Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeTaxation (KiwiSaver HomeStart and Remedial Matters) Bill — In Committee[Sitting date: 25 March 2015. Volume:704;Page:2595. Text is incorporated into the Bound Volume.]Taxation (KiwiSaver HomeStart and Remedial Matters) BillIn CommitteeTIM MACINDOE (Senior Whip—National):I seek leave for the debate on the bills that we are about to commence to be taken as one debate with clauses to be voted upon separately.The CHAIRPERSON (Hon Chester Borrows): Leave is sought for that purpose. Is there any objection? There appears to be none.Clauses 1 to 11PHIL TWYFORD (Labour—Te Atatū):I look forward to debating this bill through the Committee stage taken as one question. I want to begin by speaking to clause 6 of the bill which is the operative clause for what I think is the most significant thing the bill sets out to do which is to enable members of KiwiSaver schemes to withdraw not only their own contributions but also the member tax credits or the Government contributions in a KiwiSaver scheme in order to get a deposit together that would enable them to take advantage of a Welcome Home Loan. This bill is an enabler of the Government’s HomeStart subsidies which were announced during last year’s general election campaign.We are going to focus our discussion this afternoon on the clauses in this bill but let me just note in passing that members on this side of the House—Labour members in particular—have been very critical of the policy for which this bill is an enabler. If I can just summarise briefly our criticisms we agree with many of the highly critical things that have been said by the Reserve Bank Treasury and so on about the effect of increasing homeownership subsidies in a market that is already supply-constrained where there is already significant excess demand compared with supply. Many commentators including the officials from the Ministry of Business Innovation and Employment Treasury the Reserve Bank and the officials who briefed us in the select committee were clear that those were the problems associated with this bill.Labour as we have made clear in earlier debates is going to be voting for this bill because putting aside for a second the HomeStart policy and the expansion of homeowner subsidies which we think will drive prices up and will actually make housing more unaffordable the bill itself is at best I suppose slightly benign. But as I was saying clause 6 is the one that basically amends the KiwiSaver scheme rules and I suppose the question in relation to clause 6 is what difference is it going to make to aspiring homeowners—to first-home buyers? Our calculations are that at best it will allow possibly a couple of thousand or maybe a few thousand extra dollars to be contributed to a deposit.Put that in the context of what is happening for example in the Auckland housing market where over the last 12 months the average house price increased on average by $1700 every week—$1700 every week. A bill that is going to enable people to add just a few thousand dollars of their own retirement savings—so this bill gives people the opportunity to raid their own kitty and really to pay the price of this Government’s failure to address the housing crisis. But the quantum is all wrong. So at best it is going to allow people to withdraw a few thousand dollars extra. It might be the equivalent of 2 weeks or 3 weeks of Auckland house price inflation and I think that puts it in perspective. That shows how incremental how marginal the benefit from this bill will be.I want to point to some of the comments that have been made by officials in relation to the expansion of the subsidies including the ability to withdraw one’s own retirement savings in order to put a deposit together. Treasury advised the Government in July 2013 about the earlier change to the rules around eligibility for the KiwiSaver home deposit scheme. Treasury said that “The KiwiSaver Home Deposit Scheme increases the cash available to homebuyers for deposits. Increasing eligibility may encourage buyers to take on more debt/seek more expensive houses. This could exacerbate house price pressures.” That is what we are talking about here.Later that month Treasury advised that increasing KiwiSaver withdrawal subsidies would have an impact on the very same financial and macro-stability issues that the Reserve Bank Governor comments on on almost a weekly basis. Treasury said that the impact on financial stability would be negative and that it would undermine the effectiveness of loan-to-value ratio lending restrictions which is the main tool that the Reserve Bank has brought in to try to reduce the financial stability risks of an out-of-control Auckland housing market. Treasury said: “Government subsidies for home ownership are low value for money and tend to be regressive.” This is advice that Treasury has given elsewhere. They are low value for money and they tend to be regressive. So by raising the price caps and increasing the subsidies and the eligibility the Government is actually reducing the targeting and the value of the policy to make a difference to the people who need it most and it is expanding the pool of people who are likely to take it up.On the draft Cabinet paper—again on the previous changes but I think they are just as apposite for this bill—Treasury said: “Experience with homeowner grants in Australia suggests that such programmes tend to push prices up in a supply constrained environment by supporting greater demand rather than improving affordability.” and there is a risk that by expanding eligibility—as this bill does and as the wider policy does—for the KiwiSaver deposit subsidy the Government will end up undermining affordability for first-home buyers.So I think that is a pretty good summary of the official advice about the implications of clause 6 which allows the member tax credit or the Government contribution to be withdrawn. I think it is pretty clear that the benefit here is very very small compared with what is happening to house prices which are up by 1700 bucks a week in Auckland. But the median house price for the whole of New Zealand has been going up over the last 12 months by $1000 a week on average—$1000 a week. So the benefit of this bill for aspiring first-home buyers is pretty marginal and is probably the equivalent of about 2 or 3 weeks of house price inflation. Thank you.RICHARD PROSSER (NZ First):I rise to take a brief call on behalf of New Zealand First and on behalf of my colleague Fletcher Tabuteau as we debate in the Committee of the whole House the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill.As we have outlined previously New Zealand First does support this bill albeit with some minor reservations. I want to focus on one part of the bill that we do not believe has received as much attention as it warrants in terms of its importance to a very specific and very important sector of society—that is our returned service people our veterans. I am talking about clauses 8 to 11. We have a concern that this bill—rather than being remedial as it is intended to be and correcting certain anomalies—as it is constructed will have the effect of compromising the potential income of some veterans. This would be our single greatest concern and I am sure the Minister in the chair the Hon Anne Tolley will take the opportunity to rise as she is wont to do in order to allay this concern because we are certain it is not the intention of the Government to in any way compromise the financial position that our veterans may find themselves in.We understand that the intent of the bill is remedial with regard to veterans’ support payments that it is intended to tidy up parts of the Income Tax Act 2007 so that income replacement payments under the Veterans’ Support Act 2014 are treated the same way for tax purposes as are payments provided by ACC and that they are taken into account as regards social policy calculations so that they do not trigger the application of rules relating to auto-enrolment and the compulsory employment contributions to KiwiSaver. This is admirable and it is only proper and right and we wholeheartedly support that. However we do hold a concern as my colleague outlined earlier in this debate that it may in fact have the opposite effect under certain circumstances and we would very much appreciate the Minister taking time to address this.The Veterans’ Support Act 2014 was legislation that adopted most of the recommendations of the 2010 Law Commission review of the War Pensions Act 1954. The commission made 170 recommendations and the Government adopted 132 of them which is admirable we believe. The Act required reviewing because it was outdated. It was designed to deal with the physical risks and effects of deployments but it did not cover the psychological or environmental risks and ongoing repercussions faced by veterans—by service people who would become veterans. It focused on disability compensation but did not provide for rehabilitation.So the 2014 Act sought to address these anomalies but as is all too often the case the law of unintended consequences saw it falling foul of some unforeseen traps in other pieces of legislation notably tax law which is what we are dealing with in this bill. New Zealand First’s concern then is around the benevolent margin and it is this I would very much like the Minister to provide some further assurances on.The War Pensions Act was a form of workplace injury compensation in the days before ACC and some veterans qualify for compensation payments under the both that Act and ACC while others qualify only under the older scheme. The RSA submission to the select committee stated: “The benevolent margins for veterans which so obviously was a part of parliamentary thinking when ACC was established has not in fact been delivered as intended. Sometimes the letter of the law does not always manage to quite capture the spirit of its intention.” I very much hope the Minister will undertake to ensure either by way of amendment or directive to clarify the position of that intent.The 2014 Act provided that “Veterans who are under the age of retirement and unable to work because of any medical condition are able to receive a higher rate of income compensation than is available under the 1954 Act and surviving spouses or partners children and dependents continue to receive the same types of compensation as under the 1954 Act.” We very much want to be reassured that the higher rate of compensation provided for under the 2014 Act is able to survive the changes to tax law brought about by this and preceding Acts because if there is one group of people in society who deserve the best deal possible it is our veterans to whom we all owe a collective debt of honour.In closing I reiterate that New Zealand First will continue to support this bill. I look forward to the Minister’s very erudite contribution which we hope will be reassuring as well.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.JAN LOGIE (Green):I rise to take a short call in the Committee stage of the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill. I also want to put a few questions to the Minister in the chair Jo Goodhew specifically in relation to clauses 8 to 11 and the changes for veterans. I did say in the first reading of this bill that I was slightly bewildered to have this legislation in front of the House after just last year when the House spent such a long time considering the Veterans’ Support Bill which was in turn the result of a very extended Law Commission report on the need to modernise our veterans’ support system. Parliament spent many many hours on that legislation.I have to say that at the very least I am bewildered to be here less than a year later I think with a bill that talks about remedial matters and is in fact from what I can read in it proposing quite significant changes to what have been described as mistakes in that piece of work. It is I say again a disturbing trend that seems to be happening in this House where we are fixing up mistakes in the legislation of this Government. I would like to hear clarification about exactly what the in-the-hand impact of this change in legislation will be for veterans.I did sit through the Social Services Committee meetings and I am concerned. After all the care we took in that committee listening to veterans about the hardship they were experiencing particularly as we are coming up to—and I am not one to celebrate war—the 100th anniversary of Gallipoli I am concerned. There has been so much attention to remembering the lessons of that war and giving honour to the tragic losses and the harm done to people sent into those conflict zones by this House and the fact that we could potentially be passing legislation that would reduce their incomes and the support available to them under the title of “Remedial Matters” is deeply disturbing to me and I really do hope to have that issue positively clarified to us in the Committee tonight.I would also like to speak about this bill in terms of a measure that National cited during the election campaign as one of its key responses to the housing crisis—the crisis that nobody on that side of the House seems to acknowledge is a crisis. Clause 6 enables people to access their tax credits in their own KiwiSaver account if they are eligible for the HomeStart provision and have the ability to access their KiwiSaver savings. As has already been mentioned I think it amounts to about $521 a year which in the very very best-case scenario is around $5000 if they are old enough and enrolled in the scheme at its first inception in 2007. So we are not talking about very much money. We are not talking about any new money at all because it was money that the Government had already contributed and put into people’s KiwiSaver schemes. So it is just enabling people to access a little bit more which also means they will have less in the hand at retirement.It is critical to recognise how big the housing crisis is in this country. I think the average age of first-home purchasers in the 1970s was 25 from the best evidence that I can get from the library. The most up-to-date information we have got tells us that the average age is now 34 or 36 and I would suspect it is quite a bit higher in Auckland because that is a national figure. I know I am very lucky living in the wonderful Porirua East to have been able to buy a very cheap house but I know that is not the reality in most of New Zealand. In fact the average house price in Auckland is now over $650000. Can you imagine that? That is more than three times my house price and it requires a significant deposit. If you need 20 percent in order to have a deposit on the average house it is over $120000. When you think about how expensive rents are in Auckland—and in many other places in the country—and about what people have left over and their ability to save for a deposit it becomes clear that it is impossible.I was speaking with some caregivers up in Auckland on Monday night and they were talking about working full time caring for their kids and living in Auckland. They found a place close to their work but after they have paid their rent they have less than $200 a week left to cover all the rest of their costs and care for their children. You are not going to be able to save for a deposit—you are going to struggle to feed your kids when that is the reality.So $520 which you already have from the Government is not going to enable you to get anywhere near $120000. I do not think that clause 6 lives up to the Government’s election promise. To consider this measure an answer in terms of home affordability and people’s ability to buy their first homes is a bit of a joke but we are supporting this bill because—and it feels weird even saying this—we know that for some people somewhere in the country that little bit of money might be just enough to put them over the edge into being able to buy their first house. It would feel curmudgeonly to not support that. But in terms of integrity in terms of this being a response to home affordability and in terms of this being a response to the housing crisis then the answer is no it is not.I cannot imagine that anyone in this country listening to any of this debate would have a sense of gratitude to the Government or even a sense of confidence in the Government’s ability to respond to the real issues facing this country at this time. So we offer our very provisional support and look forward to hearing the Minister answering the questions around veterans’ support because that in fact may change our position on this bill. Kia ora.DAVID BENNETT (National—Hamilton East):This bill the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill is something that is—there will be a lot of discussion around homeownership and—Hon Clayton Cosgrove: Tell us about markets again like last time.DAVID BENNETT: Yes well I will tell you about it. You might learn something as well. That is for the member over there who has no idea what it is actually like to run a business or do anything like that. The important part of this bill is around that tax credit that homebuyers will be able to access now. As many speakers have said it is a small amount of money compared with the purchase price but still when you are getting the deposit together any bit of money is very valuable. That is the whole point of the matter and it is why people would be wanting to take advantage of this piece of legislation.The wider context of this is that the Opposition parties are basically saying here that this is ineffective in addressing the homeownership issue. That is what the Opposition parties will be pushing along. But members of the New Zealand public realise and understand that the biggest cost they face in homeownership is actually interest rates—the interest rates on the property. I just want to remind New Zealanders of what the Opposition policy would actually give you in interest rates and that is 9 percent interest rates—9 percent. National’s policy gives you 6 percent interest rates—6 percent against 9 percent for the biggest cost that you will have in purchasing a property. That is the point that underlies all the arguments you will see from the left. Basically those members say that the homeownership issue can be dealt with by 50 members of this Parliament making certain decisions and then dictating how the market will operate.In the Labour case it is definitely a case where it believes that it can just go out there and wave a magic wand and build 30000 houses overnight—30000 houses that will not exist will not last and will not deliver for New Zealanders. The Green Party for example thinks that 30000 houses will just pop out of the sky—that you do not actually have to build them. The Greens think that they come from just talking in this House and they will sort of come about. The New Zealand First Party—I think that it thinks that 30000 houses—Stuart Nash: I raise a point of order Mr Chairperson. I do understand that this is going to be a wide-ranging debate etc. etc. but actually I do think that the member talking about Labour’s policies New Zealand First’s policies and the Green Party’s policies is probably a little wide even in terms of a wide-ranging debate.The CHAIRPERSON (Hon Chester Borrows): Thank you. The member is quite right; the debate is wide-ranging. We are looking at all clauses together as one. Speakers so far have ranged across the gambit of those clauses—Phil Twyford: Were you going to say “rambled”?The CHAIRPERSON (Hon Chester Borrows): I was about to say something I probably should not have—the member is quite right. So we will call David Bennett.DAVID BENNETT: Mr Chairman I am giving the context of the arguments that are made so that when New Zealanders are listening to this debate they will understand the context of the arguments that have been made. So it is very relevant. I know Labour policy is hard to talk about but I have tried my best to encapsulate what little policy it has.Looking at it from that perspective New Zealanders have a choice over how you deal with the homeownership issue. You can see that one side of the argument is that the Government itself can dictate the solutions the Government itself can build those houses and the Government itself will provide all those solutions. That has never been seen to actually work. It has never been seen to actually have been effective and it is something that is a dream that has come apart for the Labour Party and that was not voted for by the public of New Zealand.New Zealanders understand in terms of their homeownership that the biggest cost you will have is interest rates. This Government has dedicated itself to having strong economic management so that we are able to provide the economic environment that enables low interest rates. That is the crucial thing; that is important. Although we are talking about a small part of that deposit that will come through the tax credit it is a wider issue in regard to homeownership that has been debated in this House tonight and we will continue to do so through the rest of the debate. The ability to withdraw that member tax credit—Hon Clayton Cosgrove: How much?DAVID BENNETT: —up to $521 a year so—Hon Phil Goff: How much are house prices going up a week?DAVID BENNETT: What did you say?Hon Phil Goff: How much are house prices going up a week?DAVID BENNETT: Well under Labour they went up 96 percent in the 9 years that it was in Government and they went up 28 percent in the 4 years that National was in Government up to 2014. So 96 percent compared with 28 percent—that is how much they went up Mr Goff. Under your party they doubled basically and you did nothing about it. So it is a bit rich for you to come into this House and talk about house prices in that regard when you were in Government and did nothing about it—did absolutely nothing. So now it is quite rich for those members to come into this House and talk about it.Hon CLAYTON COSGROVE (Labour):There must be some sort of anatomical block with that member David Bennett because he just does not quite get basic mathematics. So I will try my best to explain it for him. See that member—we are here to debate his policy not previous Government policies—has been in Government for 7 long years and the best he could do today is dredge up what happened 7 or 8 years ago. So let us deal with the maths using all his fingers and toes and explain it to him. He would have the New Zealand people believe that this is a wonderful gift and that people should be so grateful to this Government for this huge big hit that it is providing New Zealanders with to get them into their first homes. If you listened to him and his ilk you would think they were giving away millions of dollars to people. You would think that they were saying to people: “Look we are going to give you the biggest gift you’ve had since Christmas in monetary terms to get into your first home.” But let us try to get the maths right even if we have to get out the Cuisenaire rods for that member.So here we go. The maths goes like this: the benevolent National Government will allow you the New Zealand people to withdraw $521 of your superannuation through your KiwiSaver account—your money not theirs; yours—once a year to contribute to a first HomeStart. So have you got that? It is $521 per year. Yet we know—and that member could not name it—that Auckland house prices are going up by $1700 per week. Now wait for it—that equates to $90000 per year which in people terms funnily enough is in theory the number of people whom the Government over there says it is going to help. It says it is going to help 90000 people. There is also another 90000—a $90000 per year increase in Auckland house prices—and the generous National Government is going to allow you the New Zealand public to use $521 of your future superannuation to try to get you over the top and into a first home.I do not know whether that is clear enough for Mr Bennett. I do not know whether we have to get out the Cuisenaire rods and the abacus and a few other things to make it clear for him but if he and his ilk think that the New Zealand people should get down on bended knee and thank him and his ilk for allowing them to withdraw $521 per year to try to help them get into a first home when that amount is expunged in less than 3 to 4 days and when Auckland house prices are going up by $1700 per week which equates to $90000 per year—I do not know. I did get through standard 4 maths; it is pretty simple to me.I am no sort of genius like that member is when it comes to market forces and great issues of economics but I reckon that if you walked down the street and waved clause 6 of the bill and explained it to the average Kiwi person struggling to get into a first home one they would get it. Two if you asked them: “Do you feel great about this? Do you sort of feel warm in your old age? Should you be getting down on bended knee to the National Government and thanking it for its generosity in allowing you to use your own retirement savings small amount though it is?” I suspect—but I am happy to be corrected or if somebody has got an opinion poll—that people when they realise what piffle is in this will actually be quite outraged.Then the next question is is this the big hit—because that is what it is being portrayed as—by the National Government to solve the housing problem? Well if you look at those basic figures—521 bucks when Auckland house prices are going up by $1700 a week—you would have to say that actually this bill is not even worth the credibility of being called a political pamphlet. It does not even stack up as decent propaganda because people will look at this and know that this is not even a drop in the bucket.What I would be interested in from the Minister and maybe from some of his other erstwhile colleagues who are on the Finance and Expenditure Committee with me is whether somebody could get up—because those figures are not in dispute—and you could talk about what previous Governments have done and have a battle of percentages. But I have got to tell you team this is your policy your legislation and your Government. You are either proud of it—I say through you Mr Chair—and they will stand up and they will be proud of the fact that they are giving people a few hundred dollars a year while prices are going through the roof or they are not proud of it. And if they are proud of it I would ask the Minister in the chair Jo Goodhew this. Can she tell us whether she believes that that is a realistic contribution—or any sort of realistic contribution—to going some way to solving the housing crisis?We will support the bill because as the Green colleague said it gives some money pitiful though it is. It actually does not give any of the Government’s money; it gives people the ability to use their own retirement savings so the Government should not take credit for that benevolent though it is in allowing people to use their own dough. We will support the bill because as the Green colleague said something is better than nothing but you know we have not advanced more than a millimetre over the “nothing” line.So I would be really indebted to the Minister—or the new Minister Nicky Wagner who has just come to the chair—if either of them could actually stand up and explain to the people of New Zealand what impact this is going to have. Treasury of course told the Minister and told the select committee as Mr Goff pointed out that “increasing deposit subsidies is likely to stimulate demand and thus increase prices in supply-constrained markets thereby undermining housing affordability.” I will say it again for Mr Bennett’s benefit. It is “thereby undermining housing affordability.” That is not me saying it. That is not the Labour Party or any Opposition parties in this Committee saying it. This is Treasury and the Ministry of Business Innovation and Employment and the Government’s own advisers saying it. If you were a Minister and you said: “Look I want a policy that will help first-home buyers into their first home.” and your officials came back and said: “It will undermine housing affordability.” you would think that a Minister with half a brain would say: “Hang on that is exactly the opposite of what I want to achieve with this policy.” You would think so would you not?Phil Twyford: And who was the Minister?Hon CLAYTON COSGROVE: And who was the Minister? It was Nick Smith was it not in or out of Cabinet. I would think that you would do that but you know I am an old-fashioned guy. But not this Government—it ploughed ahead.And when the officials it bears reference to say came to the select committee and we asked them: “Look guys is this actually going to be a big bang? What effect is this going to have in a positive way for homeownership?” etc. etc. they said: “We are tentatively positive about this bill.”I would propose that in the title clause maybe we should change the name of this bill to the “Nick Smith Tentatively Positive Bill” because when officials come up to you and say: “We’re tentatively positive.” they are not even enthusiastic. They are not even convinced in their own minds—and they are the experts not us politicians—that this will have any major impact at all. The best they can do after you just sort of draw the analysis out of them like razor wire is to say: “We are tentatively positive.” Is there anybody on that side—well maybe the Minister could say whether she shares the officials’ view and that she is tentatively positive about the impact or lack of it that it will have.This is a very mean-spirited bill. Mr Bennett should realise that this bill is not about the market; this bill is about the National Party in Government trying to portray itself as doing something—anything—after 7 years about a housing crisis that it does not admit is a housing crisis. When you unbundle the basic figures—and I hope that Mr Bennett might have taken a few notes down; he might be on the calculator as we speak trying to work it out—this bill does nothing actually. It does nothing for those people who are trying to get into their first home. It gives them $521 a week of their own money their own retirement savings which is wiped out in about 48 hours when you look at Auckland house prices going up by $1700 per week or by $90000 per year.I have got to say that if the National Government wants to carry on with the masquerade that is fine but you have got to understand that people out there in Struggle Street are not stupid Mr Bennett. They are not stupid. They can see through the wool and the smoke and they can actually add up because they do. They write their own budgets. They write their own budget every week with their housekeeping as they go out and try to keep their families and buy food and clothes and shelter and the various things that they need. They know how to budget possibly I would say—even though he is a market and economic expert—better than Mr Bennett does because they have to do it in order to survive. But I will bow to his superior intelligence and I will make a deal with him. If he can rebut those figures I am quite happy to yield to him now in the short time that I have left or I am sure that somebody else will because these figures are real.This is a mean-spirited bill—mean-spirited. As I said last night it is mutton dressed up as mutton and no speaker over there—and it is interesting that the Minister will not take any questions—has been able to knock those figures over.STUART NASH (Labour—Napier):As the Hon Clayton Cosgrove and Phil Twyford and a number of members have alluded to we are supporting the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill but I do have a couple of questions around this. If I may make a comment and I do not know whether I am allowed to or not this is my fourth year in this House and I have done a few Committee stages and every now and again members have relevant questions. I must admit that Peter Dunne who I think has been in this House probably longer than anyone—when it is one of his bills he sits in the chair and he listens intently. More often than not if there is a genuine question he stands up and he answers it. I thought that that was what the Committee stage was about but maybe I am a little old-fashioned. I am sure Mr Chair that when you were in the chair and this was a bill that you were passing through Parliament you would try to do the same.The CHAIRPERSON (Hon Trevor Mallard): Order! You are not allowed to bring me into the debate. Thank you.STUART NASH: Oh sorry. I meant a former Labour Cabinet Minister who is now the Chairman I suppose.There are a couple of clauses here. Clause 6 for example is “Schedule 1 amended (KiwiSaver scheme rules)”. All it does is it changes the words a little bit. It adds the term “under section 226” of the KiwiSaver Act 2006. I am not even too sure why that is in there because in clause 8(4)(a) of schedule 1 of the Act it talks about Crown contributions anyway. All section 226 does in the bill is define what Crown contributions are. So I am not too sure why that is relevant but anyway that is part of it.I suppose one of the things I would like to talk about to start with is clause 5B which inserts new section 239. This talks about “Protection from non-compliance:” and this is obviously with regard to the new amendments around the HomeStart policy put forward by this Government. This has added a whole new section on the end of the KiwiSaver Act 2006 after section 238 and this is a section at the end of the Act. There are a couple of things that I just think we need to be very careful about because what we have come through—not just the global financial crisis—and what we have seen is what I believe is a lot of unsavoury unethical or whatever behaviour that went on in our own market. We tend to talk about the global financial crisis as one of the great catastrophes in the modern economy here but we forget that it was actually a lot of the stuff that went on in the mezzanine finance sector that actually destroyed somewhere between—I have not heard an exact figure—$4 billion and $6 billion of savings out of Kiwis’ back pockets. So the global financial crisis might have led to that but in New Zealand the rules around mezzanine finance and prospectuses and investor statements I think we all would agree were quite lax to the point where people really did not know what was going on and they were misled.If you look at new section 239 as mentioned this is a new provision to the KiwiSaver Act. The slight concern I have is that it talks about “Non-compliance with an enactment related to securities is ignored if the non-compliance—(a) results from the enactment of section 6 …”. All section 6 does in the KiwiSaver Act is it outlines who is eligible for KiwiSaver: the definition of employee and employer whether you are a Kiwi and whether you count as an employer etc. etc. So there are no problems there. When we talk about non-compliance in new section 239 it is about how you are protected from non-compliance. We talked about this a little bit in the Finance and Expenditure Committee. In new section 239(b)(i) it says that non-compliance is ignored if it relates to “a prospectus that is registered under the Securities Act 1978 before 1 April 2015:”. So what I am reading this to mean and I could be wrong is that it does not have to be a prospectus or an investor statement or a product disclosure under the Financial Markets Conduct Act if it is lodged on or before April 2015. It is just a little bit confusing. Maybe I am reading this wrong but if I am reading it wrong then perhaps so are a lot of other people because I sat on the select committee. What we need to do is ensure that the people who are putting their money into KiwiSaver or the KiwiSaver providers are mitigating the risk enough so that people I suppose do not have to suffer the risk of incompetence or negligence. That is what I am trying to say I suppose and that was a long way of saying it. That is a major risk I think that we now do not have to face and I hope we never have to again.There are a couple of other things that I would like to talk about in this bill that cause a little bit of concern and a little bit of frustration to be honest. If we look at clauses 3 4 and 5 they are sort of remedial. For example clause 4 is “Section 4 amended (Interpretation)”. This is just an interpretation of salaries or wages. Mr Goff and Jan Logie have talked about veterans. It says here in clause 4(a) “in paragraph (a)(i) replace ‘(6)(b) to (bd)’…”. Well I did what I was instructed to. I went to the Income Tax Act to find out what “(6)(bd)” was and it says it has been repealed. So I had a look at the statute book which if the computer system goes down and the lights go out is supposed to be what we can go to and it is not in here. So I went online and it said in the online version that “(6)(bd)” has been repealed. I then wondered how this could be because it mentions this in this Act. So I went to the top of the Act online and it says that this Act might not incorporate some of the amendments that have gone through Parliament.How frustrating is that for a member who is trying to do a little bit of work to find out what the changes in legislation are actually going to mean—to find they are not even there. Maybe it has been repealed. I cannot imagine it has been put back in in another piece of legislation. But if it has then this is just a little bit sloppy. If “(6)(bd)” does not exist and I can show you the piece of legislation then why is it even in here? I found this a little bit frustrating and I suppose it goes back to a lot of what we have been talking about for a number of weeks now—that is I suppose the sloppiness of a lot of the legislation that we are now seeing in front of this House.I am going to jump around a little bit here. We can go to the title. All I am seeing in a lot of the legislation I am speaking on is amendments or if not amendments then it is legislation to tidy up sloppy legislation that has gone before under this Government. So the title of this could be the “Yet Again Tidying Up Sloppy Legislation Bill” especially around veterans’ affairs.Mr Goff did talk about veterans’ affairs but goodness me if I was a veteran and I had read this Act as it came out—was it in 2013 or 2012 Mr Goff?Hon Phil Goff: 2014.STUART NASH: It was 2014 and we are already amending it. I was on the Finance and Expenditure Committee and I said to the representative of the Defence Force who was at the committee: “Now are there many veterans who are going to be affected by this?” and she said: “Don’t worry. We’ll communicate with them. We know who they are and we’ll do this well.” I said: “Please be sure you do.” because the major concern I had about this was that I got the feeling that this part of the bill was sneaking in under the KiwiSaver HomeStart portions of this bill.This is part of the Government’s core policy. The Government knew that the Opposition parties would go hard on this which we have done. But then in there at the back of it is the stuff about veterans and it actually makes quite a bit of difference. If you have a look at section CF 1 in the Income Tax Act it talks about a veteran’s pension. So what it is actually doing now is inserting the phrases “a veteran’s pension” and “a retirement lump sum paid”. So what it is actually doing is it is taking a lump sum that is being paid to a veteran and now taxing it at a point—it is like giving something and then taking it back. So what this actually does is it means that veterans who have received these lump sums are now subject to taxation. Their Working for Families entitlements change. Their student loan—their requirement to pay these things back changes. And everything like an ACC lump-sum payment will change.The thing that I find a little bit ironic about this is we have just debated in this Chamber and we are debating this out in the public at the moment sending 143 troops away to wear the New Zealand badge and serve in Iraq. Yet what we seem to be doing with those whom we treasure the most with those whose battles line the walls of this Chamber is saying: “Sorry guys we got it wrong again. The money we gave you because you were incapacitated”—and this is in another part of the bill—“we are now actually going to take some back. Oh don’t worry about it. We got it wrong.” In fact worse still we are going to sneak it in under legislation.JAMI-LEE ROSS (National—Botany):Once again the Government side of the Chamber is completely surprised—actually no we should not be surprised; we are disappointed—at the Labour Opposition members’ approach to this particular bill the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill. Yes they are saying that they are supporting it but it appears from their contributions that they simply do not think that allowing New Zealanders to get together a deposit to be able to buy their own home is a good thing. That is what this bill is all about doing.They complain about the fact this bill makes some changes to the KiwiSaver legislation that is in place but they forget about the other changes that the Government is putting in place to allow more Kiwis more young first-home buyers to purchase properties.This is actually going to make a significant difference for people who wish to buy their first home because it will significantly increase—Stuart Nash: What clause of the KiwiSaver legislation?JAMI-LEE ROSS: Well we are debating the whole bill. You should keep up Mr Nash.The CHAIRPERSON (Hon Trevor Mallard): Order! I have been keeping up thank you.JAMI-LEE ROSS: OK Mr Chair. I am hoping that Mr Nash can keep up because we are debating this whole bill.We are working hard to ensure that more Kiwis are able to access their own money in KiwiSaver. On top of that we are also doubling—doubling—the amount of grant that they are able to take up. The Labour Party members like to talk about housing in Auckland they like to talk about housing affordability around the country; if they really cared about housing affordability in New Zealand they would be embracing policies like this. To be able to purchase homes New Zealanders need to be able to have the ability to have a deposit. The changes that this Government is putting in place will vastly increase the ability of New Zealanders to access funds to put together a deposit. On top of that the policies we are putting in place to ensure that more homes are being developed in New Zealand particularly in Auckland will mean that supply is increased considerably and it will also mean that New Zealanders will have greater access to homes.The reason why I am talking rather widely about housing is that this has been the theme of the debate so far. If it is OK for Mr Twyford and if it is OK for Mr Nash and Mr Cosgrove to criticise the general housing policy of the Government then I am going to be responding.The CHAIRPERSON (Hon Trevor Mallard): Order! No you are not. I have been listening to the debate for the last half an hour both for the last part of the previous Chair’s time and for my time. There have been some clear signals to come back to the bill that have been applied to Opposition members and I think we have moved away from a general second reading robust debate to one that is on the details of the bill. I think the last two or three speakers have done that very well and I ask the member to give it a go.JAMI-LEE ROSS: I am more than happy to talk about the KiwiSaver changes that are being put in place through this bill because allowing New Zealanders to access their funds through the KiwiSaver provisions is important.When the Government looked at housing in New Zealand particularly in Auckland one of the main problems that New Zealanders have is the ability to put together a deposit and there are vast amounts of money in the KiwiSaver programme. On top of that there are grants that the Government has in place already through the KiwiSaver programme to ensure that people have a bit of a boost when it comes to the deposits.Hon Clayton Cosgrove: How much? Give us a number.JAMI-LEE ROSS: Well Mr Cosgrove it is going up from $5000 to $10000. We are actually doubling—we are doubling—the grant through the KiwiSaver scheme. A couple who are earning $50000 a year and who have been contributing to KiwiSaver for 5 years will be able to access around $35000 of their own funds through the KiwiSaver scheme. Add on top of that the $20000 combined they will be able to get through changes in this bill and other changes the Government is making and that is a deposit of about $55000 that a couple—lower to middle income New Zealanders—will be able to access.The Labour Party members think that is a gimmick. The Labour Party members think that will do nothing. But I challenge them to go out and talk to some real New Zealanders living in electorates like mine in Botany or in Hunua the electorate that Andrew Bayly represents and ask them whether they think that the changes that the Government is putting in place to allow those earning $50000 and who have been in KiwiSaver for 5 years to get a $55000 deposit are nothing.There will be 90000 New Zealanders who are expected to benefit from these changes over the next 5 years. There will be 90000 New Zealanders who will be able to access greater funds. There will be 90000 New Zealanders who will have a greater ability to afford a home and purchase a home in New Zealand. That is why we are supporting this bill.Hon PHIL GOFF (Labour—Mt Roskill):I just want to pick up on the comments of the last speaker Jami-Lee Ross. What this bill does under clauses 3 to 6 is it allows a person to withdraw their tax credits. Those tax credits are about $10 a week—$10 a week under this bill in I think clause 4 or 5. So $10 a week goes to the prospective homebuyer and at the same time house prices in Auckland are going up by $1700 each week. So $1700 a week is the increase in house prices and this bill benevolently allows a person to use $10 a week of their own money to bridge that gap. The gap is not bridged; the gap gets wider and wider which is why today instead of 75 percent—or three-quarters—of Aucklanders owning their own homes it is 61 percent and falling. The fundamental problem with this bill is that it does not go far enough. The changes made in clauses 3 4 5 and 6 do not make a real difference to the dilemma that a person in Auckland wanting to buy their own home faces.Homeownership is dropping. It is becoming harder for people to buy their own home and this bill is far from helping people to do that. If we look at the Treasury commentary on this bill it says that the Government will end up undermining affordability for first-home buyers. That is what Cabinet was told by Treasury I say to Mr Ross. That is what Treasury told the Cabinet was going to be the result of the clauses that we are now debating. Will it make it easier as the member just claimed? No. According to the financial advisers of the Government it will make affordability harder for first-home buyers. It will undermine them and it will undermine them because when you put more money in and increase demand but you do not increase supply. All that happens is the prices go up and homeownership moves further and further from the grasp of the people who desperately want a home of their own.I want to come back to the other parts of this bill—from clause 8 on—that are addressed in the title of this bill where it says “Remedial Matters”. We are told that this part of the bill is the result of a colossal stuff-up that the Government has made in what it promised veterans in the Veterans’ Support Act. An hour ago I asked the Minister in the chair for answers on specific questions that this Committee is entitled to and the Minister has not yet taken a call despite the fact that notes have passed from officials to the Minister. I think this Committee is entitled to answers to these questions. Firstly why did the Government make the error that promised that the veterans would get the gross amount of the money paid to them when in fact they are going to get only the net amount? That cuts income expectations by one-third for some veterans. How could the Government have made a mistake of that dimension?Secondly when did the Government discover when that mistake was made and what did it do to communicate to the veterans and the organisation representing veterans the RSA that the mistake was made? When I spoke to the RSA this afternoon it did not even know that this bill was before the House. It did not know that this bill was before the House.Next question: having made that error how much money if any has been paid out wrongly under the Veterans’ Support Act which this bill seeks to correct and to how many veterans? Will this bill be retrospective? Will people be required to pay back money? I do not know the answers to that question. Minister you have access to advice that can give us those answers. Our veterans surely deserve first of all an explanation; secondly an apology from the Government for getting it so wrong; and thirdly some advice about whether if they have been paid more money than they will now be entitled to the money that they have been paid will be required to be paid back.They are simple questions the Minister knows the answers to those questions and I am asking the Minister to take the time in this Committee—which is why we have a Committee of the whole House stage—to answer the questions that members genuinely have about this. She knows that under the Veterans’ Support Act the payments were not to be taxable. Now we find under this legislation that the payments being made to them are going to be taxable. That makes a huge difference to the money actually received in the hands of the veterans. To add insult to injury this bill also takes away further from veterans in a couple of different ways. It reduces their Working for Families entitlements—it reduces their Working for Families entitlements. Why is it that this bill has been debated twice before in this House and no Minister has got up and told the House what the bill does and how veterans are affected to their detriment by having their entitlements—promised in the original legislation—taken away?I accept that that was a mistake by the Government. It does not make it any easier for the veteran who believed they were going to be paid at this level to find that now they may be getting a quarter or a third less. It does not make it easier for the veteran who loses his or her entitlement to their Working for Families entitlement. It does not make it easier for the veterans who now find that their obligations in regard to student fees and child support have gone up. The veterans under this remedial bill are being caught in a double whammy. The actual money they receive in the hand goes down from what the original Veterans’ Support Act gave them and their obligations to pay out money for a whole series of social obligations go up.So you would think that the Government would at least give the Committee the veterans and the RSA the courtesy of an explanation as to how this happened. You would think that there might just be an apology by the Government for making an error of this magnitude. You might think that we could get an explanation as to whether any money has been paid out to veterans—if so how much and to how many—and whether that money will be required to be paid back.I have not finished my speaking entitlement but I am going to sit down now to give the Minister the opportunity to answer those straightforward questions.ALASTAIR SCOTT (National—Wairarapa):Thank you for the opportunity to take a brief call on the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill. This is not a silver bullet. This is not a silver bullet—Hon Clayton Cosgrove: It’s not a bullet at all.ALASTAIR SCOTT: —for the housing crisis which Mr Cosgrove is looking for. This is part of a multi-pronged approach by the Government that will continue to contribute to supporting first-home buyers. This policy this bill is alongside loan-to-value ratios which as you know first-home buyers are exempt from. If they buy their first home they are exempt from those ratios which is another good thing. The other good thing is the increase in supply of housing areas throughout the country. It is all contributing—Hon Clayton Cosgrove: Ten houses built. Ten houses built nationwide—that’s a sharp prong.ALASTAIR SCOTT: —to the supply side of the housing market. As Mr Cosgrove knows 23000 consents have been granted in the last 12 months. We know that it takes time.Coming back to the bill my point is that there is no silver bullet which the Opposition members are looking for. They instead look for a building programme which is an option but of course who is going to design the houses? Who is going to design the houses? Who is going to pay for the houses? Who is going to invest in the houses? I imagine that Mr Cosgrove’s idea would be to plan and build as many houses as he can along arterial routes which is a good idea. But who is going to raise the funds and invest in this project? Who is going to own the projects? Not the private sector. He would not dare list it on the stock exchange.The CHAIRPERSON (Hon Trevor Mallard): Order! I did warn the member about a minute ago to actually start speaking to the bill rather than Opposition policies so I think it would be good if he could now.ALASTAIR SCOTT: Coming back to the bill it will assist first-home buyers along with our other policies. This is one of many things that will contribute to those who can least afford homes because young families want to get ahead and to get into their first homes. This will affect 90000 people on lower and middle incomes. This will allow people to have access to that $521—that $10 a week. It is all part of a contribution to something that will aid first-home buyers. It is pleasing to see that the Opposition parties are supporting it because it is a small contribution to a wider policy that will alleviate the housing price crisis which is particularly felt in Auckland. We know also that this project focuses on the demand side. This supports the demand side those who are most affected by the increased house prices and they are the first-home buyers.It is interesting that there are examples of projects in the private sector that are reacting to the policy already. I know there are projects where developers have set the prices of their new houses to suit this policy. It might be that a house is advertised at $449000 in Christchurch and that is because that is the limit the cap that this policy would apply. These developments are being advertised to attract first-home buyers because they have greater access to deposits which enables them to access mortgages which as we have heard are at historical lows. This all helps the first-home buyers—the families—to get into their first homes.Hon PHIL GOFF (Labour—Mt Roskill):I raise a point of order Mr Chairperson. Can we please get an indication through you as the Chair from the Minister in the chair Nicky Wagner whether she will be answering the questions that have been genuinely put. The Committee of the whole House is the opportunity to ask questions to the Minister. They are genuine questions. They have been put several times.The CHAIRPERSON (Hon Trevor Mallard): I think the member is experienced and he does know that if a Minister intends to answer the questions it is pretty obvious because the Minister will take a call. I think one should assume that if a Minister does not take a call it is not their current intention to answer questions.PHIL TWYFORD (Labour—Te Atatū):I want to make some comments about the title clause of this bill. Although it is currently titled the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill it would I think be far more aptly named the “KiwiSaver (Look As If You’re Doing Something About the Housing Crisis) Bill”. It is very clear from the debate we have had over the last couple of hours that no initiative is too small or too incremental for this Government when it comes to putting up responses to the housing crisis.I was amazed to listen to the contribution by the member Jami-Lee Ross. If I recall correctly he referenced Milton Friedman and Margaret Thatcher in his maiden speech—Stuart Nash: And Ronald Reagan.PHIL TWYFORD: —and Ronald Reagan. It is rather sad that someone who has cast himself as a great economic liberal as an economic rationalist should come to the Committee speaking in favour of this bill. It lacks any kind of ambition in dealing with the housing crisis. Its main content is basically allowing the public—who are the victims of this Government’s failure to do anything meaningful about the housing crisis—to crack open their own retirement savings. Jami-Lee Ross its main contribution to the housing crisis is to throw subsidies to throw taxpayers’ money at a supply-constrained market.Hon Clayton Cosgrove: Mrs Thatcher wouldn’t like it.PHIL TWYFORD: Mrs Thatcher and Ronald Reagan and Milton Friedman would not think that this was a very good bill Jami-Lee Ross. I just feel sad for you that your political career—but not for you Mr Chairman not for you. I feel sad for the member Jami-Lee Ross that his political self-respect has sunk so low that he stands up in this Chamber to speak enthusiastically in favour of a bill that basically consists of throwing public money at a housing crisis where demand already exceeds supply.All of the Government’s advisers—the Ministry of Business Innovation and Employment Treasury and the Reserve Bank—have basically told the Government that this bill will do more harm than good. In fact the National Business Review reported it this way: “National’s flagship housing policy has been damned as counter productive by the Treasury.”I think that the title of this bill simply does not do justice to it. There are real similarities between this bill and the other big housing initiative that this Government announced which was to temporarily suspend anti-dumping duties and import tariffs from nails and varnish. Thank you Mr Chairperson; I will narrow the focus a little bit. So I want to propose that the title for this bill actually should be the “Mildly Benign Bill” because as one member of the Committee after another from this side has got up and basically said—Hon Phil Goff: Bury your head in the sand about the real problem.PHIL TWYFORD: Bury your head in the sand about the real problems of the housing crisis. One member after another has said on this side that we are actually going to vote for it because it is better than nothing but only just—but only just. It is testing our patience for the National Government to bring this bill to the House when its own advisers have said that at best it might be slightly benign but at worst it threatens to undermine housing affordability the very issue that Nick Smith the Minister for Building and Housing says he is trying to deal with.So there are some suggestions for amendments to the title. It could be the “Mildly Benign Bill”. It could be the “KiwiSaver (Look As If You’re Doing Something About the Housing Crisis) Bill”. Actually probably the best option of all would be to take a quote direct from the Prime Minister and call this bill the “There Is No Housing Crisis Bill” because it is that kind of denial and that kind of head in the sand mentality that this bill epitomises.JAN LOGIE (Green):I rise to take another short call in this bill just to specifically respond to the comments of the National Party member Jami-Lee Ross specifically where I think there was some comment about how vastly generous—Hon Clayton Cosgrove: Vastly—that’s the one.JAN LOGIE: The vastly—and I did really just want to specifically draw that member’s attention to the definition of vastly because I do think that maybe he does not understand what vastly means. A synonym for vastly is enormous and what this bill will do is enable people to access money that is already in their KiwiSaver account of up to around $521 a year which considering KiwiSaver has only been around since 2007 comes to a total of just over $5000 if you have been in it the whole way. So $5000 towards the 20 percent deposit for the average house price in Auckland at the moment with the deposit needing $120000—is $5000 vastly vastly helping people? I really just—[Interruption] Well 20 percent of over $650000.Hon Member: You don’t have to have 20 percent do you?JAN LOGIE: Ah you do not have to have the loan-to-value ratio for this! We would draw Government members’ attention to the 20 percent and people needing to get into the housing market and that being a major challenge and the Government bringing this measure in in response to people raising their concern about being able to get that deposit together. I think it is fair to reference the 20 percent and to say that this is a vast step forward really misrepresents what the word “vast” means. I would refer the member back to the dictionary.I would also like to in another sense of misrepresentation again reference “remedial matters” in the title and just say that I genuinely want to engage on clauses 8 to 11 in this bill around the impact for veterans of these changes. Because what I have been hearing in this debate—and not having sat through the select committee—from one of the members is that this could result in a one-third decrease in income for veterans. That is not something that I would want to be supporting and I would genuinely like to have that clarified because I think nobody in New Zealand would consider that a remedial matter which is how it is referenced in the title of this bill.So I really would ask the Minister in the chair Nicky Wagner to stand and speak and clarify the in-the-hand impact of the changes of clauses 8 to 11 and clarify whether there will be any veterans in the country who have been receiving a certain amount of money who will have that cut back after we pass this bill. I think it is our duty in this Committee if we are going to be part of a process to actually genuinely understand the impacts of it and the Government seems to have got away so far with passing these things off as remedial matters but it is now on the radar and we do want to know.The CHAIRPERSON (Hon Trevor Mallard): Clayton—the honourable Clayton Cosgrove.Hon CLAYTON COSGROVE (Labour):That is the nicest thing Mr Mallard has said to me for a long time. I just want to deal with clause 6 and take up some of the very interesting contribution of the new member Mr Alastair Scott because he said a couple of very interesting things. Firstly he was the only member of the Government who got up and confirmed our numbers. He said that this will give—I wrote it down—“$10 a week”. So well done. He is the first honest one over there to actually front up on the Government’s policy be honest about it and say that it is 10 bucks a week—a tick in the box.Secondly and we are going for the gold star here he used the words “housing crisis”. He said that this will help to solve the “housing crisis”. I want to commend him again for his honesty and his forthrightness because he is the only member—the Minister will not use the words Mr Brownlee will not use the words Nick Smith will not use the words Nicky Wagner in the chair will not use the words no one will use the words “housing crisis” but we have had a breath of fresh air come in. We have had a National member a new member straight from the vineyard come into the Chamber straight up and down—I think credit is due and honour is due. He is a straight-up member. His constituents should be proud today because he has told the truth. He has said that this policy will give you 10 bucks a week—Mr Bennett would not admit that—and that “this will go some way to helping solve the housing crisis”.What a beautiful moment in this Chamber. This is one of those moments I think we should cherish in a bipartisan way to celebrate the fact that Mr Alastair Scott a new member—normally new members and I have done it when I was a new member trip over on various things in the House but this member in relation to speaking to clause 6 has put the acid right back on the Government. [Interruption] Well how it is relevant Mr Bennett is like this. Under clause 6—we will try again—as Mr Scott pointed out the $10 a week your Government gives will allow people to take $521-odd a year out of their KiwiSaver account to go towards a deposit on a house say in Auckland where the weekly increase is $1700.So I want to commend Mr Alastair Scott. We will be printing off the Hansard and sending it out to various people. I will stand up and I want to be the first on the record to thank him for his honesty—10 bucks a week. He also said though that—there is a slight misunderstanding here—loan-to-value ratios have helped and will help first-home buyers I need to explain to him. This is what he said in his contribution; I wrote it down. He said that loan-to-value ratios will help first-home buyers. I know that Mr Bennett does not like it. The sad thing is Mr Scott loan-to-value ratios mean you have got to come up with more dough for a decent deposit.The CHAIRPERSON (Hon Trevor Mallard): Order!Hon CLAYTON COSGROVE: But getting back to clause 6—The CHAIRPERSON (Hon Trevor Mallard): Order! Yes. It is a very good rendition of Julius Caesar but I think what we might get back to now is the detail. Thank you.Hon CLAYTON COSGROVE: I have to say Julius Caesar had more hair than I have and he had laurel leaves and I do not possess those and neither am I an emperor.But on clause 6 Mr Scott has actually been honest with people. What he said in his contribution is that clause 6 provides the meanest of mean-spirited contributions for a first-home buyer: $10 a week. We were criticised for the “big cheese Budget”—remember that? I do not know. How much does a brick cost? A brick may cost what two or three bucks? So you might get three bricks a week for building your first home.Carmel Sepuloni: Jeez it’s gone up.Hon CLAYTON COSGROVE: I do not know. I am not sure how much a brick is worth and I say that word very carefully. I do not know how much it is worth but it is the meanest of mean—David Bennett: About the same as your brain.Hon CLAYTON COSGROVE: Oh well there you go. Poor old David Bennett. You have got to feel sorry for the bloke. Try hard as he does he cannot quite get it but this is actually important. This is actually important for David Bennett’s constituents in Hamilton on Struggle Street trying to get a first home. I am sure Mr Bennett will go out and say: “Alistair Scott has confirmed that we are a mean-spirited Government but you should be grateful to us anyway because we are going to give you $10 a week of your money to go towards house prices that in Auckland are increasing by $1700 a week.”So I just conclude by again thanking Mr Scott for his candour and for his honesty and I would just invite the Minister in the chair Nicky Wagner to either verify what Mr Scott has said or perhaps disagree with him if he is wrong. But I think that given he has agreed with the figures that we have put up I suggest he is right. I look forward to his further learned straightforward and honest contributions as we go through this debate.STUART NASH (Labour—Napier):This has been brought up before but not in the way that I think is important. We have talked about veterans pensions and what has happened to them and what is going to happen but what I would like to do is actually highlight the pieces of legislation that enforce this. I think it is a little bit disingenuous to be honest but if I may say just one thing it did make me smile Jami-Lee Ross’ conversation about the Government’s policy. He did not even know the piece of legislation that was giving force to that policy. It is new section 239 to be inserted in the KiwiSaver Act Mr Ross.What we have got here in clause 11 of the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill is an amendment to section RD 5 of the Income Tax Act. This is the definition of salary and wages. What clause 11 does in this bill is it amends section RD 5 in the Income Tax Act. What it actually does is it inserts—and I am going to read the words that it inserts—the definition of wages or salaries: “a retirement lump sum paid under Part 5 subpart 7 of the Veterans’ Support Act”. That was not in here. All it said about veterans was “a veteran’s pension”. It did not mention anything about a retirement lump sum. So before this piece of legislation came through—remember that the legislation governing this was passed only last year. If you go out in the hall to find the legislation to do some cross-referencing it is not even there. I suspect that what happened is that the RSA did a whole lot of work around this with its members and said: “If you have received a retirement lump sum then you are not subject to tax.” What this bill is doing less than 12 months after that piece of legislation was passed is saying to our veterans: “Sorry you’re wrong. You are going to have to pay tax on it.”I would like to go to clause 10. This talks about incapacity. I suppose this is where what happened is that the Government likes to draw the analogy of a veteran’s retirement lump sum compared with someone on ACC who has had an accident which I think is quite a long bow to draw in my view but this is what it has tried to do. Again in the Income Tax Act in section MA 7(3) it talks about incapacity. It is not a long section—it is three and a bit lines—but the Government has added a whole lot more into it: “The incapacity referred to in subsection (2)(b) and (d) is an incapacity due to personal injury by accident for which—(a) an accident compensation earnings-related payment has been is being or will be paid: (b) a payment that has been is being or will be paid under the Veterans’ Support Act 2014”.I am not suggesting that for our brave men and women who are heading across to represent us in the Middle East this is going to change their decision about whether they will go or not but what this is actually saying is that if they are injured in the course of their employment—i.e. in the army—then in the past they would have received a lump sum and it would have been exempt from tax and now it is taxed. These are often subject to inquiries. I do not know how much a soldier would get if he or she is injured but whatever it is it is now minus 30 percent. I am assuming that our soldiers are on the top tax rate. So clause 10 has inserted this provision into section MA 7(3) as well.If we go to clause 9 now it is about pensions. It talks about section CW 28 “Pensions” of the Income Tax Act. The heading for section CW 28 in the Income Tax Act is “Income from living allowances foreign superannuation compensation and government grants” and it talks about exempt income in the Act. It lists a whole lot of things that are exempt income and income is where you pay tax. What it did say is: “The following are exempt income: (a) a pension or allowance under the War Pensions Act 1954 … other than … a veteran’s pension”. So there was always a recognition that if you received a veterans pension then it was not exempt from tax. It is like your superannuation payment; you pay tax on that. You can argue about the rights and wrongs of that till we are blue in the face but that is not part of this bill. What the Government has done is that clause 9 has added into the section that it is excluding a veterans’ pension which was always there and “a retirement lump sum paid under Part 5 subpart 7 of that Act”. [Bell rung] Mr Chair—The CHAIRPERSON (Hon Trevor Mallard): Stuart Nash.STUART NASH: Good choice. So again what it is actually doing here is closing down any loophole where a war veteran who has been injured or is receiving a lump sum or for whatever reason—and I am not too sure what the reasons are because obviously the statute book has not even been printed yet—if a veteran received a lump sum then they now must pay tax on that.And then we go to clause 8. This references section CF 1 of the Income Tax Act and this is about benefits pensions compensation and Government grants. Again it talks about what defines income. We all have an idea of what defines income but remember this is not wages and salaries; this is pensions compensation and grants. It is things like listed in the Income Tax Act an accident compensation payment an education grant an income-tested benefit a living alone payment a New Zealand superannuation payment a parental leave payment under Part 7A of the Parental Leave and Employment Protection Act 1987 and the veterans pension. Those are all the things that are counted as income under benefits pensions compensation Government grants and income tax. However what is now included under income under this bill is a retirement lump sum—nothing to do with injury or incapacity—“paid under Part 5 subpart 7 of the Veterans’ Support Act 2014”. So in effect what this bill does is if a veteran is to receive a lump sum for whatever reason whether they are retiring whether they are injured or whether as a result of an accident or anything like that they must now pay tax on it.Again we can argue about the merits of this but the thing that gets to me a little bit the thing that rankles with me actually is that the Veterans’ Support Act 2014 which is quite critical was passed less than a year ago. I would have thought that this is quite an important part of an Act whether a veteran is to pay tax. I would not mind Mr Bayly talking about this because he is a colonel in our Defence Force. I would not mind knowing what his views are because I have no doubt that some of the soldiers under that member’s command are going to come and say to him: “Goodness me! What is going on?”.But the interesting thing is that this provision is retrospective. This is retrospective. This goes back to December 2014. So there may well be soldiers veterans out there who have been given money—well not given money; they have earned it—they have been injured by accident or they have retired and they have banked that. They have paid off their Auckland mortgage they have given their grandkids money or whatever and the Government is now going to go back to them and say: “Sorry chaps we are now going to take 33 percent of that off you.” I do not think it is fair.Sitting suspended from 6 p.m. to 7.30 p.m.STUART NASH: I am not going to take a long call on this because I have already spoken quite widely on it. But one thing I would like to know one thing that concerns me greatly—excuse me for being a little bit out of breath. I was just at the Speaker’s forum most interesting actually and I had to sprint in here when I heard the bells. But anyway—Hon Ruth Dyson: What was the Speaker’s forum on?STUART NASH: About pandemics actually. We have talked a lot Mr Chair and you would have been part of this conversation about the nature of the changes to veterans pensions and lump sums. One thing that we have not talked about and it was a point I was actually making before the bell is that actually this change is retrospective. It goes back to December 2014. We do not know whether there is actually a case like this but we absolutely need to know whether in fact there are war veterans who have been given a lump sum but due to the changes in clauses 8 9 10 and 11—clause 11 which amends section RD 5 of the Income Tax Act is to do with the change in the definition of salaries and wages and what it includes is a lump sum given to a war veteran. Clause 10 is to do with a lump sum given out due to incapacity—i.e. an accident to a veteran. Clause 9 is to do with the definition of a pension or a grant. And clause 8 is to do with the definition of again a benefit a pension compensation and a Government grant as opposed to income.Basically what this has done is it has amended the Income Tax Act which means that a lump sum given to a war veteran is now due for taxation whereas in the past in the Act that went through in 2014 which was only last year obviously that was not subject to taxation. One thing that we do not know and I think we really do need to know is how many veterans are going to be affected by this. The reason I say that is this is retrospective legislation because the clauses that are subject to change actually come into force according to clause 2 of this bill on 7 December 2014. I am making an assumption here and I could be wrong that the Veterans’ Support Act actually gained Royal assent on that date. So this is bringing it into line with that. If there are veterans out there who have received a lump sum and have used that money to pay off a mortgage give money to grandkids or have spent that money is the Government really going to go after these guys and get a third of that money back in tax? I find that very difficult to believe.The other thing which is slightly more insidious is what if a war veteran did receive such a lump sum and they can as the member Mr Bayly knows be quite large especially if you have received a lump sum from a war pension or something has gone wrong. But what if a war veteran has received a lump sum and heaven forbid he or she has died between 7 December and when this bill gains Royal assent—let us say it is a month away I’m not too sure when it is—is the Government really going to go after his widow for this? I just think that this is a little unfair.There are a lot of legislative tests around why you introduce retrospective legislation. We can argue about the fairness of whether a lump sum provided to a veteran should be taxed or not. That is an argument we have sort of been having here but the real-world argument is: if a veteran has been given a lump sum and they will be taxed on it due to this is that fair? I just do not think that is fair because we have set an expectation in the Veterans’ Support Act that it would not be taxed.I have no doubt that veterans advocates around the country have gone to RSAs have addressed veterans groups and actually probably—I was not here obviously—consulted widely on the veterans’ piece of legislation and also I have no doubt submitted to the select committee. Again I am unsure what select committee this piece of legislation went to. There was a whole lot of consultation—it is the Veterans’ Support Act 2014 I should get that right. But to miss this I cannot help but feel that there must have been a reason why the Government decided not to include these lump sums in the tax regime.The reason I say that is it is so blindingly obvious because on this side we argue that capital gains should be taxed for example. So the argument about whether income should be taxed is a philosophical argument that both sides of the House have from time to time. But in this case in a bill that was passed last year it was decided that a lump sum that was given to a veteran for whatever purpose be that injury be that accident be that misadventure or be that retirement was not going to be subject to income tax. It was not classed as a benefit. It was not classed as income. But now it is being classed as income and it is being done retrospectively. I just do not think that passes the fairness test for me. I would hate to think what will happen if we go after a veteran especially a veteran’s widow or widower and seek money back from these people once they have spent it or they have died or if we go into their bank account.Soldiers do not do this for the money. They do it for a whole lot of reasons: for adventure they love the country or the public service good. These often are not wealthy people. I would like Mr Bayly to stand up and address this. I am not playing politics around this because he is a colonel or a lieutenant colonel in the reservists so he has a strong association with the military forces and I would like to know how he thinks this will play out. Thank you.ANDREW BAYLY (National—Hunua):I just want to dwell a little bit on the issue of the veterans which Mr Nash has been talking about for some time. The real essence of this bill is about introducing changes to the Income Tax Act and the KiwiSaver Act to deal with some discrepancies around how the taxation of the income replacement payments to New Zealand veterans is made. Essentially it is about tidying up some of the components of that and the proposed amendments will make it quite clear that the veteran income replacement payments are treated in the same way as ACC payments are made or interpreted for the purposes of tax social policy and KiwiSaver. So they are quite minor in terms of their actual drafting but they are just important little components to try to tidy up those aspects.What I would really like to turn my mind to is the whole issue about the rest of this bill which is of course about helping the 90000 lower and middle income New Zealanders acquire their first homes. Of course it is a package of measures. There is the $35000 that is available for people who contribute to the New Zealand Superannuation Fund for a period of 5 years. That together with the KiwiSaver grant of $20000 means there is potentially a $55000 deposit available that people can join with their own savings to meet the minimum requirement for acquiring their new homes.One of the things I have heard quite a lot from the Opposition is about the lack of supply. I spoke about this briefly last night and if I could just have a moment on this. There are 100 special housing zones across the country. There are 80 in Auckland. I have two of them in my electorate in Hunua. The big one which I think is actually the biggest in the country is the Wesley property development which will contribute between 4000 and 4500 homes and another one just down the road about 2 kilometres will deliver another 700 homes. The Opposition has continually claimed that houses are not being built and factually that is totally incorrect. I was very disappointed to hear some of the earlier speakers tonight talk about this. I would just invite them to fly to Auckland hire a car and drive out to my electorate. If they stopped at the first place Mission Heights which is the area coming down to Flat Bush there are 1300 homes there. Every day a house is being completed there. If you carried on over the hill—probably another 15-minute drive—you would get to Maraetai and Beachlands. The population there at the moment is 8800 and it will increase to 17500 by 2021. There are just vast areas where the diggers the loaders and the bulldozers have been in clearing sites. Those sections are available for sale and there is an avalanche of new sections coming on for sale. It is the same in Clevedon another good part of my electorate—there are 700 homes. If you go to Pukekohe East there are a potential 10000 sections.So this claim from the Opposition that new houses are not being built and new sections are not becoming available is just not right. In fact the problem for my electorate is that we are going to have the equivalent of a new Hamilton in our electorate over the next 30-odd years and I have a council that does not actually have a lot of money to be able to support that infrastructure.Labour members particularly seem to be myopically focused on the Government building new homes. I just want to talk about this for a second. Just in terms of the total new builds in New Zealand the Government actually accounts for only 1 percent of all the new home builds—1 percent. The top 20 house builders in New Zealand actually account for 25 percent. The vast majority of new houses in New Zealand are built by one two or three-person building firms. That is why we need to create the environment to ensure that they can build houses and when the Opposition continually talks about creating new houses—they are the people who are going to deliver it: those one two or three-person businesses.In terms of homeownership at the Finance and Expenditure Committee we were briefed by the Reserve Bank Governor on this issue. The long-term 10-year average for first-home buyers is approximately 19 percent of all homes purchased in New Zealand. Even after the loan-to-value ratio changes that is still at 17 percent—i.e. within the statistical margin of error.CHRIS HIPKINS (Labour—Rimutaka):I am happy to take a brief call on this bill slightly sooner than I had anticipated but I am very happy to speak on the matter. Before I get into the specific provisions of the bill I want to pick up on a comment that the member who just resumed his seat Andrew Bayly made. He argued that the Government accounts for around 1 percent—around 1 percent—of new home builds in New Zealand. The point I would make to him is that housing in New Zealand has been at its most affordable when the Government has been an active partner in the house construction business. In fact in my electorate there are literally thousands of houses that were built as State houses that are now privately owned. Those people were able to buy those houses because the Government was a partner in that process and was actively engaged in making sure there was sufficient supply to meet the demand. So there is real merit in a more active stance from the Government.This bill in particular allows KiwiSaver members to withdraw the tax credit component of their KiwiSaver savings in order to purchase a first home. Previously they were only ever able to withdraw their own contributions and their employer contributions. This bill now allows them to withdraw the Government tax credit contributions as well so that they can get on to the property ladder in the form of a deposit contributed to from their KiwiSaver savings.In principle I can see the merit in that—in fact it was a Labour Government that introduced the KiwiSaver scheme—but I do have some anxiety. One of the reasons we introduced KiwiSaver in the first place is that New Zealand has a woefully bad track record when it comes to saving for our retirement. We have reached the point where people saving for their retirement can dip into that money prematurely just to get a foot on the property ladder. In fact not just necessarily to dip into it but potentially to clean it all out. This provision means that you effectively could end up cleaning out your KiwiSaver account your only retirement savings just in order to get on to the property ladder. Actually we want to have a situation in New Zealand where Kiwis can do both—where Kiwis can save for their retirement but also build up an asset in the form of their family home. So although I agree in principle with what this particular change is designed to achieve which is to give people who are really struggling to get on to the property ladder the opportunity to do so I have some anxiety that it is not going to lead to a sustainable rate of savings when it comes to their retirement.I think a lot of New Zealanders my age would not even think that far ahead. They are not thinking that far ahead because there are just too many other financial hurdles to get across at the moment. Buying a first home is one. Paying off their student loan is another—Stuart Nash: Getting married.CHRIS HIPKINS: Getting married is getting more and more expensive. That is not a particular burden that I have yet had to meet but there is always hope! I do believe that it is important that all New Zealanders start to think early on about their retirement savings.The final point I want to make in this very brief contribution on this legislation is just a general point around the nature of retrospective legislation and any provisions that have any kind of retrospectivity. There are really good reasons why we in this House do not do that and I am always very disappointed when any legislation has such provisions.So with that Mr Chair I thank you for the opportunity to contribute briefly to this debate. I had that one point I wanted to make because I think it is important.Hon Christopher Finlayson: And you’ve done it very well.CHRIS HIPKINS: I have done it very well. Oh look! Mr Finlayson is getting very very impatient over there. It is really important that we save for our retirement. Although I can understand the desire of people to get a foot on the property ladder they do need to be thinking longer term as well.STUART NASH (Labour—Napier):There are just a couple of things I want to say. I want to talk about the title clause and the commencement clause. We have done the serious stuff. But do you know what? I think we should call this bill the “Commando Bill”. The reason I say we should call this the “Commando Bill” is that this is slipping something under the cover of night to screw soldiers. That is why I think it should be called the “Commando Bill”.The most disappointing thing is that Mr Andrew Bayly—or I should say Colonel Bayly; he was actually a colonel in the army—has stood up and said not to worry that this measure is only small and inconsequential. Well I pity that bloke if he has to turn up on the parade ground or worse at the RSA in a couple of weeks and explain to the veterans that this is only minor. This is not minor.I think we could also call this the “All Show No Style Bill” and the reason I say that is that everyone wants to do something to improve the housing market. Everyone wants to do something to allow young people to buy their homes yet this is what this Government has come up with. After 7 years this is the best it can do. The officials told us that this bill may help 200 or 300 people. That is fantastic for 200 or 300 people but it is not the 90000 young people whom the Government keeps crowing on about. In fact the officials took such a lackadaisical approach to this that they said they had not even modelled it and I do not blame them. I think they did what we did—they had a look at it they read it and they thought: “Oh my God! This is one of those election promises we are just going to have to do because the Government wants to do it.”Labour is voting for the bill and the reason we are voting for it is that the officials actually said—and these are their words not mine: “Well it does no harm to anyone.” So we are now passing legislation because it does no harm. Well I would suspect that that is not a great reason to pass legislation.Jenny Salesa: We have better things to do—yes we have.STUART NASH: You are right. We have much better things to do than pass pieces of legislation because they do no harm. I would have thought that the Government would have a legislative agenda like it had under the busy Minister Simon Power when we had substantial pieces of legislation on the Order Paper.Carmel Sepuloni: It’s gone downhill since he left.STUART NASH: It has gone downhill. We had substantial pieces of legislation that actually made a real difference to good hard-working Kiwis—not just good hard-working Kiwis but good hard-working young Kiwis who still hold that dream of homeownership and still believe it is possible.If they live in the regions they have got to have a 20 percent deposit. This provision is not going to give them a 20 percent deposit. The Hon Nick Smith stood up here and said: “Well if you do this and this if you’re going away from home and you’ve got this amount of money you may end up with $50000. And if you do that and you get a 10 percent deposit under this sort of scenario”—there might be five people in the country who qualify for this—“you can get a $450000 loan.”But to service a $450000 loan—to come under that sort of covenant—you need to have a household income of about $175000. There are not that many young people apart from maybe our senior whip who actually have a household income of $175000. As Mr Hipkins said they are worrying about how they are going to put food on the table how they are going to pay the bill to fix the car and what they are going to do with their children let alone whether they can service a debt of $450000.So this is really tinkering around the edges. In fact that is not a bad name as well—the “Tinkering Around the Edges While Rome Burns Bill”. That is not a great metaphor because we do not want to see anyone burning but I will tell you what—a lot of a people are suffering. The thing that really distresses me is that I wonder whether my four children are ever going to be able to afford a home. I wonder what it is going to be like in 30 years. There is one way that they will be able to and that is if there is a Labour Government in 2017 and it starts dealing with the issues that are important to New Zealanders.The one thing that this whole debate has really sort of honed for me—it has solidified and cemented my views around this—is that that party believes that the market has the absolute solutions. This party believes that the Government has a role to play in actually helping good hard-working Kiwis. I would argue if you look at the Auckland housing market that the market has failed good hard-working Kiwis who only want to own a home have a beer at the end of the day get on with life and not have these massive money problems. Of course the thing is that if they are not paying off their mortgage they are paying off someone else’s mortgage through rent and they just cannot get on that property ladder. Mind you having said that there are going to be a whole lot of developers by the sound of things with a whole lot of houses that they have just bought off the Government. Thank you very much.RON MARK (NZ First):I have to say that I was sitting in my office trying to get some other work done reading for a select committee tomorrow and could not help but hear the previous speeches from the National side speaking specifically around the impact on veterans. As you know I am a returned serviceman myself. I do not know whether there is one in the Government ranks over there. There might be one. [Interruption] Well Mr Bennett. There is Mr Bennett the man who is due to become an ex - member of Parliament we know after the next election. He is the man who spends more time in San Francisco than he does in New Zealand but we will not go into that will we Mr Bennett? So he wants to chip in.When we start to talk about defence force personnel Mr Bennett has always got a mouth on him the size of that door over there. He has always got things to say. The truth is that Mr Bennett is the type of person who talks about sending people overseas but would never himself volunteer to do that work because he—well he lacks the fortitude required. But I would say that—David Bennett: I raise a point of order Mr Chairperson.The CHAIRPERSON (Hon Chester Borrows): I do not need any help. I can anticipate what the point of order is. Mr Mark has been here long enough to know that making those sorts of comments is unparliamentary in respect of questioning somebody’s fortitude. Withdraw and apologise.RON MARK: Thank you and I—The CHAIRPERSON (Hon Chester Borrows): Order! The member will withdraw and apologise.RON MARK: Oh I am sorry Mr Bennett—I withdraw wholeheartedly.David Bennett: I raise a point of order Mr Chairperson. When you withdraw and apologise you are supposed to do that—just say “I withdraw and apologise.” not make any other comment like that.The CHAIRPERSON (Hon Chester Borrows): Because the member has taken issue I ask the member to withdraw and apologise without further statement.RON MARK: I withdraw and apologise.Darroch Ball: Without further statement.RON MARK: Without further statement. As you know Mr Chair having been in this Chamber—The CHAIRPERSON (Hon Chester Borrows): Order! The member is now trifling with a good-natured Chairman. He can continue with his call and try to do so with some grace.RON MARK: Thank you Mr Chairman—Jono Naylor: Let’s talk about the bill Ron.RON MARK: There you go. I do know that the rule of this House is that every time someone has some interjection to make there is a right of reply on that interjection. The House has always understood that if you dish it out you should expect to wear it straight back Jono.So I am going to say—and clearly the Opposition is pricking the conscience of this Government having deployed men and women to Iraq. Clearly on the one hand while we get some guts join the right side and send servicemen overseas on the other hand behind the backs of the very men—that the member who is based in Palmerston North has just agreed to deploy over there; behind the backs of every person in Linton—we have this clause veterans’ support.I want the Minister in the chair Paul Goldsmith to stand and explain clearly to the Committee and to answer the questions from the Opposition: does this adversely affect veterans? Will this mean that they will lose money? Will this mean that retrospectively those veterans who had a lump sum will now be required to pay it back?It is important that the Minister does not take this lightly and that he stands because Hansard as you know Mr Chair is the record by which determinations may be better understood. Tonight it is very important that we clarify this point right now on the record of the House that the Committee receives a clear unequivocal statement from the Government that this clause will not—not—disadvantage those service personnel who will return from Iraq and become veterans and in time seek the sort of assistance that this legislation allows them to seek. Will shifting this legislation—will this clause 2 disadvantage veterans? Will it retrospectively mean that some people or their widows as was raised by a member earlier on have to repay money that they have received? Please just clarify this.New Zealand First’s position is that we support the intent of this bill and we support the bill going forward but now we have a serious issue here as far as I am concerned. I find it very difficult myself as a returned serviceman and I am really sincerely sure that there are members in the National Party ranks who would not want to think that their vote is going to disadvantage those personnel whom they have sent to Iraq as well. I actually would like to think that Mr Bennett would like to hear the answer from the Minister. Right now it needs to be clarified so I am going to sit down now and I will take another call if I do not hear an answer because I really think that this issue needs to be clarified in the Hansard tonight.Clause 1 agreed to.The question was put that the amendment set out on Supplementary Order Paper 60 in the name of the Hon Todd McClay to clause 2 be agreed to.Amendment agreed to.Clause 2 as amended agreed to.Clause 3 agreed to.Clause 4 agreed to.Clause 5 agreed to.The question was put that the amendment set out on Supplementary Order Paper 60 in the name of the Hon Todd McClay to insert new clause 5BA be agreed to.New clause 5BA agreed to.The question was put that the amendments set out on Supplementary Order Paper 60 in the name of the Hon Todd McClay to clause 5B be agreed to.Amendments agreed to.Clause 5B as amended agreed to.The question was put that the amendment set out on Supplementary Order Paper 60 in the name of the Hon Todd McClay to clause 6 be agreed to.Amendment agreed to.Clause 6 as amended agreed to.The question was put that the amendment set out on Supplementary Order Paper 60 in the name of the Hon Todd McClay to insert new clause 6B be agreed to.New clause 6B agreed to.Clause 7 agreed to.Clause 8 agreed to.Clause 9 agreed to.The question was put that the amendment set out on Supplementary Order Paper 60 in the name of the Hon Todd McClay to clause 10 be agreed to.Amendment agreed to.Clause 10 as amended agreed to.Clause 11 agreed to.Bill to be reported with amendment presently.