon PAUL GOLDSMITH: Well, that’s a typical response from the Greens. Rather than deal with the driving causes of the housing going up, all the costs that they’ve added on, the idea that they’re suddenly had, that if you pile costs on to those who provide the housing, there is perhaps the slight possibility that some of those costs will be passed on to the renters! That seems to be beyond their logic to understand that that is a possibility: if you add a whole lot of costs on to landlords, there is a slight possibility that some of those costs will be passed on to the renters. That, indeed, is what’s happened. They spend their whole time advocating for more costs, and then they complain about the fact that the price goes up, and then the solution to it is to put some rent controls on. I mean, there goes the Greens.

It’s a funny thing for this Government that their coalition partner, the Greens, couldn’t even bring themselves to vote for this legislation. So we’ve just had the Budget and they’ve stood there and they’ve said, “Oh, how wonderful we are. We’re a Government with the Labour and the Greens.”, but the Greens aren’t voting for the first piece of legislation that they’ve brought through. That’s how muddled this Government is.

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! The member’s time is up. Before I call the next speaker, may I ask the member of the ACT Party to take his pink box off the desktop, please.

Chris Bishop: He’s not the leader.

Damien Smith: Sorry, Madam Speaker.

ASSISTANT SPEAKER (Hon Jenny Salesa): I said the “member”, not the “leader”.

Hon Dr AYESHA VERRALL (Minister for Food Safety): It’s a pleasure to take this call on the Taxation (Cost of Living Payments) Bill and be the first Government speaker after the dinner break on this Budget day.

Look, we’ve all had the chance in the Labour Party to partake of some KFC with our colleagues from the Greens and Te Paati Māori, but the Opposition, instead, decided to go and have a peek at what the major news outlets had to say about the Budget instead, and we heard that in Paul Goldsmith’s comments. They would’ve been disappointed to hear Newshub describe the Budget as a masterstroke by the Government and that the Opposition has been backed into a corner, and indeed they have been. They’ve been caught flat-footed by the cost of living package in this Budget. Here they are voting against a bill that will see $350 paid to low and middle income families over the coming months. It will do a lot to address the pressures that people are under, alongside the measures to support free, reduced costs public transport, the winter energy payments, and our actions on fuel costs.

This Budget is about protecting our security as a nation, and it extends the Labour Government’s efforts to protect our people, just like we did through the pandemic, against threats from outside. If you think about that, we have done that through the pandemic and we continue that in the face of this economic crisis. So the pandemic has led to both supply chain problems and then that was compounded by Russia’s illegal war in Ukraine, causing rising inflation in New Zealand and also across the globe, putting economic pressure on families. This Government bill is about providing cash to alleviate the pressure on the cost of living for people earning less than $70,000 and who are not eligible for the winter energy payment. Just like in the pandemic, we are protecting people—that’s what this bill does: contributes to our security.

Now, you might ask, “Is it enough?” It is a contribution and other important contributions are made through other measures. It will help 2.1 million people, and students are eligible for this help. Now, the Opposition have a different policy. They have proposed tax cuts that will benefit our wealthiest earners to address the pressure on the cost of living. That won’t help low and middle income earners. And, in fact, that approach has been criticised by the IMF who advises against tax cuts at this point. So there is no economic basis to the opposition to this bill, or to the Opposition’s tax policy. This balanced Budget has presented. It is targeted at those who need it most without making inflation worse.

When I look across the Government’s agenda, I see that this approach of securing our people is widespread throughout the Budget—for example, another disruption of people’s security and their livelihoods is threats to their health, and yet we have strengthened our health system through this Budget. We have addressed inequities that have been profoundly unfair throughout our history by funding and developing a Māori Health Authority. We have cleared the DHB debts that have constrained them for far too long in terms of taking new measures to protect the health of their people. We are investing $61 million in public health systems that’ll ensure we don’t have to reconstruct an underfunded public health system in the face of a pandemic ever again. We are ensuring that the system is responsive to those it has never served before, and I’m thinking particularly about our measures for the rainbow community or for people who suffer with dementia.

Another threat to our security is climate change; in fact, in many ways you could describe it as the mother of all threats. It causes sea-level rise that endangers our homes, it damages ecosystems on which we depend, and it damages crops and our food supply. This Budget, through the emissions reduction plan and associated funding, secures us against the risk of these threats. We have a number of initiatives, including to promote the transition to electric vehicles, to reduce methane emissions in agriculture through investment in science, and through improving the use of biofuels and renewables in our energy supply. Budget ’22 secures a positive future for New Zealanders. It is not too late for the Opposition to change their votes. I commend this bill to the House.

SIMON WATTS (National—North Shore): The last speaker—the Hon Dr Ayesha Verrall—says, “It’s not too late for the Opposition to change their mind.” Well, I want to let her into a little bit of a secret, and that is the Opposition will not be changing their mind. We are strongly opposed to this bill. It is a great shame, because, normally, as bills go through this House, we would have had the opportunity to go through a select committee process, and I’m sure, looking at this bill, it would have gone through the Finance and Expenditure Committee, of which I’m a member—and I see a number of my colleagues around the room in there. But, of course, this bill has not been through any due process. It has not been through a select committee process, and so we are here, under urgency, reviewing a bill which is absolutely full of holes.

This evening, in my short call, I’m going to run everyone through, at home, where the issues are in this bill. And I want to reinforce to those people at home that think that this Government has got a plan, that this Government has been thinking about this bill for a long time, that this Government, when they drafted this bill, have considered a lot of options and have been very thoughtful—I’m going to, sadly, put the facts on the table to show that, actually, this bill has been made up on the hoof. It is a bill that has been made up, probably, only in the last four to six weeks, and it is absolutely, categorically clear that this bill is full of holes. And that shows a Government that doesn’t have a plan. It is not clear in terms of what they’re trying to deliver and, more importantly, they don’t have a sense of what the reality is on the ground for hard-working Kiwis.

Today, we heard the outlining of Government spending related to this, of which this bill is going to contribute in the region of $6.5 billion this year alone. That is the single biggest outlay of Government spending, and this bill, in terms of its fiscal cost, will account for about $800 million of that spend. And I want to quote to you some of the words around in the supplementary analysis report of this, and I’ll tell you what: of course, we didn’t have the bill till only prior to the first reading, unlike this Government which had been working on this for about four to six weeks. But I only got to page 3, and I got five points, so let’s just go through those and work those through.

The fiscal cost of payments is expected to be $747 million. This is based on a payment of $350 to an estimated 2.136 million recipients. That estimate is highly uncertain, because the size of the eligible population is unknown. Well, how about that? So we’ve got a policy here that actually is targeting a population that the officials have indicated—they’re not even sure how many people are there. So given the fact that they don’t know how big the eligible population is, they’ve put a round number of $800 million because of the uncertainty around that estimate. So that’s the first example. For those sitting at home, going, “Well, you know, this is tough; it’s a tough business. Everyone’s under pressure at the moment.” Well, that just gives you an indication that even the fiscal costs of this bill haven’t been well thought through or, actually, haven’t got any real substantive basis in order to back them up.

The second aspect goes right back in the executive summary of the supplementary analysis around the options analysis, so you’d expect that the Government would consider a number of options to deal with the problem of a cost of living crisis that is impacting Kiwis and has been around for pretty much most of this year. But oh, no, no. They haven’t. The line at the top on page 2 reads, “The Treasury recommended against progressing a broad-based payment.” So even the Treasury do not support this bill if you look at the first line of page 2 of that analysis. And they go on to provide the details why, which is all pretty sensible stuff. But, of course, a Government that is well known for not listening, for not taking on feedback, and for thinking that they know best had just kept on trucking on and continuing with this bill.

I now want to move to the next category in the report, which talks about the eligible population. The eligible population criteria for this bill is like a sieve, right. It is just full of holes, and we’ll get into that in the committee of the whole House stage. But I want to just cover off the key element here. Again, I quote: “Inland Revenue was not able to accurately forecast the number of eligible individuals for the 2021/22 tax year.”—i.e., IRD, the department which is going to be responsible for implementing these payments on 1 August, if they are lucky, are not able to forecast who is going to be eligible for this payment.

This is not a joke. Just for those that are at home, watching this thinking, “Maybe, I’ve flicked onto a wrong channel and am looking at bloopers within Parliament or something like that.” This is no joke. This is the reality of a Government who is completely out of touch, a Government and a Minister who are not over the detail, and what this shows is this bill has been thought up on the hoof, probably as a result of a bad poll. These guys have got desperate. They’ve gone, “Oh crikey, we haven’t got anything to deal with that issue. What have we got? Let’s have a go at this.” And their own officials—whose heads are down at the moment, going, “Crikey, what are we going to say to the Minister in the committee stage?”—are saying this is not able to accurately forecast that. It’s in the supplementary analysis report. That’s the facts; that’s where it is. And I’m hearing on the other side a little bit of comment that they don’t seem to believe it. They just need to read their own report.

I want to go on, as well, because I’ve covered three. But let’s talk about the administrative impacts of this bill—again, in that report. And, again, the Inland Revenue officials have provided some guidance on this. “This payment”—and I quote—“would require Inland Revenue to devote a significant number of their front-line staff to deliver the payment and manage the contact-seeking support about this payment during one of Inland Revenue’s busiest periods.” Just think about that. Let’s just throw this payment to individuals in New Zealand—2 million or so people—at the busiest time for Inland Revenue, but that Government doesn’t care about those Public Service individuals, they don’t care about the burden that this will place on them, and they absolutely wouldn’t even understand the reality and the implications of implementing a bill. And what they’ve gone on to say—the Inland Revenue has anticipated that the resources required in order to implement this are in the region of 750 fulltime-equivalent hours being required—and I quote—“in the weeks of 1 August, 1 September, and 1 October.”—750 resources. Where are these people going to come from? Well, I can tell you where they’re going to come from: they’re not going to come from anywhere, because the Minister has not got over the detail. He’s come up with a plan, he’s come up with a policy and a bill, but he has not thought through the detail on how this is going to be implemented.

And I haven’t even talked about the fact that this bill in terms of $27 a week—as I mentioned to you before—is about 9 litres of fuel for the Toyota Corolla. That is the extent. I heard before—one of the people said, “It doesn’t even get you an Uber Eats for a week.” This is inconsequential in terms of what real, hard-working Kiwis across this country are facing in terms of cost pressures on their lives right now. The ASB Bank has outlined that the cost of living increase for food alone for most families in this country is in the region of $150 a week.

Twenty seven dollars for those under $70,000 and, again, the criteria is pretty loose. You only have to be in New Zealand and a New Zealand tax resident. Do you have to be a permanent resident? Do you have to be a resident in New Zealand or, actually, can you be someone from overseas who’s working here on a working holiday visa and still get the payment? Well, I would be interested to hear the answer for that from the Minister in the next stage, because when hard-working Kiwis at home find out the reality that this is just another example of policy that has not been thought out, policy that is not going to deliver the outcomes required for hard-working Kiwis, they are going to be even more disappointed in a Government that they do not trust.

I’ve given an insight, a little bit, into five key areas within the first three pages of a document provided by officials in regard to this bill. I think it categorically proves and substantiates that this bill has been made up on the hoof. It is a broken bill built on a backward Budget by a Government that doesn’t have a plan, a Government that is out of touch with hard-working Kiwis across this country. National opposes this bill.

Dr DEBORAH RUSSELL (Labour—New Lynn): Let me tell you what motivates this bill. It is a simple question: how can we help low and middle income New Zealanders? How can we help people who are doing it tough because there is a worldwide inflation problem? How can we help people in this country who don’t get benefits, don’t get the winter energy payment, and don’t get super? What can we do for people who some on the other side like to refer to as the squeezed middle? The answer is that we have a cost of living package that is designed to help exactly those people. It’s based around cutting transport costs and putting some money in people’s back pockets. That is what motivates this bill.

The Opposition have been quibbling over it. First of all, they’ve complained that they don’t know the detail. The most recent speaker—Simon Watts—said he wasn’t sure whether it applied to New Zealand tax residents or New Zealand residents. Well, frankly, I do know that detail and he clearly does not. Tax residency is quite different from residency for citizenship purposes, and people who complain about knowing the detail ought to know that in the first place before they get up and complain about it. It’s straightforward—it goes to New Zealand tax residents, people who have been residents in New Zealand for 183 days or more within a one-year period. It’s quite straightforward. Anyone who wants to comment on tax ought to be able to tell you that.

But going on from that, they complained about the fact that perhaps IRD might not be able to tell us exactly how many people are going to be affected by this bill and are going to be eligible for the payment. Again, there’s a straightforward reason for that. The 2021-22 tax year returns processing is not yet finished. So the Inland Revenue Department can’t know exactly how many people will benefit from it, but they know about how many. We know it’s going to be about 2.1 million New Zealanders—close enough to get enough fiscal cost on it. In fact, anyone with a good business brain ought to be able to sort that out, and we can do that on this side of the House.

Simon Watts: This is a bit embarrassing, Minister. She’s pointing out where all the gaps in your bill are.

ASSISTANT SPEAKER (Hon Jenny Salesa): Order on this side of the House! You’ve had a chance to make your speech; now I’d like to hear Dr Deborah Russell.

Dr DEBORAH RUSSELL: They pointed out that it’s going to be tough for IRD to process these payments. Yes, it is going to be tough. It is a big ask. But we’re pretty confident that IRD can manage it. It will be tough, it will be hard, but, you know, times are tough and hard out there for ordinary New Zealanders, and that is why we are doing our best to answer that question: how can we help low and middle income New Zealanders? This is a new and unusual policy in New Zealand. We haven’t done something like this for a very long time. It is unusual, but that does not mean it should not be done. The times demand that we try something new and that is exactly what we are doing in this space.

I want to address some of the words that were used by Paul Goldsmith in speaking on this bill recently. I heard words like “rapacious” and “aggressively greedy” as though somehow a Government trying to collect the money it needs in order to fund services is greedy about it, and, of course, that ties into the mantra from the other side about tax cuts. They talk about tax cuts but they never talk about service cuts. They never talk about running down the health system, which is what you have to do in order to fund tax cuts. They never talk about short-changing the education system, which is what you have to do in order to have tax cuts. They never talk about the services that we provide for all New Zealanders because that is the best way we can ensure the wellbeing of New Zealanders: by making sure there is a decent health system, by making sure there is a decent welfare system, and by making sure there is a decent education system. That is also how we look after New Zealanders, and in order to that we need to have a decent tax system. Simply chanting “tax cuts” without saying where you would cut services is irresponsible and it shows an Opposition that is not prepared to do the hard work—on this side of the House we are, and on this side of the House we are confident that this payment will help New Zealanders. It will put money in people’s pockets. It will help just a little bit. It will make a bit of a contribution to the issues we all have with inflation at the moment, and that is why I am proud to support this bill.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Speaker. Reflecting on the fact that through the course of this debate, I’ve been hearing National Party members advocating for cuts to taxes and, effectively, services and, at the same time, also throwing some dog-whistles about this bill potentially reaching some of our migrant communities—so I think we’ve got this kind of scapegoating narrative on the one hand, and then the Labour Party members are expressing concern about the wellbeing of low-income New Zealanders. And I agree: the Green Party is deeply concerned about the state of our inequality crisis and the fact that so many low-income New Zealanders are doing it tough. This is why we are deeply frustrated that this cost of living payment bill is not reaching some of those New Zealanders who are doing it the toughest: people who are on the main benefit, some of our senior citizens who are relying on superannuation and they’re still renting and are struggling to make ends meet. It makes absolutely no sense to be giving a stimulus and exclude some of the people who have been doing it the toughest.

I was looking at the departmental disclosure statement and one of the sections was around external consultation, and there was, basically, an admission that stakeholders other than key Government departments were not consulted on the proposals of the bill. For the purpose of this bill, I think we’ve got a trove of feedback from community, from researchers, and from advocates on the ground about the state of things in Aotearoa and the fact that poverty continues to be a massive issue. The Government could have looked at the Fairer Future report which showed that some families are $300 a week behind to be able to participate in their communities. The Government could have listened to the countless people on the benefit who are speaking about the need to constantly go to Work and Income to get a hardship grant because they cannot make ends meet. They could have listened to the stories that have been out there for so many years. So while I would have loved for the Government to consult with key stakeholders and communities affected, they could have also looked at what was already out there and realised that including people on benefits would have been the right thing if their genuine intent was to support low-income communities.

I look back at the narratives that this Government was talking about when it came to the intent of the Budget, which was to ensure that our communities are healthy. I repeat what I said in the first reading speech: if we want our communities to stay healthy, we need to address low incomes, because far too many communities are getting sick because they don’t have adequate and abundant kai because they’re stressed from not being able to meet rent and because they’re transient from moving to one emergency housing place to another.

So if this Government is serious about our community staying healthy, they should be looking at including people on the benefit in this bill, ensuring that everyone is looked after and committing to permanent increases to incomes for the families that are doing it the toughest. The inequality crisis did not start with the rising inflation or the war in Ukraine that has caused some basic essentials to go up; it has been here since before even this Government came into power. If we’re going to do service to the communities that we talk about, that we serve, then I urge this Government to include people on the benefit and to look at permanent welfare reforms so that all of our communities are able to thrive and fully participate in our communities. Kia ora.

DAMIEN SMITH (ACT): I wonder what Mr Thomas Piketty would make of this, in terms of the structuring and hastiness of this social policy. I was very interested in how the coronation was met between this payment and rising sea levels and methane emissions by the associate health Minister, so that left me rather confused.

In terms of prioritising funding from this—let me just imagine what happened in Cabinet. Newshub poll came in, three-quarters of New Zealanders said, “This Government’s just not helping with the cost of living.”, and everybody sat around and went, “What do we do? What money have we got? Let’s reel a billion dollars out of the last of the COVID fund.” “Yeah. That’s good. Let’s use that to give a payment to everyone out there and that’ll get us through that two-month period.” I think that’s probably what happened. I think it’s probably very simple to ascertain that several of the Ministers would probably have went, “Hmm. This is not, maybe, the way to go.”, but public pressure is an amazing thing when it comes to polling and politics at this time.

That’s what the ACT alternative budget, which is fully costed, would give people thousands of dollars to help with this crisis; not $27 a week.

Hon David Bennett: What about services?

DAMIEN SMITH: And then—we have kept essential health services; we’ve just reduced Government spending. That is the logical way for the Government to have embraced the significant milestone in this Budget today. But, nope, the golden goose doesn’t apply to Kiwis. A key part of the Budget is to tokenise payments which are exciting a lot of young people, actually, tonight, around the country. People between 18 and 20 are all thinking, “Right, here’s some money to go down to the pub. It’s all good.” There’s four in a household, that’s a good old session if you get these payments rolling in. Surely that should have been thought about and tested as being inappropriate; a mass blanket payment under this Budget.

So if you’re weighing up what’s happening in Australia, there’s still a $6,000 gap between what they earn and what we earn. Structurally, we’ve got to embrace getting this right and doing it right, as opposed to this type of payment.

If you look at the COVID fund and the uses over the period, it’s had many, many iterations but not one like this sugar hit that’s come out today. We have to believe that a cost of living payment for a short period of time isn’t going to solve the long-term problems of inflation in this country. The Green Party have recognised that the cost of rentals, the costs of superannuates, people without savings—there are social issues out there that, over the last four years, has led to a gap significantly increasing between what people were paying in tax with a Labour Government and now what they’re paying today.

In terms of oversight of this payment, it must be pretty embarrassing to a Government and Treasury to be not on the same page. This is the cost of a vote, I guess, in terms of pacifying people. But what happens now, in six months’ time, in a year’s time, at the next Budget? Will we have the tax cut Budget then, or should it have been done now? In terms of our view of the world, it’s clear that the Government sees and Mr Robertson sees Kiwi people’s money as being something that is to be consumed by the Government and even before it’s taxed. So he’s once again used a Budget to reward political support.

We have to be honest, it says that this cost of living payment doesn’t really secure anybody’s future tonight. It helps with someone that comes in and buys a couple of loaves of bread, some cheese, maybe a little bit of butter—and I’ve probably overestimated those.

So, in terms of taking this seriously, we still want to encourage the Minister in the next Budget to adopt ACT’s two-step principles of reducing income tax for hard-working people to 17.5 percent up to $70,000, which would help nurses, it would help families, it would help teachers, it would help anybody who, now, the Labour Party are recognising aren’t the squeezed middle after this speech tonight. It would allow a top tax rate of 28 percent to be put in place for people who already pay their tax at the top end and work hard and contribute to this economy.

Inflation is not going away. The Reserve Bank have said that in the Monetary Policy Statement next week. The Official Cash Rate uplift will be heading towards 3 percent to 3.5 percent, which means extensive raising of interest rate payments in mortgages, and, also, if you’ve got young people under the roof of your house, the expenses are going to go up even further. This is a very serious situation. Growth estimated at now 2 percent per annum, as opposed to 5 percent. So we have a lot of forces that are going to cause potential instability.

The appetite for Government spending is just insatiable; we’ll know in two years’ time whether it’s worked and/or we’ve got billions of dollars that have been put out the door that haven’t got any traction, haven’t achieved any results—especially in the health sector—and we know that people aren’t going to stop complaining tomorrow about the cost of living crisis that is here in New Zealand. This is not going to stop this. There’ll be another poll in a months’ time which will still say people have still got the same issues that they have and nothing has been fixed by this Government. So we will be opposing this bill, but we’d like to speak to the Minister and the parties about a more extensive tax structuring philosophy when it comes to the Budget next year.

JAMIE STRANGE (Labour—Hamilton East): Madam Speaker, thanks for the opportunity to take a call on this bill. I think that there is a reason why the ACT Party are languishing in the polls, because there was no clear understanding of a plan to deal with the issues that are facing New Zealanders. Whereas—

ASSISTANT SPEAKER (Hon Jenny Salesa): I remind the member to come back to the bill.

JAMIE STRANGE: —I’m proud to be part of a Government who are supporting New Zealanders—hard-working New Zealanders—supporting middle New Zealand as they go about their lives. And the reality is—as we have heard in this debate from all sides of the House, we all acknowledge it—there are challenges with the cost of living. There are inflationary pressures happening around the globe. We do have a strong economy here in New Zealand. We have an economy that is very much export-led, primarily based on producing food for the world. The world will always need food, and we do that very well. We’re growing, we’re diversifying our economy into areas like tech, various manufacturing forms, and we are continuing to grow our economy. And as we heard from the Minister previously in this debate, we have had many years of positive GDP under Labour Governments. All through the early 2000s—high levels of GDP growth. And that growth has continued.

Obviously, COVID was a challenge. At the moment, we’re faced with a particular challenge in terms of the cost of inflation. Even though we do have a strong economy, we are not immune to the pressures that are faced around the world. This is a Government who are listening to the people on the streets. We’re in touch with New Zealanders. We’re not out of touch with New Zealanders, like some members opposite. We have a plan to support New Zealanders because we understand the challenges that we’re going through.

Clearly, this plan to fuel money into the economy to support New Zealanders—a $350 payment for those earning under $70,000. When we compare that to the National Party, the National Party have some sort of vague plan around tax cuts for those at the top. And the National Party have said, previously, there’s this trickle-down philosophy, and, hopefully, one of the next speakers from the National Party can enlighten us a bit more about that, because the idea of giving money, giving tax cuts, to those at the top and expecting that money to trickle down to those in the middle and those at the bottom is a fallacy—it’s a fallacy—it does not work. Those at the top, they’ll spend their money overseas, they’ll go on overseas holidays, they might buy another five houses or something. Whereas, if you support middle New Zealand and those at the lower end, like we did on 1 April—

Damien Smith: You didn’t get the memo about this bill.

JAMIE STRANGE: —I’m trying to hear the member—that money will go directly into the economy; it will support businesses. Now, some people will say, “Well, won’t that fuel inflation?” Well, we’ve been told by Treasury, because it’s a short-term payment of $350 over three payments, it won’t negatively affect inflation. However, it will have the impact of supporting New Zealanders as they go to the supermarket, as they go to the petrol pump, because certainly there are challenges here.

I’d like to acknowledge the Minister Grant Robertson for his speech today. He has delivered a Budget that strikes the right balance in terms of supporting New Zealanders now and looking long term. This bill here is a part of that Budget. This bill plays an important role in supporting New Zealanders right now, because we’re hearing what people are saying. We’re out there on the streets, listening—we’re not sitting in our ivory towers, locked away; we’re on the streets, listening to New Zealanders. New Zealanders have clearly told us that they’re struggling with the cost of living, and we’re listening and we’re responding. I’m proud to be a part of a Government that listens to New Zealanders and that is supporting them.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call on Matt Doocey—five minutes.

MATT DOOCEY (National—Waimakariri): Well, thank you very much, Madam Speaker. What is the purpose of a Labour Government if it doesn’t stand up for working people? Here we have a bill tonight where the average Kiwi on the average wage will get nothing out of this bill. The average Kiwi on the average wage of $72,000 will get a big New Zealand Transport Agency (NZTA) zero—you know those zeros that NZTA wasted $10,000 dollars on? An average Kiwi on the average wage will get nothing. There was a time when a Labour Government would stand up for hard-working Kiwis; they do not represent working Kiwis any more. It’s on a guaranteed tax plan that a National Government will stand up for hard-working Kiwis.

We have not had any time tonight to interrogate this bill. We’ve had no committee of the whole House stage. But what I want the Government members to do is to start fleshing this bill out—start explaining to us: why do you need 750 full-time equivalents to deliver this bill? What we know with a Labour Government is that won’t be a ceiling; that will be a minimum. So we’re looking at about 1,000 more bureaucrats on top of the 10,000 they’ve already employed. What will be the cost, Minister, of that 1,000 extra bureaucrats to administer that? The bill says it will cost $16 million. Is that including the extra funding that’s in the paperwork that none of the Government MPs have talked about? IRD has asked for extra funding to employ the 750 fulltime-equivalents. How much is that going to cost? Ten thousand bureaucrats plus 1,000—now we’re up to 11,000. When is it going to stop?

Even the Minister in his first reading admitted 200,000 Kiwis who are entitled to this—they don’t even have their bank account details. Over 10 percent—they don’t even have the details. Let’s be honest: who would trust these guys to run a hot bath, let alone deliver a programme like this? This is destined for failure. Why we know that is because one of the very few documents we have for regulatory oversight says “analysis of the problem and potential options has been significantly constrained by shortened time frames”. No one’s done any work on this bill because they only magicked it up a couple of nights ago over a late-night wine when Grant reached over and he probably said to Jacinda and Chippy, “Oh, the public’s getting a bit insatiable for tax relief. What are we going to do?”

Here we are: a band-aid Budget—a band-aid $350 for hard-working Kiwis. What is the purpose of a Labour Government if they can’t fight hard for working Kiwis? I tell you what, you go and listen to the comments on the news tonight, and the hard-working Kiwis aren’t impressed. They aren’t impressed about this band-aid response to, in fact, a very serious crisis in New Zealand.

This is a failed socialist experiment, this Government. Everything they do is failure—a failed socialist experiment. Now they’re reaching in and blowing $6 billion—the biggest spend—plus another $2 billion in the next Budget, another half a billion, and add on $800 million for this policy pledge. I tell you what, it’s the hard-working Kiwis that are going to have to pay it back on top of all the extra costs that they are paying for, and now they’ve got debt that’s growing by the day. The interest on the debt this Government is growing is twice what we pay for the New Zealand Police Force a year. This Government is out of control. But hold on, because there was one learned colleague from the Government benches who mentioned the poll, and he’s dead right, because the poll was reflective of where middle New Zealand is: middle New Zealand does not trust this Government.

SARAH PALLETT (Labour—Ilam): Thank you, Madam Speaker. I rise this evening in support of this bill and—sorry, I’m a little tiny bit taken back with the suddenness of my colleague across the row ending. Obviously, completely fascinating, but somewhat abrupt in its ending.

Matt Doocey: Point of order, Madam Speaker.

SARAH PALLETT: I’m sorry, are you starting again, Mr Doocey?

ASSISTANT SPEAKER (Hon Jenny Salesa): Point of order, Matt Doocey.

Matt Doocey: The Government MP was surprised my time had finished. I’d like to seek leave for further time.

ASSISTANT SPEAKER (Hon Jenny Salesa): No. That is not granted.

Hon Member: He sought leave!

SARAH PALLETT: Speaking to the point of order, Madam Speaker, I wasn’t surprised by his time ending; I was merely surprised by the abrupt way his sentence finished. Thank you.

ASSISTANT SPEAKER (Hon Jenny Salesa): You’re seriously seeking leave for more time?

Hon Member: He said that.

ASSISTANT SPEAKER (Hon Jenny Salesa): I put that leave for more time for Matt Doocey. It is not granted.

SARAH PALLETT: Thank you, Madam Speaker. Good try, Mr Doocey! Right now, the fundamentals of our economy are strong. Our strong health response has protected our economy through COVID-19, and we’ve done better than almost any other country because we put people first, because the best response to any crisis is to focus on the people. We know that the best health responses will result in the best economic responses. You can’t separate a solid economic response from a solid health response.

We are, though, in the middle of a global pandemic. Whilst we’ve done well, we can’t escape the fact that forces are in play that are affecting all of the economies of the OECD countries in the world—all of the countries of the world.

We heard today that in the UK, inflation has risen to 9 percent in the 12 months to April—9 percent: the highest level since 1982. I have to say, when I heard the news, an expletive that I won’t repeat in the House did escape my lips. It is predicted to rise again, unfortunately.

What did the chancellor have to say about this? The Chancellor of the Exchequer. He said, and I will remind the House that he is a Conservative MP, “There is no measure any Government could take, no law we could pass that could make these global forces disappear overnight.”

We in Government have been arguing this point, that there are some things that we cannot change, but we can respond to them. We can see examples like my friend in the UK, who has seen her fuel costs rise by thousands of dollars this year, causing them great economic hardship.

We understand that things are tough for many families here in New Zealand. That’s why we’ve introduced a comprehensive cost of living package, a package that will give a payment of $350 to all people earning $70,000 or less. That’s 2.1 million people, approximately, assessed on an individual basis, not a household basis. We are also extending our fuel tax cut, extending our road-user charges cut, extending our public transport fees rebate of 50 percent, and permanently halving public transport fees for those on the community services card.

So when you hear members of the Opposition talk about tax cuts, they mean tax cuts for the wealthy; they don’t mean relief for what they describe as the squeezed middle. They don’t mean that, and you know what? They won’t tell you what they will cut to give themselves a pay rise. Is it the new Hillmorton Hospital that the Opposition proposes to scrap? Is it the 80 new adult psychiatric beds in the new Hillmorton Hospital? Is it Whangarei Hospital? Is it Nelson Hospital? Is it money for the eating disorder services? Is it for the Pharmac money that we’ve increased? A 43 percent increase to Pharmac medicines budget since 2017 is what this Labour Government is going to be providing. Is that what they’re going to cut in the Opposition?

They’re busy telling us that $350 is nothing. They’re busy telling us this when they’re simultaneously telling us that $2 a week for the lowest earners—which is their tax cut proposal for the low-earning people of New Zealand—oh, we’re supposed to be grateful for that; that’s a lot of money?

Frankly, this is not true. We’re not going to spend $350 on a one-way ticket to Australia because people on low and middle incomes don’t spend $350 on a trip to Australia. They spend it on food, on fuel, on car registration, on looking after their families. Looking after their families is precisely what this Government is doing.

ASSISTANT SPEAKER (Hon Jenny Salesa): I call on—

Hon Member: Halbert.

ASSISTANT SPEAKER (Hon Jenny Salesa): I call on Shanan Halbert.

SHANAN HALBERT (Labour—Northcote): Thank you, Madam Speaker, and—[Interruption] Ha, ha! Thank you, Madam Speaker.

Simeon Brown: Wakey, wake!

SHANAN HALBERT: Wakey, wakey. And it is a “wakey, wakey” day under this Government as we launched a wonderful Budget—a Budget that makes a difference for every New Zealander in this country. I’ve heard the narrative this evening that it’s not enough, that it’s not enough—it’s not this; it’s not that. But in Northcote, I’ve done the numbers. It looks like up to 60 percent of Northcote constituents will be better off under this piece of legislation.

We know that our economy has been—is—one of the strongest in the world, with triple A credit ratings, record low unemployment, and lower debt than Australia, Canada, the United States, and the United Kingdom. However, despite these positive results, we know global inflation pressures are hurting some people, all across New Zealand, in our own communities. That’s why today counts.

I turn to some of the points that another member from the Opposition spoke of earlier, a colleague from the North Shore. We know that the North Shore is better under a Labour Government. National had a stronghold on the North Shore for over 15 years, and I heard one of the members last night talk about no infrastructure investment on the North Shore. Well, we know there definitely wasn’t any infrastructure investment under National, but we see it under Labour, we see it in houses, we see it in the North Shore Hospital, we see it in the Northern Busway extension—all the things that matter to changing people’s lives in Northcote, and that’s what counts.

One of the points tonight that the North Shore member raised was that this was only $27 per person in the average family—$27. Well, can I say: $2 under National—$2 versus $27. Well, I’ll count that up: $25 more per person. Well, that’s a lot. But what we haven’t seen in all of this discussion of the cost of living crisis that this particular bill addresses is that people are better off under this Government. We have put forward a balanced, a practical Budget that is going to change the lives for many people in what has been a challenging time. Challenging times will not last for ever, but they know, just like in COVID-19, this Government backs them—like things through the wage subsidy: they were supported to stay in their employment. Well, here we are: under the cost of living crisis that the Opposition wanted to call us out for, we are responding. We are responding with this piece of legislation, we’re responding with extra pūtea—extra money—in the hands of good people and families where it matters.

We’re responding in public transport. We’re extending half-price fares, and what a wonderful Minister that just walked into the House, who is taking action to change the lives to respond to the congestion challenges of Tāmaki-makau-rau Auckland, but, most importantly, to respond to the emissions that transport puts into our taiao, our environment.

What a wonderful piece of legislation that is before us tonight. It delivers for people. It takes action in a practical and very humble way. This is a responsible Budget. I’m proud of the work of the Hon Grant Robertson, and I commend it to the House.

Hon DAVID BENNETT (National): Thank you, Madam Speaker. I just want to, first, start with a little introduction for members of the public as to what happened to the Labour Party in the last three weeks. Now, they would have seen the polls and they would have known that they were in big trouble, and the squeezed middle cost of living argument was starting to take residence in the New Zealand public. Now, they would had to have rewritten their Budget in the last two weeks to actually try to achieve something to deal with that issue.

That’s what happened, and there’s only two members of the Government that would actually have known what happened. The rest of them are all backbenchers. They wouldn’t even know it. They would have only worked at caucus on Tuesday when the leader came in, or the Minister of Finance would have come in and told them, “I’ve got this great plan to give this money to all these people.” They had no idea—they had no idea. Mr Parker and Mr Woods here, they’re both sitting so silent and looking down because they knew—they knew. They were in Cabinet. They would have had the discussions. All these guys here, most of them aren’t coming back. They’re going. And they tried to save them, and that’s what happened. And the Labour Party members would have gone to caucus on Tuesday and they would have had this big presentation saying, “Look at what we’re going to do for the squeezed middle.” Don’t be so dumb. Understand what is happening. Your party has destroyed the New Zealand economy and today you have controlled that destruction even further. Don’t take it from those ones in the front. They’ll still be here. You won’t be, and that’s what you need to understand.

Now, that’s the Labour Party. That’s the dynamics of what has been going on in their party. But let’s actually look up what it is: a payment to every New Zealander that’s under $70,000 of income. Well, look at the Australians when there was a recession a few years ago for the global financial crisis (GFC). They gave $1,000 to everybody to spend. The Labour Party is not that generous, are they? They didn’t give a thousand bucks like the Labor Party did. Guess what happened in Australia when the Liberal Party gave that thousand dollars! Everyone just spent it on TVs. It didn’t actually help the Australian economy at all. And if anyone looks back at what the approaches were to the GFC, spending money by giving a payment to a community was seen as the least effective approach. The most effective approach is what the National Party did here, which was actually invest in infrastructure, invest in skills, and invest in the ability for New Zealand to grow its income going forward.

That’s what this Budget should have done. This Budget should have been a long-term Budget for New Zealand; it shouldn’t have been a short-term Budget to try and pay people off. That’s all it is, and it’s not going to save the Labour Party; in effect, it will do the opposite for the Labour Party: it will create more inflation in the next few months.

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! I’m going to ask the member to come back to the bill.

Hon DAVID BENNETT: Well, the major part of the bill and the Government’s promise for this Budget is a payment to individuals, and that payment will actually create inflation. There’s no other way to look at it. It’s just going to be spent in consumer spending; it’s not actually for the infrastructure of New Zealand to grow a stronger economy. That’s where Labour’s missed the trick. If they actually wanted to use that money effectively, they should have used it so that we could grow our way and pay our way so we can have the services we want. The services in health and education aren’t going to come from giving everyone a slight payment. That’s not going to do it. The way that the services come is if you increase the tax take by New Zealand having a bigger economy. That’s how you get more services in the country. The Labour Party doesn’t understand the fundamentals of economics.

But there is another thing that those two senior Ministers that are here will actually have known about that the backbench don’t know about yet, and that’s that New Zealand’s probably going to be in recession in a few months’ time. Look at all the other major economies in the world going through a high inflationary environment. All the projections are of recession. And guess why those two senior Ministers didn’t give you that money today! They didn’t give us that money in April near an election; they gave that money in August, leading on, because they knew that was when the recession was about to start. I bet you they’ve got that advice from Treasury and from the Reserve Bank that there is the potential of a recession in New Zealand and they are trying to stave off that recession, because you cannot win an election going into a recession and the Labour Party will do all it can to try and win the election, even if it means misusing New Zealanders’ money. And that’s what they did today. They misused the investments that New Zealanders give to this House. People don’t pay this tax to this House for fun; they work damn hard out there to make the money so this House can make the best decisions for all Kiwis. That’s why we have a Parliament. That’s how the economy works. It is not to be used by a political party for posturing and trying to win votes. In effect, they are actually going to lose votes because all they’re doing is creating more inflation, fastening that chance of a recession coming, and, therefore, ordinary Kiwis will be losing a lot more than the money that they are going to get out of this.

We’ve heard talk today about what you could actually buy for that kind of money, and it’s little or nothing. Most people know how expensive it is now to get their groceries each week. Most people know how expensive fuel is. We can’t blame overseas all the time. Look at the structural imbalance in the New Zealand economy. What could have been a better way to spend that money? You know, we had Jamie Strange stand up before, from Hamilton. Well, the Labour Party cancelled the road from Cambridge to Piarere. That was $600 million. They actually cancelled—they didn’t go ahead with Southern Links, which would actually be very important for Hamilton, which would be about the same kind of $600 million. There’s two projects there that would have actually been better investments for New Zealand than giving everybody 350 bucks to go buy a TV that’s imported from China—because that’s what’s going to happen. I bet you there’ll be sales at The Warehouse for TVs just at the right price. Every student bar will be setting up nice little packages for students to take advantage of. There’ll be all these little consumer treats that are out there, which the business community will take advantage of the Labour money. The Labour Party have fallen into another trap, and the reason they are in that position is because, first of all, they don’t understand how to make money; they don’t understand how to run an economy.

Secondly, they think you can buy votes. They think the public is stupid. They think they can actually be smarter than the public. That’s the urban academic elite that is the Labour Party.

Thirdly, they actually were under pressure. They had no understanding of what to do. They were panicking. But the learned members of the Labour Party’s senior bench were panicking in the last couple of weeks. And the result of that panic—they would have gone to their officials, “What can we do? What can we do? What are the options? What can we do in two weeks that we don’t have to do any work on?” And the option would have been: “Well, you can give everyone some money.” That’s it. The Labour Party ticked it off and their poor little backbench sitting there now, stunned as mullets, looking at each other, going, “What’s happened to us? We shouldn’t have listened to these two in the front row. We should have actually stood up for our people.” Well, there’s a chance, to the backbench of the Labour Party. There’s a year to go to the election. Stand up for the people in New Zealand; don’t be led by your front bench that are only interested in their own salaries and positions. Actually make sure, if you get to spend New Zealanders’ money, you spend it on things that are good for New Zealand and don’t make all these rash promises.

In the economic development area, we’ve had Stuart Nash come up with a beautiful promise of $100 million for a banking finance system for small business. It won’t even get off the ground. It’s got no chance. That guy could not sort that out in the next year. They have got no idea. They had this thing for regional and strategic investments that it was to take over from the Provincial Growth Fund. They gave $58 million for it last Budget. They’ve only spent $6 million of that $58 million in the whole year.

ASSISTANT SPEAKER (Hon Jacqui Dean): The member’s time has expired.

GLEN BENNETT (Labour—New Plymouth): Well, I stand up for the people of New Zealand, this afternoon, this evening. And, as a Bennett, I think from a village far, far away from the previous Bennett—David Bennett—I am proud to stand here and support this piece of legislation this evening. We’ve had things thrown at us all afternoon, evening, and our previous speaker just talked about us to not be so dumb, that we’re destroying the New Zealand economy—he’s put his headphones in, so, obviously, he doesn’t want to hear this—that we’d fall into the trap. But I just want to say tonight, thank you—thank you to the Hon Grant Robertson for his contribution to not only New Zealand society but to this Budget today.

When I look at this Taxation (Cost of Living Payments) Bill, I see our finance Minister responding to need. I see our finance Minister responding to what is going on within Aotearoa New Zealand. This isn’t about polls. One member across the floor said this was made up a couple of days ago. Another member said it was made up six weeks ago. The previous member said it was a couple of weeks ago. This was about responding to need.

I also want to say that another thing that’s been thrown around is about it being rapacious. Now, as a commoner myself, as a working-class member of our community, I had to look this word up, because I didn’t actually quite understand. And they keep throwing this “rapacious”, “rapacious”, “rapacious”. But then it’s about being greedy, about wanting more money or possessions or wanting more. But our Cabinet Minister, our Minister of Finance, is definitely not that kind of person. I think of him as smart, as driven, as compassionate, and having hard-headed compassion to ensure that, at this time when we’re dealing with our challenges, he is responding to need within our community. Now, this is a targeted payment. We’ve heard others talk about this as the 2.1 million or so people. That’s almost twice the population of the South Island that are going to benefit from this payment.

Now, we’ve heard from the Opposition that this is the cost of a flight to Sydney. Someone said earlier that this is a cheap trip to the pub or won’t pay for your Uber Eats for a week. Well, we get abused and told that we’re out of touch with New Zealand society; well, I think it’s the Opposition that’s out of touch, when they’re talking about things like flights to Australia or buying Uber Eats or going to the pub, because the community that I live in, they wouldn’t be looking at flights to Australia right now; they’d be looking at what that’s actually going to help them with, whether it’s helping with a new washing machine, whether it’s going to help them in terms of a trailer load of firewood, whether it’s going to help them with servicing their car or getting a couple of new tyres for their vehicle. This payment is going to serve the people in my community, and I’m grateful for it.

And let’s just be clear, $350—but think about a family. Two for my car—it would be two new tyres for my car. So thinking about a family, a couple of parents, $700—$700 that goes into the coffers for a family. So when we say we’re out of touch, I believe it’s the other side, when they’re talking about they’re quickly googling what a flight to Sydney is. Well, my people are googling things that are actually going to help their whānau and their communities. I’m proud to be part of this party and proud of this Government that is here to support New Zealanders at this challenging time.

In closing, I just want to mention the Hon Paul Goldsmith, who, again, talks about—you know, he was going on and was complaining, and then he talked about other things, a couple of cheap bus fares and this type of thing; it’s not much at all. But, again, announced today in the Budget was around the community services card, that is there and is going to be half-price bus fares for ever and ever, and I’m grateful for that—that we’re actually addressing, we’re responding, and we’re ensuring that New Zealanders can move forward. It’s not easy, but we’re willing to take a stand. And the Taxation (Cost of Living Payments) Bill is one that I support.

A party vote was called for on the question, That the Taxation (Cost of Living Payments) Bill be now read a second time.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32. ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

Bill read a second time.

ASSISTANT SPEAKER (Hon Jacqui Dean): This bill is set down for committee stage forthwith. I declare the House in committee for consideration of the Taxation (Cost of Living Payments) Bill.

In Committee

Part 1 Amendments to Tax Administration Act 1994

CHAIRPERSON (Hon Jenny Salesa): Members, the House is in committee on the Taxation (Cost of Living Payments) Bill. I remind members that they are able to participate remotely. If you’re on Zoom and want to take a call, please type “call” into the chat. You should also use the chat if you’d like to raise a point of order. If we receive new tabled amendments, I’ll advise members so that they can refresh the House papers page to see the new amendment. Finally, it’d be helpful for members to ask multiple questions, if they have them, or if the member’s in charge during the call.

Members, we come now to Part 1. This is the debate on clauses 3 to 6 Amendments to Tax Administration Act 1994. The question is that Part 1 stand part.

SIMEON BROWN (National—Pakuranga): Well, thank you, Madam Chair. I appreciate the opportunity to take a call on the Taxation (Cost of Living Payments) Bill, which is now at the committee of the whole House stage. It’s quite ironic that this particular Part 1, which is about interpretation and setting up the cost of living payments scheme, is even called the “cost of living payment scheme”. It says “to provide financial support to certain low and middle income persons affected by an increase in the cost of living”. Well, quite ironically, it’s a $1 a day payment, actually less than a dollar a day payment. It says here “affected by an increase in the cost of living”. I’m not sure whether this Government actually understands what is happening in New Zealand right now with the cost of living. In fact, all the one-termers over the other side who’ve been taking calls in the previous debates, trying to explain how much they care—how much they care. This was only dreamt up two weeks ago. This Government doesn’t care. They’re just reacting and responding because the reality is that New Zealanders are facing a cost of living crisis.

I note the clause doesn’t even say “crisis”—doesn’t even say “crisis”. They can’t even bring themselves to say “New Zealanders are facing a cost of living crisis”. It just says address the increase in the cost of living, and it stops there—address the increase in the cost of living, stops there. New Zealanders are facing a cost of living crisis, and today’s Budget, which this bill is part of, does nothing to address the real issues facing many, many New Zealanders. The fact is 7 percent inflation in New Zealand, brought about by a Government which printed billions and billions of dollars of cash and which has been, frankly, irresponsible, wasting money—wasting money left, right, and centre—and now is coming to this House with a $350 payment; quite irresponsible, and, quite frankly, out of touch with the needs of New Zealanders. So I ask the Minister in the chair, why doesn’t he actually just say the word? New Zealanders are facing a cost of living crisis.

Why does the piece of legislation not actually address the real issues that New Zealanders are actually facing? That real issue is actually the fact that we need proper tax relief, and the fact that this Government is constantly taking more and more taxes because they are not adjusting the tax thresholds. National has put forward a plan, a very comprehensive plan, which addresses the real issue in our tax system, which is about actually saying inflation is meaning that while New Zealanders’ incomes are going up, inflation is going up faster, and that their tax system means they’re paying more tax despite them going backwards. So, National is saying: actually, it’s time to have a comprehensive look at those tax brackets and make sure that they reflect the increase in inflation, and to ensure that New Zealanders actually keep more of what they earn.

This Government has come to New Zealanders today and said, “We know best. We know how much money you need. You need $350. Oh, only these people over here, we’ll give you $350, and then that’s it. And we’ll give it to you over a three-month period, in three different instalments. And by the way, we’re going to hire 750 people—750 people—to manage, at IRD, that process.” What about this old-fashioned principle of actually saying “New Zealanders, we trust you, and we’re going to let you keep a little bit more of what you earn because you know best where the cost pressures are in your life, you know best what is needed, and you know best how to get through this cost of living crisis.”

On this side of the House, we actually back New Zealanders, we believe in them, and we actually want to see good policy which actually provides a sensible solution, not the simple, simplistic, socialistic approach put forward by this cost of living payments scheme—

CHAIRPERSON (Hon Jenny Salesa): Does the member have a question of the Minister?

SIMEON BROWN: The question is around: why is the Minister not actually addressing the cost of living crisis and not even referring to it in clause 4(2), which says “a cost of living payment scheme”. He doesn’t even say “crisis”—doesn’t even say “crisis”. That’s the reality of New Zealanders out there in the main streets and in the towns up and down New Zealand and the suburbs of our cities. This bill doesn’t even address it. I ask the Minister: why is this Government not even mentioning the word “crisis”?

CHRIS BISHOP (National): Thank you very much, Madam Speaker. Look, this is the first of what I’m sure will be many calls on this very tricky piece of legislation. I do have a couple of points I want to make.

The first is that I just want to say to the Minister, quite seriously, it is disgraceful that the bill contains a statement about the regulatory impact statement (RIS) that says that the supplementary analysis report, which members can find on the floor of the House—the bill says that the copies are on two particular websites, the tax policy IRD website and the Treasury regulatory impact statement website. Neither of those websites have the RIS on it, as of about half an hour ago. In particular, they didn’t have them on it at 2 o’clock, when the bill was tabled for the first time. The Opposition saw this bill—sorry, at 4.30, once the urgency motion was moved.

Look, it’s Budget. It’s fair enough. Governments, including past National Governments, have tabled legislation urgently and we ran them through the House, and it’s probably a very poor lawmaking practice, but I wouldn’t be churlish and complain about it because National used to do it as well. But I don’t think it’s unreasonable that members have opportunity to scrutinise the supplementary analysis report.

So we got access to it because it was finally placed on the floor of the House later on, or later in the bill’s first reading. I, for one, while the Minister was giving his speech, tried to look up the regulatory impact assessment report, desperately trying to see some stuff in it, and it wasn’t online. I went to the tax policy website and it’s not there, and I went to the Treasury website and it’s not there, and it wasn’t on the floor of the House. So we had the first reading debate without it.

That’s a shame, because as the Minister knows, and as Matt Doocey pointed out, there’s a lot of stuff in the supplementary analysis report, most notably the fact that the IRD said, “Don’t give this job to us.” and the Treasury said, “Don’t do it at all.” So I would have thought that was, like, some pretty interesting information that Parliament would want to know about. The Treasury said, “The IRD should do this.”, and the IRD said, “No, no, no, we don’t want anything to do with this.” You know what else they said? They said this will have a significant impact on our services, including for the very people the payment scheme aims to help, because they’re the very people who contact the IRD and say, “Oh, look, I need a bit of help with this and I’ve got some issues here.”

What the supplementary analysis report shows is that those people are going to be affected, because there’s going to be a significant number of front-line staff to deliver the payment, and it’s going to be extremely tricky. It’s going to “compromise Inland Revenue’s already stretched workforce and affect the taxpayer population,”—I’m quoting from the supplementary analysis report—“including the families and individuals that this payment would be intended to support.”

So it says, “While Inland Revenue can administer the payment”—which is fair enough, I suppose, because they’re a Government department, they do a great job, and they move heaven and earth to help the Government—“doing so will significantly impact their services to its customers.” So that is pretty material information that the Parliament has a right to know about. So that’s my first point, and I’m pretty unhappy about it, and I would welcome the Minister’s comments.

The second point is a genuine point, and it goes to the departmental disclosure statement, which was available on the floor of the House. Now, we’ll get into the time issues later, and I’m sure members are going to want to explore when exactly this bill started to be developed, because poor old Glen Bennett said, “Oh, no, look, this has been planned for ages.” It’s in the Government documents that it was come up with in the last two weeks. Let’s just put aside the facade that this this was some well-organised and executed plan to assist New Zealanders with the cost of living. Let’s just not joke with the House. We all know exactly how this worked.

But my question for the Minister is: why is this legislation required? I know that sounds funny, but if you read 3.6 of the departmental disclosure statement, there’s actually quite a serious policy discussion around, basically, cutting a long story short, whether or not the bill’s required. I draw the Minister’s attention to the Legislation Design and Advisory Committee, who were asked by the IRD officials for their view on whether the eligibility criteria should be set out in secondary legislation or in an administrative notice. The LDAC, as they’re called, says, basically, “On balance, we think the balance is slightly tilted in favour of treating this as an administrative scheme, principally due to its nature as a short-term response to its immediate problem”. Well, as I understand it, that’s not what’s happened. The question for the Minister is why the Government’s done what they’ve done.

Hon DAVID PARKER (Minister of Revenue): In respect of Chris Bishop’s question about the time of tabling of the disclosure statement, I’m advised that the documents were provided to the Bills Office—Bills Office or the Clerk—yesterday, and that there’s been no attempt to delay the tabling of that document on the floor. So it wasn’t because it wasn’t provided late by the department.

SIMON WATTS (National—North Shore): Madam Chair, thank you very much for the opportunity to take a call in regards to this bill. I know my colleague Chris Bishop is, no doubt, going to come back and ask a few more questions in regard to the point that was just raised. I want to ask some questions, and I actually have a series of 10 or so questions, so I’ll take your advice the way in which we do that. I’m referring to new section 7AAA, “Administration of the cost of living payment scheme”, inserted by clause 5. My question relates to subsection (3), which specifies that “The commissioner must publish, on an internet site … the eligibility requirements”. My question to the Minister is: when can taxpayers expect to see that information published? So that’s the first question, and I’ll go on for a couple more and then we’ll go from there.

The second element is in regards to the explanatory note of the bill. The explanatory note contains the term “main eligibility criteria.” So my question to the Minister is: what else is missing? “Main eligibility criteria” implies that there are elements outside of that. So my question, quite simply, is: what else is missing from that?

For this series, I’ll finish off on this last question: can the Minister confirm that the income amount is $70,000 or less? In the Budget speech that the Minister of Finance gave today, he said that this payment will be available to people aged 18 and over who earn below $70,000 per annum, based on last year’s tax data, and who are not eligible for the winter energy payment.

I want to note—and members may think this is quite a small detail, but it goes along with the theme that it is our belief, based on the information we’ve got in front of us, that this bill has been pulled together at late notice and on the hoof. So I ask again: who is qualified to get this payment? Is it those on an income amount of $70,000 or less, or is it, as the finance Minister quoted today, below $70,000? I’ll leave it at that series of questions.

Hon DAVID PARKER (Minister of Revenue): I’m advised that the criteria will be published shortly after enactment—so very close to enactment. On the question as to what’s left, what’s left is minor administrative detail, and the example that officials have given me is that what might be the date that’s chosen for assessing whether someone is a resident or not for tax purposes to qualify or what might be the way administratively they choose to define when someone’s going on or off benefit. It is that level of administrative detail, rather than the level of the payments.

CHRIS BISHOP (National): Well, thank you very much, Madam Chair. I’ve got another question, but I want to return to the point I made before which is—it’s sort of neither here nor there whether the material was supplied to the Bills Office. The point is, the bill—which, as I say, we got a copy of at 4.30 p.m. If you watch the video, you can see the Minister move the urgency motion, and the Clerk came in and put the bills down, and we all went and raced to see it because, you know, we had literally six minutes to read it. I’m not making a point about that, because successive Governments have done that since time immemorial, and it would be churlish to complain about it. But I just make the simple point that the bill explanatory note—[Interruption] What’s that?

Hon David Parker: You are whinging about it.

CHRIS BISHOP: No I’m not. I’m whinging about the fact that I don’t think it’s unreasonable as a Parliament—

Hon Members: He’s whinging.

CHRIS BISHOP: Well, OK. Well this is a serious point—members might want to laugh but this is a serious point. It is not unreasonable, as a parliamentarian, to expect that when you read an explanatory note of a bill which you have seven minutes to read, that if you go to the websites that the bill directs you to, the things that are meant to be on the website that the bill says are on the website are there. That is a simple proposition; it’s not unreasonable, and I just make that point. I won’t belabour the point any more, but I hope the Minister takes it on board because it’s poor decision-making and poor policy-making.

The question I wanted to ask was—this, basically, defers the decisions as to eligibility to the Commissioner of IRD. And it’s a simple question, which is: what if the commissioner decides that the eligibility threshold’s not 70,000 or below? It’s Government policy that it be that, but what if it’s not what the commissioner decides? So how does that work? Because this is a highly unusual way of implementing a Government policy-making decision. There may be a simple answer to that, and it may be that I’ve just overlooked it, but I’d just welcome the Minister’s guidance on that.

Hon DAVID PARKER (Minister of Revenue): In respect of the timing of that document that the member wanted to see on the web not being available on the web—I hear his complaint. It has been tabled on the floor of the House the whole time, so it was available to members in the House. And I suspect that the reason why the exact timing doesn’t line up on the web compared with in the House is that the department would not have wanted to put it up early accidentally and break the Budget—

Chris Bishop: It’s still not online now—it’s still not online now.

Hon DAVID PARKER: Well, that is of no moment to the member because he’s got the physical copy that he’s read—

Chris Bishop: What about people watching? What about the public?

Hon DAVID PARKER: Well, actually, they’re not debating the bill. [Slamming sound] Oh, literally throwing his toys there! In respect of the idea that the commissioner might somehow change the criteria, the commissioner has no such discretion. These things are set by the Government.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. So my questions to the Minister arise from the intent of the bill, as laid out in the general policy statement, as well as some of the speeches we’ve heard from Labour Party MPs. It has to do around the intent of providing relief for people facing cost of living pressures, and specifically the mention of eligible low-income individuals. It’s clear that the bill doesn’t set clear criteria about who this bill is supposed to get the $350, and that’s going to, sort of, be decided outside of the bill. But it is clear to me, reading the explanatory note in the bill, that the Government intends to exclude people on the benefit, as they already receive the winter energy payment.

What I want to understand is: does the Minister believe that people on the benefit are not facing cost of living pressures? Despite the increases to benefit, they continue facing those cost of living pressures. I’m also thinking about under-18s who may be in paid employment. The way that the explanatory note is set out in the intent of the bill seems to be to exclude under-18s who may be doing paid work.

So I want to understand what the Minister’s intent is regarding (a) the exclusion of people on main benefits, the exclusion of under-18-year-olds who may be doing paid work, and what the reasoning was to aim to exclude those groups. Does he not think that they’re facing cost of living pressures, and whether broadening, perhaps, the intent of the bill to include them would support more New Zealanders, as spoken about by many of his colleagues? So this is why we’ve put a tabled amendment around making it really clear that this bill should actually be including people on main benefits, and also people who may be superannuitants who may be struggling. I want to note, as well, that many of our over-65s who may be in rentals are facing massive cost of living pressures, and those pressures exist despite the winter energy payment. So is it his intent to exclude those people, and why?

Hon DAVID PARKER (Minister of Revenue): Yes, that is the design of the scheme. The view of the Government is that this was properly targeted to those that aren’t on benefits. The member will be aware that, in addition to inflationary increases of adjustments to benefits, there have been increases to benefits a number of times under this Government. At this time of year, also, those people are entitled to the winter energy payment. This is struck on the basis of half the rate of the winter energy payment for a couple and is directed to those people who don’t get it. As a consequence, we won’t be voting for the member’s tabled amendment in respect of a bill in which they’re abstaining.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair, for the opportunity to take another call on Part 1 of this bill. The question I have is in regards to clause 5, new section 7AAA, which, effectively, ensures that the Commissioner of the IRD has the role to administer the cost of living payments on behalf of the Crown. And I just want to note in the supplementary analysis report, which we have here, the advice which says that the Treasury has advised that strong aggregate demand, combined with constrained supply and a tight labour market, will result in inflation staying above target in the near term.

And then I wanted to turn back a couple of pages where it mentions that this particular policy is going to require around 750 staff to operate—750 staff to operate. So my question to the Minister is: we have a tight labour market, and you’re going to find 750 people in a very tight labour market and make the tight labour market tighter? Have you considered whether this actual policy is inflationary and whether it’s actually going to put more pressure on the tight labour market, and, if so, what is the impact that this is actually going to have? Because the reality is this seems to be a policy looking for some sort of solution, dreamt up on the back of an envelope at about 11 o’clock at night two weeks ago, without actually thinking through the consequences. And the reality is: has the Minister had some advice from the IRD as to whether they’re confident they’ll be able to find 750 people to be able to actually administer the particular policy?

I already note that in the supplementary analysis, it says that up to a quarter of the people receiving payments may not be able to receive them within the time frames, due to the fact that the IRD might not have sufficient information about their particular tax details. So we may have a situation where a quarter of the people aren’t going to be able to actually get their payments in the time frame because the IRD doesn’t necessary have all the information to be able to process it.

And then you’ve got the problem of 750 staff being required to come on board in a very short period of time before August to assess millions of applications to actually see whether they’re—

Simon Watts: 2 million.

SIMEON BROWN: How many times did you say?

Simon Watts: 2 million.

SIMEON BROWN: Two million—2 million applications, and then make a number of assessments for every application to make sure that they are eligible for every one of those three payments. This is a bureaucratic nightmare—it’s an absolute bureaucratic nightmare.

I just wonder: did the Minister potentially ask for some advice as to whether maybe adjusting the tax thresholds might have been slightly more efficient? And, actually, not only efficient for the IRD—maybe they might not have had to hire as many people—but also maybe, actually, that would have given taxpayers the ability to decide how they spent their own money, rather than taxes being taken off people, and then people having to apply for a complicated process to get three payments of $117 over three months, to then come back, once they’d filled out the appropriate tax documents and proved that they were residents and that they’d been earning under a certain threshold, and that they weren’t in prison or dead and all of the other things which are required by the rules in this process, and then get some money back. That is the definition of socialism, and the definition of a Government which believes that they have control, they want control, “It’s our money”—it’s the Government’s money. They are the ones who have the money. They are the ones who own the money.

Well, actually, it’s taxpayer’s money. They worked hard for this money. They worked hard to earn it. They worked hard so that they could try and get ahead, and they give money to the Government through the tax system because they believe it will be for the benefit of all New Zealanders so that they can get the services that they need, not for this Government to use it like a play thing and just build bureaucracies. I ask the Minister to answer some of those questions around the implementation of that policy.

Hon DAVID PARKER (Minister of Revenue): To the extent that I could ascertain questions in that contribution, there was an assertion there that people eligible for the payment have to make an application—that’s not the case. The payment is made administratively by the department for those who are entitled to it; they don’t have to apply. In respect of the administrative functions that we need people to carry out, one of the main functions is to gather bank account numbers. We’re anticipating that people who want this payment will want to give us their bank account number because they will want the payment. So we don’t think that’s going to be onerous, except that the number is about—there’s a large number of people for whom we need bank accounts.

In respect of the question as to whether this is inflationary and did we give consideration to that, of course we did. And on our analysis, we realised that this would not be nearly as inflationary as policies that would give CEOs earning large amounts tax cuts every year of $270,000 per annum. Not an income tax policy that we would favour, but we know that the National Party would. So we find their concerns about the inflationary effects of what we’re doing for low and middle income earners to be crocodile tears.

SIMON O’CONNOR (National—Tāmaki): Thank you, Madam Chair. Always a welcome chance to take one’s mask off. Let’s see what happens from here, shall we?

A couple of questions for the Minister. I’m interested, actually, to pick up on a question of Chris Bishop’s from earlier on. I’m wondering whether the Minister in the chair has spoken to the Minister for the Environment to understand how many more trees have had to be culled tonight in order to provide paper-only copies, when we could have—people like myself; I’d love to have gone online—I’d love to know if he’s had a conversation with that Minister, and, in particular, what the Minister for the Environment said to the Minister in the chair.

Secondly, I’d be really interested—and it’s always to do with Part 1 but it’s in the policy background. He notes, to get this payment, you are not to be “incarcerated”. Always really useful. The only problem, what does “not incarcerated” mean? I’m not actually trying to be stupid. There’s multiple elements to this. Does that include people in remand? Is that people who are sentenced? Does that include or exclude people who are on electronic bail or people who have been bailed?

Finally, I’d like to know: it’s not quite a constituent but a Donna Summer has written and she says she works hard for her money—she says, once again, she works hard for her money. And does he believe that he’s treating her right?

Hon DAVID PARKER (Minister of Revenue): I’m not going to respond to that last flippant remark. In respect of the question is, did I ask the Minister information about the number of trees? No, that would have been a stupid question because it’s obvious the answer is zero. I didn’t need to ask the Minister for the Environment.

In respect of the question, which is a proper question, about what does “incarcerated” mean, it means people who are in custody. That could be someone who is on remand in custody. If they’re not in custody on remand, then they wouldn’t be included in the incarcerated. If they’re in prison, yes; if they’re on home detention, no.

Chris Bishop: That’s going to be easy to work out.

Hon DAVID PARKER: Well, that information is already shared by Corrections with Inland Revenue.

KAREN CHHOUR (ACT): Thank you, Madam Chair. I just had a couple of questions for the Minister around the targeting that you’ve been talking about—saying this is a targeted payment. The scenario in my household would be an extra $1,400 coming into my household, with four children living at home over the age of 18 who will all be eligible for this payment. Is the Minister confident that that is targeting the payments to people in need?

And my other concern is that this will be done automatically, and will there be an option for people to opt out if they feel that they don’t need this money?

CHAIRPERSON (Hon Jacqui Dean): Simon Watts.

SIMON WATTS (National—North Shore): Madam Chair—sorry.

CHAIRPERSON (Hon Jacqui Dean): Sorry, I’ve called Simon Watts.

SIMON WATTS: Yes, thank you, Madam Chair. I just saw the Minister stand up at the same time, and we’re going to play a bit of up and down yo-yo, but that’s OK.

The question I have in regards to clause 5, inserting new section 7AAA, and I said I’ve got a series of questions, so I’m continuing on with that. Inland Revenue will administer the payments based on information that they hold, and so my series of questions relates to that point. Can the Minister confirm that Inland Revenue holds date of birth information for all individuals in the country that are over the age of 18—quite a simple question, right? But the criteria of this bill is that anyone over the age of 18 is eligible. So my question is: does the Inland Revenue hold that information? If they don’t, well, we’ve got a little bit of a problem.

My second question is around the Inland Revenue and the Ministry of Social Development, and I’m interested to know whether there’s existing information-sharing arrangements, between those two entities, which cover specifically the winter energy payment, because, of course, looking at the criteria, that is one of the exclusion factors for getting this payment. So if that information sharing isn’t in play, Inland Revenue will not have the ability to assess criteria, and we know that that’s not often a reason why this Government don’t make payments out to people, but that is another important aspect.

The last question in this series here is: will the Inland Revenue be proactively contacting individuals before 1 August, which is the date on which this is, in order to ensure that, proactively, they hold all the necessary information to be able to make a payment—for example, asking taxpayers to update their myIR to check that the Inland Revenue holds the correct bank account details, so they can actually get their payment of $27 a week, which, as I said, is 9 litres of fuel in a Toyota Corolla per week; 20 percent of a tank of gas.

Simeon Brown: 9 litres?

SIMON WATTS: That’s it, Simeon Brown. So those are my three questions, and I’d appreciate the Minister’s response.

Hon DAVID PARKER (Minister of Revenue): Referring first to the ACT member’s question in respect of the question as to whether people can opt out, yes they can; there’s provision for that.

In respect of the targeting, we are aware that on occasions, there will be a number of people in a household earning less than $70,000, who are over 18 years of age, who will get the payment, and that is our intention. We would note that, overall, this will be better targeted, than, we would suggest, alternative tax cut policies from the member’s own party.

In respect of the issue as to the collection of bank accounts, there will be social media campaigns—well, not campaigns; that’s the wrong word: information presented to people in order to encourage people to provide their bank account details through myIR, or, if they can’t do it that way, by way of contacting Inland Revenue through other channels.

CHAIRPERSON (Hon Jacqui Dean): Matt Doocey.

MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. I think that was a very good choice, personally.

Look, I’m sure you’ll agree that without having the select committee stage, there would have been a number of questions we would have liked to have asked the advisors, so I’m hoping I can take an exploratory route into some of the key areas especially that are coming up, in this first stage, with the supplementary analysis. I think I want to take the opportunity, with the Minister for Youth in the Chamber, as well, to understand what discussions went on about why under-18s who are living independently and working were excluded from this payment. I’m sure the Minister for Youth would have advocated for them to be included, so it would be interesting to work out why that was not agreed with, because, of course, there will be a number of young people under 18 who will be in the position where, quite rightly, they should be entitled, but they’re 16 or 17 and maybe not 18.

Looking at some of the advice in this document, it does say inflation has risen over the past year and is expected to be widespread and to persist in the future. This makes a one-off payment a poor mechanism for supporting households with a longer-term problem. So I’d be interested to hear from the Minister why they are pursuing against the advice.

There’s an interesting comment under the executive summary where it talks about other Government priorities that could be pursued using the funding for this payment—for example, initiatives that more directly impact on the interim child poverty targets. So, again, that would be interesting just to hear a bit more about the conversations behind that of why they didn’t pursue something that maybe was more targeted and linked in to child poverty targets, as well.

As has been referenced in previous discussion, but just to hear from this Minister, why it was continued with the Inland Revenue as the delivery agency, considering they weren’t that interested in doing that.

And, if I may, the final comment is under “Limitations and constraints of analysis”. It says, “There is a risk that significant issues with the resulting proposal have not been identified.” And this is to do with the compressed time lines. It would be interesting to hear from the Minister about how he’s going to mitigate those significant issues so we don’t have any problems with implementation.

Hon DAVID PARKER (Minister of Revenue): It is a deliberate design of the scheme to have it for people who are 18 or over and not younger, and we’re not proposing to change that. I don’t know if the member has a tabled amendment to that effect, but if he did have it, we would oppose it.

In respect of the issues as to whether there are outstanding issues that are unforeseen, that’s always possible as was outlined in the document that the member quoted from, but we’re confident that there are no major issues that we’ve overlooked.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, I have four questions, but I just want to offer a perspective first. You’ve chosen—the Government has chosen, through the Chair, to offer a $350 tax rebate to people earning $70,000 or less, who fulfil the criteria you’ve set out. While it’s laudable that the Government does recognise that there is a cost of living crisis, and that it’s a struggle for the economy, it’s a struggle for communities, given the increasing costs—whether it’s fuel, whether it’s energy, building materials, the fact that even the Infrastructure Commission says it’s taking so long to get resource consents—it’s added billions and billions of dollars on to the cost of delivering infrastructure and homes over the past four to five years, which is primarily the term that this current Labour-led Government and the previous Labour coalition Government have been in power. So it seems like the cost of living crisis—while there may be other things the Government can point to—can largely be sheeted home to a series of policy failings or failing to address issues in a timely manner, Minister.

But, thinking about what caused the cost of living crisis—and, of course, we have a significant increase in the cost of energy, we have a significant increase in the cost of transportation fuels which are contributing to the pressure on household budgets—I’m wondering: did you consider ACT’s alternative budget, which would have changed the tax rates so that those earning up to $70,000 would have actually received a tax cut that would have given them over $2,000 in the hand, using the ACT tax formula which limits the two tax rates to 17.5 percent and 28 percent? So, Minister, you’ve offered—through this bill, through this amendment to the Tax Administration Act—a $350 one-off payment, and so I’d like you to consider how that contrasts with ACT’s proposal to limit Government spending and allow a $2,000 tax rebate for people like nurses or teachers in the middle of their career, which is, typically, what they would earn—those middle-income earners who supported us through the COVID epidemic—pandemic, if you like—and who continue to do it tough out there on the front lines.

So I have four specific questions for you, Minister: will people who are self-employed be eligible for this payment, who earn $70,000 or less on an annualised basis, as set out in this proposed amendment to the Tax Administration Act; if so, on what criteria will that eligibility be based? Will it be during the time period 2021-22 when they’ve issued invoices, or will it be when they’ve received payments? Because what we know right now is that many, many businesses are suffering from cash-flow issues because their customers are unable to pay on time. So it’s absolutely vital that we understand, Minister: will the eligibility for small business—if they’re eligible—and for self-employed people allow them to base that on cash flow, cash received, rather than invoices?

My second question is: did the Minister consider any other ways to help Kiwis facing a cost of living crisis, particularly with their energy and transport fuel bills? For example, the ACT Party have proposed that the emissions trading scheme revenues—the billions that this Government, supported by the Green Party, had proposed to allocate to business, to buy them out of their coal-fired boilers, or to Auckland Council to buy them electric ferries to compete with Fullers Ferries, who’ve just bought their own hybrid electric ferry, a fantastic thing that can go right round the Hauraki Gulf, it’ll be able to reach places that the Government-sponsored ferries couldn’t ever possibly hope to reach. They can only go between downtown Auckland and Devonport—now, that’s all you’d expect from a Government service, wouldn’t you? It would be half-baked. It’d be mediocre. It’d be 10 times the price.

Minister, did you consider offering Kiwis a carbon tax rebate of $250 per person or $1,000 for a family, on top of ACT’s $2,000 tax cut for middle-income earners up to $70,000? And was this policy modelled? Was there any modelling as to whether this would have a benefit to individuals or to the wider economy based on this money coming out of the COVID Response Fund, and what is the Minister’s response to Treasury who have asked, forgive me—[Time expired]

Hon DAVID PARKER (Minister of Revenue): Thank you, Madam Chair. As to the member’s question as to whether we considered a tax cut of $2,000 per person instead of this amount, no, we didn’t because we knew that would, if there was responsible fiscal management at the same time, require very substantial cuts in public services. We would also note that we don’t think most New Zealanders agree with that as a policy prescription, because they know full well that the Government has had to draw down on taxes and some increased debt in order to fund the support needed to get people through COVID and to have the out turns that we have had, which is a return to growth to pre-COVID levels, and very, very low unemployment. So New Zealanders back what we have done and they know that that came at a cost and that the finances of the Government need to be restored and couldn’t be restored without substantial cuts in services, if that sort of policy was pursued.

In respect of that, as a percentage of GDP, I would note that our spending this year is 31.6 percent of GDP projected, compared with under the National-ACT Government in 2010-11, 34 percent of GDP.

MAUREEN PUGH (National): Thank you very much, Madam Chair. I’ll just unmask and enjoy the fresh air. This bill has, obviously, caught a lot of people by surprise today, and with the limited amount of preparation and notice that we’ve had, of course it’s been a bit of a challenge working our way through some of the detail.

But there are a few things that have become obvious quite early on in the piece, and I’m going to turn my attention to clause 5, new section 7AAA. It says in the bill that this scheme is going to be a grant, and I just wonder if the Minister can provide other examples where IRD administers and delivers grants to taxpayers or to recipients, as it is.

The other thing I would like to know follows on from the contribution Simon Court has just made. Now, we heard earlier on from Matt Doocey that the IRD is going to need to increase their staffing levels by about 750 people.

Simeon Brown: How many?

MAUREEN PUGH: Seven hundred and fifty, Simeon Brown. And so we do know that that’s going to be a challenge to do that recruitment, and we are now at the busiest time for Inland Revenue, as annual accounts are being finalised for a lot of businesses. So for these businesses, we are talking about a lot of them being small businesses, and these are the businesses that have been struggling over the last couple of years to even stay afloat. And what we want to be sure of is that their annual accounts are going to be able to be processed in a timely manner and that these people and these businesses will be eligible for this grant. So, in terms of the time frames, with the delays that we can potentially expect in the processing through Inland Revenue, can the Minister please give us some confidence that the recruitment will happen in a timely manner and that it’s not going to delay the business as usual for IRD to process those annual accounts?

We are talking about the small-business owners—the dairies, the cafes that have struggled so hard, the tourism operations that have struggled immensely over the last couple of years, and we’re even talking about farmers. Even farmers may qualify for this grant, being under $70,000 in profit, so we want to be really careful that this is going to be administered efficiently, effectively, and in a very timely way.

Now, if that doesn’t happen, Minister, can we also get some acknowledgment from you, or confidence from you, that these grants can be made retrospectively? If in six months’ time, annual accounts are still being finalised, can they go back and be retrospectively applied for, and, if they can, that’s great; if they cannot, how can the Minister explain the fairness of that?

I have one other point that I’d like to raise while I’ve got the talking stick, and that is about the bank account details that people may not have. The Minister has said that we are going to do some advertising and that there will be media around this and people will apply, but if they don’t happen to see that—and I do know a lot of very young people that don’t necessarily read the news channels on social media or the hard copy papers—and if they don’t know about it and find out much later, are they still going to be able to apply retrospectively for this grant? Thank you.

Hon DAVID PARKER (Minister of Revenue): I’ll endeavour to answer a number of questions from prior questioners. In respect of the self-employed, they are included. The assessment is based on their net income, which is their gross income less allowable expenses before losses that have been brought forward.

In respect of other examples of grants administered by the department, of course they were responsible for COVID support payments.

In respect of staffing, not all of the 750 staff required are new. There will be redeployment of existing staff within the department.

As to my confidence as to whether the department can deliver this, I think the exceptional work that was done by the department in respect of COVID support payments should give everyone in this House confidence that they will do it well.

DAMIEN SMITH (ACT): Thank you, Madam Chair. To the Minister, was any modelling conducted to assess the dollar per day per person rate for this cost of living payment subject to taking into consideration inflation? Does the Minister agree with Treasury? It warns that after this Budget, the tax increases or spending cuts pressures are inevitable. And will the management of this system by the IRD blow out the key performance indicators that I understand the IRD have, from my observation of them on the Finance and Expenditure Committee?

Hon DAVID PARKER (Minister of Revenue): Dealing with a question first from a prior questioner in respect of—a farmer, I think, was the example given by the member from the West Coast. The last date for applications from people who were—not applications. The last date when eligibility will be determined will be in March 2023. For people to be eligible by then, they will have had to have filed their tax return for the year ended 31 March 2022. If they haven’t and they are late by that amount of time, then they will be too late to get the payment.

In respect of the ACT member’s question as to whether this will affect delivery of other services by Inland Revenue, they will be juggling between their different priorities, as they have often had to do during COVID periods, and they will use their judgment as to the prioritisation they give to their different functions. I’m expecting that their core functions will, by and large, remain unaltered, but there will be some reprioritisation. I am aware, for example, that they have put aside some of the compliance work they were planning early on in respect of the brightline test that was introduced by the previous Government and extended by us, and that has already been delayed because of priorities for other work, like administering COVID support payments. Those sorts of trade-offs have to be made within departments and will continue to be made over the coming years.

JOSEPH MOONEY (National—Southland): Thank you, Madam Chair. Minister, I just would like you to elucidate a little bit on why you set—or why the Minister established a cost of living payment totalling $350, being half the couple rate for the winter energy payment, as the amount to pay under this scheme? Noting that New Zealand is facing a significant cost of living crisis with the inflationary impact in our economy.

Noting that this is not something that’s not unique to New Zealand, but is something that we are uniquely experiencing in New Zealand. But if we look overseas, for example, the United Kingdom is facing its biggest drop in living standards since 1956 as wages fail to keep pace with rising prices. Living standards, the disposable household incomes, when adjusted for inflation, are expected to drop by 2.2 percent this year, the biggest fall in a financial year since records began in 1956. So this is a serious, serious issue that New Zealand is facing.

But my question is: why has Labour decided to give a one-off $350 payment, and why is it set on that amount rather than looking at something like National’s tax plan, which is a permanent plan, something that everyone would benefit for years to come? So it’s a structural change to the system that would benefit people on an ongoing basis, in an inflationary environment that looks like it’s going to run for some time—for example, under National’s plan, anyone on $50,000 a year or more would get more from National’s tax plan; if you’re on $50,000, you would get $362 instead of $350 from Labour; if you’re on the median wage, $57,000, you get $800 a year, rather than $350 from Labour; and if you’re on the average wage, $72,000, you would get $875, nothing from Labour. I note that this would be an ongoing benefit that people would get under National’s tax plan. This is going to be an ongoing issue with this inflation environment. It looks like it’s going to continue for some time.

So there’s two questions there: why has the Minister not considered an ongoing adjustment to account for the ongoing issue with inflation? And why has the Minister set on a $350 cost of living payment on a one-off basis?

Hon DAVID PARKER (Minister of Revenue): Just for the benefit of the committee of the whole House and, in particular, Mr Bishop, I’m advised that that supplementary analysis report is now online as well as on the floor of the Chamber. I thank him for raising it to my attention.

In respect of the reason that we chose that amount, we thought that that was a worthy contribution to household living costs facing the cost of living pressures to which the member referred. It, of course, is in addition to the assistance that we’ve given through slashing excise duty, road-user charges, and halving public transport costs as well as various other supports that’ve been made to other subsets of the population who aren’t getting this payment but have had other supports from the Government.

I would note that the gap between wages and inflation this year in the forecast economic indicators on page 158 of the Budget Economic and Fiscal Update that has been tabled today shows that inflation is forecast to be 6.7 percent during the forecast 2022 year, against wage growth of 4.6 percent. So we’re trying to bridge part of that gap, but we think that we’ve got the balance right.

TANGI UTIKERE (Labour—Palmerston North): I move, That the question be now put.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair. Look, there are a number of questions that we have still to raise on this side of the House. I do note that this bill has not been to a select committee, so whilst some members on the opposite side may wish to just want to let this piece of legislation pass into the night, it’s important that the questions are asked, because that is our job—to hold the Government to account and to ensure that there is openness and transparency.

I do note that I don’t believe the Minister answered my colleague Maureen Pugh’s question in relation to the retrospectivity, because there will potentially be a number of issues in relation to some people who may not see the social media campaign—which I’m sure the comms department at Inland Revenue can’t wait to get stuck into. They might need to grow the comms department to do that one too. But, regardless, some people might not get their details up to date so may not get their payments. So the question was: can they later on, maybe a couple of months after the payment system has finished, come back to IRD and actually get a retrospective payment? I think that’s a very important question, because this is the Government of equality and equity and making sure that no one’s left behind, but are they prepared to leave some people left behind through the incompetence of their systems?

The second question is in relation to the fact that this is a $350 payment. It’s not a big payment. I think we can all agree $350 is not a lot of money. Even Glen Bennett, the one-termer from New Plymouth—he said it’s only going to be able to replace two of the tyres on his car; not even the full set—just two. He’s looking forward to doing it. Maybe less wheelies on the weekend; more MP work—that way he might get re-elected, but I doubt it.

But the point I’d like to make is it’s 350 bucks. It’s not a big payment. IRD is going through this huge bureaucratic process to work out whether people are eligible, etc., etc. They have to do that for every single payment. They have to check the eligibility of the particular person each month for three months to make sure that they are eligible for the payment. So, I guess, if they go into jail or they die, unfortunately, or whatever the situation is, or they suddenly get a pay rise, they go across—and, obviously, that’s good news.

But why is this just not one payment? Why did the Government come to the position where they wanted to have three payments? Is it just because they want nice comms for three months in a row? They’re going to put out a press release on 1 August and say, “117 bucks is coming your way”, and then on 1 September, “Another 117 bucks”, and then on 1 October, “Another 117 bucks”. Because, actually, I think there’s a real question why this is not just being done once to give people the $350 that this Government is saying is the great cure for costs of living, the cure that they will be fixing this problem with. Why is it not just one payment to eligible people to ensure that not only they’re able to get 350 bucks but they can then do what they want to do with the 350 bucks—if it’s Glen Bennett, get his two tyres on his car fixed, and good luck to him; I don’t think he’s eligible, though, by the way—and then be able to actually make those decisions?

But instead they get 117, then another 117, another 117, and, of course—

Simon O’Connor: How many red zeros can you buy?

SIMEON BROWN: Well, you can’t even get a big red zero for 117 bucks—not even the whole $350. You need five grand—5,000 bucks. I’ll tell you what, the average taxpayer in New Zealand, Mr Wood—their tax is around $10,000. That’s two red zeros. So I just think for those taxpayers—

Chris Bishop: It’s the red zero metric.

SIMEON BROWN: It is the red zero metric. Two red zeros—10 grand. That is a shame. He spent one New Zealander’s entire tax they pay—entire tax they pay across an entire year—on two red zeros. Just disgusting. That’s the wastage we see under this Government.

But back to the point. Why are we not just having one payment? Not only does that give the people who are eligible—which is not including Glen Bennett, as noted before—the ability to make those decisions but also it removes, I’m sure, a significant amount of bureaucracy, and I’m sure that will save the taxpayer some money as well.

I do ask the Minister, on that particular point, did the Government ask for advice around whether it should be one payment or three? Did the Inland Revenue provide advice as to whether it should be one or three and what might be more efficient for them? I do note that they have been scathing of the fact that they have, effectively, dropped this job on their department to do. Look, I mean, they’re all good public servants. They will do the job. They will be stretched, and they’ll have to hire another 750 people. But the point I make here is: was there any advice requested as to whether, actually, one payment or three and what the impact and the cost benefit or the cost addition to doing three payments instead of one might be; if not, why not, and, if so, what would be the saving to the taxpayer if it was actually just one payment to actually make sure that there was some efficiency and to improve the whole system?

Look, I mean, the Minister might get up and say, you know, “Well, we don’t want people getting that much money too quickly.” I mean, 350 bucks; it’s not even two tyres on Glen Bennett’s car. We’re not talking about big money.

So in the cost of living crisis, I really just want the Minister to answer those questions, because, actually, he should be advocating for efficiency in the State service, efficiency in the Public Service, but what we see is wastage, emblematic mostly from Michael Wood and his two big red zeros.

Hon DAVID PARKER (Minister of Revenue): The member again made the assertion that these are 750 extra staff. Some of them will be reallocated within Inland Revenue. In respect of the year and the retrospectivity point, as the member described it, if eligibility is established by 31 March 2023, which, as I explained, is the date by which eligibility has to be established by the filing of a tax return for the year ended 31 March 2022—if they establish eligibility by 31 March 2023 but they don’t provide a bank account, we do allow them another year to do that, and pay out later. But if they don’t do it by 2024, we no longer carry forward the obligation to pay.

In respect of the issue as to whether we considered one payment compared with three, yes, we did. One of the reasons why we chose three was that it better reflects people’s actual circumstances if, for example, they move off a benefit.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. Just backtracking to the answer from the Minister regarding the exclusion of people on the benefit.

The Minister was drawing on, I guess, the fact that people on the benefit already receive the winter energy payment, and I’ve heard arguments around the fact that there’s other lifts to incomes for people on a benefit. But I was wondering if, as part of the analysis of creating and designing this bill and the intent of this bill, the Minister sought any information around shortfalls that people on a main benefit have when it comes to meeting the cost of living. I know that there was no external consultation, but we do have research that does show that people on the benefit have pretty significant shortfalls when it comes to making ends meet.

I’m interested to know whether he believes that the winter energy payment allows low-income people to genuinely meet the cost of living and if he believes that’s why they were excluded—because the evidence tells us otherwise—and, if so, I simply do not understand how the fact that people on very low incomes who may get a top up but yet somehow are still struggling to survive are excluded from this payment that, while modest, will make a difference. For people on a main benefit, it is the difference between often surviving, like being able to keep a rental. For people on closer to $70k a year, it’s a much different impact having an extra $350.

So if we’re genuinely concerned about the wellbeing of low income people, I just want to know what analysis was done around the ability for low-income people on a main benefit or people under 18 to actually be able to meet the cost of living.

Hon DAVID PARKER (Minister of Revenue): The analysis by Cabinet included the other measures in the Budget for beneficiaries, people on main benefits, including the pass through of child support payments and the extension of longer-term public transport subsidies for those on the community services card.

CHAIRPERSON (Hon Jacqui Dean): Matt Doocey.

MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. Excellent choice.

I just wanted to spend just a brief time, if I can, to ask the Minister a bit more about the cost of this scheme. So it is said in the paperwork, if I’m correct, $16 million, but then there is the reference to needing the full-time equivalents (FTEs) for 750, and there is a reference or a statement in there that Inland Revenue (IR) has sought funding. So I’m just getting some clarity: is the $16 million excluding the 750 FTEs or is it inclusive of that $16 million? And when it says that IR has sought funding, how much funding has it sought, and, then, I suppose, what would be the outcome if the funding was denied? Does that mean there wouldn’t be anyone to administer the programme? So it would be helpful to understand the true cost of what the $16 million is and how much on top of that may be paying for the 750 FTE, which does seem a lot considering we do know the bureaucracy has grown by 10,000 under this Government—so you would argue there’s probably someone with a bit of time around the beltway. So it would be helpful for us to understand the overall figure a bit more.

Just coming back to an original question where I asked the Minister about the exclusion of under-18s, I respect his comment that that is the floor, I suppose, or the minimum age, but I would just ask if he could tell the committee the reason why they’ve decided to keep it at 18 and not take it down to 17 or 16.

Hon DAVID PARKER (Minister of Revenue): In respect of the question as to administrative costs, the member is correct that the total is $16 million. Of that, $2 million is being funded by the department out of baselines. Therefore, there is $14 million additional. That $14 million funds the additional costs that the ministry will face through the taking on, for example, of the temporary staff. And it also includes a component for the ministry to catch up on some of the work that may be delayed as a consequence of this programme.

Dr TRACEY McLELLAN (Labour—Banks Peninsula): I move, That the question be now put.

CHAIRPERSON (Hon Jacqui Dean): I still have a number of members who are seeking the call in this Part 1 of this committee stage. I’m very mindful that this debate is in the context of a committee stage under urgency. The matters in this bill are substantial and the contributions thus far are relevant, and I don’t believe I’m quite ready to take that call. Thank you very much.

IAN McKELVIE (National—Rangitīkei): Madam Chair, thank you. I’ve listened to this debate from the start with particular interest, and it occurred to me that there’s a sector of our community that has been left out of all the Government initiatives that have taken place since COVID began. Those are the people I can easily relate to—although I don’t claim to need the payment—and they are our superannuitants. If we look at what’s happened to our superannuitants since COVID began, they’ve, effectively, been protected, but in a lot of ways that protection hasn’t helped their cause from a mental perspective or a financial perspective. And the interesting thing about the financial perspective is that that one sector of our community, other than their normal increase or annual adjustment—I suppose you’d call it an inflation adjustment—have had no particular attention paid to them at all by this Government in the form of increased payments of any sort.

The winter energy payment came in some four years ago, and was welcomed by those who didn’t opt out of it. Some opted out it—and it’s an odd way to do something isn’t it, when people opt out rather than opt in. I’ll get to my question in a minute, but if you look at the average income of a couple on superannuation, Government superannuation, it’s not going to amount to anywhere near $40,000, including the winter energy payment. Yet here we are making a payment to people on an income of less than $70,000, but we haven’t included our superannuitants in this payment. My question to the Minister is: why have we not considered them? I understand the issue with respect to means testing—we don’t do means testing in New Zealand but I understand the issue that you could raise with respect to this. But there are a lot of superannuitants, the vast majority of superannuitants, in fact, who live on that $35,000 to $40,000 a year. Why weren’t they considered for a payment as part of this bill?

Hon DAVID PARKER (Minister of Revenue): Because the annual adjustment of superannuation is the higher of inflation or wage increases. So if we look back in recent years—and, again, the table on page 158, the economic indicators, records that in recent years—and I’ll just go back to, say, 2018. In that year, average wages increased 2.8 percent, inflation increased at 1.5 percent, so the increase of super was well ahead of inflation that year. The following year, inflation was 1.7 and average wages increased 4 percent. Again, superannuitants would have had an increase based on wages, which would have been ahead of inflation.

Similarly in 2020, their increase would have been based on the wage increase of 3 percent relative to inflation of 1.5 percent. Last year, it was closer: 4 percent wage increase, still ahead of 4.3. This year, inflation is forecast to be higher than wage growth and therefore superannuitants will get the higher of those two figures: the inflation figure of 6.7. So they’re not in the same position as low to medium income wage earners in respect of the cost of living pressures. That is not to say that they do not face cost of living pressures—they do, but the situation is slightly different.

SIMON COURT (ACT): Thank you, Madam Chair. To the Minister: for context, there’s an analysis published by Thomas Coughlan from New Zealand Media and Entertainment, who has reported that Treasury thinks that the Government would have to deliver one of the biggest ever Budget spends next year just to stand still with inflation pressures, which are likely to add to the cost of the Government’s programmes by $3.5 billion next year. Now, that’s Treasury advice, which I’m sure the Minister has seen. So that raises a real dilemma for this Government and for a future Government in having committed to such extraordinary growth in spending, $6 billion this year on top of spending in previous years.

Question for the Minister: is it likely that a payment such as this one-off payment would need to be paid next year to account for the cost of living increase that New Zealanders will face? At the moment, inflation’s running around 6.9 percent. That would add, by my brief calculations, for somebody on $70,000 a year, which this payment is targeted at, if their cost of living was increasing by the rate of inflation, that would be an over $4,000 a year increase in their cost of living.

So, look, is it possible that this payment would have to be replicated next year? Will the Government be able to afford it? Is this payment inflationary on top of all the other Government spending with clearly no ability to manage any reduction in spending in any single department?

The assumption is, from the Minister, that there would have to be cuts in order to deliver ACT’s tax cuts, and he’s pointed to various aspects of baseline services, which ACT rejects—in fact, if you read our alternative budget, it’s quite clear, we propose to maintain baseline spending and deliver front-line services in education and health. The cuts that ACT propose to save money to fund our $2,000 tax cut for somebody on $70,000 a year actually come from deleting ministries which deliver no value to the taxpayer, which are completely unnecessary. But you can read all of that in ACT’s alternative budget.

So the question for the Minister: does he agree with Treasury that warns that tax increases or spending cuts will be needed next year, and is this measure inflationary or is it simply signalling that the Government will have to give New Zealanders a much-larger tax rebate next year, and is this being funded from debt or is this being funded from earnings? Because, Minister, if it’s being funded by borrowing from future taxpayers, from future generations, is this even ethical if the Government’s not prepared to look at its operational spending, which it’s also funding from debt, and make necessary cuts to wasteful Government spending?

Hon DAVID PARKER (Minister of Revenue): Of course, this year’s spending includes a one-off substantial payment to clear the historic deficits of district health boards that have accrued over a long period of time. That won’t repeat.

In respect of the total spending as a percentage of the economy, as I have said in earlier contributions—I think I’ve been over this a number of times—this year, it’s projected to be 31.6 percent of GDP; next year, even taking into account inflation on both the revenue and the expense side, it’s projected to be 31.1 percent of GDP; the following year, 30.4 percent of GDP. I think, as the member would’ve heard earlier, the date when we return to surplus is one year earlier than was achieved by the National-ACT administration following the global financial crisis. I would also note that those spending figures, as a percentage of GDP for this year, are 31.6 percent, compared with 34.1 percent of GDP spent by the ACT-National coalition in the 2010-11 year.

SIMON WATTS (National—North Shore): Thank you very much, Madam Chair. Look, I want to come back to a question that I asked the Minister before and have not been provided an answer; it’s pretty important, it’s in regards to clause 5, new section 7AAA, in regards to the eligibility payments. So these payments are going to be automatically made to people’s bank accounts. The question I ask, quite simply, is: can the Minister confirm that Inland Revenue holds date of birth information for taxpayers and all the taxpayers that are going to be eligible for this payment? Everyone over the age of 18 who meets the other criteria are going to get the payment, but does Inland Revenue have that date of birth information? If they don’t, I want to understand—well, obviously, there’s going to be a significant issue in terms of the ability to actually make the payment. So that’s my first question.

The second question in regards to the eligibility criteria under clause 5 relates to the statement around the fact that—and it’s the fourth bullet point—and it’s around “and present in New Zealand”. And so my question here is: when must you be present in New Zealand? Is it from 1 August to 31 October? Can you leave New Zealand after the third payment on 1 October? For example, can you go on holiday? Can you go on holiday during that period? Maybe to anywhere outside of the country for a short period of time, particularly if you’re 18 and maybe say your parents are saying, “Look, we’re going to take you on a holiday.” That would be reasonable, and they would earn under the income threshold.

And the aspect around this, again—and I asked a question around information sharing before between the Inland Revenue and Ministry of Social Development, of which the Minister did not answer that question either, which gives me more concern that, again, I ask the question: does IRD and the Ministry of Social Development have an existing information-sharing arrangement which covers the winter energy payment? A key criteria for this payment. He hasn’t been able to answer that question, and, again, that is concerning.

But my point around being present in New Zealand is: does Inland Revenue have an information-sharing arrangement with New Zealand Customs? In order to substantiate the criteria for this payment, Customs is going to need to provide information to IRD to stop people at the border or identify someone who’s leaving New Zealand who may be not eligible. And what’s interesting, and I quote from the Ministry of Social Development website in regards to the winter energy payment, is: “If you’re heading away from New Zealand over the winter months, we can keep paying your winter energy payment for up to 28 days. Tell us if you plan to leave New Zealand for more than 28 days, otherwise we might pay you too much and have to ask for some money back.” So I want to understand in regards to that those series of questions.

And, lastly, in regards to will the Inland Revenue be assessing or analysing prior year earnings for individuals and taxpayers to ensure that they haven’t artificially had or earned net income of $70,000 or less? And why I ask that is because we’ve seen graphs from Inland Revenue that indicate that Inland Revenue actually thinks that taxpayers are artificially paying themselves $70,000 or less in regards to personal income tax. So those questions I’d appreciate a response from the Minister.

Hon DAVID PARKER (Minister of Revenue): In respect of tax residency, it’ll be based on annual tax residency, not whether someone’s gone on holiday for a couple of weeks to Australia.

In respect of the issue that was asked as to the date of birth, generally IRD does have date of birth information. Sometimes there are gaps. Where there are gaps and people think that they’re eligible for the payment, they’ll be able—through the means that we talked about earlier—fill in the data gap in respect of the date of birth and things will flow from there.

In respect of the winter energy payment, the criteria, yes, we do have data-sharing agreements with Ministry of Social Development, but we don’t actually rely upon them for this, because the eligibility for this payment is based on not being eligible for the winter energy payment, and that’s clear from pay returns that come through the revenue, so can be automatically matched.

DAMIEN SMITH (ACT): Thank you, Madam Speaker. I listened with interest to the Minister’s response in terms of how this figure was ascertained, and it was explained that it was the difference between wage increases and inflation, and we just settled on a figure. When I asked Treasury today how they defined lower and middle income wage earners, they did not have an answer for me. It’s not in the appendix of any of the documents I’ve read today. So I ask the question again: was any modelling done to say this would be 250, 350, 450? And is there any sensitivity analysis about how you’ve linked this to the cost of living scenario that people are facing out there?

Secondly, the question again is: was it appropriate to appropriate the $1 billion from the COVID fund when COVID hasn’t been totally wound down, to this programme, as it’s a cost of living crisis programme not a COVID fund programme?

Hon David Parker: Madam Speaker.

CHAIRPERSON (Hon Jacqui Dean): The Hon David Parker.

Hon DAVID PARKER (Minister of Revenue): “Madam Chair”, I should have said; sorry about that. As to the appropriateness of deciding that it was timely to bring back some of the COVID recovery fund payment into the core and use some of it, we thought it appropriate.

In respect of the issue as to the wage threshold, or the $70,000 threshold, that was based on the average wage being around $65,000, and we thought that that was slightly above that. It was an appropriate cut-off point.

TANGI UTIKERE (Labour—Palmerston North): I move, That the question be now put.

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

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

The result corrected after originally being announced as Ayes 77, Noes 42, Abstentions 10.

CHAIRPERSON (Hon Jacqui Dean): The question is that Ricardo Menéndez March’s tabled amendment to clause 4 replacing subclause (2) to amend the definition of a cost of living payments scheme be agreed to.

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

Ayes 12

Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 107

New Zealand Labour 65; New Zealand National 32; ACT New Zealand 10.

Amendment not agreed to

CHAIRPERSON (Hon Jacqui Dean): Order! Members will be silent during the vote. [Interruption] Right, that member will stand, withdraw, and apologise.

SIMON O’CONNOR (National—Tāmaki): I withdraw and apologise.

A party vote was called for on the question, That Part 1 be agreed to.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Part 1 agreed to.

The result corrected after originally being announced as Ayes 77, Noes 42, Abstentions 10.

Part 2 Amendments to Income Tax Act 2007

CHAIRPERSON (Hon Jacqui Dean): Members, we come now to Part 2. This is the debate on Clauses 7 to 9, “Amendments to Income Tax Act 2007”. The question is that Part 2 stand part.

Hon DAVID PARKER (Minister of Revenue): It might assist the committee if I explain this short part. It has two provisions. One is to say that the cost of living payment, when received, is tax-exempt; so there’s no tax charged on the payment received. That’s clause 8 of the bill. And then clause 9 says that it doesn’t affect other payments like Working for Families.

SIMON COURT (ACT): To the Minister, you’ve just pointed out that this is a very brief amendment and that the payment is tax-exempt, but are taxpayers exempt from having to fund this payment? All of those taxpayers who are not eligible for the payment are not exempt from the cost of making the payment.

So I’d like the Minister to consider the impacts of this piece of legislation, which has been brought to the House under urgency tonight, whether taxpayers are exempt; whether, in fact, those even receiving the payment, who are taxpayers, are exempt? If the money has been borrowed and appropriated from the COVID response fund, which was borrowed to respond to the COVID pandemic situation when New Zealand’s borders were closed, where aircraft had stopped flying to New Zealand, which meant that the Government at the time had to say, put funds into Air New Zealand to make sure there was cargo coming, is it appropriate that this payment, this one-off $350 payment—which amounts to less than a dollar per day over a calendar year.

Now, when I was a young person and I used to watch television, ads would come on the television, and they would say—they would say—please donate money to this poor country where people earn less than $2 a day, and yet this payment is for a dollar a day, which wouldn’t have even solved poverty in an impoverished, starving country in the 1980s.

So a dollar a day, let’s just consider the $350 payment, which the Minister says that people who receive it will be exempt from paying tax on. So let’s assume that that’s your starting point, Minister. These individuals who receive the payment will live in a country called New Zealand, which has borrowed tens of billions of dollars to fund the COVID19 response. That’s where the money has been appropriated from. That money was intended to deliver shovel-ready projects, most of which the shovels are still sitting in the shed, clean and shiny, apart from the ones which potentially Minister Wood or Minister Parker or Minister Robertson—if he’s here—have held for a moment, just long enough to get their fingerprints on the shaft while the shovel touched the ground so they could get that photo op for the shovel-ready projects.

But let’s just come back to what the COVID-19 response fund, which this is appropriated from, was for. It was to respond to COVID, and it was borrowed. So it would appear by your statement, Minister, that these payments are tax exempt, ignores the enormous debt elephant in the room that this Government has created, which is that even the taxpayers who receive this payment will be liable through their future taxation to pay the interest on the COVID-19 debt, to pay that interest potentially for decades as these bonds mature over time, and at a much higher interest rate, no doubt, than the Government assumed they could borrow the money from when they took it from the air or hit print over at the Reserve Bank and created the money out of thin air, that money that has since created an inflation pressure that is common to all countries around the world which have used money printing to generate some kind of revenue for their Governments at a time when they weren’t collecting money from normal business activity. So to say that it’s exempt from tax, Minister, appears to be missing the point that every taxpayer who receives it and everyone who doesn’t will, through their taxes, pay for it in the future through the interest on the COVID-19 debt that that Minister, who is part of this Government, is responsible for incurring on behalf of New Zealanders. So I want the Minister to explain how taxpayers are not going to pay for this.

And, Minister, considering that and considering what other options the Minister had—as I pointed out before, at the current inflation rate of 6.9 percent, the cost of living increase for a New Zealander on $70,000 a year is over $4,000. So does the Minister seriously believe that this $350 payment, less than $1 a day on an annualised basis, is going to make any difference whatsoever in the quality of life, in the wellbeing, and the family circumstances of people earning the average wage in New Zealand? If he can get up and explain this then, then the ACT Party might potentially support it. But at this stage we wouldn’t.

Hon DAVID PARKER (Minister of Revenue): The latter part of that contribution related to Part 1, so I won’t respond to it. The earlier part was repetition of the same point made by his colleague in respect of Part 1, so I won’t repeat my answer.

SIMON COURT (ACT): Thank you, Madam Chair. So would the Minister care to explain, in terms of Part 2, clause 8(cb): “a payment under the cost of living payments scheme, as defined in section 3(1) of the Tax Administration Act 1994:”, which he described as not being subject to taxation for those who receive it, does not have a tax implication for all New Zealanders who will have to pay back the debt that this Government has incurred, the debt that the COVID-19 response fund represents, which the Minister has called on to use not to save New Zealand from COVID-19, not to protect us from COVID-19 coming across the border or to make sure that freight and logistics can move stuff in and out of the country—would the Minister care to explain how, while taxpayers who receive this payment are not required to pay tax, in fact, they don’t have any future tax obligation to pay for this one-off payment? Minister, could you please explain that in terms of Part 2 of the bill?

Hon DAVID PARKER (Minister of Revenue): The clause is very clear. It means what it says, which is that the payment when received by someone is not taxable.

BARBARA EDMONDS (Associate Whip—Labour): I move, That the question be now put.

CHAIRPERSON (Hon Jacqui Dean): The question is that Part 2 stand part—sorry; a bit of late-night confusion. I was putting the question; so I will continue putting the question. The question is that Part 2 stand part.

A party vote was called for on the question, That Part 2 be agreed to.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10

Part 2 agreed to.

CHAIRPERSON (Hon Jacqui Dean): Members, the time has come for me to leave the Chair. The House will resume at 9 a.m. in the morning. Good evening.

Sitting suspended from 9.56 p.m. to 9 a.m. (Friday)

THURSDAY, 19 MAY 2022

(continued on Friday, 20 May 2022)

Bills

Taxation (Cost of Living Payments) Bill

In Committee

Debate resumed.

Clauses 1 and 2

CHAIRPERSON (Hon Jenny Salesa): Good morning, members, as we recognise Pink Shirt Day today.

Members, the committee is resumed for further consideration of the Taxation (Cost of Living Payments) Bill. I remind members that they’re able to participate remotely. If you’re on Zoom and want to take a call, please type “call” into the chat. You should also use the chat if you’d like to raise a point of order. If we receive new tabled amendments, I’ll advise members so that they can refresh the House papers page to see the new amendment.

Finally, it’d be helpful for members to ask multiple questions, if they have them, of the member in charge during the call.

Members, before we move to consideration of clauses 1 and 2, last night during the votes of closure, Part 1 and Part 1 stand part, the votes were recorded incorrectly. The correct vote on both votes was 67 votes in favour, 42 votes against, and 10 votes in abstention.

Members, we come now to our final debate, clauses 1 and 2, which is the debate on the title and commencement.

Hon GERRY BROWNLEE (National): This bill as it lies on the Table is referred to as the Taxation (Cost of Living Payments) Bill. It should be called the “Cost of Living (Look at the Squirrel Running up the Tree) Bill”, because that’s basically what it asks New Zealanders to do. Why do I say that? Well, to qualify, an income can’t go over $70,000.

Kieran McAnulty: Point of order, Madam Chair. The member is extremely experienced. He knows that he can’t use debates on this clause to criticise the content of the bill, and proposing that a bill be called “a squirrel going up a tree”, I would argue, is exactly that.

Hon GERRY BROWNLEE: Speaking to the point of order—

CHAIRPERSON (Hon Jenny Salesa): It is myself who is able to rule things in or out of order. I would allow the member to continue.

Hon GERRY BROWNLEE: Thank you, Madam Chair. As I was saying, the bill should be called the “Cost of Living (Look at the Squirrel Running up the Tree) Bill”, because that is what it asks New Zealanders effectively to do. Seventy-thousand dollars is the threshold—for someone earning—to get this payment. Let’s look at that $70,000. That person will be paying $14,000 in tax, leaving them with a $56,000 income, and slightly less when you take off ACC and anything else that the Government might like to throw on as a result of this particular bout of urgency. But of that $56,000, $4,000 has already been lost in purchasing power through the current inflation rate—$4,000 out of an annual income, through last year’s inflation rate—and we’re being asked to support a bill that apparently is going to make up for that by giving people $350. It is an absolute misleading of people in New Zealand.

I don’t begrudge anybody getting the money—they need it—but it is just inappropriate to call it a cost of living payment when it goes nowhere near that cost of living and when Government policy, riddled throughout this Budget, is robbing people because of the high inflation rates we have at the present time. Four thousand dollars, for that $70,000 earner, is lost in purchasing power and the Government wants to deny it’s happening.

MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. I want to join my colleague Gerry Brownlee to look at the title and commencement of this bill, because you’d ask yourself, with the Taxation (Cost of Living Payments) Bill made up on the hoof, what took it so long. What we do know, when we read the limited paperwork that is on the Table this morning, is this bill was only thought about a couple of weeks ago. This Government has been dragged kicking and screaming into the cost of living crisis. They wouldn’t even admit it, and now here we have a policy—in fact, the total expenditure of $800 million sits outside the Budget of $6 billion. That’s how much this bill is made off the hoof.

I just want to quote some figures from Stuff NZ this morning. They called it the cost of living reality check. Renters—the cost increase for them has been $52.75 a week for a couple, bearing in mind the uplift from this bill is only $54, so it cancels itself out, whereas for a homeowner, they’ll get $54 a couple under this bill—the cost pressures increase has been $134.25.

So here we have a Government that’s put a bill up, but let’s not forget, if we’re talking about commencement, it doesn’t start till 1 August. Why doesn’t it start till 1 August? Well, they’ve made it up off the hoof and they’re not ready to implement it yet. Even in the Minister’s own words, they still don’t have 200,000 people who are entitled to this; they don’t have their bank details. That’s 10 percent. Then they still need to employ 750 fulltime-equivalents, and we know under this Government that won’t be a ceiling; that will be a minimum—so a thousand new bureaucrats on top of the 10,000 increase they have already employed.

And this Government’s got form in this space. Let’s not forget the legislation we had to bring before the House around the road-user charges, with the reduction of the excise tax—poorly thought-through legislation, and here we have a bill that doesn’t have the right title, and, we would argue, the commencement’s too late, but, of course, this Government is too late into the cost of living crisis. They would not accept it, they would not call it a crisis, and now they are giving a bare minimum, as my colleague Gerry Brownlee said—a squirrel up a tree—to say, “Hey, we’re doing something.” But when you drill down in the figures, this does not cover the true cost for struggling Kiwis. And let’s not forget the average Kiwi wage at $72,000 will not qualify for the $350.

DAMIEN SMITH (ACT): Overnight, we’ve learnt that people in America have seen our Budget before we did. Newspapers had access to the content of our Budget, which inextricably can’t be explained by Treasury yet. But it would actually augur something that is in consistency with this bill, which is just rushed, rushed, rushed. And we at the ACT Party, who were the first to actually expose the cost of living crisis—

Hon Paul Goldsmith: Ha, ha!

DAMIEN SMITH: Well, actually, it—and that’s right, Mr Goldsmith, and then you took on the crusade—would identify that at a dollar per day over the next year. Is that really going to solve the cost of living crisis in New Zealand? I don’t think so. And I think the polls will still show that after this reaction to this payment it won’t stop here. Come October, more will be needed. Unbudgeted aid that hasn’t been allocated yet will have to be discussed. Inflation is not going away. Monetary policy next week would show that the cost of living will increase further through mortgage interest rates.

But getting back to the bill. The cost of a Labour vote has been defined as $350. The tax per person in this country has gone up from $15,825 to—

CHAIRPERSON (Hon Jenny Salesa): Order! Order! Can the member come back to the debate that we’re having right now, which is on title and commencement?

DAMIEN SMITH: Yeah, it’s relevant—because the title of this bill, with regards to the office that has described it, is actually going to tell Kiwis that the cost of living payments bill is going to solve their problems. And it’s not.

So we at the ACT Party want to make it very clear today, before we go into the weekend, that this is a bill that’s described as something that’s not going to help and it’s not going to actually define what the problem is. Thank you.

BARBARA EDMONDS (Associate Whip—Labour): I move, That the question be now put.

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

Ayes 75

New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Motion agreed to.

A party vote was called for on the question, That clause 1 be agreed to.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Clause 1 agreed to.

A party vote was called for on the question, That clause 2 be agreed to.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Clause 2 agreed to.

CHAIRPERSON (Hon Jenny Salesa): I will report this bill without amendment.

House resumed.

CHAIRPERSON (Hon Jenny Salesa): Mr Speaker, the committee has considered the Taxation (Cost of Living Payments) Bill and reports it without amendment. Mr Speaker, I move, That the report be adopted.

DEPUTY SPEAKER: The question is that the report be adopted.

A party vote was called for on the question, That the report be adopted.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

ACT New Zealand 10; New Zealand National 32.

Abstentions 10

Green Party of Aotearoa New Zealand 10

Motion agreed to.

Report adopted.

Third Reading

Hon DAVID PARKER (Minister of Revenue): I move, That the Taxation (Cost of Living Payments) Bill be now read a third time.

What a great day to be in Government. I’ve been in this place for 20 years. My anniversary is in a couple of months’ time and I’ve never ever, in the 20 Budgets that I’ve been here for, seen such a depressed Opposition on the first morning of the continuance of the urgency motion. The contributions from that side—I know they’re awake, they’ve arrived here, come through the rain on a Wellington grey day, but the depression on the other side is palpable. I can see why. Completely taken by surprise by the Budget—completely. The terrible design of their tax policy in comparison, laid bare, and they’re left with accusations in the debates on this bill about fiscal profligacy—prophets of doom on the other side. We have to remind them that this bill gives $350 to 2.1 million people—2.1 million people assisted with the cost of living—on top of the extensions to the slashing of excise duty, to the cutting of road-user charges, and the halving of public transport costs.

This country recognises that we have had one of, if not, the best responses to COVID in the world, both health-wise and economically. And, as a consequence, New Zealand’s economy has already bounced back to being pre-COVID size, and growth rates are higher than they were pre-COVID. Unemployment is at an incredibly good low level of 3.2 percent and the Government’s books go back into surplus—notwithstanding the astounding shock of COVID—a year earlier than National got the books back into surplus after the global financial crisis (GFC). Against all of that background, the National Party still say, “Oh, profligate Government stoking inflation.”, when our expenditure in this coming year, according to the Budget documents, is 31.6 percent of GDP, compared with 34 percent of GDP under National after the GFC.

It’s no wonder that the commentators are picking that this is a great Budget, but so are the punters.

Hon Gerry Brownlee: Name one! He can’t find one.

Hon DAVID PARKER: Well, I’m actually looking for a list of some of the quotes—I’m looking for some of the statements by punters throughout the country who are saying that this $27 per week helps. But I’m going to give up on that because I can’t find the piece of paper. The pundits up and down the country are saying that the National Party tax cuts would have given less to low and middle income earners than this $27 a week; $2 a week for a low income earner under the National Party’s tax cuts, a $270,000 tax saving for the chief executive officers (CEOs) who are at the top end of the spectrum—270,000 per annum. People know that, one, the country can’t afford that after the COVID costs—

Hon Paul Goldsmith: This is muckraking.

Hon DAVID PARKER: —and, two, that it would be—“muckraking”, says the Hon Paul Goldsmith.

Hon Gerry Brownlee: Put some numbers on it.

Hon DAVID PARKER: $270,000 is the number that the CEO of Air New Zealand would have got from the tax cuts that National Party proposed and $2 a week was what a low-income earner would have got—about 110 bucks a year compared with the $350 that low and middle income earners get under this package.

This is a very, very good bill and I thought Audrey Young summed it up very well. She said that Grant Robertson delivered a measured response to the current crisis, and she said that he had written a “Goldilocks Budget”, neither too much nor too little, that it had targeted the tax cuts better than the National Party’s alternative, and that the Budget was, essentially, a masterstroke by the Minister of Finance. We’re incredibly well led in this country by the Prime Minister, Jacinda Ardern, by the Deputy Prime Minister and Minister of Finance, the Hon Grant Robertson, who I think has delivered a Budget in difficult circumstances.

Now, the final thing I would point out is that the Hon Gerry Brownlee just gave a contribution on the title debate where he said that people were 6 or 7 percent behind, and he quoted the number. He ignores wage increases—typical of the economic illiteracy on the National Party side of the equation. He just talks about inflation but not wage increases. Even this year that we’re in, the only year in the past five years where wage growth is lower than inflation and the only year that it will be, under this Government—because forward projections out to the end-year forecasts have wage growth higher than inflation—with inflation predicted to be 6.7 percent, wage growth has been 4.6 percent. The gap is not 6.7 percent, as the National Party illiterately repeat in this House; the difference is 2 percent—the difference is 2 percent. And we as a Government are doing what we can to assist people with that reality.

We all know that inflation is here, that it’s not caused by the Government. There was a bit of a spat on TV last night with a leading New Zealand economist, Shamubeel Eaqub, calling out the illiteracy of the ACT Party on this issue. The main causes of inflation are the disrupted supply chains as a consequence of COVID, including disrupted production in China, and transport constraints that have been disrupted through COVID. And then, of course, virtually the whole of the world is bouncing out of COVID at the same time. So demand pressures around the world have spiked, which is in itself inflationary. And then on top of that, we’ve got the war in Ukraine, which has doubled fuel prices, which feeds through to food prices, in part, because the cost of fertiliser has gone up by 38 percent.

So we all know those are the causes of inflation, but we also know that it’s real for New Zealand consumers and that’s why we’re doing our bit to assist them through this measure, which is fiscally responsible, will help 2.1 million New Zealanders, and is widely seen by the media as being a good Budget.

DEPUTY SPEAKER: The question is that the motion be agreed to.

Hon PAUL GOLDSMITH (National): Thank you, Mr Speaker. We started off with a hiss and a roar from the speaker Mr Parker about the Budget, and then it started to lose its way. Then he was flambling around, trying to find commentators that had supported it, and he started reading Audrey Young. But, of course, Audrey Young, yesterday, just after the Budget, said it was a “Goldilocks Budget”, but on reflection, she’s written another article a little bit later where her conclusion at the front is “Grant Robertson’s latest Budget may end up pleasing very few.” No longer is it Goldilocks; she’s actually had to pull back and recognise that it’s been a flop, and everybody else in the country recognises that it’s been a flop. It’s a backwards Budget, because the country is going backwards.

Just think, back in 2017, when National left this Government thanks to Winston Peters, this country was positive and was going places. People were flooding into the country. We were aspirational. New Zealand was reaching ahead. Everybody felt good about this country. Five years later, we’re losing a net-outflow of people. Australia is getting the best and brightest from New Zealand—not all of them, of course; some of them here on this side of the Chamber. So we’re losing a net-outflow of people, the country is going slowly, and the growth forecasts in this Budget from the Treasury are being pulled back. Instead of growing 12 percent by 2024, we’re only going to grow 9 percent if we’re lucky. For some of the years ahead, we’re going to be growing less than 1 percent.

So the country, as a whole, under this Government is going backwards. But it’s worse than that; it’s New Zealand households that are going backwards under this Government. Costs are going up faster, the cost of everything—whether it’s cheese, whether it’s petrol, whether it’s food for the table; that’s going up faster than wages are going up. And everybody knows it, everybody understands it, everybody sees it, everybody feels it, and they are frustrated by it. The Government will stand up and say, “Oh, it isn’t us.”, and they’ll point to Shamubeel Eaqub and all that sort of stuff. Shamubeel Eaqub, by the way, when we were in Government, had nothing to say other than the New Zealand Government had their head in the sand over superannuation and we needed to put the age of superannuation up. That was the only thing he used to say, and then, suddenly, this Government comes in, and Jacinda Ardern refuses to put the age of superannuation up, and he stops talking about it—has never talked about it since. So now he’s talking about inflation and about that. So, anyway, good on you, Shamubeel, you do that.

But the point about inflation is that, yes, of course, there’s an international component, but you can’t control that, but what you can control as a Government is what the Government does to contribute to it. And there are two things that have contributed to it significantly: (1) they took the focus of the Reserve Bank off inflation and added a dual mandate, and we’ve run incredibly low interest rates, and that has helped fuel the inflation—like it has in many other parts of the world—and that’s why inflation was ripping before Ukraine and it’s why New Zealand households were going backwards last year; and (2) they have massively increased Government spending—what’s called the fiscal impulse—and this Budget was the biggest splurge of new spending ever, and New Zealanders look at it, and they see it for what it is.

They look at the $11 billion in health, and they ask the obvious question, “Will this lead to any better outcomes?” And when they consider what happened to the $1.9 billion extra money in mental health two years ago for no better outcomes in so many areas, they are rightly concerned about it, and they can see it just disappearing like water into the sand—billions and billions of dollars going out and no better result. Overall, Government spending’s increased by 68 percent by this Government, and nobody can point to a 68 percent increase in actual outcomes. We’re all waiting longer for courts, we’re waiting for surgeries, and everybody’s waiting for everything. All the money goes out and where it all seems to go is into extra public servants and lots of consultants. It’s been great for the consultants, a really wonderful time for the consultants but not good for the average New Zealander—and particularly not good for the squeezed middle.

Then we look here at what is being proposed in this bill: this temporary assistance to deal with the cost of living, and the $27 a week that people will get for a few weeks. And we’ve seen, overnight, people working out how that fits. We’ve seen people say, “Well, if you look at an average couple, in the Budget they’ll get $54 between them for a few weeks, but the cost of rent has been about $50 as well.” Well, OK, that might just cover the rent increase for a few weeks, but it doesn’t cover all the food and everything else that they’re having to deal with, and all the other issues. Then what happens after three months? Oops, we’re back where we were; we’ve gone backwards. And what about the homeowner? Average costs have gone up a $134 a week, so they’re going backwards at a rate of knots, and they’ll be going back faster, because interest rates will be going up even higher to deal with inflation. And, then, of course, well, they might get a cheap bus ride for a few weeks, but that’s going to stop as well.

So the big question that everybody has is: what on earth is going to happen in three months when these little temporary fixes are going to disappear? They won’t, probably, disappear, and that’s going to be a real problem for this Government. They’ve got themselves entirely trapped, and there’s no way out for them, because they’ve raised this kind of hope that they’ll throw some money at people in order to deal with this situation. But they’re going to have to keep on doing it, because the inflation’s not going to go away any time soon. And that’s why we’re not voting for this bill, and it’s why the National Party’s plan is so much better. And it’s an obvious one which is to say, “Let’s stop taking more tax out of the hands of New Zealanders every day, using the sneaky approach of inflation—as incomes rise, hold the tax thresholds down, and more people pay higher rates of tax.”

And that’s been the dirty secret of this Government’s tax policy for the last five years. It’s why Grant Robertson has had so much money to throw around—ineffectively, sadly—and it’s why New Zealanders are feeling the pinch. We’ve just suggested the obvious and simple and right thing to do, which is to say, “OK, let’s adjust those thresholds for inflation and put $1,600 back into the hands of the average New Zealand worker. That will make a real difference to them. It’s a contribution, it’s a start, and it doesn’t go away after three months like this short-term, band-aid fix from the Government will do.”

And, of course, the other element of this is the hurried and ill-considered nature of it. When we look at this Government’s approach to this Budget, they were quite confident about the whole situation. They said that the focus of the Budget was going to be climate change and it was going to be health restructuring. That was going to be the big thing about the Budget until about five weeks ago when they thought, “Hang on a moment. Hang on a moment. Maybe we have miscued somewhat. There seems to be another issue out there—something called the cost of living. Maybe we should be doing something about that.” Just like they thought about law and order, suddenly, very late in the piece, they claimed everything was fine, and then, the only thing going forward that New Zealanders have seen is those stolen cars being rammed into dairies. So they came up with a quick fix there, which won’t really work, and then they came up with this cost-of-living package right at the very end.

We see all the notes from Treasury laid out on the table, saying, “Oh, yes, well, we haven’t really had time to consider this at all. It’s just been flung at us just beforehand. And, by the way, we think it’s pretty bad.” I mean, look. This is what the Treasury has to say on it: “Inflation has risen over the past year and is expected to be widespread and to persist into the future. This makes a one-off payment a poor mechanism for supporting households with a longer-term problem.” This is from the Government’s own advisers. Let me just repeat this: “Inflation has risen over the past year and is expected to be widespread and to persist into the future. This makes a one-off payment a poor mechanism for supporting households with a longer-term problem.” So the Government’s own advisers say it was a bad idea. They say a one-off payment of this magnitude, also, would add inflationary pressures in the short term.

Then there are other priorities that could be pursued with this money. Then, they also point out that they have to go and hire another 750 people down at IRD to figure out how to pay this money. I mean, what a shambles. I’m pretty confident notwithstanding if this bill passes—which it will, because this Government has the numbers—that they’ll turn around and find out there’ll be all sorts of problems. I wouldn’t be at all surprised if we’re not back in this House with another piece of urgent legislation to fix up some kink that they’ve forgotten and that has meant the money’s gone to people in Australia or something like that. I don’t know; there’ll be something that they won’t have figured out in their mad rush to deal with it.

That is the tragedy of this Government. They’re always, always reacting on the back foot to issues, because they’re not thinking ahead and they’re not providing a clear plan for New Zealand. So the backward Budget continues. New Zealanders are going backwards, but our message for you today is: help is on the way, and that’s in the form of Chris Luxon, Nicola Willis, and the National Party that stand ready to lead this country back to success.

Dr DEBORAH RUSSELL (Labour—New Lynn): What a miserable lot they are on the Opposition benches—a miserable, pessimistic, negative lot. Oh no, oh no, unemployment is down to 3.2 percent, and they think that’s terrible! Mr Goldsmith says that growth is predicted to be only 9 percent, and that’s a terrible thing! They are a miserable, mean lot, seeing only the dark underbelly of everything because that suits them.

Now, we know there is an inflation problem, and it is worldwide. I’d like to point out that just yesterday economist Shamubeel Eaqub said it was “economically illiterate” to sheet it home to the Government here. Well, the economic illiterates on the other side of the House might like to pretend that inflation is caused here in New Zealand alone, but we know it is a worldwide problem, and we know it is caused by worldwide issues.

Whether or not it is caused by worldwide issues, it is our job on this side of the House to help New Zealanders get through, and that is exactly what we are doing. Benefits went up on 1 April. We have the winter energy payment to help superannuitants and people who are on benefit. The minimum wage has gone up. That’s all stuff to help people get through. In this Budget, we are making a contribution to the cost of living for ordinary New Zealanders, for 2.1 million New Zealanders, who will get a contribution to help them through these winter months—$350 going to 2.1 million New Zealanders. It’s going to students. It’s going to people on the minimum wage. It’s going to those who work two or three jobs just trying to get by. It’s going to ordinary people and it will help them.

So let me tell you what people have said about this. Let’s start with some of the big-picture stuff. Now, in terms of whether or not it’s an effective and good measure, let’s talk to, I don’t know, ANZ chief economist Sharon Zollner. That would be the ANZ that is chaired by the former Leader of the Opposition, by the former Prime Minister, Sir John Key. What does this wonderful person say? She says, well, actually, good fiscal policy “should be targeted and temporary and these cost of living pressures are, we’re all hoping, going to ease, whereas a tax cut is, of course, for the long run”. In other words, she supports it. She says, “This is a one-off payment that can be repeated if necessary and it’s actually more flexible, in that regard, than a tax cut would be.” That’s from the ANZ chief economist.

Morgan Godfery, who lectures at the University of Otago Business School, says that the cost of living payment is “a necessary recognition that a large number of New Zealanders are doing it tough … Targeting that payment to the 2 million New Zealanders who are likely struggling with all kinds of rising costs—whether it’s fuel, whether it’s housing costs—I think is both necessary and sensible.” That’s what people are saying about the overall fiscal nature of this particular payment.

In terms of whether or not it would add to inflation, well, University of Otago senior lecturer in economics Dr Murat Üngör doesn’t think that it’ll add to extra pressure on inflation. It is a great, measured announcement. That’s what some of the people commenting on the economics of it are saying.

But what are ordinary people saying—what are ordinary people saying? Here it is: “Arrowtown woman Jo Scott was shopping at Countdown Andersons Bay in Dunedin yesterday and said it was ‘outrageous’ how much the cost of food had gone up.”—we all know that. “She said the payment would be a ‘big help’. Another shopper, Ann Cottrell, of Dunedin, said the payment would be ‘marvellous’.” Ordinary people are welcoming this assistance with their costs of living. It is welcomed on the streets, and that’s where that side of the House is simply out of touch.

Over on this side of the House, we know we need to help. We are doing what we can to help people get through. This is a measured and sensible response to the temporary cost of living pressures. I am so glad to be able to commend this bill to the House.

Hon GERRY BROWNLEE (National): I must take a minute or two to reply to some of the positions put by the speaker who just resumed her seat. Firstly, I think it’s extraordinary that the Government should come in here and quote the words of a bank chief executive—a bank that’s just been one of the first to jack up their interest rates in this new environment; interest rates that are contributing to that $134 a week extra costs for mortgage holders in this country. Yet the Government comes in here and says, “Well, the banks are happy about it.” Of course they are. Of course they are. It’s typical, isn’t it? The vested interests are always apparently the ones that this bank wants to talk about. Unreal.

Then, of course, we talk about the fact that it’s a measured approach. Well, the overall approach to the Budget is that there is $100 billion worth of income and $127 billion worth of expenditure. The question is: who fills the gap? When we look at this Budget from this week, we see $6 billion spent as planned—as well announced by the Government—a massive expenditure: biggest ever in New Zealand’s history. Then we see an extra $2.3 billion stolen out of next year, brought forward into this year to pay for various aspects of the Budget. And on top of that, the last-minute inclusion, the very last-minute inclusion, not actually in the Budget, only there as potentially a supplementary estimate some time down the track—the billion dollars for this particular move—$9 billion. Now, if anyone looks at how baselines work, that means over the next four years, the Government is going to spend north of an extra—an extra—$50 billion. Where does it come from?

The people who always pay are the people who are at the bottom. This is an absolute sham when it comes to any suggestion that this about solving the cost of living. It’s not. I don’t begrudge people that money. I hope they turn up in their droves and they take it. They need it.

But let’s be clear: someone on $70,000 a year, at the top end of the qualifying range, is paying $14,000 in tax right now. They’re left with a $56,000 income. There’s a bit taken off that for ACC and various other things. But that $56,000 has been eroded in its purchasing power over the last 12 months by about $4,000. David Parker says here, “Oh no, the member got his figures wrong” when I quoted this in the House earlier, because there’s been pay rises. Even if we’re generous about the pay rises, it is still a gap—and, in fact, if someone was on $70,000, they got a pay rise, they no longer qualify. But if someone had got a pay rise that took them up to that level, their purchasing power after that pay rise is still down by $4,000. So it’s an irrelevance that you get all the time being thrown into these arguments by a Government that just seems to think that if they say it and they do it—well, they don’t do it very often, do they? They’re not good on delivery—then everything will be all right.

There’s the fact too that you can have multiple speakers from the Government standing up and saying, “This is wonderful. It’s a payment to 2.1 million people.”, but we’re a population of 5 million, we’re a population of about 1.5 million children who don’t work; we’re a population of over 500,000 who don’t work because they’re retired. So these are working-age New Zealanders—a massive chunk of our population—and the Government is celebrating that their incomes are low enough to qualify for this miserable $350 over a three-month period, $27 a week.

Well, if they think they’re going to go out on the hustings and tell New Zealanders how wonderful they are, I think they’ve got another thing coming. The only people they’ve been able to talk about in the House today who expressed any degree of support for this are a political editor who’s changed his story this morning, and a bank chief executive who’s happy to rub his hands as the interest rates go flying up. Completely ridiculous.

I’ve watched people on television, I’ve heard them on the radio—people who are affected by this. They’re grateful, but they are also very annoyed about the fact that it won’t go anywhere near trying to sort out the erosion of purchasing power that their limited incomes have so far experienced—$134 a week down if someone has an average mortgage in this country.

It just seems to me hard to believe that a Government can be so excited about this. We all know how it happened. Week after week, Labour caucus members were filing into the weekly caucus meeting, saying, “It’s not good out there. We’ve got to do something. We’ve got to come up with something.” And then Grant Robertson’s come along and he’s got a bit of a bone he’s thrown at them and said, “Here, look. We’re going to give everybody $350, dripping it out over three months, and that should take care of everything.” And one by one they’ve stood up in the House since yesterday afternoon, applauding this initiative by Mr Robertson and the Prime Minister as if it is an answer to everything. It’s temporary, so is the reduction in fuel excise. Temporary.

The question still arises: how is that $27 billion worth of extra spending through this Budget going to be paid for? No answer. The only way, ultimately, is taxation. It’s alarming that this bill apparently predicates some 700 new staff being taken on by the IRD. Are they being taken on in a temporary position? I doubt it. Somebody has to be there to run the mechanisms that bring that $50 billion in over the next four years.

The great thing is, you know, I’ll bet there was never any systematic going-through of the Budget prior to it being announced yesterday by the Labour backbench. No idea. They’ll just take it as read, take it as being absolutely 100 percent, no worries, don’t ask questions. It’s been evident from the speeches that we’ve had today. The question arises: what will happen at the end of the three-month period? I’ll tell you what’ll happen: there’ll be a Christmas bonus. Grant Robertson will put on his red hat with the fluffy white pom-pom and he’ll give out a Christmas bonus. Because all of the remedies that failed the economy in the past—the 1950s, 1960s, 1970s—are being trotted out by this Government. You can’t get past the fact that when there is a massive amount of money being spent—like the 68 percent increase in Government spending in four years. Imagine what that’d be like in your household; it’d be phenomenal. And the question is: why is the Government not looking at the drivers of inflation in this country? We keep on getting told, “Oh, it’s the Ukraine war, it’s COVID, it’s all the sort of slowdown in the world.” It’s a big chunk of debt that this country has got. It was the right thing to do to go to the balance sheet to try and get the economy held together. But it is not the right thing to cripple the economy by putting the sort of pernicious tax regimes in place that this Government seems so hell-bent on. Where is the incentive for producers in this country? Go back to that question I raised before: why is the Government so happy to say that a $350 one-off payment is going to sort things out for 2.1 million New Zealanders? That is alarming that that’s the sort of thinking that’s going on. Day by day, the costs of life for those people who are in those income brackets—and remember, that’s the upper end. If you’re on $71,000, nothing. That’s the upper end. So the squeezed middle is a real group of people. It’s not some term just grabbed out of anywhere. It is a massive group in this population. There’s no way that they’re going to be able to come off this temporary assistance and say, “Well, phew. Thank goodness we got through that. It’s all over now. Cost of living has suddenly settled. Look at that. There’s some new land for some supermarkets; that’ll make a big difference to my life.” That sort of thing is not going to happen, and nor is the pressure on fuel price going to go away. So the real question also is—another real question; so many questions come out of this Budget: who is going to pay in the end? Remember, history will tell you it’s always those who are on the bottom end of the earning scale.

TĀMATI COFFEY (Labour): Yeah, history is important. We must remember history, and let’s remember that when 2020 came around and the National Party put out their alternative budget, they had a $4 billion fiscal hole in it—a $4 billion fiscal hole—and when it was pointed out to them, they didn’t do anything about it. So everything that they have stood up and said today, you should regard with a grain of salt because National are out of touch, they don’t get the numbers right, and over on this side of the House, we do. That is why we need to be celebrating this cost of living payment. But it’s not just a payment, it’s a package. It’s an absolute package.

I want to give props where they are absolutely due. That is to the Minister of Finance, Grant Robertson, for doing that; that is to our Prime Minister, the Rt Hon Jacinda Ardern, for actually putting this package together and listening to the voices of New Zealanders, because it was the voices of New Zealanders and we know it. That’s right—we’ve got 65 MPs on this side of the House that go back home into our communities after we’ve left this building, and they tell us about the cost of living crisis. We see it in our families, we see it in the people that we represent, and for that reason, we’ve brought this package to the House.

The cost of living payment is going to cost us $814 million, but that’s a drop in the bucket compared to the kind of funding that we put out there into the community, but this is absolutely going to help those in our communities: a $350 payment and let us not undervalue that. A $350 payment is a lot of money, especially when it’s going not to households but to actual individuals. That’s the difference here, and that’s going to make the difference for 2.1 million people who are not getting the winter energy payment already. And let’s not overlook that as well: the winter energy payment is already going to over a million New Zealanders out there, supporting them. But let’s not see that in isolation, because on 1 April, we actually brought in a raft of changes which made things better for our superannuitants, for our students, for those people that get Working for Families tax credits. We are absolutely making a difference to the cost of living for everyday New Zealanders.

That side of the room, they are out of touch. Check out their social media. Last night they put out social media talking about our package, talking about what they would do, and talking about the average Kiwi income being $72,000.

Hon Member: It is.

TĀMATI COFFEY: I’ve got news for that member: back home in Rotorua, we aren’t as lucky to get $72,000 every single year like the rich mates of the people on that side of the room. Back home, our average median income is a mere $28,500. The average personal income back home in Rotorua for the average Kiwi is $28,500. They will not be served well by the National Party and their proposed tax package on that side of the House. They will under this bill and I’m pleased to support it to this House.

RICARDO MENÉNDEZ MARCH (Green): I rise to speak on the third reading of the Taxation (Cost of Living Payments) Bill. I’ve been listening through yesterday evening and this morning to the exchanges between members on this temporary $350 payment that is going to be given out to people earning under $70,000, and unfortunately excluding people on the benefit and superannuitants already getting the winter energy payment. What was really clear is that across the House, everyone agrees that there are families doing it tough, but somehow the people on the right, while berating this payment, are not offering tangible solutions to put permanent fixes to our income support system. It’s all talk about austerity and cutting services. Meanwhile, on the left, while I welcome their approach to trying to address the cost of living payments, they’ve introduced a bill which seeks to exclude some of the people that are doing it the toughest. I don’t understand why we can in good conscience try to introduce a bill that seeks to address the cost of living pressures on low-income and middle-income New Zealanders and say to people on the benefits that they already received the winter energy payment and that they’re all good.

During the committee of the whole House, it was really clear to me that the Minister thought that because people on the benefit already receive some top-ups, they are not struggling to make ends meet. That is not true. The Government had not consulted with people on the benefit or those on the ground since it was it clear on the departmental reports—but they didn’t even need to, there’s already so much information out there telling us that people on the benefit are several hundred dollars behind being able to participate in their communities. So we tried to put an amendment to the bill to guarantee that people on the benefit, people under 18 who are on youth payment or who may be in work, would be included in this bill. The Government has an opportunity, still, to do this, because the bill doesn’t prescribe who the recipients are, even though the Minister has made it clear that so far the intention is to exclude beneficiaries. So we’re urging Labour to please, when you’re looking at the recipients who are going to get this payment, review your position to include people on the benefit. Because we can’t just keep talking about how low-income people are struggling and yet exclude so many of them in one of the most significant things that are being done in this Budget.

I mihi the other efforts around subsidies for free fares, the child support pass-on—those things will make a difference. But let’s not lie to ourselves. People on the benefit will continue being behind in order to make ends meet. And what that will create is a system where we’re pushing people to Work and Income to get hardship grants just to survive. So the Green Party will continue pushing for permanent fixes to our income support system beyond these temporary measures, because in three months the inequality crisis and the cost of living pressures would have not fully gone away. In fact, some of these cost of living pressures on some whanau on lowest incomes, they’ve been there since before this Government even came into power. We have had so many years of reports, and Labour has a mandate, a majority to basically transform our income support system so that it supports people.

So I think the whole process has been deeply frustrating from the point of view that the exchanges that we have had, I think, ignored the realities of low-income families. It’s been deeply frustrating to hear members of ACT and National berate this payment yet offer no alternatives to this. And so we look forward to campaigning to transform it.

Toni Severin: Check out our alternative budget.

RICARDO MENÉNDEZ MARCH: I don’t even understand the kind of exchanges that they’re having here, because, again, they’re not really offering any solutions—the members to my right. So, again, I think all low-income people deserve a life with dignity. They deserve to be able to fully participate in their communities. They deserve to not have to be put into debt by our agencies that are meant to support them. The $350 may not be enough for some families to fully participate in their communities, but it will create some relief for people who are having to face the choice each week of whether to afford food or pay their rent. This would have made a tangible difference. So again I urge Labour to include people who have missed out on this payment and look to transformative solutions so that our families can thrive, not survive.

DAMIEN SMITH (ACT): I just wanted to quote an article from Thomas Coughlan at the New Zealand Herald, which said that “Treasury recommended against the Government’s $350 cost of living payment for middle-income households saying it was a ‘poor mechanism for supporting households with a longer-term problem’ ”—that is absolutely correct—“and that it will make inflation worse in the short-term.” And that’s absolutely correct as well. “Instead, Treasury believed the Government should investigate a ‘more targeted form of support to lower-income households’, according to advice released on the scheme. Treasury even thinks the payments would ‘add to inflationary pressures in the short term’ although ‘the risk to longer-term inflationary pressures is relatively small’ because the payments are temporary. On Thursday the Government announced [this, and] people earning less than $70,000 and who do not receive the winter energy payment [is estimated at] 2 million people. … Treasury said the Government should use the money set aside for the scheme … to pursue ‘initiatives that more directly impact on interim child poverty targets’ ”, which this Government and this Prime Minister came into Parliament to actually achieve.

Let that sink in. The advice said that the Ministers wanted to forge ahead regardless of Treasury’s recommendation that Inland Revenue be the agency to administer that scheme, but the IRD said that it should not have to be put in charge of that because it would be a critical operation for the IRD, which is currently managing COVID-19 payments, and it would blow out their key performance indicators for actually doing it.

So you can see where the problems are. Under the ACT Party’s alternative budget, which the Green Party obviously haven’t read, the average worker benefit would be $2,802. A single person earning $60,000 would get an extra $800. An average income of $73,000 would get $2,800. A middle-income worker swimming against the tide of inflation in this “Brain Drain Budget” would leave because this country is working to the lowest possible common denominator in terms of aspiration.

So we’re going to tax the productive to fund Labour’s ideological advantages. But I would argue that at a dollar a day, this goes nowhere—absolutely nowhere—to helping with the cost of living crisis.

Angie Warren-Clark: Rubbish!

DAMIEN SMITH: How is that rubbish?

Angie Warren-Clark: It’s not a dollar a day.

DAMIEN SMITH: How would you actually ascertain whether this is a good spend of money, when last night the Minister Mr Parker, who’s usually respected in this House, could not even tell us how this was modelled, whether it should be $500, $400, $350, or $200? Come October, we’ll be asking this question again when the cost of living crisis still will be there, inflation will still be high, and interest rates on your mortgages will still be high, and food prices will still be high.

So I’d like to ask the Government to actually think about: why $350? Where did that come from? When was it decided? Was it because of the Newshub poll which said that three-quarters of this country don’t agree with this Government on the cost of living crisis, that they had failed to anticipate even after all the COVID stimulus? The COVID problem is a different problem to the housing and cost of living crisis. It’s absolutely a separate problem and it needs a separate set of solutions, and it’s going to be here this time next year, come the election. So let’s be honest about this, and let’s be pragmatic. That’s why I like Mr Faafoi, because sometimes he is really pragmatic, but the rest of the economic backbench of the Labour Party are throwing this out as a political spin—and now we know what it’s worth to get a vote from the Labour Party: it’s $350.

So I would ask you to look at Thomas’ article and actually say to the people of New Zealand: this is a short-term fix—it’s not a long-term fix—and you’re on your own. And that’s what they know out there. And we’re all tightening our belts, and you guys haven’t, and that’s what your opportunity was in the last Budget: tighten your belt, reduce spending, reduce the size of this Government, and give people back some taxes to have them pay for the cost of living crisis. Thank you, Mr Speaker.

ARENA WILLIAMS (Labour—Manurewa): ACT and National members in this House are right that yesterday’s Budget was a difficult one to prepare, in volatile and uncertain times around the world, and with inflation this week in the UK spiking to 9 percent. It was a difficult thing to do and I commend the finance Minister for his balanced approach that responds to the pressures that people are feeling.

This bill establishes the payments that will go directly to middle income earners to help with the cost of living pressures that are hitting people hard right now. That’s the difference—that’s the difference when you have a Labour Government that sees the need of working people and responds immediately. That’s the difference when the Government sees a crisis of COVID coming from a global pandemic and responds to keep people secure. That is what you have when you have a Labour Government that keeps people secure in their health and secure economically and financially. I thank the finance Minister for his work on this Budget.

There is one thing that hasn’t been well canvassed in this House and I want to speak to it. That is the fact that the payments that this bill enables will be paid to almost all students. Labour has always been the party of students. We have ensured fair access to tertiary education. We are the party that introduced interest-free student loans. We are the party that stands with students to access tertiary education that is fair and available through the country.

Students are a group that has been hit hard by rising living costs while studying, as rent, transport, and food payments are a very large proportion of their costs. Students also are often precariously employed and don’t have stable incomes. There is no application needed for these payments to go to students. They will go directly to their bank accounts, because they have IRD numbers.

There are also other things in the Budget for students, which makes students a huge winner in this Budget. They are things like easier access to first-home grants, which is something we haven’t had before for this age group. There’s the small-business loan scheme, which means that students starting out as business owners and entrepreneurs will have a huge boost to the way they can begin businesses when they don’t have homes to borrow against, which has been the way that small-business owners have had access to capital in the past. This Government has also introduced the Community Connect scheme, which will provide half-price transport for everyone who holds a community services card, which will be most students.

So these payments in this bill will be a big boost for students, and I am proud of that. I’m proud to stand with a Labour Government that responds to need where we see it and sticks true to our values. I commend this bill.

MATT DOOCEY (National—Waimakariri): Thank you very much, Mr Speaker. Well, what a fascinating debate, and what we have learnt over the last 24 hours—that last member who’s resumed her seat, Arena Williams, talked about students. How about students who are under 18? They will not be entitled to this. We questioned the Minister yesterday in the committee of the whole House: what about independent students living away from home, providing for themselves? He couldn’t give an answer. And you know why? Because this policy’s been made on the hoof and they have not thought through all this.

We saw it in the paperwork from the advisers: “There is a risk that significant issues with the resulting proposal have not been identified.” Because this was rushed through, thought up on 4 May, and what we saw in the paperwork was that the IRD and the Treasury had an argument because none of them wanted to be the lead delivery agency. They said, “No, IRD will do it.”, and IRD said, “No, Treasury will do it.” None of them wanted to do it, and it’s outrageous.

There’s a quote here: “This makes a one-off payment a poor mechanism for supporting households with a longer-term problem.” And that’s the issue here. This Government’s been caught on the hoof. They would not accept a cost of living crisis. So they put a band-aid in place—$350. And you’d think for all the bureaucrats they have—and there was an argument about people in the top income bracket. Well, how many bureaucrats are now earning over $100,000 a year thanks to this Government? And you’d think with all their advisers, not one of them would have said, “Stop. Hold on. The average income for a Kiwi is $72,000 and they won’t be entitled to this under Labour’s plan.”—$72,000 is the average wage for a Kiwi, and you’re not entitled. Who would have thought! You’ve got to scratch your head. But this is the reality when you make policy on the hoof. It’s a bit like Dad’s Army.

Then it even gets worse, because the Minister had to get up in his first reading speech and accept they don’t have bank details for over 200,000 people yet who are entitled to this, over 10 percent. And then he had to say, “The IRD is still applying for funding to resource the 750 fulltime-equivalents that are needed to roll out this programme. And we know one thing: under a Labour Government, 750 actually probably means about 1,000—1,000 fulltime-equivalent, on top of the 10,000 extra bureaucrats they’ve employed in Wellington already. You’ve really got to scratch your head with this—a band-aid solution to something that is very important for many Kiwis who are under a lot of financial pressure today because of domestic inflation.

These guys have blown $6 billion in the Budget. They’ve raided next year’s Budget by $2 billion, half a billion in the Budget after that, and then because they got caught out with this, this policy’s going to cost $800 million on top of that. They’re out of control, this Government. It’s addicted to spending.

One thing I will leave the House with is, what is the purpose of a Labour Government if it doesn’t stand up for hard-working Kiwis? And what we have today is that for the average Kiwi on the average wage, they will get a big New Zealand Transport Agency red zero. You know those ones that cost $10,000? That is what the average Kiwi will get today—zero. If you’re on $72K, the average wage in New Zealand, you will get zero dollars. And we were challenged by one of the Government MPs down the back there: there’s been no alternate plan put out. Well, I go and say, check. ACT has put an alternate plan out. National has put their permanent tax plan out, that would give an average Kiwi on $72,000 tax relief of $800 a year. Compare that to zero—zero from this Government. They talk a big game but they do not care about hard-working Kiwis.

ANGIE WARREN-CLARK (Labour): Thank you, Mr Speaker. It’s a real pleasure to rise and I am delighted to speak in this third reading. For 81 percent of New Zealanders, 2.1 million people, the average wage is 68K—$68,000 roughly. I don’t know where they got their figures from; probably the same place that $4 billion fiscal hole was from.

Basically, I looked at what this means for everyday New Zealanders. Basically, what I did was I calculated my income when I was pre here in Parliament. I was on roughly around $70,000. So I looked at that $70,000, and I still kind of spend like I’m still on that salary. So I looked at the cost of what I would be getting for the $116 per month for the three months. And for those of you who are concerned that IRD does not have your bank account number, we urge you to be in touch. Just go online and give them your bank account number. Some people don’t like to give the IRD their bank account number, but that’s OK. If you want this, you’ll do so.

So there were 14 items that I could purchase for $104: white rice, cheese, 8 litres of milk, bread, 10 kilos of potatoes, 4 kilos of frozen drum sticks, royal gala apples, mixed vegetables, spread, tea bags, coffee, sugar, pasta, silver beet, fruit jam, and crunchy peanut butter. I still had $10 left over, was going to whip down to The Warehouse and buy their $10 can of Milo for the kids. So I also looked and I have 65 litres in my vehicle and I could get 40 litres of fuel. I actually put $60 a week into my vehicle for fuel, so that’s going to help tremendously. The other thing: I pay $60 a week on power. So this is two weeks out of four weeks of power paid for me.

So when we hear all of these wonderful things about how terrible it is, actually real Kiwis are going to have more in their pocket. It’s going to help us to manage this short-term issue and I’m really pleased and delighted to commend it to the House.

ANAHILA KANONGATA’A-SUISUIKI (Labour): Kia ora e te Mana Whakawā. It is always an honour and a privilege to speak in this House, especially today. And can I acknowledge the Minister of Finance. Yesterday, he gave us a balanced, balanced Budget. He said, “The investments we are making in this Budget build on the progress [we’ve] made in Budget 2021.” And may I remind this House what the goal of the Budget is: securing our future. One, we are continuing to keep New Zealand safe from COVID-19. Two, we’re accelerating the recovery from the rebuild and impacts of COVID-19. Three, we are laying the foundations for the future, including addressing key issues such climate change, change housing affordability, and child poverty.

Yesterday, I heard the leader of the National Party say, “The bureaucrats—they’re getting thousands of bureaucrats.” The wage subsidy last year—we had the historic payment to businesses by those public servants. If it weren’t for those public servants, the payments would not reach the businesses so they can pay their workers. The wage, the subsidy, the winter energy payment—the average wage in the Papakura electorate is $56,000; $27 at Countdown Papakura today would get you the following: one loaf of bread, one butter, 2 litre milk, 1 kilogram of rice, a dozen eggs, a block of cheese, a can of tuna. What can you get for $2, if the National Party had their tax cuts? A $2 toilet paper—the cheapest toilet paper is $2. People, when we’re talking about real people, we’re talking about averages. Unfortunately, Pacific people always end up at the bottom, and I want to acknowledge the leadership of the Prime Minister in that as well.

I’ve ran out of time because it’s a quick call, but I want to acknowledge this side of the House—when we’re talking about people, we know what those people are eating every day because we speak with them, we talk with them. And when we’re talking about average people, we are talking about mums and dads next door to us. I end this by saying I commend this bill to the House. Malo.

SIMON WATTS (National—North Shore): This will be a lot better, I assure you. This bill is short-term measures for a long-term problem, a cost of living band-aid on what is becoming a rapidly growing wound for Kiwi households. Hard-working Kiwis are going backwards under this Labour Government. A reactive response, a tactical response, is what we’ve seen in this bill. As Kiwis go into Christmas this year, they go into Christmas with a lack of certainty and a lack of trust and confidence in a Government who doesn’t have their backs.

The ANZ quoted yesterday, “Inflation isn’t just a global problem that New Zealand is importing; it’s a domestic issue too.”—completely in contrast to what we’ve heard from the other side. I tell you what, let’s take a look at the front page of the Dominion Post today, which I’m holding up now. I think this personifies the reality and the attitude of Kiwis to this Budget. We have a finance Minister who is absolutely addicted to spending, and that page summarises how much of a flop this Budget is.

Labour’s spending addiction means this country’s books are going backwards—a bill that is part of an unprecedented $6.5 billion of new spending, of which this bill makes up $814 million. The squeezed middle in this country are paying the price for a Labour Government’s lack of fiscal discipline and mismanagement. If you’re the average wage earner in this country on $72,000, under this, what we heard yesterday, you get nothing under Labour.

Total Government borrowings are now over $200 billion. Debt is increasing at 41 percent of GDP, and the average Kiwi family is paying $150 extra a week on living costs, so $27 a week for three months is a short-term sugar hit. It is not going to be anything of substance. New Zealanders need a sustainable long-term plan. Under National, National would fight inflation. Under National’s tax plan, someone on the average income of $72,000 per annum would be better off by $860 a year. Under Labour, they get nothing. A National Government, which I am proudly part of, led by Christopher Luxon and Nicola Willis, will deliver to New Zealanders and provide meaningful long-term relief for a crippling impact of a cost of living crisis, and, more importantly, deliver an aspirational future for this country.

KIERAN McANULTY (Labour—Wairarapa): Thank you very much, Mr Speaker. There’s been a lot of emotion this morning. I think it’s because the National Party realise they have been backed into a corner here, and they have a choice. They have a choice today to actually support 2.1 million workers. That’s actually what this is today. They can heckle all they like but the reality is that in about two minutes’ time we’re going to vote on this bill, and they’re going to vote no. This bill supports 2.1 million workers and they’re going to vote no.

They’ve been talking about the average worker, and they know that the average wage in this country is less than $70,000 but they keep saying it’s higher. People can draw their own conclusions as to why they do that knowing that it’s not true. The facts are that a worker on the average wage will benefit from this package. But I wonder why they keep using average over median. Because when you’re looking at average wages, they could increase the wages of every single CEO in the country, the people they want to give tax cuts to, and the average wage will go up. But the rest of New Zealanders don’t benefit. That’s why the average wage is a poor measure.

The median wage, when you have the same number of workers above that line as you have below, is significantly lower—2.1 million workers. Between this payment and the winter energy payment, four out of five workers will be receiving assistance from this Government over winter.

Here’s something for people to reflect on: the National Party voted against the winter energy payment, and they refused to answer a question as to whether they will scrap it if they were to win the election. The National Party is about to vote no for this out of spite. They are, in their minds, letting the good be the enemy of the perfect because they are so puritan to think that only tax cuts are the answer. But tax cuts won’t help those that need it. Even Chris Luxon admits that. When he was asked what the highest earners will do if they got a tax cut, he would say “They would probably save it.” How is that targeted for those that are hurting under a cost of living issue? It’s not. It’s looking after the big end of town. That’s what they care about. They have a chance to prove me wrong, but I guarantee you right now, they won’t.

A party vote was called for on the question, That the Taxation (Cost of Living Payments) Bill be now read a third time.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

Bill read a third time.

Bills

Income Insurance Scheme (Enabling Development) Bill

First Reading

Hon CARMEL SEPULONI (Minister for ACC) on behalf of the Minister of Finance: I present to the House a legislative statement on the Income Insurance Scheme (Enabling Development) Bill.

ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon CARMEL SEPULONI: I move, That the Income Insurance Scheme (Enabling Development) Bill be now read a first time.

The Government, working alongside Business New Zealand and the New Zealand Council of Trade Unions, has consulted on an income insurance scheme to support workers who lose their jobs through no fault of their own. More than 100,000 New Zealanders lose their jobs every year, and more when we go through an economic shock like COVID-19. It’s often difficult for people to find work that matches their skills after a redundancy, and they end up taking lower-paid jobs. This wage-scarring costs our economy more than $15 billion per year. It makes it more difficult for our employers to get the skilled workers that they need, but it also causes hardship for individuals, families, and whānau, and disproportionately impacts low-income, Māori, and Pacific households.

An income insurance scheme like the one we have consulted on has the potential to deliver three key benefits to workers and employers across the labour market. First, we want to minimise the immediate financial impact of a sudden job loss for workers and their families. Second, we want to support workers back to good jobs by ensuring they have income in the period immediately after job loss. Instead of being forced to take the first job offered, we want workers to have time to find the right job for their skills or to retrain for a new, fulfilling career path. Third, we want to support the economy to adjust more rapidly to shocks and downturns.

In February this year, we asked New Zealand to give us feedback on a detailed proposal for a New Zealand income insurance scheme. It is important that we hear the views of New Zealanders about the proposed scheme, how they think a scheme should be designed, how it should be operated, and, of course, how a scheme might impact them. Consultation finished in late April, and we are currently working through the many submissions and pieces of feedback we received.

New Zealand is one of a small number of countries that does not currently provide a social insurance scheme for job loss due to redundancy or health conditions and disability. However, New Zealand has operated a successful accident compensation scheme for 50 years on a social insurance basis. ACC has proven they have expertise in delivering a successful social insurance scheme. They have been identified as an agency that could deliver a scheme if Government decides to establish one. However, ACC is currently prevented from working substantially on the development of a new scheme by the Accident Compensation Act 2001, which prohibits ACC from undertaking work that does not relate to the purposes of the accident compensation scheme.

The Income Insurance Scheme (Enabling Development) Bill will enable ACC to set up a strong implementation process for a New Zealand income insurance scheme using funding provided in Budget 2022, most of which has been set in contingency pending a decision on whether to establish a scheme. The bill does not commit the Government to proceed with or to use ACC as the delivery agency for the scheme but simply provides ACC with a function ring-fenced from its existing functions relating to the development of the scheme.

As Minister for ACC, I see the benefits for New Zealanders from an income insurance scheme delivered by ACC. It has experience unmatched in New Zealand when it comes to delivering social insurance. As the Minister for Social Development and Employment and Minister for Disability Issues, I see the benefit of an income insurance scheme in helping to address some of the discrepancies between the ACC scheme and our health and welfare systems.

The income insurance kaupapa would sit alongside and complement, not replace, the work the Government is doing in my and other Ministers’ portfolios to transform the health, disability, and welfare systems. A wide range of Government agencies and Ministers have been involved in the development of the income insurance proposal. I want to thank all of them for their involvement and assure New Zealanders that we will continue to work across portfolios to make connections between this and other system transformation kaupapa.

I also see benefits to ACC if a scheme such as this is added to their portfolio. Ensuring and supporting workers who lose a job due to a health condition or disability will broaden the current focus on injuries and accidents and allow a wider view of workers’ needs, and the economies of scale from operating two such similar schemes are significant.

I note, though, that no final decisions have yet been made to establish a scheme or about an agency to deliver it. Government expects to decide on whether to establish a social insurance scheme by July, including whether to use ACC as the delivery agency.

The bill will establish new legislation, an Income Insurance Scheme (Enabling Development) Act. The Act will either be replaced when legislation is passed, if legislation is passed, to establish an income insurance scheme, or it contains a sunset clause ensuring that it will be repealed by 31 March 2025 if the scheme does not go ahead. ACC already has the operational expertise to operate an income insurance scheme. A key provision of the bill is clause 9, which establishes a new function for ACC: “to carry out all work reasonably required for it to be in a position to bring an income insurance scheme into operation.”

The bill also includes information-sharing provisions, which are necessary for ACC to establish and test information-sharing systems for the scheme. These provisions are needed so that ACC can develop system requirements that are effective and provide appropriate protections for personal information once the scheme is up and running.

The bill recognises the Crown’s responsibility and commitment to Tiriti o Waitangi / Treaty of Waitangi principles. These must be front and centre in any work ACC does to develop a scheme. The way a social insurance scheme is developed and operationalised will have significant implications for Māori employers and workers, and their whānau, hapū, and iwi. Māori currently experience disadvantage in the Labour market, including being more likely to be made redundant than any other workers. The provisions which primarily require ACC to engage with Māori and be purposeful in developing a scheme that will work for Māori are necessary to ensure that if a scheme is developed, it will help reduce these inequities.

New Zealand workers, employers, and the wider economy have for too long lacked the support that a social insurance scheme can provide. Almost every other developed country has a long history of providing a social insurance scheme to protect workers, help employers find the workers best suited to their requirements, and support the economy during economic shocks. This Government thinks now is the time for New Zealand to join those countries and has consulted on a proposal for a scheme to do so. If a decision is made to progress such a scheme, ACC must be involved in that work from day one. The bill enables this. I commend this bill to the House.

ASSISTANT SPEAKER (Ian McKelvie): The question is that the motion be agreed to.

Hon PAUL GOLDSMITH (National): Well, we will not be agreeing to this motion, Mr Speaker. We’ll be voting against it because this bill and what it represents is a slap in the face for the squeezed middle who are getting smashed by the cost of living crisis in this country. We’ve just come out of a Budget, and everybody’s looked at this Budget, which has been the biggest-spending Budget in recent history. During the John Key - Bill English era we had new spending in each Budget of somewhere around a billion, sometimes less, and sometimes a little bit more. Grant Robertson allowed himself $6 billion, the largest amount of new spending in a Budget ever, and even that wasn’t enough. He had to reach out for all the other cookie jars available to reach into the next Budget to get an extra few billion, and into the old COVID fund, to get a bit of extra money. He was reaching around and there’s $9 billion of new spending in this Budget.

So the obvious question people ask themselves is, “Well, hang on a moment. Where’s this all going to come from?” Inevitably, if we keep on spending more and more and, unfortunately, not getting good results for it, the inevitable consequence is that we’re going to have to pay more tax down the line. This Government is sneaky when it comes to tax, and that’s why they love the inflationary environment which puts incomes up into higher tax brackets and increases the flow of income tax. And now we discover, the day after the Budget, that they’re introducing a jobs tax—another new tax. They promised that they wouldn’t bring in any new taxes, but I suppose they’ll say. “This isn’t a tax; this is a levy.” But for the New Zealanders who will have to pay it, it doesn’t matter whether it’s a levy or a tax, it’s still money coming out of their pockets and into the Government’s coffers. And so the proposal that is being considered for this jobs tax is 1.39 percent for each earner and for the employer. So if you’re on the average wage, 72,000 bucks, that’s a thousand bucks a year.

We’ve just heard with great fanfare that this Government is going to give everybody 350 bucks—well, not everybody; everybody earning less than the average wage—for three months, and then they’re going to stop it; they’re going to take it away. So they’re giving, on the one hand, and on the other hand, they’re going to sneak another thousand bucks a year out of your pocket for the new jobs tax. What a sort of crooked arrangement that is, and it’s typical of this sneaky Government. They are addicted to spending. They can’t stop spending. They always want to do more—no, they don’t want to do more; they want to announce more and they want to talk about more but they fail to deliver and New Zealanders are picking up the price. It is all making it more difficult for Kiwis who are struggling to get by and dealing with the cost of living crisis.

When we look at this bill, Mr Speaker—you might be interested in the details of this bill—this bill is a bill to prepare for another bill. I suppose that’s how you would describe it. It’s allowing the Accident Compensation Corporation to do some preparatory work for what’s called the income insurance scheme that this Government is considering introducing. You can only conclude by the fact that they’re introducing this bill that the Government is pretty keen to bring in this new jobs tax, and that is to bring in income insurance for people who are made redundant and who are sick.

Now, of course, New Zealanders are all aware that we already pay an enormous amount in tax for the benefit system that we enjoy in this country—it looks after people who are either sick or out of work, and that’s as it’s been for a long time. This proposal is to add another layer on to that—income insurance—paid for by a levy. But the problem fundamentally with this is that this Government right throughout its history in the last five years has failed to recognise that if a Government adds to the cost structure of the economy and to the costs facing businesses, it inevitably flows through to consumers—because you can’t keep adding costs to businesses without there being a result. And we’ve seen that—

Hon Members: Oh!

Hon PAUL GOLDSMITH: —and the Green Party groans, I suppose—in the housing space. If you pile a lot of costs on to landlords, surprise, surprise, they pass some of those costs on to the renters, and rents go up, and that makes it more difficult for New Zealanders to get ahead. That’s why New Zealanders are struggling so much with high rental costs—it’s partly because this Government keeps piling costs on that sector.

When we look at the employment side, we’ve got the fair pay agreements working their way through the House, which will add rigidity to the public sector. We’ve had extra sick leave, we’ve had higher minimum wages, all these wonderful things—well, the fair pay agreements are not wonderful in any way, shape, or form. They will add rigidity into our employment system at a time when we need to be flexible and agile in order to compete with the rest of the world. The Government wants to take us back to a clunky 1970s-style industrial relations framework. It’s so bizarre that they would think that’s a sensible idea. I don’t know why, but, anyway, they are.

So that adds costs to the whole system—extra public holidays, you name it; just throw it in. It’s a Father Christmas approach to Government—if you want it, you can have it. Higher minimum wages—that’s fine, but, inevitably, surprise, surprise, when you add to that cost structure that businesses face, the consumers end up paying for it, and that’s one of the reasons for rising inflation. It’s not the only reason but it’s one of the reasons for the driving up of inflation.

There’s a jobs tax on top of all the other issues, so employers will have to pay 1.4 percent in jobs tax. The employees will pay it as well. It all goes into a system which is estimated by the Treasury to cost $3.5 billion a year. Now, I don’t believe for one second that it will cost $3.5 billion a year if it is introduced. Some estimates already are suggesting $4.7 billion, but it will only be the start. At the beginning of the discussion the Minister claimed, incorrectly, I think, that Business New Zealand were all excited about this. They were quite enthusiastic early on. That enthusiasm has dimmed substantially, I understand, because what initially focused on a redundancy issue which was tied to the relaxation of other redundancy requirements so as to overall bring flexibility to the system has already expanded to sickness and other issues. And you can rest assured that once the system is set up, it will balloon and balloon and balloon, and the costs will grow and grow.

The whole welfare system, which we continue to pay for, won’t be reduced in any way, shape, or form, with a whole new system developing on top, and New Zealanders will end up suffering under the burden of it. So this bill is setting up an arrangement in order to set up a bill that we won’t support, either. It’s an announcement about an announcement. It’s a bad announcement about a bad announcement that’s coming down the line. At the end of the day, this is a backwards Budget. New Zealanders are going backwards and this is not going to help. All the talk about helping with the cost of living with a small payment to a small group for a short time will be more than wiped out by this extra jobs tax which is coming down the track.

JO LUXTON (Labour—Rangitata): Thank you, Mr Speaker. Well, once again, the House and the public of New Zealand have just heard that the National Party are going to vote against something that will support our hard-working New Zealanders, should they find themselves in a situation where they become unemployed through no fault of their own. We are hearing that more and more. The rhetoric across the House is, “We’ve got to support middle income, the squeezed middle” everything else—every measure that this Government is putting in place or suggesting is being voted down by those opposite out of pure political spite. Pure political spite.

I note that the previous speaker did talk about Kirk Hope, who actually says income insurance scheme, not a job tax. And I quote; he says: “It was designed to protect workers because economic shocks that lead to income shocks have long-term effects on those directly affected, as well as their families, communities, and local businesses where they buy their goods and services.” But, actually, it does not put this social insurance scheme into place. What this bill actually does is give the ACC the ability to begin the preparatory work should New Zealand decide that this is something that we wish to bring in to support those who lose their jobs through no fault of their own.

We heard that over 100,000 Kiwis lose their job every year. Can you imagine if that was something that was to happen to you or anyone here who may not—you know, if you weren’t an MP, you had some other form of employment, the panic that would set in when you hear that you are losing your job; particularly if you are a lower-income earner and you don’t have that ability to save for that rainy day to prepare for a shock like that. This will allow you some time to just breathe, to have a think, to reassess what you’re going to do, perhaps retrain so that you are not forced into taking the first available job that comes along, one that you may not be suited to, but one that you have to take because you have to support your family. Because people deserve to be able to work in a job that provides them with dignity, and one that they get self-satisfaction from, not something that they have to do because they simply have no choice.

Now, we heard that this idea went out to the public in February to have a think about whether it is something that they think that we should be doing. And we know that submissions have closed as of April in this year. The decision or the thinking around that ACC may well be the best organisation to facilitate this social insurance scheme, it does make sense, although no decision has been made that that would absolutely, definitely be them. But it would make sense if they were the chosen agency, because they are used to dealing with ACC payments to people around New Zealand, so they do have an idea of how that needs to work.

This piece of legislation, as I said before, simply allows ACC to begin that preparatory work, should it be something that New Zealand decides that it wishes to undertake. What it also allows is that if New Zealand decides that it is not something that they wish to do, then there will be no further legislation required in order to follow up with that decision.

We heard the Minister talk about how New Zealand is actually one of the only very few countries that does not have a social insurance scheme like this—

Hon Scott Simpson: We have an unemployment benefit.

JO LUXTON: We heard Mr Simpson just say that we have an unemployment benefit. Well, Mr Simpson, the unemployment benefit is for those that are, as you mentioned, job seekers, but when someone is working in a job that they lose through no fault of their own, they are used to a certain income. Their family relies on a certain level of income, and when that is taken away very quickly, through no fault of your own, you do need some assurance that you are going to be able to maintain that level of living that you are used to, to be able to pay the bills that your family requires you to pay in order to survive, albeit at a slightly reduced amount than your 100 percent wages that you’d be used to.

This is a really important step towards giving people that certainty and that security, should New Zealand decide that it is something that they wish to do. I commend this bill to the House.

Hon SCOTT SIMPSON (National—Coromandel): Well, thank you, Mr Speaker. We’ve just heard a socialist trying to dance on the head of a pin to justify taking away more tax money from hard-working New Zealanders to redistribute to other taxpayers in a way that only socialists can actually justify in their own heads. This has been a Budget that finds us in this urgency debate, debating a piece of legislation that is to establish the mechanism for further taxation of hard-working New Zealanders, under the most highly inflationary times that we have seen in 30 years, when the squeezed middle is being squeezed tighter than ever before and when New Zealanders are generally genuinely suffering as a result of the misguided, inappropriate, and addicted-to-spending Government that the socialist party in Government at the moment represents.

New Zealanders will have an opportunity at the next election to put that right, and they will, because this piece of mechanism to create the administrative model that would allow the Accident Compensation Corporation—can you believe it? The hint that this piece of legislation is not needed is in the name of the agency that they want to amend to allow them to do it. It’s called the “Accident Compensation Commission”. It was set up to provide support for people who have accidents, not as a mechanism for taxing people more than they already are. We’ve had this ridiculous situation of a panicked response by the Government who have realised that they have to do something about the squeezed middle. They have to do something about the cost of living crisis confronting so many New Zealanders. So what they’ve done is a sticking-plaster solution, and they’re going to give those people who earn less than $70,000, $350 to help pay for a $20 block of cheese or a one-way ticket to Australia or some other thing. That will be helpful to some people. But if you are on the average income of $70,000 and the mechanism that will trigger the taxation resulting from this piece of legislation comes into effect, you’re going to be a lot worse off to the tune of about $1,000 a year, not just once but every single year in perpetuity.

The question has to be asked: why? Well, it’s all about a socialist mind-set that says, “We know better how you should live your life and how you should have your money spent for you.”—that big Government is good and that Wellington knows best, and particularly that the Labour Party and the trades hall, their close cousins, know best how you should live your life and how you should have your money spent for you.

And make no mistake about this, this is the first step. This piece of legislation being passed under urgency, without the scrutiny of a select committee process, is the first step along the imposition of this new tax that Labour want to introduce. Well, I’ve got news for the member who has just resumed her seat: she’s going to lose that seat at the next election. There is no chance that the good people of Rangitata will re-elect a socialist of her mind-set to represent them in the Parliament of New Zealand. Because the good people of Rangitata know that their hard work and efforts don’t need to be, or should not be, squandered by a Government that is very free with the spending of other people’s money, very free with the reallocation of other people’s income to purposes and causes that they, in their weird academic world, think is somehow justified, right, and appropriate.

Well, a change is coming and it’s coming sooner than this Government thinks, and we on this side of the House oppose this sneaky Government and their jobs tax. We oppose the sneaky means that they are using under urgency to introduce the mechanism to create their sneaky jobs tax. We will oppose the sneaky jobs tax when it comes into Parliament. And, what’s more, as soon as we get an opportunity, a re-elected National-led Government will almost certainly in the first 100 days move to repeal it.

IBRAHIM OMER (Labour): What a sad day for the Opposition, opposing everything that we’re proposing for the sake of opposing. There’s no substance at all and for the five minutes Mr Simpson has been speaking, there is nothing. There isn’t one thing that New Zealanders can benefit from. Instead, an attack on Jo. Jo is actually an awesome MP and when I was in Timaru last year visiting at a local library—because she does a good job. What we have seen in the last 24 hours is just opposition for the sake of opposition. There is nothing at all—no substance in what they say or what they do. But we, on this side of the House, are working for everyone. We are working for New Zealanders.

Matt Doocey, since last night, has been asking what we’re doing for hard-working New Zealanders. This is what we’re doing for hard-working New Zealanders. The Income Insurance Scheme (Enabling Development) Bill is a bill that’s designed to help hard-working New Zealanders. More than 100,000 New Zealanders lose their job every year through no fault of their own. And then, once they lose their job, it’s difficult for them to find work that matches their skills, after redundancy, and they end up taking low-paid jobs. And then that leads to the country losing $15 billion every year. If we can deal with this, the $15 billion can be reallocated somewhere else where it’s needed. It makes it more difficult for our employers to get the skilled workers that they need. It also exposes individuals and families disproportionately to unnecessary hardships, especially in low-income households, Māori, Pasifika, Pacific Islanders, and other minorities.

This is something that the Government has consulted with Business New Zealand and the Council of Trade Unions to come up with the idea. It’s not something that the Government, behind closed doors, designed and came up with; actually, a lot of consultation and work with other entities went into this. This bill supports the Government’s priorities to accelerate our recovery from COVID-19 and it lays a foundation for the future. This is a big deal for the thousands of workers across the motu as well as our businesses.

As New Zealand moves beyond the economic and social impact of COVID-19 from the last two years, there are important lessons to be learnt from the way that we are able to support one another through an unprecedented series of challenges. We must start doing things differently and this is where it starts. This bill provides the ACC with statutory authority to work to prepare to operationalise an income insurance scheme, should we decide to establish the scheme. The bill also recognises the need to listen to workers and employers when designing the scheme, which is required by ACC to engage with representatives of workers and employers. Now it’s time for an enduring solution. This bill is a necessity so that ACC is able to do its job: for it to implement the proposed income insurance scheme and to ensure the work is done in the right way. Mr Paul Goldsmith previously said that this is yet another bill, but this bill does not establish an income insurance scheme yet, as was indicated, but we have made a decision to go ahead with this scheme or with the ACC as the delivery agency. That is what you call looking after hard-working New Zealanders.

This bill is a good bill. It leaves no one behind at all. And since the last 24 hours, the feedback that we’ve been getting from hard-working New Zealanders, from all over the country, from all corners of the country, is that this is a good Budget that leaves no one behind. Businesses are happy and that that’s really making the Opposition jealous and angry. That’s why they are reacting the way that they are reacting. I urge the Opposition to actually be the decent Opposition that New Zealanders expect them to be. New Zealanders deserve better than this. This is a good bill. I commend it to the House.

JAN LOGIE (Green): Thank you, Mr Speaker. It’s a pleasure to rise today out of my traditional black and into the pink, in a way that’s shocking my eyeballs, all for the effort to counter bullying, and I promise to do my best to be kind to everybody in the House today, which may be a challenge with some of the speeches. But I will do my absolute best to be consistent with the message of today.

So we come to the bill, which is the Income Insurance Scheme (Enabling Development) Bill, and, of course, I’m speaking on behalf of the Green Party. The Green Party hasn’t made a decision yet, similar to the Government, interestingly, in terms of whether we’re going to support the income insurance scheme. We’re waiting until we see the details of that scheme before we make a decision. In light of that, we are abstaining on this bill today, unlike the Government, because if the scheme is going to turn into something good we don’t want to oppose the work to be able to get that done. But, on the other hand, actually, our concerns as to what was consulted on are really significant, and I do want to go into a bit of that today. So we don’t actually want to vote in support of something that may be seen to be just kind of saying that we’re rolling out the red carpet for it.

So I want to start by acknowledging our absolute agreement with the Minister in terms of what we want to see in society and the problems that we see in society at the moment of the disproportional impact of sudden job loss and the profound impact that that is having on individuals and whānau and communities, and recognising that we need much better support for people to get into good jobs, as opposed to being forced into taking any job. I’ve had my own personal experience of that, of coming back from overseas and not having any money. The last time I’d worked in New Zealand, I’d been an executive director of a national organisation; I had no money and I took a job of watching a phone because I just needed some money to be able to pay the bills, and I had a job watching a phone. Now, I don’t think I got paid for it like it was an honest day’s work, watching that phone. It rang once in the six weeks that I had the job and I told the person that it rang and they answered it. I don’t think that was the best use of my skills. Some people in this House may disagree, however—

Hon Carmel Sepuloni: A lot of people would struggle to do that job.

JAN LOGIE: No—some people in this House possibly. However, this is the reality when people are facing poverty and struggling to pay the bills—is that they’re being forced into taking anything as opposed to going into our income support system, and particularly when there is a stand down for people coming overseas or from leaving jobs. And that is not serving anyone, I would argue.

We also recognise that in a time where we will have to significantly shift our economy from one that is just addicted to fossil fuels to one that is carbon neutral, there is going to be a change in our job patterns, as there will be with more automation coming into a range of industries. We need to have that structural level of support for the costs of that to be shared across the economy as opposed to being put on to, primarily, the working people of our country. So we’ve got agreement on there being some real problems. However, in the income insurance scheme as it’s been proposed at the moment the things that worry us are around the setting up of a two-tier system and a multiply complex system, in fact.

Noting that New Zealand is out of step with other countries in not having an income insurance scheme, I will note that we have had one historically in the 1930s. I think it was the United Government at the time that set up an income insurance scheme, a punitive scheme, and we do have a concern that in the system, in the proposal as it was, there was the provision for sanctions within it. So we do not want to see that replicated. I do note that that scheme was not successful. It was a dismal failure and was replaced by a Labour Government with a comprehensive social security system. I raise my hands for the vision of that, which we are yet to achieve in this country. That is the Green Party’s goal: recognising we have a responsibility as a country to be able to protect people from this massive churn in our economy that working people are bearing the cost of. But we believe that that is probably best dealt with by a really simple system of a strong social security system with free education and absolute support for people being able to retrain, and support to achieve their dreams. We’re not convinced that adding another separate system, and particularly one that’s being potentially run by ACC, is the best one.

I note the Minister is doing some good work in ACC in terms of shifting some of the culture that has raised concerns right across the country that we’ve been experiencing for a long time, where people talk about the kind of—it feels as if it’s just turned into a corporate insurance company that people are having to battle to be able to get their entitlements, and that the organisational agency’s emphasis is on limiting their liabilities as opposed to supporting people to have the best outcomes and opportunity for rehabilitation and support, as the scheme was intended.

So part of my concern with this bill today is that we are giving ACC another large job, a really significant, large job at a time when I feel like they are just starting on a really difficult and challenging programme to turn around that corporate culture, to get back to an agency that serves our communities and delivers on the Woodhouse principles. I think that is a massive risk for us as a country, to be honest. And there is the chance that when we’re seeing in this—and we have to note too that in the regulatory impact statements there’s the work around noticing that many of ACC’s systems will be the same for this work as they are at the moment, and that ACC, in terms of technology, has introduced this next-generation case management programme, that, to be honest, was supposed to be this amazing thing delivering for clients and providers and improving outcomes but has actually just resulted—in the latest findings or annual report from ACC where provider and businesses were exhibiting low trust in ACC and net trust scores for businesses and providers both declined, as did client net trust scores and Māori client net trust scores.

So we’ve seen ACC developing this new technology. They’ve been trusted to do that, and confidence in delivery and staff has gone down and staff turnover has gone up, and they are telling us that we’re not going to get the potential benefits of that realised for another 10 years. At the same time, we are going to be giving them this whole new job of exploring and potentially implementing an income insurance scheme. That, for the Greens, is quite worrying. I also note that we are expecting the updated report on that process. It was, I understand, due last week—I was contacted for media comment—and then was delayed until next week.

I also understand that next week we’ll be getting the report on the privacy breaches and practice within ACC. It feels a bit uncomfortable to be debating this today when that’s coming out next week, and when we know that this is a lot about information sharing and there have been some very serious concerns around ACC’s ability and culture in terms of protecting client information. So, again, it’s a bit worrying, but if I’ll talk more in the next speech about the specifics of the bill. Thank you.

TONI SEVERIN (ACT): Thank you, Madam Speaker. I stand on behalf of the ACT Party in opposition to this Income Insurance Scheme (Enabling Development) Bill. To me, this is an “if” bill—if we want an income insurance bill. So why are we rushing this framework through in this Government’s Budget? Oh, that’s right: they need to find a price tag of $2.2 million to be able to have the framework in place for this, if we’re going to have an income insurance scheme. Yes, it’s great that it has a sunset clause so if it isn’t in place by 31 March 2025, it’s not going to go ahead. So I’m looking forward to being in the next year’s Government, and this will definitely not be going ahead. However, I foresee this Government squeezing it through probably in the next—what?—six or 12 months, if not sooner.

This Government, with this bill, has given the lovely middle-class people, the average workers that you so much want to look after, and we want to look after—we created an alternative budget that would give people much more money in their pockets than $350 for just a short period of time. So if this bill comes through, well, there’s still an extra $350, and this had to come out of their wages, so that leaves less money in their pay packet, and every cent costs for the low and average income people.

Also, you say it’s horrible for people that can’t find a job within their skills if they’re made redundant and they have to take a lesser role. Well, I wouldn’t say that to my good friend that had to do that last year because she was made unemployed. She says, “No, I have got a university degree. I cleaned toilets and showers when I was at university. What is the difference now? It is money. I can feed my family.” Her husband was also made redundant because he worked within the tourism industry. Did they sit down and go, “Oh, woe is me, there is no job.”? They took jobs that they can do, and a lot of New Zealanders do it.

Also now, my friend has the ability to go back to school and learn as well. But they took a job. It’s not the greatest job. It doesn’t represent what their skills are. But also—and I know you’ll probably call out at me—airline pilots: yes, some of them may have had money put aside, but not all of them would have had money in their bank accounts because of family, housing; however, how many of them had to change their career last year as well because of being made unemployed?

So, really, this whole scheme is a framework for “if”, but it’s probably more likely that it will be, and all it’s going to do is just create more hassles also for ACC, which is not doing its core job properly. There are people out there that are not getting their cases heard properly, and are fighting ACC.

And then to the Privacy Act. Oh, gee, wow, how many more agencies are going to have to be linked into this bill? I believe there have to be at least four more agencies, or three more, that aren’t even talking to ACC. So when we’re sharing private information, you know, it’s a bit scary when ACC’s already had one leak in sharing information, let alone other leaks.

So as we’re saying, the cost of living is in crisis for many, many people, and if this “if” bill, which this bill is the framework for, comes through, it’s not fair on those people. It is not fair for the New Zealanders who are battling every day just to go and do their grocery shop, to pay their rent, and those who have got mortgages, with their interest rates that keep going up. Yes, it may sound great to help those that are made redundant for a period of time, but small businesses, at this stage, are still screaming out for employers. We cannot find employees. We need more people willing to take jobs as a stepping stone as well. How many of us have not had the perfect job for the first time or a second time, when we had to take what we could get so that we could live? I don’t see that being a problem; I see that as being a good Kiwi that’s working hard to feed themselves, feed their family, and get ahead, even if it’s not the job or the job of their skills.

So if this framework, as we’re saying, is going ahead, it is totally unfair on the employees in New Zealand, especially when the Nats here said it was going to cost an extra thousand dollars a year, and if this comes in while they’re still getting the $350 as an extra, that’s not going to go very far. And then you also want to put it on to the small businesses. Well, small businesses are already stretched, and this is where this comes into reality. So a small business has to pay this as well, and the small business also has to give pay increases. So that means the small business will then be raising their prices, and who do they put those prices on to? The average New Zealander. So it’s a big money roundabout and nobody is going to get ahead. This bill, as I say, is just the framework for an “if” bill, but it’s probably not going to be an “if” bill; it’s probably going to be a bill that we will be sitting here debating in probably less than six months.

It’s just—you know, why now? And also, why are we standing here on a Friday morning rushing all these bills through? I’m pretty certain that this could have been sneaked out a little bit sooner so that we could have at least had a little bit more time to take it to select committee to nut this framework out, and just make sure especially around the data sharing and how private that’s really going to be.

So I stand here in opposition to this—where is the bill name; here it is—Income Insurance Scheme (Enabling Development) Bill. As I said, it is the beginning of the “if” bill—if we have an income insurance scheme, which is going to cost $2.2 million just to get it going. So ACT opposes this bill.

ANGELA ROBERTS (Labour): Mōrena. Fabulous pink in the House today. I just want to start by acknowledging all of the teachers and schools who are doing the mahi to support this kaupapa—speak up, stand up to stop bullying; building inclusive schools. So thank you to everyone across the House who is acknowledging that kaupapa today.

It is a great pleasure to stand and take a call on this bill. This is about the next steps in this process. So far, it’s been a really collaborative process. We have had business, we have had workers, and we have had Government at the table, grappling with this wicked problem about securing our future. So it is absolutely appropriate that this bill is part of this Budget debate.

It is about the next steps in building a coherent plan—it isn’t the only part, but a coherent plan as we are working towards building a just transition for our economy. It’s not a knee-jerk reaction; it’s not a sticking plaster. It’s something that some of us have been working on for a long time.

I just need to acknowledge my dear comrade Glen Bennett. We have been involved in the just transition conversation in Taranaki for years. I think it’s really great to see this collaborative approach now coming at a system level. We have got this wonderful process, and, I guess, when we ask why—we’ve been asked why; good question. Kirk Hope, actually, from Business New Zealand, is really clear about why. He talks about when we have job losses, they don’t just harm individuals and their families, but they affect businesses, communities, and the economy.

When we were going about doing the work in Taranaki around just transition, something that was really clear, something that we committed to, was about support and empowerment for workers during economic transition. This is business, this is workers, and this is our local communities who are having to stare down climate change and the impact it is having on our economy right in the face. As our Taranaki economy changes, people who may have worked in one area for their whole life may find their skill set is no longer needed. We need a system where employers, unions, and Government support workers to develop new skills. So we’ve had this wonderful, sophisticated conversation. We’re not just talking about oil and gas, as some people constantly do; we talk about energy. We’re not just talking about our fabulous dairy sector, but we’re talking about food and fibre. So this is a really important part of building towards a just transition for workers, for businesses, and for our economy.

It’s really interesting—you know, we hear the word “socialist” thrown around as if it’s some sort of insult. But I’d like to think that actually, when I reflect on the just transition work that we have done in Taranaki, there’s maybe a bit more of a sophisticated way of looking at it. Our community decided on a shared responsibility, on a collaborative approach to making sure that we carry our entire economy to a place that is secure and prosperous for everybody, all right? So yeah, a little bit of hope and a little bit of joy in our day as we acknowledge the significant work that has gone into this Budget to help make our future a great one.

So, finally, I’d just like to reflect, this bill is enabling. It isn’t about “if”; this is about being really thoughtful and collaborative about building something that is futureproofed. And it is something that the rest of the OECD has pretty much sorted quite a while ago. The fact is that it is enabling and it continues to enable by requiring ACC to engage with representatives, workers, and employers. So don’t panic—don’t panic. The socialist approach, which is actually about collaboration and finding solutions together so we can secure a future for our children that is one that is fabulous is something I am really, really happy to support, and so I recommend this bill to the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call on Penny Simmonds for five minutes.

PENNY SIMMONDS (National—Invercargill): Has there ever been a worse time for a Government to try and cook up another new tax and disguise it as a levy to punish every worker and every business in this country? Has there ever been a worse time when people are struggling under a cost of living crisis, when people are struggling with increased interest rates, hurting their mortgages, putting their rent up? Has there ever been a worse time when inflation is running at a 30-year high and businesses are struggling to recover from COVID? And has there ever been a worse time when a Government is addicted to spending not only today’s money but tomorrow’s to cook up this way in which to punish every worker and every business in this country?

If there was anyone left out in New Zealand that had any doubt about how out of touch this Government is, the Minister would have removed that doubt in her opening speech when she said “Now is the time.”—“Now is the time.”, which were the exact words from her speech. Now is the time to cook up another way to take 1.39 percent off every worker and every business! Now is not the time. The National Party knows that. The National Party opposes this bill.

RACHEL BOYACK (Labour—Nelson): Tēnā koe, Madam Speaker. Kōrero mai, kōrero atu, mauri tū, mauri ora—stand up and speak out against bullying. Thank you, Madam Speaker. It’s a pleasure to take a call on the Income Insurance Scheme (Enabling Development) Bill. Before I begin, I just want to congratulate finance Minister Grant Robertson on an outstanding Budget, and I’m proud to have worked alongside our health Minister, Andrew Little, to secure funding for Nelson’s new hospital.

I just want to be very clear about what this bill does. This bill is enabling legislation. We are still to go through the process of determining if we introduce an income insurance scheme and what it would look like. The group who worked on this bill recommended that ACC should be the agency to have oversight of that, and what this bill does is it enables ACC to do that work.

Like many members of the Labour Government, I’m proud to have worked as a union organiser prior to coming into Parliament—[Interruption] I knew the other side would scoff at that—fascinating. But, I guess one, of the things that union organisers do—and this is really serious—is that when workers lose their jobs, we’re the ones sitting in the room next to them, and not just those who lose their jobs having been made redundant but people who lose their jobs due to things like cancer. The other side of the House is scoffing at this, but, actually, I’ve sat there, alongside some of my colleagues here, next to those people who have lost their jobs. It’s serious. It’s devastating, and many of them are in jobs where they cannot afford—like all of us, who are privileged—to have a product like an income insurance scheme.

So if we end up with a scheme of this nature, which is very common across the world, by the way—this is not something we’ve just cooked up for New Zealand; it’s very common across OECD countries—it will actually allow working-class people to have access to a scheme that will support them if they lose their jobs.

One of the other points—I just want to acknowledge some of the comments made by the ACT Party member Toni Severin. Absolutely, following COVID-19, people have lost their jobs. One of the things this bill would do, by providing enabling legislation, is allow the Government to take a serious look at an enduring scheme. The previous National Government did some really good work following the Kaikōura earthquake, in particular, to support businesses and people to stay in their work. We did some work, obviously, through the wage subsidy following COVID-19. These economic shocks can come along at any point. We can never predict when they will occur, especially in a country like ours, with so many earthquake zones—again, why we need a new hospital in Nelson. What this bill would do is give us the enabling legislation so we can have an enduring scheme so that when we face those shocks, people have that certainty of some income for a small period of time—as my colleague Jo Luxton pointed out, so they can actually have that space to take a rain check and look at what might be needed.

It’s disappointing to hear that the other side of the House won’t be supporting this bill. It is enabling legislation. I’m incredibly proud that the Labour Government is continuing to do work alongside workers, alongside employers, to take a really serious look at how this type of legislation could help our people. So, on that note, I commend the bill to the House.

GINNY ANDERSEN (Labour—Hutt South): Tēnā koe, Madam Speaker. Look, it’s really great to be able to take a call on this bill because it’s important that we note that over 100,000 New Zealanders every year lose their jobs. We need to make sure that they’re in a position to be looked after and that we maintain the continuity in those people and in their development and making sure things like mortgages can keep being paid, that school fees or those regular costs in a family can continue to happen. When you take someone out of the workforce suddenly, that can have a whole lot of knock-on effects that affect the wellbeing of their family, their wider family, and their community.

So we’ve been asked by those members opposite, “This is the worst possible time to introduce this measure.” Well, I argue different. I think it’s exactly the right time to be preparing ourselves. In the current volatile situation we find ourselves in the global economic climate, we have inflation up to 8 and 9 percent in places like the UK and the US and Canada and Australia. New Zealand is behind all of those countries in our inflation rates, but we are not immune to those pressures and we see those happening every day, putting pressure on the cost of living for families. So having a framework in place that protects our families and enables our communities to have a degree of reassurance is a good place for New Zealand to be in.

It’s often difficult for people to find work that matches their skills after redundancy, and they end up taking on lower-paid jobs. This wage scarring has a big impact on our economy, has the potential of more than $15 billion per year, and it makes it far more difficult to employers because they need to get those skilled workers in place. But it also causes hardship for those individuals, families, and whānau, and it also disproportionately affects those people from Pasifika and Māori backgrounds and communities as well. Loss of work is more likely to affect low-income workers and we know this for a fact. Those workers are more likely to lose more than one job in their lifetime. Low-income households are far less likely to have significant savings to back them up when times get tough and they’re much worse positioned to manage difficult economic times compared to higher-income households.

So having this in place is important. What this legislation does is it enables ACC to undertake the work that they need to do to engage with those key partners and to work through the framework that will take place in order to establish an income insurance scheme. The work is ancillary and consistent with its role in delivering accident compensation to New Zealand. This means that at the moment, it is difficult for ACC to take the kind of role and preparation in this process that it needs to do to be a delivery agency. It’s only right and proper that this framework is put in place first.

This bill provides ACC with the statutory authority to do work to prepare to operationalise an income insurance scheme which we decide to establish at some stage in the future. It also recognises the Crown’s responsibility and commitment to the Treaty of Waitangi and its principles, by requiring ACC to engage with Māori and to be purposeful in developing a scheme that will contribute to developing Māori outcomes and labour market outcomes in New Zealand. In addition to this, it also recognises the need to listen to workers and employers when designing the scheme, by requiring ACC to engage with representatives of workers and employers. It also puts in place protections relating to ACC’s collection and use of personal information to ensure the scheme ACC designs properly balances privacy and providing timely and accurate service to clients.

It is important to note that because a decision to proceed with the proposed income insurance scheme or ACC as a delivery agency is yet to be made, the bill contains provisions to repeal itself on 31 March, 2025, and this means that the legislation will not continue in force if it is taken not to go ahead with it.

To point out one last thing—why we support the bill. It is important to say that what it does is it sets ourselves up to be in a strong position in the future to make sure those wage shocks that we heard—whether it be a global financial crisis, whether it be inflation, or whether it be a natural disaster—those shocks to our workforce, employers, and employees have some devastating effects. On this side of the House, we care about what that does to our communities.

It’s only right and proper that we put in place a framework to mitigate those challenges we find. I commend it to the House.

SIMON WATTS (National—North Shore): Well, listening to that contribution from that prior member Ginny Andersen talking about future economic shocks, can she not understand and see what’s in front of all Kiwis today? We’re faced with a cost of living crisis today, not in the future, and this Government are asleep at the wheel in terms of putting in place solutions that are going to deal with it. This income insurance scheme, which in effect is a job tax, is absolutely a solution looking for a problem—it is not required.

Madam Speaker, I’ll take you through that quite simply, because Kiwis sitting at home watching this will go, “I haven’t heard too much about this job tax.” But I tell you what, when they work out the detail and what the impact is on their back pocket—because that’s where the money’s coming from—they’re going to send a big, bad “no” to this Government that they oppose it. Because the impact, fiscally, on the back pockets of hard-working Kiwis is a thousand dollars a year for someone on 72 grand—that is the average income. A thousand dollars—$20 a week of taxes coming to every Kiwi, or 2,750,000 workers in this country for an insurance scheme, or a tax, that benefits 50,000 people at best. That is the fact of the matter—2 percent of Kiwis if they are lucky. Because, of course, people have private medical insurance, potentially; their employers actually do the right thing and look after them when they get sick and unwell—they’ve got other medical options around this. This is a scheme that’ll benefit less than 2 percent of Kiwis, but tax nearly 3 million of them.

It is completely outrageous, and they are failing to see the issues right in front of them today: a cost of living crisis. And that shows that this Government do not have any perspective in terms of what are the real-world impacts on Kiwis at home right now. They are creating a model of State reliance. A model of reliance by individuals in this country on the state. They are not talking about aspiration. They are not looking at what is the investment we need to require in order to support this element of the workforce. They’re not looking at working and partnering with the private sector to bring in place solutions that may deal with this problem.

They’re painting a picture which, fiscally, will cost this country—and it was in their reports and in the Budget yesterday—$3.5 billion by 2026 of levies collected off hard-working Kiwis. That’s $3.5 billion, and that could increase up to over $4 billion. That is outrageous, and I hope some of the people watching and those looking will actually go, “Well hold on a second, that doesn’t sound smart. That doesn’t sound sensible. Why are they trying to deal with something that doesn’t even exist today?”

Maybe they should deal with the problems that Kiwis are facing when they’re paying an extra 150 bucks a week today for their living costs. Maybe that might be a good idea. Maybe we could give inflation-adjusted tax relief to all Kiwis. Give them the benefit today because they need the benefit today. They do not need a scheme that will impact a small number of Kiwis that will not bring benefits to the nearly 3 million hard-working Kiwis in this country. That is why National oppose this bill.

Dr GAURAV SHARMA (Labour—Hamilton West): Tēnā koe, Madam Speaker. Tēnā koe e te Whare. I want to start first of all by thanking Minister Carmel Sepuloni for introducing this bill into the House. It is one of the many good bills that she’s presented to the House, another feather in the cap. And while I’m mentioning the Minister, I would also like to say what great work she is doing in terms of bringing our Ministry for Disabled People, which is coming through on 1 July. So thank you for all the work in terms of protecting vulnerable people in this country, Minister.

In my previous life as a doctor, two types of patients that I saw often: one was related to ACC cases, where people had an accident and needed time off from work. It caused a lot of stress—mental stress, obviously physical stress as well. But the other type of people were those who had lost their jobs for whatever reason. And what I would say is the stress suffered by people who have lost their jobs isn’t much different from stress suffered by people who have had an accident—a physical injury or a mental injury—because it does add to the stress in your life, and the last thing you need at that point is to be worrying about, as my colleague here said, paying your mortgage and paying your bills.

So what this bill does, really, is give a way for these people to have a bit of time to figure out how they can get another job and to give a bit of security, but also to give a bit of mental relief in not having to worry about what’s happening when they’ve had such a big, significant event at that point. I know ACC has had its fair share of criticism over the years, but it is a beautiful system. Again, you know, there is no sort of, I guess, liability, but people are supported through it. The aim, in ACC’s term, is to support people through a terrible event, whether it’s a rugby injury they might have had or something related to sexual trauma. But people are supported, and that’s what this country’s all about.

In a similar fashion, this specific insurance scheme is about supporting people who’ve lost their job for a reason and will potentially go through stress, will go through trauma. It’s about supporting those people. So it’s a great bill and it helps people—100,000 New Zealanders who are losing their jobs every year for whatever reason; compare that to 1.9 million claims which are made through ACC. It’s a small number of people but not an insignificant number of people, and, as a speaker from the National Party, Simon Watts, said, “Oh, you know, 50,000 or 100,000 people, who cares?” Well, I would just like to remind Simon Watts, there’s about 50,000 people who live in his electorate, and if he told them that 50,000 people don’t really matter, then good luck with the next election.

So it is important that this insurance scheme comes through because there are a lot of people who are in that situation and who can end up losing their job, including some people on the other side, as we’ve seen in the last election. So it probably would help their insurance scheme as well.

It’s just important to remind ourselves that this specific bill is not just about that insurance scheme; this is just about providing a system for ACC to be able to provide that service and that scheme. And, as we move forward, I’m sure the Minister will present the actual logistics of how that scheme would look like in a separate bill.

But I would like to commend this bill to the House, and, once again, would like to thank the Minister for bringing this incredibly supportive bill for New Zealanders. Thank you.

A party vote was called for on the question, That the Income Insurance Scheme (Enabling Development) Bill be now read a first time.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

Bill read a first time.

Second Reading

Hon CARMEL SEPULONI (Minister for ACC) on behalf of the Minister of Finance: I move, That the Income Insurance Scheme (Enabling Development) Bill be now read a second time.

Every year it is estimated that more than 100,000 Kiwis lose their job through no fault of their own. The COVID-19 outbreak is a stark example that widespread job losses have occurred all too frequently over the last 40 years. As we rebuild the economy, we have an opportunity to put better protections for Kiwi workers in place. For this reason, we have consulted publicly on a proposal for an income insurance scheme that would be administered by ACC. The new scheme would be delivered alongside but separate to the accident compensation scheme. However, it is important to note that the Government has not yet decided whether to establish a scheme or whether ACC should deliver it. We are currently considering submissions and feedback we received, given the closing date for submissions was 26 April 2022.

ACC is currently only able to exercise functions that relate to the purposes of the accident compensation scheme. This means that at the moment it is difficult for ACC to participate significantly in any pre-implementation work on a scheme. It can only do so where it is consistent with what is in the legislation. The bill empowers ACC to support any future work on a scheme and ensures Government has access to the wealth of information and expertise ACC has in delivering social insurance. The authority provided by the bill is time limited and would be replaced by subsequent legislation to establish and govern a scheme.

The bill will be repealed in 2025 in the absence of subsequent legislation. The enabling legislation includes a Te Tiriti provision recognising that decisions made when establishing and operationalising such a scheme will impact on how Māori and others experience the scheme. We want a scheme that Māori can access as easily as others, that responds to their needs as individuals and also as members of whānau, hapū, and iwi. Most of all, we want a scheme that delivers outcomes for Māori and does not perpetuate current inequities that Māori experience in the Labour Party.

I want to acknowledge the support that we’ve had in the House in the first reading, particularly the Māori Party, and we’ve also been supported by iwi leaders with regards to continuing to explore and further development on this particular scheme. And there is great interest by iwi leaders with regards to how this could support Māori whānau. The bill also includes a provision requiring ACC to engage with worker and employer representatives. It goes without saying that workers’ and employers’ views must be reflected in the development of a social insurance scheme such as this. But the provision also recognises the value of the tripartite process that was critical to developing the proposal for consultation and ensures the continuation of the tripartite process where representatives of workers, employers, and Government work together.

I hear the other side of the House mocking the reference to a tripartite arrangement here. We wouldn’t have gone ahead if we didn’t have the support of both Business New Zealand and the Council of Trade Unions with regards to developing this proposal. They clearly see the benefits of such a scheme for workers and it’s very, very disappointing that the National Party can’t also see the benefits potentially to workers in the way in which Business New Zealand and the Council of Trade Unions clearly do.

Also, I will say, listening to some of the first reading speeches, it’s been very disappointing to hear some of the Opposition speeches. They really do highlight how out of touch the Opposition is with New Zealanders. They refer to hard-working Kiwis and then make statements inferring that most New Zealanders have private medical insurance. The reality is that most New Zealanders do not have private medical insurance. And so the comments that Simon Watts made about that in reference to that clearly shows how out of touch he and his party really are with the hard-working New Zealanders that they refer to, the middle New Zealanders that they refer to. Very disappointing, but a revelation, hopefully, for the many people that will be watching this debate across the country, I’m sure, right now.

The bill includes information-sharing provisions that authorise ACC to use the information it receives from Government agencies and other information held by ACC for the purpose of setting up the systems and processes for the establishment of the scheme. ACC already has authorisation to receive and use the information for administering the accident compensation scheme. The provisions in the bill will authorise requests and use of information for the new purpose of establishing the operational requirements of an income insurance scheme. I commend this bill to the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): The question is that the motion be agreed to.

Hon PAUL GOLDSMITH (National): Well, thank you, Madam Speaker. It is my pleasure to speak on the Income Insurance Scheme (Enabling Development) Bill introduced by this Government. So, for those tuning in, we’re in the Budget debate—no, not the Budget debate; the debate following the Budget. The Budget was dropped yesterday by Grant Robertson, and there were all sorts of talk and announcements about how he was going to spend this and he was going to spend that, and how wonderful he is. He didn’t really emphasise during his Budget speech that we were also planning to introduce a new tax—a new jobs tax. That didn’t feature particularly in his speech.

But the day after the Budget, here we are in the House, talking about legislation paving the way—a bill in order to prepare for another bill, which is pointing towards a new tax that New Zealanders will have to pay. And in politics, like in many elements of life, timing is everything. When you think about this Budget, well, the plan at the start of the year when Minister Robertson outlined his Budget Policy Statement was for the Budget to focus on climate change and the restructuring of the health system. That was the plan. And, then, a little bit before the Budget, they woke up to the fact that “Hang on a moment. Maybe we might have miscued here. Maybe it’s possible that the issue that New Zealanders are actually interested in—more than anything right now—is the cost of living crisis and the fact that New Zealand households are struggling to go forwards.”

In fact, they’re going backwards, because the cost of everything is up faster than their wages. People are struggling. They’re going backwards. They’re being squeezed by that cost of living crisis. So they thought, “Heck. We’re a bit off whack here. We’ve got to come up with something. We’ve got to cook up something.” But he’d already spent the $6 billion, the record amount of money available for new spending. He’d blown that all, and so he had to reach for all the other cookie jars and find some more money in order to pay for the cost of living, additional little payments for a short period of time in order to look like he was responding to the cost of living crisis. Then, the next day, we discover that if you’re lucky enough to be in receipt of this $350 for three months from this Government, the bad news is if you’re on the average wage, you’re also going to be losing $1,000 a year to pay for this new income insurance scheme. So what he didn’t emphasise was “We’ll give you 350 bucks if you’re lucky, for a short time, a one-off; but by the way, for the rest of your life, you’ll be paying an extra 1,000 bucks a year. Thank you very much, ladies and gentlemen.” And not surprisingly, people are waking up and thinking, “Well, that’s a bad deal. That sucks. We’re going backwards.”

That’s the theme of this Government and this Budget—the “backwards Budget”—because every household is going backwards. So the timing is off when it comes to this question of the job tax, which this legislation is paving the way for. It takes more money out of the pockets of New Zealanders at a time when they’re facing more cost of living pressures than ever, when the price of cheese is going up and when the price of petrol is going up. Diesel is going crazy. Everywhere you look, the prices are going up. Rents are going up through the roof, in no small measure, because of the actions of this Government adding cost to the structure. So prices are going up, and at that moment, they think it’s a good time to bring in a new tax that every worker has to pay and every employer has to pay.

Secondly, it’s a terrible time to be bringing in more costs that small businesses have to pay, because as well as employers having to pay this new levy, which is being proposed at 1.4 percent, employers also have to pay an additional 1.4 percent of the payroll as well. And that comes on top of all the additional costs that this Government has piled on to the struggling backs and shoulders of the small-business operators in New Zealand—as well as extending huge increases in the minimum wage, extra sick leave, extra entitlements, and extra public holidays. These all sound very nice in theory, but when you add them all up, they add to the cost structure of New Zealand business, which inevitably—and they don’t like to admit this; they hate to admit this. Michael Wood gets very angry when he has to engage in this discussion, but the idea that if you pile additional costs onto businesses, some of those additional costs may flow through to the prices that people have to pay for things in the supermarket and everywhere else. That sort of idea, they hate to admit it, but it’s true. And that’s what we’re seeing in this country, and it’s one of the things that is driving the increases in costs—not the only thing, but it’s one of the things that is driving the increases of cost.

So, right here, right now, when all of those small businesses are struggling financially—they’re struggling in a whole lot of other ways: they’re struggling from a law and order front; they’re struggling because many retail businesses are waking up, turning up, and finding that their windows have been smashed in because there’s been a breakdown of law and order in this country. But I won’t get too far off topic on that. They’re struggling because of the additional costs being imposed, and this Government says, “Right now, it’s a good time to add another one, and we’re going to bring in an income insurance scheme, which is going to cost about $3.5 billion according to Treasury.” I don’t believe that for a moment. It would be much more than that. This is just the start. These things have what’s called mission creep. You come in with a suggestion around an insurance scheme for redundancy—by the way, there’s a private-sector solution for that now; people can go out and buy that insurance, and a lot of New Zealanders do. So the Government doesn’t think that that’s a good idea. Everything has to be run by the Government, of course. “It’s only good if it’s run from Wellington” is their approach. By the way, people can do this; there’s nothing stopping anybody buying insurance for income insurance or sickness insurance, and a lot of New Zealanders do. So they’re going to bring that in, and then already it’s expanded from redundancy insurance to sickness insurance, and it’ll expand further, no doubt, if they were given a chance. And the cost won’t be $3.5 billion a year; it’ll be $4.7 billion, or, as somebody’s already predicting, it will be more than that.

This is just another slice of costs to the structure that New Zealanders have to deal with. You might say, “Well, that might be justified if there was a reduction in costs elsewhere in the welfare system or anything like that.” But you can rest assured there won’t be if this Government was in charge, because their solution to every problem is for Grant Robertson to just write another cheque and throw some money out with no focus on what we’re actually getting for the money—because he’s addicted to spending. And we all know that. We all know that they’re addicted to making announcements about spending without thinking through how it’s going work in practice. That’s why this bill is very poorly timed; it’s preparing the way for another jobs tax—something that this Government promised not to do: to bring in more taxes. And here we go.

We’re finding that when you see a Budget that’s coming down the track with incredible amounts of new spending, all New Zealanders know that inevitably, somewhere down the line, the bill is going to be sent. And the bill is going to be sent in higher taxes. This Government is sneaky about how it does it. It sneaks in the higher taxes through inflation. It uses inflation to push more incomes into higher tax brackets. It loves that, and that’s why there’s so much more income tax revenue. Now, it’s sneaking in another tax—this income insurance scheme levy—taking $1,000 a year out of the pockets of New Zealanders on the average wage. And they’ll be saying to themselves, “Oh, I thought I was going to be 350 bucks better off.” In fact, you won’t be if you’re on the average wage; you won’t get a cent, but if you’re below $70,000, you might get 350 bucks but, “Oompha, I’m going to lose 1,000 bucks at the same time. It’s not a one-off 1,000 bucks; it’s year in, year out I’m going backwards.” And this is part of the “backwards” Budget for 2022, and that’s why we oppose it.

JO LUXTON (Labour—Rangitata): Thank you, Madam Speaker. Well, this piece of legislation itself, the Income Insurance Scheme (Enabling Development) Bill, is a very short and quite simple and straightforward bill. It doesn’t put in place a social income insurance scheme, or it doesn’t indicate that the Government has already made a decision about putting in place a social insurance scheme. What it does do is it ensures that we’re in a position to set up a social insurance scheme, if that decision is made, by allowing ACC to engage in the work to develop the scheme.

What we know is that over 100,000 people a year in New Zealand lose their job through no fault of their own. A scheme such as this, if it was to come into place, would provide some assurance, some room to breathe, some time to think, for people should they lose their job and find themselves in that situation.

Simon Watts talked about how it would only be relatively used by up to 50,000 people per annum. That is the nature of insurance. We pay house insurance, we pay contents insurance. We may never use it, but it is there should we need it, should we find ourselves in the position.

So this bill—simple, short, quite straightforward—simply allows us to begin the process of putting into place the preparatory work required should this social insurance scheme come into place. Thank you, Madam Speaker.

Hon SCOTT SIMPSON (National—Coromandel): Thank you very much, Madam Speaker. I rise to stand in opposition to the second reading of the Income Insurance Scheme (Enabling Development) Bill being passed—rammed—through this Parliament under urgency by a Government using its absolute majority. And not even with the support of their loyal, trustworthy supporters the Greens, who are for some reason deciding to abstain on this legislation for a reason that is not clear to me, but I would have thought that the best thing to do when you come to Parliament is take a view, take a position. If the Greens are unsure, then they should certainly oppose.

The irony, the great irony of this piece of legislation is that the first probable recipients of it, once it’s eventually passed and the framework that this legislation seeks to put in place is adopted, and then the actual legislation to create the income insurance scheme is put into effect—the irony is that the first recipients are likely to be members of the Labour Party sitting opposite who have lost their jobs at the next election. Those are the people who are likely to be the first recipients, and they should actually declare an interest; they should declare a conflict of interest in this piece of legislation because they are likely to be the first recipients of it.

But this piece of legislation is—as my colleague, the Hon Paul Goldsmith has said—a sneaky little piece of legislation snuck in under the guise of the Budget that was released yesterday. Very little said about this proposal to increase the taxes of hard-working New Zealanders who are already being squeezed in every which way by the economic inefficiency and overspending and over-borrowing of the Government as it leads to the highest rate of inflation in 30 years. So we are opposed to this piece of legislation because we are opposed to the principle that it seeks to build upon.

Now, normally at this point in a debate in the Parliament we would be hearing back from a select committee. There would have been submissions from interested parties and stakeholders. We would have heard from officials and had a departmental report. But no, because this piece of legislation is being pushed through under urgency—and one would have to wonder why, other than to avoid the scrutiny that would occur at a select committee.

Now, this is a Government that came into power, on the back of Winston Peters’ decision, saying that they would be the most open and transparent Government in the history of New Zealand. And here we are on a Friday morning in the Parliament passing—under urgency—a sneaky little piece of legislation without scrutiny, without transparency, without the benefit of any kind of due diligence from members of the public, the voters, or the people who are likely to be impacted for ever and ever, if this Government was allowed to do it. No need to panic, listeners who might be listening to this at home, because a National Government will put this right at the first possible opportunity. So don’t worry too much. If this gets passed eventually, it’s only going to be for a short duration. And then, sensibleness, normality, and some sensible approach to the country’s economy and to taxation and to reward for effort will be reinstituted in this Parliament. Help is on the way.

ANGELA ROBERTS (Labour): Kia ora, Madam Speaker. It is a pleasure to take another call about this. I think it’s—maybe it’s the teacher in me, but it’s great to take an opportunity to correct a bit of misunderstanding. It sounds like somebody hasn’t done their homework. Not only is it obvious that they haven’t read the bill but there are people who, maybe, might not have even read the title of the bill, Income Insurance Scheme (Enabling Development) Bill.

There’s nothing sneaky about this. Obviously, there are people on the other side of the House who are so out of touch with business that they are unaware that this conversation has been going on for years. Like I say, when we’ve heard earlier today about the fantastic responses to things like the earthquakes and to COVID, what this bill does—and it is timely—is it helps us to prepare, not just to react but to prepare for shocks, personal shocks, like illness that has been referred to earlier, regional shocks, sectoral shocks, and global shocks. This helps us to prepare.

When I say “us”, I mean workers and I mean businesses. So out of touch on the other side of the House, they have no understanding how important it is that we collectively support businesses in such situations. We are really, really clear that it is important, especially in a tight job market, that we can have space to ensure that we have skills retained, rehabilitated, or progress education. Because we need to make sure that our human resource in our economy is well looked after, that we can ensure productive capacity is where it should be. This is progressive. It is thoughtful. This bill is enabling the development of this collaboratively. I commend this bill to the House.

JAN LOGIE (Green): Thank you, Madam Speaker. And I know I shouldn’t bring you into the debate, but I do just want to commend you on your exceptional pink outfit. It really lifts the bar, I think, for all of us. Just to take another call on behalf of the Green Party on the Income Insurance Scheme (Enabling Development) Bill 2022. I do recognise that there’s a bit of a difference in debate and the Government members are bringing it back to actually some of the content of the bill. But I do think it is fair to debate a bit wider around the income insurance scheme, even though the Government hasn’t made a commitment to going ahead with it yet, just because the Minister’s first reading speech was talking about the problems it was intending to solve and the development of it being through unions and Government and business, and that we do recognise, as a country, that we have a problem in terms of the impact of sudden job loss, whether that be through redundancy or sickness or disability, and the lack of structural support and active labour market policies in terms of supporting people to retrain.

I do need to remind this House, though, that this was actually a topic that was actively considered by the Welfare Expert Advisory Group (WEAG), who spent a really considerable amount of time looking at our whole social security system, and a large chunk of their report was around active labour market policies and how, despite the rhetoric of the National Party saying, you know, we need to support people into work and workers, the pathway out of poverty, ignoring all the barriers to work and, actually, the fact that caring for children and those who are unable or need support is actually good, important work, possibly the most important work—despite all of that, their rhetoric that, actually, the previous welfare system basically just left people with zero support in terms of finding good work, being able to work out what the opportunities were, and being able to support them into training or the pathways to get those good jobs. It was all about any job or nothing, and that served a low wage economy. It kept our queues for jobs long, but people were demoralised and their pay packets were skimpy.

So the WEAG considered all of these things and they very clearly said that we needed to look at overseas models and that there were things that we could learn from countries that operate a social insurance model of unemployment support with strong and entrenched social partnership, employment relations. But the clincher is, after all of that consideration, looking at all that information, they said, “Although we do not recommend changing our social welfare system to a social insurance model, New Zealand can learn much from the [active labour market component] of such models.” So the Greens still retain a concern that this is moving ahead at such a pace while, as at this point, not one of the Welfare Expert Advisory Group’s recommendations has been implemented in full, and that has been years that we’ve had those recommendations on the table.

They are about addressing the fundamental pain in our society of people not having enough to be able to sustain themselves, and the fact that we have horrific levels of preventable diseases and illness in this country because of poverty and precariousness. It undermines productivity, it undermines opportunity, and it undermines wellbeing. While this policy, which we are moving ahead at speed, will address some of the aspects of that, it also creates more complexity and embeds potentially more inequity. One of the aspects that we’re concerned about in particular—and we notice wage scarring is one of the things that this policy is meant to be addressing. But for women, at least, the major cause of wage scarring—and for people who don’t know that term, what it is is when you leave a job on a particular income and then are out of the workforce and you come back in at a lower rate, or without the same trajectory that you might have had in terms of pay. So there’s been a scarring from that disrupted time outside of the paid workforce. But the major reason women experience wage scarring is through our role doing caring work, that women are still the primary people doing that work. When we compare what’s in the current proposal around the income insurance scheme, it will provide up to $2,517 a week for up to 28 weeks for people receiving the income insurance if they leave for reason of a redundancy or sickness or disability. We compare that to the paid parental leave scheme, which has a cap on it of $621. That’s like a fourth of what this scheme will provide and, yet, we know that that is at least a significant part of the major cause of scarring for women’s wages. So we do have a concern around that inequity.

And there’s nothing for people—well, there’s our welfare system—who are doing the caring work for our elderly. We know that more and more people are ageing in place in their homes and that that often requires support from family members, usually from women, and that saves us collectively as a country a huge amount of money. But when we’re forcing people out of paid work to be doing that caring and putting them on poverty wages and a benefit, then, actually, they are bearing a disproportionate burden of that cost, and we don’t believe, in the Greens, that that serves our community. So we’re hoping some of these issues are going to be resolved out of the consultation and that we get a two-track forward process around welfare and any income insurance, or a decision that actually our welfare system is the best way to do this, and that I’m sure we would be very on board with.

So just to touch on the specifics of this bill, there’s a couple of things I wanted to point to: one which has a recognition clause in it of Te Tiriti o Waitangi. That has been co-written, or developed, between the iwi leaders group and ACC. I’ve got to say, I think that is a fantastic initiative. It’s kind of a little bit—I don’t mean to be churlish about this, but it just sits a bit uncomfortably, the fact that we’ve got ACC legislation in front of select committee at the moment around birth injuries and other matters, and submitters have been calling for a strong Te Tiriti amendment to go into that bill, and we’ve been told it’s out of scope from the legislation. It’s fantastic to see it coming in in terms of this part of the design, and the recognition of the importance of it. I just wish we could get it across all of ACC and our other Government agencies, because that is the way forward. That is the way to ensure that any policy actually delivers for everybody as opposed to what we’ve been doing for ever in this country, which is the Government designing policies based for the mythical average person, who’s almost always white and Pākehā, and, actually, it reaches them and nobody else and definitely not Māori.

So it’s fantastic to see that partnership in there. I was a little bit concerned to read in the explanatory note, though—and I’m sure this was not signed off by the iwi leaders group, where the framing of it recognising the Crown’s commitment to the Treaty of Waitangi / Te Tiriti o Waitangi principles. I’m sure Margaret Mutu did not approve of that presentation of Te Tiriti, or the Crown’s requirement to honour Te Tiriti o Waitangi.

However, the actual substantive provisions in the bill around requiring ACC to, as far as reasonably practical, take into account the views of Māori in the design of the systems and processes to ensure that the scheme is accessible and responsive to Māori, and that the scheme will have the capability in the context of the scheme to contribute to improved Māori economic and labour market outcomes. Thank you, Madam Speaker.

KAREN CHHOUR (ACT): I rise today in opposition to the Income Insurance Scheme (Enabling Development) Bill. There are a couple of things I’m concerned about, and one of them is the use of urgency. When I first arrived in Parliament and we were having a discussion around what urgency actually was, I was assured that urgency is not something that happens often here—so it must be for something really important. Since I’ve been here, urgency seems to happen all the time. We seem to have forgotten that for making good public policy it matters that we have good consultation. It matters that we listen to the public’s concerns, and when we’re in urgency we skip that process.

As representatives of New Zealand and as representatives of the people of New Zealand, surely listening to their concerns and listening to their voices is the most important part of our job, and it seems that we keep skipping that over and over and over again in this House. I find it quite insulting that we are debating this in urgency, when New Zealanders are struggling to feed their families right now. We should be debating right now how we can make immediate changes to help New Zealanders have more money in their back pocket so they can feed their children, and $350 is an insult—an absolute insult. It’s a dollar a day. How will you feed your children on a dollar a day, and how was that even targeted, and how are these bills going to make immediate changes when our communities are crying out for help?

People that have never asked for help are now asking for help. Have we forgotten that we’re in the middle of an economic crisis as we’re debating a bill that’s going to enable this Government to take more money off the people who are struggling to pay for food for their families? They already can’t afford to feed their families, and this bill will enable the Government to take another thousand dollars a year if it goes through. You say you care and you’re going to give them $350, but you’ll take a thousand away if this goes through—and I’d like to repeat that this bill is a framework for an “if”. Why are we spending money on an “if” bill when we could be putting more money into what we need right now?

ACT wants to have the best public policy in the world, and the only way we can do that is if we consult with the people we work for—the New Zealanders who pay the taxes that pay our wages to stand here and debate things like this. When we avoid consultation and we do things under urgency so often here, we are losing the voice of the people. This bill is an “if” bill, but when you look at what they are thinking about doing, it is just going to add extra costs to the pockets of New Zealanders. It’s going to add extra costs to small business, and it’s not going to be any immediate help for the cost of living crisis we are suffering from right now. We’ve added so many costs over the last few years on to small business, on to taxpayers, and we can’t keep doing this. Inflation is going to be around for a long time, and that is what we should be debating in this House under urgency—if you’re going to have urgency. We should be debating how we are going to immediately help people put more money in their back pocket right now so they can feed their families. That is why I stand here and oppose this bill.

IBRAHIM OMER (Labour): Thank you, Madam Speaker. I appreciate again the opportunity to speak on this bill, the Income Insurance Scheme (Enabling Development) Bill. The speaker who just resumed her seat, Karen Chhour, said “the people that we work for”. I’d like to know who the Opposition actually listens to. In regards to income insurance, Business New Zealand and the Council of Trade Unions have been consulted. Business New Zealand represents all businesses across the country, and the union also represents the working people. I just want to know: who do they work for? We, on this side of the House, listen to people and we work for the people. We listen to the people that we work for.

This bill is short, it’s simple, and it’s straightforward. This bill does a lot of things, but one thing that I like, and Jan Logie just touched on, is the Crown’s responsibility and commitment to Treaty of Waitangi principles by requiring ACC to engage with Māori and to be purposeful in developing a scheme that will contribute to improving Māori economic and labour market outcomes. This is good but also does recognise the need to listen to workers and employers when designing the scheme by requiring ACC to engage with representatives of workers and employers. This is very important. In the last two years, the pandemic has taught us a lot of things, but one of the things that it taught us is to actually value our workers who, through no fault of their own, lose their jobs across this country.

So this bill is a good bill. I’d like to thank the Minister for bringing it to the House. I commend this bill to the House.

PENNY SIMMONDS (National—Invercargill): Thank you, Madam Speaker. Well, my first speech on this bill brought attention to how out of touch this Government was when they felt that this was the time for this bill. My second speech is going to show how beautifully the Minister illustrated how this is a Government who can’t get things done, who can only make announcements about spending through their expensive PR consultants.

The Minister, in her second speech on this, explained to us that this was an enabling development bill for considering possible planning for pre-implementation. I’m prepared to give a chocolate fish to anyone who can find anything that might be in any danger of actually getting done from an enabling development bill for considering possible planning for pre-implementation. We oppose this bill.

GINNY ANDERSEN (Labour—Hutt South): Thank you very much, Madam Speaker. It’s a pleasure to take a short call on a great bill. A short, succinct bill that provides the necessary framework for us to give more security to our workers, our employers, at a time when the global economic conditions are uncertain and volatile. It’s good for workers to be able to know that if there is a short, sharp shock to the labour market, there is some reassurance that they continue to pay their mortgage, pay their school fees, put petrol in the car, and to keep working at the standard they have in the past.

This is an important assurance not only for those workers but also of employers so they can retain high-skilled, quality, hard-working people and pay them a fair wage. This is a good bill that contributes to more security in our workforce and provides a good pathway forward for both workers and employers. I commend it to the House.

RACHEL BOYACK (Labour—Nelson): Madam Speaker, thank you. It’s a pleasure to take a short call on the Income Insurance Scheme (Enabling Development) Bill. I just want to make a particular point about this bill, in that it is an enabling bill. The bill gives ACC the opportunity to continue work investigating whether a scheme of this nature is needed and how it would operate.

So I just want to be very clear, particularly for members opposite who may be trying to suggest that we’re rushing a bill through without consultation, that it’s actually going to implement such a scheme; that it’s not the case. But on that note, there has already been significant consultation with both Business New Zealand and the New Zealand Council of Trade Unions, and an opportunity for public to comment and provide feedback to Government prior to the introduction of this bill.

This bill gives the opportunity for ACC to do their work and determine whether the scheme is needed and, if it is, what it would look like. On that note, I commend this bill to the House.

SIMON WATTS (National—North Shore): It is a pleasure to take a call on the second reading of this bill, and I must acknowledge—I see the Minister Carmel Sepuloni sitting on the other side there, and I listened to her contribution on the second reading. She actually called me out personally and said that I was out of touch. Well, I can tell you what: I’m not a betting man—I’m not a betting man—but I will bet on the table here today that a thousand-dollar tax on 3 million hard-working Kiwis in this country and standing up for those Kiwis in this House is not out of touch.

What you see on that side of the House is a Minister and a Government who are out of touch. This policy will impact less than 50,000 Kiwis, less than 2 percent of New Zealanders, and burden them with a thousand dollar tax, per annum, that will not deliver the benefits that they require. It is a solution looking for a problem, and that is a grave problem. When you listen to these speakers saying it’ll deal with an economic shock in the future, well, what about the economic crisis that Kiwis are facing today? We’ve got a cost of living crisis. They’re paying more and more, they’re paying 20 bucks for a block of cheese at the supermarket, and we’re navel gazing about some economic shock that may or may not happen in years to come, when unemployment is running at 3.2 percent. We have not got a major problem in terms of people becoming unemployed and not being able to get a job; what we’ve got a problem with is that people are sitting on the unemployment benefit who can work who aren’t working. We haven’t got an aspirational Government that is putting the investment into those individuals to help them get back into the workforce and grow our economy and grow our country. National opposes this bill.

PAUL EAGLE (Labour—Rongotai): Kia ora, Mr Speaker. It’s a pleasure to speak on the Income Insurance Scheme (Enabling Development) Bill. Look, it’s always good to speak last. You hear the emotion and the punches being pulled. But can I say, that really what this is about is under the current Act it’s difficult for the Accident Compensation Corporation to take on a role in the preparation process that it needs to as a proposed service delivery agency. This bill recognises the need to listen to workers and employers when designing the scheme required by the corporation to engage with such groups while putting in place protections. So, should we decide to establish an income insurance scheme, it will ensure that this is done in the right way and able to deliver to the hundreds of thousands of Kiwis who are made redundant each year. I commend this bill to the House.

A party vote was called for on the question, That the Income Insurance Scheme (Enabling Development) Bill be now read a second time.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

Bill read a second time.

DEPUTY SPEAKER: This bill is set down for committee stage forthwith. I declare the House in committee for consideration of the Income Insurance Scheme (Enabling Development) Bill.

In Committee

CHAIRPERSON (Hon Jacqui Dean): Members, the House is in committee on the Income Insurance Scheme (Enabling Development) Bill. I will remind members they’re able to participate remotely. Simply, if you want to make a call, please type “Call” into the chat so I can see it. You should also make a call if you want to raise a point of order. If we receive new tabled amendments, I’ll let members know so that they can pick them up from the Table. We come now to Part 1.

CHRIS PENK (Senior Whip—National): Point of order, Madam Chair. I seek leave of the committee that all the parts in the bill be taken as one debate.

CHAIRPERSON (Hon Jacqui Dean): All provisions to be taken as one question?

CHRIS PENK: Yes, ma’am.

CHAIRPERSON (Hon Jacqui Dean): Is there any objection? There is none.

Parts 1 and 2, Schedules 1 to 3, and clauses 1 and 2

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. It’s a pleasure to take a call in this debate. I have a couple of questions, I’ll be fairly quick. But I note in clause 9(3)(a) it says: “In performing this function, the Corporation must ensure that, as far as is reasonably practicable,—(a) the views of Māori are taken into account in the design of the systems and processes for the income insurance scheme to ensure that the scheme is accessible to Māori and responsive to Māori perspectives;” etc., etc., which is fine, and everyone would agree with that. But in clause 9(4) it says: “The Corporation must engage with Māori in good faith in meeting the requirements of subsection (3)”, which I’ve just referred to. But then it goes into clause 9(5) to say that: “The Corporation must engage with representatives of workers and employers in the design of the systems and processes for the income insurance scheme to ensure the perspectives of workers and employers are taken into account.” But there is no reference to act “in good faith” with those groups. So that, by omission, is almost implying that their views will not necessarily be taken as seriously and they won’t act in good faith with that. So is that just an omission in the bill? Are we going to see a Supplementary Order Paper so to rectify that? Or is that what the Government intends—that one group gets selected out to be acted in good faith with, and others do not. So I’d like to know the answer to that from the Minister.

Also, in Schedule 3 I note in clause 2, information about a person—and this is referring to the information that can be gathered on people by the ACC, or the corporation. Under clause 2(a) it says: “ethnicity, including self-declared ethnicity”, and I’d really like to know what that means. Is that the case across Government, that people can self-declare ethnicity? And does that have the same legal status as some other definition of ethnicity? I’d like to know what those are. I think these are perfectly acceptable questions on things like this. If you’re going to draft—not you of course, Madam Chair—but if Government is going to draft legislation, it needs to be precise, because if this doesn’t line up with other legislation, then we’ve got a problem, and, if it does, then we need to be clear about what “ethnicity” means and what “self-declared ethnicity” means and the legal status of those two things.

Just finally, I’d like to make a little suggestion under that same clause in Schedule 3, it says “Information about a person’s—… (f) visa status”. I suspect we would all know with the current Minister that it will almost certainly be pending, it won’t be yet resolved. I would suggest that they perhaps include Minister Faafoi on their working group. Thank you, Madam Chair.

Hon CARMEL SEPULONI (Minister for ACC): Our intention is to work in good faith with all the stakeholders and groups that were mentioned earlier. We have been really clear from the get-go that we would not have embarked on the process of exploring this social income insurance scheme if we didn’t have the support of the tripartite partners—Business New Zealand and the Council of Trade Unions. So they have been with us each step of the way.

It’s been also been important to us that we do engage Māori early on, and we have been further buoyed by their support for us to continue this work and that is exactly what we’re doing. Speaking to them about the wording in the bill, they were happy with the fact that we have been so specific with regards to saying that we “must” engage. It’s not “should”, it’s not “may”; it is that we “must”. We have made that clear because of the fact that we know how important this scheme could and should be for Māori. So the intention, certainly, is to act in good faith with everyone. I think the difference is that from the start it was a discussion that was really with the Council of Trade Unions, Business New Zealand, and the Government. Then along the way we have then made sure to bring Māori or iwi on board and to keep them in step with regards to knowing what our moves might be here, as well as getting their advice on how they’re feeling with regards to where we’re going, and making sure that we’re taking them with us. So I’m quite happy with the wording. I think it’s landed where it has and I’m pretty sure our tripartite partners and also Māori are happy with the wording of the legislation as well.

JAN LOGIE (Green): Thank you, Madam Chair. I’ve got a few questions, and thank the Minister for this opportunity to try and get my head around some of the detail in the bill. So one of the first questions is about the timing of this bill and going through urgency. I’ve read through the papers and I’ve seen the modelling that was in the regulatory impact statement that was talking about how we either do it now and then there’s the risks of actually delaying implementation if the Government decides to go ahead, because the preparatory work wouldn’t have been done, and it would have to wait until the introduction of the final legislation, which would be in July. That would really slow things down.

But I didn’t see any analysis in there of the idea of introducing legislation at the point of the Government making a decision. The only thing I could find around was a line in the regulatory impact statement that was saying, “If enabling legislation is not passed now, advice on operational and budgetary implications will be more limited in scope”.

I was just interested and wanting the Minister to explain or add a bit more substance to that, because mostly the other papers talk about the stage after the Government having signed this off to keep going, and the work around modelling and the need for private information in that modelling to be able to get it to work. So I’m interested in actually what’s required between now and the Government making a decision in detail that requires this to happen under urgency now.

Hon CARMEL SEPULONI (Minister for ACC): Thank you to the member. It’s important because what we’re asking ACC to do actually falls out of the remit of ACC with regards to legislation. Money in the Budget has been set aside so that they can do the development work that we need them to do and the scoping that we need them to do with regards to what a scheme may look like and what would be required to actually operate the scheme. We need them to get that under way, because if we make the decision to do it, then—otherwise we will be playing catch up. So anyway, the legislation has to be put in place.

Also we have to have the legislation in place, otherwise they can’t spend any of the money that’s been set aside to support them to do it—money that is actually in this Budget. So I do want to clarify; I know the member who just asked the question knows this, but I do want to clarify that this bill is just enabling that. It’s actually not talking about the detail of what the scheme will look like or legislating for the scheme. I think most members in the Chamber understand that. So the scope of this bill is very narrow and it is for the purpose of us doing the preparatory work that we need to actually develop this further and then we see what happens.

JAN LOGIE (Green): I think I’ve almost got my head around it, but I’ve got more questions to try and make sure I have. My understanding is that normally in the area of policy related to ACC, it’s the Ministry of Business, Innovation and Employment that does that work, in consultation with ACC officials. So in terms of the Government being in a position to make a decision, I would have thought that that was more policy, and so I’m just trying to get my head around, actually, that point. Hopefully, that made sense.

Hon CARMEL SEPULONI (Minister for ACC): I thank the member—I understand what you’re saying. You’re right—with regards to ACC, the Ministry of Business, Innovation and Employment does develop the policy, but ACC needs to do work on what the operationalisation of this scheme would look like, what the IT requirements would be, and so it’s actually work around the practical kind of implementation side of running this type of scheme. If I haven’t been clear on that, then this is a good opportunity to be able to clear this up.

JAN LOGIE (Green): Thank you, Madam Chair. Another area of questioning, and it’s—I feel as if I’m being a bit nerdy.

Hon Carmel Sepuloni: Never!

JAN LOGIE: That’s right. But, looking at the departmental statement—this is on a completely different point—the clause that I was very happy to see, it was co-developed with the iwi leaders group and ACC around the co-design work with Māori.

I noticed in the departmental report and the general policy statement, it said that the bill requires ACC to engage with and reflect the views of Māori and to be purposeful in developing a scheme platform that will contribute to improving Māori economic and labour market outcomes, including revitalising mātauranga Māori and tikanga. Sounds awesome—it’s not actually in the bill, that specificity. So did that get taken out or is that just inherent in the labour market and economic outcomes?

Hon CARMEL SEPULONI (Minister for ACC): I actually didn’t hear the first part of the member’s question, so if she could repeat that, that would be great.

JAN LOGIE (Green): Thank you, Madam Chair. In the departmental disclosure statement on page 3 around the general policy statement where it’s talking about the bill requiring ACC to engage and reflect the views of Māori and to “contribute to improving Māori economic and labour market outcomes.”, the sentence continues on to say “including revitalising mātauranga and tikanga.” but that’s not in the bill. In the bill, it ends at “economic and labour market outcomes.” So I’m wondering whether, actually, there was a version of the bill where it was specific around mātauranga Māori and tikanga and it got taken out, or is that just inherent but it’s not mentioned anywhere else?

Hon CARMEL SEPULONI (Minister for ACC): I think the reality was, as we were developing this, that, again, we realised that the scope of this is quite narrow. Some of the more extensive wording that the member referred to, I think, would be better suited to the actual legislation if—when—we decide to go ahead.

Certainly, I can say with confidence that the particular iwi leader who, on behalf of the Iwi Leaders Forum, has been engaged with us—because of the narrow scope of the bill and because of the fact that it’s enabling legislation; it’s not actually determining the scheme—was indeed quite content with where we landed with the language.

JAN LOGIE (Green): This might be my final question, you’ll be relieved to know, and it was relating to the sharing-of-information provisions in the bill, and I’m just wondering if the Minister can talk us though a bit more of the detail around that. I was pleased to see the provision in here around the checks with the Privacy Commissioner, and that before a Government agency provides information it will first consult with the Privacy Commissioner. I was very pleased to see those checks in place. But it was a little uncomfortable for me to read some of the papers talking about the privacy protections as they are in place within ACC as if that would give us confidence around this while we’re waiting for a report to let us know whether ACC will be addressing the public concerns around privacy, particularly in relation to sensitive claims.

So I assume the Minister has seen the privacy report, which we haven’t had the chance to, and I’m wondering if she would like to make any reflections and give us some assurances around that.

Hon CARMEL SEPULONI (Minister for ACC): I won’t go into more extensive discussions around privacy. However, I will just state that of course ACC must—it is legally required—consult with the Privacy Commissioner over this and the changes they’re making. There will be the need for information sharing. The most obvious one I can think of is perhaps Inland Revenue and ACC, and we need to make sure that we get that right. So in developing the scheme further, once we pass the enabling legislation, those are going to be the areas that they will need to traverse and work out with regards to how they do that safely and how they do that in a way that will uphold the integrity of the scheme if we choose to go ahead, and so this is part of the preparation. It’s just working out what fundamentally that would look like and how they would do that, and, of course, we would want to get that right from day one if we were to go ahead with the implementation of the scheme.

A party vote was called for on the question, That Parts 1 and 2, Schedules 1 to 3, and clauses 1 and 2 be agreed to.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2

Noes 42

New Zealand National 32; ACT New Zealand 10

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Parts 1 and 2, Schedules 1 to 3, and clauses 1 and 2 agreed to.

CHAIRPERSON (Hon Jacqui Dean): I will report this bill without amendment.

House resumed.

CHAIRPERSON (Hon Jacqui Dean): Mr Speaker, the committee has considered the Income Insurance Scheme (Enabling Development) Bill and reports it without amendment. I move, That the report be adopted.

A party vote was called for on the question, That the report be adopted.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

Report adopted.

Third Reading

Hon CARMEL SEPULONI (Minister for ACC) on behalf of the Minister of Finance: I move, That the Income Insurance Scheme (Enabling Development) Bill be now read a third time.

The Income Insurance Scheme (Enabling Development) Bill is a short, relatively simple, and straightforward bill. That is because it does not put in place a social and income insurance scheme or indicate that the Government’s decisions on a scheme have been made. What it does do is ensure that we are in a position to set up the scheme, if that decision is made, by authorising ACC to engage in work to develop the scheme and setting out key requirements that must be followed when doing that work. The bill’s small size and simplicity should not make us lose sight of what a big step it represents on New Zealand’s journey towards a fairer and more productive labour market, one that supports employers to find the workers they need and supports workers to find the employer and the job that best suits their needs.

A series of independent reports all point to the need for better support for people who lose their jobs. These include reports by the Public Advisory Group on Redundancy and Restructuring, the Organization for Economic Development and Co-operation, the New Zealand Productivity Commission, and, one that I know very well, the report of the Welfare Expert Advisory Group.

Officials estimate more than 100,000 people lose their jobs every year due to redundancy, lay-offs, or health conditions. This number can be even higher during economic shock, and the significant steps this Government took to prevent widespread job losses over the COVID-19 outbreak are a stark reminder of this. We know people often struggle to find suitable re-employment after a redundancy and end up accepting lower-pay jobs that don’t match their skill set. This can have lifetime impacts on the wellbeing of them and their whānau. This is an issue that disproportionately impacts our most vulnerable New Zealanders. Loss of work is more likely to affect low-income workers and these workers are more likely to lose more than one job in their lifetime. Low-income households are far less likely to have significant savings and therefore are in a much worse position to manage difficult economic times compared to higher-income households. This is also true for our Māori and Pacific communities. Māori and Pacific people are more likely to be made redundant or leave work because of a health condition or disability. And young Māori are a significant proportion of those economically displaced.

We all know this is a gap in the support New Zealanders need to get through hard times and land on their feet. In fact, we are only one of a small number of comparable countries that does not have some kind of income insurance scheme in place. On the other side of the House, they think doing something to bridge this gap is too hard or too expensive or should be left to private insurers. But this Government is not content to do nothing and leave New Zealanders exposed to the risks of job loss and economic shocks, while wage scarring costs our economy more than $15 billion per year. That is why we have consulted on a proposal for an income insurance scheme that would support workers who lose their jobs through no fault of their own.

By also covering health conditions and disabilities through the proposed scheme, we could go some way toward addressing the disparities between the support people receive under ACC and the support available in the health and welfare systems. Fifty years after it was set up, ACC remains a world-leading income insurance scheme, providing a safety net for New Zealanders who have suffered an injury by accident. However, practically everyone knows someone whose ability to work has been affected by an illness that cannot be covered by ACC. This can leave families and whānau without an income when they are already dealing with the stress of a loved one falling ill. An income insurance scheme that covered health conditions and disabilities would help to support New Zealanders through these difficult times.

I’ll never forget a woman who I met quite early on in my political career in West Auckland, the mother of very young children, who was an early childhood teacher who developed stomach cancer and had to continue working at that time because of the fact that her household could not afford for her not to. I think all of us would agree that when someone falls seriously ill, they deserve to be able to take time out, to actually take care of their health and recover. Unfortunately, in that case, that woman passed away and she is a reminder for me why it is important that we include health conditions and disabilities when considering this scheme.

I want to thank those who have helped not just with the development of this bill but with the proposal for a new social insurance scheme and who have supported the national conversation on the benefits, costs, and risks that come with establishing such a scheme. The proposal for a scheme came from a partnership between Government, Business New Zealand, and the New Zealand Council of Trade Unions, known as the Future of Work Tripartite Forum. The discussion document setting out the proposal was developed by a working group comprising officials from a range of agencies and representatives from Business New Zealand and the New Zealand Council of Trade Unions. Having strong social dialogue can strengthen worker and employer voices on important labour market issues. Policy developed on a tripartite basis is more likely to represent and balance the interests of employers and workers and to endure. So I want to thank Business New Zealand and the New Zealand Council of Trade Unions for partnering with the Government and taking this journey with us.

Many of the issues we’ve worked on are not as simple as this bill, and, of course, we do not always agree on every issue, but having the hard conversations and continuing to journey together on this path is what will help us deliver for all those we represent, be they citizens, workers, businesses, or employers. The Tiriti provisions in the bill are being developed through engagement with Māori and I’d like to particularly thank the co-chairs of Pou Tangata, of the national Iwi Chairs Forum, and others involved. I also want to thank all of the officials across Government agencies and their responsible Ministers who continue to contribute to this kaupapa. This is a once-in-a-generation opportunity for New Zealand to add to our social safety net and their hard work and collaboration is essential to us progressing this. Running through all the contributors to the income insurance mahi, it’s clear that an incredible amount of time and effort has gone into bringing all the stakeholders together and driving the work forward. I want to particularly acknowledge the Hon Grant Robertson for his leadership and vision in this space and his ability to corral us all with regards to this kaupapa.

As we move towards the next stage in our consideration of the proposed income insurance scheme, I’d like to thank the many New Zealanders who took the time and effort to submit on the proposal or engage in the consultation. Whether they were workers, employers, or others such as representatives of the New Zealand insurance sector, the submissions and other information supplied have given us a great platform to make future decisions on a social insurance model for New Zealand. It is important that we build on that platform further by ensuring ACC can add their decades-long experience in delivering social insurance. This bill achieves that. I commend this bill to the House.

ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.

Hon PAUL GOLDSMITH (National): Look, this bill is one that brings in, or lays the path for, the development of a new tax—a jobs tax—that this country can’t afford. I’d invite people who are listening in to this debate to cast their mind back to the 2020 election. Did they ever hear the Government talking about bringing in a new tax? A jobs tax? An income insurance scheme? Was it ever talked about? No. In fact, what they said is that they would bring no more taxes through. So that was the promise in 2020—no more new taxes, apart from the higher income tax rate they’d already brought through for top income earners.

Hon Dr David Clark: It’s not like the increase in GST—we keep to our word.

Hon PAUL GOLDSMITH: Oh, and the Minister’s response is to revert to a past issue. Take responsibility for your own Government’s decisions.

Anyway, so did you hear it in the 2020 election? No, you didn’t. Did you hear much about it in the Budget? No. We had Grant Robertson deliver a long and tedious speech yesterday, and did he refer to the jobs tax? No. He talked about giving some New Zealanders 350 bucks as a one-off payment to help with the cost of living crisis. But he didn’t mention the fact that, oh, by the way, those same New Zealanders on the average wage who won’t get a single thing from the cost of living crisis payment will also have to shell out about a thousand dollars a year, year in, year out, every year for the new jobs tax, and there’s more on the way. So it’s interesting, isn’t it? It’s interesting—

Hon Poto Williams: Prove it.

Hon PAUL GOLDSMITH: Prove what? This is the Government’s bill; they brought it in. They’re laying the path for a new jobs tax, which they never talked about in the election and they didn’t talk about in the Budget. They don’t because they know that this is the Budget taking New Zealanders backwards, and this won’t help New Zealand families deal with the cost of living crisis that they’re dealing with today. And on that basis, without further ado, we oppose it.

JO LUXTON (Labour—Rangitata): Thank you, Madam Speaker. I commend this bill to the House.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Speaker. People listening to this debate know that they can’t trust Labour on tax. This is a Government that is being particularly sneaky in trying to use the cover of urgency, the cover of the Budget debate, to bring into New Zealand a regime that will tax hard-working New Zealanders even more than they are already taxed. The Minister spent a long time talking about what would happen if, when, maybe, might be, they could be going to introduce this tax and very little time talking about this particular piece of enabling legislation that enables the Government to instruct and set up ACC to develop the framework that would allow for the tax to be put in place.

National opposes the concept of the tax that the Labour Government is proposing. We oppose this piece of bridge-building initiative that will lead to the tax further imposed on hard-working New Zealanders. We oppose this legislation.

RACHEL BOYACK (Labour—Nelson): I commend this bill to the House.

JAN LOGIE (Green): Thank you, Madam Speaker. I’m going to break the mood and actually have a proper speech on this. Though I do, listening to some of the National Party members, just have to reflect. I wonder if they have a competition sometimes for the best arrangement of talking points, because it’s all I hear, and I just wonder how that is, to have to give those talking points again and again.

Anyway, to the Income Insurance Scheme (Enabling Development) Bill, which the Green Party is abstaining on. I know some people are struggling with that as a concept, but it is because, actually, we as a caucus have not made a decision on the substantive piece of legislation, so we do not want to support legislation that will speed through something we don’t agree with. But, again, if it, through consultation, turns into something that is going to contribute really well to our society, then we don’t want to get in the way of slowing that down either. So we are taking the middle role of abstaining so as not to be in the position of doing either of those two things.

We recognise very much that this is a technical bill to enable ACC to be able to do work to provide Government with the best advice around an income insurance scheme and implementation of that so that the Government can make a decision on it probably in June or July, and, if the Government decides to go ahead to enable them to implement it, to get that in place by 2025.

So I would just again state that for the Greens we share the Government’s recognition of the social problems that we have around the impact of sudden job loss, either through redundancy or sickness or disability, and the lack of good supports to help people get back into—when it’s time to return to the workforce, to make sure that they’re able to return to good jobs, not just the first job. Because we know that that has a really profound impact on people’s lifelong learning potential when they’re forced back into the workforce just to be able to pay the bills rather than being able to choose the right job in terms of their career progression and enabling people to retrain.

The proposal as it went out for consultation, though, the Greens have quite a few concerns about, though, recognising that this was—and it’s quite a beautiful thing to see unions and business and Government negotiating and trying to solve, come up with, solutions to a problem. But for us, the fact that the Welfare Expert Advisory Group (WEAG) had considered these issues and had not recommended an income insurance system—that for us is a bit of a flag and a concern as a starting point.

But also the proposed scheme, it just sits uncomfortably, hearing National talking points around tax, covert taxes, and how that’s a bad thing. We have a concern at the level of the levy and that it is, as proposed, to be universal. For really low-wage income workers, we’re worried about what that will mean for them being able to keep food on the table, particularly at a time where people are really struggling, and that migrant workers will be paying that levy but will not be entitled to the insurance at the other end. That for us is really problematic. At the moment, we’re having some quite robust debates around our receptiveness to migrants in our communities. It is, I think—where the policy landed, at least, as it went out for consultation—for us another really worrying signal. Particularly also for migrants, low-income workers, and those in the gig economy in particular, where the settings are, it looks like there won’t be a guarantee for some of them, and particularly our artists, whose work can often be quite sporadic—to ensure their access to the scheme while they’ll be required to pay into it.

Then the other points that I’ve mentioned earlier—around the fact that the biggest impact, as I understand it—the cause of wage scarring for women is leaving the workforce to do caring work, and that that is not being covered by this legislation. We know there is a massive difference between what this scheme will provide and paid parental leave. Our paid parental leave—I’ve just got to take a moment to just rail against the fact that at the moment I think it’s a maximum, a cap, of $621 a week, which isn’t even the minimum wage. While we all recognise the importance of the first thousand days in supporting our whānau, actually, our paid parental leave isn’t even enabling people to receive a minimum wage for that essential caring work that will pay off for all of us into eternity. So that is a bit of a problem for us at the moment.

Also, around the lack of clarity—the Greens had a policy we went to the election with to extend ACC for sickness and disability. This goes a little bit of a way, you could say, towards doing that, because it enables—and the Minister’s story in terms of bringing into the House those of cancer survivors who have been struggling in terms of our Work and Income system and still having been job tested while going through cancer treatment and not being able to work; just the inhumanity of that system. This could be seen as progress, but it also could be seen as adding more complexity, where we leave people who have long-term disability or illness in our income support system, where we haven’t seen an increase to the child disability allowance or the disability allowance, I think, in many, many, many years, and the call has been from WEAG for that to be increased fourfold to basically meet the same level of support it initially offered—so we’re forcing people with long-term disability into that. Or the really generous system of ACC—so it creates and embeds discrimination based on whether your disability is a result of accident or illness or birth, and creates more complexity, which worries us. But we’re really interested in hearing people’s feedback on that, because I get that it could be seen as an improvement on the status quo but is more complexity.

I do just want to flag that some of the Labour Party members, in their speeches there was some language that worried me, in talking in support of this, around people who have been unable to work “through no fault of their own” as opposed to people receiving income support, which would suggest a sense of maybe that is their own fault and maybe we should be punishing them—is the kind of the background ideas that kind of sit behind that language. That is the deserving and undeserving poor, and that is Victorian, and that is absolutely not consistent with the work of WEAG to get us to a society where we all have a place to be able to thrive and all of our work—whether it is paid or whether it is domestic labour, caring work—is properly valued so that our societies and our community has a chance to flourish.

So, for the Greens, our initial proposals around addressing those problems we identified upfront would be a guaranteed minimum income, compulsory redundancy of four weeks, to implement the WEAG report, to have free education, and to have paid parental leave extended and increased to be able to enable people at that early time to be able to do that work and have enough not to be completely stressed the entire time. We can pay for all of this by a wealth tax, which is not just about spending; it’s actually about redistributing, to all of our collective benefit. So that’s where we’re at with this at the moment. Thank you.

ASSISTANT SPEAKER (Hon Jacqui Dean): Members, the time has come for me to leave the Chair for the lunch break. The House will resume at 2 p.m.

Sitting suspended from 1.03 p.m. to 2 p.m.

TONI SEVERIN (ACT): On this beautiful Friday afternoon, I’d like to oppose the Income Insurance Scheme (Enabling Development) Bill. I know it’s only a framework bill. I understand that. However, this is the setting-up bill for what we’re all saying is the “if” bill but “probably will be” bill. There is $2.2 million to set up the framework, privacy, sharing—I know there are a few concerns there that will have to be rattled out, but, again, we’re just concerned about the fast way these measures are getting put through. Yes, you may have consulted with Business New Zealand and trade unions, but that’s not necessarily all the businesses and all the workers out there.

There is a point here that I’d like to raise from Retail New Zealand. They’ve just said to us they do not support imposing another cost on businesses and their employees without a corresponding offset in tax. So I’m just putting this out there—maybe you want to think about that if you want to put on more costs in the future, with the “possible” bill, and then we have to remember that this is supposed to be a Budget to help those that are struggling, but all it will possibly do in the future is take more money out of the pockets of hard-working—

Matt Doocey: That’s right. They don’t care.

TONI SEVERIN: Exactly. They say that over there that we’re representing rich people, but I would like to dispute that. Many of us within the ACT Party, and our friends, have done some of those low-end jobs, because we knew that we had to do those low-end jobs to feed ourselves. And you’ve got to remember that they’re not horrible—yes, for some people, I think, but any job can be a good job, and it can be a stepping-stone job as well. A lot of employers love to see people who can actually do their job. Also, we do have stuff in place already to help people that fall on hard times, and this is not the time to do this, while we’re right in the middle of cost of living crisis. Even if it is 6 months or 16 months down the track, we don’t know what the future’s going to bring and we need to support people by giving them a tax-bracket break now. Drop the taxes.

There is also the question of consultation. It’s about the everyday New Zealanders who don’t necessarily sit and watch Parliament TV. A lot of them don’t know about these bills and how they’re going to affect them until they see it in their pay packet. They don’t know why they have $3.50 less until they see such-and-such a levy or a “dollar for this”. Every frigging dollar counts for everybody in this reaction.

Now, this is true—somebody just told me today that a Tasty block of cheese is $21.50—$21.50 for a block of cheese. I know that not everybody eats the expensive cheeses—they might eat the Tasty cheese—so I would hate to think how much the other cheeses are costing. I’m not a big cheese eater so I can’t testify on that one. But there are those who do like to make toasties, and a lot of families love to make cheese sandwiches.

But we do not agree with this bill, this framework, to set up an “if” bill. It is just taking more taxpayers’ dollars away from where they should be going, and that is to hard-working Kiwis. So ACT opposes this bill.

A party vote was called for on the question, That the Income Insurance Scheme (Enabling Development) Bill be now read a third time.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

Bill read a third time.

Bills

Commerce (Grocery Sector Covenants) Amendment Bill

First Reading

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I present a legislative statement on the Commerce (Grocery Sector Covenants) Amendment Bill.

DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon Dr DAVID CLARK: I move, That the Commerce (Grocery Sector Covenants) Amendment Bill be now read a first time. I nominate the Economic Development, Science and Innovation Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 16 June 2022, and that the committee have authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, and outside the Wellington area, despite Standing Orders 193, 195, and 196.

The bill amends the Commerce Act 1986, banning restrictive covenants on land and exclusive covenants on leases which stifle competition. It makes existing covenants that meet this test unenforceable.

Groceries are an essential purchase, as well as a major expense for most New Zealand households. In the year to June 2019, food was the second largest expense for New Zealand households, with an average spend of $234 per week. Competition between the major grocery retailers is a key driver of price, quality, range, and service that is offered to Kiwi consumers. In March, the Commerce Commission published its final report on the market study into the retail grocery sector. It found that in New Zealand, competition is not working as it should be; it is not working in the interests of Kiwi consumers, and, instead, the duopoly, made up of Woolworths New Zealand and Foodstuffs, is making large profits at the expense of everyday New Zealanders. In fact, they found that even on their most conservative estimate, that duopoly was taking a million dollars a day in excess profits, each and every day of the year, out of New Zealanders’ pockets. So, in its report, then, the Commerce Commission noted that the best way to improve competition is to make it easier for competitors to enter the market, which brings us to tonight’s bill.

Our major grocery retailers have been lodging and obtaining restrictive covenants on land and exclusive covenants on leases. Because of this, our supermarkets have, effectively, been engaged in land wars, which in some cases has left suburbs and shopping centres without choice. An example of this is in Ponsonby in Auckland, which is only serviced by Countdown. Members in this House will have their own examples of this around the country. Of course, these bans on land are also a disincentive to new competitors coming into the market who might look from offshore and see a highly profitable sector that they want to be a competitor in because they think it’s good for business and because they could give a better deal for consumers.

So, based on the Commerce Commission’s findings, a new ban will be applied to covenants that benefit Woolworths New Zealand and Foodstuffs. We will build in the option to include other retailers in the future should the Commerce Commission consider it appropriate. If others set up here and start the same practices, they too would be subject to a ban.

There is one covenant that I believe should be permitted, and this is something that can be tested through the select committee process. Businesses that sell retail fuel often add a covenant to the land, preventing the future installation of fuel tanks. That guards against the potential for litigation over responsibility if there is a future leak of fuel, and that litigation typically goes around who is responsible for contamination in the soil. The proposed bill would therefore not apply to covenants in place for legal and environmental impact reasons connected to a retail fuel site as defined in section 4 of the Fuel Industry Act 2020.

The Commerce Act will also allow the commission to approve individual applications for covenants as well, should that be deemed in the public interest—i.e., if the public benefit of a covenant in a particular specific circumstance outweighs any negative effects. So that, again, makes sure we don’t end up with unintended consequences.

We made a campaign promise at the last election to address the rising cost of groceries and to make sure shoppers are paying a fair price at the checkout. Let’s not forget, as I’ve mentioned, that even in the most conservative estimate of the Commerce Commission in their recent study, the major grocery retailers are earning excess profits of a million dollars a day. Now, those are beyond the ordinary profits you’d expect. It’s a commercial enterprise; they should be able to invest and receive profits. These are the excess profits—a million dollars a day they are taking each and every day, over and above a reasonable profit, out of ordinary, everyday Kiwis’ pockets.

This is simply too important an issue not to get right on behalf of consumers. So, by introducing this bill under urgency, the Government will address the most straightforward part of the reforms quickly. It also signals Government’s desire to see new competitors enter the sector. It gives any new competitors that want to arrive in New Zealand and want to then expand the surety that they will not be subject to bans on how they can use prime sites in different districts that up until now may have been blocked for a competitor to use to bring competition to the market.

I will be bringing further legislative reforms to Parliament for consideration later this year. I propose that the bill be referred to the Economic Development, Science and Innovation Committee with a shortened process of one month. This will enable any unforeseen consequences in the drafting of the amendments to be considered. So this bill, as I close, takes a first major step forward in salvaging our broken grocery sector. We take a stand to end the anti-competitive land wars brought about by restrictive covenants. And, for that reason, I commend this bill to the House.

DEPUTY SPEAKER: The question is that the motion be agreed to.

ANDREW BAYLY (National—Port Waikato) (remote): Kia ora. Thank you, Mr Speaker. It’s a pleasure to be talking on this Commerce (Grocery Sector Covenants) Amendment Bill. The first thing I’m going to say is that National will be supporting this bill. As the Minister has identified, this bill has come as a result of the review by the Commerce Commission into the food sector. The upshot of the Commerce Commission’s finding was that there was less competition in the retail grocery sector than otherwise should be the case and it was also hard for competitors wanting to enter the market or to expand, in the fact that they were facing extra barriers or challenges. So the report from the Commerce Commission, which came out just a few months ago, was very enlightening and helpful, and obviously this is one of the key elements of it.

I think, in the context of what’s been happening in New Zealand, we’ve got a living costs crisis, escalating prices of food—not always through a lack of competition, of course; some of it’s come about through a range of factors like supply issues but also largely the Government’s own making with some of the policies they’ve imposed on businesses across New Zealand, particularly around the way that they can employ labour. So it is a combination of factors that have led to rapidly rising food prices for New Zealanders. That, of course, is hurting virtually everyone in New Zealand, and is so damaging, particularly to the more vulnerable people of New Zealand who don’t have as much income, or are on a fixed income.

So, yes, we agree with the changes. Our strong view is that the recommendations from the Commerce Commission should be implemented, and that means, first of all, supporting this bill, which is about ensuring land is not subject to restrictive covenants, but also ensuring that the mandatory code of conduct is appropriate and in force. Obviously, there’s a process to establish codes of conduct, which is common overseas and particularly in places like England. We want to make sure that there is an appropriate code of conduct that protects suppliers and also people who are wanting to enter that market, and that there are good relationships and we do not see undue practices. There are some issues, particularly around supply arrangements, that need to be dealt with so suppliers have fair access and appropriate access and are not subject to these undue practices.

The other one is we want to make sure that consumers have greater information on products and their pricing, and that was part of the Commerce Commission’s recommendation. The final key recommendation—although there are other subsidiary recommendations—is the establishment of a grocery sector regulator. And we want to make sure that that regulator is well resourced and effective in monitoring the sector so we get as much competition as possible.

So this bill deals with one aspect of those recommendations, which is making sure that land is not unduly subject to restrictive covenants. In the work of the Commerce Commission itself, it noted that there are about 90 covenants that they identified. I think the big issue for us, and this will be one of the questions that we will be wanting to explore in the select committee stage, is how do we identify them, how are these restrictive covenants identified. And whilst the bill seeks to make sure that the undue restrictive components are not enforceable, it also gives rise to how those agreements, if they need to be renewed—what is the compensation, if there’s any clause around that. All those sort of legal issues need to be explored and dealt with under the select committee process.

We also note that there’s actually been no analysis of the impact of removing these covenants, other than by the Commerce Commission, and there’s no report in the accompanying documentation that I’ve seen to support the restrictive covenants. So I think the Minister’s approach is correct, but this is just one element. And if we think this is the panacea for fixing up the supermarket trade in New Zealand, that is not the case. I would urge that we move forward on these other aspects, because we want to make sure that New Zealanders get access to food at reasonable prices. And the types of products, and the transparency around how they’re produced and their pricing arrangements is the most important thing at a time when we’ve got a cost of living crisis in New Zealand.

So we will be supporting it. Slightly disappointed that the select committee process is so truncated, but let’s hope we get good submissions during that process so we can move to a resolution on this matter. Thank you very much, Mr Speaker.

JAMIE STRANGE (Labour—Hamilton East): Mr Speaker, thank you for an opportunity to take a brief call on this bill. I’d like to begin by acknowledging the Minister, the Hon David Clark, for extending a listening ear to New Zealanders. He has certainly heard that some people are struggling with the cost of living and inflation pressures; and, as a Government, he’s taking a lead in this area to bring about some changes. I’d also like to acknowledge the contribution of the previous member—a very thoughtful contribution from Andrew Bayly—and I acknowledge the support of the National Party, and I hope that other parties will also support this bill.

The Commerce Commission report into the retail sector, as the Minister outlined, clearly identified some issues around a lack of competition. New Zealand is a very small market, and in a small market it is common to have areas where there is a lack of competition and where it tends towards monopolistic, or a duopoly, behaviour, which, in this case, we have seen in a very small market. We have struggled to attract overseas investment to New Zealand in this area, and this piece of legislation will certainly have an impact in that area. I was particularly pleased to hear what the Minister was saying in terms of his desire to see more competitors in this market in order to bring down grocery costs.

So look, as this fits into the wider Budget, this is a Budget in terms of listening to New Zealanders and responding to the needs of New Zealanders both now and into the future. I commend this bill to the House.

SIMON WATTS (National—North Shore): Well, as we’ve heard this morning, we’re going to be supporting this bill. While we’ve obviously got a number of concerns in terms of this bill, obviously the select committee process will work through those.

I, myself—big supporter, in terms of New Zealand - owned businesses. We can’t underestimate the fact that, actually, a number of our grocery sectors are 100 percent New Zealand - owned, and attacking Kiwi-owned businesses is not in the DNA of where I want to be. When you say that we need more competition and you bring in overseas providers to strip profits out of New Zealand, I do think we need to consider that.

So I’m really looking forward to a robust select committee process on this bill, getting a lot of perspective from a lot of stakeholders, and I’m sure we’ll work through the detail. Thank you very much, Mr Speaker. We support this bill.

GLEN BENNETT (Labour—New Plymouth): Kia ora, Mr Speaker. I rise in support, and it’s always encouraging to hear my colleagues across the floor supporting this as well. As the MP for New Plymouth, I know this too well. In fact, in my own suburb of Marfell and of Westown, this is actually an experience in terms of the two supermarkets fighting it out. The Hon David Clark talked about those supermarket wars, and we saw that in my very own suburb a number of years ago when one of the main chains bought out a piece of land and pretty much drove the other supermarket to move and build in a place out of our suburb. So, suddenly, us up in Westown and Marfell had no supermarket to go to. We had to drive, and for many people in my community, driving wasn’t an option. They may not have owned a vehicle, or they may have had limited access to public transport.

As the Minister spoke about earlier, good quality services are about price, about quality, about range, and about service. And so this piece of legislation is going to support that, because in many of our communities around Aotearoa, it is actually about accessing those supermarkets. What happened in my community was there was a small corner store where the price of a tin of baked beans was five or six dollars, or a roll of toilet paper came singularly and was very expensive because they didn’t have access to services.

So this is a good piece of legislation. This is moving it forward because we need to get this right, and as a member of the Labour Party, our commitment in the last election is around ensuring that customers have fairer prices at the checkout. I commend this bill to the House.

Hon EUGENIE SAGE (Green): Tēnā koe, Mr Speaker. Thank you. The Green Party is also supporting the Commerce (Grocery Sector Covenants) Amendment Bill. We support it because it is going to stop supermarkets from engaging in anti-competitive behaviour by putting restrictions on land to prevent their competitors buying up those sites, or dictating the terms of leases in shopping malls and shopping centres where they, as a major anchor tenant, might dictate that that mall cannot have similar businesses, like butcheries or bakeries, or can’t have another supermarket on the premises.

I really congratulate the Minister, firstly, for getting the Commerce Commission to do that market study of the retail grocery sector, and then moving so quickly to implement one of its key recommendations—and promising more action. Because, as the Commerce Commission noted, we’ve got a duopoly here, with some other operators on the fringes. I think, as Mr Bayly noted, that they, in their study, found that there were more than 90 of these restrictive land covenants to prevent rivals opening up stores on that land. Around 60 of these had a term of 20 years or more—they’re largely in Auckland, Wellington, and Christchurch. Similarly, with the exclusivity covenants—there are around a hundred of those being included in lease contracts. So those are definitely anti-competitive.

When New Zealanders spend $22 billion annually on groceries in supermarkets and grocery stores across the country, we’re talking about a big tranche of money and a million dollars a day, as the Minister mentioned, in profits for the supermarkets. So anything that—

Hon Dr David Clark: Excess profits.

Hon EUGENIE SAGE: Excess profits. Even though this law is retrospective—because it applies to covenants which exist at the moment—and that’s not something the Green Party would normally support; if it wasn’t retrospective, then the bill would have little effect.

We also note we’ve got some concerns over the shortened select committee process, but that there has been consultation by the Commerce Commission—it got the big grocery retailers to comment on its draft report before it was released. So there has been some consultation on the principles around this bill before it was introduced.

The Commerce Act, under Part 2 and restrictive trade practices, already has provisions which prevent anti-competitive practices. So by bringing these restrictive covenants—the land covenants and the exclusivity covenants—within the scope of Part 2, then the whole panoply of the Commerce Act, and the enforcement measures, and those prohibitions will apply to them.

Certainly, there have been, in the Resource Management Act (RMA) since about 2009, provisions which seek to prevent the supermarkets using trade competition as an argument, in their submissions against a land-use consent and related consents, when a competitor seeks to get those from council. But the courts have allowed a bit of discretion there, in terms of that. They certainly exclude the direct effects of trade competition in terms of the RMA process, but they have considered some of the flow-on significant retail distribution effects. So the RMA, as a planning tool, has not been effective in preventing these restrictions on competition, which is why we need these changes to the Commerce Act.

The Commerce Commission, in its report, also suggested changing the Overseas Investment Act to make it easier for an overseas operator to come in. As with the previous speaker from the National Party, I have some concerns about that. The fact that we have Foodstuffs—for example, it is a cooperative and has New Zealand operators. That is one benefit. Having overseas operators enter the market—like Costco is doing—certainly, that may lead to cheaper prices for consumers but it means, of course, that the profits go offshore. So it’s not something that we should encourage.

I note, too, that there’s going to be some monitoring of land banking. Even if these restrictive covenants and exclusivity covenants are outlawed, if supermarkets buy land, because they’re planning long term, and sit on those sites without any real intention of opening a store there—that is also potentially reducing the ability of other entrants into the market. And it was making it easier for other entrants to get in and for existing competitors to expand their networks that the Commerce Commission was concerned about.

When similar measures to these were introduced in Australia—I think it was the ALDI chain went from less than 200 stores to more than 500 stores. So these types of measures have been shown to be effective elsewhere. The Green Party supports this bill, while having concerns about the truncated select committee process, because all legislation benefits from public submissions and good, comprehensive select committee scrutiny. Thank you.

DAMIEN SMITH (ACT): Thank you very much, and to the Minister, thank you, too. This bill is meant to stop major supermarkets blocking competitors from accessing land for new stores, and has been introduced to the House. It amends the Commerce Act 1986, banning restrictive covenants in land and exclusive covenants of leases. It also makes existing covenants unenforceable. The legislation stops supermarkets from engaging in anti-competitive behaviour, what they’ve called “land wars”, where they buy up land or dictate the terms of the lease to block competitors from getting a foothold in the area. But Ponsonby is probably not the best example. I mean, you go to Dargaville and it’s been known that it’s taken years and years and years to develop the complex that exists there. So, regionally, there are some differences to metro urban areas. Also, the bill is supposed to promote an even playing field for new competitors to enter the market.

So lifting supermarket covenants is a step forward towards creating an environment where new operators can take on the big players, but it doesn’t address the challenges for taking on new competitors and for new players in the sense of, has this happened too late? And what’s left out there for rivals to actually develop? I look forward to exploring that and getting clarity on that in the process that we will go through with the select committee.

In some respects, the bill is flawed. For instance, there’s nothing to stop anyone else, including big box overseas grocery chains like Costco or ALDI from setting in place similar covenants. Unless the Commerce Commission recommends new retailers to be included in the ban and the Governor-General signs it off, this new law only applies to two existing supermarket chains.

Hon Dr David Clark: It’s explicit that that’s provided for.

DAMIEN SMITH: Can I just finish my speech, Mr Clark. To be clear: these land covenants and exclusivity provisions and leases are harsh, not competitive, as has been reported in articles on their anti-competitive use at Highland Park and Prebbleton, as an example.

The Commerce Commission and the supermarket chains have agreed this should put an end to the practice that’s put competitors off and stopped small, locally owned butchers and bakers and greengrocers that should be at the heart of our communities from opening anywhere near the big supermarkets. If you want to open up a mega butcher store with a fruit and vegetable side to that, then rights are duplicable. So those are some of the aspects that the Minister will be glad to know that at first reading here we are supporting this bill, with reservations.

Hon Dr David Clark: Hear, hear. Very good, thank you.

DAMIEN SMITH: Thank you. But we would like to iron out some of these details and make sure that there’s a level playing field and it’s not anti-competitive. We are absolutely sure that there are still places in this country for this to take effect. As JLL said, we want to grow and assist new chains developing, but we have to be certain that legally there are rivals out there who will want to develop. You know, it’s pretty simple. It’s a commercial enterprise. They take risk on the market. They do the demographics. They look at the amount of people that are spending. They try and second-guess the supermarket chains and they also have no special rights with councils or developers to be there or not be there.

So, in conclusion, the key question is: what is out there for rivals still to develop? And is this bill too late or will it make a difference in terms of supermarkets and helping that be competitive on prices? Because those are two separate issues. You can put a supermarket somewhere and you put it next to somewhere, but if you’ve got two of them—it’s like a cinema chain—it usually grows the market for usage, but will that actually create pricing and purchasing power for the consumer? So, on that note, we would like to support the bill at the first reading, with reservations, and get all those questions answered through the committee.

Motion agreed to.

Bill read a first time.

DEPUTY SPEAKER: The question is, That the Commerce (Grocery Sector Covenants) Amendment Bill be considered by the Economic Development, Science and Innovation Committee.

Motion agreed to.

Bill referred to the Economic Development, Science and Innovation Committee.

Instruction to the Economic Development, Science and Innovation Committee

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I move, That the Commerce (Grocery Sector Covenants) Amendment Bill be reported to the House by 16 June 2022 and that the committee have authority to meet at any time while the House is sitting except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House and outside the Wellington area despite Standing Orders 193, 195, and 196.

I consider that there is urgency—just by way of reason—in addressing competition in the grocery retail sector. It is a key driver of the price, quality, and range of grocery services offered to New Zealanders, because high grocery prices contribute to food insecurity, particularly for lower-income New Zealanders. By rapidly considering the bill, the Government is clearly signalling our intention to improve competition and outcomes for consumers.

It’s a very discrete element of the reform programme. It can be dealt with reasonably quickly. Exclusive and restrictive covenants will be prohibited immediately once the bill comes into effect. I anticipate the competitors will begin to consider new sites shortly thereafter.

It is well-considered. The major grocery retailers have already signalled that they intend to remove restrictive covenants. In fact, Foodstuffs North Island has already removed—it’s stated publicly—over half of its restrictive covenants.

But it is important to get right. That’s why we are recommending this go to a shortened select committee process, to address any loopholes that might inadvertently prevent a competitor from accessing land for new stores. Following the select committee’s report back, I intend to pass this bill swiftly thereafter.

So it’s relatively straightforward, it can be progressed within a shorter time frame, it’s a discrete proposal, and it situates the change in the Commerce Act under “Restrictive trade practices”, which means that the changes are nestled within existing process, remedies, and compliance measures, which the sector is familiar with and have all been well-tested.

DEPUTY SPEAKER: The question is that the motion be agreed to.

DAMIEN SMITH (ACT): The process for a select committee is absolutely essential, and the questions that we pose from the ACT Party absolutely are fundamentally necessary for the protection of businesses in New Zealand and new entrants to New Zealand.

We would like that full process to be honoured in the select committee and to take the time to get this right. We would like to make sure that this process isn’t just used as a legal tool; that it’s actually used as a tool that the industry understands and we expect submissions from the industry.

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

Ayes 65

New Zealand Labour 65.

Noes 54

New Zealand National 32; Green Party of Aotearoa New Zealand 10; ACT New Zealand 10; Te Paati Māori 2.

Motion agreed to.

Bills

Companies Office Registers Funding Validation Bill

First Reading

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I present a legislative statement on the Companies Office Registers Funding Validation Bill.

DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon Dr DAVID CLARK: I move, That the Companies Office Registers Funding Validation Bill be now read a first time.

This bill validates the past collection and use of fees by the New Zealand Companies Office. In a few moments, I’ll say more about the bill and how it supports the Government’s plan to improve the way our Companies Office is funded, but first I would like to explain to the House the background to the Government’s intention to introduce this bill and for it to pass through all stages under urgency. The context is important to understand why the Government is taking decisive steps, and I want to be transparent and open in the House.

Our Companies Office has been a critical part of New Zealand’s society and economy for many years. It’s well-known that the Companies Office maintains a register of companies operating in New Zealand that contains important information about businesses and makes this information accessible to the public. The Companies Register therefore builds trust and confidence in the economy, helping to make New Zealand a transparent, fair, and easy place to do business.

It’s probably less well-known that the Companies Office also has responsibility for maintaining 15 other registers that support economic and community activity in New Zealand. As well as companies, it registers other entities including incorporated societies, retirement villages, and limited partnerships. The Companies Office also maintains lists of licensed auditors and insolvency practitioners, and it maintains registers for disclosure of financial products and security interests over personal property. All of these registers have information that is searchable by the public.

The role of the Companies Office has evolved over time. It’s taken on more and varied responsibilities across our economy and community. At the same time, it has had to evolve to keep up with new and emerging information technology.

During the course of a routine fees review last year by the Companies Office, it came to light that there was a mismatch between the primary legislation governing the Companies Office and the registers and their fees, and the Companies Office actual funding practices. The Government recognises that this is a problem that needs to be resolved. The problem has arisen in circumstances where the primary legislation was based on there being 16 separate registers. However, that doesn’t reflect the reality that the modern Companies Office administers a registry system with 16 different interconnected registers. They’re all housed within what we call the Companies Office and to a varying degree they share infrastructure, technology solutions, staff, know-how, and other resources. Indeed, the same individual is currently the registrar for all of the registers except for the New Zealand Business Number Register. That set-up has in turn made it difficult for the Companies Office to keep the costs of running the registers entirely separate.

Another issue is that some of the smaller registers maintained by the Companies Office have not been recovering enough in fees for those registers to be fully self-funded. So to fill these gaps, the Companies Office has used surplus funds it’s received in fees from the users of other registers to make up shortfalls, not realising that that cross-subsidisation was not consistent with the legislation itself.

For something of a time line, just for the benefit of the House, it’s clear that the funds have been moved between registers since at least the formation of the Ministry of Business, Innovation and Employment in 2012—obviously, decisions were taken then about how things were done—but it seems likely that it’s been occurring for some time far longer. In 1995, the Companies Office started using a memorandum account, and that memorandum account shows surplus and deficits. There’s only one memorandum account for the whole Companies Office, rather than for each register, so any surpluses collected by the Companies Office or any of its registers has been in this memorandum account since 1995. That suggests that the separation of funds register by register intended by Parliament has not been happening since then. Originally, any surpluses showing in the memorandum account were returned to the Crown at the end of each financial year, but in 2011 that practice changed when surpluses began being managed internally. The issue came to light in 2021, when the Companies Office undertook a review of fees of all of its registers at the same time. In doing so, it became apparent that the Companies Office practices did not match with the legislation.

So last year, the Government allocated $3.7 million to alleviate the cross-subsidisation issue in the immediate term, and with this legislation we’re taking the first step to further resolve these issues—that’s with this validation bill. I say that’s only the first step because the Government also plans to introduce another bill to Parliament to allow for the introduction of levies that can be used across the 16 registers that the Companies Office operates: the Companies (Levies) Amendment Bill. That will lead to more appropriate and less siloed funding for the 16 registers and any new registers that are created in the future, so it will give the flexibility to do what makes sense in practice.

Now, it’s possible, obviously, that talking about two distinct bills may be a source of confusion, so, just to be clear, I think it’s helpful for members, to distinguish between the two bills, to remember that the bill before us now, the validation bill, looks backwards. It’s a retrospective bill. It fixes what’s happened in the past. The second bill, by contrast, that is yet to come, the Companies (Levies) Amendment Bill, looks forward and allows for Companies Office users to be charged levies to help pay for the corporate registry system that they share.

I hope to introduce that second bill to the Parliament before too long, and I’ll ask for it to be referred in due course to the Finance and Expenditure Committee for a full select committee process—certainly four months. That will give the public an opportunity to submit on the reforms that we legislate for, so that will be a full process. Companies Office users will be able to participate in that select committee process and also in a consultation in relation to regulations that will then be made under that bill. The consultation document will go through who should pay for the levies, how much the levies should be, and the underlying analysis for those levy proposals.

I’m seeking to take this validation bill through all stages under urgency. That’s for two main reasons. First, it will allow the Companies Office to use its existing surplus funds to cover shortfalls on registers while we put the long-term funding plan in place, and that’s important, otherwise we would have to inject more Crown funding into the Companies Office or immediately raise fees, which, for example, for an incorporated society would mean raising fees immediately by $200, I think—$200? I’m now not certain of that. Several hundred, in any case. Many societies, of course, are not-for-profit entities doing good things in the community, so we don’t want to do that without a full and appropriate process.

The second reason is that if we went through a normal statutory process, we’d leave the Crown open to uncertainty and risk that comes with that, including that some of the past money collected as fees may need to be refunded, and while that’s likely to be extremely modest sums, the cost of administering a complex regime to work out who would be owed what retrospectively, where they live now, who’s responsible for an incorporated society, who was then—you can imagine that the cost of the bureaucracy involved would be likely to be unreasonable and outweigh any benefits that might accrue to individuals. I don’t think people in this House would want that, particularly when nobody has raised any concerns about the way it’s being run currently. That just wouldn’t make sense.

So, to move forward, we’re drawing a line under these possibilities here in urgency and are looking forward to the future with a new, modern, and streamlined funding regime for our Companies Office. So I commend this bill to the House.

DEPUTY SPEAKER: The question is the motion be agreed to.

ANDREW BAYLY (National—Port Waikato) (remote): Thank you, Mr Speaker. It’s a pleasure to be talking on the Companies Office Registers Funding Validation Bill. We will be supporting this bill because, as the Minister has quite rightly pointed out, it’s dealing with an issue of inappropriate use of funds and how they’ve been applied across a number of registers, which I’ll talk about in a minute. I do want to acknowledge the Minister for bringing the matter to our attention prior to introducing this bill. So having an understanding about this, I think bipartisan support across the House is an important thing at times, even if it’s a very short notice around when you receive it, but at least gaining an understanding of why we’re doing things like this. And I do want to acknowledge the Minister on that behalf.

This bill, as the Minister quite rightly said, is dealing with an issue across subsidisation undertaken by the Companies Office. Effectively, there’s been amounts that have been charged too much in one or two registers administered by the Companies Act, which has meant that in other registers there have been an underfunding, or an undercharging, of people using those registers. As the Minister said, there are 16 registers that are affected. They are wide-ranging in terms of different registers. There’s the incorporated societies register, the financial service providers register, limited partnerships, disclosure register, auditors register, retirement villages register, friendly societies and credit unions register. So, that’s not an exhaustive list but it’s certainly a number of the registers that have been affected.

So this bill, as the Minister says, does two things. One is it stops the potential of people saying, “Look, you can go to charges previously and it is inappropriate, even though they’re modest amounts.” So we clear the backlog of this and also just make sure that we’ve got an appropriate basis going forward.

In terms of the new bill that the Government’s proposing to bring in, the Companies (Levies) Amendment Bill, which, obviously, we haven’t seen, I’m glad that it’s going to be subject to full scrutiny, because, as the Minister just said, that means that the element of cross-subsidisation between registers will be permitted under the new bill that the Government is proposing to bring in. That’s going to lead to a healthy debate, because the principle generally is that funding and charging should represent the service and no more and, obviously, no less. And what has happened is that hasn’t occurred under this arrangement. The use of the term “memorandum account” is one where, effectively, all the surpluses and losses, whatever, are accounted for in one account. It’s what’s meant by the words “memorandum account”. And to then apply that back up into the Companies Office that administers 16 different registers, that’s going to lead to a healthy conversation and debate, whether in fact that is appropriate, because that starts to cut across principles of charging of Government services.

But this one we will support. It needs to be done quickly and appropriately. Thankfully, there’s not large sums of money involved in it, and I think it addresses an issue that has been longstanding. So, on that basis, I’m happy to see it proceeding through the House today.

JAMIE STRANGE (Labour—Hamilton East): Thank you, Mr Speaker. Delighted to take a very short call on the Companies Office Registers Funding Validation Bill. I’d like to acknowledge the Minister, the Hon David Clark—a very busy, hard-working Minister, bringing multiple pieces of legislation to the House; doing an excellent job. I’d like to acknowledge the support of the National Party and echo the words of the previous member. The previous member, Andrew Bayly, spoke about, you know, with bills it’s important that we do work hard to get a consensus across the House. So I’ll be watching with interest in terms of the further speakers, hoping for support.

Simply put, the Companies Office has collected and used money in a way that was not intended by Parliament when it passed the Act. It is clear that this has been occurring at least since the formation of Ministry of Business, Innovation and Employment in 2012, but it is likely to have been occurring for some time longer. I’m very pleased to see the Minister bring this bill to the House in terms of rectifying the situation we have. I commend it to the House. Thank you.

SIMON WATTS (National—North Shore): Thank you very much, Mr Speaker, and I rise as the member of Parliament for North Shore and as a member of the National Party in support of the Companies Office Registers Funding Validation Bill. I join with prior speakers to acknowledge the Minister for working proactively with the Opposition in order to have discussions before this bill was brought to the House. That is appreciated and is representative of a good process and, in this case, a bill that is going to deal with some significant issues. National supports this bill, and we’re looking forward to seeing it pass its way through this House.

GREG O’CONNOR (Labour—Ōhāriu): Thank you, Mr Speaker. This bill could well be called “The Economies of Scale Bill”, because that’s simply what it’s doing.

We have all these different registers, it was envisaged they would all collect their own money, have their own bureaucracy around it, and have their own little jam jars to store it. That wasn’t what occurred and it shouldn’t have been what occurred.

We’ve now got the economy of scale of probably one set of accounts around these, and it just means that now, instead of the extra funding going with each of those different registers, we can now take a common-sense approach and, of course, have the retrospectivity on this to make sure that anyone alerted that might take some mischief or try to place a mischief with will be prevented from doing so.

So a very sensible piece of legislation, good to see the support around the House, and I commend it.

MARK CAMERON (ACT): Thank you, Mr Speaker. The ACT Party will be supporting the Companies Office Registers Funding Validation Bill. Thank you, Mr Speaker, for the opportunity to speak on this first reading of this bill. As one might appreciate, this piece of legislation is well outside my normal port of call. That being said, I will endeavour to offer a fair and balanced contribution for those that seek clarity of how this bill will affect them.

The bill, as written, is an omnibus bill, and it will amend 13 Acts to retrospectively validate fees that have been collected under those 13 Acts and that have been and will be applied under any register administered by New Zealand’s Companies Office. This bill, as written, amends those 13 Acts. I could go through the full 13 Acts this bill seeks to amend and quote them verbatim, but as I’m cognisant of time and as I am aware that some of my parliamentarian colleagues will be wishing to share their contributions—equally, perhaps, not as well versed as I in this area, or more—so I’ll keep my comments moderately short. However, for the benefit of some of my colleagues that are like me that may want to be more intimately versed in this legislation, here are some examples that the legislation addresses: the Companies Act 1993, the Financial Markets Conduct Act 2013, the Friendly Societies and Credit Unions Act 1982, and several others.

Over time, the Companies Office has moved towards providing shared services to the registers and has allowed the Companies Office economies of scale in the delivery of registry services and to leverage technological developments, this enabling registry services to be centralised and shared across registers. Over time, these changes have reduced cost to users, but, unfortunately, this has made it increasingly difficult to distinguish between the costs of providing services to each register. Equally, the fees charged for some small registers have not managed to keep up with the cost of operating them. The shortfall was met with a surplus from fee collections for other registers. This practice is not authorised in legislation.

In essence, the bill addresses the Companies Office practice of applying funds collected in fees not in the scope of current legislation and does this by retrospectively validating the Companies Office charging and expenditure practices. The crux of this bill addresses that shortfall and will enable the Companies Office to use the surpluses it has collected to fund anticipated shortfalls on certain registers while a new, unified funding regime is established. In short order, it provides for a lawful basis of funding shortfalls while reforms in the Companies (Levies) Amendment Bill are implemented. The regulatory impact statement produced by the Ministry of Business, Innovation and Employment suggests various options of how best the legislation could be worked through and compared to those counterfactual. After reading through these, the ACT Party found that the option that had streamlined accounting practices—compared to the counterfactual—would avoid additional costs to regulators and regulated groups. It was certainly the most practical way to address the underlying issues needed in the proposed bill. There were some concerns under the current fees-setting provision that the cost of providing a shared service for each register is recovered from fees charged to the users of that register, this because the unit cost of each register depends on the total number of entities registered. Users of an identical shared service can be charged materially different fees for what is fundamentally the same service, this, of course, depending on how many users of the register there actually are.

However, on balance, with full consideration given to the benefits and the potential cost, the ACT Party believes this bill should go through the necessary legislative scrutiny and further debate in this House to iron out any discrepancies or unintended consequences in the bill as currently written. The ACT Party does support this bill, and we look forward to the contribution of other members in the House. Thank you, Mr Speaker.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. I’m taking a very short call on behalf of the Green Party. We are supporting this bill. As all the other speakers have already mentioned, the rationale for it—there were some mistakes made in terms of the ways the Companies Office has collected and used money that was not intended by Parliament when it passed the original Act, and this needs to be cleaned up. So the Green Party is going to be supporting this bill.

GLEN BENNETT (Labour—New Plymouth): Kia ora, Mr Speaker. I rise to take a call on the Companies Office Registers Funding Validation Bill. I want to thank the Hon Dr David Clark for bringing another piece of legislation to this House and just working hard to ensure that things are in place, that things are getting sorted—and it’s more than tweaks, but it’s getting things in a better place. As was said earlier by a previous speaker, pieces of legislation like this are just common-sense approaches in terms of what’s going on.

So as others have said, the Companies Office is a registry service, it’s got the 16 different registers, each governed by a separate Act of Parliament. Basically, this piece of legislation enables the funds to be moved between the registers, as at the moment they are not. Pretty much that’s it, in a nutshell. I’m sure as we move the legislation through the second reading, third reading, I’m sure there’ll be far more information that I can share then, but I commend this bill to the House.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Mr Speaker. The Minister and others have outlined clearly the purpose of the legislation and why it’s needed, including the reason that the passage of it will be so quickly conducted through the House. So I do acknowledge those points and acknowledge, on behalf of National—as others have done already—that we support it.

Only a couple of brief points from me. One is that the effect of the bill is retrospective; often times that’s a red flag for us as lawmakers, where we’re looking back, making something right that was wrong. In this case, it’s worth noting, I think, for the record, this is not a criminal matter. So we’re not retrospectively making something a criminal offence, or even the other way around, and even if it were it would be in the nature of what’s colloquially referred to as a victimless crime. There’s no harm being done here that should not be undone.

The other point was just around the incorrect use of levies. The Minister has outlined why and how that’s the case from quite a technical legal perspective. That’s not uncommon, actually, within our various Government agencies, so I think there’s probably a wider systemic issue here, and it’s something that the Regulations Review Committee takes very close interest in as part of our remit, so we’ll look forward to that next bill coming through and with the fuller process the Minister has highlighted will take place in that.

So those were my particular points that I wanted to make. I emphasise that we continue, on this side of the House, to support the bill, and we’ll do so through further stages today.

TANGI UTIKERE (Labour—Palmerston North): Tēnā koe, Mr Speaker. Happy to take a short call.

This is a necessary piece of legislation to be in place, as it acknowledges and rectifies previous and current practice of the Companies Office and makes what has been prior practice permissible moving forward.

We’ve heard already in the House this afternoon that the Companies Office is responsible in this regard for the regulatory, or registrar, functions for 16 Acts—the earliest in 1908; the latest in 2019.

The Minister himself referred to the economic and community development aspects in New Zealand. That’s why it’s important that this is a piece of legislation before the House. I commend it.

STUART SMITH (National—Kaikōura): Well, thank you, Mr Speaker. I don’t intend to take very long. This is a necessary piece of legislation, I think it’s been said by all. I’d particularly like to acknowledge Chris Penk’s contribution regarding the regs review aspect and view on the bill. I think that really says it all. I’d like to just commend the bill to the House.

Dr EMILY HENDERSON (Labour—Whangārei) (remote): Tēnā koe, Mr Speaker. I am delighted to bring in the end of the first reading of the Companies Office Registers Funding Validation Bill, and it is good to do so in a spirit of amity around the House. This is a small but necessary fix for a very important part of our economic life, covering the gamut from the Companies Register to the incorporated societies to the retirement villages to the charitable trusts. It is important that this office continues to work smoothly. This piece of legislation is going to make that possible and I commend it to the House.

Motion agreed to.

Bill read a first time.

Second Reading

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I move, That the Companies Office Registers Funding Validation Bill be now read a second time.

As I’ve said already in the House during the first reading, this bill validates the past collection and use of fees collected by the Companies Office on all of the 16 registers it maintains. It seeks to rectify past issues of cross-subsidisation within the Companies Office ahead of the implementation of a new funding system. It allows the Companies Office to spend its existing surplus to fund shortfalls while we put the longer-term regime in place.

The legislative framework for the new funding system is the forward-looking Companies (Levies) Amendment Bill—look out for that one coming around the House. I hope it will be introduced to the House before too long. This bill is the first step in the Government’s legislative package to modernise Companies Office funding, and with that I commend this bill to the House.

Dr JAMES McDOWALL (ACT): Thank you, Mr Speaker. What a privilege being the second speaker on a bill. This is certainly a slightly unusual situation. This is like the Diet Coke version of lawmaking.

I thank the Minister for, at the very least, providing the House with a legislative statement in both readings so far. I’ll note that this is an omnibus bill. There’s a lot of aggregation being made in the law, in a heartbeat. Note we’ll have no submissions from the stakeholders, so we can’t particularly terse out the unintended consequences in advance.

We just have to hope that the Government has done its homework with this one and that the regulations work as expected. The fact that they’re doing this in Budget week, in the traditional urgency segment, it kind of—the reasons given for using urgency were not overly compelling, but at least it’s something that has cross-party support.

The Minister said New Zealand wants it to be a fair, transparent, and easy place to do business. In the global context, that’s quite true. You know, New Zealand is a relatively easy place to start a business. Those of us that have done that before know that.

But lawmaking like this can cause a bit of uncertainty, sometimes, with the levies that were mentioned in the forthcoming bill. You know, when we’re talking about enabling—like this bill does—a future unknown law, we really should ensure that the first one goes through a proper process, not just the second one.

But in any case, with some reservations—certainly some reservations about the process and this, frankly, very unusual and strange way of making laws on a Friday afternoon—we are going to support the bill.

ASSISTANT SPEAKER (Ian McKelvie): Our next call is a remote call. The question is that the motion be agreed to. In going to the remote call, I call Dr Emily Henderson—I suspect, the first of three doctors I’d want to visit.

Dr EMILY HENDERSON (Labour—Whangārei) (remote): Tēnā koe, Mr Speaker, again, and any visit from you is, of course, a welcome one, especially in this House. I rise to speak in support of this Companies Office Registers Funding Validation Bill again. The Companies Office fulfils a vital function in New Zealand life, providing the authoritative source of information about New Zealand businesses, and it is absolutely vital we keep it running. However, under current legislation, each individual register is supposed to be funded from fees charged to users of that register. Some run at a surplus, others run short, and in those case, the Companies Office has, understandably, been applying the excess funds from one to the support of the other. This in fact ultra vires the legislation, and thus we gather today to make this small but vital fix. I commend this bill to the House.

Motion agreed to.

Bill read a second time.

DEPUTY SPEAKER: I declare the House in committee for consideration of the Companies Office Registers Funding Validation Bill.

In Committee

CHAIRPERSON (Ian McKelvie): Members, the House is in committee on the Companies Office Registers Funding Validation Bill. I remind members that they are able to participate remotely. If you are on Zoom and want to take a call, please type “call” into the chat. You should also use the chat if you wish to raise a point of order. If we receive new tabled amendments, I will advise members so that they can refresh the House papers page to see the new amendments. Finally, it would helpful for members to ask multiple questions, if they have them, of the member in charge during their call. Members, we now come to Part 1.

CHRIS PENK (Senior Whip—National): Excuse me—point of order. I seek the leave of the House that all provisions within the bill be taken as one debate.

CHAIRPERSON (Ian McKelvie): Is there any objection? There is no objection.

Parts 1 and 2, Schedule 1, and clauses 1 and 2

CHAIRPERSON (Ian McKelvie): The question is that Parts 1 and 2, Schedule 1, and clauses 1 and 2 stand part.

Parts 1 and 2, Schedule 1, and clauses 1 and 2 agreed to.

CHAIRPERSON (Ian McKelvie): I will report this bill without amendment.

House resumed.

CHAIRPERSON (Ian McKelvie): Mr Speaker, the committee has considered the Companies Office Registers Funding Validation Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Third Reading

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I move, That the Companies Office Registers Funding Validation Bill be now read a third time.

The bill, as outlined in the various stages in the debate so far, is the Government’s first step in the implementation of a better and more fit for purpose model for funding the New Zealand Companies Office. The model will reflect the modern realities of running the corporate registry system. It’ll allow the Companies Office to leverage information technology developments and realise efficiencies.

The bill that we are passing now through the House validates the past collection and use of fees collected by the Companies Office across all of its 16 registers it maintains, and also expressly allows existing surpluses within the Companies Office to be used to meet funding deficiencies on some of its registers while the new funding model is implemented.

I do want to thank the members across the House for their cooperation and thoughtful comments through the passage of this bill. I have appreciated the quality of the debate. I mean that quite earnestly, Mr Penk, because the contributions, certainly the early ones, canvassed the issues involved, I thought, quite thoroughly, including the speech by Mr Bayly. And I have also appreciated the brevity of the latter speeches.

So the bill forms a package with the Companies (Levies) Amendment Bill, which lays out the legislative framework for the new Companies Office funding regime. That’s a bill that I will introduce to the House before too long and refer to the Finance and Expenditure Committee. But, for now, I commend this bill to the House.

ASSISTANT SPEAKER (Ian McKelvie): The question is that the motion be agreed to.

ANDREW BAYLY (National—Port Waikato) (remote): Thank you, Mr Speaker. It’s a pleasure to be speaking on this third reading. Yes, I do acknowledge the Minister. It’s important that we do proceed with this bill quickly, and shortly it’ll be an Act, which is better. I think the one thing we haven’t had a debate on—it didn’t come up—was the operative clauses around how this comes to pass. There’s a new section, new section 84A, which provides that “a fee to which the section applies is and always has been validly imposed.”—that’s the validation of fees component. “Money received by a Registrar of any register maintained by the Companies Office”—and we know there’s 16 of them—“in payment of the fee is declared to be, and always to have been lawfully collected and applied.”

And so the other, second component of that is it defines the Companies Office as the “division or part of each of the following departments” or agencies. As I alluded to in my first reading speech, the amendments are to the Building Societies Act 1965, the Companies Act 1993, the Financial Markets Conduct Act 2013, the Financial Services Providers (Registration and Dispute Resolution) Act 2008, the Friendly Societies and Credit Unions Act 1982, the Incorporated Societies Act 1908, the Insolvency Practitioners Regulation Act 2019, the Limited Partnerships Act 2008, the Personal Property Securities Act 1999, and the Retirement Villages Act 2003.

So just for completeness, for people listening—if they were, on a Friday afternoon—but they are the operative elements, and, of course, that’s the reason this bill is broken up into the components—because each of those 13 pieces of legislation will have the same clauses inserted in them. So, on that note, I certainly commend this bill to the House.

MARK CAMERON (ACT): Oh, for the sake of good virtue in this final reading, and I think we’ve canvassed it well in the House, I congratulate the bipartisan nature of the support for the Companies Office Registers Funding Validation Bill. It is a shame that we are having a very truncated process under urgency, and, you know, as legislators, I think it’s incumbent upon all of us to have proper and honest scrutiny about legislation. This withstanding, this is a good piece of legislation. It mitigates the problems that we have all canvassed through the various speeches today, and the ACT Party supports it in this third and final reading.

Motion agreed to.

Bill read a third time.

Bills

Customs and Excise (Tobacco Products) Amendment Bill

First Reading

Hon MEKA WHAITIRI (Minister of Customs): I present a legislative statement on the Customs and Excise (Tobacco Products) Amendment Bill.

DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon MEKA WHAITIRI: I move, That the Customs and Excise (Tobacco Products) Amendment Bill be now read a first time.

The purpose of this bill is to ensure the correct excise and excise-equivalent duty is able to be applied to certain tobacco goods and to reduce revenue evasion. Tobacco products are highly taxed for public policy reasons, in particular to reflect the negative health impacts and costs of tobacco consumption on individuals and society. The bill addresses two issues: under-declaration of the tobacco content of water-pipe tobacco, and the need for technical amendment to the definition of tobacco products in the Customs and Excise Act 2018. These issues are not related but are both urgent due to their impacts on Crown revenue and the potential to undermine the Smokefree Aotearoa 2025 Action Plan.

Water-pipe tobacco is also known as flavoured shisha, hookah, molasses, and fruit tobacco. Unlike other tobacco, water-pipe tobacco contains other items, including glycerol. It may also contain aromatic oils and extracts, molasses, or sugar, and may be flavoured with fruit. These other items may make up a significant proportion of the weight of the product. It is for this reason that in New Zealand it is taxed based on the kilo of tobacco content. When importing water-pipe tobacco, importers are required to declare the kilograms of tobacco content on their import entry. Customs suspects that self-declaration of the tobacco content by some importers is leading to material under-declaration of tobacco content in water-pipe tobacco products and revenue evasion.

In the cases of other goods where Customs question the information provided, testing and investigations can be undertaken to determine the accuracy of the information. As there is no testing facility available internationally or domestically, it is not technically possible for Customs to accurately determine the tobacco content of water-pipe tobacco. Customs is forced to use the declared tobacco content provided by importers to determine the excise on the product. As the accuracy of the declared tobacco content cannot be determined, this also means Customs is unable to meet the evidential threshold for seizure and prosecution.

The bill addresses the difficulty in accurately determining tobacco content in water-pipe tobacco for the correct levying of excise and excise-equivalent duty. The bill achieves this through imposing import controls, changing the statistical unit for calculating duty, and creating a new excise and excise-equivalent duty rate for water-pipe tobacco.

Paying incorrect revenue denies the Crown of revenue that is due to it and also undermines our health strategy of using tobacco taxation to increase prices, reduce consumption, and reduce the harm that smokers cause to New Zealanders’ health. The supply of cheaper tobacco products can also counteract the incentive to quit tobacco products that are fully taxed. It also creates an uneven playing field in the market, as honest importers who correctly declare the tobacco content of their goods are able to be undercut on price by dishonest importers who evade duty.

To combat this, the bill changes the method of calculating excise and excise-equivalent duty from per kilo of tobacco content to total weight of the water-pipe tobacco, including anything added to the tobacco during manufacturing or processing. This brings New Zealand into line with a number of other countries, such as the United Kingdom and Australia, who have encountered the same issues in determining tobacco content of this product.

Moving from tobacco content to total weight requires a new excise and excise-equivalent duty rate. The bill amends the rate to one based on an assumed tobacco content of 15 percent. Customs believes 15 percent is a fair, standardised percentage, broadly in line with the actual tobacco content that most of this type of product is likely to contain. The bill sets the excise and excise-equivalent duty rate for water-pipe tobacco at $234.77 per kilogram based on the current tobacco excise rate and a tobacco content of 15 percent.

This bill imposes the same import controls on water-pipe tobacco that most other tobacco products are subject to, making it a prohibited import. Those wanting to import water-pipe tobacco will require a permit to be issued by Customs prior to importation. The bill is not about making the system harder for compliant importers. It will have minimal impact on them. They will need to apply for a permit to import. There is no cost for a permit to import. This bill aligns with the Government’s vision of eliminating the harm that smoked tobacco causes communities and of having a tax system that is efficient and fair.

Finally, this bill also amends the definition of “tobacco products” in the Customs and Excise Act 2018 to include new tariff and excise headings. These new headings are required as a result of changes made to the Harmonized Commodity Description and Coding System, an international system that codifies all goods, that came into effect on 1 January 2022. The Customs and Excise Act 2018 defines tobacco products for the purpose of the annual inflation adjustment by reference to specific tariff and excise headings. The harmonised code has reclassified some tobacco products under a newly created tariff heading, which also needs to be included in the relevant excise item. These must be included in the definition of tobacco products to enable the goods to be adjusted annually for inflation. Without this, they will become out of step with the excise and excise-equivalent rates for other tobacco products. This bill amends the definition of tobacco products to include the new excise item and tariff heading, ensuring that excise on all tobacco products can be adjusted for inflation.

I ask Parliament to support this bill. It will come into force the day after Royal assent. I am confident that it will ensure a fair market playing field for legitimate importers of water-pipe tobacco, protect Crown revenue, and support the Government’s Smokefree Aotearoa 2025 Action Plan. I am pleased to commend this bill to the House.

ASSISTANT SPEAKER (Ian McKelvie): The question is that the motion be agreed to.

Dr SHANE RETI (National): Thank you, Mr Speaker. National will be supporting this amendment to the Customs and Excise Act, a bill that fundamentally is trying to deal with two problems: first of all, the avoidance of excise tax on tobacco products and, secondly, to standardise the tobacco in flavoured tobacco with other tobacco products. The use of flavoured tobacco is very common—also known as water-pipe tobacco—and we’ve heard some of the names. It’s also known more commonly as shisha, hookah, nargile, goza, and hubble-bubble—is how you might hear it, certainly through the Middle East. I was very familiar with this where it’s a common practice.

The difficulty that we’ve got is that the tobacco in the flavoured tobacco product is also bundled together with glycerol and aromatics and molasses, and you can’t tell the weight of just the tobacco content, the KTC or the kilo tobacco content. In fact, the regulatory impact statement describes the challenge and the difficulty in trying to determine that. You’d think you could just send it to a laboratory or do some sort of test, but it’s not quite how it is. In 2016, Customs engaged Company A to test an importation to determine the tobacco content. Company A had to clean the samples with a bleaching treatment followed by water washes, as the leaf material was deeply coloured by other materials that are added to the leaf fragments during manufacture, and the samples then had to be dried to allow microscopic examination. The result they came up with was about 4 to 5 percent kilo tobacco content, which they suspected was substantially less, which is the problem we’re dealing with, than what the tobacco content actually was.

The regulatory impact statement also talks about the high index of suspicion of avoidance where manufacturers or importers, actually—of which there’s about 15, it turns out—commercial importers, are reporting 0.4 percent KTC as a self-declared importer, where, in fact, the suspicion is that it’s at least up to the 10 percent, if not the 15 percent level. The excise over the past two years, the excise tax on these products, has been $5 million. The suspicion is that there may be $31.5 million of excise avoidance over that two-year period, and so the suggestion is that it move to a total weight and then a percentage of that total weight—and a threshold analysis was done as to what that percentage should be, 15 percent, 20 percent, and 30 percent, and 15 percent was thought to be a fairer proportion and probably more representative of the true KTC component.

So this bill tries to simplify—it’s a bit of a guess, but it’s as much of a guess as any other jurisdiction as well—the mechanism and get some more accuracy as far as possible into assessing the true tobacco content of flavoured tobacco or water pipe tobacco. And it suggests this be done just by the total weight times the 15 percentage points. The second thing it does is to standardise the reference to tobacco across these products with the rest of the tobacco framework. So National will be supporting this bill. Thank you.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe, tēnā koutou e te Whare. I’d like to join with other parties so far in their contributions in stating that the Greens, of course, will be supporting this piece of legislation today.

As others have outlined, this Customs and Excise (Tobacco Products) Amendment Bill amends the Customs and Excise Act 2018 and the Excise and Excise-equivalent Duties Table—or, for those who are well-initiated, the EEDT—to ensure that the correct excise and excise-equivalent duty is applied to certain tobacco goods and reduce duty evasion, as was just well-outlined by my colleague Dr Shane Reti. It is very much the case that this is primarily for water-pipe tobacco or for those who may know it as hookah, shisha, molasses tobacco, and also fruit or flavoured tobacco.

It obviously makes sense to simplify this system, as others have well outlined, to ensure that some are not avoiding taxes that are levied on others by exploiting a loophole. Just to really drive this home, I want to thank the Minister’s officials for getting back to me on some of the concerns and considerations that the Greens had here—always making sure that we are trying to put in place the best form of harm reduction measures that don’t err too far towards prohibition and, in turn, have those perverse consequences of an extreme underground black market.

So, to that effect, I understand that some importers have been basing their import entry on tobacco content of between 2 and 5 percent and one at 0.4 percent. However, it is the case that rates that are this low are simply not credible, but due to the unavailability of testing facilities and some of the complexity around it—which Dr Shane Reti just outlined—Customs are unable to meet the evidentiary threshold for seizure and for prosecution.

I understand that Customs has also been trying to work alongside these importers, and has contacted some of the overseas manufacturers to enable the true tobacco content to be identified. However, as Customs has found, when overseas manufacturers are refusing to cooperate, there is, in fact, little that Customs can do because, of course, they fall outside of Aotearoa New Zealand’s legal jurisdiction.

All in all, this creates an unfair situation, or an uneven playing field, which impacts negatively on those who are playing by the rules and those who are not able to exploit this loophole. In turn, Customs has decided, advised the Minister, and we’ve ended up with this legislation, that assessing on around the 15 percent average basis is a fair standardised percentage, broadly in line with the actual tobacco content that most of this type of product is likely to contain.

I asked the Minister’s officials about what this would actually look like in practice, we’re not often, when we’re debating in this House, talking about what that looks like for the people on the street. So for those who may find themselves, for whatever reason, tuned in to Parliament TV on this Friday, listening to these budgetary debates, I can tell you that a typical retail price, in New Zealand, for a 50 gram pack of flavoured tobacco is currently around $25. With the changes to the way that excise and excise-equivalent duty is charged on these types of tobacco products, it’s estimated that that price could increase by $3, to around $28 including GST.

On the point around flavoured tobacco, we understand that it is, of course, a niche product in Aotearoa. There were only 15 importers of this product operating here in 2021. All importers will need to pay that new rate. It’s not a greater rate, because, of course, it assumes a tobacco content of 15 percent, which, as I just outlined before, Customs believes is a fair averaging out, based on the limited data that is available internationally.

Just in closing, in my contributions, particularly alluding to the concerns and considerations that the Greens have, just a brief comment on the notion of sin taxes for those who are interested in harm reduction and prohibition and what it looks like to regulate substances in such a way that we actually do go about achieving the things that we purport to want to achieve.

Sin taxes, for those who are uninitiated, are the kinds of taxes that we as the State or as a Parliament levy on the kinds of social harms that we want to see less of. This is, in practice, a kind of nudge economics, whereby we are trying to encourage people to do less of harmful things and, hopefully, to be moved into doing more of better things.

However, it’s really important to note again that when you really look into sin taxes, there is a point at which these sin taxes progress beyond the point of efficacy. That is, that they err in to being something incredibly regressive but also producing a substantial black market—actually, again, on the regulatory spectrum, kind of potentially more towards the end of prohibition in practice. This, of course, drives the black market model.

I’d note that, in the broader Budget, the Government has put aside millions of dollars for tackling the underground black market that is currently starting to get a grip in Aotearoa. To that effect, I just think it’s really important that we, as a House, when reflecting on the efficacy of the likes of not only the regulatory models for the kinds of social harms that exist out there, particularly in substances, which we can all approach with evidence if we want to, but also when we’re talking about the likes of these sin taxes, that we try and get it right.

As far as I’m concerned, as far as the Greens are concerned, there is a need to continue to look into the evidence, particularly as the Government considers, per the Cabinet papers proactively released around getting to Smokefree Aotearoa 2025, that we, of course, are paying heed to what the most evidentially based harm reduction model would look like.

So the Greens support this bill because it closes that tax loophole, which creates an unfair market, frankly, but we also pay heed to the fact that we have to continue to have an evidence-based policy when it comes to drug harm reduction. Kia ora.

Dr JAMES McDOWALL (ACT): Thank you, Mr Speaker. Well, the ACT Party will go into a slightly different direction here because I think we are in different territory compared to previous bills this afternoon. Here, we believe we’ve got a slightly inappropriate use of urgency. The objectives of this bill may be perfectly well intentioned, but frankly if the under-declaring of water pipe tobacco products was such a big deal, one would assume that the Government would want to go through a full select committee with submissions, and a full consultation so they could really get a grip on all of this. We would ask what evidence exists to show that this bill is needed under urgency following the Budget—what’s the rush, what are the costs and benefits? And it would have been nice to have had the regulatory impact statement released in good time.

But, you know, there are some interesting points in the documents leading up to this. There has been no stakeholder consultation, and the regulatory impact statement mentions the limitation on analysis—the lack of quality data and evidence used in developing the proposal—and Customs acknowledge that the data limitations were significant.

Assuming this is part of the Smokefree Aotearoa 2025 scheme or objective, the evidence around taxation as a disincentive—or an effective disincentive—to reduce smoking is slightly marginal. In fact, skyrocketing prices through taxation has had mixed results—it works for some communities, but for others it actually causes quite a lot of harm. It certainly hurts the poorest communities the most. I wonder if this bill will increase the black market sale of water pipe tobacco, and we just ask: are these regulations actually well designed or will they make things worse? Will people find other ways to bring things in? I assume they will, because they bring all sorts of things in that they’re not supposed to.

So, in this case, the objectives of the bill, as I said, may be well intentioned, but the process by which the Government is doing this is not good enough, especially given the lack of data analysis and consultation. So for those reasons, we oppose this bill.

SIMON WATTS (National—North Shore): I rise on behalf of the National Party, and as a member of Parliament for North Shore, in support of the Customs and Excise (Tobacco Products) Amendment Bill. We’ve heard, from prior speaker Dr Shane Reti, the importance of this bill in terms of putting in place assessment criteria to ensure that the appropriate quantity of tobacco is within a product and that assessment is done in a way that can substantiate that in a more accurate manner than what is currently available—will lead to the avoidance of excise tax under the current model.

Obviously, the consumption of these products is something that is a burden on our society. We are, obviously, in support of ensuring that excise tax, in regards to these products, is proportionate and appropriate. It is our belief that what this bill will achieve is changes that will achieve that outcome. On that basis, we support this bill.

JOSEPH MOONEY (National—Southland): I take a brief call on the Customs and Excise (Tobacco Products) Amendment Bill. I have only one chance in my life to do so, so I’ll take that opportunity this afternoon. This bill is designed to combat suspected under-declaration of tobacco content by importers of water-pipe tobacco and to secure Crown revenue from taxes on the same. It imposes import controls, changes the statistical unit for calculating duty, and creates a new excise and excise-equivalent duty rate for water-pipe tobacco, which is also known as flavoured tobacco, hookah, shisha, molasses tobacco, and fruit tobacco. The National Party will be supporting this bill as it is a relatively straightforward and simple solution to a problem that has been identified. With that, I will end my words this afternoon.

A party vote was called for on the question, That the Customs and Excise (Tobacco Products) Amendment Bill be now read a first time.

Ayes 109

New Zealand Labour 65; New Zealand National 32; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 10

ACT New Zealand 10.

Motion agreed to.

Bill read a first time.

Second Reading

Hon MEKA WHAITIRI (Minister of Customs): I move, That the Customs and Excise (Tobacco Products) Amendment Bill be now read a second time.

The bill will combat the suspected underpayment of excise-equivalent duty on water-pipe tobacco and make a technical amendment to the Customs and Excise Act 2018 so that all tobacco excise continues to be annually adjusted for inflation. This is a short bill, barely more than a page, but it is important and it is urgent. The bill directly supports both the Government’s aim to reduce the harm from smoking and protect an important source of Government revenue. It will help New Zealand achieve its Smokefree Aotearoa 2025 Action Plan because, yes, even with a water pipe, users still inhale tobacco smoke, and we all know the personal tragedies that can result and the impact on our health system.

The bill will help Customs better oversee the importation of water-pipe tobacco and ensure that the correct amount of excise is paid. It does this by creating a new statistical unit based on the total weight of water-pipe tobacco; secondly, setting a new excise and excise-equivalent rate based on the current tobacco excise rate and tobacco content of 15 percent; and, thirdly, making water-pipe tobacco a prohibited import without a permit.

The bill will also protect excise revenue by ensuring that the correct rate of excise-equivalent duty continues to be paid on all tobacco into the future. The Customs and Excise Act 2018 provides that tobacco excise is annually adjusted for inflation. The provisions doing this refer to tobacco types by using international numerical descriptors. However, the latest international revision of those descriptors has created a new tariff heading. The Customs and Excise Act 2018 consequently needs updating. Without this update, the annual inflation adjustment would not apply to all those types of tobacco that it should.

You may ask why this bill needs to be passed with the urgency of Budget night legislation—from my colleagues in the ACT Party. Well, it is urgent because there is revenue at stake: (1) if announcements were made about proposed changes to the requirements for water-pipe tobacco, such is that which comes with a public consultation process, this would enable unscrupulous importers to import greater amounts and stockpile it to reduce the excise-equivalent duty they would pay; (2) the technical amendment updating the numerical descriptors needs to be in effect by 1 January 2023 when the next inflation adjustment will occur. Otherwise, we will have some tobacco not subject to the same excise and excise-equivalent rates as the rest. This has the potential to create an uneven playing field and will undermine the Smokefree Aotearoa 2025 Action Plan. I commend this bill to the House.

Dr SHANE RETI (National): Thank you, Mr Speaker. I do agree with other members that it’s hard to imagine that this is urgent in Budget urgency. There is some urgency, I accept that. And that urgency is shown in the regulatory impact statement by the substantial increase in capture at the Customs border. In the one year from 29 June 2019 to 29 June 2020, Customs seized a total of 32 grams of molasses; the following year, it had gone up to 430 kilograms. Wow! That’s a substantial increase. The number of seizures had also increased substantially. That June to June 2019 to 2020 had one seizure, but the following year, 2020 to 2021, it had gone up to 57, I think I did see. So there’s no doubt that avoidance is increasing, and so that does lend some urgency. It’s also a substantial volume of material we’re talking about. This is not trivial: 14,000 kilos suspected undeclared imports. That’s just the undeclared imports, so quite a large quantity. So there is a need to be doing this, there is a timeliness. I don’t think it’s under Budget urgency, but this is where we find ourselves. And as I said, National will be supporting this bill. Thank you, Mr Speaker.

ASSISTANT SPEAKER (Ian McKelvie): The question is that the motion be agreed to.

Dr JAMES McDOWALL (ACT): Thank you. I just want to make a few comments; they’ll be short comments. It was interesting there, the Minister addressing one of the points I made about why this was urgent, and the answer was, “Well, it’s about revenue.” I thought that was a bit ironic. I thought these sorts of things were supposed to be about health. But in any case, in terms of revenue capture, in terms of, you know, actually getting duties off these sorts of things—look, this is the problem of these sorts of regulations, right? You create a prohibition or a duty and then suddenly it all goes underground and you can’t actually tax it properly anyway, and then it just joins the black market with everything else coming in. So there are certainly lots of questions to be had here, and I just want to reaffirm our opposition to this whole process. Thank you, Mr Speaker.

A party vote was called for on the question, That the Customs and Excise (Tobacco Products) Amendment Bill be now read a second time.

Ayes 109

New Zealand Labour 65; New Zealand National 32; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 10

ACT New Zealand 10.

Motion agreed to.

Bill read a second time.

In Committee

CHAIRPERSON (Ian McKelvie): Members, the House is in committee on the Customs and Excise (Tobacco Products) Amendment Bill. I remind members they are able to participate remotely. If you’re on Zoom and want to take a call, please type “Call” in the chat. You should also use the chat if you wish to raise a point of order. We’ve received new tabled amendments. I will advise members so they can refresh the House papers page to see the new amendment. Finally, it would be helpful for members to ask multiple questions if they have them, of the member in charge during their call. Members, we now come to Part 1.

KIERAN McANULTY (Labour—Wairarapa): I raise a point of order, Mr Chairperson. I seek leave for all provisions to be taken as one question.

CHAIRPERSON (Ian McKelvie): Leave has been requested for that. Is there any objection? There’s none. The question is that Parts 1 and 2, the Schedule, and clauses 1 and 2 stand part.

Parts 1 and 2, the Schedule, and clauses 1 and 2

CHLÖE SWARBRICK (Green—Auckland Central): Just referring to the regulatory impact statement—it might be interesting for members given the content of the debate that we’ve had so far. It refers to, in 2020 and 2021 combined, and I’m quoting here from the regulatory impact statement: “We collected $5 million in total duty in goods and services tax on flavoured tobacco. We estimate the loss to Crown from evasion could be up to $31.5 million over the two years.”

It does then, however, go on to say: “In addition, importers are exploiting the regulatory environment in New Zealand and using it to smuggle flavoured tobacco to Australia. Large shipments can be declared at low [per kilo tobacco content] in New Zealand and smuggled to Australia to avoid the much higher excise rates Australia applies to flavoured tobacco. For example, we’re aware of cases where flavoured tobacco has been smuggled from New Zealand to Australia by sending it as smaller parcels that were falsely declared as body scrub.”

I have just two questions to the Minister in relation to both that but also other parts within this regulatory impact statement and the other contributions that I made in the debate so far, particularly around the black market.

The first is just in relation to that point about smuggling into Australia and where this puts us in line with the rest of the world. Do these changes now mean that our flavoured tobacco excise rates are at the same level that they are in Australia—i.e., meaning that this issue, as outlined in the regulatory impact statement, will be removed; if not, what is the disparity there?

Secondly, it’s a question about consideration of the black market. Just in relation to the contribution that I made in the first reading about the fact that the Government’s investing millions of dollars in tackling black market tobacco and the potential for the black market to grow were there to be a regulatory or a tax environment which erred far more towards kind of in-practice prohibition. Is the Minister concerned, or has the Minister seen reports, about what kind of impact this may have on the potential for the growth of the black market in this water-pipe tobacco?

So those two questions: around the comparison to Australia, and around the impact on the potential black market.

Hon MEKA WHAITIRI (Minister of Customs): While I’m getting some answers, I just want a comment about the Australian import that—apparently no, the Australian rate is higher.

Actually, I want to share with the member that in some jurisdictions—which is obviously Australia—water-pipe tobacco is taxed as if it was 100 percent tobacco. The rate that New Zealand will apply, which I’ve given in my speeches, is calculated on the assumption that tobacco content is 15 percent, which is, I guess, the best current estimate of the typical tobacco content of this product.

So the answer to, “Is the Australian rate higher?”: no. Like I said, it’s 100 percent. But in terms of your black market question, the black market definitely is an issue and Customs see it probably more so than any other agency. I guess that’s why the Government has allocated $10.4 million in this Budget for enforcement to try and stem the black market that you’ve alluded to.

CHLÖE SWARBRICK (Green—Auckland Central): I thank the Minister and the officials for offering those questions at such a rapid-fire rate.

Just to that first question around the comparison to Australia, in particular, and that disparity in the 15 percent and 100 percent rate, and, obviously, that story that I alluded to before around smaller parcels being funnelled through Aotearoa New Zealand to Australia, sometimes being falsely declared as body scrub. Given that disparity which seems to currently exist even were we to make these changes as we are today—is there not still some concern that we might end up seeing Aotearoa being, potentially, that back-door to the Australian black market?

As a result—kind of as a secondary question to that—what kind of collaboration are we seeing with Australian Customs, in particular, to try and either clamp down on or work together or collaborate or try and see some kind of alignment in what our policies might look like?

Hon MEKA WHAITIRI (Minister of Customs): To that member, we work quite closely with our Australian border agencies and have a post in Australia. We work on a range of Customs-related issues, and this will be but one of many that we work in tandem with our Tasman neighbours.

Again, going to the black market issue, this is why we’ve made decisions in this year’s Budget to actually address whether it’s in scrubs, whether it’s hidden anywhere, so not only the bill that we’re passing today but the extra resourcing—the $10.4 million we got in Budget 2022—would absolutely put a spotlight to actually disincentivise people smuggling any illegal substances, either into this country or to other countries because New Zealand is thought as a soft spot.

That’s not what the intention is here, and with Customs’ constant watching, we want to monitor it and manage that in, I think, a very professional way.

CHLÖE SWARBRICK (Green—Auckland Central): Following up on that line of questioning, I totally take on board the Minister’s point with regard to extra resourcing, particularly for clamping down on the black market in tobacco. That is, of course, I think, the key point of interest or curiosity, particularly for the Greens, when we’re looking at harm reduction for all substances.

How do we regulate a substance, knowing that a substance can be harmful, in order to reduce that harm, noting that even with the imposition of prohibition or taxes to the point of practical prohibition that we’re not going to necessarily eliminate this thing? In fact, there’s the potential for perverse outcomes, where we might see people cooking things up in their kitchens and distributing them on the streets, which then means that these things are unregulated and, in turn, that there might more harm produced.

Just again, alluding to that point that the Minister made about how we get that balance right and obviously our international cooperation too, and that extra resourcing to the tune of—I believe, off the top of my head, if I’m correct from my recollection of Budget documents—around $10 million for clamping down on black market tobacco. What kind of consideration has the Government given to whether there is a chance to perhaps err into the space of chasing one’s tail, where you’re throwing good money after bad without potentially getting that balance right on what the level of effective tax rate is for the likes of tobacco, noting that there is now needing to, obviously, be more money put into policing the black market; is there potential that we end up getting into a situation like, I might say, with cannabis?

Hon MEKA WHAITIRI (Minister of Customs): I want to thank the member for the questions. This isn’t about eluding the questions she’s asking, but we are trying to debate this bill, and I think I’ve attempted to address what Customs is doing with this bill. I’ve declared the 15 percent that we are targeting and also why we’re doing it under urgency. I feel I’ve answered the questions, and if members want to ask something specifically about the bill, then I’m more than happy to answer that here this afternoon.

CHLÖE SWARBRICK (Green—Auckland Central): A specific question, then, if I may. What impacts, if any, does the Minister think that this would have on the potential for the increased black market for water-based tobacco?

Hon MEKA WHAITIRI (Minister of Customs): I think it’s going to have a significant impact, both with the changes to the legislation, the Act that governs it, but also, like I said, the $10.4 million that’s invested by the Government in Budget 2022.

A party vote was called for on the question, That Parts 1 and 2, the Schedule, and clauses 1 and 2 stand part.

Ayes 109

New Zealand Labour 65; New Zealand National 32; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 10

ACT New Zealand 10.

A party vote was called for on the question, That the Customs and Excise (Tobacco Products) Amendment Bill be now read a third time.

Ayes 109

New Zealand Labour 65; New Zealand National 32; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 10

ACT New Zealand 10.

Motion agreed to.

Parts 1 and 2, the Schedule, and clauses 1 and 2 agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Ian McKelvie): Mr Speaker, the committee has considered the Customs and Excise (Tobacco Products) Amendment Bill and reports progress without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Third Reading

Hon MEKA WHAITIRI (Minister of Customs): I am pleased to come to the third reading of the Customs and Excise (Tobacco Products)—

DEPUTY SPEAKER: The Minister needs to move the motion.

Hon MEKA WHAITIRI: Sorry, Mr Speaker; my bad. I move, That the Customs and Excise (Tobacco Products) Amendment Bill be now read a third time.

As I said, I am pleased to come to the third reading of the Customs and Excise (Tobacco Products) Amendment Bill. As I’ve said before, this short bill will both protect Crown revenue and help protect New Zealanders’ health. I am therefore both happy and relieved to see it come to its final reading. The bill is a straightforward and pragmatic response to suspected non-compliance and a technical change in an international tool of trade. Both affect tobacco, and this bill, therefore, helps protect the nation’s health and the Crown revenue needed to fund Government services.

As a final re-cap, the bill achieves these objectives in the following ways. It sets a new rate for water-pipe tobacco based on the total weight of the tobacco. This will overcome the current problem where some importers are thought to be under-declaring the tobacco content of their water-pipe tobacco in order to pay less duty. I can’t tell you the extent of this practice, as it is not technically feasible for Customs to verify the tobacco content of water-pipe tobacco. That has enforcement implications. This bill will fix the situation by charging excise on water-pipe tobacco at $234.77 per kilogram of total weight. For good measure, the bill will also prohibit the importation of water-pipe tobacco without a permit. This will help Customs monitor imports and discourage any other forms of non-compliance. This regime already applies to most other tobacco.

The international Harmonized Commodity Description and Coding System, which provides numerical descriptors for all types of goods is periodically reviewed. In the last review, a new tariff and excise heading was created for some tobacco products. This has changed some of the descriptors cited in the Customs and Excise Act 2018. This bill updates those so that all tobacco excise will continue to be adjusted annually to reflect inflation.

Throughout the passage of this bill, I have talked about possible non-compliance. Some importers are under-declaring the tobacco content of water-pipe tobacco so as to pay less duty than they should. When some practices are identified, it is appropriate for me to take action to protect the fairness and integrity of the tax system by taking legislation such as this through the House. But non-compliance is the exception. I want to take this opportunity to publicly recognise that the overwhelming majority of traders are law abiding. I am proud that by closing off avenues for non-compliance, tax evasion, I and this bill are giving honest traders a level playing field. I therefore commend this bill, at its final reading, to the House.

DEPUTY SPEAKER: The question is that the motion be agreed to.

Dr SHANE RETI (National): Tēnā koe, Mr Speaker. Look, thank you, National will be supporting this bill through its progress here at the third reading, and while this is a customs and excise bill, I just want to focus for a moment that the end outcome we’re looking for is, actually, a human outcome to have a deterrence to reduce smoking. That’s the end outcome we want to reach. And while this all about the excise and the customs part to that, I want to bear that in mind.

To take that a step further, looking at the regulatory impact statement, they make notes that when they’ve been out to stakeholders, they’re unable to determine the material implications for Māori, children, seniors, disabled people, women, gender diverse, Pacific peoples, veterans, and rural communities, but they don’t believe it’s significant. I was looking at some data from Australia, and certainly, the use of tobacco water pipes is quite small and infrequent—well less than 1 percent, as I recall.

There is also commentary, as I mentioned in my first reading speech, that I saw mostly through the Middle East, and that some of the Middle Eastern communities here in New Zealand may be affected by this. The reflection from officials is that this is a niche product and one which is unlikely to have a large impact on that community. So I’m reassured by that.

I just want to briefly come to and conclude on the health impact, because for a while, there was some thinking that tobacco water-pipe smoking might be safer because, as the tobacco comes through the water, it’s almost been purified or reduced in some way. That’s actually not correct. It turns out that a number of studies have shown that for people who use water-pipe tobacco frequently, they have levels of nicotine in their urine, generally equivalent to smoking 10 cigarettes a day, and that every one session of using water-pipe tobacco is equivalent to, actually, smoking two cigarettes.

So I just wanted to bring the discussion back to the purpose: we’re actually doing this so we can offer some protection for people who might be bound by tobacco and offer some hope and a sense that we can help them change this behaviour. We commend this bill to the House.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe. Tēnā koutou e te Whare. If I may take the opportunity at this third reading to do, as the good Dr Shane Reti just did, in kind of contextualising this Customs and Excise (Tobacco Products) Amendment Bill and the broader framework of how it is that we approach substances that can cause harm. Just referencing those contributions, and I want to thank the Minister for the back and forth in the committee of the whole House just before, and her officials as well, especially for coming back to me overnight with a number of responses to some questions on what this would look like in practice.

Fundamentally, this bill is, for the Greens, and the reason that we support it, just about ensuring that we have a system that is applied simplistically across all tobacco products, hopefully to address those concerns as raised by the ACT Party and also by the National Party around why this is happening now. Otherwise, it seems pretty straightforward to me as to why this is necessary.

But that, of course, is not to detract from the core point that I was making during the committee of the whole House. That is, of course, that, again, if we are to recognise that substances like alcohol or tobacco or cannabis or whatever else can cause harm, the question then becomes, how do we create a regulatory and tax environment in order to reduce that harm? And what does the evidence say about how we go about doing that, without necessarily imposing our ethics or our morals or our ideology beyond the points of those purported intentions becoming effective?

That was the point that I was making in the first reading as well, around the notion of syntax, which is that we sometimes risk, in levying things like these excises, going beyond the point of efficacy and drifting far too much into a space that is in practice like prohibition, that drives the likes of the black market, where you have no regulation because there is nobody who is checking ID. There is no quality control and there is, in the case of substances like cannabis, next to no education for consumers or ability to intervene in problematic usage.

So when we were talking about the kind of range of different approaches that we can take in that regulatory and that tax environment, such as is outlined in this bill, you have, on the one side of things, a kind of complete prohibition where you have a clamping down and, obviously, criminal penalties associated to the sale and supply of the substance. That doesn’t get rid of the substance in most instances. As I alluded to before, it can end up meaning that we have far more harmful substances and versions of them that are cooked up in people’s kitchens or in their garages or otherwise.

On the other side of the spectrum, you have a complete free market, which is, effectively, without regulation. And, obviously, 20 or 30 - odd years ago we were far closer to that, when it comes to tobacco, with the likes of the ability to advertise at sports games and otherwise. At both ends of that spectrum, at the end of prohibition or criminal prohibition and at the end of a complete free market, with that lack of regulation around how those who are seeking to sell the substance can access consumers, you have what the Greens would argue, and, actually, what the international evidence and the Global Commission on Drug Policy says, which is that you have the maximisation of harm. That is, you have entities, whether they be organised crime or whether they be those who are large commercial entities, who are seeking to make a quick buck by exploiting vulnerable communities to sell as much of this product as possible.

Now, again, to boil it down to what this bill actually does in practice, it is about simplifying the excise that is levied on water-pipe tobacco. That is about making sure that this is applied universally across all different types of tobacco that are coming through Customs. And I acknowledge that the Minister’s role is solely within that realm of Customs. But, none the less, I ask all of those in the Chamber who are contributing today, particularly my colleagues in the ACT Party, who were not particularly keen to come out throughout the cannabis referendum campaign in 2020 and to stake their colours to the mast, to say that there is an opportunity for ideological consistency here. There is an opportunity for us to acknowledge that all substances can cause harm and that we can regulate them and that we can tax them in such a way that reduces that harm.

To the point around excise on tobacco products, again, I think it is really important, as we get towards Smokefree Aotearoa 2025, that we continue to pay attention to what is effective. At what point is this syntax potentially pushing more of the supply into the unregulated black market and potentially creating more problems that we’re going to have to mop up further down the track? And I just see the first little red flag of that with that $10 million allocated to policing the black market for underground tobacco.

However, the Greens support this bill today, again, because it is about simplifying that excise system, but we’d just like members across the Chamber to reflect on that broader point. Kia ora.

Bill read a third time.

Bills

Coroners (Coronial Cap) Amendment Bill

First Reading

Hon AUPITO WILLIAM SIO (Minister for Courts): I present a legislative statement on the Coroners (Coronial Cap) Amendment Bill.

DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon AUPITO WILLIAM SIO: I move, That the Coroners (Coronial Cap) Amendment Bill be now read a first time.

The bill will amend the Coroners Act 2006 to increase the maximum number of coroners that can be appointed at any time from 20 fulltime-equivalent (FTE) coroners to 22 fulltime-equivalent coroners. This bill is being considered under urgency because Budget decisions to appoint four additional coroners on top of the current 18 cannot be fully implemented until the statutory cap in the Coroners Act has been amended. Appointment processes will commence as soon as possible after enactment. The new coroners will be appointed by the Governor-General on the advice of the Attorney-General. I consider urgency to be appropriate to the technical nature of this bill because its purpose is to give effect to Budget decisions. The usual parliamentary process would delay these appointments for several months. This would mean more waiting before we can start to alleviate workload pressures on our existing coroners. It would mean an increase in the times for coroner’s findings and the distress being experienced by grieving families and whānau.

The coronial system exists to help prevent deaths and promote justice by investigating the causes of sudden and unexplained deaths and making findings that help reduce the chances of further deaths occurring in similar circumstances. The coronial system is currently under considerable pressure. Since 2014, coroners have struggled to keep pace with the number of cases being accepted into the coronial jurisdiction. This has resulted in an increasing active caseload and an increase in the average time taken to conclude coronial inquiries. Key drivers for these increases include more deaths entering the coronial jurisdiction that turn out to be from natural causes and several periods in recent years when the coronial bench has not been operating at full capacity due to vacancies.

The current coronial system and its resourcing is not fully meeting the needs of bereaved families and the public. The increasing length of time they are waiting to receive a coroner’s findings is severely impacting the wellbeing of many bereaved families and whānau. These families and whānau are victims because they have been harmed by the unexpected, violent, or suspicious death of a loved one, and the coroner’s findings can help provide answers about their loved one’s death and bring closure during the grieving process.

This year’s Budget finding for coronial services, coupled with the increase to this coronial cap, will enable the appointment of four additional permanent coroners. These positions will be on top of the current 18 full-time permanent coroners, taking the total to 22 fulltime-equivalents, but there are also seven FTE relief coroners who are not counted with the cap. These additional coroners will enable faster resolution of coronial cases. Many more families and whānau will receive coroner’s findings sooner than would otherwise be possible.

The bill is needed to give effect to Budget decisions. It will contribute to reducing coronial wait times, thereby relieving a little of the distress felt by families and whānau, or ainga, who have lost their loved ones, and I commend this bill to the House.

DEPUTY SPEAKER: The question is that the motion be agreed to.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you, Mr Speaker. We support this bill, the Coroners (Coronial Cap) Amendment Bill—I’ll put everyone out of their misery. So we acknowledge that the Minister has brought to the House a bill that’s worthwhile in itself, and we do thank him for doing so. The context, however, in relation to the coroner’s court and the place that we find ourselves now, is instructive, and I do want to take a moment to set that out for the House and acknowledge that what is taking place now is far later than it should have been. We do also want some assurances from the Minister, and we’ll seek those in subsequent readings and the committee of the whole House stage, about the effect that this measure will have. I think it’s fair to acknowledge to the Minister not only in the bill itself increasing the cap from 20 to 22 of the number of coroners as the maximum fulltime-equivalents but also that there is funding in the Budget to make that so for the appointment of four additional coroners, seven coronial registrars, and four clinical advisers. These things are all positive, and so, as I say, the National Party will support the bill.

It’s fair to acknowledge, however, that with access to justice being so important, it’s really disappointing that huge problems exist in the system, with massive delays across the whole judicial branch, including courts—the coroner’s court particularly, as we’re discussing today—tribunals, and so forth. These are longstanding issues. They have existed across Governments of both stripes. They existed prior to COVID-19, and they exist now. The problems have been exacerbated by the Government’s response to COVID-19. To some extent, this is fair enough. To some extent, it is understandable that there have been delays.

But the Government’s response has lacked imagination. It’s lacked urgency—lower case “u”. Of course, now we find ourselves in urgency with an uppercase “U”, such that the Parliament is being asked now to approve with some haste the passage of a bill to increase the cap of coroners to match the fact that increased funding is being provided in the Budget. National’s supporting not only the bill itself but also the use of urgency for the reasons that the Minister has outlined. It does support measures that the Government is entitled to make in the Budget. So with the bill in itself being so straightforward, as a matter of, frankly, overdue good practice, of course we are prepared in good faith to consider that and, for the record, any further amendments that the Minister might bring forward to the operation of the coronial court, of course, in conjunction with the Chief Coroner.

So I do acknowledge that there are other players than the Government of the day in the sense of the executive Government. It’s appropriate for the executive and also Parliament to operate in a way that reflects comity between the branches. So I think it’s right that I acknowledge that constraint but also that opportunity. I would urge those who are involved in the operation of this particular court to work closely with the current Minister, and the offer is made too to work constructively with the Opposition. I was disappointed to be refused a full, unredacted copy of the recommendations paper that was made from the Chief Coroner to the Minister some time ago. I think it would be helpful in the spirit of bipartisan dedication to improvement of the access to justice in this country if all key players were enabled to participate in that and there were greater transparency in that space. So I do want to take that opportunity to put that on the record.

The Minister has rightly referred to distress being the result of emotional, financial, and social problems caused by delays in the coroner’s court. Many years’ worth of additional delays have accrued over the course of time—again, I acknowledge, across successive Governments, pre- and post - COVID-19 onset, and so forth. Related systems have been under severe strain—health systems, social assistance being required, and the legal profession itself. All are groaning under the weight of the shortfalls and the shortcomings of the coroner’s system, some improvement to which is going to be made today and going forward.

Although I do give the Minister fair notice that in the committee of the whole House stage, we will want to know more about the extent to which we can expect the delays to be reduced, the backlog cleared, and so on. If urgency is to be used, and we’ve said that it’s appropriate in this case, then the quid pro quo is that the Minister and the Government have done a serious and thorough job of understanding the implications of what they’re bringing forward to the House. So I do expect more rigour and more detail in the provision of that information simply than to say that more coroners will be appointed “as soon as possible”.

The issues in the coronial system are even more acute than in many of the other types of court that operate in this country. We talk generally about lack of access to justice. We talk about the stress and strain on individuals, but the lack of closure for families of those who have died suddenly and the mental health implications for that have been particularly acute. The lack of access to services that are unlocked when the official status is provided by a coroner’s determination is a very serious consideration as well—for example, victim support services requiring a finding of the coroner in relation to a particular accident or non-accidental sudden death as well.

We think of the disruption to the lives of those who are left behind, and we also bemoan the inability of a system to learn the lessons that are meant to be learnt by a coronial finding. Where those are delayed, we are denied the opportunity in the intervening months and even years to understand where systems failures may have led to an accident taking place, whether in an industrial setting or otherwise. So we hope that this is not the end of the Government’s intentions and actions in this space. But we do acknowledge that it is a step in the right direction.

By way of heads-up to the Minister and the team that he may have supporting him in the committee of the whole House stage, we will be wanting to know what the analysis has been about the effect that these extra coronial appointments will be. We want to know when the backlog can be expected to reduce accordingly, and we’d actually also like to challenge the Minister, just as we challenge ourselves, to understand how the system can work better, including why there is a cap on the number of appointments in the first place. I acknowledge that’s something that previous Governments of a National or National-led nature have also not addressed. There may be good reasons for it, of which I am unaware, but I do remember in a previous Budget—and I think it may have been last year, but I don’t swear that that’s the case—the urgency process being used to increase the maximum number of district court judges as well. I wonder if there’s appetite across the side of the House—and it might be that we don’t thrash this out today, and fair enough if more time and analysis is needed. But it might be that we decide collectively that actually it’s not particularly productive to have a cap in the number of judges so that we’re here following the Budget in a very truncated process, without opportunity for public input, merely to increase the number from 20 to 22 fulltime-equivalents—just 10 percent. I do wonder if there’s a danger that in a following occasion in this House, perhaps the next Budget, we’ll be here extending the number from 22, say, to 24.

So all these questions I look forward to prosecuting in the committee of the whole House stage, but for now I leave my comments at that. Again, just to emphasise: a good step in the right direction, albeit disappointing to have taken so long, and we hope that this will not be the end of the Government’s efforts in this regard.

GINNY ANDERSEN (Labour—Hutt South): Tēnā koe e te Māngai o te Whare. Thank you very much, Mr Speaker. Look, it’s great to see that Budget 2022 delivers a package of investment to improve the coronial system and reduce delays, particularly for those families who are grieving. The operating funding of $28.5 million over four years and $1.6 million of capital funding aims to ensure that families and whānau receive coroner’s findings sooner than they have been, and also to reduce the coronial caseload.

It’s really heartening to hear that, as a Budget piece of legislation, the Opposition are voting in favour of this—it’s good to see that indeed. This is a good bill. We know for a fact that the coronial process, by its very nature, can take time. It is designed to find out the facts about a particular death, provide resolution for families, and also to produce findings that may help potentially prevent future deaths and to learn from what has happened in the past.

The additional coroners provided through the Budget, and enabled through this bill, will support the coronial cases to be considered far more quickly. These additional coroners will enable faster resolution of coronial cases—that way, giving families relief and a sense of closure as well.

This is a bill that, I think, will be welcomed by many New Zealanders. I commend it to the House.

Hon PAUL GOLDSMITH (National): Thank you, Mr Speaker. I acknowledge the enthusiasm of my worthy colleague from the ACT Party Nicole McKee, and I’m sure she will get her chance before too long. I do want to acknowledge the Minister Aupito William Sio—the Minister in charge of this bill, the Coroners (Coronial Cap) Amendment Bill. And National, of course, is supporting this legislation.

We do want to see progress made on what is a significant blight, I think, in the justice area where New Zealanders have been kept for far too long to get the results out of the coronial system when their loved one has died. The process is far too slow—the system has been too slow for a long time but has got substantially worse over the last few years, and even worse again over COVID. So we support both the investment in the Budget and, secondly, this legislation to lift the cap on the number of coroners.

Obviously, we don’t particularly like urgent legislation such as this and we would have preferred they could have done it in a normal pattern, but given the relatively straightforward nature of the issue, that’s something we can support. What we worry about, of course, is not so much—this Government has demonstrated its ability to announce stuff and spend stuff. What’s not quite so clear is the ability to have the actual improvement in delivery of time frames within this part of what the Government does, and so we’d be very keen to see some very clear plans about how this will actually improve things on the ground.

The other point we’d make, of course, is there are much wider issues around access to justice in the court system, which I would hope the Minister has been very focused on over the last little while. So we’ve seen the time taken between cases being taken in the criminal courts and also the civil courts hugely extended over the last four years since this Government has been in place. It’s a longstanding problem, but it’s been getting worse; likewise, in areas like the Employment Relations Authority—huge delays.

In all these areas, people’s lives have been put on hold for far too long. When we look at the justice sector in the broadest sense, the issues that confront you are, first, the rise in violent crime; second, the rise in gangs and youth crime being out of control, or of great concern. But the second broader issue is this whole issue of how can we get the court system working much more efficiently and effectively so that New Zealanders can get access to justice, but also access to speedy justice so that they can get on with their lives after a criminal case, both in terms of victims and their perpetrators. But also in the civil court, so people can get on with their business lives as well. So I just encourage the Government to show equal enthusiasm in that space as well. Mr Speaker, thank you very much.

VANUSHI WALTERS (Labour—Upper Harbour): Thank you, Mr Speaker. This is a bill that makes a very small legislative change, but it will have a big practical effect for many New Zealanders. I think a lot of people assume that the coroners don’t get referred many cases, but in fact they have a very broad mandate. What we know is that about 3,500 cases are referred to the coroner every year. What we also know is that we’ve seen an increase in the time taken to process those cases, and we know that despite extra part-time coroners being appointed in 2019, those longer processing times continue to occur. Those of us who sit on the Justice Committee know that in particular because we heard from a petitioner about this very issue. Corinda Taylor submitted to us on this particular issue, so it is wonderful to see that this is being addressed with urgency today, that allows these changes to be made in sync with the Budget commitments. I commend this bill to the House.

NICOLE McKEE (ACT): Thank you, Mr Speaker. I rise to speak on behalf of ACT for the Coroners (Coronial Cap) Amendment Bill in this, the first reading. I do acknowledge the Minister, and the fact that we actually have something in place at the moment, or now, to be able to get through some of the backlog in the Coroners Court. The intent, of course, is to lift the cap from 20 to 22 fulltime-equivalents (FTEs), and I do note in the disclosure statement that there’s no inquiries, no reviews, no evaluations, no reports, but there was, actually, a briefing from the Chief Coroner. And as my colleague across the House has already mentioned, the copies that have been received are redacted.

And in order for all of us to be able to assist our communities, it would be really great if we could understand the full issues so that we can support whomever is in Government to make sure that we have communities who can move past their grief and move on. So it is under urgency that it’s being held now, but the urgency has actually been going on for quite a number of years. And when we have a cap at 20, we want to lift it to 22, and we only have 18 coroners, then we need to do more, in our humble opinion. The seven coronial registrars and the four clinical advisors is a great result, because by lifting the cap and getting more coroners, they are going to need more support. So I appreciate that the Government has looked to that as well.

But the reality is that we are expected to have a blowout in coronial cases—an expected 400 extra cases over the next three years. We have these delays, but by increasing to 22, we’re barely keeping our heads above the water, especially as the population continues to increase. ACT says the Government needs to do more. We need to fix this issue so that we can support families in their time of grief. And while this is under urgency, it almost feels like a bit of tokenism, especially when we know there are so many more needed. So the cap being set at 20 was set at a time when our population was 4.2 million, and now that our populations is sitting at 5.1 million, that would actually equate to 24.4 FTEs being required just to keep up with the population. And this bill is increasing our cap to 22.

I have tabled an amendment in the House, where we would like to increase the cap to 30. We believe that this will allow the clearance of the backlog that is in place at the moment. It will help to give families closure, and it will mean that the Minister will not have to come back at Budget time 2023 to put through another urgent request. We’re hoping, come that time, the Government is actually giving more money to be able to progress the coronial matters that we’re hearing. Thank you, Mr Speaker. We support the bill.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe. Tēnā koutou e te Whare. Just opening my contribution to this bill, this evening, I just wanted to confirm that the Greens will, of course, be supporting the Coroners (Coronial Cap) Amendment Bill, as it appears that we have unanimity across the House. It’s exciting. We don’t often get that. This is, as others have articulated, a really important piece of legislation that goes some way towards addressing what has been actually, for a number of whānau, years’ worth of backlog in processing these coronial inquiries.

Here I want to acknowledge, as my colleague from the Labour Party did, Corinda Taylor, but also the life matters trust, who in 2019 tabled a petition which I was alongside to accept, which then went on to the Justice Committee. And I’d note, unfortunately, we still actually don’t have a report back from the Justice Committee on it. The petition requests therein spoke to not only the issues here with the amount of coroners that are available to process these cases but to the far broader issue. Their petition request, I think, is important to put on record in justice to the ask that they made of this Parliament about the justice system and about the coronial system, particularly for those families that are bereaved by suicide.

Their petition request was that the House of Representatives urge the Ministry of Justice to appoint more coroners, introduce free legal representation for all suicide-bereaved families and whānau, provide funding to suicide-bereaved families and whānau for specialist legal representation and expert witnesses equivalent to that of any State bodies, public authorities, and corporate bodies represented, and notes that 3,834 people have signed an online petition in support of this request. So I want to acknowledge that work is done by the community, particularly given that they were coming to that mahi from a place of grief and from a place of experiencing a system that was failing them.

That said, what this bill does, while increasing the cap and also matched, as other colleagues have contributed, with a Budget commitment, is it lifts the cap from 20 to 22 fulltime-equivalents (FTEs), but it does not require that any given Government of the day is required to meet that as a minimum. I think that that is a really important consideration that all of us should have. Unfortunately, it is not something, I think, that would be accepted were it to be tabled as an amendment in later stages of this debate today, because of the potential financial implications. But, none the less, just in conferring with my colleague in the ACT Party Nicole McKee, and then conferring quite quickly with my Green Party colleagues, we will be supporting that amendment to the maximum number of coroners to 30 FTEs in line with the increase of our population. I also want to join in acknowledging the fact that this is not only an increase in the FTE for coroners but also for those who work in the coronial and justice support and administrative staff, which is, of course, incredibly important for continuing to progress this work.

The Greens support this legislation. It’s been a long time coming. It’s unfortunate, again, that what we’re still talking about is a maximum and not a minimum. I want to acknowledge Corinda Taylor and the life matters trust, whose petition was tabled back in 2019. For those families and whānau who are still caught up in that system, this cannot come soon enough. And therefore, I think that it is due that this bill is afforded urgency.

Dr EMILY HENDERSON (Labour—Whangārei) (remote): Kia ora e te Māngai o te Whare. As a member of the Justice Committee dealing with the petition of Corinda Taylor, I’m pleased to be able to support the first reading of the Coroners (Coronial Cap) Amendment Bill.

It will be a bill that will bring relief to whānau already sorely burdened by the grief of a loss of a loved one and who have been further burdened by the longstanding delays in the coronial process. The Government has listened, and this year’s Budget will enable the appointment of four additional permanent coroners, taking the total from the current 18 to 22, alongside our seven full-time relief coroners.

It’s a hugely important appropriation for this court; but, to realise it, the first step is to amend the Coroners Act 2006 to raise the cap on further coroner appointments to 22. As a purely technical amendment, it’s appropriate for urgency, but most of all, urgency is appropriate so we can bring the Budget decisions to fruition and reduce the waiting times and the distress to grieving families and whānau as quickly as we possibly can. I commend this bill to the House.

HARETE HIPANGO (National): It is a privilege to take a call on this bill, which the National Party is supporting, the Coroners (Coronial Cap) Amendment Bill. However, the most important message that I can impress with the Minister is that justice delayed is justice denied. I remember being in the House, speaking to the bill. It was back in May 2019, when Minister Little announced the appointment of eight relief coroners. That was in May 2019. And here we are in May 2022.

It’s been interesting listening to the debate—with it noted under the Coroners Act that there is a maximum capacity for 20 full-time coroners to be appointed, yet there are only 17 to 18 who have been acting full time in the capacity—knowing the pressures not just on the coroner’s court; not just on the coroners but, most importantly, on the grieving family members, on the whānau.

I also speak from having been a lawyer, many years ago, for a grieving mother who was a party at the inquest of a deceased baby. The burden of the grief of losing a child was immense, but what added to that was the delay, at that time, in getting the matter heard before the court.

So I heed the submissions debate from my colleague Mr Penk, just in terms of the calibration of this, whether it should just be capped from 20 to 22—bearing in mind the pressures and the demands that are already on the coronial court. So I’ve made reference that, back in 2019, eight relief coroners part-time had been appointed. I did a little bit of research and was looking at some media commentary. That media commentary was dated August and September 2021, where the number of unresolved coroner’s inquiries are expected to blow out—and that was at that time back in 2021. So it’s worsened over that time to now. They’re expected to blow out by 400 in the next three years, despite the appointment of the eight new part-time coroners. So the burden and the pressure that’s on the court is going to require innovation in addition to appointment of more coroners to the court.

So the average time to close a coronial case increased 42 percent between 2018 and 2021, from 321 days to 455 days. Now, cases needing an inquiry—so I talked about a coronial case where that’s an initial investigation, evidence is accumulated for a judge to be able to determine and make findings of fact as to the cause of death. Taking it further to an inquest is the actual hearing of evidence before a court where the parties themselves present their position to the court. So cases needing an inquiry take an average of 877 days, and those going to an inquest—which is the hearing that I was talking about—take 1,451 days; four years.

So the point that I make, and impress upon the Minister, is: justice delayed is justice denied. Is the increase, by a further two full-time to the maximum cap of 20, really going to address the pressure and the burden that’s on the court, on the coroners, but on the families most importantly? So that’s my point at the moment. It’s wonderful that this is now being rushed through Parliament under urgency. But I implore of the Government: this is a matter that should’ve been brought to the House soon after 2019, knowing the evidence of the numbers and the pressures that are there, to deal with matters in a more expedient, appropriate manner. The National Party commends this bill to the House.

Motion agreed to.

Bill read a first time.

Second Reading

Hon AUPITO WILLIAM SIO (Minister for Courts): I move, That the Coroners (Coronial Cap) Amendment Bill be now read a second time.

Let me just find my speech. Can I just firstly acknowledge the commentary that I’ve heard from across the House and concur with the issues that have been raised. But I do want the House to note that, as I said earlier, this bill, for the reasons that have been mentioned about the concerns of urgency, is very much targeted towards amending the Coroners Act 2006 to simply increase the maximum number of coroners that can be appointed any time from 20 fulltime-equivalent coroners to 22 fulltime-equivalent coroners.

The last speaker, Harete Hipango, made mention that, yes, we did increase it in 2019, but no one took into consideration that people move on, people would get sick, people would retire. Therefore, the temporary relief coroners were to try and help resolve that. However, it doesn’t take away the fact that we do need to address this. This is the first phase. This bill is being passed under urgency because Budget decisions to appoint four additional coroners cannot be fully implemented until this bill has been enacted.

So I say, again, the recruitment of the additional coroners will commence immediately after enactment. The new coroners will be appointed by the Governor-General on the advice of the Attorney-General. The additional permanent coroners will relieve some of the pressure currently sitting with existing 18 fulltime-equivalent coroners. But sharing the workload will enable faster resolution of coronial cases, and, together with other changes under way within the coronial system, this should reduce the length of time our bereaved families and whānau are waiting for coronial findings. This will help alleviate some of the considerable stress of families and whānau going through the system. I therefore commend this bill to the House.

CHRIS PENK (National—Kaipara ki Mahurangi): Mr Speaker, thank you very much, and I acknowledge the comments of the Minister. I think it’s clear that across the House, as evidenced by the various first reading speeches, there is clear agreement on the problem faced. There is agreement on the solution required, at least so far as it is represented by the bill and also measures in the Budget. So I do want to acknowledge that. I think it’s positive that we have a bipartisan agreement on a matter so fundamental to the civil and political rights, and human rights, actually, of New Zealanders, in this case.

I do want to make just a couple of brief remarks at this the second reading to acknowledge, first of all, the comments of the ACT Party member. I won’t steal her thunder by speaking to the Supplementary Order Paper. That’s more appropriate for the committee of the whole House stage. But, actually, as it happens, I wasn’t aware of that measure that she was proposing in relation to increasing the cap when I made my remarks at the first reading that it might be that a cap at all is not appropriate. And it did occur to me that if we were to come back each subsequent year, starting this year, then we’d be increasing the number of fulltime-equivalent coroners as follows: 2022, 2022 to 2023; 2023, 2023 to 2024; 2024, 2024—anyway, it will be a lot and I don’t think we need to end up in a bidding war against ourselves and against the population and against, as the Minister said, the realities of attrition within the judicial officer framework.

The point that was made very well by my colleague and friend Harete Hipango, regarding the delays in quantifying those by reference to those statistics she used—I just want to amplify that a little bit by noting, in the form of written questions, that we have seen increases across various different measurement categories. So the average age and days of completed coronial cases by year 2017, 337; up to the present day, 512. The percentage of active coronial cases that are more than 24 months old: 16 percent in 2018 and 31 percent in 2022, an increase of nearly double. And the percentage of active coronial cases that are more than 36 months old as at the end of February: from 4 percent in 2018 to 13 percent in 2022. I think we can all agree, and it seems we do all agree, that this is an intolerable situation.

When the press release was provided in conjunction with the Budget documents yesterday, the Minister said, quite rightly—and I quote—“I know the coronial system is under pressure and that is why we have introduced these measures.” The question is begged, therefore, at what point did the coronial system come under pressure and why has it taken until now that these measures have been introduced? If it’s the case that the system was under pressure—let us say, in 2019, at the point that that excellent petition was put forward by Ms Taylor and accepted by colleagues in this House—why has it taken until 2022 before any measures to alleviate those problems have been put forward?

The other question, or rather, point, in relation to the press release is that the Minister has told us that officials have been working closely with the Chief Coroner on ways to reduce delays in the coronial system. And I note “ways”—plural—implies that there are a number of different measures that will be offered up. That’s good news if so, but, given that, effectively, we have one way of alleviating the pressures in this bill, namely the increase of coroners and more broadly coronial staff, as implied in the Budget funding, a point that Ms Swarbrick made quite rightly, my question then would be, of course, what other ways does the Government contemplate and when might we see those? So I’ll leave my contribution there, at this point, except to emphasise, of course, that National, notwithstanding that we have concerns about the operations system more generally, does continue to support this bill and the measures in the Budget in this place.

NICOLE McKEE (ACT): Thank you, Mr Speaker. I stand to speak on the second reading of the Coroners (Coronial Cap) Amendment Bill. I think that there are some figures that have already been mentioned that do need to be repeated just to put into context the tabled amendment that I have placed on the Table this afternoon.

Between 2018 and 2021, the average time to close a coronial case—it took 42 percent of time to actually close it, and, as was mentioned, 321 days had been lifted to 455 days. In 2021, that actually averaged 494 cases, and we’ve just heard this afternoon that it’s even up on that in May 2022: that an inquiry is averaging 877 days to process; that an inquest is averaging 1,451 days to process—and that is four years. We’ve also heard through the Justice Committee where some cases have been waiting eight years on, and that is simply not good enough. As I mentioned earlier, I have tabled an amendment to look to increase the cap from 20 to 30. I had outlined earlier the reasons why, and that was the cap being set at 20 was when our population was at 4.2 million; now that our population is sitting at 5.1 million, we actually require 24.4 fulltime-equivalents to be able to cover the workload.

Now, the reason why we have suggested that the cap should be increased to 30, even though the Minister wants to ensure that we can have four coroners appointed immediately—we respect that and we want that to stand—but with the 30, it’s because there have been concerns about the number of inquiries and inquests that are not occurring because of the backlog within the court system. So if we do not appoint or are not able to appoint quickly in the future more coroners for the Coroners Court, then there is a possibility that some of the inquiries and some of the inquests will not occur. Now, it is really essential that they do occur. The reason for that is because you have families that have questions about what happened to their loved ones. They wait for an inquiry or they wait for an inquest so that officials can delve into the reasons why their loved one has passed on. So to deny them that ability to take part in an inquiry or an inquest simply because we don’t have enough staff to process it is, as my colleague said, denying justice to the families of individuals who are already suffering.

The delays will mean that there would be no inquests and no inquiries, as I stated before, and the stats have shown that when the bill went through last time to increase the cap, they thought they would reduce perhaps the inquests and inquiries by a number of 10 if we got an overload, but, in actual fact, it’s ended up decreasing them by 10 percent, not 10 cases. And that’s 10 percent too many for many of our families. It stops the families from getting the answers and from being able to have full closure about the death of their loved ones. If we have enough coroners within the system, we just may be able to get back to processing coronial cases within a six- to 12-month time frame.

My tabled amendment is not asking for the 30 coroners; it’s asking for the cap to be increased. If it’s not going to be accepted by the Government, I hope that through the committee of the whole House stage it can be explained to everybody why. We were told that the reason why we have had an issue is we’ve had coroners retire and we’ve had coroners that get sick. I think that’s an important issue for why we need to lift the cap: so that we don’t get into a situation of continued backlogs and the Minister having to come back to the House for more urgent bills. The ACT Party commends this bill to the House.

Motion agreed to.

Bill read a second time.

DEPUTY SPEAKER: This bill is set down for committee stage forthwith. I declare the House in committee for consideration of the Coroners (Coronial Cap) Amendment Bill.

In Committee

CHAIRPERSON (Hon Jacqui Dean): Members, the House is in committee on the Coroners (Coronial Cap) Amendment Bill. I won’t bother going through some of the reminders. You’ve heard them many times. So, members, we come now to clause 1, and the question is that clause 1 stand part.

CHRIS PENK (Senior Whip—National): Point of order. I seek leave of the committee that all provisions within the bill be taken as one debate.

CHAIRPERSON (Hon Jacqui Dean): Leave is sought for that purpose. Is there any objection? There is none.

Clauses 1 to 4

Hon AUPITO WILLIAM SIO (Minister for Courts): I thank my colleagues on the other side for raising that so that we can dispense with the bill as quickly as possible while also maintaining the ability to be able to respond to our colleagues’ questions.

Clause 1 is really simple—it’s the title clause. The title of the bill is the Coroners (Coronial Cap) Amendment Bill. The title reflects the purpose of the bill, to raise the statutory cap on the maximum number of coroners.

Clause 2 is the commencement clause. The amendment Act will come into force on the day after the date of Royal assent. This will enable the recruitment of additional coroners to commence as soon as possible. Clause 3 notes that the principal Act to be amended is the Coroners Act.

Clause 4 is the substantial clause here, and that contains the only substantive amendment in this bill. Clause 4(1) amends section 109(1) of the Coroners Act 2006 to increase the maximum number of coroners that can be appointed at any time, from 20 fulltime-equivalent coroners to 22 fulltime-equivalent coroners. Clause 4(2) makes a consequential amendment to section 109(2)(e) of the Coroners Act 2006 to change the example that illustrates how full-time equivalents are calculated. The number given in the example has been increased from 13.5 to 21.5 to reflect the new maximum number of coroners.

Just before I sit down, I do want to say, with the greatest respect to the ACT Party, that I’m not accepting the Supplementary Order Paper as provided. I’ve been advised that the Ministry of Justice modelling from November 2021 shows that the appointment of the additional four coroners should bring caseloads to within a manageable range. The ministry’s modelling works on the basis that 3,000 active cases represents a sustainable caseload for the coronial jurisdiction, and this is based on historical data when the coroner was closing the same number of coronial cases as were entering the coronial jurisdiction each month. The number of active cases will never decrease to zero, because there is a minimum length of time a case will take to resolve, regardless of the amount of coroner resource. The appointment of more coronial resource is only one component of a broader work programme to reduce the coronial caseload and maintain it at a sustainable level.

I’ve heard members of the House raise issues about moving these things with urgency. I acknowledge that, and it’s why this bill is specifically about these case numbers. But coronial inquiries, by their nature, can take time. For example, a coroner may put the inquiry on hold pending the outcome of another agencies’ investigation—for example, by the Police or Health. That is another piece of work that is not being debated here in this case.

CHLÖE SWARBRICK (Green—Auckland Central): I appreciate the contributions of the Minister, just before, particularly in addressing the Supplementary Order Paper as tabled by my colleague Nicole McKee. However, I’m not quite sure if I align with the rationale, and I’d like to challenge it somewhat, as I’m sure others may interrogate in their contributions.

So I’m just asking the Minister and his officials in this very brief time that we have to consider this legislation—and it’s really important for those who are following along at home, for all of those unfortunate individuals tuned into Parliament TV that what we’re looking at here is a piece of legislation that increases the maximum amount of fulltime-equivalent (FTE) coroners that may be appointed. That is not a minimum, and it is quite separate to the issue of budgeting for those coroners.

The point that the Minister was making just before around the estimations that he’s got are from the Ministry of Justice around how an extra four would bring caseloads into something that is considered manageable. Per the contributions of other members, it would be really good to get a greater understanding of what “manageable” actually means, in terms of definition. I’d note that he gave the example of around 3,000 cases being active as being considered sustainable; obviously a number of those cases come with different variables in terms complexity and other ways, which the Minister himself alluded to.

So my question becomes: when we’re looking at amending the legislation in order to align with the Budget of that increase of FTEs here, why is it the case that we did not settle on, for example, an amendment to the enabling legislation of raising the cap to, for example, a proportion of population so that we wouldn’t in future need to look at again amending this legislation if it’s the case that the Government next year or the year thereafter seeks to increase the funding the Budget, which again is a separate piece of legislation to what we’re currently considering in terms of the very literal coronial cap? And if it is the case, as it is the case that we’re here looking at a maximum of coroners, why, again, was it set at two?

I note that the Minister was, again, alluding to the fact that, in current circumstances, that brings workloads into what is considered by the ministry to be manageable. But again, given that we’re going to see population increasing and given that there are all of these other variables around the likes of complexity and otherwise, why was it not four or five, given that there is, obviously, in all Budgets, typically planning for several years in advance and for future caseload to come online?

So those are questions to the Minister—around particularly why, in amending this legislation, it wasn’t considered that we, for example, looked at a proportion of the population being represented in the coronial cap, or alternatively, look perhaps at something like a minimum so that future Governments would actually need to bring these coroners and fund those coroners in the aligned Budget. Why is it—or rather, could he please provide greater information into those words as just put on Hansard around the likes of what it means to be manageable and what it means to be sustainable, given those other variables around complexity of cases and not just caseload?

CHAIRPERSON (Hon Jacqui Dean): I should have said, before I took the first call, that the question is that clauses 1 to 4 stand part.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair. I’ve got a number of questions, some of which I’ve already flagged at an earlier stage of the afternoon’s debate in the spirit of helpfulness. I think I will start by acknowledging the point that the Minister made, which is a reasonable one. Of course there is a certain period of time that coronial cases will always be required to take. And, of course, for that reason we talk about average length of cases, and it’s not right to highlight individual cases without the context. It’s also not appropriate for MPs to talk about how individual cases are tracking to the extent that that might represent an intrusion on the work of the judiciary. So we do talk about averages and what we’re interested in is the extent to which the average time to dispose of a case is greater than what would be reasonable given, as the Minister says, there are not only complexities with the cases themselves, but also other Government agencies might conduct investigations and so on.

Chlöe Swarbrick has rightly asked what “manageable” looks like in terms of the range, and that was a question that I would have asked, but I would also like to supplement that by asking: at what point does the Minister anticipate that the manageable range will be reached? So a supplementary there, effectively, to ask not only what but also when.

I do want to acknowledge the discussion that’s taken place across the House in different approaches to the cap. Whereas I’ve said that National’s approach would be to try and understand if there’s any reason that there should be a cap at all, the Greens’ point was around possible indexation of that, and it sounds to me sensible, acknowledging Ms Swarbrick’s point that it might be a minimum rather than a maximum or a floor rather than a ceiling that is appropriate. And as the ACT member Nicole McKee has said in relation to the amendment in her name, there is the possibility of increasing beyond the increase that the Minister is already making, National is open to all of those and indeed actively supportive in the case of at least what Ms McKee has put on the Table.

Finally, my questions are around the analysis that’s been made. To some extent, the Minister has answered that. I do acknowledge at the start of the committee stage, he talked about that manageable range and, effectively, then it all does come down to the approach to reduce the backlog, whether that is an aggressive one to try and bring that down as soon as possible or really over a long period of time, which seems to me the approach if we’re only increasing the cap by two. So I’ll put those questions to the Minister and look forward to those and, no doubt, the rest of the committee does as well.

NICOLE McKEE (ACT): Thank you, Madam Speaker. Minister, I hear your response in regard to lifting the cap, and I just have a few more comments on that. I wonder, in a question to you, Minister, when your advisers have suggested that the number of cases will be under control, whether or not there is, or will be, key performance indicators set to ensure that we do not continue to have a reduction in the number of inquiries and inquests because we have enough coroners to be able to go through that huge case backload.

I also wonder, Minister, why we are unable to lift the cap to 30 so that we are futureproofing the coroner’s courts for other Governments so that they do not have to bring urgent bills, but, rather, can get on with business.

And a final question for you, Minister. In your legislative statement, you said that there are seven fulltime-equivalent relief coroners and that they do not count as part of the cap. So I wonder, then, Minister, whether or not you can confirm whether you have, apart from the seven that you’ve already suggested as the coronial registrars, more relief coroners on board to help when it has been reported by the Chief Coroner that part of the reason why we have a large backload is because of an unprecedented number of deaths. So if we have a higher population and we have, with COVID, deaths occurring as well, we have an increase in unprecedented numbers—whether or not we would be able to manage that and whether or not we can guarantee that we won’t have inquiries and inquests not being held because of that backlog. Thank you.

Hon AUPITO WILLIAM SIO (Minister for Courts): I can confirm that currently we have 18 fulltime-equivalent coroners plus seven relief coroners who are not counted as part of the cap. So, at the moment, Budget funding has only been allowed for the four additional permanent coroners. I suppose that’s why, but I also want to say that the appointment of more coronial resources is only one component of a broader work programme.

With the greatest respect, I’d say to the House that we can debate this tool till midnight tonight. The problem is that it’s a political solution that often fails to achieve what we’re wanting to do. There is a comprehensive piece that’s not part of this legislation that we will debate at another time.

CHAIRPERSON (Hon Jacqui Dean): The question is that Nicole McKee’s tabled amendments to clause 4 to increase the coronial cap be agreed to.

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

Ayes 52

New Zealand National 32; Green Party of Aotearoa New Zealand 10; ACT New Zealand 10.

Noes 65

New Zealand Labour 65.

Amendments not agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that clauses 1 to 4 stand part.

Clauses 1 to 4 agreed to.

Bill to be reported without amendment.

House resumed.

ASSISTANT SPEAKER (Hon Jacqui Dean): Mr Speaker, the committee has considered the Coroners (Coronial Cap) Amendment Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Third Reading

Hon AUPITO WILLIAM SIO (Minister for Courts): I move, That the Coroners (Coronial Cap) Amendment Bill be now read a third time.

I do want to genuinely thank members for the commentary afforded from across the House. As I’ve said before, this bill will increase the maximum number of coroners that can be appointed at any time to 22 fulltime-equivalent coroners. This will enable the implementation of Budget decisions to fund an additional four coroners. An amendment is being made under urgency to enable the recruitment of the coroners to be begin immediately. The new coroners will be appointed by the Governor-General on the advice of the Attorney-General.

The coronial system has been under pressure to keep pace with the number of cases being accepted into the jurisdiction, and this has meant that whānau and families have had to wait longer to receive the findings from coroners. The additional coroners provided through the Budget and enabled through this bill will support coronial cases to be considered more quickly and will alleviate some of the distress felt by families and whānau who are grieving the loss of a loved one in difficult circumstances, but that is only one part of a more comprehensive approach so that the solution is lasting. I commend this bill to the House

DEPUTY SPEAKER: The question is that the motion be agreed to.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Mr Speaker. Thank you to the Minister Aupito William Sio. Thanks to all who have taken part in what I think’s been a really constructive and collegial debate.

So far as I’m concerned, as National Party’s courts spokesperson, we’ll always be open to supporting measures that are made in good faith and will have a positive effect on the court system, including in this case, as we’ve said, a step in the right direction—albeit a small one—to reduce the backlog in the coronial system. We’ve talked about the implications for Kiwis of the current backlog: the emotional, financial, and social problems caused by those, and indeed, the distress to those caught up in the system who have lost loved ones suddenly, unexpectedly, and who deserve answers as soon as reasonably possible.

The National Party has made its position “tolerably clear”, in the delightful phrase of my friend and former colleague the Hon Christopher Finlayson QC. And having made that tolerably clear, I repeat only for the sake of the record at this, the third reading, that we think that increasing the cap is worthwhile. Perhaps removing it altogether would be even more helpful, and we support the increasing capacity—not only the appointment of additional coroners but also coronial staff, to use that shorthand, as implied by the Budget funding announcement of yesterday.

This is not the end of the matter in terms of what is needed to improve the coronial system. It is not even necessarily the beginning of the end of the matter. It might be, at least, however, the end of the beginning, which is to say it’s a good start, the National Party supports it, and we look forward to further discussions with the current Government and any other players who wish in good faith to improve the lives of Kiwis in this regard. We commend this bill to the House.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe. Tēnā koutou e te Whare. The Greens, of course, will be supporting this legislation this evening. I just want to, once again, put on record a huge congratulations to Life Matters Suicide Prevention Trust, and to Corinda Taylor, who, of course, tabled a petition on this issue amongst a context of many others around the coronial system and the support for particularly suicide-bereaved families and whānau back in 2019.

Again, I want to acknowledge that they did that immense amount of advocacy and work to try and make the system work better for those who are grieving while they themselves were occupied with that grief and with those delays in the coronial and the justice system. The point made by my colleague Harete Hipango about how justice delayed is justice denied, I think very much continues to echo throughout this debate.

It’d be remiss of me not to address the points that were made in the committee of the whole House as we wrap up this debate tonight. I just again emphasise that what we’re talking about with the Coroners Act is a piece of legislation which is quite unique in that it limits how many people in this country can have the job of doing these kinds of inquests and inquiries. That’s quite unusual in that it doesn’t come with a floor or a minimum that is required to be funded by any given Government of the day.

This sits alongside, obviously, the Budget legislation, which empowers the spending to do the things that this legislation seeks to do in terms of increasing fulltime-equivalents (FTEs). But, once again, I think it is a lost opportunity not to be looking at potentially benchmarking the number of coroners in this country to, for example, a proportion of the population or increasing the cap—as proposed by my colleague Nicole McKee—to 30, given that that initial FTE allocation in the original Act, which we’re of course amending tonight, was set when the population was 4.2 million.

It is the case that under Budget urgency, and urgency in general, we’ve just gone through the entire process of passing a bill through first, second, committee of the whole House, and third reading—bypassing the select committee stage—in less than two hours. The process for a bill like this usually takes somewhere between six and 12 months—sometimes even longer if we have to take serious consideration through select committee, engage with the Business Committee for extensions and officials to work through this process.

So I want to, and we need to, acknowledge the Minister and for his mahi and obvious advocacy around the Cabinet table for increasing the amount of coroners in this country. It is still the case that it feels like quite a lost opportunity when, in future, we are going to need to amend this again and there’s going to be a lot of delays again.

So I support this piece of legislation. It goes quite some way to addressing the concerns of those who have been so let down by the justice and the coronial system—not, I think, for—for any lack of trying for those who exist inside the system, but because a lack of resourcing to get through the immense caseload that sits on their desk.

Just in closing, again, need to acknowledge those who’ve been advocating for this for so long now. We’ve done it. Kia ora.

NICOLE McKEE (ACT): Thank you, Mr Speaker. I’d like to begin my third reading speech by acknowledging the Minister and the work that he has been doing to ensure that we can actually get this backlog completed, or at least processed in a very timely manner. I would have hoped that, as my colleagues have suggested, we could have been able to make a maximum number rather than a smaller amount, to increase the cap, or to make it increase with population. That would have been a way that we could futureproof the processes going forward.

I do acknowledge that the Minister has said there is a bigger piece of work that is coming in this space. Minister, I do hope that you will reach out to the parties across the floor here, because you will realise, after today’s debate, that you have our support to make sure that we can process any future legislation to ensure that we can give families some closure as quickly as possible. Because if we are able to support a good initiative, we most certainly would like to. At the end of the day, it’s about our communities, it’s about our families, and when they’re grieving for up to four years through an inquest, up to eight for some others, we need to give them that closure quickly.

I don’t want to take up too much more time, but I’d like to hope that any future legislation is looking at futureproofing. What we will be seeing, especially if we have another pandemic or a flu go through—if we have more deaths we don’t want to be coming back to this House to have to do this again.

Back in my early twenties I worked for the coroner in Rotorua. His name was Roger Brewster and he was with the firm East Brewster, where Paul East, who was a former member of this Parliament, and Roger Brewster worked. Back in that day it was absolutely horrifying to be putting together a lot of the documents that the coroner needed, and I know and felt the suffering of so many families as they went through that process. I’ve been quite passionate about this particular one, because to think that some are waiting up to four years to go through that inquest, I can just imagine how heartbreaking it is.

Minister, I commend you for making a start, for doing it under urgency, and for having four coroners ready to go and work on that backlog. I thank you for that. I just hope that in the future we don’t have further delays, and perhaps in the next part of your work we can assist you to ensure that that does not occur. We do commend this bill to the House.

Motion agreed to.

Bill read a third time.

DEPUTY SPEAKER: Members, before we finish, can I just acknowledge all members for the work during urgency. In particular, can I acknowledge the Opposition whips and the Government whips for keeping the presiding officers informed of progress during urgency, and can I thank the Office of the Clerk and the Chamber staff and Hansard.

Nō reira, kia koutou katoa. Ka nui te mihi atu ki a koutou. Tēnā rā tātou katoa. The House stands adjourned until Tuesday, 31 May 2022.

The House adjourned at 5.26 p.m. (Friday)