Wood MichaelMICHAEL WOOD (Labour—Mt Roskill): In the lead up to this Budget the National Party put a lot of intellectual rigour and effort and time into trying to humanise the Prime Minister by associating him with a meat pie trying to make him more human. I suppose it was worth a try. It was a bit forced but it does actually give us a good analogy to think about this Budget and this bill because this bill and this Budget are like a dodgy pie. It is like when you go along to a coffee shop in a part of town you do not know. You want something to eat and you look in the warmer and it looks pretty good: nice flaky-looking pastry on the outside and you think: That's it. I'll spend my $3 on that." But you bite into it and it is a gristly gruelly mess. Once you get into it you see that it is not as good as it looked like from the outside and let us talk about that in respect of this bill.Kris Faafoi: I hate that. MICHAEL WOOD: I hate that as well. It is not a pleasant experience and for New Zealanders this bill is not a pleasant experience as well. My colleague David Parker pointed to I think the most egregious aspect of this and I do think it was absolutely egregious and outrageous that the Minister of Finance stood up in this House and in my view—in the printed speech in plain language—implied that only one-third of people who were eligible received the independent earner tax credit which is a $220 million tax credit that is being slashed completely annihilated as part of this bill. It took Tim Macindoe to his credit while he was sitting in the chair in the Committee stage in response to questioning from me and David Parker to actually concede—to actually concede—that the notes in the bill were correct and actually 80 percent of eligible people receive the independent earner tax credit. That is a pretty big difference. Those members look down now but they are about to vote for the abolition of that tax credit which they tried to slip through by suggesting that it was claimed by hardly any New Zealanders at all. I am actually a little surprised by that. It was one of the few good things in the area of tax reform that this Government has done. It brought it in in 2009 and it was a way of recognising those people on low incomes below $48000 who do not benefit from Working for Families. Chris Bishop: You opposed it at the time. MICHAEL WOOD: Yes but we can recognise it was a good thing. We have got a little bit of flexibility on this side of the House Mr Bishop just like there has been a little bit of flexibility—let us face it—from National in respect of Working for Families. It was called communism by what Mr Bishop? It was called communism by stealth when it was introduced by the Labour Government but you are pretty proud of it these days. We reckon the independent earner tax credit should stay because those battlers—those battlers in that band the people who do not have kids and who are earning under $48000—they are often a little bit younger. If you look at the information produced in the Budget these are the people in quintile No. 2—you know earning sort of $24000 up to about $48000. They are not in a high-paid job life is pretty tough particularly when you look at accommodation costs and this was one little thing that we had in there that helped those people out. By sleight of hand burying it deep in the Budget and being dodgy about the figures this Government is taking that away. What that does for most of these people is pretty much annihilate the benefit of any income tax cut that they gain because people in that band are probably going to get the princely sum of an $11 a week tax cut. That is something for a start I suppose but then you take off the $10 and they are down to the princely sum of $1 a week. Peeni Henare: $1.MICHAEL WOOD: One dollar a week. The Labour Party had a Budget breakfast this morning. It was with a business audience—probably people who are interested in Labour because they can see that a change is coming but who are not necessarily instinctively attuned to social democratic values. We got on to the topic of tax and a woman stood up at this breakfast and said that under this her son—how long is it going to take him? It is going take him something like 10 years on the basis of that tax cut to be able to afford his next visit to the doctor because doctors visits have gone up by so much under this Government. We also talked in the Committee stage about the fact that there is some interesting stuff in terms of the independent earner tax credit. The official advice from Treasury actually says that by removing this you are creating a disincentive to work and it will actually result in fewer hours being worked across the economy. It is there in the regulatory impact statement for any members opposite who might like to refer to that before they actually vote on the bill. Of course that is the way it would be because it is something for people who are in work so why would you take it away when those people are working hard and just need a little bit of extra help? The other area that I think of when I think of that gristly gruelly pie that you bite into is what is happening in terms of the income tax changes themselves. Frankly these are the heart of this tax bill. Yes we are going to talk about the family tax credit and we are not going to talk about the accommodation supplement of course—The ASSISTANT SPEAKER (Hon Trevor Mallard): No. MICHAEL WOOD: —but $1.9 billion of this package or five-sevenths of the package is there in the income tax changes. The National Government members speaking in this debate have been very reluctant to actually dive into the detail and understand how that distributes across wage and salary earners. Whenever you look at income tax changes from a policy point of view that is what you should do. This is real money it affects people's lives and affects their incomes and it affects the choices that Governments have going forward. How does $1.9 billion actually break down? Here is how it breaks down: $1.5 billion or 80 percent of that tax package goes to the top 50 percent of income earners. What is that word we have been hearing from the National members time and time again through this debate? The lads on the ninth floor in the comms team put this word into all of their speeches: targeted. Targeted targeted targeted. That is about as well targeted as a bacon butty at a bar mitzvah—$1.5 billion out of $1.9 billion goes to the top half of income earners. How on earth is that well targeted? How is it well targeted for the total benefit of that $1.9 billion tax package? Break it down. The top 10 percent of income earners get $379 million of that pie—the top 10 percent of income earners. The bottom 50 percent get $380 million—right? So out of that pie that National is cutting up and voting upon and every other party in this Parliament it would seem the top 10 percent of income earners get the same cumulative benefit as the bottom 50 percent. Tell me again that that is a good targeting of resource to those New Zealanders who need it most. Tell me that again. I ask the next National Party speaker who stands up and gives the customary 4½ minute response that we have been getting today to justify how that is a good targeting of the limited resources we have to help the lowest-income New Zealanders. Then we dive into the detail a bit more and this is really interesting. Again it is in the regulatory impact statement. Do you know what? Those New Zealanders earning under $48000 whom apparently we are targeting—35 percent of them get nothing. They get absolutely nothing. I am not talking about just the income tax changes here but the whole package. They get nothing. Everyone earning over $48000 benefits. Every single wage and salary earner earning over $48000 can bank some money because of this package. Thirty-five percent of those earning under $48000 get nothing and it actually gets worse. There are 3000 families who are left worse off under this package. Surprisingly we have not heard about that from anyone on the benches opposite. Tax is about opportunity cost. Every policy decision we make in this House I suppose is. What the Labour Party says is that given the challenges that New Zealand faces today—we are not going to hell in a handcart. There are good things happening in our country and our society. Hon Maggie Barry: Thanks to National. MICHAEL WOOD: But there are issues—be a bit more graceful Mrs Barry. There are issues that we face. Hon Maggie Barry: A bit more accurate "Mr Whoever You Are". MICHAEL WOOD: There are issues that we face in this country. Well if you do not want to concede that you know that is fine. There are issues that we face. If you do not think that it is an issue that 40000 New Zealanders are homeless that is fine. Take that to the election campaign this year—[Interruption]The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I will ask the member to just resume his seat for a second and I ask Mr Faafoi and Ms Barry to stop their interchange. As I have said I think the other way yesterday—when members are handling it fairly well themselves assistance from their own team is in fact not only not useful but it is quite disruptive. MICHAEL WOOD: Thank you Mr Assistant Speaker. It is good to have a supportive team though. I enjoy it in the Labour Party.The ASSISTANT SPEAKER (Hon Trevor Mallard): And the member will not comment on my ruling if he wants to continue. MICHAEL WOOD: Thank you Mr Assistant Speaker. As I say it is about opportunity cost. What we know is that there are real needs and real issues in our country and in our society and those are the things we should be focused on. So that is why the Labour Party in the amendment we put forward said that actually if there are some genuine targeting in terms of income support that we can do through this bill we are all for that. That is what Jacinda Ardern's amendment said. It said: "Let's actually get in there and go forward with the family tax credit changes." We could be right behind that. We think some of the stuff the Government is doing with abatements does not make any sense because it disincentivises work but let us actually look at those family tax credit changes. We could have gone there. But with the $1.9 billion package that is here we could do so much more. We could actually invest in decent affordable homes for all New Zealanders. We could tackle the fact that since the accommodation supplement was last raised in 2007 average rents have gone up by $240 a week and nothing in this package even touches the sides of that in terms of the impact on family incomes. We could do something about getting our young people into jobs instead of spending $760 million on prisons. New Zealand families deserve—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!MICHAEL WOOD: —better than this tax bill. The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Back to the bill. MICHAEL WOOD: They deserve decent housing and decent health and education. They deserve a fresh start and that is what the Labour Party will give them. Thank you."