Volume 705 Week 16 - Thursday 21 May 2015Text is incorporated into the Bound VolumeVolume 705 Week 16 - Thursday 21 May 2015[Sitting date: 21 May 2015. Volume:705;Page:3531. Text is incorporated into the Bound Volume.]Thursday 21 May 2015Mr Speaker took the Chair at 2 p.m.Prayers.Appropriation (2014/15 Supplementary Estimates) BillProcedureHon BILL ENGLISH (Minister of Finance): I hereby present the Supplementary Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2015 (B.7).Mr SPEAKER: That paper is published under the authority of the House.Appropriation (2015/16 Estimates) BillProcedureHon BILL ENGLISH (Minister of Finance): I hereby present the 2015 Budget Minister’s Executive Summary the Speech the Fiscal Strategy Report (B.2) the Budget Economic and Fiscal Update (B.3) and the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2016 (B.5 Volumes 1-10).Mr SPEAKER: Those papers are published under the authority of the House.First ReadingHon BILL ENGLISH (Minister of Finance): I move That the Appropriation (2015/16 Estimates) Bill be now read a first time.Bill read a first time.Budget StatementBudget DebateHon BILL ENGLISH (Minister of Finance): I move That the Appropriation (2015/16 Estimates) Bill be now read a second time.Mr SpeakerIt’s a privilege to present the National-led Government’s seventh Budget.New Zealand has come through significant challenges and is now a more confident and resilient country than it was seven years ago.Successive Budgets have sought to put New Zealand on a track to surplus and debt reduction and as a result the Government’s books are in good shape.Careful management of public spending has gone hand-in-hand with investment in public services.The economy has risen from deep recession to solid 3 per cent growth.In the 2011 Budget I mentioned Treasury’s forecast of 170000 additional jobs by June 2015 and this was treated with some scepticism.I can report that this target has already been surpassed with three months still to go.However Budget 2015 is about looking forward not looking back.This is a responsible and supportive Budget from a responsible and supportive Government.In this Budget we are providing further support for the lowest-income families and children in New Zealand.We’ve allowed for significant ACC levy reductions.We’re strengthening tax rules on property investment.We’re investing more in the drivers of economic growth.And we’re supporting health and education with $2.4 billion over the next four years.This is achieved within an overall expenditure track that sees debt start reducing as a percentage of GDP and helps keep pressure off interest rates.Delivering this Budget is only possible because of the constructive working relationships National has with the Māori Party ACT and United Future.I want to acknowledge their continuing support and contribution to stable government.Economic OutlookMr SpeakerI want to start by talking about the economic outlook.New Zealand remains one of the faster-growing developed economies with conditions supporting sustained solid growth forecast at 2.8 per cent on average over the next four years.Growth matters. It means more jobs higher incomes and opportunities for families to get ahead.By mid-2019 the number of people in work is expected to rise by another 150000 and the unemployment rate to drop to 4.5 per cent. The average wage is also expected to rise by $7000 to $63000 a year.New Zealand’s positive economic performance relative to others is demonstrated by the strength of the New Zealand dollar and the very low number of people leaving for Australia – the lowest in net terms since 1992.Lower dairy prices are a headwind for growth however and global uncertainties remain. Monetary policy easing in other countries is helping to keep upward pressure on the exchange rate.Unusually given our current growth New Zealand is experiencing very low inflation.Annual CPI inflation is only 0.1 per cent compared to the Budget 2014 forecast of 1.8 per cent.This is good news for consumers and workers because their income goes a bit further and they get good value for any pay rises.Low inflation is also keeping down interest rates. The concerns I expressed in last year’s Budget about rising interest rates have largely disappeared.But lower-than-expected prices also mean that nominal GDP – the size of the economy in dollar terms – is not rising as quickly as previously expected despite solid growth in the real economy.This means tax revenue is not rising as quickly either.Compared to what was forecast in last year’s Budget nominal GDP is expected to be $15 billion lower in total over this year and the next three years and tax revenue to be $4.5 billion lower in total over the same period.Responsibly managing the Government’s financesMr SpeakerThis leads me to the first of our four priorities which is to responsibly manage the Government’s finances.The Government inherited a poor set of accounts in 2008. Spending under the previous government had risen 50 per cent in just five years which was unaffordable. Treasury warned of permanent deficits and debt rising to over 60 per cent of GDP.Our fiscal strategy has been to support the economy in the short term by running deficits but to reduce these deficits over time through tight control of spending and a strong focus on value for money.This approach has succeeded. Core Crown expenses for example have fallen from 34.1 per cent of GDP in 2008/09 and are expected to drop to 30 per cent next year.The Crown’s books are now in good shape showing operating balances growing over time and debt reducing.The Government has five fiscal priorities:Returning to surplus this year and maintaining surpluses in the futureReducing net debt to 20 per cent of GDP by 2020 including repaying debt in dollar terms in 2017/18Further reducing ACC leviesBeginning to reduce income taxes from 2017 andUsing any further fiscal headroom to reduce debt faster.The Government is making good progress on all these fiscal priorities.While expenditure is firmly under control tax revenue – as I mentioned – is not rising as quickly as expected.This is lowering operating balances across the forecast period compared to Budget 2014 predictions.But the overall trajectory has not changed. We have come from an $18.4 billion deficit four years ago to seeing steadily rising surpluses into the future.A deficit of $684 million is now forecast for 2014/15 which is $2.2 billion less than last year’s deficit.A surplus of $176 million is expected in 2015/16 followed by $1.5 billion in 2016/17 and rising to $3.6 billion in 2018/19.As I’ve said previously the Government has no intention of making spending cuts simply to chase a surplus in a particular year.The surplus target has been successful in applying greater discipline to government spending.That discipline has turned the Government’s books around and the fiscal outlook remains very positive.Net debt is expected to peak at 26.3 per cent of GDP in 2015/16 and to fall thereafter.Debt rises a bit further in dollar terms until 2017/18 after which there will be sufficient cash surpluses to meet our objective of repaying debt.Budget projections show net debt falling to 19.7 per cent of GDP in 2020/21.At the same time the Government has allowed for significant ACC levy reductions in 2016 and 2017.The healthy state of the books means the Government is keeping operating allowances unchanged.These remain at $1 billion for Budgets 2015 and 2016 before rising to $2.5 billion in 2017.The higher allowance in 2017 provides options for modest income tax reductions should fiscal and economic conditions allow.New capital spending of $939 million in this Budget comes from the Future Investment Fund which was set up to distribute proceeds from the Government share offers. $726 million remains in the Fund.From Budget 2017 around $3.7 billion has been set aside in capital allowances to fund new initiatives over four Budgets.The Government’s assets are expected to grow significantly faster than its liabilities over the next four years which means total net worth attributable to the Crown rises by $19 billion.The Government will continue to focus its balance sheet strategy on improving capital investment decisions and getting the best value possible from the Crown’s existing assets.Building a productive and competitive economyMr SpeakerThe Government’s second priority is to build a more productive and competitive economy that supports jobs and higher incomes.Through difficult times New Zealand firms have become more resilient and innovative.They’ve been supported by a Government that understands that the country’s prosperity is created by private sector businesses large and small throughout New Zealand.Our plan is set out in the Business Growth Agenda and the Budget adds a number of initiatives to this important programme of work.Mr SpeakerBudget 2015 increases the Government’s investment in tertiary education research and innovation which are important drivers of economic growth.The Budget provides up to $25 million over three years to support the establishment of new privately-led Regional Research Institutes to support increased innovation in regional areas outside of Auckland Wellington and Christchurch.As announced previously the Budget will also give an $80 million boost over four years to R&D growth grants which support innovative businesses by contributing 20 per cent of their R&D costs.The additional funding announced in Budget 2015 will bring the Government’s total investment in science and innovation to over $1.5 billion in 2015/16.The Budget also provides $113 million over four years mostly from reprioritised spending for a number of tertiary education initiatives.These include increases in tuition rates for some science subjects an increase in the number of engineering places and a contingency to grow Māori and Pasifika Trades Training.Mr SpeakerThe Government has already reduced annual ACC levies for households and businesses by $1.5 billion since 2012.The Budget allows for further levy cuts of $375 million in 2016 and an additional $120 million in 2017.Final decisions on the levies will be made after public consultation but we anticipate the cuts will cover all levied accounts and therefore reduce annual costs for businesses workers and motor vehicle owners.As an illustration of how levies are falling the average motor vehicle levy including the annual licence fee and petrol levy could fall to around $120 in 2016 which is about a third of what it is now.Mr SpeakerAs previously announced the Budget contains measures to bolster and enforce the tax rules on property.This is to ensure that people buying and selling properties for a profit – including foreigners – are paying their fair share of tax.In particular some people will now have to provide an IRD number when they buy and sell property.This requirement will apply to all non-residents and to New Zealanders who are buying and selling a property that’s not their main home.In addition if someone sells a residential property within two years of purchase they will now have to pay income tax on any profit they make from the sale.There will be some exceptions including for a person’s main home.The Government will consult on these changes and implement them from 1 October.The Budget also contains a funding boost of $74 million over five years for extra tax compliance and enforcement of which $29 million is focused on property investment.The new tax measures we are introducing will help to take some of the pressure off Auckland’s housing market.But the Government’s main focus in Auckland is on increasing supply including through special housing areas and reforms to the Resource Management Act.The Government is also a major owner of under-utilised land in Auckland. Budget 2015 sets aside a $52 million capital contingency to facilitate housing development on Crown-owned land in Auckland.This follows confirmation last month that the Tāmaki Redevelopment Company will build around 7500 new houses in Tāmaki to replace 2500 existing properties currently owned by Housing New Zealand.Mr SpeakerNew capital investment of $939 million is provided from the Future Investment Fund.This includes a contingency of up to $210 million for additional investment to bring Ultra-Fast Broadband to 80 per cent of New Zealanders.The Telecommunications Development Levy is also being extended to provide $150 million for major improvements in rural broadband.The Budget includes a contingency of up to $52 million to replace the Waitangi Wharf on the Chatham Islands which is a critical lifeline for one of New Zealand’s most remote communities.KiwiRail receives $210 million in new capital next year and a further $190 million as a pre-commitment against Budget 2016. This support gives KiwiRail a two-year window to identify savings as this level of on-going support is not sustainable.As previously announced the Budget also provides $97 million in capital for regional highways and $40 million for urban cycleways.Mr SpeakerThrough Budget 2015 the Government is investing an additional $37 million of operating funding over four years to provide greater national direction and support to councils as they implement the Government’s resource management and freshwater reforms.High quality analysis and regulation of freshwater is critical to the ongoing success of our primary production industries.Further expansion in the primary sector will be supported by $13 million over four years for initiatives to improve the productivity of under-utilised Māori land complementing the reform of Te Ture Whenua Māori Act.A new grant scheme has been established to encourage the planting of new forests and the Budget provides $22 million for this scheme over the next six years.The Government is also investing $32 million over four years to increase the number of labour inspectors and strengthen enforcement of employment law.The New Zealand Business Number gets a boost from the Budget with funding of $12 million over four years including from company fees. This unique identifier will help to reduce costs for businesses when they interact with government agencies.Mr SpeakerThe KiwiSaver scheme has been successful in attracting 2.5 million members.It also has considerable costs with the Government spending over $850 million this year on two subsidies – the annual subsidy of up to $521 and the $1000 kick-start payment for new members.To reduce this cost the Government has decided to remove the kick-start payment which has cost taxpayers a total of $2.5 billion since the scheme began.This change is effective immediately but I want to stress that it does not affect existing KiwiSaver members in any way.The other incentives in the scheme – matching employer contributions and the annual government subsidy – will remain as they are.These incentives also provide a strong reason to join KiwiSaver. Removing the kick-start payment for future enrolments will save over $500 million over the next four years with little or no effect on the number of people expected to join the scheme.Mr SpeakerThe Government will introduce a new levy to fund passenger-related biosecurity and customs activities at our border. Currently the cost of these activities – which protect New Zealand from imported pests diseases illegal drugs and other threats – are met by taxpayers.The Government considers it fairer for the cost to fall on travellers as happens in many other countries. A per-passenger levy also helps ensure that border services are funded to meet future demand.The new Border Clearance Levy is expected to take effect from 1 January 2016 and subject to consultation will be around $16 for arriving passengers and around $6 for departing passengers. It will raise around $100 million a year.At the same time the Budget expands some border activities including an additional $25 million over four years for more biosecurity services such as x-ray machines and detector dogs.The Budget also provides $33 million over four years for more immigration staff at a time of record-breaking visitor numbers.Delivering better public servicesMr SpeakerThe Government’s third priority is to deliver better public services.Our approach is to get better results from the billions of dollars of existing spending and to invest new money where it will make a difference.Three years ago the Prime Minister set 10 challenging results for the public sector to achieve and good progress is being made.At the same time New Zealanders’ overall trust in public services has continued to grow as public services improve.The Government is pressing ahead with its social investment approach which is about targeted evidence-based investment to secure better long-term results for the most vulnerable New Zealanders.We’re willing to pay a bit more upfront to get real sustainable change and in doing so we can generate significant long-term savings for the Crown.Mr SpeakerThe Government is focused on addressing long-term drivers of hardship and this approach is already seeing results. Educational achievement is increasing for example and the number of children in benefit-dependent households has fallen by 42000 over the past three years.In addition the Prime Minister said last year he wanted to do more to help children living in the poorest households.The Budget responds to his call.This Government believes that the primary responsibility for the welfare of children lies with their parents.But government actions can and do help children whose home lives are challenging.Two-thirds of children in more severe material hardship have a parent on a benefit and nine out of 10 of those are sole parents.The best thing we can do for these children is to get their parents into sustainable full-time work where that is possible.So as part of a child hardship package in this Budget we are strengthening work expectations for parents on a benefit.From 1 April next year most sole parents and partners of beneficiaries will have to be available for part-time work when their youngest child turns three rather than five as it is now.In addition all beneficiaries with part-time work obligations will be expected to find work for 20 hours a week rather than 15 hours a week under the current requirements.Part-time work brings more income into a family and is a stepping stone to full-time work and to going off a benefit altogether.However when families do rely on a benefit it has to be enough for children to get a decent upbringing.Over many years beneficiary family incomes have hardly changed in real terms while those for working families have increased.On one hand this gap creates a strong incentive to move from welfare into work.But the Government is concerned about the effect on children when their family’s resources fall behind those of other households.In terms of that balance and with an improving economy the Government considers there is scope to increase benefit rates for families to help ensure they can pay for family necessities.On 1 April next year benefit rates for families with children will rise by $25 a week after tax.It will be the first time core benefit rates have been increased – apart from inflation adjustments – since 1972.Around 110000 families with 190000 children will be better off as a result.This increase to benefit rates comes after widespread reform of the welfare system so we’re confident it will have a positive impact on the lives of beneficiary families and children rather than contribute to further dependence.In addition to make sure the increase is going to the right people we will require beneficiaries on Sole Parent Support to reapply for their benefit every year matching the current process for Jobseeker Support.Mr SpeakerWhile two-thirds of children in more severe material hardship live in beneficiary families the other third live in low-income working families.So on 1 April next year there will also be changes to Working for Families to give more financial support to lower-income working families not on a benefit. As a result:Low-income working families earning $36350 or less a year before tax will get $12.50 extra a week from Working for Families and some very low-income families will get $24.50 extra.Working families earning more than $36350 will get extra from Working for Families but it will be less than $12.50 a week with the exact amount dependent on their family income.Families earning more than $88000 a year will get slightly lower Working for Families payments with the average reduction being around $3 a week.In total these changes to tax credits will benefit around 200000 lower-income working families who are not dependent on benefits. Around 50000 of these families earn $36350 or less a year and will therefore get the full $12.50 a week increase.The child hardship package also recognises that lower-income working parents need affordable childcare.From April next year Childcare Assistance for low-income families will increase from $4 an hour to $5 an hour for up to 50 hours of childcare a week per child.The new rate will apply to both the Childcare Subsidy for pre-schoolers and the OSCAR subsidy for out-of-school care and school holiday programmes.It will lower the cost of childcare for around 40000 low-income working families and reduce barriers for parents moving off welfare and into work.The child hardship package has a number of different elements. Its exact impact on any given family will depend on their individual circumstances including the types of supplementary assistance they receive.Overall it will have a meaningful impact for recipient families particularly for those on very low incomes and reduce the depth of hardship these families and their children experience.The total cost of the package is around $240 million in each full year and $790 million in total over the four-year forecast period.It follows last year’s $500 million children and families package which included free doctors’ visits and prescriptions for children under 13.I want to thank the Māori Party for its strong contribution to poverty-related issues over the past few years.Mr SpeakerThe Budget also provides new operating funding of $36 million over the next four years to support the Children’s Action Plan for vulnerable children.This includes funding for new and existing Children’s Teams which bring together social workers health professionals NGOs and others to work with at-risk children and their families on an individually-tailored support plan.An extra $23 million over four years is being provided to bolster the work of Child Youth and Family.The Budget also contains $8 million over four years for initiatives to help vulnerable students participate more in education or training and lift achievement.Mr SpeakerThe Budget includes measures to tackle child support debt and encourage parents to pay what they owe for their children.Currently large penalty debts are discouraging many parents from paying any child support at all.This penalty debt or a portion of it will now be forgiven in certain circumstances including where liable parents are meeting their payment requirements.If maximum discretion is applied this will result in $1.7 billion of penalties being forgiven over four years.The cost to the Crown is an estimated $47 million over four years as most of the penalty debt is already reflected as an impairment in the Government’s books.There will continue to be no tolerance for parents who deliberately avoid responsibility.Mr SpeakerDespite fiscal challenges a priority in every Budget has been to increase funding for health and education.This year’s Budget invests $1.7 billion of operating funding in health over the next four years.As a result District Health Boards will have around $320 million available next year for extra services and to help meet cost pressures and population growth.New health initiatives include $98 million to increase elective surgery volumes and help New Zealanders suffering from orthopaedic conditions.An extra $76 million is being provided for hospices and to support 60 new palliative care nurse specialists.The bowel cancer screening pilot is being extended at a cost of $12 million.And the Budget provides an additional $16 million over four years to continue support for very high needs students with disabilities after they leave school.Mr SpeakerEducational achievement is improving supported by government investment that is focused on getting better results.In Budget 2015 early childhood primary and secondary education together receive an additional $443 million of new operating funding and $244 million of capital.Of this $75 million of operating funding over four years is for early childhood education and $42 million is to increase school operating grants.An extra $63 million over four years will better assist children with special education needs. This includes funding to continue teacher aide support for 1500 additional students with special needs.As previously announced Budget 2015 provides $244 million of capital from the Future Investment Fund to build new schools expand existing schools and construct around 240 classrooms.Mr SpeakerThe Government is committed to providing more social housing places more diverse ownership of social housing and helping tenants transition to housing independence when they are able to.As part of our social housing reforms the Ministry of Social Development has become the sole purchaser of social housing places. The Government also intends to sell some Housing New Zealand properties for use as ongoing social housing run by community housing providers.Budget 2015 supports this programme with $35 million of operating funding over four years and $29 million reprioritised from other areas.The Budget also provides operating funding of $35 million over four years to support the Māori Housing Strategy which aims to improve housing for Māori families and grow the Māori housing sector.Mr SpeakerWhānau Ora is an innovative way of providing health and social services.Budget 2015 further supports the Whānau Ora approach with $50 million over four years. This will continue funding Whānau Ora navigators to help families tackle problems together develop whānau plans and access a range of services.The Budget also provides $2 million over four years for rangatahi Māori suicide prevention.New funding of $32.5 million is provided over four years to further reduce welfare dependency.This includes funding for up to 10000 extra places next year for intensive work-focused case management particularly for beneficiaries with health conditions and disabilities.Mr SpeakerPolice and Corrections will continue to target their resources to prevent crime and make our communities safer.Budget 2015 provides $164 million over four years for Police to continue delivering more effective frontline policing and crime prevention.It also provides $8 million over four years for the Serious Fraud Office.The Department of Corrections receives $6.5 million of reprioritised funding for programmes to reduce reoffending.And the Budget provides $40 million over four years for other justice sector initiatives.Mr SpeakerThe Government is committed to strengthening the New Zealand Defence Force and ensuring our country is safe from security threats.Budget 2015 provides $264 million over four years to allow the Defence Force to meet its domestic and international humanitarian aid and military commitments.The Security Intelligence Service and the Government Communications Security Bureau each receive additional funding of $20 million over four years.Mr SpeakerKiwi are New Zealand’s most iconic birds but numbers are declining every year.The Budget contains $11 million of funding over four years for breeding and predator control programmes run by community groups as well as the Department of Conservation.Rebuilding ChristchurchMr SpeakerThe Government’s fourth priority is supporting the rebuild of Christchurch.Since the first earthquake in September 2010 the Government has backed Cantabrians in the initial response and now the recovery and rebuild.The total cost of rebuilding the city and surrounding areas has been estimated at $40 billion.Budget forecasts show that the Government’s share of that cost is expected to be $16.5 billion of which $7.3 billion will be incurred by the Earthquake Commission net of reinsurance proceeds.Good progress is being made on the commercial and residential rebuild including in the central city.Large private sector projects are a testament to the positive future investors see for Christchurch and 23000 square metres of office space has been completed.Major Government projects are also progressing. By the end of next year 1700 government workers will have returned to the central business district.It is important to maintain momentum with the city’s anchor projects most of which are complex developments with multiple partners. The Budget contains additional operating funding of $108 million over four years to ensure these projects remain on track.This new funding will support land and building clearances. It will also cover the cost of owning and developing the hundreds of millions of dollars of assets purchased by the Crown.The Canterbury Earthquake Recovery Authority and the Act that governs it were established in 2011 with a limited lifespan.Last year the Government established an Advisory Board on Transition to provide recommendations on the future role functions and powers of the Government in Christchurch.By the middle of this year we will have a better idea about what the right structure in Christchurch should be and implementing this structure will help maintain progress towards long-term recovery in the city and its surrounds.ConclusionMr SpeakerThis is the kind of Budget a responsible Government can deliver when it’s following a plan that’s working.The Government’s finances are sound and the economy is doing well – thanks to the hard work of New Zealand households and businesses.Under John Key’s positive leadership the Government has been stable and cohesive.That has helped build New Zealanders’ confidence both in their homes and at work.New Zealand is in good shape though we’re not complacent.There are very real risks in the world but New Zealand is much more resilient now than when we took office in 2008.Our challenge is to secure for our economy and for our communities the hard-won gains this country has made through to 2020 and beyond.New Zealanders can look to that future with well-deserved confidence and optimism.Mr SpeakerI commend this Budget to the House.ANDREW LITTLE (Leader of the Opposition): “Wait until tomorrow.” they said. “One sleep to go.” which was a bit rich for a Government that spent 7 years sleeping at the wheel. If this is a plan that is working then why have we seen today one of the biggest spends on alleviating child poverty which this Government has known of for 7 years and done nothing about until now? Why has this Government been panicked into doing something about the desperate Aucklanders who cannot get to own their own homes? They are hardly features of the Budget at all and we know why: because the Government cobbled it together in just the last few weeks alone. I move That all the words after “That” be omitted and the following substituted: “this House has no confidence in a government which has failed to deliver the jobs the incomes or the surplus they promised; squandered the golden economic weather; failed to diversify our economy; failed to fix the housing crisis; neglected regional New Zealand; and is tired out of touch and out of ideas.”This is a Government that is demonstrating management by sleepwalk because that is what this Budget is. This is a Budget that manages the decline. There is nothing in this for the long-term future of New Zealand that will give hope and confidence to those who are working hard and struggling to get ahead. So we see now this surplus of $176 million for next year. Well just remember—just remember—last time the Government promised a surplus of over $300 million and the deficit is over $600 million. It is the billion-dollar gap—the billion-dollar gap—that has materialised in 1 year alone. So my message to New Zealanders is this: the Government might have promised it it might have budgeted for it but you cannot trust it because it never ever happens. It is a continuation of the dance of the seven veils.Poor old Bill English there ever since about 2010 another veil comes off and a promise is made. In 2011 another veil comes off and the promise is made again. We have had that repeatedly. And now we have had another veil removed and we know that there are still more to go. I do not know what he is trying to hide. It is some sort of fiscal gender-reassignment or something. Who knows what it is? He cannot produce a surplus. This is not a real surplus in this Budget and he knows it. New Zealanders will see it for what it is: a desperate Government that cannot fulfil the core election promise that it made last year that it would return the books to a balance and a surplus. And there is a good reason why: good Governments manage the Government’s books to achieve a surplus.There is a reason why the last Labour Government managed the Government’s books to achieve nine successive surpluses because when you get a surplus you do the stuff that builds a nation. You can put in place your New Zealand Superannuation Fund to pre-fund superannuation because when you take a close look at these books what you see is that by 2018 the cost of New Zealand superannuation is going to rise—it is going to increase—by nearly $1 billion a year in just 3 years’ time. And what is this Government doing for it? Absolutely nothing—absolutely nothing. That is the disgrace of this Government: no forward looking no sense of the future manage it by sleepwalking hope that nobody notices and come back next year and it will all be the same again. That is what this Budget represents.There is no future in this Budget. There is no hope in this Budget. The next generation the next Government and the future generations of New Zealanders are going to have to cobble together and patch up the failures of this Government including meeting the cost of New Zealand superannuation. This mob over here have no sense of future and do not know what to do about it so they crib around the edges—a million dollars here a million dollars there. It is not enough to build a strong resilient New Zealand. The Government has failed. It has failed. We have had the surplus we have had the surplus chimera we have had the ethereal result—it will not happen.Then we have got the challenge of dealing with child poverty. Well we will give the Government some credit for that. It has taken a step—it has taken a step. The Government has increased benefits but it has paid for it by taking it out of the future-building initiative KiwiSaver. It has taken away the kick-start for those future generations of New Zealanders who need—and know they need—to save for their retirement all those parents lining up to sign their kids up for it because they know that at least if they get that kick-start then by the time they get into their adult lives they have got a little nest egg to continue to build on. It is just an incentive when you are a youngster to carry on with the saving. This Government steals from the next generation and it does not know what to do about their needs. That is what it is doing. It is taking off from the top of Working for Families to pay for it. This is a “fiddling-around Budget”. This is a “fudge-it Budget”. The Government is doing it again. It has no long-term plan.Then there are the initiatives on housing. Well this is the biggest rort of course. This is the biggest rort. It has got new tax plans new rules that Bill English proudly announced today: “We’ve got new rules on tax.” Two days ago he was saying that they probably will not work. I do not know how they got left in the speech when 2 days ago he was saying that they will not even work but he has put them in there. I want to say this about the house build programme because the Labour Party has been saying for some years that the way to deal with the housing supply problem the way to make sure that more Aucklanders get into an affordable home is that the Government the State must lead the house building programme. So I credit this Government for taking the first step of saying that it will do that of putting land aside.But I want to say this: we will support that initiative on one condition. I look at John Key and I look at Bill English and I look at Nick Smith and I look at Steven Joyce and I look at Paula Bennett. None of them will look back. I say to each of you because you are the ones in charge of housing you know what is going on: make this promise to New Zealanders. Make the promise to New Zealanders that every single one of the houses built on the land you have released in the announcement today will be an affordable house that ordinary New Zealanders can get into. Make that promise today. You have got a dozen TV cameras around here you can make it to. Make the promise today Mr Prime Minister. Do not get on your hindquarters in 15 minutes’ time and flap about like a rooster on heat and give your usual dog and pony routine. Make a genuine promise one that you are prepared to stick by. Be straight with New Zealanders. Tell them: “We are serious about affordable housing.” Make sure those houses are affordable houses.To Paula Bennett I say: make sure you discharge your responsibilities to all New Zealanders to good New Zealanders to the hard-working New Zealanders who still hold on to that dream of getting their own home. Make sure you deliver. Your failure to deliver will be if you cannot guarantee—Hon Dr Nick Smith: The member opposed HomeStart.ANDREW LITTLE: —if you will not guarantee Nick Smith—that every single one of those houses will be an affordable home that ordinary New Zealanders in Auckland can get into. Then you will have failed. You will have failed New Zealanders and you will have failed the test that you have set for all Governments which is to look after average New Zealanders. So far all you have done is look after your rich mates. That is not a policy. Your home build policy is not a policy for the property developers who contribute so handsomely to National Party coffers. It ought to be a promise to ordinary New Zealanders who want only to get into their own home. That is what I ask you to do. That is what I am asking you to do.I want to say this about ACC. We have had the repeat of the promise about ACC and we know that it is not a promise—we know that it is not a promise. It is “It could happen.” “It might happen.” “It’s 2 years away.” “We’ve got further work to do on it.” So I say this to Nikki Kaye to Bill English and to John Key: make the promise. Look New Zealanders in the eye and say that you will cut ACC levies.Sue Moroney: Do it now.ANDREW LITTLE: You could do it now; Sue Moroney is right. You could do it now. You have not. You have held on to the cash. You have deprived good businesses and hard-working New Zealanders of their cash and now you have promised that it might happen sometime in the future. Make the promise now. Mr Prime Minister look into those TV cameras when you are up there prancing around and make the promise to good New Zealanders that you will see through to make those ACC cuts so Kiwis will have some money back in their pockets. Make a promise you are prepared to stand by. Make a promise that New Zealanders can rely on and trust. It would be the first one in your political career.This is a disappointing Budget in so many other ways. This is a Budget where New Zealanders were hanging out looking for an expression of hope for the future. This is a Government that has been 7 years in office—7 years in office—and that has enjoyed the best of times: record high dairy prices record high export volumes and growth of over 3 percent. Now we know it is all going down. You look at the projections and they are all about to go down. This is as good as it gets.New Zealanders deserve better—New Zealanders deserve better. They deserve a Government that is thinking about the regions that is thinking about what happens to the regions when that dairy cash dries up and those small towns and hamlets across New Zealand struggle to wonder what to do next. The farmers the stock and station agents and all those who contract to the farming sector have to buckle down batten down the hatches. They are wondering what to do next. They are going to look at this Government and say: “You let this happen. It didn’t have to be like this. You had the opportunity. You had the good times. You could have prepared better.” They will say and we will say that you blew it. Bill English and John Key you blew it. You have turned up today with a Budget that just continues the same sleepwalking somnambulant management that we have got used to for the last 7 years. It is not good enough—it is not good enough. New Zealanders deserve better and we need better.We are facing some difficult times ahead. The Government knows it; we all know it. New Zealanders know it and they were looking for an expression for a statement of vision and leadership such as we have never seen before with this Government. And we have not got it. It has been more of the same—fiddle around the edges faff around the sides and carry on as if no one is noticing. Well they are noticing. What we now need is a Government that is genuinely focused on the future. It is not just about dealing with the issue of making the books give the appearance of a surplus that is not going to happen; it is about a Government that is focused on building a nation and on giving people opportunities. It is fine to lift the benefits fine to help those people even though you are making it harder for sole parents with kids at the age of 3 and over. That is going to be the real hardship. How are those folks going to cope?It is fine to make some of those gestures but what those people who are out of a job want is a job. What those people are desperately in need of is more work—not the 1-hour jobs that Steven Joyce promotes and encourages; they are not even half jobs they are sort of minuscule jobs. They want real jobs that mean they can earn a living income and get ahead. That is what New Zealanders want. The Government cannot even keep its promise to add the 150000 jobs by next year. The Government has had to abandon that one. The Government cannot even meet the promise to lift incomes by an extra $7000 a year by next year either. It has had to push that out too. The Government knows how bad things are and it serves to us this sort of mess of potage today and pretends that it is all sweet and rosy. Well it is not and New Zealanders know it.New Zealanders are hanging out for a Government that is serious about lifting all New Zealanders serious about what is happening in the regions serious about what is happening down on the farm and serious about what is happening in small to medium sized enterprises. There is nothing in this Budget for them except continuing to hold on to the ACC levies that the Government does not need to. The Government has whacked on a few extra taxes—a departure tax and an arrival tax—and it is going to tax every user of the telecommunication services with a new levy on the operators; $150 million a year. Do you know who is going to pay for that? Ordinary New Zealanders. Do you know why the Government thinks that that measure is an OK thing to do? It is because it does not care about ordinary New Zealanders. That is why for 7 years the Government has shut New Zealanders out of their own homes. That is why for 7 years the Government has not cared about those living in dire poverty. The Government just does not care. We have seen more of that in this Budget today.New Zealanders need a Government that is focused on a number of core things: diversifying our economy; making sure that the State plays its role in investing and encouraging private investment in other sectors in the economy to boost and diversify it; making sure that our people and our education system are prepared for the future; preparing young people for the jobs of tomorrow not repeating the jobs of today; and really genuinely fixing our housing crisis. It is nice to have the building plan but it will not be fast enough and there will still be people without a home in years to come.I think of people like Gene Simmons—not Gene Simmons; Gene Harris. [Interruption]Mr SPEAKER: Order! [Interruption] Order!ANDREW LITTLE: There is Gerry Brownlee. Gerry Brownlee says he was asleep. Well he has woken up after 7 years now. He has woken up after 7 years and come to life. I think of people like Gene Harris who is in his 30s and is a marketing manager. He rents a two-bedroom flat in Hillcrest on the North Shore with his partner and his baby. He contacted us because he is sick and tired of this Government for its arrogance and its contempt and for laughing at people like him. He told us this: “The opportunities are few and far between. Even if you’re on a good wage you can’t get ahead and there’s something just not right about that.” Like so many thousands of other New Zealanders a good man is struggling and working hard to get ahead and he cannot because of the failures of this Government. That is what this Government represents; that is what this Government has achieved. It has let down far too many others. So Gene Harris is looking forward to a Government that is serious about building the nation building our economy strengthening it giving him and his family an opportunity and letting them realise their dreams of homeownership and a secure future.Then there is Simon Paterson who has also been in touch with us. He is an IT manager from Mosgiel who has a family and like many other Kiwis who live in the regions he is sick and tired of seeing the regions neglected. He told us this: “Middle New Zealanders like me are feeling increasingly left out in terms of stuff like health care and education.” We know that those figures today on education are not enough to fill the gap that has been slowly developing in funding for that sector. He said: “There’s been tax breaks for the rich but nothing for anyone else.” That is how he summarises this Government and it is impossible to disagree with him.We need a Government that is focused on the future; that is focused on all of New Zealand; that wants to fix the real problems; that is thinking far ahead; that is not tinkering at the edges; that is not sleepwalking around letting more and more New Zealanders down; that is creating those real opportunities; that when it says it is going to generate more housing seriously does so; and that when it says it is going to lift incomes by $7000 a year actually is serious genuine and honest about it and does so. Not like this one—not like this Government that loosely makes promises it has no intention of keeping. That is what characterises this Government time and time again. It is time to have a Government that can write a Budget that is good for New Zealand; that is good for all New Zealanders; that makes a difference; that will support the wealth generators and the wealth creators; that sustains the entrepreneurs the innovators the dreamers and the doers—not a Government that faffs around the edges supporting the extremely rich who contribute to the National Party coffers but that does nothing for the vast majority of the rest of New Zealand.Rt Hon JOHN KEY (Prime Minister): That was singularly the worst reply speech by a Leader of the Opposition that this Parliament has heard. There could be a reason for that. A cynic could say that the real leader of the Opposition has not actually given his speech yet but let us be honest. Phil Goff would have done a lot better David Shearer would have done a lot better and David Cunliffe would have done a lot better and all three of them know it—all three of them know it. That was Andrew Little and the operative word is “little” because it is a touch kind to say that he has done anything more than “little” in the entire time he has been the Leader of the Opposition. He has done nothing—nada. That is why the speech was so bad. He basically agreed with the Budget. He did not actually have an idea. This man Mr Andrew Little is like one of the least favoured contestants on The Bachelor. He knows that he is never getting a rose that boy. He is not sure why he is there. He is not sure what he is actually doing. He knows that under normal circumstances he should just say that he is happy to be there. But he is not happy either. He is “Angry Andrew”. He has had 6 months in the job. He is the do-nothing Leader of the Opposition.Hon Annette King: At least he doesn’t pull ponytails.Rt Hon JOHN KEY: Well actually you are right. You are right Annette. You are right. I take it back. He has done one thing—he has done one thing. He has spent a week with Ed Miliband working out how to lead the Labour Party in a general election. And how did that go? It went about as well as Boo’s and Pistol’s holiday in Australia with Johnny Depp. That is how well that went. No the truth of it when it comes to the Labour Party is that the only time it is busy and the only time it is focused—actually the only time it is any good—is when it is having a leadership contest. And goodness knows it is good at that because it has them every 5 minutes. There may be another one just coming because I am telling you now that Phil Goff David Shearer David Cunliffe—Hon Steven Joyce: David Parker.Rt Hon JOHN KEY:—David Parker—all four of them know. They are looking down. They will not look up. They will not make eye contact. You could have done a lot better—a lot better. You were good back then you guys—good back then.Let us go to the Budget because it is a waste of time with the Opposition. This was another outstanding Budget delivered by a man whom we are lucky to have. The Budget was fair. It was thoughtful. It was reasonable. This National Government is the first Government to raise benefits in 43 years and I am proud of that fact. There is $25 a week for 110000 beneficiary families supporting 190000 children. There is $12.50 a week in Working For Families and $12 in the minimum tax credit. Fifty-three thousand low-income families and a further 103000 children will benefit. Tens of thousands of other families will get a bit more. In one way or another this Budget touches half a million Kiwi kids and it is fair and reasonable.There is an increase in childcare in the Budget so that people can go out to work and have that extra support. We have heard it before—it has been said before and it is not new—but this is what I call it: compassionate conservatism. I am proud to lead a Government that believes in that. This Budget is a continuation of the good work of this Government. I think we can all remember that we are the Government that brought in free doctors visits and free prescriptions for under-13-year-olds. We are the Government that insulated every State house that we could. We are the Government that provided the funding for 240000 other homes to be insulated and to have heat units. We are the Government that supported breakfast in schools. We are the Government that supported low-income schools or low-decile schools to have social workers. We are the Government that has provided the new Children’s Teams.In the worst—the very worst—of the economic conditions this country faced we stood alongside those vulnerable New Zealanders. We did not reduce their pensions. We did not reduce their entitlements. We were there for them and we are there for them today. My thanks go to our support parties: to ACT and David Seymour for the leadership he is showing to United Future and Peter Dunne for the leadership he is showing and to the Māori Party and Te Ururoa Flavell and Marama Fox for the support and great work they do. Collectively we provide strong and stable Government for this country and the results are on display.Let us turn to the macro-economic numbers for a moment because you have heard a load of nonsense from Andrew Little about those and you are going to hear a lot more from his sidekick Grant Robertson. Well here are the facts on the table and Labour will not enjoy them. Mr Robertson Labour is about as good at running the economy as the Greeks are. Let us get the facts on the table. You know how to do one thing spend money OK? You know how to print money and spend money. In seven Budgets this Government on average has spent additional resources of $680 million per year—appropriate for the times. Labour spent $3 billion in each of its seven Budgets. When National is in office New Zealanders stay in our country. They do not leave; they stay in our country. When Labour is in office they are off to Australia as quick as they can spell “didgeridoo”.Let us get a few other economic facts on the table so that Labour can digest them while it is digesting the Budget. ACC: what a mess we inherited from Labour. There were dozens of unfunded programmes. What a mess the books were in—a burgeoning State sector that was out of control. Wages could not keep up with inflation. Interest rates were soaring. Inflation was high. The current account: Michael Cullen from the Opposition benches told us that he would fix it; he made it worse. Productivity was falling. If Labour wants to go head-to-head with National on economic management bring it on I say—bring it on. I am more than happy to have that discussion any day of the week. Here are the facts: when we got into office—Hon Members: Show us your surplus.Rt Hon JOHN KEY: Oh they do not—[Interruption] I will give them one thing: they are animated about my speech. They sure as hell were not animated about Andrew Little’s. Here is the deal: you vote for the Budget because you know you want to and I will sit down and we may as well just call it quits. You know you want to.Under our Government we have halved the projections of debt. When we are here it is 26.5 percent. It was going to be 60 percent. Do not take my word for it; go and have a look at the IMF numbers. When it comes to surpluses our numbers are better than those of the UK the United States Australia and the eurozone. They will be every year until 2020 and beyond. That is what good economic management looks like. And when it comes to debt—Andrew Little: When will you start repaying the $88 billion?Rt Hon JOHN KEY: Oh at least they are listening I suppose. When it comes to debt yes our net debt levels are lower than those of Australia the UK the US and the eurozone. They will be until 2020 and they will be beyond then. We are creating tens of thousands of jobs. And when it comes to employment—there are 36 countries in the OECD—only four have a higher rate of employment than we do and 31 have a lower rate than this Government is delivering for New Zealanders. Pensions are rising. Minimum wages are up. Wages are rising faster than inflation. This is good economic management.Let me turn to child hardship. The fastest way out of poverty is through work and this Government knows that. I am proud to say that there are 42000 fewer children in benefit homes today than there were 3 years ago—42000 children who are getting to see through their own eyes the value of work and how it can make a difference to their own lives. Like I did through my mother they are seeingtoday with their parents in front of them that hard work and enterprise are the way to do things. The sign of a decent society is how you look after the sick the vulnerable and those in need. But in return for that there is mutual obligation—mutual obligation. I say: if you can work you should work. That is what I say.I want to thank Paula Bennett and Anne Tolley personally for the great work they are doing now when it comes to the extensive changes we have made to welfare—long-lasting changes compassionate changes. There is expectation built into what we do; and yes we brought in work obligation.Grant Robertson: Forcing the mothers of 3-year-olds out to work.Rt Hon JOHN KEY: Well that is very interesting. Mr Robertson has just said that someone whose youngest child is 3 years old should not actually have to go out and look for a part-time job. Well tell that to the tens of thousands of Kiwi families who do that every day. They do that half the time after 14 weeks.I will show you how welfare is working. We have the lowest number of people on the equivalent of the DPB since 1988. Teenage pregnancy rates are collapsing. The attitude at Work and Income has changed. When you go there now you do not go in to sign up for a benefit; they try to get you a job and they give you the skills and the capability to do all that. There will inevitably be some people who will get up and say that the increase today is not enough. Well I say this: it is 25 times better than any Government in New Zealand has done for 43 years. Do not even start by trying to tell me that $1300 a year will not make a difference to the lowest-income families and that up to $50 per week extra for childcare will not make a difference. It will.I now want to turn to the issue of debt forgiveness. It is a very important package that Todd McClay will be running. This is a very simple story I think because the responsibility of liable parents is to make child support payments—that is the responsibility of liable parents. They have a legal obligation to pay for their kids and they have a moral obligation to pay for their kids and they should be doing it. But sadly too many people are not and this needs to change. Why? Because for a start we need to breathe hope into those 120000 families and individuals who see themselves in a hopeless position. This is the situation: they owe $3.2 billion. Only $700 million of that is principal; the other $2.5 billion is interest and penalties. What is more of that $3.2 billion $800 million is owed by people who live in Australia and $800 million is owed by people who live outside New Zealand and outside Australia. We are a very pragmatic Government. What we are saying to those 120000 people is: come back start making the principal payments to those low-income families that you owe it to and we will forgive the interest and we will forgive the penalties. That is $1.7 billion over 4 years and more money for those low-income families and probably even a chance for those 120000 people to be able to come back to New Zealand one day themselves. That is what a pragmatic Government in action looks like.It is no great surprise that in all of the seven Bill English Budgets there is always more for health and more for education. We know that when it comes to the health system it is not just about throwing more money around; it is actually about lifting productivity and about doing things smarter. Actually I want to take this moment in Parliament today to acknowledge the doctors nurses and carers who do such a magnificent job of looking after people in our system. There is more money in this Budget for health—$98 million for elective and orthopaedic operations $12 million to extend the pilot scheme for bowel cancer screening and $76 million for hospices to extend palliative care.When it comes to education when was the last time you heard the Labour Party get up and say that it did not like national standards? Oh that is right: those members try to brush that under the carpet because—guess what—they have finally woken up to the fact that if you cannot read and write it is pretty hard to participate in modern New Zealand. When was the last time that you heard them get up and say that we should not be paying good teachers more and having professional development? We know that our schools are all about having high-quality principals and high-quality teachers. Yes in this Budget there is more for early childhood education and more kids will be getting National Certificate of Educational Achievement level 2. And I am proud to say that there are more Māori and Pacific students doing as fabulously well in our education system. There is more for special needs and thanks to David Seymour and the ACT Party there is more choice actually in our education system. I could talk about so many other issues that are contained in this Budget. From housing and ultra-fast broadband to the plight of the kiwi to cutting ACC levies to biosecurity and to the men and women in uniform National is delivering on every front.Let me finish with this: on election night as I have done in the past I got up and I said to New Zealanders: “I intend to govern for all New Zealanders.” and I also said that night that I would focus on children who are most in need. I acknowledged that through no fault of their own they were growing up in some of the most deprived conditions in New Zealand. I believe that in the last 6½ years we have stood by those families. In the toughest of times we have protected them as best we could. I know my history. I know the struggle my mother had. I know how tough it is for those low-income families. Today is the day when we are in the position to stand up and just give them a little more—and rightfully so. We have done this in this Budget and rightfully so because Bill English’s economic leadership has allowed us to do it and to afford it. This is a great Budget for New Zealand. I am proud to have Bill English as the Minister of Finance of this country. May there be many more Budgets to come.METIRIA TUREI (Co-Leader—Green): Today John Key could have kept his promise to reduce child poverty. He could have kept his promise. Today John Key could have backed all of those young New Zealanders out there who are doing it tough. Today children in povertyin this country needed a game-changer but instead the Prime Minister chose to do the barest minimum for the poorest children and to abandon the hopes of our younger generations.In a classic display of smoke and mirrors John Key gave to our poorest children with one hand and took away with the other. An increase to benefits—desperately needed and woefully overdue—is eroded in many cases by reduced accommodation and emergency payments. Meanwhile instead of the Government fixing Working for Families it remains broken and even more unfair with only those on the lowest incomes set for an increase which in most cases will be the price of a block of cheese. Perhaps the cruellest reveal today was John Key’s plan to force young mums of toddlers—parents of just 3-year-old babies—into work. Forcing the parents of toddlers into work is not a solution to child poverty. Those parents will be earning something like $2.28 an hour in the hand as a result of this change yet will be significantly increasing their costs. Denying young New Zealanders the $1000 KiwiSaver kick-starter which older generations got is not going to help them make their way in the world either.This Budget is not for our kids and it is not for those under 40—the abandoned generation. This is the Budget of a Government that has abandoned those under 40. John Key boasts that he is building a stronger economy but I want to know who he is building it for because unless the economy is working for everyone it is not working. When a young couple is trying to save for a deposit on a home and the price of a house is increasing by $1000 a day do not tell them that the economy is working. When Kiwis in their 20s spend 4 or 5 years at university but the only job they can find at graduation is in a call centre do not tell them that the economy is working. When nurses and teachers are getting a 1 or 2 percent pay rise this year but the chief executive officer of ANZ is pocketing more than $4 million it is clear who in John Key’s economy is working for. And when thousands of our children show up to school hungry every day it cannot be right to say that the economy is working. An economy that delivers so much for so few while abandoning the rest is broken.But there is an alternative: a strong good economy one that works for all of us. And “all of us” includes our kids. The worst of this Budget is the broken promise—the promise that John Key gave to our kids—because despite all the Prime Minister’s promises about tackling child poverty in his third term today we see the barest acknowledgment of the drivers of poverty: low income and low wealth. A quarter of all New Zealand kids now live in families where there is not enough income to provide the basics. An additional 35000 children are living in severe poverty since National came to power and John Key took the role of Prime Minister. Those kids deserve family incomes that are sufficient for them to thrive now and they need the chance of a good life in the future. I am sorry but a $25 benefit increase which could be eroded to less than half of that by cuts in the parents’ accommodation supplement and hardship grants will not go far for a single mum with three kids—it just will not. Four or five dollars a week each for those kids is not enough to lift those children out of child poverty and the Government knows this. Children needed a game-changer today and they did not get it.The Green Party’s plan for a saving scheme for every child is an example of an inequality circuit-breaker. It is an example of the game-changer. Our Kids’ KiwiSaver policy would offer all newborns a kick-start deposit of $1000—a kick-start deposit that this Government has just ripped away from children from future generations—and matching savings contributions would help families save for their children’s future. Under this policy most kids could reasonably expect to build a nest egg of around $12900 by the time they get to 18 years old which they could then use to help fund a good education to invest in an adult KiwiSaver for long-term savings or use as a deposit on a home.Maintaining this gap as National is between those with a lot and the rest of the country is bad economics. The OECD warned late last year that inequality had inflicted more damage on the New Zealand economy than on any other developed country wiping 10 percent off our potential economic growth. Poverty is dangerous for children—it is dangerous for children—but it is also clear evidence of an economy that is broken an economy that is not working for everyone.Young New Zealanders were promised a brighter future by National some elections ago but in reality the future is looking darker for most New Zealanders under 40. People under 40 have been abandoned by John Key. They are the abandoned generation. New Zealanders aged under 40 have never been less likely to own their own home never been more burdened with student debt never been more likely to be underemployed and in the case of children never been more likely to be sick from a disease of poverty or to turn up to school hungry. What amazes me actually about young New Zealanders is how often they stay really positive and hopeful despite how much is stacked against them.Last week like many of you I watched the 2014 Victoria University graduates as they paraded down Lambton Quay. Among them was the younger brother of a colleague of mine who graduated this year with an architecture degree. It is quite a thing to get an architecture degree. You need a B+ average just to make it through the first year and then you have 4 years of full-on study and the all-night grafting that follows. This young man graduated at the top of his class not just in architecture but in the entire school of design. For all his hard work and his tremendous successes this brilliant creative young man has come away with a $40000 student loan and a job as a cook in a cafe. He earns just over the minimum wage. I am not denying this young man his hope or his pride or his happiness after one of the biggest weeks of his life. He quite likes his job in the cafe. He knows that there are many people who are much worse off than him. But we really need to ask whether this is actually the brighter future that John Key was promising young New Zealanders or whether it is yet another sign of a Government that has abandoned them.I am 45. I am lucky enough to have finished most of my degree before the student loan scheme came along but the average 22-year-old woman who graduates with a Bachelor’s degree today could be 50 years old before she pays off her student loan. It is a staggering thought but this is the reality for the abandoned generations. Then again if you are young and you do not have a tertiary qualification if you are a labourer or a shop assistant or a rest home carer the future looks even tougher. The National Government has abandoned young workers and young families.I want to tell you about some young New Zealanders whom this Government has abandoned. Sarah and Rob—these are not their real names because we know what happens to members of the public who critique the Government and how they get treated. These are not their real names but they are very real young people. Sarah is a young mum aged 30 who along with her husband Rob is expecting their second child any day now. Their little girl Eva is 5. Sarah volunteers for the Salvation Army helping to feed homeless people and she worked part-time in a shop before her morning sickness got to be too bad. Rob has a heart condition but he works very hard sometimes 50 or 60 hours a week just to bring home enough money for their family. But even when both of them were working they were stable but certainly not financially secure. A few weeks after Sarah had to quit her job for her baby’s sake Rob’s hours were cut from 50 to 60 hours to 38 hours. Even though Rob earns a reasonable hourly rate they earn just below the median wage. It is not enough to cover their rent in Auckland their food their petrol and crucially any unexpected expenses.Sarah told me when I talked to her about her life and what is happening with her that if Rob loses any more hours a week—and it is likely that he will—they simply will not be able to cope. “But we’re lucky” she says “because there are places to get things like the Sallies to help but this is not comfortable. I work with those who are homeless and I worry at how close our family are getting.” Sarah and Rob’s story is by no means out of the ordinary—in fact it is typical of so many New Zealanders working hard but barely getting by and whose prospects for economic security are very low. They are the abandoned generation. They got absolutely no help from this Budget.Bill English has told us about the increased numbers of New Zealanders in work. What he did not say was that among those he claimed to have a job are people who are working as little as an hour a week and who are doing unpaid work like on a family farm. A staggering 104000 New Zealanders whom the Government boasts are in work are officially considered underemployed. That means they are working but they are not earning enough to live and they want more hours. In the past 2 years alone National has overseen a 20 percent increase in the number of Kiwis who are underemployed. Most of these people are young. Disproportionate numbers are Māori and the disabled. Lots of them are parents whose children are living in poverty. Most are blue-collar workers like labourers and carers. The National Government is creating an enormous underclass of the underemployed.And it gets worse. The lowest-earning half of New Zealanders has seen no real rise in their incomes in the 6 years that John Key has been in power. Last year when the economy grew by 3.3 percent average wages increased by only half as much 1.7 percent. I think workers have every right to question where the fruits of their labour are going. The answer is that the fruits of their labour are going to someone else. The economy is not working for half of all wage earners. Half of all wage earners have been abandoned by this Government. They are prisoners of an economy that does not work for them.It would be easy to say that John Key’s Government does not care about young people—very easy to say that. But I think its greatest sin and his greatest sin is nonchalance. It is fundamentally out of touch with the real lives of New Zealanders. The National Party lives in a completely different world. This is probably news to John Key who until recently considered himself quite in touch with New Zealanders—at least those who had ponytails. But this Budget was clearly drawn up by people who have never sat at the kitchen table with a mountain of bills and agonised over whether they should pay for the power or their son’s school camp—agonised over these daily household decisions. These are people who have never had an enormous student loan who mostly got their education for free. The Budget was drawn up by a National Party caucus of people who are comfy with their bountiful portfolios and property and out of touch with the plight of young first-home buyers.It was written by people like the Minister for Social Development Anne Tolley who actually said that if your kids are hungry put some bread in the toaster—the “Let them eat toast Budget” approach to child poverty is what is prevalent in this Government. They are people who have no idea how frightening it is to lose a job and then suffer the financial double whammy of losing Working for Families payments as well. This is an out-of-touch Budget written by the out of touch for the out of touch.So let me put you in touch if you like with a real family like Sarah and Rob. Sarah and Rob are up against it every single week. Like most young families they are one large unexpected expense away from financial disaster. About the same time that Sarah had to give up her job their rental home was discovered to be full of asbestos. Their daughter’s asthma was getting worse and worse and their doctor eventually discovered it was the asbestos causing it and told them they had to leave their home practically immediately. They were forced to shift and the bottom fell out of their lives. With no savings and no job security they had no chance of buying a house. They struggled to get any recompense for the shoddy rental that caused their daughter’s illness. Sarah had to drop a legal case that she tried to take because she just did not have the money to fight. She said to me: “Ours is a common story. We spend $400 a week for a two-bedroom house. We can’t get a State house. There are no back-ups for low-income middle-class working families like ours.”So Prime Minister do not insult Rob and Sarah by telling them that the economy is working for them; do something to make it work for them. A good start would be giving Rob and Sarah the same shot at buying a house that previous generations had—previous generations like the Prime Minister’s. Here is a fact: people under 40 are much less likely to own their own home than they were before John Key came to power. Homeownership among people in their 30s has reduced by over 20 percent under National and it is dropping faster for this age group than for any other. The Kiwi dream of a home—any kind of home—has been downgraded to the nightmare of “Generation Rent”. National has abandoned the homeownership aspirations of young New Zealanders to protect the capital gains of their parents.There are about 300000 so-called mums and dads in New Zealand who own two or more homes. I am 45; I am one of them. It is a vast population of people like me and property investors—many who are my age or older—whom political parties are petrified of alienating with a comprehensive capital gains tax. But until politicians have the guts to fully stop the incentives that drive older New Zealanders to invest in property over more productive investments younger people like Rob and Sarah will never have a chance to own their home. They will never have a chance. When Rob and Sarah get old they are not expecting to own a home let alone own two or three. The dramatic decline in homeownership amongst this abandoned generation is John Key’s housing legacy—a policy welcome mat to the baby boomers and an eviction notice to Generation X and Generation Y. I call on John Key to choose to back young New Zealanders into their own home. I call on John Key to be brave and to stop abandoning young New Zealanders.I have heard commentators say how embarrassed they were when the Prime Minister made international headlines after pulling a cafe worker’s ponytail but for me the Prime Minister’s hair-pulling antics are nothing compared with the embarrassment I feel at his decision to not feed hungry kids at school—to not feed hungry kids at school. This decision more than other symbolises how much the National Government has lost touch with what really matters to New Zealanders. The Green Party’s Facebook post on this on the day that he denied kids lunch was viewed by 1.2 million people—1.2 million people. More than a million were shocked that their Government would deny hungry kids a meal. An apple a yoghurt and a Marmite sandwich can unleash the potential of a child. How hard is that to support?There is an alternative to National’s economy for the few. There is an alternative and it works better. New Zealand will succeed only if all of us are succeeding. The Green Party will back young New Zealanders women Māori—all of those who started behind on John Key’s race to the top and have never been given a chance to catch up. Because we can pay families a decent wage; we just have to choose to. We can feed children when they are hungry at school; we just have to do it. We can reduce our carbon emissions; we just need the commitment. And we can eradicate child poverty because the alternative—to keep children poor—is simply unacceptable. What this country so desperately needed today was imagination and leadership the courage to make change and hope—genuine hope—for something so much better. It is possible for our small country to be run on the principles of sustainability fairness and community; we just need leaders who are prepared to do it. This is the new alternative; it is not only possible it is proven. When our economy works for everyone we are all better off. Thank you.Rt Hon WINSTON PETERS (Leader—NZ First): This is a “Split Enz Budget”. Everywhere you look there are deficits and as the group Split Enz sang “I see red I see red I see red.” Mr Key got up and talked about his State house experience where a great society helped him out. And then he promptly forgot about it. Some of us remember our backgrounds and we do not intend to forget the background we came from. We know what poverty smells tastes and feels like and we do not pay it lip service of the type that those National backbenchers were saluting and clapping today. What did they do? Well there is some lip service to disadvantaged families but nothing to address why they have no income or real low income—nothing in the Budget at all.Here are the stand-outs. There is going to be a holiday tax: $6 if you leave the country $16 if you come back. The Kiwi KickStart: well the only people who got a kick in the guts today weremiddle-income New Zealanders. The Government is going to throw a further $50 million at a Whānau Ora programme seriously condemned by the Audit Office. No no National will just ignore that and forget about real Māori needs. It will go along with these Māori sociologists from Auckland University and dish up the money and never deal with real people.And then we are going to have an extra $320 million in the district health board budget. If you think about the growing population and the growing ageing population in this country and then you look at almost $200 million of unpaid debt from foreign hospital patients this is a decline. Can these people not add up? But back to my point: every year they promise to get on top of the debt and to reduce the country’s economic vulnerability. They have made that promise again for the seventh time today because six times they have never kept it. This Government is in deeper debt the surplus is always tomorrow and the balance of payments deficit is worsening. What does that mean? Well mum if you are spending far too much of the money that is coming into the household you and your family are going to go broke and so is New Zealand.Whatever the Budget claims it does nothing to solve any of the pressing problems facing New Zealand. And what a hysterical rant from a Prime Minister—he has had 7 years to become a speech-maker. That was just dreadful—the histrionics and the “sieg heil” - like behaviour of his caucus jumping up and saluting him. Those members from the provinces—the provinces have got nothing today whatsoever but just like the Black Shirts there they were saluting because they know no better.There is nothing in this Budget that will fix the Government’s finances.Hon Members: Give Ron Mark a go!Rt Hon WINSTON PETERS: It is no use ranting and raving at me; it is too late. Your day of reckoning is coming. You saw it in Northland. Prepare to see Northland over and over again around provincial New Zealand. The notion that the Minister of Finance is in any way competent and capable of managing New Zealand’s economy is just risible. It is laughable. This is the deficit you see: we start with the red in the public finance deficit. National has failed to get the country’s finances in order and all the boring tedious worn-out over-used platitudes and excuses will no longer wash.Net core debt has risen consistently under National heading to $70 billion. It was $10 billion when National came into office and it is $70 billion now. Part of that is from the Canterbury earthquakes but the rest is just incompetence. And there is worse on the horizon. And National’s doctrinaire partial privatisation of the power companies—did you hear Bill English yesterday? He said: “Despite the fact that we sold 49 percent we are getting greater dividends.” He did not say: “We’ve allowed them to boot the prices up so high that they’re price-gouging households all over the country.” and that to him was good economics. How smug and arrogant can you possibly be? The fact is that Bill English has never ever delivered a surplus. He has never ever delivered a surplus in stark contrast to the 14 years of surpluses under previous Governments one of which I was the Treasurer—[Interruption] Ha ha! We got hit by the Asian financial crisis but then of course we had experience. We are not doctrinaire. We understand economics. We are not just devoted to one theory of economics. I will make this prediction right now: Bill English will never ever deliver a surplus. He will never ever deliver an honest surplus. He is running out of words. His tenure of claiming competence in an ocean of failure will soon come to an end.We see red. We see red in the balance of payments deficit. All those farming and provincial members all those farming and provincial—[Interruption] Oh it is danger time. It is serious danger time. It is tinder-dry. You see all of those provincial members up there? The balance of payments deficit is about us failing to export enough to pay for our imports. And all of those gentlemen up there come from export electorates. And what are they doing for those people in the countryside in terms of exporting? Not a mutter not a murmur not a syllable not a sound. They will not raise a finger. It is “sieg heil” to the front bench—“whatever you say”.Here we go here we go. Balance of payments: last year December 2014 our balance of payments deficit was $7.8 billion.Chris Bishop: Tell us about “manual labour” again.Rt Hon WINSTON PETERS: Our net international investment debt: what is being invested offshore into our country versus our country investing back into those countries offshore? It is a staggering $154 billion Mr Bishop. That is what I am going to tell you about. And no amount of your nervous knee-knocking is going to change it. Let me tell you: you are a list member. There will not be a list by the time this gets out. You are a goner. Get all of the experience you can because you are going on furlough. That net international investment debt is the equivalent of 65 percent of our country’s GDP. This is PIIGS territory. This is PIIGS territory.I want to tell you this: we also see red in the provincial deficit. All over provincial New Zealand today in the hamlets and on country roads and in the villages all over the countryside in the provinces there will be despair about this Budget. There is nothing in this Budget for provincial New Zealand unless of course you live in the province of Auckland. No response for regional problems and no regional development strategy mean that the regions are stuck in the economic and social doldrums.Unemployment in Northland: 9.9 percent.David Bennett: What are you doing about it? You’re the member.Rt Hon WINSTON PETERS: What I am doing about it is getting rid of you and as soon as I can. My promise to the people of Northland is very sound: salvation is on its way. But the Bennetts of this world we are going to wipe from the political framework because they see you as obstacles to their future. Bay of Plenty: 7.8 percent unemployment. Hawke’s Bay: 7.3 percent unemployment. In Manawatū and Wanganui—or Whanganui if you want to be politically correct—it is 7.4 percent. It goes on and on and on. Farming prices: all are falling; fishing prices: falling; and forestry prices: falling. Gentlemen when are you going to stand up for the provinces? Come on—can I hear you now? No all we have got is a deafening silence—a deafening silence. Boy they are going to regret it very shortly when their careers are over. They are going to say: “I wish I had listened to New Zealand First. I wish I took the warning. I might have saved my province and myself.” But seeing as they are only about themselves well they should save themselves now.Do not forget that we over here understand what work looks like. We understand the toil the sweat and the agony of exporting offshore in order to keep a family going. These people bring money home to the family New Zealand and we should salute them not jeer and laugh at them not ignore them. Does the Reserve Bank of New Zealand Act reflect that? No. Paul Glass of Devon Funds Management pointed out recently: “… New Zealand has some of the”—listen to this—“highest real interest rates in the developed world …” He went on to say this—what New Zealand First has been saying for years—“Our interest rates have artificially pushed up our exchange rate which is damaging the productive part of the economy.” New Zealand First says: “Amen.” to that. But what are these people doing about it? When farmers are going to the wall when they go to the bank and four out of 10 will be in trouble what will these provincial members from Hamilton do then—the Bennetts Mr Mitchell and dare I say it the man from the disclosed zombie town Whangarei? What is he going to do? What are all those Māori members who know that their people lie at the bottom of the economic heap going to do? You cannot go around hobnobbing with those people over there for their fellowship. You are going to have to make a stand for your people and as soon as possible.The productive part of the economy is the provinces and National wantonly goes on abusing their loyalty. Will National change the monetary settings to help those provincial seats that it represents? No National will not raise a finger. The Salvation Army came out the other day about overcrowding low incomes and unemployment in regional New Zealand and some of the commentariat were surprised.The Prime Minister is full of promises. Recently he skulked back up to Northland to the Bay of Islands and he said that he was “going to actively work to regain your trust and confidence.”Hon Member: What did you say Winnie?Rt Hon WINSTON PETERS: I said: “I expect that to mean that it will be in the Budget.” So there I was today going through all of the Budget and looking for the 10two-lane bridges the Pūhoi to Wellsford highway the ultra-fast broadband roll-out taxpayer-paid cellphone coverage doing up the Auckland to Whangarei railway line and investment in the most obvious port in this whole country Whangarei. And was there anything in the Budget? Doughnuts—nothing. The Prime Minister was going to actively work to regain your trust and confidence. Up north we are not stupid. Forgiving we have been for so long but stupid we are not.We see red in the public services deficit. Look at this: the reality is that many New Zealanders are faced with having to go on the unofficial waiting list in public hospitals before they get on the official one. Everywhere public services are being cut. Police numbers are capped at 2009 levels and they claim to be getting on top of crime—except that if you get caught now you get a warning. You do not get charged; you only get a warning. Spending on police numbers has been capped since 2009. Write to the police and ask: how many policemen or women front-line were on duty in any given town on any night in this country and they will not answer you. They say that they do not keep information in that form. Oh really? Well what form do you keep it in—because we would like to know? For example take the local police station in Kohukohu in north Hokianga. It has been closed meaning that there will be no police presence in the whole of north Hokianga. Just like that.Hon Michael Woodhouse: Rubbish!Rt Hon WINSTON PETERS: Oh I know what that Minister’s specialty is. The Minister’s specialty is rubbish because he has got a rubbish house and he will not fix it up and the family cannot stay any longer. It is so bad that you would not put a dog in it. Yes it is rubbish Minister but get off your backside and do something for the first time. Do not sit there on your highly overpaid income on your highly over-enhanced life charisma-free as you are and claim that you are doing something. “Rubbish” is the right word. It is rubbish. Will you fix it Minister rather than taking that essentially arrogant view so smugly portrayed by the National Party today?Hon Gerry Brownlee: What’s he talking about?Rt Hon WINSTON PETERS: There is no use in the man from the woodwork lathe getting excited either. We know that his tutelage in respect of Christchurch has been disastrous. He is now the Minister of Defence. He knows nothing about defence of course which probably qualifies him for the job.We see red in the standard of living deficit. You see here is the point. Under National one thing is incontrovertible and inarguable: the poor have got poorer and the middle-income people are getting poorer as well and many old and retired people are now stressed out about how if they keep on living they are going to be able to afford to live. That is the real social condition in this country—one of the greatest countries on earth which used to be called Godzone. It has now under National under this economic theory descended to this. The National Party members should be ashamed of themselves. Just because they get about $200000 a year and most of them have got four homes somewhere around the country—some have got 10—they do not want to change anything because they are on the pig’s back and everybody else is getting what is under the pig’s tail.The standard of living deficit is dramatically bad. Then we have got this really significant thing which is not in the Budget today. The Minister of Finance talked about GDP growth but he never matched it with population growth. It is axiomatic that if GDP was to rise to a certain level and the population rose to the same level at the same percentage there is no progress at all. That is exactly what is not here. What is the GDP growth per person? What is the income per capita—the measurement that every other country understands. Oh no—no mention of that whatsoever. Why? Because the moment that people knew that they would know what a miserable failure at running this country this mass immigration party is.Hon Gerry Brownlee: And that from the refugees’ friend!Rt Hon WINSTON PETERS: Well you see again he does not understand the difference between refugees onhumanitarian grounds and mass immigration. We are a cultured party. We are people who understand international obligations. We are not as smugly arrogant—sitting there in the boat saying “I’m in the boat Jack; forget about you.”—but we do understand about focused planned immigration which every Asian nation understands but not these sell-outs to big business.There is the resilience deficit. You know things are so bad that if we have one hiccup internationally with our commodities we are in trouble. This is what the Reserve Bank Governor said the other day on 30 April—and I love this phrase; it is what is wrong with modern New Zealand politics and our institutions and it is about the character of our nation—“House price inflation is elevated in Auckland.” Really that statement is about as bleeding obvious as “The Pope is a Catholic.” That is what he said. That is New Zealand’s present problem. We have people cosseted away with high incomes and salaries many on the taxpayer’s back failing to tell the country honestly what is going on.I want to make it very clear that we are going to fix up the Reserve Bank of New Zealand Act at the first chance we get. New Zealand First is going to make sure that we have research and development and regional policy taxation and that immigration is for the first time a sound policy. We are going to govern for New Zealanders and for all those who are here legally. We are going to ensure that the exporters in the provinces and those people who make this country go and who build on production not consumption get a fair go.It is a time for a reality check. Where is National’s strategy plan and vision? It has not got one. The blunt truth is that there is absolutely no room for complacency about the New Zealand economy because National has failed to look ahead and plan and invest for the future. Nothing in this Budget warrants any confidence in the National Government’s management of the New Zealand economy. This is a Budget with deficits everywhere. Examine them carefully and like Split Enz and Tim Finn you will come to the same conclusion: “I see red I see red I see red.”Hon TE URUROA FLAVELL (Co-Leader—Māori Party):Tēnā koe Mr Speaker. Kia ora tātau katoa. Ka mihi rā ki a tātau e hui nei i tēnei rā Māori mai Pākehā mai. Ka nui te mihi.[Thank you Mr Speaker. Salutations to us all. My acknowledgments indeed to us assembled here today Māori and non-Māori. I appreciate it greatly.]Firstly can I start off by congratulating the Minister of Finance on working extremely well with the Māori Party leadership. It is sad that some will moan because they have got nothing. They have delivered nothing to the people of this country and throughout this last year the Māori Party has been able to work constructively with the National Government. I am usually a humble man as most people know. I am very humble—I am very humble but not today. I am ready to rumble today because the Māori Party has helped deliver some goodies to the people of this country. Marama Fox is like that—very humble—but just for today we are going to speak up. We are going to speak up.Since the Māori Party was created 11 years ago whānau have been at the forefront of our thinking. We have been dedicated to improving the lives of whānau and to breaking the intergenerational neglect and poor policies of previous Governments which have failed abysmally to improve the lives of our most vulnerable families. The Māori Party created history when it became the first political party in this country to call for a Ministerial Committee on Poverty. It brought into sharp focus the dire and complex issues raised by the most vulnerable families in our country of which a fair disproportionate number are Māori. I can say too that the Māori Party is extremely proud of the work that the Government has undertaken as a result of the recommendations from the Ministerial Committee on Poverty set up by the Māori Party—and I pay tribute to the former leader of the Māori Party Tariana Turia.Today the Government announced $790 million which will reduce hardship among tamariki in greatest need—$790 million. Why? Because the Māori Party rumbled up—that is why. Today I say to Aotearoa: “It’s OK. Don’t thank us too much. The Māori Party rocked up and we delivered beside this Government.” I want to put it all in a bit of context. Benefit rates for families with children will rise $25 a week after tax which is the first time since 1972 that core benefit rates have been increased by more than inflation. That is what we have done—pulled it over. We pulled it over the line. These measures will support around half a million children—half a million children. So it is a bit rich for some to rock up here and say: “Do more for children.” Hello—you do more for children and then you still get it wrong. There is something wrong there—something seriously wrong.Most of this country will be surprised I think that a National administration would offer increases to core benefit rates. I think the Prime Minister alluded to that. Here is the truth though: National and Labour have held the Treasury benches for roughly an equal amount of time—over about 43 years—and neither of them have made any moves to increase benefit rates. So who made the difference? The Māori Party made the difference that is who—the Māori Party. The Māori Party made the difference. It has been through the work of my former co-leaders Dr Pita Sharples and Tariana Turia and my co-pilot here Marama Fox—the only MP who continues to be on the Ministerial Committee on Poverty and who has talked about nothing nothing except alleviating hardship and poverty. That equals $790 million and that is how it came about.Today the Māori Party has made history. It has taken 43 years—nearly half a century—for core benefits to rise. Who did it? The Māori Party did it with some help from National. In addition to this hard-fought gain the Māori Party has also secured about $100 million worth of funding for whānau whare and whenua. What is that? That is families that is housing that is land. New operational funding—$49.8 million over the next 4 years—will support Whānau Ora navigators to work with whānau aiga and families. Do I hear “Amen”?Marama Fox: Amen.Hon TE URUROA FLAVELL: Thank you sister.Navigators play a hugely important role in linking up whānau with their vital services and information. The new funding will allow the continuation of current levels of navigators in Kaitoko Whānau and for Ōranga Whānau workers to be maintained. [Interruption] Thank you thank you. This is a 29 percent increase in the current funding for Whānau Ora and although this revolutionary approach of working with whānau to help them find the solutions for themselves has been attacked by some Opposition MPs the Māori Party and this Government have seen the outstanding results of Whānau Ora. Mr Peters you need to talk to your older sister. She knows what Whānau Ora is all about.The Budget has also provided $2.1 million of new funding for research on rangatahi Māori suicide prevention. I have to say that too often I have seen the devastating effects of Māori suicide on whānau. The Māori rate is about 22.5 times higher than the non-Māori. This fund will contribute towards taking a Whānau Ora approach to reducing youth suicide. It will prevent youth suicide and will hopefully provide support for prevention workers who are working directly with rangatahi Māori in crisis situations.Moving to housing: housing is such a crucial and critical factor in breaking the cycles of poverty dependency and poor health outcomes for whānau Māori. A new whānau housing response fund will focus on addressing housing deprivation. A Māori housing network will be established to provide practical assistance to whānau and to progress the housing aspirations of Māori. Budget 2015 provides an additional—hold on—$8.8 million per annum for Māori housing. What do I hear?Marama Fox: Amen.Hon TE URUROA FLAVELL: Thank you sister. This is in addition to existing funding for Māori housing of around $7.5 million per annum bringing the total amount to $16.2 million per annum in 2018-19. A new Māori network will provide an analytical role in implementing and evaluating He Whare Āhuru He Ōranga Tāngata—the Māori housing strategy—which sets out the Government’s commitment to improving housing outcomes for Māori and to growing the Māori housing sector.I move to whenua—from whare to whenua; it makes sense. There is a new fund of $12.8 million over 4 years to help Māori landowners improve the utilisation of their land. It is also in this year’s budget. What do I hear?Marama Fox: Amen.Hon TE URUROA FLAVELL: Thank you sister. The fund complements the current reform of Te Ture Whenua Māori Act. The issues that the fund will investigate are genuine and I am talking about rates valuation and aggregation of small land blocks and landlocked land. It has got to be good.Hon Gerry Brownlee: Tell us more.Hon TE URUROA FLAVELL: I will. Hold on there is more. There is $3.2 million per annum in a fund that will support targeted initiatives in areas with significant underutilised land such as in Northland East Coast Bay of Plenty Manawatū and Whanganui. Help is on its way. Help is on its way. It will address longstanding issues that have generally inhibited Māori whānau hapū and iwi from releasing and realising the benefits of their land.As a partner in this Government we have been criticised for getting only the crumbs. That is a blatant lie—a blatant lie. The Māori Party has had a real and profound impact on this Government in the tangible gains we have made for whānau. Over the last 7 years as a support party we have led initiatives to tackle poverty. They include Warm Up New Zealand rheumatic fever prevention free GP doctors visits and the expansion of paid parental leave. I could go on but I am a humble man; I will hold it back. The Opposition will argue that the merits and benefits increased today are pretty minimal. They get nothing. They have delivered nothing to this country. Why? Because they are in Opposition and here we are at the table getting gains for our people. Today the Māori Party can and will take every bit of credit that comes its way. Why? Because we have done it. The Māori Party has done it.I close by saying that the Budget is a win for whānau who work hard to bring up their tamariki with the necessities of life. It is a win for all of those who fight day in day out to make the lives of our people better. It is time for this country to realise the huge and valuable contribution of the mighty Māori Party in this House. That is what we do: we look after the families and we look after the lives of our people—not just Māori but all of this country. This Budget gets us on the move. We say: “Let’s get it on. Let’s move it and move it now.”Hon PETER DUNNE (Leader—United Future): Can I begin by congratulating my colleague to my right Te Ururoa Flavell on his impassioned address and on the contribution he makes to this Government. I must say also in respect of David Seymour to my left that the three support partners work remarkably closely together. We do not always agree on issues but we take a common approach on a number of things and I find it a real pleasure working alongside these colleagues to achieve real gains for the people of New Zealand. And that is what this Budget is all about.One of the reasons why the Budget is able to do the things it has been able to do is not part of the Budget at all. There was a reference in the speech from the Minister of Finance to the Prime Minister’s 10 key result areas. They are a vital part of shaping the direction and the delivery of government and its services to the people because for the first time—this may sound strange to people—the Government actually has clear measures of the impact of its policies. It sets objectives about what it wants to achieve in the justice sector or the education sector or the health sector and then it is able to measure its expenditure and its policies against achievement in those areas. As a consequence of that it is able to move out of areas where it is not making progress and into areas where greater gains can be achieved.One of the reasons why in this Budget for the first time since Sir John Marshall was Prime Minister there has been a lift in basic benefit levels is the much more strategic approach and focus that the Government has been taking to the whole area of its expenditure. It used to be the situation—I suspect we have heard it from some of the parties that have spoken earlier in this debate—where government was all about dishing out the largesse and all about leading the charge and spending the money. In this environment where this country is much more diverse and pluralistic government is about working alongside communities working alongside groups in communities to achieve specific outcomes. Those outcomes may not always be achieved by direct intervention by the Government but are part of outcomes achieved because of an overall sense of leadership.That is where those 10 key result areas are so important. They give the Government the flexibility and the drive to be able to pursue objectives that were not thought possible some time ago. It used to be the mantra at every election since 1990 about restoring basic benefit levels. We have had a National Government since then we have had a Labour Government and now another National-led Government. And only now nearly a quarter of a century later has it been possible to restore levels not to where they were in 1990 but beyond that and to make the first significant change in over 40 years. That is because the Government for the first time really has a clear understanding of the impact of its policies.Some 20-odd years ago this Parliament passed a fiscal responsibility Act which set the stage for the Government better monitoring its accounts and it is no coincidence that fiscal performance has improved markedly since that time. In coalition with National in the mid-1990s United Future proposed the complementary idea of a social responsibility Act so that we could measure the impact of the Government’s social policies and make changes accordingly. That proved far too difficult for officials to comprehend. I think the result areas are the next best thing to achieve that objective. So alongside fiscal responsibility we now have the Government much better able to measure and move in the areas of social responsibility as well. That is why you see the package in today’s Budget. That is why you see the ongoing improvements in health and education at a time when Government finances are genuinely constrained and are likely to be for some time in the future.It is almost a paradox that at a time when revenue is falling when the Minister of Finance can give this House a warning that because of international conditions the revenue track may not be as strong in the foreseeable future the Government on the other hand is able to make such significant social progress and still face the prospect of a surplus this year burgeoning to a greater number in the years ahead. That is not beyond possibility. It is certainly the sort of thing people would not have dreamt was possible just a few short years ago. That is how the transformation has occurred and that is the backdrop that makes this Budget I think such an important stepping stone for New Zealand.I am delighted that as part of the Budget one of the smaller but significant infrastructural issues facing this country has been addressed and that is the decision to rebuild the wharf at Waitangi on the Chatham Islands. The 600 Chatham Islanders identify as New Zealanders they are New Zealanders but they struggle sometimes to get their voices heard. The Minister for Treaty of Waitangi Negotiations and I have done a bit of work over the last year to get this wharf to the point where it can be renewed. It is a small step but for them it is a mighty one and will do a lot towards securing their future.In the time that is remaining to me I want to address one issue that was mentioned in the Budget but is still unresolved and that is the question of the Resource Management Act. I think this is a case of missed opportunity. For too long this Government in my view has tried to achieve its cake and eat it too in terms of the changes it wants. It is not going to get support to change the principles of the Resource Management Act.Denis O’Rourke: Hear hear!Hon PETER DUNNE: But there is a significant mood right around the House I think for addressing a number of the process issues and I say to the House that I suspect that there is sufficient momentum here that were the Government to come forward now and say that in the context of Auckland or whatever it wants to do we are going to focus on those changes we could make substantial and real progress very quickly. But that point needs to be understood. It was September 2013 that the Government first announced its intentions in this regard. We are now nearly 2 years down the track and substantially no further ahead.There is a way forward and I am pleased to have the intervention from the member on the right of me metaphorically speaking that confirms the level of support for changing the Act in that way because many of the complaints that New Zealanders have about the Resource Management Act are about its implications and about how it applies to them. They are not actually about changing the principles. In fact everywhere I go that is the one thing people say we cannot do we must not touch. So I say to the Government that given the commitment in terms of the broad infrastructure package around housing alluded to in the Budget it is time to forget those notions. It is time to actually start working on the changes that will improve and speed up the process under which the Act operates and get a majority in this House which I think would be substantial for driving those through to implementation.What the Budget says at its heart is that the Government is getting its house in order in so many different areas. The Government is now looking to provide opportunities and challenges for New Zealanders whether they be struggling families whether they be families of school-aged children or whether they be families in other situations. As a consequence of that challenge it behoves us to make sure that for its part the Government is there to help. It used to be sort of a throwaway slogan: “I’m from the Government; I’m here to help.” I think it actually has some substance as a point these days because the Government is not holding to the vain belief that it can do everything. It is really taking the view about its strategic role in a society and how that can best deliver assistance. So if I come back to my Resource Management Act example that is a strategic approach it can take that will benefit people and that will achieve a large part of the objective that it has set for itself.I want to acknowledge the work of the Minister of Finance. I think he is someone who has quite a deep vision about where he wants this country to head. It is not just a numbers game for him. He has a heart and a real sense of social commitment and I think that comes through in many of the things that are part of this Budget and many of the assumptions that underlie it. Who would have thought that we would be standing in this House today seeing a National-led Government increase benefit rates? Who would have thought a little while ago that we would see in previous Budgets a National-led Government increasing health and education expenditure? The paradigm has shifted because this Government under the leadership of the Prime Minister and the Minister of Finance understands that the nature and role of government in a modern society has also shifted. It is not the scorched earth free-market economics of the Thatcherite era nor is it Big Brother socialism which we used to see in the 1970s and 1960s and earlier; it is a new environment. This Government is smart enough to have adjusted to that. It has put out the challenges to New Zealanders and the Budget today I think reflects a sense of real opportunity for people to advance and make progress. I am very pleased to support it.DAVID SEYMOUR (Leader—ACT): What a debate. Could I also pay tribute to the fabulous speakers who went before me. I reiterate what Peter Dunne said. I greatly enjoy working with the other support parties. Kia ora and thank you. I also would like to pay tribute to the Minister of Finance following on from what Peter Dunne said. He is a man with a heart and with a vision and he is changing the way the Government operates from handing money out here there and everywhere to having the Government as an organisation focused on outcomes.This Budget is an example of stable centre-right Government. In the Epsom electorate that is what we vote for. In the Epsom electorate we are quite comfortable with choosing the Government. The fact is that that is what we have done for two out of the last three elections. But that is also why Andrew Little’s speech was so negative and so barren. You would think he was speaking in the Parliament of a sub-Saharan country. He had no policy because he has waged a scorched earth policy on nearly every policy that his party had at the last election. Some of the members opposite should check—there are so many of them away they may well be having a spill as we speak.I remember once upon a time when the Greens were a party focused on the environment. I think we saw very very clearly today that that is no longer the case. It was not mentioned once in that speech. I always enjoy the speeches from the leader of New Zealand First. How fitting that he should be back with Split Enz in the 1980s—a time when he himself showed great promise. Today he sits with a group of people who probably up until today thought that “Budget” was a brand at Countdown. Too bad; so sad.But there is one positive I would like to really emphasise—Denis O’Rourke: He won his seat. He doesn’t need to be gifted one.DAVID SEYMOUR: Oh we have got him going now. There is one positive that I would really like to emphasise and that is the announcement in this Budget that there will be funding for two new partnership schools kura hourua as early as next year. This policy has been a litmus test for one of the darkest elements of our otherwise green and pleasant land: how we treat people who make tremendous sacrifices to go out alone to swim upstream to do something different to help the next generation of children.The sad thing is that the Opposition some members of the educational sector and some members of the press have shown us the darkest underbelly of our tall poppy culture. They have had a litany of false claims to try to knock down these heroic and innovative New Zealanders opening up new schools. They said the model failed overseas until they were overwhelmed by evidence to the contrary everywhere else that this model has been tried. They said that the schools would skim the most able students. What we have discovered is that they have taken some of the students who were not even attending a school the previous year. I opened my maiden speech with a quote from one such student who said to me: “I never thought I was smart until I came here.” Last I heard she was well on track for a university scholarship. That is what these educational innovators are doing.But then the critics said that they would be under-resourced and then they said they would be over-resourced. Once again we presented the evidence to comprehensively demonstrate that that was not the fact. What the facts are is that we are taking some of the most vulnerable New Zealand children and putting them into environments where they are engaged where they learn they get skills which lead to qualifications those qualifications lead to jobs which will turn into careers and ultimately allow those New Zealanders to feel good about themselves. That is what it is about. That is one of the ACT Party’s answers to the difficulty of child poverty. Would not it be nice if from time to time some of those opponents instead of showing us the darkest underbelly of the tall poppy syndrome could actually be a little bit supportive. But I digress. I will take the time to salute some of those heroic New Zealanders in this movement—Alwyn Poole Nick Hyde Sita Selupe Raewyn Tīpene Catherine Isaac Michael Jones and even Willie Jackson. They have joined the movement for more choice in education for the most vulnerable New Zealanders.The Opposition goes on—Meka Whaitiri: How’s the roll going?DAVID SEYMOUR: There we go again. There we go again—nit-picking the negatives. The fact is that all of the schools that have been open for more than 1 year are above their guaranteed minimum roll except one which is a primary school where children start throughout the year. Opposition members cannot handle the facts but their negativity is bottomless. You should be ashamed. You should be supporting this initiative instead of giving us bottomless nit-picking and negativity. Shame on you.We had many complaints in the lead-up to this Budget about whether or not the Government would make surplus. What an approach of short-termism—an approach that unfortunately I have to say the Government has bought into somewhat as well. How many people remember whether the Government was in surplus 15 years ago? Well I will tell you what people will remember about this Budget 15 years hence and that is what superannuation is looking like. As people live longer about 1 extra year per decade; as we go from five workers per retiree in 2006 down to two by 2060; when Government debt is forecast to approach 198 percent of GDP by the time current university students retire people will be looking back at this Budget and asking whether we were prepared to look into the future and confront our challenges or whether we kicked the can down the road for 1 more year. The solution which some members around this House are keen to support is to put it to the public to put up some options and let the public vote on the future of superannuation. If we can afford $26 million to do this for the flag then we can afford to have a public referendum on fiscal sustainability and intergenerational fairness. If only the Green Party would also support that.We could have sent a message to business about the future of capital investment and productivity instead of continuing to issue corporate welfare which fundamentally assumes that people in Wellington know best how to allocate resources and deal in complex ventures. We could have reduced new spending allowances by 10 percent a year and that would have allowed us to send a message to business in a country where we have one of the highest effective tax rates on capital so that every year for the next 8 years we will drop company tax rates one point until we get to 20 percent and become competitive with where other countries such as Scandinavian countries are now in terms of company tax.What about income tax? We have heard so much about people in poverty and people bringing up children in poverty. How about sparing just a moment for the hundreds of thousands of New Zealanders who have saved sacrificed waited delayed and had children much later in life? What about relief for them? What we could have done at a time when the Minister of Finance is complaining that there is so little extra revenue from fiscal drag is we could have gone and indexed tax thresholds for income to inflation. What that would have done is it would have had a very small impact in the years to come but as inflation resumes it would have reduced the tax burden on working families in the higher tax bracket and it would have made taxation more honest. Instead of stealthily taking $1036 out of the average household in the last 4 years the Government would have to be open and honest about its tax changes. None the less we have not had that initiative today. We will have to hope for it in the future.But most fundamental is the Resource Management Act. The fact is that “inappropriate subdivision” is a phrase that appears 156 times in the 900-page document that governs land use in New Zealand. It is good to discover that the Government is the largest land speculator in Auckland. It is good that the Government is releasing 430 hectares. But what about the other 270 million hectares of New Zealand 0.7 percent of which have actually been built on and are deemed inappropriate subdivisions? What about unleashing some of that land? Unfortunately I have to disagree with my friend and colleague Peter Dunne. That phrase appears three times in the principles sections 6 and 7. It is a small wonder that there is a shortage of land on which to build and that the housing affordability problem is real.I would like to finish by thanking my National Party colleagues particularly the Prime Minister the Deputy Prime Minister and the wonderful Minister of Education with whom it is a pleasure to work. Thank you very much.Hon GERRY BROWNLEE (Leader of the House): I move That the debate be now adjourned.A party vote was called for on the question That the debate be now adjourned.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Motion agreed to.UrgencyHon GERRY BROWNLEE (Leader of the House): I move That urgency be accorded the introduction and first reading of the Support for Children in Hardship Bill and its referral to a select committee; the introduction and passing of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill and any bills into which it may be divided;the introduction and passing of the Telecommunications (Development Levy) Amendment Bill; the introduction and passing of the KiwiSaver Budget Measures Bill; and the introduction and passing of the Border Processing (Arrivals and Departures) Levy Bill and any bills into which it may be divided.The Government is moving to take urgency on these bills because they are all part of a package of moves that has been signalled today in Budget 2015.The Support for Children in Hardship Bill legislates for most of the changes that have been mentioned in the Budget. This bill will go to a select committee for consideration so that it can be effective from 1 April 2016. Also it must be in effect by February 2016—so we have got a short amount of time for a select committee to consider it—to enable the 2016 annual adjustment to reflect those benefit rate increases stated today.The Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill is urgent because the Ministry of Social Development needs to be able to purchase more social housing places. The bill allows for more flexible contracting with community housing providers which the ministry needs in order to be able to enter into contracts to purchase 300 social housing places in Auckland as soon as possible.The Telecommunications (Development Levy) Amendment Bill provides certainty to the telecommunications industry. It allows the Government to get on with rolling out the Rural Broadband Initiative extensions which it cannot do until it has a legislative mandate and funding. The bill does not increase or change the operation of the levy; it simply extends the current levy amount out to later years. The intention to extend the levy has previously been well signalled.The KiwiSaver Budget Measures Bill proposes to remove the $1000 KiwiSaver kick-start contribution paid to all new enrolees in the KiwiSaver scheme effective from 2 p.m. today. Therefore urgency is required to give effect to the proposal and to provide clarity to new enrolees in the KiwiSaver scheme.The Border Processing (Arrivals and Departures) Levy Bill is being introduced because demand for border clearance services is increasing due to the number of airline and cruise ship passengers arriving in and departing from New Zealand. This is expected to grow by some 3.5 percent annually for the foreseeable future and we simply need to have the users of the services that we provide to protect our borders paying for them. This bill requires Customs and Excise Act and Biosecurity Act changes because they do not currently provide the facility to collect that levy. Urgency is necessary to allow for a period of consultation on the design post the passing of the bill which is the process that needs to be used. Thank you.A party vote was called for on the question That urgency be accorded.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Motion agreed to.Support for Children in Hardship BillFirst ReadingHon ANNE TOLLEY (Minister for Social Development): I move That the Support for Children in Hardship Bill be now read a first time. I nominate the Social Services Committee to consider the bill. At the appropriate time I intend to move that the bill be reported by 3 November 2015.The Support for Children in Hardship Bill and the Budget package it supports represent the next step in this Government’s strong and continuing programme to tackle material hardship for children in low-income families. Introducing this omnibus bill under urgency will allow the greatest possible time in select committee while ensuring the bill can be passed into law by the end of the year to be implemented from 1 April 2016. The bill amends the Social Security Act inland revenue Acts and the Education Act delivering key components of this Government’s $790 million Budget package. The provisions in the bill build on the firm foundations this Government has laid down by creating a strong economy that supports more jobs and higher incomes for working families by setting clear targets for public services to address root causes of material hardship for children and by continuing our welfare reform’s unrelenting focus on work ensuring those who are able do all they can to find work helping themselves and their children get ahead.Welfare reform is working. In 2010 we introduced part-time work obligations for parents on a benefit with a youngest child aged 6 or over. As sound management saw the economy strengthen and job opportunities grow we extended this obligation to include beneficiaries with a child over 5 years of age. The results are clear. Since 2010 there has been a 19 percent drop in the number of people on sole parent support benefit. That means there are 16500 fewer people on sole parent support resulting in the lowest sole parent benefit numbers since the 1980s. This bill seeks to extend and accelerate those gains. It mirrors the growing and strengthening economy and labour market by expanding work obligations for beneficiary parents. From 1 April 2016 they will be required to start looking for part-time work when their youngest child is 3 and 4 years of age. This is a time in which both parents in the majority of two-parent families are in part or full-time work. Our expectation and aspiration for those on benefits should be the same. This will see another 18000 beneficiary parents brought into the part-time work obligations group. This is where case management focused on work is the strongest and where additional resources have been provided through the Budget package.We also know that there are important benefits for children attending high-quality early childhood education by 3 years of age which is why this Government provides for 20 hours of early childhood education. Research shows us that children in more vulnerable families including beneficiary households have the most to gain. Alongside this change the bill amends the definition of part-time work within the Social Security Act. Currently part-time work is defined in the benefits system as being work that averages 15 hours per week. From 1 April 2016 this bill increases that to 20 hours per week. At 20 hours’ part-time work most beneficiary parents will be better off and off benefits thanks to a combination of earned income and increased tax credits. Increasing the part-time work obligation to 20 hours a week means a greater attachment to the workforce. In addition most sole parents working 20 hours or more a week will be better off with a mixture of wages and Working for Families tax credits than they are on benefits. This is a strong incentive to leave the benefit altogether.Flexibility will be maintained regarding the exact hours of work to take account of individual factors and particular job opportunities. We know however that the costs of childcare can lessen the rewards of employment for many low-income working parents including beneficiaries moving into work. With this in mind the Budget package introduces a new higher rate of assistance for up to 50 hours a week of childcare or out-of-school care focused on helping the lowest-income working families. The significance of this change should not be underestimated. It is delivering an average gain of over $23 a week for each family. The childcare increase in the Budget package will be delivered by amendments to regulations rather than requiring amendments through this bill.Turning now to benefit rates on 1 April 2016 core benefit rates for each beneficiary household with dependent children will increase by $25 per week on top of the CPI increase that year. This is the first lift in core benefit rates since 1972 for beneficiaries with dependent children. This will deliver some of the rewards of a strong economy directly to New Zealand’s lowest-income households and the 194000 children within them. The bill amends the schedules of the Social Security Act that set out benefit rates enacting the increase to core benefit rates for families with children on 1 April 2016 and where necessary creating specific rates for households with one or more children where none exist now. A similar increase will be made to allowances for students with dependent children both to ensure that the children of low-income students share these gains and to reward students’ efforts through study rather than creating an incentive to move back on to a benefit. This increase to student allowances will also occur through regulations and will also be in addition to the consumer price increase.The core of the package and the bill is balancing more assistance and expectations for families with children while out of work with increased financial support to enter and stay in employment. We know that working families with children can struggle often as they enter work and their combined incomes are low. That is why with our childcare and tax credit changes over $300 million within the package is focused on ensuring that work pays for low-income families with children and that their incomes lift helping to ensure they can meet the needs of their children in a way we all expect to.Tax credit increases from 1 April 2016 for working families with children will provide $12.50 a week more in the base rate of the in-work tax credit delivering that full gain to families earning $36350 or less a year. It will also provide families earning more than $36350 a year with an increase in their in-work tax credit which could be less than $12.50 depending on their exact income and provide an extra $12 a week to working families who earn less than $27000 a year and are receiving the minimum family tax credit so that combined with the in-work tax credit these families’ weekly incomes are increased by $24.50. Together these changes will benefit over 203000 low-income working families and their 383000 children.To ensure that taxpayers’ investment is well targeted to lower-income families the bill at the same time increases the abatement rate for Working for Families payments by 1.25 percentage points and advances the timing of future changes to abatement rates and thresholds. A final provision in the bill as with every other major benefit and tax credit change provides a backstop that can cover exceptional circumstances and any unintended consequences due to the complexity of the tax and benefit system. Taken together this bill and the Budget package it supports will mean that almost every low-income New Zealand family with children will be better off.I commend the Support for Children in Hardship Bill to the House.JACINDA ARDERN (Labour): There are many reasons why various members of Parliament come into this place or enter into politics. Child poverty has always been one of my main motivations and it is helpful perhaps in that regard that child poverty is one of those issues that are man-made. If we are looking for an issue where the Government absolutely can make a difference it is an issue like child poverty. But how to make that difference is the question that those who are interested in this area grapple with. Well helpfully the evidence—the numbers; the whole picture that is built out of those statistics—tells us exactly what we as politicians need to do. That is what makes this area so frustrating. There are 260000 children in need and we know exactly what we need to do to help them. I would liken it also perhaps to knowing where there might be a site of frequent car crashes—where there are continual accidents because there is a blind spot. You go begging to the Government to fix the blind spot. Well today the Government has put up a sign.Let us be clear that any extra support that is going into the homes of vulnerable families is absolutely welcomed. This side of the House welcomes the fact that the Government has today—in my mind really for the first time—genuinely acknowledged that there is severe hardship and poverty in New Zealand. But now that it has acknowledged there is a problem it has an absolute obligation and responsibility to do more because that is what the evidence tells us we need to do.The first thing we know from the numbers—the measures of persistent poverty—is that the longest period of time when hardship is experienced in a child’s life is actually when that child is first born. That we also know is the most critical time of a child’s life. Instinct will probably tell you that that hardship is most often going to be the situation of sole parents. It is harder for them to go to work because they are the sole caregiver and that poverty generally lasts for 3 to 4 years in those earliest yearsof that child’s life. So yes giving those families an extra $25 a week is a good thing but let us also be realistic. For a family with one child $25 is great. What about families with two children or three children? That payment is per family not per child. This is the point the Children’s Commissioner was right to make. It is ultimately roughly enough for a large pack of nappies for a week.In the Labour Party we looked at the evidence too. That is why when we developed the Best Start package we thought that we needed to give those families $60 a week that we needed to give that per child and that we needed to make sure it lasted for at least the first 3 years of that child’s life. That was what Best Start absolutely did. It was targeted but it was more generous. That is what the evidence absolutely told us to do. In the Labour Party we also recognised that that is one part of the picture. The second part of the picture is that there are families in poverty who are working. This Government has said persistently that the way to get out of poverty is to get into work. If only that were true but that is not what our economy is delivering for New Zealand families. Two out of five families living in poverty are in work.Not all work is born equal in New Zealand. Not all work is decent work. Not all work means that families are free from the burden of poverty and that is why we absolutely needed a Government today that acknowledged that—that looked at the evidence from the Growing Up in New Zealand report which said that some families are working multiple jobs just to survive. In part this bill potentially exacerbates that problem. Yes the Government is giving a bit of extra support in welfare for families but it is also placing extra work obligations on parents of children—no longer at the age of 5 but at the age of 3. That does not acknowledge the reality for many of our sole parent caregivers. Finding a job is one thing but we must point out that in this Budget there is nothing about creating work.Last year 41 percent of jobs in New Zealand were created by whom? Small businesses. They get nothing in this Budget. If you want to help families to find work then help the people who create the jobs that they move into. Finding jobs is one thing but making sure that those jobs are paying decently is another. Also making sure that the hours that you find in those part-time jobs fit in with your early childhood education care is another question entirely. Part-time work is often at hours that are not family and child - friendly. Again we need to be realistic about the kind of environment that these parents are going to be operating in. Labour has serious reservations about this element of the bill and this is exactly what we will be looking at in the select committee.It is also about the bigger picture. The evidence has always said that to tackle child poverty you need a plan. In the wake of this Budget the Children’s Commissioner has today said that this extra payment although good does not constitute a plan. A genuine plan that really wants to fix child poverty would make housing affordable. We know it is a fact that some families are using 50 percent of their income just to make sure that they have a roof over their heads and sometimes that roof is damp and it is cold and it is crowded. If we are genuinely addressing child poverty we need to make sure that housing is affordable and available to those families. That should have been part of the plan.We need to make sure that health care is genuinely accessible. Some of these families are experiencing such dire circumstances that even though it might be free for their child to go to the doctor the parent who is meant to take them has debt at their local clinic and so does not go because they know that they will not be able to get an appointment before paying their debt. I have heard of stories of families who have lost their jobs and whose kids have contracted scabies. Although they have managed to go and get the treatment for them they cannot even afford the hot water that is required to do the hot-water wash to rid the family of that affliction. Poverty is a vicious cycle and it never affects just one part of a family’s life.We would also be making sure if we had a genuine plan that we address the hidden costs of education and make it accessible. Labour was committed and remains committed to a full whole-of-Government plan. We have a bill in the ballot called the Child Poverty Reduction and Eradication Bill. It is all about making sure that the Ministers for housing education health social development and finance all have responsibility for a package that deals with child poverty. For us Best Start—that $566 million package—was only one part of the picture and for this Government this bill should be only one part of the picture.One extra thing: on child poverty a critical difference between us and this Government is that we are willing to putin place the target. We are willing to put a number to how much we are committed to reducing child poverty by. Why has that Government not done it? I know from having done numbers for ourselves how hard it is to genuinely lift a family out of poverty and this measure today will not do it. It just will not and we will report on how much we do on that target in every single Budget.I leave my final words for the place where this all started for me. I talk a lot about having spent a few years as a child living in a town called Murupara. The people in Murupara who found themselves in hardship found themselves in that place ultimately because their region and their town were dependent on forestry. In the 1980s that industry was absolutely gutted for them. That was what ultimately drove the poverty in that town. A measure like this today will not solve that problem for the people of a town like Murupara. We need ultimately an economy that works for everyone and that gives people hope. Today the Government acknowledged that we have a problem but sadly it did not fix it.ALFRED NGARO (National): I rise to take a call on the Support for Children in Hardship Bill in its first reading. As the chair I look forward to the bill coming to the Social Services Committee a very hard-working committee that looks forward to the debate to the deliberation and also to hearing the submissions. It is always good to speak after the member Miss Ardern. She commented about the blind spot in regard to poverty and the intention coming to this House. I remember in the 2014 elections at one of the debates around poverty she was challenged about the fact that 142000 children were still in poverty during the time of the Labour Government. Her response was this: “It was a job unfinished.”—it was a job unfinished. So although the talk is about children in poverty there was a job that was unfinished by the Labour Government which talked about that. When talking about figures it is interesting that those members are talking about that now.The issue about a plan—this is a plan. As the Minister of Finance said this is a plan that is working for our children in hardship and for our families as well. How do we know? Well we can talk about ours—and I will in a moment—but in its state of the nation speech A Mountain All Can Climb out of the 22 indicators the Salvation Army gave us the thumbs up on 14 of them. I just recall at a glance that with regard to child poverty it was thumbs up for reducing it by 2 percent. With regard to children at risk there was a reduction of 15 percent. I could go on. There were 15 indicators by the Salvation Army with regard to the reduction of child poverty.As this bill comes to the House I say it is a good bill. Can I commend the Minister for Social Development the honourable Minister Tolley for the work that she has done to put this together. Can I also acknowledge our previous Minister for Social Development the honourable Minister Paula Bennett who is here as well for the work that she has done and for the leadership that she has taken for us as well. It was great to hear from the Hon Te Ururoa Flavell and this is what he said. He said that it has taken almost 43 years—in fact back to 1972—since the base benefit rate was actually increased. Under a National Government that is what has happened. What is it doing? It is doing this. As the Minister has said there is a vision and a plan for reducing hardship for children and that is what this bill is intending to do. It has a theme that I think is really important. It is this: your circumstances should not define your destiny. I think that is very important.Part of the amendments in this bill which is an omnibus bill are around the Social Security Act of 1964. If I quote from the Act in Part 1 which is its purpose and intent there is section 1A(a)(ii). It indicates that the purpose of the Social Security Act of 1964 is “to help people to find or retain paid employment;”. Section 1A(ca) says it is “to provide services to encourage and help young persons to move to education training and employment …”. I mention these because I think it is important for the public to know that the bill at hand is in line with the intentions the purpose and the principles of the Social Security Act which are to provide opportunities for employment for those who are actually in need as well. We know that employment lifts our families out of hardship. We think that is important. The bill is a balanced mix of greater work expectations. Two-thirds of children are living in hardship and we think that that is important—80000 are in sole parent families hence the reason why this bill is focused on that. We know that nine to 10 of those children are from sole parent families and we think that that is important as well.So we think that this bill will go to the select committee. We look forward to the submissions. The benefit rates we think are going to be quite important news to our communities. Can I finally just conclude my remarks briefly because I think this bill is due for its reading and its referral to the select committee by saying that the comments that are made about children in poverty are often made about Māori and Pacific children. It concerns me that in our communities a stigma is created by the Opposition about that when there is all the talk there is all the rhetoric but there is not the plan to be able to make a difference. I believe that this bill and its intentions will absolutely make a difference to those families that we are talking about.Jacinda Ardern: Now you’re just not telling the truth Alfred.ALFRED NGARO: I look forward to this bill. I look forward to the debate even if Ms Ardern returns to the Social Services Committee as well. I think that this is going to be good news for our communities. I look forward to the discussions and the submissions and I commend this bill to the House.CARMEL SEPULONI (Labour—Kelston): I just want to start by talking to some of the points made by the former speaker Alfred Ngaro. No one at all—at all—on this side of the House today has referred to or stigmatised Māori and Pacific with regard to poverty. It was he who decided to bring that up. In fact we are talking about children in poverty more widely. It does not matter what ethnicity they are. We are talking about children in poverty and the obligation and the responsibility that we have here not just the Government but the entire Parliament to make sure that we are responding to the needs of children in poverty. Even just looking at the title of this bill the Support for Children in Hardship Bill I cannot help but say we all need to remember that these children come from households with caregivers who are also experiencing hardship. When we talk about supporting these children we do need to be talking about how we can support the people who are looking after them to take them out of hardship. We of course support any measure that will put money into the pockets of New Zealanders experiencing hardship—New Zealanders who are our most vulnerable. However this bill does come with conditions that could have repercussions and those are the repercussions that I want to talk about today. Those are the things we need to think about and consider as we look to push this bill through.Labour is concerned about the implementation of the proposed work obligations on parents. It is not that we do not support parents going out into the workforce. It is not that we do not think that it is a good thing for parents to be out in the workforce. It is just that when you are saying to parents that no longer is it that when their children are 5 years old they have to go and look for part-time work it is at 3 years old then there are repercussions. We have heard widely in the media lately that there are real issues with things like accessibility to quality childcare arrangements accessibility to quality early childhood education. Unfortunately many of the areas where we have people living in hardship are the areas where those people have less access to quality early childhood education. When you put these parents in the position of having to being forced to go out to work when their child is only 3 then you are also forcing them possibly to put their children into substandard childcare arrangements into centres that they are not comfortable with into centres that they are not sure about the quality of and that is something that we should be concerned about. No parent should be forced to put their child into an early childcare centre if they are not sure about the quality that will be provided there to that child.The support that will be required for these particular parents particularly sole parents to actually get into the part-time work that will suit their circumstances is quite immense. These parents need part-time work that fits within particular hours because of the childcare arrangements that they have. They may have an older child who goes to school from 9 to 3. They may want to fit it into that time frame—it makes sense. They may need flexibility more flexibility in their work because of the fact that we know that the younger the child—any parent knows this—the more likely they are to get sick particularly when they are going to early childcare centres. Things just tend to float around. So they are going to need work that will give them that flexibility. They are going to need work that will hopefully be secure and give them the money that will ensure that they are actually going out of hardship. But what really concerns me is that here we have this move to push sole parents out into work increasing the obligations around work but at the same time what we see in this Budget is an actual $91 million cut to the job seeker budget. So here we have higher expectations on these parents but then a cut to the support that they will be getting from the State to actually get into the work that they are required to take up.I can only presume that the $91 million cut to jobseeker support which is in this Budget is because that Government thinks that the total number of beneficiaries is going down. But we have seen research around the future of work around the increasing issues we are going to have for security in work around the changes in the nature of jobs that are out there and the fact is that actually we may see more and more people going in and out of employment because of the changing nature of work. So to cut $91 million from the job seeker budget when the Government is extending the obligations on sole parents around working as well as the fact that we know that moving forward there are real issues with regard to the future of work and the security of work is actually a little bit negligent I think of that Government. To say that work is important to continually rattle off the importance of work for beneficiaries but to cut $91 million from the job seeker budget is a little bit irresponsible of that Government.We support the idea that an additional $25 will be going into the pockets of beneficiaries every week. It is not a lot of money to many people here in this House but to beneficiaries it will make a little bit of a difference. But we do need to refer back to the policy that we had leading into the last election where we actually had committed to putting in an additional $60 into the pockets of beneficiaries with children under the age of 3. That would have made much more of a difference. As my colleague Jacinda has said—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!CARMEL SEPULONI: —the $25 extra that these beneficiaries will be receiving will actually not even come close to taking them out of poverty. When Government members talk about addressing the hardship when they talk about addressing the poverty we actually need to see as the Children’s Commissioner has said a real plan not just a few sticky plasters. This is really what it is. It is not even a packet of sticky plasters. It is one sticky plaster that is going to come off the scab and then there is nothing to replace it and nothing is actually better.We acknowledge and are very glad with the Government’s announcement that National has finally acknowledged that Working for Families lifts incomes and it has continued with Labour’s sensible economic policy. What did they call it at the time? When we introduced Working for Families when we were in Government National referred to it as—Hon Members: Communism by stealth.CARMEL SEPULONI: Communism by stealth.Hon David Parker: John Key.CARMEL SEPULONI: John Key himself referred to Working for Families as communism by stealth. So it is heartening to know that eventually National has come round to the fact that it is Labour’s policies that are responsible that are effective and that actually are all about good economic management of this country.I just want to refer back to the fact that we are talking about parents being obligated to go out to work. So they will be required to put their children into early childhood education from the age of 3 so that they can take up that part-time work. I just want to say that when it comes to early childhood education when it comes to the arrangements around supporting sole parents it was Labour before the last election that proposed extending the subsidy for early childhood education to 25 hours a week. It was Labour that wanted to extend the provisions around parental leave. It was Labour that wanted to introduce a $60 a week Best Start payment for children under the age of 3.So I do want to acknowledge that yes it is a surprise as the Children’s Commissioner has said that National has done this that it has decided that $25 extra a week for a beneficiary is a good thing but as the Children’s Commissioner said this is a surprise but it is not a plan. As my colleague Jacinda has said—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!CARMEL SEPULONI: —Jacinda Ardern has said—this will not effectively address the issue that we face of child poverty. It will not necessarily address the issues that the 260000 children who are living in poverty in New Zealand are faced with every day.We will be supporting this bill. We have reservations about this bill particularly with regard to the obligations on sole parents to go out to work—not work in general but just the extension of the work obligations—but because of the fact that it does put a little bit more money into the pockets of beneficiaries we will be supporting this bill.MATT DOOCEY (National—Waimakariri): It gives me great honour to rise and support the first reading of the Support for Children in Hardship Bill. As a first-term member of Parliament and hearing my first Budget it was one of those moments where time just seemed to stop. There was plenty of time to soak in all the news and all the information. I think today will be a definitive point over the next year over the next 2 years and over the next 3 years. What I mean by that is that this Budget has proved that the National Party is the working people’s party. We are out there working for the people of New Zealand but we are listening to the people of New Zealand. Why I know that we are the working people’s party is that we have created over 194000 jobs since 2011 and we will go on to create tens of thousands more. That is important for this bill because we know that job creation reduces child poverty.The Budget announced a $790 million child hardship package. Working families who earn less than $27000 will get a $24.50 increase to their Working for Families payment every week. That is 4000 families. This National Government is the working people’s party. Families earning $27000 to $36350 will get a $12.50 increase to their Working for Families payment. That is 50000 families in New Zealand.When I campaigned last year I met many people who were voting National for the first time. They had voted for Labour all their life but they knew that we were working for New Zealanders and we were listening to New Zealanders. We are delivering better jobs and better incomes. They said to us to support the most vulnerable. That is why for beneficiary families—how much time?Todd Muller: Keep going.MATT DOOCEY: We are increasing the benefit by $25 every week. That is 110000 families. I know that when we look back we will know that we have worked hard for the working people of New Zealand and we have listened to them.I am proud of this National Government which is working hard for the working people of New Zealand. Thank you.JAN LOGIE (Green): I would like to start my speech on this bill by paying tribute to sole-parent families on a benefit who are struggling to do the best for their children who are parenting alone 24 hours a day 7 days a week and who are struggling to be able to put food on the table and feed their children. I acknowledge their children all too many of whom do not have a bed of their who do not have enough to eat who are surviving on sandwiches because some days that is all that is left in the budget at the end of the week who do not get Christmas presents or birthday presents because there is not enough money in the family budget to be able to pay for them and who cannot afford schools trips. I really want to acknowledge those children. I want to acknowledge the New Zealanders who have been fighting for years and who have been raising their hearts to the Government to stand up to change this situation. The well-being of our children is the soul of our country. When our children are suffering we are suffering as a country. So I want to acknowledge that fight and all those people who have forced the Government into this measure which is the first time that benefit rates have been increased since 1972.The Greens have been raising issues of child poverty for over a decade now. We are passionate about changing this reality because we know it is possible. Although we are hearing from the Government that this is the first time since 1972 that benefit rates have been increased the Government is admitting the fact that it cut the benefits in 1990 and that we are still not even returning with this increase to the level they were at in 1990. For most families this $25 is not actually $25 because this $25 will be eroded by cuts to the accommodation supplement and the temporary additional assistance supplement which many families are using just to get by. So the $25—which is the cost of say nappies for one child—is not even going to be that much extra in the hand for all too many of our families. So when you think of those children who are going without shoes who are going out without raincoats who are going without school trips and who are going without birthday presents and enough food to eat we know that this is not the answer. The Greens will support this bill because it is something. Those children need something but they deserve a whole lot more than this.I also really just want to raise a very real concern that we have with this bill. It is another example of the Government giving with one hand and taking with the other. What this bill will do is require parents with children who are just 3 years old to go out and look for 20 hours a week of work. Sole parents who are doing the job of caring for their family alone are now going to be expected to be working for a minimum of 20 hours a week as well as providing for the needs of their children. We know that that may actually mean a reduction in their incomes because of the abatement on the benefits. It will work out to I think about $2.20 an hour extra if they are getting $15 an hour in those jobs. We know most of those jobs sadly are at very minimum wages. That is actually probably not going to cover the cost of travel childcare or the clothes that are expected to be worn in that job—let alone the extra needs of those children to compensate for not having their parent there. I really want to say that although we are hearing a lot in the House about how we expect you to work if you can work the Green Party believes that caring for young children and children with complex needs is work. It is something that we value and that we believe will pay off in the long term for the entire society if we support it.As a society we have no concept yet of what the consequences are going to be in 20 years’ time of a generation of adults as they will be by that stage who have not had time with their parents who have been in the care of strangers for so many hours a week and whose parents have lost out on the opportunity to participate in Playcentre kōhanga reo or other family-centred childcare movements that have provided so much to our communities and so much in terms of growing knowledge around parenting for those families and our children. We have no concept yet of what the consequence will be of separating parents from their children as these kinds of policies are doing. I think it really really requires from this House and from the publicsome deep thought about this issue.The Green Party will certainly not be supporting this bill past the select committee stage unless this changes because our children deserve at least one parent who is able to be there for them in those early years. They deserve that ability for attachment and security. Again as is my wont I will remind this House that the indications are that of sole parents 70 percent are probably leaving violent relationships. Think of the needs of those children and that woman—typically—to resettle themselves to recover to actually bed in and get well and move on in their lives and think about whether that is actually possible while they are juggling the care of their children and working 20 hours a week. I would say from my experience of working with women in that situation that for many of them it is not possible and the needs of their children will suffer. That will put many women in a situation of feeling as if they are conflicted enough to go back into a relationship that is not safe.This bill raises many many concerns for us as a party and as a House. Also I really want to mention that while we are being told the Budget will also offer increases to Working for Families it is a little bit more complicated than that in that the change to the abatement rate without changing the abatement threshold will result in a family with one partner working being worse off than they currently are if their annual income exceeds $36406 or if they are getting $17.50 an hour. An extra 2c-per-hour income for those people will eat up the entire $12.50 increase in the base rate for the in-work tax credit component of Working for Families. With incomes still well below a living wage those people will actually be worse off under this proposed Working for Families regime. So we are being told by this Government that it has suddenly got the message that everyone’s lobbying around the welfare of our children has got through—that the Government has got it! It is making this change to Working for Families but in actual fact it is such a marginal change and within that change some families are actually going to be worse off.I am pleased that this bill is not passing through all stages under urgency because there certainly seems to be enough in here that we need to look at really closely. To conclude I really want to go back to the fact that we have over a quarter of a million children living in poverty in this country—between 60000 and 100000 without decent shoes without enough to eat without Christmas or birthday presents or without warm clothes or a bed of their own. Those children need us to fix this problem and sadly this bill will not fix this problem.DARROCH BALL (NZ First): It is a pleasure to rise on behalf of New Zealand First to address this bill. We will be opposing the bill for a couple of very good reasons. Before I get into the reasons why I would like to go back to the actual speech that the Minister of Finance gave today.Delivering Better Public Services: put aside for a second the actual Public Service targets that this Government has which it established in 2008 which have never been independently reviewed and which I have asked both Minister Tolley and the Minister of Finance about having reviewed and have been refused. Put that aside. There is a quotation here from a speech given earlier today which I would like to share. I think it gives a definite perspective to the priority that this Government has. It goes like this: “We’re willing to pay a bit more upfront to get real sustainable change and in doing so we can generate significant long-term savings for the Crown.” In the same sentence in the same breath we have Mr English purporting that the intent of his bill is to have some real sustainable change for the future but in the same breath he is mentioning the long-term savings for the Crown. And that set up the theme of his speech today under delivering Better Public Services for this country. Because in every single sentence he said in every single paragraph the Budget was about cost-cutting it was about saving it was about dressing up the real needs and the real changes that need to happen to solve child poverty—one of the major priorities that he said the Government was going to have—into cost-cutting measures and long-term savings for the Crown.I would also like to give a little bit of perspective to this bill and to the speech that Mr English gave today by using a little bit of a measuring stick. In regard to the child hardship package which recognises lower-income working parents the total package is around $240 million in each full year. The measuring stick that I would like to use is the flag referendum which will cost just under $30 million. That is more than 10 percent of the total that this package is going to cost each year. Where is the priority of this Government? He goes on to say that the Budget also provides a new operating fund of $36 million. We have got a flag referendum of just under $30 million: where is the priority of this Government in dealing seriously with child hardship? We have new funding for the existing Children’s Team that he was talking about. It gives an extra $23 million. That is even less than what is going towards the flag referendum. So where is the priority that Mr English purported he had for solving child poverty for giving more to the needy in our country? New Zealand First says that it evaporated as soon as he opened his mouth.The questions that came out of both the bill and the speech that was delivered today were first of all: why have these changes occurred? Was it because there was a need for them to occur? Was it because the Government can now afford for them to occur? Or was it because the Government really has no choice but to make those changes now? What rolls out of that is: why has it taken 7 years in Government for these changes to occur? Increasing the minimum benefit levels is a step in the right direction as we have heard from a couple of my colleagues in the House already. But the step that has been taken—is it enough? Of course it is not. New Zealand First believes that there should be a minimum social floor that no one should fall below. It should not be a reward. It should not be a punishment. That is what is happening at the moment. That is what this Government delivered in the Budget speech today. The benefit should be a safety net. It should be strong it should have integrity and it should have the ability to not allow people to slip through and live in poverty. That is what is happening right now and that is what will happen even after these Budget changes occur. The Government has the absolute responsibility to not allow supported poverty to occur. That is what has been happening and that is why it will continue to happen with this Budget.The Minister also talked about investment in the front end and I would like to quote: “We’re willing to pay”—like I said before—“a bit more upfront to get real sustainable change”. But what this is is plugging the gap. We have heard about a plaster over a wound but this is plugging a gap with the minimum amount of financial assistance. This is addressing the symptoms; it is not addressing the causes. New Zealand First believes that the major priority should be investing in the front end before individuals need to end up being caught by that safety net. The priorities should be investing in our youth and our young people especially unemployed youth and young people. That is the front-end investment. The KiwiSaver kick-start contribution is an example of front-end investment and that is now gone. Job creation for our young people is front-end investment and that is now gone. What we have here is a carrot-and-stick approach from this Government. It is quite simple: the number of unemployed youthis at one of the highest levels that we have had. It is steady and has not changed over the last 7 years that the National Party has been in Government. Unemployed youth will become unemployed adults. And as the Minister himself said today two-thirds of all children in material hardship are living with a parent on a benefit. That is the end result. That is the symptom. So why is this Government concentrating on the end symptom and not the cause and not on investing in the real front end of this issue?I would also just like to mention Working for Families and families earning $36000 a year. Low-income working families earning $36000 a year before tax will get $12.50 a weekextra but what does that mean in real terms? It is just over a 1 percent increase. If we compare that for example with the cost of fruit and vegies that cost has increased by 5 percent in just the last 12 months. Again where is the priority of this Government? The restrictions that are being put in place for people on benefits are cost-saving measures dressed up as help and encouragement. With the sole parent restrictions sole parents are in fact the group that is getting positive results right now. They have the highest number of exits off that benefit and the lowest number of entries. What the Government wants to do is make the sole parent benefit like the job seeker benefit. But the job seekers group has one of the worst results. Where is the logic in that? Carmel Sepuloni mentioned the impact of parents having to go back to work when their child is 3 years old and not 5 years old. Let us take a step back for a second and forget about whether that is the right or the wrong thing to do and let us ask what the social impact is for that child. What is the social cost for that child of the parent leaving the house when the child is 3 years old instead of 5 years old? Once the Government answers that question it will also see the priority that it has when dealing with child poverty and with the needy and the vulnerable in our society.As I said the increase in the benefit is part of the solution; it is not a plan and it is not the answer. I am looking forward to discussing this bill robustly in the Social Services Committee but at this stage New Zealand First cannot support this bill.TODD MULLER (National—Bay of Plenty): What a privilege to be able to stand to speak this evening to the Support for Children in Hardship Bill which gives effect to the hardship package that we announced this afternoon. Listening to the attack from the other side—I will tell you earlier today when Bill English was giving that Budget speech you could really see from the back of the House the impact that it was having not only on this side but particularly on the other side.Yesterday the Leader of the Opposition referenced my name in a speech and said I was “Mooller”—Todd “Mooller”. Well it is actually Todd “Muller”. It rhymes with “muller” as in “mullet” and the people who looked like stunned mullets as we were outlining a once-in-a-generational change were those on the other side of the House. It has been 43 years since benefits have risen and it is this side of the House—it is this Government—that has made—Hon David Parker: Looked more like a dead fish.TODD MULLER: Well I am sure you will turn up with two dead fish next week Mr Parker. It will happen. But seriously we have seen quite an afternoon here and what a tremendous bill to be able to stand up and talk to this afternoon.What a change that we can talk to. The first rise in 43 years—$25 a week for those with families on benefits and immediately it gets ridiculed by the other side. It is significant money and it talks of a Government that cares and when the Government is in a position to respond to the needs of New Zealand it does. We were handed an absolute cot-case of an economy. It has taken 6 years to get to this position and now we are in that position to respond to the needs of New Zealanders. That is exactly what we have done and that is the reaction we are getting. The Opposition members know it from the reaction that is going on outside.This is a very very good bill. It is great to be able to talk to it—194000 jobs since 2011. The reason I say that is important is it means there are 42000 fewer children living in welfare-dependent homes. We are making a difference and therefore we can put a package like this in place to encourage those who are still yet to make that journey to be able to do it. We will stand beside them and make sure that in their hour of need we are there. We are running an economy that enables them to move from welfare to work. This Government is working we have a plan that is working and I cannot wait to support this bill through the various stages of the select committee. I commend this bill to the House.CATHERINE DELAHUNTY (Green): It is always interesting to reflect on wealthy people’s understanding of poverty. There is a tone that I think possibly comes from greed dependency. We hear a lot about benefit dependency but we do not acknowledge greed dependency in our country and it is quite a problem. We will be supporting this bill in its first reading to the select committee because of the 25 bucks because we cannot deprive people of that but there is still a misunderstanding of the issue when the scale of the problem is so much greater than the supposed plan and the supposed solution. I would rather not talk about mullets or anything else today; I would like to talk about the kids. Today is in some ways a victory for the amazing group effort out there in the community to make child poverty such an important issue that the Government was unable to deny it. I would like to pay tribute to people like the Child Poverty Action Group Every Child Counts the New Zealand Council of Social Services Unicef and many more and the Green Party for our leadership through Metiria Turei’s unfailing and absolutely determined commitment to make child poverty an issue that this Government could not afford to ignore in this Budget because the focus groups told it that it could not afford it.So before we get all warm-hearted about the caring Government let us just acknowledge that this campaign has achieved a small step. The step that has been achieved which is really important tonight is an acknowledgment that income matters. I have sat in this House for the last 6½ years hearing how poverty has got nothing to do with money; it is all about individuals not pulling up their own bootstraps it is all about the failure of the education system and teachers and it is all about people not grabbing opportunity. Anybody who has worked at the front line of inequalityin this country knows that income is critical. The Government has been forced to give 25 bucks more a week after 43 years. I am not the world’s greatest mathematician but anyone can tell that that is not going to be enough after 43 years of Governments failing to lift the benefit. But we are not going to look this tiny little gift-pony in the mouth because actually any money in the hands of families right now is good. They need it but it is not a solution. So we would like to just acknowledge that it is not a solution; it is a tiny little step. The solutions have to be much more structural and much more generous.If we can afford the nauseating tax cuts of several Budgets ago for the wealthiest people we could actually afford to extend the in-work tax credit to the families who really need it. That would be a generous move. That would be a structural move. Instead of that we have got giving on one hand and taking from the other. On the one hand there is this extra money; on the other hand there is an increased obligation. An increased obligation is always a euphemism for going down to Work and Income for another ritual of humiliation. Those of us who have worked as beneficiary advocates are under no illusions about that experience. It is worse for the people who actually have to do it but we have witnessed it and what we have seen is desperate families including many solo parents particularly women-led families being told they are failures and that they will be sanctioned if they do not get work. In this bill they now have to have 20 hours’ work a week. No amount of description of the obligation as “Oh we’ll be flexible about this.” cuts any ice. We can sit in this House and use that language but go down to Work and Income and witness what actually happens when families with no money are forced into social obligation.Let me talk about early childhoodeducation. The Green Party has demonstrated just by reading the officials’ briefing documents that participation in early childhood education is not sufficient; it is quality. But now we are going to make parents with a 3-year-old look for more work while the children must be in early childhood education of whatever quality. Until we commit to the family-centred models that my colleague talked about like kōhanga playcentre and kindergarten which are losing families all the time we are going to be putting kids into some good services and some utterly indifferent ones. If we do not listen to the Brainwave Trust about what is important to the child in its first few years if we will not listen to the child experts if we will not listen to the Children’s Commissioner if we will not listen to Jonathan Boston who said today reading the bill that actually a number of the measures of poverty are failed under this bill and that the $25 will not make a difference—if we will not listen to those people because we are so inside our privileged little bubble of “We’ve done a nice thing today.” then we are failing the kids of this country. Kia ora tātou.SUE MORONEY (Labour): I rise to support the Support for Children in Hardship Bill because something is better than nothing. Still I think in this context we can see once again just how little value this National Government puts on parenting. I think that this bill more than any other bill really demonstrates this. Work in the Government’s view is not the very important and valuable work of raising children. That is seen as being not nearly as valuable as maybe a zero-hour contract for 20 hours a week. Let us be honest: for anyone who really knows or who is in touch with what is going on out in the community these types of provisions where people who are in receipt of a benefit are forced out to work—and this bill forces them to go out and seek part-time jobs from the time that their child is 3 years old—are driving a sort of employment market that actually most New Zealanders are embarrassed and ashamed about. It is forcing the type of labour market that sees the growth of zero-hour contracts and that sees the growth of our low-wage economy.I come from Hamilton and the sort of growth in jobs that we are seeing in Hamilton is that a new Wendy’s or a new Carl’s Jr has gone up—at the same time scientists are being made redundant from Ruakura Research Centre. So we are getting rid of our high-value jobs and we are getting these minimum wage zero-hour contract - type jobs. And these are exactly the sorts of jobs that the Government is now forcing parents into when many of these parents have made the decision that they would rather spend the time—or that they need to spend their time—with their young children. This bill does not make any differentiation for parents in receipt of a benefit who are raising children with disabilities or with special needs. They too when their child is the age of 3 years need to go out and pound the streets and look for zero-hour contract work up to—now—20 hours. I am not sure why the Government when it required 15 hours of part-time work before now suddenly thinks that this can just leap to 20 hours’ work without it doing anything to grow jobs in our economy—because that is the other area where this Budget fails miserably.It is of some merit that the Government has increased benefits for families with childrenby $25 a week but—and here is the but—it is a bit of a swings and roundabouts thing because it is requiring these same parents to go out and seek these part-time jobs when their child turns 3 years old. They are going to have to pay more than $25 a week in childcare fees to enable them to do that. So there is the $25—and some—gone straightaway. So I think that although it is always good to see families with children get some more support from the Budget in this instance I think that we will find that this money disappears very quickly. It will evaporate with the other mean approaches that this Government is taking to cut spending in various areas.I am speaking on this bill because I am Labour’s spokesperson on women’s affairs and this Budget will have quite a severe impact on women and their role in parenting. I just want to make sure that the House notes that although the $25 a week in this bill is good—and we certainly support that—we have some real concerns about some of the other measures. At the same time the Ministry for Women has taken a budget cut in this Budget. It has a tiny little budget to start off with and there it is: women again not being taken seriously by this Government and having their hopes dreams and aspirations dashed by a miserable approach from this Government. Labour supports this bill but we think it does not go nearly far enough.JONO NAYLOR (National): For the last 12 months since I announced that I was going to run for the National Party I have been approached by a lot of people asking: “Why would you be doing that? Why would someone with a degree in social work be joining the National Party? Why would you get involved?”. After today’s Budget I do not think I will be getting those questions any more. Today in this Budget this Government has raised—has raised—for the first time in 43 years the real bottom-line benefits for people with families.Chris Bishop: How many years?JONO NAYLOR: 43 years. The question we have to ask is: why now? I have heard that asked from across the other side of the House today: “Why now?”. Well I can tell you why now. It is because we have been able to grow the economy over recent times. We have been able to grow the minimum wage—we have been able to grow the gap between wages and what people are earning on benefits—to such a level that we can now raise benefits without disincentivising people to go to work. That is what happens when you have got a Minister of Finance who understands families and who understands how an economy works: you can have a Government that is working hard to ensure that all of these pieces of the jigsaw fit together to make a country that works hard and that is delivering the kinds of outcomes that New Zealanders want.We find ourselves now in a position where families who are struggling those who are on low incomes—and we all know that there are families who are struggling in our communities—will get more money in their pockets through an increase in Working for Families. And those who are unable to work at the moment will see a greater amount of money go into their bank accounts each week to enable them to start to lift themselves out of the place that they find themselves in. That is why I am supporting this bill that is why I am glad to hear others in this House are supporting this bill and I look forward to discussing it with the select committee and to bringing it back to this House so that we can continue to make good progress for families in New Zealand. Thank you.Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): This is the Government’s seventh Budget. It promised a surplus some 6 years ago and we have not seen it. More important we are sitting here after the Budget has been read debating benefits not jobs. We would be debating jobs if National were doing its job and it is not. What we know is: given that the Government said the rock star economy would benefit far more New Zealanders in the regions we should be debating jobs here today but we are debating benefits. I wish we were debating the “Child Opportunity Bill” and that the recognition of poverty in this country meant that we would be talking about more than just $25. We would be talking about warm homes. We would be talking about jobs in our regions communities and small towns. We would be talking about how to support those children who are the most vulnerable learners instead of supporting charter schools. We would be talking about how we could support children and parents who have multiple vulnerabilities and want a hand up not a handout. This is an “Oliver Twist Budget” and we are debating $25 more going to vulnerable children. Well we will take it. We will take it but do not expect anybody on this side of the House to say “Thank you very much.”Chris Bishop: Ah!Hon NANAIA MAHUTA: Why? Because it does not fix the multiple issues facing vulnerable families and poor families out there in the community. Chris Bishop sighs. Chris Bishop sighs because he would prefer this side of the House to say thank you. In fact the Children’s Commissioner puts it far better than I could. Dr Russell Wills himself said: “I wasn’t expecting Government to increase incomes for … children. … Let’s be clear a one-off increase is not a plan for child poverty. … What we need is a comprehensive plan to reduce child poverty.” That comes from the Children’s Commissioner. He himself recognises that an isolated payment of $25 cannot fix all the issues. But we will take it and we will take it because we know the hardships that are faced by many children and families in the community in small towns and we know that they need it.But will it make a difference? I suspect not if we require parents to be work tested when their youngest child is 3 years old. Let me share a story. We are talking about a mother who goes to kōhanga and who volunteers her time because she is worried about the type of life her child will have and she knows that getting an education will make a difference. She has to be work tested when her child turns 3. She could make a critical difference to supporting the education pathway of her under-5-year-old child if she were able to continue to be the mother that she wants to be. The bill makes a number of other changes. We will get it to the select committee so that we can identify these types of issues which will I think start to unstitch some of the challenges of how to implement it.The other thing about the bill is that it really does not address some of the aspects that are really fundamental to work. In these days and times for people who are required to be work tested—when there are no new jobs in towns and communities and when people have to make changes to go to where there is work and they have to pay for childcare because they have got no support network of family to be able to help them raise their children—$25 will not make much of a difference. That is the reality—that is the reality. In fact I heard a constituent say “I want to be work tested because I want a job but God it’s demoralising. I go in there for my regular appointments and I have to answer the same questions and go through the same types of box-ticking tests.” She said to me: “It’s just demoralising. Give me anything. Give me a meaningful job because I want to be able to support my children and give them more.” But the jobs are just not there.Sue and I are both from the Waikato. We understand the realities of what is not happening in the region.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Sue Moroney.Hon NANAIA MAHUTA: Sue Moroney. Sorry to my fellow colleague. We are both from the Waikato. We understand the realities. In our area there have been more job cuts than jobs created and the types of jobs that people are having to consider are the jobs that do not really give them certainty. This is the challenge. With the 90-day bill being employed for 3 months is not a full-time job; it is just living from hand to mouth—hand to mouth.This bill should go to a select committee. I am pleased that it is going there because there are aspects of the bill that need to be looked at further to ensure that what is intended will actually make a critical difference to the lives of people. Just yesterday I was one of several MPs who were out on the steps of Parliament receiving a petition from ActionStation. I want to thank ActionStation for its efforts. It is a collective of organisations committed to putting child poverty on the agenda. It identified that far more needs to be done and that the Government needs a plan. This is an area in which those 260000 children living in poverty will increase unless we do something meaningful and comprehensive over a long period of time. We do not want to see that happen in a country like New Zealand.It is very important that people understand the parts of this bill that the Government is trying to implement. The other aspect is being work-ready and work tested for part-time work. I think about this provision in relation to childcare provisions and the practicalities that exist in small communities. It will be very difficult if a person has childcare provisions in the place where they live—say 26 kilometres out of their main city centre—and has to travel 26 kilometres for their part-time work. It will be very difficult to make those provisions fit with childcare and their preschool arrangements. I know. I live in a small town. I have tried to find those types of arrangements. But more important for people who do not have a natural family support network where they live this is going to be an impractical type of measure about which I think we will see many people express some concern. At the end of the day I think if we want to support families and children especially those who are the most vulnerable the changes need to be able to fit them as well as ensure that they are given a hand up and not a handout.There are simply not enough afterschool childcare opportunities. For example when an early childhood centre or a kōhanga finishes at 3 o’clock in some small towns you will not get early childhood centres that can take them from 3 p.m. to 5.30 p.m. In some communities that it is just not the reality. And where there is the opportunity to have that you have to pay a lot of money—more than $25. Those are some of the practical aspects of what the Government is intending to do—that is work test people to go into part-time work—and the reality of having children who need preschool education and then afterschool care. These are some really important things that the Government needs to be mindful of.We are not going to knock the bill to the extent that $25 will not make a difference but the issue for me is whether it will make a critical difference. I suspect not. It is a change. It is an increase. There is no doubt about that. But when you look at the real costs of childcare the real costs to someone who has no car of their own and is using public transport to get to a job $25 will not cover much more than an extra bit of bread and some milk hopefully—and they are still going to have to think about other pressures.The challenge as well when we talk about vulnerable families—families with more than one child—is that you are doubling up on the cost of shoes especially in winter of warm clothes and of kai. If we are really true to what we are hearing in the community there are already significant cost of living pressures on families who are paying a heck of a lot—a heck of a lot—in private rentals. Twenty-five dollars is something but will it make a vital difference? I suspect not. I do not want to look a gift-horse in the mouth and say “Pooh pooh!” all the way through. It is pleasing to see that some effort has gone into recognising that child poverty exists; the extent of which I challenge the Government should not be minimised by the piecemeal approach that it is taking here today. I look forward to hearing the deliberations of the select committee and to identifying how in fact in terms of the implementation of the bill it will make a difference to the lives of needy children. Kia ora.Dr PARMJEET PARMAR (National): I feel so proud to be a part of this Government led by the Rt Hon John Key. I would like to congratulate our Deputy Prime Minister and Minister of Finance the Hon Bill English on keeping New Zealand on track for such solid economic growth.It is a pleasure to take this call to support the Support for Children in Hardship Bill in its first reading. This National Government has been and is always focused on delivering for families and children because we understand their needs. We also understand the importance of a strong economy because we know that it is this strong economy under this National Government that is allowing us to commit this package to help children in hardship. New Zealand families also understand the importance of a strong economy.This Budget allocates $790 million in this package which is aimed to help children in hardship—some of those children who are in New Zealand’s poorest families. Yes there is this additional support being provided to these children raised in these households but at the same time we want to support families to get out from welfare dependency. We want to break that cycle of welfare dependency because we know that work is the pathway to success in life. That is why we want to get more and more people into work as soon as possible. Moving to paid work is the best way to lift more families out of poverty.Although an increase in benefit rates will help address the concern about children whose family’s resources have been falling behind those of other households over many years if we compare families dependent on benefits versus families getting into work it is clear that the financial circumstances of families dependent on benefits do not change much over time whereas the circumstances of families who get into work do change over time. We know that in the past year 74000 more people are in work and the average wage has gone up by 2.1 percent whereas inflation is negligible at 0.1 percent. National is focused on sustainable growth which is needed to support more jobs and higher incomes. I support the bill and commend it to the House. Thank you.A party vote was called for on the question That the Support for Children in Hardship Bill be now read a first time.Ayes 109New Zealand National 59; New Zealand Labour 32; Green Party 14; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 12New Zealand First 12.Bill read a first time.Bill referred to the Social Services Committee.Hon Peseta SAM LOTU-IIGA (Minister of Corrections) on behalf of the Minister for Social Development: I move That the Support for Children in Hardship Bill be reported to the House by 3 November 2015.Motion agreed to.Sitting suspended from 6 p.m. to 7.30 p.m.Social Housing Reform (Flexible Purchasing and Remedial Matters) BillFirst ReadingHon PAULA BENNETT (Minister for Social Housing): I move That the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill be now read a first time. This Government has embarked on an ambitious programme to improve social housing and support more vulnerable New Zealanders. This bill will allow the Government to build on the crucial initiatives announced in the social housing reform programme to increase the supply of social housing and support more people in suitable housing that meets their needs while they need it. The Government will spend more than $700 million this year on the income-related rent subsidy and that will increase by $154 million over the next 3 years. The number of social housing places available increases from about 62000 currently to 65000 by 2018.This bill does four things. The first and most important of these is the introduction of the ministerial direction power to allow the Minister of Housing in consultation with other housing Ministers to authorise the Ministry of Social Development to enter into tailored agreements to purchase social housing places. Currently social housing is paid for via the income-related rent subsidy. Income-related rent is paid by the tenant and is no more than 25 percent of their income while the second component the income-related rent subsidy is paid by the Ministry of Social Development and makes up the difference between the market rent and the income-related rent. The Ministry of Social Development is not able to negotiate prices or tailor contracts in any other way that allows social housing provision to be looked at differently and incentivises providers to enter the market. That is stopping the growth of community providers and means tenants are not always getting the best services. This bill retains the income-related rent payment in the Housing Restructuring and Tenancy Matters Act so that providers who want to continue with income-related rent subsidy payments can do so. But it also allows the Ministry of Social Development to enter into tailored agreements so that the terms conditions and price can be negotiated to promote better social housing outcomes and attract organisations into social housing.To be clear nothing in this bill will change tenants’ eligibility for the income-related rent subsidies or how much they will have to pay in rent. What it does do is allow the Ministry of Social Development to explore other arrangements such as long-term fixed-price tenancies that meet the needs of the Crown provider and tenants. Longer-term contracts assure that when a provider has a place available this place will be offered to a person on the social housing register. Providers would have the certainty of a contract with the Government—that they will be paid to house a certain number of people over a certain length of time and they can still be paid for properties when they are vacant for short periods before tenants. This means that if they are looking to finance construction or buy properties they have the guarantee of an income stream that they can use to borrow against. Providers have asked for this certainty so that they can make long-term investment decisions. This will increase the supply of social housing and see more local organisations investing in homes for their communities. Long-term contracts will also guarantee the Ministry of Social Development’s supply so that it knows it can place tenants with providers as their properties become available.Tailored agreements will allow the Government to pay more or less for certain tenants depending on their level of need. Pricing for these sorts of arrangements should be able to focus on the actual costs of supporting people not just some pre-prescribed formula; it will be the ability to negotiate these kinds of deals that can help get the right providers who offer the best services and quality housing for different cohorts of people. For example the Ministry of Social Development may want to enter into an agreement with a provider who specialises in people with disabilities. It will be able to pay more for the extra services that these people might need. This bill is being passed through all stages under urgency so that we can help the community housing sector to increase the supply of social housing places particularly in Auckland as soon as possible.In December the Ministry of Social Development released a registration of interest to providers who are interested in supplying 300 social housing places in Auckland. There was a large response with 19 community housing providers taking part. Their feedback was clear: that they need more flexibility in contracting to provide more places in Auckland. This bill will allow them to do that. This is an opportunity for the Ministry of Social Development to relieve pressure on the social housing register and engage further with the community housing sector about the different types of contracting arrangements it needs. Tailored agreements are not restricted to just community housing providers. Housing New Zealand is the largest player in the market and tailored agreements will be available to it as well.The legislation also makes three minor amendments to other bills. It ensures that payments for residential social housing provision under these agreements are GST-exempt consistent with the current treatment of residential rental payments. It clarifies that Housing New Zealand is no longer required to provide policy advice to Ministers. This role has been undertaken by the Ministry of Business Innovation and Employment and its predecessor the Department of Building and Housing since 2011. Minor amendments are being made to first-home withdrawal rules in the KiwiSaver Act. These ensure that any prior period of membership in a complying superannuation fund should count towards a 3-year eligibility period when the member transfers to KiwiSaver. This means that more KiwiSaver members have access to their savings to assist with the purchase of a first home.This bill is a major step in the Government’s social housing reforms and enables the Ministry of Social Development to be a smarter purchaser of social housing. We are backing tenants by creating a social housing sector that can house more people in housing that suits their needs provide essential support services and assist them back to housing independence where appropriate. I commend this bill to the House.PHIL TWYFORD (Labour—Te Atatū): The National Party is trying to brand this Budget as a Budget of compassionate conservatism. What gives the lie to that particular piece of double-speak is that the very first piece of legislation they are trying to ram through the House after this Budget is legislation that basically is designed to help them flog off State houses to their developer mates in a fire sale and at knock-down prices. It is the big pay-off. It is the big payback. Actually it is not compassionate conservatism at all; it is Cabinet club conservatism. That is what this is about: flicking off State houses to their developer mates at knock-down prices breaking up communities and throwing State house tenants out on to the street. That is the hallmark of this National Government and of what it is doing to State housing in this country.The bill is all about flexible purchasing. It is so flexible that it is all about giving the Minister the flexibility to do sweetheart deals with property developers because the Government is desperate to sell off State houses to anybody who will take them. They know that our most respected social agency the Salvation Army looked at this policy and said that it would not improve the lives of tenants. The Salvation Army ruled itself out. It said: “We do not want to have a bar of it.” and so did the Methodist Mission. Bill English was forced to concede that only by flogging off these houses to property developers would they achieve their ambition of divesting thousands of State houses worth billions of dollars off the Government books. This Government has been a bystander for the last 6 years while the housing crisis has been getting worse and worse. House prices in Auckland have gone up 87 percent in the last 6 years. The average house price has gone up by over $100000 in the last 12 months. We have got families living in cars and garages and yet the Prime Minister is deep in denial. He says that there is no housing crisis. He says that there is no risk of a bust. Things are all fine in Parnell apparently.New Zealanders desperately wanted the Government in this Budget to finally do something about the housing crisis. That is what people wanted and they have been cruelly let down today even though all the evidence suggests that for the past few weeks since the Governor of the Reserve Bank gave the Government a bollocking in this Parliament for its failure to do anything about the housing crisis it has been in a poll-driven panic to try to come up with things that will make it look as if it is doing something about the housing crisis. We have seen its half-hearted measure to target property speculators which based on Treasury analysis will be lucky if it nets a thousand speculators a year and brings in $18 million a year. It will not make a blind bit of difference to the rampant property speculation in Auckland. Today the Government announced a very good scheme to use vacant Government land in Auckland to build housing on but it was an idea that was developed—and the study for it done—in 2008 by the Helen Clark Labour Government. The National Government has been sitting on its hands for 6 years. It has done nothing with the idea while the housing crisis has been getting worse and worse. But in a panic before this Budget it dusted it off and presented it as if it were a new idea.The biggest con job of all of the failed policies the photo opportunities and the deception that is this Government’s housing policy is its State house sell-off. In the middle of a housing crisis when we have a spike in visible homelessness and in people living on the streets and in caravan parksall over the country only the National Party would think it was a good idea to sell off the houses that it already owns. It tried to dress it up for months by saying that the Salvation Army was going to buy those houses but the Salvation Army has ruled that out. Bill English does not care who the Government sells these houses to. He said that. He does not care who it sells them to; he just wants to get rid of them. This bill is about making it easier for the Minister to sell off those houses and to put in place sweetheart deals that will allow someone—anyone—to take these houses off the Government’s hands.Let us look at what has happened to Housing New Zealand under this Government. It has stripped Housing New Zealand of its powers and its functions and it has given them to Work and Income. What was once a full-service social housing agency has been reduced to the equivalent of a Government-owned Barfoot and Thompson. It is now simply a letting agency and this legislation is the final nail in the coffin. This Government has been selling off State houses all over the country without telling anybody. In the past year it has sold 50 houses in Whanganui at an average of 33 percent below the Government valuation blatantly undermining property values in that town and flogging off publicly-owned assets below their market value. That is an absolute shame.This Government has milked $500 million in dividends off Housing New Zealand in the past 6 years. Half a billion dollars—it has used it as a cash cow to prop up its fictional surplus which never arrives. It has tightened the eligibility criteria so tightly that even people who are in acute need and acute poverty cannot get on the waiting list. It has subjected hundreds of vulnerable tenants including the elderly disabled and families with young children to the needless stress and anxiety of tenancy reviews—fearful that they will be thrown out on the street by Paula Bennett. The Government has closed offices sacked tenancy managers and forced tenants to use an 0800 number. This bill now strips away the last functions that Housing New Zealand has. It is no longer allowed even to give the Government advice on social housing—that function has been taken away. Housing New Zealand is no longer allowed to do research and it is no longer allowed to evaluate the work that the Government does.State housing has a proud history in this country. It is how we make sure in New Zealand that every child growing up in this country at least gets a decent roof over their heads no matter how much mum and dad may be strugglingfinancially. It is how we make sure in New Zealand that every kid gets a decent start in life. That is why the taxpayer subsidised John Key and his mother to have a State house in Christchurch in the 1960s. The security of the roof over their heads gave the Prime Minister a good start in life. Paula Bennett benefited from the same generosity of taxpayers. Now the two of them—the worst hypocrites this House has ever seen—are willing to strip away and dismantle the very system of social support that gave those Ministers their start in life. Paula Bennett is happy to pull the ladder up. She and John Key are happy to deny a generation of young New Zealanders the same opportunities that they had in life. They do not care—they do not care.Just imagine a young John Key in today’s generation sitting on a suitcase on the side of the roadin some suburb in some city in New Zealand thrown out of the house that he and his mother called home. He is worried night is falling and he has no idea where he is going to sleep the night and no idea where they will call home. That is the reality for families all over this country. That homelessness has been made worse by the policies of this Government and by their utter failure to do anything meaningful about the housing crisis. The worst cut of all is that in the middle of a housing crisis and a housing shortage Minister Paula Bennett is dismantling the system of support that provides decent housing to the 4 percent—the most vulnerable people and the most vulnerable families in our country. What an absolute scandal.Selling off State houses breaking up Housing New Zealand and dishing out the bits to charities reducing Housing New Zealand to being no more than a publicly-owned letting agency and moving to a system of direct subsidies for landlords—that is what Bill English and Paula Bennett want to do. Their agenda here is dressed up in lots of nice words: “We want to grow the community housing sector. We’re stepping up with wraparound services. It’s all about the tenants.” It is not about the tenants at all. Because do you know what? We asked Paula Bennett under the Official Information Act what evidence she had for the policy of privatising State housing and for shifting that responsibility to non-governmental housing providers and you know what she said? She said: “There’s no evidence.” There were no documents. The Government had nothing to say. There is no evidential basis for this policy but that Minister is happy to preside over the dismemberment and the dismantling of Housing New Zealand—the very organisation that puts a decent roof over the heads of the most vulnerable families in this country.Mr DEPUTY SPEAKER: I am sorry to interrupt the member but his time has expired.MATT DOOCEY (National—Waimakariri): It is a great honour to rise and speak to this first reading of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. I would just like to acknowledge the hard-working Hon Paula Bennett and all the work she has done as the Minister for Social Housing. I must say as a new MP it is an honour and a privilege to be part of this National Government today which has delivered. We are working hard for New Zealanders and listening to New Zealanders.The purpose of this bill is to provide flexibility. It is right that we provide flexibility because in the care sector it is now a mixed economy of care. What I mean by that is it is no longer solely State provision. It is about the Government provision it is about private provision but it is also about community organisation provision as well. So it is right that we provide flexibility in a mixed economy of care. This bill is important as we negotiate and contract with social housing providers because it is about providing the right house to the right person in the right location at the right time.It reminds me of some statistics I read at the start of this year about Housing New Zealand stock. It was interesting that when we looked at demand for one-bedroom houses the demand was around 25 percent but the actual supply was only 9 percent—25 percent demand and 9 percent supply. Then you look at three-bedroom houses—24 percent demand yet 43 percent supply. That clearly evidences how we end up in this situation where we have one or two people living in three or four-bedroom houses. So it is right that we move to a flexible model that will provide people with the right housing at the right time in the right place in the right location.I know from my own experience—I worked in the United Kingdom in the social housing sector managing a specialist intervention team for people with needs in social housing. These people can have learning difficulties mental health issues possibly physical disabilities they might need education and training employment help and budgeting help. It is right that this bill will allow for and enable them to get wraparound services. What we know is that if people are put at the centre of their care their personalised care it enables them to become independent. We want people to go on and have independence in their housing. Not only do they become independent but their self-esteem grows their confidence grows and they go on to be productive members of society. I am very happy to support this bill and commend it to the House. Thank you.Hon ANNETTE KING (Deputy Leader—Labour): I may have misheard the Minister when she started her speech this evening but it sounded to me like she said that the Government has started on a vicious programme of reforms. I thought: “She’s right—she’s absolutely right.” She is not denying it so I presume that is exactly what she said when she opened her speech on this new piece of legislation tonight. A vicious programme of reforms—that is what we have seen in Housing New Zealand under this Government.What we have seen in the last 7 years in housing policy has been a series of ideological burps. In other words nothing but a lot of hot air and gas wrapped up in the biased and unbalanced philosophy of the National Party. The greatest exponents of this ideological burping are Dr Nick Smith and Paula Bennett. The latter Paula Bennett is the architect of this latest iteration of dopey policy. That is what this policy is. This bill is another piece of National Party tripe. It is meant to give the Minister the flexibility to negotiate contracts with organisations that purchase State houses. What it is is code for the great State house sell-off Mark II. It is a continuation of an attack on State homes in New Zealand the sell-off of them by this National Party and the breaking of a solemn promise made before the last election that there would be no more asset sales. There can be no bigger asset for an individual in New Zealand than the home that they live in. This Government is prepared to sell off thousands and thousands of State houses and the Government says it is not an asset sale. The Government says it is not a broken promise. Well I would say there is a name for that but perhaps I will not use it today. That was a solemn promise—no more asset sales.This is part of the continuation of selling assets in this country. It has followed a pattern. What this Government has done to soften up the people of New Zealand those who perhaps are not in State houses is to first of all remove people from the State houses. You saw that—those of you who come from the Hawke’s Bay. You need only to go into Flaxmere and places like that. The Government cleaned the people out of the State houses. It left them empty. Then the Government would say “Nobody wants to live in those houses.” even though there were people who could not get a house and were on a waiting list—and the houses were empty. The Government said that no one wants to live in those houses.Then it says that these houses must be in the wrong place and the wrong size because nobody wants to live in them. The Government lets them stay empty. They lie empty and then the vandals come along and break the windows and graffiti the walls. The Government says it gets complaints about the security of these properties and the cost of this security. Then the Government says that there is a great necessity to sell them off because we do not need these houses any more. It is a pattern. It is a pattern that we have seen many times over.Now we have got as I said the great State house sell-off. They were all going to be sold to those very willing community groups. The poster people of this great State house sell-off were the Salvation Army. According to Bill English the Salvation Army was going to take all these houses. Well I have met with the Salvation Army and so have many others in this House and I have to say they were played as fools. They did not know the real effort that was going into this. They did not know the real agenda. When the Salvation Army people went away and did their figures and looked at their books they said: “There is no way we can buy these houses. We will be in debt for 10 years if we buy these houses. We cannot do it.” But we were told that the Salvation Army was a very willing buyer of community housing. Backbenchers might not know that. Go out and talk to your Salvation Army. Speak to those who run the Salvation Army. They will tell you the truth. You were sold a pup by the Minister of Finance and the Prime Minister—you were sold a pup because the Government does not have any intention to provide houses to buy up houses for community housing in New Zealand.Then I had a look at the regulatory impact statement that goes with this bill. There are a number of questions. I always read these with interest because they usually tell you a little bit about what goes on in policy making. The regulatory statement asks the questions: “Are there any publicly available inquiry review or evaluation reports that have informed or are relevant to the policy to be given effect by this Bill?”. What would you think the answer to that would be? Do you think there has been any evaluation of this policy? What will be the effect on people? Would you expect the Government to know that before it brought some legislation into this House to pass through every stage tonight without the scrutiny of a select committee? Would you not want to know that before you did it? Well what does the regulatory impact statement say? “No”—there has been no evaluation report to inform or is relevant to the policy. So we are going blind into this. We have no idea what the outcome is going to be.Then we are asked: “Were any regulatory impact statements provided to inform the policy decisions that led to this bill?”. We were told the Ministry used the regulatory impact statement that was done in March and that was before the community housing groups knew what the real story was and before the Salvation Army pulled out of this whole approach. It also asks: “did the [regulatory impact] team in the Treasury provide an independent opinion on the quality of any of these regulatory impact statements?”. What would you think the answer to that would be to the members opposite? We are passing the bill through all stages tonight. We are going to put it into legislation without any scrutiny other than what is happening now. Did Treasury have a look at this? Did Treasury provide any independent opinion on the quality of this? The answer to that is no. It has not happened. Why do we not learn? There is no need to rush this bill through tonight. What is the urgency in passing this legislation tonight without the scrutiny the impact and the input from New Zealanders on this bill? So Treasury has not had anything to say on this bill either.Has any further analysis become available since this policy has been given effect by this bill? What do you think the answer to that would be? It is another big fat no. I think the members opposite who are going to speak on this bill might want to go and pick up the regulatory impact statement and then ask questions of your Minister. Backbenchers are so pleased and proud to praise her but maybe they might want to ask a few questions as to why this bill has not had the scrutiny I believe it deserves.Then I want to know and maybe the Minister will answer this when we get to the Committee stage—she is going to have the power under this legislation to make delegated legislation with ministerial direction. That does not come to the House either. All she has to do is gazette it and present a copy to this House having done some consultation. I want to know why the extension of this power is going to be needed Minister. Why is this going to be needed when we know there already exists in the Act powers that you can use? I would like an answer to that question when the Minister gets into the chair.We then get to what has really been happening to Housing New Zealand and why I do not trust this latest measure. Any members who are constituency members of this House would have seen what has happened to Housing New Zealand over the last few years. The Government has stripped away its functions. It has sold houses up and down New Zealand. It has milked the dividends out of Housing New Zealand. It has closed offices and it has sacked tenancy managers. That is what has happened. That is the legacy of the National Party State house policy.I have to give the latest story I heard and the Minister might like to answer this. There are two-storey Housing New Zealand houses in Dunedin. They have just been renovated in some way and they had fire escape ladders because if you are on the second floor you might need to get out in the event of a fire. Those ladders have been removed and Housing New Zealand said no that it was not going to replace them. That is a very good indication of what has happened to Housing New Zealand and State houses in this country. It is a mean vicious nasty approach because many members opposite but not all of them think that those people who end up in State houses deserve it. They got themselves there and they are getting what they deserve and the sort of housing that Housing New Zealand is prepared to provide.TODD MULLER (National—Bay of Plenty): I would like to just speak for a few moments on the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. I would like to perhaps start by helping the member Annette King who has just spoken. It is clear that her hearing is not quite what it used to be because what Minister Paula Bennett was talking about was flexible reform it was innovative reform it is people at the centre reform and it is reform that this Government is delighted to be able to push through and debate here this evening. It is not—Hon Member: They are angry.TODD MULLER: They are incredibly angry. It is not this side of the House that is caught in an ideological rut; it is that side of the House. This side of the House has people and tenants at the focus of our social housing reforms which is not what we hear on the other side. This bill is an important part of the Government’s social housing reform programme and as we have heard from Minister Paula Bennett it has the primary aim of introducing flexibility in the way that the Ministry for Social Development can negotiate and contract with social housing providers. This flexibility is important and from our side it should be encouraged. It is absolutely appropriate that we create the framework that this bill enables which enables the Minister for Social Housing to have the power to direct the Ministry for Social Development to enter into these tailored funding agreements with social housing providers.As we know the current set-up and environment is constraining for the Ministry for Social Development. There is very little flexibility and this bill enables the agencies to be able to get outcomes that will deliver more social housing places for New Zealanders. Examples of possible tailored agreements include paying more for tenants who may be more expensive due to higher needs such as older people or entering into a long-term contract with a provider for them to offer a certain number of social housing places for several years. Both of these options are not currently possible under the current law. This is a move away from a one-size-fits-all to something that is more tailored and more sensible and that will deliver better outcomes.We have heard over the last few minutes a reasonably impassioned view around how community housing providers are not going to respond appropriately and to use the words of the Opposition that perhaps this is a pup. I will return later this evening to talk about the experience in Tauranga and the appetite that exists for participating in community housing providers. I look forward to sharing that with the House later this evening. I commend this bill to the House.KEVIN HAGUE (Green): Many New Zealanders look to the Nordic countries as a bit of a role model for how our country could be and typically look with some longing to countries that offer their citizens high standards of living and egalitarian societies that distribute wealth pretty evenly across their societies. It comes as a bit of surprise to many New Zealanders when they learn that the inspiration for those modern Nordic States was actually New Zealand in the 1930s. That is right—it was the Government of Michael Joseph Savage that provided the inspiration for the modern social democratic movements in Scandinavia. There is no image more evocative of that Savage Government than the picture of Savage himself and several other Cabinet Ministers moving furniture into the first State house at 12 Fife Lane. Savage of course talked about his programme not only of housing but also of social welfare and health care as applied Christianity. He said: “What is there more important in Christianity than to be our brothers’ keepers in reality?”. He saw the Government as the expression of our collective responsibility to care for each other.If the Government is not that then what is it? What is it for? It seems to me that those basic needs that must be met if we are indeed to care for each other must include warmth and shelter and they must include a right to housing. It is not just some matter that the Government of the day might choose to make a matter of policy but it is actually something that our Governments have collectively signed up to as part of the United Nations International Covenant on Economic Social and Cultural Rights. New Zealanders have a right to housing. New Zealand Governments have an obligation to ensure that everybody is well housed.In some ways this bill may appear on the surface to be somewhat innocuous. There is a particular exception to that which I will come to a little later in this intervention. But the issue here is what this bill stands for—what it is emblematic of. I have to agree with the contributions made by Phil Twyford and Annette King to date that this bill is emblematic of this Government’s wider housing agenda. A flag is a kind of an emblem. We have got a referendum coming up on the New Zealand flag and the Government right now is running a consultation under the banner of “What do you stand for?”. Well the emblem that this bill provides for this Government—what it says this Government stands for—is a return to the neoliberal agenda of the 1980s and 1990s. It is a return to the economic philosophies of Hayek and Nozick. It is a return to an agenda of small government and of public choice theory. It is a return to the idea of core functions of the State being stripped away and devolved to the private sector. That is what is at stake in this bill.What we have seen from this Government in housing is it shuffling the ownership of State houses ahead of actually providing more houses at a time of crisis—at a time when people are living in garages in their thousands. What we have seen from this Government is the sale of State houses to private developers who inevitably will have a different agenda—an agenda that incorporates their own profit motive. We have seen no guarantee from this Government of the proceeds from those house sales going into building any more houses. Indeed we have seen no guarantee whatsoever of any more houses being built at any time. In relation to the income-related rentals scheme what we have seen is that the changes that the Government has made to that scheme have been driven by ideology—an ideological belief that exposing Housing New Zealand to competition from the private sector will somehow increase its efficiency. That is what sits underneath this reform. It is an ideological belief.In the advice that the officials gave to Cabinet before Cabinet signed off on that particular policy the officials pointed out that one of the likely consequences of that policy change would be that State houses would sit empty. That is right—at a time when we have what 6000 on the waiting list for State houses some of those State houses would sit empty because of the ideological need to spread income-related rent subsidies across both State provision and private sector provision. We have seen in a particularly despicable development tenancy reviews being expanded so that families that are just starting to recover from the chaos of lives without secure homes are being thrust right back into that same chaos. That is an agenda that services only the ideology of the Government. It does not put tenants and it does not put families in need at the heart of the agenda in any way.Part 2 of this bill contains three measures. Two of those are relatively innocuous and a third actually continues the agenda of the early 1990s—the separation of provider funder and policy maker. Just as a reminder to the House of what that separation was all about it was a policy that was driven by public choice theory and driven by an assumption that the public servants who were involved in those functions would be motivated by their own self-interest. It was policy driven by a culture of distrust in the Public Service a policy driven by the need to create the panopticon in Bentham’s ideas where everybody in the Public Service being observed and monitored would somehow result in better outcomes. The counter approach is for Government to instead create a culture of public service a culture of trust and to acknowledge that the experience of funding planning and providing housing might just be a pretty useful start when giving Government advice on policy around housing. It is an asset not a liability.I asked earlier what this Government stands for and this bill and its housing programme say it pretty plainly. What the Green Party stands for is a return to those ideas of the Savage Government—a return to the idea that everybody is entitled to security and everybody is entitled to a safe warm affordable and secure home. It is a return to the idea that we can trust our public servants. It is a return to the idea that the community housing sector has an important role to play. It deserves support it deserves capital to assist in building housing and it deserves regulatory reform to enable it to contribute more fully but the role that the community housing sector can provide should occur in addition to the role that the State itself provides not as an alternative to it. It is only in the zero-sum game philosophy of this current Government that those two have to be alternatives and not joint solutions to a problem that besets this country.DENIS O’ROURKE (NZ First): This particular amendment bill is one that is typical of National Governments which are always seeking to find ways to reduce spending on social services while at the same time protecting their voter constituencies those on higher incomes and those whom it wishes to protect.Hon Paula Bennett: You’re just wrong Denis.DENIS O’ROURKE: That is not wrong. That is exactly what this Government is doing and most people can see it. This Government does not care whether or not its cost-cutting ways will damage the effectiveness of social policy. This is a bill that is badly researched ill-considered and based fundamentally on National Party dogma. It is a bill that will exacerbate not improve social inequalities and it will degrade the quality of Government services and not improve them. Nobody opposes sensible measures that will make the provision of Government services especially social housing more efficient or will provide the same services at a better cost—but never at the expense of worse outcomes for people. That I am afraid is inevitably what this amendment bill is going to do.There are common themes throughout National’s social housing legislation: firstly to minimise the role of the State; secondly to abdicate to others responsibility for social housing; thirdly to provide as little money as possible and to contract others to take responsibility; fourthly to push as many people out of State housing as it possibly can and to favour non-Government organisations which are not always capable of the function. We can reflect on the Salvation Army and the decision it made not to get involved. Probably the organisation in the country best able to do so chose not to do so and for very good reasons. This legislation allows the Government to pretend that it will provide social housing more cheaply but in fact it will not. It will just push it off to somebody else. It will allow the Government to avoid full accountability for social housing and it will fail to protect people against exploding rents—a huge problem in this country. Lastly the Government does not even try to support local councils in providing public rental housing or elderly persons’ housing in this country thus letting it off the hook too.The amendment bill is just as objectionable as the principal Act in two ways. First of all it relies on the policy of reviewable rents—a bureaucratic assessment of the ability of tenants to move into private accommodation—when the real problem is that rents in places like Auckland and Christchurch due to the simple unavailability of enough homes are the real problem. Secondly it will reduce the role of Housing New Zealand. This amendment actually takes that a step further by preventing Housing New Zealand from giving advice to Ministers thus sidelining that very important organisation. It now reserves that role for the Ministry of Business Innovation and Employment. That is a mistake because the ministry will only be a contract supervisor essentially and it will not have the institutional knowledge necessary to provide the service at the level we expect. And Ministers will of course be empowered to give directions about what is to be done and it is easy to see where that might lead.The results are likely to be social housing provided at very great arm’s length from the Government and its agencies. It will give more power to Ministers who are inevitably going to take a more political approach—a more dogmatic approach—not aimed at looking at the best interests of the most vulnerable people in the community despite what Government members say over there but aimed at financial results fundamentally. Ultimately that means more housing deprivation State houses being much too hard to get non-government providers imposing their own policies and practices—and we do not know what they may be—and most of all very uncertain outcomes for low-income people who are dependent on the State for their housing needs. That is not the Kiwi tradition and it is not acceptable as a role for the State in this country.The price of suppressing demand which is what this is really all about is much too high in social terms. It will cause reduced health and well-being and increased poverty. It will put more families at risk compromise social cohesion and exacerbate the creation of a disaffected underclass of people in New Zealand. Despite the Government’s aim that it will have a lenient approach when it comes to reassessing State tenancies people will inevitably be nudged out of their homes and effectively bullied out of their homes. The Government will continue to sell those homes but it will build too few of them. You only have to take a quick look at this Budget to come to the conclusion that this Government has no intention of trying to meet the demand that is already there—a demand that is not being met now. That is the real issue. This Government is not actually willing to meet the need and that is really what this legislation is about. It will seek to suppress demand artificially rather than try to meet the genuine housing needs of people in this country.The bill itself may be seen as a relatively minor provision but it is another step in the wrong direction. As others have said what is really needed in this country is a genuine social housing service—not just buildings but a true Public Service with the experience and the resources needed. This bill goes in exactly the opposite direction. The Government will instead transfer large sums of money to community housing organisations through contract payments but these are really still just subsidies so nothing much will have changed. The landlords will of course rub their hands in glee. These organisations will own the housing funded though by the taxpayer. They will profit from it and they will compete from it and as an inevitable result they will try to increase rents and that is not in the best interests of either tenants or the taxpayer—or indeed anybody else in this country. That is actually the most significant flaw of all in this whole new social housing regime of which this bill is just one more minor step in the wrong direction.There will be more diversity and that is potentially a good thing—potentially a good thing—but it is also a very risky thing if it is not doneproperly. I do not trust some of the providers to whom this function will be entrusted to do that properly. For all of those reasons New Zealand First opposes this bill. It is a retrograde step. It emasculates Housing New Zealand. It seeks to reduce Government accountability for housing and it should not be passed.JONO NAYLOR (National): Well it seems to me that the members opposite seem to be completely missing the point of this bill. This bill is for us to be able to deliver better services to those who need social housing. The purpose of this bill is to ensure that we have social housing in New Zealand that is fit for purpose. It is to create flexibility in those arrangements to ensure that we are accommodating people and allowing non-governmental organisations to work with needy people in such a way that is going to be best for their clients. It is part of a bigger plan to ensure that social housing in New Zealand is available to people in the size and the type that is most suitable to them. It is about giving flexibility to those groups maybe that will do a better job of housing them rather than simply assuming that because we are the Government we will always know what is best for every single individual which seems to be the kind of arrogance that we are getting from across the other side of the House.It is not about continuing with the status quo and assuming that just because that is the way we have always done it that is the way we should always do it. It is about moving forward. It is about delivering Better Public Services. It is about being better equipped to ensure that vulnerable people in this country are being looked after in the best possible way. This bill is one part of a very big machine that is ensuring we do just that. Thank you.Mr DEPUTY SPEAKER: I call Jan Logie—a 5-minute call.JAN LOGIE (Green): I rise to take a short call for the Green Party on this bill. We will be opposing this bill unfortunately. We see housing as a human right. Housing and shelter are at the absolute foundation of community of family and of individual well-being. Good warm stable affordable housing improves people’s health it improves educational outcomes it improves employment productivity it reduces costs to Government and it even reduces carbon emissions. What this bill does is nothing really to help us provide warm secure affordable housing for people in New Zealand. This is a shifting of the deckchairs on the Titanic.Right across this country we have people living on the streets or in their cars. We have heard stories from Invercargill from Tauranga from Hastings from Kaitāia from Auckland from Wellington from Porirua. All over this country people do not have their basic basic needs being met. This bill is not about building more houses. It is not about actually ensuring that those people get their needs met. What it is about is transferring to the community sector existing houses that are completely rundown as a result of generations of Government neglect. The community sector previously said: “Well OK we’re going to look at that because we think we can provide good wraparound services for people and maybe meet their needs a bit better than the Government.” But then it looked at the state of the housing and said: “Well actually no this isn’t really viable.”What this bill is about is enabling more flexibility to pass that over recognising the absolutely appalling state of so many of our State houses because of Government neglect. That should sit with the Government. We should acknowledge that this bill is a result of the failure of the Government to care for a key asset. The bill is not going to be increasing the housing available for people; it is just about selling it off. Part of that will go to private developers. We have heard from people in Glen Innes where as an example there has been a supposed transformation happening. Veterans were post-World War II given a house for life. They are no longer in that house. They had established a community. They knew their neighbours. They were connected. They had community. That has been destroyed by this so-called transformation.What this bill represents in part is more of this kind of transformation which is actually a destruction of community. It is a destabilisation of families that is going to disconnect children from their schools. It is going to put people in more fragile and vulnerable situations. I really struggle to see how anyone can think that that is going to be a good result. We are not hearing from the community sector that what it is being offered at the moment and being provided with is what it sees as part of the solution. We are hearing quite a lot of concern coming from those people. They know that a good thriving community housing sector will sit alongside a well-resourced Government State housing sector. We know that we have in Auckland as an example house prices going through the roof. Houses have been gaining and are earning more than most people in Auckland earn in a year. Again this bill is not going to help with that.This bill is reducing the function of Housing New Zealand even more. Housing New Zealand has already lost the ability to assess who will go into its houses and now this bill removes its policy function—its ability to provide policy advice to the Minister. So Housing New Zealand is being put intothe role of any other real estate agent as I think has already been said. If we think about that and about the fact that these are people who are the most vulnerable—because the Government has reduced the housing criteria by such an extent that anyone who is able to get into a house has to be in a pretty dire situation—none of that information and their needs will be fed through to the Minister. Is that going to be good policy making? I think not.ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe e te Māngai o te W’are i tō mihi mai ki a mātou i tēnei wāhanga o te W’are i tēnei pō.[Thank you Mr Deputy Speaker of the House in regard to your acknowledgment of us in this session of the House tonight.]I rise first of all to mihi out to all whānau who are in State houses tonight and who may be watching the broadcast tonight. They will be sitting there wondering what their future is in their home. They will be sitting there wondering hearing all of this kōrero about this bill tonight whether they are still going to have a home to live in. This bill merely provides a mechanism for the Government to sell State houses. That is how I see it. I think that the people at home in their State houses do not know what their future will be who their future private landlord will be or whether a property developer is going to come along and redevelop their home into something that they cannot afford. That is my concern about this bill. It does not do what the Minister has said it will do: provide more social housing. Well I do not think so.If you start with one set of State houses and then you sell them to someone else that does not actually increase the number of houses that you have got. Potentially I believe that it will reduce the number of social homes because the only way to increase the number of social homes is actually to build more. Under our KiwiBuild policy which we campaigned on last year that is exactly what we would have done. Our solution to the housing crisis in New Zealand is to build more homes—more affordable homes—for our people. This bill fails. It does not provide those. This bill does not increase the number of social homes.This bill actually is a reflection of core National Party policy. In the 1990s it sold 13000 State houses and this is a mechanism that the Government is willing to use to make sure that it gets rid of those homes so that it gets rid of its responsibility. Why I am here tonight is to tell the House that I believe that despite this bill the Government must never and can never transfer its responsibility for Kiwi families who require social housing. That is a fundamental way of life in New Zealand which people expect—that we should be able to have clean dry homes; social homes that people can actually afford to live in.This afternoon we have heard members on the other side of the House saying some amazing things and I have thought to myself: “I am hearing the words but they do not match up with what is on the Table.” They do not match up with what is being presented here in this bill tonight. This bill will actually create opportunities—not for families or for living in social housing but for property developers and private landlords. That is what this bill does. It attempts to transfer the responsibility of the Government to someone else and we are here to tell you that that is just not good enough. That is not good enough today and I think over the next few hours that we will be hearing a lot more about what should be happening in the social housing sector. Thank you. Kia ora.Dr PARMJEET PARMAR (National): This is another great Government bill sponsored by the Hon Paula Bennett. It reflects again this National Government’s focus on delivering for families and children. This bill is a part of the Government’s Social Housing Reform Programme which aims to address the needs of families in need for social housing and better meet those needs. In this short call I just want to address one point that is especially coming from the Labour Party. Its focus is on properties per se—just properties per se; no focus on families no focus on families’ needs. That is what this bill is about: changing that focus from properties to families and their needs. I support the bill. Thank you.Su’a WILLIAM SIO (Labour—Māngere): It gives me great pleasure to also add my remarks to this particular debate. I was caught off guard because I would have thought that given this is a significant policy introduction by this Government National members would utilise their full time in convincing us why this is an important piece of legislation. It is shameful to say the least that they spend not even a full minute on it.In my mind this bill confirms once and for all not only that the National Party continues to be in denial in terms of the housing crisis but also that it is now denying every New Zealander the opportunity to have a home that they can live in. You see for the past 7 years this Government has continued to deny that there is a New Zealand housing crisis. Even now the Prime Minister continues to deny it and does not accept it despite the fact that this is his third term. Government members are in deep denial about it. They continue to deny it because I suspect building more houses is just too challenging for them and building more houses reduces the profitability of the portfolios of some of their investor and property developer mates. Yes Mr Deputy Speaker I know that you will agree with me because those mates have been funding the campaigns of this particular Government.Mr Key and his Government have been bystanders while the housing crisis has worsened year in year out. In Auckland house prices have risen by 87 percent in 6 years. That is an increase of $100000 from last year. A generation of future New Zealanders are now permanently locked out of the dream of owning their own home. They have been locked out by Mr Key and this sad group of National MPs. More and more Pacific people are now locked out of ever owning their own house under this National Government—Hon Members: We’re not sad.Su’a WILLIAM SIO: I wanted to say something else Mr Deputy Speaker but I knew that you would pull me up if I did use those words. Any New Zealanders who find themselves unable to afford their first home today—their first home—according to the Office for Senior Citizens they will be poorer still when they retire without that particular asset. And while Mr Key and his Government continue to deny that there is a housing crisis house prices and residential rents continue to rise. The average Auckland house price will hit $1 million by next year while residential rents have jumped again by 6.3 percent to a median rent of—Kris Faafoi: They’re happy with that.Su’a WILLIAM SIO: Absolutely they are happy with that. More and more middle-income earners will never be able to buy their first home at those particular prices. How can they when middle-income earners have to front up with a 20 percent deposit before they can even secure a mortgage? That will push more and more lower-income earners into homeless situations of living in cars caravans garages and boarding houses. And what is National’s response to the housing crisis? Sell off those State houses—sell off those State houses. New Zealanders expected a plan to build more houses; instead all they are hearing from this Government is: “Sell off those State houses.”So far this Government has had every opportunity to do something meaningful to fix the housing crisis but it has not. It has not done anything meaningful or genuine to address the housing crisis. Yes it has tinkered around the edges of the crisis with half-baked policies. That tinkering has not halted the housing crisis. Every week there is a line of people applying to Housing New Zealandfor housing. They get turned away. They are told to go down to the Ministry of Social Development. They go down there and they are told: “You are eligible.” They go back to Housing New Zealand and it says: “Well we have got you on a list but you are not a priority applicant.” Every week there is a Housing New Zealand tenant being evicted by Housing New Zealand. In fact I have had cases where upon the death of parents Housing New Zealand was quick to notify the children that they would be evicted. In one case Housing New Zealand sent that eviction notice before the children had a chance to bury their parent. The lines to emergency housing offered by community social services continue to lengthen. Government tinkering in special housing areas has been an absolute failure; the special housing areas have just not worked. They managed about 170 houses in a year and a half but we are still short by 20000 houses. The Government needed 13000 houses just to keep up with population growth.Earlier I heard a National MP in this debate say that this legislation was to provide flexible options to New Zealanders. He said it was about getting the right house to the right person at the right time. What does that mean for goodness’ sake? I think what it means is: it is market speak. It means that it is up to market forces whether a person gets a house or whether they are ever housed at all. It means this Government is washing its hands of every New Zealander in a homeless situation. It means this Government does not want to take responsibility for New Zealanders who need a home of their own. This Government is selling off our publicly owned State assets to its private sector investor mates. Not to the Salvation Army or the Methodist Mission or community groups with a social conscience—it is selling them off to its investor mates.Remember how the Government couched the sell-off of State assets? It said that it would sell them off to mum and dad investors. That was a load of crock. That is the same technique that it is using tonight to cover up the fact that our State houses will be sold off to its property investor mates—the same mates who have been funding their campaign activities for the last 7 years. This is their payback. This is what it means when those members say that the bill is about flexible purchasing. It gives the Minister flexibility to flog off billions of State houses to the National Party’s developer mates. The biggest deception and con job of all is National’s State house sell-off. Most New Zealanders are wondering how on earth selling off State houses to developers and property investors will give them a home. It will not.This bill completely wrecks Housing New Zealand as we know it. The Government has got rid of the policy development feature of that particular ministry. It has got rid of people who managed tenants. Instead the tenants are faced with an 0800 number. You cannot talk to a real person when you are in need of a home. You are fobbed off in the line at the Ministry of Social Development youfobbed off in the line at Housing New Zealand and you are put in another line for the 0800 number. How on earth do people advance themselves when this Government keeps adding lines and making it difficult for people who want houses?This bill merrily transfers the responsibility onto the private sector and onto the market. The Government is going to tell people to go and find a house in the market. There is no help for them there. How on earth can people on the minimum wage afford the median rent of $420? On the minimum income you are earning about $500 gross. Less tax how do they afford the median rent of $420? These buggers—I will start using that word now—Mr DEPUTY SPEAKER: No.Su’a WILLIAM SIO: OK I will not use it. These people—these nasty people—have no care whatsoever for the plight of people in need. It is a basic human right to have a house. It is enshrined in international conventions. It is needed and yet somehow by introducing this bill the Government goes away making itself feel good that it is doing something. But it is not doing anything.All that this bill reaffirms in my mind and in the minds of many people in South Auckland watching and listening to this group here is that the Government continues to deny not only that there is a housing crisis but also that its legislation will deny every hard-working New Zealander the opportunity of either owning their own home or the opportunity of being in warm accommodation where they can house their children. What I foresee as a result of this legislation are more people in homeless situations more people forced to live in caravans more people forced to live in boarding houses more people forced to live in cars and more people forced to live in garages. That is the kind of legacy that this Government is leaving behind because under this legislation there is no long-term vision that will ensure that every New Zealander is able to aspire to own their own home and can achieve that. There is no legacy here to allow for every hard-working New Zealander on a minimum wage to be able to secure for themselves warm comfortable affordable rental accommodation—not under this legislation and none whatsoever under this National Government.STUART SMITH (National—Kaikōura): It is a great pleasure to speak on this bill and given that its merits are so blindingly obvious there is nothing more that I need to say other than that I commend it to the House. Thank you.A party vote was called for on the question That the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill be now read a first time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Bill read a first time.Second ReadingHon PAULA BENNETT (Minister for Social Housing): I move That the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill be now read a second time. I think there are a few things that we need to clear up for the member who spoke at the end of the first reading Su’a William Sio. If he is sending people to Housing New Zealand to go on the waiting list and wondering why they are standing in queues for so long it is because he is sending them to the wrong place. That is now done by Work and Income. There are 147 Work and Income offices throughout New Zealand. They are front line so you can turn up there and that is where your assessment is actually done. I think it is really important that you understand—[Interruption] Go on—shout it out; get it out. I understand you are a bit angry about today because it has not gone quite as badly actually as you hoped it would. So first of all—Carmel Sepuloni: I can’t wait for the next few days—it’s all downhill from here. When we’re talking she stops. Keep going.Hon Member: Hey grow up.Hon PAULA BENNETT: Bring it on—bring it on. [Interruption]Carmel Sepuloni: When we’re talking she stops. Keep going.Hon PAULA BENNETT: All good? Finished the abuse yet? Get it out—get it out. Get the abuse out of your system.The ASSISTANT SPEAKER (Lindsay Tisch): Order! Look I would actually like to hear the debate.Hon PAULA BENNETT: Thank you very much Mr Assistant Speaker. What we want to make clear is that what this bill can do is actually quite exciting. It is not necessarily about buying the houses but it might be. What it could be about is an organisation that wants to lease a house—yes? So currently it has land or it has got a house and thinks it wants to get more so it can provide for the very same people who we all agree need more housing.So let us go for a bottom line—we all agree that there are vulnerable New Zealanders who need access to higher-subsidised housing from the Government. So your argument is that you think the Government should own all of them land; we think there is actually room in the market for community housing providers as well as the Government. So we do not abdicate our responsibility in any way shape or form. In fact I am making a commitment that there is another $152 million that will be going in to help subsidise the accommodation of those who really need it. We actually subsidise accommodation in this country to the tune of nearly $2 billion and we are adding another $150 million.We all agree that there are vulnerable New Zealanders who are not getting access to that heavily subsidised housing and they should be. The disagreement we have is whether it should all be State-owned or whether there is room for community housing providers to also be doing that. We stand on this side and say that there is most definitely room for community housing providers to provide housing and wraparound services and how you do that is by passing this bill. What this bill actually means is that we can contract with those providers over a longer period of time and for some that provide specialist services for certain cohorts we can actually give them more money so that they have a guaranteed income that they can either borrow or lease against or provide more services. Community housing providers are saying that to us every day. We would like to be providing more housing. Whether or not we get that from the Government—right—so whether it is about them building more houses themselves going into partnerships or leasing properties what they want from the Government is a guarantee of income so that they can actually then use it against those things. That is what this bill does.This bill supports community housing providers as they are building the sector. It does not abdicate the Government’s responsibility to pay. In fact on the record we make an obligation that we will pay with certainty more than what they needed and asked for and this bill delivers it to them.PHIL TWYFORD (Labour—Te Atatū): At least the Minister for Social Housing got to her feet and stayed on her feet for what all of 3 or 4 minutes? That is more than we can say for all of those 1-minute johnnies on the Government benches—all those Government backbenchers—who are so proud of this policy of selling off State houses that they could not summon up more than half a minute’s speech to explain and promote their Government’s policies which raises I have to say the question of why this bill is being rammed through under urgency. What is it about this bill that means it has to be passed by tomorrow? Are the members opposite in such a hurry to flog off billions of dollars’ worth of State houses to their property-developer mates that the bill cannot go to select committee and the public cannot be given the opportunity to have a say and come along and make submissions? Is the bill so urgent that it has to be rammed through under Budget urgency? I would like to hear an explanation from the Minister or from other members on the Government side for why this bill has to be rammed through under urgency because I cannot see for the life of me what is so worthwhile or so urgent that it has to be pushed through under urgency.This bill is about flexible purchasing. It puts extraordinary discretionary powers into the hands of the Minister to do sweetheart deals with the people he wants to sell these State houses to. He can ramp up the subsidies if he wants to—if it is a particular deal with a private landlord or a property developer whom the Minister is desperate to do a deal with—or he can turn down the subsidies. That kind of flexibility is exactly what National members want in order to be able to do the sweetheart deals they need to flick off these State houses because they are desperate to offload them to anybody who will take them. The Salvation Army walked away the Methodist Mission walked away and the other community housing providers are basically saying “The only way we could make this work is if you not only gave them to us at rock-bottom prices but you also heavily subsidised us into the bargain.”This Government has been a bystander while the housing crisis has got worse and worse and worse. House prices in Auckland have gone up $100000 in the past year—$100000 in the past year. They have gone up by 87 percent in Auckland in the past 6 years but Government members are deep in denial because they believe that there is no housing crisis that there is no problem and that speculators are not a problem. Oh actually I think they just admitted on the weekend that speculators are a problem because they were so embarrassed by the Governor of the Reserve Bank saying publicly that they had not done enough to tackle the housing crisis and that they should do something about the rampant property speculation that is driving house prices higher and higher in Auckland. People desperately wanted this Budget to do something about the housing crisis but there are so many gaps in this Budget. It does nothing for the regions it does nothing to diversify our economy and it does nothing to plan for future economic growth for New Zealand. But probably the biggest disappointment is that it contains nothing of any substance to fix the housing crisis.Today the Government announced that it is going to make Government land in Auckland available for housing developments and I think everybody agrees that that is a good idea. The shame is that this Government did not do it 7 years ago when it came to office. Instead what did it do? Government members derided and ridiculed the Helen Clark Government’s work on providing an inventory of Government land available. They knocked that work on the head as soon as they took office and they have sat on their hands for nearly 7 years. They have done nothing with it and it was only as they were scrambling around in a panic to find something to present to the public that would show they were doing something about the housing crisis that they dusted off the work that was done 7 years ago by the former Labour Government.What is really telling if you watch Nick Smith the Minister for Building and Housing on the TV news tonight or if you go to the Stuff website and see the story about him is that he was asked by a journalist how many of the houses they are going to build in Auckland on vacant Government land will be affordable. Nick Smith gave a sly little smile and said: “I think they’ll be affordable to somebody because somebody will buy them.” That says it all.Hon Annette King: Cynical.PHIL TWYFORD: It is absolutely cynical. They do not care about the thousands and thousands of frustrated New Zealand families—Kiwi first-home buyers—who are desperate simply to get a roof over their heads and a home that they can call their own. This Government acted cynically with this announcement today—as has been the case with the special housing areas where fewer than 10 percent of the houses built are actually affordable and the Government’s definition of affordable is anything under $550000. That shows the cynicism of this Government. They were not prepared to take up Andrew Little’s challenge. They were not prepared to promise to the public of New Zealand that all the houses built will be affordable. All we got was Nick Smith with his sly little smile saying that they will be affordable to somebody.All this Government has done is tinker around the edges with half-baked policies that have not made the slightest bit of difference to a housing crisis that has been getting worse and worse under National’s watch. The special housing areas which are the centrepiece of the Government’s attempt to deliver to the lack of supply of houses in Auckland have been an abysmal failure. In 1½ years 170 houses have been built in Nick Smith’s special housing areas—170. Auckland needs 13000 houses every year just to keep up with population growth. Under National a deficit of 20000 houses has built up over the past 6 years. That is the Reserve Bank’s number. Twenty thousand houses short we need 13000 a year just to keep up with population growth and how many are being consented under National? Fewer than 8000 a year. That is why the shortage is getting worse and worse every year. Every day the shortage is getting worse and that is why Auckland house prices are going up by $1000 a day. Is it any wonder that it now takes 50 years on average to pay off the average home in Auckland? Is it any wonder that homeownership rates under this National Government are the lowest in 60 years—60 years? And John Key says there is not a housing crisis.Other than the spectacularly unsuccessful special housing areas what else has National done about the housing crisis? Well 12 months ago it unveiled another great policy of the National Party and that was to remove tariffs and anti-dumping duties from varnish nails and various building materials. Nick Smith stood in this House and promised that it would knock $3500 off the cost of a new home. His own officials advised that it would save a little over $1000 and that that money would be pocketed by developers. That is the kind of policy that this National Party specialises in. Since 2006 National members have been blaming the Resource Management Act for expensive houses; since they were in Opposition they have been saying that the Resource Management Act is the problem. And what have they done? Paul Goldsmith what have they done about the Resource Management Act reform in 6 years in Government? Absolutely zilch. National has done nothing to reform the Resource Management Act in 6 years in Government and Bill English has got the cheek to stand up in this House and blame the Resource Management Act. What audacity.National’s other bright idea was to throw subsidies at first-home buyers through the Welcome Home Loan scheme and yet the Ministry of Business Innovation and Employment Treasury and the Reserve Bank all told it that it would make no difference—that it would drive up house prices and make the unaffordability crisis even worse than it isalready. And now the National Government thinks that selling off State houses to property developers is some kind of answer to the fact that people are living in cars and garages all around New Zealand and that people are rotting in cold damp substandard private rentals because there are simply not enough houses. But National thinks that the solution to that problem rather than building more houses is to change the ownership of the few houses that we have that are there as a dedicated pool of housing for the most vulnerable and the poorest New Zealanders—that somehow selling them off to private developers is an answer to that problem. I just do not understand it. I do not understand what makes this National Government tick and I do not know where its members lost their moral compass.MATT DOOCEY (National—Waimakariri): It is an honour to rise and speak to the second reading of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. Mr Twyford and some of the Opposition have questioned the urgency for speeding through this legislation. The urgency is to do with the 3000 people who will get extra housing support because of this bill. This will allow support for up to 65000 people in total 3000 more people by 2017-18. What does Mr Twyford say to those 25 percent of people on a waiting list waiting for Housing New Zealand with a 9 percent supply?Really the urgency means that no one should talk longer than the useful information they have to say. That is a lesson your leader learnt today. Something that will last with me through this whole term is this Budget but equally what will stay with me through the whole term is the look on your faces while your leader spoke.What I say to the community sector a creative community sector is that we believe in you. Mr Hague said that we believe in a small State—we do not believe in a small State; we believe in a big community. That is what we are supporting Mr Hague—a big community. That is what we are supporting. What I can say to those New Zealanders whether they be Gene Simmons Axl Rose or Jon Bon Jovi is that we believe in you. If you want to be supported to independence in your housing this bill will support you. We believe in you. I commend the bill to the House. Thank you.Hon ANNETTE KING (Deputy Leader—Labour): Mr Speaker—Jono Naylor: One of you do it.Hon ANNETTE KING: Well at least I have got something to say. That member—all he did was pick up the research notes and make a speech that everybody else has made. I have to say when I listened to the speeches—1 minute 27 seconds 2 minutes 3 minutes—that is what the contributions have been tonight.I have to say that this is a very disappointing debate from the National Party. You see we have before us tonight a piece of legislation that is not going to go to a select committee that the public of New Zealand will have no input into at all. This House costing thousands of dollars a minute is required to scrutinise legislation on behalf of the public when urgency is taken. We would expect that a Government that is so proud of the legislation that really loves the legislation would stand and make a 10-minute speech on what it means what it is going to do and why it is so proud.Tim Macindoe: We’ve talked about that.Hon ANNETTE KING: But what we are getting—apart from the interjections from the senior whip who seldom gets to his feet but makes his speeches from his backside—I have to say from the C-team National has rolled in tonight are 1-minute and 2-minute speeches 1-minute and 2-minute speeches. That is an outrage to democracy. It is an outrage that those members cannot get on their hind legs and make a speech about a bill that they are so proud of. I have to say Minister Bennett that you have not told us why there needs to be urgency. We got an explanation from “Mr Doozy” up the back. “Mr Doozy” up the back told us—The ASSISTANT SPEAKER (Lindsay Tisch): Order! I know that the member probably does not take offence to that but his name is Doocey.Hon ANNETTE KING: The missing “s”—the missing “s”. Let us put the missing “s” back in Mr Doocey and say that he told us why this bill needed to be passed under urgency. And why does it need to be passed under urgency Minister? Because tomorrow—believe this—3000 people will be housed. If we pass this tonight we are going to have 3000 people housed tomorrow. Let us go back to our electorates and see how many people get a house tomorrow because we took urgency on a bill that does not need urgency Mr Doocey with an “s”. It does not need urgency. It does not.Why not let the people of New Zealand have a wee say on the bill. I know why. Because maybe the thinking public of New Zealand will say: “What are you doing this for? What is the reason for this bill? Why do you need this bill apart from the fact that you want a creative way to sell off State houses?”. National does not want the people coming in who may well be State house tenants telling it what they think about this bill so it is ramming it through under urgency tonight with this pathetic excuse that it has to do it because 3000 people tomorrow could get a house.Well I have to say tell me how that is going to happen with this bill. How exactly is this bill going to provide 3000 extra houses? In fact how does selling off State houses actually create more houses? How does that work? How does selling off State houses create more houses for social housing? You see National members cannot answer the question because it is nonsensical. What it is doing is absolutely nonsensical.I think the Minister really put it into perspective for all of us tonight when she was speaking and she let the cat out of the bag when she was talking about State house tenants. She called them cohorts. That is what they are; they are cohorts those State house tenants—just a figure just a number just a statistic. They are not people who need to be housed because they are the most vulnerable we have. We do not believe—Chris Bishop: Outrageous!Hon ANNETTE KING: No it is not Mr Bishop. You totally agree with me. I can tell by the look on your face. You know it. If there is one person over there who is not in the C-team it is Mr Bishop. In fact I predict that he is going to be in the A-team pretty fast indeed.I have to say that I think National members are the Neros of New Zealand because they have been fiddling away with house prices and house policy for 7 years. They have been fiddling fiddling around the edges actually having to increase their fiddling every year as we put pressure on them by saying: “You are not housing New Zealanders. You are not treating New Zealanders fairly.”So as they have been fiddling house prices in Auckland have been going up and are going up at $1000 a day. Do you know that the increase in a month is more than a pensioner gets in a year in their pension? That is how fast the house prices in Auckland have been going up. Unfortunately if they are one of those pensioners whose house value is going up they will not be able to afford the rates if they are on a pension.Then we have the Government’s new approach to housing. It is going to free up Government land. Well we said that 7 years ago. In fact we said it at Hobsonville. And let me remind members opposite what their Prime Minister who was then Leader of the Opposition and member for the area where Hobsonville is said about the use of Government land to provide affordable housing. Can anyone remember? Go back and have a look. Just put it into Google. You will find it. He said it was economic sabotage—economic sabotage—Chris Bishop: Doing it now.Hon ANNETTE KING: —well done Mr Bishop; he had it—to build State houses on land like Hobsonville.Now it has got this idea which is 7 years old that it will open up some Government land and build houses on it. But what we know is that there will not be many that will be affordable because there is something like 17 in Hobsonville out of the thousands that have been built. Even the 17—if the people in them were to sell them today—would no longer be affordable houses. They were already over $400000 and climbing.In this new policy which was made up in the last few weeks—and we know that for a fact—rushed through put together in urgency and in a panic we are not told how many will be affordable or what affordable means. You know it was only a few weeks ago that I said to Steven Joyce on our much listened to weekly radio show on Newstalk ZB: “Why don’t you use Government land to increase the supply of land in Auckland?”. I said: “The Government owns more land than anybody else.” And do you know what the Minister did? He pooh-poohed the whole idea. He pooh-poohed it.Chris Bishop: Oh!Hon ANNETTE KING: You see it was before the Government made the decision to do it Mr Bishop. That is why he pooh-poohed it. I will ask him next week on my much listened to radio show what he now thinks of the idea of releasing Government land. He will no longer pooh-pooh it; he will say it was his idea no doubt. In fact he thinks he has most of the ideas in the National Party.You have to say that the whole housing area and these special housing zones that we have got as my colleague and friend Phil Twyford said are just a sham. They are just some sort of paper transaction that the Government is having saying: “Look we’ve got these special areas and there are 170 houses that have been built.” And then it says: “But what about all the consents that we’ve got going through?”. Well I do not know whether it has worked it out but people cannot live in consents. They actually are not houses; they are bits of paper that are shuffled around and maybe one day something will happen.So what has it done in this space? Well I like one of the things it has done. It brought in the knock-down nails policy. It got the cheap nails coming in which were going to reduce the cost of houses by $3000 a building. Big deal—big deal—because within 3 days the benefits of the knock-down nails were all gone.When you look at it it has done nothing with the Resource Management Act. We offered to assist the Government in passing the Resource Management Act around housing. Oh no it did not want to do that because it wanted the whole big enchilada. It wanted the whole lot. It was not prepared to accept a deal where we could have helped it with changes to the Resource Management Act in housing.I have to say that the Government still has not learnt that if you do not provide warm dry affordable housing you are going to end up with diseases like rheumatic fever. Let me just end on this note: it has not increased the number of houses. It has not made those houses warm and dry for many people. Today to top it all off it is stopping the funding for the rheumatic fever programme.TODD MULLER (National—Bay of Plenty): I just want to speak for a few minutes on the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. The previous speaker Annette King said one thing that I agree with one thing only and that is that Chris Bishop will become a member of the A-team sooner rather than later.I do want to make a comment in respect of Phil Twyford who for every single question time for the last 6 months has been vein-bulging at the Government saying: “Housing crisis! You need to act with urgency. It needs to happen now.” So here we are tonight standing here with a bill that enables our Minister to negotiate with community housing providers who are ready and waiting to be able to enter commercial deals that are innovative and flexible and will deliver outcomes for their community and all we get is dissent pooh pooh pooh and negativity. That is why that party is where it is in the polls.This is a party that actually has a framework to enable us to be able to resolve issues. You can see it in Tauranga. I was there last week. The Tauranga Community Housing Trust was announcing there the opening of its new brand new housing with one and two bedrooms. The tenants were absolutely loving the move from the cold damp old historic State houses. You know life is not all about the State having to provide everything. There are people in the community who have skills who have people whom they care about who can partner with the State and get a better outcome. That is what this bill is about and I cannot wait for it to pass. Thank you.KEVIN HAGUE (Green): It is a second reading debate and ordinarily in a second reading I would be looking for the departmental report summarising the submissions. I would be looking for the select committee’s report on what the New Zealand public had had to say about the bill we were considering and looking for the revision-tracked version of the bill because there always is a revision-tracked version is there not? Invariably the bill that is introduced to this House is considered for its first reading goes away to a select committee and comes back changed. It comes back changed because actually scrutinising the bill for a little bit longer results in improvements to it. That is why unnecessary urgency is a bad practice for democracy and a bad practice for lawmaking. There is no conceivable reason for urgency for this bill. The bill itself would have been the better for going to a select committee.I am going to start instead of quoting from the select committee report by just quoting from the problem definition in the regulatory impact statement. What that says at paragraph 25 is: “In December 2014 Cabinet agreed a direction for reform of the social housing sector which creates a fair effective and efficient social housing market.”—market. Yet the reason that the Government needs to be involved in providing social housing at all is that experience in the real world has shown that social housing is a service that is not well matched to need by markets at all. A market is the very last thing that we need in social housing. Instead this bill is not about providing for need; it is about providing for the Government’s ideological beliefs—in particular this ideology of the smaller State. I thank Mr Doocey for his very witty joke in his contribution in this debate.On 1 November last year the Minister Paula Bennett admitted that in fact this was a State asset sale. She said so on national television continuing that ideological programme of State asset sales and winnowing down the size of the State that was commenced by the Government in the last couple of terms. She also went on to say and Bill English later on in this House confirmed that there was no guarantee whatsoever that any of the proceeds from selling off those State assets would be used to build any new houses. In other words it was just about shuffling around the ownership arrangements of the houses not about housing anyone extra at all. Simply shifting responsibility for the housing of vulnerable New Zealanders on to charities or to the private sector and then banking the cash from a fire sale of those assets will not solve anything at all.Almost 5000 families were on the waiting list for a State home in December. The census showed over 200000 people in Auckland including around 63000 children were now living in a crowded household because of the shortage of housing. Those children as Annette King has said are at growing risk of diseases of overcrowding diseases of poverty: skin infections respiratory conditions and rheumatic fever. Rheumatic fever prevention as Annette King has said was the programme that the Government introduced with all the fanfare in the last term of Parliament. It has lowered the axe on it in the Budget today with no fanfare whatsoever. Those kids do not need to be made the responsibility of a charity. They need a real tangible place to call home. New Zealand’s housing crisis is caused fundamentally by a lack of affordable homes. Selling off State houses so that developers can make money by sitting on the land or building more expensive homes which is precisely what is going on under this Government cannot possibly be the answer.This bill also serves the ideological belief of this Government that its role is only to be a provider of a small amount of help as a last resort rather than as the guarantor of those basic rights that New Zealanders hold. Bill English again in a meeting that he held with the editorial staff of the New Zealand Heraldsaid that Housing New Zealand has “become a pool of long-term dependency. You get in and you stay in so you don’t move out. So it’s creating large future liabilities having them in here.” If you go back to the original report—he refers to a report from the Department of Building and Housing. Its big thing was about mobility—how you meet serious housing needs but enable people to keep moving back up the ladder to independence which is a somewhat cynical way of saying that actually the Government’s agenda here is about minimising the cost of providing services for people. That ladder towards independence is the very ladder that the Government proposes whisking out from more and more State house tenants under the reviewable tenancies scheme.This bill is also about the ideology of separating out policy advice from the basic grounding that the policy advice could benefit from by being co-located with the planning funding and provision functions that exist in Housing New Zealand.I can almost conjure up that early 1990s environment. I can imagine the hairstyles. I can think of the shoulder pads the chrome the pink and grey stripes and probably I imagine that that is the environment in the rarefied atmosphere of the Ministry of Business Innovation and Employment the Government department that this Cabinet this Government can trust to give it the ideologically pure advice on policy around housing that it so desperately craves. Thank you.DENIS O’ROURKE (NZ First): Annette King said that this was a Government of Neros because of its fiddling policies as far as social housing is concerned but I think that it is actually a Government of zeros because that is the number of additional rental houses that its policies and this bill will generate—zero. That is the effect of this Government’s policies. That is the legacy of 7 years of this National Government—zero. That is what it really is. This bill is a monument to this Government’s appalling record on housing.When I first entered this House in 2011 there was already a very significant housing shortage especially in Auckland. Of course in that very same year we had the Christchurch earthquakes and that created another housing crisis there. Even then the Government was saying: “There is no housing crisis.” However it got worse and it got worse and it got worse until we got to the point when nobody with half a brain could deny that we have the most serious housing crisis in this country’s history. And yet this Government still fiddles and still produces zeros as far as increased houses for people who need to rent them from the State are concerned.New Zealand First would support sensible policies that provide more efficient services and better services at less cost but never—never—at the expense of people who are being forced out of their homes. That is effectively what this legislation and the principal Act that it amends do. What this Government seeks to do is to minimise the role of the State; abdicate responsibility to others; provide as little money as possible for housing; contract others to take responsibility instead; push as many people out of State houses as possible; favour non-government organisations many of whom are simply not capable of fulfilling this function; pretend that public services are being provided at less cost; avoid full accountability for social housing; and lastly fail to protect people against exploding rents. That is the record of this Government and that is why I say that this bill is a monument to its appalling record on housing.If you look at some of the best housing providers in the community one of the best is the Salvation Army. It is an NGO that could be relied upon to be a good provider. However it looked at the Government’s policies it looked at what the Government was trying to do and it stepped back and said: “We’re not going to be a part of that.”—to its credit; to its credit. That actually is a sound commentary from an independent source on what this Government’s housing record really is and on its legislation on social housing in particular. The main thrust of what the Government is trying to do is actually to reduce the size of the State and in particular in this case to reduce the role of Housing New Zealand. It could not be more clearly spelled out than we see in this amendment bill. It is a further step in the wrong direction.By preventing Housing New Zealand from giving advice to Ministers it is sidelining an important role for Housing New Zealand—a role that it has performed very well over a very long time. It is a mistake to do that. Instead the Ministry of Business Innovation and Employment will be given that responsibility but actually it is going to be only a contract supervisor with a limited role and no real responsibility. The result will be that far too much institutional knowledge will be lost and Ministers will be empowered to give directions. There is a deliberate move towards what is called “flexibility” but none of the speakers opposite—even though they have used the word a lot—have told us what that really means. What I think it means is that Ministers will be able to exercise their own agenda and that is why they have been given the power to give directions. This is not a good way to conduct and administer housing policy in this country.Tim Macindoe: Does that member understand what he’s trying to say?DENIS O’ROURKE: If that member opposite cannot understand what I am trying to say then that is an indictment on him not on what I have said. He does not understand this bill. I doubt that he has even read it and he certainly does not want to take responsibility for some of the worst Government policy that this Government has brought forward in this term or the last one. I recommend that that member actually reads the bill and when he speaks next perhaps he will try to say something sensible.The results of this Government’s policy will be that social housing will be delivered at very great arm’s length from the Government’s agencies. More power will be given to Ministers which is another example of an increase in executive power. That is likely to mean a very political approach and it is likely to mean a very dogmatic approach not one aimed at looking at the best interests of the most vulnerable people in this country despite what those opposite have been saying. It will in fact have the opposite effect. It will mean those people will be worse off and have fewer housing choices and it will certainly not meet the housing need for people who need to rent homes in this country. It ultimately means more housing deprivation. State houses will be even harder to get non-government providers will impose their own policies and practices—and goodness knows what they will be—and most of all it will mean a very uncertain outcome for low-income people many of whom will be pushed out of State houses with nowhere really to go. That is a very poor legacy and a very poor outcome.The price of supressing demand which is what this Government is really trying to do is very high in social terms. It will cause reduced health and well-being increased poverty more families at risk compromised social cohesion and an exacerbation of the already badly disaffected enough underclass of people in New Zealand. Despite the Government’s claims people will inevitably be bullied out of their State houses. The Government will continue to sell State houses. Goodness knows how that will improve the situation for people who need to rent homes in New Zealand. The Government will build far too few State houses and that is the fundamentally bad part of the Government’s programme. There is no money really set aside in this Budget to improve that situation. This Government is simply unwilling to invest and to ensure that there are enough houses for people to rent in New Zealand. It is another step in the wrong direction.The Government will pay huge sums of money to community housing organisations through contracts that are supposed to be tailored contracts. What does this term “tailored” mean? Again nobody opposite has really described what that means. What I think it means is that some organisations will be treated differently from others. And what is the effect of that and what is the reason for that? We have not been told. We do not really know what this amendment will do as far as these so-called tailored contracts are concerned. Let us hear an explanation from the Minister because so far she has not given one. These are still just subsidies to registered providers. Call it what you like; that is actually what they are. These organisations will own the housing funded by the taxpayer they will profit from it they will compete for it and they will try to get the highest rents they can for them.This bill is a retrograde step. It emasculates Housing New Zealand. It seeks to reduce Government accountability. It increases executive power. It does nothing to reduce rents. It does nothing to increase the rental housing stock. New Zealand First will certainly vote against it.STUART SMITH (National—Kaikōura): Well I think at the heart of this debate about this bill is actually a Government that is putting people at the centre of social housing rather than putting a housing provider at the centre of the bill. It is about people. That is what this whole Budget is about. I would like with great pleasure to commend the bill to the House. Thank you.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Jan Logie—5 minutes.JAN LOGIE (Green): After what may have been the shortest speech of the night—I am not even sure whether that last speech made 20 seconds—I rise to take a call—The ASSISTANT SPEAKER (Lindsay Tisch): Order! I am sorry but I will ask the member to start again. I could not hear the beginning of her speech.JAN LOGIE: Thank you Mr Assistant Speaker. I was just commenting on the brevity of the last speech possibly under 20 seconds and possibly even the shortest speech of the evening. Well done National Party! Your enthusiasm and commitment to the detail is absolutely impressive! I am sure we are all feeling far more enlightened on this side of the House about the details of this bill that has just been presented to us so recently.As my colleague has also mentioned normally we come to the second reading after having been through the select committee process where we would have heard submissions from the public who have raised concerns around the detail or the concept of the bill. We have been able to ask questions and we have had their responses back. We have had ministerial advice from the departments to be able to consider what the implications are and what this wording is conveying. In my experience even legislation that has been one page in length incredibly short has resulted in change. That is the usual process that we go through. We are here in this situation with a bill relating to housing which is an absolute core issue for this country at the moment. We know we have a housing crisis even if some members of that Government seem a bit shy about using that word. I have heard someone on that side use it occasionally slipping up and I am sure they got told off afterwards. But here we are on a major issue for this country having legislation passed under urgency.It is legislation—as we have heard several members on this side say—the detail of which is a little opaque. We are looking at the documents that have been given to us; I am looking at the departmental disclosure statement. What this bill is doing from what I can make out is that it is not going to affect a tenant’s experience directly. The actual bill itself though the context that it is sitting in is in relation to the passing over of State assets to other private property developers or community organisations.The actual bill itself will enable the Minister to have flexibility to tailor the contracts. We have been hearing a lot about flexibility. What they are saying specifically is that with tenants’ needs resulting in higher or lower tenancy management costs they can vary the terms of the contract make payments for vacant properties to guarantee a provider’s income stream and make offers for long-term fixed-price tenancies at prices that diverge from the market rent but benefit the Crown the provider and the tenant.We see mention of the tenant in there a couple of times but not that often despite the fact that we have been told this is all about the tenants; it is not about anybody else—it is not about the Government and it is not about the providers; it is about the tenants. Actually there is not much mention of the tenants from what I can see in this. There has been no consultation with any State housing tenants in the documents here. From what I am hearing from State house tenants in the community this is very unsettling. Communities are being destroyed at the moment and that is what people are telling us. Communities that have existed in Maraenui in Porirua in Glen Innes and around the country—longstanding communities are being destroyed. Yet we hear from the National Government that apparently it is the Government for big community. [Interruption] Well communities of constant transition and movement—that is actually not community Mr Doocey might I say.We are being told that this is about lower payments for providers in places where there is little ongoing demand. I really think that there is enough detail and complexity in there that deserves consideration and I do have some questions for the Minister We are being told that this bill will allow community organisations to get more money to meet the needs of clients. It is not necessarily even about the sale of houses but about leasing arrangements. I know Women’s Refuge gets houses through Housing New Zealand at the moment and the needs of women and children going into refuge are dealt with through separate contracts not through the housing-related contracts. So I am struggling to see where this fits and why those specific needs of tenants cannot be dealt with through existing contracting systems. I am also struggling to understand why Housing New Zealand would need more flexibility. There are questions to be answered and I really hope that at least at some stage in this debate we get some answers.The ASSISTANT SPEAKER (Lindsay Tisch): The Hon David Cunliffe—5 minutes.Hon DAVID CUNLIFFE (Labour—New Lynn): It is déjà vu. Here we are in the dead part of the evening passing a Budget bill under urgency through all stages when it is not urgent. It is not urgent. The only thing that is urgent is to relieve the Government of embarrassment because New Zealanders do not want the Government to do what this bill does. I remember a picture of Bob Semple taking the first table into the first State house. New Zealanders loved Mickey Savage’s Government which built State houses so that New Zealanders who could not afford to rent a house got a roof over their heads. Then the Clark-Cullen Labour Government brought in the income-related rent subsidy to take some pressure off families who could not put food on the table.Well this bill undoes all of that. This bill empowers the Minister to flog off those State houses to for-profit developers in a grand payback to National’s business lobby mates. This bill gives the Minister the ability to change by fiat the 25 percent fixed income-related rent subsidy thereby costing hard-working New Zealand families the food off their table because they cannot afford the crazy prices of Auckland rents. This is a sad day and the Government’s pollsters know it. That is why we are here in the middle of the night passing this bill this shameful bill through all stages without a select committee hearing without the opportunity for New Zealanders to have their say because the Government wants it. [Interruption] There they are—sitting and chirping smug in the arrogance of a third-term Government. They are smug in the arrogance of a third-term Government. They just want it off the TV screens because they know New Zealanders fundamentally deplore what is being done in this bill.You know the housing crisis is about real people like the people in my electorate. We have three families with young kids who are living in garages. They have come to my office. We have a family of 12 in a two-bedroom property and the adolescent kids do not have rooms and they do not have privacy. We have got a family that is under abuse which could not get a safe house because there are not enough houses. And you know that the solutions to those terrible problems of overcrowding and abuse are not hard to think of. You build more houses and you get foreign investors out of the market because they are simply speculating and driving up the rents.Carmel Sepuloni: That makes sense.Hon DAVID CUNLIFFE: That makes sense. It is not that hard to understand but what is the Government doing? It is flogging the State houses off for profit and it is going to drive up rents by fiddling with the income cap. It is taking it in exactly the wrong direction because this is a Government that has hit the panic button—hit the panic button. It is well into its third term it has finally woken up to the crisis and the word came from the pollsters: “You’d better do something.”And there is no plan except profit with these guys—no plan except for profit which comes off the tables of hard-working New Zealanders. Hard-working New Zealand families like the family in my electorate—12 of them in a two-bedroom house—are waiting for the State house that will never come. So you know the Government said: “Well we will give it to the community sector like the Salvation Army or the Methodist Mission.” Well they are decent people who said: “We don’t want an unfunded mandate. What are we going to do with all of the liabilities when you are not giving us any money to buy them with?”. It is a travesty and the longer that New Zealanders have to hear about it the less they are going to like the Government that is flogging off their houses for profit and pushing up their rents. That is why we are in this House in the dead of night passing this bill without a select committee hearing. It is wrong. The bill is wrong. The process is wrong. The result is wrong and it will be part of the undoing of this selfish greedy Government which is acting against the interests of New Zealand families.Dr PARMJEET PARMAR (National): In very simple terms this bill aims to help families in need to get into social housing that meets their needs. How can this be wrong—meeting families’ needs? It cannot be wrong. As we heard this bill is to introduce flexibility for the Ministry for Social Development to contract and negotiate with social housing providers. That is to support a growing role for community providers to deliver social housing. It is also to improve the supply of social houses to meet demand. It also clarifies and confirms a number of processes that already happen in practice. This bill will also help tenants get back into housing independence. We want to make sure that those people who are in real need are provided with social housing. We are making social houses fit for people to live in. They are not just properties to us; they are houses where we want to house people in need—families in need.This National Government has insulated all State-owned social houses. They are warmer drier and healthier under this National Government. This flexibility about ownership is a great thing. Social houses sold will remain as social houses and the tenants will remain housed in them for the duration of their need. This is a win-win situation for tenants for local communities and for taxpayers. It is not the duration of the speech; it is the message that counts and the message is that it is a win-win situation for tenants for local communities and for taxpayers. Thank you. I support the bill.Dr MEGAN WOODS (Labour—Wigram): Never before has so much pride been displayed by so few in such a short space of time. It has been quite cooling. That was one of the longest contributions that we have had at a second reading on a bill going through under urgency where it is not having the scrutiny that we would expect in Parliament under normal circumstances in terms of its select committee stage. It is frankly an arrogant Government that thinks that it can rush through legislation at this pace even under urgency without giving that legislation a full debate and a full airing. We have heard some fantastical explanations why. There was Mr Doocey who thinks that magically houses are going to grow overnight if only this bill is passed. We will wake up in the morning and throughout the land there will have sprouted houses into which the good people can move.There is a naivety in this Government which is showing through in this legislation. We are hearing over and over and over again with this piece of legislation the panic that has set in in this Government. There has been some polling and those members have seen there is a problem—their inaction on housing over their 7 years in Government—yet here we are pushing through a half measure that is only enabling something that is not going to help the situation. It is the only solution that they have come up with. Other suggestions that they have had around housing seem to have disappeared such as the much-touted during the election campaign and the much-touted at the beginning of this year Resource Management Act reforms. That was going to be the silver bullet for housing in New Zealand. We are still waiting for Dr Smith to show us those reforms. We have actually said: “Show us them. Put them on the table and do you know what? If there is some stuff that will help with housing we’ll look at it. Let’s use the mechanism of a national policy statement and then we could actually perhaps join with you and work on that.” but has National fronted up and shown them to us? No because this is a Government that does not have answers around housing. This is a Government that has got empty ideological rhetoric which is not going to make a blind bit of difference to the lives of ordinary New Zealanders.What we have had touted tonight—starting with the Prime Minister and echoed through all the research note speeches—is a clear commitment to compassionate conservatism coming from the Government benches.Hon Member: Big community.Dr MEGAN WOODS: The compassionate conservatism that those members believe they are displaying seems to have evolved so that actually it translates into the big society. One of them let it slip but I think he got it wrong and called it “big community”. The term that your overseas overlords use is “big society” when talking about this. But National Party members need to actually have a look at what compassionate conservativism is. We actually have had National Parties in the past in this country that have practised compassionate conservatism. What is happening in this House tonight and in this legislation is not the conservatism of Sid Holland and it is not the conservatism of Keith Holyoake. When those leaders of the National Party sought to remove the State from housing they looked to sell houses to the individuals who lived in those houses. They did not look to flog them off to their mates in the corporate sector in order to put people under corporate overlords. This is the Cabinet club conservatism as my colleague Phil Twyford called it that underwrote the 1990 market rentals that Ruth Richardson put in place.Do not kid yourself that this is any form of compassionate conservativism. When compassionate conservativism started to be touted by right-wing parties—it was Bush who first started using it; he abandoned it pretty much after 9/11 and just went into plain old “kick ’em in the guts” right-wingism actually. But compassionate conservativism does not look back to your roots. You are a party that has been better than that—Mr Assistant Speaker I am sure you are as well. The National Party does have a history that is rooted in some belief in that but what we are seeing displayed tonight is not that. This is a return to the 1990s and a belief that you can sell State houses off to anyone.We started with the fiction that this was legislation to enable State housing to be sold to the community sector in some hope of achieving their big society. Well the problem that we are seeing here as we have in many places is that the key providers in that sector said “Yeah thanks but no thanks.”; they did not believe that State house tenants would be better served under this model than they could be with the Government providing so they did not want a part of that. And what have we had now? We have had Bill English saying that yes we could be seeing some of these being sold to private property developers. The Government has tried to dress this up as something that this is not. This is pure and simple a flogging off of our State houses.What else are we seeing? Not only is the Government divesting itself of the ownership of the housing it is divesting Housing New Zealand of some of the core policy functions and thinking that need to go into this so that we will no longer see Housing New Zealand having a policy function. We will not have a dedicated part of our Government that tries to put the bits of housing policy together. Instead we are going to see a continuation of the approach that we have seen with the functions spread and splintered across the Government and we will see that it does not have a coherence that has tenants at the centre and the well-being of the tenants at the centre. My colleague Phil Twyford put it very well when he talked about a State-owned version of Barfoot and Thompson and said that we will have a State-owned letting agency not a Government department that is dedicated to doing what we expect Housing New Zealand to do and to doing what its functions should be.That is a very sad day for New Zealand because what we used to have in this country is a belief that a core part of the safety net that we provided for our citizens was housing—housing that would mean that people would not have to go homeless. I think what we are going to hear through the course of this debate is examples from all around the country that we can speak of where we have constituents who are not being well served. What is most upsetting for us is that these very same constituents are going to be even worse-served under the changes that we are making here under urgency tonight. There is nothing in this legislation that is going to give back to our tenants. Instead what we have is an ideological commitment to selling houses off to whoever the right bidder is that the Government can find.The shortage of housing is getting worse and other speakers from this side of the House have alluded to the fact that selling houses does not create more houses. I think my colleague Annette King chose to point out that selling them off is not going to magically create more houses any more than passing legislation under urgency Mr Doocey will allow for houses to magically appear on the landscape of New Zealand. What we have to have and what we are not having from this Government is a proper commitment from the Government to ensuring that New Zealanders are housed—something that we think is a pretty basic role of Government and something that we are committed to doing. Just simply passing the buck on to the community sector which does not want a bar of it is not responsible government in this area. Passing the buck and abrogating itself of its responsibility as a Government is not good enough.But what is more galling is where I started: this is a group of people who are trying to kid themselves that this is some kind of compassionate conservatism. This is a return to their 1990 roots not their roots in the past in the 1960s and the 1950s when actually there was a grain of truth in the fact that the National Party in New Zealand did exercise a kind of compassionate conservatism. There was a belief in the role of the State. There was a belief that it needed to do right by New Zealanders. We are not seeing that in this legislation. What we are seeing is a Government that is walking away from one of its core responsibilities which is providing adequate housing. It is a Government that is out of ideas. It is a Government that is poll driven. What we are seeing here tonight is not going to solve anything.JONO NAYLOR (National): Given that the members opposite are so keen to talk about the details of this bill I will simply commend this bill to the House so that we can move to the Committee stage.A party vote was called for on the question That the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill be now read a second time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Bill read a second time.In CommitteePart 1 Amendments to Housing Restructuring and Tenancy Matters Act 1992CHRIS HIPKINS (Labour—Rimutaka): I am very pleased to take a call on this particular bill. I want to say from the very beginning how disappointing it is to see the National Government’s wholesale privatisation agenda when it comes to State housing in New Zealand. I want to talk from experience about this. What does this actually mean in practice? In my electorate of Rimutaka the National Government decided that it was going to deal with a housing area in Pōmare that had significant problems—Farmer Crescent. What did the Government do? First of all it booted everybody out. It completely evicted all of the tenants in that area. It left the houses empty and they got vandalised. Then what did it do? Next it came along and demolished all of the houses. It demolished all of the houses. Then what did it do after that? Well of course the Government hocked off the land to private developers—to private developers—which is exactly the approach of this National Government. It is about making opportunities for private developers.Did the problems disappear? Did the families who lived in those houses who were the subjects of many of the social problems simply disappear? No they just relocated elsewhere. The problems went with them to the other locations. The Government did not actually deal with the underlying problems and the underlying issues. So what have we seen in Pōmare? Yes they have got some nice new houses in the area where there was previously a whole lot of State housing. Only a fraction of them are social houses. Only a fraction of them are social houses and the rest are privately owned.Hon Bill English: Isn’t that terrible! Shocking!CHRIS HIPKINS: And what is the problem with that Bill English asks. The problem with that is that the overall number of social houses is decreasing.Carmel Sepuloni: He’s saying: “Isn’t that terrible!”.CHRIS HIPKINS: And he is saying: “Isn’t that terrible!”. The overall number of State houses is decreasing. I say to Bill English that I actually like the idea of mixed neighbourhoods. I grew up in one. I grew up in an ex - State house with a State house next door a private house on the other side and a bunch of State houses on our street. It is a great way to grow up as a Kiwi kid. I am fully supportive of that. But I tell you what: we have got to make sure that there is an adequate number of social houses if we are going to change the make-up of neighbourhoods. And that is not what this bill is going to achieve. What it is going to result in is a wholesale sell-off of existing State houses and there is absolutely—Tim Macindoe: Saying it a thousand times won’t make it true.CHRIS HIPKINS: OK look I will open it up to Tim Macindoe. I will put the same challenge to him that Andrew Little put to John Key and Bill English and the others this afternoon which they did not take up. Will they guarantee that every one of their new houses that is going to be built will be affordable? It is an open invitation. It is an open invitation right now: will they all be affordable houses that the National Government is going to be building? No one—no one—on the Government benches is willing to make that promise to New Zealanders because they know that is simply not going to be the case.Here is another example. Will those members guarantee that the number of publicly owned social houses will not decrease? No—no: absolute silence from the Government. So when it comes to the provisions of this bill it is not willing to guarantee that the number of publicly owned social houses will not decrease. These are families whom we are talking about. These are their homes that we are talking about and this Government thinks that they should be hocked off—they should be hocked off—and it is not willing to guarantee that the overall number will not be decreased. I think that says an awful lot about the priorities of this current National Government.Tim Macindoe: That’s what this bill is all about. We are working to increase the provision—CHRIS HIPKINS: No—here we go. So Tim Macindoe is saying that this bill is all about increasing the provision of social housing. Who is going to deliver those houses? Who is going to deliver those houses? Because all of the organisations that Bill English and Paula Bennett and Nick Smith said were going to front up and deliver those houses have said that they are not interested in it; they have said that they do not have the capability to deliver it. So now the Government is bringing a bill before the House that is going to increase the scope for private developers to be involved in this.And of course what do private developers want out of this? They want to make money. They want to make money out of it and fair enough. That is their job. That is what private developers do. That is one of the reasons why over the history of New Zealand Governments have been actively involved in the building and delivery of social housing in New Zealand because the Government can do it cheaper and it can provide a higher quality of housing than private developers have done in the past. That is also one of the reasons why many ex - State houses contributed to the provision of affordable housing for first-home buyers. This Government is not interested in that. It is happy to sell them off but it is not going to replace them. Previously when Governments have sold off State houses to allow first-home buyers into their first home they have made sure they have been replaced. Not this National Government.We saw under the mother of all Budgets and under the tenure of the Government that took over from that a massive reduction in the number of State houses in New Zealand. And what was the impact of that? The impact of that was that more and more New Zealanders ended up on waiting lists. And how did this Government deal with that increase in the number of New Zealanders on waiting lists? Well first of all it just dropped the bottom two categories off the waiting list altogether. So if they were a priority C or D person on a waiting list it just cut them off altogether—pretended they no longer existed. Those people are still out there looking for houses but this Government does not want to know anything about it. This Government is not interested in making sure that there is sufficient provision of social housing for people who cannot afford to buy and sufficient provision of affordable housing for those who want to get into their first homes. It is looking the other way.It is going to cost someone a million dollars—within a few months it is going to cost a million dollars for someone to buy a home in Auckland on average. That is an absolute disgrace and that has happened under the tenure of this National Government. It is simply out of ideas when it comes to dealing with the real issues around housing in New Zealand. It has got no real plan for more affordable housing for first-home buyers and it is turning its back on those who cannot afford to buy a home and who do need that extra support when it comes to housing. Who pays the cost? It is the children and it is the families who will pay the cost for that. Of the 6000 people who applied for social housing in the last quarter 4000 did not even make it on to the waiting list. They did not even get on the waiting list. Two-thirds of people—The CHAIRPERSON (Hon Chester Borrows): Order! The Committee is suspended until 9 a.m. tomorrow. Nō reira ka kite anō.Debate interrupted.Sitting suspended from10 p.m.to9 a.m. (Friday)