Parker DavidTAXATION (COST OF LIVING PAYMENTS) BILLFirst ReadingHon DAVID PARKER (Minister of Revenue): I present a legislative statement on the Taxation (Cost of Living Payments) Bill.DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon DAVID PARKER: I move That the Taxation (Cost of Living Payments) Bill be now read a first time.The world is experiencing inflation at higher rates than we have seen for many years. This is a combination of the effects of COVID-19. COVID-19 of course disrupted methods of production and transportation around the world and those effects are not yet over. This is part of the cause of inflation as is the rising domestic demand in New Zealand and around the world which has meant that most of the world's rebounding economically from COVID at the same time creating inflationary pressures.So inflation was already building when the war in Ukraine sent energy fertiliser and food prices higher squeezing household real incomes. This is not just a New Zealand phenomena; around the globe we're seeing all countries grappling with the same issue. In the US inflation is running at 8.5 percent; in the UK it's 9 percent; and as the Minister of Finance in his Budget address today said the OECD average is 8.8 percent.We know that the cost of living affects just about all households but it most affects those who are on low to middle incomes. We've already taken a number of steps to help those households: we've of course significantly increased the minimum wage each and every year; we've increased family tax credits; and we established the Best Start payment and the winter energy payment.Treasury says that inflation will outstrip annual wage growth this year for the first time since this Government was elected in 2017. I noted in the Budget documents that the prediction for this year is wage growth of 4.6 percent against inflation of 6.7 percent. This follows years of strong wage growth and the same Budget forecasts from Treasury that next year under this Government's economic plan wages will once again grow much more strongly than inflation. I would point out this is in contrast to the record of the prior National Government where real wage growth was negative through the global financial crisis and remained very anaemic long afterwards.In recent months we've helped in other ways: we have slashed fuel excise duty we've cut road-user charges and we've halved public transport fares. Today's Budget extends those measures and also halves public transport costs to more than 1 million people on a permanent basis. We're also committed to dealing with some competition issues in the grocery sector to ensure that people pay fair prices for food and other basics—that issue will be covered in more detail in respect of other legislation which we are proposing to pass through all stages as part of this urgency motion to remove barriers to new retailers entering the market.In addition to all of those measures the Government is by this bill introducing a payment of $350 to help low and middle income people cope with current inflationary pressures. For each individual recipient this is equal to half the couple rate for the winter energy payment. The payment is a temporary measure to provide support for individuals who earned up to $70000 in the last tax year and are not receiving the winter energy payment. The income cap of $70000 has been set to provide support to those who earn up to around the average annual wage which is around $65100. On that issue with respect the Leader of the Opposition had it wrong in his Budget address about an hour ago.This initiative is not aimed at people who are on a main benefit or superannuation; those people are already being supported through the measures I previously described such as annual cost of living increases and by the winter energy payment which provides support for their living costs through the winter months.A large group of people is supported by this payment—approximately 2.1 million New Zealanders will be eligible for the payment. The total payment of $350 will be split into three monthly instalments each of around $160 million with the first on 1 August and this will be paid out by Inland Revenue. There is no application process. For those eligible Inland Revenue will make the payment by direct credit into the person's New Zealand bank account. To achieve this we need to make some relatively minor changes to tax legislation to allow Inland Revenue to make that payment using information that Inland Revenue already holds.As I said before the first instalment will be made to eligible people by 1 August. This date allows Inland Revenue time to prepare for the payments including obtaining bank details for the over 200000 taxpayers for whom we don't hold a bank account currently. It will also enable more people to complete their tax returns for the year ended 31 March 2022 upon which the entitlement is based.The International Monetary Fund has said that now is not the time for substantial tax cuts. In contrast to other parties we are not promising tax cuts that gives hundreds of thousands of dollars each year in tax cuts to CEOs and little to others; we believe our solution is better and fairer. In conclusion this payment will help more than 2 million New Zealanders and I commend this bill to the House.DEPUTY SPEAKER: The question is that the motion be agreed to.