Robertson GrantFAMILIES PACKAGE (INCOME TAX AND BENEFITS) BILLFirst ReadingHon GRANT ROBERTSON (Minister of Finance): I move That the Families Package (Income Tax and Benefits) Bill be now read a first time.This is a transformational package. It will transform the lives of low and middle income New Zealanders especially those with children. It will lift 88000 children out of poverty when it is fully implemented. That will nearly halve child poverty when that happens. In short this piece of legislation will make New Zealand a better kinder and fairer place. This package represents the shared desire of the three parties that make up this Government to not be satisfied with the status quo. We have different priorities from the previous Government. We want all New Zealanders to share in prosperity. We want all Kiwi families to have the means to provide for their children and to live in warm dry and safe homes. We see an opportunity to better support families especially those on low and middle incomes to ensure that their children get the best start in life and I want to thank the New Zealand First Party and the Green Party of Aotearoa New Zealand for joining us in transforming New Zealand society in this way.This coalition Government's families package will do these things by boosting the incomes of low and middle income families through extending Working for Families; introducing a Best Start payment to help families with supporting a child's early years; introducing a winter energy payment for our superannuitants and low-income families; introducing 26 weeks of paid parental leave by 2020 which has already been passed into law; reinstating the independent earner tax credit; implementing the accommodation supplement and accommodation benefit increases announced in Budget 2017; and finally to pay for it all repealing the tax cuts announced in Budget 2017.The Government can confidently fund these important measures by scrapping the previous Government's tax cuts. Those tax cuts were an untargeted and irresponsible election stunt. In the face of growing inequality a housing crisis and a health and education system under stress the previous Government prioritised delivering $440 million a year to the top 10 percent of earners. Rather than cutting taxes for high-income earners this Government wants to focus our support on families at the time of life when they need it most. Accordingly this bill repeals the changes that the previous Government made to increase two tax thresholds instead keeping the tax thresholds at their current rates. It is important to note that the changes proposed by the previous Government have not yet come into effect. No one will be paying more personal income tax than they do now as a result of this legislation.In the recently completed election New Zealanders were clear that they wanted something done to reduce the gaps they saw growing in New Zealand. It is not the New Zealand we know and love where your future is not determined by your hard work but rather by the circumstances of your birth. We want a New Zealand where every child has the opportunity to achieve their potential and is supported by a kind and empathetic Government. The message from voters was clear: now is not the time for tax cuts when there are pressing social issues to be solved. That message was heard by all three parties on this side of the House.Scrapping the tax cuts will save the Government almost $8.4 billion over five years. Of this $5.5 billion will be used to fund the Families Package leaving $2.8 billion that can be used for other purposes such as health housing education and infrastructure. The bill also repeals various consequential amendments that were enacted following the previous Government's changes. The bill gives effect to aspects of the Families Package that require primary legislation. For Working for Families the bill will introduce a range of new measures effective from 1 July 2018. Most significantly the family tax credit rate for the eldest child will be increased by $575 to $5878 per year. This combined with the removal of age bands so that there is only one eldest child rate and one subsequent child rate for the family tax credit represents a real boost to household incomes. In addition to these increases increasing the abatement threshold from $36350 to $42700 will significantly increase the number of families eligible for a tax credit. In 2018-19 26000 more families will be eligible for Working for Families as a result of these changes. Moreover these changes will restore much of the value lost when the last Government cut Working for Families in 2010.Some further amendments will ensure that families remain better off in work than on a benefit and are otherwise not left behind. This includes the minimum family tax credit which will be increased from $23816 to $26156. We are also including those in receipt of the orphans benefit the unsupported child's benefit and the foster care allowance to have their allowances increased by $20.31 to reflect the changes that have been made to the family tax credit and we are very pleased to be able to include this additional support.The Families Package also includes the extension of paid parental leave which was passed into law last week giving parents 22 weeks of paid leave from 1 July 2018 increasing to 26 weeks by 2020. Providing a weekly payment to families with newborns through our Best Start package helps establish a strong foundation for a healthy family. Best Start will provide all families with $60 per child per week in the first year of a child's life and for low and middle income families the support until the child turns three.The evidence from sources such as the Children's Commissioner's Expert Advisory Group on Solutions to Child Poverty and the long-running Dunedin longitudinal study is clear: support for the first three years of life is critical to a child's development. This is also the time when many families struggle to manage care and work responsibilities together. We want families to have more choice when it comes to the first three years of their child's life. Best Start will be available to children born or due to be born on or after 1 July 2018 and replaces the parental tax credit. For families who receive paid parental leave the Best Start payment will begin after the paid parental leave ends. In addition Best Start will also be available to caregivers receiving the orphans benefit unsupported child's benefit and foster care allowance. Best Start is the recognition that the well-being of children must be at the centre of everything we do as a Government.The winter energy payment will also be available to those who receive a main benefit New Zealand Superannuation or a veterans pension. On an annual basis it will be worth $450 for a single person and $700 for a couple. This payment is in recognition of the increasing cost of living that often leads to those on fixed and low incomes struggling to heat their homes in winter. Around 1600 New Zealanders die each year due to living in cold homes and thousands more end up in hospital. That is not acceptable. Eligibility Mr Joyce will be conditional on people being resident largely in New Zealand in the winter months and it will be possible for people to opt out from receiving the benefit if they do not believe they need the assistance. One million New Zealanders will receive the winter energy payment. One million New Zealanders will be warmer and safer as a result of this package.This bill will reinstate the independent earner tax credit cruelly taken away by the last Government. Around 500000 individuals received that in 2016-17. The Government has also opted to retain the increases to the accommodation supplement and accommodation benefit payments announced in Budget 2017. It is estimated that $135000 New Zealanders will benefit by an average of $35 a week. Taken together this families package will transform the lives of people all across New Zealand: 384000 families will be better off by an average of $75 per week when it's rolled out; 652000 families without dependent children will gain an average of $14 a week; and 88000 children will be lifted out of poverty—a reduction of 48 percent and 39000 more than the Budget 2017 package.This is a package that sets out to build a fairer New Zealand one where we take a significant step towards our aspiration to be the best country in the world to raise children and where we reject the hollow selfish individualism of the last nine years. It is with great pleasure that I commend this bill to the House.