Copeland Gordon: Motions — Family Support Tax Credit—Increase 
Copeland Gordon: Motions — Family Support Tax Credit—Increase 
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GORDON COPELAND (United Future) 
: 
 I rise on behalf of United Future to say that we will be endorsing as a party the increase to the family support tax credit of $10 per child per week which will come into force on 1 April 2007. To remove the confusion in the mind of the previous speaker Hone Harawira I make it clear that whether people come from a benefit family or a working family they will if they qualify receive on 1 April 2007 another $10 in the hand if they have one child $20 in the hand if they have two children $50 in the hand if they have five children and so forth. 
Michael Cullen in his speech mentioned that this was an expression of social justice and that is exactly right. This is a way of ensuring that no one in New Zealand with dependent children falls below the poverty level. As I will mention later in my speech this Working for Families package and the $10-a-week increase goes a long way towards achieving that goal. 
The description “social justice” brought to mind the fact that we could also use Michael Joseph Savage’s expression and say that this is simply applied Christianity because the whole idea of caring for one’s neighbour and of ensuring that a community supports its most vulnerable members—its poorest members—is indeed a core gospel value. 
In my first year in Parliament I remember speaking with the Minister of Finance about the need for the Government to provide tax relief for families with dependent children. I mentioned to Michael Cullen that people earning even say $50000 a year with five dependent children were certainly not well off. In fact people on that rate with five dependent children would be struggling and finding it extremely difficult to make ends meet. I know that because a number of families I am in contact with are in that situation. 
Subsequently therefore in its Budget bids for both 2003 and 2004 United Future suggested to the Government that it should bring in a tax credit system for families that had three particular design features. The first of those was that there should be specific recognition of the number of children in the family. That suggestion has been picked up on. The second was that there should be a clear gap between working families and benefit families both to incentivise work and to recognise the extra costs that arise when people enter the workforce. That has been picked up as well. The third was to ensure that the family support system in New Zealand moved closer to—and was therefore more competitive with—that which exists in Australia. That has also been picked up in the Working for Families package. Therefore we as a party were delighted when the Government announced in the 2004 Budget that it would be introducing this Working for Families package and we were equally supportive when just prior to the 2005 elections it decided that it would introduce this extra $10 per week per child which is to come into force from 1 April 2007. 
This will be of fantastic assistance to 360000 families in New Zealand who have dependent children. I hear so many favourable comments and reports from those young families—whether they have preschool or school-age children—who are just delighted with the extra financial assistance they are receiving under this package. They tell me that it has made a huge difference to their household incomes and sufficient household income for United Future is a core policy goal. It is of central interest to us because we believe that a family’s net income after tax needs to be sufficient for that family to meet its basic household needs—be they food clothing accommodation housing education health or transport. Those are the minimum things we want every single family in New Zealand to be able to afford to a reasonable level. 
Our vision for New Zealand does not include child poverty. When I came into Parliament 28 percent of all New Zealand families were according to most measurements living in poverty. Almost one out of every three of our children were in that situation. By 1 April 2008 that number of children will be down into single-digit territory—the best estimate I have heard is about 7 percent or less. In simple terms it means that basically through this excellent package we have shifted about 21 percent of our children from poverty to above the poverty line. 
I would have thought that that was something every party in this Parliament would recognise as a core Kiwi value and would support. I must say I was very disappointed that when Bill English was making his speech he said that National would not roll back this $10 a week but—when he finally got to it—he said that his party was not going to endorse this motion. National will vote against this motion—that is National is against this extra $10 a week per child. I am very very disappointed frankly to hear that because I would have thought that under the more pragmatic leadership that John Key has introduced to that party National members might just say: “Hey—are we in 2008 going to take this money back off people or not?”. Obviously they have decided they will. From my point of view that will be a backward step because I would not mind working with National after 2008 if that is what the electorate decides. But I tell you what if I am we as a party will not be going along with taking this money back from people who by then will have built it into their family budgets the repayment of their mortgages and all those other costs. It would be just crazy to take it away. 
What we do need to do is overlay this package with income splitting. I think Metiria Turei talked about home-care people and so did Bill English. Income splitting is the way we can recognise the tremendous role that a stay-at-home parent not on an income plays in the life of this nation. As I think Maurice Williamson said during the smacking debate bringing up kids is the most difficult and the most important job in the world and it is time we gave some tangible recognition to people who take time out of the workforce to do that fundamentally important work. Income splitting does that; it also addresses the effect of high marginal tax rates for people. The examples that National members have given are of those very high effective marginal tax rates normally involving single-income families. If we overlay income splitting on those we would find that the problem more or less disappears. 
So that really is the way that United Future believes we need to move post-2008. Quite early in 2008 well before the election the Minister of Revenue will be bringing out a discussion document on income splitting so that New Zealanders will have an opportunity to have some input into that. We will be asking for public submissions. I think also that that will really inform New Zealanders of the way that could transform household income. As I mentioned earlier it is a core value of United Future. We want to see every family in the country having a core income that could enable them to provide fittingly for themselves and for their dependants. 
I want to mention just one other issue in the last couple of minutes I have. National labels this package as welfare and the Government labels this package as tax credits. United Future is in the centre. We say that in fact there are—I will get the numbers right—around 196000 families who will not receive welfare through this package but who will receive a reduction in their income tax. They will pay the same amount I know but they will get a credit back. So effectively there is a bit of churn which is undesirable in some ways. But those 196000 families will actually be getting tax relief through this package. Then a further 164000 families will receive an increase in their benefits. It is quite correct for those 164000 families to say that they are welfare recipients. That is their status now and it will be after this extra $10 goes through. But for 196000 families it is actually a tax credit and should be described as such. 
Accordingly it is United Future’s position that we should actually call this package a tax reduction and family income package. That describes exactly what it does. It reduces taxes for 196000 families and gives additional income to a total of 360000 families. In United Future’s book that has to be a good thing for our society. It increases social cohesion. It is social justice in action; it is applied Christianity. Thank you.