Goff Phil: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeGoff Phil: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — In Committee[Sitting date: 25 March 2015. Volume:704;Page:2597. Text is incorporated into the Bound Volume.]Hon PHIL GOFF (Labour—Mt Roskill):There are two important matters in this bill and in my first call I guess I will look at the area I have a particular responsibility for which is veterans’ support payments. I think there are a number of questions that the Committee needs to know about and actually the country needs to know about. It seems to me that the changes that are being made in this bill to veterans’ support payments are way under the radar. I rang the RSA this afternoon just to see what its view was. It did not know about the changes being made in this legislation. The chief executive officer of the RSA did not know about this and until I saw this bill I was not aware of it.On the surface this bill dramatically decreases the income of veterans through their lump-sum payment through their weekly compensation payment and through their weekly payment to the dependent spouse of a deceased veteran and to children and dependants. It dramatically reduces their income because it makes it taxable.I had to really look through the regulatory impact statement to find out what was happening here. I read the Minister’s statement from the first reading and the Minister who spoke at the second reading did not even refer to it but it appears that there has been a massive cock-up. That cock-up is the fact that the Government did not get it right in the first place. A veteran reading the Veterans’ Support Act would believe that the income they were going to get was going to be non-taxable and suddenly they find that their income will go down by a third from what the Act apparently gave them and what is more it increases the obligations facing veterans in terms of student loans and child support obligations. It reduces veterans’ Working for Families entitlements.This has been conveniently swept under the carpet and the excuse given is: “We got it wrong. We made an error in the original Act.” This is an error such that if any veteran picked up the Act and looked at it they would believe they were entitled to far more than they are going to get as a consequence of this remedial piece of legislation.My questions to the Minister are straightforward but I would really like to get some answers to them. That is the whole point of the Committee of the whole House stage. My first question Minister is this. How did the Government make this stuff-up? How is it that it got it wrong in the Veterans’ Support Act? What went wrong why did it go wrong and why did it take so long to discover that? My second question is this. What efforts have been made to communicate this error to veterans and their families? Have any efforts been made? It seems to me that people will have been misled by the legislation originally advanced by the Government—the Veterans’ Support Act.Thirdly I take it from the regulatory impact statement but I am not sure that payments have already been made to veterans. I would really like the officials to advise the Minister as to whether any payments at the wrong level have been made to veterans. If those payments have wrongly been made to how many veterans were they made to and what was the sum of money involved? Is this legislation retrospective? Will people who have been getting more in payments than the Government now says they are entitled to have to repay that money?None of these questions has been addressed in any of the material I have seen advanced. I am hoping that the payments have not started and that there will not be any requirement to pay money back. I will understand if the Department of Inland Revenue made a genuine error but I think that when you make an error you front up you admit it you explain how you made it and you apologise for making it. I want to know from the Minister whether any of those things have happened.I had to as an experienced legislator search through the information that has been provided by the Government from every source to find out that that was actually the reason. It was swept under the carpet. The Government did not want to acknowledge it and it did not want to admit it. When the RSA says to me that it did not know about it I think there is something fundamentally wrong with how our system is working.I think they are fair questions Minister and I hope that you will take the opportunity before this debate proceeds much further to get up and answer those questions so they can be clarified. Depending on the answers you give of course we may have some further questions to ask.The second area I want to speak on is the HomeStart-related clauses clauses 3 to 6. I am asking these questions on behalf of my constituents because I want to know how much these changes are going to help people in my electorate. My electorate is Mt Roskill; it is on the Auckland isthmus. It is the area in which I grew up and it used to be an area where people could come and buy their first home. It was a working-class area. People could aspire in the old days to homeownership they could have it and it would be affordable.The really frightening thing as I went around my electorate last year and knocked on doors—doors that I had knocked on before; that I had known always for the last 40 years to be owner-occupied—was I found that they are now investor-owned and they are being rented out. They are being rented out. Homeownership has gone from nearly 75 percent in my electorate and in Auckland to 61 percent. That is a serious serious indictment on what is happening in housing because we all believe in the Kiwi dream of being able to buy your own home. I am asking these questions because I want to know whether what is in this bill will address that problem of housing affordability.I would love my kids to be able to buy on the isthmus of Auckland. They cannot. They cannot afford it. When I bought a home—and probably when you bought your home Mr Chairman—it was three times my income. That was the cost of my first home as a first-home buyer. My kids are now paying six or seven times that income and they have to rely on help from the family to be able to raise the deposit.When I look at what is happening in Auckland with prices I see the prices are going up by $1700 a week. Put yourself in the position of being a first-home buyer. You are paying out high rent because of a housing shortage and you have got to find $1700 a week more just to keep up with house prices. You cannot do it. Actually a lot of Auckland house prices have gone up by $90000 in the last year—$90000.What do we do in this bill? We alter HomeStart so that we can give people their tax credits back. It is $500 a year. That is what this bill provides to a first-home buyer—$500 a year—and house prices are going up by $90000 a year. So I ask whether this is a genuine effort by the Government to address the problem of more and more people in Auckland not being able to afford to buy a home of their own. Five hundred dollars a year—Carmel Sepuloni: It’s pathetic.Hon PHIL GOFF: Yes yes—it is $10 a week and house prices are going up by $1700 a week.So I say that this is a drop in the bucket as an answer to a serious problem. But I say more than that. When I read Treasury’s submission on what the Government is proposing it said that this will be counter-productive. It said that in a supply constrained environment putting more money in in this way is like putting petrol on a fire to put it out and that all this will do—and it quotes the Australian examples—is further push up prices and that the poor prospective homeowners being promised that they are going to get something out of this bill will just find that homeownership is further and further outside their reach.The statistics do not lie—75 percent of Aucklanders owned their own homes back in the mid-1980s; today 61 percent do. What difference will this bill make? This is tokenism is it not? It is tokenism at best. Yet everyone in this House would say that an important part of our democracy and our community is that people should have the right to own their own homes. Well because of the housing shortage they are paying more rent and because of the housing shortage house prices are going up more and more. Who benefits from house price increases? Not the first-home buyers—they are the victims. The property investor benefits. With at least 40 percent of the houses sold going to property investors they are making thousands of dollars a week on every property they own. That would be OK if it were not for the fact that they are making it out of the hide of the people who are desperate to get into a home of their own.Is this House working for property investors and not working for first-home buyers? Obviously it is. We are introducing something here that will not provide real assistance to the first-home buyer. The first-home buyer is falling further and further behind and the Minister of housing or all three Ministers of housing insults them by saying: “Here is something that will help you.” when it will not help. Things are getting worse.