Adams Amy; Rurawhe AdrianHon AMY ADAMS (National—Selwyn): Thank you Mr Chairman. I am very pleased to take another call in this Part 1 debate because there are a number of matters that we still haven't had a chance to address and I want to talk to some of those this morning in this call.And to begin with I want to put a question to the Minister in the chair Grant Robertson which I raised during the second reading debate and of course this is our opportunity to now ask the member to address that. I raised in that contribution the incongruity and the seemingly inexplicable reason for the matter that my colleague Mr Falloon has just been talking about which is where the Best Start abatement rates have been set in this legislation. Mr Falloon has just talked very wisely about some changes he's proposing but the question I have for the Minister—and I think he needs to take a call and explain—is why we have these odd thresholds set like a $79000 threshold for the abatement to start on the Best Start payment for years two and three and also this very very odd abatement rate of 20.8 percent. And look the use of abatement rates and thresholds is obviously a well-known and well-used tool but these seem to be very very inexplicable levels to have set them at.I raised that question in the second reading debate because actually bringing in complexity to the tax system is something that we've always tried very hard to stay away from. And when you introduce a very odd unusual and unprecedented level there has to be a reason for it—surely otherwise you wouldn't do it. And when I made the comment in the second reading debate the Minister nodded and said Yes there were very important reasons for it." and so I think now is the appropriate time for the Minister—and he's nodding again now. So we will look forward to hearing from him a detailed explanation of why it is there is a 20.8 percent abatement rate as opposed to a more predictable and expected rate.I'd also like the Minister to talk to us about why the baby bonus starts to abate at $79000 where the other abatement rates in this legislation are far more usually around the high $30000s to low $40000s. So I'd be interested to know why this baby bonus which is universal in year one when it does start to abate abates in such a strange and unexpected way and I look forward to the Minister explaining that to this committee.I want to talk about an important aspect of the changes in this legislation and how they change the law that's currently on the books and that is around the timing of them. You have now a period—or we will have if this bill passes—where the tax cuts that are legislated which the National Government put in place in the 2017 Budget will be abolished. So from 1 April taxpayers will now not get the extra $1060 a week in their pockets that they would've got and yet the changes in this legislation don't take effect until 1 July.So I'm interested to hear from the Minister again why it is that for those three months the Labour Government is quite contented to see people going backwards. And if they were so keen to replace our tax changes with a different package of assistance and they were true to their word that this was simply replacing one form of benefit with another why don't they start on the same date? Why is the Labour Government leaving every taxpayer of New Zealand substantially worse off for those months of April May and June of next year? I think those are important issues that really do speak to the very real world effect of this legislation on the people of New Zealand which the Minister does need to explain to this committee and I will look forward to him taking those calls.I started talking about some of the abatement rate changes and that is something I want to come back to because there are some again very incongruous approaches in this legislation that make a significant difference and one of our jobs in this committee stage is to really explore those so that the beneficiaries of any of these entitlements understand why they start losing money when they do.There are a number of amendments on the Table in my name that speak to this very point and I want to take a little bit of time to address the rationale for those changes and to talk to the committee about why I believe that those changes are sensible. The amendments in my name around the abatement rate changes really relate to the family tax credit. Other members in the committee have discussed and are proposing changes to other abatement thresholds but the abatement thresholds and rates and timing for the family tax credit are what I've focused some of my attention on in this set of amendments.They are ensuring that we have first of all a much more smoothed effect because actually as a parent you know that there are costs that go with parenting. And the way the family tax credit system works is that there is one rate paid for the eldest child and then there is a lower rate paid for each additional child. Now the changes that National had put in place and had legislated for said "Look we're not going to penalise families if their eldest child is a certain age and then give them more when they're older." Actually the National Party when it was in Government was of the view that that eldest child rate should apply irrespective of the age of the eldest child. I don't see any good reason why the eldest child rate would apply at a higher level for children over 16 and not for children under 16—for the eldest child. I can tell members of this committee—and many members of this committee will know themselves—that many of the costs of having children are actually particularly noticeable in the first 16 years of their life. As the children get past 16 in fact often they're out working and providing some income for themselves and funding some of their costs and actually as a parent it's quite a good thing to be encouraging them to be contributing in some way however small.So our view—and the one that my amendments reflect—is that when you have this eldest child rate it shouldn't be discounted if the eldest child is under 16. The National Party and the National Government under our changes had made sure that the eldest child would get the highest rate going irrespective of whether they were over or under 16. I'd like to hear from the Minister why he thinks that that eldest child rate—a family should be penalised if their eldest child is younger. So actually that's making it harder for families with younger children.We've heard a lot from members—well we haven't heard a lot from members from the other side in this debate at all. But you know in the first and second reading debates when they had to take calls they were keen to tell us how this was all about supporting younger children and yet in this family tax credit space the way that the Labour Government has set up the abatement rates penalises those with younger children.Now we think that's crazy. Our changes were very clear that the rates would be paid for the eldest child and then for subsequent children irrespective of their age. But in the framing we have in this legislation we've gone back to penalising younger children in a family and letting them get to those top levels only when the children are older. I don't see any good rationale for that. We've certainly heard none from the Minister in the chair. The amendments that I've put up—and there are a number of them; I see the Clerk doesn't appear to have used a numbering system but a time system to refer to them but members have them available. I have a number of amendments in my name that relate to the various aspects of the bill that are in clause 55 inserting changes to new section MF 4G(4) and MF 4F(8) and (4). And the reason for the number of different references is obviously because of the point I made earlier which is that this bill differentiates between people missing out for those first months before the 1 July changes kick in and then the rates from there.So those are the points that I really want the Minister to respond to. Why do we have these strange odd complicated and seemingly incomprehensible abatement rate thresholds and rates for the Best Start grant? Why has the Labour Government and the Minister in this bill chosen to give less money to younger children and more money to older children in the family tax credits? And why—and this is an important one—has the Government if this is about retargeting the National Government's tax cuts chosen to have families missing out entirely for that three-month period between 1 April when our changes would've kicked in and 1 July when these changes kick in?It doesn't seem to fit with the narrative. If the narrative is actually replacing one for the other why don't they start on 1 April? If the narrative is actually about helping children with young families when we know the costs are the greatest the pressures are the highest and incomes are often lower why is the Government penalising those families by removing access to the higher rate of family tax credit and providing eligibility for that only when the children are older and the families almost always are actually in a better financial position as the years have passed?Those changes seem completely at odds with the Labour narrative as does the very fact of replacing many of our universal tax cuts which they say are too universal with equally universal benefits. So I do implore the Minister to explain to us how his narrative makes sense and why he has left every taxpaying New Zealander worse off over the period from April May and June of next year.The CHAIRPERSON (Adrian Rurawhe): I call Simon O'Connor."