Kuriger Barbara; Williams ArenaTHURSDAY 30 MAY 2024(continued on Friday 31 May 2024)TAXATION (BUDGET MEASURES) BILLIn CommitteeDebate resumed.Part 1 Income Tax Act 2007 amendments commencing 1 April 2024 (continued)CHAIRPERSON (Barbara Kuriger): Good morning members. Members when the committee rose last evening we were considering the Taxation (Budget Measures) Bill and we were debating Part 1. Part 1 is the debate on clauses 3 to 7 Income Tax Act 2007 amendments commencing 1 April 2024. The question is again that Part 1 stand part.And just before I give the call I have a list and I've had a discussion with the presiding officer who was in here last night of the things that have been discussed. So on Part 1 we're looking for new information or any Amendment Papers that have not yet had an opportunity to discuss—so new things please. And at that I'll say the question is again that Part 1 stand part.ARENA WILLIAMS (Labour—Manurewa): Thank you Madam Chair and good morning to you Madam Chair and good morning to the Minister. I thank him for his lively engagement last night in what has been an interesting and useful debate given that we haven't had a chance for the select committee stage on this bill.And I have a number of questions about the redistributive effect of clause 7 that's Schedule 1 that is still on the Table for us to canvas a bit more today. Before the House adjourned we were discussing some of my questions which were still outstanding about the redistributive effect of those numbers outlined in Schedule 1 given that there are fixed costs which are still rising for some families in the lower three brackets on that table particularly around accommodation. Because we saw yesterday that Treasury has predicted rising rents.So my question to the Minister was about the trade-offs that he spoke about when he answered my questions when he considered the accommodation supplement going up alongside this redistribution that he's set out in Schedule 1. The reason I'm asking him this is because we want to make sure that the tax and transfer system is redistributive and is designed to provide assistance to those in financial hardship. That was something that's not only been canvassed in similar bills introduced to this House by Labour Governments but was also introduced in the 2017 bill which set out to do exactly the same kind of change that the Minister has proposed in Schedule 1.So what I want to hear from the Minister on is those questions which I asked him last night which he did not address about the values which he has used to determined the redistributive effect of those bottom three brackets alongside rising costs for people on the lowest incomes. And what I really want to get to here with the Minister is whether he's considered the tax benefits that he says will accrue for those lower three brackets whether those will be eroded particularly by housing costs.Because Madam Chair if you'll let me explain this point rising housing costs have increased the proportion of income spent on housing particularly for low-income families. And as a result some low-income families have seen declines in after-housing costs in their real incomes and in their spending.So the impact that I want to discuss with the Minister is what he said last night when he said that we have considered increasing the accommodation supplement alongside these changes but we decided not to do that because of the trade-offs involved. I'd like him to talk us through what those trade-offs were particularly in the area of housing costs. Because recipients of the accommodation supplement who receive a main benefit have seen their residual incomes fall in real terms on average across the period that we're talking about here but the Minister's choices in those three brackets in Schedule 1 don't address that aspect of it. And also people who receive superannuation and don't receive a main benefit have seen their residual incomes fall in real terms on average. So that's the point I want to get to here with understanding that.And my second question for the Minister in the time remaining that I have is about whether these changes represented in Schedule 1 represent a move that is simple in our tax system which is it's a tax and transfer model that he is using which is often complex and the rules determining eligibility and claiming entitlements can be difficult to navigate in other parts of the section. But I want him to explain why this measure is preferred that he's outlined in Schedule 1 when other mechanisms that he is using to essentially give rebates in the rest of the tax bill don't meet with those objectives of simplifying the system to clearly link what he I think would see as linking hard work with reward. While we don't agree with that it is a principle of the tax system that is important and is internationally recognised and I'd like him to give us some sense of whether this is a simple and effective way to redistribute wealth.