Volume 617 Week 58 - Thursday 27 May 2004(continued on Friday 28 May 2004) 
Volume 617 Week 58 - Thursday 27 May 2004(continued on Friday 28 May 2004) 
[Volume:617;Page:13471] 
Thursday 27 May 2004 
( 
continued on Friday 28 May 2004 
) 
Future Directions (Working for Families) Bill 
Second Reading 
Debate resumed. 
BARBARA STEWART (NZ First) 
: 
 New Zealand First will be supporting this legislation. It is the low and middle income families that this bill is designed for and I was quite amazed last night at the focus in the House on the  
Holmes  
poll. We know that most low and middle income people in New Zealand do not spend their money on ringing the  
Holmes 
 poll. 
Hon David Carter 
: What? 
BARBARA STEWART 
: It is not the low and the middle income people. 
Hon David Carter 
: So the $100000 people sit there and text? 
BARBARA STEWART 
: They bother phoning in; the low-income people do not. That money can be spent elsewhere. This legislation is good news for New Zealand families. We have looked at the legislation again overnight and heard the public and we are seeking an amendment to move the dates forward. We challenge United Future and Labour to support this amendment. We know that in New Zealand we have children and adolescents who go without basic health-care proper food clothing and a good education. New Zealand is not a Third World country. We want our children to have the best. 
The Government’s own report shows that nearly one-third of New Zealand children live in poverty. The Ministry of Social Development stated in its report that many poor families with children were missing out on the basics. The hardships facing these families included not having adequate or sufficient fresh fruit and vegetables a lack of warm clothing or raincoats having to put up with worn-out shoes because of cost not having glasses because of cost not visiting medical practitioners not having a telephone or a washing machine and putting up with cold because of cost; children having to live in overcrowded situations and not being able to afford to attend birthday parties because they cannot buy a gift; children who do not have birthday parties because their parents cannot afford the expense. 
We want our children in New Zealand to have the best. We once led the world in the care of our children and we need to lead the world again. Ongoing child poverty can cause serious problems in the future. We all know that poverty during childhood has impacts across a child’s whole life setting off a series of potential problems that are cumulative and affect both health and educational outcomes. Poverty is a terrible state. The desperation of poverty is also an important consideration in the despair that leads to attempted suicide for some young people. 
New Zealand First believes that child poverty has a major though largely hidden cost to society that will compromise future human and intellectual capital. We were pleased to see that improvements were made to the Government policies because children must be a priority for policy if we are to make the most of the future for all New Zealanders. The well-being of our children affects the well-being of our nation and that is the bottom line. Ignoring the needs of children incurs costs in the future from increased unemployment poor health mental health problems and low educational achievement. Child poverty must be eliminated if New Zealand is to reach its full potential. Supporting families who are struggling to make ends meet is a good investment. It is clear that children achieve more at school when they have good nutrition and secure homes and that they then have greater opportunities in the future. 
We believe that this is really vital legislation. We want to see the improvements that will be made for our children. We are really pleased to see the improvements made to childcare assistance. We will be pushing to have the dates moved forward because we support this legislation. 
LYNNE PILLAY (Labour—Waitakere) 
: 
 What a great day! The sun is shining and as I walked to the steps of Parliament today I saw a person with a placard that stated three simple words: “Labour helps kids”. That is something to celebrate and that is what this Government is about. It is about looking after families and recognising ordinary Kiwis—low and middle income earners. I want to acknowledge United Future which has stood beside us and applauded this legislation. This is a package that carries through to 2007 with 60 percent of families with dependent children winning. This is one of our Government’s greatest achievements and there have been many. When it is fully in place there will be an average increase of around $100 a week for families in the $25000 to $45000 wage bracket; families like this family pictured in the newspaper. 
This Budget is not just about putting money into families’ pockets it is also about building on our early childhood strategy. By 2007 3 and 4-year-olds will get 23 hours of early childhood education. That is an investment not a cost and it is an investment that this Government is proud to make. Low and middle income earners were dealt to through the 1990s. Their take-home pay was driven down by ruthless legislation under the National Government. There was no support for apprenticeships or training—none whatsoever. There was a harsh market rent regime in State houses and most of them were flogged off big time. User-pays was pushed more and more in health and education with the theory being that if people did not pay they did not use. There was no hope for ordinary New Zealanders. 
What do we have now? We have paid parental leave apprenticeships a fairer loan scheme for our students better primary health-care a doubling of hip surgery industry training and more people in work than in decades. That investment in people has paid off and now we can keep reinvesting in people. The response from the “grab the jelly” party is once again that Dr Brash will not come clean. It is the same old tired rhetoric from the same old tired party that has the mantra: tax cuts are better. Who gets the most out of tax cuts? The rich. Katherine Rich and Don Brash. The National Party members and their cronies are once again looking at lining their own pockets—self self self. Has “Mr Selfish” got the guts to come clean? 
Mr SPEAKER 
: That is enough. That phrase must be withdrawn and apologised for. The member has to be very careful and start coming back to the bill. 
LYNNE PILLAY 
: I withdraw and apologise. Is Dr Brash coming clean about what he has proposed to do with these increases for modest-income earners—the people who need it the most? Will he? No. Once again it will be the same old mantra and he will bleat about how bad things are. What is bad when we have a buoyant economy the lowest unemployment in decades fairer tertiary education paid parental leave and fairer labour laws to name just a few? He promises tax cuts but does not tell us what would go with that loss of revenue. This Budget is about working for families. This Budget is good for New Zealand families and I am pleased to be part of a Labour-led Government that is delivering it. 
A party vote was called for on the question  
That the Future Directions (Working for Families) Bill be now read a second time. 
Ayes 81 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8. 
Noes 28 
New Zealand National 22; ACT New Zealand 5; Independent: Awatere Huata. 
Bill read a second time. 
Instruction to Committee 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I move  
That it be an instruction to the Committee of the whole House on the Future Directions (Working for Families) Bill that it take the bill part by part. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8. 
Noes 28 
New Zealand National 22; ACT New Zealand 5; Independent: Awatere Huata. 
Motion agreed to. 
In Committee 
Part 1 Amendments to Social Security Act 1964 
KATHERINE RICH (National) 
: 
 As I rise to speak to Part 1 of the Future Directions (Working for Families) Bill it is very clear that members on this side have a whole host of questions for the Minister about how this bill will really take this country into a future direction that is positive for New Zealand. Looking at this bill one of the first questions for the Minister is: what in this bill will keep some of our professional educated New Zealanders in this country? What will keep our nurses and doctors from going to Australia and the UK our teachers from leaving to go to better salaries overseas and even our social workers from going to London? What will make it easier for the Department of Child Youth and Family Services to not only get social workers but also be able to keep them and pay decent wages? One of the things that is absent in this bill is any discussion about how it will contribute to economic growth and grow the pie. This bill is just about redistributing the pie and handing it out to different New Zealanders. 
Hon Maurice Williamson 
: Vote bribe. 
KATHERINE RICH 
: It is a vote buyer—it is nothing more than a bribe. I ask the Minister: where is the courage of his convictions? If he was serious about putting his plans in place then how come these benefits are dribbled out over the next couple of years? That has been the major feedback over the last couple of days. People are saying that if the Government is serious about this why is it not putting these plans in place earlier? They are saying: “Well I might get something 3 years down the track but big deal!”. In today’s  
Dominion Post 
 Jane Clifton said: “Jam tomorrow and a smear of Marmite today.” This proves that it really is an election bribe. All the benefits conveniently start to filter in after the next election. There is nothing in here to provide a blueprint for making this country a better place for a larger group of New Zealanders. There is nothing in here about growing the economy or creating an environment where our professionals educated New Zealanders and tradespeople will stay. It is not just the nurses teachers and doctors taking off; it is also our plumbers electricians and those people who have any kind of skill because they can travel across the ditch and get better salaries and wages. 
A lot of these things happen sometime in the future. Now if this Government were serious about making a difference to its voters then it would have the start date more or less immediately. One of the things that is quite strange is why members are debating this in urgency at all as there is nothing in this bill that kicks in before this October. The Government is not changing any taxes or putting up any prices. Those members are here only because they want to make a huge performance and try to convince their voters that they are doing something glamorous and making a major change. 
Well I think most of us can see through this. This is nothing more than a cute performance to make it look as if the Government is doing something—marmite today and jam tomorrow for many of Labour’s voters. This bill is called “future directions” but I ask what future this legislation will actually give to families in New Zealand. What is in it for the young student who has just got a degree and gone off to get his or her first job? What is in it for young married couples who have no children? Nothing. That is why the feedback on the Budget has been mixed. I imagine that the Minister is pretty gutted that many New Zealanders have not looked at the Budget and cried: “Yeehah we’re for Labour!”. New Zealanders have realised that four out of five families get nothing from the Future Directions (Working for Families) Bill. 
Even the childcare part of the bill is a bit of a joke. Anybody who listened to  
Morning Report  
would have heard that Sean Plunket has his kids in a private childcare arrangement. Those families who choose not to be in community-based childcare facilities will get nothing. Once again it is social engineering at its worst. 
If this Government had the courage of its convictions the start dates would not be in some far-flung year in the future conveniently after the next election. The Government would not be holding this lolly scramble out and basically telling New Zealanders: “Yes there is going to be a lolly scramble but the lollies will be delivered right up until 2007.” In this bill there is a major change that will not be good for New Zealand. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 How would one feel the morning after one’s great Budget—heralded throughout the country for days as the great saviour of the Labour Government—after reading the  
New Zealand Herald  
headline: “One for the kids (and for their parents’ votes)”. It then goes on to state: “Michael Cullen fulfils his role in life by splashing out to give poor families $100 a week more … eventually”. This is legislation that shows no aspiration for this country’s future—none at all. It is a simple redistribution. How typical of a Government hell-bent on the sorts of socialist policies Labour has. 
Hon Dr Michael Cullen 
: Right on! 
GERRY BROWNLEE 
: Every small-business operator and every person on a low wage in this country should be terrified on hearing Michael Cullen say that because what they now know is that as long as there is a Labour Government those who are low paid will get in their pocket only the money the Government says they can have. I think that is quite unacceptable. 
I ask the Minister of Finance why we are here today. Clearly the first part of his package is already appropriated and we do not need the $600 million - odd in this giveaway until next April or well beyond that point. But the Minister has decided that Government members will come into the Chamber belt this bill through under urgency and then try to convince the public of New Zealand that this Government has done something amazing and immediate. 
There is nothing amazing or immediate about this bill. I ask the Minister whether he can confirm that the reason this bill is not going to a select committee is that proper scrutiny of it would see it torn to bits as that would be the best way to deliver better incomes for low-paid New Zealanders. It would be torn to bits because this bill is all about condemning low-paid workers—for the benefit of the Government—and making them beneficiaries rather than workers. 
 This Budget will go down historically as being the Budget that started to pave the road from work to welfare. 
Darren Hughes 
: Nonsense! 
GERRY BROWNLEE 
: The soon-to-be-retired member from Kapiti over the other side is saying “Nonsense!”. He should go and ask low-paid workers in his electorate whether they want to have a Government handout or whether they want to keep more of the money they earn—and more important whether they want to earn more money. 
This Budget was as has been pointed out very well by the leader of the ACT party a Budget in which we could have had enormous economic stimulation to the point where New Zealanders’ salaries might have started to move in a much quicker fashion towards those of our near neighbour Australia. But no Dr Cullen in a bit of panic and knowing that the nation across the border has got sick of the Government telling it what to do all the time—which it has started to indicate in the polls—decided that he would put a few markers out in the sand to see how keen it is to run and pick them up. Is it not an irony that when the problem is that the people are sick of being told what to do when to do it and how to do it the Government comes in and says to a big chunk of those people: “This is what you can have this is when you can have it and this is all you’re going to get.” That will just exacerbate the situation that the Labour Party finds itself in and this great centrepiece of the Budget the so-called Future Directions package will not do it one bit of good in the eyes of this country’s voting population. 
How can it proclaim that the future direction for low-paid workers and for struggling families is simply a hope that the Government might on a more regular basis allow them to keep more of the money they already earn? I heard Dr Cullen this morning saying that families cannot be advantaged to the same extent by reducing tax rates. I think that is an utter nonsense. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I would like deal with that last point first before I go on to a few other matters. Let us take the case of the Waihi family—which I suspect might have a bit of a connection with another party in this House—on $55000 a year. That family will gain $150 a week. To deliver that through the tax system what flat tax rate would we need? The rate would be 11.3 percent flat tax. What would that cost? Mr Williamson will buy that. The cost of that in revenue terms is equal to the entire expenditure on education and health put together. That is how much money we would lose from the 11.3 percent flat tax rate. We would have to demolish the health system and the education system and then say: “Haven’t we been very clever? We’ve got a system that isn’t targeted out of that.” 
The member asked what happens in terms of gains to employment. We have widened the gap in this package between benefits and work from a Lockwood Smith width to a Gerry Brownlee width. That is what we have done. It has gone up a long long way. 
What is the National Party’s objection to the package in this legislation? Listen to the confusion as always! What members say is that it is an election bribe it is not big enough and it should be sooner. They say it is a lolly-scramble and it should be a lolly stampede. That is what the National Party says. Mr Brownlee holds up a newspaper—one of the few things he can hide behind—which states: “One for the kids”. He says that is a bad condemnation of the Budget. That confused ramble down either road will not reflect anything in terms of where ordinary middle New Zealanders are. “One for the kids” is a bad headline? My God! To me that is a dream headline arising from a Budget; one I could scarcely have written myself. 
So what are those members trying to say? They are trying to say: “We’re actually jealous that they’ve managed to do this. We wish we could have done it.” They will not say what they are trying to do. If this package comes into force a little bit after the election then to be an election bribe there has to be an assumption that the National Party would repeal it. Ah yes those members have cottoned on. They have suddenly realised the trap they have created for themselves with bad illogical thinking. It is only a bribe on behalf of the Labour Party if it will not be there post-election if there is a change of Government. 
So perhaps Mr Brownlee would like to take a call during another part. Perhaps with Dr Lockwood Smith grinning behind him he might like to tell us whether a National Government would repeal the Future Directions package. Would it repeal it? Will one of the 15 members of the National Party who have bothered to stay to work today tell us whether they would repeal this package? I think we could sit here for a couple of hours and ask that question as we go through the Committee stage and wait for an answer. Let me try it again. Would the National Party repeal the package? 
Gerry Brownlee 
: Someone stop the clock! 
Hon Dr MICHAEL CULLEN 
: That is right because that is all that will save that member—stopping the clock at this particular point in time. That is all that will save Mr Brownlee. 
The answer is that of course they would. Of course they would take these gains away because this is not their favoured group in society. They do not want a headline that states: “One for the kids”. They want a headline that states: “One taken away from the kids”. Mr Brownlee wants to be the lolly stealer from the children of New Zealand. That is what he wants to do. He wants to mount a raid from Ilam Road down into where I used to live in Burwood—a raid into middle-income New Zealand—and take the lollies back off the kids that the Labour Party is supposed to be offering them. Come the next election I think that will be a pretty good kind of contest to run between Labour and National. We cannot wait for that to be the focus of the next election campaign. 
Who is for families? The Labour Party the Progressive party and the United Future party are and the Green Party is—with reservations. The New Zealand First party is. Barbara Stewart gave an eloquent speech on the problems of child poverty. But the National Party is not and the ACT party does not count. That is all there is of them there. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I am happy to take up the challenges given to us by the Minister of Finance but first I want to put it on the record that I regard it as unparliamentary and bad lawmaking that a bill of this sort that should be going through the normal procedure to a select committee is not doing so. The only reason a bill would not be sent to a select committee would be if it were genuinely urgent. But as has been pointed out and as the public has worked out the first of the changes does not arrive until October and the significant changes arrive in April next year. Those changes are all for welfare beneficiaries. The workers whom Mr Cullen said he was in favour of and was giving incentives to do not receive anything for 2 years. We can understand why the Government does not want to send that to a select committee. That would be the first submission it would receive. 
We have an interesting situation. Treasury says there is a $6 billion surplus but the Minister of Finance apparently has lost most of the money. But Treasury keeps writing down $6 billion and I am sticking to that. We have the largest surplus ever yet the Government states that it cannot do anything for 2 years and then challenges us to say whether we would wait 2 years as it is doing. The answer is no we would not. While I do not like this package I will support New Zealand First’s sensible amendment that if this is so urgent we should bring it on. 
I also say to Dr Cullen that if he is so keen to have an election let us have one. I say to him that I know which of the proposals will win—the proposal of the ACT party to have a prosperity-creating tax cut versus these payments for social welfare beneficiaries. Is the first clause of Part 1 in this bill all about workers? No. Clause 3 is headed: “Social Security Act 1964 called principal Act in this part”. Of course it is. This is a welfare Budget. It is not a Budget for workers. It is in black and white—the principal Act is the Social Welfare Act. Why is that? 
When one looks at the numbers who will be getting the money? The money will be going to beneficiaries. When one looks at what families will get the majority of working families with dependants will get nothing from this Budget. If one looks at the whole of New Zealand four out of five New Zealanders will get nothing from this Budget. We will not support Dr Cullen in that unfairness. We ought to be returning the money to the people it belongs to. 
Dr Cullen and the Labour Party should think back. People are saying that this is the first Labour Budget for 30 years. I remember Charles Waldegrave and his misery industry saying in 1989—after Roger Douglas had been sacked David Caygill was put in and he put up a Budget of this sort—what a wonderful Labour Budget it was. 
Opposition Member 
: Did he? 
Hon RICHARD PREBBLE 
: Yes. Did it work? No it did not and I will tell members why. First the majority of working people did not get anything. Next welfare beneficiaries were not grateful either and why was that? The majority of people on welfare do not plan to stay there. When they are told to vote Labour and in 2 years’ time they will get more money they will say: “That’s not me. I’m going to be off welfare.” If members opposite think that this is a popular Budget they should look back at David Caygill’s giveaway Budget in 1989. It went down like a rock and so will this Budget. 
The Government has also made this mistake: Government members have gone around the country for a month saying—as we read in the  
New Zealand Herald— 
that families that earn up to $80000 a year will benefit. People thought that would be so and no doubt the Labour Party did recover. I would like the Government to produce this $80000-a-year working family that will benefit from this Budget. In 3 years’ time that family might benefit providing it has nine kids. There will be about three families in the whole of New Zealand that will benefit from this Budget. 
Hon DAVID CARTER (National) 
: 
 It appears that in the Committee stage the Minister in the chair Steve Maharey will not take the opportunity to answer some of our questions. I note the sarcastic cheeky comments made by the Minister of Finance who in the normal course of events would be going around the country proudly defending his Budget but on this occasion—to make sure that he did not have to leave Wellington to defend his Budget—slams the House into urgency to pass measures that will not need to be enacted until 2007. 
As many members on this side of the House have pointed out if the Government is so proud of this legislation it should allow it to go to a select committee allow it to be scrutinised by the public of New Zealand and allow New Zealanders to comment on how they think they will be better off. But no Dr Cullen and Mr Maharey have no intention of allowing this legislation to go to a select committee. They know that they have conned members like Darren Hughes who yells across the Chamber that this Budget is for working families. Mr Maharey and Dr Cullen know that this legislation is about giving more money to people who are on benefits and it is about putting more New Zealanders on to a benefit who at the moment do not have to interface with the benefit system. 
I tell Dr Cullen and Mr Maharey that the real sad thing about this Budget is that nobody will seriously give thought to the creation of wealth. This Budget is all about simply redistributing money to people who are battling away and paying far higher taxes now than they did before this Labour Government. Dr Cullen and Mr Maharey have missed the opportunity to turn back this excessive take in tax from New Zealanders and give it back to those hard-working New Zealanders. 
I remind Mr Maharey that 46 percent of all the tax that is collected by PAYE is taken off people who earn $60000 or more. Mr Maharey looks up with surprise. He had forgotten that. He should open his Budget pack and look at the simple little card in the name of the Hon Dr Michael Cullen which demonstrates that about 12 percent of all working New Zealanders are now paying the high tax rate of 39 cents despite solemn promises on a credit card from the Prime Minister that that figure would affect 5 percent of taxpayers. I want the Minister to acknowledge that not only are 12 percent paying the tax rate of 39 cents but that people in that tax bracket are now paying nearly half of all the income tax that is collected. 
That lolly-scramble does nothing to address the real problem that faces New Zealand which is the long-term growth rate of New Zealand. While Mr Maharey sighs and appears totally uninterested in this legislation— 
Hon Steve Maharey 
: In this speech yes. 
Hon DAVID CARTER 
: If the Minister thinks that he can answer some of the questions we are raising he should take a call. That is the purpose of the Committee stage. He is not prepared to send the legislation to the select committee because he does not want it to be scrutinised there. However if he thinks he is doing such a good job why does he not acknowledge that more children are living in poverty than when he became the Minister? We now have more usage of food banks in this country than when Mr Maharey became the Minister. The lolly-scramble of dishing out money to people in the hope that the Labour Party might resurrect itself in the polls and buy back some votes is why the legislation is being rushed through today even though there is no intention of delivering the bulk of it until 2007. That is a sham and a con and it has been accepted as that by most New Zealanders. 
BRENT CATCHPOLE (NZ First) 
: 
 I have listened to many National Party members come up with all sorts of excuses about why this is bad legislation. They keep forgetting one very important point: this legislation will help people get into work. It will help them get off the benefit and into work. We have a huge shortage of ready employees out there so why do we not get some beneficiaries off the benefit? That can only help businesses. I thought National was a party that helped businesses. This legislation will help businesses because it will help and encourage people to get into work and fill those job vacancies. I would have thought that National would support this bill because it will help businesses and improve the welfare of many people on the poverty line. 
Let us look at another National claim. National claims that this legislation does nothing for education; I say that it does. If National members would just listen they would learn something from this: by putting a little bit more money in the pockets of beneficiaries those people will have money to provide breakfast for their kids. An awful lot of school kids go to school without having had breakfast and a lot of schools have to provide breakfasts. They have to provide breakfasts if only to get those kids to learn. If those kids go to school with empty stomachs they will not learn or concentrate so schools have to put on food. This bill will help parents to be able to provide for their children rather than rely on schools to do that. So National should wake up and smell the coffee and realise that this bill will help those on the poverty line. It will help them with their education and it will help businesses. 
The bill needs to come into effect now. I think Richard Prebble acknowledged that the dates New Zealand First is proposing should be brought forward so that people get the benefit now. They desperately need it now. Those kids cannot keep on going to school on empty stomachs; they need that benefit now. So the bill has a huge flow-on effect which starts with improved learning and a reduction in truancy because when those kids stop learning at their early stages they start to wag school. Then they start getting into petty crime hanging around street corners and marking buildings with graffiti. That then leads on to long-term crime. If we can stop that with this bill and if this bill goes anywhere near helping that then you have to support it. I am sorry Mr Chairman I brought you into that argument. We must support it and everybody in this Parliament must support it. 
Dr Wayne Mapp 
: I think the Chairman supports it actually. 
BRENT CATCHPOLE 
: Maybe the Chairman does support it but I did not want to bring him into it. He is neutral; he should sit there and not be brought into this discussion. In summary this bill helps people to get into employment. 
Dr Wayne Mapp 
: It does absolutely nothing for growth. 
BRENT CATCHPOLE 
: If it gets people into employment and helps businesses surely that will improve growth. If we have additional people going into employment they will fill those gaps that businesses are crying out about. Businesses are crying out for additional staff because they cannot get them. This legislation will help. With its benefits businesses will be able to afford to take on those extra people and be able to have improved employment and wealth. 
In summary this bill will go a long way to assisting people into employment. It will help children to go to school with full stomachs and it will help businesses grow. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I would like the Minister in the chair the Hon Steve Maharey to explain to the Committee—because this is very important—why this legislation is not being referred to a select committee. There is absolutely no reason why it should not be referred to a select committee. Nothing in this bill that I can find happens before 1 October. If there is something that happens before 1 October then let the Minister get to his feet and tell us what that is. 
Anyone who knows anything about the interaction between our benefit system—the way benefits abate how those interact with our tax credit system and how that interacts with our stepwise progressive income tax system—knows that these issues are hugely complex. I tell the Minister in the chair that he and Dr Cullen are not the only people who have done a lot of work on this sort of stuff. If the Minister and Dr Cullen think they can stand in this Parliament and arrogantly say that the only way National could address this matter through the tax system is by giving massive tax cuts to certain people they are showing they have not opened their minds to what is possible through innovative thinking. 
The Inland Revenue Department is involved in the policy work on the interaction between benefits tax credits and the income tax system. It is so complex—and I would like the Minister to listen to this—that the department has struggled at times to actually work out correctly how the system currently works. This legislation will make it even more complex. 
Given the complexity of those interactions it is inexcusable that this bill is not going to a select committee. I wager there will be problems with what this bill is setting out. Let us forget the policy and forget for a moment what the Government is trying to do because this Committee is meant to be scrutinising the detail of this bill because it is not going to a select committee. The Minister cannot guarantee there will not be huge problems because of a lack of scrutiny of the detail of this bill. It will go through all stages today and there will be no detailed scrutiny in terms of what it does. I simply repeat that the issues are hugely complex. 
I would not mind betting that the Minister in the chair probably does not even know how one calculates the net tax position of someone on a benefit who receives tax credits and also pays income tax. I would not mind betting that he has never actually worked it out. I would not mind betting for example that he probably does not even know how the different benefits and credits that this bill is talking about abate—whether they abate on gross income or net income whether tax then applies whether things have to be grossed up to sort out final tax commitments and all that kind of thing. It is hugely complex and I have studied it in some detail. 
This legislation would be some of the more complex that we have seen before this Parliament yet it is not even going to a select committee; and we know why. It is because this legislation is so poor. It is just tinkering with old systems and there is nothing new in it. It is fiddling with old systems that are already struggling to cope with the requirements. There is nothing wrong with helping low-income families. National supports that view. We support the relief for low-income working families. However the problem with this legislation is that it uses old frameworks that are already failing to deliver properly and turns tens of thousands more people into beneficiaries when there is no need to do that. 
Darren Hughes 
: No. 
Dr the Hon LOCKWOOD SMITH 
: I refer that member to clause 6 which states that the definition of “income” in section 3(1) of the principal Act is amended by excluding any tax credit or amount received under certain provisions of the Income Tax Act 2004 the Income Tax 1994 and its predecessor. I ask Darren Hughes what that means. He would not have a clue. I will tell him what that means. It means that tax credits are now being treated as benefits because clause 6 refers to section 3(1) of the Social Security Act which I have right here. Section 3(1) defines income for benefit testing from what I can work out. We will see that tax credits will no longer be treated as income. 
Hon MAURICE WILLIAMSON (National—Pakuranga) 
: 
 This Parliament will regret 2004. There will be a time in future years when politicians of all persuasions will look back at this measure and ask why on earth our entire focus was on scrapping over the crumbs left on the plate rather than on trying actually to grow the pie so that there could be reasonable distribution to all. That is the answer here. It is to do with economic growth. For most people out in radioland the words “economic growth” are words that spring off the tongues of politicians but do not mean much. I say to ordinary voters that it is to do with our ability to pay—that is our ability actually to fund quality health-care our ability to provide first-class education services. 
This Government set a laudable aim when it first came in. It was going to return our gross domestic product (GDP) to being within the top half of the OECD. Again for the ordinary punter “GDP” is just three letters and sounds like it stands for the German Democratic Republic or something but it is actually to do with our ability to pay. It is our wealth. GDP per capita is the wealth of individuals—we divide the value of the total economic pie by the number of people. In this Budget we see that growth in our ability to pay is forecast to increase at absolutely pathetic levels; it is forecast to be less over the next 10 years—this is Dr Cullen’s own Treasury’s forecast—than we have already experienced. That is a recipe for slipping even further behind. So we will be back here in 10 years with people still not getting heart surgery or hip replacements and with kids still not getting access to quality education and still fighting over student loans. Why? Because we will be slipping further and further down the tree. 
 I found that the Catching the Knowledge Wave conference had some exciting figures for us. It showed that our GDP per capita which was once second in the world has continued to slide and—listen to this—we were passed 3 years ago by Puerto Rico. Puerto Rico is now wealthier per person than us. Slovenia passed us last year. The forecast on the Standard and Poor’s McKenzie website suggests that Uruguay will pass us by 2010 which is about when some of these benefits come in. So what we are doing is sitting here and scrapping and arguing over how we redistribute some of the crumbs instead of over how the hell we grow the pie. 
During this debate I have heard a few things from Dr Cullen that are a bit rich. He got up and started screaming on about whether the National Party would repeal this legislation. Well “repeal” is not normally the solution for anything to do with income support; “replace” is normally the word. And my word I am happy to commit to replacing this legislation with stuff that works. 
But let me get to the rich stuff from Dr Cullen. I have a list this long which I am soon to publish of the absolute promises from Labour as to what it would repeal when it got into office. I will give the absolute mother of all the repeals: the Maritime Transport Act. When that bill was going through this House Labour members sat here every night and said: “When we are in Government it will be gone—gone by lunchtime.” That is what they said but for the 5 years they have been in Government they have not touched it—not a mutter not a murmur not a sausage. It was the same with the benefit cuts in 1991. When Ruth Richardson carried out what was a desperately needed measure because of economic mismanagement by the previous Labour Government and actually did cut benefits what did those members say? They said it was an outrage and a disgrace. They said it was just unacceptable and they would not tolerate it. When they were elected to Government in 1999 did they reinstate benefit levels back to where they were? No they did not. Did they do it in 2000? No they did not. Did they do it in 2001? No they did not. I could not have more fun than this! So we do not want Dr Cullen shedding crocodile tears about whether we will repeal this measure because quite frankly the public have had a gutsful of promises to repeal that have never come through. 
If I ever want a touchstone a measure of whether the National Party is on the right track it is my old mate the Rev. Charles Waldegrave. If he thinks something is good people had better look out because there is a man who has got it wrong on every occasion in the past. I am proud to be opposing this bill and I want the Minister for Social Development and Employment to tell us why it has to be debated under urgency. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 If I was inspired by any content of anybody’s speech yesterday it was when Dr Cullen really let loose and said he earns $200000 a year and is determined to give something back to the people who put him here. He was a poor lad from Edmonton close to where I come from in the UK but a little bit nearer Tottenham Hotspur than I was—I am not close to Tottenham Hotspur at all! He said he wanted to give something back and I thought that was an admirable sentiment. Then I looked at the bill and saw that he wants to give it back next year. We want to give it back this year so on the Table there is an amendment in my name to clause 2 and other clauses that brings the date forward. If we are going to give something to families in this country why wait a year? Let us give it to them now. 
I take the point that Maurice Williamson made—and he made it very strongly—that this bill might not be the best way of doing it. But right now we would sooner see some money in the pockets of poor families in this country than in the “Treasurer’s” treasure chest. We do not want him to sit on a war chest at the expense of families in this country. There are families out there who have young children who are out on the streets selling their bodies for money. I would like to think that a little bit of compassion a little bit of understanding and a little bit of finance would solve or at least ease that problem. I do not want to wait until April next year. New Zealand First does not want to wait until then before things happen. That looks to me like a lolly-scramble an election bribe—nothing more nothing less. 
The Greens will support our bringing the dates forward ACT will support our bringing the dates forward and I think National will support our bringing the dates forward—although National members oppose the bill they can support our bringing the dates forward. So I ask the members of United Future what they will do.It will come down to the United Future members—who are not awake at the moment. If they come alongside and vote to bring forward the dates then we can do business with Dr Cullen and Mr Maharey and we can test their allegiance to families in this country. We can test whether they really mean to do something to help people or are just having a lolly-scramble that will make them look good a month or so out from the next election. 
I do not know whether the contents of this bill are sound. I would have preferred this bill to go through the process of select committee scrutiny. That is where the bill should have gone. I cannot see the point of our sitting here in urgency to pass a bill that does not take any meaningful effect until April next year. We could have done things properly and listened to submissions. So New Zealand First is prepared to say: “We will go with you Labour. We will go with the Government. You might not have got it right—we have not found all that we are looking for—but we will go with you. But we want it delivered now.” We want the promises delivered now. We want the date of April next year changed to July this year. It can be done and we want the outgoing years 2006 and 2007 changed to 2005 and 2006. That is the challenge. As soon as I finish this call I am going to talk to the officials and find out the practicalities of that but I cannot see from reading this bill any hindrance whatsoever to the Government’s bringing this measure in now. 
I hope the United Future members subscribe to that view. Those members have been loud and clear. I heard Mr Dunne say loudly and clearly that the United Future members are fighting for families. Well we want them to fight for achieving something now not next year. He made a big noise saying that until United Future came on board no one had mentioned the word “family”. Well we are saying that if this legislation is to have a good effect on families it should be brought in now. There is a war chest of money there. Let us give some money back to the average New Zealanders out there who are suffering. 
JUDY TURNER (United Future) 
: 
 I rise on behalf of United Future to speak to Part 1 of the Future Directions (Working for Families) Bill. What an amazing night it was last night! The outcomes for families in this bill are certainly more substantial than any proposal I have heard to date from Opposition parties. In fact I would challenge National members in particular who are talking about replacing this legislation to flesh it out for us and tell us with what they intend to replace it. Certainly nothing they have spoken of previously would lead us to believe that families will be better off with anything they are proposing. 
The gap has widened between benefit-derived incomes and work-derived incomes and the moral mandate alone to address that gap is huge. The evidence is unmistakable and my understanding and memory serves me to say that Muriel Newman from ACT has often brought to the attention of the House the fact that children in working families—statistically anyway—do better on a whole range of measurable outcomes. Here now is the chance for families previously disadvantaged through pursuing employment to be on the winning team. The only conclusion I can come to is that the ACT party and possibly its National Party friend prefers sticks to carrots when it comes to encouraging families to take up the opportunity to work. 
 However United Future does see some areas that need improving over time and I will mention a couple of those. The first is the foster care allowance which is still even under this legislation substantially better than the unsupported child allowance. For grandparents raising grandchildren that is a real issue. Even the Children’s Commissioner has highlighted the concerns she has regarding grandparents who are often on fixed superannuation incomes having to deal with children who come into their care. We have to understand what the issues are for those families. By and large they are raising traumatised children who have come out of extremely difficult situations. Therefore it is often difficult for the grandparents to work; their hands are full in dealing with those children. 
Hon Member 
: Why wait 2 years? 
JUDY TURNER 
: They will not be helped even in 2 years’ time because the grandparents have to be working grandparents to get the full benefit of what is on offer here. And the truth is that many of those grandparents give up work to put time into those children who are in a bad way. So in terms of future directions for this legislation United Future would like to see some real improvements. We would like to see of course that those kinship caregivers are given the full foster-care status we believe they are due. 
The other interesting area United Future still wants to champion of course is income splitting. What income splitting does and what this bill does not do is recognise the contribution of a parent at home. In fact what the Government is saying and what it was saying even prior to this legislation is that it will supplement children through proxy childcare but it will not specifically recognise parents who stay at home and do exactly the same job. United Future is concerned about that and we think it is something that can be addressed in the future. 
We are also concerned that this legislation lets employers who employ low and medium income workers off the hook a little bit with regard to the improvement in the wages they pay. I would like to invite the Minister in the chair the Hon Steve Maharey to explain to us the new rules-based approach to the new temporary additional support benefit. United Future understands that very low-income beneficiary families in particular have unexpected circumstances that crop up—the whiteware breaks down or a dental bill comes—and the income they receive does not stretch far enough for them to cover those kinds of eventualities. So we understand the need for an opportunity to jump in sometimes and help out. What we are not clear about and what we would like the Minister to explain to us is whether these new rules make any difference to the numbers of families with ongoing debt-management problems. 
The CHAIRPERSON (H V Ross Robertson) 
: I call the honourable member Sue Bradford. 
Deborah Coddington 
: I raise a point of order Mr Chairperson. The ACT party has been seeking the call. We had one call with the Hon Richard Prebble. We have sought the call while you have given three calls to National two to New Zealand First one to United Future and now one to the Green Party. Is there a reason for that? 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the honourable member for her contribution. I look at the proportionality in the Chamber and ACT is certainly within that consideration. At the moment the Green Party has not had one call at all. 
SUE BRADFORD (Green) 
: 
 The Green Party is tabling an amendment to Part 1 of this bill in which we seek to repeal clauses 12 and 23. To be realistic about things we are not particularly hopeful of the chances of our amendment passing but I am putting it forward because I think it is important to highlight the dangers in changing so substantially the special benefit regime especially given the lack of opportunity for public consultation. With this bill being rushed through the House under urgency all the people and groups who would normally have had plenty of time to make considered submissions on changes to the Social Security Act and to the taxation laws are being denied that chance and probably in most cases they are simply unaware of the detail of the reforms that are being made in these clauses. The Green Party amendment that I am putting before the Committee in effect reverses the part of the bill that repeals section 61G of the Social Security Act and sets up a new system called temporary additional support. The impact of what the Government is doing here is to remove statutory discretion for the payment of the special benefit. Its replacement called temporary additional support is likely to subject a small but very vulnerable number of beneficiaries to greater poverty than is currently experienced by anyone. 
To give just one example of how that could work in future I will take the situation of a single invalids beneficiary with very high disability costs. The person who lives rurally has to travel significant distances twice weekly at a cost of say $200 per week for the treatment of a chronic medical condition because that treatment is available only at the nearest city. On current rates the disability allowance to cover the costs of travel for the treatment is capped at just over $48 a week. The proposed cap on the temporary additional support at 30 percent of the main benefit rate would result in maximum temporary additional support at the current invalids benefit rate of $61.55 a week. Any disability-related costs above $109 per week would have to be met out of the person’s invalids benefit itself. In this example those costs would amount to $90.27 leaving the beneficiary with only $114.91 a week to meet everyday living expenses. By contrast under the current special benefit regime although there is a guideline cap of 30 percent of the allowable costs there is still discretion for departmental staff to exceed that if the beneficiary’s individual circumstances justify it. A special benefit of $152 would be likely to be paid in respect of the disability-related travel costs of the beneficiary I have just described. 
In effect what we will see is a big benefit cut for some people—an unknown number of individuals and families—who in the future will find themselves in all sorts of difficult situations beyond their control. I am not sure whether the Government is clear about the impact of what it is doing here. While of course we applaud Labour’s moves to improve income support levels for families we are disturbed that these major changes to the special benefit regime are being slipped in within the context of what is mainly a beneficial piece of legislation—and under urgency to boot. 
We acknowledge of course the many difficulties there have been with the administration of the special benefit. Globally we do not support third-tier benefits and would like to see a much simpler benefit system in this country but while we continue to work with the fractured mosaic of the Social Security Act and all its amendments we need to do the best we can and we wonder whether Labour actually intended to implement this benefit cut. I would welcome a response from the Government on that. We know there have been a lot of problems. Many people are not getting the special benefit they are entitled to at the moment and people are treated very differently depending on the part of the country they live in. But we also know there has been a long and an arduous consultation process between the beneficiary advocacy groups and the Ministry of Social Development. I do not know whether those groups are aware of what is being implemented here today. I call on parties like New Zealand First and United Future and possibly even Labour if it has not understood what it is doing here to support my amendment. 
On a final note I would like to say that the Green Party will be supporting Peter Brown’s amendments to bring the dates of implementation of this bill forward because we too would like to see as much as possible of the additional resources going into families now or as soon as possible rather than waiting to see the implementation of the legislation dragged out over the next 4 years. 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 I am looking forward to hearing from Deborah Coddington but as I think we have gone through about 10 speakers from various parties it is important for me to begin to respond to some of what they have said. We began after Michael Cullen’s speech with Katherine Rich who in an almost ”Pythonesque” way continues to rise in the Chamber to ask what is in this Budget for working families. If one has ever seen the  
Life of Brian  
one will remember the wonderfully comic scene that always come to mind whenever Katherine rises in the Chamber— 
The CHAIRPERSON (H V Ross Robertson) 
: The member cannot refer to single names. I refer him to Speakers’ rulings 26/6 and 26/7. 
Hon STEVE MAHAREY 
: —to ask what is in the bill. All I can say in response is this: apart from the accommodation supplement childcare subsidy out-of-school care rates family support and in-work payment what is in this Budget for the working family? “All right” Katherine Rich would probably say “what is in this Budget apart from accommodation supplements in-work payments family support and out-of-school childcare for the ordinary working family?” Well I have to say there is even more: there is the unsupported child’s benefit and the orphans benefit. Katherine Rich would probably then say: “All right apart from all those things what is in this Budget for the working family?”. It all adds up to an average of about $66 for families earning between $25000 and $45000. That will go right up for that Waihi family although a member of that family will probably be standing for ACT at the next election. He or she may stand against us but even that family is about to have $150 coming into its household. So I would say to Katherine Rich that there is a lot in this Budget for those families. 
Mr Gerry Brownlee representing the National Party’s sudden concern for low-income families came into the Chamber and asked us how dreadful and how awful things could get. The  
New Zealand Herald  
has a headline that states this Budget is ‘One for the kids’ so Gerry Brownlee asked how awful things could get. If Katherine Rich is “Pythonesque” Gerry Brownlee is the  
Goon Show 
! It becomes incredible when we have National Party members come to the Chamber and say they would hate to have that headline about a future National Government’s Budget. I just ask every National Party spokesperson to please stand up and hold that headline against his or her head as he or she says that because we would love the cameras to come in and film them while they repeat the  
New Zealand Herald  
headline. I thank Gerry Brownlee for pointing that out. 
Richard Prebble asked why we are not sending this bill to a select committee. Also to leap forward to Dr Lockwood Smith’s contribution as I think we could call it he asked the same question. I will tell members why we are not doing so. We have to introduce rules and processes by 1 October in order to ensure we can begin to dispense money to people through the new changes. I have to have legislation through so that I can do that. That is the reason the money will be able to be distributed. 
Deborah Coddington 
: Whose money is it? 
Hon STEVE MAHAREY 
: It is New Zealanders’ money. They pay taxes and they ask their Government to use that money wisely and we are doing just that. 
Mr David Carter asked why we do not have taxation cuts. He asked why we could not have a taxation cut across the board so all the hard-working well-off people could get more than the people who are hard-working but on a low income. He asked why we could not in National’s terms give 19c a week to low-income New Zealanders and $400 or $500 to Don Brash. I suppose once again we are happy to go to the people of New Zealand at the election whenever that may be and say that is the choice and they as an average New Zealand household can either have 19c from a taxation cut by the ACT-National coalition if it were in power or up to $160 from this coalition. I am happy to campaign on that so I hope Mr David Carter will carry on arguing for that. 
I thought Mr Catchpole gave a very good speech looking at how the different parts of this Budget would help education and business—all the practical things the Budget is intended to do. It was a good speech. I have not heard New Zealand First members getting up and speaking uncritically. They have asked us to bring the implementation dates forward and I put it on the record that we cannot do that because this is a Budget and the Budget allocates money in a time frame. Therefore we cannot have the money come forward. What we cannot do at the moment is to bring the dates forward in the way the member would like. I will skip over Dr Lockwood Smith because I have already mentioned his point. In relation to the Hon Maurice Williamson all I can say is that he has to let it go—the maritime legislation has been passed. It was passed a long time ago and he has to stop grieving. After a while he has to stop grieving and move on. If the Prime Minister were here she would say in a counselling kind of way: “Move on Mr Maurice Williamson you cannot keep grieving forever.” Mr Peter Brown once again made an excellent speech. It was largely about the implementation times and I have dealt with that. Judy Turner is always incisive about what is going on here in the Chamber. She is not uncritical of this bill. Members from those parties have always said they support this measure but they have something they would like to add to it. Sue Bradford has just done exactly that and I want to touch on the point she has made about temporary supplementary assistance which replaces special benefits. 
The issue regarding the replacement of the special benefit is very simple. When we came into office a very small group of people was getting access to the special benefit. There were people who should have been getting it but the National Party had been too mean to give it to them so we began to ensure they could receive it. All that meant was more and more people had to migrate into the third tier so they could get the income they should have been getting. We are paying about $63 million in special benefits at the present time and we are looking at forecasts of paying $70 million or $80 million. That is not the way to run a benefit system. People should not have to come up to the third tier to get their money from there. We are essentially moving all that money forward and saying that we want to return to the essential purpose of the special benefit which is to be temporary assistance when people are genuinely in hardship. As Bob Stephens said today at the Child Poverty Action Group breakfast this is a good move because it means paying money upfront. People should not now need to apply for those special benefits. Therefore we can return to the original purpose of that benefit which was temporary assistance when genuine hardship was being felt. I think that is a good move. We will see how we go but I think one can tell from the point of view of the Greens who are concerned about people getting their entitlements that we are being serious. We have moved from paying about $7 million in special benefits to about $63 million now and the figure is growing. We are trying to move all that money forward and to pay it to people earlier. 
I am about to sit down so that people can rip into this debate again but I do want to hear from the National Party and the ACT party about what they will do on 1 October this year when we allow changes to the accommodation supplement that will put more money into people’s pockets. I want to know whether the press releases from Deborah Coddington and Dr the Hon Lockwood Smith are ready. When those changes come in on 1 October this year will those members be putting out a press release to voters stating that they would not give them the money? On 4 October when the childcare subsidy and the out-of-school care rates change which will put about $23 a week into households with children will the press releases be ready to go stating those members would not give that $23 a week to those people on 4 October? What about the changes to invalids benefits rules this year? The National Party says it wants to move those people off benefits and into work but it never says how it would do that apart from threatening to cut their benefits or to reassess them or whatever. When a positive move for getting more money for the invalids benefit is introduced in December this year will the National Party have press releases ready stating it would not give those beneficiaries more money? On 1 April next year when 260000 families receive a $25 increase in their family support will the National Party have press releases ready to go stating that no it would not allow those families to get $25 a week more or $15 a week more for each child? That is what I want to hear about from the National Party and ACT spokespeople. Will the press releases be ready in October in December and on 1 April next year when a bulk of money will go into those households? Let us hear whether those parties are ready to go and say that no New Zealanders will not get that money. 
DEBORAH CODDINGTON (ACT) 
: 
 The Hon Steve Maharey said it all when he kept going on and on about press releases because that is what this bill is all about. It is all about public relations. He is obsessed with public relations. If what he says is so great why wait until 1 October or 1 April to bring it in? Why not do it now? That is why as Richard Prebble said we will be supporting Peter Brown’s amendment. 
It is outrageous that this bill is not going to a select committee as several members have already pointed out. We all know why the bill will not go to a select committee. It is because the Government is scared of the submissions that would come in. This is the ultimate in redistribution of wealth. Labour has finally once and for all abandoned the worker. It has abandoned all pretence of supporting the worker. One of Labour’s supporters Chris Trotter even said that himself yesterday on television. He is no supporter of the ACT party but he damned this Budget because there is nothing in it for working people. It will take working people into welfare. 
This Government and several other parties have said how this bill will support families. This bill will do nothing for families. Welfare in this country has destroyed families. It is absolutely destroying families. Anybody who is concerned about families in this country would get tough on welfare. The only person who had the fortitude to be tough on welfare was Ruth Richardson in her Budget. 
Hon Damien O'Connor 
: Are you proud of that? 
DEBORAH CODDINGTON 
: The member should do the research. I am not proud of this country’s appalling rate of teenage pregnancies sexually transmitted diseases and abortions. What happened when Ruth Richardson cut the benefit? Those rates all went down. Read the research. If we give people incentives to have babies they will have them. As P J O’Rourke said: “If I can’t be part of the fun in making these babies why should I pay for them?”. 
This bill will punish those who work hard. Dr Cullen is destroying this country. Why should we take from those who have just because they have it? What sort of message does that send to everyone out there? Giving 300000 households more money to spend will make Dr Cullen and the Hon Steve Maharey feel great but it will come at a huge cost to this country. Brian Fallow in this morning’s  
New Zealand Herald  
had it right. He said that New Zealand now and for the last few years has been trying to live a First World lifestyle on Third World incomes. What have we done? We have just given ourselves a huge pay rise. The country is going to go down. There will not be growth. 
The Hon Steve Maharey asked us whether if ACT were in power on 1 October it would say it would take the money back from people. The ACT party will not ever have to say that because it would not take the money off them in the first place. Whose money is it? Why should people not have the right to keep their own money and spend it how they see fit instead of having a nanny State bossyboots Government tax workers into oblivion? The New Zealand First Party said it would get people into work. Where? Where will the jobs be? What businesses will make jobs available when they have to cope with all this other legislation that is strangling them and driving them across the Tasman in droves? 
The new employment relations legislation and the Holidays Act that came in are the obstacles to job growth. They are the things that in conjunction with a bill like this keep people in welfare. Keeping people dependent on the State is one of the worst things we can ever do to them. It is the worst thing anyone can ever do to anyone and this Government is doing it. The only incentive for families to do any better is to go from work to welfare. 
Dr Cullen talked about a surplus. A surplus used to mean a genuine mistake by the Government in taking more tax than it spent—what is not required for the purpose in hand. A surplus now means a calculated scheme of money collection for redistribution in election year. Those are not my words. Those are words from a document that came out this morning from the Maxim Institute. These are real issues. The institute bases its opinions on sound values supported by United Future and supported by New Zealand First too. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 This debate today on the Future Directions (Working for Families) Bill really demonstrates the difference between socialism and capitalism. 
Hon Steve Maharey 
: It does. 
Dr LYNDA SCOTT 
: Absolutely! Steve Maharey was my sociology lecturer at Massey University. We used to call him “The Marxist Man from Massey”. He was known everywhere as that. He has now entered Parliament to put into practice his Marxist philosophy and principles. We see that in this Future Directions (Working for Families) Bill. Rather than leaving money in the pockets of individuals rather than leaving it in the pockets of families to allow them to have freedom to have choice to decide how they want to spend their money this Government overtaxes and puts the money into Treasury and then the Government decides how it will hand it back to certain people. That gives the Government a huge amount of State control to determine how it will hand it back. 
New section 61GA inserted by clause 13 relates to childcare assistance. Of course it is available only if parents use State sector providers. They cannot use the private sector. This Government will not let the private sector be involved in health or education because of ideology. It is not because the private sector does not work as well. In many cases it works a whole lot better. There are efficiencies that are driven because private sector providers have to be absolutely responsible to the people who are buying the service from them and that is the driver for much better quality. This Government being socialist to the core wants to determine how the individual the family can spend their own money. The Government will tell those people; it will not give them choice and freedom. 
New section 44A inserted by clause 7 relates to the invalids benefit. I have to say that I agree with the trial period of employment. I think that a lot of people especially in the mental health area become very unwell. As they recover it is very difficult for them to go back into full-time employment. Having a trial period of employment is a very good thing to be able to help people back on the road to recovery. But if we look at mental health and at what this Government is doing in the Budget it is just continuing to put in the blueprint money that has always been there. Rather than having better systems that treat more people we see that in Auckland 1.7 percent of the population used to be treated and now it is down to 1.6 percent. Despite more money fewer people are being treated and in a less timely fashion. We have quite a crisis in mental health services due to the delivery of that care. 
Clause 8 covers an increase in the funeral grant. Yesterday I attended the funeral of a friend. She is the second friend of my age to die of breast cancer in the last 2 months. It was an extremely sad occasion. Both my friends developed breast cancer in their early 40s and I would very much like to see the age for free breast-screening reduced to 40. That may have done something positive for this mum of two children because I say that this Budget will not do anything for them. It will not give them any money whatsoever. 
Jill Pettis 
: Tell the whole story. National never trained anybody. [ 
Interruption 
] Just 16 people a year. We can’t possibly keep up if we train only 16 people a year. 
Dr LYNDA SCOTT 
: The chief Government whip harangues me and screams and shouts across the Chamber. But who set up the breast-screening programme? It was the National Government that set it up. I suggest that Ms Pettis takes a call because her screaming across the Chamber is just annoying everybody. 
This Budget is totally about wealth redistribution not wealth creation. Let us look at the money spent on health in the OECD and take a look at Ireland. Ireland was spending a very low amount on health but the amount has increased in the last few years because of its OECD growth—because growth in that economy is increasing. National will talk about this a great deal. If the salaries coming into those families—which will be getting a measly $15 or $20 extra a week from this bill—went up by that amount they would be far better off. If this economy was growing if salaries were increasing then they would be better off. 
LARRY BALDOCK (United Future) 
: 
 There has been a lot of talk about whether this bill is about giving money to beneficiaries with the ACT party often saying this is about robbing Peter to pay Paul. I would like us to look at some statistics with regard to beneficiaries because that has also been a topic of great discussion. If we go back to 1999 when National was in Government and look at how many beneficiaries we had and then see what is happening today with domestic purposes beneficiaries in 1999 we had 110067 and in 2004 we have 108851. 
Judith Collins 
: What about invalids? 
LARRY BALDOCK 
: We will come to that in a moment. So there has been a reduction in domestic purposes beneficiaries of 1 percent despite ACT claiming about 18 months ago that we supported the Government in assisting some people on that benefit to hold on to more of their income when they did go out to work and that this was going to result in a huge increase of numbers on the domestic purposes benefit. That has not happened; we have reduced it by 1 percent. 
The number of unemployment beneficiaries has reduced by 48 percent since 1999. The number of sickness beneficiaries has increased by 28 percent. That is a concern to us. The number of invalids beneficiaries has increased by 39 percent. 
Opposition Members 
: Ah! 
LARRY BALDOCK 
: Before members opposite crow too much we need to note that the net result since 1999 is that the number of beneficiaries has reduced by 14 percent. So the Government must be doing something that is working and working for the benefit of all New Zealanders. It is too easy for the Opposition to suggest that numbers have decreased because people have switched benefit because there has been a reduction overall of 14 percent. I do not see anything in this Budget that will lead to a blowout in the number of beneficiaries. 
With regard to the domestic purposes benefit I welcome the initiatives in the Budget that will enable these hard-working single mothers and fathers to be able to hold on to more of the money they earn when they go out to work because it has always been ridiculous that on one side of the Chamber people say that we need to get those people out into “real” work as though the only real work is paid employment when we know they are working very hard raising their children. My mother did when she raised six children all on her own. She worked very hard and she still got on her bike at 6.30 in the morning and went to clean the annexe at the public hospital. 
It is ridiculous that we take money off those people when they go out to work so they end up working for some miserable hourly rate like $4 or $5. I welcome the fact that the Budget adjusts that situation. I believe it provides a greater incentive for more domestic purposes beneficiaries to find paid employment but not at the risk of neglecting their children who need to have time with that single parent. I speak out positively in support of that part of the Budget and completely refute ACT’s claims that somehow this will lead to a huge blowout in the numbers because people will have more children just so they can live off the State. That is a ridiculous argument. 
Deborah Coddington said that the benefit cuts in 1991 resulted in a reduction in the number of teenage pregnancies and so on and that this Budget would result in a huge increase. That is ridiculous too. I would like to partner with Deborah Coddington if she wishes in attacking the Family Planning Association for the ridiculous sex education it provides in our schools and join her in upholding a standard that adults might live by in this country so that our young people would have a better role model in the way they conduct themselves. That would be a worthwhile cause but to blame this Budget for what might happen in the future in terms of more teenage pregnancies more sexually transmitted diseases and so on is absolutely ridiculous. 
United Future will not be supporting New Zealand First’s amendment to change the commencement dates. If I seek to take another call on this matter I hope the Chair will acknowledge me so I can finish this discussion and give New Zealand First a good understanding of why we will not be supporting the amendment. When Peter Brown was speaking about the amendment he asked why the provisions could not all be brought in now. That is a huge worry if we think about it. New Zealand First was saying yesterday that it would be forming part of the next Government but Peter Brown does not seem to understand that one cannot come into the Chamber this morning with an amendment that disregards all the Treasury projections all the budgetary projections and just say that we should pay it all out now. 
BILL GUDGEON (NZ First) 
: 
 Approximately 18 to 20 months ago I had the honour and privilege of attending the Commonwealth Parliamentary Association conference in Namibia. As I observed the lifestyle of the people I could not help but notice the bars on all the residential buildings. I noticed the difference in lifestyle between the people who lived there. They have the rich and the very poor. In fact we were warned not to walk around in the streets because of the threat of being knocked about a bit and robbed. We had the privilege of visiting the very poor areas and we saw people selling to make a living the sort of rubbish that we would throw in the rubbish dump. We did not venture into the very poorest areas because of a possible threat to our safety. 
Dr Wayne Mapp 
: That’s right. 
BILL GUDGEON 
: Mr Mapp vouches for that. We visited some of the rehabilitation areas provided for people who have come out of prison. We saw them making an effort to grow vegetables in the dust in an irrigation system that they had created. In this debate I have listened to the figures and percentages and the toing and froing about why we should or should not help people. I say the No. 1 reason we are in Parliament is to assist people. I have heard the question asked in this Chamber this very day as to why the very rich should give to those who have nothing. Some have asked why the well-off should give to those who have nothing. I want to quote from the book  
His Way: A Biography of Robert Muldoon 
: “Muldoon could not bring himself to vote with the Labour Opposition against National welfare cuts in November 1991 but his expression showed his feelings and he abstained from voting.” 
Former Governments have put some citizens of this country in a situation where we need to have a Budget like this to try to get them back on their feet. New Zealand First supports this bill firstly because it will help to assist these people regardless of their situation. Maybe they are there through no fault of their own or anybody else’s but they are citizens of this nation. Sir Apirana Ngata in the 1930s said the social welfare system would be the downfall of many. Who created that system? The policies put in place created this situation. Now we have a Budget that has seen the light and is trying to sort this out. 
Maybe amendments will be needed but the effort has been made to assist people to get on their feet so they can become independent of the State. This Budget with some fine-tuning will begin to fulfil the aspirations of every individual in this nation. Not only do we need to get people off benefits but also we need to look at the other assets in the way of education health and especially law and order. This society will never be a balanced society if we cut off those people who are struggling. So it is our responsibility as parliamentarians to assist people all we can to become independent of the State. 
Dr the Hon Lockwood Smith 
: This makes thousands more dependent. 
BILL GUDGEON 
: It does not make thousands more dependent. Why did a former Prime Minister Sir Robert Muldoon not support National in trying to cut the welfare system? 
Dr WAYNE MAPP (National—North Shore) 
: 
 This Budget can properly be described as half a Budget. It is all about redistribution; there is nothing about growth. And Mr Maharey knows that. One of the extraordinary things in this Budget is that even after what purports to be a distribution there is a surplus of $5.5 billion. The  
Dominion Post  
got that right when it said to the Government that it was overachieving with the surplus so to make less effort please. What did it say about the other issue of tax cuts? That it was not astrophysics— “stubbornly refuses to attend class and throws rocks at those who do.” 
Yesterday we heard the Minister rave on—because that is what he did giving a lecture to business as to why there should not be a tax cut and why corporate taxes in New Zealand had to be the highest in the Asia-Pacific region. That is why this Budget is anti-growth. It is all about redistribution. It is anti-growth and that is why it is half a Budget. 
Let us think of the alternatives. I think that everyone would acknowledge there needs to be a surplus but does it have to be $5.5 billion? The answer is: absolutely not. Let us for instance say that $4 billion might have been a reasonable target. That is another $1.5 billion could have been returned to New Zealanders. A corporate tax cut would have cost $450 million which still leaves $1 billion available for a tax cut across the board even when every part of this Budget is delivered. Every part of it could have been delivered plus a tax cut to every taxpayer in New Zealand plus a tax cut for corporate entities. It is extraordinary is it not when that opportunity was there and a $4 billion surplus could still have been delivered that that opportunity would be turned down. So that is why we on this side of the House say this Budget is anti-growth and only half a Budget. 
We also say that it ignores real needs; when the opportunity is there to make a redistribution that is the sign of failure. New Zealand First has put forward a proposal to bring the family package forward by 1 year. National will support that. 
It is extraordinary is it not that members of the party that is the lapdog to the Government day in day out have got up in this House and said: “Oh no we couldn’t do anything so reckless as that.” Let me tell Mr Baldock that there is a $5.5 billion surplus and it does not take rocket science to work out that voting for an earlier package is doable. On top of that there could even be a tax cut for every New Zealander. Every single New Zealander could have benefited. 
Now it disturbs the Minister in the chair Mr Maharey to know—[ 
Interruption 
]—apparently he did not know; he had not been told by the Minister of Finance—that a $4 billion surplus was in fact doable. That would have been a responsible surplus; it would have enabled business to get ahead. I guess there could have been a headline that did not just say that kids benefited but that said kids business and New Zealand benefited. That would have been a better headline but the Government refused that opportunity. So that is why National will be voting against the Government’s bill today. It represents only a half-pie job. 
This is surely a situation of missed opportunities. At a time when New Zealand is actually doing well—which is not due to the Government but to external conditions—we could have really given it an extra boost and businesses could have had real benefit. There could have been a real reduction so that we were competitive with Australia instead of having to have the carping lecture we had from the Minister of Finance yesterday as to why it could not be done. Well his own figures tell him his words were a lie. It could have been done it could have boosted growth but that was the opportunity the Government messed up. 
We are not talking here about hard things to do. Those things were easy because there is a $5.5 billion surplus not only for this period just gone by but for the future. It is that kind of missed opportunity that is so lamentable and that is why this Budget will go down as a lost opportunity as anti-growth and as only half a Budget. Frankly it deserves at best a C grade; there was an opportunity for an A grade. 
Hon DAMIEN O'CONNOR (Minister for Racing) 
: 
 If there were ever a debate in this Parliament that defined what Tories stood for and meant and what the Labour Party stood for then this is it. What drives me more than anything in Parliament to be in the Labour Party is the difference in approach to what we call hard-working New Zealanders and the difference in the way that a Government appreciates and deals with them; because a bunch of Tories a bunch of mean-spirited over-privileged Tories think that the only way to get people producing and working harder—if they are rich—is to provide them with tax incentives; if people are poor or struggling it is to drive them with a stick—to threaten them with unemployment and to tell them they have to accept $8 or $10 an hour otherwise they will lose their jobs. Tories think that the only way to get more productivity from the top—to get people who own businesses to do more or people who get big salaries to do more—is to give tax breaks and offer people more money and more security. 
Well this Budget is about giving hard-working Kiwis who struggle on $10 an hour and who are trying to bring up families on $40000 or $50000 a year some extra assistance. The Tories in the National Party will give to their privileged mates time and time again while they will ignore others. And they will not just ignore them. It is important this country knows that if that bunch of Tories ever gets back into Government they like their mate Jenny Shipley and like their mate Ruth Richardson who is now running the ACT party will drive down and cut benefits for good hard-working New Zealanders. 
I tell Mr Tisch Mr Lockwood Smith and Mr Mapp that people work hard at every tier of income in this country. In fact I put to Mr Mapp although he would not know it that the less people’s income the harder they have to work to stay alive the harder they have to work to bring up their kids in the way they want to and the harder they have to work to keep their families together and build a future in this country. So the good hard-working Kiwis he tries to bribe with tax cuts will not be looked after by the Tories. They will not look after people on low incomes or people who need the support of the State. We are looking after them through this Budget and there are so many ways we are doing it acknowledged by the  
New Zealand Herald  
this morning—thankfully. Finally that paper has seen that we are looking after kids and hard-working New Zealanders. While we may not have provided the incentives National would have— 
Dr Wayne Mapp 
: You could have done both. 
Hon DAMIEN O'CONNOR 
: We have not done that. If Mr Mapp understood economics he would know that the money we give to good hard-working low and middle income New Zealanders will go back into the economy so that people in business will have an opportunity if they are providing a good fair service and a good product to get access to that money. That will drive growth; that will drive opportunity; that will drive regional development. 
Dr Wayne Mapp 
: You could have done better. 
Hon DAMIEN O'CONNOR 
: Oh “Could have done better.” he says! We do not claim to be a perfect Government but we know where we have to start to provide the benefits. We know who we have to support in this country and it is not the privileged few that the ACT party as a bunch of Tories will support now and into the future. Anyone listening to this debate knows where that party stands and what it stands for. They know where ACT stands and what it stands for and that is not looking after considering and caring for those hard-working families who deserve a break. We are giving them a break. 
PANSY WONG (National) 
: 
 The  
Dominion Post  
this morning features a couple—Phil and Carol Andrews—who are likely Labour and Green supporters. They were approached and asked how they felt about the Government’s announced election bribe. Mr Andrews said: “I would have been happier if they had done it with tax breaks rather than benefits. No one likes being a beneficiary.” That is why we are standing here today. That is the distinction between National and Labour which has low aspirations for our New Zealand people. Hard-working New Zealanders want a tax break. They aspire to stand on their own two feet. But what Labour is telling New Zealanders in this Budget that was very very well labelled as “half-pie” by my learned colleague Dr Wayne Mapp is: “Don’t worry. Labour will take it from you and lock you into a life of being a beneficiary.” rather than assisting them to stand up and work their way by growing the economy. 
Why should even those 300000 families be grateful? How did the Government ever get this surplus? How did the Government get this money? They taxed people. It was never “money man” Dr Michael Cullen’s money; it is hard-working New Zealanders’ money. Labour took it away and now thinks that people should thank them for it. I think it is an outrage that Labour is wasting Parliament’s time by keeping us here debating a bill that has no urgency. The only justification today for urgency is for Labour to support the New Zealand First amendment. 
United Future the party that is for family should stand up this morning and say yes it will go all the way for hard-working families and support the New Zealand First amendment to justify the reason why we are meeting here today in urgency. 
I have not heard a passionate speech made by the Minister about why Labour would not support the amendment put up by New Zealand First. If the Hon Steve Maharey as I understood has been battling with his Cabinet colleagues for a universal benefit structure why can he not this morning stand up and give us a good reason particularly to the 300000 families who are supposed to benefit from this package why it cannot be put in place now? I also want to challenge the Minister to stand up and answer some specific questions. 
Dr Wayne Mapp 
: Why does he think a $5.5 billion surplus is necessary? 
PANSY WONG 
: That is a good question. No. 1: why does the Minister for Social Development and Employment think a $5.5 billion surplus is necessary? I also want the Minister to explain what guarantee he will give to the public that the new benefit that he introduced—the temporary additional support—will not fall into the same category as the emergency unemployment benefit. There are people in New Zealand who have been on the emergency unemployment benefit for 19 years. So I would like the Minister to stand up and tell us whether there is a definition of “temporary additional support”. How temporary is it? Would it run to 10 years 20 years 30 years or life? 
JILL PETTIS (Senior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 67 
New Zealand Labour 51; Green Party 8; United Future 8. 
Noes 41 
New Zealand National 22; New Zealand First 13; ACT New Zealand 5; Independent: Awatere Huata. 
Motion agreed to. 
The CHAIRPERSON (H V Ross Robertson) 
: Before we proceed I have received a certificate under Standing Order 313 relating to amendments proposed to be moved in the Committee of the whole House. Under Standing Order 313 the Government does not concur with the following amendments being proposed: amendments moved by the honourable member Peter Brown to clause 4(1) (2) (3) (4) and (5); and amendments moved by the honourable member Sue Bradford to clauses 12 and 23 and schedule 3. I should mention just in case members are wondering that these are veto certificates that have vetoed the amendments because of the financial implications that they have. 
LINDSAY TISCH (Junior Whip—National) 
: 
 I raise a point of order Mr Chairperson. I note that you have ruled out of order the amendment by New Zealand First to clause 4(3). I also note that the Minister has put in an amendment on that same clause. Are you suggesting that New Zealand First’s amendments are out of order because of the veto yet you are prepared to accept the Minister’s amendment that came in just about 20 minutes ago which covers exactly the same subclause that New Zealand First was trying to amend? I do not see how you can throw New Zealand First’s amendment out and accept the Minister’s one on the same subject. 
The CHAIRPERSON (H V Ross Robertson) 
: It is my understanding that the Government has vetoed these particular amendments because of the consequential effects they would have on the Budget. 
LINDSAY TISCH 
: I raise a point of order Mr Chairperson. The Minister’s amendment is to clause 4 and states: “to omit from subclause (3) the expression ‘1 December 2004’ and substitute the expression ‘1 July 2004’ ”. New Zealand First’s amendment has exactly the same intent so how can you rule out New Zealand First’s amendment on that subject because of a veto when the Minister’s one will be accepted? 
JIM PETERS (NZ First) 
: 
 Mr Tisch raised— 
The CHAIRPERSON (H V Ross Robertson) 
: Is this a new point of order because we are dealing with one at the moment from the honourable member Lindsay Tisch? Does the member want to speak to this point of order? 
JIM PETERS 
: I want to speak to the same point of order and suggest on behalf of my colleague that we would very strongly urge the Government to consider exactly its use of the veto when its changes are in the same section. We believe this is something that needs to be looked at with greater care. 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 Speaking to the point of order—because I know that the New Zealand First members want to know exactly what is going on with their change—I point out that the legal advice from officials is that we needed to veto the clause so all their amendments have been vetoed. But because we want to support what they are doing we have simply put one in so that we can advance what they have asked for. It is the legal advice that has led to this but we will advance what they are asking for. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 That is just a load of rubbish. Parliament itself determines how it receives information from Ministers relating to bills. If the legal advice is that the New Zealand First amendment is out of order and should therefore be vetoed it seems to me that it is only consistent if the Government’s own amendment—which is exactly the same—should also be vetoed. 
I do not believe that the veto power given to a Minister and to the Government is there for the exercise of political preference. It is there to protect the Government against the excesses of changes to Budgets. Therefore I think it would be quite unfair and unparliamentary for the Chair to accept that Mr Brown’s amendment can be vetoed by the Government but the Government itself can propose exactly the same arrangement and have it allowed. That is a Minister manipulating Parliament for political preferment and I am not sure it would be a good thing for that to happen. While I welcome your comments on this I would like to reserve our position until we get a ruling on this matter from the Speaker. 
LINDSAY TISCH (Junior Whip—National) 
: 
 I note that Standing Order 301(2)(a) states: “An amendment proposed by the member in charge of the bill is taken ahead of an amendment proposed by another member …” occurring at the same place in the bill. I would have thought that in this case the Minister’s amendment would be put first. That would then rule out New Zealand First’s amendment because the amendments say exactly the same thing and then there would have been no need to put New Zealand First’s amendment. 
What I have difficulty with—as I have stated before and as my colleague Gerry Brownlee has also indicated—is that if you are using the reasoning of Standing Order 313 because it is a financial veto I cannot see how you can say New Zealand First’s amendments are ruled out because of the financial veto but then accept the Minister’s amendment which says exactly the same thing. It is a contradiction. I believe you should have looked at Standing Order 301 first and used that as the reason for not accepting New Zealand First’s amendments and in particular the amendment to clause 4(3). 
The CHAIRPERSON (H V Ross Robertson) 
: I thank Mr Tisch for the very considered summation he has made and I appreciate that. I think a valid point was made. However the Government veto applies to Mr Brown’s amendments as a whole and as a result the certificates are taken as a whole. 
HEATHER ROY (ACT) 
: 
 I raise a point of order Mr Chairperson. I just seek some advice from the Chair. I have been calling for a speech on Part 1 of this bill for an hour and a half and indeed I called a point of order to alert the Chair to that effect before the vote was called. This bill is being heard under urgency which means it will not be subject to the normal select committee scrutiny that a bill should be subject to. It is a very important bill and I would like to know what a member has to do to get the call. I did have points to raise in Part 1 of the bill that have not been heard previously. Is it not reasonable that if somebody is seeking the call for over an hour and a half that that member is in fact called? 
The CHAIRPERSON (H V Ross Robertson) 
: Can I just say to the member that the closure has been taken. I appreciate the point she has made. I did look at proportionality across Parliament and that was the reason the closure motion was accepted. The Committee proportionality applies principally to fixed-time debates if the member would like to look at Speaker’s ruling 59/2. 
SUE BRADFORD (Green) 
: 
 I raise a point of order Mr Chairperson. I seek leave to allow the Minister to explain why the amendment I put forward has received a fiscal veto. 
The CHAIRPERSON (H V Ross Robertson) 
: The problem is that we are already in the voting stage of the bill and under Speakers’ rulings 1/5 and 1/6 the member is unable to seek leave on behalf of someone else. 
The question was put that the following amendment in the name of the Hon Steve Maharey to clause 4 be agreed to: 
to omit from subclause (3) the words “1 December 2004” and substitute the words “1 July 2004”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 80 
New Zealand Labour 51; New Zealand First 13; Green Party 8; United Future 8. 
Noes 29 
New Zealand National 22; ACT New Zealand 6; Independent: Awatere Huata. 
Amendment agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 80 
New Zealand Labour 51; New Zealand First 13; Green Party 8; United Future 8. 
Noes 29 
New Zealand National 22; ACT New Zealand 6; Independent: Awatere Huata. 
Part 1 as amended agreed to. 
Part 2 Taxation related amendments 
The CHAIRPERSON (H V Ross Robertson) 
: Part 2 clauses 28 to 52 includes debate on schedule 5. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I think one of the things the Committee should first take note of is that even though this bill is the centrepiece of the Government’s Budget we have just completed Part 1 of the Committee stage of the debate and the Government is already making amendments to its legislation. This shows how poorly thought out this legislation is and that it is likely to be full of flaws and given that there is no immediate need for the appropriation to be made it shows that this bill should have gone to a select committee. 
Further coming to Part 2 “Taxation related amendments” there are some 40 pages in which a number of calculations spell out how this benefit will be delivered to people who previously thought they could look after themselves because they had a job. 
 This will have a number of mistakes in it. It is quite unacceptable that the Committee will be given the limited time of perhaps 2 hours to consider these 40 pages of calculations. I predict that within a very short period of time—possibly before the bill takes effect in October this year in April next year and in April 2007—the Government will have to come back to Parliament to correct it. 
I am amazed by the figures I see in these tax calculations. What it tells us is that there are an appalling number of New Zealanders on very low incomes. It tells us that this Government has squandered the opportunity to raise the living standards and incomes of New Zealanders over the past 5 years when New Zealand has experienced some of the highest commodity prices ever and has had very very favourable trading conditions and when the Government itself has been able to record very large surpluses. These figures are not significantly different from those introduced by a National Government for a similar sort of support back in 1998. 
It is a sad indictment on the Labour Government that it should be waving banners in front of people’s faces and saying this is “your Budget” when that statement is just a cynical laughing attempt to get a vote off them. I ask Mr Cunliffe the outgoing member for New Lynn how long he thinks it will be before the family displayed on the poster stating “Your Budget” sees one cent of it. He does not know. That is the problem we have here today. Even the Government’s own members do not know what the effects of this bill will be. They have been wheeled into a room by the Minister of Finance accompanied by the Minister for Social Development and Employment and told that this is a marvellous Budget that will deliver extra dollars into the hands of low-income New Zealanders whether they are in work or on a benefit and that we should be celebrating that. 
I want the Minister to confirm that the family on the poster stating “Your Budget” will not see a blind cent of that money prior to 2007. If he is going to stand up and say that it will then I hope he outlines the circumstances of that family so that we can all learn what the Government is planning. It seems to me that there is a great deal of cynicism about a poster that states “Your Budget”. Most people would say “If that’s my Budget then I’m being roundly abused. I am being asked to go to work every day to put in my 40 45 or 50 hours a week and at the end of it still be a State beneficiary.” New Zealanders will not buy that. 
MARK PECK (Labour—Invercargill) 
: 
 I am delighted to take a call on this part. I start my comments by reminding people that I remember very well the “mother of all Budgets” prior to my coming into this place. I remember as a result of that Budget the redistribution of income from the very poor to the wealthy. Let me tell members what happened as a result of that redistribution of income in my city. We saw businesses close. The theory of trickle down simply did not work. Those who became wealthy remained wealthy and the poor had to scrap and fight for a living. The workers of this nation saw their jobs put in jeopardy by those others who were so desperate they worked for less. We saw workers—who had been told their wages and conditions would never be attacked—lose their penalty rates lose their work on Saturdays and Sundays and lose their overtime rates so that their families had to go to the Department of Social Welfare to get enough to pay their bills. 
We know that that party opposite despite the fact that its members are not prepared to say so now would see this package of change—this redistributional effort made by this Government in this Budget—gone by lunchtime and we know that Gerry Brownlee Katherine Rich John Key and Don Brash would see that their mates got the vast bulk of the money back in their pockets. 
I heard Dr Cullen on the radio this morning being very heavily questioned by  
Morning Report 
’s Sean Plunket who asked why Dr Cullen did not simply give everyone a tax cut. That family in Waihi on $55000 a year which is so incensed the Government has done nothing for it will be $150 a week better off by 2007. We know that that family will be $60 a week better off by 2005 and $120 a week better off by 2006. We know that for that family to get $150 a week in the hand delivered to it now would mean there had to be a flat tax rate in this nation of 11c in the dollar which would be $20 billion out of the tax take. 
Members of that party opposite should stand up and tell the families of this nation how they would deliver to low and middle income families in a tax cut that would not see the wealthy advantaged over the poor. It is about time it was the Budget of low to middle income families. For the last 20 years they have carried the brunt of this nation’s economic reforms and we are giving them a little bit back. It is about time! I am sick and tired of my constituents having to go to Work and Income to get a special grant to buy a second-hand refrigerator. It is time they had the ability to live with some decency and we are restoring that now. We have restored a lot of things to make life a little bit easier for them. 
I have had enough of the National Party’s cant. It is time its members stood up in this Chamber and told the families of this nation they either support them or they do not. I say they do not. I say they do not give a damn. I say they do not give a damn for anyone other than their rich mates because the distributional efforts that have been made in the last 20 years have been for the rich. Now a little bit of balance is being restored to the battlers who have worked hard to make sure they pay for their families. 
I know many of those people. They work in the freezing works the fishing industry and the timber industry. They sweep the streets and they collect the garbage. They do the work that members on that side would not contemplate doing and it is time we gave them something back. The thing those workers will understand which members on that side will not understand is that we are giving it back to them in a way that is sustainable now and into the future. That is why we are doing it over 3 years. That is why we are making sure that it is fiscally prudent and that we can continue to pay our debt. What those families understand when they get their wages every week is that if they do not pay their rent their phone or their electricity those things are taken from them. So what gives for mum and dad is food because the kids eat but mum and dad miss out. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I compliment the previous speaker on his passion. We could feel it from over here. He made a lot of sense but the bit I do not understand about the whole thing is if this legislation is so urgent why did the Government veto my earlier amendments? If what Mr Peck is saying is true why did it veto my amendments? 
Hon Member 
: Money. 
PETER BROWN 
: Money the member says. Money money money—that is the old Abba song. I will play it to him one day. 
I thank the Minister because he has taken note of one point we made. He recognised that and acknowledged it publicly which is a small gain. It is not enough but it is a small gain. Perhaps Winston Churchill’s words can best describe New Zealand First’s attitude to this—and maybe Mr Baldock would like to take notice because I hear him castigating by implication my character. 
 Winston Churchill once said: “Never give in. Never give in. Never never never never—in nothing great or small large or petty—never give in except to convictions of honour and good sense. Never yield to force. Never yield to the apparently overwhelming might of the enemy.” Those words describe New Zealand First’s attitude to families. We will not roll over and say we support families—and put it into practice next year. We will not roll over. 
That reminds me of a quote by another English Tory politician and it also describes United Future’s position very well. Chris Patten the last British Governor of Hong Kong once said: “In democracy everyone has the right to be represented even the jerks.” When it comes to United Future’s attitude to family I think that describes that party. 
I shall give United Future and the Committee another opportunity to recognise the worth of families. New Zealand First will be putting forward a new definition of families—namely the Craig McNair definition which I have here and I shall read it out to members because I know they are interested: “For the purposes of this Act family is defined as—(a) in which there is at least 1 adult member; and (b) in which the members have a biological or legal relationship.” For the benefit of Mr Dunne in particular I have to tell him that his No. 8 spokesperson was on Radio Rhema the other day actually giving some merit to that clause. Mr Baldock shakes his head. I have a tape of what he said. 
Darren Hughes 
: Table it. 
PETER BROWN 
: I will. It is not in the Chamber at the moment. However I can tell members that by the time we finish debating the legislation it will be here. I will have a transcript and I will tell members exactly what that member said on Radio Rhema. Outside this Chamber we call people hypocrites who tell the public one thing and the Parliament something different. However members are not allowed to use that term in this House. 
Hon Peter Dunne 
: I raise a point of order Madam Chairperson. I have listened to this speech with some interest. Generally I would give it the charity of my silence but to imply that my colleague is being dishonest is a breach of the Standing Orders of this House and you should pull him up on that. 
The CHAIRPERSON (Ann Hartley) 
: I thank the member. He is quite correct. I ask Mr Brown to withdraw that remark. 
PETER BROWN 
: I withdraw the implication of Mr Baldock being dishonest. 
Hon Peter Dunne 
: He can’t do that. 
The CHAIRPERSON (Ann Hartley) 
: The member will just withdraw and that will be the end of it. 
PETER BROWN 
: I withdraw. I am prepared to table the transcript— 
Deborah Coddington 
: I raise a point of order Madam Chairperson. I am sorry to interrupt but I seek your advice on this. You might not have heard but the Hon Peter Dunne was making what I would consider unparliamentary interjections on Mr Brown when he was speaking. Is it general practice that members can take a point of order when someone who is being fiercely interjected on responds with a comment about a person in that member’s party and then the same person who has been interjecting using unparliamentary terms wants that member to withdraw? 
The CHAIRPERSON (Ann Hartley) 
: I thank the member. If the member did hear something she considered to be unparliamentary—and I certainly did not—she must raise it at the time. 
Hon Peter Dunne 
: I raise a point of order Madam Chairperson. I think I might be able to help the member. I think I said that Mr Brown was a sad old man who had forgotten more than he had ever learnt. If that is unparliamentary then I invite you to rule on it. 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. 
PETER BROWN 
: I assure the Committee that I am not worried about anything those has-beens say. They will be going to the scrap heap—big time. I have been insulted by the professionals—the watersiders and seafarers of this country. So there is nothing Mr Dunne could say that would worry me at all. I have seen and heard the lot. Mr Dunne has an opportunity to rectify— 
Katherine Rich 
: That’s not very Christian from a Christian party. 
PETER BROWN 
: Is it the Christian party? Oh no it is not Sunday! They are Christians on Sunday or when they are on Radio Rhema. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I am amazed to find this sort of levity in the Chamber today. It shows that everybody here is totally in support of this very very significant Future Directions (Working for Families) Bill. We are light-hearted optimistic and really thrilled. Even though we have heard very sad bitter and cynical opposition from members opposite to the Budget yesterday and now the introduction of the Future Directions (Working for Families) Bill I know that mothers and young parents in the Opposition like Simon Power really do believe that families deserve assistance. They really do understand that unless we front-end load investment into families we will never ever get over the stigmatisation of at-risk families in this country. 
Any member of this House who has been an electorate MP who has sat down with families in despair gone through their entitlements under the old Social Security Act and worked out that they are getting all their benefit entitlements but still cannot afford to pay their indebtedness get the power restored or get that food parcel knows in his or her heart of hearts that this legislation is an absolutely fantastic fillip for families in New Zealand today. Members opposite talk about our not understanding that flat-tax rates—their idea of the future—actually provide a benefit. But we are front-end loading families so that they are resilient are optimistic have hope and ultimately participate in society in a productive way and that is what this bill achieves. 
It also achieves a beautiful elegance in the benefit system not a dependency. I congratulate the Greens on the work they have done with us in our electorate to help beneficiaries understand how to get their full entitlements. I made several phone calls from my office last night to check back with a few of my constituents who had had to have help. They had already rung the 0800 number. They had already used the 0800 number to learn what would be in the Budget for them and they were absolutely thrilled. They were prepared to wait. Those constituents did not even know there was an election next year—that is how disempowered they have been. But they knew that help was on the way for them and I found that absolutely gratifying. 
I also had a phone call from my son who would like to thank Mr Maharey. In 3 years’ time when his daughter who was born last week is 3 she will be entitled to 20 free hours of childcare. He said that was fantastic. My son is young and upwardly mobile he has a huge student debt and a wife who wants to go back to university and they will need childcare so Mr Maharey is helping them enormously. He thanks Mr Maharey and Dr Cullen for a fabulous Budget yesterday. 
Once Opposition members truly read the detail in this bill they will see the elegance of it see the change to the benefit system whereby people will know what their entitlements are and then will feel that they are truly empowered to grow healthy and resilient families. I thank Mr Maharey. 
LARRY BALDOCK (United Future) 
: 
 I rise to speak to the amendment that has been put on the Table by Mr Peter Brown. It is another attempt by New Zealand First to make this bill better—though its first attempt went down in a screaming heap. New Zealand First members have been making claims all week about how they will govern when they get into power yet it was clear from the first amendment that they did not understand the budgetary process. 
I have to say though that there are some problems that New Zealand First members would solve if they got into power. One of them would be the traffic congestion problem in Auckland. If New Zealand First ever got its hands on the Treasury benches again so many people would leave New Zealand that there would be no problem with congestion anywhere in the country. 
This definition that has been put forward for consideration is nothing short of simple political point-scoring. We had a very interesting discussion on Radio Rhema yesterday when New Zealand First tried to convince New Zealanders that somehow this definition would solve everybody’s problems and questioned how we in United Future could be opposing civil unions and the omnibus bill yet could have a definition of family that supposedly opens the door to same-sex parenting. Well let us look seriously at New Zealand First’s definition to see whether what its members proudly claim is correct—that is that their definition does not cover same-sex families. 
First of all their definition excludes orphaned groups of siblings who have tragically lost their parents. [ 
Interruption 
] I hope New Zealand First members will be quiet for a moment and consider this. According to the New Zealand First definition of a family there must be at least one adult member. So not only could a family of three or four kids say aged 14 to 6 suffer the loss of their parents overnight but also with New Zealand First’s definition of a family they would suffer the loss of instantly ceasing to be a family which would cause more pain for those children. We were a little bit clearer in the use of words in our definition to make sure we did not exclude anybody. 
Secondly does their definition exclude same-sex families in which there is at least one adult member and in which the members have a biological or legal relationship? Clearly it covers same-sex families in this country right now because they may have a biological attachment because of the way they have become involved with in vitro fertilisation treatments and so on—something I am very strongly opposed to. So their definition would include them. Everyone in this Parliament knows that the Care of Children Bill perhaps soon to be passed by the Labour Government with the support of the Greens will give legal recognition through guardianship to those same-sex families so this definition is nothing more than simple political point-scoring. It has nothing to do with improving this legislation at all. 
This bill that we are supporting and debating today is about families. It is about kids. We want to help the children of New Zealand to be able to have a reasonable standard of living through giving assistance to those who are raising them. Everyone who knows me knows that I have very strong beliefs about marriage—marriage between a man and a woman. In fact I will introduce a member’s bill into the ballot very soon that will make it clear that our Marriage Act relates to marriage between a man and a woman. I disagree with gays claiming the right to have children and to raise children because I believe that it is the right of children to be raised by a mother and a father—that is the child’s right not the adult’s right—but given that society has already allowed the circumstance where children find themselves being raised by two fathers or two mothers it would be adding insult to injury for us to come up with a definition of family that excluded them. That is why United Future will not support this amendment. It is simply a political game to try to gain points. 
Peter Brown 
: The member didn’t say that on Radio Rhema. 
LARRY BALDOCK 
: I will be happy to go on Radio Rhema at any time with the member to discuss this as we have been doing for so long. This legislation should not exclude any child in New Zealand whatever the make-up of his or her family and that is the point that we will continue to stand up for. We will not exclude one single person from the benefits of this very good legislation. 
KATHERINE RICH (National) 
: 
 We have heard a lot from the Labour Party today about how good this bill is. Well if it is so good why is no one sitting on the front bench? Where is the Labour Party? Why are its members not here in the Chamber supporting the bill talking about it and defending it to the hilt? We have heard from one member that there is a beautiful elegance in this bill. If that is the case why are Labour Party members not in this Chamber demanding their turn to debate it so that they can talk to their constituents? We have heard it is a fabulous fillip. That is a joke is it not? If that is the case where are the Labour Party members? Why are all these empty seats before me? Where are the big guns? Where are the people who are going to debate this bill? 
As for the 0800 number so far the only use of the 0800 number to members on this side is to find out that some of the original figures were incorrect in the first place. I hope New Zealanders are ringing the 0800 number. 
Gordon Copeland 
: I raise a point of order Madam Chairperson. I am sorry to interrupt the member but I think it would be quite nice actually to find which clause of the bill she is talking to in this Committee stage. There has been no mention of anything yet. 
The CHAIRPERSON (Ann Hartley) 
: I guess I have been fairly lenient I suppose is the word because— 
Peter Brown 
: You’re very lenient on their members. 
The CHAIRPERSON (Ann Hartley) 
: That member knows the rules. When I am ruling on a point of order there will be silence. I say to Mr Copeland that I have been lenient over the last several speakers. I now ask members to address Part 2 of the bill. 
KATHERINE RICH 
: In speaking to the point of order may I say we have just had a speech from Mark Peck who said nothing whatsoever about the bill. We had a speech from Steve Chadwick who did the same. 
The CHAIRPERSON (Ann Hartley) 
: The member will pleased be seated. I have ruled on Mr Copeland’s point of order. I have indicated that yes I have been lenient. I now ask that members speak to Part 2 of the bill. 
KATHERINE RICH 
: I raise a point of order Madam Chairperson. I understood that members who rise to speak in this debate are able to make mention of comments that previous speakers have made. In fact all of the comments I have made so far have been in relation to comments made by other members who have spoken and in fact have been rebuttals of comments that other members have made. 
The CHAIRPERSON (Ann Hartley) 
: That is true. However I have ruled and I have ruled that I have been lenient and that there has been some leeway this morning. I am now saying that the member has raised a legitimate point of order and I am now asking people to speak to the bill. 
KATHERINE RICH 
: I raise a point of order Madam Chairperson. As a point of clarification are we led to believe that because a lot of other members have spoken and had their say when a National members stands up to speak you will not be lenient from this point on—now that the Opposition is having a say? 
The CHAIRPERSON (Ann Hartley) 
: I have already ruled on that and I have asked members to return to the bill. 
KATHERINE RICH 
: Part 2 is about the taxation-related amendments. It has been very interesting to hear some members from that side talk about how excited they are about some of the headlines they have read up and down the country. I would like the Minister for Social Development and Employment to take a call to say how he feels about the  
Otago Daily Times 
 headline that states: “Budget on the never-never”. That confirms what I think four out of five New Zealanders have already established—that there is nothing in this bill for them. Mark Peck spoke about the battlers. He said this bill was all about the battlers. Well the  
Otago Daily Times 
 states: “Battling New Zealanders will have to wait.” So once again we are seeing confirmation that this bill does not deliver anything for most working New Zealanders at all and for those to whom it does deliver something it drip-feeds it out over a couple of years. 
The other point the Minister made was about the tax implications of the accommodation supplement. It was very interesting to hear Steve Maharey talk about the accommodation supplement. When he was in Opposition he railed against the accommodation supplement and said things like: “The Government will rely on shuffling money from people who will have to register for the accommodation supplement to get that supplement and give it back to the landlord who will give it back to officials who will put it into the accommodation supplement in order to give it back to those people.” Well has he not changed his tune? He has gone from thinking the accommodation supplement was a waste of time to further entrenching it. He used to think it was just a payback for landlords. He originally said that New Zealanders needed to have it explained to them that the accommodation supplement was a hoax and that it seemed silly for the Government to take money off people through taxation only to give it back as the accommodation supplement. Well has the Minister not changed his tune? I think he needs to take a call and explain why he is now so keen on the accommodation supplement when he was so anti it when it was first proposed by National. 
The next thing that the Minister said he was aiming to do was to simplify the benefit system and simplify the taxation implications. Well I challenge the Minister to go out into the street show this bill to New Zealanders and say: “There you go. You work out what you’re going to get as a result of this bill.” I think most New Zealanders would read this bill look at how complex it is and say: “I’m none the wiser.” I think that is why New Zealanders have worked out that four out of five New Zealanders will not get anything out of this Budget and that those who will get something will have to remain on a benefit for the next 3 years. I challenge the Minister to get up and explain what some of these implications are. 
I think it is a travesty that the Minister has not got the guts to refer this bill to a select committee for full scrutiny. Already we have seen some amendments and that shows us that the bill is actually a work in progress. I predict that we will be back here very soon doing some amendments to Part 2 because what has been done has not been fully worked through. It has not had the scrutiny of Parliament. There have not been public submissions. We have not seen what Treasury’s response is. The bill is going to be a disaster. 
DEBORAH CODDINGTON (ACT) 
: 
 My oath Katherine Rich is right! Let us look at Part 2 and then at what the explanatory note to the bill states. It states that the bill will “take steps to simplify the social security system.” Obviously the Minister himself wrote Part 2. Listen to this from Part 2. I am reading from new subsection (6) which clause 39 inserts into the principal Act: “A person who satisfies the requirements of subsection (1)(d)(ii) but who in a 1 week period is not engaged in an activity related to their employment and who is on leave from that employment because of the birth of a child and who is eligible to receive the parental tax credit in respect of the child is treated for the purpose of subsection (1)(d)(ii) and for the period for which the parental tax credit is paid to the person as being engaged in the week in the activity for the number of hours in respect of which the Commissioner is satisfied that the person would have been engaged but for the birth of the child.” 
I challenge the Minster to get up and tell us what that means. While he is on his feet could he please tell us what the next bit new subsection (7) means—and this I remind the Committee is from a bill that plans to take steps to simplify the social security system. New subsection (7) states: “A person who satisfies the requirements of subsection (1)(d)(ii) but who in a 1 week period is engaged in employment for less than the number of hours required in employment for less than the number of hours required to satisfy . . .” –blah blah blah. 
This is the reason that bills like this should go to a select committee. This is one of the reasons that they should not be rammed through the House under urgency especially when the provisions for this bill do not even come in until October. The Minister could have got the bill through without using urgency. The reason the bill is not going to a select committee is that he does not want people to see his writing—his typical woolly-woofter degree in “bureaucratese” from Massey University which one has to have to be able to write such garbage. The only people in New Zealand who will benefit from this bill are the bureaucrats. We will see a huge build-up of bureaucrats. A greater behemoth will spring up out of what social welfare or WINZ or whatever they call it these days already is. We will have lawyers employed by the hundreds just so they can “simplify the social security system”. 
Part 2 makes no sense at all. Part of Part 2 will address issues like more assistance for childcare so parents can go out to work. What about those parents who want to stay home? What about the Home Instruction Programme for Pre-school Youngsters? That programme integrates parents and early childcare but it gets a measly couple of hundred thousand in this Budget. That programme works but all this Government wants to do is herd children away from their parents and families and put them into institutions. What do they do to do that? They pay them a bounty. Part 2 will further obfuscate the social security system. It will not simplify it at all. Dr Cullen is now the Minister in the chair. That is an improvement. Perhaps Dr Cullen could get up and explain to us what these two new subsections in clause 39 mean. Can he get up and tell us what they mean? They are absolute nonsense andmake no sense at all. 
It has been very interesting in this debate to see the scrap between United Future and New Zealand First. We still do not know which party they are scrapping to support. They are sort of hedging their bets at the moment while National goes up in the polls. They are sitting on the fence and we know what happens when people sit on the fence. They get bowled. 
Ten percent of the workers contribute 45 percent of the tax take and this Government is just going to redistribute more of that. As the  
Dominion Post 
 commentator said this morning there is nothing in this bill for people who work for middle and high income families. Middle and high income families in this country are not even rich. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I really enjoy following on from a speech made by that member and before her Katherine Rich. I want to speak to Part 2 and the taxation-related amendments. If any member in this Chamber would know about taxation especially GST that member would—and we know why. That member would know all about taxation and avoidance. She would know the lot. 
I want to address a couple of points for the old tumbleweeds over there. I want to quote from a former Australian Prime Minister who said: “This is the one that brings home the bacon.” We know that that crew over there are psyched out by this package. I cannot believe some of the arguments. We have just heard Katherine Rich and Deborah Coddington who one would hope would have some intelligence say that there is nothing in this package for low and middle income people. Let me tell them that 300000 families are delivered an average increase through this package of around $100. 
Pansy Wong 
: I raise a point of order Madam Chairperson.I thought you had made it very clear to the Committee that this debate is now much narrower. It is confined to the amendments to the Tax Administration Act the Housing Restructuring Act and— 
The CHAIRPERSON (Ann Hartley) 
: Please be seated. I listened to the member. He was speaking to Part 2. 
CLAYTON COSGROVE 
: They cannot hack it—that is their problem. 
Deborah Coddington 
: I raise a point of order Madam Chairperson. Where in Part 2 does it refer to tax evasion by other members of the House? 
The CHAIRPERSON (Ann Hartley) 
: The member will be seated. I have ruled on the point of order. 
CLAYTON COSGROVE 
: About 300000 families on between $25000 and $45000 are delivered an average increase of about $100 a week in direct income assistance. That is fantastic. I refer members to the $55000 bracket. Let us go through it. This package has been attacked by members on that side because the measures do not all come in in one hit. Why is that? Because that would not be sustainable and sustainability in an economic sense was something that the old tumbleweed Lockwood Smith and a few of the others were actually for before this package came out. 
So let us have a look at it. This is what occurs. Under Part 2 a single-income person on $55000 with four kids will be $70 a week better off in April 2005. In 2006 that person will be $110 better off in 2007 will be $150 a week better off and we will maintain our surplus. 
But in terms of taxation let us look at what the alternatives would be to Part 2. If the National Party had its way we would get a flat tax of 11c costing $20 billion. I want to know from that side over there and their rich mates in ACT and using that $20 billion which hospitals and schools they would close and which pensions they would cut. They should front up and tell us now because in talking to Part 2 I say that we have fronted up in this bill today with a policy directly targeting hard-working low and middle income families. 
What have we heard from the Opposition? Zip. I tell members why. They are psyched out absolutely psyched out. The old “tumbleweed” over there can grin at me but I invite him to get up and give us his tax policy and keep talking about it. Because I say that under Part 2— 
The CHAIRPERSON (Ann Hartley) 
: The member knows that he must refer to members by their correct titles. 
CLAYTON COSGROVE 
: I apologise I was referring to Dr the Hon Lockwood Smith. Our policy actually targets low and middle income people. I just use the words of the Prime Minister yesterday. National Party members say this Part 2 is an election bribe. That is what they have been going around the country saying. Well why is it as the Prime Minister said that when we target hard-working battling low and middle income people they say it is an election bribe but not an election bribe when they propose a $20 billion tax cut that will give people like Dr Smith and Gerry Brownlee 600 bucks a week extra and then somebody on $55000 will get 39 bucks a week extra and somebody on $39000 will get zero? Because if we stack up our figures in Part 2 and our calculations targeting low and middle-income battlers against what those members say they will do we know what will happen. 
We know this policy has been well received because it is honest because it is over 3 years and because we want to make sure it is stable. I suppose what Dr Cullen could have done is what the National Party says he should have done—plonked it all in 1 year. Then we would have been criticised I am sure for spending the whole lot in one hit. Then they would have stood up and said that this is a traditional Labour Budget—sell everything off tax and spend. One cannot have it both ways. This is a sustainable package. Mr Brownlee nods. How two-faced is that? That is true. Did the member nod? 
Gerry Brownlee 
: No not at you mate! 
CLAYTON COSGROVE 
: Of course that member comes from Ilam and those income earners in the tax bracket that will be affected by his tax package are all in their big flash houses all wearing their jewellery on their wrists and saying: “This is terrible isn’t it?” because the low and the middle income earners get a break. Mr Brownlee’s mates in Ilam—and I look across at him with glee—do not get a break because they are doing OK. 
PANSY WONG (National) 
: 
 I am just so glad to follow the previous speaker Clayton Cosgrove. He is the chairman of the Finance and Expenditure Committee of which I am also a member and to which ordinarily I thought Part 2 might have gone. 
We are very concerned because that select committee recently recommended to the House a taxation bill with over 2000 pages—and the House generously supported the passage of the bill which the Hon Dr Michael Cullen sponsored—but now the Hon Dr Michael Cullen together with the Hon Steve Maharey has suddenly dropped in this piece of legislation Part 2 of which makes taxation changes without it having been scrutinised. Shortly after the House passed the taxation bill we had a lot of amendments—and that is after the select committee spent 1 whole year deliberating on it. Today under urgency I really would like the Minister of Finance to stand up and give us an assurance that we will not return in a short time to debate further amendments because of some technical hitches or because some clauses do not have the right references to the taxation Act. For a Labour Government that says it is looking at simplifying taxation I thought that was a very strange way of going about it. 
The junior Labour whip said that if anybody does not understand Part 2 which relates to the calculation of family tax credits he or she should ring the 0800 line and get the answer. But our very diligent spokesperson on social welfare Katherine Rich has already spoken about the 0800 hotline last night. She is the future Hon Katherine Rich because she would be a good Minister. She understands that hard-working New Zealanders do not want to stay on a benefit. She would move them to work in a caring and constructive manner. Last night she rang the hotline and she has already denied the public relations spin put out by the Labour Government about a family with a 16-year-old child. That family in effect will not have relief of $170 because that child in 3 years’ time will no longer be eligible as a dependent child. So on day one the package was already wrong. 
How can this Committee and the public have confidence that Part 2 is absolutely error-free particularly if I share what I have read for example about the calculation of subpart KD credit? I am not too sure actually how many people understand this but it states that there are complications. Clause 29 has a few long sentences that tell people who want to know the amount they will be entitled to that it is $3744 if the child is under the age of 16 $4420 if the child is 16 years or older or a “weighted average of the amounts in subparagraphs (i) and (ii) that reflects the proportion of the period …” Well I am not too sure that any person can actually get through to the 0800 number as the junior Government whip is apparently already on the line checking on what I have just read to him. When he goes back to his electorate later on he will not be able to answer any questions. 
GORDON COPELAND (United Future) 
: 
 I want to speak to clause 39 which is about in-work payments. I think Deborah Coddington made quite a valid point in respect of subsections (6) and (7) of section KD 2AAA when she said they are somewhat economical with full stops. At least they are symmetrical because there is one full stop every 10 lines exactly. So some thought and care obviously have been given to where full stops should go. It is a bit of a pity when we have just rewritten the tax legislation at great expense and in a process that took some years to put in those two provisions without any full stops in them. 
However let me come to the main point that I want to talk to in this Committee stage and that is the in-work payment. In the explanatory note of the bill we are told that the in-work payment will be available to superannuitants. I want to relay to the Committee exactly what happened at the Finance and Expenditure Committee. We had a visit from a grandmother who wanted to draw our attention—in relation to the Budget Policy Statement which we were considering then—to the problems of grandparents raising grandchildren. She was already a superannuitant. She was about 66 years of age. She had taken on two of her grandchildren in what can only be described as undesirable circumstances. She told the committee that in order to make ends meet and to support those children which she was committed to doing she had to take out a $20000 mortgage on her house. She went on to tell us that by living off that mortgage very very carefully and being very careful about her funding she hoped to have it paid off within 20 years—namely at the age of 86 years. 
I think that all of us on the Finance and Expenditure Committee—in fact we actually put it in our report back to the House in a rather oblique manner—expressed the hope that superannuitants would continue to receive in spite of that status assistance with childcare costs. It is true that grandparents raising grandchildren do under this bill get the unsupported child’s benefit and would get the in-work payment in clause 39 if they were in the workforce. But when we think about it a 66-year-old woman who is looking after two of her grandchildren is most unlikely to be in the workforce and therefore she does not qualify for the in-work payment. She is left simply with the unsupported child’s benefit. 
In that regard the principal point she was making to us is that although that benefit will be increased by $15 a week from 1 April 2005 it still remains $30 below the foster-care allowance. I would like the Government to think very very carefully about why there should be that $30 gap between the two benefits. If members were to listen to this woman and to hear the circumstances in which she was bringing up her grandchildren it would be clear to them that there was no less work and no less expense—including psychiatric counselling and things of that sort—in bringing up those grandchildren than there would be in bringing up foster-children. I think that for the sake of another 30 bucks a week and perhaps too for the sake of simplification the Government should give thought to whether there are valid policy reasons for superannuitants raising grandchildren to be on the unsupported child’s benefit rather than on the foster-care benefit which would give them another $30 a week. 
That is my central point and I would like the Government to think about that. If the Minister felt inclined to take a call that would be great. 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 I move  
That the question be now put 
. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 Part 2 is fairly technical. It deals with the actual tax implications of the Future Directions (Working for Families) Bill. This bill is all about the difference between Labour and National. It really demonstrates that. Labour is very keen on re-establishing the welfare State and that is what this bill is all about. It is about socialism—about taking tax off people and the Government then making its choices about how it is spent. We certainly heard from the people reported in the  
Dominion Post  
this morning who said that those on middle incomes will miss out again as they always have missed out. Another couple said they would be happier if there were taxation cuts rather than benefits. Why do they want that? Why do middle New Zealanders want taxation cuts? It is because they want a choice about how they spend the extra money in their pockets. They want to be able to choose where they have their childcare assistance. They do not want to be dictated to about having to go to a State provider. 
People want to choose where they might be able to spend a little more money and buy a bit of health insurance because under this Government they cannot get a hip or knee replacement to save their life. More money may have been put into that in the Budget but that is only because this Government was doing less major-joint surgery than in 1999 when National left Government despite an ageing and increasing population. That is clearly shown in the  
Health and Independence Report 
 to the Minister last year—on page 174 if members would like to look it up. We also see cataract surgery is in that list so it is true that someone has to be blind and in a wheelchair before the Government will help that person. People talk about wanting to have taxation cuts rather than a benefit or they say they hope that those on middle incomes may actually benefit from the Budget but they have not. 
There is nothing in all the pages in Part 2 of this bill that will improve growth in the economy. I think most people would much prefer to have better jobs than to have this Government hand them out a little bit here and a little bit there. They would prefer to have better educational opportunities better jobs and higher incomes. People would prefer to be like our Australian cousins who are $180 a week better off than us today—not in 2005 2006 or 2007 which is what this Government is handing out in its drip feeding. No today the Australians are better off than we are and most New Zealanders would like to see an investment in things that will create growth for this country and bring us back to the same level as our Australian cousins. 
Some of the language in this part of the bill is interesting. Section KD2(6B) inserted by clause 29 states: “For the purpose of subsection (6) a ring-fenced family support recipient”— 
Judith Collins 
: What does that mean? 
Dr LYNDA SCOTT 
: What is a ring-fenced family support recipient? The bill is not going to a select committee; it is being rushed through the House. I would like the Minister in the chair Dr Cullen to take a call and tell us what a ring-fenced family support recipient is because that is the sort of language that is in the bill and without the scrutiny of a select committee it will be difficult to come to understand the details of how the legislation will impact on people. There are sure to be problems and we are sure to see some amendment bills. There is a family tax credit a family support credit and a child tax credit. 
I sat here in the Chamber and listened to Government members give speeches of envy. They talked about the people on the Opposition side of the House being rich. I have to tell Government members that a whole lot of people on the Opposition side of the House grew up in poor social circumstances and worked extremely hard to get where they are. We know that rewarding effort by being able to have a better education and earn more money is exactly what is needed. I started my working life as a nurse-aide at Porirua Hospital and it was better education that got me to where I am today—through being a nurse and a doctor. That is what people want. Those people in the Labour Party who are a bunch of unionists and teachers and who generally have not done a hard day’s work in their life are the ones who have not got their hands dirty. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I would like to bring the Minister in the chair the Hon Dr Michael Cullen to the clauses in Part 2 of this bill because they are very important. Part 2 purports to address the poverty traps that currently exist in our family tax credit family support tax credit and child tax credit arrangements. I would like the Minister in the chair to answer some questions. Obviously under clause 30 the family tax credit remains. The family tax credit will be raised so that the net income of a family receiving the family tax credit will go up to from memory about $17000. From memory it is currently about $15080. My question is this: does the abatement rate remain dollar for dollar? If it does does that mean the effective marginal taxation rates through certain income ranges in this system remain at over 100 percent by the time the accident compensation payment is included—probably 101.2 percent? If that does remain the case the Minister has not dealt with that poverty trap. That is my first question—although the family tax credit is retained in this legislation and will be increased eventually does the 100 percent abatement rate remain? If it does there is a poverty trap in the system. 
Next I would like to focus on the interaction between the benefit system and family support. Clearly under clause 38 the abatement system for family support is being changed so that family support will no longer abate while the benefit is abating. That is a plus. National would support that because it means the effective marginal taxation rate faced by people in the $20000 to $27000 income range—well over 80 percent—will now come down to a much lower effective marginal taxation rate of no more than 70 percent. It seems there is to be no change to the abatement rate of the domestic purposes benefit which remains at 70 percent. But at least we do not have the family support tax credit abating at 18 percent on top of that making a combined effective marginal taxation rate of well over 80 percent. Although that change has been made page 22 of the explanatory note states: “However EMTRs will be higher for some middle and higher income families not previously eligible for assistance:”. If this legislation had gone to a select committee the committee would have had the chance to examine the crucial issue in all this which is the effective marginal taxation rates throughout the low to middle income earning bracket. 
If we are to pass this legislation today I believe the Minister in the chair should tell this Committee what the effective marginal taxation rates now will be. What will they be? What does this legislation mean? How high will effective marginal taxation rates go? We know of the Waihi family with four children that is on $55000. One of that family’s problems was that as it was in the $35000 to $55000 income range it faced an effective marginal taxation rate of 63 percent all the way through that income range. This legislation will change that to some extent. But the Minister in the chair should tell us what will happen to that family’s effective marginal taxation rate as its income goes a bit higher. If we are to believe what page 22 of the explanatory note tells us the effective marginal taxation rates at the higher end of the middle income bracket will go higher. They will be way higher than 39 percent; there is no question about that. We know the problem with the interaction between the benefits family tax credit family support tax credit and child tax credit. It is the poverty traps caused by the interaction of all those tax credits—the effective marginal taxation rates they generate. Government members do not have a damn clue what this legislation is doing to those effective marginal taxation rates. Darren Hughes could not calculate the effective marginal taxation rate that these changes will make; he would not have a hope of doing it. I believe that Parliament should know about this issue because those are the crucial incentives that face people through that income range. What is this legislation doing to the effective marginal taxation rates? 
The final point I would like to make is that the in-work payment provided for in clause 39 is a bit of a con. The Government talks about a $60 in-work payment. Do Government members know it is a bit of a con? Do the United Future people who think this in-work payment is all wonderful know it is a bit of a con? For a family with three children the only extra bit is $15 a week because it replaces the child tax credit. For a family with three children the child tax credit already pays $45 a week so the in-work payment is a con. It has not been honestly expressed at all. 
RUSSELL FAIRBROTHER (Labour—Napier) 
: 
 I move  
That the question be now put 
. 
JUDITH COLLINS (National—Clevedon) 
: 
 In rising to speak against Part 2 of the Future Directions (Working for Families) Bill I am amazed at the fact that just about every speech today from the Government and its poodles has involved a personal attack on members on the Opposition side of the House. Government members have had nothing to say other than to personally attack us. Mark Peck has been fantasising about when Labour will be in Opposition. Well I say to Mr Peck that it will not be far off. [ 
Interruption 
] He will not be in Parliament at all because National will take the Invercargill seat. We have looked at what this bill will do for families. I looked at what Steve Maharey put out yesterday because as National’s spokesperson on families I was slightly interested in what he might want to say about families. This is what he had to say: “Parenting is society’s most important job.” What? What sort of loony place does that man come from if he thinks that parenting is society’s most important job? I notice that the United Future people are very very quiet about that. Do those members really think that parenting is society’s job? No it is the job of parents. Parents are in charge of families. Parents do parenting—not society and certainly not the Labour Party. That party cannot tell the difference between parents and society whatever that term may mean. 
There is a clause in the bill that talks about a ring-fenced family support recipient. I had a look through the bill to see whether there is anything in Part 2 or even in Part 1 or any other part that tells us what a ring-fenced family support recipient is. I can tell members there is no definition of a ring-fenced family support recipient or even a definition of a ring-fenced anything. What we are doing today is creating a law so it would be very interesting to find out what the legal definition of “ring-fenced” is. I think we will find that it is another example of a situation where this bill should have gone to a select committee. Although Part 2 is full of mistakes and definitions are not given in it the bill will not be going anywhere near a select committee and the reason is that the Government does not want people to know about the detail of the legislation. It does not want people to know what is really in it. What the Government thinks we might want to do is to find out about what it wants to tell us. 
The Hon Steve Maharey again told us that this legislation will provide more free childcare centres and early childhood education for children aged 3 to 4. That sounds great. That sounds fantastic except there is a little catch: it is available only for those children who go to community-owned childcare centres. But in every new housing area in my electorate and in every new housing area around the country there are no community-owned childcare centres. This Government says that those people are on too high a decile—over 3—so they will not get anything. It does not want them to have anything out of this Budget. All those nice people who are bringing up their own children and asking for very little from the Government are thinking today that they may get at least a little bit of early childhood education in return for all the hard-earned money they pay in taxes. But they will get nothing because this Government will give it only to the community-owned centres—in other words the kindergartens. Those are the very same organisations that ban Christmas and Easter. [ 
Interruption 
] They did that; they banned Christmas in my electorate. They do that because of this politically correct Government which is kept in power by United Future and now by New Zealand First. 
Even Sue Bradford said that this legislation is not good. She said that the detail of this legislation shows us that some beneficiaries will be worse off than they are. This Government has not risen to answer Sue Bradford’s questions. I do not agree with Sue Bradford on most things but when she tells me that beneficiaries will be worse off under this legislation I know she is right. One of the things I do know is that most beneficiaries are very good at working out the detail on these things. We have heard from Clayton Cosgrove who stood up and verbally attacked—abused—people in this House. 
PAUL ADAMS (United Future) 
: 
 I rise on behalf of United Future to speak on Part 2. I think that the title of the bill—“Future Directions (Working for Families)”—is an excellent one. United Future will be supporting the bill and I am very pleased because although we have been in Parliament for only 2 years all of a sudden families are at the forefront in this year’s Budget. When I looked at the Budget I rated it and gave it 5 out 10; so I guess that shows where I am on it—in the centre. 
This package for families has funding allocated to it in the Budget for its implementation. It is based on Labour’s ideology of wealth distribution but I personally do not believe that is the best way of handling it. In listening to the various aspects of the debate on Part 2 which deals with taxation matters I heard Mr Peter Brown encouraging United Future members to support earlier implementation dates. I personally do not support that because although I am pleased that the Budget takes a good look at families in New Zealand and very pleased that it recognises that those who are bringing up children face a tremendous challenge at present I do not disagree with Mr Peter Brown’s claim that the help is needed right now. Some have said that perhaps the commencement dates in the bill are related to the next election. If that is the case then I welcome that. I am pleased that the Budget allocates funding for future dates and puts consideration of families at the forefront. I believe there will be a time in the future when whoever is in Government will look at how these requirements for families can be implemented. 
I personally believe that the correct way to help families is through the taxation system. I know that in respect of the current rate we consider only whether a person is in the category of a single-parent family or in the category of a couple living together. I suggest that it is quite easy in terms of the taxation system to distinguish whether a family comprises a couple with one child two children or three or four children and adjust the taxation system accordingly so that the family gets the rebate—something that most members would agree those families need and deserve. 
I think there can be a problem with wealth redistribution in that it is very easy to kill a dream. We must try to bring in legislation that shows people the importance of achieving. It does not matter where their place is in society as long as we give them an incentive to better themselves. It is important that people are encouraged to have a dream. If I may I will give an illustration from motor racing. I was a young man in a family that was against motor sport yet I had a dream of becoming a champion. Against all the odds I began to walk that path. It involved sacrifice but I achieved my dream. When we are talking about families— 
Hon Richard Prebble 
: Which clause talks about motor racing? 
PAUL ADAMS 
: That was an illustration. There is nothing wrong with being a dreamer. I believe that if we make people reliant on a system of Government handouts even though well-intentioned—and I commend the intention—we can destroy their ability to dream and to achieve. Therefore United Future supports the intention of this bill. 
I thank the Committee for the opportunity to come at this matter from a personal aspect. I believe that the Future Directions (Working for Families) Bill takes us in the right direction. It is of the utmost importance. I hope that whoever is in Government continues in that way over the years that lie ahead. 
HELEN DUNCAN (Labour) 
: 
 I move  
That the question be now put 
. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 As a number of members have criticised contributions I have made I want to speak to the Budget. Firstly I say to Mr Paul Adams that he was a better motorcar driver than he is a parliamentary speaker because he has actually given a very good argument against the Budget. He is absolutely right: this Budget will lead people into dependency. 
I want to pick up on a point made by Dr Cullen who I see is now the Minister in the chair. He said that as a result of the changes in Part 2 the incentives will be there for people to move off dependency and into work and that this Budget will achieve that. Well last week I gave an example to the House of a family on $50000 a year deciding they would like to have more free time and reduce their income by half—to $25000 a year. In gross terms that is a 50 percent split from $50000 to $25000; but if we look at what it means to that family right now as a result of Government subsidies and the like we see that the $50000 family moves to an income of $742 a week. However the $25000 family does not move to an income that is half of that; it moves to an income of $609 a week as a result of the various incentives it gets. So does this Budget actually restore the incentive for that family with two children to remain on an income of $50000 a year? No it does not. 
It is true that as a result of this Budget families with two children will eventually—in April 2006—have a weekly income of $839. That has gone from a gross income of $962 because they will still have to pay tax but they will get some money back in the credits and end up with $839 a week. But if they halve their income if they decide to take half of their time off do they end up with their income being halved? No they do not. Their gross income is $487 and through these subsidies it increases to $746. So they are only $91 a week poorer by working half the amount of time. 
When we look at this Budget and the logic of it we see that people who have two kids and earn $50000 ought to halve their income and the amount of work they do because the Government will give them so much in the way of subsidies as a result of their reduced income that in real terms 20 hours a week becomes worth a heck of a lot more than $91 bucks. I tell Dr Cullen that that is the problem with this Budget. That is the reality. People will look at this Budget and realise that it is saying to them: “The Government wants you to have a low income. The more you lower your income the more money you will get from the Government.” That is what should be upsetting Paul Adams and United Future because although they identify that this is a bit of a trap they say they will vote for the bill. That is what is wrong with these tax credits. 
Politically this Budget will work against the Government. I will explain that to Dr Cullen because this is not the first time I have seen this sort of Labour Budget. I pulled out some comments that were made about David Caygill’s Budget in 1989. People described it as a “Michael Joseph Savage Budget”. Did it work? No it did not. This Budget will not work either because firstly most people on benefits do not intend to stay on them—they will not give the Government any thanks for this Budget—and secondly people do not intend to stay on low incomes for the next 2 years so they can take advantage of all these handouts. Some people might end up still being on low incomes but if we are talking about their intentions they will be against this. 
Of course as has been pointed out the majority of working families get nothing from this Budget and the vast majority of New Zealanders get nothing. I have given one example but I would like to talk about what is really wrong with this Budget. 
Hon DAVID BENSON-POPE (Minister of Fisheries) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 66 
New Zealand Labour 51; Green Party 7; United Future 8;. 
Noes 40 
New Zealand National 21; New Zealand First 13; ACT New Zealand 5; Independent: Awatere Huata. 
Motion agreed to. 
LINDSAY TISCH (Junior Whip—National) 
: 
 I raise a point of order Madam Chairperson. I want to bring your attention to the debate the member Clayton Cosgrove was involved in. You ruled on the comments he made concerning tax evasion. Comments—and Deborah Coddington brought the matter to your attention—in that exchange where the member used the words “tax evasion” were a reflection on all members not only on Deborah Coddington. Also in that context Katherine Rich’s name was mentioned and I ask that Mr Cosgrove be asked to withdraw and apologise for those statements about tax evasion. 
The CHAIRPERSON (Ann Hartley) 
: No. The matter should have been raised at the time by the member concerned— 
LINDSAY TISCH 
: At the time Deborah Coddington did raise a point of order but subsequent to that we have been able to determine that under Standing Order 116 “Personal reflections” bringing Katherine Rich’s name into it is unacceptable. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I just clarify for the member that I was not referring to Katherine Rich at all. I would not do so. 
The CHAIRPERSON (Ann Hartley) 
: I tell the member that the point should have been raised at the time. 
LINDSAY TISCH 
: The member just said he was not referring to Katherine Rich. The question is then: whom was he referring to? When the words “tax evasion” are used it implicates somebody. In this case the implication was against Deborah Coddington. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 The point has been made by Madam Chair—and she is correct—that points of order have to be raised at the time the matter occurs. There are good reasons for that partly about recollections and partly about the fact that there would otherwise be endless points of order relating to something that happened the day before hours ago or whatever. It is clear in the  
Speakers’ Rulings 
; points have to be raised at the time matters occur. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 The problem we have in this case is that while what Dr Cullen says is correct this was a case when a serious reflection was made against a member. The point of order was raised at the time. I understand there was some disorder in the Chamber and it may well be that the noise was sufficient for you not to hear it. But other people did including listeners on the radio and we have a situation where Mr Clayton Cosgrove made a personal reflection against a member in the House—one that causes grave concern. You did not rule on the matter—I hope because you did not hear it—but now that you are aware that it was heard and raised at the time I think it would be appropriate for you to ask Mr Cosgrove to withdraw and apologise for making such an allegation against a member of this House. 
The CHAIRPERSON (Ann Hartley) 
: At the time that Deborah Coddington was raising the matter we had had a discussion about the part and the issue of taxation and I honestly thought that that was what Deborah Coddington was raising the matter about. I think the matter would be cleared up if Mr Cosgrove were to withdraw and apologise. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I withdraw and apologise. 
The question was put that the following amendment in the name of Peter Brown to clause 36 be agreed to: 
to insert the following new subclause: 
(11A)For the purposes of this Act a family is defined as one— 
(a)in which there is at least one adult member; and 
(b)in which the members have a biological or legal relationship. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 19 
New Zealand First 13; ACT New Zealand 5; Independent: Awatere Huata. 
Noes 87 
New Zealand Labour 51; New Zealand National 21; Green Party 7; United Future 8. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to 
. 
Ayes 79 
New Zealand Labour 51; New Zealand First 13; Green Party 7; United Future 8. 
Noes 28 
New Zealand National 21; ACT New Zealand 6; Independent: Awatere Huata. 
Part 2 agreed to. 
Schedule 1  
A party vote was called for on the question  
That schedule 1 be agreed to 
. 
Ayes 79 
New Zealand Labour 51; New Zealand First 13; Green Party 7; United Future 8. 
Noes 28 
New Zealand National 21; ACT New Zealand 6; Independent: Awatere Huata. 
Schedule 1 agreed to. 
Schedule 2  
A party vote was called for on the question  
That schedule 2 be agreed to 
. 
Ayes 79 
New Zealand Labour 51; New Zealand First 13; Green Party 7; United Future 8. 
Noes 28 
New Zealand National 21; ACT New Zealand 6; Independent: Awatere Huata. 
Schedule 2 agreed to. 
Schedule 3 
A party vote was called for on the question  
That schedule 3 be agreed to 
. 
Ayes 79 
New Zealand Labour 51; New Zealand First 13; Green Party 7; United Future 8. 
Noes 28 
New Zealand National 21; ACT New Zealand 6; Independent: Awatere Huata. 
Schedule 3 agreed to. 
Schedule 4 
A party vote was called for on the question  
That schedule 4 be agreed to 
. 
Ayes 79 
New Zealand Labour 51; New Zealand First 13; Green Party 7; United Future 8. 
Noes 28 
New Zealand National 21; ACT New Zealand 6; Independent: Awatere Huata. 
Schedule 4 agreed to. 
Schedule 5  
A party vote was called for on the question  
That schedule 5 be agreed to. 
Ayes 79 
New Zealand Labour 51; New Zealand First 13; Green Party 7; United Future 8. 
Noes 28 
New Zealand National 21; ACT New Zealand 6; Independent: Awatere Huata. 
Schedule 5 agreed to. 
KATHERINE RICH (National) 
: 
 As I rise to speak on the title of the Future Directions (Working for Families) Bill I find it quite clear from the debate already on this bill that it is a totally inappropriate title. I ask the Minister in the chair Michael Cullen what sort of future direction he plans for this country when in fact we have seen that what is in this bill will lead more middle New Zealanders into dole queues and dependency on the State for handouts. The Minister is proud that he will make some families who now earn $80000 dependent on handouts from the Government. What sort of future will that be for our country? 
There is nothing in the legislation that is designed to retain some of our best and brightest New Zealanders who are leaving this country. There is nothing in the legislation that talks about growth or that provides a grand vision for creating a country that our children and our children’s children will want to stay in. There is nothing that will keep our doctors from going overseas to Australia our nurses from going to the UK or our social workers fleeing from the Department of Child Youth and Family Services to get better incomes overseas. There is nothing and that is why I think the Government is very disappointed that the reaction to this bill has been not quite what it would have expected. Dr Cullen thought his Budget would be welcomed with open arms but the response has been poor in some sectors. Many people have said there is nothing in it for them or for their families. 
Hon Richard Prebble 
: How many? 
KATHERINE RICH 
: Four out of five New Zealanders have worked out there is nothing in the Future Directions (Working for Families) Bill that could make a skerrick of difference to their lives. I wonder if Dr Cullen has seen the headlines in today’s  
Otago Daily Times 
: “Budget on the never-never …” and “ ‘Battling NZers’ will have to wait” or the commentary that states: “… Michael Cullen may have squandered the opportunity to leave a lasting mark on the New Zealand economy …”. This bill is about future directions and I think we have shown in our debate what a different opinion to Labour we have about the future direction for this country. We do not see that capturing middle-class New Zealanders to be dependent on State handouts is something to crow about. The Minister wants the country’s people to feel grateful for getting back what was their own money in the first place. 
That is why this is a “never-never” Budget. That is why it is not about future directions; it is about a direction down to the soup kitchen. That is why this bill is not about working for families. How can it be when four out of five families look at this Budget and say there is nothing in it for them? This is a Government that laboriously debated the definition of the family. “Family” was going to include almost anybody who had a psychological attachment to any other New Zealander. But in this bill a family is defined in terms of only those people who have children because they are the only people to benefit from this particular Budget. It does not matter if a young married couple just setting out and having to pay back a mortgage is trying to get ahead to reduce debt before having kids. There is nothing in the Budget for that couple. There is nothing in it for a young apprentice who has just left an apprenticeship and who is going out to work for the first time. His or her taxes will now be redirected to pay for some of the initiatives in this bill. 
This bill should not make middle-income New Zealanders increasingly dependent on the generosity of future Governments. That dependence is not something to be excited about; it is something to be embarrassed about. Families who earn $80000 are now being asked to go to the Government to get a handout—basically to get the taxes they have paid in the first place. This bill does not work for families. It is not about working for families; it is about four families working harder than ever to pay more for one family that may already be dependent on welfare. That is what this Budget is about. It is a welfare Budget. 
That is why the response from the community has not been overly excited. That is why most people can look at this Budget and say there is nothing in it for them—[ 
Interruption 
] If that member does not think that that is the case obviously he did not tune into the  
Holmes  
show 
last night where four out of five Kiwis said that the Budget did not do it for them—four out of five. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I rise to speak to the title of this bill. The title is appropriate. It is short and concise and it lets people know exactly what the bill is about. This bill will work for families. The worthy goals outlined at the very start of this bill should help families in New Zealand. 
This bill is about future direction. We want people to work and to be able to go back into the workforce. The childcare subsidies that we read about in the bill are absolutely critical to ensure that work is made more attractive for people. 
New Zealand First is tired of reading negative reports about families and their children in New Zealand and how they miss out. This legislation actually helps to ensure that those children do not miss out. We see children missing out on the basics and that is not what a First World country should allow. We do not want to be a Third World country at all. This bill really is one for families and New Zealand First will be supporting it. 
I am amazed that we continually hear about the  
Holmes 
 poll last night. I know for a fact that most low and middle income people in New Zealand do not spend their money on ringing the  
Holmes 
 poll; they save their money for something for their children. It is not low and middle income people who ring the  
Holmes  
show. Those people at the top end who can afford it ring in; low and middle income people spend their money elsewhere. 
This legislation is good news for New Zealand families. We have looked at it overnight and we still support it so New Zealand First supports this part as well. 
DEBORAH CODDINGTON (ACT) 
: 
 I rise on behalf of the ACT party to talk to the title of this bill which should in truth be called the “Future Elections (Working for Welfare Families) Bill” because that is what it is all about. That is what the future vision of this Government is—getting more and more people on to welfare and State dependency so that it can guarantee to have their vote in future elections. 
That is what the Government thinks will happen but it actually will not because people do not want to live on welfare for the rest of their lives. They know how dispiriting it is and they know what it causes. In the case in Carterton where the child “Lillybing” was abused and died the family had $1000 a week coming in in various forms of welfare payments and family support. That family was not financially poor. It suffered from a poverty of spirit and that is what locking people into welfare dependency gives to them. The only way such people can increase their incomes or get bigger houses is to have more and more children—children who are not wanted or cared about. In that case—a most disgraceful situation—a child was left clinging to a toilet seat for 4 hours clinging so that she did not fall in. That is the vision this Government wants for this country. That is what this bill will do for families. 
The bill will do absolutely nothing for the Kiwi battler on Struggle Street—not a thing. Members of this Government should listen to talkback radio but they are too snobby to do that and think that talkback has a lot of whingers and moaners. Talkback is the people’s Parliament and it is what makes the world go around in this country. If Government members listened to talkback they would hear what people are really saying about this bill. 
They are saying there is nothing in it for the working family. We can take the example of a teacher married with two children who is earning $50000 a year and next door a family with two children earning $25000 a year. Both families are living in the same street in Auckland and paying $300 a week in rent or mortgage payments. The family who works twice as hard to get $50000 is sending across the back fence to the other family on $25000— 
Hon Dr Michael Cullen 
: Unbelievable snobbery. 
DEBORAH CODDINGTON 
: The Minister can take a call if he has any problems with what I am saying. He is sending across the back fence around $200 a week. He is sending another $100 a week to the Government to spend how it likes. Why does this patronising Government not just allow those people to keep their own money so that they can be rewarded for working hard? 
This Government though thinks that earning $50000 a year is being rich. One is considered rich and high-income if one is on $50000 a year and what does this Government do to those it thinks are rich people? It takes money away from those people just because they have it. The best thing this Government could have done for families in this country was to give them a choice. 
I bet this Government has not seen the press statement from the School Trustees Association this morning which said that the association has no chance of meeting its budgets now because of the miserly increase this Government has made in the operational funding grant. ACT would not actually make the grant any greater but we would let the funding follow the child. 
This Government entrusts parents to give it their votes every 3 years but it will not trust them to pick schools for their children. It allows parents to choose the family doctors they go to—it does not do that based on where they live—but when it comes to choosing schools for their children the view is: “Oh no. These are just ordinary people. Ordinary people cannot choose. They do not know what is best for their children.” This Government thinks it does know so that is why it will bring in a bill it calls the Future Directions (Working for Families) Bill. It is an absolute disgrace that this Government thinks it can direct how families will go in the future of New Zealand. 
JUDY TURNER (United Future) 
: 
 I just want to take a very brief call on the title clause of the Future Directions (Working for Families) Bill because we think it is a very good title. When we want to work for families and set future directions we have to understand that that is not an event; it is a journey and a process. This legislation by the very title that has been chosen for it talks about a journey and a process rather than an event and we applaud that. 
We have already signalled the fact that there are additions to those future directions that we would like to see addressed in the future and the truth is that we want to achieve that in a different way from the way suggested by the Opposition. The Opposition says: “The way to fix this United Future is just to pull the Government down and throw it on the mercy of the Greens and New Zealand First.” as if that will somehow translate into outcomes for families. 
Well that is not the way we work in United Future. The way we work is that we honour our word and maintain our commitment. Our commitment is to both those who elected us who are family people and to the Government that the New Zealand public put into power. Let us just remember what the voters said on 27 July 2002. 
United Future will not allow its judgment to be clouded by what is not being achieved by this bill but will choose to focus on the substantial achievements offered by this legislation. If the economy responds as Dr Cullen hopes then United Future will take every opportunity to further the issues that we consider still need to be addressed so we will continue to support this bill. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 If ever there were a bill whose title was a misnomer it would be this Labour Government’s so-called Future Directions (Working for Families) Bill. We know that this is a bill where the future direction is more and more taxation—and more and more locked-in dependency—by the Labour Government. If this bill had an appropriate title it would be something like “The Labour Government is Desperate to Win an Election Bill”. 
That is summed up perfectly by the front page of the  
Dominion Post 
 which says: “The centrepiece of the Budget is a Working for Families package worth $221 million this year but rising to $664 million next April—in time for the election.” I see Dr Cullen sitting there with his hands steeple-ing and I ask him: what else is it? Will he take a call and answer? The article then goes on to state: “It will cost $900 million and then $1.1 billion in the next two years which Labour is likely to use as a carrot to win re-election.” As I said if ever there were a bill more incorrectly named in terms of the future direction for New Zealand it happens to be this bill. 
Perhaps another appropriate title might be the “Labour Government Working for Some Families but Neglecting Many Others Bill”. That is backed up by the very fact that there are in the order of 25000 young children automatically excluded from an entitlement of 20 hours’ free attendance at early childhood centres. Members have heard the Labour Government crow about the 300000 families who are covered by this bill but we know in actual fact that only one in five households in New Zealand will be helped in any way by it and that 80 percent of households have been utterly neglected by Dr Cullen and his friends from the Labour Party. Is that the sort of future direction this country wants? Undoubtedly it is not. Looking at the 25000 young children who will be excluded we realise that that means about 1000 privately operated early childhood centres and the children going to them are absolutely ineligible. Working mothers who use private early childhood centres will be surprised to find out that the Government values their children less than others. If ever there were a directed piece of blatant electioneering it is encapsulated in the title of this bill. 
Dr Cullen knows very well that what he should have been doing was working on what he set out to do 4 years ago—the achievement of sustainable economic growth for this country. But no he has reverted to form. After 4 long years what has he come up with but a blatant election bribe when he knows very clearly that he should have been taking advantage of those 4 years of reasonably good economic growth. Instead what do we see now but a big spend-up—a huge spend-up—and Treasury predictions of continually falling economic growth. This Government came into power when there was a rate of 4.9 percent economic growth and the record shows that it has fallen gradually ever since. 
Another appropriate title for this bill could be the “Steve Maharey: Let’s Complicate the Social Security Act Bill” because Steve Maharey was the very man who said: “Look we want to simplify social security.” Well as we go through Part 2 we see that it is nothing more than a classic Labour Party beat-up on how to complicate a bill. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 The Future Directions (Working for Families) Bill is very poorly titled. Perhaps it should be called the “Labour Future for Working Families is the Road from Work to Welfare Bill”. That would have been a better description of it because what it does is say to people like the teacher in Waihi: “Even though you are a valued professional in the community even though we want young people like you to make a commitment to the teaching profession unfortunately the wage and salary increases expected in this country are so poor and so despondent that all you can expect is a Government benefit in order to keep up with the expenses of life.” 
Sitting suspended from 1 p.m. to 2 p.m. 
GERRY BROWNLEE 
: The centrepiece of the Government’s Budget the Future Directions (Working for Families) Bill should be renamed the “Labour Government’s Promise to Workers to Take the Road from Work to Welfare Bill”. This bill says to teachers in our community like the man from Waihi who earns $55000 a year that the only chance they have for getting more income for their families in the next 3 years is to wait until 2007 to get a lousy $140 a week extra. That should tell every teacher in this country that the Government does not anticipate wage and salary rises from this economy in the next 3 years. It is saying to working New Zealanders that if they expect to have more value from the money they earn they will have to take it by way of a benefit. We will see 300000 families advantaged under this legislation but 1.2 million families will still have to work and battle hard to pay their way through this very difficult world. 
I ask Dr Cullen when he proudly says that this will give the Waihi family on $55000 a year an extra $150 a week in 3 years’ time what will happen to that family if that particular teacher has moved up through the salary scale—remember he has two salary levels to go yet—picked up maybe one or two management units and got himself over $60000 a year. The answer is that he gets very very little and certainly gets a lot less than he would get if a tax solution had been found that would advantage low-income New Zealanders. This will go down in history as legislation and a Budget that gave up on growing the New Zealand economy and said rather that if New Zealanders want to get some advantage from being in work in the future they will also have to sign up as welfare beneficiaries. 
This bill should have its title changed. It should not be cynically described as the Future Directions (Working for Families) Bill when clearly the only place it leads to is welfare and that is not the sort of aspiration that New Zealanders expect from a Government. It will be good to get on the stump against Labour members some time next year. People will be saying: “Hang on you guys spent $7000 a minute passing a bill through all stages of urgency to put more money in our pockets. Where is it?” The Labour members will say: “Well if you vote for us you can have it in another 2 years’ time.” People will not believe it because alongside that they will understand that any prospect of wages and salaries growing in this country under this Government is now gone. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 65 
New Zealand Labour 51; Green Party 6; United Future 8. 
Noes 41 
New Zealand National 21; New Zealand First 13; ACT New Zealand 6; Independent: Awatere Huata. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 78 
New Zealand Labour 51; New Zealand First 13; Green Party 6; United Future 8. 
Noes 28 
New Zealand National 21; ACT New Zealand 6; Independent: Awatere Huata. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 78 
New Zealand Labour 51; New Zealand First 13; Green Party 6; United Future 8. 
Noes 28 
New Zealand National 21; ACT New Zealand 6; Independent: Awatere Huata. 
Clause 2 agreed to. 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 I move  
That the Committee divide the bill into the Social Security (Working for Families) Amendment Bill and the Taxation (Working for Families) Bill pursuant to Supplementary Order Paper 222. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 78 
New Zealand Labour 51; New Zealand First 13; Green Party 6; United Future 8. 
Noes 28 
New Zealand National 21; ACT New Zealand 6; Independent: Awatere Huata. 
Motion agreed to. 
House resumed. 
Procedure 
Bill reported with amendment. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 78 
New Zealand Labour 51; New Zealand First 13; Green Party 6; United Future 8. 
Noes 28 
New Zealand National 21; ACT New Zealand 6; Independent: Awatere Huata. 
Report adopted. 
Social Security (Working for Families) Amendment Bill 
Taxation (Working for Families) Bill 
Third Readings 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
:  
I move  
That the Social Security (Working for Families) Amendment Bill and the Taxation (Working for Families) Bill be now read a third time 
. Having listened carefully to the debate I would like to take my few minutes at the end of this to summarise the excellent provisions in the bills as they provide more support to low and middleincome families with children and go on to address some of the other points that were raised during the debate. Families will be benefiting from the Working for Families package this year. On 1 October this year housing will become more affordable. On 4 October this year the thresholds in the areas of childcare subsidies and out-of-school care rates will be increased. We will see Work and Income New Zealand offering childcare to coordinators around the country to ensure that people access what they need. Contrary to what was being said here people can choose whatever early childhood or quality childcare centre they want to. 
On 1 April next year family support unsupported child’s benefit—the orphans benefit—will be increased to some 260000 New Zealand families improving their weekly income by over $32 a week alone. That will happen as from 1 April next year. There will be changes to all of our systems to ensure that their value no longer erodes. The number of accommodation supplement areas will be increased from three to four and the amount of accommodation supplement to people will rise. On 3 October next year childcare and out-of-school care rates will increase again assisting 28000 families. On 1 October 2006 the new in-work payment will come in providing $60 per week $15 for each child in larger families. It will replace the child tax credit and ensure that work pays. Family income assistance abatement thresholds are simplified and made more generous on 1 April 2006. On 1 April 2007 family support increases once again and the legislation locks in increases in all of those areas. 
We listened carefully to Peter Brown. Although we could not accommodate everything he said we did move on the invalids benefit rules. We appreciate his support in putting that forward and we would like to support him in doing so. 
I record now my thanks to all of the parties that have stood up in this House for low and middle income families with children who want to go to work to earn a dollar. They are the Labour Party the Progressives United Future New Zealand the Greens and New Zealand First. That is an overwhelming amount of support for making work pay for parents as they move off the benefit. We will increase the family income address accommodation affordability place childcare assistance on a secure footing and simplify our social security system. 
There are two things that are being supported here today that are absolutely the foundation of why I came into this House and why these bills came into the House. The first is social justice. We believe in social justice. That is why we are here. Today we have spread the money that is available because of a growing economy across those families that have worked hard and deserve to share in the prosperity of this country. That is justice. 
The second thing we have stood for is social development. We have spread opportunity. We see in the paper today that people who have said that they could not go to work now say that their dream has come true. They can now go to work earn enough look after their children make a difference to their family and get on with their lives. That is what social development is about. Those are the two things that we stand for on this side of the debate; and on the other side predictably disappointingly ACT and National have failed to stand up for kids and jobs. That is hard to fathom. 
I look at the lacklustre pathetic performance of the National Opposition in particular. It knows that these measures are good and will make a genuine difference to 300000 families in this country. National has put up a token argument. It has said that it might change things and will not repeal things and will do a little tinkering. New Zealanders know that the National Party will say that it will muck around with this package but it knows good policy when it sees it. I look forward as all my colleagues do to the day we can get up on a platform and hear them go on and on about tax cuts as their only policy against the fact that a family earning $55000 a year with four children would gain only $39 from its tax cuts as long as it went down to 20 percent whereas under this package that same family will get $70 from 1 April next year building up to $110 in April 2006 and $150 from 1 April 2007. 
I am begging for the opportunity to stand alongside a National Party person to listen to him or her say that that family will get less. National will cut that family’s health education and all the other things that that family needs to be able to make ends meet. We heard National and ACT members say that if people take family support they will become beneficiaries. The bulk of the support comes through the family income assistance system. People will not go on to welfare. They will be rewarded and supported for having children and for going to work. This is about kids and jobs. It is not about the privileged few. It is not about them. It is about the majority of New Zealanders kids and jobs. Kids and jobs are what we are on about here. 
I thank Sue Bradford Judy Turner Barbara Stewart and the other members from different parties who have stood up in the House to give thoughtful contributions. They have not just stood up as members of the National Party and ACT have done to try to fill in the time so that they do not have to worry about being told that they collapsed in front of this legislation. This is a collapse. National and ACT have no arguments. They have had hardly anybody down here. They have had nothing to say but other people have come to the House to make thoughtful contributions to this debate. 
I like those thoughtful people want to see working New Zealanders get on with their lives. I want them to share in prosperity. I want their kids to be able to grow up to be secure young people and to take this country forward. I want them to share in the good things that we have to offer and this Government will make sure that we have more and more to offer. 
Finally I thank the officials from the Ministry of Social Development the Inland Revenue Department and Treasury who have worked tirelessly to make this a real success for this country. They have worked tirelessly because they know that this will make a difference. They have put their hearts and souls in it. It is a very very important day for them as well. It is hard to pick out individuals. In particular I thank Sue Mackwell from the Ministry of Social Development Mike Nutsford from the Inland Revenue Department and Paul Clarke from Treasury for their particular efforts in their leadership of large teams of people who have done a large amount of work. 
Finally it has been a pleasure to work through this with my colleague Dr Michael Cullen because of three things. He brings to these issues a level of intelligence and commitment to social justice that makes him one of the best Treasurers if not the best Treasurer we have ever had in this country. I thank him for delivering this Budget. 
KATHERINE RICH (National) 
: 
 After that patronising tirade listeners will expect that this legislation will fix all the problems currently out there in our communities all the problems that currently face New Zealand as we plan our future. The only future direction that this bill takes us towards is the dole queue and entrenched welfare dependence in this country. Dr Cullen had a once-in-a-lifetime opportunity to make a big change to this country. After 5 years of overtaxation he had an opportunity to invest that money in something that would grow the economy and close the gap between living standards here in New Zealand and in Australia and he blew it. He did not do that. I read from the  
Otago Daily Times 
: “… Michael Cullen may have squandered the opportunity to leave a lasting mark on the New Zealand economy and eventually attain legendary status in Labour Party history.” Michael Cullen had a major opportunity to make some big changes but he has not done it. 
By the Government’s own admission only one in five households will benefit from this legislation. Four out of five households will get absolutely nothing. Four out of five households will look at the changes that are being made and realise that they will get absolutely nothing. While that Government continues to patronise New Zealanders and expect them to be grateful for getting their own money back that Government will miss the point. New Zealanders do not feel grateful for getting handouts. New Zealanders do not feel grateful for getting back their own money that they earned in the first place. 
There is no vision for New Zealand in making the middle classes dependent on welfare. Michael Cullen is proud that families who earn $80000 will be dependent on handouts. Michael Joseph Savage will be rolling in his grave. When he first brought in the welfare State he understood that it was supposed to be for people who were genuinely in need and people were supposed to do as much as they could to help themselves. The thought that handouts are being given to families who earn $80000 will upset not only Michael Joseph Savage up there but also Peter Fraser who interestingly was concerned that many people thought the welfare State was an armchair ride to prosperity. Well we know where that armchair ride is to; it is to poverty and it is to entrenched welfare dependence. This Government will look back at this Budget and see it as a watershed for welfare dependence in this country. 
We have seen no vision. There is nothing in here that will contribute to growth nothing that will allow New Zealand families to try to earn the $175 extra a week that they would get if they worked in Australia. No wonder our doctors are leaving. No wonder our nurses look across the ditch and see opportunities over there. Nothing in this legislation will try to make New Zealand a better place for those people. The young married couple who are just starting out and are putting off having children so that they can pay their mortgage and pay their own way get nothing from this legislation. The superannuitant gets nothing from it. I had a call to my office today from a superannuitant who cares for his son who is intellectually disabled. He said: “I resent that my taxes are going to families who do not work in the first place.” If members look at this legislation they will see that most of the families who benefit are already dependent on welfare. The original bill was called the Future Directions (Working for Families) Bill but how can that be so when four out of five New Zealand households get absolutely nothing? 
New Zealanders have worked that out. New Zealanders have realised it. They will not be sucked in by this Government which expects them to be thankful for getting handouts to be thankful for getting back their own money that they earned in the first place. That is why this legislation and this Budget will backfire on this Government—because New Zealanders are not thick. They understand that this is a lolly-scramble. They also understand that this is not about solving problems out there in the community. This is about buying votes. This is about winning elections. If the Government is not cynically attempting to win votes then why do these provisions not start immediately? No most of the significant benefits kick in after 2007. This is probably the most cynical bribe I have seen in certainly my short lifetime. This legislation is about buying votes; it is not about solving problems within our community. That is why the  
Otago Daily Times 
 called this Budget the “Budget on the never-never”. It is a lolly-scramble all right but people get their lollies 3 years down the track. 
I think New Zealanders will see through that bribe. They will see that this is not a future direction for their community that they want. The original legislation had in its title the words “Future Directions”; I think that is laughable. What sort of future does this legislation build for our country? What does it do to make it easier for people to set up a small business? Where are the growth aspirations in this Budget and in this legislation? They are not there. This is totally about income redistribution. This is not about growing a pie; this is about redistributing it. In the long term that means that New Zealand loses the chance to do something great with the overtaxation that the Minister of Finance has extracted. 
The Minister has taken funding from New Zealand families over a period of years. Sure the Government has announced hip operations and knee replacements but that is no consolation to those New Zealanders who have been waiting for the last 5 years for these sorts of changes. The timing of all of this is for a reason. Although Michael Cullen says that Budgets are not put in place to win votes I think New Zealanders are not stupid; they can see that this is a cynical attempt to win their votes. If it is not then why do these provisions not kick in now? New Zealand First put forward amendments challenging this Government to put its money where its mouth is. If the Government is serious about these changes why could they not start this year? The Government had no answer to that. 
People seldom feel good about receiving support from the State. It is adding insult to injury to overtax people and place them in a position of dependency just to get back their own money in order to get by. I can see why the Waihi family is not very happy about what has been done. It is a sad comment on this country if families who earn $55000 doing jobs that we look up to—teachers policemen etc—cannot get by. That will be Michael Cullen’s legacy with this Budget—further welfare dependence entrenched into our community. There is no vision for our country in making middle-income New Zealanders more dependent on the State. That is no vision for our country. 
That side of the House should be embarrassed that that is the situation it is putting New Zealanders in. This Government had a once-in-a-lifetime opportunity to invest that money into growth into something that would make a huge difference to New Zealanders’ lives. What we have here is something that four out of five New Zealand households can look at and say: “It doesn’t do anything for me.” That demonstrates that this Budget and this legislation are short-sighted. This is about responding to Labour Party supporters and saying: “Here you go guys; here’s your payback.” New Zealanders will see through this cruel hoax. They can understand it. The Government is hacked off that people are not very grateful. People can see through the cruel hoax. 
Hon RUTH DYSON (Minister for ACC) 
: 
 My colleague Steve Maharey referred to the opposition to this legislation earlier in the debate as lacklustre. Well that was a very generous description. The member who has just resumed her seat has taken lacklustre to being an art form. In fact if was a still-life art form I think we would describe it as lacklustre on a lean. She was hardly able to hold herself up for the entire duration of her speech. Frankly most of us had difficulty staying awake as well. 
The Opposition should know by now that just because it is called the Opposition does not mean it has to oppose everything particularly when it is something that is good. There is nothing about providing working families with financial support better assistance through the accommodation supplement and better assistance with childcare that is worthy of their being voted against let alone spoken against. All of those things should be supported. But it is not surprising that we now have a demonstration of the pure ideology of the extremists within the National Party. Lockwood Smith Katherine Rich and Maurice Williamson are clearly the extreme right wing of the National Party. They are the only people who are able to rise in this debate and oppose this legislation. 
Katherine Rich seems to resent working families in New Zealand. She pays her taxes so it should all go back to her! She seems to be the only hard-working mother in the country! I am sure she was too proud to take paid parental leave from the Government; that would have been an insult to her independence. I am sure she is too proud to take 3 weeks’ paid holiday. I am sure she is too proud to take a salary frankly. It would be so demeaning to earn a salary; she would much rather be totally independent. Well I say to Mrs Rich that she is not the only hard-working mother in this country and I am very very pleased that many others benefit from the legislation we are going to pass later on today. 
I particularly look forward to the National Party campaigning during the election period against this legislation. I want to go around the country listening to Katherine Rich explain to a two-parent one-income family with four children that earns $55000 that this legislation is wrong. This legislation will give them $70 from 1 April next year $110 from 2006 and $150 from the year after. I would like to hear Katherine Rich tell those people that that is wrong and that it would be much better to give them a 20 percent tax rate which would give them $39 a week. I would like Mrs Rich to explain that and I hope that she explains that the reason she supports that tax cut instead of our social development proposals in this legislation is that she works hard and she should get back more of her taxes. That is what that member said to members earlier today. 
It is a great honour to be part of this debate and to be in one of the many parties in this Parliament that are supporting the legislation to have come from the Future Directions (Working for Families) Bill. I want to acknowledge the Labour-Progressive team here but I also acknowledge that we are being supported on this legislation by United Future the Green Party and New Zealand First. That is quite unusual and it is a particularly proud moment for all members of New Zealand First for them to be able to say: “We looked at the legislation we understood the intent and we are going to support it.” The members of all those parties can now go around the country and say: “We back working families.” 
We support social justice. We say that the many hard-working families around New Zealand deserve ongoing support and when our financial circumstances mean we can increase that support we should do so. Working families deserve support. They have worked hard and they are getting that additional support in this legislation. The issue of social development is one that clearly has totally bypassed the National Party and ACT. They would not understand the term so it is no wonder they oppose its implementation in this legislation. But social development does make a real difference to people’s independence their self-esteem and their ability to earn their own way and care for their families. We should never underestimate the value that that contribution makes in our society. It provides the opportunity for people to support themselves and their families in dignity. 
I end by endorsing the comments Steve Maharey made in relation to the officials from the Ministry of Social Development the Inland Revenue Department and Treasury. They are well worthy of commendation during the final stages of this legislation because their work has been huge and they have applied their considerable intelligence consistently over many months to produce this legislation. Steve Maharey and Michael Cullen also deserve particular mention. To have in our caucus two men who provide such intellectual rigour vision determination and commitment to this legislation is something I am very proud of. I was going to say “young men” but I think that would be a slight exaggeration. But I am very proud to be part of the team they lead. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 New Zealand First will support this bill— 
Government Members 
: Good! 
PETER BROWN 
: Goodness me I have said only about four words! [ 
Interruption 
] I hear that I should sit down while I am ahead. 
This bill was delivered late to this House in our view and we read the aims on the very front page and thought they were exceedingly good aims and very commendable. How could we not support them? To oppose the Government on this bill would have put us in an impossible position. We had to support this bill. But I need to tell members that we have some real concerns about how things come and go through this House. 
We think that a bill of 50 pages which is quite complicated in parts should have gone through a more extensive process. We are fearful that there might well be some mistakes in this bill. Indeed from looking at our amendments the Minister has picked up a mistake in the bill which I am pleased to say he has recognised and given New Zealand First the credit for pursuing it. But we think there might well be other mistakes. We hope there are not but we think there might well be others. 
It saddens us that this bill will not take effect for quite some time. Indeed I think the first measure with any meaningful deliverance will not take effect until April next year so we think this bill could have been put under the scrutiny of a select committee. That way—and maybe Mr Baldock and United Future could listen to this because they go off on a tangent quite frequently—we could have challenged the statements the Hon Steve Maharey made that there is not the money to pursue this bill any quicker than that. I would have liked to cover that point in depth because I believe there would be a way around it. I believe that this bill could have been implemented a lot more quickly. I cannot categorically say that but I believe we should have had the ability to challenge and scrutinise that statement in the select committee. 
New Zealand First does not just roll over and accept everything that is put before it. We like to know that there are the nuts and bolts and we would have preferred that this bill go to the select committee. There is time enough—plenty of time—for it to be referred to a select committee be examined and if necessary come back as it is and be implemented in the time frame stipulated in the bill. But I have strong suspicion that had it gone to a select committee and had our members had a fair opportunity to examine it in detail we would have been able to tell the Government how to implement these measures more quickly. We would have been able to tell the Government how to pass on the gains in this bill to families in this country well before April next year which seems to be an alarmingly long time away. 
Too frequently quite extensive legislation and Supplementary Order Papers come through this House at the last minute and we do not get the chance to examine or scrutinise them in full. Nevertheless the bill is here. We hope and pray that the Government has got it right. I would like to say with confidence that it has got it right. I certainly think the direction is right and the aims are very worthwhile but I do not know whether the Government has got the nuts and bolts right. We have scrutinised this legislation as best we can in the time frame under urgency. There is a lot of pressure on MPs to examine a bill of some depth in a relatively short time and come up with the right answers. So we hope the background work has been done. We hope that it all sticks together not only for the Government’s sake—well I am not too worried about the Government to be honest—but for the people of New Zealand who will benefit from this. That is where our principal concern is. 
In summary the aims are worthwhile but the process is wrong and ill considered and I believe that to some degree this has treated Parliament with some contempt—particularly after last Monday when members all gathered in this House and told the nation on live television how important Parliament is and what it does for the people of this country. This bill should have gone through the proper process. 
However I am pleased to see some more money in the pockets of family people in this country as against sitting in Michael Cullen’s chest—not his physical chest but the little chest he sits on at night when he goes into his office counts all those gold coins and says: “Oh another billion here!”. We would prefer to see some of that money in the pockets of family members in New Zealand. We know there are people out there suffering. We know there are people out there who need a helping hand and we know that this bill will eventually help them quite some way—if the Government has done its homework correctly. 
As I said the legislation should have gone through the correct process. We would have been able to challenge the assertions of Steve Maharey when he said the Government could not deliver any more promptly because of money problems. We are not totally convinced by that argument; nevertheless we will support this bill and we hope that families and New Zealanders are better off in the long run for it. 
SUE BRADFORD (Green) 
: 
 Yesterday afternoon when the Budget was announced I felt genuinely moved and gratified that at last this Labour Government was doing something that would directly go some way towards alleviating endemic child poverty. Overall the Green Party has welcomed—indeed applauded—the Working for Families package which at least partially redresses the structural imbalance between rich and poor that has developed over the last 20 years. 
However there are a few issues of concern lurking beneath the socially benevolent exterior of the 2004 Budget. Those are issues that the bill in front of us today actually brings to the fore. 
First of all and most alarmingly upon reading the fine detail of the Future Directions (Working for Families) Bill some of us were somewhat startled to discover that suddenly and without warning the special benefit is to be disestablished and replaced with a much more limited form of assistance called temporary additional support. Now to those who are happily not familiar with the labyrinthine intricacies in New Zealand’s income support system that will not mean much if anything at all. But for those who depend on that very system for enough money to live on the special benefit is unfortunately an unavoidable tool of survival. 
In an ideal world the Green Party would like to see that special benefit and the whole complex range of third-tier assistance abolished completely and immediately—and we would welcome such moves to do that from the Government. The 35 or so forms of benefit and allowance that have grown up over the years are a nightmare to administer. They soak up huge administrative costs including salaries which could be put to a much more productive use elsewhere in the economy or even within the Work and Income system—for example in providing a lot more vocational support for unemployed people. 
The special benefit also has a particularly difficult history because it has been administered so ineffectually and with such random application between geographical areas. As a result of that beneficiary advocacy groups in the last couple of years have carried out what they call special benefit impacts in Rotorua Hawke’s Bay and the East Coast in an effort to get Work and Income to pay people what they were actually entitled to in the first place in those areas that suffered particular discrimination. Those impacts have had a significant effect in encouraging local departments to improve their attitudes towards beneficiary entitlements. The Government is to be commended for the work it has done in trying to reduce some of the greater inequities and stupidities in special benefit administration for being prepared up till now to budget more for special benefits and for having an overarching policy that says all beneficiaries should actually be able to access their full entitlements—quite a novel notion really in the history of social welfare in our generation. 
However what we are seeing in this bill in front of us this afternoon overturns all of that. The effect of this bill is to remove the special benefit and replace it partially with something called temporary additional support. While that sounds fine on the surface in fact what the Government has not spelt out in any of its great Budget promotion in the last 24 hours is that this new allowance will be much lower and far more restricted in its application than a special benefit. When I introduced an amendment during the Committee stage this morning to attempt to reverse that aspect of the bill I was probably naively surprised when the Government suddenly placed a fiscal veto on my innocent little amendment alerting me to the fact that the financial implications of what was going on were probably a lot worse than I had suspected. I then turned rather belatedly to the estimates themselves to discover that the Government will be saving $7 million on the special benefit in 2004 $45 million in 2005 $57 million in 2006 and $91 million in 2007. 
While there will be some compensation for some future beneficiaries in the fact that those with children will gain through the new family support regime and while some people will get help through the additional temporary support allowance the savings I have just outlined go to show that in fact the Government plans to gain a substantial amount overall from cutting the special benefit. The people who will suffer particularly are most likely to be beneficiaries without children and those who have particular high living and medical costs. The Government will save a great deal of money from scrapping that benefit at the expense of a lot of people who rely on the temporary support it affords them in otherwise desperate situations. 
It is particularly disturbing that the Government is rushing a change of this significance through under urgency and under the cover of a bill that overall seeks to improve things for families and the poor. That is the sort of administrative change and benefit cut that should have been subjected to the normal select committee process where all concerned groups and individuals could have had a chance to analyse the bill closely and make their views heard. I just hope that the Government implements its further promised reforms of the benefit system with enough alacrity and with enough compassion to ensure that the kinds of social and personal disasters that could result from what it is doing today will not in the end eventuate. 
Apart from the matter of the abolition of the special benefit the Green Party has some broader underpinning concerns about the way this new legislation will continue to bed in and extend the discrimination between the families of beneficiaries and the families of those in paid work. Beneficiary families gain only very modest amounts from changes made in the legislation and the new in-work allowance is directly aimed at encouraging beneficiary parents out of their homes and into the paid workforce. I have no problems with anything that can be done to assist people into the paid workforce but what we should not be doing as a society is saying that firstly somehow the children of those people should be punished for the situation their parents find themselves in and secondly that somehow people should be forced into getting a job—of any kind at any cost. People should have the choice of staying home with their children when those children are young and should not have the kind of pressure put on them by a society that says paid work is automatically and intrinsically worth more than caring for one’s children. 
A third area of concern which New Zealand First brought up in this debate is the timing of the proposed changes. We were happy to support New Zealand First’s amendments—which were also met with a fiscal veto—that changed the timing so that increases to family assistance and the rest of the changes could be brought in a lot more quickly. Of course the Government says that it cannot afford that. But we can see the Budget the Government is dealing with and we say that if the Government were serious about supporting families now—and it acknowledges for the first time that there is serious child poverty in this country—then those changes should have been brought in a lot sooner. Through the media in the last 24 hours I think we have seen some of the people who have been really upset to have heard first of all the promises that Dr Cullen made yesterday afternoon and then to have realised that the impact of those promises—the benefits they will gain and whether they will mean a few dollars or a lot of dollars—are not really going to hit in for at least a year if not 2 3 or 4 years. 
A further area of concern is that area around the accommodation supplement. The Government is putting a lot of hope into the fact that the accommodation supplement will increase for some people. We see that in the long term the accommodation supplement is not the solution. It is a subsidy to landlords and employers and the Government should be putting a lot more focus on extending social housing stock. 
But overall—and in some ways I am sorry to have been so negative in this final speech on this bill—the Green Party is delighted with the direction the Government is taking in this legislation. We would also like to acknowledge the role that United Future played in putting it together. We are delighted that Labour is helping families overall and that it is finally making an overt commitment to ending child poverty and that is long overdue so we congratulate it on the overall direction it is taking. We will vote for the bill. 
HEATHER ROY (ACT) 
: 
 ACT New Zealand will be opposing this legislation so the Minister will not be disappointed. I should point out that we oppose this legislation for several reasons but the first one that is certainly worthy of note is the way in which the Government as it has several times during this session of Parliament is showing yet again its contempt for the democratic process. Despite the staggered commencement dates that the Government has put forward for the introduction of many parts of this legislation it has insisted on having this bill heard through all its stages in urgency. There will be no select committee process no public scrutiny and no time for the Opposition to look carefully at the pitfalls in this legislation that the Government obviously is not the least bit interested in. The Government is exhibiting yet again its “don’t worry New Zealand we know best just do as we tell you” attitude. This is wrong. The New Zealand public knows it is wrong and will vote accordingly at the next election. 
Our other concerns are of a much more fundamental nature. We should completely ignore Mr Maharey’s very clever words about social justice and social development. In fact we should point out that this legislation is about social engineering. It is about engineering the social fabric of New Zealand society. At the end of the day this legislation will mean that more New Zealand families will be dependent on the State. This legislation is about welfare dependency. It is about vote buying. 
This Labour Government is very happy to have New Zealanders dependent on the State. When people are dependent on the State they are not about to vote for somebody else. That is what the legislation is all about—welfare dependency. Time and time again ACT New Zealand has railed against welfare dependency. There are much better ways of going about promoting families in New Zealand society progressing New Zealand and ensuring that we have strong economic growth. This Budget is a tax-and-spend Budget and the legislation to support it will not achieve any of the visions that ACT has for New Zealand’s future. 
It is worth taking a moment or two to look at some of the comments that the Minister in charge of the legislation Mr Maharey made when he was debating it. He said that New Zealanders are excited about it. I look around this House and I do not see a great deal of excitement. The place where I see the least excitement is on the Government benches. There is not a great deal of excitement in the press gallery. Where have the journalists gone? They know what the legislation is about and they will be reporting that. Then there is the  
Holmes 
 show poll. Are New Zealanders out in the provinces excited about this legislation? No. In one newspaper report today about this legislation one man said: “This is not enough.” In fact there are many reports of a similar nature. That is the trouble with welfare dependency in this country—there is never enough. When people are dependent on the Government when they have their hands out expecting money to come to them there is never enough. 
Hon Member 
: And they’re never grateful either. 
HEATHER ROY 
: That is entirely right. We need to make people responsible for themselves. We need to encourage people to be responsible for themselves. People can spend their own money more wisely than the Government can on their behalf. 
New Zealand First members made some very interesting comments during the debating process. Mr Maharey was nodding his agreement and shouting out in support of them at one point. They said that this bill would help people to get into work. But not surprisingly not one person stood up in the debate and said how that would happen. The reason for that is simple—there is not an answer. How will anything in this legislation help people get into work? It will not. It does not help business which creates the wealth in the country that would help people get into work. 
Mr Cullen stood up yesterday and said that there is a $6 billion surplus. I agree with the National Party member Katherine Rich that Mr Cullen had a golden opportunity yesterday that he turned down. It would have cost the Government $5.5 billion of that $6 billion surplus to implement a 20 percent flat tax rate. 
Hon Dr Michael Cullen 
: Oh! 
HEATHER ROY 
: Dr Cullen groans because he knows that it is correct. That 20 percent flat tax rate would include personal and company tax rates—a 20c in the dollar flat tax rate. Imagine the business that would come back to New Zealand if our tax rate was 10c in the dollar less than Australia’s. Business would flow back to this country there would be more jobs than we knew what to do with and families would flourish and prosper. This legislation perhaps more than any other legislation we have debated in the time I have been in the New Zealand Parliament shows the differences in attitudes to the fabric of New Zealand society. 
Government Members 
: Yes! 
HEATHER ROY 
: I am glad that Government members agree with me. In fact it was the Hon Damien O’Connor who first pointed this out. We have a Labour Government that likes telling people how to live their lives. It is happy to assist people in doing that. 
Hon Richard Prebble 
: Socially develop them. 
HEATHER ROY 
: The Government socially develops them. It hands out money so that people become dependent on the State. Why does the Labour Government want State dependency? It is so that the people who are dependent on it will vote for it. Government members are in trouble and they know it. 
However on this side of the House we know what it is to have responsibility for oneself and for one’s actions. We know how that benefits people. We know the value of having a safety net not a safety hammock that traps so many people in it that one cannot tell the needy from those who are capable of taking responsibility for themselves looking after themselves working for themselves and providing for their own families. This country needs a safety net not a safety hammock. All that this Budget and this legislation will achieve for the 300000 families it is making dependent on the State is a safety hammock. It is trapping them further and further into dependency. 
If we look briefly at the main objectives of the legislation firstly it is to make work pay for parents who move off benefits into work and to increase family income. Let me tell members opposite that lower taxes would have done that in a much more fiscally responsible way and in a way that is much more responsible for individuals. It was interesting to watch some of the television commentators yesterday discussing the legislation as the provisions in the Budget unfolded. In fact Chris Trotter has some very interesting comments to make. He said that he could not really work out what the details of the Budget were. He said that the most interesting point—and this is very pertinent—is that people must apply for every different step of the provisions within the legislation. They will not. I predict that approximately 20 percent of people will find the system cumbersome complicated and will have a great deal of difficulty applying for the provisions. That may be what the Government wants. It does not want people to cost it more money. A tax cut would automatically have gone to every working family in this country. 
The other benefit of tax cuts of course is that they do not cost the country a huge amount of money. Every time we churn money through Government departments—and I am talking in an administrative sense—we lose approximately 10 percent at every step. We have people working the money goes from tax to social security and 10 percent is lost at every step. 
JUDY TURNER (United Future) 
: 
 For all the talk about individuals and beneficiaries we seem to forget that this package is about assisting families and that is why United Future is supporting this bill. Families are worthy of support. The decision to start a family involves a degree of financial sacrifice and some would say that would-be parents have to take responsibility for the decision to start a family. 
United Future believes that families are the cornerstone of our communities and our nation and they need to be recognised and supported. If one parent decides to stay at home and look after children then there is a potential loss of income. If both parents go out to work then there are childcare costs. In clinical economic terms with children comes the arrival of non-productive yet highly consumptive members of the household. That is why the key mechanisms of this package put the focus fairly and squarely on children. Both family support and the in-work payment weigh joint income against the number of dependent children. 
That said we have expressed reservations about the fact that the key delivery mechanisms for this package come in a form that would appear to families to be for all intents and purposes like a benefit. In general we would prefer that working families did not have to receive assistance in the form of a weekly payment alongside their wages but rather indirectly as more money in their pay packets or as a lump sum at the close of a tax year that could be used to offset large expenses. 
 But we recognise that it would be more difficult although not impossible to use generalised tax cuts in such a way that recognises the different needs of different families as they all come in different shapes and sizes. A cut to the 19.5 percent rate would be welcomed by all families and individuals alike but it does not take into account the additional financial constraints faced by families. United Future’s own suggestion of income splitting would assist those families where one parent chooses to stay at home or work only part-time and would be the perfect complement to this legislation today. 
Although not fully comprehensive the use of family support and the in-work payment as key delivery mechanisms in this legislation do at least recognise the needs of families so when many elements of the taxation system assess an individual’s income these are measures that are based on family income. At the end of the day it is worth remembering that they are tax credits not benefits and they have been in place in some form for some time. 
The increase in eligibility and in the rates for the childcare subsidy also recognise the costs faced by families as well as the goal of ensuring that all-important pre-school education is accessible to all families. My only regret in that respect is that such measures effectively favour families whose parents both choose to work. This is not to pass a value judgment on this decision but merely notes that the option of either parent spending some of their working life at home with their children is not supported in a similar way. In the end such financial implications mean that the choice to do so has become less of a choice and possibly even a luxury or as the Minister has said an ambition. 
The other element of this package that United Future finds favour with is the extension of its reach into what might normally be considered middle incomes. The Government’s first instinct in developing this package was to lift the living standards of those families on low incomes whether or not they were in work. As the fiscal situation has appeared more favourable we have been very pleased to see that the Government has recognised the increasing hardship of those families that would not consider themselves poor but are finding it a challenge to get by. 
Previously families earning over $30000 would have received the message that they were considered too wealthy to get help. Family support for a family with one child extinguished at a combined income of over $30000 child tax credits disappeared at $33000-plus the family tax credit applied only if a family earned less than $18368 and the parental tax credit starts abating at $33000. The Government did not provide childcare subsidies to those with an income over $32240. Yet families that earn over these amounts face impediments that others do not. They may face higher marginal rates of tax at $38000. They are more likely to have student loans to service which is just like another tax and takes even more money out of their pay packets. Someone who is earning $50000 will be $3000 or $4000 worse off a year thanks to a student loan repayment. These aspirational families are also more likely to want to buy a home and that is no mean feat in today’s buoyant housing market. United Future is not afraid to say that it backs these families and we are pleased to see that they will come within the ambit of this bill. 
I want to touch on one final point. This package is also about ensuring that work pays for those moving off benefits creating a gap between work and welfare. However the way it does that is not immediately apparent since a simple reading of the bill would lead to the conclusion that both benefit-led and working families get a lift. But if we examine the way the different provisions interact we find that the size of this increase will be different for families depending on the source of income. The enactment of this legislation will mean that financial assistance towards the cost of children will be primarily paid through one payment—family support. This means that the basic benefit rates do not include a child component since it is loaded into family support which is then readily transferred when a family moves from benefit income to paid work. 
We think that a key requirement for the success of this provision in encouraging beneficiaries into work—and this is very important—will be to ensure that they can see the difference between what they receive in benefits and what they receive in family support so that they will know what they will retain by starting work. It may take some work to get the balance right but this bill at least provides the model through which such incentives can be created. For that reason United Future is very happy to support the Labour-led Government’s legislation. 
RUSSELL FAIRBROTHER (Labour—Napier) 
: 
 I want to make one point. I take my point from the “ACT - National Party” manifesto that august magazine that did a Budget special that came out this morning—the  
National Business Review 
. I am drawn to the headline in that august magazine which reads: “Incentive to work package is a welcome signal” when speaking about the Budget and particularly the Future Directions (Working for Families) Bill. It states further that this Budget: “makes a potentially valuable contribution to economic growth.” It then states: “One of the items on the Budget wish list of many businesspeople is encouragement for people to work to fill the skilled labour shortage that has emerged as a significant growth constraint.” The package is a welcome signal. The Government is saying to the country that it values people who want to work and is prepared to provide rewards and incentives to back that up. 
Hon Richard Prebble 
: It’s a handout. 
RUSSELL FAIRBROTHER 
: No this is not a handout. I am reading from a magazine that points out the unstable party of ACT whose members cannot decide among themselves a potential leader and have to use the people’s money to stump the country for airfares and run a primary election to try to sort out their own stability so that eight members can elect one member. They are using the money and the resources of this country but they are absent during this great Budget debate. Their contribution is zilch. The papers say that the main contenders Hide and Franks adore the leader of the National Party. So we see this slipping through the cloth in the shallow arguments but in the confluence of their approach to this legislation a party is emerging—the “ACT and Hide National Party”. 
I endorse this bill. The  
National Business Review 
 that august organ of the ACT party the august organ of the National Party recognises that the package of this bill provides an incentive to work. What the previous speaker seems to have ignored and the previous speaker for ACT seems to have ignored is that this puts money where it is needed. The effect of this on business is very very strong. This is money that goes into the pockets of people who need to spend it and will spend it in the businesses that the ACT party and the National Party claim to represent. If they had their way of tax cuts there would not be sufficient money to boost the business economy and the very people whom they claim to represent would be suffering. 
This is great legislation. Not only does it recognise the importance of families and not only does it support them in the vital parenting role but it also reinforces the approach that families are backed by strong services for the times they need a little extra help. Tax cuts would not give that assistance but discreet services discreet assistance as is provided in this legislation is the most plain and elegant way to provide that. That is an issue not spoken about by some speakers and an issue that was not even considered in their speeches. 
I am proud to represent a party that is stable and can stick with its leader as opposed to the two parties opposite which have leadership problems—there is a temporary leader for National and an indecisive leadership position for ACT. We have a party that says we have our act together and we know how to help people who need help and they are the parents with young children. They are the parents who work hard and want to get into work and provide this economy with a cash flow. That is the reason that I think this is a great day for New Zealand. This was a great Budget for the country. For years after people will speak of the 2004 Budget as a watershed in the country’s affairs. They will speak of this as legislation that set this country on the future path of great economic security social contentment and advancement for all the hard-working decent people. I thoroughly endorse this legislation and every considerate well-intentioned thoughtful member of this House will do likewise. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 About the only thing I agree with that the honourable member said is that this measure will set New Zealand on a path—but a path towards more and more welfarism. We know from history that that is not good for New Zealand. 
We have seen in this last 18 to 20 hours a very shoddy legislative process. This is important legislation. It deals with very complex matters and it is a disgrace that this Labour Government did not see fit to send this legislation to a select committee. There was absolutely no need to ram this through Parliament under urgency. Nothing happens for months with this legislation. Some of it does not happen for years. There was no need to ram this through Parliament under urgency. It is bad legislative process with legislation as complex as this. 
Some might ask why this legislation is so complex when it is just handing out a bit more welfare to hard-working families. The reason it is complex is that it deals with the interaction between people on benefits who are trying to leave those benefits doing more hours of work; the tax credits they receive as they do that and the interaction of the abatement of the benefits as they do more hours of work; the abatement of the various tax credits they receive—and they can receive three different lots of tax credits under this legislation; and how that interacts with the progressive old-style progressive income tax system. That produces an extraordinarily complex set of interactions—such that at present we have real genuine poverty traps in New Zealand which no one can support and like. 
We have a situation right now of for example a married couple where one is working and they are on the unemployment benefit. They receive family support and are trying to get off the unemployment benefit. The person working is a low-skilled $10-an-hour worker. That family at present after they have worked 8 hours a week at $10 an hour earns a certain amount of money. Under current arrangements if they were to try to earn a dollar more they would not succeed in that. If they worked not 8 hours but 20 hours a week they would not get another dollar. If they worked 30 hours a week at $10 an hour they would not get another dollar. At 40 hours a week that family is still in the poverty trap. They would not get another dollar. Only after they had worked 49 hours a week would that family get another dollar. That is not my research; that is the work of a researcher at Victoria University Patrick Nolan. That is a serious poverty trap because there is a low-skilled family on a benefit trying to get off the benefit—trapped! This legislation purports to try to do something about that. The issue is that we do not know whether it has or it has not because a select committee has not had the chance to examine this complex legislation. 
Let me share with members another reason why some of this legislation is so complex. This legislation retains what is known as the family tax credit. That tax credit guarantees a certain level of family income after tax. This legislation eventually will raise that after-tax income by a couple of thousand dollars a year. But that family tax credit currently abates at 100 percent so as that family earns one more dollar they lose a dollar of their family tax credit. That does not change with this legislation. I ask Dr Cullen: “Does that change?” because that is another poverty trap. How could anyone support something that taxes a person at 100 percent? Yet that is what happens with the family tax credit that this legislation perpetuates. No one explained—not Dr Cullen not Mr Maharey no one—whether the family tax credit abatement in this legislation removes that poverty trap. Earn another dollar—be taxed another dollar! That is outrageous. The Government members sit there saying this is wonderful legislation. They should let the select committee examine whether it has dealt with those poverty traps. It is shameful—I do not believe one member sitting on the Government benches could explain how the in-work payment arrangements in clause 39 work. I would not mind betting that most of those members opposite could not even do the maths involved in working out whether people are still caught in the poverty trap. 
Jill Pettis 
: Like this member can? 
Dr the Hon LOCKWOOD SMITH 
: Could the member repeat that? 
Jill Pettis 
: Like this member can? 
Dr the Hon LOCKWOOD SMITH 
: It might just surprise the member that I do know how to work it out. I have done a lot of work on it. That is how I can tell that member exactly what the current abatement regimes are and why in fact people do face those poverty traps. In this legislation the poverty traps have been moved further out. The explanatory note of the Future Directions (Working for Families) Bill states: “effective marginal tax rates (EMTRs) will be improved for low income working families with total income between $20000 to $27500 a year”. That will not be done immediately but when the abatement-free threshold changes for the family support tax credit. I would not mind betting that half the members opposite do not even know why that is the case. The problem is as the explanatory note goes on to state: “However EMTRs will be higher for some middle and higher income families not previously eligible for assistance:”. 
All the Government has done is shifted the high poverty trap hurdles—the high effective marginal tax rates—just a bit further up the income tax scale. It has not solved the poverty trap problem. Labour members sit there and say what wonderful legislation it is. Why did they not let a select committee look at it to see whether those serious poverty traps were properly solved and whether the abatement regimes as all these tax credits interact produce rational effective marginal tax rates? But no the Government did not want that to happen. Do members know why the Government did not want that to happen? The Government was frightened that once there was decent scrutiny of the legislation the weakness and ineptness of it would be plain for all to see. This is a con job. 
What has happened under this Government is that the average working person in New Zealand has been taxed more and more. That is what the OECD analysis shows. We have the second highest increase in the OECD in the tax that is taken off the average working person since the Government has been in office. Then it says with this legislation: “Aren’t we wonderful? You can come along cap in hand to us and ask for some of it back. And if you do what we want we’ll give some of it back to you after a while. But if you dare to send your child to a private early childhood institution oh no we won’t give it back if you do that. You’ve got to send your child to an institution we like—in other words a community one or a kindergarten.” 
That is an outrageous manipulation of people using their own money. [ 
Interruption 
] The average worker that this bill addresses earned that money—not that member. She earned none of it. The average working person earned this money. That member has taken it off them and is coming to them and saying: “We’ll give some of it back to you.” It is a con job in order to bribe people with their own money. It is cynical because it is not given back to them until after the next election. The people of New Zealand will see it for the cynical election bribe it is. It is poorly thought out and shows no innovation about how to solve the poverty trap problems. It shows an arrogant Government that thinks the public is stupid enough to be bribed with its own money but the public is not. 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 It is a pleasure to stand in this House and speak in this debate. A couple of weeks ago I was a very proud grandfather attending the birthday party of my little 2-year-old grandson. I was sitting there looking at those little children who were enjoying that party and then I looked at their parents. Not too many years ago they were the little 2 3 and 4-year-olds coming to my house for my own children’s birthday parties but now they are young parents. 
They are the young parents this Budget seeks to help. They are the young parents who will wonder why the National and ACT parties say that they should not have $25 a week for those little children—that they should not get extra money in their wage packets to look after those little children because it is not philosophically the correct way to do it. Well they will be really interested in that argument when the rent has to be paid and the National Party has said that they should not have enough money to pay it. 
Some people in this House have short memories. The National Party would believe and ACT absolutely believes that anybody who dares take money from any sort of Government system—whether it be the old family benefit system we grew up with or the family support system we are talking about here—will turn that person into a beneficiary and a bludger. Well every New Zealander alive today should be described as a beneficiary and a bludger because all our parents were in receipt of the family benefit when we were growing up. 
My mum and dad bought the first family home with the help of family benefit capitalisation. When they started to have a heap more of us they capitalised a bit more of the family benefit and built an extra bedroom so that we were not all in the same room together. Seven of us grew up not to be bludgers and beneficiaries. I dare the National and ACT parties—or anybody else in this House—to front up to my brothers and sisters and tell them that they are bludgers and beneficiaries. 
Of course Mrs Rich might be silly enough to do that because she has not been around long enough to understand the ethos of New Zealand—that we are not a nation of beneficiaries and bludgers just because the Government finds a way of assisting us when we need help most. When we are young parents with the big overheads that come from being on small wages and having to pay rent and mortgages that is the time that New Zealand has traditionally helped families. 
Does Mark Gosche on a salary of $120000 a year need an extra $25 a week? No he does not and he is not getting it from this Budget. But I did not rush to the telephone to ring up the  
Holmes 
 show and say: “Oh there’s nothing in this for me; I’m against it.” No I said: “Bloody great!” because my grandson and his parents and all of those young people who are now parents need that money. I applauded it. I voted for it along with New Zealand First Green Party United Future Progressive and Labour Party colleagues. We know what it is like to be young parents struggling every day to find enough money. That lot over there too lazy even to go out and even visit a constituency let alone win one do not have a clue. 
Mrs Rich would not have a clue what it is like to be one of the struggling young parents in this country where every dollar counts. They do not like being told that they are beneficiaries and bludgers by the likes of her. They know what she got up to in her first few years in this House. They know that she took plenty of time off to have children and then she voted against paid parental leave. That is the sort of nonsense that New Zealanders understand. It is described by the sort of word I cannot say in this House but they know what it is. Those people over there have been employed for the last 4½ years in Opposition and still do not have a policy to help young families and the parents who brought those little children to my grandson’s birthday party. 
It is a proud day every day to come to this place as the representative of the people of Maungakiekie. When I go home I do not expect them to come to my house and say: “Well great. You did an excellent job.” All we have done is what they expect us to do—make proper laws and write good Budgets that reflect what the vast majority of New Zealanders want. It is a fair system. 
Most of the people who are now grandparents like me will be saying: “Personally I do not need huge amounts of money in my pocket because I have gone through the hard years of my life. The mortgage is on the way to being paid off or is paid off I have a reasonable income and I want to see my kids and their kids get a decent shot at life.” I want them to have childcare a bit of money to pay the rent some money to pay for food clothing and the normal things that people in the National Party and ACT do not even have to worry about because a lot of them have never ever struggled. 
I find it absolutely extraordinary that somebody like John Key who is proud of growing up in a State house with all the benefits the State poured into him is opposing this bill. He was not a bludger or a beneficiary before he came to this place but what has he been doing in the last 4½ years? He has no policy so is he earning his keep now? Absolutely not! That lot over there on the Opposition benches are bereft of ideas have no policy and are just telling ordinary New Zealand families and their kids that they should not get this money. 
The ACT party says: “Vote ACT and we will give you $39 because that miserable lot called Labour will give you $150.” Well that makes a lot of sense as its members fly around the country at taxpayers’ expense trying to figure out who the leader is by holding a primary. I want to get Mr Hide back here to perk-bust his own party so that they can ask themselves who is paying for those air fares. We want Rodney Hide to come back and answer the question about who paid his airfare so that he could go to Dunedin to stump up to the 3½ members of the ACT party who turned up to vote. 
This is a wonderful Budget and Mr Steve Maharey is a great Minister. I am extraordinarily proud of the enormous work he has done and of the work of all my colleagues in Cabinet. The Minister of Finance and every single member of this Government contributed to this package. We are proud of it; we will go home tonight feeling proud of it—and our constituents out there will be asking why that lot voted against it. 
Mr SPEAKER 
: I understand that Lindsay Tisch and Barbara Stewart will take a 5-minute call each. I presume there is no objection to that course being followed? There is not. 
LINDSAY TISCH (National—Piako) 
: 
 I have sat through all the debates on this legislation from the first reading right through until now as we are closing the third reading. It is interesting to note that of all the speeches we have heard this afternoon’s third reading speeches from the Labour members have been the most proactive in trying to gloss over the in-depth problems that will occur with this legislation. During the Committee stage—yesterday and earlier today—only five Labour members took a call. The Committee stage was when we went through this legislation part by part. It was when we digested dissected and looked at what this legislation does. Yet only five Labour members thought it important to stand up and justify what this Government is doing and what the Minister of Finance did in the Budget announcement. 
Hon David Benson-Pope 
: Don’t be so silly. 
LINDSAY TISCH 
: The member may make those sorts of comments but at the end of the day we need to see what this legislation does. Over the last 5 years this Government has taxed at such a level that it now has a windfall of money—and what will it do with it? It will redistribute. That is what socialist Governments do. They tax on this hand build up a fund and then on the other hand give the money back to the people it has already taken it off. Then they say: “Aren’t we doing well.” 
When we look at it if we want to lift New Zealand’s living standards we do not just give money out we have to grow the cake. We have to grow the economy. That is the basis of economics. What do the wealth creators of New Zealand—those people who are prepared to invest and put a dollar at risk—get out of this? Absolutely nothing. There is nothing in this legislation to say to employers that the Government will cut compliance costs make it easier to employ staff and allow them to compete in the market place. There is none of those influences or catalysts to grow the economy. 
What this Government has done and what this legislation does is lock people into dependency. Why would somebody on an $80000 salary with four children get $25.12 per week in April 2007? Why would someone on that sort of income get $25.12 in April 2007? Why do those people need to be locked into dependency? They would far rather have a tax cut. Money in the hand today is worth a helluva lot more than what it will be worth in 3 years’ time. That is the basis of economics—money in the hand today and what I can do with it is worth a lot more. But this Government believes that it can do better with taxpayers’ money than they can do with their own money. 
This really means that the 300000 families out there who will benefit out of this legislation will not benefit immediately. There will be some concessions for beneficiaries but those low-income earners whom we all aspire to help do not get assistance until April next year and then again in 2006. So here is a Government that says it will help those on lower incomes and in the middle-income bracket. That is fine but at the end of the day if we study all the figures there is little for those people. That is why they will be disappointed and why all the media comments say that it is just a lolly-scramble as my colleague said. 
The Government is saying that over the next couple of years many families will be assisted. The Budget benefits 300000 households—that is one in five because there are 1.2 million households that get absolutely nothing out of this Budget. When it is scrutinised and when people ask where they get this big handout from that the Government is talking about they will be bitterly disappointed. When I am on the campaign trail I will say that this was a hoax—a cynical Budget to do nothing else but buy votes. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I rise to speak to the third reading of this legislation. As my New Zealand First colleague Peter Brown has already said we will be supporting this legislation. It should be good for New Zealand families—the low-income and middle-income families that it is actually designed for. This is a people’s Budget. In this Budget the Government has recognised that families matter and has developed a strategy to help and support New Zealand families. The old policies that have been used for years have not worked and it is time to develop new ones and that is what we have in this Budget. 
The family support and tax relief measures will be a help for many families. With the increasing rise in the cost of consumer goods like petrol and electricity and the subsequent flow-on effect on foodstuffs meeting the needs of a growing family has never been more difficult and every bit of income helps. This Budget is one for children and their families and this legislation shows that. The increased subsidies should make working far more attractive. 
I was reading recently that in 2002 only 10 countries showed Government spending that was lower than New Zealand’s so the choices between tax cuts for the wealthy and policies that reduce child poverty are real choices that needed to be made. They have been made with families this time being a priority. Budget surpluses mean there is no excuse for not dealing with child poverty—particularly when the Government’s own reports show that nearly one-third of New Zealand children live in poverty—and this has been done. We are a First World country and our children should reflect this. We once led the world with the care of our children and we need to regain our place. 
I can assure the House that childcare assistance is required for New Zealanders. Increasing the rate of the subsidy and the number of families eligible to receive it are good measures. I think back to the time when my son required childcare so that I could go back to work. Even 8 years ago the fees were extremely high and I know that I paid the equivalent of another mortgage. I must admit that like many mothers I sometimes wondered what on earth I was actually working for. I ask how many other mothers come to the same conclusion and give up. Assistance in that area is really required. 
The measures that are in this Budget and this legislation will help families get back to affording the best they can for their families. Policies to improve the well-being of children all alleviate some of the challenges that most New Zealand families are facing at the moment. New Zealand families are struggling to make ends meet and this legislation is a good investment for everyone. I must admit that New Zealand First wanted to see this legislation enacted as soon as possible and we have got some concessions concerning that. We hope this legislation is accurate and contains no errors. We want to see a better future for families in New Zealand. This legislation has worthy goals and New Zealand First supports it. 
A party vote was called for on the question  
That the Social Security (Working for Families) Amendment Bill be now read a third time. 
Ayes 78 
New Zealand Labour 51; New Zealand First 13; Green Party 6; United Future 8. 
Noes 26 
New Zealand National 21; ACT New Zealand 4; Independent: Awatere Huata. 
Bill read a third time. 
A party vote was called for on the question  
That the Taxation (Working for Families) Bill be now read a third time. 
Ayes 78 
New Zealand Labour 51; New Zealand First 13; Green Party 6; United Future 8. 
Noes 26 
New Zealand National 21; ACT New Zealand 4; Independent: Awatere Huata. 
Bill read a third time. 
The House adjourned at 3.38 p.m. (Friday)