Upston LouiseSOCIAL SECURITY (BENEFITS ADJUSTMENT) AND INCOME TAX (MINIMUM FAMILY TAX CREDIT) AMENDMENT BILLFirst ReadingHon LOUISE UPSTON (Minister for Social Development and Employment): I present a legislative statement on the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill. DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website. Hon LOUISE UPSTON: I move That the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill be now read a first time. The bill that we are considering amends the Social Security Act 2018 to ensure that income support responds directly to the increases in the cost of living by indexing main benefits to changes in the Consumers Price Index (CPI) for inflation. This change will revert the amendment made by the previous Government in 2019 to index main benefits to net average wage growth. In line with this change to the rate of indexation the bill also amends the Income Tax Act of 2007 to adjust the minimum family tax credit threshold to ensure that it remains aligned with changes to the rate of main benefit. This ensures that low-income working families remain better off financially in full-time work than they would be on a main benefit. These changes will protect the real incomes of benefit recipients and low-income working families in the years to come while also ensuring that the costs associated with the benefits system remain sustainable and manageable in the long term. In the short term New Zealanders enduring the cost of living crisis can expect that main benefit rates will remain broadly similar. Over the longer term New Zealand will gain from savings in benefit expenditure while benefit recipients retain a consistent level of real financial resources and their purchasing power will be protected. Making this simple change forms part of the coalition Government's wider commitment to prudent financial management and it is being progressed under urgency to ensure that the rate of main benefits will reflect inflation when the yearly indexation is implemented on 1 April 2024. It will also support our Government's relentless focus on getting people who can work into work by improving the incentive to move off benefit in the long term. We know that having a job is the best way for New Zealanders to get ahead and we want to make sure that the rates of main benefits reflect this. Easing the impacts of the cost of living is also a priority for our Government which will benefit both people in work and those receiving benefits. The lower than forecast CPI figure of 4.7 percent for the year ending December 2023 shows that inflation is slowing but it still remains outside the Reserve Bank's target range of 1 to 3 percent. There is still more work to do and this Government is committed to returning to within the target range to make sure that we ease the cost of living crisis for all New Zealanders. In recognition of these pressures our Government has committed to providing income tax relief increasing tax credits for working households and introducing a new childcare tax credit to help address the cost of living pressures.This bill fulfils the Government's commitment to return the rate of indexation of main benefits to inflation a measure which has also been used for 31 of the last 35 years. In doing so it takes a responsible and common-sense approach to the ongoing maintenance of the income support system. As such I commend the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill to the House. DEPUTY SPEAKER: The question is that the motion be agreed to.