Upston Louise; Pugh MaureenSOCIAL SECURITY (BENEFITS ADJUSTMENT) AND INCOME TAX (MINIMUM FAMILY TAX CREDIT) AMENDMENT BILLThird ReadingHon LOUISE UPSTON (Minister for Social Development and Employment): Thank you Madam Speaker. I move That the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill be now read a third time.Madam Speaker and the House I appreciate that sections of this bill were progressed under urgency last week so I do want to put my thanks on record for the House's consideration during this time. I would also like to put on record my thanks to the officials who have worked incredibly hard to ensure that we were able to deliver this legislation within time frames. The time frames are important because it means that the changes that we are legislating for today come into effect on 1 April 2024.As I said it is a simple bill that returns the indexation of main benefits to inflation while making other required consequential amendments. This change prioritises fiscal sustainability the real incomes of beneficiaries and work incentives reflecting this Government's belief that a job is the best way for New Zealanders to get ahead. Employment enhances mental health develops self-esteem and strengthens communities. In turn this bill will help to achieve these outcomes while also promoting the ongoing health of the income support system. So for those who have just been tuning in to this debate now I wanted to go through what those changes are to be clear because as a result of some of the debate in earlier stages members of the public may have thought this was an isolated policy that had impacts that the Opposition would like you to propose. The reality is that this Government the coalition Government is very much focused on improving the lives of New Zealanders—those on welfare as well as those in work—and more importantly to reduce the number of children in benefit-dependent households.So let me go through the changes. The bill amends the Social Security Act 2018 to ensure that income support responds to the increases in the cost of living by indexing main benefits to changes in the Consumers Price Index (CPI). This is the method that has been used for 31 of the last 35 years so it is not a new change; it is returning to a method that Governments of both sides of the House have utilised in more years than not. This change will revert the amendment made by the previous Government in 2019 to index main benefits to net average wage growth. In line with this change to the rate of indexation the bill also amends the Income Tax Act 2007 to adjust the minimum family tax credit threshold to ensure that it remains aligned with changes to the rate of main benefit. This is done very deliberately to ensure that low-income working families remain better off financially in full-time work than they would on a main benefit.The changes will protect the real incomes of benefit recipients and low-income working families in the years to come while also ensuring the costs associated with the benefit system remain sustainable and manageable in the long term. As I've said in this House it is important that we balance the needs of those who are working New Zealanders whose taxes are contributing to the welfare system as well as those who are in receipt and supported by the benefit system. In the short term New Zealanders who are enduring the cost of living crisis—and we do know that it is hardest hitting those on low incomes—can expect that their main benefit rates will remain broadly similar. Over the longer term New Zealand will gain from savings in benefit expenditure while benefit recipients retain a consistent level of real financial resources—a simple way to put this is that it protects their purchasing power.Making this simple change forms part of our Government's wider commitment to prudent financial management and it's been progressed in part—not this part today—under urgency to ensure that the rate of main benefits reflect inflation as I said earlier when the indexation occurs and takes effect from 1 April 2024.Easing the cost of living crisis is also a priority for our Government and we know from many people that we speak to on a regular basis that the cost of living is really hurting New Zealanders and that is why it is a number one priority of our Government. The lower than forecast CPI figure for the year ending December 2023 shows that inflation is slowing but it still remains currently outside the Reserve Bank target range of 1 to 3 percent. It clearly shows that there is more work to do and our Government is committed to returning within the target range and easing cost of living pressures for all New Zealanders.Some of the measures our Government is committed to taking include providing income tax relief increasing tax credits for working households and introducing a new childcare tax credit as well as reducing taxes on petrol. All of these measures will help to address the cost of living pressures. As I have said in previous contributions in this House and in this debate it is not just one measure that we need to take not just one policy but a suite of many—many of which we are delivering in the first hundred days. That shows the New Zealand public that the coalition Government is delivering on its promises. We are delivering on the priority areas that they set and we campaigned on during the election period. So this simple bill that returns the indexation of main benefits to inflation is an important step in the suite of changes we are making as a Government and as such I commend the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill to the House.CHAIRPERSON (Maureen Pugh): The question is that the motion be agreed to.