edithatogo/nz-hansard-corpus huggingface dataset:
Halbert ShananSHANAN HALBERT (Labour—Northcote): E te Māngai o te Whare tēnā koe. You know I've heard from the other side this morning just a whole bunch of grumbles and sadness particularly from the member from the North Shore. Now the reality—and I take Mr Brownlee's point that there's nothing special in our announcements yesterday and in this Budget but the reality for the North Shore community: 10000 people will have their benefits lifted—10000 people on the north shore of Tāmaki-makau-rau. Now that is very very important to acknowledge. That's 10000 people that are getting a lift of $20 coming up in mid-year and then increasing from there thereafter. But that money—and people forget—that may not be much to us is spent in our local businesses on the North Shore across Auckland and across Aotearoa New Zealand. People forget those key important points.This Budget is about securing our recovery and the step today in this taxation bill and why I'm supporting it in the House today is because we want to secure our recovery. I'm proud to be a Labour member. I'm proud of this first Budget and the investment in our people and I commend this bill to the House.
Henderson EmilyDr EMILY HENDERSON (Labour—Whangārei): I am so proud to be here to stand in support of this Taxation (Budget 2021 and Remedial Measures) Bill which raises the benefit level and is going to benefit so many of our people. If you want to talk about this not just in terms of the impact it is going to have on the lives of those people for whom 20 bucks come the middle of this year and another raise next year—the impact it's going to have on them. It is also to talk over the other side of the House talking about the impact it's going to have on our whole society. Frankly if we don't get used to raising the living standards of those at the bottom of our country then we may as well get used to raising our fences because we either create an inclusive society or we create one that is divided angry and no way for a Kiwi to live. I am so proud of this bill.I remember what it was like when the mother of all Budgets" came in. I remember the immense impact it had on my clients in the Family Court. I remember seeing for the first time in my life children with mouths full of rotten teeth because their parents couldn't afford the costs. I am therefore so proud to see that we are raising the benefits for those on the lowest incomes not just because of what it will do for them but what it will do for our whole society.I am also absolutely thrilled to see that we are adjusting the tax threshold for the working families because as the Prime Minister said yesterday it's not just about the making of dignity and good lives for those on the benefit; it is also about continuing to incentivise work. I am absolutely thrilled to commend this bill to the House."
Leary IngridINGRID LEARY (Labour—Taieri): The member opposite Simon Watts wanted to know what happened yesterday. Well I'll tell you what happened yesterday: we secured our economic recovery. Yesterday we created the opportunity to lift between 19000 and 33000 of our children out of poverty. In my electorate in Taieri the median income is $29700. These changes will make an incredible difference to the people who live in the South. I am so proud of this Budget I am so proud of the ability to be able to stand in support of this bill which will enable us to increase benefits by $20 a week from 1 July this year and then further increases from next April. This is a proud day for me.I am so grateful on behalf of our constituents in Taieri to be able to take a call on this support this and say to those on the other side that we are securing the economic recovery of New Zealand. I commend this bill to the House.
Rurawhe Adrian; Williams ArenaTHURSDAY 20 MAY 2021(continued on Friday 21 May 2021)TAXATION (BUDGET 2021 AND REMEDIAL MEASURES) BILLThird ReadingDebate resumed.DEPUTY SPEAKER: Kāti rā tēnā rā tātou ata mārie. [If I may greetings all and good morning.]The House is resumed. Members when we adjourned last night we were debating the third reading of the Taxation (Budget 2021 and Remedial Measures) Bill. We are up to call number eight which is a Labour Party call. I call Arena Williams.ARENA WILLIAMS (Labour—Manurewa): Good morning Mr Speaker and members of this House. It's a brilliant day in Wellington and a Pink Shirt Day acknowledging bullying in our schools. I acknowledge everyone here who has taken the opportunity to wear a pink shirt and I will be donning one when I go back to my office.I want to give a very short contribution on a very short bill which contains amendments to the Income Tax Act 2007 and the Child Support Act 1991. The amendments to the Income Tax Act 2007 relate to an increase in the minimum family tax threshold. These changes are an important part of this Government's plan and what we heard in the Budget yesterday. But it relates more broadly to the Government's plan. Since 2017 it's made changes which would see 109000 families with kids better off by $175 per week on average. That's an incredible change since that time and these changes will do their part to do that.What's that going to mean for New Zealanders? Well I know in my electorate of Manurewa this is going to be a massive investment in those families who need a Labour Government the most and who need our representation here in this House. I'm proud to represent that community of Manurewa today.Now a quick note on the minimum family tax credit for those who are new to this debate who might be following along as a consequence of the benefit rate increase announced yesterday the threshold for the minimum family tax credit is also being increased to ensure that on an annual basis eligible low-income families continue to be better off in work receiving that tax credit than they would be on a benefit. We've heard contributions from that side of the House that we haven't addressed the need for people to be in work and this bill is an important part of doing that and making sure that families who are working can get ahead in this country and are incentivised to do so. I'm proud of that and I want to speak to the people at home who are confused about that: that is simply not the case. By raising benefits we do in fact increase everyone's ability to live a good life in the way that they conceive of it and to live with dignity and respect in our communities. That is why I commend this bill to the House.DEPUTY SPEAKER: This call is a split call. I call Simon Watts five minutes.
Thursday 20 May 2021 - Volume 752
Taxation (Budget 2021 and Remedial Measures) Bill — In Committee—Clauses 1 and 2
VoteA party vote was called for on the question That clause 2 be agreed to.Ayes 100New Zealand Labour 65; New Zealand National 33; Te Paati Māori 2.Noes 10ACT New Zealand 10.Abstentions 10Green Party of Aotearoa New Zealand 10.Clause 2 agreed to.
VoteA party vote was called for on the question That the question be now put.Ayes 75New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.Noes 43New Zealand National 33; ACT New Zealand 10.Motion agreed to.CHAIRPERSON (Hon Jacqui Dean): The Hon Michael Woodhouse's tabled amendment inserting new clause 6A amending the top rate of income tax is out of order as outside the scope of the bill. The Hon Simon Bridges' tabled amendment inserting new clauses 6A and 6B concerning the indexation of tax brackets is out of order as outside the scope of the bill. The Hon Gerry Brownlee's tabled amendment inserting new clause 6A increasing the lowest tax threshold is out of order as outside the scope of the bill. Nicola Willis' tabled amendment inserting new clause 6A lowering the rate of income tax is out of order as outside the scope of the bill. A party vote was called for on the question That Part 1 be agreed to.Ayes 98New Zealand Labour 65; New Zealand National 33.Noes 10ACT New Zealand 10.Abstentions 10Green Party of Aotearoa New Zealand 10.Part 1 agreed to.
Taxation (Budget 2021 and Remedial Measures) Bill — In Committee—Part 1
Taxation (Budget 2021 and Remedial Measures) Bill — Second Reading — Continued
VoteA party vote was called for on the question That the Taxation (Budget 2021 and Remedial Measures) Bill be now read a second time.Ayes 100New Zealand Labour 65; New Zealand National 33; Te Paati Māori 2.Noes 10ACT New Zealand 10.Abstentions 10Green Party of Aotearoa New Zealand 10.Motion agreed to.Bill read a second time.
VoteA party vote was called for on the question That the Taxation (Budget 2021 and Remedial Measures) Bill be now read a first time.Ayes 100New Zealand Labour 65; New Zealand National 33; Te Paati Māori 2.Noes 10ACT New Zealand 10.Abstentions 10Green Party of Aotearoa New Zealand 10.Motion agreed to.Bill read a first time.Result corrected after originally being announced as Ayes 100 Noes 10.ASSISTANT SPEAKER (Hon Jacqui Dean): Can I just remind members if they wish to call for a party vote they do it very promptly.
Taxation (Budget 2021 and Remedial Measures) Bill — First reading
VoteA party vote was called for on the question That urgency be accorded.Ayes 75New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.Noes 45New Zealand National 33; ACT New Zealand 10; Te Paati Māori 2.Motion agreed to.
Taxation (Budget 2021 and Remedial Measures) Bill — Third Reading
Salesa JennyASSISTANT SPEAKER (Hon Jenny Salesa): This debate is interrupted. The House is suspended until 9 a.m. tomorrow. Pō mārie.Debate interrupted.Sitting suspended from 9.58 p.m. to 9 a.m. (Friday)
Menéndez March RicardoRICARDO MENÉNDEZ MARCH (Green): Kia ora Madam Speaker. As we wrap up this debate on the Taxation (Budget 2021 and Remedial Measures) Bill I want to acknowledge that throughout the debate the concept of good socialist policy has been thrown around as if it was an insult. What we've seen though is an acknowledgment by all sides of the spectrum that people on low incomes are struggling whether they're in paid employment or otherwise. I think it's a disservice for us to not acknowledge that people outside of paid employment also deserve to live with dignity. And in the nature of this bill I think the main concern is the response by several members that people outside of paid employment do not deserve livable incomes. The Green Party believes that everyone has a right to have enough income to thrive not just to survive. The question here as well around the minimum family tax credit the threshold amount is that ultimately it provides OK incomes for some. We may be talking about people who don't want to go into paid employment and that's used as a scapegoat by members to my right but the truth is that the people who lose by having a policy that discriminates against unemployed people are the children of unemployed people. Why should we be punishing children because of a policy that has chosen to punish those that are unemployed? And those people that are unemployed often it's not just because they want to be in that situation. Often there's just no employment that meets their aspirations. Often they're actually already doing meaningful productive labour in their communities via caregiving via volunteering and we should be recognising that labour and valuing it as such. So the issue that we take with the minimum family tax credit is the fact that children and whānau who are living on income support ultimately are discriminated against and those families deserve to have livable incomes. This bill comes in the context of the increase to baseline benefits we saw in this Budget which we believe is a step in the right direction. But like many front-line groups who have been really authentic and honest with us they've told us that the increases to benefits don't go far enough so that our families can thrive. So we hope that in future Budgets we'll be discussing a similar bill with a much different threshold because benefit levels have been increased substantially so that no one needs a food grant in order to survive.I'm thinking right now as we wrap up the debate of all the front-line advocates who work really hard day in day out to get people's full entitlements at Work and Income people who work so hard to just get a food grant because we've kept incomes so low. So while this bill won't provide livable incomes for all and continues a discriminatory policy we will continue campaigning for an income support system that provides livable incomes for all and that it's unconditional. The Green Party will continue working hard to offer our support to Labour to enact genuine bold socialist policy. Kia ora.
Edmonds BarbaraBARBARA EDMONDS (Labour—Mana): I'm going to keep my contribution really short—short like the bill; short as it is only four pages and corrects a drafting error in the Child Support Act and sweet in the sense that it changes the minimum family tax credit threshold as a consequence of the awesome Budget benefit rate changes that happened earlier today. I commend this bill to the House.
Webb DuncanDr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe Madam Speaker. It's a funny old day isn't it when you get a moaning old speech like that and he then says but we'll support the bill" and sits down not having mentioned the bill once in the entire speech.I'm very proud of what this Government is doing in supporting the most needy New Zealanders and at the same time giving New Zealand the assets and the infrastructure to be prosperous and to succeed. This is a bill that is one small step in that direction. I absolutely support it. I commend it to the House."
Parker DavidThird ReadingHon DAVID PARKER (Minister of Revenue): Can I thank the members for their attention in the committee stage and their questions—particularly the Hon Michael Woodhouse as he helped the House get their head around the complex provisions in respect of the very minor corrections being made in respect of the penalties for overdue child support payments.I really don't have anything else to add to the earlier speeches. There have been legislative statements already filed there has been no amendment to the bill during the committee stage and the speeches that have been given in earlier stages of the debate aptly described the legislation from the point of view of the Government.ASSISTANT SPEAKER (Hon Jenny Salesa): Minister my apologies: would you kindly move the taxation bill?Hon DAVID PARKER: I move That the Taxation (Budget 2021 and Remedial Measures) Bill be now read a third time. ASSISTANT SPEAKER (Hon Jenny Salesa): The question is that the motion be agreed to.
Salesa Jenny; Mallard TrevorHouse resumed.CHAIRPERSON (Hon Jenny Salesa): Mr Speaker the committee has considered the Taxation (Budget 2021 and Remedial Measures) Bill and reports it without amendment.SPEAKER: The question is That the report be adopted.Motion agreed to.Report adopted.
Edmonds Barbara; Salesa JennyBARBARA EDMONDS (Associate Whip—Labour): I move That the question be now put.Motion agreed to.CHAIRPERSON (Hon Jenny Salesa): The question is that clause 1 stand part.Clause 1 agreed to.
Salesa Jenny; Woodhouse MichaelClauses 1 and 2CHAIRPERSON (Hon Jenny Salesa): Members our final debate relates to clauses 1 and 2 the preliminary clauses. The question is that clauses 1 and 2 stand part. Hon MICHAEL WOODHOUSE (National): Thank you Madam Chair. I want to make a brief comment about the title and commencement particularly given the conversation we've just had about commencement. My initial comment is I really hope we've got it right because the likelihood is that we could be back here in two or three months' time going Oh clause 8 should have been clause 4 and section 134(2) was really meant to be '1 April 2020-whatever'." This has been a very confusing conversation so I implore the Government to get better at passing legislation so that we don't have confusing commencement conversations like we've just had. I'm not one normally to give trite speeches about what the title of a bill should be or that it should be this bill or that bill but I feel compelled on this occasion—Anna Lorck: Come on! Hon MICHAEL WOODHOUSE: It's all right Anna Lorck I've had my Berocca. I can go all night. Don't worry—no magnesium near me. But I think what's on the tin is definitely what's not in the bill—Chris Bishop: She's back—she's b-b-b-b-back! Hon MICHAEL WOODHOUSE: With a bounce in her step. It says it's the Taxation (Budget 2021—Hon Member: "B-B-B-Budget". Hon MICHAEL WOODHOUSE: —and Remedial Measures) "B-B-B-Bill" but it's got little to do with taxation and in fact now what we know is that this Government really wants to throw lots of taxes at people and never ever wants to cut them. We heard unequivocally that threshold changes lowering the top tax rate lifting the threshold for the bottom rates cutting that gap between 17.5 percent and 30 percent is not even something they want to have a conversation about and that's because all they know how to do is tax. "Remedial Measures"—well I don't know how remedial they really were. Sure it was a muck-up. It's a fixing of the muck-up that was made and boy if that's the way legislation is written it's no wonder that people get confused. It went through select committee. It went through expert submissions. Generally speaking the IRD bill writers—who are not Parliamentary Counsel Office; they're usually IRD staff themselves—do a heck of a good job. If anybody has read or scanned the Income Tax Act it is a massive massive document and how on earth tax agents can actually fight their way through it I don't know but that's what they're paid to do. So these are muck-up measures where "Remedial" is a euphemism for fixing muck-ups and I hope that we don't have to waste any more of this House's time doing just that."
Henare Peeni; Salesa JennyHon PEENI HENARE (Minister of Defence): I move That the question be now put.CHAIRPERSON (Hon Jenny Salesa): The question is that the question be now put. Motion agreed to.CHAIRPERSON (Hon Jenny Salesa): The question is That Part 2 be agreed to. Part 2 agreed to.
Taxation (Budget 2021 and Remedial Measures) Bill — In Committee—Part 2
Brown SimeonSIMEON BROWN (National—Pakuranga): Thank you Madam Chair. My question relates to clause 9 which is Schedule 1 amended application transitional and savings provisions. The question relates to the—and I understand this is probably another timing matter where The amendments to section 134 made by sections 8(2) and (4) of the Taxation (Budget 2021 and Remedial Measures) Act 2021 apply to a financial support debt if the expiry of the seventh day after the due date falls on or after commencement of section 8(2) and (4) … but do not apply to a financial support debt if the expiry of the seventh day after the due date falls before …". I just want to ask the Minister whether that's another of these timing issues which relate to when the different provisions start having the commencement of 8(2) and 8(4) come into force on 1 April and I guess that relates to the fact that it goes back from a 27th date with a seventh. So if they had not been due until—if they'd been eight or nine days then essentially that clock doesn't start ticking because at that point they're only having to be due on the 27th but then after that time on 1 April 2022 then they have to be within seven days. So just wanting the Minister to clarify that and whether that is a correct interpretation of that particular clause due to the nature of these quite clunky commencement dates and the fact that there hasn't really been an explanation about that in the explanatory note or in the departmental disclosure statement and just understanding how all this fits together would be very helpful. Thank you Madam Chair."
Chen NaisiNAISI CHEN (Labour): I move That the question be now put.Simon Watts: Madam Chair.Hon Member: Stand up.
Penk Chris; Parker DavidCHRIS PENK (National—Kaipara ki Mahurangi): Thank you Madam Chair. I fear that my pearls may be cast if not before swine then on non-fertile soil but to be fair it's probably just as well if the Minister can't hear what will pass for questions in this contribution. Honestly continue Minister please whatever discussion you may be having while I gather my own thoughts.I did just want to try to understand the way in which the amounts have been calculated. I did acknowledge in a previous contribution that they are relatively small. Again I emphasise not to trivialise the fact that for some families in the situation it may be difficult to pay any amount. And in fact given that we're in the realm of penalties that's almost certainly the case. But I wonder if there was a particular rationale for the calculation of $5 or if greater 2 percent of the outstanding amount at that time. I just pause to note the irony that we are passing in urgency a remedial measure whereby of course we are in danger of compounding the error by making further errors as a Parliament and perhaps I should say more accurately as the Government for it is they who introduced it in urgency as part of their Budget package. I do also want to acknowledge that point about the valiant efforts of the Hon Peter Dunne to bring down the system from the inside libertarian hero that he was!Hon DAVID PARKER (Minister of Revenue): I don't know what the history of the $5 minimum was and maybe its history goes back to when these things were a lot more manual and there was a lot more work to it. I don't know but I do know that there's a policy agreement that is that it's an unnecessary impediment to people maintaining compliance with their obligations and the policy rationale is that it's an unnecessary penalty that actually puts a lot more people in a material way in breach and 2 percent without a $5 minimum is a better remedy and so that's where we end up.
Parker DavidHon MICHAEL WOODHOUSE (National): This is really confusing and I think we've got to the bottom of the first bit. One of the problems is that on the legislation website that many MPs use the Child Support Amendment Act 2021 has disappeared and you've got to go fishing to go back to the commencement clauses that the Minister was referring to. And I found them so I understand now that the changes that we're amending in clause 8 of this bill were actually in section 42 of the 2021 Act—and I'm getting nods from the officials so that's great. That said that the commencement of that section was 1 April 2021 and it should have been 1 April 2022. Clause 8(2) now is putting that back. I get that.I'm still uncertain about how we then revert to the new language which is the bit that I said hadn't changed in wording. What is the link back to the amendment that makes that effective on 1 April 2022 or sooner by Order in Council if the computer system enables it? So I've got the first bit—we're there—but I just want to know whether we've actually got to come back and change the law again or how do we link this new clause to a commencement date given that it's hard to link back to the previous Act if I'm making myself clear? I'm not sure if I am.Hon DAVID PARKER (Minister of Revenue): The member is making himself clear and it's a clearly made point. So what happens is that on 1 April clause 8(1) comes into effect and it says Replace section 134(2) other than the heading with:" those words that are under clause 8(1) in grey scale after "(2)". And that's all that then happens in respect of that particular provision until 1 April 2022 or an earlier date by Order in Council brings into effect clause 8(2) which says "Replace section 134(2)" which by that time will be the one above and that then has effect going forward.Hon Michael Woodhouse: Does that have effect in the commencement clause of this bill?Hon DAVID PARKER: No. No it has effect from 1 April 2022 because of clause 2(4) of this bill.Hon MICHAEL WOODHOUSE (National): We got there. I would just like to clarify what's actually happening now. There's two things. The Minister says—and technically correctly—that it would be expedient to wait until the computer system is up and running but as I mentioned this was a quite heavy burden for those people who fell into arrears and who didn't really have great means to pay. Am I correct that actually the Commissioner of Inland Revenue does have a power to remit in circumstances and that perhaps a slightly long bow could be drawn in order to exercise her powers? And secondly it was part of one of my first questions which was: what's actually happening with the degree to which child support arrears are being incurred? Because it would be quite nice to think that we're seeing a reduction even before the new computer system takes full effect."
Penk Chris; Parker DavidCHRIS PENK (National—Kaipara ki Mahurangi): Thank you Madam Chair. I hope I can just clarify that I've understood this correctly with reference to clause 8 which is to say at subclause (1) we've got section 134(2) and at subclause (2) we've got section 134(2) too; whereas we should have section 134(2) under either subclause (1) or (2)—we've got two (2)s under (1) and (2). And clause 2 has two dates whereas if it only had one date it would be much clearer. So if the Minister can confirm that that would be really helpful I think to everyone's mental health.Hon Member: Can you repeat that question?CHRIS PENK: No I'm not going to repeat it. It was bad enough the first time.But I do have another question which is in relation to the grace period—as I think it could reasonably be called—which is the replacement of the number or the ordinal seventh" with "27th". Or perhaps it's the other way around; I'm genuinely unsure. But I'm just asking the Minister to explain the logic behind that. So we're now talking—just to be clear—about the amendment to section 134 of the Child Support Act 1991 I think as un-amended by the 2021 amendment legislation. But in any case just to express some curiosity at the policy reason behind that difference in the grace period—the 27th day or the seventh day being the point at which the calculation is made about a late payment and a penalty calculated at that point. I'd be grateful if the Minister could explain that.Also while I've got a bit more time to ask a further question: the basis for the amounts of $5 or 2 percent of the outstanding amount whichever is the greater. There are relatively small amounts involved and I don't mean to trivialise that for families for whom that's difficult. But nevertheless it would be good to place on the record—of course without the benefit of a select committee process for the explanation thereof—in particular considering that that explanation doesn't appear to occur within the legislative statement. So if the Minister could help me out on all those points that would be much appreciated.Hon DAVID PARKER (Minister of Revenue): Thank you Madam Chair. The policy rationale that lies behind extending the late payment period for the first payment due by a liable parent from seven to 27 days is to enable the Inland Revenue Department to have more time to make contact with the liable parent before they fall into penalties. The experience both overseas and in New Zealand is if you get these things on track at the start when people become liable parents and penalties don't start accruing too early they're more likely to meet their liable parent contributions not just for the first payment but also going forward. So in respect of the first liable parent contribution due there is more latitude for lateness that is not extended in respect of subsequent liable parent contributions because people are expected by that time to have their affairs in order."
Upston LouiseHon LOUISE UPSTON (National—Taupō): Thank you Madam Chair. I need to gather myself just for a moment. Excuse me. Ha ha! I'd like to just ask the Minister in charge of the bill who is no longer the Hon Peter Dunne—David Seymour: If only—if only.Hon LOUISE UPSTON: Ha ha! In all seriousness I want to ask about the legislative statement and how it actually relates to what's been drafted in Part 2 for the remedial measures. The legislative statement quite clearly refers to the fact that there was a drafting error with the application of the time frame being 1 April 2021 with the intention of it being 1 April 2022. I have a number of calls I'd like to take but I'd like to start with the very basic simple one of could Minister Parker please explain why the legislative statement doesn't line up with the drafting of the bill.
Seymour DavidDAVID SEYMOUR (Leader—ACT): Thank you very much Madam Chair. We find ourselves again in the Chamber trying to fix up past mistakes. All of this should have been easier if the IRD had better computer systems. But actually this is in large part not the case due to Peter Dunne. Peter Dunne with his silver bouffant and trade mark bow ties easily underestimated by the untrained eye was a weapon and he often harboured agendas that were not easily detected by the less keen observers. He actually heroically ran down the IRD's computer systems over a series of years staying in Parliament for a total of 30 years to complete the task.One of the effects of that was that it was actually much more difficult for medalling socialist Governments to introduce more complex policies that would surgically take money from hard-working taxpayers and give it to the lazy and indolent and that's why Peter Dunne is our hero of the day and someone who was always there to protect New Zealanders from the kind of medalling bureaucracy and socialism so common in New Zealand politics today. I just wanted to put the record straight in defence of my friend and hero Peter Dunne.
Dean JacquiPart 2 Remedial measuresCHAIRPERSON (Hon Jacqui Dean): Members we come now to the debate on Part 2 which is clauses 7 to 9 and relates to remedial measures. The question is that Part 2—Hon Members: Madam Chair.CHAIRPERSON (Hon Jacqui Dean): Just let me get it out. The question is that Part 2 stand part.
Woodhouse Michael; Parker DavidHon MICHAEL WOODHOUSE (National): Very quick call in response to the Minister's quite rightly gloating about the success of Business Transformation. But instead could I ask him in light of that that rather than making IT workers redundant use those resources to actually staff the call centres because tax agents up and down the country tell me the calls are not being answered. Yes I know we want to drive so many of the inquiries to IRD online—I accept that—but guess what? The Income Tax Act is so large and complex and everybody's situation is different that it is necessary for taxpayers and tax agents to call. How about the phones get answered?Hon DAVID PARKER (Minister of Revenue): I am very confident that the small number of people that are affected by this change will not overrun the call centre at IRD.
Seymour David; Parker DavidDAVID SEYMOUR (Leader—ACT): Thank you very much Madam Chair. I thought I should just comment on a few things I'd heard from speakers in the National Party. They were advocating for more progressive taxation and I thought I should just make the point that bracket indexation actually ensures that the portion of the tax burden that falls on lower-income earners remains low; the proportion of the tax burden that falls on higher-income earners remains higher than it would otherwise be. Fiscal drag actually has the effect of increasing the average tax rate and therefore reducing the relative progressivity. So of course I think it's important we have an ACT Party to point these things out otherwise we on this side of the House could inadvertently make the taxation system more progressive and we've already got several parties on the left to do that. So I don't think it's something that the National Party should be advocating as well or at least I'd hope that they wouldn't.Then I also just wanted to come back to this question about the incentives or the marginal tax rates that we're facing. The Minister said Well if somebody's on $375 a week 52 weeks a year then I guess we can conclude it's $17000 $18000 a year and $31000 is certainly more than that." So I guess they would be getting an additional $13000 a year but they might have to work 30 hours a week—so 1500 hours per year to get that $13000. So would that mean that the marginal after-tax income of somebody who goes from being on a benefit to working 30 hours in order to get this credit would be somewhere around $8 or $9 a year—an hour sorry; certainly not a year. But you know it's interesting just to get a sense of what sort of policy we're expanding here and what real incentives people face because if you only get $8 or $9 an hour for choosing to go to work you can understand why people might be reluctant to do so.Hon DAVID PARKER (Minister of Revenue): I think the answer to that—and I expect the member already knows it—is a very small group of people who are actually affected by this; the vast majority of people who are in this income band if they were coming off a benefit they were at that abatement threshold and they chose to work more would actually earn more than this amount except at the margins and as they earned more they would if they were coming off a benefit and therefore affected by this be capturing every dollar that they earned less their tax rate."
Seymour David; Parker DavidDAVID SEYMOUR (Leader—ACT): Madam Chair thank you. I'd like to ask the Minister for somebody—there's 4800 people he said who will be affected by this change. Presumably those are people whose income is currently between the current threshold and the new threshold. I wonder for those 4800 people it would seem that until they get to the new amount of $31096 total after-tax income and they get offered extra hours or an increase in their hourly rate perhaps they won't actually get any more money. It seems as though if I'm reading this right those people have now been put in a position where if they do work more until they get to $31096 the effective payment for those extra hours is nothing. Am I reading that correctly?Hon DAVID PARKER (Minister of Revenue): At the intersection between work and benefit there are always a small number of people whose circumstances are close to identical whether they're in work or on a benefit. That's long been the case and it's a difficult area of intersection because we want to maintain incentives to work. We also know that the amounts that are in issue when there is any change to benefits in terms of effect on the minimum family tax credit they're always very small. And people who are higher earners might sometimes think Gee there's not much in this." but it does matter. It's a matter of principle and $500 for someone in that situation can be significant or is significant and is important to them. The member is correct though that if someone was earning for their hours of work less than $31096 and earned a little more then the payment to take them up to that minimum level of income that's effectively provided through the minimum family tax credit would mean that they would be no better off.DAVID SEYMOUR (Leader—ACT): A further question for the Minister then. I take the principle that this $31096 threshold has been calculated by making sure that the maximum someone could theoretically get on a benefit is going to be $1 less than what they would get if they were working. Now I just wondered does that include a benefit for somebody that was not working at all because it would seem that in order to qualify for that $1 a person would have to work 20 hours a week 52 weeks a year—make it 1000 hours. They'd have to work 1000 hours for $1 and I just did some quick mental arithmetic and I wonder if you could confirm or get the Treasury officials to confirm that that amounts to working for 0.1c an hour. I know this Government is very committed to higher wages; that seems like a very small amount of money. It can't be the case that the difference between the benefit and working is 0.1c an hour but that sounds like the logical conclusion of what the Government's saying.Hon DAVID PARKER (Minister of Revenue): Well if someone was on a job seeker benefit and they were receiving $350 per week the member can see that that would roughly total about $17500 a year which of course is much much less than the $31096 minimum through the minimum family tax credit."
Watts Simon; Parker DavidSIMON WATTS (National—North Shore): Madam Chair thank you very much for the opportunity to speak on Part 1 in regards to the adjustments to the minimum family tax credits changes. Look I just wanted to pick up what I thought were some very insightful comments by my colleague Chris Penk—Chris Penk: That's right.SIMON WATTS: —in regards to some of the amendments—stop you're kicking me in there. But before I do that I wanted to just raise that Business New Zealand has obviously come out with some comments about the Budget this evening. Their comment is The Budget has a missed opportunity for growth." and I think that really sums up some of the aspects but I want to get back to the amendment because I know that's why we're here to chat about that at the moment.Specifically I'm looking at clause 4 and I'm looking at section ME 1(3)(a) the replacement of $30576 up to $31096. So we've talked a little bit about that. A colleague previously has just discussed the differential in the rate. Minister what I'm interested in is that you mentioned that $25 a week is going to be the consequence. Most of that is going to go on to essential spend. You did actually note that that won't impact inflation. I'd question that considering some of that'll go on rent which we definitely know is going up. But getting back to the point around the question I want to raise: with that rate that you've set I'd be interested potentially from officials in some comments around that. What type of scenario testing did you play out when you were coming up to land that number—CHAIRPERSON (Hon Jacqui Dean): Order! The member will leave the Speaker out of the debate.Tim van de Molen: You can't say "you".SIMON WATTS: My apologies—sorry. To the Minister so I'd just like to clarify with the Minister when you were considering setting the number at $31096 what range of sensitivities did you look at in regards to setting that number and taking into account the point that you made before Minister in regards to what was a reasonably minor impact what was some of the decision-making process that went around that?I think the minimum family tax credit aspect is as we know a payment to make sure that families are getting a basic income—where parents are working—and we definitely acknowledge that that's an important aspect but I guess there must have been a little bit of consideration and did you consider anything more? How did you land on that number? Can you give me a little bit of clarity around that? Thank you Minister.Hon DAVID PARKER (Minister of Revenue): We took advice from officials as to the appropriate number and we were also mindful as I think I said earlier that there is a mechanism for the annual updating of the figure in response to increases in benefit levels that are occasioned by adjustment for inflation whether it's Consumers Price Index inflation or wage inflation. There's an annual adjustment process by way of Order in Council in December each year and we took that into account as well."
Pugh Maureen; Parker DavidMAUREEN PUGH (National): Thank you very much Mr Chair. It was a bit of a shame that I never got to speak to the Hon Michael Woodhouse's amendment because that is what I intended to do. So I'll turn my mind back to Part 1 clause 4 Section ME 1 amended (Minimum family tax credit)" where it says "In section ME 1(3)(a) replace '$30576' with '$31096'." Now I understand what the Government is trying to achieve by increasing that family tax credit but to my colleague Michael Woodhouse's point: that margin is $520. So we have—Hon Members: How much?MAUREEN PUGH: What the Government has—it's $520.Simeon Brown: That's like 10 bucks a week.MAUREEN PUGH: It is $10 a week exactly. So what we're looking at here is a Government that is pretending to be very generous and supporting people to get an increase in their family tax credit but the reality is that on one hand they are losing 10 times that in the increased costs of living and that's just for their rentals and we know that in the last five years rents have gone up 21 percent. But the staggering figure is into March 2021: the largest year-on-year increase in 2½ years because it grew by 6 percent.Now it might seem very generous to deliver a $520 increase in the minimum family tax credit threshold but it does not go anywhere near closing the gap in the expenditure those same families are being asked to fork out for and we know that they are very hard-working families. That's why we top them up—because we want to keep them in work. But I ask the Minister: what drove the decision to increase by $520 a year when the Minister will be very aware that the actual costs for those families at that threshold is in effect going backwards with the increased outlay that those families have?Hon DAVID PARKER (Minister of Revenue): I've got great sympathy for people—as I'm sure members on all sides do actually—on low incomes who manage weekly budgets and I have great respect for people who sometimes do very mundane jobs don't earn a lot of money and struggle to make ends meet. We as a Government have been quite obviously—given the controversies in the House and elsewhere recently—trying to disproportionately lift the income of low-income earners whether they are on benefits or in work. We've done that through minimum wage increases the way we construct wage agreements in the public sector and also through the lifting of benefits and other prior changes like the Best Start package for children—previously for those families with children. And that is in my opinion all good. This is not as significant as a lot of those other measurements but it does ensure that we lift the minimum tax credit so that those families that are in work for 20 hours or more a week will earn a little bit more with their income being topped up if they happen to earn less than $31096 per annum."
Parker David; Rurawhe AdrianHon DAVID PARKER (Minister of Revenue): I will take the opportunity to respond to the member's tabled amendment to which he referred which purports to decrease the top tax rate from 39c in the dollar to 33c in the dollar—39c currently kicks in for incomes over $180000. Now again if this was to be in order we would be voting against it but again I'm not sure how that could be within scope given that there's nothing in the bill about income tax rates.CHAIRPERSON (Adrian Rurawhe): Similarly as I ruled before I'll be ruling the member's tabled amendment out of scope as well.
Parker DavidHon DAVID PARKER (Minister of Revenue): I won't digress into either house price or rent inflation because the Speaker sat me down during the second reading when I responded to incorrect statements by the Opposition on that same subject. So I don't think it would be wise for me to raise those issues at the committee stage.However in respect of the wider inflationary concern the member Chris Penk has I would observe that putting $20 $25 a week into the pockets of the lowest-income people in the country is not likely to lead to great pressures in the economy because that's likely to be spent on basics—food clothing and the like—and so I don't see a huge inflationary risk there.I would note that if there is an increase in underlying benefits occasioned by either inflation or by Consumers Price Index (CPI) inflation or by wage inflation—given that benefits are now indexed to both effectively—there is already a provision in the law that allows the minimum tax credit to be adjusted as a response to those benefits going up as a consequence of either CPI or wage inflation. That generally happens in December each year and is so regular that it's occasioned by an adjustment to the members tax credit by Order in Council rather than primary legislation.
Rurawhe AdrianCHAIRPERSON (Adrian Rurawhe): Before I take the next call I'm going to make a ruling. Just for clarity: we've heard from the member on his tabled amendment and we've heard a response from the Minister. I will be ruling that amendment out of scope of the bill as accepted by the House at second reading.
Parker DavidHon DAVID PARKER (Minister of Revenue): There's nothing in the bill before the House about income tax rates and therefore I suppose it's a question for the Chair as to whether introducing an amendment to the bill about income tax rates would be within scope. However that decision has not yet been made by the Chair and so I will advise the member that were that to be ruled in order the Government would still be voting against it for a number of reasons. I would note that of course not so long ago the Hon Simon Bridges was in Government for nine long years and didn't put indexation of brackets in—Hon Michael Woodhouse: That's because inflation wasn't out of control. Hon DAVID PARKER: Well he says Because inflation wasn't out of control." Inflation's about 2 percent max at the moment. Hon Michael Woodhouse: Wage inflation I said. Hon DAVID PARKER: In respect of—wage inflation's out of control. No actually we quite like it in the Labour Party when people get paid more. We don't call that wage—Hon Simon Bridges: It doesn't matter if their rent goes up a couple of hundy bucks. Hon DAVID PARKER: Well it's not. So in respect of the issue—in respect of why the National Party chose not to index brackets—it's because they preferred to give tax cuts to the top. Their most significant tax cuts gave 40 percent of the tax cut to the top 10 percent of income earners. The cost of those tax cuts was paid disproportionately by low to middle income earners who suffered the increase in GST. We won't be repeating that mistake and if this amendment is ruled in order—Hon Simon Bridges: Oh nasty. Hon DAVID PARKER: I don't think that's nasty. Is it nasty to put your amendment on the Table? It's no more nasty for you to put your amendment on the Table than it is for me to speak against it. So if this amendment is in order notwithstanding the fact that this bill isn't about income tax the Labour Party will be voting against it."
Menéndez March Ricardo; Parker DavidRICARDO MENÉNDEZ MARCH (Green): Kia ora Mr Chair. In the spirit of discussing the minimum family tax credit thresholds I'm interested in knowing I guess the political decision to set the threshold where it's been set because I guess one of the things—well ideally we would have liked to replace the minimum family tax threshold with a family support credit for all low-income families. We're thinking about the decision to put the threshold in a way that prevents some families from acquiring it and where the rationale is coming from in terms of setting that threshold and also the consideration of perhaps expanding the minimum family tax credit to self-employed people and beneficiaries in recognition of some of the productive labour many of our people who are reliant on income support do.Hon DAVID PARKER (Minister of Revenue): It's the Government position that we intend that there be a differential between incomes for people who are on benefits and incomes for people who work. We think that it is appropriate that people who work do earn a bit more than those that are on a benefit. We think that is an appropriate incentive in society. We have had those debates in this Parliament for many years and the Labour Party was sometime criticised by people who hold a contrary view. We understand that view but we disagree with it.