Smith Lockwood: Urgent Debates — Mercury Energy—Disconnection of Electricity Supply 
Smith Lockwood: Urgent Debates — Mercury Energy—Disconnection of Electricity Supply 
[Volume:639;Page:9756] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I add my condolences and sympathies to those expressed by my colleagues in this Parliament to the Muliagafamily at this tragic time. I think that the hearts of New Zealanders went out to this family because this was a hard-working Kiwi family. This was not people bludging off the system; this was a family with four children that was trying to make ends meet and we understand earning a low income. 
That is what I want to ask the Government about this afternoon because I believe that it is a hugely important issue. In New Zealand over many years now New Zealanders have come to take some pride in the fact that where people in this country make the effort to help themselves and to take care of their families we are prepared to step in and support them. That is the basis of family support which was started as a policy in this country many years ago by a Labour Government. It is the basis of this Labour Government’s flagship Working for Families policy so one question that I think needs to be answered in the debate this afternoon is whether this family was benefiting from that policy. From what we read we are led to believe that this hard-working family was trying to make ends meet on $400 a week—that is what I read in the media somewhere—which is $20000 a year assuming the income earner is working full time. No family of four can live on that; it is simply not possible to live on that amount. That is why over the years a whole series of policies to support hard-working families has been put in place and supported by successive Governments to make sure that no working family has to try to survive on $400 a week because it simply is not possible. 
This afternoon in this debate I heard the Minister for Social Development and Employment the Hon David Benson-Pope crowing about the Government’s wonderful Working for Families policy and the amount of money the Government has put into it. That is fine; I guess that a Labour Minister will do that. I heard the Hon Clayton Cosgrove who has just finished speaking criticise my colleague Gerry Brownlee for asking whether this family was in receipt of all it was entitled to under New Zealand’s systems to support our low-income hard-working families. I believe that there are questions this Labour Government should answer because the Working for Families package is one of its flagship policies. At the last election people may recollect that taxpayers in this country poured another $800 million I think into the Working for Families package in order to help low-income hard-working families. Over the next little while I want Labour members to make it clear to the public whether this flagship family support policy is working. 
We know from what we are told that the Muliaga family is a proud family and I congratulate it on that. This family did not want to be on a benefit which perhaps it could have been on. So I presume that the father of this family is working independently of the benefit system and we are told trying to survive on $400 a week. The salary or wage this family is earning is $20000 a year; I asked the Minister of Revenue not that long ago what kind of support under the new Working for Families package such a family would receive. One of the four children is I believe beyond the age of being called dependent so let us say that three of the children are dependent. I do not know the facts for certain because I do not want to get too specific in relation to the particular family’s circumstances. 
The Minister of Revenue told me that a family with three dependent children independent of the primary benefit system and earning $20000 a year—that is $400 a week—would be entitled to the following tax support. It would receive a family tax credit of about $1300. In addition to that it would receive family support after abatement—although in fact at that level of income there would be no abatement—of $10192. In addition to that $20000 of earned income if the family were independent of the benefit system it would also receive $1320 of in-work payment after abatement. 
So on $20000 of earned income after PAYE had been deducted and after the proper tax credits had been paid under the Government’s flagship Working for Families policy that family should not have been trying to live off $20000 a year but it should have been getting well over 50 percent more than that—and I presume living in Auckland that it would have been entitled to the accommodation supplement as well. This means that it should have been entitled to something more like twice the level of income it was getting without having to go on to standard benefits or into the standard benefit system. Just through the tax credit system alone it should have been entitled to support of more than 50 percent of its earned income—that is its net support which does not include an accommodation supplement. 
I believe that Government Ministers must make it very clear whether this family was in receipt of those entitlements. If that family was legally employed in this country—and I have no reason to doubt that it was—then there has been a major major policy failure that far exceeds issues around the cost of electricity. It is a major policy failure if the flagship family support policy failed to look after a family in this country that was working—working hard and working for income that seems extraordinarily and sadly low. I have not heard that question answered because it is possible that the family was not receiving that level of support. I think that members of this Labour Government should make it clear whether their flagship policy was working because if that hard-working family that suffered this unthinkable tragedy was not getting that full level of support then that is a major major failure of policy by this Labour Government and we should know whether that failure has happened. 
I put it to this Labour Government that in the legislation recently introduced following the Budget—the Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill—those various elements of support for working families have had their names changed. Whoopee do—they have had their names changed! For example a family tax credit now becomes a minimum family tax credit etc. But what has not changed is how these family support elements are made to work. 
The Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill will now require employers when they employ someone legally to go through a whole new rigmarole of enrolling them in a savings scheme. Would it be beyond the wit of a Government to come up with an implementation policy that enabled employers to make sure that when they employ people they actually get them on the various tax credit support systems they are entitled to without there being a risk of a low-income family like that falling through the cracks? 
Judging by the way Government members are hanging their heads I suspect that this family did fall through the cracks. I suspect that this family was probably not in receipt of the support entitlements it was entitled to and I believe that that is a grave failure in policy. This Labour Government should be thinking about how it makes sure that someone who is legally employed in this country should be legally entitled automatically to receive the various tax credits to which he or she is entitled. 
Of course the moment that that does not happen people have to have the knowledge to apply for those credits. Some hard-working families may not know that they have the opportunity to apply for them or they may not have the wherewithal to do so. If it is good enough for people legally employed now to be able automatically to be put into savings schemes it ought to be good enough for our hard-working low-income people in this country automatically to get the tax credits to which they are entitled. Sadly I feel that this family probably did not get those credits. 
The debate having concluded the motion lapsed.