Volume 680 Week 11 - Thursday 24 May 2012(continued on Friday 25 May 2012) 
Text is incorporated into the Bound Volume 
Volume 680 Week 11 - Thursday 24 May 2012(continued on Friday 25 May 2012) 
[Sitting date: 24 May 2012. Volume:680;Page:2475. Text is incorporated into the Bound Volume.] 
Thursday 24 May 2012 
( 
continued on Friday 25 May 2012 
) 
Taxation (Budget Measures) Bill 
In Committee 
Debate resumed. 
Part 3Student loan scheme: Repeal of 10% voluntary repayment bonus  ( 
continued 
)  
The CHAIRPERSON (Eric Roy) 
: Good morning everybody. The sitting is resumed and the House is in Committee on the Taxation (Budget Measures) Bill. The question is that Part 3 stand part. Chris Hipkins has the call; he has 4½ minutes remaining. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Thank you Mr Chairperson—I am very happy to take those. As I was saying before I was rudely interrupted by the break last night it is slightly ironic to be here debating the Taxation (Budget Measures) Bill only a few years after the National Government introduced it. We heard from the likes of the revenue Minister Peter Dunne that he could not fathom why anybody would oppose it—he could not fathom why anybody would oppose it. And here he is in the chair today and doing away with that very measure that he could not fathom why anyone would oppose.  
There are other National members who had quite a lot to say on this as well—Louise Upston for example. Louise Upston was very very supportive of this—very supportive. “The message very clearly” she said “is that our young people will be debt-free sooner” which was going to be the result of this bonus repayment scheme—this absolute rort that the Ministry of Education has pointed out has resulted in an increase in the number of people who borrow for 1 year and pay it back straight away so that they can benefit from the repayment bonuses.  
I think it is a good thing that the Government is doing away with this particular piece of very bad legislation which it rushed through in 2009 as part of its effort to look like it did care about students. Well of course we know it does not care about students now because of all the other mean nasty things it has done to students like trimming their allowances— 
Louise Upston 
: So how much more money are we putting in education—do you know the figure? 
CHRIS HIPKINS 
: What was that? 
Louise Upston 
: How much more are we putting in education? 
CHRIS HIPKINS 
: Not much more into student support; in fact probably less into student support—far less into student support. I am willing to wager that the growth in tertiary education funding is less than the growth in the overall tertiary student population and the rising cost of tertiary education. I would say overall in real terms per student it is going down. I would be willing to bet that and suddenly the Government is very very quiet. Their heads are down and they have nothing to say about that—nothing to say about that. Doing away with this very half-baked scheme cooked up by Steven Joyce back in about 2007 is a good thing. It is a good— 
Grant Robertson 
: Actually I think it might have been Anne Tolley. 
CHRIS HIPKINS 
: It might have been Anne Tolley. It is funny you should mention that because Anne Tolley said: “We estimate that this measure will reduce repayment times of those who take up the bonus by 1.5 years and we believe that it will decrease the upfront cost of new lending to 39.4c. How could anyone vote against that?”. And now she is going to do exactly that. She is going to vote against it by voting to repeal it. It was a stupid thing to put in place in the first place.  
The Labour Party pointed out all of the flaws with it when it was first introduced. The Government ignored us and now it has finally come round—it has finally come round. I think I will give credit where credit is due: it is a good thing that it is doing away with this repayment bonus. It does not make any sense and it was a ridiculous thing to do in the first place. 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 It is a pleasure to rise this morning to speak on Part 3 of the Taxation (Budget Measures) Bill. Mr Hipkins has just been discussing the folly of the Government in bringing this particular proposal forward. I note in the regulatory impact statement around Part 3 the following statement: “The voluntary repayment bonus is part of a wider student support package and is not a stand-alone policy.” Never a truer word has been said in a regulatory impact statement because the Government’s overall student support package in this Budget is one where the message is very very clear indeed: if you are from a low-income background this Government does not want you undertaking postgraduate study. That is the message from the student support package in this Budget.  
To be absolutely clear about what the Government did yesterday it said that student allowances will not be available for anyone studying postgraduate qualifications—anyone at all—from 2013. If we look at this measure as part of that package as the regulatory impact statement tells us to do we can see quite clearly that in fact Mr Joyce’s answer to the people who say “I cannot get a student allowance. How am I going to be able to do postgraduate study?” is for them to take on more debt through the student loan scheme which is the very thing that the Government told us it did not want. The very thing that is meant to sit at the heart of the so-called student support package is that there will actually now be more debt for students if they are going to be able to carry on. 
 A very important point on that is that students who currently receive an allowance for postgraduate study will in most cases be getting far more than the $171 a week that is paid out in the student loan scheme living costs component. So the overall package of student support which this voluntary repayment bonus repeal is part of is actually a package of declining support. It is actually restricting access to allowances and meaning that many people who would have been undertaking postgraduate study will not be doing so. That is a great shame. It is something that is going to limit the potential of many New Zealanders and add to the debts that they and their families have. It is a retrograde step and as part of this wider package of student support it is simply not on.  
This particular measure in Part 3 is designed we are told by the regulatory impact statement to “encourage greater contribution to tertiary education costs from students who can most afford to pay and who are more likely to receive higher levels of private return from their study; and reduce unnecessary borrowing.” Well the very thing this package of student support will do is increase borrowing and the notion is that a greater contribution to tertiary education costs comes from students who can most afford to pay. That is what this regulatory impact statement says—“students who can most afford to pay”. The students who are on student allowances now are people who cannot afford to pay for their postgraduate qualifications and this Government is saying to those people: “We will not support you into postgraduate study.”  
We need more people going into postgraduate study. We want more people qualifying with master’s degrees and PhDs to help grow the economy but because there is nothing in this Budget about growing the economy anyway this Government has said: “Well we are not going to bother with actually supporting people into those postgraduate qualifications.”  
The voluntary repayment bonus was as my colleague Mr Hipkins said brought in by the National Government in 2009. It decided that this would be a good way of getting borrowers to pay off their loans more quickly. I just want to note at that point John Key and Steven Joyce’s recent conversion to the idea that the thing that will allow people to pay off their loans more quickly is the interest-free nature of the student loan scheme. That is something the Labour Government was heavily criticised for by National. John Key said he would oppose that policy with every bone in his body but now he has realised that that is actually what is allowing people to pay off their loans quicker because the scheme that National put up to try to get people to pay off their loans quicker actually did not work. In fact the one thing that did work was the interest-free nature of it but that was the goal of this.  
The regulatory impact statement tells us that despite the fact that the goal of this policy was for people to pay off their loans more quickly many borrowers who undertook it were actually already the very people who were paying off their loans quickly. The bonus it says is also encouraging some students to borrow when they do not need to do so. So the policy actually had exactly the opposite effect of what the Government said it wanted to do. The regulatory impact statement tells us: “In 2011 2611 borrowers repaid their student loans in the same year they borrowed” so actually they were gaming the system which is what the Labour Party told the National Government would happen.  
If the National Government wants people to pay off their loans more quickly it should make tertiary education more affordable. It should actually support students to study. It should make sure that fees do not go up. It should give more people access to student allowances if it wants to make tertiary education more affordable which is what it said was the goal of this policy. Instead what it did was run up a policy that was doomed to failure.  
It was not as Mr Hipkins said just Anne Tolley Peter Dunne and Louise Upston who were hugely behind this policy. John Key trumpeted it in a press release on 31 January 2008. He said he was announcing “a plan to help student loan holders get out of debt quicker.” Well that did not work out very well. He said: “We will keep interest-free student loans”—good on you John that is well done. “Many have made long-term financial decisions on the basis of the current policy and”—this is what Mr Key said—“we want to ensure they can plan with certainty.”  
That is what John Key said in 2008. He said that this policy would be introduced so that students and their families could plan with certainty. Well here we are 3 years later. Certainty is out the window because the policy just did not work but John Key said he wanted students to plan with certainty. That is not what happened. He said: “What I’ve announced today is aimed at helping borrowers get out of debt sooner”—that did not happen—“and give them certainty so they can plan.” That did not happen.  
Then we have the following statement from John Key: “National has no intention of doing anything that impedes people from realizing their own educational ambitions.” Let us read that again: “National has no intention of doing anything that impedes people from realizing their own educational ambitions.” There are words for that that I am not allowed to use in this Chamber but we can look at the Budget and it tells us for sure that the impeding of people achieving their educational ambitions will be happening as a result of this Budget if allowances are taken away from anyone trying to do postgraduate study. That impedes educational ambition.  
I have had students contacting me via social media and via email over the last 24 hours— 
Hon Tau Henare 
: Prove it. 
GRANT ROBERTSON 
: I can table them if you like Mr Henare. 
Hon Tau Henare 
: Go and get them. 
GRANT ROBERTSON 
: I will. I will do it for you later. I would like you Mr Henare to go and talk to some constituents—you do not have an electorate any more—and actually ask them about how this is going to impact on them. What this means for the students who have contacted me is that people part-way through master’s programmes are now not going to be able to carry on. These are people who have families and who have planned for this. They are halfway through a master’s programme or a third of a way through a PhD programme and they will not be able to get the allowances to allow them to carry on.  
Mr Key tells us that National has no intention of doing anything that impedes people realising their own educational ambitions. This Budget impedes people realising their educational ambition. It increases the repayment rate on student loans. It says that student allowances are only for rich people to do a postgraduate qualification. That is what the message is from this Budget. Part 3 of this bill is part of a student support package that is actually about limiting the number of people who can go into tertiary education. Steven Joyce’s goal from day one as Minister of Tertiary Education was to “dampen demand”—those were his words “dampen demand”—for tertiary education. That is the opposite of what this country should be doing. This country should be encouraging more people into tertiary education more people into training and more people into postgraduate qualifications but instead this Government is determined to take money away from supporting students to do that. That is a great shame.  
Part 3 of this bill repeals something the Government should never have done. It was a silly part of its package. But what it should really do is put forward proposals that actually enable participation and enable people to carry on with the study that they want to do so that they can get qualifications that will get them higher incomes that will support their families and that will add to economic growth for New Zealand. We have seen none of that in this Budget from the Government. What we have seen is simply a proposal to get rid of a silly policy it had in the first place. I want to see a commitment from this Government to encouraging more people to do postgraduate qualifications. That will not happen. 
ANDREW LITTLE (Labour) 
: 
 I suppose we should be thankful that this is a Government that even 2 or 3 years after it introduced a meaningless provision has had the fortitude to step up and say it got it wrong and is going to change it back. But the fact we are doing this—here we are less than 24 hours after the introduction of this great game-changing Budget spending time now having to undo the unnecessary things that were done some years ago—is symbolic unfortunately not only of what this Budget overall represents but of what this Government represents. It is tinkering around and faffing around the edges rather than doing anything meaningful and substantial. And if there is anything that is needed in our country today particularly in tertiary education it is to attract as many as we can to get there.  
If there is one thing that New Zealand needs like so many other countries in the grip of recession and in the grip of world-changing times we actually need to be focusing on and investing in our young people and building up our skills base our education and the talented people we have got. But what we have got is a Government that is not interested in that. It fiddles around the edges. It has introduced the other measure in terms of the student loan scheme that is going to put pressure on those at the lower-income end of the spectrum who are repaying loans. It was foreseen from the outset that this measure here would never have the effect or the impact that was claimed of it and now it has to be undone. 
 But of all the challenges facing this country and after yesterday’s Budget what do we find ourselves—on this bright cheery Friday morning—talking about? We are talking about undoing another of this Government’s mistakes. Sadly there are many more of them. There are many more mistakes that we should be undoing. But actually it takes away from what is most important and that is doing the genuine heavy-lifting work of making economic policy and social policy. That work is about rebuilding this nation and its people so that we can thrive and prosper in the future.  
There is nothing in this part of the Taxation (Budget Measures) Bill that is going to address the very serious issues that we have got. So what is left to do in the time of this Parliament? It is to undo the measures that were brought in but were never going to have any meaningful or substantial impact at all. That is what we are reduced to doing now. It is not as if there are not issues that are crying out for attention. It is not as if this is not a country that is crying out for a decent Budget. We have yet to see it. Yesterday’s Budget does not cut the mustard and barely passes mark. It does nothing meaningful or substantial.  
We have some big challenges ahead. Education and tertiary education lie at the heart of a programme that is about building a future for New Zealand and retaining our young people here. We look at the unprecedented numbers of people leaving the country—53000 or 54000 a year now—and so many of them are our talented young skilled people. They take with them offshore the skills that we as a community have invested in. Whereas 20 or 30 years ago those people would have come back here with their international level of skills the tragedy now is they are not coming back. We need a student loan scheme—if we need one at all—that does not create further incentives to lose our young people overseas. Instead of dealing with the real issues about tertiary education funding and financing both of the student and of the institution and instead of talking about the real issues of how we are going to improve or maximise tertiary education provision we are left here in this mighty Parliament of Parliaments to talk about undoing measures—silly measures—that this Government knew at the time would not work. We now have to backtrack and get out of them. That is a tragedy. It is a travesty. It is symbolic of so much of what happens and passes for good lawmaking under this Government.  
We welcome this measure but we understand the symbolism of it. It is disappointing that we have to spend our time and Budget time at a time when this country is looking for genuine policy leadership and economic leadership diverting our attention to these sorts of things. We support the measure but let us not obscure the fact that it was pointless to begin with and it now has to be undone. 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am happy to take a call on the Taxation (Budget Measures) Bill. As my colleagues have said we are happy to support this because this was legislation that was wrong from the outset. This was legislation that did not do anything to encourage tertiary education in this country. This was legislation that did nothing to improve us and lead us on the path to being an economy that was truly based on legislation. We see this as one small beacon of light in this legislation that we are debating this morning—this very important legislation that we have come back under urgency to debate which is about how we are going to fix our great nation. 
We are talking about the scrapping of a half-baked scheme that was doomed to fail. We are doing a fix-up here but we are not seeing any great vision from National in this Budget to actually do anything to encourage education and the creation of an economy that is truly based on innovation. Instead what we are seeing is some money put into the front end of science while we are treating the back end—the people our greatest resource in terms of innovation—as an extractive industry. 
Apparently what we do not want in this country now is postgraduate research. This is something that is not going to be encouraged. Actually what we are going to do is set up a student allowance scheme that explicitly rules out doing that. We would not want to be educating the masses too much! That might lead to actually raising incomes creating more jobs and getting an economy that works! 
Louise Upston 
: You missed the fact that we’re putting more money into the PBRS scheme. 
Dr MEGAN WOODS 
: I have not missed the purpose of this bill because what we are doing here is playing fix-up on legislation that was wrong-sighted that was wrong from the outset. We will be back here soon playing fix-up on other legislation being introduced from this Budget that is going to do nothing to improve this country.  
 This is a half-baked bill. It is a total failure. I do note that the member opposite Louise Upston talked lyrically at the time of the bill’s introduction about what a great piece of legislation this was. I am looking forward to her call on why it is that we need to get rid of it now. We are back here only 3 short years after it was introduced so how long will it be until we are back here having to play fix-up on the other short-sighted measures that we are seeing in Budget 2012 from the National Government? 
Dr David Clark 
: They don’t even care. 
Dr MEGAN WOODS 
: Will we be back giving the money back to the paper boys? You are quite right there David Clark. Will we be back saying that we are actually killing innovation in this country we are not backing our young people and we are doing nothing to create a brighter future? In fact all we are doing is filling Air New Zealand’s planes over to the Gold Coast. There is nothing in this Budget to keep people here. This is too little too late—a U-turn on what was a mistake 3 years ago. It does nothing to fix our economy. Thank you. 
The CHAIRPERSON (Eric Roy) 
: I call the member Andrew Little—sorry Andrew Williams. Sorry it is an early morning.  
ANDREW WILLIAMS (NZ First) 
: 
 Thank you Mr Chairman and I am not Mr Australia either. It is nice to stand and take a call on behalf of New Zealand First on Part 3 of the Taxation (Budget Measures) Bill in relation to the student loan scheme and the bonus payment programme. It was introduced by the National Government only in 2010 and now it is planning to remove it. It is symptomatic of basically a Government that is blundering along muddling along and really just not in charge of the train. And this train wreck seems to be just coming off the rails everywhere it turns. In this particular instance the Government brought in something in 2010 without much thought and it did not really work it was not a great result and now the Government overturns it. It is symptomatic of so many other things that this Government is doing. If the people of New Zealand the public of New Zealand were to analyse much of what this Government is doing they would see the same thing time and time again. It is bringing in policies and trying out policies and it is real hit-and-miss sort of stuff. As a result there are big U-turns being taken left right and centre. This sends a very poor message I believe to the young people of New Zealand. Basically how can they have faith in the Government of New Zealand—or the National Government of New Zealand—when it can bring in a policy one year and a year or so later it just dumps it because it did not quite work out where there has not been much analysis of it and it has not really resulted in what it was expecting it would?  
New Zealand First has had a policy for some time now that would actually resolve the whole student loan problem. We put it out at the election and it was greatly supported by young students all over New Zealand who saw real merit in it. That was the dollar for dollar student loan scheme where we would incentivise students and say that for every dollar they pay back the Government would match them with another dollar. At the present time when there is more than $12 billion in student loans sitting out there on the Government books and when very very little of the money is being recovered—something like only a fraction is being recovered—the New Zealand First scheme would ensure that we actually started to get most of that money back. Students would have an incentive: they would know that basically they can get rid of half of their loan if they get on and start paying it on a dollar for dollar scheme. It came with some caveats. It came with the caveat that when you completed your degree you would have to stay in New Zealand and work and repay that loan. You could not just wander off; you had to stay and work here to get that dollar for dollar scheme.  
What that would do is ensure that our students and our graduates did have an incentive to stay in New Zealand—we would keep their brains keep their knowledge keep their expertise in New Zealand—and work in New Zealand. And—and this is the win-win part of it—of course if they are working in New Zealand and they are paying tax the very dollar that the Government would be providing to subsidise them in the student loan scheme the very dollar that the Government would be helping them with on a dollar for dollar repayment scheme would actually be coming out of the very taxes that they would be paying as a new working person within the New Zealand working environment.  
The CHAIRPERSON (Eric Roy) 
: Just come back to Part 3.  
ANDREW WILLIAMS 
: Well no it is very important because what we are saying is that this is failed policy. This is failed policy and it is proven that the Government has failed on this and what we are saying is that this whole Budget is full of failed policies again.  
It is a shame that this Government has not had the foresight to bring in some policies with vision which would actually solve the problems. We could have vision in some of our policies which would actually get on top of the problems such as the policies that New Zealand First was expounding in terms of the student loan dollar for dollar scheme. Here we have students now marching in the streets in Auckland in relation to this barricading Symonds Street and up in arms. It is a sad thing in this world that we have now got to the stage where a Budget can result in young people marching in the streets because they are so dissatisfied with it. New Zealand First does not support this latest move by the Government. Again it is an attack on our young people. It is not too different to the attack on the young paper boys and paper girls of this country. Basically this Government is going for the lowest form of resistance that it can. It is going after anybody it can attack and who cannot fight back: so it goes after the students after the young people after the families after the elderly—after all of those. But it leaves the Government’s wealthy rich friendly mates exempt.  
Hon ANNETTE KING (Labour—Rongotai) 
: 
 I had to get to my feet when I looked at this part of legislation that we are passing today under urgency. I had to do it because this is the bright light of the Budget! This is the light at the end of the tunnel for us all this particular clause and that is why we are sitting here on Friday morning under urgency changing a major mistake by National. This was the dopey idea of Steven Joyce his dopey idea that was going to see wonderful things happen for students. They were going to pay back their loans faster and New Zealand was going to be much better off. So I could not avoid speaking on it when it is such a significant piece of legislation. Actually it is one great big fat U-turn by this Government. I mean Anne Tolley the then Minister of Education said “How could you vote against such a measure?”. Then you read some of the other comments. I would like to read Louise Upston’s. I am sure it has been read many times but it does deserve another reading. She said: “This bill is a significant step to encourage student loan repayment and more important to reduce the overall repayment times. The message very clearly is our young people will be debt-free sooner”. Well is that true? Has that happened? Of course it has not and Labour told National at the time that it would not happen.  
As for the Minister in the chair the Minister of Revenue who has been sent here to clean up Steven Joyce’s mess this is what he had to say: “I say to the House that this is a significant incentive for students to pay their loans earlier. I cannot fathom why anyone would oppose the introduction of such an incentive.” Well I hope Peter Dunne has had the good grace to stand up on his hind legs and tell this Committee he made a mistake. I know that it would be rare for that Government to admit a mistake but perhaps Peter Dunne would like to do that on behalf of Steven Joyce.  
You see the sad thing about this Budget is that this is the bright spot of the Budget because when you look at everything else you might as well say “Kiss your kids goodbye Kiwis.” I have to say that that is not just a slogan because last night up in Kaikohe 600 people gathered for a meeting the biggest meeting in 40 years to see what jobs were available—where? In Australia. Six hundred people gathered to see whether they could get a job in Australia. And there are three more meetings to be held: two up in Kaitaia and one just north of Whangarei. So people are looking to go elsewhere. Why? Because they are not getting a good deal from this Government. They are lining up to go to South Australia New South Wales Queensland and Western Australia. Why? Why stay and study here? If you do not believe what we are saying why not look at some of the response today from young people around New Zealand.  
What really gets to me is the fact that we are told that this Budget is called “Investing in our future”. It is not a brighter future now; we are now investing in our future. [ 
Interruption 
] Well where do you start Sam? Where do you start? You start with your kids. You start with your young people and you invest in those young people to ensure they have the skills to build a great country. That is what our grandparents did. That is what our parents did. They invested in us and that is what we as parents have done for our kids. But not this Government! They have penalised young people. And what do people want to do? They want to go to Australia because they will get a better deal there. I think it is a real shame that this Government cannot recognise that when you look to the long term you would have been investing in young people’s education from early childhood. You do not freeze early childhood education; you invest more into it to give them a good start. You invest in good class sizes not small sizes for private schools only where some of our members send their children. You invest in all children and you invest in their tertiary education.  
Some of us were lucky enough to get tertiary education where we were paid to study. Some of us were lucky enough to go to university where it did not cost as much at all. We would have thought if you were going to invest in a brighter future or just even invest in a future you would invest in our young people and our students. So I have to say this is the only bright spot. This is the light at the end of the tunnel. Well done! You made a mistake and now you are admitting it. 
A party vote was called for on the question  
That Part 3 be agreed to. 
Ayes 98 
New Zealand National 59; New Zealand Labour 34; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 21 
Green Party 12; New Zealand First 8; Mana 1. 
Part 3 agreed to. 
The result corrected after originally being announced as Ayes 97 Noes 21. 
Clauses 1 and 2  
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 55 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Mana 1. 
Clause 1 agreed to. 
The result corrected after originally being announced as Ayes 63 Noes 55. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 55 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Mana 1. 
Clause 2 agreed to. 
LOUISE UPSTON (Junior Whip—National) 
: 
 I seek leave to amend the votes for the Maori Party in the last two votes cast before this; they should be three instead of two. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought. Is there anyone opposed to that course of action? It appears not. Leave is granted. 
Hon PETER DUNNE (Minister of Revenue) 
 on behalf of the Minister of Finance: I move  
That the Committee divide the bill into the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) 
Amendment Bill  
pursuant to Supplementary Order Paper 31. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 55 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Mana 1. 
Motion agreed to. 
Bill reported without amendment. 
Report adopted. 
Taxation (Budget Measures) Bill 
Student Loan Scheme (Budget Measures) Amendment Bill 
Third Readings 
Hon PETER DUNNE (Minister of Revenue) 
 on behalf of the Minister of Finance: I move  
That the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill be now read a third time 
. I will not delay the House unduly but can I just recap that the main points of these two bills are as follows. Firstly there is the repeal of tax credits for income under $9880 which was introduced as a transitional measure in 1986 and has long since ceased to serve its purpose and secondly the tax credit for childcare and housekeeper expenditure which dates back to Depression times—1933—and has even longer since ceased to be relevant to current circumstances.  
There is the introduction of transitional arrangements to manage the repeal of these credits by allowing employers time to update their payroll systems the replacement of the tax credit for the active income of children with a limited tax exemption—again this change is a transitional move put in place by Sir Robert Muldoon way back in 1978—legislation to enact the change announced in March this year to the livestock valuation rules and finally the repeal of the student loans voluntary repayment bonus. I should also point out that the detail of the livestock tax changes will be enacted separately later this year. 
 I need not report unduly from the Committee stage of the Taxation (Budget Measures) Bill except to say that it was a robust exchange around predictable issues and I am not sure that any of the previously entrenched positions shifted at all during the course of the debate.  
As I close I do want to acknowledge the work of the officials from the Inland Revenue Department StudyLink and the Ministry of Education who have worked on this legislation over a period of time. I want to thank them for their diligence for their advice and also for the pretty rigorous way in which they examined all of the issues before us. I am pleased that the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill are now going to proceed to their third readings. Once again I commend them to the House. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I rise to speak to the third readings of the Taxation (Budget Measures) Bill and Student Loan Scheme (Budget Measures) Amendment Bill which Labour will oppose. We have had this legislation characterised correctly as picking the pockets of the paper boys and paper girls around the country. I think that has resonated with the wider public. They are realising that this Budget offers very little for ordinary New Zealanders who are feeling the squeeze. And now we have this kind of legislation going through which really is plugging the odd gap here and there—and that is at best. We certainly have seen that in the case of the changes to the student loan repayment scheme where the Government is swallowing a rat. Far from being a flip-flop the change is so fast that it has been described simply as a flop. 
The Taxation (Budget Measures) Bill as Mr Dunne has said takes the money from low-earning children. It also makes some changes to the herd valuation election scheme and that is a good change. That is a positive change that the Labour Party first mooted and it is good to see National following through on that. I am afraid though there is little else to say about this legislation that is not a criticism because it really is tinkering. It is tinkering at the edges. After a very short time into its second term this National Government is reduced to that. 
There is no bright vision in these particular tax bills. The Minister of Finance said this morning that he believes that spending is under control on the Government side but that the revenue side is uncertain. This is an attempt to get that under control. We know that revenue has dropped from 35 percent of GDP down to 31 percent in the last couple of years as a result of changes that the Government has made. A good deal of that can be pinned back to the changes in the 2010 Budget which saw the wealthiest 10 percent of New Zealanders get 44 percent of the value of those tax changes and the bottom 20 percent get just 2 percent of the value of those tax changes. That was designed we are told to stimulate the economy. Well we know now that it was not revenue-neutral because the economy has not been stimulated by that. When the wealthiest people get their tax rebate their tax back they tend to go on holidays or put it into savings. It does not stimulate the economy in the way that tax cuts for lower-income earners do. What we see here is a broadening of that. The Government is taking the money off low-income children who are perhaps working after school as cleaners paper boys paper girls or pamphlet deliverers. These are not the people we should be pursuing. This is the not the Budget of pro-growth free enterprise; this is the Budget of tinkering and this bill backs up that particular agenda. 
I have spoken about the regulatory impact statement in previous debates on this legislation. We learn in the regulatory impact statement that in terms of the 68000 children affected by the changes that will see money taken out of the pockets of paper boys paper girls couriers and cleaners businesses are likely to have an extra overhead. I think that is a point that just underscores the hopelessness of this measure. This particular legislation not only goes around chasing those who are earning below $2340 a year but it then puts an extra overhead on the businesses having to collect that. This is ridiculous. This increase in compliance costs just shows where the National Government has got to. It is now making businesses pick the pockets of boys and girls around the country. It is a tragedy.  
The other thing that I noted in the regulatory impact statement which I just have not had an opportunity to mention until now is that it also has not been consulted on yet. Because this is such an urgent measure for the Government to get through we have put it under urgency. It cannot even estimate the additional compliance on business and I just do not think this can be best practice. The businesses carry this extra overhead and they do not even have an opportunity to express their discontent or suggest a more sensible way of doing it. 
There is another point that falls out of this which is that it effectively encourages the grey economy. Those employers who collect pay-as-you-earn tax will be encouraged to do so—they will be encouraged to tax those low-income kids around the country. Those ones who do not do pay-as-you-earn tax—the people mowing lawns next door or babysitting and so on who receive cash—are not taxed. For a Government that talks about going after those areas of the grey economy this is actually just completely the opposite. It is just unbelievable. So we have in front of us legislation that is not only ludicrous in its intent but it also imposes an extra cost on business. This is so far from a pro-growth policy and we could not get much further. 
I will touch briefly on the effect on students. We heard Ms Upston crying out in protest— 
Louise Upston 
: It is Mrs actually—Mrs Upston. 
Dr DAVID CLARK 
: Mrs Upston—my apologies Mrs Upston. I must get her name right because we have got a quote coming up from her. Three years ago she described the changes being made in this legislation and she said: “This bill is a significant step to encourage student loan repayment and more important to reduce the overall repayment times. The message very clearly is that our young people will be debt-free sooner”. 
Andrew Little 
: Who said that? 
Dr DAVID CLARK 
: Who said that? It was Mrs Upston. Mrs Upston said that just 3 years ago. And now this legislation is repealing exactly that action that she was saying 3 years ago was a good idea. 
This is the other thing we are doing with this legislation. We are repairing the mistakes of this Government. It is kind of crazy. So here we have not only extra costs to employers and picking the pockets of our children but we also have flip-flops—we have flip-flops. The only thing we can say apart from this is that this is wider tinkering and it fits with the wider Government tax programme. We have a tax programme that was announced at the beginning of the year which shows a tightening up of loopholes and trying to make sure that there are no exemptions here or there. This in fact encourages employers in some ways as I have noted. 
The goals of that tax programme are worthy. There is no doubt that we need a robust tax system. Every country needs one and every Western country has one. But we need pro-growth tax policies. We actually need big changes if we are going to change the way our economy is structured. If we are going to support our exporters if we are going to grow the economy if we are going to afford to give our people the skills and training that will take New Zealand ahead we need proper pro-growth tax policies. This Government instead of doing that is tinkering. It is urgently putting through measures to pick the pockets of the boys and girls of this country. That is not proper base-broadening. That is not vision. That is a backward step. 
If we are wishing to see the brighter future that has been promised us we are going to need to change the Government. That is becoming more and more apparent because there is no plan—there is no plan—there is only tinkering. At the moment we know that 50000 people a year are leaving for Australia. This bill is not going to help that. If the paper boys and paper girls can save up enough of their money after tax they might be able to buy a ticket to get out of here. But maybe this measure will slow them down because they are the only ones the Government can slow down from leaving the country. If these policies are light at the end of the tunnel as perhaps they have been described by some—I heard some saying this—I think it is not really light at the end of the tunnel; it is in fact a train coming in the opposite direction. 
TODD McCLAY (National—Rotorua) 
: 
 I want to take only a brief call in this debate. But can I start by saying to the last speaker David Clark that his speech was factually morally and intellectually wrong on all counts. One day when we look back he will be judged on that.  
This was a Budget that was extremely important for New Zealanders at an extremely important time. It was full of hope and it was full of direction. It was delivered to help us get back on to an even footing so that we would not end up like the countries overseas that the members opposite seem to want us to be like so much. The Budget will do a number of things. It will reform some outdated tax credits. It will abolish some issues around herd valuations on farms. It will make some important—and I say important—changes to the student loan scheme. What this will do over 4 years is save $349 million for New Zealanders so that this Government can reinvest that in more productive areas of our economy. I say to the members opposite if they believe that we should not be passing this legislation and we should be borrowing that extra $349 million give up your seats get off the list get on the plane and go to Greece. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Here we are in the dead of morning on the morning after Budget day urgently taxing toddlers—urgently taxing toddlers. It is so important that we have suspended the Budget debate suspended the normal business of the House suspended all select committee process and imposed retrospective tax legislation to turn the country round on whom? Paper boys and paper girls are going to be pickpocketed by this Government. It is so laughable so risible so pathetic that it would be funny if it was not so sad. So sad because as the nation’s press has woken up imagine the feeling in the Government’s procedures room this morning when confronted by the headlines in the country’s largest newspaper the  
New Zealand Herald 
 “[A] big fat zero Budget” zero ideas and zero hope. In the nation’s capital there is this charming cartoon in the  
Dominion Post 
 of the most important feature of the Budget which is what the Government is doing to the nation’s children.  
Is it those members’ best idea really—is it really—to take the nation’s paper boys and shake their pockets shake their pockets? Look at them squirming look at them squirming. I almost—almost—feel sorry for them but I say “almost” because I am looking at such charming Ministers as the Minister of Health and the Minister of Police and the feeling has strangely left me. The feeling has strangely left me.  
Before the Budget came out there was speculation in the media that there were going to be some major what they call base-broadening measures and this was an important little narrative for the Government to get out because of course Labour’s pro-growth tax reform had been courageous and was well-received by both the business community and the general press. Labour campaigned in the last election on a pro-growth capital gains tax that would get money going where business investment needed it and on a research and development tax credit so this Budget was National’s answer. It let the media know there were going to be pro-growth base-broadening measures and here they are—taxing toddlers by going for the pockets of paper boys and paper girls. Well is that not just amazing.  
The centrepiece of this Budget is the raiding of the piggy banks of 68000 kids. It is hardly strategic hardly fair on some of the lowest-earning people in the country. But as I said yesterday the test of a Budget is not only what is in it. I think we have got common ground now by the time we have got to the third reading of this legislation for saying that that part of this legislation is just a joke but we have not spent as much time talking about what else is in the legislation. I think in fairness to the Government it is appropriate to mention the two other significant—well that might be overstating it—the two other measures in the legislation. The first one we might call the “David Bennett special”. There is a new member from the Waikato a relatively new member who has come here to earn a decent living sustained only by the three dairy farms that he has had to disclose in the pecuniary interests register and one wonders how such a young man has come into such largesse.  
I now understand it. I mean I am not taking his personal finances as an example as of course that would be inappropriate but taking that kind of thing as an example I dare say it was not because he was a paper boy when he was at school. Rather I suspect as a savvy Waikato accountant he has made an art form of precisely the provision that it has taken this Government—out of shame now—4 years to fix.  
How do you like this mum and dad workers in our cities? If you are a dairy farmer and the market is rising you can classify your cows as capital so that you do not pay any tax on them when the price goes up. But—but—if the price starts going down you can reclassify them as revenue and claim a tax loss on them. Then when the market goes up what do you do? You classify them as capital so you do not pay tax. Why not? It is because we have no tax on capital or capital gains. Maybe that explains why a new member from the Waikato comes here with a mere three dairy farms in his back pocket. How come it took 4 years for the modicum of justice on that outrageous rural rort to be closed down? On that part of the Taxation (Budget Measures) Bill I actually agree with the Government but I ask why we are doing this in year 4 when it should have been done in year 1. That is appalling.  
Here is the next bit: what National did do when it came in was its little Christmas present for the trust fund babies. The trust fund kids we were hearing about at breakfast are so outraged that they are going to march on Parliament. There is going to be a new group set up called the trust fund babies action group—TFAB. The trust fund babies action group is going to be marching against this last part of the legislation the Student Loan Scheme (Budget Measures) Amendment Bill. I do not want to put too much weight on it but here is the thing: the repayment bonus on a student loan. If you paid it off quickly because you had millions in the bank—say you came from a dairy-farming community and you could afford to pay off your student loan—that would have been great and you would have got a bonus from the Government for doing it. If you happened to be on the bones of your bum doing a paper round which the Government is now taxing to get by or as when I was student pulling drinks or working in a shearing gang you did not get the bonus. Thank God that has been closed down. That was a National initiative that was driven by greed it did not work and now it has had to admit it. Those are three things in the Taxation (Budget Measures) Bill and Student Loan Scheme (Budget Measures) Amendment Bill. The first one is a joke the second one is 4 years too late and the third one only corrects a mistake that they cravenly made themselves in the first year.  
So what is not in the bill? That is just as important is it not—what is not in this bill? This is the Budget tax legislation. 
Dr David Clark 
: Pro-growth tax policy. 
Hon DAVID CUNLIFFE 
: My colleague rightly said: “Pro-growth tax policy”. Where is it? It is the elephant in the room. How can New Zealand have a zero Budget and ask for real cuts in the health system? There are massive health cuts coming—Tony Ryall knows it. Why are we getting increased class sizes? Why are we going to be 1000 teachers short? As Annette King knows why are we cutting back on the provision of housing when we have a housing crisis around the country and Government members are sitting on their fat bank balances and doing nothing about capital gains—nothing about capital gains?  
Why is it that of the 100 wealthiest New Zealanders only 50 are on the top tax rate at all? It is because they have capital gains tax free and because they use all those fancy accountants’ tricks like trusts and fancy company structures and they do that to avoid paying tax. Pro-growth tax reform would tax capital gains and it would sort out the trust rorts. Is there any of that in this Budget? No. Why? Why are we taxing paper boys but not the big end of town? It is because they are too busy having private dinners with the Prime Minister like Skycity Casino wherein— 
Peseta Sam Lotu-Iiga 
: What about Vector? What about Fonterra? 
Hon DAVID CUNLIFFE 
: The “member for Vodafone” puts up his hand. That is Sam Lotu-Iiga who as deputy chair of the Commerce Committee took an all-expenses-paid tour to Australia to see the footy courtesy of Vodafone. Was that not good judgment? It is going to take a wee while to live that one down. But there is a much more important issue here and it is this. We had a proper transparent tender around that conference centre. Labour does not think it is the be-all and end-all but at least there was a transparent process until one party had a private dinner with the Prime Minister and he then intervened to stop it. That is no way to run a country—that is no way to run a country. You end up looking like a banana republic.  
I will go back to the bills. There are three measures in the legislation: the first of them is a joke the second one is late and the third one corrects a mistake of National’s making. What is not in these bills? It is proper thorough-going capital gains taxation pro-growth tax reform around research and development tax credits and other measures to correct what are the big holes in the tax system. This is at best a wasted opportunity. For once I agree with the  
New Zealand Herald 
—it is our big fat zero hope Budget. 
Dr KENNEDY GRAHAM (Green) 
: 
 I have listened to the debate both in the first reading and the second reading to date and in Committee. I have to say that nothing has been said yet to alter our substantive view of the Budget in general or these particular bills the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill. Nothing indeed has been said I think that would inspire us or the public to want to embrace Government policy on this. The Budget is touted as the most important event of the parliamentary year—erroneously it would seem for the Taxation (Budget Measures) Bill agonisingly dragged out last night hit a new low. After the leaders’ speeches we descended not for the first time into the theatre of the absurd—a robust exchange between entrenched positions to quote the Minister Peter Dunne. If we can drag out the debate on this bill when virtually its only aspect of interest is the pecuniary interests of paper boys for 5 hours as we are doing when the importance of the general issue of the global ecology and the global economy and New Zealand’s destiny within that is ignored then pity the poor citizens of this realm. They are worth more than this. 
In this exchange last night what did we learn? We heard Labour call National members of Parliament clowns. We heard— 
Hon Clayton Cosgrove 
: True. 
Dr KENNEDY GRAHAM 
: Whatever the accuracy might be it is out of order. We heard National describe one Labour MP as a bloody bigot and none of this occasioned— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! Look whatever members said you cannot get around Speakers’ rulings or the Standing Orders on using unparliamentary language by quoting someone. 
Dr KENNEDY GRAHAM 
: Thank you and I apologise for dragging down the House to such a low level. We heard National taunt Labour to tell the truth which in itself was offensive and disorderly and at least that one—or its aftermath since National repeated the offence—occasioned an apology the sincerity of which was left hanging in the stagnant evening air of the wilting House of Representatives.  
The House last night was populated by a back row of bored minds and vacuous stares with a continuous muffled uproar between the two trenches punctuated by occasional outbursts of derision—and that was just National. The evening was characterised by self-demeaning pack behaviour characterised by an after-dinner cocktail of complacence ignorance and arrogance—and that was just National. And we wonder why politicians are ranked so low in public esteem. The theatre of the absurd was marked by a series of ineluctable predictable voting—64 to 57. That is not exactly a ringing endorsement of Government policy. 
There is a distinction in this House between the main parties and the other parties between first past the post and MMP. It is as if there are two Houses in one—first past the post and mixed-member proportional representation. It is not only the Green Party that seeks to constructively critique Government policy and offer an alternative budget. All parties on the cross benches aspire to be constructive—Green New Zealand First and Mana—yet those speeches were dismissed as excessively earnest or naive. Earnestness in the House of Representatives would be superior to the self-demeaning. Members of this legislature are enjoined and paid a decent salary to respect the dignity of the institution. The people who vote us in expect us to live up to that. Last night we mostly let them down. Suffice to consider that for the reasons that were substantively advanced in the first reading and the second reading the Green Party will vote against this bill in the final third reading. 
PAUL GOLDSMITH (National) 
: 
 It was like wading through a pool of porridge listening to that previous speech. Aside from the grave and solemn speech of Dr Graham—and I thank him for it—we have had a lot of low-grade huffing and puffing from the other side of the House about this bill that there has not been enough excitement in this Budget. What do they want? Do they want dancing bears and whirling dervishes? The burden of the Opposition it seems to me is boiled down to “more”. They want more. Labour wants to have more State taxing and spending and Father Christmas distributing all his gifts. It is exactly that sort of pap that has got this country into the trouble we are in at the moment and it has taken 4 years for this Government to try to get us back to a more stable sensible and well-grounded Budget.  
The centrepiece of this Budget it seems to me is staying the course. We outlined a clear and sensible direction in the 2010 Budget. We got the tax settings of this country right in the 2010 Budget and now this Budget is about adjusting some of the areas to maintain the tax system and collect an extra $350 million over the next 4 years by tightening up a couple of loose loopholes. The three aspects we are dealing with here are livestock valuation rules tax credits that made sense a few decades ago but are no longer fit for purpose and cancelling the student loan repayment incentive which did not prove to be successful.  
Labour might be disappointed that there is not enough excitement and some of the media might be too but most New Zealanders are busy getting on with their lives getting on with it reducing their debts and being careful about spending. They know that that is what this Government is about and that is why they like it. That is why they are supporting this Government and I commend this bill for its third reading. Thank you. 
ANDREW WILLIAMS (NZ First) 
: 
 I rise to take a call on behalf of New Zealand First in relation to the Fagin “pick a pocket or two Budget” of 2012. We only have to look at the headlines in our major dailies today to see what the response is from New Zealand from the media and from the general public as to this failed Budget from this failed National Government. One headline: “Bill English is looking down the back of the sofa for loose change—raiding the kids’ pocket money …”. Another quote: “[it] is not fair it is not sensible.” Another headline: “Kids: Meet the taxman.” And another one said that a “wafer-thin surplus” is tipped for 2014-15. And the worst of all from the  
New Zealand Herald 
: “Our big fat zero Budget”.  
This Government must be highly embarrassed that it is being absolutely flannelled by all quarters in relation to this Budget. This goes back to the Budget of 1991 which was very similar to this: the “mother of all Budgets” under Ruth Richardson who taught the current Minister of Finance Bill English his financial skills—or lack of financial skills. That Budget in 1991 failed. It had many of the same essences that this Budget has of selling off assets of hitting the weak and the defenceless and propping up the wealthy and their rich mates. This Budget does the same. It attacks the poor the people who can least afford it the young children of this country the students of this country the families of this country the working people of this country and it leaves those who can afford to do more totally exempt.  
This Budget also looks to having a surplus in 2014-15 of a miserable $197 million which is so close to the margin of error that basically it is another example of this Government’s use of a dartboard: throw a dart pick a figure let us go for $197 million it could be plus or minus $500 million on that—it would not know because it really does not know.  
Further today it is shown in the media that the current account deficit blows out to $15 billion and our net international investment position which is the debt that New Zealand owes the world goes to 80 percent of GDP. How can this country be proud of a record like that? How can this Government be proud of a record like that? When also the New Zealand Manufacturers and Exporters Association comes out and says that this is a poor Budget that it is not providing step change to turn round the economy and that it is not supporting exports. We require exports if this country is going to lift its act and the fundamental problems such as a lack of export growth have once again gone ignored.  
This is a “nickel and dime Budget” this is attacking the children of this country and the families of this country but it is not giving vision as to how we are going to lift our exports. The trade stats for this latest month April show that we are 17 percent down on our exports compared with April last year. That is an appalling figure—17 percent down on 12 months ago. Therefore this Government is sitting on its hands it is playing around on the edges it is playing around on the fridges—fringes and probably in the fridges—and it is just basically navel-gazing. This Government is navel-gazing. It is playing with the pennies and as the  
Dominion Post 
 says today 
it is looking down the back of the sofa to try to find a few dollars here and a few dollars there. But it is not addressing the fundamentals of getting growth in this economy providing jobs providing employment helping our exports and getting incentives into our companies to grow the economy grow the pie and grow the taxation base that we have.  
This is an inward-looking reverse-moving Budget that basically is taking New Zealand back to the future back to the 1991 “mother of all Budgets” of Ruth Richardson and back to the days of the 1990s when National sold off its assets sold off the silverware of New Zealanders and sold off what we have built up as a nation. This is a very negative penny-pinching miserable Budget. The Minister of Finance should be ashamed of it. The Prime Minister John Key should be ashamed of it. The Ministers over there and the members of the National Government should be ashamed of it. I am sure they will be pleased to get away from the House this weekend and go back to their electorates to lick their wounds because they will have to go back to face the music in their electorates. I am sure people over this weekend will be telling them what a miserable miserable National Government this is. 
KANWALJIT SINGH BAKSHI (National) 
: 
 Sat sri akaal Mr Speaker. I stand to debate the third reading of the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill. This is omnibus legislation. It deals with the livestock evaluation rules and removes three tax credits. It ensures that everyone pays their fair share of taxes. It ensures that loopholes will be closed and tax credits updated which will create extra revenue over the next 4 years. The childcare and housekeepers’ tax credits have been replaced by Working for Families and 20 hours’ free early childhood education. They have been a major boost for families to elevate their incomes. Times have changed. Society has changed. The Government believes that its spending on the tax credits could be better directed to areas of higher need and that is what this bill is doing. I commend these bills to the House. 
KRIS FAAFOI (Labour—Mana) 
: 
 Taloha ni Mr Assistant Speaker and thank you very much for the call in this the third reading of the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill. But I do not think I can leave the comments from the Green list member Kennedy Graham go unchecked. This is a House of Representatives it should be a place of robust debate it should be a place with colour and I think that the fact we all just received a lecture from Mr Graham—someone whom I have a lot of personal respect for—may be just a little bit over the top. I think this place should be robust. I am sure the Assistant Speaker in the Chair at the moment may think that from time to time it may get a bit out of hand but this should be a place where we should feel free to express ourselves in any way that we choose as long as it is within the Standing Orders. But I will go back to the bill now that I have dealt with Mr Graham’s sermon.  
I think that this bill is a sorry sign that the Government lacks any real leadership in terms of an economic plan to make sure that we deal with some pretty serious issues that New Zealand faces. Instead of getting real leadership I think as Mr Winston Peters said yesterday we have got reruns. We have got reruns of failed economic policies that are not going to do anything to address some of the serious issues that New Zealand faces. We have had the worst economic growth in 50 years. In fact every week of the last 12 months 1000 Kiwis have thought it better to get on a plane and head to Australia to make their living usually with their families than to stay in New Zealand their country of origin their country of birth. I think that is very sad. It is also very sad that there is no real leadership on the fact unemployment has risen by 52 percent in the 4 years that this National Government has been in power. So we have gone back to reruns of the last 20 years. It is almost like  
Star Trek 
—this Government has gone where no Government has gone before. It has gone into the pay packets of our paper boys and our paper girls. It is very very sad to see that we are passing legislation that targets those little critters who are out there— 
Iain Lees-Galloway 
: Bludgers! 
KRIS FAAFOI 
: —those bludgers—who are delivering our papers and our pamphlets in our communities!  
I just want to talk about a couple of people who are doing this job. There is a person in my electorate whose name is Mark James. His two young daughters go out every week and deliver this Porirua paper I have here. It is the  
Citylife Porirua News. 
Andrew Little 
: A good newspaper. 
KRIS FAAFOI 
: It is a very good newspaper. Every fortnight it runs a very excellent comment by its local member of Parliament! Mr James was to encourage his two young daughters to know the value of work so they can earn some money and know the value of money. 
Andrew Little 
: Good parents. 
KRIS FAAFOI 
: They are very very good parents. Mr James is such a good parent but in October last year his worst nightmare came true. The company that contracts his children to deliver these newspapers sent something to them that they did not want to deliver. It was this National Party leaflet. But because he is a professional and he wants his kids to be professional he said: “Come on kids. Despite the fact that we don’t want to deliver these we’re going to go out and deliver them.” So they know about good work ethics. They are good professional young kids but this Government want to penny-pinch off them to the tune of $240 a year. How miserly can you get? Instead of real leadership on the big economic issues that matter to New Zealand we get penny-pinching on our paper girls and our paper boys around the country.  
We wanted real leadership. When people read their newspapers this morning—the  
Dominion Post¸ 
 or the  
New Zealand Herald 
 or the  
Press 
 or the  
Otago Daily Times 
—they wanted to see real leadership. But what are we debating here? We are debating a bill that removes three tax credits: the income under $9880 tax credit the housekeeper and childcare tax credit the children’s active income tax credit. It also deals with the abolition of elections to leave the herd valuation scheme. Mr Cunliffe has already mentioned that change in detail so I will not go into it. 
Iain Lees-Galloway 
: Bold stuff! 
KRIS FAAFOI 
: The Student Loan Scheme (Budget Measures) Amendment Bill also abolishes the student loan repayment bonus scheme. Bold stuff!  
Andrew Little 
: They didn’t tell us about that. 
KRIS FAAFOI 
: Where was that mentioned in this National Party leaflet that was delivered by these young professionals in my electorate?  
I just turn to the changes that are made to the student loan scheme. It has been debated quite well in the Committee stage. We supported that move because we thought the repayment bonus was a daft thing to do initially anyway. But I did want to point out some of the quotes from National when it passed this legislation. Anne Tolley said: “We estimate that this measure will reduce repayment times of those who take up the bonus by 1.5 years and we believe that it will decrease the upfront cost of new lending to 39.4c.” How could anyone vote against that?  
Next we have Mrs Louise Upston who said: “This bill is a significant step to encourage student loan repayment and more important to reduce the overall repayment times. The message very clearly”—and I will stress this—“is that our young people will be debt-free sooner”. Peter Dunne—the Minister in the chair in the Committee stage—said: “I say to the House that this is a significant incentive for students to pay their loans earlier. I cannot fathom why anyone would oppose the introduction of such an incentive.” But then the truth comes out—in the regulatory impact statement for this bill. Under “Conclusion and recommendations” it essentially says that they got it wrong: “The voluntary repayment bonus does not appear to be improving the value of the Student Loan Scheme. The bonus aims to encourage borrowers who were slow to repay to pay off their loan more quickly. However many borrowers who were already paying back their loans quickly are also claiming the bonus.”  
It basically has not worked. It is what we said. So finally the penny drops for the Government. One of its big announcements in this Budget for real economic leadership is to do away with something that it should never have done in the first place. So where is the leadership? Where is the leadership from this Government in Budget 2012? We do not think there is any. We were asking serious questions of this Government in the Budget but what we get is penny-pinching from our paper boys and paper girls.  
The next bill also shows how it is not just the young that it is targeting but also the old in our rest homes. We look forward to debating that issue in the House because that was not really highlighted in the Budget speech. I trawled through with my highlighter hoping to get it out and say: “Well there it is. They are being quite upfront about this.” But no there is not one mention in Bill English’s speech about changing the threshold for residential homecare. There was not one mention at all. Where is the leadership on growth? Where is the leadership on growth? There is none.  
We commend the fact that the Government has finally again recognised that research and development might be a good thing to do but doing that 4 years after it scrapped the research and development tax credits just does not cut the mustard. It is 4 years too late—sorry National. It is 4 years too late. That is another good point.  
As well as the changes to the student loan scheme which we agree with in this legislation this Government is going to make it harder for low and middle-income families to support their children who might be clever and want to do some postgraduate study. No—the Government will not do that because after the fourth year the student will have to go back to mum and dad and say: “Mum dad I’m not getting the student allowance any more. Can I grab some food from the fridge? Can I bum 20 bucks so I can make sure that I can go and get to university tomorrow?”.  
Is that good enough? Is that going to encourage our students who want to better their lives by going into postgraduate study? I do not think so. Essentially there is no leadership in this legislation—there is no leadership at all. It is absolute tinkering. It is picking on our paper boys and paper girls. Where is the strategy for growth? Where is the plan to make sure we get people into jobs? It certainly is not in this legislation and it certainly was not in this Budget. 
MAGGIE BARRY (National—North Shore) 
: 
 Well what an unedifying spectacle that speech from Kris Faafoi was. We heard a  
Star Trek 
 metaphor that actually was entirely appropriate coming as it did from an inhabitant of “Planet Labour”. We unlike Labour are able to plan and to boldly go where no one else has gone before where Labour could not possibly envisage going. Our Budget looks to try to invest in the future. It builds on the economy and it invests money in infrastructure that is going to deliver jobs—an alien concept to the people who inhabit “Planet Labour”. This of course is something we boldly address. We boldly go where Labour has never gone before. We are building a competitive economy. We are addressing the hard issues. We are not moving away into the shallow pool of nonsense headlines of an obsessive focus on paper boys and pickpocketing and all this other nonsense. I doubt very much whether from the combined intellectual rigour of our opponents they have even actually read the Budget or have actually listened to it. They are leaderless rudderless and they have no plan. They are indeed aliens and the  
Star Trek 
 metaphor I think is well chosen by them. 
Looking at what we are doing with Budget 2012 it invests heavily in infrastructure innovation and skills because we know that it is important to create a more productive and competitive economy that will give more jobs to people in this country. This is what we are doing. We have increased science and innovation funding right across government to more than $1.3 billion in this next 2-year period. We have put in $166 million extra to develop the new Advanced Technology Institute. These are the places where the growth in the economy will come from. We have put in $60 million extra for National Science Challenges. These are matters of substance. These are matters of substance that the people who dwell in the shallow troughs those on the opposing benches cannot possibly acknowledge. They do not want to go beyond the headline grabbing and the superficial. They are to be pitied and they are to be ignored.  
This legislation the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill as I said last night in the two opportunities I had to address it does tidy up some mad old legislation that needs to be worked through. It makes the Inland Revenue Department a more streamlined and efficient organisation. It has been meticulously worked through. Some of the old obsolete taxes have gone. That needs to happen. This Government is focused on growth and on tidying up legislation and I commend these bills to the House. I think they are entirely worthwhile and the arguments put forward from the Opposition are superficial alien and facile. Thank you. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Just before I call the next member I advise members of the House that this is a split call and the speakers will get a bell at 1 minute.  
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 Frankly I did not think that I would see the day when I would agree with Maggie Barry but I do now. She said that this legislation repeals “mad old legislation”. It repeals mad old legislation brought into place 2 or 3 years ago by that National Government over there to try to encourage students to pay off their loans faster. What an absolute failure of legislation it has been. It was a bad idea at the time everybody knew that it was a bad idea at the time and finally—it has taken only 3 years—the Government has figured out that its legislation was mad old legislation in the words of Maggie Barry. The National Government has finally figured out that it needs to repeal those changes that it made just 3 years ago.  
 The Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measure) Amendment Bill are an absolute admission of failure by this Government. They are an absolute admission of failure. The Government has failed to grow the economy. It has introduced a zero Budget with zero hope zero ideas zero ambition and zero growth for this country. These bills are an admission that that zero Budget is an absolute failure for this country. The Government has been so poor at growing the economy that it now has to go hunting down the back of the couch. It has to tip the poor paper boys and paper girls on their heads and squeeze every last cent out of their pockets. It has to go and chase down the students. 
And not only is it repealing its mad old legislation for the students but also of course what we are seeing is that it is going to take away the student allowance for postgraduate students. Not 2 weeks after the Government announced that all teachers were going to have to have postgraduate qualifications it is now announcing that if you want to do a postgraduate qualification you have to do it without a student allowance. My goodness National hates teachers. This Government hates teachers. It has told them that they are not high quality and now it is telling them that if they want to get their qualification they are on their own. They are on their own. The Government is not going to support them. In fact the Government is actively discouraging people from going into the teaching profession with that cut to the student allowance. 
What are we talking about with this bill? Well we are going to see the paper boys and paper girls taxed. Actually Andrew Williams called this Budget the “Fagin Budget”. You can just see the poor paper boy going to Mr Bill English and saying: “Please sir may I have some more?”. It is poor old paper boy Oliver Twist. In fact there are a few other Dickens novels that I think are appropriate for this Government and this Budget such as  
Hard Times. 
 That is a Dickens novel that I think sums up the situation in New Zealand as well. Another is  
Great Expectations 
. How about  
Great Expectations 
? Every year the Prime Minister told us that the economy was going to grow that there were going to be 170000 more jobs; now it is 154000 more jobs. It is shrinking—it is shrinking. But the Government still has these great expectations that somehow by magic—by magic—everything is going to turn round. 
Dr Megan Woods 
:  
A Tale of Two Cities 
? 
IAIN LEES-GALLOWAY 
:  
A Tale of Two Cities 
—well indeed. From where I come from Palmerston North we think it is pretty much a tale of one city in this country: it is all about Auckland and roads of national significance. I am sorry but it is all about roads of national significance. You are completely overlooked in the provinces—no roads no rail. The Government is not interested in what is happening in provinces like the Manawatu and it has run out of ideas. 
 The best it can come up with is this penny-pinching legislation which hammers the poor old paper boys and paper girls. They are copping it for the Government’s failure. The Government is taking away a few housekeeping rebates. It is taking away childcare rebates as well. Gosh has not the Government chosen some delightful people to pick on? Has it not gone after— 
Hon David Cunliffe 
: Middle New Zealand.  
IAIN LEES-GALLOWAY 
: Yes middle New Zealand is getting absolutely hammered by this Government because it has just failed year after year after year to meet any of the promises that the Prime Minister made absolutely empty promises not based on any facts. We told it so at the time. We told it so. It refused to believe us but this legislation the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill is an absolute admission of failure from this zero National Government.  
CATHERINE DELAHUNTY (Green) 
: 
 Tena koe Mr Speaker. Tena koutou e te Whare. I am pleased to take a call on these bills the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill because I would like to continue the debate on the issue around poverty. I have just come from the Child Poverty Action Group breakfast. If you want to talk about urgency let us talk about what is actually urgent and it is not this legislation. We are in urgency while people are making really urgent decisions like: “Which medicine shall I be able to purchase this week out of the 12 life-supporting medicines that I need because I can’t pay the prescription charges?”. Or: “Shall I have breakfast or shall my children have breakfast?”. Yesterday as she walked to the House I heard the Minister for Social Development say: “Oh it’s just so boring.” Well I will tell you what is boring. It is boring to have to make a choice between whether you eat or your children eat and then to turn on the television and see Parliament acting as if this was urgency and ignoring the really urgent issues—and it does actually make me feel quite ashamed. 
However as they say in  
Star Trek 
: “Beam me up Scotty.” I have just come from the real world where people treat each other with respect. I do understand what the member Kris Faafoi was saying about behaviour in the House. The Green Party does not always keep its cool either. But we do not celebrate personal abuse and what Dr Graham was trying to say was that the community has higher standards than we do and that is a fact. The community has higher standards of behaviour than we do. At the Child Poverty Action Group breakfast this morning when we talked about the Taxation (Budget Measures) Bill people were astonished that the bill that we were debating was about attacking some of the most vulnerable minors—as in younger people—through this bill. They were astonished that that was the kind of urgency we had gone into. I heard people speak about the real issues that are urgent in this country this morning about the attack on welfare beneficiaries and the rhetoric which acts as if there are thousands of jobs out there when we know that there is no job creation plan so we are going to punish and scapegoat people who cannot get the work that they are supposed to be looking for. 
I heard students talking about what is going on and they were amused by this legislation because students opposed this measure when it came before the Education and Science Committee to change this measure. They knew it was not going to work except to try to reward wealthy students. I am not going to attack the Government for making a mistake. I am glad that it humbly acknowledges that it was a mistake and I am glad that it is changing that mistake. It is OK to get it wrong as the Government does but it is not OK to get it wrong on the big issues. What it has done in the Budget as well as in one aspect of this legislation is to get it very very wrong. It has got it very very wrong to say that selling assets will benefit the families and whanau of Aotearoa. This morning I listened to people from the social sciences from the university from the student community and from the front-line community services dealing with poverty and they are very distressed because they are unpicking the Budget inch by inch going through the rhetoric and finding the cuts. So if you look at education and health wherever there has been a gain there has been a loss. They were calling this Budget the “smoke and mirrors Budget”.  
But in terms of this bill I would call it the “Fiddling while Rome Burns Bill” or the “Emperors with No Clothes and Being Deliberately Urgent about Non-urgent Matters Bill” because that is what we are doing. We are talking under urgency about issues that are minor while the rest of the country is out there trying to unpick the rhetoric about what is actually going to happen to our access to food access to rent and access to medicine. The fact that people think this is a minor matter and that we can focus on a minor matter is an example of how privileged we are in this House. People with white gloves open doors for us. We earn good money and we have forgotten—at least the Government has; some of the rest of us have not—that the Budget and the very first bill we debate after the Budget should be about what really matters which is whether our kids get to eat or not. That is the measure of a civilised community and it is not supported in this bill and it is not supported in the Budget. 
The Green Party supports the changes to the rural rorting system for cows. Good on you. Great. We are pleased to see that you admit that you have made a mistake but I am afraid that this legislation is fiddling while Rome burns and people out there are burning. Kia ora.  
MARK MITCHELL (National—Rodney) 
: 
 It is with great pleasure that I rise in support of the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill. I have to say that this was a great Budget and the reason why I know that it was a great Budget is that the only thing that Labour members have spoken about for the last day and a half is paper boys. If that is all that they can discuss if that is the only thing they can find to criticise in this Budget I know that it is a good Budget. 
But what interests me even more is that yesterday I saw the Rt Hon Winston Peters get up and he wailed on about this Budget and he went right back to 1991. So as a new member of Parliament I went away and I decided to pull out  
Hansard 
 and I— 
Hon Maurice Williamson 
: What happened?  
MARK MITCHELL 
: I will tell you what happened. I could not believe it. Mr Peters voted for every one of the measures in the 1991 Budget—every single one of those measures.  
Hon Members 
: Oh! 
MARK MITCHELL 
: I know but no it is true.  
Hon Maurice Williamson 
: Not Winston! 
MARK MITCHELL 
: Yes he did.  
Hon Maurice Williamson 
: He voted for every one?  
MARK MITCHELL 
: He did. He voted for every single measure in the 1991 Budget. So when Mr Peters gets up and starts criticising when he stands up with indignation he needs—he has got a very short memory—to go back and check the facts.  
What I am proud about with this Budget is that it is going to continue on with our proud track record of delivering better health services. Our country is safer today than it was 4 years ago and our economy is growing. When we came into Government we were facing never-ending deficits—that was what we inherited from the Labour Party. Now we are heading towards a surplus in 2014 and 2015. You have only to look around the world to see what is going on and to see that we—this Government—are doing everything right to keep New Zealand moving in the right direction. We will emerge as a stronger better and well-educated country. Thank you very much. 
A party vote was called for on the question  
That the Taxation (Budget Measures) Bill and the Student Loan Scheme (Budget Measures) Amendment Bill be now read a third time. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 53 
New Zealand Labour 34; Green Party 10; New Zealand First 8; Mana 1. 
Bills read a third time. 
Social Security (Long-term Residential Care—Budget Measures) Amendment Bill 
First Reading 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 I move  
That the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill be now read a first time. 
 This bill amends the Social Security Act 1964 to change the amount of the annual increases in the applicable asset thresholds used in determining the amount that residents in aged residential care are required to contribute to the cost of their care. Current increases of $10000 each year in the thresholds are replaced with Consumers Price Index indexation of the thresholds. If the resident’s assets are equal to or below the applicable asset threshold then they qualify for Government funding through the residential care subsidy to meet the cost of their care in a rest home or a continuing care hospital.  
This bill is a priority for this Government. It is an important piece of legislation that will ensure that the residential care subsidy is sustainable into the future particularly as demand for long-term residential care for older people increases. I am pleased to be able to present this bill here today. I commend this bill to the House.  
KRIS FAAFOI (Labour—Mana) 
: 
 Taloha ni Mr Assistant Speaker and thank you for giving me the call at the first reading of the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. Labour will not be supporting this bill at this stage. 
We oppose this bill because of the way it has come to the House. We listened very intently to the finance Minister’s speech yesterday and nowhere in that document could we find any reference to this change. But we do have a bill before the House that will impose a significant change to some of the elderly who are in residential care in New Zealand. So we do not believe that the Government’s process around this has been transparent and we are not happy that a significant number of people who we believe would want to submit this bill to a select committee hearing on this issue will not have the opportunity to do that because this bill is being put through this House under urgency. 
The Minister the Hon Paula Bennett in her contribution—a very brief contribution—did mention that this was a priority for the Government. It is so much of a priority that there was no press release. There was no mention of this in the Budget speech at all. So we wonder why there was not any mention about— 
Hon Paula Bennett 
: It was in a press statement. 
KRIS FAAFOI 
: I stand to be corrected. There may have been a press statement; we certainly have not seen it. But it was not a priority enough to make it into this document—the Minister of Finance’s speech that he made to the House yesterday. 
We have already heard through the media that there is concern around this bill. Roy Reid from Grey Power has already said publicly that he is concerned about the moves that are being made in this bill. We believe that he should have the chance to make a submission to a select committee so he can give his opinion. I am sure that there will be opinions on both sides of the fence and I did notice that there was a press release yesterday from Martin Taylor from the New Zealand Aged Care Association. So maybe Mr Taylor should also have his opportunity to make his contribution to this. This bill is going to affect a significant number of elderly people and the fact that it is going to be rushed through this House under urgency without people getting a chance to make a submission we think is extremely bad process. It does deal with an issue that is going to be a very important issue going forward for New Zealand but we do not believe it is a plan as such to deal with the increasing age of New Zealand’s population. Again it is another example of tinkering and a lack of leadership from this National Government. 
This bill will affect the amount of money that some of our elderly will be able to have in terms of being able to get a residential care subsidy. So in this Budget which we had before this House over the last 20 or so hours we have seen the Government target the very very young—our paper boys and paper girls—and now the very very old. Although our paper boys and our paper girls may not be of voting age our elderly certainly are and certainly their families—their sons and daughters and other family—will be very concerned about some of the measures that are contained in this bill. Again that is why we believe that the process is wrong and that those concerned families should have a chance to have their say in the select committee process. 
As I said at the beginning of my contribution we will not be supporting this bill. The process is bad. It is being rushed through under urgency in this House not giving the families of those elderly people concerned the opportunity to have their say not letting Grey Power—a significant lobby group in this country—have its say and not letting the sector have its say as well. We believe they should have their say. We will not be supporting this bill. 
Peseta SAM LOTU-IIGA (National—Maungakiekie) 
: 
 Talofa lava in Samoan Language Week. I rise to support the Minister for Social Development in the first reading of this Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. I want to thank the Minister who is sitting in front of me for bringing this bill into the House. I thank her for her courage her tenacity her fortitude. She is bringing not only welfare reforms to this House but this bill as well and that shows the vision and leadership of this Minister in what is one of the most difficult portfolio areas in Government. 
She referred to the Social Security Act 1964 and amending that Act to change the threshold levels. Mr Faafoi asked why we are doing that. Well he did not listen yesterday afternoon to the Budget speeches. The reason National is bringing these bills to the House is that we are acting responsibly in terms of managing this Government’s finances and delivering better public services in tight financial times. Why is it a priority Mr Faafoi? It is a priority because as we all know the demographics of New Zealand are changing and as demand for residential care services increases we need to meet that increased demand with prudence and with sustainable policies. So instead of annual increases the Consumers Price Index will set the threshold. We know that that is consistent with other indexed entitlements like national superannuation which is adjusted every year. 
It is also to cover up for some of the profligate policies of the last Labour Government in the early 2000s. It was looking for ways to spend money and it introduced $10000 annual increases in this threshold. Once again it is a bill that delivers on covering up the bad mismanagement of the last Labour Government. What will it do fiscally? Simply it will save just under $35 million over 4 years. Again that is a demonstration of this Government’s fiscal prudence and fiscal sustainability and it has been brought to this House because this Government is about driving our economy back on the road to recovery and back into surplus. I recommend this bill to the House. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: As it is Samoan Language Week fa‘afetai lava.  
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Thank you for the opportunity to rise to speak to the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. The bill amends the thresholds used in determining the amount residents in aged residential care have to contribute towards the costs of their own care. The current increases of $10000 each year in the thresholds are proposed to be replaced with Consumers Price Index indexation of the thresholds. 
This will affect a couple of groups of people. Those in that category are those who have partners and those who do not whose partners are either in aged residential care or not. Specifically in clause 7 in Part 2 of the bill we read that schedule 27 is going to be amended and the threshold—the upper threshold threshold A—“applies to every resident assessed as requiring care—(a) who has no spouse or partner; or (b) whose spouse or partner is also a resident assessed as requiring care; or (c) whose spouse or partner is not a resident assessed as requiring care but who has elected under clause 2 to have Threshold A apply to him or her rather than Threshold B.” Threshold B the second threshold is a lower threshold and applies to every resident who has a spouse or partner not assessed as requiring residential care and who for some reason has opted out of threshold A. 
So there will be elderly people facing difficult decisions in changing circumstances whom this policy affects. Members of the families of those people will also be interested in following what is going on here. It is actually a relatively small number of people and the savings over a number of years are not enormous but there are some savings. So there is an issue here that should properly be debated. So that sits before us. People eligible for the subsidy pay their income less certain exempt amounts for their care and the residents’ district health board pays the difference between what the residents pay and the contracted cost of their care. 
We have seen the Government go after the paper boys in the previous bill; here we see it going after the most vulnerable elderly folk and we see that these measures are required to be taken under urgency to take the economy to a different level to turn the economy round. Well I do not think that is so. I think it is more tinkering by the Government but it is the kind of tinkering that does actually affect real people. It would be far better in my view to have a full and proper process around the progress of this bill not a process whereby it simply slips through under the veil of urgency when it is really not the measure that is going to turn the country round. Again it is not a pro-growth tax policy; it is more tinkering by this Government. If we go through the history of this threshold asset testing was introduced by the National Government in the 1990s. We can see where it was going with that. Following the 1999 election Labour introduced a big increase in the threshold and later made sure that $10000 chunks went in year after year to make sure that that threshold continued to rise. It is clear that National is wanting to reduce it; there is no question about that. Our quibble is really with the process on this matter—our primary quibble—because there is a real genuine issue that sits behind this. 
On the one hand you have got those who have worked hard saved and paid down a mortgage and the incentives for them to do that are that they may well be able to pass on some of that to the next generation. There are many elderly folk out there who are proud of the fact that they have worked hard all their lives paid their taxes saved and paid down a mortgage and they want to pass a little bit of that on to the next generation. So are we discouraging savings here? Is this what is going on here? Is the National Government against savings? Well it pushed KiwiSaver out in the Budget so we might be led to conclude that. On the other hand we have got the issue of intergenerational wealth and we do have here a subsidy that goes in and around our elderly folk—those folk who do have assets. We have got to ask ourselves when we have one of the more generous superannuation arrangements in the world whether this is the right thing to be doing. Is this perhaps a good measure to make sure that we are supporting these people but not supporting them more than we can afford? 
So there is a live debate there but this Government does not want to have the debate. It does not want to invite people to come in and have their say. That is unfortunate. These people do have real lives and this measure affects them and it affects their wider families. But for some reason this Government—and Mr Woodhouse is yelling out because he is one of those people who do not think that old people should have a say on this matter and do not think that their families should have a say on this matter. It is a real disappointment. The answer is that the process is wrong. This does not need to be done in urgency. It is not going to turn the economy round Mr Woodhouse any more than picking the pockets of paper boys and paper girls in Dunedin will turn the economy round. It will not turn the economy round. It is a bill that tinkers once again but it is tinkering with real people’s lives. 
The Labour Party will not support this bill because we do not support the process that has been put down. We have a select committee process for a reason and it is so that we can hear the views and the concerns of the people who will be affected by these measures. That is the proper process and that should be happening. That should be happening. There is no reason for the National Government to crimp this process back “crimp” being a word that we associate with the ACT Party not the National Government necessarily—but occasionally with some others. Let us leave my contribution there for today but for saying there is a better way of doing this. There are better policies that could be put in place. It is a shame that we are having this debate here in this crimped down shortened fashion when the measure affects real lives and it is not going to change the economy. It is not addressing the real issues. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Before I call the next speaker can I just remind members on my right that when they yell across the Chamber “you” they are referring to me. 
KEVIN HAGUE (Green) 
: 
 Tena koe Mr Speaker. Can I begin by remarking on one of the last things that the previous speaker David Clark said. He said he would leave his contribution on the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill at that for today. But that is kind of the problem is it not? Today is it. 
The reason that has been advanced by the Labour speakers so far for opposing this bill is one of the two substantive reasons that we in the Green Party will also oppose it. The process that is being pursued here is nothing short of abysmal and shows a certain contempt for the New Zealand public. This is a policy that was not signalled by National prior to the election. It was not signalled by the Government in the months following the election. It was not signalled in the Budget speech. It is the kind of policy that now today as we face a bill that is to be progressed through all of its stages today is going to rob a significant number of New Zealanders of their right to have a say about this issue. Of course we understand that sometimes following a Budget there will be a need for urgency. There will be a need to progress a bill through all of its stages in order to ensure that changes to legislation come into place in a timely way and that they are not avoided. I am a little surprised for example that the next bill that the House debates is not going to be progressed through all of its stages today. I would have thought on the track record of Governments that it would be a bill that would go through all of its stages today. But not this one. There is no need. There is no urgency surrounding the matters in this bill. There is no reason why it could not go to a select committee to give New Zealanders the opportunity to have a say about it. That is one of our reasons for opposing this bill. The process that the Government intends to follow is a completely wrong one. 
But unlike the comments of the Labour speakers that I have heard so far we do not have an equivocal view about whether the measure that is outlined in this bill is a good one or not. We believe that it is entirely wrong. Although some of the media coverage of the bill so far has suggested that it is something of a cosmetic change in fact to the asset-testing threshold we do not believe that to be the case. It is understandable perhaps that people will have got hold of the wrong end of the stick because their opportunity to scrutinise what is planned has been so limited. But the reality is that rather than a cosmetic change this bill in fact is a complete change of the policy setting around asset testing for aged residential care. 
Our policy the Green Party’s policy has always been to oppose asset testing for residential care and I will go into the reasons for that in a moment. But we were certainly heartened by the Labour Government in I think the 2002-05 period having campaigned on removing asset testing setting about a process—slower than we would have liked but none the less a progressive process—to remove asset testing. And that is the current policy setting. It is a policy setting towards progressive removal of asset testing for aged residential care. What this bill does is to change that policy setting from eventual removal of asset testing to instead freezing the asset-testing threshold at its current level. That is the effect of this bill. It is to freeze the asset-testing threshold where it currently stands. That is a complete change of policy and we believe that it is one that New Zealanders ought to have had a say about. It is not cosmetic. It is entirely substantive. 
The reasons to oppose asset testing are many. Probably the single greatest one is that in fact asset testing for aged residential care introduces age-related discrimination in the provision of State care. That has been the argument that has been advanced by Age Concern. It has been advanced by Grey Power. it has been advanced by the Green Party and it has been advanced by many others. The argument is that this is effectively the only area of care or support from the State that is asset tested and it is a form of discrimination based on age and it ought not to be. 
Secondly it is especially discriminatory for a couple who own assets collectively but one person of whom requires aged residential care. That is a second form of discrimination that ought to be scrutinised by a select committee but will not be because of the process being followed around this bill. 
The third reason to oppose asset testing is that its effect is capricious. The reality is that those of us who are more resourceful in society will find ways of evading the asset test. Actually it promotes behaviour to avoid the regime by those who are sufficiently well connected and knowledgable to be able to do so. That is not an appropriate basis for the policy being applied or not. So the effect of asset testing is capricious and that is a bad principle in law. 
The fourth reason—and I certainly heard Dr Clark allude to this in his contribution—is that another effect of an asset-testing regime is that it encourages people to not save. So it actually creates conflicting signals to ageing New Zealanders about whether they ought to be saving for their retirement or not. An asset-testing regime around aged residential care in fact encourages people to spend rather than save. I think it has been a mantra of I believe all political parties for quite some time now that that is the polar opposite of the effect that we are trying to encourage in our economy. So for picking up the 170 New Zealanders who will be picked up by this effect in its first year actually we create an incentive that takes the economy in the wrong direction which is away from saving and towards greater spending. 
The last point that I want to make that is an argument against asset sales— 
Hon Member 
: Asset sales? 
KEVIN HAGUE 
: —well it is an argument against asset sales and maybe I will come to that—or rather against asset testing for aged residential care is a point that has been made by Age Concern and that is the point that as we move to an environment in which we wish to encourage ageing in place where we want people to be able to remain in their own homes or home-like environments for as long as they possible can we do not want aged residential care to become the norm. What happens with asset testing is that a person who has been living in their own home who moves into aged residential care and is subject to the asset test may well lose therefore the asset—which is their own home—that they are most likely to have. Then should they no longer need residential care and be sufficiently independent to be able to live in their own home again their own home is no longer there for them to move back into. So asset testing undermines our approach to aged care and to the health of older people. 
The last point I want to make at this point in the many debates that we will have over this measure today is that what this measure is about—and the regulatory impact statement makes it clear—is saving money for the Government. And that is because the Government has not allocated sufficient in the health budget for the health services required by New Zealanders. So it is instead taking the money that it needs for the new initiatives from other services. In this case it is taking it from older New Zealanders from older New Zealanders who have contributed to the care that they need through a lifetime of work a lifetime of contribution and that is unprincipled and wrong. 
MICHAEL WOODHOUSE (National) 
: 
 I was not going to take a call yet in the first reading of the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill but I do think that the call by Dr Clark warrants something of a response. After a very long commentary which sounded more like a political studies lecture Dr Clark said two things. Well he is a bit vexed. On the one hand he said families should have the ability to pass on assets through the generations but on the other hand he asked whether the State should really pay for the care of the elderly when that happens. Well that is a fair enough question to ask I think but Dr Clark needs to come off the fence and tell this House what he actually thinks. It is no longer enough to say “on the one hand and on the other hand”. MPs are required to hold a view. I look forward in the second reading to hearing what his view is about whether there should be one or the other. But it is actually consistent with the dollar-each-way mantra that Labour has about this.  
Remember when we removed the gifting regime last year because it was completely irrelevant and was not working. What Labour members did not tell you in opposition to that legislation was that about 7 years ago when they were passing regulations around the deprivation clauses in residential care subsidies they could not bring themselves to allow families to gift off $54000 to couples. That was not good enough for them. They had to make it $27000. They completely unhooked the residential care subsidy tests from the gifting policy. This was a stupid policy—stupid policy—but now it does not really matter because the gifting regime has gone. But I suggest to the party on the other side that it needs to stop sitting on the fence and tell this House what it really thinks about the regime overall because this change is actually a very sensible way of dealing with the increase.  
When house prices are flattening and going down an inflation adjustment will actually benefit those people in this system in the short run. What happens in the long run who knows. [ 
Interruption 
] Relative to the value of their properties—relative to the value of their properties. I reckon it is an excellent idea and I support it. 
DENIS O’ROURKE (NZ First) 
: 
 It is a pleasure to take this call on behalf of New Zealand First on the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. There are one or two things I want to say about it and about the Budget as a whole. This is a penny-pinching measure and it is symptomatic of the Government’s whole approach to this Budget. It is making more elderly people in residential care pay more for their residential care and sooner by the indexation of asset thresholds. This will save very little. In the year 2012-13 it will save $4.5 million in 2013-14 it will save $8.4 million in 2014-15 it will save $12.4 million and in 2015-16 it will save $16.4 million. 
In terms of the Government’s overall Budget over these years this means actually very little. But for people in the last years of their lives it means less access to their savings for the comforts that they should have during those years it means earlier State dependence and it means they are robbed of the pleasure of passing a financial legacy on to their family. That is something that is so important to so many of them. But this Government of course does not actually care about the elderly at all. New Zealand First on the other hand has a well-deserved reputation for caring for the elderly and their needs. 
As I said this is a penny-pinching Budget. It attacks the most vulnerable people in our community it does very little to stimulate the economy and it does practically nothing to stimulate exports despite the declared objectives of this Government. Rather than punishing the elderly it should try to support them further as this community as a whole should do. New Zealand First therefore does have policies along those directions including a 10 percent discount on power bills for the elderly and people with a SuperGold card and free doctors’ visits for the first year and then a $10 cap for the years after that. 
Those are the sorts of positive policies that New Zealand First has for the elderly and what do we see from the National Government? We see not only nothing for the elderly we see a policy of punishing the elderly punishing paper boys and providing nothing whatever for the low-income people in our community. The Prime Minister referred to “Planet Labour” during his speech but the architects of this Budget are from “Asteroid National” a dull lifeless rock from outer space producing no life no light and no warmth especially not for the elderly in our community. That asteroid is very much like this Budget in its approach. Like an asteroid National and this Government go endlessly round and round in circles. The underlying policies—asset sales austerity especially for the elderly and low-income earners and an obsession with an early surplus for no good apparent reason—are the same failed policies from the past. They did not work in National’s Ruth Richardson Budget the mother of all austerity Budgets and they will not work now. 
This Minister of Finance is like a witch doctor trying to give life to the undead and producing zombie policies—policies more dead than alive. These policies will not work because they are really about the Government’s financial and political objectives. They are not about people and their welfare. They are not about communities and their viability. They are not about the elderly who are ignored in this Budget except by being punished in the same way that we see in this particular bill. They are not about students who will find it harder to manage their student loans under this Budget. It is not about stimulating employment. In fact without the economic windfall of the Christchurch earthquakes with the thousands of short-term jobs provided by that employment under this Government would get worse and worse and worse. It is bad enough already. 
This bill and this Budget are all about political economics. It is 2 years of excessive austerity as a surrogate for genuine financial management with all the damage that does to people young and old as we see in this particular bill. Then after 2 years of unnecessary pain the Government plans a small surplus. This is solely for election-year purposes. No doubt in that year National will find some lollies but not for low-income people not for the elderly—for National supporters only. So National’s approach is to punish the paper boys and to punish the elderly and low-income people so that in 2014-15 there can be some lollies for National’s mates. 
The leader of the Government’s political economics is the Prime Minister John Key—always richer in politics than economics. He cast an aspersion on Mr Shearer when David Shearer’s slip of the tongue referred to Mr Speaker as “Mr Australia”. But that was misdirected. It is the Prime Minister who should be “Mr Australia” because he is the principal cause of the exit of thousands of talented young Kiwis to Australia. They have no confidence in him or his Government’s policies—especially in this Budget. The Budget will produce no real long-term jobs no real growth no worthwhile assistance with housing and it will punish people with student loans. There is no mention of anything positive in this Budget for the elderly at all. In fact this bill which punishes only the elderly is the only reference to the elderly in the entire Budget. 
In response to these failing policies all we get are the tired old excuses of recession from 2008 4 years ago; the global financial crisis also originating years ago; and the Christchurch earthquakes. Those are three tired old excuses for these failed policies. But this Government has had over 3 years to deal with the recession and the global financial crisis has in fact had a limited direct effect on the New Zealand economy. In fact the Christchurch earthquake recovery is actually funded more by insurance money and to a lesser extent by $5 billion to $6 billion from Government borrowing. 
It is very very difficult to see why measures that are set out in this bill are really required at all when you see the magnitude of the issues facing this country. The small amount of money that will be saved is penny-pinching when the elderly should be more supported by our community. This Government’s failed policies relying on tired old excuses for not doing more will not advance this community and this nation at all. We see that right throughout the Budget. It is a failed Budget. It is an old-fashioned Budget. It is a penny-pinching Budget that we can do without. 
TIM MACINDOE (National—Hamilton West) 
: 
 What an extraordinary contribution we have just had from that member Denis O’Rourke. We have now got it on the record that New Zealand First does not want New Zealand to be back in surplus. That was one of his most memorable comments. Another one a quick question for Mr O’Rourke: which way did Winston Peters vote on the 1991 Budget—yes or no? Winston Peters—yes or no for the 1991 Budget? Those members are deafening in their inability to answer that question. The only thing that was getting worse and worse about that particular contribution was the member’s speech. 
Let us turn our attention to the Labour Party. We have had Kris Faafoi leading off telling us that the Labour Party will oppose this measure not because it cares about the policy in it but because it does not like the process. There was no engagement with the significant challenges that our rapidly escalating older population put before us and no engagement with any of the Budget at all—just saying “We don’t like the process.” Then we had Dr David Clark read to us at length what is in the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. In fact he read to us for such a long time that he forgot to tell us what he actually thought about it. When he was asked to state an opinion he came back with that old chestnut “We don’t like the process.” and he is still over there warbling away. He will not actually tell us what he thinks of the bill. Well I want to tell both Dr Clark and Mr Faafoi—and Mr O’Rourke for that matter—that there is nothing unusual at all about the fact that here we are in urgency the day after a Budget considering tax changes because actually that is what always happens. That is what Governments do. It even happened when the Labour Government was in power. But what was the one difference? The difference was that Labour was always pushing the taxes up and we are trying to do something a little better than that. 
This bill will create savings of nearly $35 million over a 4-year period which we will then reinvest in critical health care. It will quite sensibly ensure that from 1 July this year the Government can begin adjusting the asset threshold for rest home subsidies at the rate of inflation. Well what is wrong with that? Why would you not want to do that? This is responsible governing in very challenging times. It recognises our responsibility to respond to the rapid increase in our older population—and not just because New Zealand First is back in Parliament. It is an appropriate aspect of a Budget that I am proud to support and I encourage all the members opposite to change the habit of a lifetime and to support it because it makes sense. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 I want to begin by extending my sympathy to the Minister for Social Development who introduced this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill by delivering a 3-minute speech. I have never ever in my years in Parliament seen a Minister less enthusiastic about legislation in her name. I notice that she is not even able to continue contributing to the debate. She did interject though— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! The member knows she cannot refer—when the member said the Minister would not contribute there was an inference that the Minister had left the Chamber. Just be careful. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. You inferred it; she did not. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: No I am just saying to be careful in the future. 
Hon RUTH DYSON 
: The Minister however in an interjection did refer to a press statement that had been made on this issue. I invite the Minister to table the press statement which may have been in her name—that would be logical as she is the Minister who introduced the legislation. It may have been in the name of the Hon Tony Ryall the Minister of Health. It may have been in the name of the Hon Jo Goodhew the Minister for Senior Citizens. But whoever’s name the press statement is in they should go back to their office and tell their press secretary to put it on the National Party website alongside every other statement that has been issued in relation to the Budget. Jo Goodhew who is now claiming credit for this asset-testing legislation must have forgotten to get her press statement put on the New Zealand National Party website because it is not there. So either Paula Bennett made a mistake in saying that a press statement was released in relation to this bill or her press secretary has forgotten to put it on the National Party website. 
Hon Trevor Mallard 
: They forgot to put it in the packs that were given out to the media yesterday. 
Hon RUTH DYSON 
: It was not in the packs given to the media my colleague the Hon Trevor Mallard has reminded me. It was not in the Budget speech delivered by Bill English earlier. It has not been mentioned anywhere but suddenly under urgency we are introducing legislation that in my view breaches the contract at the least that has been made with 170 people who are currently in residential care who went into residential care on the understanding that they would be subject to the legislative asset-testing regime. Those 170 people deserve an apology from the Government in my view. But if that is too good for the Government to offer at the very least they deserve an opportunity to have their say before a select committee.  
The Minister for Social Development in her introductory speech said that this legislation was necessary for the sustainability of the asset-testing regime. In this financial year it will save $4.5 million. The Government will spend $94 billion in the coming financial year. If it is necessary for the sustainability of this regime to save $4 million then this Government has put us into a bigger financial crisis than any of us has imagined. We had earlier in this debate around the Budget the tragic sight of Bill English turning the poor old paper deliverers upside down and shaking them to get their few cents’ worth of tax money out of them and now we see the same Minister saying to the elderly of New Zealand: “There is nothing for you in this Budget but actually can we have $4.5 million out of your pocket this year so that we can continue giving tax cuts to the wealthiest New Zealanders?”. Budgets are about choices. There are always limits on what can be spent. That is what Budget decisions are about. But to pretend that this is necessary for the financial sustainability of the asset-testing regime beggars belief and Minister Bennett should be ashamed of herself. 
Tim Macindoe in his equally short and thoughtless contribution on this debate— 
Hon Trevor Mallard 
: It was one of his better ones though. 
Hon RUTH DYSON 
: —it was one of his better speeches—referred to the aged being an increasing percentage of the population in New Zealand as a problem. Well he is part of that problem. He is part of the generation that will increase the percentage of total people in New Zealand who are older. 
Hon Member 
: None of us are getting younger. 
Hon RUTH DYSON 
: I agree with him on that point. He is a problem. People in the Waikato have been referring to him in that way for some time. But I do not consider that this is a problem that we should therefore park on the sidelines and say: “Let’s get money out of them.” The fact that we in New Zealand will have an increasing percentage of our population who are older should be celebrated because it means we have improved the health and well-being of people. We need to ensure that those people have genuine choices about what they do and how they participate in our society. They should be respected not classified as a problem and then used as a way of penny-pinching and getting money to pay for other things that the Government has chosen to pay for. The sum of $4.5 million is not going to save New Zealand nor will it be part of a great vision for economic growth and prosperity. The  
Dominion Post 
 editorial got it right this morning when it said: “Loose change won’t pay the bills”. It was referring to the tax grab by the Government from the poor old paper deliverers. The youngest kids in our society who are working are now having to pay tax. The  
Dominion Post 
 tomorrow should repeat the headline but talk about the difference that the $4.5 million that this Government is penny-pinching under urgency in its change to the asset-testing regime will make. 
 As I said earlier I do not think this move is going to solve any issues at all that New Zealand is facing. It should not be a move that is considered under urgency. We should give older New Zealanders the decency and respect that they deserve and at least refer this legislation to a select committee. Other colleagues from Labour New Zealand First and the Green Party have made very important contributions about the nature of this debate. A select committee would enjoy that debate because it is an important one to be held. This bill being introduced under urgency and passed through all stages is the biggest mark of disrespect that older New Zealanders could have and I say to the Minister responsible Paula Bennett and to the Minister for Senior Citizens Jo Goodhew that they should be ashamed of this move. 
ALFRED NGARO (National) 
: 
 As a new member of Parliament I stand in respect of older members of Parliament more experienced members of Parliament for the things that they say. I take them very seriously. But I now start to think about the credibility of the things that were just said by the member Ruth Dyson and I take her to account for talking about the lack of transparency the lack of engagement and the lack of consultation. If this member was to look even now on the National Party website she would find the information there. On the Ministry of Health website those members would find the information there and on the Beehive website they would find the information there. But here goes it gets even better. In the press release from Minister Ryall it was there. But here are the Ginsu knives. Here are the Ginsu knives. You will be saying this: did we consult— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! 
ALFRED NGARO 
: —did we consult? This is what we did— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! When I stand you sit. 
Hon Jo Goodhew 
: I raise a point of order Mr Speaker. I am absolutely certain that I am hearing a chant from the other side of “lies”. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I am the judge of that and Alfred Ngaro will continue. 
ALFRED NGARO 
: Thank you Mr Speaker. But here are the Ginsu knives for you. The word “consult” was what your lips would be saying so this was what the National Government did. An hour before the Budget was released there was a conversation with who else Grey Power. That is right—Grey Power. 
There has been a lot of talk about “Where is the plan?”—somebody talking about “Where is the plan?”. Well you know we talk about “Planet Labour” and I wanted to find out where “Planet Labour” was. So I went to the portal. Here is the portal: it is the Labour Party website. When I went to the portal when I went to the Labour Party website guess what I found? It said that it was an organisation in review. It was going out to ask—who? Its members. Do you know why? Because it wanted their views. Here is what it said: “We want your party for your views for our future.” But it gets even better. On the website the leader of the Labour Party is there Mr David Shearer. What is he doing? He is playing a guitar. I think he is singing the song “Ten Guitars”. Hang on I have just heard a newsflash: it is now “Nine Guitars”. That is right. It is no longer “Ten Guitars”; it is “Nine Guitars”. 
OK back to the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. This bill is about responsibility this bill is about sustainability and most important this bill is about continuing to subsidise the needs of our older people. It is about increasing Government spending by $82.4 million. I could keep going on and on but I think the point serves itself. We support this bill. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 Normally people who get to lead the Address in Reply debate are seen to be people of substance people of principle and people who are used—[ 
Interruption 
] No I went last. I went last in my group in 1984. But we have just had the second speech in the House from that member Alfred Ngaro and we understand why the gap between the two was so long listening to that. This bill— 
Alfred Ngaro 
: I raise a point of order Mr Speaker. That is incorrect. Actually this is my fifth speech— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: No that is not a point of order. 
Hon TREVOR MALLARD 
: The member reinforces the point of how much substance he is bringing to the House and how forgettable he is. 
The point that I want to make to the House is that this is the legislation of the people who do not have the fortitude to make the big decisions. John Key puts all his assets in a trust and then says he will not look at the superannuation age. He puts his assets in a trust to avoid this legislation and then attacks the poor people of Wainuiomata who save up and get a house that is worth $200000. That is the approach of the National Government. It shakes down the paper boys and paper girls. 
There is another thing that we have not got to yet. The group National has hit the most is the disabled people who deliver brochures. The disabled who push their pushchairs around who are contractors who work more than 20 hours per week and who do not get a daily rate have lost their exemptions—they have lost their exemptions. So it is the young it is the old it is the poor and it is the disabled who are being attacked by this Government. Do Government members have the bravery do they have courage do they have the gumption to send the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill to a select committee?  
Chris Hipkins 
: No. 
Hon TREVOR MALLARD 
: Do they? 
Chris Hipkins 
: No. 
Hon TREVOR MALLARD 
: No they do not. They are not prepared to have people who have saved up for their $220000 house and paid the mortgage off over 50 or 60 years come to Parliament to a select committee to have their say. 
So afraid were they that they did not include this bill on the Table of the House during the Budget speech yesterday. They did not put the press statement in the media pack yesterday. They hid it. They hid it. It was secret legislation. They did not put it on their website until this morning because they are not prepared to front up to Kiwis. It is a secret agenda. It might be a small secret agenda but it is a secret attack on older New Zealanders. I do not know maybe we do have to go back to Muldoon or Bolger or even Shipley. They would have had the guts to stand up in this Parliament as part of the Budget— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! I do not think that is a good term to use that phrase so the member should just bear this in mind and also you must use full names when you are referring to people. 
Hon TREVOR MALLARD 
: Mr Assistant Speaker I think we have always been allowed to refer to former politicians by their surnames. 
Muldoon Shipley and Bolger would have always had the guts to stand up in here. They would have stood up in here if they had a policy like that and they would have said “This is our policy and we are prepared to go to the people in an election and we are prepared to go to a select committee in order to debate this.” But what have we here? We are not allowed to use the words that properly describe the members opposite. They are the people whom if I were going into the trenches I would not want beside me. I would not want them beside me because I would rather have people with courage beside me and I would rather have people with integrity and they lack both. 
DENISE ROCHE (Green) 
: 
 This week is Youth Week. It is quite ironic really that this Budget delivers such a harsh deal for young people. If we look at the reduction in allowances for postgraduate study and if we look at what is happening with student loans it really is quite a savage deal for our younger people. 
It is quite distressing as well to see the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill which attacks our older people in front of the House. The Green policy is to oppose asset testing for our senior members. We have this policy for several reasons and my colleague Kevin Hague has already outlined some of them. One reason is that we see asset testing—and this legislation seeks to increase the threshold basically—as discriminatory. It is discrimination against older people because there are no other health care services for which you have to front up and be asset tested on in order to access them. 
We also oppose it because it is unevenly spread. I think the previous speaker the Hon Trevor Mallard referred to the fact that people who are quite well off and who are used to placing things in family trusts will be able to rort the system. They will not be as savagely dealt to as those who are less well off but who still have their own assets. It goes against sensible reasoning. We have already heard from a previous speaker that this actually delivers just $4.5 million in savings which is not much when you consider the lifelong contribution that our senior members have made to our society. 
The bill also goes against what we see as the current policy for the care of the elderly which is about ageing in place. We are moving to a situation where older people will be picking up residential care only episodically if you like and where they will move into residential care for respite and then come back into the community. It is going to be very difficult to do that if they have already had to sell their family home. 
The capping of the threshold makes it harder for people. I live on Waiheke Island. It is a really beautiful place to live. It has been a haven for older people and quite a large number of our community are beneficiaries. Most of those beneficiaries are superannuitants. People retired to Waiheke because it used to be cheap. It was a great place to live out your last years in good health in the sun and go swimming every day and people bought cheaply in order to fund their lifestyles. What has happened in the last 10 to 15 years is that the property boom has meant that our older people are now asset-rich. They are asset-rich because the property prices have increased because there has been quite a lot of property speculation. The property speculation has meant that the cost and the value of people’s homes have gone up. What that means for our older people is that they are now at stages where they are having to access residential care. 
In the case of Mr Jones who actually was the president of Grey Power—and a serial submitter who is going to be seriously hacked off about not being able to submit on this—his wife went to a rest home some years ago. He has been asset tested and this will mean that he will suffer more hardship because his bach that he bought 30 years ago is now worth half a million dollars. That means he has to pay for the quality of care that his wife receives. He treks over to the North Shore every day of the week to see her. He does that because that is the commitment he made when he married her. I cannot believe this Government is being so cruel to our older people. This is a stingy and unpleasant piece of legislation.  
MIKE SABIN (National—Northland) 
: 
 We have heard from previous members about our not having the fortitude to make strong decisions. I think that is exactly what this Budget has been about rather than the big pile of lolly scrambles and voter bribes that this nation got used to over the 9 years of the Labour Government’s tenure. This Budget is another good example of this Government’s priorities in action. It is responsibly managing the Government’s finances building a more competitive and productive economy delivering better public services and rebuilding Christchurch. What we have seen in the last 24 hours is a good example of what New Zealanders expect of this Government which is fortitude which is making the right decisions for the right time and not throwing a bunch of lollies out. 
The Social Security (Long-term Residential Care—Budget Measures) Amendment Bill is about sustainable management of long-term residential care. Members opposite know it and we know it but as usual it is oppose oppose oppose. This bill reflects the practice of this Government to responsibly manage the finances to responsibly manage our taxpayers’ dollars and to make sure that we can continue to afford the cost of residential care as our population ages. That is about having fortitude and making the right decisions for the right time. Clearly that is what sets us apart from our opposition. That is why when you look at the polls we have been about 20 points apart for the last 3 years. They look like a set of railway tracks—30 percent and 50 percent. They are a set of railway tracks. That is because the New Zealand public have woken up to the need to manage the Government’s finances for the day. That is what they are doing at home. 
We have also heard from the Labour benches that “It’s only $4 million here. It’s only a few million there.” Well a few million here and there soon adds up to a few billion here and there. Although the previous Government might have been happy to spend up large to buy its way back into power we make decisions that we know New Zealanders want need and deserve. That is about leadership. That is what this country expects. That is why we are on this side of the House. This is a good bill and I commend it to the House. 
A party vote was called for on the question  
That the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill be now read a first time. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future. 
Noes 54 
New Zealand Labour 34; Green Party 11; New Zealand First 8; Mana 1. 
Bill read a first time. 
Second Reading 
Hon JO GOODHEW (Minister for the Community and Voluntary Sector) 
 on behalf of the Minister for Social Development: I move  
That the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill be now read a second time 
. This bill will set in place a fair and responsible framework for assessing a person’s assets to determine whether they are eligible for assistance through the residential care subsidy. Increasing the asset threshold by the change in the Consumers Price Index maintains the real value of the assets a resident is able to own for their own use including for bequests if that is their wish. It ensures sustainability of the residential care subsidy into the future. 
This bill amends the Social Security Act 1964 to change the amount of the annual increase in the applicable asset thresholds used in determining the amount residents in aged residential care are required to contribute to the costs of their care. Current increases of $10000 each year in the thresholds are replaced with Consumers Price Index indexation of the thresholds. The bill sets the thresholds for 1 July 2012 to 30 June 2013 to $213297 which is Threshold A and $116806 which is Threshold B respectively. Threshold B is the lower threshold excluding a person’s home and car. It also requires those amounts to be CPI-adjusted by Order in Council for each later year beginning on 1 July 2013. This bill also ensures that the thresholds will continue to operate and to be CPI-adjusted for each year beginning on 1 July after the close of 30 June 2026. 
I draw the attention of members opposite to the Beehive website—not difficult to find—where they will find a press release from the Hon Tony Ryall that sets out this particular measure. I am pleased to be able to bring this bill before the House today. I commend this bill to the House. 
KRIS FAAFOI (Labour—Mana) 
: 
 I would like to thank the Minister for the Community and Voluntary Sector who just rose to take a call on the second reading of this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill because she took 2 minutes to speak to this bill as opposed to the Minister in charge of this bill the Minister for Social Development who said that this bill was such a priority for this Government that she gave it all of 1 minute’s attention in this House. It was all of 1 minute’s attention in this House. If this is such a priority for this Government why have the two Ministers for whom this bill roughly comes under their areas spent the collective wisdom of 3 minutes in this House—3 minutes—to go through the merits of bringing in this bill? It has been only 3 minutes. There was not one mention in the Minister of Finance’s speech yesterday—3 minutes and not one mention in the Minister of Finance’s speech.  
Hon Member 
: Not in the media pack. 
KRIS FAAFOI 
: It was not in the media pack. We are told that maybe there is a press release and I will take the Minister’s word on that. Apparently there is a press release. This bill has been the dirty little secret of this Budget. Where did it come from? It is so important and it is such a priority that we are in this House debating it and National members did not even want to talk about it—go and find the press release on Tony Ryall’s website. Fine we will go have a look but it is burrowed away somewhere I am sure in amongst what else he is saying about the health budget in this year’s Budget which was delivered yesterday. 
We are going to oppose this bill and we support other parties that are going to oppose this bill too. Yes we are going to oppose it because the process is poor. I have already mentioned the fact that this bill has snuck up on us. The people who are concerned about this in the community—the elderly and the families of the elderly—will not get to have their chance to have their say on it. As I think Mr McClay or perhaps it was the member for Hamilton East mentioned he thought that the measures taken in this bill would help the Government get back on track in terms of its fiscal plan. Well $4.5 million worth of savings in the first year is hardly a significant step change for the economy in order for this bill to become a reality.  
If this is one of National’s big ideas in this Budget I would hate to see the little ones. I would hate to see the little ones because this is going to save us $4.5 million in the first year. It will affect 170 elderly people around our country and their voice in this process has been taken away from them. I am sure there will be many many families around the country who are concerned about the welfare of their elderly mothers fathers and grandparents who are—[ 
Interruption 
] Yes that is a very good point Sue Moroney. They have spent their lifetime savings to make sure—they have done the right thing. They have paid off their mortgages and now they find the fact that this Government wants to take money off them. So again I make the point that this Budget has hit the young and the old and probably everyone else in between.  
This is another example another symptom of a Government with no plan. It has no plan to deal with the big issues. Instead of dealing with the big issues it is almost like a really bad horror movie where someone is doing the dishes and someone is coming up behind them with a dagger. You shout: “No! You need to address the problem that’s behind you! There’s a big problem behind you. Look out! Look out!”. But no that person keeps doing the dishes because the dishes are the right thing to do. No—survival is the right thing to do. Survival is the right thing to do and this Budget that was delivered this week is a bad B-grade horror movie. Unfortunately the people of New Zealand woke up and it was their own personal nightmare. That is why we need some real leadership especially the elderly people of New Zealand. They need some leadership on this area too. This is tinkering—$4.5 million in the first year and $16.4 million in the fourth year. Aged care in New Zealand will become an increasingly important issue for our nation. If we do not start addressing this in a way that is not tinkering—and this bill is certainly an example of that—we will have big problems.  
 That is why we need to have that select committee process so that people from both sides of the fence can have this debate. It would be an opportunity for that. But they are not going to get that. It would have been a great opportunity for Roy Reid and his team from Grey Power to come forward and say: “We don’t necessarily agree with this. We think that you guys should take a broader approach as to how we go forward and maybe work together across this Parliament to deal with how we deal with aged care going forward.” But we will not get that. Instead we get a piece of legislation that will do very little. It sneaks up on us; it does not even get a mention in the Budget speech. Apparently there is a press release— 
Hon Trevor Mallard 
: We’ve found it. 
KRIS FAAFOI 
: Have we found it? 
Hon Trevor Mallard 
: It’s a paragraph of something else. 
KRIS FAAFOI 
: Right. There is not a press release; it is contained in a press release. This is how proud National members are. They are so proud of it and it is such a priority that there is a paragraph in a press release probably at the bottom of the press release so it is camouflaged in this Budget. If this was such a priority why was it not in the first paragraph of the Minister of Finance’s Budget speech? What we get is more contempt for the New Zealand people more contempt for our elderly and in a previous bill that this House considered contempt for our paper boys and paper girls around the country.  
What we have got here is another example of bad process in this Government. It is taking away the voices of our elderly and their families who should get to have their say on this. As I mentioned in my first reading speech we should hear from the other side too because I did see a press release out from Martin Taylor from the Aged Care Association. We should let him have his say as well. But no this is going through under urgency under dodgy process. No one gets to have a say on it but this is the way the Government wants to do the business on this. This is the way the Government wants to do business on this on a very very important issue that is facing our nation.  
This is another example of a lack of leadership for this country. We were looking for leadership in terms of growth in terms of how we create jobs and in terms of how we look after our elderly. What do we get? What do we get? We get tinkering around the edges. It is the low-hanging fruit strategy from the Government: let us steal a little bit from the paper boys and the paper girls let us take a little bit off our elderly. We will not tell them about it; we will just thrust it upon them in a very dodgy process in this House. Let them have their say. Let them have their say on this one because the 170 elderly people in New Zealand whom this is going to affect surely should be able to have their say. And the 610 in 2015-16 should be able to have their say as well. 
Denis O’Rourke 
: And their families. 
KRIS FAAFOI 
: And their families. They are taking money away from some of our most vulnerable citizens in this country. They are people who have paid taxes all through their life they have done the right thing they bought a house and they have built up their assets and this is how the Government treats them. This is how it treats them. Do the right thing and make sure that you give these people their say and give the other side a say too. 
Hon Maurice Williamson 
: Do the right thing and sit down. 
KRIS FAAFOI 
: You should stay sitting down too. I am sorry Mr Assistant Speaker the member should stay sitting down. But again this bill is another example of lack of leadership. They have a crack at the oldies they have a crack at the youngies and they are probably going to have a crack at everyone else in between. But we have not found that press release yet. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I seek leave to table a document titled “Health receives largest increase in spending” embedded within which is a single-line reference— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! We first want to know the source of the document. 
IAIN LEES-GALLOWAY 
: The source is the Hon Tony Ryall. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Is this in the public domain? 
IAIN LEES-GALLOWAY 
: Well it is hard to tell. It is hard to tell. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Is this on a website? 
IAIN LEES-GALLOWAY 
: It is on a website. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Well we are not going to entertain that. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 It gives me great pleasure to speak on this Social Security (Long-term Residential Care—Budget Measures) Amendment Bill because this is a responsible bill this is a realistic bill this is a fair bill and this bill certainly ensures the sustainability of long-term residential care in New Zealand with the changing demographic that we have. 
Hon Trevor Mallard 
: Rubbish! It makes no difference to long-term residential care. 
Dr PAUL HUTCHISON 
: And there we have Trevor Mallard saying “Rubbish!”—and how absolutely typical this is of Labour over there who undoubtedly are in “Cloud Labour Land” once again. 
Hon Members 
: Get the lines right! It’s “Planet Labour”. 
Dr PAUL HUTCHISON 
: Well “Planet Labour” as well. Those members have totally forgotten about the global recession they have totally forgotten about the Christchurch earthquakes and they have totally forgotten about the unpredictability of the situation right around Europe and elsewhere. They are determined to spend more to tax more and to borrow more if they possibly can. That is what they would do. Only last week I was overseas with their former leader the Hon Phil Goff and it just does bring back to me the absolute reality of how lucky we are here in New Zealand with responsible government with stable government and with enlightened government and that is what this is all about.  
We have heard from this tawdry Labour Opposition that this bill has been kept secret. But this measure has not been kept secret from the sector. Government Ministers briefed the sector just prior to the Budget and neither the Aged Care Association nor Grey Power have put out press releases against this measure. I think it is very important that indeed the Opposition does realise this.  
It is important to realise that from 1 July the change will take place whereby the Government will begin adjusting the asset threshold for rest home care subsidies at the rate of inflation. It is because it comes in on 1 July that it is important that we have urgency at this stage of events. We will be using the Consumers Price Index because that is a realistic and rational way to ensure that there is an appropriate adjustment.  
I looked back at the Hon Ruth Dyson’s speech when she introduced the bill in 2004 and of course somehow she plucked out of the air a $10000 increase that was going to continue on to 2025. The reality of that is that in 7 years for a single person this has increased from $45000 to $115000—more than doubled. It has by far more than doubled and that is just unsustainable. In these times it is quite unworkable and unrealistic.  
So we have over there a party that is prepared in these difficult economic times to pluck something out of the air and have no rationale whatsoever as to the number. Those were the days when we had surpluses when the Government could have been using a much more prudential long-term view so as to get New Zealand well prepared for the future. But no it did not. It was prepared just to pluck this number out of the ether and away it went and consequently we have seen this amount more than double in 7 short years which is totally unrealistic. So we are simply slowing the rate of increase in recognition of tight times and an ageing population. We are making sure we can afford to afford subsidising the cost of residential care for an increasing number of older New Zealanders who need it. When Opposition members talk about $4.5 million in the first year over 4 years this actually amounts to $34.5 million. That is a substantial amount of money. Every million dollars counts. It might not to that wasteful Labour Opposition but for us it is absolutely important. This is a responsible bill this is a realistic bill this is a fair bill and this indeed will sustain long-term residential care into the future. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 You can always tell when a member does not believe a word he is saying particularly a member like Dr Paul Hutchison who is regarded by every member in this House as having integrity and being honest. He had to force every single word out of his throat and out of his mouth. It was so clear that he does not believe a word of it.  
Earlier in this debate we heard first of all from the Minister for Social Development the Hon Paula Bennett who introduced this piece of legislation the Social Security (Long-term Residential Care—Budget Measures) Bill in the most lacklustre unpassionate resentful way imaginable in the House. Then we heard from Jo Goodhew the Minister for Senior Citizens—except when she is supporting legislation like this. Then we heard from a new member Alfred Ngaro that in fact National did release a press statement announcing this legislation. So what I would like to offer again is for one of those members or any National member—frankly I do not give a toss which one it is—to table the press release. It is not on the National Party website. 
Hon Jo Goodhew 
: It is. 
Hon RUTH DYSON 
: It is nowhere to be found. 
Hon Jo Goodhew 
: It is. 
Hon RUTH DYSON 
: The Minister is bleating away “It is. It is” Well I am sorry Minister. It is not.  
Hon Jo Goodhew 
: Then you’re blind. 
Hon RUTH DYSON 
: No I am not blind. I am able to go through the National Party website. Other people have including members of other political parties. So I just invite the member to table it. 
Hon Jo Goodhew 
: Your colleague tried to table it before. 
Hon RUTH DYSON 
: I would just like to invite the member to table the press release announcing this legislation which is being put through under urgency through all stages. I want to further invite the next National speaker to explain to the 170 affected residents of residential care in New Zealand why the contract that they entered into when they entered the residential facility—which explained how much they would be entitled to keep as their assets before they were fully subsidised or partly subsidised in that residential care facility—is being broken. Why is the contract with those 170 hard-working decent honest good New Zealanders being broken because this bill is going through under urgency without giving any of those residents the opportunity to appear before a select committee and say to this House “We entered a residential facility on the clear understanding that the legislation was in place and that is how we would be affected.” but now under urgency the rules are being changed from 1 July?  
I think that every single one of those 170 residents deserves the respect of having the opportunity to appear before a select committee. In fact it would not do any harm if members of the select committee actually went to a residential care facility and listened directly to those residents. But we have not had that respect shown to any older person in New Zealand. What we have had is older New Zealanders being described as a problem being described as a burden and being described as a critical part of the financial crisis. If saving $4.5 million by taking money out of the pockets of current rest home residents is going to save New Zealand then National has quite a lot of fronting up to do about the actual financial position we are in. Taking $4.5 million from 170 residents in residential care is what this bill is going to save in the next financial year. That is out of $94 billion that the Government is going to spend. How can saving that amount of money ensure the long-term sustainability of the asset-testing regime? It is just nonsense.  
The fact that the Government is ramming this legislation through under all stages under urgency without giving one single member of the public the opportunity to have a say shows just how ashamed they are of this legislation. I bet that not one single backbench member went into their caucus briefing on the Budget on Tuesday knowing that this legislation was going to be introduced. I challenge any single National backbencher to tell this House that they knew in advance of their caucus briefing on Tuesday morning that this was what they were going to be signing up to.  
Hon Trevor Mallard 
: Not one. 
Hon RUTH DYSON 
: Not one single member of their caucus knew in advance of the caucus briefing on Tuesday that they were going to have to put their name on the public record to this legislation being rammed through under urgency for no good reason. Not one single member of their backbench knew it. What about after the caucus briefing? I want any single National backbencher to tell this House that they knew after the caucus briefing on Tuesday that this legislation was being introduced under urgency and being taken through all stages.  
Hon Trevor Mallard 
: No not one.  
Hon RUTH DYSON 
: Not one single National member was told about this legislation in advance of its coming in. I guess what you could conclude from that is that older New Zealanders should not feel too bad after all. Yes they have had the rules around asset testing changed yes the bill is going through under urgency and they will be totally denied any opportunity to have their say about whether or not this is a good move whether it is justifiable whether it is fair but they should not feel too bad about that because not one single National backbencher knew about it either. They clearly did not have a say. No wonder Alfred Ngaro was so embarrassed about speaking on behalf of it! The member used to be highly regarded in Auckland in the social services sector but that regard is rapidly disappearing and I think quite tragically.  
I think it is an embarrassment to the process of Parliament that when we have the opportunity to say this is an issue that requires the urgent attention of the House and therefore we will extend our sitting hours and we will all stay in Wellington away from other work that we would normally do on a Friday the process is being used to cheat our older New Zealanders out of the money that just yesterday they could have looked up in the legislative framework—in the statute book—and seen what they would be entitled to. They have now had the rules totally changed. A number of those people are already in a contractual arrangement with a residential provider. They cannot change that arrangement. In just over 1 month the rules will be changed. I think that is an embarrassment. I think the process is a breach of the goodwill of Parliament. I think the Minister for Senior Citizens the Minister for Social Development and the Minister of Health should be ashamed of themselves. 
KEVIN HAGUE (Green) 
: 
 I want to first of all make some remarks in response to the contribution from Dr Paul Hutchison. Dr Hutchison’s contribution to the debate indicates I think that perhaps like everyone else in New Zealand he has been left a little flat-footed—and the remarks from my Labour colleagues may indicate why—about what this Social Security (Long-term Residential Care—Budget Measures) Amendment Bill does. 
He appears to suggest in his contribution that the change is merely a cosmetic one. He draws our attention to the reasonableness of CPI increases—in fact missing the point that actually what this bill represents is a fundamental change to the State’s policy in relation to asset-testing thresholds. Actually we are moving in this bill—which will not be subject to any submissions at all from the public—to a regime in which the current threshold is frozen in real terms. That is what we are doing. We are freezing the current threshold and that is a change from a policy that has been in place since 2004 of actually progressively rolling back the threshold. That is not just a cosmetic change; that is a fundamental change. 
As Ruth Dyson indicated it is a change that older New Zealanders I believe are entitled to have been consulted about because actually if there is one thing that older New Zealanders ask from the State it is some certainty on which to plan their affairs. Effectively they had been made a promise about the asset-testing regime that would be in place at the point that they might need residential care and that promise is now being gone back on. That is what the Government is doing with this bill. Sadly Dr Hutchison does not seem to understand that that is what is being done. Most New Zealanders will have woken up this morning not understanding what is being done. I just hope that through the process of this debate we can actually raise with them what is occurring and the fact that tragically they will not have a say on it. They will not have a say on it. 
Dr Hutchison suggests there is support for the changes being made. The weak basis for that claim is that he has not personally seen a press release from Age Concern or Grey Power about it. Well I have not seen their press releases either but I did hear Roy Reid the National President of Grey Power on  
Morning Report  
this morning around a quarter past 6 saying that he thought it was a very bad idea and talking about asset testing as a discriminatory act against older people. That is the Green Party’s view also. That is the Green Party’s view—that asset testing for aged residential care is discriminatory on the grounds of age against a group of New Zealanders who actually if anyone is entitled to it are entitled to security in their old age. “What is there more important in Christianity than to be our brothers’ keepers in reality? Why should people not have security in their old age or when they are invalided?”. That was Michael Joseph Savage from the parliamentary debate on the introduction of the Social Security Act in the first place. Indeed that cuts to the very heart of this issue. 
Finally Paul Hutchison refers to this bill as being a responsible bill. Well I would say it is not responsible. I would say it is responsive but responsive not to the needs of New Zealanders but rather to the need of the Government to be able spin the health budget. Because the spin is all about $1.5 billion extra for health—health being the big winner from this Government’s Budget. Well it is a struggle to figure out exactly how the Government has reached that $1.5 billion number but it seems to be the total cost over 4 years of what have been announced as new initiatives. Well that is a cost it is over 4 years and it is not about the revenue. So yes it is true; it is true that the Government is intending in the Budget that the Minister of Health Tony Ryall has trumpeted with the press release that is on the Beehive website—and I see that members from the National Party have been displaying it on their iPads—to spend that. It is true that that is the total cost of those new initiatives. But the fact is that in a Budget that at its top line is supplying just $288 million more in Vote Health—and that is barely 2 percent of the Vote Health budget—as an increase that increase is probably not enough to cover even the cost of inflation in health let alone the growing population and let alone the growing population of older people with increased needs. So actually the increase from last year to this year in Vote Health will not even enable the sector to stand still. Just to be able to try to stand still the sector will need to be cutting health services. That is the only way that the sector will be able to do that. 
On top of that we have got a whole series of new initiatives from the Government. Well all of those new initiatives—$434 million in the first year—will have to be funded by cuts elsewhere in the health sector. That is not how it is being spun by the Government but that is the reality when the Budget is not even being increased by enough to cover inflation let alone demographic factors and let alone these new initiatives. So the only way that the Government is able to put more money into elective surgery for example or more money into rheumatic fever or more money into cancer services is to take that money from somewhere else in the health sector. Sadly in this bill we are seeing the machinery behind one of those sources because one of the places that the Government is taking money from to be able to fund those new initiatives and the demographic change in demand is older people. It is from older people. Actually that is the point. 
So what Mr Hutchison says—that this is a responsible Budget—is completely wrong. It is responsive to the Government’s need to find revenue sources to fund its extravagant promises in health and its extravagant spin around health. That is reprehensible because the cost of doing that—and members have referred to the year 1 contribution that this measure will make of just somewhat over $4 million—the amount of money that the Government will peg back by going back on its promise to older New Zealanders over time will increase. In the fourth year it is something like $16 million. Sure it is not a lot in the face of the health budget but what it suggests is a Government that is so desperate to be able to support its spin about health spending and about the $1.5 billion in new initiatives that it is prepared to claw back even that promise that it made to older people. 
There are big issues—there are big issues—in aged residential care. The Green Party and the Labour Party in the last term of Parliament produced a report about what some of those issues are. They are things like ensuring quality of care. They are things like ensuring equitable wages for the work that is done in that sector. And they are things like ensuring the dignity of older people and reflecting the dignity of older people in the type of care that they receive and the type of regime to which they are subjected. In this bill the Government further undermines the dignity of older people by creating once again a discriminatory regime and entrenching that regime. That is not what older New Zealanders deserve. Older New Zealanders deserve that security in the evening of their days as Michael Joseph Savage first promised in the 1930s and that is what this Government ought to be living up to and is not. 
MELISSA LEE (National) 
: 
 It is a great pleasure to rise to make a short contribution on the second reading of the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. But before I go forward with this speech I would like to just respond to something Ruth Dyson said. I would like to say that unlike the Labour caucus this caucus on this side of the House does not leak like a sieve. We do not actually comment about things. We have discussions but we do not actually leak like Labour. 
Demand for long-term residential care for older people is increasing and this important bill will make sure that the aged residential care subsidy is sustainable into the future. That is the important bit—that it is sustainable into the future. We need to make sure we can pay for it in the future. The number of New Zealanders aged 65 and over will exceed 1 million by the late 2020s compared with half a million people back in 2009. In fact the number of people over 75 years of age is forecast to double by 2033. From 1 July the Government will begin adjusting the asset threshold for rest home care subsidies at the rate of inflation. To me that is actually a good thing because unlike the rhetoric that the Green Party and the Labour Party—the members opposite—have been saying what this change really means is that 30 percent of people receiving rest home care who pay the full price of their care will do so for a little longer—on average it will be for about 8 to 10 weeks—before the lower rest home subsidy actually kicks in. The asset threshold for the aged residential care subsidy will increase from $210000 to $213000 for single people and for married couples where both are in residential care. 
This is a responsible bill. This is a pragmatic bill. I commend it to the House. 
Mr DEPUTY SPEAKER 
: Before I call the next member I have been informed that this is to be a split call between members of New Zealand First. The members participating can determine how much of the 10 minutes they want each. I will ring a warning bell at 2 minutes from the end of the 10-minute call.  
Le’aufa’amulia ASENATI LOLE-TAYLOR (NZ First) 
: 
 New Zealand First is not supporting this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. Yes we are not supporting this bill. What next? Paula Bennett decides to take away the SuperGold card to provide funding to pay the accounts manager for KiwiSaver? That is what is going to be next. 
How demoralising how disgusting that we show our gratitude to our elderly by forcing their hand to sell off their hard-earned assets in order to feed the welfare reform which should be called welfare destruction. These welfare reforms are doomed to disaster. How senseless is the current Government which has decided that the elderly of New Zealand must take out loans in order to pay for care. Because that is what this is all about. We might as well slam the elderly into urban ghettoes. That is definitely going to happen. This new housing scheme which is incorporated into the welfare reforms is sure to see South Auckland turn into a dumping-ground—it might as well be. The zero Budget means zero chance for both younger paper boys and girls and senior citizens. It has been made very clear that basing the threshold on a volatile CPI means that the threshold will always be vulnerable to change. The elderly lying on their deathbeds will be forced to wait on their assets either to depreciate or be sold off just so that they are cared for. Somebody needs to tell that to the National Government. Funnily enough we will now be asking our elderly to sell off their life insurance and savings and take out loans just so that they can be provided with care. 
As for Tim Macindoe Alfred Ngaro and Mike Sabin it would be interesting to see whether those members would give up their houses or their pay to pay for elderly residential care. There are a lot of elderly in Manukau. There are a lot of them from where Alfred Ngaro comes from. How hypocritical is this Government giving this Budget the theme of— 
Tim Macindoe 
: I raise a point of order Mr Speaker. It is a longstanding convention in this House that you do not use that particular word to describe other members.  
Mr DEPUTY SPEAKER 
: I was communicating with the senior Opposition whip so I missed it but I will take the member’s word. I am not sure what it was but do not do it again. [ 
Interruption 
] Yes that word is inappropriate.  
Le’aufa’amulia ASENATI LOLE-TAYLOR 
: Assets include prepaid funeral schemes. Well say goodbye to them. The elderly will not be able to die with dignity. No it is more important to let them struggle to live. That is what this is all about. 
It is obvious that the National Government has been sitting on this announcement for quite some time. It knew about it well in advance. The welfare reforms which should be renamed “welfare destruction” will not work. Funding has to come from somewhere right? It has to come from somewhere. These welfare reforms have been rushed through simply to sugar-coat a non-existent job market. These welfare reforms this welfare destruction will have skilled Kiwis packing and off to Australia. 
New Zealand First definitely does not support this bill because it discriminates against our elderly. Alfred Ngaro and Peseta Lotu-Iiga I challenge you to come out to Manukau to come out to South Auckland and tell the people of the Cook Island and Samoan communities tell the Tongan community the Tokelauan and the Tuvaluan what the National Government’s plan is doing which is to take away what they rightly should be entitled to. Thank you. 
BRENDAN HORAN (NZ First) 
: 
 Further to my colleague Asenati Lole-Taylor’s learned comments I would like to add that our question is: where is democracy? Where is the true democratic process where we go to a select committee and New Zealanders get their opportunity to view democracy in progress? But we have come to learn that with this Government democracy is in short supply. When we look at this Budget—what I call a “bovine-manure sandwich Budget”—which this Government has thrust down the throats of good New Zealand families we see that it has taken a million here and a million there from other areas and has just thrown it in as a lubricant. But here is the kicker: it spent $120 million on marketing to isolate New Zealand families and make them think that somehow they are the only ones who do not like the taste. I would say to members like Mike Sabin and Mark Mitchell: take this “bovine-manure sandwich Budget” up north to your constituents and ask them whether they like the taste. Mark Mitchell take this “bovine-manure sandwich Budget” to the elderly in your electorate and ask them whether they like the taste. I wonder whether the elderly when they were overseas fighting for New Zealand ever thought they would be coming back to this: selling New Zealand off and attacking the vulnerable and the young and the elderly. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 Having to respond to the contribution of that member Brendan Horan about bovine infection or whatever it was is a wonderful place to start for the member for Taranaki - King Country. I would suggest that he needs a dose of either milk fever medicine or some bloat oil. I am going to try something novel in this debate: I am going to refer to the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill that is before us and speak in support of it. 
If you pick up the bill and just read the general policy statement it states: “This Bill amends the Social Securities Act 1964 to change the amount of the annual increase in the applicable asset thresholds used in determining the amount residents in aged residential care have to contribute to the cost of their care. Current increases of $10000 each year in the thresholds are replaced with Consumers Price Index (CPI) indexation of the thresholds.” From listening to our opponents the presumption is that there must be going to be an increase. When you have a listen to the general comments from our opponents they are about the National Government reducing the tax on the rich and they are about the National Government not taking into account those who are vulnerable in society. What I would suggest is that the levers that the National Government is going to use have a far greater opportunity to reduce the Consumers Price Index increases every year than any other particular measure you have seen from a Government in recent times has done. By doing that there is a high probability that the increase for those in long-term aged residential care could be less than $10000 per year. Injecting a bit of fact into the debate occasionally is I know new and novel particularly if you are on the other side of the House but I thought that might be worthy of mention right now. 
This is a sensible measure proceeding from the Budget and I look forward to it progressing through the House.  
JACINDA ARDERN (Labour) 
: 
 It is my pleasure to speak on the second reading of the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. I was listening to the contribution made by the National member Shane Ardern and of course he was speculating over some of the impact that this bill—these changes in asset thresholds—might have. I guess the key word there is “speculating” because we really do not know because this bill is not going to go through the rigorous process that we would usually in this Parliament expect a piece of legislation to go through. We do tend to use urgency I think often unwisely in this House and I think this is a prime case of that. I understand that when we are talking about excise and when we are talking about things that might cause a run on the liquor stories you may have reason for extraordinary urgency but this is not one of those cases. So I really challenge the Minister for Social Development to share with us during the Committee stage why this was determined to be of such urgency that we denied the people of New Zealand the ability to have their say. I look forward to the Minister’s contribution on that because I know that on this side of the House we would have appreciated the opportunity to speak with members of the public about the impact that this change would have on them and also with the likes of groups such as Grey Power and Age Concern which represent the interests of the people the elderly who will be affected by these changes.  
 I am also interested from the Government’s side in its motivation for this change because I do not think that has come across with enough clarity. Is it an issue of sustainability? Or is it an issue of revenue? I see these as being two distinct things. Most of the changes we have debated in this House to date since the Budget was read yesterday have been under the proviso of revenue-gathering exercises or savings. If that is indeed the case and if this is the best we can do that is somewhat worrying and we would suggest that there is still time for the Government to consider a capital gains tax. Secondly if it is an issue of sustainability then I think that that is an incredibly interesting point because the impact that this will have will be very direct for the individuals it affects but in terms of the wider fiscal spend nominal—compared for instance with the impact of superannuation.  
I should not need to tell the Government this because it is set out in plain language in Vote Social Development. In fact it states from the Ministry of Social Development that New Zealand superannuation accounted for 55 percent of total expenditure on benefits in 2007-08 and fell to nearly 52 percent. This ratio is at 55 percent in the current year and is estimated to rise to 60 percent by 2015-16. Sixty percent—that might seem meaningless but when you factor in that within 3 years the amount we spend on superannuation alone will be equivalent to almost the entire education budget then we are starting to talk about a significant spend.  
So if we want to talk about sustainability in this House we need to start getting real about the impact that our superannuation spend is having not just on social development but on the New Zealand economy generally. In fact by 2050 according to the long-term fiscal Treasury output—which of course it is required to provide I believe every 5 years—over $200 billion will be the amount of the shortfall. That is more than New Zealand’s entire GDP. Even Treasury is supporting a lift in the age of superannuation. It is completely disingenuous that that side of the House should try to maintain the line that we do not need to look at this issue. We absolutely do and this is classic avoidance. This bill represents classic avoidance. In fact Bill English himself admits that something needs to happen in this area which puts him at odds with the Prime Minister when it comes to the age of eligibility for superannuation. In fact it is widely known that the Prime Minister comments privately that the position is probably unsustainable but because he has made a political commitment he is unwilling to address that.  
That is not leadership in my mind. That is not leadership. These are the hard issues and the issues that this Budget has chosen to avoid and the result of that is this bill. This bill is a direct result of avoidance from that Government around the most significant issues. I even just this morning heard a Government Minister in fact state that the Retirement Commissioner said that this is really going to bite in 2020 so we do not need to worry about it now. We do not need to worry about it now. Again I see that as a failure of leadership. The reason we need to debate this now is that for all of those who are under the age of 45—that may not include many people in this House—they deserve to know that there will be changes coming. They deserve to know that the system will be sustainable and they deserve for instance to have the knowledge in order to be investing in their own retirement funds because that is what we are going to need in the future: a real mixture of personal savings as well as superannuation.  
But the sad fact is that most of the people my age when surveyed by the Retirement Commissioner did not believe that universal superannuation would be available to them when they retired. And no wonder when you see classic avoidance in this House to deal with the sustainability of superannuation. We need to address it. I also think the reason we need to address it is that we need to start looking at ways to cushion any change on our most vulnerable. I do believe it is necessary that if we see a lift in the retirement age those who are working particularly in low-wage low-skilled but hard working environments which mean that it would be physically impossible for them to continue beyond a certain age we need to make sure we cushion that that we have the necessary policy in place that allows them to retire at a time that is fair and equitable. We need time to develop those policies and those ideas and that is what we should be debating in this House not this threshold change that we are debating today.  
But also I think one of the reasons the Government is unwilling to bring this up to date is that it would highlight the contradictions in what it is doing currently. In fact if this really is about sustainability for people when they retire delaying auto-enrolment delaying the urgency around people’s personal savings which we know is crucial given the outlook for the Treasury books seems utterly bizarre to me. Our personal savings are shallow—they are shallow—and that has a flow-on effect for our wider economy. But instead of encouraging further personal savings this is another thing that this Government for political expediency has decided to just waylay and we cannot do that for ever.  
Where is all of this coming from then—this idea that all of this should be loaded on to future generations? It is not just in superannuation policies it is not just around superannuation; the intergenerational inequity that this Government feels perfectly content to load on to the next generation of voters extends beyond superannuation. Where else does it go to? Well we can name a few on this side. Asset sales. Selling off future revenue-gathering—[ 
Interruption 
] I am still going I am sorry Mr Calder. I have not finished. We are selling off our assets—a future source of revenue for the next generation.  
What about student allowances? I will listen intently to you when you do get to your feet but if you would not mind I want to use these 2 minutes. Secondly student allowances—we have now removed in Mr Joyce’s wisdom the ability for anyone at postgraduate level to gain a student allowance in order to allow them to contribute to our economy. This bill delays the bigger issues and instead of dealing with them we are offloading them on to the future generations.  
It is easy for that Government to talk in general terms about policy like this but what about some real examples? I know a graduate at the moment who is studying towards helping those with learning disabilities—deaf children to learn in the classroom. She will not be able to complete her studies as a consequence of Mr Joyce’s grand plan to remove student allowances. And I have not even started on the freeze on early childhood education funding and of course the classic paper boy tax credit which becomes emblematic of this Budget—and how emblematic of this Budget is that Government’s refusal to address the big issues. That is why this is a nickel-and-dime Budget. 
Dr CAM CALDER (National) 
: 
 It is timely in view of the rhetoric we have heard from the other side of the House to remind the House that this legislation the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill maintains the real value of assets a resident is able to retain as the indexing of the threshold index allows. It is a sustainable protection of some of the vulnerable in our society.  
Dealing with the debt that this country faces is the key to our recovery. We understand that on this side of the House. We understand that. The people of New Zealand understand that. Is it understood on “Planet Parliament”? Is it understood in “Gulag Green”? Is it understood in the land of Nod?  
Hon Member 
: Absolutely no. 
Dr CAM CALDER 
: Absolutely not. No glimmer of understanding from New Zealand First either. However we on this side of the House do know that this Government has to get back into surplus by 2014-15 and this is what we are about to do. This is a principled pragmatic Government. I commend this bill to the House. 
Mr DEPUTY SPEAKER 
: I call Dr David Clark. This is a split call?  
Dr David Clark 
: It is a 5-minute call. 
Mr DEPUTY SPEAKER 
: Are the Greens seeking a call? Yes. A split call—5 minutes. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I was not going to rise to speak in this debate on the Social Services (Long-term Residential Care—Budget Measures) Amendment Bill but I feel compelled to given some of the aspersions Mr Woodhouse was casting earlier in the first reading. Mr Woodhouse was casting aspersions on me for wanting the elderly people of Dunedin to have their say. He did not want the elderly people of Dunedin to have their say. In fact he was apoplectic with rage at the thought that his own constituents—well they are not actually his constituents to be fair; let me say the elderly of New Zealand—should have a say on this legislation. 
Old folks do deserve a say on this legislation. It concerns the assets that are in their care. They are the assets that enable them to have a sense of independence and a sense of being their own person even as they go into aged care and to have the opportunity to pass something on to their wider family from the hard work that they have done throughout their working lives. Those same old people also have a concern for intergenerational equity. The older folk whom I talk to—certainly at the moment—are concerned about their children and particularly their grandchildren as they see that their generation has many of its assets still intact but those younger folk are missing out on educational opportunities that the older folk feel should be afforded to them because of many of the miserly changes that this Government is making around tertiary education policy right now. 
So I want to challenge Mr Woodhouse to go out and perhaps have a chat to the people at the Montecillo rest home and tell them he does not want them to have a say in terms of how these decisions are made. I want him to go out and talk to the people at Ross Home. 
Clare Curran 
: I’ll go with him. 
Dr DAVID CLARK 
: I have my colleague Clare Curran saying she will take him there if he does not know where to go. These rest homes in Dunedin have people in them who care about their own situation and care about the situation of their grandchildren— 
Clare Curran 
: Oxford Court. 
Dr DAVID CLARK 
: —and they feel they should have a say in these pieces of legislation. Mrs Curran is offering to take him to Oxford Court as well. There we go we have got a programme of visits for Mr Woodhouse if he wants to hear whether old people should have a say in or have an opinion on this legislation which his Government is trying to ram through following the Budget because those members believe that stealing—I should not say stealing; please excuse me—taking money from the elderly and taking money from the paper boys and paper girls of this country is their most urgent priority. They do not want to have a debate about what is going on in the world outside of those easy targets. They do not want to have a debate about real people’s lives. They do not want to have a debate about the pro-growth tax measures that they could be putting through instead of this kind of grab. They do not want to have a talk about pro-export measures. In the previous bill we saw that they were actually more concerned about putting red tape on business and we have seen that they are just taking the money where it is easy to get. 
So my challenge is and remains for Mr Woodhouse to go and ask those people whether they are really happy to miss out on having a say in this regard. This bill does affect real people and this process is simply wrong. We have a select committee process for a reason. It would allow people to weigh up the trade-offs that are being made in this bill and the very real effect that those trade-offs would have on different people’s lives. I challenge Mr Woodhouse to get out there talk to those people and see whether they really would rather have a say. My view is that I think they would. 
JULIE ANNE GENTER (Green) 
: 
 Tena koe Mr Speaker. Tena koutou e te Whare. I rise to take a short call on the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. Obviously the Green Party will not be supporting it as my colleague Mr Hague made clear earlier. There are a number of reasons for that which I think he outlined very well: the problems with asset testing and why it is discriminatory. 
I rise to speak on this bill with a feeling of misgiving because this bill and other Budget legislation are being rushed through under urgency. In my short time in this House I have been really impressed by the quality of submissions and the level of engagement in our legislative process by knowledgable affected citizens. I acknowledge that many of my colleagues have spoken about this already but I would like to say that an opportunity to come to a select committee and explain how one will be affected by proposed legislative changes is not just a privilege and it is not just an opportunity to engage in the democratic process; it is actually a really useful tool for us as legislators. It gives us essential information that ensures that there will be a robust policy that will actually serve all New Zealanders and that we are taking into account all of the costs all of the benefits and all of the trade-offs. 
The very very brief regulatory impact statement on this bill which was clearly delivered just a few days ago—not a lot of research went into it as far as I can tell—is just another example of bureaucrats in Government departments being told to make choices about how we can find fiscal savings. That is the entire objective: how can we find fiscal savings? There is no real consideration of what the human cost of it is. Really the only way to know that is to go out and talk to the people affected. I would like to see more of that in our legislation—that we are actually hearing from New Zealanders about how they are going to be affected. 
I have to acknowledge what Ms Jacinda Ardern said earlier. We really do need to have a debate about the sustainability of superannuation and we need to start having that debate now. Let us imagine if this National Government for example was going to be forced to deal with that problem which is a problem of debt. It is interesting to hear those members saying that we are not willing to engage with the problems that we are facing when in fact it is about choices and some of the debt problems we are facing have been created by this Government’s choices. Although it is quite happy to spend billions on tax cuts for the rich it is looking to find fiscal solutions elsewhere and savings elsewhere. It is not willing to have a debate about superannuation. But if National is in Government in 2020—which it probably will not be—when this starts to become a serious problem it seems to me by the example that has been shown today that it would not engage with New Zealanders not have a conversation about it but just wait until Budget day and rush it through under urgency without any sort of consideration or advanced warning. I think that is really unfortunate. That is really all I have to say. Thank you. 
MIKE SABIN (National—Northland) 
: 
 I just want to reflect back on the rather bizarre and stunning contribution from across the floor in New Zealand First. The member Brendan Horan suggested that perhaps I should take what he considered to be a bovine-manure sandwich—referring to the Budget—to my colleagues in the north and ask them to eat that. Well I would suggest to this House that that member must have been eating a few too many of those sandwiches himself because that is exactly what has been coming out of his mouth this morning.  
What is this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill about? This is about $34 million worth of savings over the next 4 years. This is about sustainable management of long-term residential care. That is what New Zealanders care about. This Budget has been about investing in education in 21st century schools. This Budget has been about science and innovation. This Budget has been about investing in infrastructure. This Budget has been about the future focus of our welfare reforms and our health sector. This Budget has been about investing in growth about investing in New Zealanders while not spending taxpayers’ money to do it. That is what our colleagues across the floor did for 9 years: spend up large and do not worry about it—someone will have to clean that up tomorrow. Well that is not good enough. This Government’s responsible Budget is for the times and it is what Kiwis want deserve and need.  
What else is changing? What else is changing? We are increasing funding for aged residential care beds by $82 million over 4 years. There is an additional $10 million over 4 years for community dementia services; that might be very handy for that member Mr O’Rourke in the very near future I would suggest. That is an additional $46 million on home care; that will rise next year to $57 million. This bill is about getting the balance right. It is about keeping the course and getting New Zealanders back into surplus by 2014-15. New Zealanders know it is not easy out there. They know it is not. They have changed with the times as have we. Unfortunately the only people who have not changed with the times are the people sitting on that side of the House and long may that continue. 
A party vote was called for on the question  
That the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill be now read a second time. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 54 
New Zealand Labour 34; Green Party 11; New Zealand First 8; Mana 1. 
Bill read a second time. 
In Committee 
The CHAIRPERSON (H V Ross Robertson) 
: The House is in Committee on the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. Kia ora tatou no reira e te Whare e nga iwi e nga reo e nga hau e wha. Tena koutou tena koutou tena koutou katoa.  
Hon David Cunliffe 
: Fa‘afetai lava. Fa‘afetai lava. 
The CHAIRPERSON (H V Ross Robertson) 
: The Hon David Cunliffe has reminded me that it is Samoan Language Week so talofa lava.  
Hon Members 
: Talofa lava. 
The CHAIRPERSON (H V Ross Robertson) 
: Let us get back to business. The question is that Part 1 stand part. 
Part 1Applicable asset thresholds: Indexation  
KRIS FAAFOI (Labour—Mana) 
: 
 Taloha ni Mr Chair and talofa lava manuia le aso in Samoan Language Week. It is a pleasure to take a call in the Committee stage of this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. The Minister in the chair the Minister for Social Development in her first reading speech mentioned that this is a priority for the Government. Although the debate has been robust I would like to take a little bit more of a serious approach in the Committee stage. 
Tim Macindoe 
: Oh no! 
KRIS FAAFOI 
: Yes I am sorry Mr Macindoe. I will take a slightly more serious approach in my Committee stage contribution because I wish that this was a priority for the Government. The aged-care sector and the way that we look after our older New Zealanders are very very serious issues going forward. The fact that Part 1 introduces indexation as opposed to raising the threshold by $10000 per annum does not really do a lot in terms of addressing some of the serious structural issues that we will face soon in terms of looking after our older New Zealanders. 
We need a much much broader approach to looking after our elders and that is why we believe that in terms of this change the indexation to the CPI it would have been good in this instance for New Zealanders who are affected and New Zealanders who are concerned to have the opportunity to speak at a select committee hearing. I would like to ask the Minister why this bill is going through under urgency and why New Zealanders are not going to be able to have their say in a select committee hearing. Having spoken to Roy Reid last night I know that he is very concerned about the fact that this will provide New Zealanders with a disincentive to save for their retirement. As I have earlier spoken about at the first and second readings of this bill there is also a difference of opinion from the Aged Care Association. It is welcoming this move. 
But I would have liked the opportunity as the Labour Party spokesperson on aged care to ask questions of those people and to hear the opinions of Kiwis who have concerns about how their parents or their grandparents are being cared for and to hear how this change might affect them. So again I put forward my question to the Minister as to the rationale for this bill going through Parliament under urgency and I ask why those people who will have concerns out there in the community are not being given the opportunity to make a submission at a select committee hearing.  
Part 1 introduces a change to the asset threshold for residential care for our elderly. In the first year according to the regulatory impact statement there will be savings of $4.5 million. There is also an estimation I guess from the Ministry of Health that this will affect around 170 residents at any one time. This does not address the issue that the aged-care sector and Kiwi families are facing at the moment. It is tinkering. We have heard from the opposite side of the Chamber that this is a measure for achieving a sustainable long-term plan for the care of our elderly. But in the first year we are going to look at $4.5 million and in the fourth year this is going to be increased to $16.4 million. So in no way does this significantly address the issues that we as a country have to— 
Hon Ruth Dyson 
: Would that pay off Government debt? 
KRIS FAAFOI 
: No it will not pay off Government debt. It in no way addresses the significant challenge that we face in terms of our elderly. The $4.5 million in the first year will pretty much pay for the pens and the paper clips at the Ministry of Health. So the reason why the Government is in Part 1 changing from the $10000 threshold to indexation to the CPI troubles me in terms of whether or not this Government has a long-term plan or a long-term vision in this area. One would think not because this is the bill that is before the Committee and that is troublesome. If the big silver bullet from the Government is CPI indexation of the thresholds and not what has been practised for the last I believe 7 or 8 years then we as a nation are in big trouble if we do not have any more—[ 
Bell rung 
] Mr Chair. 
The CHAIRPERSON (H V Ross Robertson) 
: I call the honourable member Kris Faafoi. 
KRIS FAAFOI 
: Thank you Mr Chair. I want to make just one more point. 
Chris Hipkins 
: Make a few more. 
KRIS FAAFOI 
: Make a few more—OK. Actually sorry there are two more points I want to raise. One is the way that this bill has been introduced to the House through the Budget process. We have had clarification since the debate began on the bill. In the beginning we heard that it was not mentioned at all in the Budget speech from the Minister of Finance and we have confirmed that. That is a fact. We have trawled through the press releases looking for a press release on the issue. We were not able to find one but we were able to find a press release in the name of the Minister of Health the Hon Tony Ryall where there is a very fleeting mention of the measure that is being debated at the moment. There were one and a half sentences in a press release and there was not one mention in the Budget speech about this change to the thresholds from the increases of $10000 each year to CPI indexation. If this is a priority for the Government it is not cheering it and it is not putting it out there as a priority at the moment. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 I was I must admit expecting the Minister of Health to take a call on the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill because as my colleague Kris Faafoi the member of Parliament for Mana has just explained after searching and searching and searching for a press release in the name of the Hon Paula Bennett or the Hon Jo Goodhew the current Minister for Senior Citizens or the Minister of Health announcing to the public that not only was the asset-testing regime being changed but it was being frozen and that this change in legislation was going to be put through all stages under urgency without giving the public any opportunity to have a say at all I thought that the Minister of Health would be taking a call. Because it was the Minister of Health who made this massive announcement but not as a press release titled “Asset testing regime to change” or “Breach of contract with 170 residents in residential care” or “Massive investment in New Zealand’s economic growth because of a saving this financial year of $4.5 million”. No it was just one and a half sentences snuck halfway down in a press release announcing all the other major changes in the health budget. So it was not even in the name of the Minister who introduced the legislation and whose name will remain on this change in the statute. The Minister in charge of the legislation said nothing to the public about this. The Minister for Senior Citizens made no public comment at all in relation to the asset-testing regime despite her portfolio giving her the advocacy mandate for senior citizens in New Zealand. So I would expect the Minister of Health to take a call. I thought he would take a call immediately after my colleague Kris Faafoi but he did not do that. 
Sitting suspended from 1 p.m. to 2 p.m. 
Hon RUTH DYSON 
: Talofa to you Mr Chairman. First of all I want to express my disappointment that despite acknowledging Samoan Language Week you did not acknowledge to the senior whip from Labour and other members of the House that it is also Hug a Ginga Day. You may want to take the opportunity before the House rises later on to address that with the many members of the House. The Hon Kate Wilkinson is smiling in anticipation of this so I look forward to the Hon Kate Wilkinson leading the queue to have that interaction with the Chairman.  
I am really pleased to conclude my first contribution in the Committee stage of the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill by repeating my call that I made prior to the lunch adjournment to the Minister of Health or indeed to the Minister for Social Development to take a call in this Committee stage and explain to particularly the 170 current residents in residential care why the $4.5 million that they are being asked to pay this year is necessary. Why is it necessary for them to contribute that amount of money given the range of other options that I am sure both Ministers considered? Why is that being described totally incorrectly by National members as the way of securing the long-term sustainability of the asset-testing regime? Because it is not. In fact what this does is fundamentally alter the asset-testing regime as was very appropriately commented on by Kevin Hague in his earlier contribution to this debate.  
What it actually means is outlined very well in what I do not think is the greatest regulatory impact statement that I have ever seen but perhaps it was because the officials did not have very much notice to put it together but certainly the fiscal savings which is all the regulatory impact statement describes are very appropriately laid out. For a person who currently is under a contractual understanding that their asset threshold would be at $220000 the CPI indexation would mean that it would be at $213297 and that is with the assumption that there is a 2 percent increase in the CPI from year to March 2013 and onwards. As I said that is outlined in the regulatory impact statement.  
A lot of National members do not seem to think that this is a problem. You know what does it matter if older people who are in a rest home have to have fewer assets before they qualify for this asset-testing regime? But what it actually means for the average resident again according to the regulatory impact statement is that they will have to pay an extra $70 a day and the difference between the current amount and the new amount is that they will not become eligible for the full income subsidy for 96 days longer than they currently would. Again National members would say “Well older people are a problem. What’s 96 days?”. I have heard in speech after speech in the earlier stages of this debate National members referring to older people as a problem. I find that offensive. I also think that it indicates that they are totally out of touch with reality if they think that the additional 96 days of paying $70 per day is not much. It is a lot and particularly it is a lot when you face the harsh reality of the fact that the average stay in a rest home for older New Zealanders is now around 18 months. The brutal reality of this is that these people do not have very much longer to live. That is borne out by the facts.  
You would think—Mr Chairman I apologise for referring to you in that manner—one would think that at most times at all times preferably but certainly at the time when people are nearing the end of their life this would be the very time that they should be treated with the utmost dignity and respect. Instead what people who are facing or living in residential care are being told is that without them having an opportunity to have a say personally or through an advocacy organisation such as Grey Power or an organisation such as Age Concern or through their family members and without any opportunity for them to have a say to a select committee the asset-testing regime is being completely changed. The threshold levels are being effectively frozen rather than progressively increased so that the asset-testing regime would completely phase out as was our commitment in 2004 in the legislation and at this time people are being treated with total disdain and disrespect. I find that offensive. I am really really puzzled that neither the Minister for Social Development nor the Minister of Health let alone the Minister who should be the advocacy Minister the Minister for Senior Citizens—none of them—have bothered taking a substantial call and explaining to people why this fundamental policy change. Instead of having a progressive phasing-out of asset testing we are now moving to the freezing of assets and we are doing this under urgency with not one single member of the public being entitled to have a say to a select committee. How can that be justified?  
If this is the answer to the financial situation that the Government insists New Zealand is facing—$4.5 million being saved in the next financial year from older New Zealanders who are at such a high level of health need that they are in a residential facility—then heaven help the future of this country. I think it is offensive that we do this sort of legislation under urgency when there is clearly no need. The only reason that the Government could justify this legislation under urgency is if failing this on 1 July we would fall over as a country financially. I do not think that $4.5 million is going to save us from that crisis if that is as bad as it can be. There is no reason for this to go through Parliament under urgency. Every older New Zealander should be saying to their National member of Parliament: “How dare you treat us with such disrespect.” I am sure they will. I have seen the press statements from Grey Power. I have had phone calls and email messages from different branches of Grey Power and indeed from Age Concern from around the country. People are so upset that without any notification without any justification this has now been rammed through under urgency with the backing of National the Maori Party the ACT Party and United Future.  
This was not part of the National Party’s great plan for the future outlined during the election campaign. Not once did I hear my National Party opponent or any other member of the National Party say that in order to get through the next 3 years we are going to have to freeze the asset-testing regime for older New Zealanders in rest homes or hospital-level care. Not once was that mentioned. 
DENIS O’ROURKE (NZ First) 
: 
 This Budget as I said in the first reading is a penny-pinching Budget and this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill is the most pathetic of the penny-pinching measures in it. It imposes costs on the elderly and it confers absolutely no benefits whatsoever on them anywhere in it. So for them it is a zero Budget. It is a zero care Budget for the elderly. 
In the first reading I referred to the Prime Minister Mr John Key as “Mr Australia” because of his policies and intentions to ensure that many of our most talented young people will disappear to Australia as a result of Government policy. But maybe it would be more appropriate to refer to him as “Mr Fagin” because he is pinching pennies from the pockets of the elderly and of course from newspaper delivery boys. That is the level at which we see the National Government’s pitch to the elderly in this Budget. It is an insult to the elderly of this country and it follows an insult by the Prime Minister to the elderly during the last election campaign in which the Prime Minister referred to New Zealand First supporters dying off. Of course in fact more and more New Zealanders are going to be reaching retirement age so it is the opposite in effect to that which the Prime Minister referred to. It will be his problem to regain their confidence in National policies. Well if he did want to do that this Budget sure ain’t going anywhere near there and certainly not with the measure proposed in this bill. They will lose confidence in National the elderly people of this country in droves. 
Where is the strategy to deal with the elderly? Where is the strategy in this Budget or in Government policy to support the elderly long term to ensure funding of superannuation for 65-year-olds in the future? There is nothing but silence for the elderly in this Budget except of course for this bill which will only make life harder for them. Only New Zealand First can be relied on to support superannuation for the elderly from 65 years permanently. At least the Labour Party is open about its policy to increase the retirement age to 67 but that will never be adopted by New Zealand First. 
The Government was hoping to slide this bill through unnoticed and when you have a look at it you can see that that is not surprising. Maybe the Government just forgot to do a press release or perhaps could not do one in this case. Well I could help the Government. I could help it do the press release. I could tell the people of New Zealand how the elderly are being treated and how the elderly are being punished in this Budget and by this measure. The Government did not consult did not assess the negative effects on the elderly or their families and did not allow reference to a select committee. It did not care about the elderly. It did not care about their views. That has been typical of its approach to this all along. This is a disappointing Budget for the elderly. Compare it with New Zealand First policy. If we were part of Government right now we would be looking at a 10 percent reduction in power bills for the elderly—for SuperGold card holders—and a $10 cap on visits to the doctor with the first year free altogether. Those are the sorts of policies that the elderly in this country want to see—not the kind of thing we see in this bill. 
I want to talk next about the Minister for Social Development’s claim about indexation somehow preserving the assets. What utter nonsense that is. In fact this policy ensures that those assets will be whittled away and whittled away sooner. More people will be forced to reach the threshold sooner as well. Otherwise how indeed could the money be saved at all? National is making a political football out of this issue. This is not what the elderly want and not what the people of New Zealand want either. What they do need— 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 I would really appreciate the Minister in the chair the Hon Paula Bennett answering three questions: why have we got this policy why now and why is it being imposed retrospectively? Because from our position on this side of the House this is a sneaky grubby little move by a money-grubbing Government; a dirty little secret that it kept right up until it tabled the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill in this House to be passed under urgency with no consultation with the public of New Zealand particularly older New Zealanders. It is a nasty little secret that it did not have the fortitude to tell New Zealanders about before this Budget. Why not? Why did it not have the fortitude to tell the older people of New Zealand? Why not consult with Grey Power ask an organisation that represents hundreds of thousands of New Zealanders whether it supported this move? 
Well I can tell the people who are listening that this measure will be the thin end of the wedge for older New Zealanders because I have seen it all before. It was National that brought in asset testing. It was National that made promises to older New Zealanders and broke them. And now we have it bringing back a sneaky little deal to undermine services and support for older New Zealanders and doing it under urgency with no consultation. 
 Maybe those who are listening would also like to know that the Rates Rebate Scheme has been frozen in this Budget. 
Hon Ruth Dyson 
: What! 
Hon ANNETTE KING 
: Yes its funding has been frozen in this Budget. The Government did not tell the public about that. They might like to know that there will be no funding to tell people about the Rates Rebate Scheme. Keep them in the dark do not tell the older folk that there is something that could help them—keep it hidden. That is the thin end of the wedge for me. This is an agenda that is going to attack those who are the most vulnerable. As you heard from Ruth Dyson who was the Minister who introduced the legislation that changed the regime for asset testing so that it could be phased out over a period of time older people in New Zealand are staying in rest homes on average for 18 months. It was not that long ago that people going into rest homes could be there for between 8 years and 10 years. Today they stay longer at home—without the support they ought to have; it has been cut—and they spend a very short time in rest homes. This Government in a sneaky way wants to penalise them. 
I also want to say what a superficial regulatory impact statement we received from the Ministry of Health. I am incredibly disappointed with the regulatory impact statement. If you read the first page of it is the Government worried about older people? No the first thing it is worried about is making sure it will not “impose significant additional cost on business” it will not “impair their property rights” or the “market competition” and it will provide only “minor costs” on providers because they have to inform patients. Where in the front of this regulatory impact statement is concern about the older people? Why is it about business? Have those members become so devoid of care about the people in this society that when they write a regulatory impact statement it has more to do with about how it suits business than it does about older people? 
Then you look at the consultation. What consultation took place on this bill? Well the Ministry of Health talked to itself. It talked to the Ministry of Social Development and Treasury. But of course it had to maintain Budget secrecy over this. We are talking about $4.5 million in the first year. The ministry said that it had to have Budget secrecy over that and that was why it could not consult. That is a nonsense. It could have gone out and found out how it affected people. Then when you look to see whether there is going to be any monitoring evaluation or review of it you see that no there is going to be none at all. There is going to be no look to see what impact this measure has on older New Zealanders. 
I am incredibly disappointed in this Government once again attacking the most vulnerable of people our older people who by the very fact that they are in a rest home are vulnerable. They are not there unless they really are in the final twilight years of their lives. Then for the Government to bring in this measure under urgency secretly is despicable—despicable. On this side of the House we oppose the way that the Government is going about it. This is not what you do to New Zealanders who have worked so hard in their lives to support the rest of us. 
DARIEN FENTON (Labour) 
: 
 It is a pleasure to follow that very excellent speech made by the Hon Annette King. One of the things about this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill that has really shocked me is the derisory approach of this Government. We had a 1-minute speech from the Minister for Social Development in introducing the bill and a 2-minute speech from the junior Minister Jo Goodhew when introducing the second reading. There was nothing in the Budget speech. We pored through the press releases and finally after much searching found a paragraph that was deeply buried in a press release. Nothing was talked about it in the Budget yesterday. This Government has kept its secret. It is the dirty— 
Kris Faafoi 
: It’s a sentence. 
DARIEN FENTON 
: Oh it is a sentence. It is a sentence—not even a paragraph—telling the older people of New Zealand that this major change is being considered by this Parliament under urgency. If this is such an important conversation for us to be having why cannot people participate in it? Why cannot people have a say? Why is it that we have to have this debate on a Friday afternoon under urgency when all of the people who will be affected by it—people currently in residential care and people who will be in residential care in the future including most of us in this House I would imagine—cannot participate? Why can they not have a say?  
As I have been listening to the debate I have been thinking about a personal example. My mother-in-law and father-in-law are in residential care. One is in a private hospital and one is in a rest home. My father-in-law is 93 years old and my mother-in-law is 88 years old. They have only recently gone into residential care when it got far too much for them to stay at home. In fact my mother-in-law went in first and then my father-in-law followed. I want to talk a little bit about their lives.  
My father-in-law was an Anglican minister. He was an Anglican minister in the far north. He used to give half of his income to the poor people of his community. My mother-in-law and father-in-law struggled and scraped on a minister’s income year in and year out giving half of it away to the poor people whom they wanted to support because they are good people. They are good Christian people.  
Eventually they were able to save enough to buy their own home. They bought their own home and they paid it off bit by bit. That is the only asset that they have. It is the only thing they own. They are now in residential care they are paying for themselves—they are paying the bills themselves—and eventually they will get to the point where the asset value of their home means that they will have to pay a whole lot more.  
When I think about my father-in-law’s life and my mother-in-law’s life I think it is so undignified—so undignified—that they are going to be listening to this and hearing about this in this debate under urgency in this Parliament on a Friday afternoon in secret. They will say to me at the weekend: “Darien why could we not have a say on this? We have lived and worked hard. We have tried to be good people. We have been good citizens. We have stood by the principles and values that we grew up with.” Love thy neighbour is one of them and treat other people as you would be treated yourself. 
All of those principles they have lived by and worked hard by. Here they are and here they will be in their twilight years in residential care listening to this and finding out that this Government does not believe that they should have any say in this change. I think it is not only undignified but completely disrespectful. The way this Government has gone about this—approaching the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill in urgency—is just appalling.  
As we know this is a Budget that is picking on kids—and we debated that last night—who do not even earn the minimum wage. They are on $4 or $5 per hour. It is appalling. Students are picked on too and now it is a case of “Let’s get stuck into the older people. Let’s not talk to them and let’s not let them have a say. Let’s forget about them.” The Government does not really care about the people living in rest homes. Do you know what it is? It is peanuts that we are dealing with here. It is absolute peanuts. 
BARBARA STEWART (NZ First) 
: 
 It is my first call on the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill and I am very delighted to get up and take a call on behalf of New Zealand First. We in New Zealand First believe that this bill is an ambush on senior citizens. Nothing was specifically mentioned yesterday. We heard nothing in the Prime Minister’s speech about it. There have been no press releases from the Minister either that we have seen. We have had a look at the website. Nothing has been said about this. It just snuck in under the quiet of urgency which is really quite shameful.  
Why on earth are we attacking senior citizens in this way? Private saving is what has been flagged as the way for the Government to get out of trouble and we are all expected to save in order to dig the country out of the mess it is in. But this legislation shows New Zealanders that it is not worthwhile to actually save because a good portion of your savings will be whittled away to pay for your care.  
I cannot understand why Grey Power and other senior organisations were not invited to have a say on this particular legislation. What do we have in the regulatory impact statement? It states: “The analysis of fiscal savings was undertaken by the Ministry of Health with limited consultation with the Ministry of Social Development and the Treasury. Consultation was limited in order to maintain budget confidentiality.” Then we have the audacity to have this legislation snuck through the House under the guise of urgency. 
Chris Auchinvole 
: Snuck? Snuck? Barbara! 
BARBARA STEWART 
: It is sneaking through under the guise of urgency. I do not know why the views of this part of society—a vulnerable section of society—are being ignored totally by this bill being snuck through Parliament. We want a brighter future for our senior citizens but where is that brighter future? I can assure National members that it is definitely not at this part of a person’s life. When you get to living in a rest home it does not look very good at all. We might as well all have the brighter future while we are younger and spend as much as we can because the Government is going to remove the savings anyway. It is a total disincentive to saving.  
I was quite interested to hear one of the National members say this morning that we are boldly going where no man has gone before and I say they are right. They are right and we do not like the direction that this is going in. It is negative it is penny-pinching it is miserable and it does not address the fundamentals that are actually needed to put this country back on the right track again. Where is the brighter future for our seniors? It has gone. It is not even there. It is a bleak outlook for this particular group and it is a shame that the legislation has to go through the House under urgency when it need not have. It is not an urgent piece of legislation. There was plenty of time to consult with other groups and to let our seniors actually have a say on this particular legislation.  
We in New Zealand First think this is an ambush on our senior citizens and we will not be supporting this legislation in any way. It is too shameful to support. 
Hon PHIL GOFF (Labour—Mt Roskill) 
: 
 I have been listening to this debate for some time. I was not going to take a call but I noticed that the Minister in the chair the Minister for Social Development has stayed silent—stayed silent—all the way through this debate. I want the Minister to get up on her hind legs and explain to me to the Committee and to New Zealanders why it is that during the whole election campaign she said nothing to the elderly people of this country about what she was intending to do—not one word. No wonder this Government is sneaking the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill through under urgency because it would not have the guts to stand up— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! 
Hon PHIL GOFF 
: —and tell the people who appeared before the select committee why it was doing this. It would not have the intestinal fortitude if you prefer those words Mr Chairman to say to the people of New Zealand that it stuck this in and it did not tell them about it.  
I heard the Prime Minister during the campaign say the grand words “You judge a society on how it treats not its wealthiest and strongest citizens but its most vulnerable.” What weasel words they turned out to be. This is a Government that is hitting the vulnerable in everything it has done in this Budget. It is even picking the pockets of the paper boys and paper girls of this country—kids who cannot vote. It is taking a tiny amount of money in fiscal terms but a lot of money in terms of what those kids get. It is picking on the people who send their kids to public schools. Is it not ironic that we have a Government whose leaders send their kids to private schools that advertise the fact that they have lower class sizes telling the parents who send their kids to public schools that class sizes do not matter? That is a double standard. There is a word you cannot use in the House but everybody in this country knows what I am talking about.  
Now the Government is doing it to the elderly. It is a miserable amount of money—$4.5 million—but what does it tell the elderly people of this country? These are people who have worked all of their lives and have built up some sort of asset. They are not wealthy people; probably the only thing they have is a home and few possessions. The Government is telling those people that in the twilight years of their lives they will have to spend those assets rather than die with the dignity of knowing that there is something they can pass on to their kids. I have to say that that is pretty pathetic.  
I say to the Minister to get up on your feet and explain to the country why you are doing this. Tell the country why you never gave any warning that that is what the re-election of a National Government might mean. 
Hon Annette King 
: What’s their agenda? 
Hon PHIL GOFF 
: We said during the campaign that there was a secret agenda but oh no no—no secret agenda! National members said they were upfront and nice that they smile and they talk optimistically. Then they come in straight after the election with the first Budget and do they hit the people who have a lot of money—people like the Prime Minister who got another $1000 a week in tax cuts? No! They are sacrosanct. The wealthy and the powerful will be looked after by the National Government. This bill is a further example of how a National Government picks on the most vulnerable. Yes the people that you are affecting Minister will be dead by the time of the next election. You will not suffer any political consequences but what is the Minister doing—I know you Mr Chairman would not consider an underhand thing like this. The Government is picking on the people who are vulnerable the people who have least to give and the people who cannot hurt them politically. That is to use the term of my colleague Annette King a despicable act by this Government. It is picking on these people. At one end there are the paper boys and girls who get about $2 an hour and at the other end are the people in the twilight years of their lives.  
Ruth Dyson mentioned that the average time that a person is spending in a rest home now is about 8 months— 
Hon Ruth Dyson 
: 18. 
Hon PHIL GOFF 
: —18 months I am sorry. It is the last 18 months of their lives and this Government is taking advantage of their vulnerability by sneaking in a measure that it had not warned the public about. It never had the intestinal fortitude to tell the public what it was going to do before the election and it does not even have the courage to stand up in this Chamber and defend the measure that it is pushing through. Why can this not go to a select committee? There is no— 
The CHAIRPERSON (H V Ross Robertson) 
: I call the honourable member Asenati Taylor. Talofa lava. 
Le’aufa’amulia ASENATI LOLE-TAYLOR (NZ First) 
: 
 Talofa lava. It is “Lole-Taylor”. 
The CHAIRPERSON (H V Ross Robertson) 
: Lole-Taylor then. 
Le’aufa’amulia ASENATI LOLE-TAYLOR 
: Thank you. The argument that the New Zealand population is one that is ageing and we do not have enough care facilities to cope with demand is a pathetic excuse to cut down on services. Why does this Government not take some of its newly proposed Future Investment Fund and invest in our elderly? The injection of nearly $12 million into aged care should be used to open up new aged care facilities. This National Government is willing to put $40 million into dementia services hoping—hoping—that the elderly will forget about the new Budget measures. Would the Minister open her home to those who will be reduced to a less-than-dignified state of living? Because that is exactly what will happen as the result of this Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. That is exactly what will happen.  
The Minister for Social Development has dumped this bill on to us knowing full well that this had been planned for weeks if not months in advance. The Minister has dumped this bill on to the New Zealand elderly and she has dumped this bill on the New Zealanders who are vulnerable. Shame! Shame—it has to be said. The Government is paying into those big pockets of its mates but bugger the rest—I am not sure if I am allowed to use that. 
The CHAIRPERSON (H V Ross Robertson) 
: No you are not. 
Le’aufa’amulia ASENATI LOLE-TAYLOR 
: I apologise. The threshold for the subsidy is now dependent on the rate of inflation—CPI. This means that at any stage the threshold is vulnerable and can either not change or change very very minimally. What we get is the forcing of the hand of the elderly to sell off their assets that they have worked so hard for all their lives. Paula Bennett has introduced this bill because she needs money for the welfare budget so we take from the old in order to provide for welfare reforms that are destroying New Zealand society. The Government has looked at this subsidy because it did not realise that the 10 percent increase in thresholds would be yearly and it was worried that this meant the window for the subsidy would widen dramatically.  
New Zealand First does not support this bill. It is a direct undermining of elderly people in residential care. Elderly people will be forced to either sell their assets or apply for a residential care loan in order to pay for residential care in a rest home. Setting the rate of the applicable asset threshold used in determining the amount residents in aged residential care have to contribute to the costs of their care to change according to the CPI gives uncertainty to the scheme. It will most probably now take longer for the elderly based on the value of their assets to become eligible for the residential care subsidy. The elderly will be forced to find other means of paying for residential care. Some may even become more dependent on their children. Of course that is the usual situation. It is something that happens quite a lot in the Polynesian community especially those in South Auckland—something that Peseta Sam Lotu-Iiga should be familiar with. Even member Alfred Ngaro should know better or even Dr Cam Calder—that is right. They are from South Auckland and they should be familiar with what it is like for the Polynesian people in South Auckland to try to save for assets. Now they will find it a lot harder much harder to even get into residential care. It is National’s direct and quick way to try to cut areas in welfare not only to force New Zealand to sell its assets but also now to force the elderly to sell their assets. Thank you. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 53 
New Zealand Labour 34; Green Party 10; New Zealand First 8; Mana 1. 
Part 1 agreed to. 
Part 2Applicable asset thresholds: General  
KRIS FAAFOI (Labour—Mana) 
: 
 Thank you for giving me the chance to speak to Part 2 of the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. In 1967 the Tremeloes a band that I am sure many of the people who will be affected by this bill were fans of released a song called “Silence is Golden”. The chorus to that song is “Silence is golden but my eyes still see”. The people out beyond these walls know exactly what is happening here. They still see what is happening here: that this Government is trying to sneak in this piece of legislation which significantly changes the way in which the threshold for assets for residential care is calculated for them. What will it mean for them? It will mean that it will cost them a lot more money to pay for their residential home care. 
 This change was not telegraphed. I cannot see it anywhere in this piece of information which was sent by the National Party around election time last year. I did not hear Mr Lotu-Iiga out around the traps talking about raising the threshold by the CPI. I did not see any of the members across the other side of the Chamber talking about this. But it is so important that it needs to be rushed through this House under urgency. It is so important that it has to be rushed through this House under urgency and it was not mentioned once in the Budget speech at all.  
This is so important that this needs to be rushed through in the House under urgency and how were the New Zealand people told about this? They were told in 1½ lines at the bottom of a press release from the Minister of Health. This is a Budget measure that the Minister in charge of this bill the Minister for Social Development said was a priority for her Government in her 1-minute speech in the first reading to the House—in her 1-minute contribution in the first reading in the House. You have got to give Miss Goodhew some praise too because at least she made a 2-minute speech—a 2-minute speech—in the second reading of this bill which is now before the Committee. But I will remind you again of that song “Silence is Golden”.  
I notice that there has been a change in membership for the Minister in the chair and I would encourage the new Minister in the chair the Hon Nathan Guy to maybe perhaps take a call and answer the myriad of questions that have been asked by people on this side of the Chamber as to why this has to be done. If as Mr Macindoe said in another contribution this Government wants to tackle the serious issues around aged care then why bring this in and raise $4.5 million in the first year and in the fourth year raise $16.5 million? Thank you very much you have solved the problems in aged care with that amazing measure that comes in with this bill—with that amazing measure. I say thank you very much to the National Government for sorting out aged care with this bill.  
It is ironic that the Minister in charge of this bill had the gall to say that this is a priority when it was not mentioned once in the Budget speech. It got half a mention in a press release and the Ministers who are in charge of shepherding this bill through the House afforded it 3 minutes of time. We will not even get the chance for the people whom this measure concerns in this area—the 170 people who will be affected in the first year and their families and the aged-care sector—to have their say because this bill is not going to a select committee. This is being rushed through this House under urgency. So the process is shameful and awful.  
You have got to ask why this is happening. Why is the Government doing this? Why is it picking on the elderly? Why is it picking on the elderly and at the other end of the scheme why is it picking— 
Hon Member 
: They did kids yesterday. 
KRIS FAAFOI 
: Well yeah yesterday was kids’ day and today it is elderlies’ day and maybe what is going to come beyond this Budget will affect the rest. The Government has already hit all Kiwis with its rise in GST in order to give its mates a tax cut but I ask what is going to come next.  
This is bad leadership because there are serious issues around aged care that need to be addressed. I went to an aged-care centre in Ian McKelvie’s electorate. It is facing serious issues and it needs some serious thinking done about this issue. But what does it get? What do the residents and the staff at Edale residential home in Marton get? They get this: four pieces of waffle from National which it claims is going to help sort out aged care in our country. What disrespect in another way can you get from this Government in terms of making sure that our elderly people are looked after?  
This change was not telegraphed in the various statements that were made by all the National Party candidates. Mr Goff mentioned before that Mr Key said during the election debate that we judge a Government on how it treats our elderly. Well this Government is treating our elderly with disrespect because it is not giving them and their families and the aged-care sector a chance to come and have their say. It may not like what they say but at least they should get their chance to have a say. People on the other side of the fence would get to have their say as well—those who agree with these measures. At least they would get their chance to have a say and we as parliamentarians who have a duty to make sure that we look after our elderly would be able to ask questions of those who are concerned about this bill. They are people like the residents at Edale in Marton and people in a number of residential homes in my electorate as well. Those people deserve to get the chance to have their say but because we are here on a Friday—well technically not on a Friday; this is still Thursday—still talking about this bill under urgency talking about the way that this bill changes the threshold for assets for residential care they do not get to have their say. I think that is a shame.  
It is a shame that this Government is doing it this way. It had the opportunity to do it properly and to make sure that we had a select committee hearing on what is a serious issue. I just want to repeat again that I ask the Minister in the chair to make a contribution. “Silence is golden but my eyes still see”. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 I am really pleased to take a brief call on Part 2 of the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. I want to commend my colleague Kris Faafoi the member of Parliament for Mana and back up his request to the Minister in the chair the Minister for Social Development to answer the questions that have been raised during the Committee stage. It is not as if we have another opportunity to have these questions addressed. We do not have a select committee process that we could look forward to or look back on; this is it. This is the final stage of the Committee stage of this bill after which we will move to the third reading and if the third reading votes follow the pattern of previous votes on this legislation this will be law before this session of Parliament is over.  
There is no chance for anyone to have a say. There is no chance for the bigger debate to be had on whether this massive visionary move by the National Government taking $4.5 million out of the pockets of rest home and hospital care residents which we are assured by National members will save our country’s economy was the best or the only measure to take. That debate cannot be had and the Minister has not taken the opportunity to justify that. I am frankly in her court; I would not try to justify it either. I would not hold my portfolio on a continuing basis if I was asked to introduce a bill that I did not agree with that was offensive and that was wrong. I am stunned that the Minister for Social Development the Minister of Health and the Minister for Senior Citizens have not considered that is an option. I do not know how they can justify doing this retrospectively to older people who are already in residential care by changing the regime under which they bought into a contract to have their final months of life supported in the way that was needed. How can they justify this coming to the House at all let alone under urgency?  
Earlier on in the debate we had quite a lot of discussion about how this was signalled to the public. We know that it was not mentioned in the Budget speech. We certainly know it was not mentioned prior to that. The Hon David Carter is in the Chamber and he will recall the many times that we have stood on public platforms in opposition to each other seeking the candidacy for the Port Hills electorate. During the last election campaign I listened to every word he spoke—you do not have much option really when you are on the same stage. I listened very carefully and not once did the Hon David Carter say to the good people in the Port Hills electorate: “By the way we are going to change the asset-testing regime for older people.” I bet the Hon Nathan Guy who was in the chair earlier did not mention that to his constituents either and I bet not a single member of the National Party did.  
This is a dirty little secret that has been kept under wraps by the National Government not just until the Budget speech—because it was not mentioned in the Budget speech—but until later in the day. Suddenly we have a bill in the House of Parliament and we are told that it is getting rammed through all stages under urgency. The way it was signalled to the public was hidden in a 1½ line sentence in a press statement by the Hon Tony Ryall—not even the Minister responsible for it—under the heading “Health receives largest increase in spending in the Budget”.  
 Would anybody read that headline and think: “Oh they’re going to put the asset-testing regime on to a holding pattern. They’re going to freeze the asset-testing threshold.”? Nobody who read that press statement would have been able to determine the truth because this is a dirty little secret. It has been kept from the public until after the Budget speech was read in the House. It has had no opportunity to go to a select committee. There is no opportunity to hear from the 170 residents who are affected by this immediately and the others who will be affected in the future. I think it is an outrage. It is a breach of the privilege of this Parliament to use urgency for matters that do require the urgent attention of the House. The public should and I am sure will feel outraged at this breach. 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 The Minister for Social Development has now resumed her seat in the chair and I am asking her once again to answer the questions about why the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill is being introduced why now why it applies retrospectively and why there was no consultation with anybody other than a couple of Government departments and her own. Will the Minister stand up and answer those questions because I know that at this moment Grey Power members are listening to this debate. They have already contacted members of this House and they are waiting to hear from the Minister why she did not—when she meets with them on a regular basis—raise with them the issue of asset testing knowing what a sensitive issue this has been over many many years.  
When National introduced asset testing it caused an outrage around New Zealand. This Government should have known when it was going to change it that there would be many people who would want to know what research what evidence National had in terms of what the effect would be. I say to the Minister: earn your money. Stand up and answer questions that have been put to you from this side of the Chamber by the parties that are participating in this debate.  
I ask a person like Paul Hutchison who is a man of compassion why he does not stand up and tell this Committee why he thinks taking $4.5 million from the most vulnerable people in our society is a good idea. Tell us Dr Hutchison why doing it secretly is such a good idea. I do not believe that is something that Dr Hutchison would have supported. I suspect that the backbench members of the National Party had absolutely no idea that this policy was going to be introduced. They had no idea that a bill was going to be put on the Table of the House and they are nothing more than fodder. They are fodder for the National Government. They have to stand up and defend it.  
I ask Chris Auchinvole who is also a man I think who is a thinking person what he thinks about this bill. How does he feel about being used by Cabinet to defend a measure that I guarantee he had no say in? The first this caucus— 
Louise Upston 
: Do you even know what clauses we’re talking about right now? 
Hon ANNETTE KING 
: The first the junior whip would have heard about this measure was when it was taken to their caucus just before the Budget was read. Just before the Budget was read they would have gone in and said: “By the way you’ll have to stay here on Friday because we’re introducing a bill that is going to change asset testing in New Zealand.” That is what they would have done. So the cannon fodder on the backbenches is expected to leave this Chamber and go out and defend the decision to all the older folk around New Zealand. Well you are going to find it heavy weather.  
The first argument the older folk are going to put to those new backbenchers who do not seem to be worried about it is why National did not consult them. They will say: “Why didn’t you ask us and tell us that that was what you were going to do?”. They will ask why National could not have had the decency and the honesty to go out and say to them that National was thinking about changing the asset-testing regime and ask them about it. The Government could have said: “There are a number of ways we could do it. We could leave it as it is we could do it by the CPI or we could do it in a number of other ways. What do you think the impact would be?”. If National could have talked to Grey Power at least it has a big base of members it could go to—a large number of members it could go to and ask what they thought.  
This is a particularly sneaky piece of legislation. I cannot think of a sneakier piece of legislation in recent times. Mr Auchinvole is laughing about it. I am sorry that he is doing that because he obviously does not think it affects the older folk in New Zealand. You see the people whom this does affect are not the wealthy people. Those who have money have no problems when it comes to paying for rest home care. It does not worry them at all but it certainly worries those who have the least. They are the ones who are affected. Get on your feet Minister and answer some questions. That is your job. 
Hon PHIL GOFF (Labour—Mt Roskill) 
: 
 I want to pick up where my colleague the Hon Annette King has left off. We have been sitting in this Chamber now for some time. We have been waiting for the Minister for Social Development to get to her feet to justify what she is doing in the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill why she is rushing it through under urgency why she has not consulted with any group or individual in New Zealand about it and why she will not have the Government front up at a select committee and explain to people why the National Government kept this as a dirty little secret that it did not tell the electorate about. I am surprised that this Minister has not got to her feet to defend this legislation. She prides herself on being a westie—you know one of those people who tell it as it is who are ready to get up and stand behind what they do and justify it. But she has been nailed to her seat. She has not taken the call. She has not answered the questions. She has not had the courage of her convictions to get up to say to the country why she is doing this. 
And we have that row of backbenchers over there. Maggie Barry is from the North Shore. There are a lot of elderly people on the North Shore. I wonder whether Maggie Barry fronted up before the election and said to them: “Well I’ve got to tell you this: the Government’s got to make hard calls and what we’re going to do is stop the process of exempting your assets from asset testing when you’re in the last 18 months of your life.” I wonder whether she got up during the election campaign and said that. 
Maggie Barry 
: It wasn’t known at that stage Phil. I’m not a clairvoyant.  
Hon PHIL GOFF 
: Jami-Lee Ross was in a by-election and an election campaign. 
Hon Annette King 
: She just said it wasn’t known. 
Hon PHIL GOFF 
: It was not known! Oh it was not known. I think that Annette King is right you know. I think those backbenchers are sitting there like stunned mullets ashamed embarrassed and not prepared to get to their feet to defend their Government because this bill was dumped on them. They did not know a thing about it. Well welcome to the world of politics Maggie Barry! You did not know— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
Hon PHIL GOFF 
: You did not know about it but you are— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
Hon PHIL GOFF 
: —part of the team and you will have to take responsibility. You will have to be accountable for what you did but you will not be. 
Louise Upston 
: I raise a point of order Mr Chairperson. It is a very longstanding tradition that you are not brought into the debate. 
The CHAIRPERSON (H V Ross Robertson) 
: That is very true and I had pointed it out to the member. 
Hon PHIL GOFF 
: I apologise to the Chairman because I know that you Mr Chairman would not have had anything to do with this. You would have had the courage of your convictions to speak— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! The member knows that he cannot challenge someone’s courage. He is a very longstanding member and knows better than anybody else. 
Hon PHIL GOFF 
: Speaking to the point of order Mr Chairman far from challenging your courage I was saying you would have had the courage. By inference maybe the others did not—but that is only by inference. 
I want to know why this National Government which knew before the election all of the things that it knows now never told the people of New Zealand what it intended to do. Why did the National Government keep this as a dirty little secret that it would not share with the country? Did it tell the elderly people of this country what it was going to do? Did it tell the elderly people of this country that it was not going to index the rates rebate so that those people who had worked hard all their lives and were struggling to pay their rates would not get assistance to match inflation and the high rise in rates that has occurred? Did Government members tell New Zealanders—here is another dirty little secret—that they would remove the promotional budget for the Rates Rebate Scheme? They will not necessarily have what it takes to remove rates rebates but they do not want people to know about it so that they can take advantage of it. That is another sneaky little secret that those members did not warn people about. 
You know what is it that this Government has got against the elderly? In the last term it actually took away the home help that many elderly people relied on so that they could stay in their own home. They are being forced out. I was in Kris Faafoi’s electorate during the by-election and we came across a 91-year-old lady in Titahi Bay who was being forced into a rest home because the National Government had cut her home care. Now that she has been forced into the rest home the Government is going to make sure she has to use up more of her assets to be able to meet the costs of care—after it put her in that position. Why is it that this National Government in everything that it has done in this Budget has picked on the most vulnerable? From the young paper boys and girls it is now taking away their tax rebate. How pathetic is that? There are 68000 young people out there in the rain and the wind and the cold in Wellington delivering the newspapers and the Government takes away their tax credit. It knows that people cannot vote at that age and it knows that the elderly the most vulnerable are not in a position to defend themselves. 
No wonder not one of those backbench members will get to their feet and defend this. No wonder the Minister time and again will not take the call. I hope she will under this provocation. I hope she does have the courage and the conviction to get up and say to this country why this National Government has done something that it did not tell the country about and why it is not prepared to go to the country to consult—to let people come to a select committee and say what is wrong with what she is proposing. No wonder every National backbencher and the Minister in this Chamber today are too ashamed to speak out to defend what they have done to those who are defenceless those who are most vulnerable and those who will be paying a price for something that the National Government never had the guts to tell the country about— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
A party vote was called for on the question  
That Part 2 be agreed to.  
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 54 
New Zealand Labour 34; Green Party 11; New Zealand First 8; Mana 1. 
Part 2 agreed to. 
Clauses 1 to 3  
A party vote was called for on the question  
That clause 1 be agreed to.  
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 54 
New Zealand Labour 34; Green Party 11; New Zealand First 8; Mana 1. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to.  
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 54 
New Zealand Labour 34; Green Party 11; New Zealand First 8; Mana 1. 
Clause 2 agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to.  
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 54 
New Zealand Labour 34; Green Party 11; New Zealand First 8; Mana 1. 
Clause 3 agreed to. 
Bill reported without amendment. 
Report adopted. 
Third Reading 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 I move  
That the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill be now read a third time 
. I would like to start by acknowledging the Parliamentary Counsel Office Treasury the Ministry of Social Development the Ministry of Health and other contributing agencies for their role in this work. The Government welcomes the enactment of this bill. It sets in place a responsible and sustainable framework for assessing a person’s assets to determine whether they are eligible for assistance through the residential care subsidy.  
This bill amends the Social Security Act 1964 to change the amount of annual increase in the applicable assets thresholds used in determining the amount that residents in aged residential care are required to contribute to the cost of their care. Throughout this debate and throughout the Committee stage we have heard all sorts of rhetoric about what might be happening but actually current increases of $10000 each year in the thresholds are going to be replaced with CPI indexation of the thresholds. We have heard that all sorts of other things are going on so let us get the facts here. The bill sets the thresholds for 1 July 2012 to 30 June 2013 to $213297 for Threshold A and $116806 for Threshold B respectively. Threshold B is the lower threshold excluding a person’s home and car and it also requires those amounts to be CPI adjusted by Order in Council for each later year beginning on 1 July 2013.  
This bill means that the residential care subsidy will continue to be available into the future as the demand for residential care for older people rises. It is a fair deal and one that this Government is pleased to support. It is a priority for this Government to enact this bill at this time. Passing this legislation through this Parliament will provide certainty for those people who may require residential care and for the Crown and will establish a sustainable pathway. I commend this bill to the House. 
KRIS FAAFOI (Labour—Mana) 
: 
 Thank you very much for giving me the chance to speak in the third reading of the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. The previous stage—the Committee stage—I think could best be described as unbalanced because not one member opposite took a call in the Committee stage. The bill is such a priority for this Government as the Minister for Social Development said in the first reading but there was not one contribution from the other side of the House. Actually to be fair there were two contributions: a point of order from the junior whip and Maggie Barry actually answered a question for the Minister in the chair. If this Government thinks this bill is a priority then it might have been good for members opposite to take a few more calls—or a call—in the Committee stage. 
I feel sorry for the members opposite who did not know that this measure was coming in the Budget. It is going to be a very long plane ride or car drive home because those members opposite know they are going to have to go home to their local electorates if they have got one or to their piece of New Zealand and explain this to the people in their electorate. Maggie Barry has got quite a few rest homes in her electorate so she can consider herself to be very very busy soon having to explain the measures that are contained in this bill which will adversely affect quite a number of the older people in her electorate I would say. I am sure that the families of those concerned on the North Shore will make their opinions known to her so the phone in the electorate office of Maggie Barry MP will be going off the hook now—off the hook. As she explained to us she did not know at election time that this was going to happen. This is a new initiative from the Government so I feel sorry for all the members at the back of the House in the National Party who will have to go home at the end of this urgency and say: “What the hell happened there?”. They will have to go home and explain this rubbish piece of legislation which was brought sneakily into this House. 
This has been sneakily put through this House. It was not mentioned once—you know I have been saying this ad nauseum today—in the Minister of Finance’s Budget speech. Not once. How were the people of New Zealand notified about this legislation? By one and a half sentences in a throwaway line in Tony Ryall’s health budget press release. Shocking appalling process—that is the way that the Government announces what Paula Bennett called a priority. 
Darien Fenton 
: She did 2 minutes during the first reading.  
KRIS FAAFOI 
: Sorry yes—2 minutes. I will give her credit for that. The other travesty here in this process is that this is being rushed through under urgency. In the first year of this measure being introduced 170 elderly Kiwis who are currently in rest home care are going to be affected. That is 170 families out there and probably more who are going to be very concerned about what is happening in this House today.  
Hon Annette King 
: That’s just to start with.  
KRIS FAAFOI 
: It is just to start because—if Ms King could advise me about the fourth year—I believe it is 640 individuals who will be affected in the fourth year. So over the next 2 or 3 years even more families will be affected by this. Those families are not going to get the opportunity to take their concerns to this House. They are not going to be able to come and say that they are unhappy happy or indifferent or ask: “Have you thought about this? Have you considered that? How much money is it going to save?”. We can answer a few of those questions now because the Ministry of Health has quite helpfully given us some numbers in the regulatory impact statement: $4.5 million saved in the first year and I believe that in the fourth year it gets up to $16.5 million. This is in a measure that earlier someone from the other side of the House and I think it was Tim Macindoe said was a measure to ensure the sustainability of residential aged care in New Zealand—to save $46 million. If this Government thinks saving $46 million in— 
Hon Annette King 
: It’s $16 million by the fourth year.  
KRIS FAAFOI 
: I say $16 million; $46 million I think in total. If this Government thinks saving $46 million is the answer to sorting out residential aged care in New Zealand it has got some problems. 
During the Committee stage many people on this side of the House did mention the silence of the Minister who was in the chair the Minister for Social Development. Well to be fair one member of the National Party did answer a question even though she got herself into a bit of grief with the whip. But the silence from the chair just shows you the tactics that the Government has employed to bring this piece of legislation through. It wants to sweep it through this House as fast as possible so that nobody outside of this House realises what is going on. That could be put in the category I believe of dodgy process. Those people outside of this House who are worried about this—and as Annette King said Grey Power is watching—wanted to hear from the Minister as to why this is being brought in what the rationale of it is how much money it is going to save and why they were not consulted earlier on. None of those questions were answered at all apart from the response that we got from Maggie Barry to say that members did not know about this before the election. Well I am sorry about this but that is just not good enough when serious questions are being asked and especially when this House does not get the opportunity at the select committee to let other people answer questions. So we are here asking the Minister in the chair questions and there was not a peep out of the Minister. I think that is a shame given what I think are the large ramifications of this bill to elderly people around the country. 
This is a serious issue about how we look after our elderly. It is an issue that personally I think needs the heads of this whole Parliament to get round a table and sort out. It needs a broad cooperative approach to make sure that our loved ones—and I am sure that we all in this House have people whom we hold dear and who are around this age—are looked after properly. If some of those people cannot afford care we must look at how we provide that for them and if there are some who can we must look at how we make sure that they are looked after as well in a way that is not overly burdensome to them. But it is an issue that needs a proper debate a broad debate about all the issues that are concerned in aged care not a piece of flimsy rushed through the House last-minute legislation that the Government would prefer be swept through this House very very quickly. 
This is a piece of legislation that unfortunately has gone through this House under urgency. It did not deserve that. This issue is bigger than this. It should not have been swept through under urgency people should have been able to have their say and as I said during my Committee speech about the silence of the Minister in the chair when we were putting questions to the Minister—I think some of them were reasonable and some of them might have had a slight political edge to them—the silence was golden. I think that shows the level of respect that this Government through this process with this bill has shown the elderly people of New Zealand. 
Hon TONY RYALL (Minister of Health) 
: 
 I wanted to come down to the House to acknowledge the fine stewardship of the Minister for Social Development throughout the consideration of this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. This bill represents a slowing down in the increase of the asset-testing threshold in New Zealand. Instead of increasing it by $10000 a year and stopping it in 2026 which is what the existing legislation does this new legislation— 
Hon Annette King 
: Because it would have been phased out by then you silly man.  
Hon TONY RYALL 
: It does not get phased out if the increase is stopped in 2026. That is not a phase-out. What this legislation does is slow the increase right up into the future. The increases in the asset-testing thresholds are slower but the thresholds still continue to increase. Money is going to be raised from these increased asset-test thresholds and the real question the Opposition never asked is what that money is going to contribute to for helping older New Zealanders.  
I will tell you what it is going to contribute to over the next 4 years: rest home subsidies will increase by $47 million— 
Hon Members 
: How much? 
Hon TONY RYALL 
: There will be $47 million extra in rest home subsidies. On top of that we will be increasing dementia bed subsidies by $37 million over the next 4 years and home support services will increase by $40 million or so over the next 4 years. So there will be $47 million extra in rest home subsides $37 million extra in dementia bed subsidies and $40 million - plus more in home care services.  
This Government is making rest home care and home care priorities in investments and one of the ways that we are able to afford this extra investment for the older New Zealanders of this country is to slow the increase in asset-test thresholds. I agree with Minister Bennett; I think it is moderate it is sensible and it recognises the tough economic times our country is in and the demographic pressures. Of course information has been made available on the Ministry of Health website to assist people who are inquiring and Grey Power and Age Concern were briefed before the Budget yesterday to advise them of what was happening. I certainly commend this bill to the House.  
Hon RUTH DYSON (Labour—Port Hills) 
: 
 I would not be at all surprised if the next speaker from National is Steven Joyce. Clearly the optics have not been great on this. Clearly the messaging has not been as succinct as Minister Joyce the “Minister of Everything” would wish so the Hon Tony Ryall was sent down to rescue the Hon Paula Bennett who did not make a single contribution through the entire Committee stage of this legislation. During the introduction of the bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill Minister Bennett described it as a priority. She said this was a priority. Well the Hon Tony Ryall has just described to us the loaves and fishes of the asset-testing health budget regime. This is a fantastic policy whereby you can save $4.5 million taken from the dressing gown pockets of residents of rest home and hospital care - level facilities. Suddenly you get $4.5 million over here out of their dressing gown pockets—they are already residents; they have entered into that contract and it is being broken by National—and on the other side of the ledger you can put $47 million into rest home care you can put $37 million into dementia care and you can put around $40 million into home support. Wow! That is loaves and fishes in action. Thank you Minister Ryall for that amazing lesson in new maths. No wonder this Budget looks so bad for New Zealanders. If people on that side of the House think that any older person is going to fall for that spin then they are wrong.  
This has been a disgraceful breach of the respect that we should hold older New Zealanders in and a disgraceful breach of proper parliamentary process where urgency should be accorded when it is needed and at no other time. In fact the arrangements of the House—the rules of the House—have been changed so that we do not have urgency just when the Government wants to do overtime. We are now correctly calling that extended sitting hours. This legislation may well have fallen into that category. It may have been that the Government has got a bit behind in its workload and wanted to get a bit more done but at no time ever could this be justified as needing to go through all stages under urgency without any reference at all to a select committee and therefore to the public.  
The arrogance demonstrated by the Government towards older New Zealanders is gobsmacking and I am sure as my colleague Kris Faafoi mentioned earlier this will be mentioned regularly and frequently to members of the National Party by their constituents. I know that as word of this gets out over the weekend and over the next little while many people will be contacting the National Party and asking those members why the Minister for Social Development could not answer a single question during the Committee stage. Why could she not answer the questions of how this bill helps why it was needed and why it went through the House under urgency? There is no justification for it at all.  
I was also surprised that the Hon Peter Dunne did not take a call at all on this bill; nor did the Hon John Banks. I am not sure whether he has realised that he is actually a member of another party now. He is a member of ACT and his vote was cast on his behalf by National. And nobody from the Maori Party took a call despite their votes being cast in support of this legislation as well. So for the entire Committee stage we had opposition raised by members of the Green Party by NZ First and by Labour and not a single contribution from the majority vote that will make this legislation our law and freeze the threshold for the asset-testing regime for older people—freeze it for the people who are already in a rest home who entered that rest home with a clear contractual understanding of how the law was a contract that has now been broken by National.  
The Hon Tony Ryall said: “We’re not changing anything dramatically; we’re just slowing down the increase.” This is a major policy reversal Mr Ryall and I know that that Minister understands that very well. No amount of his spin is going to alter the fact that this has penalised older people who are not able to have a say at a select committee—not just older people but older people who are at the most vulnerable stage of their lives at a level where they are dependent on support being provided to them because they are not able to independently live on their own.  
We know and I am sure everyone in the House is aware of the issues in the aged-care sector. Everyone knows the issues and the challenges. What we have seen from this Government is a total denial of its leadership responsibility in aged care. What it has done is said: “Yes we know. There are lots of issues in aged care and we’re going to change the asset-testing regime for older people.” If that is the answer then the Government has not understood the question. Everyone else throughout the country in this sector understands the issues and the challenges. We should face up to that.  
I recall at the Health Committee when Labour and Green members of the select committee tried and tried and tried to get the select committee to agree to having an inquiry into these issues so that we could across all the parties in Parliament look at the issues in the aged-care sector and develop some systematic responses to them—in consultation and in partnership with the different players. They all care about the quality the affordability the sustainability of home support of residential care of dementia care. But no the National members blocked that inquiry so Labour and the Greens did it themselves and we came up with a lot of tragic stories about issues facing us in the aged-care sector. Grey Power was a partner in that inquiry as well. Grey Power I know and Age Concern New Zealand were told of this change just minutes before it was introduced to the House. They had no opportunity for any genuine debate and they had no opportunity for consultation. They should be feeling very aggrieved and I know they will express their views to the appropriate people at the appropriate time.  
This is a big disappointment to me because in my view it is an opportunity lost. We have every part of the aged-care sector saying that we know there are issues we know there are challenges and we agree on the problems. Why could the Minister of Health and the Minister for Senior Citizens not have taken that opportunity and said: “Let us work together and develop solutions that are sustainable.”? Instead they are penalising a small group of people for a pitiful amount of money that will make no difference to the overall health budget but will penalise just those who have been denied an opportunity to have a say.  
KEVIN HAGUE (Green) 
: 
 In the second reading debate on the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill I made some references to parliamentary debate and to remarks made by the Prime Minister at the time Michael Joseph Savage around the passage of the Social Security Act. I am going to give that quote in full now. He said at the time that the honourable gentlemen “on the Opposition benches want to turn back the clocks. I want to know why people should not have security—why people should not have security in the evening of their days or when they are invalided. What is there more important in Christianity than to be our brothers’ keepers in reality?”. That idea of security has formed the basis of the social contract between the State and the public since the 1930s. That idea of security involves a number of different concepts of course. It includes the idea of fair treatment—people being treated fairly. It involves effective high-quality services and it also involves policy stability. So all of those elements are important and all of those are called into question by the Government’s behaviour around this bill.  
Asset testing is a discriminatory regime. As Grey Power has so ably advocated asset testing is a form of discrimination against older New Zealanders. It has no place in the New Zealand policy landscape. It is also contrary to the direction that we want to pursue in our economy in that in our economy we are trying to encourage saving yet asset testing for aged residential care encourages people instead to spend not to save—to dispose of their assets or else to conceal them. That is inappropriate. Asset-testing regimes lead to situations where those who have the connections and the legal nous to be able to evade the test are generally easily able to do so and those who do not are thereby penalised leading to capricious effects. That is not what we require in a law.  
Asset testing for aged residential care also mitigates against being able to pursue our Ageing in Place strategy where we want to try to retain older people’s ability to live in their own homes. A person who needs aged residential care for a time but is required effectively to lose their family home because of the asset-testing regime and then regains their independence actually is no longer able to leave the rest home and to return to their family home—a situation that we would expect to occur more and more as time goes by. So asset testing is discriminatory and something to be discouraged on all fronts.  
Ruth Dyson has just spoken in the House about the repeated attempts that Labour and the Green members made in the last Parliament towards an inquiry into aged residential care and this Government—or I guess the National Government that we had at that time—resisted every one of those. Yet the inquiry that we undertook found that wages were totally inadequate in that sector that quality of care was totally inadequate in that sector and that training was totally inadequate in that sector. What we see is a situation where both the asset-testing regime and the type of care that is provided show a disrespect for older New Zealanders.  
But also people are entitled to policy stability. That is part of security. There are many New Zealanders older and otherwise who will have planned their retirement who will have planned their aged care on the basis of the policy settings that have been in place. For 10 years those policy settings have been that asset testing is being phased out. That has been the goal of the law. Now with a stroke of the pen this Government is changing those policy settings changing the goal so that rather than the aim being to eliminate asset testing the goal of the Government’s policy is now to retain asset testing to freeze it in place in real terms. In fact that is a polar switch and one that older New Zealanders were entitled to at least know about before it occurred—and we believe to have a say about.  
In fact I had to struggle to restrain my incredulity at the comment from the Hon Tony Ryall. He appeared to give the impression that Age Concern and Grey Power were in some way consulted about this change before the Budget was read yesterday. My understanding is that Age Concern and Grey Power were told about what would occur approximately an hour before the Budget. That fails every test of consultation law in New Zealand. If the Government believed that those organisations were entitled to be consulted then actually there was a whole lot more it needed to do.  
The reason behind this bill is really in fact to fill the hole in the Government’s health budget—to fill the hole that a 2 percent increase on last year’s appropriation for health will leave. That 2 percent increase will go no way towards covering the costs of merely treading water in health—merely being able to retain our same capacity to provide services—let alone deal with population growth an ageing population changes to KiwiSaver that district health boards will need to somehow accommodate and the trumpeted $1.5 billion worth of new initiatives. In fact those will have to be funded entirely from savings or cut programmes within the health sector and this is one of those.  
The Government needs this bill to fill that hole to compensate for the magical thinking that lies behind its health budget. That is why we have got this bill—that is why we have got this bill. It needs it for that reason. The next step in the logical chain is that it needs to be able to pass it through into law without public consultation because it knows that the public are extremely exercised about the topic of asset sales and would wish to actually have their say about that matter. The Government cannot afford to have this bill go before a select committee because it knows what the public would say it knows what older New Zealanders would say and it knows that it would make it a heck of a lot harder to get this bill through. It cannot afford to have it go through select committee and that is the reason for the urgency. That is the reason for the urgency. The 1 July commencement date for this bill is actually the end of the chain; it is not the beginning of it. This whole process is in order to allow this Government to get this bill through without public scrutiny to fill the hole left by magical thinking in the health budget. It shows a contempt for the processes of this House and a contempt for older New Zealanders. Shame on this Government. 
Peseta SAM LOTU-IIGA (National—Maungakiekie) 
: 
 It is my honour to speak on the third reading of the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. I have been listening intently on this side of the House and I have heard all the arguments from the Labour Party. And the belief that you can shout and scream and cry loud and be heard is just—having listened to the false arguments that have come from across the House I just have to straighten out some of the hyperbole.  
As the Minister for Social Development has already said this is about changing the annual increases. It is not taking away the annual increases; it is merely making the annual increases go up in an affordable way. If the Labour Party should have learnt anything in the last 3½ years of being in Opposition it is the context in which we now operate within this global environment. It is a global environment of recession; it is a global environment of fiscal responsibility. If those members want to live like the Greeks and eat Greek salad then they can go right ahead and campaign on those promises. But if they want to be fiscally prudent and fiscally responsible like the National Government then they can sit there and learn some things.  
What are the facts? What are the facts? Well the facts are that the threshold levels for aged residential care were increased from $210000 to $213000. That is what it is: it has gone up. It has actually increased. That is for singles and for married couples who are both in residential care. It has gone up for a married person whose spouse is not in a rest home; it has gone up to $116806 from 1 July. But what has happened as well is that the family home and car are not counted as assets while the remaining spouse is not in a rest home. That is contrary to what has been espoused across this Chamber. It is contrary to some of the things that have been said by the Labour Party.  
I will tell you what is not changing. What is not changing is that it will not affect anyone getting subsidised in rest home care or anyone who applies and is assessed before the 1 July 2012 date. 
Hon Annette King 
: Of course it affects them. 
Peseta SAM LOTU-IIGA 
: Mrs King continues to propagate the nonsense that they are affected—that this is retrospective. But I am sorry Mrs King I ask you to read the bill—I ask you to read the bill. I will tell you what: I am specially going to visit the rest homes in Maungakiekie from Onehunga One Tree Hill Ellerslie and right throughout my electorate.  
I will tell you what I am going to do. I am going to talk about the facts of this Budget. There is $47 million in rest home subsidies over 4 years—increased. There is $35 million to dementia bed subsidies—increased. There is $40 million for home care support—going up. That is what they want to hear in our electorates. That is what the people of New Zealand want to hear and that is what this National Government is providing for the people of New Zealand. I support this bill. 
Le’aufa’amulia ASENATI LOLE-TAYLOR (NZ First) 
: 
 I rise to speak on behalf of New Zealand First while at the same time I am trying to find a good reason to agree with the previous member’s speech. I believe that Peseta Sam Lotu-Iiga is rather confused about which bill is being discussed right now; nor is he aware of what is being said. In fact the previous speaker reminds me of the lyrics of an Irish song that go something like “For all the languages we cannot communicate.”—“For all the languages we cannot communicate.” There seems to be no clear communication from the Government nor is it able to say anything that will provide any comfort to any of our senior residents at residential homes.  
It is strange to tell that National earthen lot that some of us over on this side of the House can articulate what they cannot—clearly they cannot. I thought it was very strange to hear the Minister for Social Development say that she sees the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill as a fair bill. For years our citizens who should be cared for fairly—“fairly” is the word—in residential care have been demanded by Government departments to complete forms. If they need long-term residential care in hospitals they need to complete these forms. There is also another demand of them and it goes like this: “You may be able to get a residential care subsidy from the Ministry of Health.” Note the word “may”; it is only a three-letter word. Why is that? It is because the Ministry of Health determines whether a person may get a residential care subsidy. Our senior citizens may get a residential care subsidy if they are assessed as needing long-term residential care in a hospital. It also depends on how much they and their spouses earn.  
These residents have spent many years of their lives serving this country. Peseta Sam Lotu-Iiga would not understand that. These residents have spent many years of their lives contributing to and building the economy of this country. Somebody should tell that to Peseta Sam Lotu-Iiga. These residents have spent many years of their lives fighting hard to ensure that people like those members over there on that side of the House have a better future. They have worked really hard to provide for a brighter future and a healthy environment for all New Zealanders not just for the few—and not just for the few wealthy friends of the National Government. Sadly the Government has failed to take that into account. In fact the response it has is always “Aye. Aye.” “Aye” becomes the only vocabulary of members on that side of the House in their everyday language leaving common sense outside of Parliament altogether.  
The Minister who introduced this bill Paula Bennett is obviously confused about what planet she is on given that her welfare destruction bill says yes to some sort of youth training and no to sensible New Zealand First policies that create jobs. The bill strikes at the hearts of our elderly citizens by determining that their assets should be used to pay for the cost of their contracted care services. Instead the Government just responds with “Aye” to anything and everything. I am reminded of an old saying: 
The ball no question makes of Ayes and Noes 
But right or left as strikes the player goes;  
And [she] that toss’d thee down into the field  
[She] knows about it all—[she] knows—[she] knows.” 
How naive of this Government to quickly forget about many years of service and positive contribution. This Government needs to wake up and start introducing some better solutions. These welfare reforms will have skilled Kiwis packing their bags for Australia or being reduced to student wages. While we are on the exodus path we might as well send our elderly off with them! At least in Australia they may have a better hope of holding on to their assets.  
Has anyone thought of the effects that this new Budget measure will have on low-income families? Alfred Ngaro will forget that—oh yes. Those families will be forced to provide for the care of their parents and grandparents. National members cannot sit there and complain that Pacific people are the highest statistics on the unemployment scale when the Government is forcing them to stay home to look after their elderly because Pacific people simply cannot afford to have their elderly placed in care. I know this for sure. Pacific people cannot afford to go to work because they have to stay home and look after their papas and mamas from the Cook Islands and their tina and their tama from Samoa. I know that those small-minded National members will say: “Well these people do not have any assets so they won’t be affected.” Well this Budget measure is surely going to say to these people: “Don’t bother attaining assets.” That is what this bill is all about.  
In 2010 19000 depended on the residential subsidy. This rate is likely to drop dramatically. What the Government is saying to the children of New Zealand is: “Don’t bother having savings don’t bother having assets and don’t bother with the bright future because this will mean absolutely nothing when you are older.” That is what this bill is all about. People need not bother having assets that are worth more than $213000. Have those members seen the prices of houses in Auckland especially in Manukau? The average price of a house—just in case Alfred Ngaro has forgotten—is $345000 in South Auckland. As we get closer to central and east Auckland this price increases to $800000. I am sure Housing New Zealand Corporation will be grinning with glee at these facts because there will be an increase in the number of people renting their homes after hearing about the threshold which will be so low that they cannot even buy a parking slot in the city. National members will come back with the argument that the families of the elderly or the younger spouses can live in their houses so that they are not affected by the threshold.  
This zero Budget—or zero initiative we might as well call it—is dependent on volatility. The Government has decided to base the job market on Christchurch. Well let us face it; we are not even sure whether that is going to happen or whether it is going to bounce back. Now the Government will base how the elderly are going to be cared for on a CPI rate of 2.1 percent. I have constituents a couple who are reaching the age of retirement and have saved up in order to buy the State house they have been living in for a number of years. They were informed in April by the Housing New Zealand Corporation that they could actually buy this property. That was last year. This year they were told that the offer has been withdrawn. I suspect that the Housing New Zealand Corporation knew that these people and those in a similar age bracket were best not to buy their houses because of the Budget announcement yesterday. So what are they left with? Well there are no assets to pass on to future generations just so they can have a subsidy to allow them to stay in a rest home. The reality is that rest homes can come pretty close to eating up a person’s entire wealth. We do not support this bill. 
Mr DEPUTY SPEAKER 
: I call Tim Macindoe. 
Hon Ruth Dyson 
: Oh! You could have chosen Annette. 
TIM MACINDOE (National—Hamilton West) 
: 
 I am very sure the Speaker is glad he did not choose Annette. As the Hon Tony Ryall noted a few minutes ago this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill merely slows the increase in the asset-testing threshold. Opposition members have worked themselves up into their customary collective frenzy and declared for the umpteenth time the end of the world. But they do not cry foul about the increase in rest home subsidies or in funding for vitally important dementia care—a problem that we know is increasing dramatically. They do not cry foul about the increase in home-care services provisions. These are the things that are at the heart of this measure we are debating this afternoon. Instead the members opposite conveniently ignore all these worthy outcomes because they do not want their constituents to know about them. 
So let us put it on the record that that is what we are doing. I am proud to tell my constituents that we are making provision for those important things because they know that it is a huge challenge. I applaud yet another step that meets the needs of our ageing population and the many fine folk who work in the aged-care sector while acknowledging as all but the occupants of “Planet Labour” surely do the very tight fiscal environment in which we are operating. 
On “Planet Labour” sound policy means squandering all the funds in the good times and leaving nothing for the bad. On “Planet Labour” it means making big commitments to sound kind and caring but failing to make any budgetary provision for those commitments. That was the record of Labour’s 9 years in office. It means failing to establish priorities to ensure that our country can avoid heading down the path that so many of the European economies are currently embarked upon and it means coming into this House to feign mock outrage and pretend that improving our public services and making provision for these important measures will not matter. 
That is why Labour members are still hopelessly out of touch with public opinion. That is why they are still hopelessly divided even within their own caucus. And that is why they remain totally without hope of returning to this side of the House for many many years to come. 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 Sam Lotu-Iiga said that the Opposition has been shouting and screaming to be heard. Well yes we have and I will tell you why: because no one over there is listening. No one over there has had their ears open to anything that has been said by the Opposition side of the House today. I heard Tim Macindoe and I have got one question for him: did he tell his constituents his elderly constituents before the election that he intended through his Government to change the asset-testing regime? Did he tell his constituents? Well I know what the answer is. The answer is a big fat no. He did not tell his constituents. 
I have to say that his Cabinet did not tell him either. The backbench members did not know that the Government was going to bring this measure in. I feel sorry for the suckers. They did not know that the Government was going to bring in this measure until they trooped into the caucus room yesterday. They sat down and Bill English proudly held up his Budget and said: “By the way we’re going to introduce a little bill just a few minor technical amendments and we’re going to change the asset-testing regime. You sit on your chuffs in the House and say nothing because that is what your job is. You’re the suckers for our policy.” That is what happened. I know that is what happened. I have to say that it is pretty blimmin poor for the older people of New Zealand. 
Tim Macindoe said we all have to make sacrifices. Well is it not interesting: members opposite are going to take $4.5 million off the poor old people who spend on average 18 months in a rest home but guess how much is going into VIP limos? Guess how much is going into VIP limos? There is $8.2 million for the big limos. I am going to say they are taking the money off the old people so that they can have their BMWs. That is what it means—take it off the old people so that Government members can pay $8.2 million for their limousines to drive around in. 
There is one word for this Cabinet—and I am not going to include the backbenchers because they did not know about this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill. There is one word for this Cabinet: arrogant. What an arrogant Cabinet. You know during the Committee stage of this bill would those arrogant Ministers stand up and defend this bill? No they would not. They sat on their behinds in this House and would not say a word. What do they earn their money doing? I am sure that Tau Henare when he was a Minister would have been on his feet. He would not be able to resist it. But did we hear from Paula Bennett? Did we hear from Nathan Guy? No they sat there with their heads down. They could not defend this measure. Why could they not defend it? Because they consulted with nobody and it was a sneaky secret little deal. It was a secret deal done in Cabinet that did not even include their backbench colleagues. They said they consulted on it. Tony Ryall: “We consulted on this bill.” Do you know what? They consulted on this bill at about the same time they told the backbench—yesterday. Is that consultation? Does that constitute consultation? You ring up Age Concern and Grey Power and say: “By the way we’re going to change the asset-testing regime in the Budget in half an hour.” Is that consultation? No it is not. It is arrogance. That is what it is. 
The Minister for Social Development said when she did finally speak in the third reading—a well-prepared 2-minute speech—that this was a responsible framework. She said that the fact is that it is a good deal. It is a good deal for whom? It is certainly not a good deal for older New Zealanders. And she said that it is a priority for this Government. When did it become a priority for this Government to change a regime that has been in place for almost 10 years and that older New Zealanders and people who are moving into the years when they will need rest home care were relying on? They had no idea that something that had been on the books for 10 years was going to be changed at a swipe of a pen under urgency and through a very secret sneaky little deal done in Cabinet.  
Andrew Little 
: Shameful 
Hon ANNETTE KING 
: Shame! It is shameful. It is very shameful indeed. This measure is not a priority for this Government. It is nothing but meanness. I think those members ought to be ashamed of themselves. They are taking $4.5 million off the most vulnerable. 
Then they told us that they were doing it so that the older people could have certainty. Well do you know what? They had certainty. They had the certainty of a 10-year-old policy that the National Party did not change in the first 4 years that it was in Government. It never mentioned it never changed it never said it would change it. Older people had certainty for 10 years and then at the drop of a hat National changed the policy. It changed it for $4.5 million. It is OK to spend $8.2 million on limos but you cannot spend $4.5 million on the most vulnerable in our society. 
I have to say it is the beginning of the end for older people in New Zealand under a National Government. I have seen it all before. Bill English in 1998 said that he would not get rid of asset testing although he had promised in a coalition deal with New Zealand First that he would. He welshed on the deal under National which refused to get rid of asset testing. In this Budget National has frozen the Rates Rebate Scheme. There is no more money for the Rates Rebate Scheme. That is another kick in the guts for older New Zealanders. And there is no money to promote the Rates Rebate Scheme. Do not tell them there might be a little bit of help for them. The way to reduce expenditure is to never tell them that they are entitled to it. That is the way that this arrogant Government is carrying on. 
I have to say I liked the analogy from Ruth Dyson. She said Government members were putting their hands in the dressing gown pockets of older New Zealanders and performing the old loaves and fishes act by taking $4.5 million off the old people then claiming somehow that they were putting so much more money into residential care and home care. Well for those members over there who obviously know nothing there is no extra money for those people who are in home care. There is no extra money for those in residential care. The money merely covers the increase in the number of people going into rest homes and it merely covers the number of people who need home care. 
The members over there might like to have the wool pulled over their eyes but I can tell you something that I know about older New Zealanders: they do not. I would say that Government members when they sulk home out of this House are going to face some older people who will say: “You could have changed it. You could have asked us though. You could have consulted us. You could have said ‘Is there another way to do it?’ but no you kept it secret.” They will remember that this is an arrogant sneaky Government that when there is urgency will do what it can to undermine the most vulnerable in New Zealand. Well good luck to you because I can tell you they will not forget it. 
Dr CAM CALDER (National) 
: 
 I think it is about time we got a little bit of common sense back into this debate. We have had the rhetoric from the Opposition: from the Labour benches from the Green benches and from the land of Nod. We have had rhetoric—rhetoric after rhetoric—debating the need for fiscal restraint and discipline. You would think that nobody had heard of the global financial crisis. You would think that nobody was aware of the need to be disciplined in our spending to be fiscally prudent guardians of the public purse.  
Let us just look at what we are proposing. As the Hon Tony Ryall pointed out we are looking at a slowing of the increase in the asset threshold—a slowing of the increase in the asset threshold. From 1 July we will begin to adjust the asset threshold by the Consumers Price Index for rest home care subsidies. This is what we do with superannuation—this is what we do with superannuation. Up until now under the profligacy of the previous Government it went up $10000 a year. We are looking at that; we thought that this is no longer sustainable. We are about protecting the most vulnerable in our community. We are about having a sustainable programme. I commend this bill the Social Security (Long-term Residential Care—Budget Measures Amendment Bill to the House. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I understand the next call is a split call with the Greens. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I think the time has come to put this debate in some context. It is in the context of a Budget with zero ideas and zero hope and a Government that is failing. The previous speaker Dr Cam Calder tried to paint the context of the global financial crisis as though it had just happened as though this Government had not had opportunities to address it as though this Government had not had opportunities to promote pro-growth tax policies and as though this Government had not had the opportunity to direct money towards research and development. The previous speaker unfortunately is defending a status quo Government. If we do not change things nothing will change. We will continue to buy more from overseas than we export. If we do not look after our exporters who grow our economy we will not succeed as a country.  
What we are debating here in this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill is a threshold test change. It is a threshold test change that normally involves $10000 a year over 4 years. This is the big idea of the Budget—this is the big idea of the Budget. Sadly the reason we know it was the big idea was that it was kept secret. It was one line in a press release. The backbenchers opposite knew nothing of it so it must be the big idea. The Government did not want it to get out. This was the big idea that was going to change the economy around. That is why we are in urgency. That is why we are trying to get this bill through so that New Zealand will be put on the right track because of a $10000-a-year threshold test change.  
It follows on from picking the pockets of children in the previous legislation. We can see the theme: it is tinkering about the edges of tax law. It is not addressing the fundamental change that we need as a country if we want to grow our exports and make our country a better place to live in.  
What this bill is not doing is the big issue. As my colleague Jacinda Ardern said in a previous stage of the debate there is no discussion on superannuation. There is no real fruitful discussion on superannuation in the Government’s documents. It does push out KiwiSaver another year it puts off savings as a country for us all but it does not discuss the big issue of retirement age. It is really tinkering with a small group of people who are on this threshold.  
They are real people with real lives and real concerns and there is no doubt about it that they need their voices heard. This is where this goes really wrong because this Government is not following the usual process. It is not following the select committee process. It is not letting people have a say. It is not consulting. It is not asking whether we could do this a different way. Instead it is getting on with it. Instead of following the usual process this Government is pushing through this legislation because it knows it will be unpopular. It knows that cutting away—I say “cutting”; there is no other word for it—this threshold means that those who live independently will see their assets eroded away. They will be paying for their own care. They will be losing the subsidy that they are used to. This may be a good way of going about things at the margins but they are not being allowed to have a say about that.  
These old people are also concerned about intergenerational equity. I have spoken with them. They are concerned about their grandchildren. They are worried about the costs in the health system of looking after older folk. They are worried about the opportunities that may not be there for their grandchildren as a result of an ageing population and they want to be a part of this debate. But this process does not allow them to do that.  
That is why we are opposed to this legislation. It has not allowed the conversation to happen that should happen. It is tinkering about the edges. It is not making the changes that we need to make and then we have Ministers unshamefacedly seemingly standing up and trying to spin this as something other than a cut. We have the numbers in the regulatory impact statement that show that in 2012-13 instead of the threshold being $220000 it will be $213297. How that is not a cut I do not know. 
EUGENIE SAGE (Green) 
: 
 There are more than 42000 people in New Zealand who are in residential care in 700 different facilities so the changing of the rules that is happening in this bill the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill obviously affects quite a number of people and there would have been a lot of people and their families who would have been interested in contributing to the bill through making submissions. As a new member of this House I think being at the select committee hearing the submissions and hearing the expertise that members of the public contribute is an incredible contribution to the lawmaking process. But having this bill go through under urgency with no opportunity for people to have their say means we are making bad law.  
I think the Government has been deaf to a lot of the concerns that have been raised on this side of the House. There has been a theme of the need for collaboration. In areas as contested as water we have had a collaborative process through the Land and Water Forum. Here we are dealing with the way people are looked after—our senior citizens who have contributed taxes for all of their lives—in the twilight of their lives. We need to have a cross-party solution here a lasting solution not one that is going to be tossed out with the next Government. That is why Labour and the Greens working with Grey Power had an inquiry into aged care. That is why we want to work on something that works well for everyone and that endures. But this bill sneaked through under urgency with no public process will not do that.  
It has been really puzzling listening to the Government. If you read the regulatory impact statement that makes it clear what the motive for the bill is and I quote: “Increasing the asset threshold … by the CPI (rather than by $10000) would reduce the number of residents eligible for the subsidy and thereby reduce the amount of Residential Care Subsidy paid.” The reason for this bill is to cut the number of people who can access that care. It is miserly in comparison with the overall $870 million that is spent by the district health boards on subsidising residential care so it is tinkering as my colleague Mr Clark noted. It is tinkering about the edges. Why are we doing this? Why is the Government doing this except to penalise a few people and to cause enormous uncertainty insecurity and grief amongst older citizens to make this small saving out of an $870 million Budget? It discriminates against older citizens. It is bad process because it is being done under urgency. It is not good law and it discriminates. Thank you. 
ALFRED NGARO (National) 
: 
 I seek leave of the House to add that document which is  
Changes to the Residential Care Subsidy asset threshold 
 from the Ministry of Health. 
Hon Annette King 
: It’s available on the website. 
ALFRED NGARO 
: It is? I am sorry Mr Speaker. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Leave is not granted. 
ALFRED NGARO (National) 
: 
 I also have another document here from the— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Hang on. What are these documents? What is the source of the documents? 
ALFRED NGARO 
: These documents are all available on the website but— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: The member knows that we do not table documents that are readily available in the public domain.  
ALFRED NGARO (National) 
: 
 I mentioned these documents because we were accused for quite some time throughout this morning of the fact that information that was there was not there—and yet it was there. Enough with that debate; this is about the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill.  
What this debate has been about has been the care and concern of our elderly people. This is the final word—I have the final word this afternoon—and it comes from Martin Taylor who is the Chief Executive Officer of the New Zealand Aged Care Association and who supports the Government’s initiative to slow down the yearly asset threshold increase for eligibility for an aged residential care entitlement. This is what the association says: “Currently the asset threshold is $210000 and increases to $10000 each July. But with the policy change announced today the asset threshold will now be indexed to inflation. ‘This is a small but significant step in addressing one of the most significant issues facing this and future governments which is how to fund care for an ageing population’ the Chief Executive of the NZACA Martin Taylor says.”  
This again confirms why this bill is a bill that we support. This is a bill that cares and this is a bill about the concern that we have for elder people. We will go to our constituents we will go to our elder people and we will tell them the truth. There will be no more scaremongering. I support this bill. 
A party vote was called for on the question  
That the Social Security (Long-term Residential Care—Budget Measures) Amendment Bill be now read a third time. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 54 
New Zealand Labour 34; Green Party 11; New Zealand First 8; Mana 1. 
Bill read a third time. 
Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill 
First Reading 
Hon TARIANA TURIA (Associate Minister of Health) 
: 
 I move  
That the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill be now read a first time. 
 At the appropriate time the bill will be referred to the Finance and Expenditure Committee. I want to first of all mihi to all of those visionaries who began the journey of smoke-free legislation over two decades ago. The Smoke-free Environments Amendment Act in 1990 was one of the major turning points in New Zealand’s tobacco control history. In the space of more 20 years these people—too many to name—have reshaped our attitude to tobacco and this bill is but another step on that journey. I want to also acknowledge the dedicated enthusiasm of officials who continue to impress me with their tireless efforts to support the Government’s agenda to be smoke-free by 2025. Tena koutou. 
This bill is about saving lives and protecting our future generations. In the Budget debate there is always an avalanche of numbers that falls upon the public but in my mind there is only one number and that is the 5000 New Zealanders who die each year due to smoking and exposure to second-hand smoke. It is profoundly disturbing that over half of all long-term smokers die of a smoking-related illness losing an average of 15 years of life. It is not right and we can and we must do something about it. 
This bill reflects the view that smoking is not part of our future. Increasing tobacco excise taxes by 10 percent per year in each of the next 4 years is a key part of our strategy to prevent young people from taking up smoking and encourage existing smokers to quit. We know from New Zealand and international experience that increasing the price of tobacco is the single best thing that we can do to reduce tobacco consumption and consequently prevent tobacco-related harm. After the four annual increases in tobacco excise promulgated in this bill it is expected that a typical packet of 20 cigarettes will cost over $20 or $1 per cigarette. This is likely to be a huge psychological price point. I have read all the headlines that tell me that this is a hard-hitting move and it will hurt but I ask the question: what sort of future are we shaping if we do not try to do everything possible to extend life expectancy improve health outcomes and strengthen our families? I would have to ask as to which is the greater hurt when we consider the impact of this addiction on far too many family members—loved ones who have gone far too soon. 
At the moment one in every five people over the age of 15 continues to put their health and their lives at significant risk by smoking. For Maori the data is even more distressing. Some 155000 current smokers are Maori. That is 45 percent of the Maori population aged between 15 and 64. I care deeply that almost half our population is living with compromised health and the expectation of a reduced lifespan. I know that together this Parliament can act to change that situation and I look forward to broad support across the House. 
We know that people are more responsive to price than they are to any other marketing intervention. A tax increase will stimulate smokers to make a quit attempt and successfully become smoke-free. One of the things I am most pleased about as a result of the last term’s changes is that we have seen a large reduction in the number of young people who are taking up smoking. The annual Action on Smoking and Health year 10 student survey included 26000—or nearly 50 percent—of all students in this year and showed the lowest rate ever recorded of year 10 students who were daily smokers and the biggest year-on-year drop in daily smoking was from 16.3 percent in 2010 to 11.3 percent last year for Maori girls who have the highest smoking rates. That is a great result and a result that I believe this entire House can be proud of in having voted for the previous tobacco excise increases. 
The Government’s goal of a smoke-free Aotearoa New Zealand by 2025 has in no uncertain terms signalled that it is serious about eliminating the harms that are caused by smoking. The tobacco industry and wholesalers and retailers of tobacco need to understand this message: selling tobacco is a sunset industry in New Zealand. It is not our future.  
I was intrigued to read the  
National Business Review  
yesterday with the headline “Budget 2012: higher tobacco tax may encourage black market”. On reading more closely it was revealed that the robust research basis for the article was none other than the viewpoints of the Imperial Tobacco Group. That is the company that produces brands like Drum Horizon and Peter Stuyvesant; it is hardly an objective observer. It is a pity that the  
National Business Review  
had not opted for a more balanced opinion by including the advice of people such as Professor Janet Hoek from Otago University. In the Science Media Centre Professor Hoek responded to these allegations with the following statement: “I have never seen any evidence to support these claims and closer analyses of the industry’s claims have raised serious questions about their validity …”. On the contrary there is a wealth of research available that gives even more reason for introducing this latest legislation to reduce the long-term burden on the health system and make people’s lives better.  
Just 2 days ago research by ASPIRE2025 funded by the Health Research Council and published in the international peer review journal  
Tobacco Control 
 revealed that smokers strongly support tighter regulation of the tobacco industry and almost half support an outright ban within a decade. I think that is amazing. These further four 10 percent increases are important and meaningful steps that are a necessary part of the Government’s commitments to achieve the 2025 smoke-free goal. 
 This bill is but one of a multi-pronged strategy. From 23 July this year a complete ban on the display of tobacco products will apply in everyday retail settings—out of sight hopefully out of mind. Cabinet has agreed in principle to introduce a plain-packaging regime following public consultation later in the year. We have increased the fines for selling tobacco to minors from $2000 to $5000 and I have many other initiatives in progress including that of stopping smoking in cars. I have stated that my approach is to do whatever it takes to support people to quit. The motivation is clear. I want all New Zealanders to enjoy the highest quality of health and of course to benefit from more money back in their pockets rather than feeding an addiction that sees their income literally go up in smoke. I am also clear that smokers should not have to do the hard yards on their own. It is about promoting and sustaining supportive environments that encourage us all to be smoke-free. 
I am really proud that we have been able to establish a fund of $20 million under the umbrella of Pathway to Smoke-Free 2025. This fund gives us an opportunity to initiate programmes that support positive and healthy lifestyles free from tobacco harm. We are calling this an innovation fund because we are seeking wider solutions to support our goals of becoming a smoke-free Aotearoa. 
There is one particular feature of this legislation that I want to describe in a little more depth. When the increases in excise on tobacco products occurred in 2010 time-limited legislative amendments were made to exclude tobacco price increases from the annual CPI-based adjustments to the main benefits. This bill proposes to continue to extend the time-limited provisions to ensure that until the end of 2017 the following bills will exclude tobacco product price increases from required CPI indexation: the Children Young Persons and Their Families Act 1989 the Education Act 1989 the Income Tax Act the New Zealand Superannuation and Retirement Income Act the Social Security Act 1964 and the War Pensions Act 1954. The purpose of this is to ensure that recipients of social assistance are not reimbursed for increases in tobacco excise. 
This bill takes us another step forward towards being a smoke-free nation by 2025. It is continuing the momentum created by the previous three tobacco excise tax increases. Raising tobacco excise is our most effective lever to influence the price of tobacco products and I commend this bill to the House. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I would like to like the Associate Minister of Health the Hon Tariana Turia did acknowledge the over two decades now of work on reducing the impact of tobacco and the harm that tobacco causes to our communities. The Minister mentioned the introduction of the Smoke-free Environments Act in 1990 which I believe was introduced by Helen Clark. There have been other members—Tukoroirangi Morgan I know did a lot of work and Stevie Chadwick of course. She actually had a pretty rough time when she introduced legislation to reduce the impact of tobacco. I would like to acknowledge Dr Paul Hutchison who actually had the fortitude to cross the floor at times when his party was not quite seeing things the right way. Dr Hutchison crossed the floor and voted with the Labour Government and other parties to put in place the right legislation to reduce the impact of tobacco. And of course I would like to acknowledge the Minister. Her work over the last 3 to 4 years has been just stupendous and has really driven this agenda where we now have a target of making New Zealand smoke-free by 2025. I applaud the Minister for all the measures that she has been able to guide through Parliament—the excise tax increases the removal of tobacco displays which we will actually start to see happening in the months ahead and now this measure the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill which we on this side of the House are happy to support.  
We understand of course that increasing tax is a burden on people but the message is really clear: if you want to relieve yourself of that burden give up the smokes. It is as simple as that—give up the smokes. It will do more than just put money in your pocket; it will put years on your life and it will put life in your years. It is well— 
Hon Simon Bridges 
: And a spring in your step. 
IAIN LEES-GALLOWAY 
: And a spring in your step Simon. So we absolutely support this move on this side of the House.  
We look forward to more progress in other areas as well. The Minister mentioned stopping people smoking in cars. We on this side of the House would prefer to focus on stopping people smoking in cars when there are children present in the car. We think that is the more important area to focus on. Children cannot make that decision themselves. They cannot ask an adult to not smoke and we would like to see smoking prohibited in vehicles where there are children under the age of 18 present. That seems like a good next step.  
I would also like to congratulate the Maori Party and I know the Green Party is on the same page because like the Labour Party their position on tobacco control measures has been absolutely consistent over the years. The same of course cannot be said for our friends on the other side of the House. Their conversion to supporting tobacco control measures is entirely down to Tariana Turia. I do not believe—well I did not believe—that this bill would be coming into the House if Tariana Turia was not a member of the Government because this just is not the sort of thing that the National Party has ever voted for.  
But there is one thing that has maybe just made me think about that. I think that maybe actually even in the absence of the Maori Party National would have brought this bill to Parliament this year but for different motivations—completely different motivations. Because it will raise $528 million over the next 4 to 5 years and we know that this Government is scrounging around everywhere to try to get revenue from wherever it can. We know it has been picking the pockets of the paper boys and paper girls. We know it has been cutting funding for our older people who want to go into rest homes. We know all the different ways that this Government is tinkering around the edges to try to find some revenue and here is another way. So it disappoints me that a good robust evidence-based public health measure that we should actually be celebrating is really being supported by those members over there because they are desperate to make up the hole in their revenue caused by mismanagement of this economy and unsustainable unaffordable tax cuts that they brought in during their last term of Government. That is where the support for this bill in the National Party really comes from.  
Dr Hutchison wants me to wind up. I know the optics are not good on this are they Dr Hutchison? I know that the member supports this for the right reasons but his colleagues around him do not feel quite the same way. We know why they are really supporting this bill today. It is because of the failure of this Government to actually grow New Zealand’s economy. We have seen it time and time again and in fact that is the only reason that each of the three pieces of legislation that we have debated under urgency over the last 24 hours have actually come to the House this week—because this Government has failed to grow the economy.  
However I do want to just finish by again applauding the Minister on this move. This from a public health perspective is absolutely the right direction. It is a next step in the journey that started decades ago and hopefully a journey that we will be able to complete maybe in 10 or 12 years’ time from now when we actually see New Zealand becoming smoke-free. Thank you. 
Hon TAU HENARE (National) 
: 
 As a smoker a non-smoker a smoker a non-smoker and unfortunately a smoker—but tomorrow will be another non-smoking day—I say that that speech we heard then from Iain Lees-Galloway was from a man who has never ever had to worry about giving up smoking after 25-odd years. It is so easy for that person to come into the House and pontificate about this that and the other thing and smoking in cars and blah-blah-blah. But the fact of the matter is that what he should have said right from the start is kia ora to our Minister in charge of this Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill— 
Iain Lees-Galloway 
: I did. 
Hon TAU HENARE 
: Oh yeah he did. He did. But he could not help saying what Labour had done back in 1990. Why do you not just stick to the issue in front of you which is to say kia ora to the Hon Tariana Turia? 
Being a non-smoker a smoker a non-smoker a smoker and then hopefully a non-smoker again I say that this bill is a good thing. It will say to our young people that actually you should not be smoking because of all these reasons but also because hey cigarettes are going to cost 20 bucks a packet. You have got to be a fool—you have to be a fool— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Oh order! 
Hon TAU HENARE 
: —if you are going to pay 20 bucks for a packet. 
Hon Annette King 
: Oh Mr Speaker you’re not a fool. 
Hon TAU HENARE 
: You know what I mean. You also have to congratulate the Minister because if you extrapolate it out say 10 years what we save in health costs is going to be millions and millions and millions of dollars and not only through preventing the odd heart attack that a member of Parliament may have; respiratory problems all sorts of problems come from smoking. I am not a zealot. I will tell you now that if it ever comes to the House I will not vote to ban smoking in cars or even to ban smoking in cars with children in them. That is a decision for mum and dad or whomever. If you get to that point it is just one step away from being a dictatorship and as far as I am concerned I will be voting no. 
But other than that there is $20 million in this package that is going towards other assistance packages for people who find it difficult to give up smoking. I can tell you from experience—from several experiences—that even if you have been off the fags for 2 years it is so easy to pick one up and get off the wagon. I am not ashamed of it. I know that it is a buzzy thing to be a non-smoker these days like the former speaker but I have got to tell you that it is not the easiest thing to do. 
Dr Jackie Blue 
: It’s an addiction. 
Hon TAU HENARE 
: Yeah yeah and we know all of that. We know all of that. Smokers know all of that. One thing that I ask of this House and every member in it is that they do not vilify the smoker— 
Dr Jackie Blue 
: We’re not. 
Hon TAU HENARE 
: But you do. [ 
Interruption 
] You do not but she does. It is a very easy thing to do. It is a very easy thing to do. 
Hon Member 
: Yell at us. Yell at us. Yell at us. 
Hon TAU HENARE 
: I would not waste my breath on yelling at the Labour Party. It is easy to get up and be a zealot and tell people what to do. What we have to do is use some of that money that our Minister has saved for us and got in the Budget to actually prompt people in the right way to give up smoking. Kia ora. 
DARIEN FENTON (Labour) 
: 
 I am happy to take a call on the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill and I reiterate Labour’s support for this bill and congratulations to the Associate Minister of Health the Hon Tariana Turia on bringing this to the House. I am a long-given-up smoker but I was around in the 1990s and Helen Clark—in 1990 was it not—was not my friend at the time. We all smoked at our workplace and along came Helen Clark and told us that we were not able to smoke. But I have to tell you that that was the best thing that happened to me. From then on there was a smokers’ room and then that got banned so from then we had to go outside and then that got cold. So eventually I gave up smoking. So I think those sorts of measures do encourage people and certainly if I was having to pay 20 bucks for a packet of fags now that would be a very very strong incentive.  
Just one other comment: I am interested that we are sending this to select committee. I am very pleased about that. It is nice to be debating a bill that is actually going to select committee in this urgency period. I think there are still some issues around smoking in the workplace. I certainly know there are some at Skycity with its so-called outdoor high rollers area where people are smoking. Issues have been brought up there with me and I am sure others— 
Kris Faafoi 
: Skycity? 
DARIEN FENTON 
: Skycity—yes that is right. So I hope that the select committee process will give us the opportunity to have a really good debate about Skycity but also we can talk about the very very important issue that those workers I know feel very strongly about and actually campaigned to support Stevie Chadwick’s bill in 2005. Thank you and we support this bill. 
KEVIN HAGUE (Green) 
: 
 I want to begin by joining with other members of this House in once again applauding the singular and extraordinary contribution made by the Hon Tariana Turia to this agenda towards a smoke-free Aotearoa. I agree with the comments of Iain Lees-Galloway that it has been her drive and commitment on this issue that have seen this agenda take positive steps forward and I greatly appreciate that. 
Next week—31 May—is World Smokefree Day and it is a good time for us to look back on the progress that we have made on this agenda and the steps still to take. Cigarette smoking is the biggest cause of preventable death in this country causing somewhere between 4500 and 5000 preventable deaths each year. As George Thomson and others have established through their research work the single most important intervention in the prevention of those deaths is the mechanism of price increase. So the measures in this Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill that we are debating today are the single most important thing that we could be doing about the single greatest source of preventable death in this country. They are pretty important. 
There is considerable evidence of high quality that excise tax increases are very closely linked in fact with increased quit attempts and increased successful quit attempts. That from a public health practitioner’s point of view is a very encouraging thing because it says that by making this one intervention it is possible to have a very direct effect on the problem that we are trying to deal with. It is solid nationwide evidence but I particularly note the evidence from my home area of the West Coast. In 2010 when the House debated a similar bill around increasing the excise tax on tobacco I drew attention to the fact that the West Coast has one of the highest rates of cigarette smoking in the country and the pain I felt as a result of that and my desperation and determination to do something effective about it. Last week I was very pleased to receive a communication from the West Coast Primary Health Organisation—and some other members may have also—recording some of the progress that that organisation has been making on its smoke-free agenda. I am very pleased to say that it is making some very good progress. In the current year to date it has some 436 smokers currently engaged in cessation attempts and 24 percent of those attempts are successful. That is an extremely good rate; 24 percent may sound like not very much to some people but as my colleague the Hon Tau Henare has just pointed out quitting is a really hard thing to do. The last evidence I saw was that it took on average seven quit attempts to be successful. So keep going brother and congratulations to the West Coast Primary Health Organisation because a 24 percent success rate is extraordinarily good. 
But the thing that I particularly drew encouragement from was the evidence from the primary health organisation about when quit attempts were being made. It has tracked that over a 2-year period and has noticed a surge in those attempts in the April to June quarter over the last couple of years. It attributes those surges to two factors. It says they are associated with the excise increases that have occurred in those 2 years and also the quit-smoking campaigns that have occurred in May associated with World Smokefree Day. Again that is great encouragement for what we are doing here today with this bill. 
There have been in the last week several opportunities in the House to talk about health promotion. I want to briefly remind the House about what health promotion says. It says that illness is a function of effectively marginalisation or disempowerment and the social and physical environment that surrounds a particular community. It is those socio-environmental factors that drive the fact that illnesses are clustered in particular communities. The West Coast population has the lowest median household income of any population in New Zealand. It is a relatively marginalised population. That is why the smoking rates are higher. That is why the smoking rates on the West Coast are comparable with those amongst Maori and Pacific Island people—two other population groups that are marginalised in our community. The answer to that problem is to address the marginalisation and also address the environmental factors surrounding those communities. So the price increase is important but not by itself sufficient. There are many other things that we need to be doing in the area of public policy social and physical environment resourcing community-based programmes assisting people with personal skills and reorienting our health services. 
The Ministry of Health has funded a research programme to assess what it would take to halve smoking rates by the year 2020. I say it is great that such a programme exists but I want to encourage a redoubling of the effort because in fact halving smoking rates by 2020 is still insufficient. That will not be enough to get us to our goal of rates less than 5 percent by 2025. We still need to do more. The Minister has talked about some of the other things that we are doing and I take a lot of encouragement from them but I would also draw on some other things that we could be doing. This House has had for example the recommendations from the Maori Affairs Committee. We are doing some of those things but there are an awful lot of things on that agenda that the Government is not moving on. That agenda was set by I think the biggest and most important and powerful inquiry into tobacco use in New Zealand—certainly in recent years. There was a great action programme set out by that select committee and we should be following it. I want to mention a particular initiative that we could be following and that is to take more of the excise tax from tobacco products to fund cessation programmes and health promotion programmes around smoke-free environments. That would be another concrete step that this country could easily take towards that goal of a smoke-free Aotearoa by 2025. 
I want to finally refer to I guess a time line prepared by Regional Public Health here in Wellington. It records the achievements in this journey since 1990 and it was prepared in 2010. It said we should increase the tobacco tax by 10 percent each year until 2012 prohibit tobacco product displays have tighter control of the display of trading names look at infringement notices for selling to the under-aged clarify trade rebates and discounts—we are doing that—have plain packaging reduce the transitional period amend the health warning and look at infringement notices. We are moving in that direction. And then we move on to licensing retailers local authority control over the number and location of outlets the prohibition of vending machines embedding the framework convention annually reducing the amount of imported products and so on until we achieve that goal. Thank you.  
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker. Kia ora tatou e te Whare tatau e wetewete nei i tenei pire na te Honore Tariana Turia i whakatakoto ki mua i o koutou aroaro. Ka nui te mihi ki a koutou e mihi mai ki a ia. Me mihi ki a ia ka tika nana tenei pire i kokiri ki mua i te aro o te Kawana Nahinara. Na kua eke tenei o nga pire ki tona taumata i tenei wa no reira mihi mai ki a ia.  
I etahi wa ka pataia te patai he aha te take o te noho o tetahi ropu pakupaku penei i te Pati Maori roto i te Whare Paremata? Anei. Anei te puawaitanga o te korero. Ka taea e nga ropu pakupaku te kokiri nga take nui mena kai te noho ratau hai hoa haere mo te Kawanatanga. Na reira kai te mihi ki a ia kai te mihi ki te painga o te noho i roto i te Whare Paremata. Kai te mihi ki te ra he ra whakahirahira mo matou o te Pati Maori ka mutu te tikanga ia mo te motu whanui tonu. Koia tetahi kaupapa kua roa e kokirihia ana e te Pati Maori mai i te ra tuatahi i eke matau ki roto i tenei Whare Paremata. Koia tetahi kaupapa nui whakaharahara ana koinei te puawatanga i te ra nei a he ra ano apopo mo nga wetewetenga o roto i nga komiti whaiti engari tona mutunga mai kua aro mai me ki te nuinga o te Whare Paremata ki tenei o nga pire. Ka mihi ra ka mihi ka mihi. 
[ 
Thank you Mr Assistant Speaker. Greetings to us who are here considering this bill which the Hon Tariana Turia has put before you. I really appreciate your acknowledgments to her. It is apt indeed that you praise her as she is responsible for putting this bill before the National Government. This bill has reached its pinnacle at this point in time. So acknowledge her indeed.  
There are times when the question is posed: why exactly does a minor party like the Maori Party remain in Parliament? Here it is. Here then is the fruition of the talk. It is possible for minor parties to broker matters of huge significance if they are an associate of the Government. So I applaud her I applaud the benefits of being in Parliament and I applaud this day. It is a wonderful and magnificent day for us the Maori Party and generally for the entire nation eventually. The topic at hand is one that the Maori Party has been dealing with for a long time right from the first day we entered this Parliament. It is a huge and enormous one and its fruition is at hand today. Of course there is another day tomorrow for select committee considerations but at the end of it all the majority of members shall we say will have taken due diligence to this bill. My acknowledgments to each and all. 
] 
It is a good day to be a Maori Party member when all of the things come together the stars align and you happen to get a nice sharp concise well-thought-out common-sense bill that is going to take the country forward. I made up all of those words just by myself. I do not think there is too much to argue about in this bill the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill as we really focus on looking after the well-being of the people of this land. We know that cigarettes are highly addictive and lethal and they cannot be made any safer.  
He mea mauhere i te ngakau i te wairua i te tinana o te tangata koinei te mate penei ta te Honore Tau Henare e korero nei. 
[ 
It is like what the Hon Tau Henare said: the problem is that it grips the heart spirit and body of the person who is imprisoned. 
] 
It is something that obviously grabs you. You can be un-grabbed as he was un-grabbed and then it grabs you again. That is one of the unfortunate things about it. This is one of the things that we of the Maori Party call a social hazard and it is something that we clearly wanted to address from day one when we arrived in the Parliament of this land. It is an epidemic and unfortunately we do not always have control over it. 
I can say that there have been many approaches and many ways that the Parliament of this land has attempted to deal with this issue from disease warnings on tobacco packaging through to bans in the workplace. Others have spoken this afternoon about subsidising medicinal nicotine but it has not had too much of an effect. I for one have been to tangi after tangi after tangi in particular of women—Maori women—who have suffered from cancer. There is nothing worse than seeing the children who are left behind because of the effects of cancer on not only that person who has passed away but the families and the children and the partners. As I say the consequences of this are pretty grim. Lung cancer mortality rates for Maori are three times that of non-Maori and we have much to think about as we take this bill forward.  
It is about life and death. We are at a critical point I think in our history where we have never been before seeing the levels of support—from both sides of the House and both from politicians and from the public—to take a serious look at tobacco control measures. As I say I am really proud of the outstanding leadership and the dedication that the Hon Tariana Turia has shown in progressing this bill. It is acknowledged that some of the work was done through the Maori Affairs Committee as well and there are members of the House who were on that committee who really did push this issue out into the public arena. In terms of the Hon Tariana Turia she has been at the front of this for the last couple of years certainly. Not that I should necessarily talk behind her back but she is one who does not tolerate inertia too much. She wants some action and I know that she was pretty disappointed that we could not unfortunately send the legislation all the way through the legislative process today. But we get that it has to happen like that. But we must try to seize the moment to meet the vision of having a smoke-free Aotearoa by 2025. 
It is also about the leadership that each of the MPs in the Parliament of our land has in exercising and voting on this particular issue supporting raising the tax as a catalyst for change. The great thing that we know about the rise in the tobacco excise tax increases that were introduced in April 2010 and in January 2011 and then again in January 2012 is that putting up that tax not only prevents young people from smoking but also encourages existing smokers to quit. I hope the Hon Tau Henare will follow through on that particular issue as well. 
It is particularly pleasing to read through the Action on Smoking and Health year 10 study and to see that Maori students had the biggest decline in daily smoking compared with other ethnicities with a change from 14.1 percent in 2010 to 10.3 percent in 2011. As that points out it is all about changing attitudes and creating an environment that enables smokers basically to quit. Research from the Otago University study of 1300 smokers reported that almost 70 percent of Maori who smoke and 74 percent of Pasifika people who smoke actually supported tighter regulation of the tobacco industry. The study also showed that 66 percent of the Maori smokers and 78 percent of the Pasifika participants thought the Government should do more to tackle the harms of smoking. 
I have heard all of the arguments that tobacco tax increases can induce financial hardship and result in ill health in families. But I would have to say that on balance increasing tobacco tax actually benefits poor families far more because as we all know the harms from smoking are far greater than the harms from tobacco tax will ever be. The ill health and premature loss of life caused by smoking particularly for Maori as I say is a real disgrace. It is also a perfect opportunity right now to put in place an immediate strategy to eliminate a social hazard that has done so much to hinder economic and human growth in Aotearoa and as other members have said it costs literally millions of dollars in health care. 
I want to commend again the Hon Tariana Turia for looking at this issue in a wider context as we take on this issue with all of the other initiatives that we have in train—for example the plain packaging tobacco not being displayed in the shops from July of this year the issue about making cars smoke-free and all the other ideas to advance the tobacco control strategy to be smoke-free as I said by 2025.  
Although the tax increases are effective we know that tobacco tax alone will not do it by itself. We need to support those who are struggling to quit. So with that in mind I am really proud of the Budget that we are currently debating and of the Maori Party being able to negotiate through some gains across the board but in particular the $20 million for health promotion initiatives which are basically about supporting positive and healthy lifestyles and freeing people from cigarette smoking. The initiatives can relate to a wide range of things and I am hoping they are talking about sport recreation creating incentives to quit smoking healthy homes and all of those sorts of initiatives.  
Finally I recognise that this is a huge challenge. Who would think that in another 15 or 16 years or so we can hopefully realise the dream of a smoke-free Aotearoa? If we achieve that it will be a great day for this country. But it is going to take some leadership and it is going to take some action. We saw last week the Iwi Leaders Group taking a leadership role at the AFFCO plants around the country. It was able to negotiate through the communication gap between the unions and that firm and I would hope that the iwi take up another leadership role in respect of this particular kaupapa. I know that Dr Pita Sharples through Ngati Kahungunu is skiting about Ngati Kahungunu’s youth tobacco strategy. It has certainly looked at banning cigarette smoking on marae in the whare on waka at the urupa at the cemetery and so on. We hope that that rolls out throughout the country.  
Finally we want to invite all New Zealanders to pick up on the challenge to quit smoking to support and encourage whanau members to give up and to discourage our younger ones from ever starting. That would be the ultimate. Smoking has robbed us of too many of our treasures. We need to de-normalise smoking and we need to support our whanau to be smoke-free. The Maori Party supports this bill absolutely. 
ANDREW WILLIAMS (NZ First) 
: 
 Talofa lava Mr Speaker in Samoan Language Week and heading towards Samoa’s 50th anniversary of independence in the next week. Tena koe Minister Tariana Turia. I rise on behalf of New Zealand First to speak to the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill. We read in the bill that this bill will see cumulative 10 percent increases in tax on tobacco commencing 1 January 2013 and on every 1 January thereafter for the following 4 years taking a packet of cigarettes from about $14 per packet to over $20 a packet by the year 2016. The bill states that the increase in the price of cigarettes will discourage tobacco consumption which in turn will improve the health of New Zealanders. New Zealand First will not oppose this bill; we will support it. However we agree that it is in New Zealand’s interest to tackle the harmful effects of smoking and the cost of cigarettes is only just one tool—a very simple basic tool—to limit consumption. 
New Zealand First has some concerns that this may have been just a pay-off by the National Government to the Maori Party in order to keep its vote and support. This is a common thought throughout New Zealand. Was this just another sop to one of the cling-on parties attached to the National Party—a bit like the charter schools for the ACT Party? We hope we are proven wrong. We hope there are real reasons for this and that this is not something being put through by the National Government just as another one of its sops to its cling-on parties. 
We are also concerned that this is being done in the interests of the health of New Zealanders that it is not being done by a nickel-and-dime pick-a-pocket Fagin Government looking just to extract more tax and money from the hard-working everyday man woman and child—or even people in rest homes—in this country and that this is being done for genuine reasons and is not just another means of topping up the coffers of the National Government.  
New Zealand First on the other hand expects that increases in tax on tobacco and cigarettes will see these taxes making a real difference with the effects of smoking in New Zealand. We would expect that the increased funding from the taxes taken from the increase in the excise will go into the following things which are already taking place to a certain extent but which we would expect as a result to be beefed up. We expect an increase in the media spend on public awareness campaigns concentrating for example on the media showing the real effects of smoking on unborn babies—real stories real people the good and the bad and getting the real information out there to show the effects on our children. We would expect that such campaigns would dispel the whanau myths. Smoking is a killer but the messages that come down through the Maori whakapapa contradict that. “I smoked through all my pregnancies and you lot are all right.” is a common comment. 
The truth is cigarettes now contain many more poisons than they ever did before. They are more potent and New Zealand cigarettes have one of the highest levels of nicotine in the world which therefore makes them more highly addictive and harder to do without. Tau Henare is testimony to that.  
New Zealand First would also expect that more funding from these tax increases would allow health professionals to work with specialist populations such as more specific support for those with mental illness who may find it extremely difficult to quit without extra assistance. We hope more funding will go into programmes with those with mental problems who face difficulties giving up smoking. Our very able primary health organisations throughout New Zealand are already doing a great job in terms of their smoking cessation programmes. We hope those primary health organisations throughout New Zealand will get more funding to raise awareness of the importance and seriousness of tobacco-related harm. Smoking cessation programmes need to become more integrated and prioritised across contracted funding streams such as cardiovascular disease and diabetes. Quitting smoking reduces risks across these other health issues and this must be part of the tax package that goes back into these health programmes. 
Cigarette taxation needs to fund research with resources made available to those who are at the coalface without there being huge application processes or bureaucracy and access to researchers who can give their time to help write up case-based realities to share and grow existing smoking cessation services. We need more training and recognition of the smoking cessation workforce and access for funded quality training of those people providing those programmes. 
We also need money from these increased taxes to go into an innovation fund to recognise that there are lots of great suggestions to try such as quit cafes for example which have been tried around the world. In other countries they have been very successful. Let us give them a go. Let us have some quit cafes developed in New Zealand. New Zealand needs to look at innovative ideas and methods to help our population reduce the consumption of tobacco and cigarettes. 
New Zealand First will not oppose this Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill but we will put the Government on notice. New Zealand First will be monitoring what funding is being provided on the other side of the ledger to help deliver programmes that will make a real difference to smoking consumption in this country. We will expect to see funding and delivery of smoking cessation programmes to go up quite a few notches—not just lip service but proper funding and delivery of good programmes. These cigarette tax increases must not be just another way for this penny-pinching Fagin Government to pick the pockets of good everyday New Zealanders in order to balance the books of an ever-failing Government.  
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Talofa Mr Speaker. It is a great pleasure to speak on this Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill. It is hugely encouraging to think that every member in this Parliament supports it. I think that it is well realised that increasing the excise does indeed diminish smoking. The issue is in the order of 15 premature deaths per day and 5000 premature deaths per year.  
Last night TV3 dragged out a fairly elderly man with a deeply nicotine-stained finger and crinkly skin and he claimed that his doctor 60 years ago had encouraged him to start smoking to ease his anxiety. The interesting thing is that that may well have been so because at that stage of events members of the armed services right throughout the world were literally encouraged to smoke. But it was in the late 1950s that Sir Richard Doll epidemiologist demonstrated unequivocally the harm associated with smoking.  
It has been since then that groups of professionals NGOs and many others have worked in this long journey towards achieving a smoke-free New Zealand. Might I acknowledge all those groups: Action on Smoking and Health and the Labour Party in the 1990s which worked so hard to progress the legislation. But more recently I acknowledge people like Tariana Turia who has worked extremely hard and led so extremely hard and people like my colleague the Hon Tau Henare and the Maori Affairs Committee. I acknowledge people like Hone Harawira and Tukoroirangi Morgan from New Zealand First but even more recently the glorious National Government and the Hon Tony Ryall who have indeed supported this tobacco excise tax and made it possible. It is indeed very very satisfying to be able to support this first reading of this bill in the House. Fa‘afetai tele lava. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Are there any further speakers? 
Gareth Hughes 
: Mr Speaker—  
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Well you are standing. I call Gareth Hughes. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Speaker. I am going to take a very brief call. The Green Party supports a smoke-free nation. We think that increasing the price of tobacco is an important market signal. That is why we are voting for the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill tonight. Kia ora. 
Bill read a first time.  
Bill referred to the Finance and Expenditure Committee. 
MICHAEL WOODHOUSE (Senior Whip—National) 
: 
 I seek leave for the Minister to move an earlier report-back date under Standing Order 286(1). 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Leave is sought for that purpose. Is there any objection? There is no objection. 
Hon TARIANA TURIA (Associate Minister of Health) 
: 
 I move  
That the Finance and Expenditure Committee report to the House on or before 26 September 2012 
. 
Motion agreed to. 
The House adjourned at 5.06 p.m. (Friday)