Andersen Ginny; Carter Kahurangi; Watts SimonHon GINNY ANDERSEN (Labour): Thank you very much Madam Chair. Thank you for the opportunity to take a call. In terms of the amendments that this bill is making to the independent earner tax credit and also the in-work tax credit I have a couple of questions for the Minister of Revenue and it really comes down to how people are going to figure out exactly what they're entitled to and how they know that those corrections have been done accurately and maybe the Minister might like to shine some light on this. When we're going through the bill's commentary that's been prepared by the Inland Revenue Department it gives some examples of how composite calculations for the 2024-25 tax year can be analysed and it reads kind of like a sixth form maths problem. You've got someone called Elizabeth and they've got how much the abatement under the current settings is which is 13c per $1000. Then you've got the calculation of the number of days that the current settings apply which in this example is 121 and then you've got the amount of the abatement under the proposed settings which is 13c times zero dollars. So when you're trying to calculate the differences between how those settings have changed it is not really that straightforward for members of the public to ascertain what in fact they're entitled to. If you're a salary earner who's getting paid then a lot of that is already done on your behalf but if you are in fact generating your own income and if you are having to also pay staff there seems to be quite a complicated sort of formula in terms of trying to establish what the number of days are that you are entitled to the periods that it applies to and how that increases. In particular what I would really like to know is what the role of the IRD is in this to assist people to understand what they are entitled to and if a taxpayer would receive more from the independent tax earner credit—which I've just referred to—than the in-work tax credit because of these changes what the role of the IRD is to proactively change it for them. I don't think it is made clear that it is incumbent upon the taxpayer to do those calculations and to ascertain the interactions between the independent earner tax credit and the in-work tax credit and also I think that that sort of bleeds into the minimum family tax credit. So while people can go online and plug their details into the calculator I actually think that there's additional information that people out there who have figured out that they get maybe $80 a fortnight—how does that actually work for them and what do they do to ensure that they get that money coming back to them? I think to be honest that there's a high level of suspicion sometimes when it is said that you're going to be getting this extra money but what happens if those calculations are being done on your behalf and what if those calculations aren't quite accurate? What is the recourse for those people who believe they are entitled to a greater share of tax relief but who haven't managed to realise this increase in their back pockets? So I think just from looking at how people calculate it through this document it seems incredibly convoluted in terms of establishing the process particularly in this transitional period of changing where the thresholds are and the interactions that that makes for people. So I would really appreciate it on behalf of the people who have contacted me since the Budget has been announced—for those people in our own areas who are interested to know how they would access this—how it works for those people who are not necessarily salary earners but who are generating their income either from their own business or from a range of other sources. If the Minister is able to address some of those questions I'd be really happy to hear that. KAHURANGI CARTER (Green): Thank you Madam Chair for the opportunity to speak on this Taxation (Budget Measures) Bill. We are looking at Part 3 Income Tax Act 2007 and Tax Administration Act 1994 amendments commencing 31 July 2024". Now looking at clause 27 "Section MD 10 amended (Calculation of in-work tax credit)" I want to draw from the regulatory impact statement on the $25 per week increase to the in-work tax credit (IWTC) particularly around the impact on child poverty and the increase of the IWTC by $25 per week. I'm really interested to understand what ongoing work there will be to model what hasn't been done yet which is the independent model on the other tax packages due to those time constraints: It says that "the tax package may slightly reduce moving-line BHC50 child poverty since the poverty line for this measure is set at 50% of the median household income." Well when we're talking about child poverty in Aotearoa New Zealand as the child spokesperson for the Greens I go back to Jonathon Boston's quote about raising tamariki in New Zealand which was that above all New Zealand should be a great place for raising children. Now for some children in New Zealand it's far from a great place. Their reality consists of living in cold damp overcrowded homes moving homes frequently experiencing hunger suffering Third World diseases like rheumatic fever and missing out on many things which the majority of children take for granted. Furthermore looking at the table on page 21 of the regulatory impact statement where it says that there will be an average weekly increase of $16.97 for 170000 households I want to understand what $16.97 actually achieves. Well if we're talking about it at the flaxroots for families that's about a block of cheese and 500 grams of butter. So how is that really going to help when we've got more children going into poverty? Furthermore on page 22 what I'm really keen to understand is how these tax credits can actually help lift children out of poverty because we can actually be the best place in the world for children to grow up. New Zealand can achieve that but when we're looking at the table on page 22 the analysis is saying that the impact of this wider tax package is very low. The impact on child poverty reduction from the increase of $25 per week has not been modelled independently of other tax package changes. We really want to focus on lifting children out of poverty in New Zealand and I really want to understand when that independent review on how this tax package will actually affect children—particularly children in poverty in New Zealand—when this table itself says that the impact on child poverty is going to be low. Thank you. Hon SIMON WATTS (Minister of Revenue): Thank you very much Madam Chair. Obviously the implications of reducing child poverty are a significant priority for this coalition Government and the Budget that we released yesterday by reducing the cost of living pressures for low and medium wage households will aid in supporting that. In respect of the specific question around what are the implications that the changes to personal income tax the IETC the IWTC and FamilyBoost will have—now all of those acronyms are basically the different changes that have been made as part of this tax bill—there is an estimation that child poverty will reduce by 17000 children plus or minus 6000 by the 2027 tax year and there is a margin of error on that using standardised measures. That is statistically significant. If you refer to a status quo model then the expectation is that without doing any of the changes that this Government is driving through then child poverty potentially could increase by 2000 children plus or minus 500—again acknowledging that there are margins of error—by the 2027 tax year."