Wood MichaelMICHAEL WOOD (Labour—Mt Roskill): I want to pick up and develop some of the points that have been made around the independent earner tax credit by some of the previous speakers and then speak to some of the tabled amendments. The reason I think we deserve some real scrutiny over the independent earner tax credit at this Committee stage of the debate—and of course this refers to the changes in clause 5 of the bill—is that it is actually one of the hidden secrets of this Budget. It is not a small thing—it is not a small thing. This is a tax credit that goes to 500000 New Zealanders. It is worth $220 million a year and it is being stripped out of the Budget by this bill. The other reason it is important is because of the people whom it actually affects.Let us talk about who those people are. It is in the information that the Government has taken out. The people whom this affects are the battlers. They are the battlers whom the Labour Party represents and has always represented. The Government claims to represent them but it is kicking them in the teeth right now. It is people in that income band—the second quintile—between $24000 and $51000 and if you look at the Government's own information these are the people who are most impacted by the removal of the independent earner tax credit. They are people who are going out there working in jobs that do not pay them too much often struggling to get by but doing their very very best. This is one of the small things that we did—that the Government did—back in 2009 as my colleague Grant Robertson said. We said to those people that we are on their side and we are going to help them with some of those small expenses. If we actually look at the distributional gains as are affected by this tax package those are the people who are most heavily impacted. Those people in that $24000 to $51000 range once you take out the accommodation supplement—as Mr Chair you have said we should not be considering it in this debate—are $12 a week better off as a result of this package. People in the top quintile are $33 a week better off. So people in the top quintile are three times better off under this package than those battlers earning between $24000 and $51000 per year. Yet we have heard from the National Government that supposedly this is a good way of targeting the Government's resources to help those who need it most. Actually the benefit is targeted at those who need it the least.Moving on there are some interesting things that come up in the regulatory impact statement and it would actually be good to hear from the Minister in the chair Scott Simpson. One of the slightly surprising things and it is really dissonant with what we have heard from other Government speeches is that as a result of these changes—and I am looking at page 31 of the regulatory impact statement—Hours worked are estimated to reduce in total." The actual analysis that has been done by officials says that the impact of taking away the independent earner tax credit for those who receive it in full is a work disincentive. It is pretty obvious when you think about it why that is. It is because people who are in work get the independent earner tax credit—it is there in the name. When you remove it it is not a big disincentive but it is some disincentive to work. That is completely contradictory from everything else that we have heard from the Government.The other useful bit of analysis in the regulatory impact statement is actually in the modelling—the modelling that has actually been done of this package. Let me just read it out. It is very direct. It says that "Around 85 percent … of families benefit from the tax IETC and FTC changes."—and of course that benefit varies from quite a lot to not very much at all as we have heard from Grant Robertson. "The average gain is $26 per week. Around 65 percent … of families with … income less than $48k gain and all families with income above $48k gain." So I would like to hear from the Minister how he explains that this is a targeted package when 35 percent of people below $48000 get nothing and everyone above $48000 benefits from this package.Further to that what the regulatory impact statement tells us—and this is on page 32—is that actually there are around 3000 families who lose financially out of this package. Funnily enough in Mr Joyce's speech and all of the National Government speeches we have heard over the course of this debate we have heard nothing about the 3000 families who actually lose money out of this package. This is not the Labour Party position; it is here in the regulatory impact statement. The losses are not likely to be large I will concede that. But combined with the fact that we know that we have got many many people who as a result of the loss of that independent earner tax credit get a tiny tiny benefit—maybe a dollar a week—plus at least 3000 families who are worse off I would like to hear from the Minister once again how he justifies that as an example of targeting resources to those who need it the most.Finishing off I am obviously supportive of Jacinda Ardern's tabled amendment and also Marama Davidson's which will bring forward the one useful thing in this package—the family tax credit—to 1 July. Thank you."