Adams AmyHon AMY ADAMS (National—Selwyn): I've come down to the House of course to take a second call in quick succession after the first reading debate on this Families Package (Income Tax and Benefits) Bill because it is vitally important that New Zealanders who are listening to this debate who go back to it understand the real impact of what's happening here tonight.The starting point is very clearly that the bill in front of us repeals legislation that is currently on the books which would have moved the income tax brackets from $0 to $14000 to $0 to $22000 for the first tier. That means that anyone earning under $22000 a year would have with the law as it currently stands been paying only 10.5 percent income. Now as a consequence of this bill most of that income will flick up into the next tax bracket and they'll be paying 17.5 percent. Similarly anyone earning under $52000 under the law as it currently stands would pay a maximum tax rate of 17.5 percent. But the Labour Government wants to make them pay upwards of 30 percent. So what we're doing here is targeting those on the very lowest incomes and saying actually they should be paying some of our highest tax rates.Now when National was in Government we were very clear that over the passage of time when the value of money changes it is important that we continually reflect that buying power of money and the increase in the average and median wages so that you don't end up getting more and more of the lower-paid workforce paying the higher rates of tax. It is just crazy to have a bill that insists on lower-paid workers paying income tax rates that are targeted to and designed for those on higher incomes. So if you want to talk about targeting support the most sensible basic thing that you can do is ensure that those lower tax brackets which are designed under our incremental tax system to apply to those who earn the least are actually relative and keep pace with the value of the money and the increase in the average wages. And yet the first thing that we've seen this new Government do is move to force all of those lower-paid workers back into higher tax brackets. That is a simple incontrovertible fact that cannot be challenged. That is the law at the moment and this bill changes the law so lower-paid workers pay more tax than they should and that they need to.When a Government is successful at managing the economy and we are successful at ensuring that Government spending is controlled we get to a situation where we realise that we are taking more money from people from their pockets every week than we need to. In that case the responsible thing to do is to not take it out of their pockets to begin with. You don't take it add a bit more filter it through a whole lot of crazy schemes and then dribble a bit out. When the Government is taking more than it needs from hard-working Kiwis it is its duty to allow those workers to keep what they earn. Governments should only take what they need to run the country properly and efficiently.Within just days of this Government taking office we are seeing them move to not only pull more and more money out of the pockets of hard-working Kiwis to use them like the ATM and the cash cow that they obviously see them as but they're doing it in ways that don't even follow their own narrative.We have heard speech after speech today about how this package is somehow better at getting help to those who most need it. Well that's a fine-sounding piece of rhetoric but if that were true even in the slightest why would you have a baby bonus being paid out to millionaires? Why? If your concern was genuinely to make sure that it was targeted you would do a couple of things. First of all you'd make sure that the lowest tax thresholds actually were kept for those who are on the lowest incomes. They haven't done that. And you'd make sure that the benefits that you provide are actually made available to those who need them the most and they haven't done that.In fact the biggest spending item that this Government is funding by cancelling the tax cuts keeping more of Kiwis' money is providing a universal gap year in the first year of university for every single young person whether they need it or not. We can argue the merits of free education but let's not kid ourselves that this is about targeting. If you wanted to target you would do it first and foremost by ensuring you don't take any more money away from low-paid workers than we need to.I want to just spend a moment reflecting on the fact that this is being done under urgency. This doesn't come into effect straight away. There are a number of months more in which this could have gone to a select committee. While there is no doubt we will continue to have significant principled differences between the Government and this side of the House—and they're differences that I'm very pleased to stand up and defend in this House—I don't think it's sensible to suggest that there aren't questions and improvements that could sensibly have been worked through.I just want to highlight a couple of those. There are some very strange and inexplicable—maybe members on the opposite side would like to explain them to us—calculations and figures that have been set for which we've heard no explanation. I would have thought in the select committee process members of the public would have been very interested to know for example why when you have the baby bonus in years two and three—not in year one when it's universal and everyone gets it whether they need it or not; not when we're effectively paying them to have that child irrespective of need. In years two and three that payment does begin to abate with income but that income threshold kicks in at the very logical and round number of $79000. Now why $79000? What is the logic of the abatement rate starting from $79000?Even more inexplicable is that the abatement rate itself is 20.8 percent. Now in what universe would you illogically go to starting an abatement from $79000 and then applying it at an abatement rate of 20.8 percent? Not 28 percent—two zero point eight percent.I'm assuming that Grant Robertson has got some genius behind that and there are very sensible reasons for it. But what he hasn't done—Hon Grant Robertson: Of course. That goes without saying.Hon AMY ADAMS: I'm trying to be a little bit—you know it's the spirit of Christmas—magnanimous to the Minister of Finance. But what he hasn't done at any point is come up with any good reason why 20.8 percent was right; not 20.9 percent not 20.7 percent not 21 percent not 20 percent. He's very carefully obviously determined that 20.8 percent abatement was right. If there was a good rationale for that perhaps we will hear it. But in the select committee process we would have had the opportunity to go through that and examine it in some detail.We heard for nine years outrage and rallying and indignation at the inappropriate use of urgency. I remember a time when we were debating something that would take effect that afternoon. In fact it was so urgent we had to get the bill—well actually we worked around it but at one stage we were going to get an air force plane to fly the bill to the Governor-General to give his assent because it was that urgent. And still Chris Hipkins and Gareth Hughes in particular said it wasn't appropriate to use urgency.So in that case with that sort of time frame you shouldn't use urgency because even a short select committee process would help. But here we have a bill that no party other than Labour campaigned on that doesn't take effect even in its very early stages until 1 April next year—in fact most of it takes effect much later than that—that has strange and inexplicable thresholds and measures and complications to it and that has a lack of clarity around how things like the winter heating payment will apply to superannuitants. Do they have to apply? Do they get it contemporaneously? What happens if they do go overseas for four weeks and one day not three weeks and six days because I don't know there was a volcano erupting in Bali and their flight was delayed? Do they have to pay it back? How does that work? Do they have to go and re-enrol? None of that is clear. Superannuitants will be none the wiser as to what they get and how it works. We've got no idea what the bureaucracy required to run it is.All of that could have been worked through in a select committee process. And yet even with that we have the issues of superannuitants who find themselves in residential care as many do in the later stage of life. They will now find out tonight that not only will they not get any sort of winter heating payment but they also lose $1060 that they were due to get on 1 April.Where in all of the glossy material is the Labour Party saying By the way all you superannuitants who are in care: sorry about that. You get nothing because we're going to take away the increase in your superannuation payment and you don't get anything else. To all you other superannuitants who aren't in care: good luck for all of those of you who don't need it because you'll get it anyway; and those of you who do well we can't really tell you what you're going to have to go through to get it what's going to happen if you get your travel dates wrong by a couple of days and what sort of penalty rate will apply."This is not only a bad bill; it is a rushed bill. It won't achieve what it's setting out to achieve. It could have been improved through the select committee. Worst of all it is taking money away from the workers who earned it and who deserve to keep it."